Texas Department of Transportation Commission Meeting

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

Thursday, August 26, 2004

COMMISSION MEMBERS:

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

STAFF:

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

PROCEEDINGS

MR. WILLIAMSON: Good morning. Welcome to the August 2004 meeting of the Texas Transportation Commission. Going to do all of this without a script this time, John. We appreciate the fact that each of you have chosen to attend and participate in what we believe is one of the more important meetings of the year.

For the record, it is 9:25 a.m., and I would like to call the August meeting of the Texas Transportation Commission to order. Also, for the record, public notice of this meeting, containing all of the items on the agenda, was filed with the Office of Secretary of State at 2:08 p.m. on August 18, 2004.

Before we begin our meeting today, if you would indulge me, let's all take out our cell phones, our personal communication devices, our PDAs, and let's take a moment to turn them off or put them on the silent mode so that we won't be disrupted during our meeting. Thank you very much.

As is our custom, we will open with comments from the other commission members, and I would like to begin with Commissioner Houghton. Ted, have at it.

MR. HOUGHTON: Good morning. Thank you, Mr. Chair. Always a pleasure to be here and to see such distinguished guests in the audience, as well as the regular attendees. Look forward to the discussion on the Texas mobility plans from around the state and comments by those in the audience. Thank you, sir.

MR. WILLIAMSON: Hope?

MS. ANDRADE: I also would like to welcome and thank everyone that has joined us in Austin for our August commission meeting. And Mr. Chairman, I couldn't help but remember, as I was driving on I-35 this morning from San Antonio, our last meeting where we were in Childress, Texas, and we rode to our commission meeting in a stress-free rush minute traffic.

MR. WILLIAMSON: Rush minute.

MS. ANDRADE: But I'm glad to be in Austin and I'm looking forward to a very productive day where we make decisions not for today but for tomorrow. Thank you.

MR. WILLIAMSON: Most excellent.

MR. JOHNSON: I guess my interpretation is that you had no stress coming up, and that one minute in Childress was a little bit more than you wanted to handle.

MS. ANDRADE: Commissioner Johnson, I have to tell you that it was stressful but I enjoyed the most beautiful sunrise and I appreciated being in Texas.

MR. JOHNSON: Don't we all.

It's interesting to note how many people are here for the August meeting, and the August meeting is generally one that's pretty vanilla in terms of the agenda items, and I too would like to welcome you, and appreciate very much your willingness to come out and express your views and opinions because the more I'm around what goes on at this agency, the more I become convinced of how important transportation -- and in this case surface transportation -- are to the quality of life in this great state. So I appreciate your being here and look forward to a very productive session.

MR. WILLIAMSON: Robert.

MR. NICHOLS: I'd also like to welcome all of you here and I truly mean that. I know there will be diverse opinions and ideas at issue today. We look forward to everybody's ideas and appreciate the time and consideration for you coming here for what you believe in, and when you leave, I ask you to drive safely back home. Thank you.

MR. WILLIAMSON: Thank you, members, and I associate myself with all those remarks. Again, welcome to the commission meeting.

We do value on the commission frank and open exchanges of opinions and ideas; we think that the most important part of civilized discourse in this great country is our willingness to frankly exchange our viewpoints and to listen to the other person's side, and we think this is a good forum in which to do that.

We are particularly grateful for some special guests who attended today and they'll be all recognized in their order, but to each member of the House and Senate who have taken the time to be here, Senator Barrientos, Senator Lindsay, Mr. Pickett, Ms. Hamric, others. My sight is so bad that if I don't know you personally, I can't recognize you, I apologize. We appreciate your taking your time to be here; I know how difficult that is.

If we have persons who wish to comment on an agenda item, we ask that you fill out this yellow card or a yellow card like this, and you can find that out in the lobby; and if you intend to comment not on an agenda item but on transportation generally in the open comment period, we ask that you complete a blue card -- again, cards can be found in the lobby at the entrance to this room. Regardless of the color of the card, other than statewide elected officials, we ask that you try to limit yourself to three minutes, not because we wish to suppress your speech but because there are so many people that wish to comment that if we didn't try to put some limitations on that, we would be here for several days and that would be difficult, and for those who hadn't spoken yet, it would be rude to those at the end of the line.

I also need to announce that we are going to take some items out of our order today. We always accommodate, if we can, out-of-town guests; we always try to accommodate, where we can, elected state officials who choose to come and participate in our meetings. And frankly, the chair exercises the prerogative to take things out of order if it means a change in the context of the day's events, and I don't hesitate to do that. I'll try to give you as much warning as possible so you won't be caught off guard. I will tell you that we think we have a full-day meeting today and that means we will be taking a lunch break, and that lunch break will occur around one o'clock. Would that be about right, Mike?

MR. BEHRENS: 12:30, one o'clock.

MR. WILLIAMSON: Around one o'clock we'll take a 45-minute to a one-hour lunch break for those of you that need to plan for items later on in the day.

I need to also announce that we have some legal matters which require the convening of an executive session and what I'm going to try to do is coordinate the executive session with our lunch hour so as to not make the meeting, for those of you who are participating, any longer than necessary.

The first item on our agenda today is the approval of the minutes of the July Commission meeting. Do I have a motion?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Do I have a second?

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: The motion passes and the minutes are adopted.

We need to take a moment to do something that we do here at the commission on a monthly basis which reinforces and more typifies the family approach that the Department of Transportation tries to take in its leadership of its 14,000-plus employees.

Ms. Diane Burkett, are you here? Diane, can you come to the podium, please? Go over there where the microphone is.

MR. NICHOLS: Your speech is next.

(General laughter.)

MR. WILLIAMSON: We take great delight in surprising our great employees, and I think we may have pulled this one off. Have we pulled this one off?

MS. BURKETT: Yes, you did.

MR. WILLIAMSON: This, ladies and gentlemen, is Ms. Diane Burkett. Now, the interesting thing about Ms. Burkett is, as young as she appears to be, she has been with this department for 35 years of her life, and during that time has performed admirably as a contributing employee to this organization's success, and it is the desire of this commission to recognize and thank you for 35 years of service. I would like to read into the record the resolution that we will present to you in a moment. The resolution reads:

"In recognition and appreciation of 35 years of meritorious service with the Texas Department of Transportation, the Texas Department of Transportation Commission recognizes and presents to you this certificate, Diane D. Burkett, and extends to you its congratulations and best wishes for a long and happy continuance of service" -- because we could not operate on the second floor without you up there making sure we were all lined up and doing what we were supposed to do. And it's signed by all five commissioners and the executive director. And I'm going to bring it to you in a minute, but I'm going to first give you the opportunity to say all those things you've wanted to say all these years.

(General laughter.)

MS. BURKETT: I just thank each and every one of you. I've enjoyed being with the department; I've seen it go through a lot of changes and I think we're just on a better road, and I thank you for letting me work here.

MR. WILLIAMSON: Well, we thank you, and in a moment we're all going to walk down and take a picture, but in the meantime, let's all recognize Diane for her work.

(Applause and pause for photos.)

MR. WILLIAMSON: For those of you who take advantage of our continuously updated website and our attempt to publish as far in advance as possible our agenda, you were probably thrown off guard because the printed item was a resolution for Ms. Ralls. We had to omit this from the agenda in order to get the proper level of surprise for Diane.

We have a resolution honoring yet another one of our department's great leaders and I suppose departing leaders, the sad truth, because she's decided that she's given us all that she wishes to give us and she's going on to spend more time with her family and other pursuits.

Mary Lou, are you here? Do you want to change your mind? Don't want to change your mind? I don't blame you. You've done about enough.

This is Mary Lou Ralls. She is the director of the Bridge Division, and I think it's probable that there are certain aspects of the department's business that receive more public attention than others, but the others are as important to the safety and promotion of commerce. The interesting thing about what this department does is not only is it a team, family-oriented, but they're components to building a transportation asset that any one component absent means the entire asset is worthless, and certainly bridges fall into that category.

At this point I'm going to turn it over, if you don't object, to Mike because I think he's got pretty deep feelings about being the one to take credit for honoring you for your years of service.

MR. BEHRENS: Mary Lou, in a minute I'll read this resolution to you, but just for folks to know, Mary Lou has been involved, of course, directing our Bridge Division, she was also involved a lot in research; she's known nationally for the work that she has done in structures; she also served on the AASHTO, the American Association of State Highway and Transportation Officials, the group they put together to look at homeland security in transportation issues. So Mary's done a lot of work here in Texas but has also done a lot of work across the whole country which we appreciate and was glad that she was able to represent Texas in doing that.

Let me now read this resolution:

"Whereas, the Texas Transportation Commission takes great pride in recognizing Mary Lou Ralls, P.E. as an outstanding dedicated engineer who has served the Texas Department of Transportation for two decades, most recently as director of the Bridge Division;

"And whereas, Ms. Ralls earned her master's degree in civil engineering from the University of Texas at Austin in 1984 and her license as a Professional Engineer in 1987, and during her career was recognized with many honors including the Texas Transportation Institute's Dewitt C. Greer Award in 1994;

"And whereas, Ms. Ralls has devoted her professional life to public service with TxDOT by holding various positions including: engineering assistant, bridge design engineer, bridge construction maintenance engineer, and structural research engineer, and during that time served on several professional committees;

"And whereas, Ms. Ralls became director of the Bridge Division in December 1999 and oversaw policy standards, manuals and guidelines for the design, construction, maintenance and inspection of 48,720 bridges in Texas;

"And whereas, Ms. Ralls has devoted her professional life to improving transportation safety and mobility and has worked to improve the quality of life for all Texans;

"Now, therefore, be it resolved that the Texas Transportation Commission on the occasion of her retirement from service with the State of Texas, hereby recognizes and thanks Mary Lou Ralls, P.E. for her professional career achievements and loyal service on behalf of Texas and its citizens.

"Presented by the Texas Transportation Commission on this the 26th day of August 2004." And signed by all five commissioners.

Mary Lou, congratulations.

MS. RALLS: Thank you.

MR. WILLIAMSON: Your last shot at us; go ahead and take it.

(General laughter.)

MS. RALLS: It's been a delight working here. I think TxDOT is just the premier agency in the state of Texas; it's a wonderful place to work, it's given me a very fulfilling and challenging career the entire time, and I appreciate the opportunities I've been given here. Thank you.

MR. WILLIAMSON: That's kind of you. Members, Ted?

MR. HOUGHTON: I meant to mention it when Diane was up here and I see Mary Lou, but we did not have child labor laws back when these people were hired?

(General laughter.)

MR. HOUGHTON: Congratulations.

MS. ANDRADE: Thank you, congratulations, and as I travel throughout Texas, I hear about you, so I'm sorry that you're leaving us but I thank you for everything that you did for us.

MS. RALLS: Thank you very much.

MR. JOHNSON: Are we going down the line here? Mary Lou, to the best of my recollection, you are the only bridge division head that I've had the pleasure of knowing, or at least knowing in that capacity, and as you know by some of my comments, I think bridges are very important because they have a lot to do with the driving experience. We don't have mountains and oceans that we can show off too much of, so bridges is one way we can enhance the driving experience, and I want to laud you for -- there are many examples around the state of your creativity and leadership, and I want to thank you personally for those, and for the people who drive the roads and cross the bridges of this great state. I know they're grateful also.

MS. RALLS: Thank you, sir.

MR. WILLIAMSON: Robert.

MR. NICHOLS: Mary Lou, it has been nice knowing you for a number of years now. I had read about you and the work you had done related to bridges and pre-stress beams and things like that way before I ever met you. You and your team have received statewide and national recognition for many of the innovative ideas and programs on pre-stress beams and bridge designs for a long time, not just one but multiple.

When you had the opportunity to head up the Bridge Division, since you've been in that capacity, I know that the number of bridges statewide, not just on the state system but the county bridges and city bridges as part of that program, have increased dramatically, the work that's been done. And I know that even though you're going to be doing a different type of career now, that you're going to take great pride as you drive around the state and see bridges that you have worked on, and we want you to know that we appreciate the dedication that you have had to this state and our state system is better off because of you. Thank you.

MS. RALLS: Thank you for your leadership in helping us get there.

MR. WILLIAMSON: I haven't been around as long as Robert, and I'm not as old as Robert, but I have known of you all the way back to my legislative days and have certainly gotten to know you better since I've been on the commission, and people in Texas probably don't realize how much national and in fact international leadership the Texas Department of Transportation exercises in engineering and construction services and ideas all the time, and that's not because the organization is different -- an organization is inert, an organization is just a structure -- we're known nationally and internationally because of the individuals who work full-time for this organization and attract attention, and you're certainly one of those individuals.

I really wish you wouldn't go. It hurts every time someone leaves because I know what great things we're going to be doing in the next ten years, but I suspect you'll still be a part of it, you'll volunteer, come in and give us your opinion, or maybe even have an idea to work on in the outside world. I appreciate your years of service and your contribution to this state. Thank you very much.

MS. RALLS: Thank you very much, and thank you for your emphasis on innovations and being more innovative. That's what we need to be doing.

MR. WILLIAMSON: I appreciate that. There are some in the audience today that wish we might not be as innovative as we have been, but they'll get a chance to talk about that.

We're going to officially recognize you and if the audience would join with us.

(Applause and pause for photos.)

MR. WILLIAMSON: We'd like to thank the audience for indulging us and participating with us; these things are very important to the commission and the executive administration and the employees of the department.

We are going to at this point deviate from the posted agenda, and I'm going to try to do the best I can to explain it to my colleagues and the audience.

We asked some of our urban, our metro district engineers to come bring us up to speed on the progress being made in the metro areas, the urban areas, with regard to our request for a mobility plan because we are a creature of the political process. The five of us that sit at the commission level and develop policy for the department are appointees of the governor and confirmees -- or will be, we hope -- of the Senate. Because of that, we are a creature of the political process and we are sensitive to and listen carefully to those who are elected in this state to give us direction and guidance on what our policy should be about transportation.

In the last month, as our wonderful core of urban district engineers have sort of fought through at the local level the development of the mobility plan, some of our House and Senate member transportation leaders have expressed some concern that we're headed down the right path, a few that we're not going fast enough, a few that we're going in the wrong direction, and we always listen when that happens. So we're going to hear from some of those people and I think we might even hear from some locally elected officials on the discussion of the progress of the mobility plan.

Now, in the last month it seems to me that certain business and community and even a few statewide and federal elected officials have assumed it important to make clear their position on certain matters, and as I said earlier, I do believe the mark of a civilized nation is one in which the participants can argue and disagree and listen to each other and get on down the road. But I think that that discussion needs to be in the context of the facts as best we know them and in the context of the truth, and not in the context of what I like to call the soft glove of the empty promise, not backed up by the facts.

So before we hear from these district engineers, Mike, and before we hear from those who wish to comment directly, I think it would probably benefit all of us for us to share with our guests the facts as we see them facing the transportation world. And so I would like to take the Legislative Affairs director out of order and bring him up not to necessarily go over the legislative program as we scheduled so much as to establish for the audience some information that we operate off of that we believe to be accurate that in many ways, maybe most ways, color our policy decisions. And you are?

MR. CHASE: I am Coby Chase, director of Legislative Affairs.

MR. WILLIAMSON: Thank you.

Now, members, I'm going to ask a few questions and I do invite you to ask whatever other questions you feel necessary.

Coby, this morning there was an article in the local newspaper and there was a quote in that article attributed to the senior senator of Texas that Texans are only receiving 90 percent -- that the federal government is only returning 90 percent of what Texans pay in federal gas taxes back to the State of Texas. Now, that 90 percent figure caught me off guard because I have operated on the assumption that the true percentage actually ranges from as low as 81 percent to maybe as high as 84 percent, and I wish you would take just a moment -- because we want to operate on the right set of facts here. We don't want to be guilty of making decisions based on the wrong information -- so what can you share with the commission about when I pay a dollar of federal gas tax and it's sent to Washington, D.C., how much of that dollar is actually returned to the state for transportation purposes?

MR. CHASE: Well, it is kind of a common thing to say we get a 90.5 cent rate of return and that's not true. We get a 90.5 percent rate of return on about 90 to -- I'm going to be off just a little bit but close enough -- to about 90-95 percent of the dollars that are distributed. Some of the money is actually distributed by discretionary means, and so when you factor that in, all the gas tax money that we send to Washington -- and it varies from year to year, it will go low down to about 81-82 percent, one year we got close to 90 percent, and when you average it all out, it's closer to 85 cents to 86 cents on the dollar. So 90.5 cent rate of return simply isn't true; it's just not true, just depends on how you do the math, and we like to count all the dollars that we send up there.

MR. WILLIAMSON: So when this commission is having to make decisions about such things as toll policy, to what degree do we ask our district engineers and the planning organizations and the local leaders of our communities to adopt policies of new constructions for toll roads? We do that because we project out that our cash receipts from the gasoline tax, the motor vehicle registration fee, other sources and what the federal government returns to us of our gasoline tax.

MR. CHASE: Yes, sir.

MR. WILLIAMSON: And when we do that, we have to use the true percentage -- and I think we generally think it averages 85 percent, not 90 percent, and that would be some 5 percent difference would be a billion, about $200 million a year? No?

MR. CHASE: Well, in 2003 it would have been --

MR. WILLIAMSON: $125 million approximately. We paid $2.5 billion in federal taxes in 2003. Is that correct?

MR. CHASE: If we had received 100 percent back in 2003, we would have received $300 million more.

MR. WILLIAMSON: $300 million more in 2003.

MR. CHASE: Right, if it were a dollar-for-dollar rate of return.

MR. WILLIAMSON: And so if the actual percentage is 15 as opposed to 10 -- as was cited this morning --that would be a 33 percent increase in our return, so it would be about $100 million a year more. So when we do our planning, we have to assume 85 percent or $100 million a year less than some apparently are convinced we're getting back.

MR. CHASE: Correct.

MR. WILLIAMSON: Now, I've got the information I wanted to discuss, members, and I'm going to ask Amadeo to come up in just a minute, but I want to stop and allow you.

MR. NICHOLS: I was going to ask a question. It's my understanding that on our federal reimbursement, even though we're averaging 85-86 percent, that's just for the last six or seven years. Prior to that, on the former federal cycle, our return rate was substantially lower.

MR. CHASE: Yes.

MR. NICHOLS: Do you happen to have that number? Wasn't it in the mid '70s?

MR. CHASE: In the 1988 to 1991 legislation -- which I had nothing to do with and it's referred to as STURRA -- I'm not even sure what that means -- that was a 77 percent rate of return. ISTEA from '92 to '97 was a 74.5 percent rate of return; TEA-21 is an 85-1/2 percent rate of return.

MR. NICHOLS: So instead of losing $300 million a year or the equivalent of that, we were really, for the previous decade before that, losing probably more like $600, $700 million a year, or at least proportionately.

MR. WILLIAMSON: I don't know because the '92 gas tax contributions from Texas were $1.2 billion and that year we got about 78 percent.

MR. NICHOLS: So we were losing 21 percent, or 21-22 percent for over a decade.

MR. WILLIAMSON: So it looks like the percentages have gone up and the dollars -- our percent of return, even though it's at 85, not at 90 quoted this morning in the newspaper, it looks like the dollars are going up and the percentages are going down.

MR. CHASE: Right, and we call that watching the rabbit and not the magician. Don't watch the dollars; it's easy to be swayed by the dollars, and people tend to look at the dollars; it is rate of return. There are other things that are equally important that we're pursuing and that's flexibility, but I'm discussing rate of return right at the moment. People get very interested in money for individual projects, they get interested in aggregate dollar amounts, but at the end of the day, it is calculated on a percentage, and it might look like more money and feel like more money at the end of the day, but the truth of the matter is we're building some very nice roads and bridges in the northeast.

MR. NICHOLS: The northeast part of the United States?

MR. CHASE: Yes.

MR. WILLIAMSON: And when was the last time Senator Kennedy indicated that he wished to take money away from Massachusetts and send it to Texas?

MR. CHASE: Not that I recall.

MR. WILLIAMSON: Thank you. Other members?

MR. HOUGHTON: I've got a real basic question.

MR. WILLIAMSON: Sure, go ahead.

MR. HOUGHTON: What is the total tax at the pump state and federal?

MR. CHASE: The state is 20 cents and we don't see all that 20 cents, and then it's 18.3 cents federal.

MR. HOUGHTON: That leads to my next question. What's the net at-the-pump stake? If you take 20 cents and you take available school fund contribution, DPS and start peeling?

MR. WILLIAMSON: James and Amadeo are going to come up and answer that question in a moment.

MR. HOUGHTON: Am I ahead of myself? Okay.

MR. WILLIAMSON: Other questions for Coby -- Hope, John? He'll be back; it's going to be a long day for Coby.

MR. NICHOLS: Let me ask one last question. While we're receiving roughly 85-86 percent, it's my understanding from information we see from other states, that while we're receiving that percentage, there are a lot of states that are actually receiving 150 percent and 200 percent of what they actually contributed to federal.

MR. CHASE: Oh, yes, absolutely. It is an interesting political story about how that's arrived at, and it is interesting -- I mean, some people like to look at Alaska's rate of return at something like $6 or $7 for every dollar they put in, but they're a cheap date, we could hold a bake sale and cover their costs; that's not that much money. But it doesn't look quite so egregious like $1.25 or $1.40 in New York, more or less, and something like that in Massachusetts and things like that, that starts to add up proportionately to very large amounts of money.

MR. WILLIAMSON: James Bass, are you here with us today? Before we begin, James, we're mindful of important members of the legislature present. I'm trying to make this as quick as possible, so I won't characteristically drag it out for you.

In the fiscal year we're soon to close, we know pretty much what our business is going to wind up looking like in a few weeks. Can you share with me how much money we probably received from the federal government in this fiscal year for prior months' expenditures?

MR. BASS: For the record, I'm James Bass, director of Finance at TxDOT. And yes, slightly different from what we talked about just earlier which was dealing with the apportionment and obligation authority from the Federal Highway Administration, the figure I give you will be on a reimbursement basis, and for Fiscal Year 2004 -- that we'll be closing out in just a couple of days -- we will receive as reimbursement about $2.7 billion which equates to about 44 percent of the total revenue to the State Highway Fund.

MR. WILLIAMSON: Do we have the ability to maybe mark that on the screen where the audience can see that amount of money, or are you going to just display it off your piece of paper? As long as my guests can see it.

MR. BASS: I would point out just for the audience and everyone, this is revenues and expenditures of the State Highway Fund which encompasses more than just the operations of the Department of Transportation.

MR. WILLIAMSON: And the amount that you just cited for me, is that the third figure down?

MR. BASS: The two-seven-two-six under the FY 2004, and it's the third figure of the revenues, yes, sir.

MR. WILLIAMSON: What's the first figure?

MR. BASS: The first figure is the State Motor Fuel Tax deposited to the State Highway Fund.

MR. WILLIAMSON: What's the second figure?

MR. BASS: That is Vehicle Registration Fees that are remitted to the state; there's also a portion that's retained by the counties, but the $830 million represents the amounts that are remitted to the state.

MR. WILLIAMSON: And the $2.7-, real quickly, how does that $2.7- get back to us?

MR. BASS: It gets back as we expend money on projects. We the State of Texas, initially pay for that, then we seek reimbursement from our federal partners for those prior expenditures.

MR. WILLIAMSON: So if, for example, Senator Barrientos pays a dollar in gasoline tax today and the comptroller processes it and sends us  -- we don't get a dollar, we get 96 cents?

MR. BASS: On the state gas tax, in response to Commissioner Houghton's question, the State Highway Fund receives in the neighborhood of 73 cents for every dollar of state gas tax.

MR. WILLIAMSON: So you take that 73 cents that we got from Senator Lindsay, and we go out and repair the shoulder of Interstate 10, not build a new shoulder but repair the shoulder of Interstate 10 as it runs through Representative Hamric's district, and we hire a vendor to do that and the vendor gives us a bill and we pay the vendor the 73 cents; we send a copy of that bill to the Federal Highway Administration.

MR. BASS: Correct.

MR. WILLIAMSON: And then they send back to us about how much of that 73 cents?

MR. BASS: Eighty percent over the life of the project.

MR. WILLIAMSON: And that 56 cents they send back to us -- Coby, if I'm wrong, you've got to tell me I'm wrong because I do not want, in front of my great friend Gonzalo Barrientos, want to be wrong -- we send the bill to the feds, they send us back 56 cents, and that 56 cents shows up in that $2.7 billion as reimbursement for the state's expenditure of the money. Okay.

The next figure is Other Federal; that's a significant amount of money. James, what is that?

MR. BASS: That represents the amount from our other federal partners: Federal Transit, Federal Aviation, National Highway Traffic Safety Administration. They also participate in those programs, but it's other than highways and so I separated it out that way.

MR. WILLIAMSON: Local?

MR. BASS: Local. Cities and counties, on a number of our projects, participate financially in that and this year we expect that participation to be in the neighborhood of just under $170 million.

MR. WILLIAMSON: And Other is all other things?

MR. BASS: Correct.

MR. WILLIAMSON: So we anticipate that at the close of this year we would have had responsibility for spending about $6.1 billion.

MR. BASS: The State Highway Fund would have received about $6.1 billion; we have the lion's share of the responsibility for spending that; there are other state agencies who also have access to the revenue of the State Highway Fund.

MR. WILLIAMSON: Is that this figure right here, the four ninety-one?

MR. BASS: Yes, sir. The bottom numbers represent the expenditures on a cash basis, again, out of the State Highway Fund, encompassing more than just TxDOT operations.

MR. WILLIAMSON: Department of Public Safety?

MR. BASS: Correct.

MR. WILLIAMSON: Medical transit, Health and Human Services transit?

MR. BASS: That actually is included under the Other TxDOT in that figure before you.

MR. WILLIAMSON: So is this primarily DPS?

MR. BASS: It's primarily DPS; there's a smaller amount associated with the Attorney General. Their Highway Section that handles a lot of the eminent domain cases for us, they receive some funding from the State Highway Fund as well.

MR. WILLIAMSON: Is this pretty much what we pay you and Mike and Steve and Amadeo and other things?

MR. BASS: We share it with a few other recipients, but, yes.

MR. WILLIAMSON: Primarily our staff overhead.

MR. BASS: Well, included in there is -- again, comparing it to a budget which some people may be more familiar with -- that $915 million includes about $180 million of employee benefits, insurance, retirement costs of employees of the Department of Transportation which in the state's budget are spent by the Employees' Retirement System and the Comptroller, but we reflected that here as part of our overhead or Other TxDOT.

MR. WILLIAMSON: Because the cash actually leaves our hands and goes someplace else.

MR. BASS: It leaves out of the State Highway Fund but it's being expended for the benefit of TxDOT employees.

MR. WILLIAMSON: Okay, starting up here I see $2.2 billion for maintenance. Now, we define maintenance in many different ways, but generally it is preserving our existing roads. Is that correct?

MR. BASS: Correct.

MR. WILLIAMSON: Preserving the asset that's already built. That's an allocation. If, for example, MoPac was complete to Circle C, that would be an allocation of preserving and maintaining that stretch of road, maintaining an existing stretch of road.

MR. BASS: Correct.

MR. WILLIAMSON: Is there also money spent out of this, for example, in maintaining State Highway 249 in Ms. Hamric's area?

MR. BASS: Yes.

MR. WILLIAMSON: Now, this $836 million, tell me a little bit about that without going into much detail.

MR. BASS: That includes the development of the plans, the inspection of the active ongoing construction, and the expenditure for the acquisition of right of way associated with those highway projects.

MR. WILLIAMSON: And is part of this money spent in support of our preservation or is it all spent in support of new construction?

MR. BASS: The majority of it is in support of new construction; there is some, probably a smaller amount, that would also support the maintenance activities.

VOICE: And probably Amadeo can give us some idea about that.

MR. WILLIAMSON: So that leaves us $1.8 billion for what we call construction. Now, is that primarily increasing the capacity of our system, or is it increasing the capacity and reconstructing existing footprint?

MR. BASS: That figure represents increasing the capacity.

If I can break off a little bit and give you an example that we all may be familiar with. Say an existing two-lane roadway that may be 30 years old and the demands placed upon that section of the highway system are such that we need to expand the system. Rather than just merely coming in and adding two lanes on the outside, what we'd likely do, because of the age of the existing system, is come in and take out and replace/upgrade the existing two lanes and add two lanes on the outside. The remove and replace, if you will, of the existing two lanes would be considered preservation or maintenance; the addition of the two lanes on the outside would be considered construction on that chart.

MR. WILLIAMSON: And that's because we like to, as much as possible, report accurately and because the reimbursement rates from the federal government are slightly different for those things.

MR. BASS: Correct, there are different types of projects they will participate at different levels.

MR. WILLIAMSON: I'll be real quick and wrap it up with you, James. So I just want to be sure I understand this. All things being equal, about $6.1 billion would have touched our Highway Fund, we would have spent $2.2- preserving the system, $836- planning for construction of the future, $1.8- constructing the future, $900- running our shop, and almost $500- running DPS's shop. That's a good way to summarize.

MR. BASS: Right, and the Other TxDOT, I would just point out, that obviously is more than just administration; it includes a number of other programs within the department: public transit, aviation.

MR. WILLIAMSON: License plates.

MR. BASS: Exactly.

MR. WILLIAMSON: So $2.2-, we're spending 37 percent of all of our money on maintaining what we've got. Is that percentage up from previous years?

MR. BASS: Yes, and that may be a new percentage to a number of people and to the commission as well. That percentage is off of all of the State Highway Fund. Traditionally in some of our earlier conversations, we focus on the money allocated to the department which would obviously give you a different percentage than the 37 percent there.

MR. WILLIAMSON: Well, for example, if Senator Lindsay wanted to know today how much of our money are we spending on actually constructing the asset, we would go in and say well, we're spending $2.2- maintaining what we've got and we're spending now $3 billion maintaining what we've got in planning, and we're spending $4.2 billion protecting what we have, planning for tomorrow and building for tomorrow, and of that $4.2 billion, Senator, about 56 percent is now for maintenance and that's the figure we normally use to express how much of our budget we spend on maintenance. These two figures aren't going to change; no matter what we're doing up here, we're going to have an agency to run and the DPS to reimburse. So it's 37 percent of total cash and close to 54 percent of cash allocated to the building and maintaining of the transportation asset.

Is that how I would characterize it?

MR. BASS: Correct.

MR. WILLIAMSON: Now, is that percentage up from last year, or up from previous years?

MR. BASS: From previous years, yes; last year there has not been a great deal of change, but over time, yes, that has increased.

MR. WILLIAMSON: And will that percentage increase?

MR. BASS: I would expect it to as the age of the system continues to increase and the 80,000-mile system that exists today is getting older and older and having more and more demands placed upon it.

MR. WILLIAMSON: That's all my questions, members. Mr. Bass is available to you.

MR. NICHOLS: Isn't there one other item related to the motor fuel tax that's not really on the list? I believe there's a 3 percent of gross motor fuel tax that's deducted prior -- I call it off books -- that's deducted for collection and enforcement before we ever see a dollar?

MR. BASS: Correct, and that gets back to traditionally --

MR. WILLIAMSON: Three percent of this?

MR. NICHOLS: Top number, yes.

MR. WILLIAMSON: Three percent of $2 billion?

MR. JOHNSON: That's a net number.

MR. NICHOLS: It's 3 percent of about $2-1/2 billion.

MR. BASS: It's about $2.8.

MR. NICHOLS: It's about $75 million a year.

MR. WILLIAMSON: For what?

MR. BASS: Just generally what happens --

MR. WILLIAMSON: What's this for?

MR. NICHOLS: It's deducted before it ever hits the state coffers.

MR. WILLIAMSON: Deducted by who? What are you talking about? I don't know about this.

MR. NICHOLS: For the enforcement and collection of those.

MR. WILLIAMSON: Who deducts it?

MR. BASS: The comptroller. Part of that is directed by statute and other is directed by estimates calculated by the comptroller's office.

MR. WILLIAMSON: Wait, I want to go back to the senator's dollar. Are you saying that when the senator paid that dollar in gas tax today, before we got our 74 cents or whatever it is, are you saying the comptroller gets 3 percent of that?

MR. BASS: Not all 3 percent of that goes to the comptroller, and it gets back to really my response to Commissioner Houghton's question of when we buy five gallons of gasoline and we pay a dollar of state gas tax, what happens to that dollar. Most people generally think a quarter of it goes to education and three-quarters goes to transportation. Generally that's true, but if you recall, I didn't say that we receive 75 cents, I said that we receive 73 cents.

What happens when that dollar comes in, a penny comes off the top to fund and support the collection and enforcement activities of the Comptroller's Office. There's obviously costs associated with collecting that gas tax on a statewide basis, but one penny is pulled off the top, if you will, to fund those activities.

In addition, the way the constitution reads is the state gas tax is dedicated for transportation only when it is used to propel a motor vehicle across the state highway system. So if you buy gasoline for your motor boat, your bass boat, whatever, you can seek a refund from the Comptroller's Office for the payment of that tax. What the Comptroller's Office does is they estimate each year how much of the gross collections of state gas tax went for activities other than propelling a motorized vehicle across the state highway system. They then pull that money aside and make it available for those who ask for a refund. If those people do not ask for a refund, the money then goes to general revenue fund and I believe the Parks and Wildlife Department; it does not return to the State Highway Fund.

If I can jump back to the 1 percent collection and enforcement, if that one cent in aggregate is not all used for the enforcement and collection, they then distribute the remainder, and here in the past couple of years to the State Highway Fund or to the Education Fund.

And sorry, that long-winded response is why out of the one dollar that's paid, we receive 73 cents, not 75.

MR. NICHOLS: One percent is deducted by the Comptroller's Office for administration of the fuel tax.

MR. BASS: Correct.

MR. NICHOLS: But there's an additional 2 percent that's deducted prior to the comptroller ever getting it for the state, I assume to reimburse the motor fuel people for administration of that, but most comparable -- if there is such a thing -- retailers around the state get a half percent. I just wanted to make sure that it was pointed out that 3 percent of the fuel tax is not even stuck up there in the first place.

MR. WILLIAMSON: Well, I didn't know that; I appreciate you pointing that out to me.

Other questions for James, members?

MR. JOHNSON: I've got one observation. Many people have heard the statement that we are now spending more on the maintenance and preservation of the system than we are collecting in the motor fuel tax, and those numbers show that to be the case. At the very top line we estimate collecting $2,144,000 from the motor fuel tax, and the top line in the expenditure column, the maintenance or preservation is $2,249,000, so there's $105 million more that we are spending on preservation of the system today than we're collecting in the motor fuel tax. Now, we also have other sources of revenue, but that statement is very factual.

The other thing that jumps out at me is I apologize that the numbers are not fresh in my mind, but the Governor's Business Council commissioned a study by the Texas Transportation Institute to look at congestion and mobility in our urban areas, and my recollection is that the number that that study showed would be necessary to get mobility -- or congestion back in our urban areas to be at a manageable level was $75 billion. Now, I apologize if that's not right on, but it's a huge number.

So I think if you look at what we're talking about here, we have a huge mountain -- and I'm sorry to interject another thought into this discussion, Mr. Chairman -- but I mean, there's a huge challenge out there and we're dealing with hundreds of millions of dollars and yet the challenge is a multi, multi billion dollar challenge. Thank you.

MR. NICHOLS: I hope I'm not jumping too far ahead. The figure that Commissioner Johnson just mentioned, the $75 billion, that's a shortfall, that's in addition to what is projected using traditional revenues for the department throughout time, I believe 25 years out; that's either to 2030 or 2025. And we're going back region by region and recalculating that again and we're still coming out in the ballpark, so it's almost like two independent means arriving at that number, so the number is fairly close.

If you take the $75 billion divided by the 25 years, that's $3 billion per year shortfall over and beyond what we traditionally get for funding in today's dollars. At 4 percent inflation -- because every year that you delay doing those projects, the cost of those projects goes up about 4 percent, that's the average -- actually means that unless you've got the $75 billion today which nobody does, you actually have to book up and come up with about $6 billion extra every year beginning this year, every single year for the next 25 years not to solve the congestion problem but to not make it dramatically worse. That's my understanding.

To come up with $6 billion a year in revenues using fuel taxes, about how much per gallon would that be?

MR. BASS: One penny brings in about $100 million so I'm thinking that would be 60 cents.

MR. NICHOLS: So you're in 50-60 cents a gallon.

MR. BASS: In addition to the existing 20 cents. And the actual problem is -- I'm sorry, I need to calculate my math -- it would be 60 cents if we were to receive 100 percent back, but since we only receive in the neighborhood of three-quarters, then we'd be higher than that. It would be in the neighborhood of 80 cents so we could get the 60 cents for transportation.

MR. NICHOLS: My point by stating that -- which is a carryover from what Commissioner Johnson was talking about -- is that people that are talking about maybe we ought to do a nickel a gallon really wouldn't even begin to touch the inflation on the shortfall of what is truly needed in our great cities of this state.

MR. WILLIAMSON: In fact -- because it's appropriate to why we're doing all this in the first place -- Bob, are you back there someplace, just off the top of your head, what's the cost to build the flyover of MoPac over William Cannon Boulevard?

MR. DAIGH: $8 million.

MR. WILLIAMSON: $8 million. Thank you.

MR. BASS: If I may, since the figure you mentioned of $6 billion per year I've received earlier questions, if I can kind of elaborate a little bit. A lot of people said we just received bonding authority for $6 billion in the last legislative session. There seems to be a lot of confusion over that. Of course, part of that $6 billion really is in two pieces: part of it is from Proposition 14 which is a pledging of the future revenues that you see on the chart above you.

MR. WILLIAMSON: Those are Ogden-Pickett Safety Bonds?

MR. BASS: Correct. My point is that that is not new money, it is an acceleration of existing money, so it allows us to spend that money quicker -- huge benefits, I'm not arguing with that; over the next two or three years we can accelerate and do a number more projects -- but if you expand it into the 25-year period that you're looking at, it's the same dollars; we've just spent them over time differently.

MR. WILLIAMSON: Ted? Hope?

MR. HOUGHTON: I have a question. Commissioner Nichols talked about the $6 billion fix but I don't know if we focused in on the maintenance out into the future. $6 billion is for new mobility. Correct? What does the crystal ball say about maintenance into the future? That's another how many billion that now we have a shortfall in the state gas tax?

MR. BASS: I would hate to speculate, and I would be speculating if I were to give you a number right now. As I mentioned earlier in just general terms --

MR. WILLIAMSON: Amadeo might know. What's the average age of our system, Amadeo?

MR. SAENZ: About 45 years.

MR. WILLIAMSON: So if we add up all the road miles in the state and say how old are these on the average, 45 years is the average age? What's the useful life of a road? Forget the fact that Gary Trietsch has learned how to make a 20-year road last 100 years, what's the estimated useful life?

MS. SAENZ: For the record, Amadeo Saenz. We design on a 20-year life, but of course, through the use of good preventive maintenance techniques where we go back and patch our potholes, seal our cracks, put overlays to restrengthen, we can stretch the life of those highways for many, many years. The only problem is it's still an old highway and eventually it's going to have to be rebuilt.

When we looked at the average life of our highways, about 45 years is the average life of our system. So we've done a good job at stretching our dollars; that's why you see more and more dollars going into the maintenance, into keeping it going because otherwise it would have to be reconstructed and it would take a lot more to reconstruct than it does to put a maintenance overlay or to put a seal coat.

MR. WILLIAMSON: So one way of looking at it is we could take any funds we receive, whatever they are, we could put more into maintenance and less into construction and extend the useful life of our roads but not have to have that whole maybe $6 billion and become more congested, as Mr. Nichols pointed out.

MS. SAENZ: We can put more money into maintenance, and eventually every year we see that we're having to put more to maintain our system because it's getting older, but it's less money that's available so that $6 billion really would be getting bigger and bigger and bigger because we're not adding any additional lanes to what we're spending the maintenance money for.

MR. WILLIAMSON: Well, that's in effect what we've been doing the last 20 years.

MS. SAENZ: Correct.

MR. WILLIAMSON: We've been building less and less and maintaining more and more.

MR. HOUGHTON: So the delta widens.

MR. WILLIAMSON: Gets bigger.

