Texas Department of Transportation Commission Meeting

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

Thursday, October 28, 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. It's a great morning. It is 9:09 a.m., and I would like to call the October meeting of the Texas Transportation Commission to order. We welcome each and every one of you; it's a pleasure to have you here this morning.

In a little while we will receive presentations from two delegations, the Texarkana Metropolitan Planning Organization and the Gulf Coast Regional Mobility Partners. We welcome members of those delegations from their respective hometowns to Austin, Texas.

Please note for the record that notice of this meeting was filed with the Office of Secretary of State at 10:51 a.m. on October 20, 2004.

Before we begin, you are all prepared for this. Before we begin our meeting today, let's all take a moment to place our pagers, cell phones, Dewberries and all other electronic devices that would make noise and disrupt us on the silent or vibrate mode, please. Thank you.

As is our custom, we will open with comments from the commission and this morning we'll begin with Commissioner Houghton. Ted?

MR. HOUGHTON: Good morning, everyone. We've got a standing room crowd only again; we've got two delegations; mobility plan is going to be discussed. Looking for some great new ideas, great thoughts and partnerships with the rest of the state of Texas, and I welcome you all. Thank you.

MS. ANDRADE: Good morning. I'd like to welcome our delegations and our guests and thank them for their interest in transportation, and I look forward to moving transportation in Texas forward today. Thank you.

MR. JOHNSON: I'm glad to speak in front of Commissioner Nichols because I'm going to steal something that he's going to say, I'm confident of this.

It's nice to see so many people here who have such a great interest in transportation and quality of life in this state, and special thanks to the people from the Texarkana area and the Greater Houston area for their hospitality last night. It's nice to convene in a less business and more social setting and get to know one another and visit about local priorities, and last night was really an enjoyable experience in that regard.

Thank you for your interest in what goes on in this state, and this is going to be a very full agenda and a very active day.

MR. NICHOLS: You did get part of mine. Thank you.

I'd like to also welcome you here. I hope you feel welcome, hope you feel comfortable in making comments of your thoughts and ideas and concerns on transportation. We very much appreciate all of your input and the time that you've taken out of your day to come and work on projects of transportation for your communities.

There are several items in this book that I think we have worked on for a number of years that are really quite monumental, so to me it's a very exciting day, and I'm glad you're going to be here to share it with us. Thank you.

MR. WILLIAMSON: Thank you, members.

Again, welcome everyone here. I need to say a couple of things to sort of establish the tone for the day, if I might.

First, it seems as though every meeting for the last 18 months has been an important meeting and I went back a few nights ago and looked at the agendas for the last 18 months, and in fact, almost every meeting the last 18 months has involved the adoption or the beginning of something that had a marked impact on the transportation world in our state.

This meeting today perhaps more so than the others because we are either concluding or beginning our discussion and deliberations on some of the more controversial paths that the state has chosen to take to address its infrastructure needs.

It is instructive for me to say to myself and to everyone present all Texans should be heard, all Texans have an opinion, no opinion is worth more or less than the other. Some things everyone in the audience will agree with us on, some things some in the audience will disagree with the commission on. We understand that.

We understand that in a republican democracy, in an environment where men and women are elected to represent groups of people in making decisions, that not everyone is made happy or satisfied with the decisions of those elected officials or their appointees.

Our great state will continue its advance towards civilized perfection if we all conduct ourselves in a civilized and mature manner, if we all understand that we might disagree but that none of us operate from the perspective of self-interest or wishing to inflict pain on others.

I say these things because the decision to embrace the use of debt and the use of toll collection to finance infrastructure for the future is painful for some people and some people disagree. Some people agree that tolls, Mr. Johnson, represent double taxation. I know that citizens from your part of the state believe that they have been forced to build toll roads in the Houston area for the last 20 years because the state has not allocated an appropriate share of its resources to that area.

I know personally, as a citizen of North Texas, leaders in North Texas feel that same way. At the same time there are citizens in other parts of the state that are now being exposed to decisions about toll roads who feel they are soon to be double taxed because they've been paying gasoline taxes all these years for their roads.

The harsh reality is the tax system we have to pay for infrastructure allocated on a user basis only pays for about 48 cents of the new roads you build, and perhaps we haven't been strident enough in repeating that over and over.

That's another way of saying that the legislature and the governor, in their wisdom, could choose to double the gasoline tax and double the vehicle registration fee and we would have enough cash flow to build the new roads that we say we need. But the governor, this governor and five governors before him, Democrat and Republican, and this legislature and five legislatures before them, including myself, have chosen not to do that.

We believe in this society men and women elect men and women to reflect their wishes and they must be reflecting the wishes of the citizens they represent in choosing not to double taxes to buy and pay for this infrastructure, chose instead to give us the alternative of empowering regions and local leaders to make individual decisions about constructing toll roads, with the economic partnership of the state, to address the future needs of the state.

It's not that any of us -- what's the word -- look forward to paying the tolls, just as any of us look forward to paying greater taxes. It is the case that the transportation infrastructure of this state has deteriorated to the point that someone has to act and someone has to lead. The alternative is to experience the same transportation crisis of the other nine industrial states in this nation and none of us want that, I don't think.

So as we go through the day, as we hear from esteemed elected leaders, senators, House members, city councilmen, county commissioners and judges, let us all remember that the worst thing that can happen in Texas is to be divided north against south, black, brown and white against each other, rich against poor, city against country. That's not how you keep your great state intact.

At the end of the day we will have made some decisions that will irritate some people and decisions that will not be unanimously endorsed by all the citizens of our state, but we've made those decisions based on what we think is the best long-term interest of every citizen in the state, the least of them and the most of them.

Having said that, we have a long agenda, there is no question that we'll take a break for lunch, hopefully after item 7, sometime around 11:00 to 11:30. We will certainly try to collect our guests present from the House and Senate to speak before that occurs. We have some other guests from out of town that will need to speak before that time.

Mike, I'll try to stay on the schedule. I'm going to turn the agenda over to you and let's move as quickly as we possibly can.

MR. BEHRENS: Thank you, Chairman. We'll then go to agenda item number 2 which is Aviation. That would be a minute order recommending funding for airport improvement projects for this month. David?

MR. FULTON: Thank you, Mike.

For the record, my name is Dave Fulton, director of the Aviation Division.

This minute order contains a request for grant funding approval for seven airport improvement projects. The total estimated cost of all grant requests, as shown in the Exhibit A, is approximately $4 million, approximately $1.5 million federal, $2 million state, and approximately $400,000 in local funds.

A public hearing was held on September 24 of this year and no comments were received. We would recommend approval of this minute order.

MR. WILLIAMSON: Questions or comments from the commission?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. JOHNSON: 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 of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

Mike, why don't we go back and approve the minutes. I inadvertently skipped those.

MR. BEHRENS: That would be fine.

MR. WILLIAMSON: Members, we need to approve the minutes from the September 30 meeting. Do I have a motion?

MR. HOUGHTON: So moved.

MR. WILLIAMSON: Do I have a second?

MR. NICHOLS: Second.

MR. WILLIAMSON: 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, the minutes are approved.

Mike, back to you.

MR. BEHRENS: Agenda item number 3, we're having a discussion item we've had for several commission meetings, and this will be a presentation by Coby Chase from our Legislative Affairs Office to go over some recommendations on our legislative agenda for the upcoming session. Coby?

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

Once again, I'm before you to lead further discussion of the Transportation Commission's legislative priorities for the upcoming 79th Texas Legislature. And I've given you a copy of my prepared remarks, and I can either summarize them or I can go through them, depending on the wishes of the chair.

MR. WILLIAMSON: Please summarize them succinctly, though; don't leave anything out. We set this up, as you know, for the purpose of continually advertising to the members of the legislature, to the public that watches transportation throughout the state what we think the legislature ought take up in the next session so that there's no secrets and no one is caught by surprise.

MR. CHASE: My staff has recently completed its research on the matters you've asked us to investigate. We now have a clearer picture of the issues I would advise the chairman recommend to the legislature. I will separate these into two broad groups: those that I recommend going forward with and then those I would not. I will begin with the bigger picture items.

As we have all been discussing for some time, there is general sentiment to revise some of the provisions of House Bill 3588. Those fall along four major lines: financial, rail, toll conversion, and comprehensive development agreements.

On the first there are four financial issues: that statutory capital and toll equity should be repealed; it should be clarified that all toll revenue from TxDOT projects is to be deposited into the State Highway Fund, not just the revenue from bonded projects; the present laws governing the use of any surplus toll revenue from TxDOT projects should be expanded.

Presently, any surplus revenue must be used in other turnpike projects in the region. It would be beneficial to allow surplus toll revenue to be used on a non-turnpike project within the same geographical area, or, for instance, rail.

Fourth, state law should be amended to allow TxDOT to enter into pass-through toll financing agreements where we build the project and local public or private entities repay us.

There are three rail issues: the statutory cap of $12.5 million per year in expenditures for non-Trans-Texas Corridor rail projects should be repealed, as should the $25 million per year cap in expenditures for Trans-Texas Corridor rail projects; there is also need to clarify TxDOT's contracting authority for rail -- currently law requires the department to use the low bid process and does not always take into account other factors which should be considered like best value, or put another way, CDA-type process for the construction of rail.

Third under House Bill 3588 is toll conversion. Toll conversion revenue for TxDOT or a county is currently limited for use on that converted segment or an extension of that segment. It would be beneficial to allow the revenue to be used on other transportation projects in the region.

And second, there is still the definition of toll conversion, the matter is still under internal discussion.

And last there are a couple of recommendations on comprehensive development agreements. Right now they can only be utilized for toll projects; they may be beneficial to other types of projects. The department's ability to use CDAs expires in 2011; that Sunset provision should be eliminated.

You have recommended to us that regional mobility authorities be allowed the capacity to develop transit within their geographical jurisdiction, the idea being that RMAs should be permitted to integrate all of their region's public transportation strategies under the oversight of one authority.

Our recommendation to you is that an RMA that wishes to offer transit services in an area served by an existing provider would be able to do that by entering into a voluntary agreement.

You have recommended to us that the department be granted the authority to acquire property in advance of finalizing the environmental process. This should be pursued. TxDOT should be granted the authority to acquire property from a willing seller in advance of the environmental work being completed. Again, this should only be in the form of a willing seller; no condemnation authority is contemplated in this recommendation.

In addition, the department's use of this authority should be limited in such a manner that acquisition of the property does not influence the final determination of a route.

You have recommended to us that local governments should be granted clear authority to regulate development identified transportation corridors. We believe this should be pursued.

This is a two-stage process: first, TxDOT should be granted the authority to enter into agreements with local governments for the purposes of identifying long-range transportation needs of the area and establishing future transportation corridors; following that, the local government should be granted the express authority to regulate or control development within that corridor.

You asked us to investigate enhanced department authority to relocate existing rail lines. In addition, you asked for a funding source to accomplish this. We absolutely believe that this represents a critical need and should be pursued.

We currently may only provide for rail relocation on a very limited basis and only when necessary for a highway project. TxDOT should be granted clear authority to enter into contracts for the relocation. In addition, the legislature should provide the funding to capitalize a rail relocation fund through which TxDOT may issue bonds. In our recently adopted legislative appropriations request, the department has asked for $200 million in General Revenue for this purpose.

In addition to the rail relocation fund, the commission has recommended that we look into three different loan programs, two of which will require statutory changes.

The first is the establishment of a State Infrastructure Bank program that is capitalized with state dollars and offers loans for roadway projects. The department's presently federally funded SIB has numerous strings attached to it that are proving inflexible, not the least of which is the inability to increase its size with more federal dollars. This seems to be more of a noose than a string, quite frankly. Startup capital placed into the SIB would come from the State Highway Fund.

The second is the establishment of a state-funded SIB for capital investment loans to public transportation providers. In the LAR we have asked for $40 million from General Revenue to capitalize this fund. We recommend that these two statutory initiatives be pursued.

And the third is simply an appropriations request for $4 million from General Revenue to be placed in the existing Aviation Loan Fund. This request has also been put forward in our LAR.

The last significant issue pertains to the Texas Mobility Fund. Its full promise won't be realized if select fees are allowed to determine its size. We should join like-minded supporters in asking the legislature to make the decision to direct more state resources to the fund. About $400 million in annual transportation-related fees go into General Revenue that could be redirected to the Mobility Fund.

Some examples are motor vehicle certificate of title fees, certain motor carrier permit fees, and personalized license plate fees. In addition, certain overweight truck fees and fees for taking a defensive driving class could be increased and allocated to the Mobility Fund. Increasing these fees could raise another $50 million annually.

I recommend to you that the commission stake out a clear position on directing as much of this revenue as possible into the Mobility Fund.

Now I will proceed to a discussion of five items of an operational nature that I recommend be included in your report to the legislature.

There is a definite need for the department to clarify its authority and responsibility regarding construction of our department-owned building facilities. The department's authority in this regard has never been clearly specified in law and instead has rested mainly in attorney general opinions.

I recommend to you that the department seek clear authority for us to construct, finance and manage our own buildings.

Secondly, prior to this most recent session, there were interpretations of law which provided that when TxDOT sold its property, the proceeds would be deposited back into the State Highway Fund. That was amended during the last session to provide that these proceeds would go into General Revenue. It seems that the agency has a responsibility to protect the funds that the public believes are being spent for transportation purposes.

I recommend to you that as we pursue this, it apply not only to the sale of property of TxDOT but also the Department of Public Safety, that property, of course, also being paid for with constitutionally dedicated gas tax money.

Third, it has been recommended to us that we expand the number of courts authorized to hear eminent domain cases. Because of the large number of public improvement projects that are underway or in development in our populated areas, it would be more efficient to allow state district courts, in addition to county courts at law, to hear eminent domain cases. This issue has repeatedly been brought up in light of inefficiencies in the Harris County Court system.

We recommend that this issue be addressed and clarified for all counties in Texas.

Fourth, the agency has recommended the department's authority regarding the award of contracts to the second lowest bidder be expanded. Right now the department may award small maintenance contracts under $100,000 to the second lowest bidder if the lowest bidder fails to accept the contract. Although this authority has been utilized in only a limited number of cases, we agree that the dollar amount should be increased to $300,000.

Lastly, you asked us to look at personnel issues which could assist the agency in recruiting and retaining a qualified workforce. Cathy Williams and the Human Resources Division led an effort that arrived at two recommendations which I believe should be included with the commission's recommendations to the legislature.

The two are: paying a night and weekend differential for those employees who are required to work nontraditional hours, and then modify the statutory requirement that we post jobs above a B-13 pay grade outside the agency. This threshold should be raised to a B-17 in order to provide greater flexibility for reallocating and realigning the department's resources for effective management.

And now I'd like to discuss three issues that you've asked us to research that I recommend not be pursued, at least legislatively.

The first one is incentives for economically disadvantaged counties to participate in toll projects. This needs to be done but I do not believe that a statutory remedy is necessary. The department is in the process of proposing revised local participation rules that should move this along the right path.

I recommend that we pursue an internal remedy before asking the legislature to intervene.

The second issue pertains to the department's involvement in the Border Colonia Roads Program. There is no denying the fact that counties are not spending the funds as quickly as envisioned. A lot of this, however, may simply be the traditional problem with implementing any new program and not necessarily something wrong with county oversight.

One of the thoughts floated in our discussions is that TxDOT could design, let and inspect these projects with greater speed. We certainly do this better than just about anyone else, but shifting work from the private sector to border districts that have already stretched their limits doesn't seem like the right move, at least not right now.

This initiative will never develop into a healthy program unless it's given time and proper oversight for a while longer. Unless there is compelling evidence of insurmountable inefficiencies between now and January 1, I recommend that this issue be addressed internally and in conjunction with the counties.

And third, you asked us to look into the possibility of funding highway initiatives in Mexico. Although this is clearly worthwhile, there is a federal constitutional hurdle. The United States Constitution provides that no state shall enter into an agreement with another country without the consent of Congress.

This would need to be explored before staking out a program in state law. If you have any further direction regarding this, let me know now or sometime later.

That concludes my recommendations. If it is the commission's desire, I can prepare a draft report for your consideration at the December commission meeting.

MR. WILLIAMSON: Members, let's address it this way. Ted, are you ready with any questions or comments you might have?

MR. HOUGHTON: Go ahead.

MR. WILLIAMSON: I was going to say I would prefer, if you're ready, just go ahead.

MR. HOUGHTON: The rail projects, Coby, when you're talking about them, trying to look back at your numbers again, on the funds we're asking out of the legislature.

MR. CHASE: Yes, sir.

MR. HOUGHTON: Rail relocation, the department is asking for $200 million in General Revenue for this purpose?

MR. CHASE: Yes.

MR. HOUGHTON: How far does that go?

MR. CHASE: Well, if it's the ability to issue bonds against that or if it is a loan, but if you can issue bonds against it, I guess it's a times-ten multiplier, it would be about $2 billion.

MR. HOUGHTON: $2 billion. What's the fix statewide?

MR. CHASE: I don't know off the top of my head what the rail needs are statewide, but I imagine we could go through $2 billion rather rapidly.

MR. HOUGHTON: That seems to be percolating to the top as the issue in the very foreseeable future is rail relocation.

MR. WILLIAMSON: This may be mea culpa. I think I suggested the $200 million figure when we were preparing our LAR because we had to have a starting spot.

Is it not the case, Mike, that we're doing a study right now to define those dollars?

MR. BEHRENS: That's correct, and we did talk about we can bond and get $2 billion. Just looking at some of the estimates we have on some rail relocation, we could probably do three to four of those with that $2 billion.

MR. HOUGHTON: Three to four communities or three or four rail relocations?

MR. BEHRENS: Three or four rail relocations, let's just say they were $500 million a pop.

MR. WILLIAMSON: We've all been working on this for quite a while.

MR. HOUGHTON: Yes, you have.

MR. WILLIAMSON: I suspect that the total number is somewhere around $10- or $12 billion.

I don't know, Robert, you've been on this hard for a year, what are your thoughts?

MR. NICHOLS: It's a little bit early to try to pick a number but it is quite a large number because it's going to be extensive in each of the urbanized areas. But if you start with a working number of about $10 billion, recognizing you can't appropriate that much at one time, then the best approach is to take a logical revenue stream. If you chose $200 million a year, then you could start taking a bite each year or that could be set up like the Texas Mobility Fund just for rail relocation where you could issue out in bonds that revenue stream and tackle a billion at a time or $2 billion at a time which I think is becoming quite aware is desperately needed in many of these urbanized areas.

Not just for safety but to improve the mobility of the freight capacity which is needed and also possibly picking up the right of ways, either for commuter light rail or additional toll lanes but still be able to service those industries. So it's going to be a real issue and it's not regionalized in one area of the state, it seems to be everywhere.

MR. WILLIAMSON: I think the approach the governor has chosen to take in this matter, like the other large issues he's tackled the last four years, is unlike what other states have done. Other states have done it sort of piecemeal. I think the governor's viewpoint is if you're going to attempt to negotiate a transaction with the Union Pacific to move the rail out of downtown Houston, downtown San Antonio, downtown Austin, downtown Waco and Fort Worth, and the best approach is to relocate it at once and way away and acquire their right of way for other transportation uses.

So clearly it's a lot of money. The flip side is, is the rate of return better than a lot of money, and if it is, well, then it makes sense. And that's been the governor's instruction: to do it in a way that it makes economic or business sense.

I think the $200 million, Ted, to get back to your question, it was the starting point to begin the dialogue with the legislature.

MR. HOUGHTON: Will this agency be the lead agency in those negotiations with the railroad?

MR. WILLIAMSON: I would think the legislature would assign us that responsibility, yes, sir.

MR. HOUGHTON: That's my questions.

MR. WILLIAMSON: Any other questions for Coby about the legislative report at this point? Hope?

MS. ANDRADE: Yes, and my questions are more directed to Mike.

On the incentives to economically disadvantaged counties, I understand that we're working on some internal measures to help. I just want to make sure that we develop some kind of comprehensive approach to address this and that we explore all internal avenues to acknowledge that these counties are different when we're looking at toll projects out there.

MR. BEHRENS: We will do that.

MS. ANDRADE: Okay. And on the Border Colonia Program, as you know, my concern was that the $175 million that we have is just not enough and so I want to make sure that the money that we do have right now that it does get used directly to the roads. And I would recommend that we work closely, and perhaps Amadeo can help us with that and in working closely with our district offices.

MR. BEHRENS: And we have been in discussions. I know Amadeo has been working with the water development board because of the utility construction. Some we've found out that they were coming after. There had been some road construction so we want to coordinate that to make sure we get the utilities done and then we do the road work and coordinate that.

MS. ANDRADE: I think we've had more authority than what we've used, and so I want to make sure that we use that to hold them accountable for making sure that these projects get done.

MR. BEHRENS: Correct, and we're looking at some of this legislates a little bit more oversight from TxDOT.

MS. ANDRADE: Good. Thank you very much.

MR. WILLIAMSON: John?

MR. JOHNSON: Coby, I don't have any specific items. This is, I believe, your third appearance, fourth? It's been so much fun, I missed one. I apologize.

Here's a broad-brush impression that I've gotten. Most of what we are proposing are facilitators, clarifications, operating efficiencies, and certainly in today's presentation on the financial side we talk about an increase in fees for the overweight loads going into the Mobility Fund, we talk about the $200 million from General Revenue to start the ability to relocate rail out of our cities, and there might be others, but those are the only two what I call financial drivers or revenue issues that I see in the program.

And yet if you look at the encompassing area that we are trying to assist, we're trying to assist ports; we're trying to assist transit; we've talked about the rail issues; and we have all the surface transportation, the roads in this state.

I'm somewhat in awe that we can try to get our arms around so much and the financial package seems to be less of a focus. But I think there's some good in that in that this transition that we're making, the chairman so eloquently talked about early on, a system we recognize that the gasoline tax: one, is inefficient, and two, that it's becoming a decreasing dependent source in being able to do what we need to do.

And so we are looking at leverage through bonds, we're looking at being able to amortize that leverage through user pay, and how significant that is in terms of being able to fund all the areas that we're trying to get our arms around.

Now, it's not an oil patch, an eight-eighths deal. We can't do it all; on that we need help. But I'm struck by this shift that is occurring and I hope that others come to the same conclusion that I have, that in my viewpoint it's not only the way, it might be the only way to equitably try to do what we need to do and then also fund what we need to do.

MR. WILLIAMSON: Robert?

MR. NICHOLS: Thanks. I'm going to step back just a second on rail and then come back to a different issue.

On the rail I just want to make sure that everybody in the audience is not left with the misunderstanding that we're talking about or proposing to remove all rail from cities. There's a big difference between relocating and preparing rail corridors, rail alignments in urban areas as opposed to just getting rail out of big cities, because it seems almost a paradox that rail was located because of industry need, creation of jobs and towns built up around it, and now there's this rail problem inside these cities.

Because of the way the cities grew and became trapped and landlocked with some of these things, there are opportunities for developing rail corridors in realignments that improve safety dramatically. I know in the Houston area, I think the number heard last night at one of the receptions was 752 at-grade crossings on public roads, state, city, stuff like that. Over time there's a lot of fatalities created on those things.

And if we could relocate and consolidate some of that stuff, then not only do we improve safety but we improve the capacity of rail distribution for industries who desperately need it. We don't want to harm that, so I just wanted to make sure we clarified that.

When you hit tolls, toll conversion issue, then there is a definition of toll conversion, and that seems to spark, obviously, pretty active interest around the state. And in a toll conversion, existing law that was passed is very clear how that is done, but I think the clarification of what is considered a toll conversion seems to be the issue.

We've taken a position on what we thought it was or feel like it is, and I think Chairman Krusee has already publicly said that that's going to be an issue, and in fact, he's trying to direct a lot of activity, so we know there's going to be a readdressing of that issue. So I don't know that we will be carrying the bill but we'll hopefully be involved in that.

The last thing, I think at our last monthly meeting, as Commissioner Johnson had said, we're looking for improvements in efficiencies and things like that we might could pick up through legislative actions. And we issue a tremendous amount of contracts, probably 90 percent of our entire budget, we issue out in contracts in one form or another.

And I mentioned something to the effect that while you study with all the different divisions and districts and things like that, if you can come up with suggestions of ways to improve our contracting and any of those things that might need to be addressed legislatively, that we'd urge you to bring them forward.

MR. CHASE: Yes, sir.

MR. WILLIAMSON: John, you're correct, this has been monthly for four months. And it will be for one more month, Coby; we'll be prepared to do this one more time in November. I think I can safely ask you to begin building your draft report.

To remind the audience and the commission, we're going through this process for two reasons: one, we don't want our stakeholders, partners and those who stand on the other side of us from time to time to be caught off guard with what the department believes is the legislative package most appropriate for transportation.

And the reason we have a legislative package is because in the last legislative session, the legislature instructed us for the first time in the history of the state to prepare a legislative package and submit that to them. So this is in compliance with the law.

I have a couple of questions, Coby, that I would like for you to expand on over the next month, and by way of publicly stating where the chair's interest is. If we are to, for example, ask the legislature to repeal the statutory cap on toll equity, we should begin to warn the Office of the Governor and the legislative leadership of that and not let them see it for the first time in our legislative report.

We have a great network established with men and women across the street. We should take advantage of that network now and begin to warn them that we think this is something that should be addressed. We don't, again, want a senator or a House member or the governor to say that we caught them off guard with our viewpoint about something that at least in the past, Robert, was pretty significant to the legislature. Now, maybe it's not anymore, maybe the cap is irrelevant.

And similarly, I would ask -- you've been in the business longer than I have -- I would ask that you go through and sort of ask yourself: Okay, now this is one for which arguments were had, we need to warn Senator Shapiro, Senator Staples, Senator Ogden, Chairman Krusee, Chairman Heflin of this and not just wait until the document is drafted.

The other thing that I think is important is we're probably going to pick up some new stakeholders. We've certainly picked up some new Texans who sit on the other side of some issues in the last year; we're probably going to pick up some new stakeholders and partners. We might want to start compiling a pretty good list of who those persons are.

I think, for example, the Gulf Coast folks who are with us today are perhaps going to maybe give a different viewpoint of rail than we've had in the past. That would be an example of stakeholders that we would need to go ahead and start reaching out to in helping us prepare for the next session.

Other than that, I'd just say again I'm very pleased with your work, I think this process has gone as it should have gone. We'll go through it one more time but I think you can be comfortable in beginning to prepare your report for December's adoption. We were going to adopt it in November but we've only got three weeks to get ready and maybe it's best to wait until December.

MR. CHASE: Okay. Thank you very much.

MR. WILLIAMSON: Thank you.

Members, I overlooked a moment ago the required suggestion to the audience about our cards, so if you'll bear with me for a moment.

I need to remind everyone that if you wish to address the commission today during the meeting, I need for you to complete a speaker's card at the registration table in the lobby. If you're going to comment on an item that's posted on the agenda, I need for you to fill out a yellow card and identify the agenda item upon which you wish to speak. If you wish to comment in the open comment period but not on an agenda item, then there is a blue card at the table and we need for you to complete that card.

Regardless of the color of the card, to the extent that you're able, please try to limit your remarks to three minutes because we have a lot of people that have things that they want to say today.

Mike, I've chugged as long as I can, buddy, so you're going to have to get back here and do your role or we're going to have to take a quick recess. There he is.

I've cleared out the cards, Mike, we're back to you. There was no action necessary to be taken on the discussion item. You're fixing to give it back to me, aren't you?

MR. BEHRENS: No. We're going to agenda item number 4 and we're going to have Phil Russell come up and discuss the recommendation of creating a regional mobility authority for Smith and Gregg Counties.

MR. RUSSELL: Good morning, commissioners and Mike. For the record, I'm Phillip Russell and I'm the director of the Turnpike Division for TxDOT.

On June 23 of this year, Smith and Gregg Counties filed a petition for authorization to form an RMA. The petition identified the continuation and the completion of Loop 49 in Smith County as a four-lane divided highway, including an eastern corridor to extend into Gregg County as their initial project. The project will improve traffic flow throughout the region and eliminate the need to make connections through Tyler's urban center.

On September 7 and 8 and on October 7, the department conducted public hearings pursuant to the RMA rules to receive public comments on the proposed RMA formation. Notice of the public hearing was published in the Texas Register and in a newspaper of general circulation in the region.

At the public hearing several individuals spoke in favor of the creation of the RMA. Several individuals also submitted written comments, most in favor and one opposing the development of toll roads. Resolutions supporting the RMA were received by commissioners courts of Smith and Gregg Counties and a joint resolution of support from the cities of Tyler and Longview.

By approving this minute order, you would authorize the creation of the Northeast Texas Regional Mobility Authority. The area that encompasses the NET would be the Smith and Gregg County lines. The initial project that would be developed, maintained and operated would be the Loop 49 project. The initial board of directors composition would be of seven members; six directors would be appointed by Gregg and Smith County commissioners courts, and of course the chair would be appointed by the governor.

We have Mary Owen here and I think we have several others in attendance. I think from my perspective, Mary and the group have really done a fantastic job of educating the public and really being accessible to those folks in Smith and Gregg Counties.

So with that, I'd be happy to open it up to any questions you might have.

MR. WILLIAMSON: Members, we do have three commenters/witnesses. What's your pleasure? Do you want to dialogue with Phil first or would you like to hear the three persons who wish to comment for the record?

MR. NICHOLS: I want to hear the comments.

MR. WILLIAMSON: Okay, Judge. Once again we get to see your smiling face. Judge Dempsey. You're wearing out that path between Smith County and Travis County.

JUDGE DEMPSEY: Well, thank you again. Mr. Chair and members of the commission, it's always a pleasure to be before you.

Gregg County Judge Bill Stoudt had court this morning and sends his regards and his apologies that he can't be with us, but had he not had that conflict, he certainly would have been here.

I appreciate your comment, Commissioner Williamson, at the beginning of the meeting today with respect to what we all hope to accomplish as Texans and that is at the end of the day we work together, all of us, toward the betterment of the state of Texas.

And I think that's what we've done in Smith and Gregg Counties. Historically, neighboring counties don't always get along, as you know, but we've moved past that and we have worked together in Smith County and Gregg County to come together for the benefit of our region and actually present what we believe to be an excellent project as far as our RMA is concerned.

As was indicated previously, the public hearings have shown overwhelming support for the development of the RMA and the tolling of the portion of Loop 49. We will continue, both counties, to assist TxDOT in the acquisition of right of way.

And I'm not going to belabor this, I think you've heard from me previously. I just want to thank you again for your consideration and the opportunity again to address you all.

MR. WILLIAMSON: Members, dialogue with the judge.

MR. HOUGHTON: Just congratulations again.

JUDGE DEMPSEY: Thank you very much.

MR. HOUGHTON: What's the count now, Phil, on RMAs?

MR. RUSSELL: That would be five.

MR. HOUGHTON: Welcome to the family.

JUDGE DEMPSEY: Thank you.

MR. NICHOLS: I didn't know if they were going to make a comment. I wanted to congratulate you also and thank you for the work that you have done throughout not only your county but with your neighboring counties. I think it's a real accomplishment to go from where you began to where you are today, and I know what you're looking forward to is where you're going tomorrow. So congratulations.

JUDGE DEMPSEY: Thank you, Mr. Nichols.

MR. WILLIAMSON: Members?

(No response.)

MR. WILLIAMSON: Judge, hard work occurs here but it also occurs back home, and we appreciate the hard work of everyone in both places.

JUDGE DEMPSEY: Thank you.

MR. WILLIAMSON: Our next is Sue Cooper. I think Sue is not as comfortable about the proposal as perhaps others.

Sue? And we do welcome you; we appreciate you taking the long drive from Whitehouse.

What's unique about Whitehouse?

MS. COOPER: I don't really know, but I've been there in Smith County for 50 years so I don't really want to leave.

I was not prepared to give you individual handouts. I have a 56-page written comment that I would like to present to you for your review. Obviously you can't do it right now; I wasn't prepared to do that. But in this comment I would like to share with you thoughts that people in Smith County have shared with me, thoughts that I have gleaned and learned over this very short time period of a learning process on what an RMA is, on the tolling of Loop 49.

And I'd like to say before I get started -- because I have my written comments so I don't get off track -- I am a property-owner, lifetime resident of Smith County, born and raised in Noonday. The Loop 49 project crosses our family farm. We are in favor of Loop 49; we would like to see Loop 49 completed yesterday, but I hope you realize my comments are coming from my heart, coming from my concern for the little people of Smith County, concern that everyone has equal access to Loop 49. Since it is Tyler's first expressway, it is very much needed to be available to everyone.

And that's where my comments are coming from, not from a personal benefit gain or lost end point but for the good of everyone in Smith County and that region.

My name is Valerie Sue Bedford Cooper. I'm a property-owner on Loop 49; I'm a 50-year resident of Smith County -- I'm older than 50, though. I'm a former high school math teacher at Whitehouse ISD; I'm currently employed as a mechanical integrity coordinator and certified API 510 pressure vessel and API 570 piping inspector for the Longview Operations Center of BP American Production Company that was formerly Amoco Production Company and Oil Company.

I am an active user of Texas public roadways, driving in excess of 45,000 miles per year in my company vehicle and personal vehicles. I'm very appreciative of the Texas highway system, especially when I drive in other states.

My reason for being at this commission meeting is to request that you not approve the NETRMA at this time. The residents of Smith County and Gregg County are not informed of this RMA, and when they are informed, the majority do not approve.

My first knowledge of the NETRMA was at the public meeting on 10/7/04 in Tyler. During the first part of this meeting we were told this was our last chance to make public comments on the NETRMA and it was too late to make a written comment. I spoke against the RMA based on the information read to us by Mr. Doug Woodall, and that's the only information I had.

And I'll just add here the reason I spoke is because other people that I grew up with in the community were on the agenda to speak but they chose not to because they felt intimidated, and I felt like somebody needed to speak up for those people.

My comments, I'm sure you have because they were recorded by a court reporter, and as I said, they were based on very limited knowledge of what I heard that day.

Since the purpose of the RMAs was to pay for transportation projects with fees or tolls, I am against the RMA. When I finished speaking and returned to my seat, a member of the Chamber of Commerce tapped me on the shoulder and said, You do know this is not going to raise taxes. And of course, you know what I thought.

The second half of this public meeting was supposed to be an open-house format for any questions, comments and concerns for tolling on Loop 49. As described in the letter dated 10/7/04 by Mr. Randall Redmond -- and this letter is included in my written comments -- this did not happen.

After TxDOT made several presentations, ending with the lady from Texas A&M -- I'm sorry I don't remember her name -- that described surveys, focus groups, roadblocks, and surveys of truckers on tolling of Loop 49, Mr. Woodall adjourned the meeting by telling us we had ten days to fill out our comment forms and return them to the TxDOT office in Tyler.

I stood up and asked the lady to tell us what the truckers said because that was one of the main points in my previous comments is I felt that truckers would not use the toll road. She informed me that the private truckers said they would not pay the toll but corporate truckers would pay the toll as their companies would pay that toll.

Several other people tried to ask a few questions before Mr. Woodall ended the meeting. By no means were all the questions or concerns addressed. Being a school teacher, I like answers.

After the meeting, I had a lengthy -- in fact, they closed the doors on me -- I had a lengthy conversation with Mr. Doug Woodall and asked many questions. I was concerned how long the toll would be on Loop 49. He stated he estimated Loop 49 would generate $100 million per year in tolls and said why would we want to give up that money. I was shocked with such a statement as I could not see how that amount of revenue could be generated from tolling Loop 49, and I told Mr. Woodall I was more concerned about Loop 49 going bankrupt by not generating enough tolls to fully fund the project.

I was also concerned about the functionality of Loop 49 being reduced by tolling. One of the main purposes we had been told for Loop 49 was to reduce congestion on Loop 323 and Broadway and improve movement around Tyler. I stated my concerns and beliefs that people would not use a toll road and that Tyler's first expressway should not be tolled. Mr. Woodall said I was not the only person stating that Tyler should first have an infrastructure of expressways before building toll roads.

I also told him I was concerned with private property rights after hearing RMAs had the right to condemn property for transportation projects, and I had read on the internet that day about I-69 making millions of dollars by leasing the right of ways to fast food chains, service stations and truck stops. Obviously the right of ways were bigger than the roadway.

Mr. Woodall confirmed that RMAs could do the same, even put up hotels on locations they deemed to be service centers for the transportation project. He assured me this could not happen to our property because we were too close to Tyler, but this could happen in remote areas.

He also told me that RMAs could go away if they had no projects to generate revenue by tolling, but if Loop 49 was tolled, the tolling process would have to be administered by an RMA. He provided me with his only copy of the July 2004 TxDOT brochure on RMAs, this nice color printed brochure that I have right here.

I read this brochure and had many more questions and concerns on the roles and authorities of RMAs. I called Mr. Woodall in the Tyler TxDOT office the following week after October 7, but all were in a training session till the end of the week.

I then called my state representative Leo Berman to ask him questions regarding the RMA's authority. Representative Berman was not familiar with my questions but he called me back the next day with the answers that he gleaned and funding information that I requested.

When Mr. Woodall returned my call on October 14, I asked him how I could comment and request this NETRMA not be formed. He said I could attend this meeting today but I would not have much impact as one person. He said I might have more impact if I had a petition signed by the landowners on Loop 49 requesting this RMA not be formed.

I faxed a request which is included in the written comments to the TxDOT office that afternoon. I requested a copy of the sign-up sheets of all three meetings -- there were two in Smith, one in Gregg, including the one I attended on October 7 -- and I also requested a list of the landowners and addresses so I could contact them.

The following day on October 14, I picked up the sign-up sheet for the October 7 meeting; I have the receipt for that in this handout. I was told the Attorney General's Office would have to approve my request for the landowners; I was told that Mr. Woodall had the sign-up sheets for the prior two meetings.

Since I was not going to be able to get a listing of the landowners on Loop 49 in a timely fashion, I proceeded to write a one-page summary sheet on the tolling of Loop 49 and the NETRMA based on the facts I had learned from Mr. Woodall and the July 2004 RMA brochure.

I distributed this petition on 10/17/04 to friends and neighbors to circulate in the community. Included are 266 signatures of Loop 49 landowners and Smith and Gregg County residents. I originally only intended to do Smith because I didn't want to go to Gregg County, but I had a meeting yesterday at my district office in Longview and got everyone in the office to sign.

I also included these co-workers in Longview that lived in Gregg. They were all opposed to the RMA based on my fact sheet which I agree might not be exactly factual. It's based on what I knew at the time. All were opposed to the RMA and had not heard of it until I showed them the petition and the fact sheet on 10/27/04, just yesterday.

I also included in this the written comments from two of my sisters, Jessie Enright who lives in Lafayette, Louisiana, and Regina Kirby who lives in Tyler, on the RMA issue. We kind of got conflicting instructions on the October 7 meeting and didn't know whether it was too late to comment on the RMA or not too late, we can only comment on tolling, so it was kind of a confusing time. We didn't know what we could and could not comment on.

The tolling issue comments that were returned to Randall Redmond on 10/18/04, I made copies, circulated them in my neighborhood. These were what we were asked to turn in in ten days, our comments on the tolling issues, not on the RMA. We were asked not to comment, it was too late.

I attended the Tyler MPO meeting on October 26 and presented my fact sheet and petition opposing the RMA and the tolling of Loop 49. A member of the Chamber of Commerce spoke in favor of tolling and made a statement: We do not want people to bypass Tyler but to come to Tyler to shop.

If Tyler does not want a fully functional Loop 49 that will allow truck and local traffic the option to bypass Tyler when needed, then you should consider a better use of tax dollars than funding a tolled Loop 49. There are many worthwhile projects listed in the MPO that are as not yet funded.

But I would prefer that you consider not forming the NETRMA at this time, consider other options for funding a fully functional Loop 49 as an expressway that will be accessible to all residents of Smith County.

Now, I have other attachments. I know I've exceeded my time limit but there are 56 pages in here, including the petitions signed by the residents that are concerned about the NETRMA. I also included the fact sheet, and I was approached by members at the meeting on October 26 and given information that my fact sheet may not be actually correct, because every time I discuss it I get new information.

So I'm open to information, the people of Tyler need information, and I think they welcome information. But 266 people have signed the petition, and if you would like, I can read you what the petition stated.

MR. WILLIAMSON: We'll be able to read that and it will be read into the record.

Members, an articulate and well thought out message from Ms. Cooper. Are there questions or do you have any dialogue you wish to have with Ms. Cooper? Mr. Nichols?

MR. NICHOLS: (No audible response.)

MR. WILLIAMSON: Mr. Johnson?

MR. JOHNSON: First of all, thank you for being a part of the process and expressing your opinions. They are important, the opinion of everyone is extremely important.

The question that I have -- and I believe Mary Owen is here.

Mary, are you here? Would you come forward and shed a little light for me? And then I was going to ask Sue a question.

Also, thank you for being a teacher and the many contributions that you've made to your community.

Mary, under traditional funding -- which is the way we've been going for years and years -- how long would it take to complete Loop 49?

MR. WILLIAMSON: Mary, please identify yourself when you answer the question.

MS. OWEN: Yes, sir. I'm Mary Owen, the district engineer for the Tyler District.

Our current projections, our hopeful projections are 2033.

MR. JOHNSON: So that's 29 years from now.

MS. OWEN: Yes, sir.

MR. JOHNSON: And if this RMA is approved and successful in its development of Loop 49, how many years would that take?

MS. OWEN: We're projecting 2012.

MR. JOHNSON: So that's eight years; 29 to eight.

You made the comment about trying to figure out an alternative way of doing this other than making it a toll road, a tollway, and I think illustrative of what Mary said, if we go the traditional route of funding, it's going to take a long, long time, and if we don't, if we go the RMA route and it becomes a toll feature, we can save a huge amount of time.

Is that an important consideration to you and to your neighbors and the people that you work with?

MS. COOPER: I think Tyler needs an outer loop desperately because our inner loop is just a city street with red lights at every intersection, and that's obvious. But also, the people of Tyler need to have access to the outer loop for it to accomplish its goal, and I feel like a lot of the people, we don't know what the structure of this tolling would be, we don't know the amounts, there's a lot of unanswered questions.

I would like to see us consider other options. We could do nothing and continue with the time frame and build it as budget allows in 2033.

MR. JOHNSON: By my calculations, both of us will be 25 years older when it's finished.

MS. COOPER: Hopefully.

MR. WILLIAMSON: Hopefully, exactly.

MS. COOPER: Another option, I looked at the internet at the sales tax, the tax option that we have, we have different categories, there are categories. Not all of Smith County has used up the total tax that is allowed; Tyler is very wisely using their projects to pay as they go, they have the tax rate.

I was hoping we look into some options in making a county-wide tax of an eighth of a percent to go towards this funding so that everyone would have equal access. This is Tyler's first freeway, if you will. We do not have other access routes for the people of Smith County to take.

If it's a tolled route, that will, by virtue of economics, eliminate some people. And this is of benefit to all the citizens of Smith County, all the citizens of the region, to Tyler especially, to allow open access, and we need to look at those options.

Most large cities have toll roads but they have other freeways for people to choose if they don't want to take the toll, because the tollways are always less traveled, less traffic because you can choose or not choose to pay the price. And in Tyler we won't have that choice if it's a toll road.

MR. JOHNSON: Thank you.

MR. NICHOLS: I'd also like to, Ms. Cooper, thank you for taking the time to be here. You obviously have dug into the issue, are trying to learn all the facts, have picked on a number of key issues and key facts. And I want you to know that we hope you feel welcome here and comfortable here; we appreciate you coming.

I have about three or four areas I was going to mention. First of all, on the RMA itself, some people think in terms of an RMA being possibly a cruel beast out there that's beyond control that we're all sitting back hoping they don't do these kind of things. It's not. It is a governmental entity; it is totally controlled locally, your people in Smith County and Gregg County -- the way this is set up, will have absolute control of the RMA. It's a local entity.

The board members who are voting on these actions are local people who are appointed mostly by the county commissioners court and the chair appointed from a local pool of people by the governor. And once they're appointed, the county court, if they don't like the way they're going, can remove anyone of them at will. The people of Smith County elect the commissioners court. So you've got due process locally for absolute control.

If the citizens of that county don't like the way they're running it, your commissioners court can change that RMA any time they want. So it's not an uncontrollable beast. And if you go and study all the powers of a county commissioners court or a city council, it would frighten you also.

But the comfort level should always be to know that it's local decisions and local control, and the legislature and the governor supported that type of entity because they felt like on these type of issues local control was very important. So first of all, kind of keep that in mind.

Secondly, on the choice of wouldn't it really be better to build it as an expressway without tolls versus with tolls, that is the statewide issue that has strangled the state for two decades. I think generally, if given the choice, everybody would choose a non-tolled expressway as opposed to a tollway, everybody would take that choice.

The problem is there is no money, not enough money to build it. You just heard 28 years and that's without inflation and that's also assuming that 25-30 years from now that the fuel consumption per mile in automobiles is the same as it is today which is primary basis of our income to build roads. We know when I was a kid you could buy gasoline for 20 cents a gallon -- I'm showing my age -- 19 cents if you really checked around, and now it's two bucks a gallon, give or take. That's ten times.

Who could have imagined when I was a kid gasoline was going to be ten times per gallon? And at $2 a gallon what's going to happen when it's $20 a gallon?

What's going to happen is people are still going to drive or they're going to take transit, but what they're not going to be doing is consuming gasoline nearly as much or at all. It may be all electric, it may be some combination, it's going to be electric, fuel cell, who knows. I have all the confidence in the world that technology and market driven forces are going to take us where they need to go.

But the one thing I do feel comfortable with is that our future, the way our current funding is based on gallons being consumed of gasoline is slowly going to disappear which is what we've seen. So we're going to have to have some type of a user fee to pay for these things.

The third thing was one of your early questions I think was a key important question and it was a legislative question of philosophy, and that is when the road is paid for, will the toll booths come down. I mean, when the department, working with the legislative body several years ago, got into the issue of allowing us to participate in toll roads to the extent that we do now, panels of committees and state legislators, House representatives and senators would ask that question.

Half the panel would say we want those toll booths to come down when it's paid off; the other half would say no, we need to have that option to use that money because we might need it to expand the road or build some of these other roads.

And here came the conflict, and people like myself and some of the other commissioners were put in the middle of that to be asked the question: Which way do we think it should be? And the answer that I know I gave and I heard other people say was regardless of what law they pass today to assure you the toll booths come down or that they might stay up, that decision really is going to be made 30 and 40 years from now by whoever the elected officials are, and it certainly won't be most of the ones that are there now. So that real decision is going to be made 30 or 40 years from now when the toll bonds are paid off.

Our responsibility is utilizing the tools that are available to us, knowing all the options, this is what we need to do to get the infrastructure built today to get people moving, commerce as well as people moving today, and put the generation that follows us in a position where they have a choice. Because if we sit and wait 29 years to build that loop, assuming people are still buying gasoline at $10 and $20 a gallon, what's going to happen is the Tyler Loop -- which was the freeway -- is choked up from local traffic.

You've got, I think, in the neighborhood of 50,000 cars a day and you know how choked up that thing is from 3:00 to 6:00 or whatever, but in 15 years, half the time the waiting period, you're looking at an easy 25,000 vehicles per day increase. It's going to happen in 15 years, not 30. And when you jam another 25,000 cars on top of the 50,000 on that existing loop, it will be an absolute quagmire, and not very long from now.

So something has got to be done today, and that's kind of the choice that we are given. Somebody has got to take a tough choice, and that's where we were faced. We laid the choices and the tools out to your local elected officials. Our department has tried to lay out to the public, as well as to the county commissioners courts and the city councils, what their options are, and it's important for people to know the truth as to the reality of the problem as opposed to some rosy thing so they can make some serious decisions.

They reached out into the community, I know they worked with the chamber. I actually take the Tyler paper -- I take about four other newspapers too -- and I know this issue has been floating around for way more than a year in Tyler, not just like the last couple of months.

Something that you said that concerns me greatly was you said you had a lack of time to comment in some of these hearings, and I know there were a number of hearings. And you said you had a number of friends who went to those meetings who would have said something but they felt intimidated.

When you said that, do you think that they were discouraged to make any comments or frightened by the TxDOT staff, or do you mean that some people are afraid to get up in a public meeting and talk because they're somewhat bashful? Are they more like that, or are you actually saying that you thought our people didn't want them to say something and intimidated them? That's kind of a spooky thing to say.

MS. COOPER: Well, the person that I talked to who was on the agenda, he said, They don't want to hear what I have to say. And he wouldn't get up and speak. He said, They don't want to hear it. So I don't know if you want to call that intimidation or what.

And I'm just the opposite. I go: Well, if you won't speak, I will.

MR. NICHOLS: Good for you.

MS. COOPER: I had no intentions because I had no knowledge, but I've worked real hard in the last few weeks to try to get some knowledge, talking to Representative Berman and the TxDOT officials and trying to get some facts. Because I'm for Loop 49 being completed yesterday, but I want as many citizens of the county and the region to have access to it to do everybody good.

MR. NICHOLS: Okay. I want you to know that I hope you feel like you are welcome here, and we do appreciate your comments and hope you are getting some of your questions answered.

MS. COOPER: May I ask you a question? Does the RMA have to be the sole governing body of the tolling of the outer loop? Could it be done under TxDOT auspices and not an RMA?

MR. NICHOLS: There are a combination of checks and balances, several different checks and balances. And the legislature anticipated if you had a runaway RMA, for instance -- which is what you're concerned about -- any project that they have where they want to build a road that connects to a state system, they have to come to this commission and get approval. They can't just go connect. So there is an approval process in there.

If they need any funding for state equity to help support that road -- and in this case, that loop would, even if it's an RMA -- they have to come to this commission to get approval. So if it's a runaway thing doing bad things -- which you might be concerned about -- and somehow or another got away from your county commissioners -- which I don't think they would let that happen -- you've got another check and balance here.

And I know the Governor's Office or your legislators, like Leo Berman and other senators and stuff, if they thought something bad was going on, they would be calling. So you do have protections in there.

MS. COOPER: That was my concern was an infinite toll that never had an ending life, even when the loop was paid for.

MR. NICHOLS: And I hope I answered that question.

MS. COOPER: Well, not really, because part of the RMA is to continue that so they have revenue to generate other projects from what I've been reading.

MR. NICHOLS: And my point was that regardless of even if the legislature passed a law that said it had to come down 30 years from now, they could pass another law that says, Hey, we'll leave it up.

So the important thing is to get it built today so we can start moving traffic.

MR. WILLIAMSON: I think that, Ms. Cooper, one of the challenges of government in our state and our country is that there are, because we are a free people, there are never-ending questions we can all ask about a decision our government is going to make and we may feel like we're intimidated in some cases, the gentleman you spoke of, or we may be self-assured, as you are, and ask the question.

But the point is that in our organizational structure we're allowed to have never-ending questions and concerns about every decision government makes.

The flip side of that is at some point somebody has to say it's time to move ahead and note the concerns of the citizens and try to address them as we move, and in fact, my only suggestion to the persons from Smith and Gregg County that are here today is I think you would be a wonderful appointee to the board of directors of the RMA and I hope they give that some thought.

You know, the whole transportation world in Texas has changed a little bit. This governor believes in local control, regional planning, and state financing, and that's the environment we've been creating for two years now. It is driving decision-making at the lowest possible level, driving planning to the regional level, and driving state tax dollars to those regions to be partners in solving those problems.

These boards that constitute the boards of the RMAs ought reflect not only those who agree with the toll approach but those who have concerns about its impact on the working people of the area, on the retired of the area, on the property-owners of the area. So I hope the Smith and Gregg County leadership will take note of your articulation of the opposite viewpoint.

MS. COOPER: May I ask another question?

MR. WILLIAMSON: Please.

MS. COOPER: Is it possible, because my concern is for the working people that may not can afford the toll -- because I personally take tollways when I'm in Houston when I'm in a company vehicle and BP pays me back, when I'm driving my vehicle, I don't.

MR. WILLIAMSON: I'm going to answer my question as best I can in the context of we have another witness, we've spent a lot of time, we need to move on the agenda, but I'm going to try to answer your question.

Your question presumes that the level of taxes that same working woman pays would not have to change to build a tax road or a free road. You see, we've gone to great lengths for a year now to explain to the public there simply is not enough cash flow in the current system to maintain what we have, rehabilitate what we already have built, construct the Loop 49s across the state -- of which there are thousands -- there's simply not enough cash flow.

So our choices go in three directions: we can not build the capacity, we can wait until 2033 for Loop 49, that's one choice we have; we can raise taxes to create the cash flow we need to build Loop 49 as a non-tolled road; or we can implement a well-thought-out toll structure, borrow money against those future toll collections, and build the road we need right now.

You posed the question within the context that somehow there might be we like to call it the "Road Fairy" in Washington, D.C., bringing us money, or that there's somehow a pot of money someplace that no one knows about and we can go build 49.

Or frankly, the concern that we hear most often -- for which we're grateful you didn't share -- you just aren't sending us our fair share -- we hear that a lot. The reality is there is not enough cash to build Loop 49 as a non-tolled road.

So the real answer to your question is do we increase gasoline taxes from 10 to 20 cents a gallon on the same working people you're concerned about, do we force them to pay for the road through their taxes, or do we offer them the alternative of the existing road structure and stay off the toll road or pay the toll to use the road.

One of the things that's often overlooked in the argument about toll versus tax road is that when the RMA builds the toll road, a large percentage of the cars on the currently congested inner loop will move to the outer loop. The intended consequence of that toll road is that a percentage of people crowding the current existing loop will move to the outer loop.

I have several persons interested in an agenda item later on in the day that need some guidance. If you would indulge me for a moment.

It's the intention of the chair to pick up item 7 which I know many of you are here for at exactly 11:15. That's 44 minutes from now we will begin that process. For those of you who need to do other things and come back or need to change your schedule, 11:15 we will take up item 7, no matter what.

Now back to you. I'm sorry to interrupt our dialogue.

I guess my answer to your question, I grew up in a working family, a union family. We're well aware of the impact of the cost of government, whether it's higher sales tax, higher gasoline tax, or a toll.

I think our viewpoint is the RMA proposes an optional tax or an optional toll. You suggest that we either find some money that's not there or we force those working people to pay higher taxes to pay for the road. We just think our approach makes sense, but perhaps you disagree. But I hope you'll be on that board.

MS. COOPER: My question was can you have variable tolls -- local residents would use it much more -- have like a yearly toll rate versus passing-through rates.

MR. WILLIAMSON: Absolutely. There are so many options available to your RMA that they are totally in control of how the rates are set and how they're collected.

I have often suggested from this dais that one way to give comfort to working Texans who are fixing to have to go through this is to just issue toll credits to all citizens of the county once a year that says: Here's your $100, your first hundred bucks this year is paid for, and then after that you're paying like everybody else.

If you can make that work in your financial structure and get the debt -- the State of Texas doesn't care, and I guarantee you, Rick Perry would love to see that happen all across the state, as a governor, he would like to see that kind of consumer-oriented decision made by the RMAs.

But the important thing to remember is this commission is not in the business, once an RMA forms, we're not in the business of telling an RMA what to do, we're not in the business of telling an MPO what to do, we're in the business of empowering local leaders to regionally plan and use state resources to execute. That's the business plan.

We really do appreciate your remarks.

MS. COOPER: Thank you very much.

MR. WILLIAMSON: And we're going to think carefully about what you've said.

MS. COOPER: Who do I need to give this to?

MR. WILLIAMSON: Staff will take that and make sure that each of us get a copy and that a copy of it is read into the record.

You were a very civil person. Thank you.

Jeff, tough act to follow, buddy. Where are you, Jeff Austin? If you can outdo Ms. Cooper, you're something.

MR. AUSTIN: Good morning, commissioners, Executive Director Behrens. I'm Jeff Austin, III, chairman of the Tyler Area Chamber of Commerce.

I respect where Ms. Cooper is coming from and she certainly raises some interesting topics which we do appreciate.

We're happy to be here before you guys to hopefully approve and ask for your vote of confidence to approve -- and lady, excuse me, Commissioner -- the Northeast Texas Regional Mobility Authority.

This is exciting. You know, we have been down here, we as part of the Tyler community initially since 1985 with delegation appearances in support of Loop 49, asking for strategic priority dollars. Well, we're competing with a lot of folks across the state and we realize that there's not a lot of money available. Thank you to the voters of Texas, the commission and the legislature for giving us new tools.

When you were up in Tyler a year ago for the commission meeting, you spoke and you gave us some hints on how to be innovative and challenged us to be innovative and look at different alternatives. We listened. That's when we came back in June to petition the commission to form the RMA.

We've had several public meetings and public hearings. I'd like to give you the results of those that spoke at the public hearings on September 7, 8 and October 8: 25 spoke in favor of it and three were against. And this was a cumulative of the written comments and the verbal comments that were submitted. We see that as absolutely outstanding.

Public education has recently begun. We've started with new brochures -- hopefully you have a copy of these to be able to see these -- and we've actually started working on our logo for this with voting. And I guess it wouldn't be appropriate for something that's on the agenda to vote on the logo that you prefer, but as of 10/27 we've had 2,500 people vote for this, so you see the public support that is beginning to take place.

Commissioner Nichols, you mentioned a while ago about the number of headlines and articles. We're excited because I know just in the Tyler paper alone there are over 30 articles that go back into early 2003 in support of this, plus with the media coverage that has been tremendous.

Why am I here? We want to continue to work with TxDOT and TTA to acquire the right of way and to select the appropriate projects that have toll viability within the Smith and Gregg County areas. We don't want to confuse those who may have conflicts of interest with adjacent landowners, we want to focus what's within the jurisdiction of the RMA to look at toll-viable projects within this region.

A couple of final comments. We have widespread support for this RMA, starting with the Tyler MPO, Tyler Chamber of Commerce, City of Tyler, Smith County, Tyler Economic Development Corporation, plus the similar entities from Gregg County, in addition to the neighboring counties surrounding as a region. We are excited about the possibility.

We as Texans and as a region have choices. The choice that we're here to make as part of the RMA is that the glass is half full and that we can begin our project sooner than later. That's what we're excited about and we hope to move forward and look forward to using the Texas Tag as we go across the state.

We also want to be a model to show how it can work, not all the reasons why it can't. It's still a new process, we want to be creative and flexible to help work with that model, and we're excited that we have all of our elected officials moving in the same direction as we've set priorities.

Again, we ask for your vote of confidence today to approve the Northeast Texas Regional Mobility Authority.

MR. WILLIAMSON: Members, questions or comments for Jeff? Robert?

MR. NICHOLS: Comment. First of all, thank you for all the work that you've done. I know you've kind of been everywhere on all those issues. I think your elected officials have done a fabulous job.

As I understand it, all that was technically required were resolutions from the counties which we not only have those -- there was not one dissenting vote -- but we, in addition to that, have resolutions from the cities and chambers and stuff like that, also which had no dissenting votes. Is that correct?

MR. AUSTIN: That is correct.

MR. NICHOLS: Okay. So there was not one dissenting vote in any of those resolutions. I think that's fabulous.

MR. WILLIAMSON: Hope?

MS. ANDRADE: Mr. Austin, thank you, and congratulations, and thank you for the time that you spent with me and educating me on your project. We've come a long way, so keep up the good work.

But I do want to urge you to keep listening to concerns like Ms. Cooper had, and perhaps you can get her involved. But I do believe that tolling actually gives our working class choices. The other would not give them choices, they would be forced to pay the motor sales tax increase. So I just want you to keep listening to those concerns and keep giving the working class choices. Thank you.

MR. AUSTIN: Thank you.

MR. WILLIAMSON: Other questions or comments for Jeff?

(No response.)

MR. WILLIAMSON: Phil, do you want to close it out?

MR. RUSSELL: Thank you Mr. Chairman.

I should also point out -- and I should have done this earlier -- that by approving this minute order you would authorize the creation of the RMA. As to the individual project, Loop 49, an RMA would need to come back to the commission to seek that final approval.

MR. WILLIAMSON: So as in the past, we create the RMA, they go back to the community, they pick their project, they study their project, they bring the project back to us for funding.

MR. RUSSELL: Absolutely.

MR. WILLIAMSON: And no doubt you got a good relationship with the leadership of Smith and Gregg Counties during this process. You will pass on to those who weren't present how impressed the commission was with Ms. Cooper's layout.

MR. RUSSELL: I will certainly do so.

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

MR. NICHOLS: So moved.

MR. WILLIAMSON: Do I have a second?

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. Congratulations, Smith and Gregg Counties. Number five.

I want to announce to the audience at this time we will be changing our approach to our agenda. With the indulgence of our Financial and Public Transit staff, we're going to defer agenda item 5 until later in the day, we're going to take a short break to permit the Smith/Gregg delegation to exit without disrupting the next speakers. We'll then take up the Texarkana delegation, with the reminder that we we're going to start at 11:15 on item 7, and we hope the Texarkana folks will work with us on our schedule.

I need about four minutes, and four minutes in this case does mean four, and we'll be right back here, so four minutes we're going to recess.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: Okay, Mike. We're welcoming the Texarkana folks.

MR. BEHRENS: That's correct.

MR. WILLIAMSON: We're going to defer agenda item 5 and we're going to allow the Texarkana folks to play out. I know the many that are here for agenda item 7 need to start preparing, because in 29 minutes we'll start.

TEXARKANA METROPOLITAN PLANNING ORGANIZATION

(Judge James Carlow, Senator Kevin Eltife, George Shackelford)

MR. WILLIAMSON: Judge Carlow, are you here?

Judge, once again the commission welcomes you and all the folks you brought with you from upper northeast Texas.

JUDGE CARLOW: The right corner of Texas.

MR. WILLIAMSON: Yes, sir. The floor is yours, sir.

JUDGE CARLOW: Mr. Chairman and members of the commission, I want to thank you this morning for the opportunity to speak to you today regarding a very important project for northeast Texas.

For the record, my name is James Carlow and I'm county judge in Bowie County.

With me today in our delegation -- and I'd like for them to stand.

MR. WILLIAMSON: We saw all those guys last night.

JUDGE CARLOW: Yes, that's good.

We have with us in this delegation: Senator Kevin Eltife; Mayor James Bramlett who is the mayor of Texarkana, Texas; Mayor Henry Slayton who is the mayor of Nash and the chairman of the MPO; Texarkana Council members Bradley Hardin and Van Alexander; Nash Council members John Ratwood and Darrel Cox; we have executive director of the Arkansas Red River Commission, Mr. Bob Tellos; we have the city manager of Nash, Ms. Liz Lee; the Texarkana Chamber chairman, Howard Glick; the Texarkana Chamber president, Jim Cherry; Texarkana city manager, George Shackelford; the president of Texas A&M University Texarkana, Dr. Steven Hensley; Steve Harris who is executive director of the Nash Industrial Development Corporation; and several other stakeholders and people who own property along this corridor.