MR. NICHOLS: The average age, as I understand it, of a typical road is 30 to 40 years, depending on where it's built in the state?

MS. SAENZ: Average design life or average age?

MR. NICHOLS: Average design life.

MS. SAENZ: Design life, we use 20 as a parameter but between 30 and 40 years is what they actually last. We have some roads out there --

MR. NICHOLS: I've heard that they typically last 30 to 40 years; that's after you've coated them and patched them and you finally get to the point that you just have to totally overhaul it.

MS. SAENZ: Right.

MR. NICHOLS: But it's not just a factor of life -- in other words, age -- it's also a factor of volumes and weights. The heavier the volumes and the heavier the weights, the quicker it's going to deteriorate, and our volumes have increased in the past three decades since interstates were completed over 300 percent, and the weights have continued to go up, and we're anticipating a dramatically higher increase in volumes, and therefore, heavy truckloads and things like that over the next 20 to 30 years.

MS. SAENZ: Right.

MR. NICHOLS: When we ran some numbers on the typical cost of a roadway -- you may recall some of the charts I was looking at -- we looked at first the cost of construction of a certain number of miles, but then I wanted the Maintenance Department to go in and over the lifetime of that road -- I think we used 40 years -- how much it cost to preserve or maintain that road over a 40-year period. And what we saw and what came out of that was that the cost to preserve it over that 40 years was more than twice as much as the original cost.

MS. SAENZ: It was between two and three times.

MR. NICHOLS: Two and three times.

MS. SAENZ: Yes, sir.

MR. NICHOLS: And the number that Commissioner Johnson was referring to from the Task Force, the $75 billion shortfall -- and we're seeing through our studies similar numbers -- that's new construction.

MS. SAENZ: That's correct, that's additional capacity.

MR. NICHOLS: So if somehow magically we came up with an additional $60- to $75 billion, we would have to, in a 40-year period of time not only come up with that and the inflation as we get there, but almost twice that much more just to preserve it.

MS. SAENZ: That's correct.

MR. NICHOLS: And I know these numbers sound fantastic and unbelievable but they're real, and that's what most people don't understand.

MR. WILLIAMSON: Judge Lindsay has got to catch a plane, so what I want to do at this point is ask -- is it David that's going to lay out our mobility plan?

MR. BEHRENS: Yes.

MR. WILLIAMSON: David Casteel, where are you? What we're going to do is you're going to lay it out and you're going to talk about San Antonio right quick and then we're going to ask Gary to talk about Houston, and then Judge -- I'm sorry, Senator -- I can't get Judge out of my head -- then we're going to let Senator Lindsay offer his remarks.

MR. CASTEEL: Okay, sir, I'll be pretty brief. My name is David Casteel and I work for you in the San Antonio District, and the purpose of my being here today is to update you on progress towards meeting the Texas Metropolitan Mobility Plan goals and to provide a briefing on implementation in San Antonio, and this presentation should take eight to ten minutes.

Last year the commission approved the framework for the Texas Metropolitan Mobility Plan which was developed under Mr. Simmons' leadership by a group of district engineers who worked with the Federal Highway Administration, community leaders, MPOs and elected officials.

The plan asked that very specific milestones be met on a very specific time frame. These included: the regional allocation, allocation of the Metropolitan Mobility Funds, or Category 2 funds, for the upcoming 2005 UTP. TP&P accomplished this goal in about January of this year.

Also asked for was the development of a Texas Congestion Index to help measure congestion relief efforts. TTI developed this under the guidance of Jack Foster and TP&P and we're using those in our plans at this time.

Development of goals for congestion relief in each of the metropolitan areas. The MPOs have performed this task and those are included in their draft plans.

Development of unconstrained needs analysis based on the congestion relief goals, and the MPOs have done this and this is in their draft plans.

And the development of plans to fill the funding gap between needs, traditional funding and goals, the "fill the gap plan," and this is under development by each of the metro areas at this time. Some are further along than others.

MR. WILLIAMSON: When you say metro areas, do you mean Texas Department of Transportation employees, or do you mean community volunteers?

MR. CASTEEL: This effort was led by the MPOs in each of the areas.

MR. WILLIAMSON: And the MPOs are made up of Texas Department of Transportation employees?

MR. CASTEEL: No, sir. The MPOs are the umbrella planning organization for the metropolitan areas, generally governed by a policy board combined of elected officials and technical personnel from the different agencies.

MR. WILLIAMSON: Local elected officials or state elected officials, or a combination of both?

MR. CASTEEL: Sometimes a combination of both. In San Antonio we have two state elected officials, four city councilmen, I believe three county commissioners, some technical people from the city and technical people from the state in our metropolitan planning organization.

MR. WILLIAMSON: So whenever one of those MPOs conclude and recommend and vote on and approve, for example, a toll plan for their area, was that a local decision?

MR. CASTEEL: It was discussed locally, yes, sir.

MR. WILLIAMSON: Did they vote?

MR. CASTEEL: Yes, sir. Not always unanimously.

MR. WILLIAMSON: This is America; I don't think things are ever unanimous anymore.

Somebody told me that we were cramming it down people's noses. Are you telling me local leaders are making these decisions?

MR. CASTEEL: Local leaders are making the decisions, of course with staff input from us and from the MPO.

MR. WILLIAMSON: I guess I was misinformed.

MR. CASTEEL: Okay, sir.

The status of where we're at right now, the eight large MPOs in the state representing the big metropolitan areas of Texas, the leaders of those MPOs, the staff of those MPOs have been meeting regularly over the past year to facilitate the development of the individual plans. The MPOs have met in several cities around the state; they're traveling together and have been working closely together. I would say Michael Morris of the North Texas COG has been a great leader on this effort, as well as Alan Clarke and Ashby Johnson of the Houston-Galveston COG; Joanne Walsh and Jeanie Geiger of San Antonio have been involved very heavily; as has Michael Aulick of CAMPO. And they've been working well with district staff like Julie Brown here with me from San Antonio, and other staff have also been working very hard in developing these plans.

Each of the MPOs submitted their draft plans to Mr. Simmons this month. Mr. Simmons had all the metro DEs and our planning and development directors in Austin on August 18. We went through the plans and are now in the process of correlating the various plans and combining the results for presentation to you. There are some minor differences in how the individual MPOs calculated and interpreted some of the data, so each district is now working with the MPOs to normalize the data to common definitions and interpretations.

Since Mr. Simmons' August 18 meeting, the DEs, staff and MPOs have begun formulating their individual data into an executive summary for you. I believe the DEs and MPOs to be able to have this available to Mr. Simmons for your consideration on the planned October time frame as shown in the Metropolitan Mobility Plan.

The San Antonio Metropolitan Mobility Plan developed by our MPO consists of the application of the Texas Congestion Index -- we call it the TCI -- to assess our status, the development of non-financially constrained needs plan, the study of goals for congestion relief as measured by our Texas Congestion Index, the application of the House Bill 3588 tools to start on a plan to fill the funding gap between the goals and needs.

This chart shows the relationship between the congestion index needs and funding investment levels in San Antonio and the impacts of our first "fill the gap plan." In this presentation I hope to show how the data in this chart was developed and how it was used in the San Antonio MPO in our project and financial planning for our metropolitan area and our local portion of the Unified Transportation Plan.

The Texas Congestion Index, as a reminder, is a measure of travel time during peak periods across the metro area compared to travel times with free flow. The larger the value, the more congested the metropolitan area is.

Looking at traditional funding, our Category 2 funding which you regionally allocate to us, as well as the already committed Categories 7, 11 and 12 and various other funds that we can project --

MR. WILLIAMSON: A normal person won't know what that is. Give me a normal-person description of Category 2.

MR. CASTEEL: Category 2 is the Metropolitan Mobility Funds which you regionally distributed to us.

MR. WILLIAMSON: Is that construction money?

MR. CASTEEL: That's construction money for mobility only.

MR. WILLIAMSON: What's Categories 7, 11 and 12?

MR. CASTEEL: Category 7 is some preventative maintenance funds -- excuse me -- some Metropolitan Mobility Funds that are allocated to the MPOs; Category 11 is the district discretionary money that you give me to work with; and Category 12 is Commission Strategic Priority funds.

MR. WILLIAMSON: Thank you. Go ahead.

MR. CASTEEL: Yes, sir.

What we can anticipate in San Antonio over the next 25-year period is about $1.7 billion available for congestion relief efforts. In San Antonio the state highway system is pretty extensive; we account for about 20 percent of all the roads and we carry about 65 percent of all the vehicle miles traveled in our area. Our MPO tells us that the system carries about 35 million vehicle miles per day and is projected to increase significantly as our population increases over the years.

When you look at the Texas Congestion Index, our MPO modeling efforts show that congestion has increased over the past years from a 1.14 index to a 1.21 index, and with the expected traditional $1.7 billion that we can apply to transportation, we'll continue to increase to a 1.47 index by 2030.

To reduce congestion to near 1995 levels -- which would be a good goal for us -- would take an estimated additional $8 billion infrastructure investment. That $8 billion figure was arrived at by calculating the equivalent lane miles needed to accommodate the increased population and traffic. In San Antonio we would need an additional 2,300-odd equivalent lane miles beyond what traditional funds would allow.

An equivalent lane mile for our calculation purposes is either an actual mile of travel lane or a light rail system or a bus rapid transit system or an ITS expansion or a freight rail or a demand reduction strategy or something else that equates to moving the demand carried by a lane mile of highway. We are not saying that we think we'll ever build an additional 2,300 lane miles of highway in San Antonio with the funding that we'll receive, but this is the way that we can use the urban models that we do have to estimate total mobility needs.

So once we have established our goal, looked at our congestion and established what we can expect through traditional funding, we need to start working on filling the gap. In San Antonio we are looking at our mobility plan with how we can use the new tools available to us to add some more equivalent lane miles. The Regional Mobility Authority of Bexar County petitioned for a 50-mile system of toll lane projects -- shown in green -- and may add some other logical segments in the future.

TxDOT, the MPO and the Regional Mobility Authority are working together to get started on this system with a 22-mile, $450 million initiative in a congested and fast-growing area of the city as shown here. Our approach is to add four new tolled express lanes within the congested Loop 1604 corridor and improve interchanges at I-10 and US 281, and add a new six-lane tolled expressway on the US 281 corridor. This is accomplished by moving the existing lanes out to function as they do today like frontage roads and then adding six new tolled express lanes between.

Using the tolls, Proposition 14 authority, some of the Texas Mobility Fund and some toll equity, we were able to move this initiative from a 20-year-plus phase in into construction starting in less than two years, saving over 24 years for some segments. If we had phased in the segments over the 20-plus year period, the projects would have cost us closer to $750 million rather than the $450 million we are planning.

MR. JOHNSON: David, I hate to interrupt. Would you go back and repeat the last three or four sentences?

MR. CASTEEL: Certainly.

MR. JOHNSON: I think that's so important.

MR. CASTEEL: Our plan with that segment we showed, that $450 million project on 1604, 281 and our interchanges, using tolls to help us fund the debt, using Proposition 14 authority to advance our existing dollars to today's dollars, using some of the Texas Mobility Fund that you're allocating to us, we were able to move the initiative of this $450 million project from a 20-plus-year phase in, as shown here, into construction in less than two years beginning, saving over 24 years for some of those segments. If we had phased these segments in over that 20-year period, the project would have cost closer to $750 million to construct due to inflation, rather than the $450 million we're projecting.

MR. NICHOLS: I hate to interrupt but I want to ask a quick question. It's an existing highway but you're not talking about tolling the existing capacity, you're talking about tolling the new capacity.

MR. CASTEEL: Yes, sir, we're only tolling -- the Bexar County Regional Mobility Authority petition did not allow us to toll any existing lanes under their petition.

MR. NICHOLS: Okay. So somebody who's not well informed on the issue might think that you're converting that highway into a toll road because it's still going to have the same highway number, but in effect, the existing capacity they're driving on without paying a toll, they'll still be able to drive on and they'll only be tolling on the new capacity and the rider gets the choice.

MR. CASTEEL: The rider gets the choice, as well as I would think those people on the non-tolled lanes would realize some benefit because some people would move over to the tolled lanes allowing them some more room to move.

MR. NICHOLS: Okay. Thank you.

MR. CASTEEL: The traditional funding plan for the San Antonio area would allow us to address less mobility needs in San Antonio than we can do with what we're showing. We could do less on fewer roads.

Shown here is what we could have done with the traditional funds; this is actually our 25-year plan from a year ago. That same section of Loop 1604 I talked about is shown on here; however, with the traditional funding plan we could only add two lanes rather than the needed four lanes, and that's true for many cases. Some of the very needed interchanges in our city that need to be worked on could not even be addressed with the traditional funding plan.

Our new 25-year plan, using the new tools and the new partners we have, we were able to add about $900 million more in investment in our area and add an additional 260-plus lane miles more than the traditional funding allowed, and we can take a more comprehensive approach addressing congestion sooner. With our first "fill the gap plan," we can move the congestion index from about 1.47 that we got with the $1.7 billion down to about a 1.39.

MR. HOUGHTON: So David, what bite did you take out of that $8 billion apple out into the future?

MR. CASTEEL: About $900 million.

MR. HOUGHTON: Almost a billion dollars.

MR. CASTEEL: Yes, about a billion, and that includes what I talked about with the TMF, the toll and the passage -- hopefully -- of an ATD, Advanced Transportation District, sales tax in our area.

We can start connecting to State Highway 130 and the Trans Texas Corridor by developing 1604 and helping relieve some of the traffic that has to go through town now and take them on around to 10 and out to the east quicker with this plan.

This is good to move from a 1.47 to a 1.39, but it also means we need to keep looking at ways to reduce congestion, most likely with some more highway projects and definitely with additional transit and probably some rail projects in the future as well. When you look at the infrastructure, with the new tools we are able to add more infrastructure sooner allowing infrastructure investments to more than double in the next few years over what traditional methods would have allowed.

To get to this point in our mobility plan, we have formed some great partnerships with the MPO and the RMA, and to keep reducing congestion to our goal, we will need to expand our circle of innovative partners to the transit and rail community as well.

Thank you.

MR. NICHOLS: I'd like to ask.

MR. WILLIAMSON: I need to do one thing, Robert. Senator Lindsay, I know you've got a plane. We would do this for Senator Barrientos, for Ms. Hamric -- if you wish to address or if you wish to wait until Gary lays out, it is your decision. I'm sorry it's taken this long. If you want to speak your piece, you can and catch your plane, or if you want to wait for Mr. Trietsch to lay out the Houston dilemma.

SENATOR LINDSAY: Let's let Gary go.

MR. WILLIAMSON: And if you don't mind, Mike, let's let Gary go ahead and kind of lay out the Houston situation.

MR. TRIETSCH: Thank you. For the record, I'm Gary Trietsch, district engineer.

MR. WILLIAMSON: Do you want to borrow my hard hat?

MR. TRIETSCH: No. I've got a hard head. But also for the record, I can't talk as fast as David talks.

One thing kind of concerned me. Commissioner Andrade, worried about your one-minute rush commute in Childress, I want to assure you that you will not have that when you come to Houston because all you have to do is ride down the elevator to the meeting room so we won't even get you out on the freeway that morning; that afternoon is a different story.

MS. ANDRADE: I was there yesterday and I saw that.

MR. TRIETSCH: Okay, good. But we're a pretty laid back group of people in Houston.

In one sense in the Houston area we've been working on the Metropolitan Mobility Plan for a number of years, and I'm not as high tech, but the handout you got earlier of the little newsletter kind of illustrates we're now 14 months into the reconstruction and widening of the Katy Freeway, and the reason I bring that up, primarily before we had House Bill 3588 and other things, we figured, we squirmed our way around the only way available to us at that point in time and we were able to bring Harris County Toll Road Authority in as a partner and what started out as managed lanes have become tolled lanes, HOT lanes, any number, but basically the four lanes that are in the middle of the Katy Freeway expansion, Harris County Toll Road Authority is putting $250 million into that effort.

So we're basically just past the one-year construction anniversary and we've let half of the work on this 23-mile segment and we'll have all of it under contract by March, and basically other than a few weekends that are kind of rough when we have some major beam hanging or something like that, most of the traffic works generally as well as before we went to work.

What House Bill 3588 and the additional tools has done for us in the Houston area has really made us focus and caused us to concentrate our efforts on funding in all the different scenarios, and I will tell you it has not been easy, primarily because there are so many options. We have been fortunate in that we have the Harris County Toll Road Authority to work with, but also now we have two other toll road authorities in the area: the Fort Bend County and Brazoria County. And it should be noted that Fort Bend County Toll Road Authority opens its first toll road come Monday; matter of fact, we'll have the ribbon-cutting tomorrow evening at 6:30 and if you want to come out, you can even drive golf balls down the freeway, so I've asked Steve, he might want to come back, it might be your only opportunity.

During this past year, though, we have been working with the MPO, the Houston-Galveston Area Council to develop an overall plan using the tools provided in House Bill 3588. Last month you approved a minute order that allows us to negotiate with Montgomery County on a series of projects using Pass Through Tolls. That's kind of exciting to us because I don't know anything about it, but we're going to learn.

As you may have seen in the paper, we've proposed both a toll conversion project on State 249 for the eight-mile freeway section already open to traffic -- and I might mention, we talked about acceleration; that eight miles took us 12 miles to do and we've got 42 more miles to build; you can do the math and figure out how long it will take us if we do it the old way -- and we are proposing that State Highway 99, Grand Parkway be tolled, and US 290 expansion has a major toll component within it. And we are working on the detailed schematics and environmental and working with Harris County Toll Road Authority to figure out who's going to do what on that one. But we also have many other roadways to investigate.

It is also not just roads that are a part of this plan. Harris County began a freight rail and commuter rail study last year. TxDOT will expand that study; Harris County only has jurisdiction within Harris County; it became very evident quite soon on that study is that the study needed to be expanded for a regional basis and TxDOT will take on that role to look at multiple counties, looking at all rail elements and how they will tie in with Metro's rail plan to see if we can get agreement by all parties on where we ought to be with rail in the next 100 years. And we're talking about moving freight rail lines, developing commuter rail and other elements, but it all has to fit together.

What it has taught us, in the last few years we looked at these corridors on a project basis and we look at a rail element and it doesn't exist -- and the Katy Freeway is a classic example. Metro didn't have anything planned, we didn't have anything, there was no plan, so obviously rail kind of went away. So there needs to be a grand rail plan, and as I tell everybody, it's a 100-year plan. It's going to be curious to see if we can get folks to agree to it, but we haven't been afraid to take on these things and with our partners, with HGAC we will begin that study shortly.

Obviously what it has taught us -- we already knew this but it's even more evident today -- when we really start looking at this -- and you've mentioned a number of these facts on financing; I won't repeat those -- but we have to look at every mode, every method of financing that we can find available, gather every partner that we can -- and I'm going to tell you, partnerships are great but sometimes they're a little bit of a burden also. When you're the only one responsible, you can make decisions faster; I think that's why small business is so efficient. Whether it's government or large business, the more people you get in, it does tend to take longer, but we cannot do this, TxDOT cannot do it, City of Houston cannot do it, Harris County, Metro, none of the individual agencies can do it without working together.

And finally, if congestion and air quality were not enough to worry about, we also need to do this work and develop this plan for our region to have a viable functioning evacuation system. One of the things you haven't heard today that's true, especially in the coastal areas, we have to have some of these routes if for no other reason than evacuation. I hope my tenure lasts long enough before the next big hurricane comes because it just blows my mind every time I go down to the coast and see all the development going on.

And I'd like to leave one thought with you, maybe a picture, but by 2025 -- we currently have about 5 million people in the region -- in 2025 which is only 20 years from now, we're going to have another 3 million people. You don't have to be a rocket scientist to figure out with what we're doing at the rate we're going, we're going to be in a heck of a shape if we don't figure out how to do something better. Thank you.

MR. JOHNSON: Can I ask Gary one question?

MR. WILLIAMSON: Sure.

MR. JOHNSON: Gary, David Casteel mentioned the time savings on just one project in Bexar County using a toll element to finance it. You and I have had a discussion about State Highway 99, and I'm going to put you on the spot here -- and I'm hesitant to do that but I think I need to hear what you have to say -- what in your estimation is the time savings by developing the Grand Parkway as a toll facility versus waiting on traditional funding to build the Grand Parkway?

MR. TRIETSCH: This is my guess, as I told Judge Willy, a couple of months ago Brazoria County was developing a bond program -- you know, I used to could tell you just by my experience how long these would take, and now with the new tools, I don't have a real good handle on that because I'm relearning again -- but based on the way we've done things, Grand Parkway, it's 152 miles, it would probably take 20 to 40 years to do. Obviously, we have some sections under construction, some already built, and we'd start others probably within the next couple of years, but to get the whole thing done, if something happened greatly, federal funds became much more abundant, if we did get 95 percent or something, we might be able to do it in 20 years, but I think it would be closer to 40 years to complete.

My guess is by going to toll, we could conceivably have those parts that are most needed on the northwest quadrant and the southwest quadrant probably open to traffic within four to five years from now. To have the total Grand Parkway constructed, I think we could be done in 15 years. Obviously on the east side the need is not quite as great and it would take a little longer. But basically, simple short answer, 40 years to change it to 15 years.

MR. JOHNSON: Thank you.

MR. HOUGHTON: Gary, David talked about the gap in the funding reaching a certain index. His was about $8 billion rounded. What's Houston's gap?

MR. TRIETSCH: Seventeen.

MR. HOUGHTON: 17 billion?

MR. TRIETSCH: Billion.

MR. WILLIAMSON: Gary, we have Senator Lindsay, Ms. Hamric and I think others and I think their focus might be on 249. Just so I understand completely where we are on not only 249 but many of the other pending plans across the state, right now we're trying to figure our what's supportable and what's planable; we're not making final decisions about what we're going to do. Is that the case?

MR. TRIETSCH: Absolutely, just a proposal, we've got a lot to look at. I don't even know if some things could be done physically, you know, whether there would be enough room.

MR. WILLIAMSON: We have, as I'm sure they have, received a lot of input from that part of the world, and a lot of it actually -- I want to cite a guy named Whitworth, whoever's district he's in over there, Steven Whitworth. He's a remarkably intelligent and articulate guy, writes a really good letter, and he gave us some reasons for why we need to think about doing it a different way.

But the point is, State Highway 249, the way we approach things is we say here's what we think we should do, now we let the public tell us what they think they can support or what they think is supportable. Correct?

MR. TRIETSCH: Correct.

MR. WILLIAMSON: Senator Lindsay, I apologize, it has taken a long time.

SENATOR LINDSAY: Does that mean I'm up?

MR. WILLIAMSON: Yes, sir. These are difficult times for the transportation world and sometimes it takes some time.

SENATOR LINDSAY: Well, and listen, I'm ready to stay as long as you'd like for me to stay, and I'm learning as we go, by the way, and listening to Gary and others talk, it's valuable to me to stay and listen -- which I will do.

But first of all, before I get into the subject on toll roads, I want to thank you for one thing in particular and comment about another. I want to thank you, first of all, about the money that you all saw to it that we got to do the enhancement program going into the airport on the Hardy Toll Road connector, a little less than $2 million you gave us a couple of years ago. We're going to dedicate that on September 3; we've planted 30,000 plants, crepe myrtles, you name it, we've got them out there. You need to drive that; it's going to be a colorful entry into the airport, it's going to be beautiful.

The other thing I'd like to comment on, Tuesday I attended a luncheon with the I-69 Coalition where Tom DeLay was making a luncheon talk, and of course, he's the majority leader of the House, he controls the agenda, he's on the Conference Committee for the Transportation Bill, but he emphatically said in front of this crowd and admitted in the newspaper that that bill won't come out without a 95 percent guarantee in it. Now, I didn't ask him because I didn't think about it until the presentation was made just a little bit ago, does that include the discretionary funds. So maybe we need to follow up here a little bit and find out more about what he's talking about there. But I did want to make that comment, and say that if we've got to follow up on those discretionary funds, we need to do it.

But on toll roads, needless to say, I've had a little bit of experience with them. I'm a strong believer in building toll roads and you've talked about it a little bit here today. I'm probably the strongest advocate that you can imagine for building toll roads in some form or fashion, but I think it needs to be left, in large part, to the local entity on how they do it, and I think House Bill 3588 made it so that that would be the case so that the local guys with the MPOs would develop some kind of program on what needs to be done locally and your job was to kind of give us the impetus to move forward -- which you've done.

And I think putting things on the table, Mr. Chairman, like you've done, and you commented earlier in your statements today, putting things on the table, even if they're controversial, is good and we need to discuss them. You know, just because they're on the table doesn't necessarily mean they're going to be done but we're going to get the public input, and certainly we've got the public input on 249, and I know also here in the Austin area with Senator Barrientos you've had a little input there as well. But I think that is great, it needs to be done. And we're going to listen to them and respond and I'm sure the first thing that's put on the table is not going to be the final thing that comes out at the end of the chute at the end of the day.

But let me give you a little history on how we started our Harris County Toll Road because I think there's a point here that I want to make by telling you how we got started. Back in 1982 we decided to do the toll roads. We took the project, with the legislation approved -- you were here at the time -- got the legislation approved, let Harris County indeed do their own toll road project because Texas Turnpike Authority was kind of dragging their feet and not doing what needed to be done on the two major projects we were talking about: the Beltway and Hardy Road.

So we decided what we needed to do was develop, after we talked to the rating agencies -- they weren't going to authorize any bonds or encourage any bonds to be sold there just on the come, you had to put up a credit enhancement, is what it amounted to, in order to be able to sell those bonds. Well, a credit enhancement in Harris County was a $900 million bond program that we the voters and the property taxpayers in Harris County were going to be asked to say: Yes, we will put up the credit of the county in that amount in order to guarantee the first sale of bonds.

It was a very controversial election in 1982, and September 19 -- I remember the date very well -- I remember all the things we went through, we had a lot of opposition, but we passed it, and then we sold those $900 million worth of bonds, built the project. We sold another $900 million worth of bonds to continue the project, and those bonds were not ad valorem tax backed bonds, those were first call on the revenue bonds, so the rating agencies would give us a good rating on those bonds as well.

Now, the point I'm driving to here is I think there's ways to enhance other local entities -- now, Harris County is in great shape now, as we all know; those projects are making money, Harris County is making a lot of money and they're able to do the 99, the Grand Parkway, and other things pretty much on their own without a lot of outside help. But the most important thing for a local entity to do is to get a reasonably good rating on their bonds, so we need to be innovative in how we help the San Antonios, the El Pasos, the Austins -- all of these other areas, Dallas-Fort Worth, how we enhance their ability to actually sell the bonds, and if there's ways to do that, we need to be innovative and work that. And I think that's really the program we need to be and should work on, and I'm sure during the legislative session we'll be working on that as time goes on in any way and every way we can.

Anyhow, that's kind of my story and I'm sticking to it.

(General laughter.)

SENATOR LINDSAY: But 99 was talked about by Gary; I've talked to a couple of you about that already. I've talked to more of you on that about how I think we can get this done, and I truly believe we can have the segment between Interstate 10 and US 59, 58 miles, done in no more than five years if we get with it, I really do.

MR. NICHOLS: I have a question.

MR. WILLIAMSON: The members are aware that Senator Lindsay is among the -- like Senator Barrientos -- one of the warriors for transportation, and we appreciate all your leadership over the years, Senator/Judge.

The floor is yours, members. Please.

MR. HOUGHTON: Senator, you said they're making a lot of money. How much money is the Harris County Toll Authority making?

SENATOR LINDSAY: Well, I believe last year's net profit was around $50 million after all expenses. They have a large amount of money in the bank; a lot of it is debt reserve funds and has to be in the bank, but they've got a sizable amount of money. They contributed, as mentioned earlier, $250 million towards the construction of the Katy Highway expansion. Of course, they'll get that money back with tolls that they'll place on those interior lanes. I'm very confident that will be very successful.

MR. HOUGHTON: Tremendous.

MR. NICHOLS: Just for clarification for people in the audience, when you were referring to credit enhancement for bonds and bond issuance and stuff like that, you were referring to bonds for toll roads.

SENATOR LINDSAY: Yes, I am.

MR. NICHOLS: The bonds for the actual construction of toll roads.

SENATOR LINDSAY: Yes.

MR. NICHOLS: I don't know that that was clear to everybody; I think we understood it.

SENATOR LINDSAY: That's all I'm talking about is toll roads right now.

MR. NICHOLS: So there really was a lot of controversy in Houston when that first came up.

SENATOR LINDSAY: There was, very contested. I spent four months speaking at least four or five times a day at different organizations around town.

MR. NICHOLS: I was at a number of different functions in Houston over the last number of years, obviously since construction of the major toll roads, and the attitude of the people that I've talked with and in pretty large audiences was what in the world would you have done for transportation if that system had not been built. So it was very visionary and I don't know what you would have done, but you've got a major amount of traffic flowing on those lanes now.

SENATOR LINDSAY: They had to raise the tolls to try to get a few people off of it.

(General laughter.)

MR. HOUGHTON: Senator, I was in Houston yesterday visiting with your Harris County Toll Authority and I heard the success that they've had over the years, but I also went into your tag stores and I saw the many people that were in line to buy the tags, I stood by a toll booth and saw all the cars that were in line to pay and the cars that speeded through when they had a toll tag, and saw that on the access roads that were available that you still had more people on the toll roads than you did on the access lanes. But I think that what you've done with Houston, that's a normal way of life.

SENATOR LINDSAY: That's true and I think that's the case. People get used to it after a while and they say, Okay, a few dollars a month is worth it to get on that thing and speed through -- especially if you have an EZ Tag where you can go through speedily.

MR. HOUGHTON: And I asked about had there been any controversy when West Park was built, and they said no, to Houston another toll road is just another toll road.

SENATOR LINDSAY: Right.

MR. HOUGHTON: And so I got the privilege to drive on it and it was great.

SENATOR LINDSAY: Once people get used to it, I think it's easy to sell, but that first sale is a hard sell.

MR. HOUGHTON: Thank you very much for your vision.

SENATOR LINDSAY: Thank you.

MR. WILLIAMSON: Go ahead, John.

MR. JOHNSON: Senator/Judge, I'm going to go on the record, clearly you're the father of the toll road system in Harris County, and as has been mentioned by my colleagues, it's very successful. Without it, who knows how bad the congestion would be, and they're invested back in the community. West Park is a splendid example that will continue to build that to the west and join up with the Fort Bend Toll Road, and they have other projects coming forward, and they're utilizing the cash flow after debt service, after maintenance to reinvest in the community, and without them we would really be in dire straits in terms of congestion.

SENATOR LINDSAY: I might have left with some people -- the wrong impression on one item, as I think back on what I said, and let me clarify one thing just to make sure I didn't leave that bad impression. When I said tax backed bonds, it's true we sold those bonds and used that money to build the roads but we never assessed a tax, an ad valorem tax for the payment of those bonds. The money that paid those bonds back was always revenue generated from the project itself. So although we had the authorization to impose an ad valorem tax for those bonds, we never did it. I just want to make sure I didn't leave a bad impression there somewhere.

MR. JOHNSON: Well, I guess the end of my points are I'm deeply appreciative as a citizen of Harris County for what you've fathered in our toll road system, and as a member of this commission, I'm as appreciative of your leadership on transportation issues here that I know will continue well into the future.

SENATOR LINDSAY: Thank you.

MR. WILLIAMSON: Thank you, Judge/Senator, and if you do hang around, maybe if something comes up, we'll ask you to come back and comment again.

Ms. Hamric, another warrior for transportation, and we appreciate it.

MS. HAMRIC: Good morning, Commissioners and Mr. Chairman. My senator failed to tell you that he was county judge in Harris County for 20 years and when he came up with the toll road idea, I'm sure he probably remembers it was referred to as Lindsay's Folly for a long time until everyone in Harris County decided that it was a good idea, and certainly the Beltway 8 and the Hardy Toll Road have been responsible for a lot of the economic development up in the north part of the county because literally before the toll road opened, it was like taking a pig trail to get down to the west side of town from up where I live in the 1960 area, and as a lot of you know, I've always been very grateful for that beltway.

For the record, my name is Peggy Hamric and I'm the state representative in District 126 which is in northwest Harris County, and today I'm really here -- obviously as a member of the Transportation Committee, I care about all transportation projects throughout the state of Texas, but today I will limit my comments to testimony concerning the proposed toll conversion of State Highway 249 between Beltway 8 and Spring-Cypress which is in my legislative district.

As a member of the Appropriations Subcommittee on General Government, on June 16, Commissioner Nichols and Mr. Behrens will remember, that I commented that I had some concerns that I'd heard about this conversion in that particular area. Now, that was prior to the two public meetings. Had I known then what I know now, I would have been probably a little more hearty in my comments that day about what I expected to happen.

At the public hearing in my district on August 5, I did oppose the conversion of State Highway 249, that conversion portion between the Beltway and Spring-Cypress, due in large part to the years of construction the citizens and businesses in the area have already endured: first, several widenings of FM 1960; second, construction of State Highway 249; and third, the construction of the underpass at the intersection of 1960 and 249.

People unfamiliar with the area that I represent often laugh when I tell them that I'm served by a seven-lane farm to market road through my district, but FM 1960 dissects the legislative district that I represent and 249 certainly is a big part of that area.

Traffic on FM 1960 has become so congested that 249 has now become the major artery to the businesses and the residences in my area. The FM 1960/State Highway 249/Willowbrook area is the economic driver for a several mile radius throughout the area. The Willowbrook Mall area that is at that intersection a few years ago was considered the second busiest mall after the Galleria in the Harris County area, so that tells you that business has been brisk and good. And I believe that tolling or construction on 249 would likely dissuade patronage, thus equating to dollars and jobs and business that might be lost in that area.

After years of construction and congestion and headaches, this area, I believe, simply cannot afford another hindrance to our economic stability. Some of you may recall that that was also the home of Compaq Computer which was probably one of the reasons that we wanted 249 improved years ago, and when Compaq moved, certainly Hewlett Packard bought them, but we did lose several thousand employees with that.

So as a small business owner myself, forced to endure years of construction on Highway 59 with my business in Deerbrook Mall, I can empathize with businesses feeling the economic strain resulting from limited access or economic deterrence. I believe toll conversions do have merit in the state of Texas but I don't believe that this particular conversion is probably one that I would recommend. In addition, I question the need to convert the completed portion of State Highway 249 to a toll facility in order to subsidize new construction of a tollway that is adamantly opposed by the people that we would be hoping to pay for it.

In filing House Bill 3545, amending House Bill 3588 and ultimately voting in favor of House Bill 3588, it was always my intention that all toll conversion proposals would be deliberated with the context of public good, public support, with some pragmatism thrown in there also. I have advocated to some of my constituents and some of my locally elected officials that designated toll lanes or HOT lanes may be a compromise sufficient enough to lessen economic impact concerns while at the same time giving TxDOT the flexibility and funding that it needs to fulfill its mission.

A number of community leaders in the area stand ready to discuss the conversion and the tolling with the commission, or with certainly you, Mr. Chairman -- you've offered to come into the district. I believe once the commission understands the community's history of exasperating congestion and construction, you will agree that conversion of State Highway 249 from Beltway 8 to Spring-Cypress to a toll-only facility is not a long-term answer to completing the entire State Highway 249 corridor.

And that does complete my remarks, and certainly I have always been an advocate of tolling and certainly relieving congestion, but no one was more surprised than I when this proposal was made, particularly in that area because it is the economic driver in my area; it is the retail destination. So I do have some concerns that anything that would prevent people from getting there to do business -- like I said, I have had personal experience with that when 59 was built and my business certainly suffered, as well as all the businesses in that mall, because you couldn't get there.

MR. WILLIAMSON: Well, we certainly, as I said at the outset of the meeting, we take very seriously all comments and all pragmatic suggestions from House and Senate members.

MS. HAMRIC: I know you do, Mr. Chairman, and having served with you in the Texas House, I know you're a very thoughtful person about proposals and I know that all of the commission will listen to what we have to say. And your having served in the House, you know we do have to respond to the wishes of our constituents.

MR. WILLIAMSON: You've got about 160,000 people out there.

MS. HAMRIC: That's who we represent.

MR. WILLIAMSON: In the Senator's case, I guess about 500,000.

MS. HAMRIC: He's got about probably 700,000.

MR. WILLIAMSON: Well, we've tried to approach this -- and we have individual opinions and commission opinions -- we've tried to approach this, as we have to tell our district engineers, we have to be as aggressive as we can because of the facts and figures we've laid out for everybody.

MS. HAMRIC: Absolutely.

MR. WILLIAMSON: I mean, the state, without leadership -- and my roommate Cliff Johnson, former colleague, and known to all here said something to me the other night -- that he reminded me of something. He said, You know, some things are worth fighting for, some things are worth defending, some things are worth advocating. We spent a lot of time and energy on things that don't matter, but some things matter, and if the leadership of the state doesn't do something about the transportation infrastructure now and for tomorrow and for next week, it will fall upon our heads as it has in every other industrial state and we'll spend decades digging back out from underneath the problems.

I think that's all we're trying to do is advocate for today, tomorrow and next week, and figure out what works.

MS. HAMRIC: Absolutely, and I certainly understand that, and on Monday the House Transportation Committee had the Florida Department of Transportation as well as their tolling authority give a presentation, and they have all the same problems that we do, and so this is not just a Texas problem, this is something that's going on all across the country because Florida, like Texas, is a donor state as far as the federal taxes are concerned.

Thank you very much for that presentation for those questions because I think you brought out a very good point. Our congressional leadership has been using that 90-cent number in a lot of articles recently which has made it very difficult for all of us who understood it was somewhere between 84-88 cents to understand exactly where this was coming from, and we thought perhaps there was a surprise we didn't know about that we were getting all this money. So I'm glad you did clarify that.

MR. WILLIAMSON: Members, questions for Ms. Hamric?

MR. NICHOLS: I just wanted to thank you very much for all the work that you have done on transportation. I think as you came up, Johnny said that -- or maybe it was the Chair that said you have been a warhorse for transportation, and we do appreciate it.

MS. HAMRIC: Well, you know, my few years in the legislature. I want to say there's two wonderful young women that you honored earlier this morning spent 20 and 30 years with the department. Obviously it doesn't do the wear and tear the legislature does on life, and so I had to think about that, but I was so happy that you did honor them because they are a fine example of the kind of people that we have working throughout the department for the people in this state, and so I'm happy that we did have guests here today to see the kind of -- it's not just the commission, it's not just the elected officials, but we have fine staff backing us up on all of this, and so I was glad you honored those two young women. But like I say, I think you did abuse the child labor laws a few times.

(General laughter.)

MR. WILLIAMSON: We appreciate your taking the time to offer your comments.

MS. HAMRIC: Thank you very much and I appreciate you allowing me to be here this morning. As always, always happy to work with you on projects and hopefully we can work these things out where everyone wins.

MR. WILLIAMSON: We shall pay very close attention to what you've had to say.

MS. HAMRIC: Thank you, Mr. Chairman and members.

MR. WILLIAMSON: Mr. Van Arsdale? I need to announce that as soon as we've got through -- I understand that Mr. Van Arsdale is going to compliment us roundly for our approach in this matter, and as soon as we get done with that, we are going to take up matter 8(a), the Strategic Priority Funds for Bell County, and we're going to hear from Congressman Carter, and that won't take but a few minutes and then we'll return to the Metropolitan Mobility Plan.

Corbin Van Arsdale. I didn't serve with you.

MR. VAN ARSDALE: No, you did not.

MR. WILLIAMSON: You sent a remarkable letter and I want to thank you. The urge to lash out, the urge to jump off the cliff to prove yourself to your constituents is sometimes overpowering and you resisted that. You sent a very thoughtful, but to the point, letter: I don't want this; I understand the problems you guys face; I want to help you get there. And we appreciate it; it was a very thoughtful way to approach it.

MR. VAN ARSDALE: Thank you, Mr. Chairman.

For the record, I'm Corbin Van Arsdale, state representative for District 130 which is northwest Harris County; Highway 249 and Highway 290 both cut through my district. And I want to echo a lot of the comments made by Senator Lindsay and Representative Hamric without repeating any of them and wasting time. I'm here to talk about toll conversion.