Improvements to the I-30 corridor are vital to provide for the present and future transportation needs of our region. I refer to this as the I-30 corridor, but 3-1/2 miles of this corridor also serve NAFTA traffic traveling north and south on 59. I-30 and US 59 traffic is flowing through a highly developed area of Texarkana. TxDOT advises is a level of service F area.

The Arkansas Highway Department is currently constructing the I-49 corridor that will connect to the east of our proposed project. A northern leg of I-69 is currently being planned and will eventually be connected to I-30 west of the proposed project.

The I-30 corridor through Texarkana is the northeast gateway to Texas, particularly to Central and South Texas. The corridor is of national significance because of the movement of people, freight and goods between the north and eastern United States and the interior of Texas. The location of the Red River Army Depot and the Lone Star Army Ammunition plant are located just to the west of Texarkana.

One of the new interchanges proposed in the project will provide access from I-30 to the new Texas A&M Texarkana University campus that will soon be constructed on the north side of Texarkana.

As far as I know there is no local opposition to this project.

At this time it's my pleasure to introduce Senator Kevin Eltife to speak on behalf of this project.

MR. WILLIAMSON: Senator Eltife, welcome, and you're always welcome here. You were welcome when you were a mayor and you're certainly welcome when you're a senator.

SENATOR ELTIFE: And you did us a good job when I was mayor. I appreciate all you did for us very, very much.

Thank you, commissioners and chairman and Director Behrens for the opportunity to be here, and Judge Carlow.

I want to start off by saying thank you to the commission for your service to the citizens of Texas. We know this body has a very difficult task in addressing all the transportation needs in our great state.

I also wanted to say thank you to the hard-working TxDOT staff. They do an incredible job around this state taking care of us, and we appreciate them very, very much.

As Senator for District 1 to ask for the commission's support of a project that is very important to the safety and economic vitality of our region and the state as a whole.

Although the cost and size of our projects may not seem large in comparison to projects in the metropolitan areas, we cannot overstate the enormous impact they have on our region. We feel it is comparatively equal to those projects of more metropolitan areas when you consider the population in the Greater Texarkana area, the region's limited ability to generate revenue, and what the Interstate 30 corridor means to this part of the state.

The project that our delegation will be presenting to you is not the only needed in the Texarkana region, but it is our number one priority. The project offers the best overall impact for the community and the state. It will greatly improve safety and mobility within the corridor, while supporting the economic development that is taking place.

This project will ensure that NAFTA traffic flowing through our area flows safely while continuing to support our economy.

Texarkana is Texas' great gateway to the eastern half of the nation. This corridor is the backbone of the transportation system and the economy for our area. In many instances it will be the first impression people have of Texas. It should be noted that in 2003 the Tourist Information Center on Interstate 30 in Texarkana served the third largest number of customers out of 12 centers across the state.

While other urban areas in Texas have the ability to partner with other urban or metropolitan communities within Texas, due to its geographic location, Texarkana's partner happens to be located in Arkansas. The people in northeast Texas, southwest Arkansas are united in seeing this project completed.

Our friends in Arkansas have already committed a portion of the funding for this project, and Bowie County Judge Carlow will be reading a letter of support from the vice-chairman of the Arkansas State Highway Commission.

I understand you have limited funds to use all over the great state of Texas, but I feel confident you will find exceptional value in the positive impact of this project.

I'm extremely proud of the cooperative work that has been done in the Texarkana community. I cannot say enough good things about the great mayor of Texarkana, Mayor Bramlett, and Judge Carlow and their effort providing leadership to get this project where it is today.

It will improve the overall quality of life of our citizens and the general public that travels through the Texarkana area.

We really appreciate having the opportunity to be before you today, and we appreciate your consideration. Thank you.

MR. WILLIAMSON: Members, do we need to talk with the senator?

SENATOR ELTIFE: You don't want to talk about funding, do you?

MR. WILLIAMSON: Sixty-six days.

SENATOR ELTIFE: Okay, we'll be ready.

(General laughter.)

MR. WILLIAMSON: Thank you very much for being here.

SENATOR ELTIFE: Thank you very much, appreciate your time.

MR. WILLIAMSON: Thank you, sir.

JUDGE CARLOW: The letter that the senator was referring to is signed by Prissy Hickerson who is on Arkansas' counterpart to your commission. She lives in Texarkana, very much supports this project. Her letter is in your packet. She will be chairman starting in January of next year, so we're looking forward to that.

At this time I'd like to introduce the city manager of Texarkana, Texas, Mr. George Shackelford.

MR. SHACKELFORD: Mr. Chairman, members of the commission, thank you very much for the opportunity to be here today.

I've been the city manager in Texarkana, Texas since 1989, and one of the items that the TxDOT Atlanta District approached us on -- I remember very vividly -- in '89 was the conversion of two-way frontage roads to one-way. The timing was just not ever good for that project, but we knew that we were going to have to do conversions at some point in time. We knew we'd have to do that because of safety and mobility; the traffic continues.

I'm running a video just so you can get a flavor of from state line -- actually Jefferson Avenue which is in Arkansas westbound to Loop 151. For your information it runs eight minutes, so we'll meet your 10:15 deadline.

Working with the TxDOT Atlanta District, we began constructing and improving sections of the frontage roads along the I-30 corridor back in '89. We planned for backage roads and parallel roads to the I-30 corridor. These backage roads direct local traffic to new businesses, relieving congestion along the frontage roads and providing the access management philosophy encouraged by TxDOT.

The City of Texarkana, Texas, has already contributed $11 million to the construction of frontage roads and backage roads. We're also committing another $3 million as our contribution to this project.

The I-30 corridor project includes: reconstruction and completion of the discontinuous frontage road system; conversion from two-way to one-way frontage road operations, per TxDOT current policies; reconstruction of US 59 and 71 interchanges with I-30; construction of turnaround structures; conversion of ramps and associated improvements to traffic control devices; and access management construction of backage roadways to relieve congestion, per TxDOT policy.

In 2000, TxDOT hired the engineering firm of Chain, Patel and Urby to prepare the schematics and options for the project. After obtaining the approvals from city council, the local business developers, the local MPO, TxDOT continued the process by placing under contract Carter Burgess to prepare the plans and specifications for the entire project. It's my understanding that this project can be let in 2006 as one project.

A few facts about the project area. I-30 was designed for a 20-year life and next February we'll celebrate its 40th anniversary. In 2002 TxDOT reported traffic volumes within the project limits ranging from 39,000 to over 61,000; 25 percent are trucks. To put that in a little perspective, in 2000 the urbanized area population for the Texarkana MPO is less than 70,000. It's estimated local trips constitute up to 15 percent of the mainlane volume between US 59 and State Highway 245 in Arkansas.

A 2001 traffic study concluded that conversion to one-ways would relieve congestion, increase capacity and improve safety in this corridor.

One segment within the project area is the

US 59/I-30 interchange reconstruction project and it is currently fully funded. My understanding is it's going to be scheduled for letting in 2006.

The Arkansas Highway Commission funded their portion of the US 71 -- which is state line  -- I-30 interchange, and the project is included in the 2005-2007 Transportation Improvement Program.

The City of Texarkana, Texas, is committed to donating any necessary right of way and continuing the construction of backage roads and additional local streets in support of this corridor project.

It's our opinion that TxDOT objectives and the objectives of this delegation will be met by implementing all of the components of this project in a single effort.

Some of the benefits of a single project:

The project will enhance mobility; it will improve the transition between interstate, state and local facilities; it will eliminate six signalized intersections; it will provide a continuous frontage road system; it will improve accessibility to major regional medical facilities that are located on the frontage roads.

The project will improve safety; it will eliminate 21 left turns in conflicting areas and associated right-angle collisions; it will replace the outdated cloverleaf and trumpet interchanges; it will improve designs for direct connects between highway facilities; it will lengthen the acceleration and deceleration lanes; provide separate local trips from thru trips; it will prevent exiting traffic from backing up on the interstate which is a very frequent occurrence; it will provide continuous roads will which will allow secondary lane should the mainlanes become blocked.

The I-30 corridor project will enhance and improve the existing system by: improving access management along the corridor; increasing the capacity of the corridor by constructing the one-way frontage roads continuous which will delay the necessity of adding additional mainlanes to the interstate; it will recapture interstate capacity for thru trips.

The accelerated project delivery would result in: obviously an economy of scale; savings for design and construction; reduction of overall construction time; and result in a decrease of driver delay time and associated road user costs.

The project will support economic vitality by minimizing the negative impacts of letting multiple projects over a number of years; it will improve the overall system of the transportation in the corridor; it will improve access management within the corridor through development of backage roads;

We believe that the majority of the project benefits are derived from the implementation of a continuous one-way frontage road.

We're here today asking for the commission's help. We've explored the tools made available under House Bill 3588 and we understand that it allows for advancement of projects such as this. We estimate that there are $45.9 million in Category 3 funding that will be available in the next 15 years. The Texarkana MPO is willing to commit its future Category 3 funding towards the construction costs of these improvements.

We also understand that the commission expects communities to offer some assistance in leveraging this project. Please remember that we've already committed $11 million and are willing to commit an additional $3 million to construct backage roads and other supporting roadways.

We realize that the selling of bonds will create debt service to those bonds, and we believe by combining the multiple projects into one project and accelerating the project, there should be construction cost savings sufficient to offset the debt service.

You may ask are we willing to put all of our eggs into one basket by committing all of the MPO's Category 3 funding, and the answer is yes.

We also recognize that one of the discussion items on your agenda today is safety bond projects eligible for funding with the proceeds of bonds. It's our understanding that conversion of two-way to one-way frontage roads is an eligible project under that safety bond program.

Any assistance that the commission can give to us is certainly appreciated, and we also want to thank the commission for the funding that you provided to us on Loop 151 a number of years ago. It has recently opened and is being utilized quite a bit by our citizens.

And also we understand that next month advanced funding for the 71/I-30 corridor which is the east end of this portion for Texarkana is going to be considered, and we certainly appreciate your consideration for that next month in November.

And we'll try to answer any questions you might have.

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

MR. JOHNSON: I just have one question about the location of the new Texas A&M campus relative to the improvements on I-30. Can you help me?

MR. SHACKELFORD: Yes, sir. One of the bridges that's actually west of 59 corridor, 59 and I-30, there is proposed to be a new bridge and it will be what we hope to be advertised as the I-30 exit for the new Texarkana, Texas, Texas A&M campus.

MR. JOHNSON: Will the campus be north or south of I-30?

MR. SHACKELFORD: It's on the very north side.

MR. JOHNSON: So it will be between 59 and 989?

MR. SHACKELFORD: Actually to the east of that area. It's probably, as the crow flies, due north from Richmond Road exit off I-59, just due north. The city donated 300 acres to Texas A&M for downward expansion and to build a brand new campus.

MR. JOHNSON: My impression is that will have a remarkable influence on activity along this corridor and for the greater community, and I think it's wonderful for northeast Texas what's going on there.

MR. SHACKELFORD: Thank you.

MR. NICHOLS: Ted or Hope?

MR. HOUGHTON: Can you describe to me again the leveraging effect that you're accomplishing?

MR. SHACKELFORD: The City of Texarkana, Texas, we've already spent right at $11 million in backage roads and we also did some expansion of the frontage roads that were not there, so we've got a hodgepodge of roads, no roads, roads. And the city over the last 15 years has constructed quite a bit, several miles of frontage roads, plus some backage roads to help relieve some of the congestion there at Richmond Road.

We're experiencing a rather large retail explosion right now at that intersection, and it's getting worse and worse, and hopefully some of the backage roads that we're putting in will help relieve some of that. But the other $3 million is for another bridge in that area that we're committing to, plus backage roads that are currently under construction.

MR. HOUGHTON: And then you're committing all the resources of Category 3 from the MPO to this one project. Correct?

MR. SHACKELFORD: That's correct, sir.

MR. NICHOLS: Hope, did you have anything?

MS. ANDRADE: No.

MR. NICHOLS: Thank all of you for coming and the reception last night and for the presentation today. Had quite a few people here from the Texarkana and Nash areas and it's greatly appreciated.

Of the three requests, two interchange projects, I think as you mentioned, the US 59/I-30 I think is funded.

MR. SHACKELFORD: Yes, sir.

MR. NICHOLS: The 71 interchange, as I understand it, is on the draft transportation plan to be voted on, I think, next month.

MR. SHACKELFORD: That's my understanding, sir.

MR. NICHOLS: Which gets you down to the frontage roads. I know I was there six-eight months ago and drove that entire route with your district engineer, and while we drove we actually had the traffic count maps, and I personally was kind of amazed with the gaps in your frontage roads how that impacted the traffic count on the actual interstate itself.

It was very obvious that your flow was having to move onto the interstate and off of the interstate, and back and forth, and you were jumping between 30,000 and 50- or 60,000 cars a day depending on where those frontage roads stopped. So you're certainly on to something that needs to be done, not only from a traffic flow stand point but safety.

We have known and have been encouraging and working all over the state and our goal is to eliminate two-way frontage roads wherever possible that there's a lot of traffic. Not only are people going to not expect a frontage road to have two ways who do not live in your area. For those who are familiar with it, it's really not a problem, but it's the stranger in the community who pulls into a convenience store and then pulls back out -- I've done it myself -- in that second lane expecting to get back on the interstate.

So it's not only a head-on collision-type thing but somebody going the wrong way could easily go up the ramp and be facing the wrong direction on the interstate. And we have fatalities related to that. So you're on the right track to solve that problem.

I didn't realize it had been brought up 15 years ago. I know it's been an emphasis for the last five or six years statewide.

I would like to thank the community for your commitment toward access management. I think there's a recognition not only in Texarkana but in other areas of the state of how important that is for managing flow and safety and stuff.

And your commitment of funds from the city -- is that city or county?

MR. SHACKELFORD: These are city funds.

MR. NICHOLS: To build some of those backage roads. I couldn't help but notice in some of the diagrams I had and also some of the maps you had last night that you had some areas that were proposed where you had a gap where there was no frontage road, propose us to not only close the gap on the frontage road, but parallel to that you were going to build a backage road also.

MR. SHACKELFORD: Yes, sir.

MR. NICHOLS: And you may not be aware that we do have in our rules the ability to help pay for a backage road when it's in the best interest of the state. I couldn't understand why you would have two parallel new roads where there's currently a gap.

In other words, instead of you spending all of your money to get part of it there, and us spending our money to get part of it there and still having a gap, if we shared the expense of that, whether you call it a frontage road or a backage road, I think we have that backage road rules under some certain circumstances where it has to do with safety and flow, I think we could do that.

So I would encourage you to work with our district engineer to see if we can get there quicker by doing something like that, and maybe cut down the overall expense. But I think you are on the right track for sure on this frontage road thing.

MR. WILLIAMSON: We once again thank you for taking time out of your valuable week to be with us and state your support for a project that's important to your part of the state.

As you know, we don't make decisions about delegation requests at the commission meeting that the presentation was made, but we take note of what was said and our district engineer does follow up, and we'll be looking at this along with 2,700 others every day and every month.

And we do appreciate your time; time is very valuable.

MR. SHACKELFORD: On behalf of the Texarkana Delegation, we certainly appreciate your assistance in this matter.

MR. WILLIAMSON: Was there anyone else from Texarkana that needed to speak?

MR. SHACKELFORD: Not that I know of, sir.

MR. WILLIAMSON: Thank you very much for being here.

So the audience is advised, we're now going to take two minutes to allow the Texarkana folks to exit.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: Shortly we'll begin agenda item 7. I've just been advised that our friends from the Houston-Galveston-Beaumont area, the Gulf Coast region are in a small degree of panic about their timing.

You know, Judge Eckels, we've been good friends for 20 years, colleagues for 12. I'd like nothing more than to accommodate and move our Houston folks up. The dilemma we have, many, many months ago we began to post our agendas ahead of time, we began to put as much text as we could into it, we've tried to tell people every step of the way our meetings are all day now, they're not all over by noon like they used to be.

Item number 7 is probably the most significant thing we'll do today and we have about 20 people that are here that I know of just for that, and the reality is that we need to take up item number 7 and deal with it, and it's going to probably be awhile.

We are, much to the dismay of my colleagues, going to delay lunch so that we can hear you, but so that the audience is advised, if you're here on any item other than 7 or the Gulf Coast Partners, we will take a lunch break after our friends from the southeast part of the state have finished giving us their report.

So we're going to do agenda item 7, we're going to do Gulf Coast, and then we're going to take one hour and have lunch, and reconvene about two o'clock or so.

That being said, I will shortly introduce Mr. Simmons to begin the discussion on agenda item 7 and I will do that by just simply referring to my remarks earlier in the day.

This is an important and significant step in the department's journey towards a different way of approaching transportation infrastructure in this state, and we want to hear everybody that's got something to say. We'd much rather hear you say it to us than read about it in the newspaper or hear about it secondhand. We listen to all and we move forward.

So Mr. Simmons, the floor is yours.

MR. SIMMONS: Thank you, Mr. Chairman, commissioners.

For the record, my name is Steve Simmons and I'm the deputy executive director of the department.

In March 2003, Governor Perry asked the department to work with local urban leaders to develop a long-range plan focused on relieving traffic congestion in the metropolitan areas of our state.

To illustrate the impact of congestion on Texas, we pulled information from the Governor's Business Council Transportation Task Force report that showed congestion cost Texans more than $45 billion in time and wasted fuel during the 1990s.

The report also showed that if you make a significant investment in transportation, you will reduce metropolitan congestion and produce a benefit of more than $500 billion in the next 25 years.

Responding to the governor and building on the principles presented in Commissioner Johnson's August 2001 Texas Transportation Partnerships report, the leadership of TxDOT formed a core team of TxDOT and Federal Highway personnel to develop a plan to better meet the needs of metropolitan Texas and reduce congestion.

This is another step but a major step in the direction the governor and the commission have established to allow local leaders to make local decisions on transportation issues in their communities.

If I could, let me show you where these Texas metropolitan mobility plans fit into the process. As shown on the slide in front of you, this began with Commissioner Johnson's, as I said, report on Texas Transportation Partnerships which established five goals for Texas transportation: reliable mobility, improved safety, responsible systems preservation, streamlined project delivery, and economic vitality.

And of course, our goal through all these steps will be, as I mentioned, local decisions by local leaders with a reliable funding stream to fight congestion.

Shortly after Commissioner Johnson's report, the commission directed the department to streamline the funding categories that are used in ranking projects. As you remember, we went from some 34 categories down to 12.

With this new streamlining of categories, you asked our transportation partners to develop a means to distribute mobility funding to our districts based on need and conditions. This led to our metropolitan areas being able to rely on a stable and uniform funding source from year to year, and allowed them to prioritize their projects according to their perceived needs.

While we were accomplishing these tasks, the legislature approved House Bill 3588, the most far-reaching transportation bill the state has ever seen. These brought new tools that will allow for expedited construction to address congestion and connectivity in the state.

These tools included: a new revenue source in the Texas Mobility Fund, Proposition 14 bonding authority, toll equity, pass-through tolls, and as we heard earlier, regional mobility authorities.

With the initiation of these new tools, we now have -- and I have to change my notes -- five regional mobility authorities approved across the state. These five RMAs, coupled with our other two transportation partners, the North Texas Toll Authority and Harris County Toll Road Authority, we're able to move projects to contract much faster than we have in the past.

Last month you approved the Strategic Plan for the Texas Mobility Fund. Your direction is to use the Mobility Fund to leverage funding for transportation projects, including public transportation through the use of tolls or other equity from locals.

And now we are presenting the Texas Metropolitan Mobility Plan for your concurrence. Meeting with leaders of the state's eight metropolitan transportation management areas, the team developed the report "The Texas Metropolitan Mobility Plan, Breaking the Gridlock." And of course, the eight metropolitan planning organizations were: Houston-Galveston Area Council, the North Central Texas Council of Governments, the San Antonio Bexar County MPO, the Capital Area MPO, El Paso MPO, Corpus Christi MPO, Lubbock MPO, and Hidalgo MPO.

Adopted by the commission in August 2003, this report outlined the planning activities, funding strategies, and action plan for the department and the eight metropolitan areas to follow to improve the mobility and safety of Texans living and working in the metropolitan areas.

These activities included: designation of TxDOT leadership for metropolitan issues; establishment of TxDOT-MPO working groups; enactment of a regional baseline metropolitan funding allocation; development of the Texas Congestion Index to measure and evaluate how the projects will improve congestion; identify the funding gap; and development of comprehensive mobility plans and strategies towards filling the funding gap.

One of the actions in the report called for the development and implementation of the Texas Metropolitan Mobility Plan. This plan focuses on the mobility needs of each area in order to address the funding shortfalls that exist between the total of resources available to each region through traditional funding sources and the amount needed to reduce congestion to locally accepted levels.

The 2004 Texas Metropolitan Mobility Plan shown in Exhibit A is a culmination of locally conceived comprehensive regional mobility plans to be used to improve congestion in the metropolitan areas.

Using the Texas Congestion Index and planning models, the metropolitan areas assessed their mobility needs. According to this assessment, a total of $136 billion -- that is billion with a "B" -- in mobility projects is needed by 2030 to achieve a locally accepted level of congestion, or a Texas Congestion Index of 1.18.

Traditional funding can provide $68 billion, leaving a funding gap of another $68 billion. The metropolitan areas have identified an additional $12 billion in new or leveraged funds during the next 25 years to help reduce congestion. These funds, utilizing innovative financing initiatives, such as the Texas Mobility Fund and the new tools provided in House Bill 3588 legislation, reduce the funding gap down to $56 billion.

MR. WILLIAMSON: Hang on a second, Steve. I want to be sure I understood what you just said.

The combined impact of the eight plans is to produce $12 billion in new capacity over what would have otherwise been available to those urban areas.

MR. SIMMONS: That is correct.

MR. WILLIAMSON: $12 billion in new capacity.

MR. SIMMONS: New capacity.

MR. WILLIAMSON: Do you have off the top of your head the total amount of new capacity -- new capacity we have been able to afford out of traditional revenue sources for the past ten years?

MR. SIMMONS: I would say roughly $18- to $20 billion -- well, no, not even that much -- I'd say $10- to $15 billion of new capacity in the last ten years.

MR. WILLIAMSON: In the last ten years. And so if the next ten is like the last ten, we'll have that $10- to $12- plus an additional $12-.

MR. SIMMONS: Yes, sir.

MR. WILLIAMSON: We will double the new capacity on urban Texas roadways in the next ten years.

MR. SIMMONS: We believe so, yes, sir.

MR. WILLIAMSON: Thank you. Go ahead.

MR. SIMMONS: These funds utilizing innovative financing initiatives, such as the Texas Mobility Fund, reduce the gap to $56 billion. When the funding gap is closed, the metropolitan areas will realize a savings of more than 6.1 billion hours delay over the next 25 years.

At the last commission meeting you heard some very impressive news: as the eight metropolitan planning organizations began working on the plans, I believe the concepts of House Bill 3588 really took root.

What you will see in these individual plans and will consider at next month's commission meeting with the consideration and possible approval of the Statewide Mobility Plan, is approving funding that will allow 88 percent of the mobility projects in these eight areas originally scheduled to go to contract in 12 years can now go to contract in the first six years of that plan. An easy way to say it is more mobility projects under construction sooner.

It also allows for up to $700 million to be moved into the second six years, plus the plans do not account for all toll revenue that will be associated with some of these leveraged projects in this 12-year period, and we hopefully will have two federal transportation bills reauthorized that we believe will bring additional funding and flexibility to help us address congestion.

I also believe that these areas understand that the commission is serious in giving them more local control over their transportation needs.

I'm sure you realize that a great deal of effort was expended to develop these plans. Each MPO worked very hard and in a cooperative manner with their sister organizations. When you start recognizing individuals, you are sure to leave some out, but I would be remiss if I did not express my sincere appreciation to some of the outstanding contributors to this plan.

And of course I know that we have most of the MPO directors and their staffs. If they're here, would they stand?

But also, this couldn't have been done without other leaders such as: Michael Morris and his capable staff, Alan Clark and Ashby Johnson from the Houston-Galveston Area Council; Jeanie Geiger from the San Antonio MPO; and he's very bashful but I would like to express my appreciation to David Casteel, Julie Brown and Clay Smith from the San Antonio District who truly took leadership in providing guidance to but not dictating to the MPOs in developing their plans.

And before I move on to the next steps in the recommendation, I would like to ask Michael Morris to make a few comments.

MR. WILLIAMSON: Michael, are you ready or do you want to wait and see how things develop? We're going to let you decide.

MR. MORRIS: It's up to you, Mr. Chairman. Maybe if you'd permit me five minutes to finish the presentation.

MR. WILLIAMSON: I have a state official I would like to hear from. Would that bother you?

MR. MORRIS: No, sir, not at all.

MR. WILLIAMSON: And the reason I say that is, Steve, we should not hide from the fact that this has been a difficult process for certain parts of the state.

I have asked Senator Barrientos to be with us today because it's my judgment that the senator has taken an unusual and undeserved amount of criticism for having steadfastly maintained CAMPO's focus on what everyone in the state agrees is the most forward-reaching transportation plan ever brought out of Central Texas.

And before the senator takes the podium, I have one question I want to ask of you. Throughout this process has this commission or have the employees of the department at any time interfered with or attempted to influence in one direction or another any of the plans that the urban areas have brought forward to support the Mobility Plan?

MR. SIMMONS: No, sir, they have not.

MR. WILLIAMSON: We have completely and totally stepped aside and been available as resources as these local and regional leaders dealt with, grappled and made tough votes on their own plans.

MR. SIMMONS: We have provided information and been there as a resource, yes, sir.

MR. WILLIAMSON: And unlike four years ago, perhaps, is it your belief that the MPOs now trust that it's our intention to be partners and not big daddy?

MR. SIMMONS: I believe that is absolutely true.

MR. WILLIAMSON: Senator, I would welcome whatever remarks you might have, sir, and I appreciate your coming.

SENATOR BARRIENTOS: May it please the commission. My name is Gonzalo Barrientos; I am the senator from the district of Travis and also the chairman of the Capital Area MPO.

First of all, my district of Travis thanks you, your capital city area thanks you.

Now, unaccustomed as I am to these microphones, I shall not filibuster, I'm going to help my Judge Eckels.

(General laughter.)

SENATOR BARRIENTOS: Mr. Chairman, members, who likes taxes? Who likes toll roads? Well, now that depends. Here in Austin we embarked on our aggressive, some even said bold toll road plan, largely at the commission and the department's behest.

Now, when I voted for House Bill 3588 in committee and on the floor, I was voting to expand the range of options for financing and constructing roads and other mobility projects. I was voting to provide congestion relief faster and cheaper.

One of those options was tolling. At that time, Mr. Chairman, members, I really did not foresee a toll plan of the scope I eventually supported as a member of the CAMPO for Central Texas. But the department showed us in numbers and made the case with respect to the serious transportation funding crisis we have here in Texas.

They worked with me and with others to provide things like the preservation of non-tolled alternatives, fair and flexible toll policies -- as you've mentioned, Mr. Chairman -- and specific things like sound walls on MoPac. Now today I'm here to address all of the MoPac corridor, including the construction of long overdue sound walls for which I've been striving for nearly 20 years, it seems like.

As you probably know, our toll plan called for tolling a short segment of Loop 1. This has probably been the most discussed aspect or cussed aspect of the entire plan.

Like most people, I was originally taken aback by the comprehensiveness of the toll road proposal, especially the Loop 1/William Cannon segment, but recognizing the magnitude of our needs in the MoPac corridor as a whole and the lack of potential funding, I agreed to go forward with it as a first step towards providing a total package of relief on MoPac: new capacity, sound walls, and even passenger rail possibilities.

Now, in making my decision, I relied on the expertise of TxDOT, both in terms of engineering and financial consequences. Now, after a lot of thought, debate and study, I think that the commission would agree that tolling this short segment is neither the best engineering nor the best financial approach, and that if the commission will partner with us, we can do more faster in this MoPac corridor without tolling that short segment.

Now, some might say that changing the Loop 1/William Cannon bridge is a political consideration as well as a practical one. To those who are inclined to believe that -- and forgive me for not sugar coating this, Mr. Chairman, members -- I would simply remind them that the political considerations go far beyond the Central Texas area. Indeed, they go all the way to the Governor's Office and other statewide offices.

That said, I do think that with your help we can achieve more significant goals than we had originally envisioned in the short term for that Loop 1 without tolling the Loop 1/William Cannon bridge.

Now, to do that we're going to need your help, of course, your commitment. We have an aggressive toll plan in Central Texas, Mr. Chairman, commissioners. You have recognized this and have already begun working with us.

Commissioner Williamson, with your help and that of our Austin District engineer, we have already figured out a better approach which I had asked for on the Loop 1/North Parmer Lane area on the first round of the Central Texas toll roads. Today I thank you for that work, Mr. Chairman, and I suggest to you that in the same spirit of cooperation, we can do a better job on providing comprehensive improvements in the entire Loop 1 corridor than we originally envisioned.

And of course, I'm going to be keeping my eye on tolling only new lanes and on rail because of the bill Senator Wentworth and I passed to establish a San Antonio-Austin commuter rail district.

I will ask you after a few days, Mr. Chairman, for a meeting with you to keep on with communications. And I still have to remind you of that story I wanted to tell you of the insurance agent who was in a home selling an insurance policy to this family, and having parked in the driveway, backed up and ran over the little puppy -- I've got to tell you that story.

Thank you and God bless you.

MR. WILLIAMSON: Members, anything for the senator?

MR. HOUGHTON: Senator, I want to thank you for your leadership on the MPO. I have seen like leadership in El Paso from your fellow senator Shapleigh, taking a strong position on moving transportation to the next step and to another level. But that's my purpose is to thank you for that leadership, and again, the continued work on your issues. And we look forward to partnering with you on these things that you brought here today.

SENATOR BARRIENTOS: Thank you, Mr. Houghton.

MR. ANDRADE: Senator, thank you so much for everything that you do for the State of Texas and especially for this area also. I've always known you to stand firm on something that you believe in and you're certainly standing firm on this and I respect you even more for that. So I hope to continue working with you. Thank you so much.

SENATOR BARRIENTOS: Thank you, Commissioner Andrade.

MR. JOHNSON: Senator, I wanted to remind you that when I went through the confirmation process, you asked me the question of did I realize that it took as long to drive from San Antonio to Dallas today -- or this was 1999 -- as it did 20 years ago. And I said I had no earthly idea that that was true. But you said, Are you aware where the most congested part of that road is? And I said, Well, since you asked the question, I assume it's right here in Austin.

And like my colleagues, I salute your leadership because we're about to do something significant in that regard, not only for the community but for the state in terms of relieving congestion. And it takes people working together and having the flexibility to accomplish mutual goals, and I can assure you that our goals are one and the same here. And thank you for your leadership.

SENATOR BARRIENTOS: Thank you, Commissioner Johnson.

MR. NICHOLS: First of all, I'd like to thank you for the support of transportation you have given over a long number of years, and how much I've appreciated working with you over the years. I know you have always been tough, studied the facts, held our feet to the fire when necessary, but you've always been also very fair and taken a statewide approach and any time we had a problem, your door was always open, and I appreciate that very much.

On this issue you have done an amazing thing, I really believe that. The work that CAMPO has done under your leadership and the other people involved, the plan that you have brought forward is absolutely amazing. I know you have gone through about as much incredible scrutiny, I guess, through the community as anyplace in the state of Texas, and I feel that years from now people are going to look back and see that as a major turning point in the Austin region transportation.

That being said, we look to you, we try not to interfere in the decisions you make. We want to sit back, lend guidance, lend support, we will encourage, we will back up wherever we can, but ultimately it's CAMPO's decision how you develop your plan.

And if you are here saying that there's a piece of that plan that may need to be opened back up and reviewed, would TxDOT be willing to open that door and re-evaluate any possibilities with you, I would think that what the chairman has been saying and what we have been saying all along is yes.

Any time that you've got a part of your plan that you feel like, CAMPO feels like needs to be re-evaluated, I think you will always find us a willing partner to open the door and try to work with you on solving the problem, but ultimately it's your decision.

SENATOR BARRIENTOS: Thank you, Commissioner Nichols.

MR. WILLIAMSON: Senator, when I had the great pleasure of serving with you in the legislature, one of my observations about some of our colleagues is that words were easy to use, actions were a little harder to take. And I observed many on both sides of the aisle who willingly talked about the power of local control but less willingly gave the tools and the responsibility that goes with that to the school districts we represent, to the MPOs we represent, and so forth.

We have watched quietly, not just in Austin but in the areas of Houston and Dallas and San Antonio as well, as people have perhaps said things that in retrospect they wish they might not have said or uttered things that perhaps were not true, certainly in anger, as if you build a highway or design a commuter rail or make a transportation decision of a billion dollars without having public hearings and lots of discussion and lots of opportunity to complain and lots of opportunity to negotiate. And we've been a bit amazed at the almost illogical words of those who disagree with the planning process.

We've known from day one that we set out a local control, regional plan, state financial partnership paradigm, and we would never, under any circumstances, whether it were the governor or a senator or a citizen, interfere with your work as an MPO. Obviously the governor wasn't going to do it because this is his program, he sent us down this path.

So we sit here today prepared to concur with these plans and if MPOs and local leaders and state leaders come to us and say we're going to reopen them and revise them, sir, the door is open. I look forward to that meeting and we will revise it as is necessary for CAMPO's wishes.

SENATOR BARRIENTOS: Mr. Chairman, I thank you and all the good members of this commission for serving the people of Texas, all of the people of Texas. We're talking about the good of the whole and public services. Thank you, sir.

MR. WILLIAMSON: Thank you, Senator. We appreciate you being here today.

Michael, I think I have a few minutes I want to hear from you, and then I'm going to ask you to not leave because there's some other things I want to hear from you, but I want to hear from the Dallas leadership.

MR. MORRIS: Mr. Chairman, thank you very much. I'm Michael Morris, MPO director from Dallas-Fort Worth.

As a staff person in Dallas-Fort Worth and today really representing the MPOs, I would like to extend our appreciation to the senator as well. I've stood before you the last two months that transportation is not an item or a jewel in a particular part of the state, it is clearly an item for the whole system and One Texas. I think the senator echoed that; we support his leadership.

I'm here representing the metropolitan planning organizations who helped put this particular plan together, I don't intend to use a lot of your time today, but Mr. Chairman and commissioners and Mr. Behrens, thank you for letting us be here.

We've met monthly for the last 15 months and we've attended your last three commission meetings to assist you and your staff. We're very proud of the product that you have before you; it has gone a long way.

We purposely have met monthly to ensure that when we communicate this item to the commission that the methodologies and the accounting process are consistent across the whole state so we can be proud of the discussion that we hope to have with you today and with the legislature in the coming months with regard to these implications.

I think we should underscore -- and Mr. Houghton, we talked about this two months ago -- the partnership benefits that have accrued, partnership between the MPOs, partnership between the MPOs and the districts, the partnership between the technical process and the elected officials, the improvement in the process with the public at large, all those have benefited tremendously through this particular initiative in the last 15 months. And you'll hear in our recommendations we hope to continue that in the future.

This innovation in consistency helps the technology transfer of ideas across one state to get the best mouse trap in one particular corner and finding a good application in other places.

I've brought three graphs we have been using. I'm going to give one example from the Dallas-Fort Worth region, but you could have the similar example from my colleagues in other places.

When Chairman Johnson was chairman in his Texas Transportation Partnership, the check marks on this particular graph are the five elements of the TxDOT strategic goals at that particular time, and although you asked us in the Mobility Plan to look at congestion, safety, air quality, quality of life, and economic development, we took it upon ourselves to look at two of your particular goals that weren't included: enhanced infrastructure, maintenance -- which is kind of a key finding as a result; I'm glad we included it, and streamlined project delivery.

Mr. Simmons has already talked to you about the importance of the time frame improvement. What is critical for everyone to understand is this is not just about more projects being built, it's more projects being built sooner. So you're helping with the congestion level at some time in the future but you're helping with the congestion often five, ten, twenty years sooner than you'd be able to help previously.

I would like to take a moment and focus, since Steve has already focused on project delivery, this infrastructure maintenance question.

This next graph that you have happens to be a table from the Dallas-Fort Worth region. You have a similar table from the other eight metropolitan areas.

In this particular discussion let me first explain this. The first column is your source of transportation investment that you're making; the middle dollar amount is what we call our financial constrained plans -- in 1991 the process with the federal government changed and we could only put in a transportation plan that we had available revenue for.

I think, Mr. Chairman, back to your question, has the commission put pressure on local MPOs to do things that they don't wish to do, I would argue the opposite has occurred. I think since 1991, because of the financial constraint requirement and the fact that we couldn't put a lot of transportation projects in our plans that we knew were needed, it was the local MPOs putting pressure on a state institutional structure.

We couldn't have predicted all the tools that came out of it, but please give us new and additional tools to try to advance. And the Dallas-Fort Worth region, for example, has been advancing, as Houston has, for close to a decade a much more aggressive posture with regard to toll road and bonding implementation.

The important part of this table is under the Unfunded Needs -- which is what you're getting with your new Texas Metropolitan Mobility Plan -- you certainly see additional out-year capacity needs, and in this particular case it's $16.2 billion of roadway or transportation corridor improvements, there could be other types of transportation investments. The real critical number on here is the $31.4 billion needed for rehabilitation or reconstruction of the infrastructure.

People in our region have seen this table a hundred times in presentations over the last six months. Similar tables have been presented in eight other metropolitan areas probably the same number of times.

If it boils down to one thing that we have done in the Dallas-Fort Worth region to get people's attention on new tools, it's the $31.4 billion number. And people ask me all the time how do you sleep at night, you're in the middle of these controversies and a lot of people are worried that you're pushing a toll road system or innovative tools, or partnering or getting locals to sell bond programs.

That's not what worries the MPO people, what worries us is if we don't raise these particular issues and time continues to go by, what the implications to One Texas will be. If you were to start 20 years from now an innovative toll road policy or other innovative structures, it would be too late.

By starting it now you have the ability of moving ahead with new revenue sources to chip away at what is going to be the need for additional infrastructure costs in this state, probably close to $100 billion, to rebuild the infrastructure that is quickly aging.

So because of your strategic goal, we spent a lot of time on that strategy. It paid dividends to us because I think the message to the legislature is not just additional capacity needs for congestion but additional money to help pay for the reconstruction of the infrastructure of Texas which we think by 2005 nearly 60 percent of the lane miles of Texas will be 45 years old, and we need to put tools in place now to make improvement.

And one tool we think we'd add if we do this again -- which we are -- is to have not just a congestion index but a capital assets age index. And you should be holding us accountable in our regions about what are we doing to innovatively maintain not only the mobility objectives and the safety objectives, but how are we planning the reconstruction of our corridors to help with the rehabilitation and reconstruction of those particular assets.

We stand ready as local metropolitan planning organizations to communicate this message with you to the legislature. That was one of the intents of this was to come up with a common accounting system across the eight metropolitan areas, sum it up, look at the implementation, review the tools that we've had. We have some suggestions on how some tools could be improved. We also are willing as staff and representing elected officials that we can bring from our regions to talk about the importance and findings of this Texas Metropolitan Mobility Plan.

The last table I want to share with you with regard to partnerships. This is one that we spent a lot of time with the MPOs, we aggregated the tools into four concepts: how we can build projects to spend money wiser; how we can do transportation projects to be more efficient and more environmentally sensitive as we combine transportation corridors -- and we call managed facilities across the state; how we borrow to build and the mechanics of that; and how we find additional partners.

And this last slide and the last message to you is the good news is you have partners, the bad news is you have partners. A lot of you are in your own business so you kind of know what that means.

What's happening is no one agency anymore is paying 100 percent of a particular project cost. So as you deliberate today and deliberate over the next 30 days, when you see the short-range ten-year projects that are before you in the Unified Transportation Program, you'll be somewhat surprised that in some cases to build a $500 million project we have seven different funding sources in that particular project.

Some are the flexibility of MPOs that are taking their surface transportation funds and moving them from the thoroughfare system to the freeway or toll road project -- as being done in Dallas-Fort Worth. There's others in San Antonio, Houston and other MPOs that are selling bond programs, and bond program proceeds from property tax will be put into a particular project if that project is built.

We have some in this state that are putting $50 million from bond programs on property tax into interstate highways. You would have never thought of a local community taxing themselves, but that $50 million is contingent on the fact that the other six partners put their money into that particular project as well.

So the good news is you have partners, the good news is you've created terrific leveraging opportunities. I think this is the beginning; the MPOs have worked very hard. You're given us your confidence to work with this and the districts to do it. We're proud of the products we've developed.

We look forward to your hopeful concurrence of the plans today, and your guided sensitivity to look at the funding partners as you move forward in your deliberations for specific projects that are coming up in your discussion next month.

And I reminded you, I think last month, holding to that schedule will be critical for those of us in nonattainment areas to take those findings, get them into our air quality plans and turn that around by the June 2005 deadline that we have for nonattainment areas.

Mr. Chairman and members, we wanted to give you an MPO view which is very partner driven. We want to hear from the other speakers that want to either add or subtract from this momentous day, and we're prepared to come up and defend the use of these tools as a leverage if you want to give us the opportunity to respond to some of those questions.

MR. WILLIAMSON: We would hope that you would stand by because we're going to want to talk to you several times during the hour.

Mayor Wynn.

MAYOR WYNN: Yes, sir.

MR. WILLIAMSON: Before you start, probably more so than the senator has -- my view -- unnecessary and wasteful criticism and abuse has been heaped upon your shoulders, sir. You have been steadfast in staying with the planning process we asked the MPOs to follow. It is so difficult sometimes to try to explain to people we're going down a path that has turns that you might not even agree with but you have to go down the path to get to the end of the journey for the planning process to work.

I think it's safe to say that all five of us have grieved for you as you've gone through this. We hope that at the end of this meeting and the meeting a month from now when the citizens of Central Texas and the other urban areas of the state see what a good product has been produced, people will remember that folks such as yourself, the mayor of The Colony in North Texas, the mayor of Tomball in southeast Texas, the mayor of San Antonio, have shouldered a great burden for three months to get us to this point. And we're deeply grateful and we wish that it had happened some other way.

MAYOR WYNN: Well, thank you for the kind words.

Mr. Chairman, commissioners, first and foremost, thank you for getting me out of the Austin City Council meeting this morning. That's worth something.

(General laughter.)

MAYOR WYNN: I'm proud to be here with you. When I ran for mayor of Austin 18 months or so ago, I promised that I was actually going to do something about our traffic crisis, knowing that we're down to really one last true viable funding option for improving our roads in our lifetime. I'm sticking to that pledge and I have and I will continue to.

Under the leadership of Senator Barrientos -- glad to see him here, Senator -- our MPO CAMPO has put forth a plan that many people continue to consider bold and we're proud of that. We're having to do that, obviously, however, because for different reasons, the Central Texas region, the Austin metropolitan area really has fallen behind, and I would say really fallen behind other Texas cities in dealing with our traffic woes, dealing with our population growth.

We're still projecting that our population will double in the next 25 years and you don't get there from here unless you take some bold action.

The plan that we brought forward is bold, it's comprehensive, it's large. Clearly within that plan there are pieces that are more problematic than others. The core, the vast majority the CAMPO board, the core of us took the approach that we're not going to piecemeal this plan, we're not going to pull out large portions of this plan, we in fact need to show this commission, in fact, take this commission up on your statewide charge, that is, how can a local area leverage as much state help as possible.

I think we've done that. I think we've come forward with a plan that, frankly, maximizes any potential leveraging we can have with our state help.

As mentioned by the senator, one small piece of a plan, our proposal to toll a soon-to-be-opened overpass at William Cannon Drive on the Loop 1 MoPac corridor, has clearly been more problematic. We knew that before we voted on the plan. It's more problematic geographically, it's more problematic logistically, it's more problematic politically, and it clearly has shown that to be the case.

But we have great needs in the MoPac corridor and during that plan approval process, Travis County Commissioner Karen Sonleitner, who is here, Travis County Judge Sam Biscoe, myself, the senator and others crafted a number of amendments. One that specifically addressed the MoPac corridor -- it's a big, unique, important corridor to us -- because we have so many needs in that corridor, is that any revenues generated in that corridor would stay in that corridor.

We weren't going to take money from the William Cannon overpass and go help us on Ed Bluestein which needs help, or on east Ben White, or other parts of our plan. We have a lot of needs in that corridor. However, that was the only sort of revenue stream coming forward as part of a plan, the only thing on the radar screen, if you will.

I have been steadfast about the need to toll that overpass, even with the problems that persist, because of the revenue needs along the MoPac corridor. To the extent that you all, the state, can continue to partner with us on the Loop 1 corridor -- we have a pretty good identification, we know what they are -- continue to identify the challenges of MoPac but deal with them, your efforts would be greatly appreciated and I think rewarded.

That's the important corridor in many ways, and the fact that the Union Pacific tracks, of course, have been there for 140 years run down a big portion of that corridor is both a challenge but a pretty remarkable opportunity for us here in Central Texas. It really does create an opportunity to have both a multimodal and an expanded capacity, much more efficient corridor through this part of our region, however, we have no other revenue streams projected in that corridor.

So I'm here to thank you for the kind words about the plan, thank you for some personal thoughts, but to ask for your help on the MoPac corridor. To the extent that TxDOT can partner with us and frankly help us, the more financing we have there, the more revenue we have there, the money, frankly, we have in that corridor, the far more flexible we can be with this plan.

And to the extent that there is sufficient revenue to allow us to do the things that we haven't done -- building those sound walls has been a long-standing sort of broken promise -- figuring out how to better utilize that corridor, figuring out how to move the majority of UP's freight service off of that corridor, then we can potentially address the issue of us locally, where moving the William Cannon overpass from the plan that, frankly, has caused so much heartburn, and really in a sense isn't helping us logistically with mobility, it was simply a revenue stream for us to plug into, so I'm here to thank you but also to ask for your continued help, specifically with the MoPac corridor.

MR. WILLIAMSON: Other members will speak for themselves. As you know, we make five individual decisions on a team decision, but my thought hasn't changed from ten minutes ago. We believe in staying out of the local process. If CAMPO is going to amend its plan or recommend to us that their plan be modified to take that particular problem out of the mix, we're going to say: Look, we're your partners; if that's what you want, Senator, if that's what you want, Mayor, if that's what you want, Commissioner, we're here to help all we can.

I think that's what you're going to hear from all of us -- I'll let them speak for themselves.

MR. NICHOLS: I'm going to echo that. I could just stop right there, but obviously we take no action items that are not properly published on the agenda and stuff like that, so we certainly can't, and you know, I don't know that it would be appropriate even if it was at this time.

But the consistent thing that we have been saying we support what you're doing, we think you are heading in a fantastic direction. You have been very bold and aggressive. The whole CAMPO plan, what the RMA has brought forward is just really -- I'm not going to say unbelievable, it is believable, but I think it is fantastic.

And the nice thing about those plans is by having local control, as it was envisioned, you have the ability to change any problematic pieces of it. We have tried to stay out of that process and let it be resolved at a local area, and any time the local officials, whether it be legislative or city or county, ask that the door be opened to work with TxDOT on trying to resolve a particular problem, my response is always "absolutely." We will sit down and have our district and our administration trying to work with CAMPO or working with the RMA or whatever is the appropriate process to support and resolve whatever needs to be resolved.

My compliments to you, Mayor, for hanging in there tough. You are right and so are the other people who have supported that thing, in my opinion, and those people ten years from now and 15 years from now when they see the results of the actions you have taken, will be amazed, and they're going to look back, like Houston did many years ago.

Today Houston says how would we have ever gotten around without the system we built, but when it was proposed in Houston it was dynamite and they fought and they struggled, but now everybody in Houston knows how would they have ever done without it. And I think that's what will happen here.

MR. JOHNSON: Mayor Wynn, it's sure nice to have you here. I'm going to echo a little bit of the echo.

One observation, Robert, is that Houston frankly could not have gotten along without its system of toll facilities, and I think there's a huge contingent of Houstonians here that will agree with that statement.

I want to thank you personally for your leadership on this, particularly your leadership in transportation for your community, for the region, but the ripple effect that that has for the entire state there's a lot of leverage in what you're doing here.

The question of assistance on Loop 1, you know, as we've mentioned and we firmly believe, these plans are derived at the local level because that's where people know the issues and they know the priorities, and that's the way this commission -- and I'm speaking for myself individually but I think my colleagues on the commission agree with me -- that's the way it should be.

It's difficult for someone from Jacksonville or Houston or El Paso, San Antonio or Parker County to know all the issues in whether it's Austin or El Paso or Houston or wherever, and I think that's been a huge benefit of this exercise. And at the end of the day we have not all agreed on the result but as the vote of the MPO showed, the local decision-makers have voted and we listen to that vote, and I think it's so important to partner with the MPO and local decision-makers.

But a like-minded situation, you have to have the flexibility to go back and tweak what you've done, and I think our attitude, certainly my attitude will be let's have that flexibility, let's agree amongst ourselves that whether it's here in Austin or it's in El Paso or it's in the North Texas COG, Michael, that we recognize on first blush that it's not going to be perfect, and we should have that flexibility. And we're here to get things done, not to figure out reasons not to do them.

But thank you so much for what you've done.

MAYOR WYNN: Thank you.

MS. ANDRADE: Mayor, I will continue echoing on the compliments and appreciation onto you for your efforts. And your plan is bold but your problems are large and you have to have a bold plan. And you're young enough that I hope years from now you will see the positive outcomes of that and it will relieve some of the negative issues that you had to deal with.

So congratulations, thank you, and I admire you even more for being flexible on that plan. Thank you so much.

MR. HOUGHTON: Like I said to Senator Barrientos, you have to have champions and leaders for these things to work, and you're truly a champion, and it takes a lot of guts to stand up and continue with the convictions, and the partnerships we're developing around the state, local decisions are outstanding.

What I have said, I said this to Houston last week, I said it to Cameron County on Sunday -- they came to El Paso with specific projects -- I said to the Dallas-Fort Worth Metroplex area, we will make sure you succeed, whatever that is, and you have to define what the success and the goal is.

I pledge that and I have pledged that to these other communities, but the leadership is paramount. And I will note, Mr. Chairman, that I think he went to school where they develop leaders, where two of my children have gone through. I can close on that, Mr. Chairman.

MR. WILLIAMSON: Did you go to Blinn Community College?

(General laughter.)

MAYOR WYNN: I wasn't going to bring all this up.

MR. WILLIAMSON: Mike Behrens, that wasn't fair.

MAYOR WYNN: Mr. Chairman, I appreciate the open door, I appreciate the invitation to come back to next month's meeting, and I appreciate Mr. Behrens and all the TxDOT staff for the ability for us to work together over this next month or more, really ongoing, as we address a specific order in our plan.

MR. WILLIAMSON: Well, subject to what County Commissioner Sonleitner -- who is also a great friend of the department has to say -- I think what you'll hear us say in a few minutes you'll like. So we do appreciate the struggle you've been through. We've all, in our own way, been through it as well.

MAYOR WYNN: Agreed.

MR. WILLIAMSON: Do you have your own website? I've got my own website.

MAYOR WYNN: I'm told there's a number of websites out there about me.

(General laughter.)

MR. WILLIAMSON: Karen? Longtime friend of this public servant and this department.

MS. SONLEITNER: Thank you, Mr. Chair and commissioners. And I do appreciate your service here on this board and I also want to say a personal thank you for the help you've given the Austin District related to our issue and problem on Parmer Lane at the intersection of northern MoPac. I appreciate you working with the Austin District and that has been very helpful.

I am coming up on ten years in terms of being an elected member of the Travis County Commissioners Court. That also means ten years on CAMPO, and I helped to birth the RMA here in Central Texas. I am one of the CAMPO 15 who voted for the mobility plan. It was a very difficult vote, as has been mentioned to you, but it is a vote I do not regret, and here is why.

I am in total denial that in a few weeks I'm going to be 49 years old, but when I was 28 in 1983, I sat in this front row here as a member of the news media to cover a story of our then-mayor Ron Mullen who came to the old Highway Commission and asked to see if we could get Research Boulevard upgraded to Highway 183 from Interstate 35 to Highway 620. It took more than two decades for that to occur, going the traditional route of how we get highway funding done, kind of a pay as you go. That's just the way it was done.

Now I want to contrast that with how we are doing our first RMA project. Coincidentally, it is also named 183, 183A. Two years ago this commission authorized the Central Texas Regional Mobility Authority and yesterday I was present at the RMA board meeting when they approved the comprehensive development agreement on 183A. That road will begin construction a little after the first of the year, 2005; it will open in 2007, coinciding with the opening of our Central Texas Tollway Project, the lead project being State Highway 130.

So you tell me: more than two decades going the traditional route, standing in line, knowing that the dollars are limited and the needs are great; or a little more than four years. And some of that included startup time to get our agency up and running, to get our board members seated, to get an executive director chosen, to get policies and procedures in place.

Again, I do not regret my vote to go the route of tolls, to go the route of regional mobility authorities. And for the folks that were here earlier from northeast Texas, it is a process that I believe in because it is all about local control.

Thank you very much for your service and your partnership, and we look forward to your action. Thank you, sir.

MR. WILLIAMSON: Thank you, Commissioner, we appreciate it.

We have some others who wish to speak about the Central Texas plan. If any of those are longtime friends of ours, we don't say that we mean to heap praise on just those that agree with us, it just so happens that we've worked with all three of these people for a long time.

I wish you to be comfortable in coming up and expressing whatever viewpoints that you have, and we'll start with Randall Stephens.

MR. STEPHENS: Good afternoon. I'm Randall Stephens, a homeowner in northwest Austin. I'm not used to public speaking. I just wanted to say thank you for your time and for allowing public input.

I've been in Austin about a little over 2-1/2 years but I've had the pleasure of working in Texas since 1987 and residing in four communities now.

This plan in Austin to toll existing roads, as you are well aware, has become very highly unpopular. I became aware of a political organizing group, PETPAC -- which is online at austintollparty.com -- and went to one of their meetings to see what they were about, and they were a group of people from all political persuasions in this wonderful and diverse community who disagree with tolling existing roads, and that seemed to be the prime focus.

Building new infrastructure -- like in Houston has been referenced many times here, in some cases up in Dallas -- has benefited the community. It's added sufficient capacity to alleviate pressure on the community and the average working people, business owners and the like.

In Austin, to toll existing roads, to toll virtually every state highway in the city of Austin will be regressive, in my opinion, in that it will add to the costs of doing business, it will add to the costs of products and services, it will add to the tendency for many businesses to look elsewhere when they're looking for a place to move. It is regressive in that way.

Adding new capacity, adding rail lines, okay. You put it on the ballot.

And I just want to offer this suggestion, that as Commissioner Nichols mentioned earlier, we do have due process. People are out here collecting signatures to recall three local officials because they're so vehemently opposed. It's all volunteers and I just want to let you know that almost to a man the thousands of people that are signing those petitions today want to hold these people accountable at the ballot box in May. They disagree with the plan.

I would suggest that funding options be placed on the ballot and not done behind closed doors. I voted for this governor, I believe in market forces, I believe in the American people and the creativity and the ingenuity of people to come up with funding options, built our infrastructure.

I lived in Europe a few years when I served in the military. People over there have comprehensive mobility plans and they have various options to get to work.

I've ridden a bicycle from the northwest all the way to the airport through this great city. We have bicycle lanes, I love that. My own mother-in-law can't walk on a sidewalk from the Estates of Brentwood because they did not put in a sidewalk on Anderson Mill Lane; that's going to be changed.

If anybody has any questions, I'm at randallstephens.com -- we all have a website. Have a nice day. Thank you.

MR. WILLIAMSON: Wait. We've got a couple of questions.

Mr. Nichols, go ahead.

MR. NICHOLS: Yes, I have a question. First of all, a comment. Thank you for being here. We respect all opinions and want anyone who feels like they want to bring an issue up to the commission should always feel welcome to, so we listen to everyone.

Your first comment has to do with tolling existing roads, and I know there is a lot of misinformation out there about what that does or does not mean. I think most people when they are told -- T-O-L-D, told -- that an existing road will have a toll on it, are under the impression that you are going to take literally a four-lane highway and put toll booths across it. To me, that would be tolling an existing road.

Everything that I'm looking at overwhelmingly in the CAMPO plan only tolls new added capacity and does not toll any existing lanes or capacity in the system. So literally everything that you're driving on today in Austin without paying a toll, you will be able to drive on those lanes when they're through without paying a toll. But you will also have the option of paying a toll, if you choose to, along those routes and driving on new capacity that would not be there without this plan.

And then you have a choice, and anybody who takes that choice to drive on that new lane that's tolled also has, if they choose not to, the benefit of all the cars that were removed from existing lanes who did make that choice. So everybody comes out. Without that, you would not even have that capacity.

Is that your understanding or is that not your understanding?

MR. STEPHENS: It's been our understanding that we're going to be tolled on existing highways, if you will, legacy highways that are bought and paid for already.

MR. NICHOLS: Does that mean literally a toll booth across those lanes?

MR. STEPHENS: This is the public understanding, or misunderstanding, if you will.

MR. NICHOLS: I will surely, clearly tell you that it is a public misunderstanding because that is not the case.

Any lanes that you currently drive on today you will be able to have the same capacity of those lanes when they're through without tolls. Only the new lanes and capacity that's added will be tolled, and that is a fact and that is the truth.

And if you can show me anything other than that, then I will go back to our staff because we have been misinformed, but I know that's not the case. So if you can show me any drawing, diagram or whatever where they're going to be tolling existing lanes like that, I will be very impressed.

MR. STEPHENS: I don't have any materials with me at the moment.

MR. NICHOLS: That seems to be the greatest public misconception that they're going to toll existing lanes that you drive on, and they're not.

MR. STEPHENS: They need to communicate it better to the public.

I think that you'd be well served in this whole process and be well served in this whole process if these alternatives are put before the public on a ballot rather than by politically appointed people who may be suspect or alleged, rightfully or wrongfully, for other vested interests and various things like that.

So thank you again.

MR. JOHNSON: I have one question.

Excuse me, Ted.

MR. HOUGHTON: Go ahead.

MR. JOHNSON: Preceding you was a county commissioner and she talked about the time element -- when you get to my age, time is a pretty important ingredient -- and the fact that in 1986 there was a project that came before the then Highway Commission that's taken 20 years to develop, and here is a series of projects that will take four years to complete, and yet in the 20 years that has transpired the pressures on our resources, the gasoline tax and registration fees has spread out amongst a huge increase in the population, has also spread out a huge increase in traffic volumes.

The efficiency of engines --which is good -- has made the fuel tax even less of a supporter of what we're doing. We pay more to maintain our existing infrastructure than we do to build new infrastructure. And so there's a crossroads of a lot of challenges and time becomes sort of the ingredient that gets penalized in all this.

And so I guess my question, with that as a background, are you impressed by the time element? Is that a consideration?

MR. STEPHENS: I'm impressed with the level of planning. In the aviation business and heavy aircraft maintenance over 25 years, I've worn a lot of hats. The planning process is similar in that you have to bring a lot of diverse groups of people together to get a large job done. And I would just like to see that the people get a chance to vote on their regional funding options, and to have options laid out, A, B or C, by the RMAs. That would be my suggestion, and let them vote on those.

That would strengthen your hand in getting things done, because there is a need to alleviate congestion. I believe we're creative and capable enough and wealthy enough as a nation to come up with ways of solving these problems, I'm very confident of that.

I don't believe -- and with respect to Commissioner Nichols -- I walked in here and I simply just do not believe that tolling existing roads would be acceptable to a large segment of the population, and that is what we predicate our objectives on here.

MR. HOUGHTON: Well, when you came in, the basis for your protest on the toll plan was tolling existing lanes. It seems to me that's what it was.

MR. STEPHENS: That's what had me fired up enough to walk down here.

MR. HOUGHTON: And the basis for your recall is tolling existing lanes. Is that fair?

MR. STEPHENS: It seems to be the basis of the anger of a lot of people.

MR. HOUGHTON: And Commissioner Nichols guaranteeing that there will not be tolling of existing lanes, does that change your opinion any?

MR. STEPHENS: My personal opinion? Yes, that might affect my personal opinion. I will continue to study the entire plan and learn more.

See, the public generally -- this came upon the public very quickly and the way people see these things coming and the few announcements that we heard there was going to be some change and that sort of thing, probably there wasn't enough depth of understanding upon the general population, and there's a feeling amongst a lot of people that this is being done behind closed doors, if you will.

MR. HOUGHTON: Wait. You made the allegation of that.

MR. STEPHENS: It's just public perception.

MR. HOUGHTON: That was my next point: behind closed doors. This is pretty much wide open as to what we're all about and the local control.

MR. STEPHENS: Sure, I appreciate that.

MR. HOUGHTON: But again, I go back to the original, we're not tolling existing lanes. If that is the basis of your objection to the plan and to a recall, does that change your group's -- if you speak for a group or you speak for yourself?

MR. STEPHENS: I certainly wait to see all this in writing and I'll study it more carefully as an individual.

Now, I wasn't the founder of any group. I have been a volunteer, I've been collecting petitions and that sort of thing.

MR. HOUGHTON: Well, let me ask a question of Mike Behrens. Are we going to toll any existing lanes in the state of Texas?

MR. BEHRENS: No.

MR. HOUGHTON: Thanks. That's all.

MR. NICHOLS: I'm going to make a suggestion, and it kind of comes from what he was saying. I'm going to throw this out to our administration or our local district.

Let me suggest why don't you get some of the people together that you've been talking to that are concerned and we'll be happy to have somebody from staff, whether it be somebody from administration or the district or the local area RMA them, to sit down -- I mean, you get as big a meeting as you want where people really want to know what we're talking about doing -- and show you where all the current lanes exist will not be tolled and that the new capacity is what they're tolling and show you those drawings that you somehow or another have not been able to get.

I've seen a lot of the drawings where they show like Highway 183 or this or that where it's all in a certain color that says it's going to be tolled and it doesn't differentiate between what is going to be existing non-tolled and what is going to be new tolled. And that probably is where a lot of that confusion is.

You put a meeting together, we'll get some people there, we'll lay those maps out, and I'd encourage it.

MR. STEPHENS: Thank you.

MR. WILLIAMSON: Anything else, members?

(No response.)

MR. WILLIAMSON: Hey, thanks for coming. But see the difference between your website and mine is mine got invented for me, you probably invented your own.

MR. STEPHENS: There will probably be a new one up today, you never know. Have a nice day.

MR. WILLIAMSON: Okay. We look forward to hearing from you again, though.

MR. STEPHENS: I'll be glad to be a constructive member of the process. Thank you.

MR. WILLIAMSON: Vincent J. May.

MR. MAY: I'm here for the Travis County Libertarian Party.

And you were just discussing tolling existing lanes. I have used US 183 for the last 20 or more years and there are grade separations on US 183 at Springdale Road, Martin Luther King, and I can't name them all right now, but I've been using it and it's been a benefit to me for many years, and yet when you convert 183 to a toll road, if I don't pay the toll, I'll have to go onto a frontage road and I'll lose the benefit of that paid-for infrastructure and I'll have to stop at lights.