I'm a big proponent of tollways, just like Senator Lindsay and Representative Hamric. The conversion nature is kind of what I want to talk about today and I think it's kind of a dual nature problem: one of them is strictly public perception and the disconnect there that's taking place; second, there are some policy problems, but these are all fixable, and I want to emphasize that.

There's three things I'm kind of getting from my constituents. One is that people don't want to pay for roads twice. Now, we all know in this room that that's not what the toll conversion is doing, it's not repaying for a road that's already paid for, but that is one of the things I get from my constituents. I don't have as many e-mails as are on this dolly back here, but I've gotten over a thousand letters, e-mails, et cetera. Even though I'm a freshman -- and it's hard for me to think that I still have four months left as a freshman because it seems like I've been a freshman for six years -- but I am a freshman, but before I was elected I was very involved in politics, campaigning, policy, and I've never seen the kind of heat generated from this toll conversion plan as it exists in Harris County. I mean, I've had three like physical threats on this issue.

But again, the three themes I'm getting from people: one, they don't want to pay for roads twice -- well, we know that's not really what's going on; second, they don't want to pay a toll for a road that's going to be built somewhere else that they're not going to use; and third, they don't want to pay a toll to use a road that right now they're using free of charge. But on the third one, I want to emphasize that the more I've talked with the folks, they're willing to make an exception to that one; they're willing to pay for a road that they are currently using for free if that's going to expedite construction of a new road that they really want badly, and they're willing to do that.

But the key components of that construction is: number one, it has to be a highly visible benefit to them, and number two, that benefit has to accrue to them. I mean, they're not willing to go pay money now to use a free road to benefit someone else, and they need to see that. A lot of Texans know we've been building roads in Connecticut and New York; it's funny that they don't get as angry about that as they do about building roads two counties over, but that's the way these toll conversions have ended up.

MR. NICHOLS: That's very well put.

MR. VAN ARSDALE: A lot of urban areas -- and I'm from an urban area -- we've been subsidizing roads in other states, we've been subsidizing roads in rural areas of Texas, and I haven't had people threaten me about that, I haven't had people write 900 e-mails, but the second you say you're going to put a toll booth up and build a road one county over, they go ballistic. I actually think it's more targeted and it's probably a better subsidy, but when you do the toll conversion, the subsidy becomes so visible and so clear-cut that it sends people into orbit.

Basically I think some of the problems are, number one, the predicate, for example, that you have laid, the department has laid here this morning to this room of I guess 120 people or so, that predicate has not been laid to the thousands of people in some of the urban areas, and if they knew some of that and when I tell them some of the things that were said here -- and the legislators tend to know a lot of these numbers and how the federal government works in terms of the redistribution, but the people don't understand the crisis that we're in. And I don't know if that's because the media is not handling it right or maybe editorials aren't getting written into the papers in the urban areas, but this is a big problem, and as you know, traditional funding is not going to fix it.

The other thing is just the whole semantics of conversion. I mean, for example, down in Harris County the proposal came across like we're going to convert eight miles of Highway 249 into tolled. Well, people don't really care what piece of pavement you're converting into a toll, they just care where is the toll booth, do I have to go through the toll booth, and how much do I have to pay to go through the toll booth. I don't think people would really care if you converted eight miles of Highway 249 and put up toll booths everywhere and charged one cent as a toll, I really don't think they would care too much, but when you start talking about dedicated pavement, that's a different issue than just sticking up a toll booth.

For example, I have some constituents in Tomball who really want this Tomball bypass around Tomball, and they would be hollering and yelling because they had visions of toll booths on every ramp between Beltway 8 and Spring-Cypress. The second you asked them what if all TxDOT is really meaning is one line of toll booths north of Spring-Cypress on an existing highway to fund the bypass, then all of a sudden they're okay, they like that idea. So I think it has to do with what they envision the conversion. Maybe one of the solutions is to maybe fix some of the semantics of what 3588 does.

And lastly, the local control issue might be something that has to be fixed. As you know, having worked in the legislature, Harris County is a weird creature. I heard the local control argument and I've used that with people, but it just doesn't work as well in Harris as in the other counties because, as you know, Harris County is one of the biggest counties in the country, it's bigger than a lot of states, and because of that and because of the fact that much of it is unincorporated -- I mean, I love telling my friends from Dallas in the legislature, you know, we have more people out of cities, in unincorporated, than you have in your city -- we have millions of people in Harris County that have no city government. For people from other areas of the state, that's hard for them to grasp. I mean, we have no city government, no ordinances.

A constituent called me a couple of months ago and he didn't like the speed limit on his road in his neighborhood in his subdivision and he wanted to know who the mayor of Cypress was, and I had to tell him there is no mayor of Cypress because we don't have mayors out here.

But anyway, I think the fact that we have a 4 million-plus-whatever county that's unincorporated, that when it gets down to these local decisions, whereas maybe in Austin or in San Antonio you have maybe a state rep with 150,000 constituents and that state rep is on the MPO, in Harris County you've got a county commissioner that has one million constituents. And so the local control element kind of evaporates really when you don't have people like city council members with districts or state reps with districts who are close to the people. I mean, state reps, city council members, usually they know where you live, your constituents, but county commissioners, you have one million people, you do insulate yourselves from some of the pulse of the public.

So that's all I wanted to share with you. I have publicly expressed my opposition to putting toll booths between Beltway 8 and Spring-Cypress to fund any construction in Montgomery or Grimes counties, but I think there are construction projects -- and maybe it's just a matter of cutting one big project into three projects, I don't know, but I just think that when people see a highly visible subsidy and they can see their money is going somewhere else, I think they've learned to live with these subsidies on transportation and I think people are just tired of it in the urban areas. Thanks.

MR. WILLIAMSON: Well, again, we appreciate your thoughtful words, and your words today are as thoughtful as the letter you sent. I'm not kidding you, I'm not blowing smoke. That was a really well put letter; you were very thoughtful in your analysis.

The dilemma that we face, as you saw in the earlier presentation for a reason, sometimes I read in the free press and sometimes I see on free television and sometimes I hear on the free phone and witness on the not so free internet a lot of what I consider to be erroneous information, in some cases outright misrepresentation of facts, and I think we at the commission don't ever want to be accused of whining. This commission doesn't want to whine, it doesn't want to beg you, the legislature; we know that you, Senator Barrientos, will do what you can; we don't want to be put in the position of putting House and Senate members feeling uncomfortable about what we think are the problems.

I think the governor understands, probably more than any governor in the history of this state, how bad it is and he was willing to stick his neck out and say these are the things I think we need to do; he appointed people to this commission who will carry that vision out. That vision doesn't include, as some have said, cramming it down their throats; that vision includes giving people options and opportunity to improve their transportation system without increasing general taxes to a level that's intolerable for the working person.

I have engaged in a few tax debates in my time, and it's the damndest thing; sales tax is the most unfair, most regressive tax we can level on a working person in Travis County but the gasoline tax isn't. And you explain that to me, Glenn Gadbois, explain to me how a ten-cent gasoline tax isn't the worst tax you can put on a man or a woman earning minimum wage plus a buck. Because they've got to buy the gasoline, they haven't got any choice about that. We don't tax food, we tax gasoline, but suddenly some at the elected level, at the state level advocate raising taxes over market options to solve the problem. I don't comprehend it myself.

You were very rational in your approach, and we don't know you well enough to tell you that you're a warrior yet, but we know that Ms. Hamric, we know that the Senator are. We hope you are a warrior some day but you are a very nice guy.

MR. VAN ARSDALE: But I just want to make it clear I'm a big supporter of user pay, I think that's the way we have to do it, and I can't speak for other legislators but I'm perfectly willing to lose my job fighting for a good idea. I don't think that's a reason why you avoid being unelected, I really don't. But I just want to be sure it's a good idea.

MR. WILLIAMSON: Members, this House member is available to you.

MR. NICHOLS: I was going to say you articulated what I think are some very good points about identifying where the revenue is going to go and making sure that those who are paying that toll understand that's where it goes and it does benefit them. We probably have not done a good enough job on the education side and some of the other points you made, and I appreciate you bringing those up and being here.

MR. VAN ARSDALE: Thank you. I attended the second public hearing that Representative Hamric was speaking of and prior to that hearing we had received dozens and dozens of calls every day, and at the outset of the hearing I got up, and of course, we were all booed, and I laid out a bunch of these predicates, and since that hearing we've received no more than probably five calls a day. That's not to say they agree with what's going on, let's just say they had a little better handle on what was going on in terms of policy.

MR. WILLIAMSON: Ted?

MR. HOUGHTON: Well, I piggyback what Commissioner Nichols has talked about, education, but the art of communication in Harris County and those areas reaches new levels because of some of the unincorporated areas and the representation, but we all could probably communicate a little better as to what the intentions are, and wish we could take all this on the road and show people the issues.

MR. WILLIAMSON: The best we can do is hope that Lucas wrote down every word of it and puts it on the front page of the Houston newspaper.

(General laughter.)

MR. JOHNSON: One question. You know, I asked Gary Trietsch about the timing difference on State Highway 99. Is it important to your constituents -- let's talk about the bypass and then farther to the west construction -- is it important to them the time that it takes to get those projects done? I assume the answer is yes.

MR. VAN ARSDALE: Absolutely, and in fact, I think it's probably not as important to them as it ought to be. I think it's very important to them; I just don't think they appreciate the timetables when you're talking about traditional revenue

MR. JOHNSON: In my experience on the commission -- and it's not quite as long as Commissioner Nichols' -- there have been twice delegations from the Tomball area that have come and talked about the needs of the community and the surrounding areas, and I know the bypass is the centerpiece of it. And it occurs to me -- and I've tried to drive this point home with the questions that I've asked -- that the time to do these projects seems to not be present in the consideration of whether we're going to toll a facility or not.

In the year 2000 when I was chair, we had what I would call a Blue Ribbon Task Force group to come up with meaningful and measurable goals that the commission and the department ought to utilize, and they're pretty commonsensical in terms of the broad categorizations. There's mobility/congestion, safety -- without safety, a lot of this discussion is pretty moot, preservation of the system, and project delivery. And if you tie all those together, and as I say, if you make an "A" in every one of those courses, economic vitality is going to come arm in arm with the results. But project delivery is very crucial and sometimes we lose sight that we have to do things to speed these things up. And you know, it's a user pay; if we want this thing done faster, this particular project, we're going to have to figure out another way to pay for it than waiting on the traditional sources which are federal and state.

MR. WILLIAMSON: The federal road fairy.

MR. JOHNSON: Which we don't get dollar for dollar participation in, and yet I think if you look at any toll system around the state, you take out administrative costs which might be 1 or 2 percent, 98 percent of what they generate goes back into the system, and that's why the Harris County system, I think, is so successful.

I bring these things up and I'm probably overstating the point, but I think time considerations sometimes are lost in the discussion and I think they need to be emphasized.

MR. VAN ARSDALE: Absolutely. I don't even think the average taxpayer views project delivery as a separate category. I think because they don't see it, it's kind of a subgroup of the congestion category. Congestion is the biggest thing in urban areas that drives it and what people don't realize is they don't understand the traditional funding, traditional timing, and that all ties into what it's going to look like five years from now.

And that's what I've asked people: if you don't put a toll booth across 249 and use that to fund some sort of bypass construction, what's congestion going to look like ten years from now without a road. I mean, project delivery is sort of a subset of congestion, as viewed by the taxpayer.

MR. JOHNSON: Well, certainly it facilitates our ability, hopefully, to deal with the congestion issues that we face, and as we talked about the study, we've been spinning our wheels at best in dealing with congestion because we're short resources.

But to make a long story short, I appreciate your understanding and your grasp of all this; I think it's incredible for a one-year eight-month man across the street to have such a deep knowledge.

MR. VAN ARSDALE: When the speaker handed out the cards, I signed Transportation Committee as my number one choice, but being a freshman, he stuck me on insurance -- which, you know, with the homeowners' insurance, I'd rather have been on transportation. Thank you.

(General laughter.)

MR. WILLIAMSON: Thank you very much.

Members, we are going to shift gears for a moment. We have a guest of the federal government with us and we try to make allowances where we can, and this particular person has been instrumental in encouraging the decisions that are going to bring some jobs to our state, so at this time, Mike, I would turn it over to you for item 8(a).

MR. BEHRENS: Thank you, Mr. Chairman.

We're going to lay out agenda item 8(a) which is under Transportation Planning and this concerns an item in Bell and Coryell Counties dealing with Fort Hood. There's expanded operations that are going to be coming to Fort Hood and we're going to recommend some transportation improvements in that area, and Jim Randall will lay that out for us.

MR. RANDALL: Good morning, commissioners. Jim Randall, Planning and Programming Division.

Item 8(a), this minute order authorizes CONSTRUCT authority for various roadway projects associated with the Fort Hood Military Reservation in Bell and Coryell Counties at a cost totaling $20-1/2 billion to be funded in Category 12 Strategic Priority of the 2004 Statewide Mobility Program.

In an effort to support expanding military operations at Fort Hood, Governor Rick Perry recently made a commitment to begin the process for building new roads and other infrastructure in this area. The projects as shown in Exhibit A include the extension of State Highway 195 from FM 439 to Central Drive, an interchange project at State Highway 201 and Mohawk Drive, an overpass project at US 190, and the widening of Tank Destroyer Boulevard.

These roadway improvements are needed in order to safely accommodate the anticipated traffic increase that will occur as a result of the expanded post operations. These projects would also improve mobility and will create additional access to the post by both military and civilian personnel.

Staff recommends approval of this minute order.

MR. WILLIAMSON: Members, we have the great pleasure of sharing part of our morning with Congressman John Carter, and we'll reserve the right to ask Jim some questions about the proposals, but at this time I would like to recognize Congressman Carter. What an education you've had this morning.

CONGRESSMAN CARTER: I needed to be here, I'll tell you; we need to hear these things. I was very impressed, first off, with everything that's been done so far. The district I represent goes from Houston to Austin, the new district goes from Austin to Stephenville, and I've got kind of a big "L" through the center of the state, and all these problems seem to fall in my district someplace, either the one that I'm going to try to represent or the one that I presently represent.

I'm here about Fort Hood because, as I think you know and I think everybody in this state knows -- but if they don't, they need to know -- we are sitting with the Crown Jewel of the entire Defense Department system in Texas at Fort Hood. It is the number one Army post in the world; it holds over two divisions of troops, and there's a very good possibility a third division of troops will be brought in when we bring the troop deployment back from Europe and overseas. Two divisions of those adopted Texans have responded to the call of the war on terrorism within the last 18 months, and one of those divisions is the one that captured the "bad guy." So we have got patriots doing patriots' work in the most shining example of a great military base in the history of the world.

And the governor is courageous to step forward, when you've got all these problems -- and I recognize that the people of this state have mobility problems, we have a lot of issues; I've been to these town hall meetings, I've held them in Houston, I've held them in this area, I've held them in Washington, and I know what the whole state looks like and you've got a lot of these big dogs that need help, and I understand that, and to be courageous enough to say yes, the national security of this country requires that we take care of the Fort Hood area so that we can rapidly deploy troops.

I don't know if you know this or not, but Fort Hood holds the record for rapid deployment of troops in the United States. They set the record during the last war and they broke the record during this war, and the kind of people that are out there, they will continue to set that standard because in the world we live in we need to be rapidly able to move to meet crises, and Texas is full of heroes and those heroes meet the call. The governor made the call by making this proposal to say even though we've got lots of needs, we've got to make sure we protect our nation and this is part of our nation's protection. You are heroes to meet that call, and we need this.

And it's not being overly dramatic. I went to Iraq in February and I'm telling you, that's some great, great human beings over there in that 140-degree temperature with armored vests fighting for freedom, and we in Texas have always stood by those people and I think we will again. So I'm encouraging you to approve this proposal from Fort Hood. It will ultimately not only be, in my opinion, part of a solution for rapid deployment of troops but also a solution for that evacuation of the Gulf Coast area that could be headed our way in future plans on homeland security. So it's part of a big picture that makes good sense.

That's it. I'm just here to say thanks for taking it up, I hope you'll vote for it, and thank you in advance for voting for it.

MR. WILLIAMSON: Members?

CONGRESSMAN CARTER: And I will answer the question. It's 95 cents of every dollar that goes to Washington, that's what we signed.

MR. WILLIAMSON: That's the guy we're looking for.

(General laughter.)

MR. HOUGHTON: Congressman, some would question Crown Jewel of the state of Texas at Fort Hood.

CONGRESSMAN CARTER: Military post.

MR. HOUGHTON: Some in far west Texas would question.

MR. WILLIAMSON: One of the crown jewels.

CONGRESSMAN CARTER: Check the numbers. They do a great job out there, most of the time through us.

(General laughter.)

MR. HOUGHTON: Congratulations.

CONGRESSMAN CARTER: Thank you.

MR. WILLIAMSON: Thank you for your patience today, and we've had several elected officials who have been very patient and you've been one of them, and I appreciate it.

CONGRESSMAN CARTER: And I tell you, this is tough work you're having to do. I've been sitting in on these transportation issues in Washington and I know what we've got here in Texas, and I want to commend you for thinking outside the box, looking at new alternatives. I think you have some solutions that people in the rest of the state are looking down to Texas and saying: Look what they're doing down there on I-10; could we do something like that? There's a lot of stuff going on that you are becoming an example for of how to build a Cadillac with Ford parts.

MR. WILLIAMSON: Well, you're kind to say that. We have a favorite saying around here, Congressman, there's no road fairy, nobody is going to come from Washington, D.C., and sprinkle money on us and solve our problems.

CONGRESSMAN CARTER: I wish we could but we're not.

MR. WILLIAMSON: And the soft glove of the hollow promise from other elected statewide officials who just think there's some kind of magic solution out there doesn't fit here. We understand that we've got to reach down and pick ourselves up and solve our problems ourselves.

MR. HOUGHTON: Being from the other Crown Jewel of the state of Texas, I move to approve.

MR. NICHOLS: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of approving this item 8(a), please signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries; Fort Hood is on the way. Thank you, Congressman.

CONGRESSMAN CARTER: Thank you.

MR. JOHNSON: Could I ask Jim a couple of questions?

MR. WILLIAMSON: Please.

MR. JOHNSON: On this particular item, 195, I know in our long-range plan we have 195, I believe, to be four-lane divided all the way from Fort Hood to Interstate 35.

MR. RANDALL: Yes, sir.

MR. JOHNSON: How much is left undone after this?

MR. RANDALL: I'm going to have to go back and check on that, sir.

MR. JOHNSON: Would you get that answer?

MR. RANDALL: I'll get back with you on that.

MR. JOHNSON: Are you on the agenda any time after this?

MR. RANDALL: Yes, sir.

MR. WILLIAMSON: He'll be back.

MR. JOHNSON: I'll save my other.

MR. WILLIAMSON: We're going to return to our Metro Mobility Plan discussion now, and we're going to say once again to the remaining House members and senator how much we appreciate your patience; it's been a long morning.

I think that if it's okay with you, Mike, we'll ask Jack Stick's favorite person, Bob Daigh, to come up and lay out the Austin discussion. The way we started this out was David laid out the statewide plan, then he laid out San Antonio, and Gary laid out what they've done in Houston, and now you'll be laying out what you're doing here in Austin.

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

Before I go any farther, let me take a moment to commend Senator Barrientos, Mike Aulick and his staff for the leadership in putting this plan together in a very short time frame. There was an awful lot of work in a very short time frame that had to occur and a lot of coordination with all the other MPOs, and I think they did an outstanding job of pulling this together. So Senator and Mike, thank you very much.

MR. WILLIAMSON: Thank both of those gentlemen.

MR. DAIGH: In Austin, similar to Houston and San Antonio and the other regions of the state, obviously we have a current congestion problem and if we do not do anything about it, it is going to get much, much worse. The no-build scenario which is essentially finishing the contracts we have right now will result in a TCI going from 1.22 to 2.14; if we assume the statewide level that you remove all of the gridlock in the city, we end up with a TCI of 1.14. That is the goal. To do that, similar to the other metropolitan areas, we will need additional lane mile equivalents, in this case well over 1,100 additional lane mile equivalents. As was stressed by the previous speakers, this does not mean all lane miles are highways, but for different modes.

The cost of these improvements, when you also include some other reconstruction dollars, is as much as $27 billion; our gap is approaching the $15- to $18 billion range.

To address the mobility situation, Austin is a multimodal oriented area; we are looking towards transit, we are looking towards managed lanes; we are looking towards improving our operations through extensive ITS networks to manage our signals and have better incident management; and of course, we are also including bicycles not only for recreational purposes but we're trying to encourage non four-wheel rubber tire commuters if at all possible; and then of course, we do have traditional additions in freeway lanes and in toll lanes.

An early jump has been accomplished by the local community by the adoption in July of the Austin Area Toll Road Plan. This picture here depicts in dark green the facilities that were previously adopted by the area and placed under construction: Loop 1, State Highway 45, and the northern 49 miles of State Highway 130. The blue-purple lines indicate projects that we will move forward with under the new plan; the orange lines indicate connector facilities and new facilities that we will also proceed with as turnpikes under the plan. And I'd like to point out that the dark blue and purple for Loop 360 is in the plan to be considered as a candidate turnpike if and when that project is constructed. It was removed from the immediate construction category based on public comments that we had heard, but it is still in the long-range plan as a turnpike.

With that, I'll be happy to answer any questions you may have.

MR. NICHOLS: I'm sure the Chair will have some questions as soon as he returns. One of the questions I had was I noticed on the chart on each of those categories on the toll roads you said "Toll new capacity."

MR. DAIGH: Yes.

MR. NICHOLS: Under no circumstances in the plan did you consider what they were talking about earlier in Tomball, Texas where you took existing lanes that people are driving on to put up toll booths?

MR. DAIGH: Under the plan that was proposed by the CTRMA and TxDOT and approved by CAMPO, there are absolutely no lanes where rubber tires are driving non-tolled today that would be converted to tolled; all of these are tolling added capacity.

MR. NICHOLS: So when references are made -- and I've seen them made quite often, either in articles that somebody wrote or letters where they're talking about converting an existing highway to a toll road -- I think most of the population or a lot of the population in Austin was under the misconception that we were just going to go out there and take a highway and stick up a toll booth. And you're really not talking about doing that, that you're only talking about adding the toll booths to the new capacity.

MR. DAIGH: That's correct.

MR. NICHOLS: That may not be there otherwise.

MR. DAIGH: That's correct.

MR. NICHOLS: Okay.

MR. HOUGHTON: My question, Bob, is you had a chart up there that talked about total mobility versus tolled mobility. What's the difference? You went through that real quick.

MR. DAIGH: I'm sorry.

MR. HOUGHTON: Total mobility versus tolled mobility.

MR. DAIGH: Let me go back to the chart.

MR. HOUGHTON: That's it. You're talking about additional lane miles equivalent but not all of those are going to be lane miles. Correct?

MR. DAIGH: Yes, sir. We, like the other metropolitan areas, are looking for a multimodal approach. It is not feasible and probably not desirable to try to construct only highway lanes to try to solve our transportation problems; it's going to take a multimodal approach.

MR. HOUGHTON: That's my question. So when you look at the multimodal that doesn't get reported, that's one, that's the gross; the net, the other is what is the toll mobility coming out of that, what's the rail mobility, all of the other multimodal type of plans? Am I confusing you?

MR. DAIGH: I'm sorry, I don't understand the question. This plan tried to identify, using whatever mode might be chosen, what would the cost be to try to get us out of a level of service F -- which is just above gridlock -- to have that eliminated from our system. If you eliminate the gridlock, we're talking about needing a total of about $27 billion and that leaves us net in this area someplace $15-, $18 billion.

MR. HOUGHTON: Okay.

MR. DAIGH: No matter what mode that goes for is yet to be determined. Did that answer your question, sir?

MR. HOUGHTON: Yes, I got it now.

MS. ANDRADE: Bob, I have a question, and I realize that you've got several projects there, but under traditional funding, how many years did you save by this new way of financing?

MR. DAIGH: Well, we have not outlined all of the projects out for the 30 years as San Antonio has done, but I would say that the answer in general terms is dozens of years. And more importantly to me is not only are we able to bring safety and mobility projects sooner, but by having the toll system in place, we are able to create an economic engine for mobility and safety for this region that will allow us to build projects in the future that we would not have otherwise been able to fund given the funding crisis that we face.

MS. ANDRADE: So it's not only these projects that are going to be affected, it will be other projects that will be affected.

MR. DAIGH: That's right. We are giving ourselves an opportunity to have projects that we would never have had.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Bob, I'm going to ask you a couple of questions. Obviously your MPO has tentatively adopted a plan which is one of the more sweeping plans in the state, and I think in fairness to my home area, it would have to be said that the Dallas-Fort Worth proposal was probably the most aggressive, but this is pretty aggressive for the population and its impact on people's lives.

I know from personal contact from very able members of the House and Senate who are concerned about this that the concern is -- as Mr. Van Arsdale pointed out earlier -- the definition of conversion. People who particularly will travel across MoPac on the south, crossing over William Cannon Drive believe that they have paid for that improvement to the state highway system already. Even though it's not completed and rubber is not on the pavement, they believe that full implementation of the plan would have the unintended consequence of requiring them to pay again and over and over for that piece of the state highway system. And I don't believe anything we say today or afterwards would change people's minds about that; I think that, as Mr. Van Arsdale said very eloquently, people believe what they're going to believe, and that's okay and we have to deal with that, we can't be insensitive to that.

However, have you been here for the entire morning?

MR. DAIGH: Yes.

MR. WILLIAMSON: Then you probably are capable of responding accurately to some questions that I might ask you about this. Is it not the case that in the current funding scenario of transportation in Texas that it would never be accurate to say through my gasoline tax payments and my vehicle registration fees I have already paid for this road? No one can ever accurately say that, can they?

MR. DAIGH: That is my understanding and that is what I have related in public meetings throughout this area.

MR. WILLIAMSON: The truth is when Commissioner Daugherty pays a dollar in gasoline tax, he pays into a common pool which is then distributed throughout the state to pay for multiple projects, and that it is not the case that there is any stretch of road in Texas that we know of that the allocated gasoline tax and the allocated motor vehicle registration fee ever pay for the construction of that asset.

MR. DAIGH: That's correct.

MR. WILLIAMSON: It never occurs.

MR. DAIGH: Correct.

MR. WILLIAMSON: The reason we know that and the reason we took all of you through the tortuous educational process this morning was to try to understand that we are using a system that's approaching 45 years of age that was paid for in a day and at a time when MoPac could be built and the overpass over William Cannon could be built for pennies compared to what it's going to cost today, and that it might well have been true in 1958 that every dollar paid into the Federal Highway System and reimbursed back to the state was in fact buying that asset, but it is now the case today that the taxes all of us pay into the common pool do not cover the cost of new construction for the additional assets that are needed for a growing state. That doesn't happen, and that's precisely why every year we spend more money on our maintenance program and less money on our new construction.

So people can say I've already paid for this through my taxes and that philosophically is a good position to take but it's not an accurate statement to make. Is that or is that not the case? And I didn't ask you this question beforehand, if you disagree, say so.

MR. DAIGH: No.

MR. WILLIAMSON: You're a DE, you're one of the Supreme Court, you're going to be here forever.

MR. DAIGH: I'm in firm agreement.

MR. WILLIAMSON: I'm so irreverent. Say again.

MR. DAIGH: I'm in firm agreement.

MR. WILLIAMSON: That is the reality.

MR. DAIGH: That's right.

MR. WILLIAMSON: And perhaps what should be said is that this governor and this legislature -- and they're to be equally commended -- and the legislature two years ago, they've done three things. They've said, Look, here's the truth, the truth is the federal government is not going to send us enough money to pay for this; the truth is we are depleting our assets, we're spending almost a third of our cash, over a half of our available construction cash on just maintaining what we have; the truth is a gasoline tax is a levy on the poorest of this state, not the most of us, the least of us, and the only way we can rationally figure out how to build our way out of this is a user fee system that associates the use of the new asset with the persons who are using it. There's nothing devious or hidden about that.

Any other questions for Mr. Daigh, members?

MR. JOHNSON: I just had one observation. Bob, the mobility plan you have probably been put in a position where there is, I would say, more discussion, more controversy, if you will, and you've been right in the middle of it. And one, I want to thank you for the job that you're doing and your ability to endure a lot of discussion dialogue which is a very healthy thing but if you don't have the right demeanor, it can be a defeating thing, and I know that this has not been an easy road traveled, if you will, but you've done a terrific job regardless of where this all sorts out, and I'm confident it's going to sort out in the best interests of not only this area but the state.

MR. DAIGH: Well, thank you for your kind comments. I would like to say that in Austin we have a diversity of opinions and views on most topics, and we at the department are happy to consider all suggestions that come our way so that we can improve what we're doing.

MR. WILLIAMSON: Will the RMA own most of these toll roads or run most of these toll roads?

MR. DAIGH: Yes, sir. Out of the new candidate of projects, they will all be RMA facilities run by the RMA except for 45 Southeast which is planned to be retained by the department.

MR. WILLIAMSON: And the equity owners of the RMA are the two counties, Williamson and Travis Counties?

MR. DAIGH: Williamson and Travis Counties.

MR. WILLIAMSON: And the board members are appointed by the county commissioners and one appointed by the governor?

MR. DAIGH: Yes, sir.

MR. WILLIAMSON: Tell me about the revenues accruing to the RMA. Do they have to send those revenues to the state or do they get to keep those revenues and work on road projects in their counties?

MR. DAIGH: All of the revenues that go to the RMA are retained by the RMA; they are able to decide how those revenues are to be spent; they do not have to be spent on turnpike projects, they can be spent on whatever transportation projects the board feels are the most important for the region.

MR. WILLIAMSON: And I know you're familiar with the department and the governor's focus on trying to perhaps relocate the Union Pacific outside of downtown Austin and downtown San Marcos. The revenue to pay for that won't come from the RMA, will it, as far as we know?

MR. DAIGH: At this time my understanding is no revenue sources have been identified.

MR. WILLIAMSON: So the state will continue to invest additional dollars into the Travis-Hays-Williamson County corridor to improve the transportation assets of that area, not necessarily relying on just the RMA to supply that cash.

MR. DAIGH: That's correct.

MR. HOUGHTON: You've recreated, basically mirrored Harris County Toll Authority.

MR. DAIGH: I think Judge Lindsay had a good model.

MR. NICHOLS: In the MPO's 25-year plan, all of the money that they're anticipating for project selection and expansion are not toll roads either. There are a lot of other expansions and improvement projects besides toll projects.

MR. DAIGH: Absolutely, yes.

MR. WILLIAMSON: When Judge Lindsay indicated that the positive cash flow from the Harris County Toll Authority was $50 million last year, that was after the authority -- and you may not know the answer and maybe Gary would have to answer that -- I think it was after the authority also invested in county and city streets throughout Harris County which in effect kept the property tax down to pay for those same streets. Is that the case, Gary? I think it's the case.

MR. DAIGH: I think he just stepped out for a minute.

MR. WILLIAMSON: Steve, do you know?

MR. SIMMONS: That's correct.

MR. WILLIAMSON: So not only does the toll authority -- the $50 million is after assistance, a large amount of assistance, I think, several hundred million to the constituent participants in the toll system.

So the vision of the department is there's a moment in time when these two counties and maybe some day counties they allow to come in with them are no longer sending gasoline tax to the federal government and the state government only to see a little bit of it come back, but are in effect generating their own cash flow from their own citizens to offset the cost of their own road, air quality, rail, including county and city transportation assets.

MR. DAIGH: That is our hope to have a strong economic engine for mobility created.

MR. WILLIAMSON: Paid by those who can afford it and not forced on those who can't.

MR. DAIGH: Absolutely.

MR. WILLIAMSON: Other questions, members, before we recognize members of the legislature?

Gerald, if you don't mind, in deference I think I would rather have the House and Senate members -- I'm sorry, I think the Senate member prefers to go last. I guess Mr. Stick.

MR. STICK: Actually I'd like to follow Gerald.

MR. WILLIAMSON: You want to follow the county commissioner?

MR. STICK: I do.

MR. WILLIAMSON: First time that's ever happened.

MR. DAUGHERTY: Mr. Chairman, anybody else that needs to be in front of me?

MR. WILLIAMSON: No, sir, but thank you for asking.

MR. DAUGHERTY: Mr. Chairman, Mr. Behrens, members of the commission, thank you for allowing me to speak today, and I need to start off by saying that Representative Baxter wanted to be here this morning but he is in a committee hearing I think in Weatherford.

MR. WILLIAMSON: Yes, I set that up where he couldn't make it.

(General laughter.)

MR. DAUGHERTY: He could have been in front of me too. And then also Representative Keel also wanted you all to know that he would have liked to have addressed you this morning, but I think that you have gotten both of their comments in writing.

MR. WILLIAMSON: Right.

MR. DAUGHERTY: So they wanted to make sure, and in deference to the time, they'd rather me not read it and just let you have it in writing.

Thank you for giving me the opportunity. I think I was here two months ago, three months ago, and I'm basically coming back asking for the same thing that I asked when I was here to begin with. I don't have to be convinced that we need a funding mechanism to do roads, I get it, I've gotten it for a long time, I think I got it before we even started talking about it, Mr. Chairman. But I never thought that what we would end up having to deal with is a process, and let me really comment on the process, y'all. The process is what has really stunk in this community.

This is 6,700 e-mails from different people; I got 10,216 e-mails within two weeks against our plan. Now, I want to concentrate on against our plan. We don't have a plan that's like Houston, we don't have a plan that's like Dallas, and it's been said we've been very aggressive with this plan, and let me say I am supportive of every road in our plan. I mean, I thought we needed to do it ten years ago, and I think that most people in this community are supportive of that plan.

When we had a public hearing we had about 500 people that either signed up or signed cards, and the common theme with all of them was we're not against toll roads, we get it, we've been there, we understand that. We didn't have a lot of fight over SH-130 because it was built. Houston, I understand that probably when Judge Lindsay did the Sam Houston Tollway, there was probably some people that thought what in the world are you doing, but whenever you do a legitimate toll plan, you can sell it, it's easy to sell.

Now, knowing that we had a plan that was very difficult to do, my issue has been -- well, let me just cut to the chase. There is some damage, I think, of what the commission has done to us, and the damage that you've done to us is put a gun to our head and tell us that we've got to do this plan in 60 or 90 days. Mr. Chairman, that is our problem. I think that I could go out into this community and sell a plan if I had been given enough time to go out and to really get people to understand. You know what, we didn't understand the numbers that you put up there at first, I don't think that you understood the numbers that were put up there at first; it's very detailed work to understand what you want people to know in order to make decisions.

I mean, it is really hard for me to sell somebody that you know what, you haven't paid for the Loop 1 South over the William Cannon Bridge, it doesn't make any difference how many D9s are out there and how much stuff is already being laid. You know what, I might be able to sell that if you give me enough time to go out there and get the community to embrace what we really are trying to do. The first thing I've got to convince them of is, you know what, we really don't have the dough to do all the things that we need to do. And I think that they would think, you know what, if Gerald Daugherty is coming to us, the guy that we know -- part of the reason I think I got elected in this community is because I have been so out front and so aggressive with building a comprehensive road system in this community. So I think that that would have gone a long ways for people to have said, Oh, my gosh, let's listen to Commissioner Daugherty. And I think I could have sold them that.

But I've always said that I've been behind the eight-ball because I've had 60 or 90 days, and let me tell you something, folks, what's happened since I came here to speak to you all has been an orchestration in this community of convincing elected officials that this is what they needed to do, and let me tell you the common denominator in what I think everybody -- the 16 people that voted for it. The one thing I could never convince everybody of is the highway Commission told us that if we don't do it right now, then we lose the Texas Mobility Fund money, and folks, that is not fair to do that to this community.

I mean, I'm willing to wait, and I asked for six months when Commissioner Andrade asked me how much time do you need. I mean, at this stage there is so much damage in this community that I don't think that I could convince anybody of something that I honestly felt because now you've got people being recalled, I know you all are getting these things and if you haven't, I'll be glad to make you a copy of about 6,700 so you can take them home with you and read through them, but the common theme there is that we think that we are being had.

So I'm going to ask you all one more time because there are some tweakings that need to take place in the plan, and I'm willing. You know what, you do need to get a few of us at the table, even though you think that you might not be able to work with us because you can work with me. I mean, can I be aggressive? Yes, I can be aggressive, but I mean, if you're not aggressive in this community, you just absolutely get run over.

What we need in this community is we need time to come up with a plan. If I try to tweak Loop 1 South, do I think that Representative Dukes or Senator Barrientos wants to have a say-so on the east side of town with 183 or 71? Probably. And so I've always said you can't just let me cherry pick because if I cherry pick, then everybody else wants to, but that doesn't mean that you shouldn't sit down with me and say okay, how do you think that you can sell the real problem areas for you in your precinct. And it's not just that it's my precinct, I just think it's overall as a plan, but what we don't need in this community, we don't need the bloodshed, and I'm going to tell you we are swimming upstream. Now we've got people that want to go and start talking to the bond houses. That is not what we need in this community; we all know that we need a comprehensive road system.

So I'm going to ask you one more time -- I'm not asking you to come in and do away with the plan because that's not what I'm asking, but I am asking for somebody to tell me that, you know what, we'll come up, we'll work with certain people or all the people that want to work with us, and let's come up with a reasonable time that we think that you can go out and that you can work and if you can work this plan -- and you know what, we're not going to give your Texas Mobility Fund money to Houston and to Dallas.

I mean, I think when somebody said we need to go and get El Paso's money, I said I'm not interested in getting El Paso's money, that's not what I'm trying to do. I'm trying to just take the money that you all have basically identified for this area, give us the opportunity to work a plan. Am I going to get 100 percent buy-in? No. But I think, Mr. Chairman, that if somebody will bring a few of us back into the fold in this thing and say, okay, what can we do to at least lessen the animosity and the anxiety that we have because we know that we have a much different plan than everybody else has. Unfortunately, we probably need the plan because we have, I think, the worst road system in any major city in the state of Texas, and so I'm very willing to work with that.

But if you all are going to tell me one more time, you know what, you got a 16-to-7 vote and that's what you've got to live with, well, I'm going to tell you that I'm not happy with that, I'm not happy if the Highway Commission is going to tell me that's the way it works and that's what you've got to go back and do. I don't think that's fair to me, I don't think it's fair to the people of Austin, Texas, and I would hope that I hear something differently. Thank you.

MR. WILLIAMSON: Thank you for your candid remarks, Mr. Daugherty. Traditionally, when witnesses say things that I think are uncivilized, I stop them but I realize you're angry.

Mr. Simmons, please.

I would ask you the next time you come to visit with us, it's not productive to describe this process as holding a gun to someone's head; we don't deal in guns at this commission. I know it's a term of art but it's just uncivilized somehow. We don't spill bloodshed over a damn transportation plan; this is about roads and rail, this isn't about people's blood being spilled.

I know you're upset. You're probably as upset as the people who live in Dallas, Texas that ship approximately 18 percent of their tax dollars to Austin every year to help Austin build their roads; you may be even more upset than those people; you may even be as upset as the people in Houston that send, from their viewpoint, about 21 percent of their tax dollars every year to Weatherford to fix their roads.

Because, Mr. Daugherty -- and this applies, I think, to perhaps some others who are coming behind you -- we don't have a divide-the-pie financing system in this state. We are one state, one people, we don't divide by Republican and Democrat, by Hispanic, Anglo and African, by gay and straight, by old and young, by rich and poor, we don't do that in this state. We pay into a common pool, the Metro Mobility Fund doesn't belong -- this little piece to your commissioner district and this little piece to Parker County Precinct 2, it belongs to the entire state. We're not an RMA; we're trying to equip all of the urban areas, Senator, to be able to do these things on their own without us interfering.

But we don't have a county road system, we don't divide the pie. In fact, I think my colleagues will tell you we struggle every day to tell people don't bring that mentality here. I don't want to advocate for Dallas, Ted doesn't want to advocate for El Paso. We have a state system.

Where's my rack? I have a fine appreciation for the art of example. You brought in 6,800 e-mails; those are 6,800 mad Texans. That stack represents 22 million mad Texans who can't get their projects built. That's a brochure from every delegation that's been before us in the last two years who needs a project built for which there is no money, none.

And when Michael Morris comes to me from Dallas and says Ric, we represent 23 percent of the state's population, 27 percent of the tax base of the state, and you're only spending 16 percent of the state's money up here, what do I tell him? What do I tell Michael Stevens when he comes up here and says Houston represents 26 percent -- not Houston, the Harris district represents 26 percent of the state's population, 24 percent of the state's taxes paid, and you're only sending 20 percent of the state's tax money back to the road system? What do I tell those guys?

Well, we want to divide the pie, everybody has got their piece they need. And there's 6,800 people plus, I guess, a few state elected officials who don't live in this area but have decided to weigh in that feel like they're being treated unfairly, and so the 22 million who can't get what they need can wait, we need to wait six more months, we need to wait another year. What do I say, Commissioner?

MR. DAUGHERTY: Do you want a response?

MR. WILLIAMSON: Yes.

MR. DAUGHERTY: I don't think that I'm asking, Mr. Chairman, you know what -- and I'm sorry I speak in cliches, I'm kind of a Texas guy but if I'm going to get taken to task over a gun to your head, maybe I shouldn't have said that. You're right, I am upset because I have worked so hard on mobility and transportation in this community, I mean, unbelievably hard, and I have never asked for anything other than to be reasonable.

When you ask for time in order to go out and to sell something that you know is a very difficult thing to sell, I'm not trying to get 22 million other people's money, I understand that there are programs. I'm just saying that the hand that I am dealt as an elected official in this community with people going we know that we need to do transportation, we know that we have got to find creative ways to fund them. I mean, Mr. Chairman, all this community is asking for is a reasonable process where people can weigh in and 60 or 90 days is not enough time; I can't convince people of some of these things. If I can't come to the commission, and we said let's talk openly and we're going to have spirited conversation, we understand that, I'm not trying to be disrespectful to any of you.

MR. HOUGHTON: What is it that you would like to try to sell? What gives you heartburn about Bob Daigh's plan that he presented here today? Where's the heartburn?

MR. DAUGHERTY: Well, the heartburn is that I know that there are people that aren't willing to accept Loop 1 South, for example.

MR. HOUGHTON: Is that a bridge?

MR. DAUGHERTY: That's a bridge.

MR. HOUGHTON: One bridge.

MR. DAUGHERTY: It's one bridge.

MR. HOUGHTON: That represents one bridge?

MR. DAUGHERTY: I don't know if this is all just one bridge; this is a plan that has -- I'm sure that there's some people that don't like --

MR. HOUGHTON: Out of the plan that was proposed today, the lane miles, all the graphics you saw, what percentage of that can you support?

MR. DAUGHERTY: Well, I can support 100 percent of the roads.

MR. HOUGHTON: Except for?

MR. DAUGHERTY: Commissioner Houghton, I could probably support Loop 1 South and I think that I could go to the people in southwest Travis County and say how about us maybe toll part of it, or how about us --

MR. HOUGHTON: So we've got one issue that's a bridge, so 99 percent of the plan you can support.

MR. DAUGHERTY: I can support 100 percent of the roads; a lot of the plan and the process, Commissioner Houghton, is what is the problem here. When people feel like that they haven't been listened to or that they haven't gotten to participate in a plan, when a plan is presented and you are told this is the plan that you have to do and you have to do it in the net 60 to 90 days, that's the problem.

MR. HOUGHTON: Was there a vote of the MPO?

MR. DAUGHERTY: Yes, there was; there was a 16-to-7 vote.

MR. HOUGHTON: Is that not the democratic process?

MR. DAUGHERTY: You can take me to task over that. I've told you that if it's a simple matter of, Mr. Daugherty, there was a vote and that's what you live with, I understand that, yes. I'm an elected official, I understand that you've only got to win by one.

MR. HOUGHTON: And there was input into the plan?

MR. DAUGHERTY: No. That is the problem, you do not have the majority of the people in this community that feel like that they had ample time to participate in this plan. When the plan that was laid out says this is the plan -- now, we have some amendments but I will tell you, folks, the amendments was not something that -- I mean, I guess it was better than a poke in the eye with a sharp stick, but it wasn't great.

MR. HOUGHTON: So it really comes down to a bridge.

MR. DAUGHERTY: No. It comes down to a process. I mean, I have told the RMA and I have told Bob Daigh: Bob, I think that we can pull the majority of the people together in this community if we let them participate in the process, if they don't feel like that this thing has been shoved down their throat. It's not you all shoving the thing down their throat, but there is a plan that was put out and you basically do this plan. Folks, I've asked every elected official: Have you ever had a subject matter where you got 10,000 e-mails? This is not an insignificant number of people that feel like they have been disenfranchised.

MR. HOUGHTON: Are they against the plan?

MR. DAUGHERTY: I think that most -- again, 95 percent of the people that came to the public hearings said, I understand toll roads and I'm not against toll roads, but there are some parts of the plan that I think you've got different people, whatever parts of town they're in -- we thought at one time that 183 north of Anderson Mill Road to 620 was going to be tolled because there was some talk about it. Now, the public went crazy about that, and TxDOT says we're not going to do that.

MR. HOUGHTON: That's the process.

MR. DAUGHERTY: That is the process. This process did not take place in a manner where I think that people felt like they were dealt fairly with.

MR. HOUGHTON: So 16 people did not deal fairly with these people.

MR. DAUGHERTY: Mr. Houghton, the vote was 16 to 7.

MR. HOUGHTON: Sixteen people; that's the democratic process.

MR. DAUGHERTY: And if that's what you're telling me that the vote was 16 to 7, and that's what you go with.

MR. HOUGHTON: Well, do you want us to override the democratic process of an RMA?

MR. DAUGHERTY: I have not asked you to override anything.

MR. HOUGHTON: What are you asking us to do?

MR. DAUGHERTY: I'm asking you to give us the thing that I asked you for the first time that I came which is give this community some more time to bring people back to the table and say let's look at this plan, what parts of the plan can you just absolutely not live with, or to the district engineer, is there anything that you can do with this particular part, whether it's 183 or whether it's Loop 1 South. Because I quite honestly think that you probably will have some people that will want to weigh in on some other roads other than Loop 1 South.

I mean, nobody questions whether or not the one part of the plan that drives people the craziest because you can't convince people you're right. Like Arsdale said, you can't convince them that if you've got a bridge that's being laid and you've got dirt being moved that there are dollars somewhere for that project to be built. Now, I don't know, maybe I can go out and sell them and say you know what -- bring up all of here is how the funding really works for this thing and this is not really happening to you. I mean, if I get convinced of that -- and maybe somebody can convince me of that -- if that's the case, well, then maybe we can make it happen.

MR. NICHOLS: First of all, I do want to thank you for being here today and expressing. You have been very open and honest on how you feel all the way through this process; you and I have sat down and talked with some others before also on this thing, so you've been consistent all the way through.

MR. DAUGHERTY: Thank you.

MR. NICHOLS: Also, I recognize that you have been stepping out for transportation way early in the Austin area when other people were against roads, so I think that's important for people to recognize too.

I have seen the plan and I've seen plans from all over the state, so I'm in a very good position to compare plans. I never want to go in a community and say, you know, your plan is better than their plan or whatever, but I will tell you from what I have seen, compared to other communities' plans, it is a very good plan. I think the weakness in the whole process is that the public has not been well educated on it. I have read some of those e-mails; the great bulk of what I have seen is misinformation that people have. There is this big fear by a lot of those people -- I'm not going to ask you what percent or anything, but I would anticipate that a great portion of that stack thinks that we're going to take toll signs and toll booths and just stick them across many of these roads which is not the case.

MR. DAUGHERTY: That's right.

MR. NICHOLS: What we do know, and the MPO members on that board have a responsibility to be educated to a much higher level than the public at large, and county commissioners, whether they're on the board or not. Everybody that's in a leadership position has a responsibility to be much more informed than the public -- and I did ten years of city council work and mayor, I know what hot topics are. Those members have been educated, I think, fairly well on the real picture of what the crisis is in transportation in the Austin area, the region; they have seen the shortfalls; they have seen the population growth.

The public sees every day -- every day incredibly bad traffic congestion out here. I talk to people all over the state that dread coming -- they love Austin but they dread coming here and driving on these roads because you can't get from one end to the other. So every single day while we talk about this stuff, it gets worse and worse, and there's tens of thousands of people that are frustrated every day that if given the choice of throwing a couple of quarters in a bucket so they can get home would gladly throw a couple of quarters in a bucket.

And it's the leadership on that MPO that has been informed, I feel, quite well as to the pros and the cons, the options, the pitfalls for not making decisions, and regardless of the uninformed who are getting informed, have had to make a very tough decision knowing there were going to be repercussions, and I think knowing there were going to be repercussions and knowing what was in the best interest of their region, they stepped forward and made those decisions. And it's tough. That's really what I wanted to say.

MR. WILLIAMSON: You know, Gerald, I really do appreciate the intensity you feel about this. I was in an elected position once, I understand this stuff. But what are the alternatives? What are the alternatives for you to go sell: a gasoline tax? You can't raise gas taxes high enough in Travis County to create enough money to do these things. I mean, physically can't do it. A Travis County vehicle registration fee, is that going to generate any less concern?

I mean, the point that we've been trying to make consistently, and we think we've been very open about it, is we are out of money in this state, and in particular the eight urban areas -- maybe less so El Paso -- the eight urban areas are choking, they're collapsing under their own weight. It gets worse -- as Mr. Nichols said, it gets worse every minute; it doesn't get better, it gets worse. Air quality suffers, economic development suffers.

And so what's happening -- and I'm not trying to pick on developers, but people want to move to Austin; they're willing to buy a house in Austin, Texas. The roads are so bad, you go up 35 and down 35 and out 183 and out 79 and now the urban sprawl -- Michael, no offense -- the urban sprawl we live with in North Texas with suburban community after suburban community scattered over 200 miles is happening here. Why is it happening here? Because people can't get to existing urbanized Austin, Texas; the road won't hold them anymore.

So we go along, we give advice to the governor and answer questions for the legislature to allow them to develop what we think and what people are saying in the country is a near-perfect system of regions generating their own cash flow and paying for their own immediate problems defined by themselves, assisted by us, the state system maintaining the existing infrastructure and worried about the connectivity between the eight urban areas, the border area, and future Texas, without raising the general levy that hits primarily working Texans, a user-based fee system that's driven by local leaders. What else do we do?

MR. DAUGHERTY: I understand.

MS. ANDRADE: Commissioner, I'd like to thank you again for coming back and visiting with us, and I feel for you, I can hear what you're trying to say, but let me share something with you. In Bexar County when our MPO was going to take a vote on that Monday the 26th, I received several calls the week prior asking me if we would consider waiting, that they wanted to have more public hearings, and I had to say no. Sometimes we have to make difficult decisions, but we also have a job to do here, and one of the things that I've realized in this department is that we're a huge department, and something that we have to do and that you can respect us for doing is that we must be consistent, and we have to do that because we have a big job to do for this state.

But I'll tell you, I've attended also the public hearings and I don't think that by holding more and more public hearings we're going to sometimes change people's minds, but I do think that we need to continue with the process of public education, and so I urge you to continue that process although we may not give you more time, but you must continue that public education process, and it's something that we have to do throughout the state.

MR. DAUGHERTY: Commissioner Andrade, I appreciate that, but let me tell you something, when you're doing what you're doing on 1604 and 281, those are easy sales and those are things that need to be done. Those projects didn't get you 10,000 e-mails. I'm just saying as an elected official, when you get 10,000 e-mails, something is wrong, y'all. I mean, if I could go out and I had a 281 -- I wish that I had a 1604 in Austin, Texas; I mean, I wish I had a 410 in Austin, Texas. We have a 360; we called it a loop; it's a road that goes around two-thirds of one-half of the city with 15 lights on it. That's what we do in Austin.

So what we're talking about here, folks, is we've got a horrible plan. Commissioner Andrade, you couldn't sell our plan in San Antonio, and that's what I'm saying is that we have such an aggressive odd-looking plan that I can't -- it's hard for me to talk out of cliches; I'm afraid if I use them, I'm liable to get in trouble.

(General talking and laughter.)

MR. DAUGHERTY: You know, folks, all I'm asking is as an elected official I would be not doing my constituents a decent job if I didn't come and say, you know what, I've got people going absolutely coo-coo over this thing. I mean, I was with Representative Hamric and I said, Have you gotten 10,000 e-mails? Well, no, I've got a lot of people who are upset. I mean, I'm just responding to you folks because I've never seen anything like this, and you've got to respond to this so I have at least some kind of a responsibility to the governor and the Highway Commission to say, you know what, I think there's something wrong, either the process -- I know, more than anybody, that we don't have the dough to do the things that we need to do with roads. Now, I could get into the "B" topic or the "R" topic, and I know you don't want me to get into rail, and talk about other funding.

MR. WILLIAMSON: Yes, I like rail. You're the one that doesn't like rail; I'm the one that likes rail.

MR. DAUGHERTY: I know I've taken more time and I need to let the representative speak. I appreciate it; I decided I'm going to come here and ask one more time. I think my stack is still a little bit bigger than yours, even though yours constitutes 22 million.

I'm ready to do whatever it takes in this community to try to bring this community back together, and I'm going to tell you, Mr. Chairman, this is a hurting community. I have never seen a subject matter -- I thought that light rail tore it apart, this thing makes the light rail vote look like Ned in the first reader. I mean, it makes it look like no big deal. This thing is absolutely got so many people so bothered and so upset that -- I mean, I don't want to see the mayor recalled. I told him I've sent out publicly a message that said, Recall is not the answer to this thing, let's all get together, roll up our sleeves and find a way to put something back on the table and talk with some folks where people can get a little desensitized, because at this stage, people are just nuts.

MR. WILLIAMSON: I was reading my Austin Chronicle and I noticed where this guy had written a pretty good article about be careful what you ask for. I would hope that the mayor would not be recalled for standing for what he thought was the right thing to do.

I think the concern here, Commissioner, is you've come to us the second time and asked us to jump over a process that we consider to be local control, and as Hope said, we're not inclined to -- it's a state system and we have to apply the state standards and state procedures and state policy, and it's not our inclination to reach over the MPOs and listen to -- the forum for you to express that position and make that argument exists and it puts us in a very awkward position, and we don't want to do that.

And the other thing I think that bothers me a little bit is the whole notion that you have to do it -- and I suspect I'm going to hear it again from another House member in a moment -- this notion that the Mobility Fund belongs to the individual communities. I've got to tell you something, I am a proud conservative person, I was a proud conservative Democrat when there was a place for not really conservative Democrats in my part of the state, I am a proud conservative Republican, but I'm not interested in cutting up the pie in this state. I don't think I get stronger when my state is divided against itself, and we don't pass -- or so far the legislature hasn't passed tax systems that divide the pie up.

And our admonition to our DEs is we have $100 billion-plus of immediate problems; we are not being true to the entire state, the least of them and the most of them, if we don't look at this as a common problem. Now, take the additional money that will be available and go to your communities and try to develop plans through your MPOs that maximize and leverage this new funded source of money. If your communities are not interested in doing that, tell them that the old system won't change, we will continue to pool resources and allocate based on project and borrow from the future and do the best we can.

And from that, you know, comes an argument from a couple of places in the state that wait a minute, that's our money, you're holding a gun to our head, you're forcing us to accept these plans. Listen, if the MPO doesn't want to do this, nothing is going to change other than this amount of money to address congestion problems will have to be considered for someplace else because we've got problems as bad as Austin's are. What did Gary say, we've got $17 billion worth of problems in Harris County right now and we've been shaving out their fair share, I hear from some people, for 20 years -- 1984, I believe is the last year they got their fair share, whatever that is.

But on the other hand, you know what, we listen to everybody and you might be surprised, so what else can I say.

MR. DAUGHERTY: I appreciate the extra time and I know I've taken more time. And I'll take a bigger pill the next time before I come over here.

MR. WILLIAMSON: Are you going to leave this here?

MR. DAUGHERTY: I mean, I'd love to shuck these things. Would you like to have all 6,700 of them?

MR. WILLIAMSON: I'd love to have them, I really would. If you don't mind, just leave them here.

MR. DAUGHERTY: Can I keep the dolly?

MR. WILLIAMSON: Please take the dolly.

(General laughter.)

MR. DAUGHERTY: Thank you, Mr. Chairman, it's always a pleasure.

MR. WILLIAMSON: It's a pleasure to have you. You're always welcome here and you know that -- plus it's a lot of fun.

Mr. Stick. First of all, thank you for your patience. Second, I'm sorry that we've been even a small part of any kind of pain created in your life.

MR. STICK: I appreciate that, and I've enjoyed the opportunity to watch you, the questions you've asked. I'm not going to blow any more smoke. Obviously the issue of toll roads is divisive in this community. One of the things about living in Austin is if you put two Austinites together and you talk about an issue, you're going to walk away with three different opinions, and certainly there is that division of opinion.

When you rolled out your stack there, I was reminded of that scene from the "Ten Commandments" when Moses throws his staff down and it turns into a snake, and I was pretty well sure that one of your stacks was going to eat the other one. I'm a little disappointed that didn't happen.

(General laughter.)

MR. STICK: You have tough jobs. I sat on Appropriations last -- well, let me introduce myself. My name is Jack Stick; I'm the state representative for House District 50 which is northern Travis County. I sat on Appropriations during the last legislative session and I thought that we had a fairly difficult job to do; finding -- depending on whose numbers you use -- $9-1/2 to $11 billion is difficult, and I think maybe your job is a little more difficult than ours, not just because you've got more money that you've got to come up with but you're not going to be able to come up with the money. No matter what decision you make, somebody is going to be unhappy and a large group of somebodies are going to be unhappy, and I've got a lot of empathy and I've got a lot of sympathy for you.

I want you to know that I'm not here today to yell and to scream, I'm not here -- and I'm not suggesting that anybody else is either. I do want you to know that I've worked very long, very hard and I think to a certain degree successfully with the district engineer. Bob Daigh has just done a tremendous job; every time I've asked him to go someplace in my district and take the slings and arrows of an unhappy population, he's been there and he's to be commended about that.

I'm not here to talk about the CAMPO plan, and I hope that's not a disappointment to you. What I am here to talk about is a specific area that is being tolled that's in my district that presents, I think, a unique problem; I haven't found anybody else who has this problem. The North MoPac extension goes directly through the northernmost part of the central part of my district. It affects people who live in Wells Branch, Scofield, and Lamplight Village, and it affects them because when it is completed, that's the road they're going to have to take in order to get home.

Currently you can drive north on MoPac, stay on 1325 and go through two lights; the first light is at Parmer and the second light is at Scofield. As it is right now, the light at Parmer is awful, it's terrible. If you were to go there during rush hour traffic, you would experience a wait of probably 15 minutes; on a good day it would be as little as 12, on a bad day it could be 20. Once this new toll extension is open, folks who live in that area -- and when I say folks, I mean that there are about 25,000 people, 30,000 people who live in that area -- they're going to either have to take the toll road and pay 50 cents to go the half mile between Parmer north to the Wells Branch exit, or they're going to have to get off before Parmer to avoid paying that toll and they're going to have to sit at that light. And I'm telling you right now, with the increase in population in that area, and the increased travel to avoid that toll road, and given that the city recently annexed 6,000 acres directly to the west of the area that we're talking about and that will be developed, we're talking about waits that will greatly exceed 20 minutes.

I was just sitting here doing some calculating. That is the equivalent for the average person, assuming they make seven of these trips a week -- and I think actually the real number is going to be significantly more than that -- but if they have to sit at that light seven times during a week, they will spend the equivalent of 6-1/2 days a year more at that red light at the Parmer intersection, 6-1/2 days. For those of you who do a lot of traveling and you listen to books on tape or books on CD, you would be able to listen to the entire Tolkien series, you would probably get through most of the abridged version of "War and Peace" and take a significant chunk out of the Encyclopedia Britannica. This is nuts, I mean, this is too long.

Now, look, I'm as supportive of toll roads as anybody; I think that they're an important part of a comprehensive transportation plan, and lord knows we need that, particularly here in Central Texas, and I believe that the toll road plans that we have can be an important part of tremendous economic growth, and I'm not particularly concerned about using them as an element of that economic growth. But let me tell you, we need some sort of help in my district to alleviate this problem because folks in that area cannot be expected to pay an additional minimum of $420 a year to use that toll extension, nor can they reasonably be expected to sit at that light for an additional 6-1/2 or more days per year; it's not a reasonable alternative.

I hope that none of you ask me what the answer is because I can't tell you what the answer is. I can tell you that there are possibilities: take the tolls off altogether -- I know that's not a realistic possibility; improve the intersection, put a flyover there, expand it -- that's a reasonable possibility; allow people who live in Wells Branch, Scofield and Lamplight Village to avoid paying the toll altogether -- that may be a possibility, I don't know the mechanics of it.

But what I do know is that as people avoid that toll road and they use the Parmer intersection, they're going to go through residential areas, having waited 20 or 25 or more minutes to get through that intersection, and they're going to be racing through those residential areas and some kid is going to get killed because of this, and we need to take action now to avoid that.

I can go on and on about this problem, but let me wrap it up by telling you that I've not gotten 6,800 e-mails about this like Gerald has, but I don't think there is a day in my office when we don't get at least 20 or 25 e-mails or phone calls or letters about this. And Mr. Chairman, I know that you know what that's like being a state representative. When you get that number of folks writing to you or communicating with you every single day for the last three or four months on this -- not counting what we got before the CAMPO plan when people were just mildly irritated by this -- that is a significant portion of the population, and it doesn't stop.

And by the way, let me also just tell you that we eliminate the duplicates; I'm not telling you that we're getting one guy who's writing one week and then another week, these are different people. It's a serious problem and we need help.

I am aware that bonds have been sold, I am aware that it is the opinion of TxDOT officials that when the bonds were sold in New York, there was a representation that this portion would be a tollway. I've looked through some of those documents and I know that lawyers have looked through the remainder, and we have not yet found that provision, so there is some, I think, flexibility in there.

But Mr. Chairman and members of the commission, what we need is this commission to articulate clearly that we will get some sort of relief there, and that's why I'm here today.

MR. WILLIAMSON: Members?

MR. HOUGHTON: I go back to the basic principle, Representative, that no one has figured this out yet. We have yielded to the communities, to the RMAs, to the major mets the local control, and CAMPO is the local control. Now people come to us to say override CAMPO -- that's a basic philosophical problem -- override their plan and I'm having a hard time with that.

In El Paso, if the El Paso MPO comes here and says this is our plan, I'm not going to override that plan. And that's what I think we're being asked, basic philosophy is to do that.

MR. NICHOLS: Can I kind of jump in there? I think we all feel that way on the basic overall plan. You're not here arguing about the process or the need or any of that, you're articulating a specific problem which is a unique problem in that plan, and that's the Parmer exit ramp, and it is a problem, it is a weak spot, the weakest link in the whole thing, in my opinion, because although it does not put a toll on existing capacity -- in other words, there's a free alternative -- that alternative does have a lot of stack-up time right now and you're anticipating it is going to get worse and I think I agree with you.

For your information and for those who may be in the audience, on that particular one I know that we have asked Executive Director Mike Behrens and his administration to check into it. I know they have met with Bob Daigh and Bob has had his people looking at that spot. I know that I've talked to Bob Daigh myself with some of them, trying to understand the actual what can be done. It may not can be done in the toll plan that the MPO approved, but I think there are some things that can be done on the normal highway system that may take some specific funds or special funds that are not in that plan. And I will assure you -- I don't think we want Bob to come up and actually get into what we may can do -- but I will tell you that they are looking desperately and as quickly as they can and trying to figure out ways to fix that.

I think that the commission -- I know I would be very supportive of taking some of our Strategic Priority money -- that's what that kind of stuff is for, for projects and problems that fall outside formulas -- and go in there and address that as quickly as possible to try to minimize the problem when that does open.

MR. STICK: Well, I appreciate that, Commissioner. And Commissioner, let me also address your concern. This is not part of that CAMPO plan that Commissioner Daugherty was talking about; in fact, the planning for this began some three or more years ago.

And again, I'm not pointing fingers and I'm not saying that somebody has done an evil deed that needs to be punished, what I'm saying is any time we move forward on projects as massive as these, we have to recognize that there may be unintended consequences, and as Commissioner Nichols indicated, this is one of those situations. And I appreciate your response.

MR. NICHOLS: I know that some of the things you specifically talked about -- and this meeting is getting pretty long as it is -- but you talked about a flyover; that's one of the things that will get people who are wanting to make a left turn there from having to stop at the lights; you can do an extension of the bridge like we've done on 35 in several spots where people that really trying to make a U-turn to go back would be able to do that without having to hit the lights. Each one of those would peel people off, and there may be some other things that they're considering, and we will do whatever we can to accelerate the construction of that.

MR. STICK: I appreciate that, Commissioner.

And Mr. Chairman, let me just finally say that I have about 45 more minutes worth of comments but I've got these written down so I'll go ahead and submit these to you and save you the agony of listening to them. But I do appreciate your responsiveness, I do appreciate the time that you've taken today.

If there are any other questions, I'm glad to answer them.

MR. WILLIAMSON: Other questions, members?

(No response.)

MR. WILLIAMSON: You are very kind, and I will say once again for the problems that have been created in North Austin and Travis County, from yourself to Senator Barrientos to Representative Baxter who has been pretty insistent about this, to Representative Keel, that was an unintended consequence. All I can say is just to refer to the dialogue that's been had today and this we've got to do something. Doing something is pretty tough and we think the doing something is giving local communities and regions rules and the authority to act and be responsible for their actions is a good thing, not a bad thing. Maybe there's sometimes in life where we all just can't get along and agree. But you've done a very good job of directing attention to a problem that needs to be directed to.

MR. STICK: Well, I appreciate that, and I was waiting to see what nice thing you said about me like you did about Corbin, and that's what I'm going to take.

MR. WILLIAMSON: You've got a good smile, you're articulate, and you lay your stuff down. I'm kind of amazed at how young you are to be in the legislature, but other than that.

MR. STICK: Actually I'm 38.

MR. WILLIAMSON: Are you 38?

MR. STICK: Yes.

MR. WILLIAMSON: So that means you're older than Corbin.

MR. STICK: I am older than Corbin.

MR. WILLIAMSON: He doesn't look as young as you. I'm digging a hole here.

MR. STICK: I appreciate it, I know you've got a long day. Thank you very much, and Mr. Chairman, I'll be in touch.

MR. WILLIAMSON: Mr. Pickett, do you want to speak at this time, or do you want to wait till later on in the day when we do Fort Bliss?

MR. PICKETT: This would be fine.

MR. WILLIAMSON: Something hit me that you might be here for the Mobility Plan as opposed to the Fort Bliss decision.

MR. PICKETT: Actually both, and thank you for the opportunity.

MR. WILLIAMSON: Fort Bliss is going to be a long time away, I'm afraid.

MR. PICKETT: Again, I appreciate it.

I'm going to try to bring you an update on what I think the situation is. I've had an opportunity to visit with you socially last week in El Paso and then the following day we were on a panel together that we talked about. I visited with Chairman Krusee socially earlier this week and we tried not to talk shop and we had a good meeting of the minds. I visited with Commissioner Houghton last night socially and tried to not talk shop, but meeting of the minds. And believe it or not, I've been listening to a lot of things -- do you mind if I call you Ric?

MR. WILLIAMSON: Please do.

MR. PICKETT: I feel much better that way. And sometimes what you say, what I say, you don't ever know if somebody means you particularly or somebody else, and I was reminded that I'm a baptized Christian at a young age and I had a contested primary race -- that happens in the spring, as we all know -- and at my Catholic church, springtime, Easter is also when those who convert to Catholicism go through classes and of course it all comes to the time where they actually convert.

And the monsignor at our church refers to these people in a certain tag or tone, and being in a primary situation but trying to do my duty there and being a good Catholic in church, sitting there and I heard "Will all candidates rise?" And I stood up in about a thousand people in the middle of the church and realized they were talking about the soon-to-be converts, they called them candidates. Well, all I could figure out was they were talking to me. So today all the stuff going back and forth, did he mean that to me, did he mean that to them.

And obviously I stood up, and it's about 15 times the size and amount of people here, and I didn't know whether to sit back down or walk up front and become baptized again.

(General laughter.)

MR. PICKETT: Okay, here's what I'd like to talk about real quickly, kind of two issues. I'm going to tell you again, reiterate some of the concerns that I currently have, but I also want to talk about the things that we have in common, and I told you a couple of months ago that we're not that far off, that we can work on those commonalities, and my conversations with Commissioner Houghton, yourself, Mike Krusee has actually helped with this.

The concerns are still that we don't have enough oversight on the regional mobility authorities. I have a little bit of concern, even though we're selling this as local control, is it really local control. We're going to create a board that no longer is just the county commissioners court or the MPO, it's a different board who has an appointed chairman, so I have a little concern there.

Commissioner Nichols heard my concerns a couple of months ago about ten years down the road how much money will be going into administration, capital expenditures on these regional mobility authorities that is not going into building roads, maintaining roads. I still have some of those same concerns, and some of the good news is, though, it sounds like a few of you do too -- without throwing out the baby, so to speak.

I also understand the voting situation -- Commissioner Houghton, 16 people voted for it -- but those of us that are elected officials know that if those 16 votes were all voting selfishly because the issue benefitted those 16 people, damn the rest, and so some of them get a little dicey.

I mean, I would have recommended to the people who didn't like the outcome to take one issue back to CAMPO; not try to recall anybody but maybe we take that one issue that you were trying to get the commissioners, one thing. Well, maybe we take that one and see if the other 16 will buy into that and go yes, we still are getting what we want but we change, and that didn't happen. So that's a possibility.

You and I have talked, Ric, about I don't want to see a lot of things set in stone in legislation because I believe real strongly in our system of allowing you to have that policy. And here's where we would lose if we decided to take all the money that we do have in TxDOT -- whether it's enough or not -- and try to legislate that in an appropriation process, there's going to be major losers, there's going to be a nightmare, it's terrible.

So I'm going to continue to support the part of you having a lot of authority for policy, so that's why I'm here. There are a lot of members who feel much, much stronger than I about this, are upset and mad, but they're not here talking policy. They may be planning on writing legislation and none of us will know that until November. That is not my current plan of action that I want to do.

Okay, so let me go to money, and I know a little bit about that, not a lot but a little bit, and I was watching the presentation of Mr. Bass. And I have a different view, and I tried this on my roommate last night; I woke him up to try it on my roommate, and he's from Denton and he didn't understand it but I tried it out on him. And this is again after some of our discussions, looking at the money, the training that I feel that I have and the leadership in Appropriations and some great members about looking at things differently.

We know there are three things that I believe we all have talked about. This one-third, we only have one-third of the money to build all the things that we want to build -- everybody in this room has heard it a million times. We also know that tolls are something that was already out there, is out there, we've enhanced it, it's there. None of the speakers who have problems today said that they had a problem with tolls in general -- there's another commonality.

The biggest part of this whole scenario is the maintenance. We're spending more money maintaining what we have than building the capacity that we need. Now, I'm going to use numbers in the Appropriations Bill because the numbers Mr. Bass had are updated, and that's the good news because it's more money that we originally estimated for appropriations, so TxDOT has got more money than we thought a year ago, that's good.

But in the bill, TxDOT's budget is about $6 billion a year, $3 billion is construction and maintenance; of that the 55 percent of that goes to maintenance, about $1.8 billion; that means construction is about $1.2-, and that's the one-third, we only have one-third to build everything. So here's what I would propose if I was king for the day, I would take that $1.8 billion in maintenance, put it in construction, boom, automatically. We're no longer at a third, we're at 83 percent of what we need annually to build. We come up with another $600 million and we've got the three-thirds that we all wish -- and you talked about the Transportation Fairy -- so we've got the three-thirds and we're building everything we need to build, we've taken the argument away about we don't have enough money to build.

All right, Pickett, you've left this huge hole, though. But we've got two problems. We've got construction/maintenance. But we've fixed one, we have fixed an entire problem with all the money for construction. Okay, we need to come up with $1.8 billion, we can round it to $2 billion annually -- not one time, we can't borrow our way out of this -- we've got to come up with $2 billion annually now to maintain the roads that we have.

And here's where maybe a hybrid of what's going on and my concerns about the regional mobility authorities and the commission's role. Now let's take the map of Texas -- and I picked up a new one up because all five of you are in this one and Mr. Houghton, the glamour shots picture came out great.

(General laughter.)

MR. PICKETT: We take the map and we put it down on the table and we work backwards. We come up with the toll projects that will generate the perpetual amount of money that we need to do the maintenance. It doesn't cost us dollar for dollar, meaning if we spent a dollar for construction, it doesn't cost us a dollar for maintenance. Mike is maintaining 80,000 miles, some of up to 45 years old, with the $1.8 billion. Any toll project out there -- and I've already said this publicly, the best argument that we have is that we take that new toll project and it's no longer a maintenance drain, so let's work it backwards.

I think we're getting to a point that it might start making sense for people to understand. You mentioned pie, and you heard me say I didn't think it was fair to take the Mobility Fund and not let areas use it. I've actually listened very closely to what you said, I liked what you said about the pie, and you know what, I might be able to sell this idea of putting all this money in construction, going out and now finding a perpetual source for maintenance because we're going to do all the construction.

What if I was able to go back to my community and everybody in this room and say we no longer have a third of the money that we've been letting, we've got three-thirds.

MR. WILLIAMSON: That would be wonderful.

MR. PICKETT: Pretty cool. Now, I will also tell you my community is not ready, we couldn't do it tomorrow, we couldn't let three times what we're doing now. It would be great if I could go home to tell the public, the business community we're going to double it, that's even great, so I don't even need all of the construction dollars that we've now dedicated. So we have a period of time that we could figure out how to make the transition into this maintenance, because I can't use it, I can't spend the money, so we can still use it.

Okay, you're proposing this because you don't want to toll in El Paso. You want three-thirds of the money that you're getting now, you want three times your money, no toll today. But if TxDOT, the commission, puts the whole map down on the table, El Paso has got to realize that there will be a toll because we are creating a perpetual maintenance fund but it's not a toll maybe today and we will have a plan to put it on. If we don't do that and we stay with what's currently on the table -- and again, Mr. Houghton said the vote is already in, we're not going to override CAMPO -- if our MPO says, even knowing that we're not going to participate in the new Mobility Fund and if that's what they want to do and we don't, I don't feel that we have ruined our transportation infrastructure in El Paso forever.

We had the ability to do tolls before, we'll have the ability to do them again even if we don't participate in the Mobility Fund. So I can go back to my community because we're getting double of what we were letting last year and say we're not going to toll right now but there's going to come a point where we are going to have to toll when we do finish our basic infrastructure and we do give you a real alternative to another route, and you're going to have to pay for it and I'm going to support that you're going to have to pay for that.

I think it takes care of a lot of the problems about the divisiveness. We've got elected officials against elected officials. Part of this current policy actually is instilling turf-orientedness.

I sat on city council, Mayor Nichols. Every year we sold bonds for roads, and Ted knows this, Ted may have been mad at me. We had six districts, we divided it by six because it sounded fair. I represented a district that wasn't 100 years old; a district that was 100 years old was getting the same amount of money my district was getting. That's not fair, but because we divided by six, we called it fair. So I like the pie, I like the idea. And that's again going back to 2001, I saw the benefit of tolls as being something that would eventually happen in my community but until it happened, I imagined the pie for the state would be growing during that time. And if we can find a way to do that, I think you are going to get the buy-in.

And there will always be somebody, you are never going to please everybody, but I'm here to tell you, Mr. Chairman, Ric, that I have listened to what you and I have -- what did you say the other day -- cussed and discussed, and I thought he makes some great points, he's got me moving in a certain direction to where I looked at it differently. This isn't something that I thought about last Friday, last Thursday; Ted, it wasn't something I thought about last night at seven o'clock; this came to me last night. I said if I was to do it all over, king for a day, appropriations process, that's what I would do: I would put all the money into construction, find that perpetual number we need for maintenance, make that number work backward, find those high, high percentage toll projects would be priority, not 35 percent toll viability ones in El Paso, higher ones, knowing that El Paso has to do it.

I got excited but I'm the only one; I voted for it, it was one to zero. My roommate didn't understand what I was trying to say; he said white light.

So I am not here to try to knock the process off the rail, whatever is going to happen is going to happen, but I do have some peace of mind that if I'm around over the next five, six, seven, eight years either as an elected official or very active in my community, whether we participate in the Mobility Fund or not, I will be proposing that my community is eventually going to have to be part of this perpetual funding of that maintenance. And I hope you take what I've offered here and please take a look at it, take a look at doing it this way. Let's take a look at going backwards, not creating all the tolls. And part of the problem that I still have is these regional mobility authorities -- the three you created -- are going to be the first against it, they've already been created.

Some of them have left other things, they have spouses, husbands, kids, birthday presents to buy and we're saying we're going to do away with them. Well, obviously I wouldn't propose to do that. But what's going on is going to perpetuate some turf-orientedness. Even you said, Chairman, that the toll authorities will keep expanding where they are, more money will go in for those projects there. That doesn't expand the pie, that just does again that one region, and if one region really wants to get aggressive, they can build all kinds of stuff.

So let's bring it back in a little bit, let's bring it back to the pie that you say and you do make some of those decisions and not say we're going to leave it to the MPOs because they made the decision, not us. Go ahead and make some of those decisions and you tell me in El Paso: Pickett, I think there is a toll project over there; you're right, 35 percent toll viability is not quite right; we are going to maybe double the letting there because we can now because we have the 100 percent for construction, but you're going to have come onboard in 2015 with this toll project. Because you know, you've got the minds to figure that out today and where we're going to be. And if we don't buy it here, the next state that passes a 3588, I'm going to go try it on them.

MR. WILLIAMSON: You're always thinking. Of course we'll think about that; we think about all good ideas; it's a good idea. Mike almost came out of his chair when he started thinking about $3 billion for new construction, thought he'd like that.

MR. PICKETT: And it does, and the numbers work because we really are spending more on maintenance but why aren't we putting the emphasis on the construction, and now we are saying we are because we don't want to depend on the federal government and the gas tax, but then let's just put it all in construction and worry about the maintenance.

MR. WILLIAMSON: Road Fairy. Discussion, members, with Mr. Pickett?

MR. HOUGHTON: I appreciate Representative Pickett's passion, and I look forward to the journey, it's going to be a lot of fun working with him over the years -- and I imagine you'll be around for a long time. I do appreciate your passion for this and your support.

MR. PICKETT: And I believe our MPO -- unless I'm missing the boat -- I believe that we're going to tell you that we're not ready to participate in a toll project. So I will also go to the public and tell them honestly that it's been estimated that we could lose $81 million out of this new revenue source; I will also tell them, though, we'll still be able to toll.

And what I've provided you still has some additional tools to bring back in: you still have this revenue source of $300 million a year -- in what I just proposed, we didn't use it yet; you still have the Ogden Bonds -- and I appreciated, Chairman, you calling them the Ogden-Pickett Bonds, but let's be honest --

MR. WILLIAMSON: We don't have the Ogden Bonds anymore, we have the Ogden-Pickett Bonds.

MR. PICKETT: Well, I was used and abused and I wanted to; it was not my idea. I had the vehicle; Peggy Hamric and I had a constitutional amendment on a related issue. Senator Ogden, Chairman Krusee came to me, it was their idea, I liked their idea. I just happened to be the only ride they could get to the dance on, and I was more than happy to let them piggyback on it because I supported what they're going to do. My only change -- and I mentioned that to you last time -- was I didn't want an artificial limit, and so I'm the bad guy for those people who don't like borrowing money. There was going to be a $2 billion artificial limit; I asked Senator Ogden and Representative Krusee if we could just take that out, we're going to open the constitution, let's leave it with no limit and let the legislature make that decision periodically. I still believe in that as well.

MR. WILLIAMSON: Discussion for Mr. Pickett?

MS. ANDRADE: Representative Pickett, thank you for being such a strong advocate for transportation, and it sounds like you live transportation if you thought about this in the middle of the night. I've done that myself.