That's what I think the public is speaking of in taking existing lanes and converting them to tolled. Am I wrong there? I mean, that's the same thing that as going on with MoPac with the people up at Parmer Lane, and of course, they have more political pull than the people who live on the east side, so they got theirs fixed, but on 183 we're going to lose a lot more than they were losing.

MR. WILLIAMSON: I'm just seeing where I want to go with this because he made a couple of comments that deserve being addressed.

I guess, Bob, would you like to respond? These are two valid criticisms that probably deserve first your comments.

MR. DAIGH: I'd be happy to.

We are very well aware of concerns such as this. We have modified the schematic drawings to provide distributor/collectors to allow people a non-tolled route around those signals which they have a non-tolled route around those signals today.

So once again, as Mike Behrens has pointed out, if you can drive that way today non-tolled, you will be able to drive that way tomorrow non-tolled, you will be able to drive that way ten years from now non-tolled, if that is your will.

MR. WILLIAMSON: I think, Mr. May, this sort of reinforces the remarks we tried to lay out earlier when this all started, and that is planning a transportation asset is a long, some would say, torturous process, and at every step of the way adjustments are made -- the senator put it oh so well -- some based on common sense and some will say based on politics -- mostly based on common sense and cost. Cost is always a factor. There will be lots of adjustments more before this is over with.

MR. MAY: Well, it's certainly good to hear that that plan is in the works.

My thinking was that the intention was to make the frontage roads discontinuous to force people to get on to pay the tolls, but now they're going to build extra sets of frontage roads that go around.

MR. WILLIAMSON: I think the source of the "design the frontage roads to force people on the tolls" might have begun, unfortunately, with what I'm told is an offhand or humorous e-mail that went back and forth between some employees of the department that, as things do, got picked and copied and sent out as policy. That's what I'm told; I haven't seen the e-mail myself.

If we say it here, that's pretty much the way it's going to be.

MR. MAY: All right.

The CTRMA plan US 183 -- and by the way, I do support toll roads and Libertarians mostly do support tolls as a valid method of paying for needed infrastructure, but the CTRMA plan has a lot of defects.

One thing we're opposed to redistribution of schemes where you take money from one person and use it for the benefit of another, and that's the way this plan is working.

For instance, US 183A -- all of this data comes from the CTRMA feasibility study so I'm not borrowing anybody else's data -- they had a draft plan that charged 10 cents a mile on US 183A, that was their toll rate. On the C-1 section of US 183 which is between 290 and I-35, their draft rate was 30 cents a mile.

Now, why would they charge so much more one section than another. While it's not because they hate people who live east of I-35 but that's where the vehicle miles traveled are right now, so charging a little bit more they can really rake in a lot of money, truckloads of money which will leave Travis County and go to Williamson County to pay for 183A. That's what I see going on.

I think 183A could be scaled down. For instance, CTRMA is going to build new capacity for free in Williamson County, they're building the frontage roads on US 183A. They don't exist now, they're going to be built and made free to the public.

So I think that if 183A were scaled back, maybe it didn't have the frontage roads. Let Williamson County build a couple of little blacktop lanes if the owners want access, but don't make the people of Travis County pay to build a real nice infrastructure in another county that could have left out a couple of the bridges on the mainlanes or a couple of lanes, and I think they could have got by and paid for it out of their own money without having to come and take money from somebody else.

State Highway 45 Southwest, that's even worse. The feasibility studies say they project 1,500 users per day when it opens. Is that a need or is that a want? I mean, I keep hearing that there are needs that we have to come up with new sources of taxes and tolls and one way or another it's going to be either a gas tax increase -- a huge $3 a gallon I heard a couple of months back -- or tolls. And is it because we need this road or because we just want this road, and therefore we have to raise taxes.

And once again, you know that State Highway 45 Southwest can't fund itself, so they're back over on the east side of town over on 183 and they're going to have to toll another section that would be paid for out of gas taxes, so it's getting awfully expensive for the people who live on that side of town,

And again, I'm going to say I don't think that there's a conspiracy to go and rob those people. They are politically less inclined to speak up than the average citizen, the citizens on MoPac North or South, but they're going to be paying a lot of money to support somebody else's lifestyle, and that's just not right.

I think that you could build State Highway 45 Southwest instead of as an interstate quality road, just build a four-lane divided without grade separations and they can pay for it themselves without having to go and take somebody else's money.

I think the problem here, as I see it, is that being able to force people to pay for things, not having a public vote, having it all done by appointed people making decisions, you end up with a plan that's not as good as you might have gotten with more public participation, more honesty about the cost.

And that's about what I had to say.

MR. WILLIAMSON: Thank you, Mr. May. We appreciate your comments and we will duly note what your position is worth.

Theresa Woodsong.

MS. WOODSONG: Thank you for letting us speak today. I was one of the people who had the misconception about exactly how tolling the existing roads would work.

I still do have a lot of questions about the access and the availability. Will the existing roads be nonstop or are they alternative roads? Will I be forced to stop and do stop-and-go traffic, so I can still get from one end of town to the other in 30 minutes or less, or will it take me an hour and a half unless I pay the toll roads. This is a very valid concern and I will do research and follow up with it.

Something that really concerns me is I am not opposed to toll roads. I go to Houston, I pay the tolls, but that's a continuous loop, and you can plan and say I'll pay the toll and go all the way around town, it's not stop-and-go.

I have questions about the safety and the congestion that will be caused by the tolls, but something that really, really concerns me is why are -- when it was stated today that gasoline may cost $10 or $20 in 30 years, why are we spending so much money now on a system that by your own definition is going to become obsolete? Why are we not looking toward alternatives? Why is it highways and highways and highways when this is no longer the Highway Department, this is the Transportation Department?

There are lots of big cities around the world that have really good viable alternate transportation, and I'm not hearing anything about that except for that one little commuter rail that doesn't serve my end of town at all.

MR. WILLIAMSON: Well, let me take a shot at that.

MS. WOODSONG: Okay.

MR. WILLIAMSON: The reason we're not like Canada and France and England or Germany, to a lesser extent perhaps Italy -- Italy probably has a good transit system -- is because we have more land than they have, we're not as mature as they are, we're still depending on the internal combustion machine to move 95 percent of our people. We are a market driven decision-making society, we are a win-lose society.

Individuals get up every day and are empowered to make individual choices about where to spend their money, what to do with their time. Countries that have tremendous public transit systems, that level of liberty -- as opposed to freedom -- liberty doesn't exist. The consumers that populate America today, 95 percent of them prefer the mode they're on.

Now, having said that, you should know this governor and this commission have done more in terms of dollars and time than all previous governors and commissions before us to promote commuter rail and the expenditure of public money investing in the future of commuter rail in the state.

And we don't get involved in the light rail business because that's a city decision, that's primarily a city transportation mode, so we stay out of that, the light rail business. We don't get involved much in the bus business because that's primarily a mode of transportation within the city.

But we have been super-aggressive and this governor has been super-aggressive on commuter rail in the state, and there are many people in this room who are transportation professionals who will confirm that to you as you leave the room. In fact some of them even criticize us for spending a little bit too much time and money on commuter rail because they don't like commuter rail at all.

So we're trying to do what we can, but we are a market driven, almost Mr. May, libertarian society about how we choose to travel. And right now, the market in this country doesn't choose to travel much by public or mass transportation. That's the answer to that question.

MS. WOODSONG: So you're saying even though you acknowledge that the cost of gas is going to go up, you're basing your decisions on the assumption that people are going to pay $20 a gallon?

MR. WILLIAMSON: No. What Mr. Nichols was saying earlier was we believe gasoline is going to become so expensive that technology will produce a different way of powering the individual car other than gasoline, but we still believe even at $20 a gallon and 20 years from now, there's no reason to believe that the largest percentage of people will not continue their personal transport vehicles, whatever they are.

Now, as I tried to indicate earlier, we're trying to lay the groundwork for a commuter system when the day comes that the market in this state and this country accepts that. We have initiatives and investments all across the state to do that, more so than all the previous governors and commissions combined. We're doing a pretty aggressive job at it, given what our stockholders, the taxpayers wish us to do.

MS. WOODSONG: Okay. Thank you.

MR. WILLIAMSON: But thanks for being here. We appreciate your comments.

Roger, Roger, where are you? It's been too long, buddy. Where have you been? What was oil the last time you were here? Do you remember, Roger?

MR. R. BAKER: It was probably below 50.

MR. WILLIAMSON: Yes, it was about 38. The last time Roger was with us, it was 38. He and I agreed it was going up, and bubba, has it gone up.

MR. R. BAKER: Well, as you imagine, that's part of what I want to talk about today.

MR. WILLIAMSON: It's good to have you, Roger.

MR. R. BAKER: Austin's section of the Texas Metropolitan Mobility Plan is up for formal consideration today, so I think it is important to warn you commissioners in advance why this plan won't work.

As you know, Austin's part of this proposal is heavily dependent on tolling existing roads to generate a guaranteed revenue stream to use as collateral to borrow money from Wall Street in the form of long-term municipal revenue bonds. Quite naturally, the residents most affected do not like being made into cash cows to finance business as usual in the road-building business, so this has led to efforts to recall the mayor and so on.

So Mayor Will Wynn is trying to make deals to keep things from falling apart politically even more than now, as you can read in today's Austin paper.

Is that all? No, it gets worse. If you look at the backup material for this item, you will see a partial cost breakdown. You have your $2 billion in Austin toll roads and so on, and here is another roughly similar cost for central city arterials to help the toll roads work as planned, and I think that would become an unfunded mandate.

But the really big hit is the $8.5 billion funding gap due to unfunded maintenance costs which you call a problem for further study. In other words, if all goes well according to this plan, Austin's roads are still predicted to fall apart due to maintenance shortfalls.

Are you all aware of this $8 billion plus gap in Austin's portion of this plan?

Is that all? No, it gets worse. The CTTP road bonds were said by your own consultant that they are only good investments so long as the price of gasoline adjusted for inflation never goes up above $2.50 over the next 30 years. As you will recall, gas prices have been going up sharply, and just yesterday, the head of OPEC officially requested that the USA sell part of its emergency strategic petroleum reserve to help hold down the price of oil.

So as far as oil price warnings are concerned, this is like the captain of your jetliner telling you to get your parachute ready to deploy.

If you know about all these problems and approve this plan anyway, then it seems to me that you're approving something that you know in advance cannot work for multiple reasons. By your vote the public will learn an important lesson in government from your vote on this plan.

So I'd be happy to expand or discuss anything that I've said today or to document it or anything like that.

MR. NICHOLS: Roger, we always appreciate you coming and making your comments. We have so many people waiting today, we're going to try to start staying as close to a time schedule when possible. I know we'll see you again next month.

So I don't have any questions, but thank you for being here.

MR. R. BAKER: I'll see you later.

MR. NICHOLS: Next is Rob Fritsche.

MR. FRITSCHE: Good afternoon. My name is Rob Fritsche and I am candidate for the US House of Representatives in the 10th Congressional District, part of which is made up by northern Travis County.

And today I come to speak in opposition to the Central Texas plan, and I have two concerns, and fortunately members of this commission have already brought up parts of those concerns during discussion today.

The first was by the chairman. During his opening remarks he talked about double taxation, and we've just recently had a bit of a discussion on tolling existing roads. Now, if we define an existing road as a road where we can go out and drive on it today, I don't believe we're going to put tolls on existing roads. But if we talk about putting tolls on roads that are currently under construction, roads that have already been funded through taxpayer means, then we are talking about double taxation, and I have a problem with that.

Second, Commissioner Nichols, you talked about a runaway MPO earlier with the lady from Gregg and Smith County. Our Capital Area MPO, I feel, meets that definition of a runaway MPO. When asked for public input, 93 percent of the respondents opposed this plan, yet our elected representatives on CAMPO went ahead and approved the plan. That defeats the idea of living in a representative democracy.

I'm hoping that the members of this commission will reflect upon this and ask members of CAMPO and the Central Texas RMA to go back and reconsider these plans, much like Senator Barrientos and Mayor Wynn have today indicated that they are willing to reconsider parts of the plan, and I think that's a good first step. I think we have many more steps to take.

Thank you for your time.

MR. NICHOLS: Thank you.

Karen Felthauser.

MS. FELTHAUSER: I also am running for state representative; I'm running for state representative as a write-in candidate in District 52 which is southern Williamson County.

I fully understand the need for increased mobility in our area and I applaud this group for trying to get to that and trying to get to it in a faster manner. However, I am here to plead to you to reconsider this whole move to fund our state highway system with tolls. There are many reasons not to move to tolling as a means of paying for needed roads.

First of all, 40 percent of each dollar goes to private for-profit companies to pay for toll structures and toll employees. This money could be better spent, I think.

Studies show that toll roads have four to five times more accidents than non-tolled alternatives. Toll roads cause more pollution than non-tolled alternatives. There's more congestion on tolled roads than non-tolled alternatives.

It seems also that toll roads will place a disproportionate burden on commuter populations such as the one in southern Williamson County which I hope to represent. Toll roads are a huge commuter tax and Williamson County is a commuter community.

And while we've discussed some the increasing of gas taxes, that would require everybody who is driving to pay something for the increased mobility as opposed to putting a huge burden on the commuters. I think that that is only fair, however, since as we've pointed out here and as you've pointed out, this increased mobility will benefit all of the residents of the entire area and the entire state.

An additional benefit of paying for our roads with the traditional method of the gas tax is that 25 percent of the money raised by this method goes to education, instead of the 40 percent going to private for-profit companies and for the building of toll structures and toll employees.

Since the state's percentage of funding for education has dropped to the lowest levels in history, and since the state recently lost a case for underfunding education, using the gas tax instead of a toll road plan would help solve two problems the state is currently facing: the mobility improvement and reliable education funding for our state.

I think if you need money faster than the current traditional cash flow allows, then the state and the legislature needs to work to fix this problem, and there's got to be another way than toll roads because there's too many negatives with toll roads.

MR. NICHOLS: Thank you.

Colin Clark.

MR. CLARK: My name is Colin Clark with Save Our Springs Alliance. We're a nonprofit group here in Austin.

I guess all of you live outside of Austin. I would encourage you when you're in town every month to take a trip down to Barton Springs and jump in. The pool is closed on Thursdays but if you get in on Wednesday, I encourage you to go take a dip.

We're here to ask you to slow down on the Metropolitan Mobility Plan, specifically the CAMPO plan. There are a number of reasons for that, including increased levels of pollution to the Edwards Aquifer and Barton Springs, but I'd like to focus on what I think is a more compelling reason to ask you to slow down.

This plan for the Metropolitan Mobility areas is based on the premise that you're going to relieve congestion. That's what I guess the governor's goal is and the commission's and the department's, and we just heard earlier that these plans would double our capacity of lane miles in urban areas in the eight largest places in Texas and that's going to cost many, many billions of dollars and would require also going into debt financing, tolling new lanes and tolling new capacity on existing highways.

We would submit to you that the CAMPO plan will not relieve congestion, and I wouldn't expect you to take that on face value from me, so I'm going to offer some supporting evidence for that claim.

The Surface Transportation Policy Project out of D.C. analyzed the Texas Transportation Institute's data from a 15-year period from 70 metropolitan areas across the nation, and they determined, based on the TTI data, that metro areas that invested heavily in road capacity expansion fared no better in easing congestion than metropolitan areas that did not.

Numerous studies have found that new roads are ineffective in relieving congestion and in many cases have increased traffic. Despite these lessons, many of the nations transportation leaders still believe that the answer to bottlenecks and slow-moving traffic is more highways. And I'll give this report to you.

Another interesting part of this report it notes that despite the common perception that Austin has been behind in road-building, Austin was building roads at a faster clip than every metropolitan city in America except Tucson, Arizona. Those details are in here as well.

At a recent CAMPO meeting, executive director Michael Aulick included a policy brief from the Brookings Institution in D.C., a nonpartisan group, certainly not a left-leaning group, and this is on congestion. The Brookings Institution report -- and I'll also give you copies of this -- states that: "Experience shows that if a road is part of a larger transportation network within a region, peak hour congestion cannot be eliminated for long on a congested road by expanding that road's capacity."

A lot of this toll road plan is to expand capacity on the existing roads while keeping the frontage roads.

This report goes on to state that: "Peak hour traffic congestion in almost all large and growing metropolitan regions around the world is here to stay. This will be true no matter what public and private policies are adopted to combat congestion."

As you're looking at spending many, many billions of dollars, I'd ask you to slow down and take a look at some of these studies and think about continuing on the course we've been on of widening existing roads, building new highways -- is that the most effective way?

And I also submit to you some data, this is from San Antonio, showing average commute time in 1990 at 22 minutes, and correlated that with the lane miles of freeways per capita. In 2000 your average commute time was up to 24.5 minutes while at the same time lane miles per capita grew steadily as well.

Here in Austin we've had vehicles miles traveled increasing at a greater rate than our population. That means people are driving further to get to work, and if you expand a roadway network, such as is contemplated under the CAMPO plan, people are going to be driving even further and your road expansions will get clogged up as soon as they open.

Thank you for your time.

MR. WILLIAMSON: Discussion with this witness?

(No response.)

MR. WILLIAMSON: As always, you've been with us many times, we appreciate very much you taking the time to be here. You're always polite and professional and we like the way you lay your stuff out.

MR. CLARK: Appreciate that and appreciate your respect for other citizens with their concerns coming before you today.

MR. WILLIAMSON: Mr. Costello.

MR. COSTELLO: I am Sal Costello, People for Efficient Transportation, PET. I'm here to talk about the Austin toll plan just a little bit.

There are a few problems with this plan that most citizens see. It shifts our local highways to tollways. Yes, it is not existing roads that we drive on today but they are highways. And no other city in the country has shifted its local highways except for in this case I-35 to tollways.

Reference was made here earlier about Houston. Many cities in our countries have loops around their city as tollways and I think that's fine. Most people see that as an option, as a different way to get around. They can take their local highways or take the tollway.

This plan is nothing like Houston, although 130 which has already been approved which is acceptable to most people because it's half a loop around Austin and it's a new highway, a whole new highway. The same thing with North 45.

There was a little discussion earlier about this plan being a good product. What is the product? Is it revenue generation or is it mobility or is it capacity? Well, obviously it will be adding capacity to our existing highways.

Then the question comes in will it raise revenue? Maybe. Maybe people will take them. I assume they will because I've seen an internal TxDOT presentation on page 10 -- and I can get you this PDF if you'd like it -- on page 10 it shows how TxDOT has a plan. The presentation was called "Toll Finance 101" and on page 10 it shows how they have plans to make those frontage roads discontinuous, and there are some examples that were said here earlier that there will not be tolls on existing highways.

And there are portions north of William Cannon currently as we drive around the bridge that we've actually paid for the construction of, currently we go up over 290 and with this current plan there will be no way we can go on that over-ramp for 290. It's not possible because of the construction of the other ramps. So there is an example of existing highways that we will not be able to drive for free that we will have to pay for.

Going back to mobility. Does this plan help mobility? Well, some people will say it will help mobility. Does that make it so? Where are the studies? Has there been a penny spent to prove that this will help mobility?

We're going to deal with a $2.2 billion plan that I assume is not just $2.2 billion worth of roads but we're also going to be paying for the toll infrastructure, and half the roads in this plan we've already paid for.

Specifically there are three roads -- I got something faxed to me many months ago from TxDOT -- three of them that are fully funded, they started construction last year as freeways and now they want to convert these three roads, over $100 million, and there's a fourth one that a TxDOT employee told Gerald Dougherty in one of the CAMPO hearings -- he's gotten correspondence -- told him that the Y in Oak Hill is also paid for even though they haven't started construction of that.

Mr. Bob Daigh will tell you that they need donor revenue for this plan, that's why they need to take these roads that we've paid for construction of -- I understand the issue with repairing down the line -- a plan with half the roads that are paid for by us already and then we pay again, and it's more than double tax, it's an infinity tax because we'll have to pay over and over and over again.

And one last thing, Senator Barrientos and Mayor Will Wynn were here talking about pulling back on the William Cannon overpass. That is just one of the roads that we've already paid for the construction of, and that's a good step. But the community wants to be involved in this process and one hearing for something this big, one CAMPO hearing, is not enough, and there's where all the frustration in this community comes from, that's where all the anger comes from, and that is not the way that you do some proper planning.

MR. WILLIAMSON: Members?

(No response.)

MR. WILLIAMSON: Mr. Costello, first of all, I sincerely thank you for the passion you've shown the last few months. Unlike many in the political world, I actually think cussing and discussing is a good thing, and I think as long as it's civilized, disagreement and poking and prodding at a plan only makes a plan stronger or it kills a bad plan, one of the two.

You and I will probably never agree on some things. There are two propositions that the commission has to consistently say, whether it's to a citizen from The Colony or a citizen from south Travis County or a citizen from north Harris County.

There is no question that the taxes you and I pay, the gasoline tax we pay to the state, the motor vehicle registration fee we pay each year to the state and the county, and the federal gas taxes we pay to Washington, D.C., a portion of which are sent back to us, there is no question those taxes in the aggregate will never pay for the cost of most new roads in Texas, most new capacity. There are a few exceptions.

We think that the expansion of the Katy Freeway east of Houston is one of those exceptions. We think that a portion of the capacity we'll add to Interstate 30 between Dallas and Fort Worth might be an exception.

But by and large, the way roads have been built in Texas for 60 years, the modern road-building era from 1954 forward, is based upon the notion that we all pool our tax payments every day, the pool resides in Austin, a piece of the pool is distributed every day back out to parts of the state to pay a contractor to build a road, and in that manner over time we're all contributing our taxes to all of our own road construction.

That approach worked very well as long as Texas was two things: a primarily suburban state -- I won't even say rural, I'll say suburban state, that is a whole series of small towns widely dispersed across a large area, and as long as the concentration of those small towns wasn't too great. The dilemma we face in Texas, from our perspective, is simply this: since the economic recession of 1986, the population of our state has, in an unplanned-for fashion, risen much faster than the current tax structure was prepared to pay into the common pool to build roads for.

And even worse, that population growth occurred almost completely within the triangle from Denison to Beaumont to San Antonio and back to Denison. In other words, it became concentrated.

And probably our pooling scheme that we used for 60 years, or at that time 40 years, probably would have worked if that population growth had been dispersed all the way out to El Paso, all the way down to Brownsville and the all the way to Amarillo. And I don't mean to be a schoolteacher or something, I'm just trying to give you our perspective.

We have the dilemma of having to provide infrastructure for that growth in the fashion that the governor and the legislature has given us. It was the governor's view that if we were to have to go down this path, the wisest course of action was to place the financial benefit of doing this at the taxpayer level of those who were going to pay for it. So we created the structure of the RMA and toll equity so that if you choose to pay a toll, every time you pay a toll in Central Texas, that dollar is staying in Central Texas.

MR. COSTELLO: That is not true. The dollar that somebody pays at a toll booth, a portion of that, a large portion of that, about 45 percent of that dollar goes to collecting that dollar. That is what happens with the tolling idea. It is a sloppy, inefficient, additional tax, that's what it is.

MR. WILLIAMSON: Why don't we stop for a second. Is anyone here with expertise that can speak to that? Phil? Because if Mr. Costello believes that 45 percent of our gross revenue goes to collecting the toll, then if he's right, then we need to be doing something real fast.

MR. POWELL: I can't tell you exactly what the percentage is right now.

MR. BEHRENS: State your name for the record.

MR. POWELL: I'm David Powell, director of Information Technology and Operations for the Turnpike Authority Division.

I don't have an exact percentage as to what that is. I know on the total project budget there's something like 5 percent for toll collection systems, and the operations the per transaction cost can be somewhere around a quarter apiece. A lot of that is labor to collect the transaction which people locally employed is a high component of that cost.

MR. WILLIAMSON: I thought that our system or any system we invested in also envisioned electronic tolls only, no coin collections. Is that not the case?

MR. POWELL: Absolutely, yes, and electronic toll collection is much less expensive.

MR. WILLIAMSON: I'm sorry, Mr. Costello.

MR. COSTELLO: Also, what was proposed to CAMPO when they voted that this would be an all-electronic plan, but when you add toll booths -- which now they're talking about collecting cash as well, you're slowing down traffic, we're talking about bottlenecks all over Austin. How does that help mobility?

And again, we want to see a study.

MR. WILLIAMSON: Well, Mr. Costello, I can tell you that this commission has made it very clear publicly we will not invest the state's equity in any toll plan that is not 100 percent electronic. We're not going to be in the toll booth business.

MR. COSTELLO: Well, I suggest you look at the CTRMA's website because they are backing off the electronic route only on their website and even in recent papers, The Houston Chronicle yesterday talked about the problems with all-electronic. These tollways that were all-electronic, they're having major problems with them.

MR. WILLIAMSON: Well, major problems from one person's perspective. We view the very objection you have to the traffic backup for coin boxes as being more of a problem than whatever problems are occurring electronically, and I will just tell you -- in fact, if you care to stay till probably about six o'clock tonight, we're going to have a discussion about interoperability of tolls, and we will repeat our toll master down there what we've said to him ten times: no booths; we are not in the toll booth business, we're in the electronic toll business, that's all we're in.

MR. COSTELLO: I hope that Mike Heiligenstein will speak about that. I saw him here earlier. Maybe he can tell us why he's changed the information on the CTRMA website.

Thank you.

MR. WILLIAMSON: Is that it?

MR. COSTELLO: That's it for me.

MR. WILLIAMSON: We thank you very much for being patient all day long.

Gregory Gaynier. Gregory, are you out there? Gregory A. Gaynier.

(No response.)

MR. WILLIAMSON: Okay, we'll hold him for a moment.

Chris Baker, city of Austin. Are you any kin to Roger?

MR. C. BAKER: Thank you for having this meeting. I hope everyone can hear me.

I just moved to this great city two months from Columbus, Ohio. That's a city that has about a quarter of a million people in about half the area and they have a lot less problems than Austin does. It's mainly because they've just built more roads and in many cases a lot of those roads were built in the '70s. It's one of those problems that when you get behind, you sometimes have trouble catching up.

One of my objections to the toll plan is it seems to be bucking a nationwide trend. I was on a road in July where I literally passed through a toll booth where they had taken out the people and it was now a free road. This was Interstate 95 in New Hampshire. No state income tax, no state sales tax. Those people hate taxes more than people down here do, and they had actually taken a toll road and made it into a free road.

Secondly, if you've ever been in New York City, you can wait an hour at the toll booths on the George Washington Bridge. I mean, that does not solve a congestion problem by any means.

I realize, however, that roads do need to be paid for and in some ways not having roads can cost us more. I was in an accident 13 days ago and my car insurance went up when I moved here, so would we rather pay more money for the roads or we can pay more money to our insurance companies because we're going to have more accidents.

I do have a suggestion and this should probably be addressed more to the legislature, and I think we should ultimately take the gas tax off of the budget completely and say the gas tax goes to the Department of Transportation automatically, every penny of it, not into the General Fund where it can be played with and tampered with.

MR. WILLIAMSON: You wouldn't get much disagreement in this room.

(General laughter.)

MR. C. BAKER: Mr. Williamson, you said yourself at the beginning of this meeting that only 48 percent of that money goes to the Department of Transportation. I know this is ambitious but it's a possible solution to the problem because it would double the funding for the Department of Transportation.

MR. WILLIAMSON: If I misspoke, the taxes we pay equal only 48 percent of the cost of building a road. We get about, what did we calculate, Mike, 72 percent of our gas taxes?

MR. NICHOLS: Sixty-eight percent.

MR. WILLIAMSON: Sixty-eight percent. So if I misled, I apologize. It's still a significant hit.

MR. C. BAKER: I'm sorry if I made that mistake.

MR. WILLIAMSON: It was probably me.

MR. C. BAKER: But I appreciate you having this meeting. It's certainly been very informative, and it's inspired me to maybe run for the legislature in two years myself.

MR. WILLIAMSON: Good man.

MR. C. BAKER: I love this city.

MR. WILLIAMSON: Hey, listen, we thank you for being so patient.

MR. C. BAKER: Thank you.

MR. WILLIAMSON: Michael, I'm going to ask you. I know you've been taking notes of some of the objections and some of the observations. I know that you're in north Texas, I know that you speak for all the MPOs today, but I also know that you have some experience with all these problems. Could you just kind of summarize what our view might be?

MR. MORRIS: Well, just a couple of thoughts. I didn't know you were going to call on me to do that, but there are maybe two or three or four things.

One is the concept of the forest versus the tree, and those of us and our MPO colleagues working in different corridors, we are clearly seeing individual travelers making the point, well, I was going to get a road that had gas tax supported money and now you're going to charge me for that particular roadway, you get into this notion of double taxation.

The thing that people have to remember that if one were to increase the gasoline tax, you have a person every day paying higher gasoline tax with no assurances that they're going to see the improvements of a particular road investment. And that's traditionally been the issue in Texas that urban areas would typically have greater needs than the rural areas, so you may have rural people paying gasoline tax and never see any improvements.

So that issue of equity, the forest versus the tree, remains whatever the instrument that is used with regard to financing, not just with regard to people that are arguing the toll.

The other item is one of streamlining. I think there's some misconception on the part of the public that your decision today locks in place forever and the public can no longer participate.

You are setting in motion a financial structure. It then would result in plans being developed, those plans have to go through an environmental process, the public has an opportunity to participate in that environmental process, public meetings occur, consensus is built, changes are often made, options are presented. This is really not the end of a journey but the beginning of a journey.

MPOs would have to create new transportation plans where there's a public involvement process. So a project that was once conceived to be a gas tax supported roadway and now conceived to be a toll road, still has other legal mechanisms in place in which the public participates.

Clearly the American notion that everybody wants something for free is still alive and well here today. That is clear.

I think the notion of a toll road has the benefit of the person to vote with their feet. Commissioner, you articulated earlier that often it's the blue collar user who is the toll road user, and that is very true and the data supports that. And you say, well, why is that, these individuals can't necessarily afford it as well as a richer person. A richer person's flexibility of schedule often doesn't require them to take a toll road.

But if you're 15 minutes late picking up your three children at a daycare and they charge $83, you wish there was an option to get there for a $1.10 to save the $83, or if you're going to be docked at work for being late or if someone is missing a plane. This particular user mechanism that is being promoted is not a user mechanism that the person pays every single day, it's a mechanism that the person pays when they wish to use that particular process.

I said this last month. It's unfortunate, first of all, most of the discussion here today has been on this metropolitan's plan and it's been on one element of this metropolitan's plan, and the public isn't getting the benefit of the rail systems that are being contemplated, and the integration of goods movement in the future and the movement of railroads and hazardous materials out of our downtown.

I encourage the public to not take 100 percent of the vision that's been presented to you just based on the comments you've heard because there are so many more new opportunities from hurricane evacuation systems in the south to new managed facilities, time of day pricing.

People come before you and still think the toll may be the same every day of the week, weekend or weekday, when clearly we're moving towards tolls by time of day -- similar to how your phone is tolled -- and if you want to travel when everyone else does, it's more expensive, and when you want to travel when no one else does, it's going to be a different price.

I guess speaking for the metropolitan planning organizations, I think we've been through the process, some of us have worked on this for a long time. We had people in our region that told us in '93 that the stupidest thing we were ever going to do was build a light rail system, and that came out of long energy lines in the '70s.

And our business communities came forward and said we want to have a sustainable community that can get people and employees to work -- and I told you this last month -- despite what the fuel price or fuel availability is. And that was a conscious decision to build a rail system for those reasons.