MR. PICKETT: Well, I also had two Budweisers and had to get up no matter what.

(General laughter.)

MS. ANDRADE: What I'm concerned about is that I don't know if Commissioners Nichols and Johnson feel this way, but I haven't visited with you socially so I didn't know if we had to do that so that you could also start giving me also some more input.

MR. PICKETT: Well, it was actually not by design. I ran into Chairman Krusee, I ran into Commissioner Houghton.

MR. WILLIAMSON: He was stalking Ted.

(General laughter.)

MR. PICKETT: And the chairman actually started the discussion on Thursday in El Paso. I did wonder a little bit, we both were told wrong information. He and I were going to be on a panel with a couple of other members, we thought, at 10:00 a.m. last Friday; we were notified it was going to be 3:10 in the afternoon after we prepared to be there at 10:00. And I figured that the chairman was going to take it out on me and was going to wait till 3:10 in the afternoon to ask me to speak.

MR. WILLIAMSON: My wife and I got home at 4:15 the next morning. It was a long drive from El Paso to Weatherford.

MR. PICKETT: But I know you've got the minds and I can see the little bubbles above your head, there's no nasty thoughts. Think about what I just proposed. I think there is some validity in it and I hope some of the people in the audience today stayed up with what I was proposing. I think there is some merit in what we just discussed.

MR. JOHNSON: Very imaginative and innovative. A couple of questions just to jump forward. The toll revenues that come into the system at some point in time to fund perpetually the maintenance of the system, are those built as toll features in the origin or are they converted at some point in time down the road when financially this --

MR. PICKETT: I believe that would be a decision jointly of the commission with local input because I see that now, as the chairman described the Mobility Fund, it shouldn't matter that the money is coming from all over the state, it's one pot used for all. I think if we go back to looking at the tolls as being how we pay for maintenance that we push them up, push them down because we all can have an example out there. Someone is going to come in and say we know of a toll project that went away. There really isn't anybody in this room that honestly believes that all these toll projects being created are ever going to go away except with some exception.

If we look at the bigger picture again, we don't grow government. I'm a conservative Democrat, as you were and now a conservative Republican. I worry that this is public funds. It may be not be TxDOT employees but we're going to be growing government under these RMA situations, we're going to be buying podiums and speaker systems and we're going to be buying maintenance equipment and police cars for the toll police. We're going to have a lot of money that is not going to be used for construction and for maintenance out of TxDOT's budget, and I'm not dinking TxDOT because there's a lot of important things.

You have a $6 billion a year budget, Mike; $1.2- goes to construction, the other stuff goes where? Well, if we had the same analogy in RMAs, RMAs are going to be spending 25 percent on construction and maintenance and 75 percent on what else? It won't be that high but there's going to be a lot of things that we've created bigger government, we just don't call it an FTE because it's somebody hired by an RMA, but it's public funds that create that RMA.

So let's find a way to keep the three created in the fold so they can plan Christmas -- it's only a couple of months away, we don't want to fire anybody in an RMA at this time of the year -- but please think about it. And I've thought of all the things wrong with what I just proposed, I've thought about them all; you'll think about them over the next couple of hours, next couple of days, I've thought about them too, and I have a response. It may not be an answer that everybody agrees about but I have a response. I tore apart what I proposed over and over and over again, and I still see it as something that takes care of that divisiveness, we won't please everybody.

Again, we have a form of local control, we have somebody taking care of the bigger picture because you right now at TxDOT make the decisions and you don't want -- I know you don't want to send the allocation of the dollars by project over across the street to the pink building, I know you don't want to do that, I don't either. We're going to see more of that happen with the creation of the RMAs.

MR. JOHNSON: One thing I would like for your fertile mind to consider and think about under his proposal, this innovative way that you're thinking about. In the 2025 plan, Gary Trietsch mentioned there's a shortfall, a disconnect of $17 billion in getting the Houston District from where they will be in 2025 to where they should be, want to be in 2025; I think our district engineer from San Antonio mentioned, I think the number there was about $8 billion, and if you add Dallas-Fort Worth, El Paso, the other metros in, the number just gets daunting, if you will.

How do we begin to fill in that daunting gap? Just by putting everything over into construction is not going to produce what we need to produce.

MR. PICKETT: It actually would be the same way that you're proposing now. Not only would this perpetual funding source take care of maintenance, we're probably going to get to the point -- not speculation, not selling somebody on creating an RMA because you're going to have more money after you pay your debt service -- we are going to have more than we need to pay for maintenance and we will be able to put that money into even more construction.

And I still believe that this is also a more efficient way and all those monies that are going to be out there in all those different RMAs for administrative costs, capital expenditures will no longer exist and they will be in roads and in maintenance.

That's just all I'm asking, get one of these Ph.D. guys, get one of these folks, let them look at it, let them tear it apart. And I want them to tear it apart, I encourage them to do it because I think we're going to find that we're getting close. Again, I'm here to tell you everything that I thought the first day I heard the proposal is not the way I feel today. I do feel a little bit better in some of the sincerity and the fact that you're reaching out and talking to people and that this is a hard sell, people don't like change, we don't have enough money. You're right, you're absolutely right.

And I will try to bring in people like Commissioner Daugherty. I believe he would come in. I'm ready to go out and propose this in my community of hey, if we don't toll in the next five, six, seven years, and especially not that project, but knowing that we're going to have to bite the bullet down the road to take care of our responsibility to the whole pie for Texas, I think I can sell it.

MR. JOHNSON: I believe we're talking about specific issues here, and your presence here is very important, but the big picture is your contribution and interest in the transportation arena in this entire state, not only your district and your community but this entire state is to be appreciated and admired, certainly from commission's standpoint but I would say the citizens of the state.

MR. PICKETT: I don't want to see renewal fees increased; I own more cars than most people in this room put together. And I can take different arguments to different levels. I was thinking last night about the $10 I pay in El Paso County for road and bridge; Mr. Houghton and I both live within the city limits of El Paso so he doesn't get any of that $10, he doesn't get a dime of it, not one cent does he get from the $10 that he pays in registration for the road and bridge fee in our county. Well, that's not our problem, go to the county. You're right. But we look at those bigger issues too because we're already fighting that there.

Now we're selling people on a new method of finance and they're also telling me we're raising $5 million in El Paso for the road and bridge fee, and it doesn't go for roads and bridges. So now how much do you think they believe in us when we say that this toll will really -- you know, we'll paint the road a different color every year, we'll hang up Christmas trees at Christmas to spend all that money we're going to have in our RMA.

Think about it, that's all I ask.

MR. NICHOLS: I just wanted to thank you for being here and all that you have done for transportation over the years, and that we do have a lot of respect for your ideas because I know that whenever you articulate them, because of your years in transportation and your exposure in the Appropriations to a lot of other state problems, that whenever you come forward with an idea, it has been thought through a lot and it's something that you've worried about.

And we do not, by any means, try to represent that we have better ideas than other people or that we have a monopoly on the best ideas, what we try to do is come up with the best ideas that we know.

MR. PICKETT: Come up with an idea.

MR. NICHOLS: Right.

MR. PICKETT: If you didn't, nobody would.

MR. NICHOLS: And we're always looking for more ideas and areas of interest.

When you said pull the preservation and maintenance out and put it in construction, I almost fell out of my chair to start with.

MR. PICKETT: I know; that's why I was trying to talk fast.

MR. NICHOLS: I knew what that impact was, and then as you went on, I understood.

MR. PICKETT: And Chairman Williamson also brought up some things that I've been looking at too. We can whittle down that $1.8- or $2 billion in maintenance by -- I tell you what, what if I proposed something to the appropriation process or statutory that said state agencies compete for that collection of that money. TxDOT, what do you think, can you collect the gas tax better than another agency?

MR. WILLIAMSON: Oh, yes.

MR. PICKETT: Okay. We'll take that number and guess what.

MR. WILLIAMSON: Pass that along with the DPS, will you.

MR. NICHOLS: I know as I've worked on some of this stuff and looking at numbers forward and have had an opportunity to talk to different elected officials and community leaders, on the toll thing the one number that probably surprises them more than any other -- because they're always thinking in terms of what it costs to build something new -- they forget every time that we've got to maintain it, and these numbers, like the shortfall, the one out of three projects, that's all new projects and it has nothing to do with the preservation. The somewhere between $60- and $75 billion shortfall in the metros to get the capacity has nothing to do with the preservation.

MR. PICKETT: And the shortfall is an easier number to come up with a dedicated source than the construction because we need three times the construction amount, we don't need three times the maintenance amount. The maintenance dollars are growing and will grow no matter what. Again, if we put out another billion dollars in new construction, it is not a billion dollars more in maintenance, it is not. Anyway, it works.

MR. NICHOLS: I want to thank you for everything you've done.

MR. PICKETT: My pleasure. And I'm sorry to keep you. And I've been saving this, I've had this for years and years and I thought today might be the one to do it. I have one of these stickers that says "I am a friend of TxDOT" and I figured if I walked across the street and got hit by a truck, they'd look at my driver's license, they'd look at this, and it would be in the papers that Pickett died a friend of TxDOT.

(General laughter.)

MR. WILLIAMSON: Thank you, Joe, thank you for staying so long.

Members and guests in the audience, I need to acknowledge that Senator Barrientos stayed with us the entire morning. It was his decision to wait until the end to speak last; unfortunately we went longer than he and we anticipated we would go, and he had another obligation that he needed to meet. I do not know if he will return. I think he would prefer us to move ahead on our agenda and not plan on that, unless staff has got some words of wisdom for me about that. We do want to acknowledge that the senator was here to speak about the CAMPO plan and to share with us some personal viewpoints of where he thinks this whole process ought to go, and we trust that he will relay that to us at some point at a later date.

We have one other speaker on this matter and then we're going to adjourn for 45 minutes for lunch and executive session. The next speaker is our old friend Roger Baker. Where are you, Roger? Are you still here?

(No response.)

MR. WILLIAMSON: Well, I guess Roger decided to take a break, with Senator Barrientos, perhaps.

Mr. Monroe, do I need to announce that we're going into executive session if we're going to do it the same time as lunch?

MR. MONROE: Yes.

MR. WILLIAMSON: Thank you, Mr. Monroe.

At this time I would like to announce that we are going to recess in order for the commission to meet in executive session, as provided for in the public notice posted for the meeting agenda filed with the Office of Secretary of State. Specifically, we will receive legal counsel from the Office of the Attorney General about litigation related to TxDOT projects. We will return no sooner than 2:15; if the executive session ends sooner than that, we shall take a short lunch break. For those of you that need to continue to participate, we'll start again no sooner than 2:15 and probably right at 2:15.

We're very sorry for the inconvenience. Transportation is becoming an increasingly important function on American Texans' lives. We're in recess.

(Whereupon, at 1:30 p.m., the meeting was recessed, to reconvene this same day, Thursday, August 26, 2004, following executive session and a lunch break.)

A F T E R N O O N S E S S I O N

(2:51 p.m.)

MR. WILLIAMSON: We'll return from recess. Mr. Monroe, do I need to mention the executive session?

MR. MONROE: Not really.

MR. WILLIAMSON: We're returning from recess and we're going to go back on our agenda. Mike, as I understand it, we did the approval of the minutes, we did the resolution. Did we finish item 8(a)

MR. BEHRENS: Yes, we finished 8(a).

MR. WILLIAMSON: And did we finish with item 7(b) or do we need to go back to that?

MR. BEHRENS: No, we finished with item 7(b); we will go now to agenda item 3, Aviation.

MR. WILLIAMSON: And historically we wouldn't start without all members being present unless they were out of town, but Hope is tied up in a meeting on commission business so she'll join us when she can. Go ahead, Mike.

MR. BEHRENS: We'll go to agenda item number 3 which is the Aviation minute orders for the month of August, the first being approving funding for airport improvement projects, and the second, recommendation to reauthorize the Routine Airport Maintenance Program. And today we have Bill Fuller representing the Aviation Division.

MR. FULLER: Thank you. Item 3(a), this minute order contains a request for grant funding approval for 26 airport improvement projects. Total estimated cost of all requests, as shown in Exhibit A, is $7,739,335, of which $5,304,900 are federal monies, $1,660,500 state, and $773,935 local match. A public hearing was held on July 23, 2004. The only comment provided was from a citizen from Georgetown speaking in favor of their proposed air traffic control tower. We recommend approval of this minute order.

MR. WILLIAMSON: Will any of these improvements be made in the Jacksonville area?

MR. FULLER: No, sir.

MR. NICHOLS: I so move.

MR. JOHNSON: I second.

MR. WILLIAMSON: I've got 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.

MR. FULLER: Item 3(b), this minute order provides for continuation of the Routine Airport Maintenance Program for Fiscal Year 2005. A public hearing was held on July 23, 2004; no comments were received. We recommend approval of this minute order.

MR. WILLIAMSON: There's some Jacksonville in here. There it is.

MR. NICHOLS: Is it there?

MR. WILLIAMSON: Robert Nichols Airport, Jacksonville, Texas.

MR. NICHOLS: Isn't this every airport in the state?

MR. FULLER: Every public airport.

MR. WILLIAMSON: You're not supposed to ask that.

(General laughter.)

MR. JOHNSON: I'll move in this case because I know Mr. Nichols is restrained from doing so.

MR. HOUGHTON: Second.

MR. WILLIAMSON: And Mr. Houghton seconded. 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.

MR. FULLER: Thank you.

MR. BEHRENS: Thank you, Bill.

Agenda item number 4, we'll have a couple of discussion items, the first being led by James Bass who is going to be discussing financing alternatives, including the State Infrastructure Bank and Toll credits and their relation to public transportation projects. James.

MR. BASS: Good afternoon. I'm James Bass, director of Finance at TxDOT. As Mr. Behrens stated, I'm here to lead a discussion on some potential alternatives for financing public transit in the state of Texas, primarily those two items being use of the State Infrastructure Bank and Toll credits. Also here today, if you ask any detailed tough questions, are members of the Public Transportation Division to assist when we get to that point.

Most of you and many members of our audience are probably familiar with the State Infrastructure Bank that exists within Texas which is effectively a revolving loan fund that has been used to financially assist communities throughout Texas with their highway projects. Some may not be aware that there is also the ability to create a transit account within the State Infrastructure Bank to assist transit projects. The question would then become once you create an account, how do you capitalize that account.

On the highway side, the highway account in the State Infrastructure Bank was originally capitalized through the draw down of federal highway dollars and matched with state highway funds to form and create that initial capitalization. On the transit side, to date -- my understanding because a lot of this goes back to before my time as director of Finance -- when the Transit Association was initially approached about capitalizing this transit account, there was not a great deal of interest because unlike the highway funds, the transit funds were much cleaner and they were directed by formula to different areas of the state. So each area would have been giving up, in effect, very close to a guaranteed dollar amount to then redirect to this potential loan program. So to date there has been no capitalization and no activity within a transit account from the State Infrastructure Bank.

MR. WILLIAMSON: Who was the head of that Transit Association at that time?

MR. BASS: I'm not exactly sure it was back in -- this would have been in the time period of 1997.

MR. WILLIAMSON: Is it the same person that's there now?

MR. BASS: I don't believe so; I believe there's been a change in recent months. I'm not sure, the previous head of the Texas Transit Association, how long their tenure was, if it dates back to 1997 or not.

MR. WILLIAMSON: That person is not available to us to ask why they weren't excited about it.

MR. BASS: Correct. My understanding, what I've been told second or third hand, is because the allocation of transit dollars was almost known, and so the transit entities would have been giving up a known dollar amount for the potential and the possibility of perhaps getting a loan in the future. At that time their will seemed to be, "No, we want to keep getting our guaranteed share" -- and they used the term "guaranteed" and perhaps overused it in this case.

In some previous discussions that the commission has had over the past six months, there have been questions about the State Infrastructure Bank and different types of projects that we can utilize the SIB for, and after one of those meetings I was approached and given some information about a program in California that they have established to assist transit entities in that state. The individual thought it sounded very similar to what the commission was inquiring about.

We've looked at that, and in California it actually created a separate entity. It appears that if we were to move this direction -- and I'll get into a little more detail -- in the state of Texas the State Infrastructure Bank would be able to serve that role.

What happens in Texas, in its broadest sense, is the State Infrastructure Bank which has the authority to issue revenue bonds could go to the market, receive these bond proceeds, and then allocate those back to various transit associations throughout the state of Texas who could then utilize that to accelerate their acquisition of some capital assets, simplest example being buses. Then over time, through receipt of local funding, state funding, federal funding, those various transit agencies could then on an annual basis repay that loan to the State Infrastructure Bank which would in turn use those proceeds to repay the bondholders.

The benefit from that is on a statewide perspective rather than each local transit authority going out and developing their own set of documents, going through that process, introducing a new and slightly different credit to the market over and over, there would seem to be some economies of scale by pooling all those needs together and one entity carrying that forward, setting one template of bond documents and going to the market perceived as one general credit.

From the transit side, obviously the benefit would be they would receive the bond proceeds sooner than they would the other grant funding from the various sources I mentioned earlier and they'd be able to accelerate their acquisition of these capital assets. I mentioned buses as one example; there could be other examples as well where this could be utilized.

One of the benefits of this is the Federal Transit Association funding that the local transit providers receive is eligible to participate in a loan repayment, so if the SIB did this, the federal dollars that the transit providers receive, they could utilize those Federal Transit funds as a portion of their repayment to the SIB.

Earlier this month, I believe it may have been late last month, but the Public Transportation Advisory Committee on July 20 had a meeting at which I presented the California case study and how it might fit within the authority that Texas has, and members of that committee did express interest in further exploring the possibility of the SIB issuing revenue bonds for this purpose. And the way I would imagine it going forward is rather than just capitalizing the account and not knowing what the need might be out there, we would go out for a program call, if you will, to gauge what the interest was. If there were a number of projects that the commission felt were worthy, we could pull those together for multiple providers and take that forward as one package and then perhaps set that up on an annual or biannual basis to go through a program call for this purpose.

Members of the Public Transit Advisory Committee, as I said, expressed some interest and also offered their assistance in continuing to investigate this effort.

I guess it may make sense at this point, before I move into Toll credits and see if utilization of the SIB, if I did a good job of describing that and the possibilities that exist within that program and see if you have any questions on that before moving into Toll credits.

MR. NICHOLS: They're two different issues.

MR. WILLIAMSON: Correct.

MR. NICHOLS: Since this is a discussion time, do you want us to try to -- have you got people signed up to talk on this?

MR. WILLIAMSON: I have people signed up to talk on item 4(a).

MR. BEHRENS: Which would be this entire item.

MR. BASS: If you'd prefer, I can go ahead and discuss the Toll credits as well and then see if you have questions on either one.

MR. WILLIAMSON: I'm waiting for my commission members to give me an idea on what they want to do.

MR. NICHOLS: It makes no difference to me. If we have people who were going to comment on it, I wanted to hear the comments.

MR. WILLIAMSON: You want to hear the comments first?

MR. NICHOLS: Before I said anything, yes.

MR. WILLIAMSON: Unless I hear objection from the other three members, I'd like for you to go ahead and lay out, and then I'd like to take comments from the public, and then give the members the opportunity to talk to everybody in sequence.

MR. BASS: The second item that's been discussed numerous times over the past several months is the state's utilization of toll credits, and I guess I'll start off trying to describe what a toll credit is because that simple statement in and of itself is confusing at times.

Toll credits are not cash dollars, it is not necessarily additional money; to my mind I would describe it as financing flexibility. Federal entities would refer to it as soft match; a state -- and the states are the only entities that are allowed to earn toll credits -- but a state, the State of Texas can earn toll credits by tolling authorities within the state spending what they refer to as toll revenue for the capital infrastructure of toll roads, so regular and routine maintenance would not earn a state any toll credits, but building of a system or expanding an existing system, the expenditure of toll revenues for capital expansion or creation, a state can earn toll credits.

There are different maintenance effort requirements and tests that a state must meet in order for those expenditures in any one year to be eligible for that. Once a state establishes and earns these toll credits, an account is established with our federal transportation partners. Then throughout numerous projects, the state has the flexibility of either matching the federal assistance with cash or matching it with toll credits.

As an example I'll use -- one of them we had talked about with the Public Transportation Advisory Committee, there may be an entity that would like to purchase 40 new buses and from what I understand, each bus is around a quarter million dollars so that would be a $10 million purchase, and there may be federal dollars available for that purchase of $8 million at an 80 percent ratio. In order to pull down those $8 million of federal funds, the local provider would have to come up with $2 million of non-federal money, either state or local money, cash to attract that $8 million. They then have a total of $10 million cash to go purchase 40 buses.

There are times where that local entity may not be able to come up with that $2 million of cash to serve as match. What typically happens in that case is the $8 million of federal money may just sit there and not be utilized. So they want to purchase 40 buses but since they can't come up with the local match, zero buses are actually acquired.

Through the use of toll credits in that same situation, they could use $2 million of toll credits out of the state's account of toll credits, use that as the soft match, pull down the $8 million of federal money that's available, and acquire 32 buses, falling short of the 40 that they wanted to begin with but much greater than the zero they'd be able to get under the existing system that would require cash.

That example would be true in more than just buses, it's also true on the highway side and in different federal programs, but for transit, I think that may serve as a good example. There again, toll credits are not cash but it does provide financing flexibility and in some case may allow access to federal funds that are available that otherwise might not be made available due to the lack of cash at the local level.

MR. JOHNSON: James, in the example that you have just given, where does the other $2 million cash come from?

MR. BASS: If they normally came up and were able to purchase the full?

MR. JOHNSON: Put in $2 million of toll credits and they utilize that to get the federal match which is $8 million which is cash money, but the buses cost $10 million.

MR. BASS: Right, but rather than being able to get 40 buses at $10 million, they could only get 32 buses at $8 million.

MR. JOHNSON: So they've spent $8 million cash.

MR. BASS: Correct, because I haven't found a vendor yet who will accept toll credits as payment.

MR. JOHNSON: Well, keep looking.

(General laughter.)

MR. BASS: We're looking but hadn't found any yet.

And so that's a key point that, as I said, toll credits are not money, they're not a substitute for cash, but in that example without toll credits that local provider wanting to get 40 buses, not having the local money available to match the $8 million, they would have ended up with zero buses.

MR. HOUGHTON: The state is the only one that has the toll credits.

MR. BASS: Correct. For example, if an RMA spends money on a toll road, if NTTA, Harris County Toll Road Authority, other tolling authorities in the state spend money, the State of Texas can earn toll credits for those expenditures, but the State of Texas is the only one that can establish and earn toll credits. We can utilize the expenditures of these other toll authorities, but the keeper, if you will, of the account is at the state level.

MR. NICHOLS: In the example you used of the $10 million buses where they would get $8 million worth and then the soft would offset but they'd just end up with 32 buses, you also, I think, had used an example where instead of asking for $10-, they would ask for more like $12- or $12-and a fraction, offset it with the necessary toll credits, and actually get $10 million in cash.

MR. BASS: It could be. In another example on the same one, if -- and this may be a big if -- if there were $10 million of federal available, they could on that same 40 buses, they could increase the federal participation to $10 million and then they would have to utilize $2-1/2 million of toll credits. It's a four-to-one ratio.

MR. NICHOLS: And in the situation that currently exists all around Texas where counties have to participate or where cities have to participate on these matching grants with Federal Transit, they're having to put up hard cash, and if they could utilize toll credits, they could free up a lot of that hard cash and put it into improving the system, expanding the system, or something else.

MR. BASS: Correct.

MR. NICHOLS: So even though it's called a soft match, in effect, it can free up some real hard dollars.

MR. BASS: It could save $2 million, and rather than someone saying I only have $2 million in my budget, I either use that to keep the lights on and pay everybody or acquire buses, it would give them that flexibility to perhaps use the $2 million of cash elsewhere within their operations.

MR. NICHOLS: Although it's not the same as cash, in effect since it can free up cash, it's almost as good as cash in specific situations.

MR. BASS: One additional thing I'd like to point out on the earning of toll credits, it is a federal program and the rules as they read right now is -- I'm going to do another example. Let's say we have the $100 million toll road and it's going to be paid for, we're going to issue $90 million of toll bonds and pay for it, and the other $10 million we're going to fund through toll equity and we're going to seek Federal Highway participation on that. So it would be $90 million in toll bonds, $8 million of Federal Highway money, and $2 million of state money cash. Because of that utilization of $8 million of federal money, we would earn zero toll credits on that project. And using that $8 million of federal, it wouldn't matter if that project was $100 million, a billion or $2 billion, the use of one dollar of federal assistance on a toll project taints or invalidates all expenditures on that project.

MR. NICHOLS: And the formula that you just mentioned at the federal level would kick out all those toll credits for say Texas in that example is not actually written in the federal law reauthorization that way, so much as it is that is just an interpretation of that particular element by the Federal Highway Administration.

MR. BASS: Correct, that's my understanding, and there was some discussion during the current --

MR. NICHOLS: Hopefully we can get some clarification of that in the new bill.

MR. BASS: -- there was some discussion during reauthorization of making that more on a pro rata basis.

MR. WILLIAMSON: Are we working on that, Coby, at the federal level? Thank you.

MR. JOHNSON: That includes TIFIA loans also.

MR. BASS: Correct.

MR. JOHNSON: Now all the federal funds are being repaid.

MR. BASS: Correct, and that was another item that through these discussions through reauthorization that if used federal dollars, that should be not allowed on a pro rata basis; if it were a federal loan, then once we repay that loan, those expenditures should be eligible but it should not taint the entire project for any consideration of the earning of toll credits.

MR. WILLIAMSON: Other dialogue about this matter with James before we hear from outside witnesses?

(No response.)

MR. WILLIAMSON: James, don't get too far away because we're going to want to talk about this but we want to hear from some people from the normal world.

Our old chairman, Sam Russell; former House member Sam Russell, members. Sam now owns a bus company in Texarkana -- no, I'm sorry -- he's the general counsel of the Texas Transit Association.

MR. SAM RUSSELL: I realize we're getting old, Mr. Chairman, and memories fade, but thank you very much for allowing me the opportunity to testify this afternoon.

MR. JOHNSON: Is this two meetings in a row?

MR. SAM RUSSELL: I believe it is. Have I exceeded my limit?

MR. JOHNSON: I'll have to talk to the chairman about that.

(General laughter.)

MR. SAM RUSSELL: Mr. Chairman, members of the commission, Mr. Behrens. For the record, I'm Sam Russell, general counsel for the Texas Transit Association. First of all, I want to thank you for placing the item of financing alternatives for public transportation, and more specifically, the use of toll credits, on your agenda for discussion this month.

The association conducted a survey of rural and small urban providers in July specifically regarding the issue of use of toll credits, and we made those results available to PTAC at their July meeting, a copy of the letter which I have with me and will leave which details some of the information in the survey.

Specifically, though, I wanted to mention that several of the respondents reported currently available congressional appropriations of Federal Section 5309 funding that could be matched with toll credits. Some respondents also reported specific projects that were delayed or for which funding could not be spent because of lack of available local funds. Many of the respondents reported that additional federal funds could be acquired if toll credits were available.

When asked how toll credits would specifically impact their systems, 26 respondents indicated that toll credits could increase local dollars available to support operating costs, 30 indicated that they could increase investment in technology and infrastructure, and 26 indicated that they could expand service. So there's a wide variety of responses that were received in response to the questionnaire.

Based on those responses, the letter to PTAC requested that PTAC make a recommendation to you commissioners that you set aside $6 million in toll credits per year for capital projects for public transportation. When the association board met earlier this month, we had received additional responses and determined that the $6 million figure represented roughly about 60 percent of the responses to the questionnaire and the survey that was conducted, and after looking at those additional responses and discussing the issue, the board determined that we should revise our position, and accordingly, the Texas Transit Association Board respectfully requests that the commission set aside $10 million in toll credits for this fiscal year of 2005 -- not on an annual basis but to look at it annually -- to assist with eligible capital projects for the 5307, 5309, 5310, 5311 and Vehicle Replacement programs for the years 2003, 2004 and 2005 -- because there are programs still on the books for all of those years for some of those entities.

We had a couple of council members from Midland and a commissioner from Bastrop County that were not able to stay here with us, but Ms. Johnson, our acting executive director, has some testimony that she would like to read into the record for a couple of those, with your indulgence.

MR. WILLIAMSON: But hang on a second.

MR. SAM RUSSELL: Yes.

MR. WILLIAMSON: Was she the person that testified previously that she didn't think the association would be interested in a SIB or any kind of loan program, or was that somebody before her?

MR. SAM RUSSELL: It was probably someone before her, because this, to my knowledge --

MR. WILLIAMSON: I mean, this is the association you were talking about, wasn't it, James, that wasn't interested in any kind of financing structure?

MR. BASS: That is what I have been told; I don't have firsthand experience about that.

MR. WILLIAMSON: It wasn't this person?

MR. SAM RUSSELL: No.

MR. WILLIAMSON: Do you have any idea who that may have been, Sam?

MR. SAM RUSSELL: The only other person I can think of, it might have been Michael Plaster who was the executive director for, I think, about ten years.

MR. WILLIAMSON: Who?

MR. SAM RUSSELL: Michael Plaster.

MR. WILLIAMSON: Is that who this lady replaced?

MR. SAM RUSSELL: Yes.

MR. WILLIAMSON: Michael Plaster?

MR. SAM RUSSELL: Yes.

MR. WILLIAMSON: Well, then maybe she'll have an opinion about that.

Questions, members, for Sam?

MR. HOUGHTON: Sam, where did the total project come from? I guess that's $50 million in projects from across the state of Texas, capital projects.

MR. SAM RUSSELL: These projects range from --

MR. HOUGHTON: You have input from various regions?

MR. SAM RUSSELL: Well, the survey that we conducted was from individual providers, and it's a variety of projects that those specific providers would like to be involved in but aren't able to because they don't have the extra funds to make it happen, and that's whether it's vehicle replacement or infrastructure.

MR. JOHNSON: Is it mostly rolling stock?

MR. SAM RUSSELL: Probably mostly rolling stock.

MR. JOHNSON: Just ballpark, what percentage of these are located in non-attainment areas?

MR. SAM RUSSELL: Well, all of these are the rural and small urban providers, so the metropolitan transit authorities, like Houston, Dallas, San Antonio, El Paso --

MR. JOHNSON: Well, I think they still might be -- you know, non-attainment areas go well out into some rural areas.

MR. SAM RUSSELL: Oh, yes.

MR. JOHNSON: I'm just curious.

MR. SAM RUSSELL: I don't know.

MR. HOUGHTON: So we're just looking at the rural transportation providers, not the major metropolitan areas.

MR. SAM RUSSELL: Well, if the metropolitan authorities are eligible for any of those grant programs, they would fall under this recommendation. But I think the argument that's been made to the metropolitan transit authorities is that they have independent sources of revenue where the rural and small urbans don't and have to rely on state and federal grants in order to fund themselves rather than sales tax.

MR. WILLIAMSON: Metros have a tax base.

MR. SAM RUSSELL: Yes.

MR. WILLIAMSON: Other questions for Sam?

Mr. Russell, the organizations that you ticked off, the 5-0 numbers --

MR. SAM RUSSELL: The grants?

MR. WILLIAMSON: -- do any of those currently provide medical transit services or will they provide medical transit services?

MR. SAM RUSSELL: Yes.

MR. WILLIAMSON: Would it be your -- I mean, it's no secret why the commission hasn't moved on distributing these credits; we are preparing for what's possibly going to be a large investment in commuter rail and we're trying to save all the credits we can, and we do understand that there are other needs out there that some of the commissioners are interested in addressing and we're certainly going to do that. But would it be your opinion that toll credits would be an appropriate reward mechanism for transit agencies that aggressively embrace our request for consolidation of services?

MR. SAM RUSSELL: I think that could safely be said. Any additional funding source for rural and small urban providers or for public transportation as a whole I think would be a reward above and beyond what they already receive.

MR. WILLIAMSON: In other words, help us consolidate services and make this work right and we've got these toll credits we want to help you access federal funds and purchase new equipment.

MR. SAM RUSSELL: I'm sure you could certainly do that.

MR. NICHOLS: I have one more, since you brought the health and human services up, that's one of the main reasons that we're kind of waiting to see how we're going to apply this stuff. The other second reason is depending on the outcome of the clarification in the federal reauthorization bill, the State of Texas either will or will not have a lot of toll credits coming in the future, and it makes a huge difference. So we're either going to have a lot more coming in the future as we build more toll roads, or we're going to have the limited that we currently have or can apply and a few along the way, and to me that makes a big difference also. So a lot keeps riding on the federal bill that never seems to quite get there.

MR. SAM RUSSELL: Oh, I think you're absolutely correct, Commissioner.

MR. WILLIAMSON: And your new director's name is what?

MR. SAM RUSSELL: Edna Johnson.

MR. WILLIAMSON: Is she signed up to speak?

MR. SAM RUSSELL: She's not individually but she has testimony from Commissioner Lee Dildy from Bastrop County and from Council Member Berry Simpson from Midland. They left their remarks with her.

MR. JOHNSON: Is your group actively trying to be heard in Washington on this toll credit issue that's being considered in the reauthorization?

MR. SAM RUSSELL: There has been no concerted effort, to my knowledge, on the part of the association. I think very likely individual members in their dealings with their congress people have brought that information to those elected officials' attention.

MR. JOHNSON: Well, being of the school that you never can tell exactly what swings the pendulum one way or another, especially as complex legislation is concerned, it might be a good idea to sort of re-communicate with the members that this is a very, very important issue. As Robert Nichols referred, we have the prospects, if the law is changed or the interpretation of the law is changed, that we can qualify for a large dollar amount of toll credits, and if it is not, our pool is going to be pretty stagnant, and from time to time we'll be able to add a little bit to it but not near what our needs are.

MR. SAM RUSSELL: Right.

MR. WILLIAMSON: I think, Coby, in working, again, on our federal legislation we have -- not on our federal legislation -- don't we have an effort -- aren't we considering an effort to secure someone to start coordinating all of the different interest groups in the state that are focused on some kind of transportation issue, kind of looking forward six years from now? I think we're going to try to offer Sam and every other group in the state the opportunity to join together and speak as one state -- which we are.

MR. JOHNSON: Well, I'm just hopeful that if something comes out -- and of course, it was referred to by Senator Lindsay in the talk that Majority Leader DeLay gave in Houston the other day on I-69 that something might come out, but I realize that's a long shot.

MR. WILLIAMSON: Do what you can, Sam.

MR. SAM RUSSELL: Well, quite frankly, I thought that it was federal legislation that prohibited the use of federal dollars in a toll project if you're going to derive toll credits, and I thought there had been a bill that was introduced to correct that.

MR. NICHOLS: And that bill came back but they're trying to coordinate it in the rewrite.

MR. JOHNSON: In the reauthorization on a pro rata basis.

MR. NICHOLS: I think what's written in the law, part of the confusion is if you use the federal dollars, you get no credits, but what if you borrow federal money, like on a TIFIA loan and then paid it back, but you'd never really actually use federal dollars as part of the permanent cost of the road. It was a loan; does that count the same? Well, that's part of where the clarification is. Right now they're saying if you borrow a dime and even if you pay it back with interest, you still get zero. That's part of the clarification.

MR. SAM RUSSELL: If I may leave this?

MR. WILLIAMSON: If you may leave, is that what you're saying?

MR. SAM RUSSELL: Maybe I did, Mr. Chairman. If I may leave this letter.

(General laughter.)

MR. WILLIAMSON: Well, do I need to go ahead and recognize that Berry Simpson was here and prepared to testify and had to leave and someone chooses to speak for him? Is that what' you'd like?

MR. SAM RUSSELL: Please.

MR. WILLIAMSON: Berry Simpson, are you present?

(No response.)

MR. WILLIAMSON: Berry Simpson was here earlier and not able to remain, and so someone will be speaking for Mr. Simpson and that someone will identify herself momentarily.

MS. EDNA JOHNSON: Actually, I'm going to wear three hats today. I'm Edna Johnson with the Texas Transit Association and I'm here to represent a city council member from Midland and County Commissioner Lee Dildy from Bastrop County.

MR. WILLIAMSON: So are you representing Mr. Dildy?

MS. JOHNSON: Mr. Dildy; he had to leave.

MR. WILLIAMSON: Mr. Simpson?

MS. JOHNSON: And Mr. Simpson.

MR. WILLIAMSON: Do you represent Mr. Dingus also?

MS. JOHNSON: No, just those two.

MR. WILLIAMSON: Thank you.

MS. JOHNSON: The other city council member from Midland had to leave and go back. So give me just a minute and let me read both of these statements for you. Should I lower my voice and pretend I'm the commissioner?

MR. WILLIAMSON: You're too much; I remember you from last time.

(General laughter.)

MS. JOHNSON: I'm Lee Dildy -- actually, I'm Edna Johnson and I'm representing Lee Dildy, county commissioner from Precinct 4, Bastrop County. He's also chairman of the Capital Area Rural Transportation System Board. He'd like to thank you for being here; however, he did have to leave.

During the last two years, local governments, like state government, have experienced budget crunches and shortfalls. As a result, they simply do not have the funds to do everything they would like to do. In fact, they probably don't have enough funds to do everything that they should do. In spite of its importance, funding for public transportation is one of those things that seems to get placed on the back burner.

When one considers all of the other basic services that local governments must offer its citizens, the most pressing need for and use of toll credits for public transportation that he sees is for the replacement of old equipment that continues to break down and disrupt services. A good public transportation system must have equipment that is in good operating condition in order to meet the needs of those individuals who depend upon public transit as their means of mobility.

Using toll credits as a funding source for matching funds for public transit capital projects would go a long way toward bringing the budget shortfalls we as local government entities and public transportation entities currently experience. He urges the Transportation Commission to adopt this financial tool to assist public transit entities, particularly rural and small urban, in meeting their needs to maintain, grow and expand their transit systems. He says thank you.

Now I have to go to Midland here, so we've kind of got a good representation.

Council Member Berry Simpson is a member of the Midland City Council, and it's kind of hard because I'm here to speak, but he was here to speak in favor of using toll credits for public transportation projects.

From a small urban perspective, it can be a financial hardship to continue to operate our transit system while trying to match the federal funding to provide for fleet expansion or replacement or to carry out other capital projects for the benefit of the riding public.

He's got a bunch of arrows here. Midland-Odessa Urban Transit began service in 2003. As they near the end of their first year of operation, they have provided 200,000 passenger trips -- that's quite a few -- in the two cities combined, with Midland accounting for some 60 percent of that total. They are proud of their new system and they want to see it continue to develop and grow, and we believe toll credits are an effective way to accomplish that.

During Fiscal Year 2004, Midland-Odessa could have used $70,000 in toll credits for capitalized operating costs instead of local funds. In Fiscal Year 2005, they could have used $84,000 in toll credits which would free up local funds for other operating costs. In addition to this, Midland-Odessa currently has $983,000 in congressional appropriations that U.S. Representative Larry Combest -- I hope I pronounced that right -- secured before he left office.

MR. WILLIAMSON: Combest. He doesn't serve anymore so you can call him whatever you want to.

(General laughter.)

MS. JOHNSON: He's not here. Right? But it will be in the minutes, so strike that in the minutes.

Those funds have been earmarked for the purchase of alternate fuel bus vehicles and must be used within three years or they will be lost. The local match for these federal funds is $245,000, but toll credits could be used in place of local funds.

Finally, next year they will be applying for Section 5307 for some $2.4 million to purchase more buses which will require a local match or toll credits in the amount of $600,000.

MR. WILLIAMSON: Dollars?

MS. JOHNSON: $600,000. Coupled with the earmark, the use of toll credits would give us over $3.3 million to purchase more buses without spending any local funds.

As you can see, Midland-Odessa is critically affected by the issue of toll credits and I am sure this situation is reflected in many of the small urban areas across the state. We understand that in the past the commission has authorized the use of toll credits for public transportation capital projects, and we respectfully ask that the commission seriously consider restoring the use of toll credits for this purpose.

And then he kind of had a joke down here and I probably won't carry it off as well as he did. He said, Please help us keep our public transportation running so we won't be back some day on other topics like congestion. It was supposed to be funny but I couldn't quite pull it off.

MR. WILLIAMSON: Where did you say he's from?

MS. JOHNSON: He is from Midland-Odessa, city council member. So I have a role as a county commissioner and a city official, and I'm sure they voice many of the small cities.

MR. WILLIAMSON: I suspect coming from Midland it will get pretty prompt attention.

MS. JOHNSON: And they would have loved to have been here, but they had flights that they had to catch.

MR. WILLIAMSON: And do you have any words to speak for yourself? Were you the one that didn't want to have a financing facility?

MS. JOHNSON: No. The first time I'd heard it -- we'd heard about it before but I think that the members do not have enough information on it. It was brought up at the PTAC meeting. And I would be glad to work with Sam to do maybe a survey or get some information out. What I've heard is a lot of them don't like to borrow money that they have to pay back.

MR. HOUGHTON: I'm the same way.

(General laughter.)

MS. JOHNSON: And again, we don't have enough information. And I'd be glad to work with Sam to get it out. Well, it's true, especially with the way a lot of the rural buses --

MR. NICHOLS: Let me ask a question. Would it be helpful -- I mean, honestly the issue has been brought up originally, it was put away, it's a tool that possibly -- talking about establishing a SIB, State Infrastructure Bank for transit, and this is a discussion item on this area -- would it not be helpful if we had our people work to kind of draft what a plan might look like and then work with your Transit Association over a period of time, educate.

MS. JOHNSON: Right.

MR. NICHOLS: And find out if some are interested and some aren't, that's fine. If it's helpful to enough of them, it might be worth doing, but they would have to pay it back.

MS. JOHNSON: Through CTAA they do have some loans available to rural areas with like a 5 percent, 3 percent interest rate, but I don't think we have enough information at this time, and I'd be glad to go forward with it to them to see if they're interested. And again, we don't have enough information to determine that.

Any other questions? Thank you.

MR. WILLIAMSON: Thank you. It's always a pleasure for you to be here.

I think I can pick now and I think I'm going to pick Kermit Black.

MR. BLACK: I think we've organized our presentation a little bit and I'd ask that Mr. Gadbois come first.

MR. WILLIAMSON: I thought you wanted to bring up the tail, Glen.

MR. GADBOIS: I am, but I'm going to just say a few words and pass out something, and then if you will let Michelle Crain go first and then Kermit and then I'll be back up.

MR. WILLIAMSON: Okay, however you want to do it. So you want Glen to come up first? Members, this is Glen Gadbois. Now, let me tell you about Glen; you already know him probably but I want to say it for the record.

Glen's been around for a long time; he's normally thought of as an activist; he's a very bright guy. I rely on him for advice on different matters of not just public transit but other areas of transportation for a different perspective, and I had to kind of beg Glen to come speak, he doesn't like to be the public face. I think that's a fair way to say it.

MR. GADBOIS: That's a fair way to say it.

MR. WILLIAMSON: I'm very appreciative that you're doing this because you're articulate and you can speak to some of this stuff in ways that other people can't.

MR. GADBOIS: Chairman and commissioners, I appreciate your time on this. I am going to hand off -- I'm kind of embarrassed by my stack, given what Gerald brought in earlier --

(General laughter.)

MR. GADBOIS: I'm going to hand off some letters from around this state; the top letter will be from Judge Eckels, we also will have Michael Morris here who has graciously stayed to talk, from the two places in this state that generate toll credits about their support for giving toll credits to public transit and why.

As I hand these out, Michelle Crain is going to come up from the city of Lubbock and talk to you, and then Kermit Black will talk to you after that about the Colonias and the border area, and then I will be back up to kind of wrap things up. And I really appreciate your time.

MR. WILLIAMSON: And Michelle, I know this has been a long day for you. We want to thank you for your patience.

MS. CRAIN: Thank you. I feel like I've gotten to know you just in the time I've been sitting up here.

Good afternoon, Commissioner Williamson and committee members. My name is Michelle Crain and I'm the executive director of the Life Run Center for Independent Living in Lubbock, Texas. I would like to start out by saying thank you for allowing my colleagues and me to address you about the transportation problems in our respective communities.

Just to know that there are possible solutions to the problems that most of us are facing is an encouragement. The solution to these problems would be restoration of toll credits.

I hope you don't mind if I take a minute to somewhat boast about our city's efforts in trying to continue providing quality transit services to our community in the face of the budget cuts and everything that we are being faced with. We can be considered a pretty much perfect example of doing everything right in order to provide and maintain quality services to Lubbock citizens. Citibus which is our city transit, has consistently sought and applied for funding which our city is eligible for. We have also formed an alliance consisting of consumers, other stakeholders in the community, and Citibus in order to find resolutions to the problems we have identified in our community.

And also, our city officials have been very responsive in light of the budget cuts that we have faced. I know that with the budget cuts we have gone before our city councilmen on numerous occasions and asked that they not allow for services to be decreased, and they have been very responsive to that.

However, because of the lack of toll credits and the fact that Lubbock's population now exceeds that 200,000 mark, we have been pushed to the financial edge. For example, Lubbock has received over 2.5 million in federal dollars for the preventative maintenance, ADA equipment, and low floor buses, but without toll credits, Citibus has two choices. One of those would be to not accept these federal funds because match dollars aren't available, meaning that we would lose this equipment in order to provide effective transit services. Also, they could accept the federal dollars and use local funds as a match whereby they would lose monies in operating costs meaning that that would end up with a decrease in services.

Because my center works exclusively with people with disabilities, we are deeply concerned about what this means for the disability community there in Lubbock. Transportation plays a vital role in allowing a lot of us to remain independent in an inclusive part of our communities. As a matter of fact, I have three staff members that depend on Citibus to get to and from work every day. So as you can see, it's not just about a financial cost, this has a human face and a human cost to it as well.

In concluding, I would like to say that during the summertime we awarded Citibus, because of their efforts in continuing to try to provide quality services, we awarded them at our ADA celebration. I'm asking that you reward them as well by restoring toll credits for the use of the city of Lubbock, and not only restoring these credits but allowing the flexibility in which they can use these credits as far as operational costs.

I do thank you for allowing me to speak today.

MR. WILLIAMSON: Questions or discussion, members? Does Citibus offer medical transit services?

MS. CRAIN: Yes.

MR. WILLIAMSON: How do you think they would react to us distributing toll credits as an incentive or as a performance reward for accepting part of the medical transit services we need to provide under House Bill 3588 and other legislation?

MS. CRAIN: And I'm not going to pretend like I'm an expert on that subject because the director of Citibus is here and he can answer that better than I can. I don't think he's on the list to speak, and maybe not. John Wilson.

MR. WILLIAMSON: I don't see him. Is John here? As soon as I started talking to Michelle, he left.

MS. CRAIN: But all I know is that Citibus has been, like I say, very responsible and have done everything that they could do. I don't see why that would be a problem at all; I mean, that's just another service to be able to provide, I don't see why that would be a problem.

MR. WILLIAMSON: I want to say again how much I appreciate you sitting in the front row and slugging it out.

MS. CRAIN: Thank you. It's been entertaining.

MR. HOUGHTON: We take it on the road every so often.

(General laughter.)

MR. WILLIAMSON: Glen, I'm going to wait on you for a while, I guess, and I'm going to listen to Kermit. Is that right?

MR. BLACK: Mr. Chairman, members, Mr. Behrens. Just in case I forget, it's been entertaining for me too.

MR. WILLIAMSON: Kermit, you're from Texas A&M.

MR. BLACK: Yes, I am.

I work in the Colonias along the border from Brownsville to El Paso, have for the last 12 years. A&M has a program that builds community centers, does outreach, brings education, health and human services, youth and elderly, and provides van service within 19 different Colonia areas that serve about 160,000 Colonia residents.

The reason I'm here today is that TxDOT staff, you may remember, requested an earmark and got an earmark in the federal budget for this last year for $2.4 million for a Job Access Reverse Commute Program for the Colonias only.

MR. WILLIAMSON: We call that the Glen JARC.

MR. BLACK: Some of us came together and helped pull the ideas together and it turned out to be a van pool program for helping Colonia residents get to jobs and job training. There's a particular need that wasn't addressed specifically but would be met on the border, the warehouse operators, and the hospitals and the Wal-Marts and so on need low income people in the B and C shift. Those are the very same people that have great difficulty getting to work B and C shift because they live in rural settings and public transportation is usually non-existent, personal transportation is not dependable.

So we were very pleased to see the opportunity to try out showing what could be done if you could help solve the transportation problem because the long-term solution in the Colonias, in addition to fixing up the physical infrastructure -- that we've all heard about -- is mom and dad making more dollars an hour, more hours a year and the kids making it through school. So the parents being good role models for that and having the money that the family is on the edge is very important.

The reason I'm here today is that the JARC money that was received was $2.4 million and it requires, as I understand it, a 50-50 match, meaning that there would need to be $2.4 million available to the not-for-profits that would be proposing to TxDOT under the RFP that will go out. And I can't imagine the border not-for-profits having $2.4 million of cash to put up, and the in-kind they could put up would be quite small compared to that.

So then I thought about the alternatives. As I was talking to Mr. Houghton, they could go to the El Paso County Commissioners Court and ask for half a million dollars -- that won't work. They could come to the president of our university and ask for some money -- that wouldn't work, the money is not going to be there.

This is not sort of our project, it's a TxDOT project, but I really have an emotional investment in seeing it work, and if there's not some form of match assistance made available, I'm afraid this $2.4 million that could do so much in the Colonias will go to waste.

Let me give you an idea of what's at stake. There are about 100,000 homes in the Colonias; there are about half a million people that live in the Colonias. What that means is that on the border of Texas one person in five that lives on the border lives in a Colonia. This is not a little 5 percent thing off on the edge, the fringe of our society. The typical home is about five people so three kids, on average. 85 percent of the people living in these communities, according to a University of Texas study, are legal, either by birth, naturalization, or green card. That means those kids, whatever that is, 300,000 of them, are going to be here. And the Colonia populations continue to grow even though Colonias aren't being continued to be built; half the lots are still empty so the population grows.

If you make an average, as these families do, make an average of $10,000 a year, that's a billion dollars a year in income for those half million people, for those 100,000 families. If we could just help them make a dollar an hour more, or alternatively, if we could raise the employment rate from 55 percent to 65 percent, we'd put $200 million a year extra income into those communities. Now, the 30-35 buses/vans that this project would buy will not in themselves serve all 500,000 residents or all 100,000 homes by any means, but it could show what would work.

And there's an extra benefit. Once we show what works, then maybe there would be funding from other sources if it's going to make a real difference in the economy of Texas, maybe even federal funding, I don't know. But these kids and their parents have to make it or they're going to drag the rest of us down, even if you don't have the heart for it, hard-headed math says they've got to make it.

There's an extra benefit here, and that is that if you imagine these vans being used primarily to get people to and from jobs, you think about the morning shift, 7:00 or 8:00 showing up, getting off at 4:00 or 5:00, going to work at 11:00 or 12:00 at night. That leaves a lot of unused time, like school buses. I don't know how many of you grind your teeth looking at the school buses parked all day when we need transportation, but we'd have that same thing here, but we'd have the flexibility, if the RFP is written properly, to get the Colonia moms and kids to the doctor or to nurses training or to adult ed, or to get grandma to her routine care examination for diabetes or whatever, and we could do an awful lot of good.

We know that because we have 36 vans that the State Energy Conservation Office has provided us with already and we do a lot of good in these Colonia communities, not near enough, and we can't operate them nights and so on, we can't do the things for job training that this could do. I can say we know what they could do, and I'd hate to see this $2.4 million not come to Texas because there was no match money. The poorest of the poor in our state aren't going to come up with the match money, it can't be done.

MR. JOHNSON: Kermit, is this a 100 percent match that's required?

MR. BLACK: One to one, as I understand it.

MR. JOHNSON: And toll credits can be used?

MR. BLACK: Toll credits can be used for it. As I understand it -- Glen has probably studied better than I have -- it's one to one and non-federal.

MR. GADBOIS: Fifty-fifty, and when we originally talked about this, toll credits were going to be used.

MR. BLACK: But that requires an action of your commission to make that possible, of course.

MR. JOHNSON: Well, another observation --

MR. BLACK: So that would be $2.4 million of toll credits. People are talking dollars up here, that would be another $2.4-. Everybody is taking a bite out of what you would like to use for other things -- or would like to.

MR. WILLIAMSON: Hadn't got that bite yet.

MR. BLACK: No. I said would like to.

MR. JOHNSON: I ran into you when we were cutting the ribbon or starting construction on the first road in the Colonias, and I just wanted you to know that I appreciate the work that you do there and Texas A&M does. It's not noticed and it's often not recognized but it's appreciated by some who observe the investment that you both have.

MR. BLACK: Thank you. We enjoy it; it's rewarding work.

MS. ANDRADE: Job Access Review Program?

MR. BLACK: Job Access Reverse Commute. Brief background, I think the first one was run in Philadelphia. All the good paying jobs were downtown, all the people that did them lived in the suburbs, all the people left living downtown, the jobs that were available to them were out in the suburbs, so they set up a bus system that would take the low-income people from in town out to the low-income jobs in the peripheral areas. So that's why it's called reverse commute.

MS. ANDRADE: Thank you so much for what you're doing. I will tell you that I have been visiting the Colonias and you're absolutely right, we have children there and if we don't think it's going to affect us, it's going to affect us 15-20 years from now.

MR. BLACK: It really will. I don't want to get on my soapbox, but I think we all have a stake in this.

MR. HOUGHTON: Kermit, who manages this program? Do you manage it?

MR. BLACK: I did for about 12 years and we now are in an interim stage selecting a faculty member to direct that, but I'm still involved in running the outreach.

MR. HOUGHTON: Ever do the analysis on where the transportation is needed, the assets where they were purchased?

MR. BLACK: You're asking an embarrassing question. I'll just be straight. We are a 501(c)(6), we're not a 501(c)(3); I don't know how the RFP will be written. We do have a 501(c)(3) through which we can bid; we may also wind up serving as a resource for the local border-based 501(c)(3)s that would do the bidding. That's not clear yet until the RFP rules are written as to whether we'd be really eligible.

We have a really good infrastructure in place such that if a portion of this money were given to us, we could do a lot more than some because we have a base and this would be incremental money off a base. We already have 50-60 people working out in these communities door-to-door and supervisors and so on, but that's a conversation for the folks that are preparing the RFP, I'm afraid.

MR. WILLIAMSON: We allow soapboxes here.

MR. BLACK: Thank you very much; I like it.

MR. WILLIAMSON: Anything else, members?

(No response.)

MR. WILLIAMSON: Kermit, we want to thank you, appreciate it.

MR. BLACK: Thank you for having me.

MR. WILLIAMSON: Glen, you don't have to close. If you want to be the very, very last one, I'll go ahead and talk with John and Roxanne and Sarah and Michael, however you want to do it.

MR. GADBOIS: No, sir. At this point I'll be more than happy to close.

We wanted to bring a human face to this conversation, it's not just about transit agencies, and so we invited a couple of people to give you a little glimpse of that. We're completely with you, Chairman, on the idea of using toll credits, if you're going to give them back to transit, to provide incentive to the transit agencies to do the things that need to be done. We encourage you, though, to think about that very creatively when you're doing it.

If we're giving toll credits back, for example, for them being involved in Medicaid services, well, then ultimately there are a lot of transit agencies out there that are already doing that and have been for years. That is not necessarily in and of itself moving us along in the forwarding of coordination, number one. Number two, there are places in this state where incredible experiments are already going on. Robert Eckels in Houston has taken on a Harris County Coordinated Transportation Project using vouchers with five different transportation providers. Customers get to select what kind of transportation they need and use vouchers to pay for it. That is an incredible experiment that is going on there; there are a number of other ones going on around, including within the transit agencies.

As a consequence, as we move forward, as we get past some of our fights around funding formulas, as you consider the sheer volume of need that the Transit Agency indicated, as you think about the human faces that are affected by all this, I want you to think about a few very specific things.

One, yes, we need toll credits to help match transit funding. I think that can be kind of refined. Is it going to have the best bang for the buck? If you look at special cases, either where they're doing coordination or doing some coordination model that you want to invest in, or where you're getting a lot of the bang for the buck around capital replacement, or where you're really freeing up a significant volume of local money. Certainly leverage something but just don't presume to know exactly what the best experiment or the best thing to invest in is going to be.

As a consequence, think flexibly about this. Identify general categories, give at least a couple of years of certainty because the certainty is going to be very important, and then also be flexible around a commission rule that is now fairly old -- none of you may have even been here when it was written -- that requires toll credits be used only for capital. I strongly urge you opening it for operations as well because Judge Eckels -- and this is the perfect example -- Judge Eckels' experiment cannot have access to the toll credits that he helps this state to generate to use for an experiment that is going to extend way beyond his county.

He is right now spending Harris County money administering and managing a program; he is just now coming to you for some 5310 money to help build on top of the money he's already gotten in CMAQ and other money; and eventually, if this continues to work, it is going to go out into the other counties, but he alone cannot be responsible for carrying all that weight, and so he will probably be back to you for toll credits. And I encourage you to be able to respond positively to him; he won't be able to do it if you limit it to capital only.

Thank you.

MR. WILLIAMSON: Anything else for Glen, members?

MR. JOHNSON: I've got a question.

MR. WILLIAMSON: Give him a good one, John. It's hard to talk him into coming up here.

MR. JOHNSON: Well, maybe then I won't ask my question.

MR. WILLIAMSON: No, I'm serious.

MR. JOHNSON: You mentioned Judge Eckels and this CMAQ money. CMAQ dollars, I believe, are hard dollars; toll credit dollars are soft dollars.

MR. GADBOIS: Yes.

MR. JOHNSON: So he's got to use CMAQ money to qualify for the federal funds -- he's got to find the dollars, be they hard or soft, to qualify for the federal match to attract the federal dollars.

MR. GADBOIS: If that's a question, not exactly. He has gotten CMAQ money. The way the program is set up, they are getting the local organizations, that are all partners in this in helping people to understand how to access it, to contribute a dollar out of five for a voucher, and so they're getting their match that way. The problem comes in when you look to expand this outward and other counties may not be able to have the money to kick in for the administration and management. Then it will be helpful to move around and maybe to match federal 5310 Elderly/Disabled Program, or CMAQ money or if we go for HUD money or if we go for DEO money, it will be helpful to have this match to go forward and pull those monies down as well.

MR. JOHNSON: Question. This has been a very enlightening discussion and presentation and has opened up, at least in my case, a whole new arena, and especially, as you say, putting a personal, putting people's faces in with these needs. On your cover -- I assume this is yours -- you refer to the request that the commission set aside $6- to $8 million a year for toll credits, and is that sufficient money to cover the landscape of needs that we've heard about from Lubbock or the Colonias and everywhere else?

MR. GADBOIS: This state doesn't have the money to cover all of the needs of roads or transit. We have characteristically been starving transit, they are on a cusp, some of them have fallen off by circumstance -- Lubbock, I think, is one of those that is just, if not teetering, but there because they went over 200,000; therefore, their federal money can only be used for capital. They have used CDBG money, Block Grant money to cover some of the costs; the city gave them all of their CDBG money to cover those costs. So we have been starving transit.

Do we have enough? No. Do we have enough to make a difference? Yes. If we do it strategically, we will have enough to even make more of a difference.

MR. JOHNSON: I don't mean to monopolize your time and I apologize, this is my final question. In your estimation, what would be an appropriate ratio of operating funding versus capital funding in terms of the issuance of toll credits?

MR. GADBOIS: I can't answer that question, to be honest with you. What I would suggest is you figure out strategic priorities and then put that out to your department or your division and to the transit providers and to us, and then let us work on coming back to you with an answer on that. Because we can determine an answer, but what --

MR. JOHNSON: I meant to ask you, not you ask me.

MR. GADBOIS: You need to indicate priorities. If it is about how do we coordinate and take better advantage of 3588 and that's the priority that you want to incentivize with this money -- or these toll credits, then let us know that and we'll have a conversation and come back with an answer to you.

I do want to answer one question that you haven't asked me. We did work very hard in the House side to make sure and try to get past over Star's objection to the State of Texas being able to take advantage of toll credits. We will continue to work hard on that because we understand that it is incredibly important to do.

MR. JOHNSON: Great. Thank you very much.

MR. NICHOLS: Let me just make the comment, I think your points are well taken. I feel quite certain that as we get into this again -- I was here when we did open up the toll credits even though it was a long time ago; I remember when we did that -- and that was to kind of help jumpstart some of the transit that had a lot of real ragged equipment, probably wasn't safe, needed to be upgraded, and it was to give them some relief and stuff like that, and it was done fairly quick to give quick relief. It was not part of an integrated plan, and I think it worked.

I think the reason we had to pull it back off a little bit is because we were uncertain as to what we're going to have -- not a little uncertain, we don't know what we're going to have on toll credits until the federal issue is resolved. When that is resolved and while we are integrating and helping the human services portion of this, then I think we're going to have a lot better feel. And I can assure you and the rest of the transit providers that as we evolve a program that there will be a lot of feed back and forth. We want to work with all of the needs and come up with a system that does make sense, and I certainly like the word "incentive" because there are certainly areas that we need incentives in those things.

We're not going to sit over here by ourselves and come up with a formula and let you know this is what it is; everyone will be involved in that process.

MR. GADBOIS: And you reminded me of the one thing I wanted to get back to. When Chairman Williamson suggested that what if we use this to get them involved in medical transportation or encourage them to go that way, what we can't have happen is the needs right now, the experiments that are going on right now and people are looking for money right now. What I don't want to see happen is us delay waiting for all of the ducks to get in a row on how this state is going to do coordination, waiting for us to engage in and develop regional service plans, waiting for us to figure out a plan for how we're going to deal with medical transportation and all the other human service programs before we actually decide these are our priorities and this is what we'll invest in.

MR. NICHOLS: The difference between what we currently think we have, roughly 150 million in toll credits, and a minor change in the federal law will mean the difference between 150 million for the state in toll credits or 1-1/2 billion plus, and there's a huge difference that extra billion makes in how we're going to use it. Makes an incredible --

MR. WILLIAMSON: That's one of the reasons I think we're imploring Sam and you and anyone else that will listen, the toll credit disagreement in the Conference Committee is not over and all the help you can apply, it's worthwhile. It's worth it in our state to talk continually to those federal officials.

MR. NICHOLS: We began releasing toll credits when we realized how much good they could do out there in transit, and if we'd continued that course, I can assure you with the applications that people were talking to us about, it would have all been gone. There would have been no options; we wouldn't even be having this discussion. It would be gone, because we had some transit providers that could have gobbled up 75 million and 100 million at a pop. So that's when we quickly realized that we had better back up and so we had to pull back, and I don't think everybody really understands that.

I read this letter from Judge Eckels and I have great respect. I kind of got the impression that you implied that he was saying that Harris County supports us using toll credits all over the state when the big metros or the ones that have the toll roads are generating the toll credits. I'm not so sure that's really what he says; I certainly would like to get some clarification.

MR. GADBOIS: And I'll be more than happy to get Judge Eckels to talk for himself. When I had a conversation with him before this letter was written, he finds less use for toll credits in the building of toll roads -- something else that the county is very heavily involved in -- than he does seeing a use for toll credits for transit, and he understands their need around the state. He's certainly not willing to, as some have invited him, give up his toll revenues, I wouldn't think, but he expressed to me that he's much more understanding of why they would be used statewide.

MR. NICHOLS: Now, in reading his letter, it was real clear that he felt like toll credits should be used for transit and it should be used for more than just capital, should be operating costs and other areas and some of these other unique programs that were discussed. I just didn't quite read in there that he felt like even though we and a few others generate toll credits, we think everybody should have them. And it's an issue also that's going to be coming up, because I have spoken -- I'm not going to say which group, but I know in particular one toll group that feels like they're building a toll road, their residents are going to be putting the money in that toll road from their region, and they were very blunt in telling me that they felt like the toll credits from that toll road ought to stay in their region, and have a very compelling argument.

That's why there's different points of view and that's another issue that's going to be involved. It's going to be a unique one. But we can't just open up and release this program back out, I don't think, until we get some clarity on that stuff. As I said, if we hadn't backed up, it would have been over.

MR. GADBOIS: And I understand some of the big rail projects can just completely wipe the account out.

MR. WILLIAMSON: Is that it, members? Thank you, Glen, appreciate it.

MR. GADBOIS: Thank you.

MR. WILLIAMSON: Roxanne. You've been patient all day. Thank you.

MR. NICHOLS: Aren't you from beautiful East Texas?

MS. McKINLEY: Yes, sir, right north of Jacksonville.

Good afternoon. I'm Roxanne McKinley; I'm with the East Texas Council of Governments and I'm the rural transportation manager.

I've got a resolution that the Council of Governments has passed back in December. We have been discussing also the use of toll credits in the rural area that we serve, and I'll read you the resolution.

"East Texas Council of Governments Resolution Number 03-13 in Support of Toll Credits for Local Public Transportation.

"Whereas, the United States Congress has recognized that states with tollways have partially funded their transportation through local tolls, that such use of tolls has increased the overall local contribution to the transportation system, and that Congress, in recognizing the increased toll contribution, established toll credits as a source of federal funding that can be and has been used to fund the local contribution requirement of funds from the Federal Transit Administration and the Department of Transportation;

"And whereas, the toll credits in the State of Texas have been directed in the past by the Texas Transportation Commission to public transportation agencies in the state;

"And whereas, public transportation's use of toll credits has effectively leveraged four times the amount of toll credit dollars in additional federal funds;

"And whereas, the matching of federal funds represented by toll credits has been crucial to maximizing the draw-down and use of federal transportation grants to the State of Texas;

"And whereas, public transportation has historically faced financial needs that greatly exceed that which is available and that those needs have been well documented by the Texas Department of Transportation;

"And whereas, any backward movement in the use of toll credits for public transportation by the Texas Department of Transportation will further diminish the ability of public transit to serve residents;

"And whereas, the public transit agencies in Texas and the local governments that support them have practical limits in extending any financial resources in substitution of state toll credits;

"Therefore, be it resolved that the East Texas Council of Governments, on behalf of Texas Public Transit Agency, urge the Texas Transportation Commission to continue its strong historic support for using toll credits in maintaining the existing system of public transportation. And be it further resolved that the East Texas Council of Governments further recommends to the Texas Transportation Commission that public transportation be granted first use of toll credits in the advancement of transit services in the state."

That was signed by the secretary-treasurer of the Council of Governments, George Wilkins, on December 11, 2003.

In East Texas, when we buy a vehicle, our vehicles -- the numbers that I'm going to use are going to be much, much smaller than numbers we've heard since 9:30 this morning. One of our vehicles -- which we purchase between four and six a year -- one vehicle is $70,000 and this is a dedicated propane vehicle that holds approximately 12 to 13 people that we can transport in those vehicles. Toll credits enable us to buy more trips for the people we provide service to. $14,000 is what we would need to match that $75,000 vehicle, and that would buy us 875 trips for the current cost that we pay our subcontractors $16 to provide service in our 14 counties, and that times four -- which we normally buy four to six -- we would be able to buy 3,500 trips instead of the vehicle.

MR. NICHOLS: Roxanne, we appreciate you coming. Did anybody have any questions?

(No response.)

MR. NICHOLS: Thank you very much.

MS. McKINLEY: Thank you.

MR. NICHOLS: We've still got some more. I've got Sarah Cook. It says TTA -- I'm assuming that's not the Texas Turnpike Authority but instead it's the Texas Transit Authority.

MS. COOK: Hello, Mr. Chairman and members of the committee. My name is Sarah Hidalgo Cook and I am the transit director for Southwest Transit. We provide rural public transportation in the counties of Dimmit, Edwards, Kinney, Maverick, La Salle, Real, Uvalde and Zavala.

Over the past few years rural transit systems like mine have experienced funding shortfalls which have made service delivery extremely difficult to maintain, let alone to expand. In addition, rural communities and rural transit systems have been plagued with stagnant economies, rising fuel costs, increased insurance costs and deteriorating equipment that have negatively impacted our services.

Rural systems like mine, we depend on federal and state funds, also on client fares, financial support from municipalities, donations, creative fund-raising in order to provide much-needed transportation. Over the past 15 years rural transit systems have already been coordinating with health and human services like Medicaid, where currently over 85 percent or rural transit operators provide medical transportation.

In the matter of deteriorating equipment and vehicles, it's a daily factor for all systems, not only rurals but smaller urbans and metros. The replacement of old vehicles and equipment is imperative to continue providing the service needed throughout the state. By the use of toll credits for match and capital projects, transit systems are able to utilize their state and federal funding to operate their systems, thus, not having to take away monies from the service in order to match capital projects.

The use of toll credits can assist systems to alleviate funding shortfalls. For instance, in our area over the next two years our small system will be replacing three vehicles -- it doesn't sound like much. The match on these vehicles needed to purchase vehicles that are wheelchair-accessed and alternative-fueled runs between $35- and $50,000. This is not a lot compared to, again, the figures we've heard all day long. But without toll credits or without raising some type of money in order to pay for this match, we'll be forced to cut two routes and three drivers in our area just to replace three vehicles.

The use of toll credits does not solely benefit transit systems but actually the many riders that depend on our service to enhance their quality of life. Your support in this matter and your support in public transportation enables riders like Bernie Lopez from Uvalde to travel to monthly medical visits; it enables people like Lorensa Martinez who for over five years traveled 160 miles daily to the University of Texas in San Antonio to obtain her bachelor's degree in education and as of last week began riding our services again as a teacher for the Uvalde Consolidated Independent School District -- took her five years; and lastly, it benefits people like Leticia Martinez of Crystal City who for 13 years and currently continues to ride and board our buses three times a week at 3:30 a.m. to travel to lifesaving dialysis. This is what toll credits can help us do: continue providing this service.

Your consideration of this matter is greatly appreciated. Thank you.

MR. WILLIAMSON: We thank you for your patience. Members, questions or comments for Sarah?

(No response.)

MR. WILLIAMSON: Thank you, Sarah. I really appreciate your staying the day.

MS. COOK: Thank you.

MR. WILLIAMSON: Michael, we're saving you for the last because everybody likes for you to sum up, if you don't mind.

MR. MORRIS: Mr. Chairman, thank you very much. My name is Michael Morris, director of transportation for the North Central Texas Council of Governments.

I think if there's one any item -- and you had a large item earlier today that impacts people's lives, you had an item before that affects a lot of people, 10 or 15 minutes a day; this item is just as important because it affects often people that have mobility or not in their particular communities.

Why are you surrounded by so much money and this particular issue become a problem? And I think this is at the core of this particular item. You have a constitutional protection with regard to using your revenues for roadway purposes, yet you are the administrator of a federal program that has federal funds and needs a local match. You're not able to flex your funds that you receive on the roadway side so you're often dealing with very low dollar amounts and it's really this accounting issue that I really bring you today. And I'm going to show you an example and thank you for something you've done in the past and maybe come up with a way to deal with it here.

I'm not going to talk about how to fund transit in Texas, what I'm going to talk about is this accounting problem, this in-kind match, this flexibility. This particular program there are three elements: you have rural providers, small urban, and non-profit organizations, affects both metropolitan areas and rural areas. These are the small metropolitan areas that are providing elderly and disabled service; these are often your non-profit organizations; or your rural providers that still reside within metropolitan areas. You are the state administrator of this program so you're trying to get the 20 percent match or the 50 percent match to administer it.

Let me first come here and say thank you for a program you did 20 years ago, and I'll use it as a model. We metropolitan planning organizations -- and I bring it up today because a lot of us were here earlier on your previous item -- receive planning funds to conduct our activities in urban regions; that's an 80 percent program, gets a 20 percent match. For us to get a 20 percent match to go door to door within our regions to match something called Planning Funds for Metropolitan Areas, we went to your state and said, Okay, you have employees within our metropolitan regions but Mr. Behrens, you can pay them with state funds instead of federal funds. That accounting process of those state employees working in our metropolitan areas is the 20 percent match we use to receive 80 percent of our funds; we don't need your 20 percent cash to do our work, we need your accounting system to fund your employees with state money in order for that to be the accounting flexibility for our program.

We're on the heels of a major issue with regard to Congestion Mitigation Air Quality. For us to build all the transportation projects today, we have to pass conformity which we use Congestion Mitigation Air Quality funds that need a 20 percent match. We're going to have to develop innovative ways to meet that. Texas Mobility Fund will be one that I'm going to bring to you because now that particular tool using general revenue is falling outside the constitutional protection of those particular funds. Wouldn't it be nice for the commission to come say, Look, we're in the air quality business helping with conformity; we're going to let MPOs flex Texas mobility funds in order to continue to enhance the air quality issues with our region. Now, you don't have Texas mobility funds in all portions of the particular state which takes us to this particular challenge of toll credits.

You should look at toll credits, in my mind, not the way to fund billion dollar rail systems because the expectation is if you need toll credits to fund a rail system, you probably shouldn't be in the rail business to begin with because you need real money to pay salaries and deal with that. This is often for the smaller entities that don't have the cash flow in order to leverage the money, like the border, like some of our smaller communities. I think Glen is talking to you about maybe a two-step approach: have the flexibility to keep the small transit providers in business while you solve the larger issue with regard to that item.

Why would our region be interested in helping out the state? Well, I heard all morning we're one state, aren't we? So if we're going to come before you and say thank you for the Texas mobility funds, thank you for the partnership of paying some of your employees in urban regions with state funds, thank you for the flexibility of using Congestion Mitigation Air Quality funds, why can't we in regions be able to say if we're producing some asset that is of great need to the state, especially to individuals of our state who have no transportation at all, why can't we flex that back to the state, why can't it be a two-way street.

I think, Mr. Chairman, as you deal with incentives, I would incentivize the program. Just like I've stood before you and said by you standing up to the notion of Texas mobility funds for leveraging purposes in May when I was here, those leveraging purposes don't have to be toll roads for roadways. We shared with you an example of how we're going to leverage Texas mobility funds for rail improvements with regard to seat charges and other items with regard to that. Why don't you let some of the regions help you develop what the incentives should be for their particular region? It doesn't have to be a one-size-fits-all.

In our region we have an air quality program. One incentive I'd like to have is that these vehicles that are driving in our region, they're low-emitting vehicles and work out those particular requirements locally. What about enhancing these vehicles for joint use? Often in the smaller communities you have Meals on Wheels and other particular programs. Let's deal with developing a seamless system with regard to provision of services.

Why can't we get a commitment from those transit partners as the regional system is built, those could be feeder buses to the rail system and have seamless arrangements with regard to that delivery. Why can't you leave to the regions if it's capital or operating.

We stand up every day and say a freeway management system is critical; I would argue for the reliability of a transportation system, that's an operating cost, but we don't say, Oh, my god, we can't do too much freeway management because it may go below 18 percent or 22 percent. Why don't we leave to the regions the best way to mix our capital and operations to deliver it.

This item, in my mind, is just as important to the State of Texas as the item we talked about this morning that has billions of dollars about it because of the impact it has on individual lives. And Mr. Chairman, I'd be happy to take any questions.

MR. WILLIAMSON: Good.

MR. HOUGHTON: Do you want to run the program?

MR. WILLIAMSON: It's no secret the department listens carefully when Michael speaks. Members?

MR. HOUGHTON: Outstanding comments. I truly take it to heart. For one of the few times today I hear how passionate the Chair is about one Texas and you echoed that one Texas here from the Dallas-Fort Worth area. I'm glad to hear that.

MR. MORRIS: If, Commissioner, I could share a short story. When Chairman Laney was sitting in that chair -- and I think, Mr. Johnson, you heard those comments -- going back six or seven years, I was asked to come down and say we have a problem with safety inspections at the border because we may have trucks coming across. And I said, Mr. Chairman, we're one Texas; if we need CMAQ funds from Dallas-Fort Worth or some other funding program to improve the safety of trucks or the air quality of trucks crossing into the state of Texas, those trucks eventually impact the lives of people in Dallas-Fort Worth; if that's a program you want me to take back and try to sell, I'd be happy to do that.

I think people that come before this need to get into a routine of a two-way street with regard to partnership. It isn't about coming here and asking for our share of the money, it's sometimes coming here saying thank you for the innovation 20 years ago of using state payroll taxes to help match our funds so I can spend most of my time dealing with transportation instead of convincing the City of Edgecliff Village I need $246 to run an annual program. I think we should come here and say, "Okay, if you want to use toll tags and you want that flexibility, then charge us with the responsibility of going back and selling a two-way regional street back to our region."

MR. NICHOLS: I was just going to thank you for being here all day and coming down. I know you came for this one item, you probably thought you'd get to go back before lunch.

MR. MORRIS: I came here for both; we were here to help if you needed help on your other item this morning.

MR. NICHOLS: You really do come up with some very creative ideas. I've seen the work you've done; it's some of the most advanced planning work in the state and I would put it in the top three or four in the nation, I really would. So thanks for everything.

MR. MORRIS: Sure. Thank you.

MR. NICHOLS: Whenever we've called for help, you've certainly been there to offer your expertise. Appreciate it.

MR. MORRIS: Thank you for those nice words.

MR. HOUGHTON: Where were you this morning when I needed help?

MR. MORRIS: The last time, Commissioner, when the chairman needed help in May, he drug me up to the podium at that particular time; I was expecting you to do the same when you were looking for help this morning.

(General laughter.)

MR. WILLIAMSON: Thank you.

MR. MORRIS: Thank you very much.

MR. WILLIAMSON: Rita, are you still here? You've been patient all day and we thank you.

MS. KELLEY: Well, actually, I signed up by accident, but as long as you called on me, I'm going to talk.

My name is Rita Kelley and I'm the director of Bell County Human Services in Killeen, and I actually have my office right there along with the Jewel of Texas Fort Hood. I want to thank you for letting me speak, even though I didn't mean to; I actually came to cheer Glen on.

I will tell you, though, that in my capacity in my job, we work with all types of health and humans services agencies in our county of Bell County, as well as those that come in from Coryell and other areas around our CIT COG area, and our main goal in my office is to help people get out of whatever hole they fell in and back on their own feet and many times that includes -- most times actually -- giving them a ride to get to wherever it is they need to go. They not only need to get out of the hole but they need to get on a bus and get to work, they need to get to school, they need to get to the doctor, they need to get to a lot of places.

Because in my capacity I work within the community with other organizations and one of those organizations that we work closely with is Hill Country Transportation District. Hill Country Transportation District provides the HOP in our area; they actually provide a regionalized service for all of the CIT COG area, they provide rural transportation as well as urban transportation with fixed route and paratransit in Bell County and in the west side of Coryell County.

One of the things that I feel like we do well in Central Texas is we work very closely together. The community, the local governments, city, county, as well as all of the not-for-profits and health and human services agencies work closely to coordinate services and to get our best bang for our buck. One of the things that we know is that it works better if you work as a team, it works better if you pool your dollars as best you can, and it works better if you look for any other dollars or any other way out there to make what little bit you have in your hand stretch and go further.

Toll credits is one of the things that would help us tremendously. Now, I will tell you I know you've got your work cut out for you. I sat yesterday with my county judge and my county auditor going over my budget, trying to figure out how in the world I was going to get blood out of that turnip just to pay for the very basic operational service needs that we have in our office. We run a very lean county; we have a very low tax rate for the number of people in our community and in our county; we are also one of the fastest growing counties in the state of Texas; we are 2 percent faster growing than the state of Texas itself. We also have a very young population and we also have a very old population, depending on which side of the county you live on.

Our transportation system that we have with the HOP -- and I'm speaking specifically about Bell County and the urban transportation and the fixed route and paratransit route now -- is a wonderful resource to those in our community, not only to those who are at the lower income level but also to those who are working hard, just trying to make it every day. We have so many people who are under-employed who depend heavily on that transportation.

Besides that, we have a high number of people who use transportation for medical reasons. Our HOP provides medical transportation, not only the Medicaid transportation but also transportation for dialysis. We sit in Scott & White Hospital's lab -- which is a major healthcare provider; actually we have a VA, we have Scott & White, we have Metroplex Hospital, and we have Darnell Hospital which is part of Fort Hood, so we do have a high healthcare community. We have a lot of folks going back and forth to the doctor. Medicaid transportation pays for Medicaid recipients to go to the hospital and to the doctor; Medicaid transportation does not pay for people who are not eligible for other services to go to the doctor.