I think people that are in this business, your district engineers, your community citizens that participate, your metropolitan planning organization staffs and elected officials, they deal with this every day.

And I guess the final point to leave with you the three Cs of transportation: it is comprehensive, despite the fact that we're only focusing on one small element today; it is continuous, these plans never stay fixed, they're mobile, we learn, we adjust as part of the elements of moving forward; and those comprehensive plans lead to contingencies and opportunities for new funding and new strategies as we learn forward. We don't just have a vision in '64 and continue to plow through that particular vision over time.

And the notion of moving from toll roads with toll booths to now technology that permits us to someday have a vehicle registration sticker on our vehicle or a chip in our car in order to have rental cars from visitors to our region to be able to participate in transportation -- these are the future discussions that are occurring with the region.

And I think as MPO individuals who deal with this day-in and day-out, we're very comfortable that we still need to proceed. With some of our regions adding a million people every ten years, we keep reminding ourselves we can't package coal and groceries in the back of light rail vehicles, we've got to develop a balanced and diversified transportation system. And all those constituent groups need to have some ability of getting their product to the market in a just-in-time notion, and I think the toll road strategies is very consistent with that philosophy.

MR. WILLIAMSON: Members, any questions or comments for Mr. Morris?

MR. NICHOLS: I was just going to say thank you again for all that you have done, not only working with your region and us but with the whole state on these issues.

MR. MORRIS: Appreciate it. The MPO folks have met monthly and we stand ready to continue to work with you.

MR. JOHNSON: My thanks so much for all you've done starting when our task force got together and before that and since then.

If I might, if Bob Daigh hasn't left, I have one question since we've focused a lot on the Austin area MPO's plan as part of the Texas Metropolitan Mobility Plan.

Bob, help me with time here. The MPO's submission of its plan under normal circumstance would take how long to build?

MR. DAIGH: At least 30 years, if not really 50 or 60.

MR. JOHNSON: And what has been submitted will take how long under this plan?

MR. DAIGH: Under the toll plan we hope to essentially build 20 or 30 years' worth of roadways in about five years.

MR. JOHNSON: I heard the number last night "28 in 4" and that was hearsay, so I wanted you to confirm that.

MR. DAIGH: Yes, sir.

MR. JOHNSON: That's phenomenal.

MR. DAIGH: It took a lot of bold leadership by the mayor's part and by the senator's part to get us there.

MR. JOHNSON: Thanks.

MR. WILLIAMSON: Hope?

MS. ANDRADE: Michael, I'd just like to thank you for the plans and to all the MPO directors. I think that this has been a great way to bring partnerships together, to all be visionary, creative, and I urge for all of us to continue working together. I truly believe that we're not alone anymore, it has to be partnerships together working together.

So thank you so much and thank you to all the MPO directors for the great job.

MR. HOUGHTON: I'll go back to those champions and leaders, and Mike, you're one of them. I'd sure like to get that "90-50" pin I could wear, you know, 90 percent of the projects in 50 percent of the time. I was told by Steve that we're up to 90 percent now. Thank you very much, Mike.

MR. WILLIAMSON: Thank you for your hard work, Michael, we do appreciate it.

MR. MORRIS: Sure.

MR. WILLIAMSON: Steve, I'm going to let you wrap and then I'm going to have a commuter rail comment.

MR. SIMMONS: Thank you, Mr. Chairman.

And before I ask for your concurrence on these plans, as Michael says, we can't just have this plan and put it on the shelf and it's always that way. There are a few next steps that we would recommend.

First off is to inform our state and federal legislative decision-makers of the results of this plan, not only of the shortfall in funding and the needs to address congestion, but the successes of House Bill 3588, and also how we see we can continue to move forward in improving funding and expediting project delivery with new tools.

We also need to continue to refine the Texas Congestion Index, and I failed to mention earlier in my presentation Dr. Tim Lomax is here from the Texas Transportation Institute that helped us develop that. The Texas Congestion Index is a way to measure whether or not we're making progress.

We need to develop a 2006 Metropolitan Mobility Plan that is more comprehensive and multimodal, and we need to continue to network, not only with these eight MPOs on a regular basis, but also bring our other MPOs into the picture.

With that being said, staff recommends acceptance and concurrence with the Texas Metropolitan Mobility Plan and encourages continued partnerships with the local entities in the eight metropolitan areas.

MR. WILLIAMSON: Thank you for all your hard work, Steve.

Members, the chair wishes to make a few comments on some of the points brought out by the witnesses, and I'll be brief.

Mr. Clark spoke about congestion and ever-expanding roads. If Mr. Clark is here, or even if he's not, the record will reflect we actually agree with that, we understand that it doesn't matter how many lanes you add to the footprint, they will fill up during certain times of the day. We understand that.

That's probably not in our mind an argument for not expanding the footprint, it's just a recognition of the fact that there are certain times of the day we're going to have congestion and we can't do anything about it.

With regard to commuter rail, the citizens of Austin, Texas, will vote on a commuter rail system soon. We have purposely steered away from making public comments about that decision because, again, we don't wish to interfere in the local decision-making process.

However, the commission is on record, this governor is on record as being strongly interested in beginning to build a viable commuter rail system in this state within regions and linking those regions with the Trans-Texas Corridor. We started down this path three years ago, because we believe the day will come when there will be market forces driving more of our citizens toward that choice. And as Michael said, if we waited 20 years to start that process, we would be 20 years further behind.

Several issues were raised by witnesses concerning the manner in which the Austin plan was advanced. You know, we respect those viewpoints, whether it's Mr. Costello or Mr. Gray or whomever else. I learned in the legislature there's always time for another public hearing, there's always time to explain it again, there's always time to talk about it more. In our society that values liberty, there's always time for that.

Unfortunately, this governor and this legislature and this commission choose to move forward because it's our judgment, it's our subjective judgment that we can no longer afford not to move forward as aggressively as possible.

We appreciate everyone that's participated in this important part of our commission meeting today and we have heard all viewpoints.

Do I have a motion?

MR. HOUGHTON: So moved.

MR. NICHOLS: Second.

MR. WILLIAMSON: I have two motions and two seconds. All in favor will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

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

MR. SIMMONS: Thank you.

GULF COAST REGIONAL MOBILITY PARTNERS

(Judge Robert Eckels, Jim Royer)

MR. WILLIAMSON: You may leave if you wish, but we're going to hear our Gulf Coast people because if we don't hear them, some of them are going to faint from hunger.

So who leads off, Judge?

JUDGE ECKELS: We'll be quick. Are you ready?

MR. WILLIAMSON: Yes, we're ready because all of us want to eat lunch just like you, although we don't want to minimize your appearance here.

JUDGE ECKELS: And I do appreciate your bearing with us and accommodating the group here. As they're loading the program, I will again thank the commissioners.

I enjoyed listening, actually, to the discussion coming into the adoption of these plans. I chair the MPO for Houston, the Gulf Coast, the Houston-Galveston Area MPO, the Transportation Policy Council we refer to it as.

We have gone through much of this debate. We have a mature toll road system. We have free lanes that run parallel and create the grade separations, and we've dealt with the issues with the frontage roads and find that it's better to have continuous frontage roads than to try to break them and force people onto the system. In fact, it generates more business. People will pay 75 cents to get around a traffic light sometimes. It's better to have that continuity along the lines.

The concept that TxDOT is developing with the new capacity being tolled lanes has got relatively strong acceptance in the Houston region. We are expanding, and part of this discussion will go into the other elements of the plans which includes the commuter rail and the transit facilities. There's a lot more than roads and toll roads in it.

That's what's been interesting listening to the discussion, particularly out of the Capital Metro.

We do commend the department, the Transportation Commission and the staff and their working with us and our MPO as we've developed these plans. I do think that this is one of the most significant steps the State of Texas has ever taken on transportation, and the strong leadership of this organization to build leaders in the community that can bring forth plans and build a state plan that is not driven from the top down is greatly appreciated and I think will pay off well for the people of this state. So thank you all.

We are here today specifically about this plan in our Houston region and the work of our Gulf Coast Regional Mobility Partners. It is folks throughout the Houston-Galveston area that have come together as a single entity, not only for the planning process but to ensure that these plans are implemented and become part of a broader system to improve transportation in our area.

We do have here with us a large group of folks from officials, mayors and council members, business leaders, various folks who are here, and I'd like to ask the group to stand, anybody from the Gulf Coast Regional Mobility Partners. We are pleased to have them here and want you to understand the importance we do place on this.

All of the areas in the state realize that congestion is getting worse. In fact, we already know that our region has some of the worst congestion in the country, so instead of focusing on the problems today -- we'll cover that briefly -- we do want to expand the scope of this message to include what we are doing to solve our problems, the effort that are going in with you in our partnerships, why it is important for the state to reduce congestion, and offer up some opportunities for us to come together and continue to work on building that consensus.

Our message will be consistent with the themes that we have heard today and that this commission has espoused for some time, particularly with the passage of HB 3588, of the effort to be a leader, to be more local responsibility for developing innovative strategies to fund transportation projects.

Without question, we're going to show a strong willingness to raise revenues locally through sales taxes, local government bond programs, toll revenues, local option motor fuels taxes that we discussed in the past.

With that said, we appreciate your being here with us, and we will make this as abbreviated as possible because we do appreciate your taking some time to have us at this late hour before lunch.

And I will introduce to you Jim Royer who serves as chairman of the Regional Mobility Partners.

MR. WILLIAMSON: And Jim, please don't misunderstand us. We're here to hear you.

JUDGE ECKELS: We were talking as we came in about our history in the legislature staying till two o'clock in the morning. It is not our goal to have you do that, and we appreciate your service.

MR. ROYER: And again, we do appreciate your service, and I'll be as brief and succinct as possible because I know most of you have seen various parts of this at various times, so a lot of this information isn't new, we've put it in a new context.

We greatly appreciated the visit of the two new commissioners to our region last week and had an opportunity to cover much of this material with them.

But as the judge said, we look at our partnership with TxDOT as being one of the key elements in our transportation system and what we want to do is give you an update on where we are in our region, what mobility improvements we have in progress, and an overview of the whole area.

The region we're referring to, the Gulf Coast Regional Mobility Partners, covers this area. We have involvement from the county judges, transportation leaders in the community, and we've put together what we believe is a comprehensive view of both our region and the vital nature that transportation plays in our region.

Some statistics that we think help set the stage for why transportation and surface transportation particularly are so important is that we have the sixth largest port in the world. We have the largest international port in the United States of America, the second largest port in the country. We have 40 percent of the nation's petrochemical capacity within our region; 13 percent of the refining capacity to the United States of America is located on the Gulf Coast region of Texas.

We obviously have the world's largest medical center by a factor of five, employs over 60,000 people. That's five times larger than the Mayo Clinic, just to put it in perspective.

We have a substantial tax base to the state of Texas in generating revenues for the state of Texas and economic activity in the state of Texas. It's estimated that 30 percent of the gross state product is produced within this region, 23 percent of the state retail sales, and we expect the growth to be faster than we are currently in that portion of the marketplace. The economic growth in the Houston metropolitan area is faster now than it has ever been in recent history.

An item that we'd like to bring to your attention. The Port of Houston imports 190 million tons of material every year. Ninety percent of that is consumed within the state of Texas. The citizens of Harris County are underwriting a $1,400,000,000 investment in the Port of Houston. That is an ad valorem tax for the citizens in Harris County to build a facility which benefits the entire state. We get no state funds to develop the Port of Houston.

We have three toll road authorities that have invested close to $3 billion in our toll road facilities with a lot of assistance from the state of Texas in helping produce that program. We've added our light rail system that's underway; we have a freight rail program that we're going to touch on briefly here.

We have three major airports, one of them Houston Intercontinental Airport, in which the citizens of the city of Houston underwrite $1.5 billion worth of investment to supply the state with one of its two major international gateways. We get no state money for our airport system.

There are investments that are made in Houston that benefit the entire state. We aren't saying that to brag, we aren't saying that to stick our finger in our eye, we're saying it to point out that we need that investment from the state to help support these facilities, and it is a partnership.

We're pleased to do it, we're pleased to have the port, we're pleased to have Intercontinental Airport -- just as we're sure the people in Dallas are pleased to have DFW -- we supply those facilities to the state, but having state support in order to be able to take advantage of those facilities is something that is very important to us.

On the bad side, we have some significant congestion. We have the worst congestion in the state at 139. We had severe congestion back in the early 1980s and those members of the commission at that time realized that, we partnered with TxDOT and built our way out of that problem. We built our way into having one of the lowest congestion indexes in the country.

We are now a victim of our success. The metropolitan area has grown, the economy has grown, and we've grown ourselves back into a congestion problem. We have to figure out a way to get out of that. It costs the local peak hour traveler a thousand dollars a year in just congestion within the Houston metropolitan area.

MR. WILLIAMSON: That's got to be a cartoon.

MR. ROYER: Which one is that?

MR. WILLIAMSON: My guys haven't gone out and put a sign up like that, have they?

MR. ROYER: No, that is a cartoon.

MR. WILLIAMSON: Hey, Gary, that's a little bit too lighthearted.

MR. ROYER: That's a county sign, Mr. Chairman. We're glad you picked that up, though. I didn't think anybody would pick that up.

(General laughter.)

MR. ROYER: We saw the presentation by the MPOs and I think the numbers that they mentioned in the Dallas-Fort Worth area was that had $55 billion worth of unfunded improvements that were identified and needed. We represent that we have $61.5 billion, but $55 billion, $61 billion, that's all the same.

The point is we have planned to fund about half the capacity improvements we need to achieve a reasonable congestion index. We have a great deal of work underway, we have a great deal of effort being applied by TxDOT, we have a great deal of effort being applied by the toll road authorities, by the counties involved and their issues, and we can fund about half the transportation improvements we need to have to get us to a reasonable congestion level.

If we do not find a way to double our transportation funding, we will sink further and further into congestion and then it becomes a moot question as to whether or not we can become the economic engine for the state that we currently are. It will become a moot question as to whether or not Dallas can be the economic engine or Austin or any of our metropolitan areas.

Texas has a tremendous place in the United States and the world, for that matter, in the folklore of Texas; Texas is famous throughout the world. Our urban areas are now becoming significant centers of commerce which are also becoming well known throughout the world. Whether it's Houston, whether it's Dallas, whether it's Fort Worth, whether it's Austin, you can go to Shanghai, China, and they know of our urban commercial centers.

But we are going to be unable to allow these commercial centers to achieve their place in the world, along with the New York Cities, the Chicagos, the Parises, the Londons, the Shanghais, unless we can figure out how to solve our transportation problem. We will fade into mediocrity and other parts of the country or other parts of the world will take over the positions that we are currently in a place to take advantage of.

We have got to figure out how to double our investment in our urban transportation systems. That $64 billion includes all the money we can generate to build toll roads, all the money we can generate to build our transit systems, all the money we can seek from the state to build our transportation systems on our highways, but yet we come up with only 50 percent of what we need in order to achieve our place of commerce in the world.

And it's the same story from Dallas. This is not one part of the state tugging war with the other parts of the state. The urban areas of this state have a common problem and we're trying to seek common solutions, and it is a very important element of what goes on here with the state and with TxDOT as being a partner in that.

We're leading the way with our toll roads. We've built toll roads, everybody is building toll roads and they're a key element of our transportation system. We have a regional toll system and we have more candidate projects. State Highway 99, or the Grand Parkway, is up as being considered the next major element of the toll road. Fort Bend County has started its toll roads, Montgomery County is considering forming its toll road authority; Brazoria County has formed its toll road authority.

All the toll road authorities are working cooperatively with themselves and with TxDOT and we greatly appreciate the assistance TxDOT has given in facilitating the development of those toll roads.

We have programs in all of our major corridors. You're familiar with what we're doing on I-10 where we've partnered very well, the local community putting up $500 million of the $1.4 billion. We're putting up about 40 percent of the money locally in order to advance that project.

We have a similar project that we're going go be coming to you with on 290. Gary Trietsch and his people are working that out. We've finished the major investment study on that on how to expand that capacity. Going out to the north side of town there's a lot of work going on on I-45, things of that nature that we have in the program. We're going south towards Galveston with some major projects.

We have a great deal of planning that is in that MPO plan you saw, we know what needs to be done, what we have to do is figure out how to finance it.

We have some initiatives, as I said, with Montgomery County. We have comprehensive development agreements in 3588; we plan on taking advantage of those and bringing those to bear.

We have all those issues that we're using in developing our transportation plan, but again, I remind you we deal with 50 percent of the problem.

Another major issue -- and we appreciate meeting with the chairman and Mr. Nichols on this yesterday -- that's the railroad network that comes to Houston. Houston used to represent itself as the place where the railroads met the sea. Matter of fact, the seal of the City of Houston is an old locomotive engine.

That network spiderweb of railroads causes as much congestion in the Houston metropolitan area as any other single item. It crosses all of our major thoroughfares, it is an important strength to our community, it feeds the Port of Houston, it feeds the rest of the state, but it is also something that generates a great deal of congestion in our community.

Working with the Port of Houston and Harris County, the concept of developing a corridor in which we can locate the majority of those freight rail lines is starting to gain a great deal of momentum in the Houston area.

This is a conceptual view, we aren't sure this is the ultimate corridor, we aren't sure if there aren't other corridors that go into this. But we believe if we could develop those corridors, grade separate them, we could supply increased capacity to the Port of Houston to take advantage of the investments that are being made there, we could supply increased capacity to development in the surrounding counties and other parts of the state to take advantage of the Port of Houston, we could provide a more efficient rail system, and we would relieve a great deal of the congestion caused by the freight trains that move through our community, not to mention the safety issues that come with some of the hazardous cargo that moves through them.

The result would be that these corridors would be available for other modes of transportation, be it either commuter rail or high speed managed toll lanes.

So working with TxDOT we would very much like to advance this plan, find out the details of the plan, work with the railroads. Majority Leader Tom DeLay, Congressman Gene Green, Congressman Culberson, Congressman Sheila Jackson Lee, both sides of the aisle are interested in advancing this plan and we look forward to working with TxDOT on how best to go about doing that as you look at freight rail throughout the state.

At the federal policy issues, we work hard with our congressional delegation to get the 95 percent of the money that Texas deserves. I'm not quite sure why we can't get to 100 percent but I'm told that's impossible, but we are seeking the 95 percent. We want to get toll credits so that we can use those in our funding, and we want matching flexibility on tolling toll roads from the federal government.

From the state we do have some issues. If school finance -- not if -- school finance is going to be a major subject in the next session of the legislature. We would like to have the transportation interests of the state consider how we can remove school financing from our gas tax program.

Not that we don't support school financing. We're all for developing a proper education system, but bleeding it out of the gasoline tax is probably not, in our opinion, the most appropriate way to do that. And if there is an opportunity for constitutional amendments, we would like to join forces with all the transportation interests in the state to find an alternative way to fund schools, not necessarily coming out of the gas tax.

In addition, we would like to stop all the other diversions out of Fund 6. We know the Department of Public Safety is important for public safety, we're just not sure it should be funded out of the gasoline tax. And then all the other diversions that go in that.

As I said before, we in the urban areas across the state can only figure out how to fund half of our transportation needs, and we need to join with TxDOT, we need to join all the transportation interests and find a way to dedicate our transportation taxes to transportation.

We'd like to index the motor fuel tax and we'd like to work with our delegation, should TxDOT decide to put that forward, and see if we couldn't get that done so we can index the motor fuel tax. We believe the transportation interests would support an increase in the motor fuel tax. We need more resources.

We also know that passing a statewide gasoline tax is politically extremely difficult, if not impossible. I know this is an issue that needs a lot of consideration, but if the state can't pass a good statewide gas tax, the urban areas of the state are coming to the conclusion that it would be very helpful if the state would authorize a local gas tax passed by voter referendum.

If a local area wanted to impose a gas tax and went to the voters to seek approval to add that gas tax, and the voters who believe that transportation is the number one issue in Houston, in Dallas, I believe in Austin, I believe in our other urban areas and we're willing to invest more and we're willing to invest more in our own transportation systems, we think it would be advantageous for the state legislature to enable that.

It takes a lot of thrashing around, we know, but we've got to keep that in front of us because, again, we have to double our investment in our transportation facilities.

We would hope we have a way to work out these policy solutions with you so that the transportation interests of the state approach the legislature on a unified front. We need some specific help in moving some of our programs to the development authority, particularly to expedite right of way acquisitions on 290, US 59 South, State Highway 99.

We need to maintain increased funding for our rehabilitation and maintenance. Modernizing some of these roads, while they may not be listed as capacity improvements, certainly does help a great deal. What's going on Interstate 610 with putting in some modern geometry is very, very important and we need to press on with those.

Continue to get a fair allocation out of the Statewide Mobility Fund, continue to work on the freight rail issue in partnership with TxDOT. It would be helpful if we could simplify the agreements between TxDOT and local authorities, get the lawyers to kind of smooth out that process.

And we appreciate your time. Thank you very much. We appreciate your service.

And last but not least, Gary Trietsch and his staff are doing a fabulous job. They go out and they get abused by the public for not doing things fast enough, they get abused by the public for doing some things at all, they get criticized for undertaking programs, they get criticized for not undertaking programs. They do a fabulous job representing the State of Texas and we appreciate their service and we appreciate all the support you give them.

Thank you very much, and if you have questions, I have some experts here who may be able to answer them for you. Thank you very much.

MR. WILLIAMSON: Ted?

MR. HOUGHTON: Just a comment. Thank you for hosting Hope and myself last week or two weeks ago.

MR. ROYER: Thank you for taking the time to come out.

MR. HOUGHTON: Great helicopter ride, another view of I called it, when I introduced Johnny Johnson or mentioned him at TTI, the State of Houston. It's got its own GDP, by the size of it, but it's a magnificent community. And I've got two children who live there, so I've got to support the city of Houston.

Thank you very much, Jim.

MR. ROYER: Thank you for taking the time and doing it. We greatly appreciate that.

MS. ANDRADE: Jim, also I want to echo. Thank you so much for the visit a couple of weeks ago. I certainly enjoyed that. And I do want you to know that I am looking at some of the issues that you've brought up and seeing what support we can give you. Thank you.

MR. ROYER: Thank you.

MR. JOHNSON: Mr. Royer, as you know, I'm new to the area. When do I get my helicopter ride?

(General laughter.)

MR. ROYER: Any time you want it, Mr. Johnson, we'll arrange that.

MR. JOHNSON: I wanted to echo and endorse and just magnify what you said about Gary Trietsch and the Houston District, and this is really spread across all 25 of our districts, but certainly in our larger metropolitan areas. They get banged on from every side and I compare it often to being on the school board. I mean, in most instances they just can't win, and yet they are phenomenal in what they're able to do.

They listen with concerned ears, they're mindful of who they're listening to, they do it in a very civil way, they have to make decisions, they have to make recommendations, and they accomplish an extraordinary amount given all the pressures that are brought to bear on them. And I just echo and support what you've said.

Help me or ask one of your experts to help me. The congestion index, currently 139?

MR. ROYER: That's the estimate from TTI.

MR. JOHNSON: The stated goal of the Texas Metropolitan Mobility Plan is to get to 121, and did I correctly interpret that even with the adoption of the Texas Metropolitan Mobility Plan after it's up and done, the Houston area's congestion index will go up to 148?

MR. ROYER: That's correct. If we invest the $61 billion of visible funding that we believe we get, a mix of TxDOT money, toll road money, county bond issues, federal money, and we invest that $61 billion between now and 2025, our congestion index, given the forecast, would grow to 146.

Oddly enough, that's not possible. If it gets to 146, economic growth will be stifled. I know there's problems in education; there's problems in healthcare; there's problems all around. If we can't figure out how to maintain a growing economy, we'll never have the resources to deal with those other problems.

And transportation is the backbone to economic development. If we can't solve that problem, we won't have the economy to figure out how to fund the schools, to figure out how to deal with healthcare.

MR. JOHNSON: I think that illuminates how large the challenge is. I mean, it's not only the Houston area, it's the Metroplex, it's the spinal cord of Texas, Laredo, San Antonio, Austin.

MR. ROYER: The urban areas have the same problem. An additional issue, Commissioner Johnson, is that the 60-some-odd billion dollars of unfunded work, a large part of that is off-system. It is upgrading the major thoroughfare system of our urban areas. Same situation in our other urban areas: we have got to upgrade the major thoroughfares so they carry more traffic. We've got to take major thoroughfares and convert them into super streets.

They are off the TxDOT system, that's why we seek that local option transportation tax as a revenue stream so we can upgrade those facilities so that when you're leaving your house and going to the hardware store, you're not going to get on the interstate highway but you can get from your house to the hardware store.

We have a major thoroughfare system that was basically designed or conceived in the 1950s. We need one that's designed for the 21st century. Partial grade separations, different ways of developing major thoroughfares, and that's the off-system stuff where a large part of that unfunded $60 billion needs to be invested.

MR. JOHNSON: Well, my last observation, the GCRMP and its cohorts, be they the Houston-Galveston Area Council, this is a very interesting and comprehensive plan, and I think it points out that the solutions to these challenges are multimodal, what you've considered and proposed. The rail issue, the Port of Houston is a huge economic driver, as you've illustrated, not only for the Greater Houston area but for this state and the country.

We have to take into consideration all modes if we're going to remain where we are and improve upon where we are. So I like the comprehensive nature of what you've presented.

MR. ROYER: Thank you.

MR. NICHOLS: Well, if Houston is its own state, I guess my hometown of Jacksonville is a Third World country. Our petrochemical industry is mixing up a paint can, I think.

(General laughter.)

MR. NICHOLS: It wasn't that funny.

There are no other speakers, I presume?

MR. ROYER: No.

MR. NICHOLS: Thank you, as usual, for an outstanding presentation collectively, and I want to thank the Houston area and the MPO and all the elected officials for all the work that has gone in to a culmination of what we called item number 7 a while ago. You had to sit here and kind of listen to a lot of that stuff.

But what began three years ago with local allocation of funding now is a reality. Local input and putting together locally the prioritization of projects with the congestion index and the fiscally unconstrained plan, for the first time Houston can actually see the dollars of shortfall, and all this came together today.

And I think the timing for you to be here is just perfect, I just really do, because now all of us working together can focus on the shortfalls. I very much appreciate it.

To be more specific kind of on a couple of things. One was in the development of the toll roads in the Houston area, the Harris County Toll Road Authority, as well as the North Texas Turnpike Authority, have been treasures of the state and the community or region. The Harris County Toll Road Authority is one of the pioneers out there that developed it and worked it and such.

What I think we see evolving is as each county surrounding Harris County -- I think one of the words that was used earlier, the three Cs of roads, one was "continuous." As a region those roads need to be expanded further out, so Fort Bend County forming its own toll road authority and I guess Montgomery County and some of these other counties are going to be right behind there.

And as I understand it, Harris County Toll Road Authority in most cases would be the managing operator or administrator, but you're going to have a collection in a region of individual counties. And in the regional mobility authority that the state set up, at some point collectively the region needs to start thinking forward as those tolls were collected -- in the provisions of the law on RMAs, as you develop surpluses, that money can be used for other transportation projects which could be rail.

MR. ROYER: You're exactly right. And Commissioner, I think that thinking is beginning. Harris County Toll Road Authority works in concert with the Fort Bend County Toll Road Authority to build the pieces of road that have connectivity, and then while it assists the Fort Bend County Toll Road Authority in getting its first project up so it can generate its own revenue stream.

Same with the Brazoria County Toll Road Authority and will be with the Montgomery County Toll Road Authority, the county judges and toll road authorities are working very, very cooperatively.

As far as an RMA, the initial talk about a regional mobility authority in the whole region starts to revolve around that freight rail issue. That is truly a regional issue and it has tremendous benefits to the region, tremendous costs, obviously, but those conversations have started in concert with TxDOT and with your freight rail program.

MR. NICHOLS: And I don't know how you're going to resolve that, but every time I talk to somebody it seems like there's an effort to work in that direction because resources of revenues from that could go into freight rail relocation and go into other rail or transit or any number of transportation projects. So that's something to look forward to.

I know that in discussions last night and from some meetings on Monday, you are on a short timetable to accelerate some rail studies, and although that is not an action item, I think the commission would look very favorable toward supporting whatever we can study-wise that makes sense within the realms of what we have authority to do to maybe support some of that. And I assume Gary Trietsch and the district is working with you together on that.

JUDGE ECKELS: We had our first meeting on that after our meeting in Houston with the Surface Transportation Board yesterday, and we'll get with Gary and bring that back to you hopefully by the next meeting.

MR. NICHOLS: I think you'll see very favorable response.

The third thing and I guess the last thing was I know particularly in the urbanized areas where the greatest congestion is, local option transportation taxes are a real important issue, and I will tell you that you will find the commission very supportive of local option -- as long as it's a local option -- transportation tax for a wide variety of reasons.

And I will tell you individually I will do all I can to help you and the other regions to do that, but if the component in there is a local option fuel tax, I will be just the opposite. I don't believe in a local option fuel tax for a long number of reasons which I don't really want to go into today, I don't think it would be appropriate. But I really truly believe there's a long list, and once you saw all those, you might feel a little differently too, but then again may not.

MR. ROYER: I look forward to exchanging views on that.

MR. NICHOLS: But other than, it's always great to see you, and thank you very much for the reception last night.

MR. WILLIAMSON: Jim, I want to also thank you for the time that you spent with us yesterday talking about freight rail and the reception last night. All of your reports since I've been on the commission have been good but there are some things in this report that strike to the heart of some stuff we're trying to do statewide, and I want to say thank you for putting together that kind of report.

I think we're getting to the point in this state where we understand we're all for one and one for all. The Port of Houston is as important to Weatherford as the Port of Laredo and the Port of El Paso. What's good for Houston is good for Weatherford, and what's good for Weatherford is good for Jacksonville -- God forbid.

(General laughter.)

MR. WILLIAMSON: All rising boats are lifted. So thank you very much.

And Judge, thank you. It's always good to see you. I'm glad you didn't bring your running buddy David Dean with you.

JUDGE ECKELS: We'll bring him next month.

MR. WILLIAMSON: And for everyone from Houston who gutted it out and watched the morning's activities, I want to tell you that we appreciate very much. We hope you learned some things and can take them back and spread the news.

We are most definitely going to take lunch and we're most definitely going to finish this agenda today. So those of you who are interested in things to follow, we shall come off of recess in 32 minutes and 8 seconds.

(Whereupon, the meeting was recessed, to reconvene this same day, Thursday, October 28, 2004, following a lunch break.)

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

(2:35 p.m.)

MR. WILLIAMSON: We appreciate your patience. Members, we'll turn the agenda back to Mr. Behrens, and I think we were at item 5, Mike?

MR. BEHRENS: That's correct. We'll go to agenda item number 5, a discussion item regarding transit operating interest in financing alternatives and also talking about the SIB bank for transit and toll credits for transit. Sue?

MS. BRYANT: Thank you. Commissioners, Mr. Behrens and Roger, good afternoon.

My name is Sue Bryant and I'm the Public Transportation Division director.

At the August commission meeting there was a discussion item on additional resources in terms of utilizing the State Infrastructure Bank and toll credits for rural and small urban public transportation providers. At that point we were asked to please pursue both those topics further and get a sense from the providers what the level of interest was.

So in the meantime we did canvas the providers and regarding the State Infrastructure Bank, even though the response was not what I would consider overwhelming -- we only received about 30 percent response from the providers -- we did receive what I would also consider an enthusiastic response from those that did respond.

And that interest totaled just a little over $39 million for the SIB. Of that $39 million, by far most of that interest is actually coming from the small urban systems who expressed an interest in $37 million out of the total that came in of $39 million.

The amount of potential projects that were submitted back to us comes to $61 million. So it is not just, of course, accessing SIB, it is also accessing other funding sources. And I'd like to recognize the Texas Transit Association, the providers that responded, for becoming more creative and more interested in other funding sources because that was actually a good response.

The type of projects that were considered or that came in in terms of expected interest were extremely varied -- it's pretty difficult to categorize them in one way or another -- and they ranged considerably from multimillion multimodal park-and-ride facilities to a pump head for ultra low sulfur diesel at $10,000. So what providers expressed an interest in was extremely varied, as you would expect, considering the diversity in the providers and the clients they serve as well.

We also pursued asking the providers about their level of interest in toll credits. We received approximately the same percentage of response in terms of the numbers of providers that responded. In this case we got a response from 22 percent and in this case they expressed an interest of receiving a total of $5.5 million in toll credits.

Again, the types of projects that they were interested in using the toll credits for were also extremely varied and ranged from a few like $36,000 to a few projects that were over a million dollars.

We are not going to be able to respond to any details about the potential projects because at this point we did not ask for proposals or any detail in this regard, we just wanted to find out what the level of interest was, what kind of uses might be put to these resources, and what kind of needs there seem to be out there.

In terms of toll credits, this was not part of the survey but we did look at internally what kinds of criteria might be considered before any toll credits might be allocated. And these were derived from previous discussions with the Public Transportation Advisory Committee in terms of their interest, not in terms of a specific question that was asked but just in terms of what are some of the issues out there.

So this is certainly not a complete list by any means but the criteria is something that might be looked at in terms of allowing for or allocating toll credits, and that criteria would certainly include things like coordination, being part of an overall larger state plan, contributing to air quality, cost efficiencies, tying into other Health and Human Services, certainly enhancement of services, and also certainly performance.

One of the additional questions that we were asked to look at was what is the limitation or what is really the Federal Transit Administration's position on allocating toll credits and how restrictive is this. And in looking this up and in conversations with the FTA as well, this is not something that is actually in law but FTA does have a policy whereby the toll credits are used for capital projects and not for operating projects.

There is somewhat an exception to that because some operating expenses can be capitalized and therefore may be able to have toll credits used in conjunction with them, and some of those expenses that can be capitalized under FTA's definitions would include those that might generally be considered operating.

Some examples would be: preventive maintenance, purchase of service, capital costs of contracting, leasing of capital assets, and some costs of providing ADA paratransit service.

Those were the primary questions that we were asked to research for this meeting, and if I can help answer any questions, I'd certainly be glad to.

MR. WILLIAMSON: Who's first? Ted?

MR. HOUGHTON: I was noticing not quite about a third of those who responded, out of that third they seem to weigh heavily on multimodal, and out of multimodal you have small urban systems and rural systems. Now, multimodal in rural systems?

MS. BRYANT: And again, we combined the listing of projects so I don't have in front of me which provider submitted for what kind of project.

The multimodal facilities, especially what you have listed there, is park and ride. Those obviously are coming from the small urban systems and generally not rural.

MR. HOUGHTON: Describe to me a small urban.

MS. BRYANT: Small urban would be like Lubbock.

MR. HOUGHTON: So they want to park somewhere and then ride to school at Texas Tech or something like that.

MS. BRYANT: I didn't go to Texas Tech.

MR. HOUGHTON: Neither did I.

MS. BRYANT: Another example, and this is something we were actually very glad to see come in as a possible SIB project, we had to decline a project earlier this year in terms of Inner City Bus Program. Brownsville had submitted as part of the Inner City Bus Program a multimodal facility, and unfortunately the project was several million dollars, the Inner City Bus Program itself is only a few million dollars, and that project did not make the Inner City Bus Program because we wouldn't have had any money left if that was taken up.

So at that time when we let Brownsville know that that one project would basically wipe out that whole program, we also let them know that the State Infrastructure Bank could be a potential for their use and we were real glad to see that they turned that project in as a potential SIB project.

MR. WILLIAMSON: Hope?

MS. ANDRADE: In your report you mentioned about paratransit services when you were talking about what toll credits may be used for. I didn't hear your full statement on paratransit services.

MS. BRYANT: I'm so sorry.

MS. ANDRADE: That's okay.

MS. BRYANT: FTA by policy has a limit, basically a framework for what they are currently allowing toll credits to be used for. It's for capital projects but some things under FTA can be what they consider capitalized, and I don't have the details in front of me but there is some allowance for ADA paratransit services that even though that might be considered operating under most definitions of that, that there is a potential of using toll credits for enhancing paratransit services.

MS. ANDRADE: The question I have is so the federal law is not clear on what it defines other than capital expenses. Is that what you're telling me? Because you're saying that some things may be considered.

MS. BRYANT: They may be capitalized. They still need to be capital but they may move over into by capital definition.

MS. ANDRADE: And we're sure of that?

MS. BRYANT: We know that from experience and we have communicated with them. Now, further definition of specifically what items can and can't be capitalized, I gave you a list of examples but we would want to make a better, more concrete list.

MS. ANDRADE: Yes, I'd like that. I just don't want to assume that we could use something and then find out that we can't if we were to ever consider it.

MS. BRYANT: Correct. Thank you. Will do.

MR. WILLIAMSON: Other questions?

MR. JOHNSON: Sue.

MS. BRYANT: Yes, sir.

MR. JOHNSON: The questionnaire was sent to transit authorities which are all public agencies. Is that correct?

MS. BRYANT: Yes, sir.

MR. JOHNSON: And to urban and rural operators who are private.

MS. BRYANT: Public.

MR. JOHNSON: They're also all public?

MS. BRYANT: The rural and small urban, these were all sent to public entities, yes, sir.

MR. JOHNSON: Okay, good. Is there anything in the response that surprises you?

MS. BRYANT: No.

MR. JOHNSON: What surprised me a little bit was what I consider to be the low amount of requests for toll credits, $5-1/2 million. You know, we get those requests in for various, generally rolling stock for the federal match which we've had a tendency to support before, especially in nonattainment or near-nonattainment areas for alternatively fueled vehicles.

That number just kind of looked low especially as compared to the very large number that came in under the potential funding of a loan from a State Infrastructure Bank.

MS. BRYANT: That's true. The toll credits are used, however, as match since they really can't pay for bulk of the project.

The other thing in terms of not being maybe so much a surprise is that some of the projects listed there are really kind of one-time projects. In other words, there's a mix here of some of those things that there would be need to be replacement year after year, and some of the things, for example, a park-and-ride facility that would certainly be a one-time use of the toll credits.

MR. JOHNSON: Well, I guess part of my surprise is the loan, most of the banks that I'm familiar with like to be repaid and the SIB loan should be repaid and the toll credits, even though it's not actual cash, there's no repayment. So maybe I'm confused or just my thinking is not in line with these operators.

But I appreciate your report.

MS. BRYANT: And I wouldn't want to speak for the providers.

MR. JOHNSON: No, I wouldn't either. Thanks.

MS. BRYANT: Thank you.

MR. NICHOLS: On this SIB part first, in that survey, the $39 million, I guess one of the things that kind of stuck out was what Commissioner Houghton was talking about, $35 million of the $39 million was for park and rides.

MS. BRYANT: Yes.

MR. NICHOLS: Whereas I had anticipated they'd use it for bus financing or something to get them across a couple of budget periods.

MR. WILLIAMSON: Well, I had that same question, and just let me interrupt you, Robert, and say that I'm assuming that this park and ride to acquire perhaps the land or lease the land so that they would have a park and ride.

MS. BRYANT: I'm going to hesitate to assume here so I'm actually not going to. That's one of the differences in terms of these projects came in simply by name only. In other words, at this stage of the game we certainly didn't ask for proposals or detail or budgets, and so when someone said we're interested in a SIB for a park and ride, they just gave us a total dollar amount.

MR. NICHOLS: Since we're talking about rural transit and small urban transit, I normally think in terms of rural transit being I don't have a car and I need a ride, or I can't drive or something like that where somebody needs help if they're elderly or something to get to the store or doctor or something like that or just get to work. So I don't really think in terms of a park and ride being I'll drive my car to the parking lot and you have the bus pick me up there.

MS. BRYANT: Those particular projects, the $35 million, I'm not going to say it's all but those largely came in from the small urban providers, not the rural providers.

MR. NICHOLS: So we're dealing with people who do have cars, who can ride in that situation, drive if they wanted to, but we're trying to get cars off the road, therefore, get them on the bus.

MS. BRYANT: Correct. And areas that are certainly growing significantly and are starting to experience some congestion.

MR. NICHOLS: This is kind of our first run at this thing.

MS. BRYANT: Yes, it is.

MR. NICHOLS: With what you have seen, do you think we do need to go ask the legislature to set up money for a SIB for transit?

MS. BRYANT: Yes, sir.

MR. NICHOLS: To what extent, how many dollars?

MS. BRYANT: To $40 million at this point, because for a couple of reasons. One is that these are all needs that are certainly not going to go away, the needs are only going to continue to grow.

And second, we did get a relatively small percentage of response, and so there is also an untapped area that I believe we should go back out to and determine did you not respond because you have no interest, did you not respond at this time but you'd have subsequent interest later. So we would need more information.

MR. WILLIAMSON: Were you so shocked that TxDOT wants to help you find money? I mean, what was it?

MR. NICHOLS: On payback period, the transit operators work on a year-to-year budget, and some of the SIBs that we have done for communities, counties and cities where they have ongoing revenue streams, property taxes and things like that, if they need a five-year or ten-year or 15-year type of loan to get them across a big hump for a transportation project, that's one thing. How many years are you looking at on some of these paybacks?

MS. BRYANT: I'm sorry, Commissioner, I really couldn't answer that. That would be a detail in a particular project and it would vary so much across this list. Obviously a park and ride would be a considerably longer term loan than one $10,000 pump head, for example.

MR. NICHOLS: All right. That's all the questions I had. Thank you.

MR. WILLIAMSON: I think I know what's going to happen -- I mean, I believe I know in one case one of your respondents plugged in the cost of leasing a property and buying a couple of different types of vehicles to open up a park and ride where she believed there was a market for that, mostly to get people to the doctor over in Fort Worth and not so much to get people to their workplace.

But here's what I could see happening. I'm a transit operator in Parker County, Texas, and I am proposing on health-related transit contracts. I'm going to come to the TxDOT SIB and say I have successfully proposed on these seven contracts, I know I have a cash flow stream for the foreseeable future to take care of these groups of people and now I need to borrow $10 million to buy two taxis, three buses and rent space to operate my health services transit. I think that would be one place where we would see this kind of stuff.

Correct me if I'm wrong, Mike. Did we not go ahead and plug in a request for a public transit SIB in our LAR?

MR. BEHRENS: Yes, $40 million.

MR. WILLIAMSON: We put in $40 million initially.

I think that -- and certainly the other commissioners will need to speak -- I think maybe we ought to start drafting something comprehensive and let's shoot for something twice that amount, in the $100 million range, and let's begin to identify our legislative allies who would be incented to support this kind of program.

And I think it's a natural carry-on to being assigned responsibility for health-related transit services. I think we can sell this; I think it will be an easy sell.

We may have to pay them back in four years, but that's okay if we do this right. We can get some operations started and we can afford to pay them back.

MS. BRYANT: And get some needed service out on the streets.

MR. WILLIAMSON: I had the same surprise as John did about the low amount of toll credits versus the high amount of debt, but I guess the more you look at the park-and-ride business, you understand that.

I asked the question myself when I was reading the document the other day and I listened to your explanation, but going back to FTA comments on restrictions on toll credits, I asked myself the question: So how does one get an exception? And you gave me some known exceptions, but can I infer that we could do a grant program where we turn around to the FTA and say we want to use our toll credits for this test, will you approve it? I mean, I inferred that we're not prohibited from doing that.

MS. BRYANT: And Transportation Planning and Programming has also pursued this question with FTA on a more specific basis and as yet FTA has not responded to that.

MR. WILLIAMSON: Well, Robert and I have always been interested in taxicabs in small-town Texas. I still think about that pilot program to have taxicabs on standby.

MR. NICHOLS: With vouchers.

MR. WILLIAMSON: And I still think that there's some application for transit operators for that line of business if we so choose.

MS. BRYANT: It would be better to ask than not to ask.

MR. WILLIAMSON: Okay, members, other questions?

(No response.)

MR. WILLIAMSON: I think we're not set up to take a vote on this matter, but is it the consensus that we want Sue to develop some language for us to look at?

MR. NICHOLS: Sure.

MR. WILLIAMSON: Identify our partners in the legislature and if our partners/stakeholders out in the world and let's put a coalition together and put Coby to work.

MS. BRYANT: That's great. Thank you.

MR. WILLIAMSON: One of my first chairmen, Samuel Russell, has something to comment about on this matter. Did you used to represent Texarkana, or was that further back to the west?

MR. S. RUSSELL: that's too close to Arkansas and Louisiana for me to have represented it, Mr. Chairman. I was right next to it, though. In fact, my district did border on Louisiana at one point.

(General laughter.)

MR. S. RUSSELL: Thank you very much, Mr. Chairman, members of the commission. I'm Sam Russell, general counsel for the Texas Transit Association.

If I might refresh your recollection, back earlier the Texas Transit Association, before the PTAC meeting I believe in June, did a comparable survey of members of the association. I think we had at that time about a 60 percent response that was pretty much specifically directed towards the use of toll credits. And out of that 60 percent I think we had in the neighborhood of $6 million that would accommodate the capital projects that those respondents had on the books.

So I know in August when I was here I mentioned to you that we recommended that you set aside $10 million in toll credits for those capital projects covering fiscal years 2003, -4 and -5. So I think the figure that Ms. Bryant has is somewhere in line with what of course we did initially and just interpolating that 60 percent to 100 percent is how we came up with the recommendation of $10 million in toll credits.

We certainly, as an association, support programs that advance public transportation, and of course funding this SIB or the public transit side of SIB we think will advance public transportation.

The concerns that have been expressed to me by particularly, I guess, rural providers is that of course their revenues are limited to what the appropriations process over here across the street does and what Washington does. And I guess you really never know from one year to the next or one session to the next whether or not that's going to fluctuate.

So some of the rural providers are concerned if they commit resources towards capital projects that they would otherwise use for operations, they're going to have to reduce, in all likelihood, their services to pay for those capital projects that could have been accomplished with the use of toll credits.

So I would suggest to you and I know James Bass and TTA have kind of made a commitment to each other to work together to try to come up with some guidelines and some recommendations on the SIB, but there may be some way that you can work the SIB and toll credits in conjunction. Maybe use the SIB for the 20 percent match to where if somebody needed ten buses they could go on and get ten buses rather than having to just cut back to eight because they didn't have the 20 percent. So there may be some way that we can use both of these things together to benefit public transportation.

And we're certainly here to tell you that we appreciate what Ms. Bryant and the Public Transportation Division is doing and look forward to continue to work with them however we can.

MR. WILLIAMSON: That's an interesting concept. Questions of Mr. Russell?

(No response.)

MR. WILLIAMSON: Thank you, Sam. Always good to see you, buddy.

MR. RUSSELL: Good to see you.

MR. WILLIAMSON: You're always welcome here, you know that.

MR. BEHRENS: We'll move on then to agenda item number 8, and this will be two additional discussion items. The first one will be led by Carlos Lopez concerning our safety bond program that we're putting together and intend to utilize bonds to fund that program. Carlos?

MR. WILLIAMSON: Mr. Behrens, I had a call from a financial analyst a few days ago and he asked me why we had changed the name of our safety bond program from Ogden-Pickett to Saenz-Lopez, and I didn't know anything about that. Do you know anything about that?

MR. BEHRENS: I wasn't made aware of that. They might have a conspiracy.

MR. WILLIAMSON: Is Mr. Saenz here today?

MR. BEHRENS: He's probably not here because he figured you were going to ask him about it.

MR. JOHNSON: Not any more.

MR. WILLIAMSON: I just wondered. I'm sure it was a mistake.

(General laughter.)

MR. WILLIAMSON: All right, Carlos.

MR. BEHRENS: Maybe Carlos wants to comment on that.

MR. LOPEZ: All right, I will.

Good afternoon, commissioners, Mike, Roger.

The discussion item before you deals with the voter-approved Proposition 14 bonds. Back at the beginning of the last legislative session, Mike got a phone call from Senator Ogden and he asked Mike if the legislature was to pass a bill that provided a $5 billion safety program, what would you do with the money. Then Mike called us and after the shock wore off, we started getting to work on what we would do with $5 billion.

So we put together a program of a number of items that we do to improve safety around the state, doing things like median barriers, traffic signals, left-turn bays, converting frontage roads, putting rumble strips down, all the things that we've done over a number of years to help reduce fatalities.

Well, ultimately that bill got rolled into 3588 and became the Prop 14 bonds, and the way the wording came out was that it was a $3 billion package, no more than a billion a year, for safety and mobility projects with at least 20 percent having to go towards safety-related projects that improved high-accident locations.

Well, earlier this year Amadeo called in May and said, I think we're going to want to move out of the safety part of these bonds first, so go ahead and get to work. So what we did is we dusted off that straw man that we had put together for Mike and we called the TTI safety center -- in fact, John Mounce, the guy that looked at it for us, is in the audience right now -- and we asked them to look at our proposal to see if it made some sense, to see if the kind of projects that we had outlined would actually give us the best safety benefit.

And they did a real good job of doing an analysis for about a month or two, and they narrowed down that long list of projects to some fewer categories that could get us the best safety benefits.

One of the interesting things that came out in John's report, he did an analysis of crash rates on our narrow roads, and we've got about 30,000 miles of roads in the state that are less than 20 foot of width. And he did the crash rates for roads that are 18 feet wide, 20 feet wide, 22, 24, and you see all these real high crash rates, but when you got to the 24-foot roads, you saw that crash rate almost get cut in half.

So what happened there is that at 24 feet we can put an edge line down on a road and that gives better guidance to the people driving, especially at night. So we knew that whenever this program was put together, we knew pavement widening was going to be one of the things that could get us a lot of safety benefit.

After we got the report, we sent that out at the beginning of August to the districts, we narrowed it down, and we asked the districts to give us candidate projects in four areas. We asked for pavement-widening jobs; median barrier projects, either concrete or wire rope; we asked for left-turn bays and for grade separations.

And the districts did a real good job of getting those projects in by October 1. In fact, that last day that they were due, we had people driving their projects in because we told them that they couldn't blame the mailman if they got in late.

Every district submitted projects, and that call translated into $1.8 billion worth of requests and about 945 projects.

MR. NICHOLS: Is that just the width of the road or is that all the categories?

MR. LOPEZ: That's all the categories. In fact, the way it broke down into $920 million for grade separations alone, $650 million for pavement-widening projects, $200 million for median barrier projects, and $50 million for left-turn bays.

So what we're doing right now is we're looking at all the estimates that came in, trying to level the playing field, making sure everybody's estimates are kind of right because sometimes they tend to come in a little low, and we're going to be using our Safety Improvement Index -- which is the same index that we use for our Annual Safety Program -- to rank all of these projects.

And what the Safety Improvement Index takes into account are the number of crashes on a road, the number of fatalities, the type of improvement we're going to be doing, and in fact, it boils it down to a benefit-cost type of index.

The other difference from our Annual Safety Program that we're going to try to do here is that like projects will compete against like projects. So the grade seps compete only against the grade seps, pavement widenings only against the pavement widenings, and that will give those larger cost projects a better chance to compete and maybe get some of this funding.

Ultimately when it's all said and done, we'll probably come back to you in January or December with somewhere between a $300 million and a $600 million program. Don't know exactly where all the dollars will go in each of those categories but we want to see how the Safety Improvement Indexes shake out.

That program will also most likely include some leftover projects from our earlier program call for our Annual Safety Program that were left on the table that we could not fund. You might recall earlier this year we did a $40 million program to comply with a rider from the last session to spend more money on safety.

There were still a lot of projects left on the table. We'll probably pick some of those out too that have high Safety Improvement Indexes and include that in that program of work that you will see in a couple of months.

We have asked the districts to be very aggressive with these projects. We have told them that anything that they get selected, they have to let -- except for the grade seps -- they have to let by December of '05 because we want to make sure these safety improvements get down on the road just as fast as possible.

We will also use our new Crash Records Information System to track these projects. We're going to know what the "before" data is on these roads; after they're built we're going to have that new timely and accurate data to see what the "after" situation was. And to some future legislative session we're going to be able to say this is what we did with the Prop 14 bonds, this is how many lives we saved, this is how many injuries we prevented, so we can show what we did with safety.

I think of all the things that we got out of 3588, all the new tools, I think it's going to be a real significant message for TxDOT to send that among the first bonds that we issue will be for safety purposes, and I think that's a real important thing that will re-emphasize that safety is indeed TxDOT's first priority.

That's all I have and I'll be glad to try to answer any questions.

MR. WILLIAMSON: Who's first? Ted?

MR. HOUGHTON: Where did the majority of the projects come from?

MR. LOPEZ: They came from all over the state. East Texas submitted a lot of projects just because they have a lot of narrow roads in that part of the state, and we saw a lot of pavement-widening projects from that side of the state, also some grade separations.

Going down the list, the district that submitted the most projects was Austin, $222 million worth.

MR. WILLIAMSON: Bob Daigh, he's aggressive.

MR. LOPEZ: Yes.

MR. WILLIAMSON: Didn't you hear all those witnesses earlier?

MR. HOUGHTON: And part of the analysis, Carlos, will be the cost benefit, bang for the buck.

MR. LOPEZ: Yes.

MR. HOUGHTON: And then the history on that piece of road or grade separation.

MR. LOPEZ: That is correct.

MR. WILLIAMSON: Other questions, members?

MS. ANDRADE: I have no questions.

MR. JOHNSON: I do. Carlos, you mentioned the Crash Records Information System. To my way of thinking, this sort of works arm-in-arm with that.

MR. LOPEZ: Right.

MR. JOHNSON: Are we pretty close to up to speed to current in terms of the data input in the CRIS?

MR. LOPEZ: Until CRIS comes online, we're unfortunately still pretty far behind in our accident data. Right now the last full year of accident data that we have is 2001.

MR. JOHNSON: So that's the data that we basically are trying to interpret and put into our Safety Improvement Index. So it's a little bit dated.

MR. LOPEZ: It's a little bit dated, but we have also allowed the districts to submit newer crash reports, hard copy crash reports that they know of fatalities and injuries that have occurred recently on that roadway. So we want to try to take as much new data into account, but without a very fully automated system that can do that easier, it would obviously be easier if we had CRIS online right now, but it's coming.

MR. JOHNSON: I may have missed this. Have you come to a conclusion on the four improvement areas a ratio or percentage that's going to be devoted to each? Are they all 25 percent, or are the median-barriers 15 and grade separations 32?

MR. LOPEZ: That's still unknown at this time. In the report that TTI did for us, we asked them to give us a scenario on a $600 million package how they might break the dollars out, and they came out with 50 percent of any amount that we do ought to probably go to pavement widening, simply because we'll get a good safety benefit out of that.

We'd probably like to stay somewhere around there, but we want to see how those Safety Improvement Indexes come out on these projects, and then if we see some higher Safety Improvement Indexes in the other categories, we'll try to shift some money over there, and see if administration and the commission likes what we propose.

MR. JOHNSON: Not to put you on the spot -- and maybe Carol will be asked up here to answer this question, the award-winning -- when do we expect to be current on the Crash Records Information System?

MR. LOPEZ: We expect the Crash Records System to come online probably February or March.

MR. JOHNSON: Of '05?

MR. LOPEZ: Of '05. When it comes online, we ought to have through '03 data complete, so right away we're going to gain a couple of years in newness.

MR. JOHNSON: Then how long will it take us, or will there always be a 12-month lag? Are you talking calendar '03 or fiscal '03?

MR. LOPEZ: Calendar '03.

Carol, why don't you come on up.

MS. RAWSON: They promise me '03 is going to be in. And then what we're estimating is that once it comes online, that's whenever DPS gets to start using the system, it becomes a productional system.

In looking at, the totals that they think they can pull down the calendar year of 2004 in about six months. It's learning how to do the new system, getting it up and getting DPS's people all ready to go. So if it comes up February, maybe by fall of next year we'll have 2004 in, and at that point we'd be maybe about nine months behind.

But the thing about it is our backlog is going to start coming from both sides. We're going to start pulling that paper that's coming on a daily basis, but whenever CRIS comes up, we're going to be able to accept records electronically. And a number of cities, the City of San Antonio is the first city that's going to come online that they have an electronic database, and what they do is they already enter all this stuff, so why did DPS have to enter it twice.

So what they're going to do is provide it electronically, it's going to go into the CRIS system, be validated and get in. So we're going to kind of work from both ends. We're going to have that 2005 coming from this end and the 2004 coming from this end, so it's going to come down. We hope by 2006, if everything goes the way it was, we're going to hope to be no more than 30 days behind.

MR. JOHNSON: So that's when it's going to be mature, let's say.

MS. RAWSON: Correct, and all the backlog is caught up.

MR. JOHNSON: So it will be about a 30-day lag.

MS. RAWSON: Correct. And that's also get the officers to put those records in. They've never been held accountable for this so it will be interesting because by law they're supposed to have them in by 30 days but with the system being two years behind, you really can't tell how quick they're getting them in, so it might turn around for us to do that.

MR. JOHNSON: Thank you. I'm done.

MR. NICHOLS: I was going to ask proportionately between the categories how you are going to arrive at that. You said you thought that the pavement widening was probably going to be about 50 percent of it?

MR. LOPEZ: Correct.

MR. NICHOLS: When you do your Safety Index, that's kind of a relationship between the dollars spent, I guess, and the number of lives, or some type of ratio like that, or accidents?

MR. LOPEZ: Well, when TTI did that analysis for us, they thought we could get a 10-to-1 return, something like that, on a widening type of project. That was right up at the top.

MR. NICHOLS: Even with low volumes like 400 a day?

MR. LOPEZ: Even with low volumes because we're going to be looking at the rates, also, that are on those roads.

MR. NICHOLS: Okay. But then you are still going to have these other categories assigned dollars. How is that going to be determined?

MR. LOPEZ: We're going to look at those Safety Improvement Indexes for all of those categories and see where they come out.

MR. NICHOLS: Just try to work out a proportional amount?

MR. LOPEZ: Yes.

MR. NICHOLS: I have all the confidence in the world you will do a good job on that.

MR. LOPEZ: Thank you.

MR. NICHOLS: I'm excited to get going on it, I think it's great.

MR. WILLIAMSON: I think Carlos is going to be the most popular guy in the department for about two months. And then he's going to be the most unpopular guy in the department for about two months after he has to start telling everybody who didn't make it.

MR. LOPEZ: That's why we're fortunate to have a commission that's willing to take arrows for its staff.

(General laughter.)

MR. WILLIAMSON: Okay, members, any other dialogue or instruction for administration on this matter?

MR. JOHNSON: There are no narrow roads in Cherokee County, are there?

MR. LOPEZ: I'm sure there are.

MR. JOHNSON: That's not what you told me.

(General laughter.)

MR. LOPEZ: Commissioners, if I may, I'd just like to recognize a couple of folks that are here that are working real hard on this program.

MR. WILLIAMSON: Please do.

MR. LOPEZ: Meg Moore is our engineer in traffic -- stand up, Meg -- has all the safety stuff under her and a lot of others, work zone and things like that. And Debra Vermillion who is right next to her is the one going through all 945 of these projects and making sure they're all right. She also runs point on our Annual Safety Program and our Safe Routes to School Program. We call her the "Safety Queen" in TRF, and to coin one of Amadeo's phrases, when it comes to safety projects, if Debra says no, the job doesn't go.

MR. WILLIAMSON: Did they have to sit through this whole thing waiting on us?

MR. LOPEZ: No. We called them when we were getting closer to our time.

MR. NICHOLS: Carlos, let me ask you one more question. Now that you've hesitated so long, I've thought of another question. I know that safety is one of the more important missions we've got, to make sure people are protected out there.

As you start weighting these projects, and you're doing a score of traffic versus cost to save lives kind of thing, I know that in here are going to be some opportunities also for relieving congestion while improving safety. Like some of the grade separations, even though they're safety-related, some of those grade separations are going to reduce congestion more than others.

MR. LOPEZ: Correct.

MR. NICHOLS: And the left-turn lanes and stuff like that. Do you totally just look at the safety or do you also go over here and kind of run a parallel column if this safety project rates up here and all of a sudden it's got a big congestion relief where this one in safety is up here but it does not relieve, and we don't have enough money for all of them, do you take that into consideration?

MR. LOPEZ: Well, right now we're running just purely as a safety program to try to reduce as many fatalities and injuries as we can.

You're exactly right, that is going to be a side benefit, especially on the grade seps, that we will be able to relieve congestion on some parts.

MR. NICHOLS: When we reach the end of the list -- because if $600- is what we've got, that's basically it, that's what the legislature set -- you're still going to have projects. You said you had $1.8- or $1.9- or something like that, so we've got enough to do one out of three -- an interesting number.

You'll have some of those that will have congestion relief, so I would hope that you would take a look at that at the same time.

MR. BEHRENS: Of course, I think by the legislation we're obligated to use up to $600 million; we can go beyond that.

MR. NICHOLS: It's not a cap?

MR. LOPEZ: It's "at least" language.

MR. NICHOLS: You really are going to be popular for a couple of months. Thank you.

MS. ANDRADE: Well, now I have a question. So the $600- is not a cap?

MR. LOPEZ: That is correct.

MR. BEHRENS: At least $600- out of $3 billion.

MR. HOUGHTON: I've got some dirt roads in El Paso County.

MR. WILLIAMSON: We just have to be -- I hate to interrupt this light moment, we just have to be cognizant that this is unlike Mobility Fund debt which we'll have a source to repay it. We're issuing debt today against our gas tax and motor vehicle registration collections four years from now, so we have to be cognizant that whatever programs we advance into this, we're going to have to pay back with interest payments in four years.

Not that there's anything wrong with that, we were prepared to do a small amount of debt against Fund 6, but we just need to be aware of that. I think the instinct is to go out and do them all and get those projects built, but as with all the money that we've all borrowed from time to time, there will be a time when we have to pay it back.

MR. LOPEZ: Thank you, commissioners.

MR. WILLIAMSON: Thank you, Carlos. Good luck. It's a good program, it's an important program, and thanks for your report.

MR. BEHRENS: Agenda item 8(b) will also be a discussion item, and it is on interoperability of toll roads in Texas.

MR. RUSSELL: Thanks, Mike. Good afternoon again, commissioners.

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

About two years ago you all laid down the gauntlet for us related to interoperability. The goal was really two-pronged: not only our Central Texas Turnpike Project that when it would open it should be interoperable, but you really wanted to push that out to all corners of the state with the goal being that our customers, the traveling public, had a seamless process as they traveled throughout the toll roads across the state.

And so we immediately started that discussion, some of the technical and some of the business discussions that we had. David Powell, who is my director of IT and Toll Collections really headed that up for me. And I think those earlier meetings that we had early on between Dallas and Houston -- Dallas and Houston of course had very good mature systems, they had similar toll tags, in fact, made by the same manufacturer, yet they weren't interoperable, they couldn't really read each other's systems.

And so from those very humble beginnings, I think the seeds that we've planted now have really taken root. Dallas and Houston now are interoperable, they're well into the process now of ensuring that not only do they have interoperability between their toll roads but also those airports in those regions.