Toll credits would greatly expand our HOP's ability to provide more routes for people who need to get back and forth to the doctor, but would also provide the flexibility to provide longer hours in the evening and on weekends. We have many people, many of our seniors, that if they did not have the ability to ride on the HOP or some other way, would not be able to even get out of their house, they just don't have any other way to go anywhere.

In the city of Killeen, even though we have a great HOP program, the city actually uses a small portion of Community Development dollars to fund a limited program that provides about eight taxi rides a month to about 150 senior citizens. The reason the city chose to continue spending money that way was because this particular target group, when they need to get out of their house and when they need to go someplace is generally when HOP no longer provides service. They close up at night, and we did just start getting Saturday service but it's partial. These folks need ways to get out for socialization. Now, that may not sound like a big deal in the light of all of the other needs that people have, but when you're dealing with an older population and they are basically isolated without a way to get out of their house, going to church, going to the grocery store, visiting with their friends, and getting to the doctor are very important things for that group of people, and we can't forget that.

I really don't have much else to say except thank you very much for letting me speak and I appreciate anything you can do toward this.

MR. WILLIAMSON: We thank you, and we thank you for waiting all day. Members?

(No response.)

MR. WILLIAMSON: Thank you very much. And last on this topic that I'm aware of, John L. Hendrickson.

MR. HENDRICKSON: Mr. Chairman, and members of the commission. My name is John Hendrickson; I'm the general manager of Waco Transit in Waco, Texas.

Waco, Texas started transportation planning for a new maintenance/administration facility back about six years ago. That facility is now coming to fruition due to the fact that we were authorized toll credits in the past to build that facility. If we hadn't have been authorized toll credits to build that facility, we still currently wouldn't have the funding needed to make the local matches for that facility.

We're currently working on a bus replacement program. We're currently operating buses that are past their expected useful life; those buses are 12-year buses and we've operated them for 12 years, going on 13 years. The maintenance cost of keeping those buses up and running is escalating; they're not clean-burning vehicles; and so it causes a problem and a challenge for us to decide do we put more maintenance money into keeping these buses running or do we try and seek funds to replace those buses, and that's what we've started to do. In the 2004 allocation, we got $1.5 million for bus replacement.

Well, now we're in a situation, toll credits, when we asked for that request, we were under the hope that we would continue to receive toll credits for that. Currently we don't have the funds to match that to buy vehicles to replace our current fleet, and so our maintenance costs escalate. And that's one thing that toll credits would help is if you could use preventive maintenance funds which is an 80-20 match -- it's an actually an operating category -- but utilize toll credits to match operating funds. If you had a million dollars in preventive maintenance, you could use that 20 percent toll credit money to actually match the preventive maintenance side and then take that $200,000 and use that back on the operating side to actually increase service and provide better service to the community and the citizens of your respective areas.

I had a prepared speech to give you but based on time and things of that nature, I'm not going to elaborate on that. I want to thank you for authorizing us toll credits in the past and I hope that you will really seriously consider providing a stable and reliable source of funding for small urban and rural systems; it's direly needed. Small urban systems have a hard time coming up with the local match to provide the services that we provide currently, and I don't want to see services cut whenever a city the size of Waco -- it's about 153,000 and we carry about just over 800,000 passenger trips a year, so it's a substantial amount of passenger trips and we provide service all over the community. I appreciate your time.

MR. WILLIAMSON: You mean all those remarks were not a prepared speech?

MR. HENDRICKSON: No, sir.

MR. WILLIAMSON: You did good.

Questions for this person, members?

MR. JOHNSON: I just have one. John, is any part of your rolling fleet alternatively-fueled?

MR. HENDRICKSON: The fleet that we currently have, no, sir, it is not. The facility that we designed and built is designed and built for both lighter than air and heavier than air fuels, so it is designed for alternative fuels, but we won't have vehicles to put on that side currently because we don't have the local match to buy those buses.

MR. JOHNSON: Thank you.

MR. WILLIAMSON: Thank you very much. We appreciate it.

MR. HENDRICKSON: Appreciate it; thank you.

MR. WILLIAMSON: I think this wraps up the public members who were going to comment, and I guess James is coming back, and I guess what James would want is some guidance from us, or leave this just as it is and move on to the next item.

MR. BEHRENS: I think we have been handling our discussion items, one thing we do would be to offer any suggestions you may have to help direct the staff how we need to move forward.

MR. WILLIAMSON: We didn't call Sue up and I assume we don't need to at this point, but she's still available to us if we need to talk to her.

MR. BASS: If I might add one thing, Mr. Chairman. Sorry to interrupt. I find myself in the unenviable position of pointing out to the commission a limitation of their authority based upon some of the earlier discussions of using toll credits on operating funds, and although there may be a commission rule or guidance restricting that, as importantly, our understanding in the Finance Division and in Public Transportation is that the Federal Transit Authority has that restriction on the use of toll credits that it must go for capital projects.

We will certainly work with the Public Transportation Division and recheck that understanding with the FTA, but that is our understanding is that under federal guidelines, toll credits may only be used for capital projects. However, as some of the examples you heard here at the end, a savings in one area can then transfer the cash over to another, so there's still opportunities to assist there; it may just not be as direct as maybe hoped for in some cases.

MR. NICHOLS: Two things, and I'm not sure if I direct them to him or the executive director or Sue Bryant or what. On the transit SIB, I think one of the things that came up was that it might be good if you would work to try to come up with a draft plan of how that might work and then give, I guess it would be Sue, the opportunity as she works with transit providers around the state to explain it and start getting some feedback as to whether or not it would even be utilized. Then if it appears that they would find it beneficial, then let's take it to kind of the next level. I think that would be beneficial.

The second thing I think came out very well in this and that is that we intend to do something but until we can come up with what it is, I don't want to and I don't think anybody else up here wants to see any particularly small providers, like the few that came and spoke today, have to drop a bus or drop some routes or something like that because it is a real impact to a very small provider to drop a level of service. And while we may not have the money to do some of the big train projects that gobble up 25 million, 50 million, we might have the opportunity to temporarily do something -- I'm not saying that we take any action or anything. I would like to see Sue Bryant, possibly, see if she could come up with a survey of some of the small providers -- doesn't matter to me whether it's small urban or small rural or whatever -- and see what type of impact or loss of services we're liable to see.

I was not aware that that was going on, and if there's some level, even if it's a low level only to small providers, up to a maximum dollar provider or something, to see what impact that might have and get it back to us real quick. If we cannot gobble up all the big funds but still preserve that service of some of the small providers, I think we might have done a good service for the state while we're developing the big plan and finding out what the federal -- I'm seeing a bunch of nods out there.

MR. WILLIAMSON: We've heard from Mr. Nichols. Ms. Andrade?

MS. ANDRADE: So it's not that we don't care about the people that are taking dialysis, like you mentioned, or the people that were brought to UTSA, but it's that we're restricted in what we can use those toll credits for. Is that what you're telling me?

MR. BASS: We can utilize toll credits only for certain capital items.

MS. ANDRADE: So we're restricted.

MR. BASS: Correct.

MR. WILLIAMSON: And so what do we need to do to work with the federal entity to change that? Is it legislatively or is it just agency with agency?

MR. BASS: I think the first thing will be to revisit with FTA and make sure that our understanding is correct based upon some of the other comments we heard today, and then if indeed that understanding is correct, I think we look at it and see is that an interpretation of FTA or is there something specific in the federal code that restricts it to that, and if so, then we'll report that back to the commission and administration, and if it is something in federal law, then we'd obviously seek the assistance of Legislative Affairs to remedy that.

MS. ANDRADE: And also seek the support of these organizations that have come to help us do that.

MR. BASS: Yes, ma'am.

MS. ANDRADE: So you'll keep us posted on that.

MR. BASS: Yes.

MS. ANDRADE: Thank you very much.

MR. WILLIAMSON: Ted?

MR. HOUGHTON: Well, if that, in fact, is true regarding the capital asset versus the operating, it really narrows the scope because they already have a line item in their budget they're going to get this federal money. Correct? But they're going to get the federal money to pay us back under the SIB is what we're talking about.

MR. BASS: On the SIB alternative.

MR. HOUGHTON: That's on the SIB alternative, correct.

MR. BASS: Correct.

MR. HOUGHTON: So I think the survey on what people are looking for and if capital asset is a big item, Kermit, I think has $2.4 million waiting for a match.

MR. BLACK: Well, waiting on the RFP first.

MR. HOUGHTON: Yes, that kind of stuff. But that's the point: money waiting for a home.

MR. WILLIAMSON: John, do you have any instructions you want to offer?

MR. JOHNSON: Well, I don't know if they're instructions, but impressions I think might be how I would interpret.

I think what Robert has proposed in terms of asking these providers about the structure of a SIB and having that flexibility and getting their response, if they would utilize that source if available, I think we ought to pursue it. I think it adds a level of flexibility and we shouldn't close any of these avenues.

From time to time in the last five years that I'm aware of, we have issued toll credits to small providers to assist them in the purchase of their rolling stock, in most cases, and it has been predominantly based, I believe, mostly on need. I do think in most of the instances we required alternatively-fueled vehicles; we also, I think, looked at whether they were in a non-attainment area or not, but I don't think that became a defining criteria.

I would hope -- and I've expressed this before -- that we would set aside a portion of our toll credits for assistance along the lines we have historically given. The challenge is -- and it's a daunting one -- if the reauthorization does not change the law and the interpretation remains that one cent and it can be both a literal penny or a smell of a federal dollar goes into a project, it gets no toll credits, if that becomes indeed what we are faced with, our ability to add to our toll credit reservoir, if you will, is restricted. And so the granting of toll credits becomes a very challenging and difficult and delicate matter because we've seen just here today there are great needs in every nook and cranny and large city in the state, and ideally I wish we could open up the floodgates but there's not any water behind the dam -- or there's very little right now, and hopefully there will be a lot more if we're successful in either reauthorization or some federal legislation.

But I do feel what we've done in the past is an appropriate thing to do to assist some of these providers in their needs when their needs are great and their ability to meet those needs are very limited.

MR. WILLIAMSON: I think that, Mike, you can infer that all five commissioners are interested in now moving ahead on toll credits. I think that my view is much the same as it was earlier in the day and last month and six months ago, and that is I'm disinclined to be aggressive about issuing toll credits unless it's associated with performance. I'm inclined to take Michael Morris's suggestion to let areas and regions define what performance is.

One thing I fear, Robert and John, I've had a local hometown experience with a transit service going under or almost going under. If it hadn't been for the brave work of Ms. Bryant and some of her employees in the Fort Worth District, it would have gone under. The truth is it didn't go under because of any one thing, it went under for a lot of things, but that executive director would walk in here and say, "Well, we went under because you didn't give us toll credits," and if that didn't work, she'd say, "Well, it went under because you reallocated the formulas and we fell into a slot," and if that didn't work, it would be, "We went under because we have too many paramedical cases," and on and on and on. And that's not an indictment of her or the culture, Glen, it's the fact that when you need money and you can legitimately say I need it for this reason, you're going to say I need it for this reason, whether you are going to survive or not, you're going to say that.

So I think in summary, Mike, we want the staff to work up some proposals for us for next month at the soonest, October at the latest. We want to look at the SIB and see if we can make it work. I have this instinct that as we take more and more responsibility for the medical transit services, we're going to see a whole lot of our public transit organizations stopping and saying, "Well, wait a minute, they're offering me a contract and the money associated with that contract will provide me the cash flow to pay debt; if I can secure the vehicles, here's an opportunity to go buy the vehicles, use the state's contract to pay the debt off, and at the same time provide services to some of my under-served population."

So in that context, I think maybe we are interested in talking, Sue, with the public transit community and seeing if they think debt will work, and talking with our brothers and sisters at the federal government and seeing what we can work out on a transit SIB. I know Mr. Houghton has some interest in seeing if the General Land Office might be interested in being involved in this, work with him to see if that will happen. And work some alternatives up, as suggested by Glen and Michael particularly, on how we can begin to distribute some of these toll credits, particularly to small agencies that are really struggling and fixing to cut back service, where we can be convinced that they're not going to be cutting service anyway and not just because of something we have or haven't done.

Does that summarize it up good, members, to send the staff in that direction?

Thank you, James, and thank you, Sue, for hanging around; thank you for everyone who participated in this discussion.

MR. BEHRENS: Next we'll go and we'll call Sue up here to discuss state public transportation coordination and how we're looking at developing a public transportation business plan.

MR. WILLIAMSON: Do you think we haven't been talking about that for the last three hours?

MS. BRYANT: Feels like it. For the record, I'm Susan Bryant, Public Transportation director. And the previous discussion actually is an excellent segue into talking about public transportation coordination. And this effort is an extremely large one on both the local level, the state level and the federal level, and it would entail several accomplishments once we achieve coordination, and that would include many of the things that you've heard for the last discussion which would be more customer-oriented services, increased levels of transportation services, and last but certainly not least, reductions in duplicative trips.

The state has actually been mandated through the guidance and direction of the legislature and the commission, through HB 3588 and 2292, which requires and calls for enhanced client access to transportation services, services in a manner that generate efficiencies in operation, controls costs, and permits increased levels of service. It requires cooperation and coordination among all of us, including the state agencies and the users and the providers, and to identify gaps and inefficiencies in transportation services.

You've already heard many excellent examples of coordination at the local level, again in the previous discussion, so I'm going to focus just for a minute on what TxDOT is doing and what we still need to do.

TxDOT has entered into contractual agreements with both the Health and Human Services Commission and the Texas Workforce Commission for the ongoing provision of transportation benefits for those clients. TxDOT, Health and Human Services Commission and the Texas Department of Health have worked together to ensure the smooth transfer in and continued day-to-day operation of the Medical Transportation Program under TxDOT's responsibilities. And transportation providers, advocates and TxDOT hosted and participated in a statewide coordination summit to discuss coordination issues as part of the Texas Transit Association's annual conference, and TxDOT has issued a request for proposal for development of a business operating plan to cover both internal and external business coordination functions.

So where do we go from here? There are a number of points along this line. In continuation of the summit efforts, we are working with the transportation providers, the advocates and FTA to conduct a second summit, and this will be sometime this fall -- we do not have a date set as yet. State agencies and transportation providers will work to develop methodologies for tracking passenger client data which is something all of us need. That would include appropriate funding sources. We are going to be working and we are working with local stakeholders in the development of -- and this is something Glen mentioned previously -- regional transportation plans as called for in Chapter 461 of the Transportation Code, and incorporate the regional planning processes into existing transportation planning processes wherever possible.

TxDOT, Health and Human Services Commission and the Texas Workforce Commission will continue to work together to determine what other client transportation services could best be provided by incorporating those core functions within TxDOT or potentially contract out as part of TxDOT's transportation services operations.

We will further the implementation of the multi-agency policies and procedures, as we have been directed by HB 3588 and HB 2292, and we will work with the selected business plan contractor to develop that plan for internal and external business coordination functions, and subsequently implement the approved elements of that plan.

Regarding the business plan, we have, as I mentioned earlier, issued the request for proposal; we have at this point reviewed proposals for the development of that plan; and we do hope to be able to announce a selection of a vendor very soon. The final decision is simply waiting to be made, and as soon as that's made, then we will be able to make that announcement.

A little bit about what that business plan is intended to do. There are several required submissions that were included in the request for proposal. First, there is to be a strategic plan submitted; that strategic plan is to be submitted by the end of this chronological year; completion of that plan is to include the involvement of stakeholders, the users and is to include internal and external assessments, including resource availability and technology uses.

That is also to be followed by a best practices review. Again, you've already heard a number of best practices that we hope and plan to tout, but we do also want to look at other parts of the country for whatever best practices that we can follow here in Texas. That will also then be followed by operational reviews, and finally and foremost, an operational plan that we can look at as part of an overall work to bring about not just coordination but to really redo how we basically do business.

If I can answer any questions, I would be more than happy to.

MR. WILLIAMSON: Questions of Ms. Bryant, members?

(No response.)

MR. WILLIAMSON: I think we're glad that we're moving towards conclusion on a contract; we trust that that decision will be made soon.

MS. BRYANT: Soon.

MR. WILLIAMSON: We need to be getting ready to report to the legislature here in a few months.

MR. NICHOLS: I so move.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: We'll go to agenda item number 5(a) which is also public transportation, and Sue will have two minute orders to present.

MR. WILLIAMSON: Thank you.

MR. BEHRENS: I'm sorry, we've got a comment.

MR. WILLIAMSON: I thought Dick wanted to propose a transportation corridor; we've given the Sierra Club the opportunity to build highways now, they got what they want. Isn't that why he's here?

Back up, members. Do you withdraw your second motion?

MR. BEHRENS: We didn't need a vote on that discussion item.

MR. WILLIAMSON: That's all withdrawn.

Sue, would you excuse us just a moment. The Chair recognizes Dick Kallerman who frequently comes in here and smiles and then writes tough articles about us in the newspaper. Dick, where did you go?

(No response.)

MR. WILLIAMSON: Well, then I don't guess we're going to hear from Dick Kallerman. The record will reflect that Dick wanted to comment on your discussion item, and as Mike pointed out, that wasn't a voting matter so the record will reflect that there was not a motion, there was not a second, there was not a vote on item 4(b).

MR. JOHNSON: It was a premature motion, second and vote.

(General laughter.)

MR. WILLIAMSON: Thank you for the report, and your admonition to get us a contract as quickly as possible stands.

MS. BRYANT: Understand.

MR. BEHRENS: Now let's go to agenda item number 5, Susan.

MS. BRYANT: Thank you. Again for the record, I'm Susan Bryant, director of the Public Transportation Division.

For your consideration, in front of you is a minute order which provides federal funding to support public transportation planning and research for the metropolitan planning organizations and the department. Section 5303 funds are allocated to the MPOs by a preset formula based on population; Section 5313 funds are for TxDOT's use for planning, research, training, technical assistance, and department administrative expenses.

Your consideration and approval of this minute order will be appreciated.

MR. WILLIAMSON: Discussion?

(No response.)

MR. WILLIAMSON: Is there a motion?

MR. JOHNSON: I would move that we approve item 5(a), and if we're not on item 5(a), then I'm going to defer to Mr. Nichols.

(General laughter.)

MR. WILLIAMSON: Do I have a second?

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion 5(a) carries.

MS. BRYANT: For the record once again, I'm Susan Bryant, Public Transportation Division director. For your consideration is a minute order which authorizes the reappointment of three members of the Public Transportation Advisory Committee: Bob Geyer of El Paso County, serving as public transportation provider; Vastene Olier of Colorado Transit in Columbus, serving as a public transportation provider; and Vinsen Faris of Galilee, serving as a public transportation user. Each of these members has been an active participant on the Public Transportation Advisory Committee representing their respective areas.

By law, the advisory committee shall consist of four members representing the public transportation providers, three members representing the public transportation users, and two members representing the general public.

Your consideration and approval of this minute order would be appreciated so that these members might continue to serve.

MR. WILLIAMSON: Members, before I open up for questions and a motion, I need to clarify some things for primarily some of our associates across the street. Several House and Senate members who are very active and concerned about public transit wrote recommending different people to be appointed to the committee. I think the staff felt like they needed to recommend to the commission the continuation of the existing board for a couple of reasons. And I say this because you're going to all be asked about it.

Is it not the case, Sue, that all of these members are very active and attend and participate?

MS. BRYANT: Yes, they very much are.

MR. WILLIAMSON: And one of the problems we ran into until two or three years ago was that we did not have members that would attend and participate and contribute.

MS. BRYANT: That's correct.

MR. WILLIAMSON: And some of the suggestions made to us by our friends across the street were good suggestions, nothing wrong with the people they suggested.

MS. BRYANT: No. They're excellent suggestions.

MR. WILLIAMSON: But right now the public transit whole world is in an uproar and the worst thing for the system is instability, and the staff's recommendation is based on the need for stability as well as these are good participating members, and we're going to have the opportunity to appoint some more in less than a year.

MS. BRYANT: There will be an opportunity to either reappoint or make new appointments in another year, and these three members have just begun to serve.

MR. JOHNSON: These three have just served one year. Correct?

MS. BRYANT: In a way they've actually served a little less than that because of when they were actually appointed and when the committee actually began functioning actively, so I would actually say they've served less than a year.

MR. WILLIAMSON: So we're cognizant of the recommendations of our members and we acknowledge those recommendations. We had reasons, I think, why the staff made these recommendations.

Now having said that, questions of Sue, or do I have a motion?

MR. JOHNSON: Mr. Chair, as you so eloquently laid this issue out, I would move approval of 5(b).

MR. WILLIAMSON: Do I have a second?

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MS. BRYANT: Thank you.

MR. BEHRENS: Commissioners, we'll now go to item number 6, our Proposed Rules for Adoption, the first one concerning Chapter 1, Management, and Richard will lay that out for us.

MR. MONROE: Moving right along.

(General laughter.)

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

The minute order before you is approval for the department to publish for public comment revisions to our donation rules. By this rule we would propose to lift from $100 to $500 the donations the executive director may accept, and also that the executive director can at least tentatively accept a $1,500 or more donation for travel of one of our employees.

We've also taken the step to define travel reimbursements to exclude those received from government agencies that provide funding to the department, and private organizations of which the department is a member since we don't believe these were envisioned by the legislature at the time.

Once again, I would add that by approval of this minute order you will allow the department to publish these for public comment. I would recommend approval of the minute order.

MR. WILLIAMSON: Questions or comments for Mr. Monroe?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MS. ANDRADE: So moved.

MR. WILLIAMSON: Do I have a second?

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed will say nay.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. MONROE: Thank you.

MR. WILLIAMSON: Thank you.

MR. BEHRENS: Agenda item 6(a)(2) which is proposed rules under Finance would be to recommend to repeal some rules for hardship finance for utility adjustments since we now have the SIB. James.

MR. BASS: Good evening. For the record, I'm James Bass, director of Finance at TxDOT.

Item 6(a)(2) proposes the repeal of sections in the Texas Administrative Code dealing with hardship financing for utility adjustments. This program was established back in 1997 to enable the department to loan money for the movement of utilities in order to avoid delaying work on projects. The terms of a loan under this program are set at an interest rate of 6 percent and for a period of no more than five years. To date, no entity has requested assistance under this program. This inactivity may be due to the fact that also in 1997 the department received the authority to operate a State Infrastructure Bank which allows the commission more flexibility in establishing the terms of such a loan.

MR. WILLIAMSON: Questions, comments, members?

MR. JOHNSON: One question. Is the same process on a repeal done like a proposed rule, or is it repealed immediately?

MR. BASS: We would publish this in the Texas Register for public comment and then bring it back to you for final adoption.

MR. JOHNSON: Thank you.

MR. WILLIAMSON: Other questions or comments?

(No response.)

MR. JOHNSON: So moved.

MR. WILLIAMSON: So moved. Do I have a second?

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

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

MR. BEHRENS: Agenda item 6(a)(3) under Contract Management concerning our Historically Underutilized Business Program. Thomas.

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

Item 6(a)(3) are proposed amendments to Sections 9.51 and 9.54, Subchapter D concerning the department's Business Opportunity Program, specifically the Historically Underutilized Business Program. These rules are being adopted in order to be consistent with newly adopted Texas Building and Procurement Commission rules.

These HUB rules apply to contracts relating to buildings, professional services, aviation, public transportation, private consultant services, and purchases funded entirely with state and local funds. These proposed rules include requirements for proposers for contracts to include a HUB plan for the projects the department determines to have subcontracting opportunities.

MR. WILLIAMSON: Thank you, Thomas. Questions or comments for Thomas?

MR. NICHOLS: A comment. I think these goals are good, I think they're there for a reason.

MR. BOHUSLAV: You're ahead of me; these are the rules.

MR. NICHOLS: Yes, this is the rules, not the goals. I so move.

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

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

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

MR. BEHRENS: Agenda item 6(a)(4), we'll have two rules for proposed adoption that will be presented by John Campbell concerning right of way operations.

MR. CAMPBELL: Good evening. For the record, my name is John Campbell, director of the Right of Way Division. I'd like to present for your consideration this minute order proposing amendment to Section 21.4 concerning title insurance and the use of abstract plant facilities, also Section 21.6.

These proposed amendments are necessary to solve the problem that the department is experiencing with the timely acquisition of right of way in the more rural areas of the state. Often there are only one or two title companies serving a large rural area and those title companies either refuse to provide title insurance for the state or they create such a delay in providing insurance services that it effectively stops acquisition.

Historically department practice has been to refuse to pay for closing fees and other administrative fees. This works as a disincentive for the title companies to do business with TxDOT.

Proposed amendment 21.4 makes it clear that the department can pay commercially reasonable fees for escrow, settlements, typing, delivery, other administrative costs. It is hoped that this will cause title insurance to respond more favorably to our title insurance examination and also to allow them to run title sheets for us instead of title insurance.

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

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: I move.

MR. WILLIAMSON: Ted so moves. Do I have a second?

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

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

MR. CAMPBELL: Item 6(a)(4)(B) is a minute order that proposes amendment to Section 21.160 and this is relating to the relocation of outdoor advertising signs along the interstate and primary highways. This proposed amendment is necessary to clarify current department policy.

MR. WILLIAMSON: Is this the one that lets us put billboards wherever we want to now finally again?

MR. CAMPBELL: No, sir, we have no such rule.

MR. WILLIAMSON: Just thought I'd ask, John.

MR. CAMPBELL: Section 21.160 provides that those sign owners whose structures are in conflict with highway improvement projects may relocate to another location. It sets criteria for alternative locations for these relocated signs.

There's been confusion due to the language in this section which implies that the department will consider sign structures to be real property.

MR. WILLIAMSON: Members, questions or comments for John Campbell on this minute order?

(No response.)

MR. JOHNSON: So moved.

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

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

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

MR. BEHRENS: Agenda item 6(a)(5), we have rules for proposed adoption under Traffic Operations concerning speed zones.

MS. RAWSON: For the record, I'm Carol Rawson, deputy director of the Traffic Operations Division.

The rules before you today makes changes in the department's procedures for establishing speed zones and also bring the rules into conformity with House Bill 1365 of the 78th Legislature. The proposed changes will: one, clarify that no new environmental speed limits may be created on the state highway system as per House Bill 1365; two, clarify language relating to regional mobility authorities and regional toll authorities establishing speed zones; number three, require that a commission minute order or city ordinance be passed prior to establishing an interim speed limit lower than the state maximum on a new or reconstructed highway; four, allow the use of buffer zones that operate during the same time period that a school speed zone operates on roadways with a speed limit greater than 55 miles per hour; and five, make a number of technical changes including removal of references to metric units, the use of trial runs and the number of speed check stations.

We believe these changes make necessary technical changes to the manual and also address requirements under state law. We recommend approval.

MR. WILLIAMSON: Members, do you have questions or comments?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. JOHNSON: So moved.

MR. WILLIAMSON: Do I have a second?

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed will signify by saying nay.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Rules for Final Adoption, 6(b)(1) will be final adoption of rules concerning Employee Practices.

MS. ISABEL: For the record, my name is Diana Isabel; I'm the director of Human Resources.

Today we have our proposed final adoption of our Sick Leave Program rules. We did receive 16 comments from various employees and those were summarized and reviewed, but based upon the comments received, there are no changes necessary to the rules. We recommend adoption.

MR. WILLIAMSON: Questions or comments?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

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

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed will say nay.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you for waiting all day.

MR. BEHRENS: Agenda item 6(b)(2) we have final adoption of rules under our Travel Information Section.

MR. MONROE: Once again for the record, my name is Richard Monroe; I'm standing in for Doris Howdeshell today. No comments were received on these rules when they were published; the substantive part will remove info boards from our rest areas since they have been replaced by much better and higher tech sort of presentations, and as long as the Travel Division was in there, they did some cleaning up and replaced old references with new ones, et cetera. As I said, no comments were received; therefore, I would recommend approval of the minute order.

MR. WILLIAMSON: Questions or comments for Mr. Monroe?

(No response.)

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, nay.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Richard, if you would continue with 6(c), Rule Review.

MR. MONROE: Yes, sir. This concerns re-adoption of two parts of 43 Chapter 1, Management, and Chapter 11, Design. These were published in accordance with the rule review procedures and the Government Code. The reasons for hanging on to Management hopefully still apply and we believe we will still need some design work done, so the reasons for the rules remain and we believe the rules should be re-adopted.

MR. WILLIAMSON: Questions or comments, members?

MR. NICHOLS: 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, nay.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. MONROE: Again, thank you.

MR. BEHRENS: Agenda item 7(a) will be a discussion item led by Coby Chase which will be some discussion about commission recommendations that we will take to the Texas Legislature regarding potential statutory changes that would improve the operations of the department.

MR. WILLIAMSON: Coby, we raced out there and ate a few of them up, but we'll pull them back down, so let me first do something for the record that I forgot to do.

I prefer that we would have caught this, but for the record, during the executive session that occurred from about one o'clock to about 2:45, or whatever it was, no decisions were made and no actions were taken. I failed to read that into the minutes, and I apologize to the audience, I try to be more precise about that.

Also, Coby, we ate up a lot of your business earlier in the day when we touched on many of the things that you're going to touch on. What I'm going to do -- because I'm perhaps more familiar with what you're laying out than anyone else, I'm going to exit for a moment.

Members, don't let him go the whole time. If you want to stop him and talk about what he's laying out, he's perfectly prepared to be interrupted and discuss the items that he's going to lay out for you.

MR. CHASE: Do you want me to continue along my planned course or do you want me to shorten it?

MR. WILLIAMSON: Be brief but let's don't leave anything out. This is important stuff; people need to know what it is we're going to be talking about. I mean, I think Robert's idea to push the Red Light Bill for not only stop lights but for speed violations on state highways is a great idea. I just want to commend you, Robert.

MR. CHASE: Absolutely. Let me write that down.

(General laughter.)

MR. CHASE: Good evening. My name is Coby Chase; I'm the director of Legislative Affairs. I'm here today for the purpose of having a discussion of potential transportation-related legislative issues for the upcoming 79th Session of the Legislature.

With me today, should their assistance be required, are Jefferson Grimes, manager of State Legislative Affairs, and from our General Counsel's Office, Richard Monroe and Bob Jackson -- at least I think they're still here. Yes, they are.

In preparing for this discussion item, we were asked to do three things: first, you asked us to meet with those who sit in ultimate judgment of us, the legislature, to solicit input on prospective legislative issues; secondly, you asked us to canvas the department for potential issues; and lastly, you asked us to do the same with each member of the Transportation Commission. I am here today to inform you of our findings as they stand at this point.

Process-wise, I will discuss each of these three items in order. As far as the department-derived issues go, I do not plan to mention all of them because some really do not rise to the level of this discussion, at least not at this point. Furthermore, once we have concluded our discussion here today, I will take all comments back to the appropriate constituency to further refine our thoughts. I will then bring back to the commission, on a schedule of your choosing, a final report.

The enactment of House Bill 3588 this past session has served as the focal point for accelerating transportation improvements; however, the foundation for this enterprise was laid two sessions ago. Beginning with Senate Bill 342, Senate Bill 4, and SJR 16 in the 2001 session, the Texas Mobility fund was established and the concept of regional mobility authorities was first presented, and toll equity became the buzzword it is today. House Bill 3588 built upon the successes established in 2001 by Senator Shapiro and former Representative Clyde Alexander.

Since enactment of House Bill 3588, the state has witnessed growing successes. The department has had back-to-back $4 billion lettings, the commission has now approved three RMAs, the commission had put forth the Texas Metropolitan Mobility Plan and the department's Unified Transportation Plan which provide metro areas the opportunity to plan and leverage predictable funding.

But there have also been miscues. I will say this gently but firmly, and you heard a lot about it today so I won't dwell on it, the commission's message on toll conversion has not been explained thoroughly or has not had a chance to be absorbed properly. What the public has heard through this process has been swallowed up within the reverberating echos of making tax roads into toll roads. The monetary benefit to an area that is being affected by potential toll conversion has been lost on our audience. Toll conversion can move projects along faster; projects may be cost-shared between the department and the local government in order to accelerate other projects; and then finally, toll conversion can assist in bringing new projects into an area.

Toll conversion is a phase in the evolution of House Bill 3588; it can't go on forever. We just don't have enough roads and after a while it just won't make sense.

MR. NICHOLS: I'm not trying to mess up your chain of thought, but when I read your comments on this thing, you used the words "toll conversion" over and over and over several times in there, and that is a lot of what the public is hearing is we're going to take a highway and just stick up toll booths on it -- to them that's toll conversion. When you're referring to toll conversion, you're not talking about where we take existing lanes and convert them to toll roads, or are you?

MR. CHASE: Or facilities we're about to open.

MR. NICHOLS: Okay.

MR. CHASE: I mean, I think in the general public's mind it's kind of one and the same thing.

MR. NICHOLS: A great bulk of what we're talking about overwhelmingly is tolling new capacity and new location and I don't think the public has clearly understood that.

MR. CHASE: Yes, sir, and that's precisely my point.

MR. NICHOLS: Okay.

MR. CHASE: But if you remember nothing else from our discussion today, remember this: if we don't take the lead in defining toll conversions and things that look like toll conversions, it will be defined for us and the benefit may be lost for quite some time.

Now, I'd like to discuss some of what we heard from the legislative audience. Members have expressed their interest in seeing the pass-through toll provisions of this past session expanded to allow the department to fund projects and have the cost of those projects repaid by local and private entities, essentially allowing the process to work in the reverse of what it can today. It's kind of the opposite of the toll conversion discussion; this part has really taken on a lot of significant positive interest.

We've also heard from members that should toll conversion be considered for a segment of a highway, the revenue derived from that conversion should reside as close to the original project as possible. For instance, toll conversion revenue could be used to fund an additional segment of the converted roadway. Regardless of the specifics, to make the converting of a tax road to a toll road palatable, we must demonstrate an investment which directly benefits those using the now-tolled facility.

Like Representative Van Arsdale did point out very well, we can build bridges in Connecticut all day long and people don't seem to get bothered by that, but down the street if it looks like the neighbors are benefitting, then we have a different set of problems.

We also heard that in the area of public transportation funding, there was an omission to last session's legislation which has caused some confusion for the department and some communities surrounding the Dallas-Fort Worth area. It could be interpreted that the amount these enclave communities may receive from the commission is set in statute; there have been preliminary discussions regarding these communities' ability to become a part of the larger transportation systems in Dallas and Fort Worth. The roles these communities play in receiving state transit funds needs to be reviewed, and at this point, to be honest, I'm not certain that all the thinking is finished on that, there's still a great deal of internal discussion occurring on that. At the end of the day, it might not be an issue at all.

We've also heard from the leadership that we can expect a push for some type of local option transportation tax this next session. Local governments are very interested in identifying ways to address the gap between present funding and needs. The thought in some quarters is to center on a sales tax option instead of looking at the gasoline tax, and as we all must understand, the focus on the gas tax as the primary funding option for highway projects must become a thing of the past. As cars continue to become more efficient and the use of hybrid vehicles becomes more commonplace, the buying power of the gas tax will continue to diminish.

Issues surrounding rail sprang up in many of our conversations but it was the primary focus in our discussions with the Office of the Governor. The driver was the movement of rail lines by and large. Urban areas are interested in converting existing freight rail lines to either commuter lines or roadways. In addition, the movement of hazardous material transport on rail from core inner cities to areas away from the population centers is an important safety concern as we were reminded recently when UP and Burlington Northern trains collided near San Antonio releasing pressurized chlorine and ammonium nitrate. The state should be granted the authority to enter into business agreements with the public and private sector to provide funding to make rail line location a reality.

MR. NICHOLS: You said to interrupt as we go through this thing. On this rail relocation, particularly in urbanized areas, obviously the primary focus, because of some of the problems, was safety-related due to chemical hazards and things like that. But I think it's also, as you put some of this stuff together, real important to develop the talking points, identifying points of the other benefits that the state derives because of the safety by reducing rail crossings. Incredible number of crossings, particularly of high volume routes inside the city, at-grade crossings, and also as the rail gets moved out of these urbanized areas, particularly when they're the primary corridor, they're able to pick up speed, become much more efficient which ultimately will lower cost for goods and doing business in Texas which will have some economic benefits for manufacturers and help create jobs -- which is of great importance. But there's a long list of things.

MR. CHASE: Yes, sir. I just decided to focus on the safety element, but there are a lot of compelling reasons.

MR. WILLIAMSON: So can we infer from that, Coby, that one of the governor's principal focus points on transportation in the next session will be rail?

MR. CHASE: Yes, sir. That was loud and clear in our discussions with them.

MR. NICHOLS: And as they become more efficient and it becomes more economical for businesses to put freight on rail, and as that occurs, then more trucks get off the road, or at least not as many put on the road. So there's a long list of beneficial reasons for that.

MR. CHASE: Yes, sir, absolutely.

As I mentioned earlier, there are many outstanding issues proposed by those within the agency, and let me bring a few of the key proposals to your attention.

One of the primary issues coming from within the department had to do with land acquisition, and it came in two forms. The first of these is the crucial need for the department to get further ahead in the acquisition of rights of way. Presently the department may not acquire a right of way until the scope of the project has been clearly identified. That is, we cannot acquire property in fee simple terms until we know precisely where and how much is needed and the environmental clearance has been established. House Bill 3588 granted the department the ability to exercise options with willing participants for the purpose of setting aside property from further development. This is certainly a step in the right direction.

However, the internal consensus is that more should be done in this regard. The department should be granted the ability to acquire property outright from a willing seller much earlier in the process. Again, let me emphasize here that we are talking about the acquisition of property from a willing seller only. Having this authority will not only benefit the state in setting aside potential corridors, it will also help in instances in highly congested metropolitan areas where land prices tend to disproportionately spiral upwards.

The second land issue has to do with moving this concept a step further into what I would call land-based transportation planning authority -- that would be my term, that's nobody else's term. The legislature should take a hard look at granting the department and counties the authority to enter into agreements for the purpose of allowing counties to regulate future development within a corridor. That would have the effect of limiting the types of speculation we have seen where a developer knows where a new highway will be constructed, buys property, subdivides it and the value of the land increases significantly.

MR. WILLIAMSON: When you say subdivide, do you mean surveys it off and drives stakes, doesn't actually build buildings.

MR. CHASE: Yes.

MR. WILLIAMSON: But by the act of doing that can allege a higher value during the condemnation process.

MR. CHASE: Yes, and we all get mad at John Campbell because prices went up.

MR. WILLIAMSON: And do we believe that's occurring now, members?

MR. NICHOLS: It does occur.

MR. WILLIAMSON: It does occur. Okay.

MR. CHASE: We also heard from the department regarding the significant problems that we have recruiting and retaining a qualified workforce. This problem may become even more pronounced as both the private sector and RMAs staff up with department professionals. What we have done is ask Cathy Williams, assistant executive director of Support Services, to spearhead an internal effort to identify substantive changes in state law needed in order to address this issue. Cathy and her group should have recommendations back to us by mid September, if I remember correctly.

Another issue worthy of note here is the recommendation to expand the department's ability to move to a second bidder on small routine maintenance contracts should the low bidder reject the job. Presently the department mandated the second lowest bidder under these circumstances if the project is less than $100,000. It has been recommended that this threshold be increased to contracts up to $300,000. This will coincide with the dollar amount of our locally-let contracts. Although the amount of contracts that would be affected by this is limited, the efficiencies realized are significant from a district standpoint.

Turning now to the commission, as we interviewed each of you, a constant theme emerged: House Bill 3588 is the cornerstone of transportation's future for a long time to come; however, as with all new creations, some fine-tuning is necessary. I will run through each of these briefly.

First and foremost is to ask the legislature to re-examine the monetary caps placed within House Bill 3588. Although the present cap on toll equity expenditures from the State Highway Fund may not be an issue today, with our movement toward toll roads, this cap may prove inflexible tomorrow. A statutory cap on the use of funds from the State Highway Fund for toll equity should be eliminated.

A second monetary cap pertains to the use of state funds for rail purposes. Presently the cap is only $12.5 million per year for certain rail purposes. Again, as the state heads further into the business of providing a truly multimodal transportation network, this cap can be counterproductive. The opportunities previously mentioned with regard to rail line relocation will play a pivotal role in this issue regarding the present monetary cap.

MR. NICHOLS: On that particular subject -- because it ties in to what we were talking about a while ago on rail relocation -- I don't think it's just so much raising the cap as it is these are going to be expensive projects and they're going to be significant all the way around the state, different regions. It's probably going to require an actual identified funding source, in my opinion, for that. I don't know if everybody feels that way or not. But it's more than just a cap, it's trying to identify a funding source for it too.

MR. CHASE: We will include that in our research, absolutely.

MR. WILLIAMSON: Well, for example, if you assume, Ted, that the right of way for -- is it UP or BNSF that goes through the middle of El Paso?

MR. HOUGHTON: UP.

MR. WILLIAMSON: If you assume that the physical area going through the middle of El Paso is worth something to us and it's worth something to UP and it's only worth something to UP as long as they're using it and they've got to keep using it unless we move them, the point I think Robert is trying to make is we can't go build something they'll move to and then get that valuable land on a hope -- no pun intended, Hope.

So what you're suggesting, Robert, is that this becomes part of the commission's legislative package.

MR. NICHOLS: Yes.

MR. WILLIAMSON: We've got to also say, hand in glove, there is no railroad fairy, we've got to find a way to pay for this.

MR. NICHOLS: Yes, and I think it meets all the governor's desires because of the economic development, safety -- I mean, it's just a long list of beneficial things. And these projects are going to be expensive. It's things you'll see in Dallas and Houston and San Antonio and Austin and so on. We're going to have to have a funding source for it if it's going to happen -- in my opinion.

MR. WILLIAMSON: We need to be sure and that will need to be part of our final recommendation. I mean, we can't sit up here for two years and tell people there's no money and we've got to pay for things and then go off on a legislative request hunt without asking for the money to pay for it.

MR. CHASE: Absolutely.

MR. WILLIAMSON: We're big boys and girls.

MR. CHASE: Other significant House Bill 3588 related recommendations include the use of comprehensive development agreements for non-tolled projects, the dedication of toll revenue to the State Highway Fund and the dedication of surplus toll revenue to the State Highway Fund and made available for non-tolled projects within the same geographical area. If I may reiterate my earlier comments on toll conversions.

Another issue is granting to an RMA the ability to develop mass transit within the region. This should only be done with the blessings of any presently operating transit authorities, not a hostile takeover situation. Should a region decide to consolidate transit within the RMA, the sales tax should be assumed by the RMA and be used for appropriate transportation purposes.

I'm not sure exactly how to frame this other than to say that a legislative discussion or a discussion of some sort needs to be had regarding economically disadvantaged. It seems that different definitions apply in different circumstances. We have to pay a prevailing labor wage in our contracts along the border, a fairly new Davis-Bacon type law for Texas; there is the definition of economically disadvantaged that drives the local match for projects; and now there's the Colonia Program. None of these programs or laws were created together at one time and certainly not viewed through the opportunities created through House Bill 3588, and I'll touch on that in a moment.

Implementation of the Border Colonia Program is occupying much of the department's time. The program is administered chiefly out of the border counties; TxDOT acts essentially as the pass-through agency for these funds. There's been some criticism of the program due to the speed by which projects are being completed as well as the types of projects being undertaken. It may be prudent for the department or the legislature -- I think there's some discussion on whether or not we can make the decision ourselves to do this -- take a look at handing this program off to the department in total, managed by TxDOT.

Another interesting issue on toll roads has arisen. How does the state fully leverage the potential for toll projects in areas which have been historically economically disadvantaged by any of those definitions? The promise of the combined laws of 2001 and 2003 cannot take root in geographical areas of the state without the obvious means to take advantage of the benefits of toll projects. And if I might speculate for a moment, we may not be the only party interested in this; I would assume that the areas of the state which subsidize the border regions with gas tax dollars and are working on toll plans -- sometimes painfully -- might like to see the region embrace more innovative House Bill 3588 style solutions. Although we have no specific recommendations at this point, it is certainly a good time to begin discussion on what assistance can be provided to economically disadvantaged counties for the purposes of developing toll roads in that area. There may not be a legislative solution to this, but I do think it's something we're going to have to confront on some level, and things of this magnitude tend to crop up in my audience across the street.

I just think we need to think long and hard about how to make House Bill 3588 really work along our border region and not make it seem as frightening as it does to some -- I think.

That concludes my remarks. As I said in the beginning, we will go back and flesh these issues out in greater detail with our legislative audience and return with a final set of recommendations, and like I said early on, Chairman, on a schedule of your choosing, and before I leave, if you know what that is.

MR. WILLIAMSON: Well, as we've discussed off and on over the last month, I deem it extremely important that in January all five commissioners are united in what we will oppose and what we will support. We now have the legal blessing to oppose and support things, and that's a little bit different than what we've had in the past. Well, let me rephrase that. It appears to me that we have the legislative blessing to state our opinion about things, although the staff I'm not sure can do that.

Nonetheless, the message needs to be consistent and the reasoning behind that message needs to be consistent between the five of us, down the ranks, and if our partners, associates, supporters and parallel support groups -- NTTA, HCTRA or North Texas Commission, on and on and on, RMAs -- if they so choose to support our views, we would want the message to be consistent as well, and in order to do that, I would think we would want to be talking about this every month until we get to a point the commission is ready to bless something.

So I think it's safe to say that you can expect to be here every month between now and January until we do adopt something, and we'll either adopt something in September or we'll talk about it some more and we'll adopt something in October, or we'll talk about it some more and we'll just continue on until we reach a 5-0 consensus on what we think we need to be advocating. That gives you guidance.

MR. CHASE: That works.

MR. WILLIAMSON: Works for you?

MR. CHASE: Works for me. Keeps me employed for a little while.

MR. WILLIAMSON: Any other questions or discussions we want to have with Coby, members?

MR. JOHNSON: I just had one observation -- actually two observations. I think this is a very healthy process of bringing this well in advance of the legislative session, bringing it out for a lot of vetting, actually, a lot of inspection.

Robert brought up the issue of the relocation of rail -- actually, Coby brought it up and Robert brought up some very important pieces and benefits of that, and living in a large city and traveling to the other large cities in the state, I don't think we can under-emphasize how important from a long-term perspective that is and the benefits that accrue not only to the people who live and travel in that area in terms of whether it's clean air or decreased waiting times at at-grade crossings, or wasted fuel economically -- I mean, you can go on and on and on -- but when our cities function better, our state functions better.

So I think it's difficult when you're dealing in two-year economic budget cycles to take a long-term view and say that this is important, it's going to remain important for a long, long time, but from my experience and my observation, I think that this is an extremely important issue. It's going to remain there for a long, long time and it will benefit not only the large cities where the rail, in essence -- as you pointed out -- got there first and has remained there and the cities have gone around, but the benefits become immeasurable in terms of an objective analysis, but they're there and I think that's why this needs to be focused upon.

MR. WILLIAMSON: Yes, Hope.

MR. ANDRADE: A comment. Coby, I'd like to say that I appreciate very much the time that Jefferson spent with me. From your report, I can tell that he listened and that he took to heart what I said, so thank you very much. Thank you, Jefferson.

MR. HOUGHTON: I may be missing something here, but we are not talking about our largest trading partner to the south much. Is that by design?

MR. CHASE: No.

MR. HOUGHTON: We're not talking about ports and bringing goods and services in from Mexico and efficient movement of goods and people across that border, the border crossings, and maximizing the talent that we have and the stroke that we may have on helping Mexico with advancing their ports along the Pacific Coast. That's a statement more than it is a question; I don't see that much.

Does the legislature have an appetite. If Michael Morris was talking about one Texas, knowing that those ports are important to this economic vitality of this state.

MR. CHASE: I don't think that there has been that much of a discussion about that issue, and I will say not for the purposes of discouraging the discussion but I will say that the one time we got near it, it had to do with spending Texas' taxpayer money across the border for some very simple efficiency things that actually seemed to make a lot of sense. It wasn't our proposal but it wasn't a bad idea either. I forgot all the specifics, but it drew fire like crazy, just the concept.

So no, we haven't explored it, it hasn't been brought to our attention. I just think when we do it, we need to paint the big picture pretty well. But fill me in on some details when you have a chance on what you're thinking about.

MR. WILLIAMSON: I think that we all -- I may be wrong but I don't think so -- I think that we all understand, because we live this stuff all the time, that it would be beneficial to Dallas to figure out a way to build a high-speed railroad from Monterrey to Laredo to Corpus Christi, from the west coast of Mexico through El Paso to Dallas, but I'm not sure that we could expect people who don't live in this world to understand why that would make sense without a long educational process. I don't know that any of us are opposed to it; you know that several of your colleagues are interested in that.

MR. HOUGHTON: Yes.

MR. WILLIAMSON: Let's put it up and start doing a little basic research; let's run a few Krusee-Staples-Ogden-Heflin traps and kind of see what the reaction is. You know the drill, you're the best there is, let's go check it out.

MR. CHASE: Thank you.

MR. WILLIAMSON: Other jewels?

(No response.)

MR. WILLIAMSON: Okay, thank you, Coby. Good report.

MR. CHASE: Thank you.

MR. BEHRENS: We'll move on to agenda item 8(b). This is in El Paso County where we're looking, similar to what we talked about earlier at Fort Hood, the expanded operations that will be moved into another jewel, Fort Bliss.

MR. HOUGHTON: This is not a jewel; this is a diamond in the rough and we've got a lot of rough out there.

MR. BEHRENS: I stand corrected.

(General laughter.)

MR. BEHRENS: Jim.

MR. RANDALL: Jim Randall, Planning and Programming Division. Item 8(b), this minute order authorizes CONSTRUCT authority for --

MR. WILLIAMSON: Corporal Randall, I see.

MR. RANDALL: It's Dick Butkus Randall.

MR. WILLIAMSON: I like it.

MR. RANDALL: Thank you, sir. I'm trying to talk Coby into getting one, but he doesn't take the hint.

MR. CHASE: I don't have enough hair.

MR. JOHNSON: Well, since the Chair has brought this issue up, the question that I had, is this dedication until national championship -- it's dangerous for me to bring up people's hairlines -- I want you to recognize that -- but in this case I'm making an exception -- is this a national championship dedication type thing, or are you just trying to emulate the Chairman's hairline?

MR. RANDALL: This is the results of my vacation rebuilding about a quarter mile of fence on my property, and so it got pretty hot at the end of July and so it just all came off. But I like it.

MR. NICHOLS: You didn't wear a hat?

MR. RANDALL: I wore a hat and shorts; I didn't look like a real farmer-rancher.

MR. NICHOLS: Hats will make your hair fall out.

MR. HOUGHTON: That's why I don't wear hats.

(General laughter.)

MR. RANDALL: Okay, sir, item 8(b) again. This minute order authorizes CONSTRUCT authority for an interchange project in El Paso County between Biggs Army Airfield and Fort Bliss, located at the intersection of Fred Wilson Boulevard and Airport Road to be funded at a total cost of $16.2 million in Category 12 Strategic Priority in the 2004 Statewide Mobility Program.

In addition to making commitments to the Fort Hood area, the government has also made a commitment to Fort Bliss Military Post in El Paso. Completing this interchange project will improve traffic flow between Fort Bliss and the airfield. This project will also serve as the initial phase for the future inner loop connection between US 54 and Loop 375. We recommend approval of this minute order.

MR. WILLIAMSON: And Mr. Pickett asked me to suggest, members -- he had to leave -- that had he been here he would have said he really appreciates this and he thinks it's very important and he thinks that attracting thousands and thousands of troops to El Paso and Killeen is a good thing for economic development. We agree.

Members, any questions for Big Jim?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MR. WILLIAMSON: Do I have a second?

MR. JOHNSON: Second.

MR. WILLIAMSON: Let the record reflect that Mr. Houghton moved the item before us.

MR. HOUGHTON: And I'd like to congratulate, as you have done in El Paso in Friday, our district engineer and Amadeo Saenz and Steve Simmons for jumping through those hoops in a very, very expeditious manner.

MR. WILLIAMSON: Yes, those guys move pretty fast.

MR. HOUGHTON: They moved fast.

MR. WILLIAMSON: Mr. Houghton moved and Mr. Johnson seconded. All those in favor will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

MR. WILLIAMSON: Motion carries. Fort Bliss, here we come.

MR. BEHRENS: Jim, if you'll continue on with 8(c) and 8(d), and commissioners, we're deferring 8(e) till next month.

MR. NICHOLS: Deferring which one?

MR. BEHRENS: 8(e).

MR. NICHOLS: E as in Edward?

MR. BEHRENS: Yes, the one concerning Category 11.

MR. NICHOLS: Okay.

MR. RANDALL: Item 8(c), we bring you the fourth quarter program for economically disadvantaged counties to adjust matching fund requirements. Your book has Exhibit A that lists the projects and staff has recommended adjustments for each of them; the adjustments are based on the equations approved in earlier proposals. There are 18 projects in five counties; the total reduction in participation for these projects is $1,444,133. We recommend approval of this minute order.

MR. WILLIAMSON: Questions or comments, members?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MR. WILLIAMSON: Do I have a second?

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed say nay.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. RANDALL: Item 8(d), this minute order presented for your consideration authorizes $13,050,000 in Federal Discretionary funds as approved by the Federal Highway Administration. These funds will be used specifically for the development of projects listed in Exhibit A. In order to remain eligible to receive these funds, the department must obligate the funds by September 30, 2004 to meet the FHWA requirements. We recommend approval of this minute order.

MR. WILLIAMSON: Questions or comments, members?

(No response.)

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: We'll move to agenda item number 9 concerning Turnpike Projects. Phil will discuss a CDA proposal for design, construction and maintenance of toll booths for our turnpike facilities.

MR. RUSSELL: Yes, sir. Thank you, Mike. Good evening, commissioners. For the record, I'm Phillip Russell, director of the Texas Turnpike Authority Division.

MR. WILLIAMSON: Good evening, commissioners -- I heard that.

(General laughter.)

MR. RUSSELL: I usually catch myself at 1:00 trying to say good morning, so I'm adjusting. It has been a long day so I'll try to hit the high points, but I'm happy to address any questions you might have.

In February of this year the department issued a request for qualifications for a comprehensive development agreement for the design, construction and delivery of toll booths for installation on turnpike projects, primarily in the Austin area. Three teams responded with qualification statements and all three were short-listed.

In May the department issued a request for detailed proposals and in August, this month, two firms, Cushing Manufacturing and Meta-Lite, Inc., submitted detailed proposals. The Austin District evaluated the price and the technical components separately, as we always do. The technical scores were computed and tabulated and converted to a dollar value. These technical values, along with the pricing value, were combined to give the apparent best value.

By these evaluations the results of the proposals ranked as follows: Meta-Lite with an overall proposal value of $3,468,184, and Cushing Manufacturing with a proposal value of $7,324,815. The proposal submitted by Meta-Lite, Inc., was accordingly determined to provide the best value. This dollar value, of course, represents only the overall proposal score and it's not the actual contract amount if Meta-Lite is awarded the contract. That amount is slightly less than $3.4 million.

By approving this minute order, you would be approving Meta-Lite, Inc., as the apparent best value for the department to fabricate and deliver toll booths; you would authorize the department to commence and complete discussions with Meta-Lite; and subject to the successful conclusion of those discussions, you would award the CDA to Meta-Lite, Inc.

I'll be happy to address any questions you might have on that very rapid presentation.

MR. WILLIAMSON: Would this be our first true turnkey contract?

MR. RUSSELL: I would think, Chairman, again depending on your definition of turnkey.

MR. WILLIAMSON: This is the first turnkey contract not for a vertical strip of asset.

MR. RUSSELL: To my knowledge, it would be.

MR. WILLIAMSON: So the process was you sent out to many people and said, If you want to propose, please propose?

MR. RUSSELL: Yes, sir, to five companies.

MR. WILLIAMSON: And then you took the responses and selected the best qualified and sent out and asked for a final proposal?

MR. RUSSELL: Three responded of those five teams responded that they were interested; of those three, we sent out a request for detailed proposal, and two of those three responded.

MR. WILLIAMSON: And you're recommending now the one you think you should final negotiate with?

MR. RUSSELL: Yes, sir.

MR. NICHOLS: In the field of stipends that we've talked about in the past, in this situation is the loser of the bid going to get a stipend or nothing?

MR. RUSSELL: I may need some help on this. I believe it's either none or very minimal, Commissioner.

MR. NICHOLS: Because I think we established that at the beginning and I don't recall establishing one for this.

MR. RUSSELL: Again, the purpose of a stipend --

MR. NICHOLS: Probably because of the size of it.

MR. RUSSELL: Exactly. The type of work this is, there should be very minimal need up front for that sort of work.

MR. WILLIAMSON: Other questions or comments, members?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MR. NICHOLS: So moved.

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you. Congratulations. I think it's significant.

MR. BEHRENS: Agenda item 10(a) and 10(b) will be discussed by James. 10(a) will be our LAR discussion and 10(b) will be adoption of our 2005 operating budget.

MR. BASS: Again, I'm James Bass, director of Finance for TxDOT.

Item 10(a) proposes adoption of the department's Legislative Appropriations Request, or LAR, for Fiscal Years 2006 and 2007. This is the document where the commission has a chance to put their money where their mouth is, so to speak. In the LAR the commission allocates the limited resources available to the department in both dollars and FTEs to the commission's priorities, as discussed and laid out in the earlier Strategic Plan.

As you can understand, the LAR is a very important document, and together with the Strategic Plan it lays out the priorities of the commission. And as you can also see from the 2004-2005 LAR that I have here with me, it is a long and detailed document of almost 500 pages. Unfortunately, what you cannot see before you today is the 2006 and 2007 LAR. There are a number of reasons for that and I won't bore you with all of those.

One of them is with all of the new programs of the department, trying to blend those into the format of the LAR bringing in the Mobility Fund into the different strategies and areas, it has been difficult and we have likely not provided the commission with sufficient time to get comfortable with a document of such import, but you do have a minute order before you today and I would be happy to attempt to answer any questions you might have.

MR. WILLIAMSON: By way of explanation, members, I wanted to give you the opportunity to visit with James about whatever you thought we should at 5:55 in the evening, but I've asked Mike to allow us to leave this as a pending matter or defer it until next month to give James the opportunity to put together a more complete document for our review and allowing us to ask questions.

I've also asked Mike to guide staff in preparing an alternative LAR which exactly matches our Strategic Plan in our never-ending quest to talk the legislature into financing us the same way we plan.

Coby, did you touch on that when you laid out your legislative package? You probably didn't.

MR. CHASE: No.

MR. WILLIAMSON: If the commission is in agreement, this will be a major thrust for us next year. We set the stage with Chairman Johnson's efforts to map a true goal-setting plan four years ago; reinforced it in '03 when we attempted to get our budget, and did get our budget pattern changed some; we've laid the groundwork -- at Chairman Ogden's, Chairman Krusee's, and Chairman Heflin's invitation, we've laid the groundwork to make our case again this year and we need to have those documents in order before we send them across the street.

So with that, if you care to ask James questions, please do; otherwise, you're going to be asked to meet with him privately a lot during the next three weeks.

Okay, James, I don't think there's going to be any questions then. I appreciate your patience with us. This is an important move for the commission. And Mike, I also appreciate your patience if we can defer this until next month.

MR. BASS: Item 10(b), if I may, moving forward, seeks your approval of the department's Fiscal Year 2005 Operating Budget in the amount of just over $5.2 billion. The minute order that you have laid out before you exactly matches the order and numbers as shown in the General Appropriations Act for the department.

The most important thing, in my mind, of the minute order that you have before you for the 2005 Operating Budget is you're delegating the administration of the department's budget to the executive director. And staff would recommend your approval.

MR. WILLIAMSON: Is that somehow different from what we've done in the past?

MR. BASS: No, sir. Some may question so is the minute order the act of the commission approving what the legislature passed for the department? The answer to that would be no. Again, not to point out limitations of your authority. It would be delegating that authority and responsibility to the executive director.

MR. WILLIAMSON: Well, how did ol' Mike spend that $5 billion last year; did he do okay?

MR. BASS: Pretty well.

MR. BEHRENS: We used it all up.

MR. WILLIAMSON: Questions or comments, members?

MR. JOHNSON: So moved.

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Agenda item 11 is our contracts; 11(a) would be our contracts for the month of August, 11(b) would be setting participation goals for our HUB Program.

MR. BOHUSLAV: Good afternoon, commissioners. Again, my name is Thomas Bohuslav, director of the Construction Division.

Item 11(a)(1) is for consideration of award or rejection of highway maintenance contracts let on August 10 and 11, 2004. Staff recommends award of all projects in the exhibit.

MR. WILLIAMSON: Questions or comments for Thomas?

MR. JOHNSON: Thomas, this includes the contract on outsourcing the maintenance on I-35 for the Waco District, a portion of the Waco District?

MR. BOHUSLAV: Yes, it does.

MR. JOHNSON: I notice that there were several bidders; the incumbent is being awarded the business. What is the difference in this price versus the previous contracted amount on an annual basis? And in talking to Zane and others, I know at one time there was some concern about our ability to control or at least to make sure that they were doing the job as we saw that they should be doing the job, and has language been inserted in the agreement that's tightened that down?

MR. BOHUSLAV: Let me start with the latter question. In regard to the requirements for the contractor -- and I think the primary issue is to perform preventive maintenance in this contract which was not occurring in the previous contract -- there is language that addresses that, and basically what the contract does is it identifies a lump sum item for most routine work such as mowing and litter pickup and things like that with performance requirements for that, and it separates out a unit price for other types of pavement work, basically preventive maintenance which would be overlays and seal coats and things like that such that we would direct that work at a unit price during the course of the project.

MR. JOHNSON: We would direct that work?

MR. BOHUSLAV: We would direct that work. And Amadeo may need to come up and answer some more questions on this. The price is higher; I don't know the duration of the contract, if it's the same amount. They're both five years, so it is higher maybe by 25 percent over the previous bid.

MR. JOHNSON: And it is under the estimate, though.

MR. SAENZ: Yes, it's just a little bit under our estimate. For the record, Amadeo Saenz, and as Thomas said, we have broken up the contract to allow for the routine maintenance items, mostly the roadside items, to be done on a performance type of contract where we have some parameters, and we will be evaluating the roadside and the roadway, and then that will determine how much the contractor will get paid. He could get a deduct if he does not reach certain levels of rating. And then the items that are on the pavement were kept separate and apart and are under the control of the department so that we can control when we want those higher preventive maintenance items done and we have them by bid price.

MR. JOHNSON: This same contractor was the successful awardee of the work in the Dallas District on I-20, I believe.

MS. SAENZ: That's correct.

MR. JOHNSON: Is that contract up for renewal any time soon?

MS. SAENZ: That contract is up for renewal I believe next year, and we are working a specification a little bit different than this one. The specification for this contract that we're awarding today was changed from the original specification, and we're working with the Dallas District for that contract to even make it more like a routine maintenance contract with multiple items where we're in control of the whole thing -- something that we've used in Abilene and in Houston and it's worked very well, and we want to try that one so we can compare that one to this we're doing here.

MR. JOHNSON: Is my impression accurate, were there four bidders on the Waco District's work this time?

MS. SAENZ: Yes, sir, I believe there were.

MR. JOHNSON: And five years ago were there only two?

MS. SAENZ: Five years ago we had only two bidders.

MR. JOHNSON: Thank you.

MR. NICHOLS: And the reason that we are doing this and continuing to work with this is a unique way to our department for contracting maintenance; we think it's innovative. Our first shot at it, I don't think we would qualify as being real successful, but we have taken the weak things through that process, tried to refine them, and going back out again.

MS. SAENZ: That's correct.

MR. NICHOLS: So we're continuing to try to innovate and improve.

MR. WILLIAMSON: Other questions or comments for Thomas in this regard?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BOHUSLAV: Item 11(a)(2)is for consideration of award or rejection of highway construction and building contracts let on August 10 and 11, 2004.

We have five projects recommended for rejection:

Angelina County, Project Number 3260; was 28 percent under; it's for some curb and gutter work to meet ADA requirements. The contractor submitted that they had a bid error for mobilization and left off the word "thousand," so factor that bid price by a thousand, basically.

Project Number 3058 in Mason County was one percent under; this was for surface work for pavement. The contractor in this case again stated they had a bid error; their spreadsheet failed to carry through a haul work in their price.

Project Number 3264 in Montgomery County was 42 percent over; this is widening of FM 1314 from two to four lanes. There was a late addendum in this project and some of the contractors were unable to process that and get that so that they could get a bid. We'd like to go back and rebid this project and solicit more competition.

Project Number 3222 in Val Verde County, 22 percent over; we had one bidder on this project again and it was for pavement work on US 277. The time allocated for this project was very short and the contractor has stated that that caused their price to be significantly increased. We'd like to go back and rebid that project again and try to solicit additional competition.

And Project Number 3263 in Wood County was 56 percent over; we had three bidders; this is a transportation enhancement project for a renovation of a train depot building. The City of Mineola is a participant in the funding of that project and they were unable to fund their part.

We'd like to recommend those five rejections; everything else would be recommended for award. Questions?

MR. WILLIAMSON: Are there questions or comments directed towards Thomas, members?

MR. NICHOLS: I have no questions on the rejections. This is a huge letting. Although it may not be a record, it's sure one of the bigger ones, isn't it?

MS. SAENZ: I think this is our biggest letting.

MR. WILLIAMSON: We think it's the biggest monthly let.

MR. NICHOLS: Okay.

MR. BOHUSLAV: I need to go back and check. I thought it was but my staff said it wasn't.

MR. NICHOLS: Not counting the big toll road because that was a $900 million contract, but excluding that in our traditional stuff. Anyway, it's huge, it's not a record. I thought that was important.

MR. WILLIAMSON: We're building Texas.

MR. NICHOLS: So congratulations to everybody for that.

MR. WILLIAMSON: Other questions or comments?

(No response.)

MR. HOUGHTON: So moved.

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

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

MR. BEHRENS: Item 11(b) is a minute order establishing HUB goals for Fiscal Year 2005. These goals are 26.1 percent for building contracts, 57.2 percent for special trade contracts, 20 percent for professional services, 33 percent for other service contracts, and 12.6 percent for commodity purchase.

These goals are established based on availability studies and they're the same as those used by the TBPC or Texas Building Procurement Commission. Staff recommends approval.

MR. WILLIAMSON: Will Royce West think these goals are high enough?

MR. BOHUSLAV: I can't answer for him.

MR. WILLIAMSON: What do you think he'd think, based on your conversations with him?

MR. BOHUSLAV: I think we accept those roles; they'd like to see us increase our achievement. They haven't really addressed what we set for our goals, and we basically adopt what TBPC goals are. What they'd like to see is increase what we do as far as achievement, and we do achieve our goals in the areas of professional services and construction -- in construction now we're looking at the DBE program, though -- but in some areas it's more difficult such as the special trades where we have plumbers and things like that, you just don't see that much participation. At times for building contracts we exceed the goal and there are cases in some years when we just don't get participation from HUBs in that area and we don't exceed the goal, especially when we cut back on what we do in regard to buildings.

But generally we look good; we are the largest agency in regard to HUB achievements in this state; we do $400 million worth of work in the state toward the HUB goal and I think it's very significant. So we're almost 40 to 50 percent, I believe, of what the entire state does toward HUB participation or achievements.

MR. WILLIAMSON: Questions or comments, members? Hope?

MS. ANDRADE: I'd just say that I'm pleased to see that we've done well on some of our goals, and I also have to say that I've been part of business conferences where we've had our business opportunity specialists there, and they do a great job in outreaching to the small business community. So we're working on it.

MR. WILLIAMSON: Good to know.

MR. NICHOLS: I was just going to suggest that I know we have done well and I think we have done better than most any large agency in the state, but I would encourage us -- we set these goals for a reason and I think they're attainable, and I would encourage us to go back in each of the different categories and review what the trend has been and our ability or percentage toward attainment to see if we're bobbing up and down, to see if we're progressively getting closer, to see if in some of the categories we may be progressively sliding over the last four or five years. And if you find a sliding trend, I would encourage the staff, the administration to try to analyze why we may have a declining trend in one of those categories and see what we can do to bring it back up. And I'm sure all the cases are different.

It's trends that are more important to me if we're not making them, is the trend in the right direction.

MR. BOHUSLAV: Let me answer just quickly. In regard to our DBE program, we do do that; every year we analyze where we're at and we actually set two goals in our DBE program: we set one called a race neutral part which means we don't set goals in our projects; and we have a part that's called race conscious where we set goals in our projects. And we look at that and we lower that race conscious part -- in other words, setting goals in projects more and more as we tend to contractors come and do it on their own and just report what they're paying their DBEs out there. And we're seeing a significant increase in contractor unrequired participation in the DBE program.

MR. NICHOLS: All I'm suggesting is that we look for trends over the last four or five years because I know in some of the categories we're higher, and if we're drifting lower, what did we do wrong, what can we do to bring it back up. If we do have some of those, what can we do to get it back up.

MR. BOHUSLAV: Staff recommends approval.

MR. WILLIAMSON: Other questions or comments, members?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: 11(c), Thomas, Small Business Enterprise Program.

MR. BOHUSLAV: Item 118 is a minute order establishing the department's annual SBE goal. The SBE goal applies to the department's construction and maintenance projects funded entirely with state and local funds; the goal is 23 percent. Staff recommends approval.

MR. WILLIAMSON: Questions or comments, members?

MR. NICHOLS: My comment related to this is the same comment for the other; I think they're somewhat similar.

MR. WILLIAMSON: Look for trends.

MR. JOHNSON: So moved.

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BEHRENS: Amadeo will have agenda item number 11(d) which is a contract claim settlement with Jones Bros. Dirt & Paving.

MS. SAENZ: Good evening, commissioners, Mr. Behrens, Roger. For the record, I'm Amadeo Saenz, assistant executive director for Engineering and also chair of the Contract Claims Committee.

The minute order before you approves a claim settlement for a contract by Jones Bros. Dirt & Paving Contractors, Inc., for a project STP 2000(378)R in Crockett County in the San Angelo District. On July 13, TxDOT's Contract Claims Committee considered this claim and made a recommendation for settlement to the contractor and the contractor has accepted. The committee considers this to be a fair and reasonable settlement of the claim and recommends your approval. Be happy to answer any questions.

MR. JOHNSON: What were the amounts involved?

MS. SAENZ: The contractor had claimed $108,605 and our recommendation was $23,000 and they've accepted. The issue in here was the dirt work, the quantities of embankment and excavation on the contract, and there was an issue of the possibility that original cross-sections were not correct and that's why the contractor had brought in additional material and he wanted to be compensated.

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BEHRENS: Agenda item number 12 is our routine minute orders. They were all duly posted on our required agenda. We recommend approval of all those minute orders. I don't think any of them pertain to any of the commissioners. If you want to have any of them discussed, we'd be glad to discuss any one of them for you.

MR. WILLIAMSON: Mike, is this a modern record?

MR. BEHRENS: For time?

MR. WILLIAMSON: Uh-huh.

MR. BEHRENS: A modern record, I think so, sir.

MR. NICHOLS: But we're not through yet.

(General laughter.)

MR. WILLIAMSON: Okay, members, you've heard the recommendation. Is there a motion?

MR. HOUGHTON: So moved.

MR. WILLIAMSON: Are there comments or questions?

MR. NICHOLS: I had a comment. In Speed Zones, in here we establish the speed zones, and Mr. Director and Chairman, particularly to some of the staff and the newest members, I had received somewhat concern from a legislator regarding speed limits and speeding in the state, and it was kind of interesting. It's kind of an old letter but I can't pass up the opportunity.

Just so you'll know, about one month after I was sworn in, as I was going to the district, I sent a letter to a Representative Ric Williamson in 1997 letting him know I was coming into his district to talk to his constituents, and shortly -- I'm not going to read his whole response because I was just being polite: I'm going to your district to talk and do you have any concerns.

I'm going to highlight some of the comments he made. This is June 30, '97. "Mr. Nichols, I hope you will drive rather than fly to Wichita Falls, and I hope you will drive across two-lane state highways as opposed to the interstate." I'm going to skip through some of this. "You and your fellow commissioners refuse to recognize that local officials know their districts better than you and your Austin-based employees who are more worried about the cost of signage than the cost of safety."

Anyway, I'll kind of skip on down here. He said, "Were I a gambling man, I would bet you intend to fly. It's one hell of a lot safer than driving. Respectfully, Ric Williamson."

Mine was even briefer than that; I said, "Thank you very much." Anyway, I told him that I was going to hand-carry the letter and that I was definitely going to drive -- and I underlined that -- along the non-interstate highways to your district and hand-carry your letter.

MR. HOUGHTON: Did you visit him in the district when you were there?

MR. NICHOLS: Yes.

MR. WILLIAMSON: There's a great story behind this. We had the House-Senate Joint Committee to overhaul the tax system that we got one vote from passing in '97 from the president, and right in the middle of this, Mark Stiles, who was on the committee, drags poor Chairman David Laney to the committee to explain why we need to not mess with gasoline taxes. And I said, Now, who are you -- because I'd never met David. And he said, I'm the chairman of the Highway Commission. I said, I want to talk to you about speed limits on State Highway 51. I thought Mark Stiles, who's a dear friend of mine, was going to have a heart attack because, I mean, I just kind of launched. We'd just had five wrecks on my stretch of highway -- that you've been on now -- we had five wrecks in seven days and four different people in five of those wrecks had been killed, and I was just ballistic about the speed on this road.

Shortly thereafter I got this letter from Nichols, so I sent him the letter.

MR. NICHOLS: Of course, I didn't know the background.

MR. WILLIAMSON: All that I'm ever told by our great staff is we have this 85 percent rule, and by god, it's inviolate. We can go out there and put the speed limits signs up and people won't pay any attention to it, they're going to still go 90 miles an hour -- which I, to this day, don't believe to be true. I believe that when you put speed limit signs up, people slow down.

MR. JOHNSON: Especially if they're electronically enforced.

MR. WILLIAMSON: With cameras, you're right.

MR. HOUGHTON: Especially if DPS were part of the Texas Department of Transportation.

MR. WILLIAMSON: Correct.

MR. JOHNSON: Is this a filibuster?

MR. NICHOLS: I finished my comment, by the way; I'm ready to move on.

(General talking and laughter.)

MR. BEHRENS: We need a motion.

MR. WILLIAMSON: Do we have a motion on this minute order?

MR. HOUGHTON: So moved.

MR. WILLIAMSON: A second?

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

MR. WILLIAMSON: Motion carries.

Now, we had Roger Baker and we had another person. Did Roger leave?

MR. BEHRENS: I think so.

MR. WILLIAMSON: In the open comment section, members, we have a very patient guy named Jerry Roane, and Jerry is the owner of Roane Inventions.

MR. ROANE: This is information. I'm looking at the TCEQ to alleviate the problem in Houston with the bad air, and this project is hopefully going to be funded by a grant from TCEQ for $1.17 million. We're going to be build a 3,000 foot test track in Comfort, Texas and hopefully the follow-on to the 3,000 foot test track will be to continue it across the river and down the Interstate 10 to San Antonio. One demonstration track would be up and down MoPac to go from the UT main campus to J.J. "Jake" Pickle. So if you could start the VHS tape.

(Whereupon, a video was shown.)

MR. ROANE: Anyway, something a little different. This solves traffic congestion, it addresses the death toll on our highways, and it will be governed so there will be no speeding. A lot of the concerns today of how you're going to pay for all these roads when the population is going to increase, as it is, the difference between the $6 billion or $72 billion or whatever difference there is, in order to accommodate that many more people, you need a lower cost approach to making highways. And each one of these tracks is the equivalent of a super highway, and the idea is to put a grid across the entire urban areas and also link the areas with single tracks.

Anyway, just thought you might want to know what's going on in the rest of the state.

MR. WILLIAMSON: That's what we like about that stuff. Why didn't you bring that idea to us first?

MR. ROANE: Well, I paid a guy to sit here through this meeting about three months ago but he bailed on me. So anyway, what I would like from the commission -- and I've talked to a lot of the TxDOT engineers and the employees, and they suggested that I should hit you guys up from the high end and see if maybe something might trickle down to let them be a little more empowered on studying the concept.

MR. WILLIAMSON: You won't find five guys and gals more open to new ideas than right here.

MR. ROANE: Well, this is an Austin company and it's electric. It gets about 105 miles per gallon equivalent, runs on electricity; the NOX reduction is about 15 to 1 less than gasoline. There's no intersections, the roads cross on different planes, so everything is an overpass.

MR. NICHOLS: And the advantage to that, riding in a monorail type transit system is what?

MR. ROANE: Well, it's a car, it's a four-passenger car and it's your car, the individual buys it and owns it. The state only has to pay for the track and so it's a way for the state to save a tremendous amount of money. The person that's buying the car, if he buys a new car, he can sell it as a used car to someone for less money, and that can trickle down to the lowest economic rungs.

MR. NICHOLS: So if you had those cars available, if we put up the tracks, you could put like a toll sensor or something in that, and as it drove on it, it would zip in and we could get reimbursed. Somehow or other you've got to pay for the track.

MR. ROANE: When you use your electricity, it shows up there, it's embedded. The track is $125,000 a mile and not like regular highway costs, so the cost is way down. It's a 14-1/2 inch triangle for the track.

MR. WILLIAMSON: $825,000, that's pretty cheap.

MR. ROANE: And there's four modes of operation. It's on the ground, parks in your garage, you don't do anything special, you don't wire anything. You go from your house to the start of the track and that's kind of in a golf cart mode, and the legislature, thank goodness, passed a neighborhood vehicle law and so it's a neighborhood vehicle. You get to the beginning of the first track; it's at the most a quarter of a mile from your house; you get on the track and the first 1,029 feet is the linear motor built into the track and that's tied directly to the power grid so that you're converting from OPEC oil to coal or nuclear power or wind or whatever -- it's very flexible how you power the electric power grid.

And then that 300 horsepower linear motor brings you up to speed and up to elevation and then once you're at speed and at elevation, then you only need about 60 horsepower to maintain speed. So there's a little motor and a little battery pack that's in the car that powers it to the other end of the rail, and then as you go down the rail, the other mode pulls that power back off the car from the mass and the elevation and so that electricity is recycled straight back into the power grid.

MR. NICHOLS: I was watching in each of the demos that you've got -- I'm still watching it some on the screen -- it's the beginning of the tube and the end of the tube, or rail, whatever you want to call it, but if you wanted to make a left turn somewhere, how do you do that?

MR. ROANE: The way you determine where you're going to be, in the city of Austin -- I have a grid set up on one of my slides here if I could find it quickly. See, there's four tracks side by side.

MR. NICHOLS: Is there strictly a beginning of the rail and the end of the rail? You can't get off of it anywhere.

MR. ROANE: Right. You pick the track you want to be on for how long that track is. So like one-mile, two-mile, four-mile, eight-mile, and somewhere in the middle of the city you would have a 16-mile/32-mile track. So it's a binary grid. But by picking the track, you determine when you get on it how far you're going down that track, and then there's a grid point to pick up going the other direction at that point. So this would be like Austin laid out on real streets with real buildings considered.

MR. WILLIAMSON: Further questions, members?

(No response.)

MR. WILLIAMSON: Thank you very much for taking the time to share that with us. I look forward to the day they call you the third coming of Michael Dell.

MR. ROANE: Hope so. Thank you.

MR. WILLIAMSON: Roger Baker, are you here?

(No response.)

MR. WILLIAMSON: Members, I think our business is done on this record-breaking day. I have only to receive and process a motion.

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion to adjourn made by four commission members. I have four seconds. All those in favor will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, nay.

(No response.)

MR. WILLIAMSON: We stand adjourned. For the record, it is 6:28 p.m.

(Whereupon, at 6:28 p.m., the meeting was concluded.)

C E R T I F I C A T E

MEETING OF: Texas Transportation Commission
LOCATION: Austin, Texas
DATE: August 26, 2004

I do hereby certify that the foregoing pages, numbers 1 through 355, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Ben Bynum before the Texas Department of Transportation.

__________09/02/2004
(Transcriber) (Date)
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