So I'm going to turn it over to David Powell. David has a very short power point presentation to give you a little background on interoperability, and then give you an update on it.

I should also mention that we have folks here from NTTA as well as Harris County. I think Jerry Hebert had to rush back to Dallas, but Allan Rutter and Rick Herrington are both here. I believe Judge Eckels had to head back to Houston as well, but we also have Fred Philipson in here from the Harris County Toll Authority.

So with that, I'll turn it over to David.

MR. POWELL: Thank you. I'm David Powell, director of Information Technology and Toll Operations for the Turnpike Authority Division of TxDOT.

The mission for interoperability that we determined as a group here is to balance the requirements of many stakeholders and develop a coordinated and effective and efficient interoperability program. At the minimum we wanted to involve the three major toll facilities in the state of Texas being: North Texas Tollway Authority, Harris County Toll Road Authority, and the TxDOT project, the CTTP that are under construction.

This has definitely been a joint effort between the three agencies and I want to commend NTTA and HCTRA for working so hard with us to put this together.

The goals for the traveling public are fairly simple: to have one tag, one account, one supporting agency per account, and to be able to drive anywhere in the state of Texas on any toll road and receive one bill from your supporting agency.

The goals for the agencies are: to achieve economies of scale, have a joint marketability to improve market penetration, and to retain local autonomy and maintain the existing program, so that NTTA and HCTRA and any others that join the program are still in control of their own destiny.

MR. WILLIAMSON: Go back to that slide, please.

MR. POWELL: Oh, sure.

MR. WILLIAMSON: What did you say, so they're in control of their own what?

MR. POWELL: In control of their own destiny.

MR. WILLIAMSON: How does having local autonomy and maintaining existing programs affect positively or negatively your own destiny?

MR. POWELL: Well, the NTTA and HCTRA believe very strongly that they have a good relationship with the customers that use their roads. There are some interoperability programs that would take away their control of their customers and centralize everything in one location.

MR. WILLIAMSON: David, are you telling me that Allan Rutter wants to be on record as wanting to be in control of his customers?

MR. POWELL: In control of the relationship with those customers, between the agency and his customers. I don't want to speak for Allan Rutter.

(General laughter.)

MR. POWELL: Am I missing something here? I'm sorry.

MR. WILLIAMSON: I find it's just odd to use the words. I trust that "in control" was words that came out of HCTRA's and NTTA's mouths, so I'm looking at that and I'm saying this doesn't look very customer friendly to me. Maybe I'm an odd customer, who knows. I've been called that.

Okay, go ahead.

MR. BEHRENS: David, if you'll indulge me for one moment and give me a brief update in Toll Tag 101. Is it correct that in one of either Harris County or the North Texas Tollway Authority the reader emits a signal, and then the other, the toll tag emits a signal to the reader? In one the reader emits a signal and I guess it bounces off the toll tag and comes back to the reader.

MR. POWELL: There are some differences in the two systems, and you're correct. In Dallas, the reader emits a signal and the toll tag absorbs the energy from that signal, and when it's absorbed enough energy, it then broadcasts back to the antenna a unique ID and that's how we know which toll tag that is.

The system in Houston works a little bit differently in that it has a battery and it doesn't have to absorb that energy from the antenna.

MR. JOHNSON: It has its own power.

MR. POWELL: It has its own power, but it is still activated by that antenna. As it enters the read zone, the antenna emits a signal, the tag in Houston recognizes that signal and the battery is used to supply the signal back.

MR. JOHNSON: Thank you.

MR. WILLIAMSON: Go ahead.

MR. POWELL: Speaking of the tags that we're going to use, they do have slightly different tags in Houston and in Dallas, and one of our mandates is to be fully interoperable with those two.

Initially we were looking at choosing one or the other of those tags and trying to accommodate the other technology. In the meantime, TransCore has come up with a new product that's called a SeGo Tag that is entirely interoperable and compatible with the two existing systems.

MR. WILLIAMSON: Who owns TransCore?

MR. POWELL: I'm not sure who the parent company is, if there is one. Oh, I'm sorry, it just changed hands. Is it Roper Industries?

MR. WILLIAMSON: Who did own it?

MR. POWELL: I think they were an independent company, publicly traded. I'm not sure.

MR. WILLIAMSON: Were they a publicly traded company?

MR. POWELL: I believe so.

MR. HOUGHTON: Is NTTA and HCTRA compatible?

MR. POWELL: Yes, they're interoperable today.

MR. WILLIAMSON: They were not publicly owned? Why don't you come up here, and if you don't mind, identify yourself.

MR. HERRINGTON: I'm Rick Herrington; I'm assistant executive director at NTTA.

They were actually going through an IPO process.

MR. WILLIAMSON: Well, let me rephrase my question, let's back all the way up. When was TransCore invented?

MR. HERRINGTON: Actually they bought AmTech.

MR. WILLIAMSON: Okay, stop. Who was AmTech?

MR. HERRINGTON: AmTech was the originator of the RFID-type technology for transponders and tolls.

MR. WILLIAMSON: For just NTTA or for the world?

MR. HERRINGTON: No, sir. They developed the first RFID system to use on the toll facilities. It actually was created to track cows and it was moved to transponders and used to collect tolls electronically, the first time in the states in 1987, actually on the Dallas North Tollway. They had a bridge in another location but the Dallas North Tollway in 1987.

MR. WILLIAMSON: So it was AmTech and then they got bought by TransCore.

MR. HERRINGTON: Yes, sir.

MR. WILLIAMSON: Now, was AmTech a publicly held company?

MR. HERRINGTON: That I don't know.

MR. WILLIAMSON: TransCore wasn't a publicly held company or was?

MR. HERRINGTON: It's currently not a publicly held company.

MR. WILLIAMSON: Was it a publicly held company?

MR. HERRINGTON: No, sir.

MR. WILLIAMSON: So who are the individuals who owned TransCore? Do we know?

MR. HERRINGTON: John Worthington is the President-CEO.

MR. WILLIAMSON: And where does he live?

MR. HERRINGTON: In the northeast.

MR. WILLIAMSON: And do we know anybody else that owns TransCore?

MR. HERRINGTON: That's as much as I know.

MR. WILLIAMSON: Very good. And now they're owned by who?

MR. HERRINGTON: They're in the process of being bought -- they announced the purchase about two weeks ago by Roper Industries.

MR. WILLIAMSON: Who is that?

MR. HERRINGTON: It's an industrial manufacturing company that's not really involved in transportation to date. But they are doing about a 90-day process to actually make that sale final.

MR. WILLIAMSON: Okay, thank you.

MR. HERRINGTON: You're welcome.

MR. WILLIAMSON: Go ahead.

MR. POWELL: Okay, we're talking about the tags. The previous technology was about a $30 tag; with the new technology it's a new sticker technology that will go for less than $10. So all three agencies are very excited to have this new technology available.

Right now we have prototypes that we're testing; they're testing out very well. Rick, I think, has one that he's been testing in Dallas, I know Houston has tested one of the preliminary prototypes, and our system integrator is doing so as well, and we're very happy with the progress there.

So it looks like all three systems will be able to work together seamlessly without any further modification to the lane equipment and the tag readers.

MR. WILLIAMSON: So by implication, our Toll Division will enter into a contract with NTTA and HCTRA?

MR. POWELL: Yes. We will have interlocal agreements with NTTA and HCTRA to specify the business processes and the transfer of funds and all of those back office things.

MR. WILLIAMSON: Pay each of them a fee for processing customers that use our system?

MR. POWELL: Right now the agreement is that we're not going to initially start charging fees but there is --

MR. WILLIAMSON: Now wait a minute. Who do you work for?

MR. POWELL: TxDOT.

MR. WILLIAMSON: I didn't say we're going to charge them, I said are they going to charge us.

MR. POWELL: No, sir, they are not.

MR. WILLIAMSON: Okay, that's what I wanted to know. Initially.

MR. POWELL: Initially.

MR. WILLIAMSON: Will they secondly?

MR. POWELL: The draft agreements allow for the interoperable agencies to bring up the charging of fees at a later point upon the agreement of everyone to begin charging fees.

MR. WILLIAMSON: Allan, why would you do this free? And please identify yourself.

MR. RUTTER: Allan Rutter, deputy executive director of NTTA.

At this point the part of doing it free is one of our missions is to make sure that all toll road agencies in Texas succeed -- that's better for us, it's better for HCTRA -- and if we can do that by at least making that initial interoperability process non-cost to the agencies that participate, it's better that we're interoperable than we're collecting dollars.

The longer that goes, the more we're going to know how much money we're incurring to serve each other, and at that point we can start talking about how we want to share that. But right now it's more important for us that everybody's tags be used everywhere than collecting money for it.

MR. HOUGHTON: Can I ask a question? What does it cost to collect a toll on the dollar?

MR. RUTTER: It depends on for us per transaction. An electronic transaction on our system costs about 11 cents a transaction and about 22 cents for a cash transaction.

MR. HOUGHTON: And that's on the dollar or on the transaction?

MR. RUTTER: It's just the transaction.

MR. HOUGHTON: Regardless of the price?

MR. RUTTER: The cost of the transaction has nothing to do with how much money we're collecting. Our cost of collecting that is the same regardless of how much we collect.

MR. HOUGHTON: So if it's a 50-cent toll, it's 11 cents, if it's $1.50, it's 11 cents.

MR. RUTTER: Yes.

MR. HOUGHTON: So you have an average toll?

MR. RUTTER: Well, here again, the costs we incur are transaction-based rather than percentage of the toll.

MR. HOUGHTON: No. I'm saying what's your average toll. What do you collect on average: $1, $1.25?

MR. RUTTER: At our toll plazas right now we're collecting 75 cents for a cash transaction and 60 cents for a toll tag collection. It averages about, on a weighted average, about 10 cents per mile of our system.

MR. JOHNSON: Allan, it's nice to have you back in Texas.

MR. RUTTER: It's nice to be back.

MR. WILLIAMSON: Brother Nichols and I were just debating the efficacy of somebody who does something for nothing. We're trying to figure that one out.

MR. NICHOLS: We think it's very noble.

MR. HOUGHTON: That's what the conclusion was, it was noble?

MR. RUTTER: Here again, for us to be able to demonstrate that this works, it's in our interest. We have how many, Rick, how many HCTRA folks do we have on our property every week?

MR. HERRINGTON: We're doing about 66,000 transactions a month of Harris County folks on our facilities, and they're doing about 33,000 Dallas folks in Houston.

MR. JOHNSON: Are they lost?

(General laughter.)

MR. RUTTER: They're doing business and we want them doing business on our roads, the benefit of demonstrating this by doing it, I'd much rather have toll road operators in the state determining what the toll collection system is rather than a vendor go to the legislature and say we think there ought to be interoperability and here's what it looks like.

MR. NICHOLS: I think we've come a long way -- and I seriously mean that -- in the last three or four years. I remember having conversations with all three entities when everybody agreed it needed to be done but Houston wanted Dallas to change and Dallas wanted Houston to change and all that kind of stuff, and now we've figured out a way to do it. You are interoperable, we're going to have a third system or whatever, and we're going to make it work, and I think that's a great approach.

As technology moves forward to the next leap, five, eight, ten years or whatever the next one is, I'm hoping that we will get to the point -- and maybe you're going to cover this -- like some of the other states have in other parts of the United States where not just internal to that state does a card work but it works for a multitude of states. Like a Visa card, my Visa card doesn't care what state I'm in, it will take it. And I'm hoping we'll get there.

MR. JOHNSON: Allan, NTTA has how many toll tags issued?

MR. RUTTER: I think about 890,000, approximately.

MR. JOHNSON: And what's the percentage of cash transactions versus toll tag transactions?

MR. RUTTER: On that I'll have to quote on a revenue basis. We have about 32 percent of our revenue coming from cash customers.

MR. JOHNSON: And that's gross. Right?

MR. RUTTER: Yes. But on a given day, particularly in peak periods, on many of our plazas we're having 80 to 90 percent of the transactions going through there being electronic which gets a whole lot higher average speed through those plazas.

MR. NICHOLS: I saw the most amazing thing in Houston when I was on your toll loop the other day on the west side. In the beginning I think when they opened up you had a whole bunch of lanes for cash because those were backing up into the mainlanes and slowing things down, so you had a large percentage of those toll gates being cash with a fewer percentage being electronic. And I had seen it that way where it backed up on the cash down in the mainlanes.

When I was traveling there a couple of weeks ago, I saw just the reverse. The toll tag only lanes were backed up and the cash there wasn't anybody waiting in line there. In other words, it looks like more people keep switching over to toll tags I guess is the point I'm making.

MR. JOHNSON: Can Fred or Rick tell me how many toll tags does HCTRA have?

MR. PHILIPSON: We've got 856,000 active customers with about 1.2 million tags.

MR. JOHNSON: And do you, off the top of your head, know the breakdown between electronic and cash transactions?

MR. PHILIPSON: Yes, I do. On a monthly basis we're looking at about 65 percent electronic total; at peak periods it gets to be more like 70 percent electronic.

MR. JOHNSON: Thanks.

MR. POWELL: A couple of things I wanted to mention from that conversation, you talked about the toll transaction cost, and I mentioned earlier that an average toll transaction might be 25 cents. In our budgeting process, our ETC transactions are more in line with what Dallas has.

MR. HOUGHTON: Well, what I was trying to dispute is some of the information this morning that was getting blown out there that was 45-40 cents, calculated at 20 and 30 percent.

MR. POWELL: And had I been thinking a little faster on my feet, I would have said that in the 10- to 15-cent range for electronic transactions.

As to why would we do something for nothing here, process these transactions and not charge. On one hand, we're not sure exactly how much interoperability there's going to be. We know there will be a lot of interest in interoperability. We could build a lot of systems and financial processes for tracking and exchanging, and I'll charge you a nickel and you charge me a nickel.

We're not sure yet if the expenditure of those funds to set up those processes -- in fact we're pretty sure they would exceed the actual monies traded back and forth, so I think it's in everybody's interest not to do that yet.

But we have put the provision in so that if it gets to that level and there's an imbalance in trade, so to speak, then we will begin to address those issues.

MS. ANDRADE: I have a question. On the electronic tag is it mostly debited to your credit card, there's no such thing as a debit card that they can debit it to? I mean, is it just strictly credit card?

MR. POWELL: Most people choose to use credit card or a debit card, one of the debit cards that acts like a credit card because they can be automatically replenished and that's the most convenient way.

And I think something like 80 or 90 percent of the people that participate typically use their credit card or one of the debit cards that doesn't require a PIN.

We're looking at TxDOT at making that a little more open and available to people that don't have access to credit cards by providing a little bit easier method for purchasing and replenishing with cash here. We definitely want to serve that part of the community as well as everybody else.

MS. ANDRADE: So you could purchase a card and then replenish it when it's gone.

MR. POWELL: Yes, we're looking at kind of like the prepaid phone cards that you buy in a grocery store or wherever. You walk out with it, you stick it on, you spend your $20 and you've got toll money in the account ready to go, and then a replenishment process so they can do that with cash.

MS. ANDRADE: Thank you.

MR. POWELL: In regards to the nationwide interoperability, that's something that is definitely coming. I'm personally serving as a representative for TxDOT on the board of a group called IMNER that is an IBTTA offshoot, and our charter is to implement a nationwide interoperable system. I'm working on the back office software parts and we have other people with the hardware too.

The branding of the system, we have chosen the three agencies have chosen the name TxTAG. We have a logo that will be used to mark the interoperable lanes throughout the state, and this the logo here. So if you're traveling, it's just like your Visa card; if you see Visa on the door, you know your Visa is good.

This will be posted on the lanes that are interoperable so that the traveling public will know if you have a tag that's good for the TxTAG system, it's good where this logo is posted. In addition, TxDOT is going to use this because all the TxDOT facilities are going to be interoperable. We're going to use TxTAG as our brand for our TxDOT electronic toll systems.

MR. HOUGHTON: Is this going to work on international bridges, these fast lanes they're putting on international bridges?

MR. POWELL: The fast lanes currently are using a different technology, but we're talking to the bridges. The City of Laredo is talking about converting their bridges to the same technology so that eventually it's all going to be seamless but there may be some interim periods where we're going to be working on trying to put the thing together.

We've already talked quite a bit about the NTTA and HCTRA current structure for interoperability, and they deserve a lot of credit for getting it out there and getting this all started and putting the system up, and it's working very well. I personally have a Dallas tag. I use it in Houston; I use it in Dallas. It works great in both places.

As we add other agencies, we're adding a TxDOT agency, we've got a lot of RMAs that are showing interest, the natural inclination is to extend this so every pair of agencies has a connection between the two. I won't bore you with the architecture, it gets kind of messy; it goes up exponentially, and we realized quickly that we needed to sit down and plan a little bit better for the future and we've come up with what we call the "Smart Hub Concept."

If you look at this, the red dot in the center is a hub that processes everybody's transactions. Initially those three agencies would be represented by the green circles there, that's each of their respective customer service centers. We've borrowed some terms from the financial agency and called those service providers which is possibly a little bit obscuring but that's essentially the customer service centers of the three major agencies.

Attached to that we have some blue circles there that represent what we call subscriber agencies. Those would represent a system similar like Fort Bend County where Harris County is using their back office and their tags and Fort Bend County has constructed their road but the Fort Bend County customers are actually registered with the Harris County system. We call that a subscriber agency. And this is the architecture that we're moving forward to implement.

These slides just basically say what I was just saying about what a service provider and a subscriber is, so I'm not going to go into the details on that, I think.

Progress to date. Our Interoperability Task Force was formed early in 2004. We meet approximately every month or every month and a half. Again, we have the three agencies as the initial participants, and we're working on jointly developing all the documents and systems to support interoperability in the state as we go into the future.

Progress to date. We have a memorandum of understanding that has been agreed upon which commits each agency to be interoperable. It's been signed by NTTA, it's waiting for the Harris County Court to have its next session for their signature, and it's going to come back to TxDOT for signature so that we'll all three have the MOU in place.

We're beginning to work on the ILAs, the interlocal agreements between the agencies. We've established our goals and have agreed on business rules by which all three agencies will exchange data and transfer funds. That document is still in draft form but basically we've agreed on it. We've set the technical architecture and beginning to work on the detailed system design.

Moving forward, we have some decisions to make on funding, ownership, contract services and so forth on exactly how that Smart Hub is going to be implemented, and then after we do that, we'll be looking for some approvals from the respective agencies. And then we move into the actual system development and testing and deployment.

Because of the schedules that we have with the CTTP opening within a fairly short time frame and also TxDOT has made a commitment to support CTRMA in their projects which could be opening in a matter of months, we do have a contingency plan which is a short-term arrangement between the three agencies that we've agreed on to implement interoperability in the short term to get everything up and running so that all of the TxDOT roads will be interoperable the day they open, with a migration to the Smart Hub plan so we can accommodate the many RMAs and bridges and other entities that are interested in participating.

MR. HOUGHTON: You said interested in participating. Is an RMA mandated to participate where it's all interoperable? They cannot go out on their own and say we're going to have our own system?

MR. POWELL: There's no mandate, no.

MR. NICHOLS: They can have any system they want but if they want TxDOT to participate in any equity at all, they're not going to have as much chance of doing that -- I think is the position we took.

MR. HOUGHTON: But if they do operate individually, then they can go out and have their own system.

MR. WILLIAMSON: I think what Ted is getting at is El Paso probably is a little bit farther away from Dallas. Is that what you're getting at?

MR. HOUGHTON: Uh-huh.

MR. WILLIAMSON: You might be more concerned about being interoperable with a New Mexico system or Republic of Mexico system.

MR. HOUGHTON: Well, not necessarily, that we're all in the same boat together and we don't have the Lone Ranger approach saying, and we're going to go do our own system.

MR. WILLIAMSON: I think we were thinking in terms of between Dallas and Austin. Clearly, if El Paso has got to do something separately for a separate reason, all for one and one for all.

MR. HOUGHTON: That's my point.

MR. WILLIAMSON: We'll make it work for El Paso. Of course, the answer there is just to have a town every ten miles on Interstate 10 between San Antonio and El Paso and then the problem is solved.

MR. POWELL: And that's why when we were looking at the rules we looked at suggestions but not mandates because every project has to be evaluated individually.

In conclusion, we think the Interoperability Task Force has been an effective approach. It demonstrates the commitment of all the participating agencies, it's critical to the success of the statewide interoperability program and we believe we're moving forward. We already have measurable results to show, and as soon as TxDOT is up and running, we'll be able to demonstrate that we're all interoperable.

MR. WILLIAMSON: Okay, Phillip, do you want to return to the podium, please, buddy?

Questions or comments to be directed to Phillip or his staff or the fools he roped into helping him from NTTA? Notice Allan Rutter left -- no, he's hiding.

MR. JOHNSON: He's just shielded.

MR. RUSSELL: It's hard for Allan to hide too. That's impressive.

(General laughter.)

MR. WILLIAMSON: Questions or comments for Phil or his staff or his support group?

MR. JOHNSON: A question of Phil. The SeGo tag which the TTA is going to use in the Central Texas Turnpike, on a scale from one being little to 100 being absolute, what is your confidence level that this is going to be interoperable since it has not been up and running?

MR. POWELL: Well, we have prototypes in hand, so does NTTA and HCTRA, and they have shown to be 100 percent interoperable. I'm not an engineer, I'd say you can never say 100 percent, but if you ever could, this is it.

MR. JOHNSON: It's a little risky saying 100 percent.

MR. POWELL: It's risky to say 100 percent but I have absolutely no doubt that it's going to work perfectly.

MR. JOHNSON: Thanks, David.

MR. WILLIAMSON: Robert?

MR. NICHOLS: No. David, thank you very much. We tease up here a little bit, especially late in the day, so I hope you don't feel uncomfortable. We are very appreciative of the work you do, and the other toll authorities, the work you have done in making this system interoperable. It's really come a long ways in the last couple of years and I think it's going to go even further in the next eight-ten years.

MR. POWELL: Thank you very much.

MR. WILLIAMSON: Phil, just the same concerns I've had from day one, and I understand that it's not a universally shared viewpoint, but what I hear from my former colleagues across the street is the worst thing that can happen to our toll system in Texas -- no offense Allan or to Judge Eckels -- but the criticism to tolls are the lines.

Whether it's the toll tag line or the cash line, it doesn't matter, we all say we can live with this new system but we don't want it to look like New York, so resist the temptation to put up cash boxes, eat your losses, work on enforcement, learn how to catch people and make them pay, persuade them to buy cards but keep it electronic but don't slow people down. Otherwise, the whole purpose is defeated.

MR. RUSSELL: Mr. Chairman, if I could. Last week I was in another state -- I'd better not say which one -- and we were driving on the interstate -- which was tolled, by the way -- and I found it very ironic as I'm driving down the lane to go through a cash lane and the sign said, If you have a such-and-such tag, please exit and slow to 20 miles an hour.

I promise you, that won't happen on ours. If you have a toll tag, you're going to be in that express lane and you're going to get an unimpeded, uninhibited path down the roadway. And if you choose to use manual collection, say on the Central Texas project, you'll have to exit and hit those plazas.

But I found that very ironic that was flipped and you had to slow down to 20 miles an hour to use your electronic toll tag.

MR. WILLIAMSON: Well, I'm just thinking the temptation will be -- and I can see it coming -- where there will be pressure on us to set up cash boxes: one, because working people can't afford a credit card; two, because we need to collect every dime that comes through even if it costs us 11 cents to collect it; and three, because that's what toll roads are. And we just can't do that, we have to resist that temptation.

We have a tax system that if people want to go slow, they can go on the tax system; we've got a toll system and if people want to pay to go fast, they can go on the toll system, no slowing down.

MR. RUSSELL: Chairman, the other thing that you just mentioned we ought to emphasize. We shouldn't be spending $10 to chase a dollar, we shouldn't be spending $100 to chase $10 and running it as a business. We don't intend to. That's going to be critical.

MR. WILLIAMSON: Anything else for this gentleman on this topic, members?

MR. JOHNSON: What were you doing in Kansas?

MR. RUSSELL: Did I say that?

MR. WILLIAMSON: He said he was chasing Dorothy.

MR. RUSSELL: I don't remember which state it was, Commissioner. It was another state.

MR. WILLIAMSON: He was on his way to hunt in Colorado, that's what he was doing in Kansas.

MR. RUSSELL: I don't know if that's on the direct path or not. Must have been New Mexico in that case, Chairman.

(General laughter.)

MS. ANDRADE: Phil, I have a question. We've talked about what it costs per transaction. Do we have, from your association with HCTRA and NTTA, as to how much it costs for marketing?

MR. RUSSELL: I think a short course, last week we heard that in Florida, Florida Turnpike Enterprises spends about $4 million a year.

MS. ANDRADE: Yes, I'm familiar with that, but what about HCTRA and NTTA?

MR. RUSSELL: Do you guys have some idea? The NTTA guys tell me about $500,000 a year.

Harris County, any idea?

MR. WILLIAMSON: Commissioner Andrade, their marketing department is the congestion on TxDOT's roads.

MS. ANDRADE: I just want to keep in mind that we need to think about that also.

MR. RUSSELL: I agree, Commissioner Andrade, we've always talked about that. As a department we tend to be a little more self-effacing, I guess, about this and we don't always tell our story. In this case we're going to have to be very, very aggressive marketers to get them on the road.

MR. HOUGHTON: What caricature are you going to use?

MR. RUSSELL: Got any idea?

MR. HOUGHTON: Maybe we can pencil something down.

MS. ANDRADE: Phil, for me that and the prepaid are very important.

MR. RUSSELL: Yes, ma'am.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Okay, Phillip, thank you.

Michael.

MR. BEHRENS: We'll go to agenda item number 10, we have two minute orders in Public Transportation, and Sue Bryant will present those.

MR. WILLIAMSON: Thanks for sticking it out, Allan, and your staff. Thank you for staying.

MR. RUTTER: It's been fun watching.

MS. BRYANT: Commissioners, Mr. Behrens and Roger, thank you again very much.

This minute order for your consideration is requesting approval to transfer title of a trailer. The trailer was repossessed by the department in approximately 2004; it has been under litigation since then and that litigation is now, for TxDOT at least, we understand completed, and we request title transfer so that the Central Texas Rural Transit District can make use of that trailer.

So the staff recommends your approval.

MR. WILLIAMSON: Any discussion, members? Hearing none, is there a motion?

MR. JOHNSON: So moved.

MR. WILLIAMSON: Is there a second?

MS. ANDRADE: Second.

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

The second minute order is actually an update and a correction to an earlier allocation. It would allow a couple of providers to receive 5310 Elderly and Persons with Disabilities funding. This is a slight modification from an earlier minute order, and it is actually a correction, and therefore, staff also recommends approval of this minute order.

MR. WILLIAMSON: Now, do these organizations in Houston and Tyler understand that it's just a slight correction?

MS. BRYANT: Yes, sir, they do.

MR. WILLIAMSON: I'm not going to be getting a nasty phone call from the Gulf Coast Center here in a few days?

MS. BRYANT: I certainly hope not and I don't expect that we will.

MR. WILLIAMSON: Discussion, members?

MR. NICHOLS: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MS. BRYANT: Thank you.

MR. BEHRENS: Agenda item number 11 is our Proposed Rules for Adoption. 11(a) will be rules concerning Contract Claims and Contested Case Procedures. Richard.

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

By approving this minute order you will allow the department to go forward with publication of revised rules for public comment. One reason for these new rules is the Texas Supreme Court surprised everybody in a decision not too long ago saying that prime contractors could bring the claims of subs through them.

That having occurred, we would like the chance for such claims to be heard by a Contract Claims Commission rather than going directly to the courthouse. So the rules will be revised to provide for that.

While we were in that process, we decided to make some things explicit which we thought had been implicit as to burdens of proof. Once again, if you approve this minute order, the rules will be published for public comment, then we would come back later for final approval for adoption from the commission.

My recommendation would be that the commission approve the minute order.

MR. WILLIAMSON: Questions, members?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MS. ANDRADE: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. MONROE: Thank you.

MR. WILLIAMSON: Thank you, Mr. Monroe.

MR. BEHRENS: 11(a)(2) we have proposed rules concerning Contract Management. Mark.

MR. MAREK: For the record, my name is Mark Marek; I'm the director of the Design Division for the Texas Department of Transportation.

The minute order before you proposes the adoption of amendments to Sections 9.30 through 9.39 and 9.41 and 9.42, new section 9.43, and the repeal of sections 9.40 and the old 9.43 to revise procurement of architectural, engineering and surveying services.

These changes do not significantly change the procurement process externally to the firms interested in doing business with TxDOT. The major revisions to the rules are the removal of the pre-certification work categories from the rules in the new Section 9.43. These categories will be posted on the department's website instead and subsequent changes will be made through the Texas Transportation Commission minute order process to allow for public comment on any changes in these work categories.

In the definitions in 9.31, the Lubbock and Corpus Christi districts' contracting limitation is increased from $2- to $5 million since their growth has resulted in their addition to the definition of now a Metropolitan District.

Finally, amendments to Section 9.39(a)(3) add a procedure for emergency selection procedures which have not previously been in this section of the rules. The other sections were revised to reflect these described changes above.

Staff recommends your approval of this minute order.

MR. WILLIAMSON: Discussion, members, questions? Mr. Nichols?

MR. NICHOLS: I had had a lot of questions because it did seem like such a large change, and I wanted to thank Mark and Camille for the time that you gave me yesterday -- I think we spent about four or five hours on it. I'm satisfied to go out as proposed as is, I look forward to the industry comments.

And I will say I was very impressed with the depth of knowledge that Camille and the rest of you had in this area. It was something that was new to the department, really, what, five-six years ago? We've had a ramp-up, I consider a pretty substantial refinement in that area. Always room for improvement but that's what it looks like you're working towards.

So thank you. That was meant as a compliment and I do appreciate it.

MR. MAREK: Steve Stagner is here in the audience today, the executive director for the Consulting Engineers Council, and we certainly encourage them to give us any comments that they have.

And as we work through these categories in the future where we'll probably have some new categories of work, particularly with respect to tolling operations, we'd like to run those revised categories through the private sector to see any comments they may give us with respect to those work items.

MR. NICHOLS: I so move.

MR. JOHNSON: I'll second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Agenda item 11(a)(3) concerning Right of Way and our new rules for Utility Accommodation. John.

MR. CAMPBELL: Good afternoon. My name, for the record, is John Campbell, director of the Right of Way Division.

MR. WILLIAMSON: Did you say Right Wing Division?

MR. CAMPBELL: Right of Way, the moderate Right of Way Division.

(General laughter.)

MR. CAMPBELL: I'd like to present for your consideration this minute order which proposes amendments to 43 Texas Administrative Code, Chapter 21, Subchapter C, Utility Accommodation.

These proposed utility accommodation rule changes include a reorganization for clarity of the section, additions of new sections to incorporate new utility construction methods and materials, and an enhanced focus on management of the State's real property asset.

That focus is exemplified through improving the quality of utility plans that we receive for installation on TxDOT right of way, for documentation to inventory abandoned facilities that will remain in the state right of way, and then finally strengthening the requirements for the restoration of the highway right of way following utility work.

We conducted four informal public hearings on this item a year ago in November and December, four different locations throughout the state to just give industry an opportunity to make comment and get their input. Subsequently we put together a team of TxDOT division and district personnel to put these rule revisions together.

We now do propose during the comment period to have another public hearing in order to receive more formalized comment on these.

Staff recommends your approval of the proposed amendments.

MR. WILLIAMSON: Comments, members?

MR. NICHOLS: Did you also work, in addition to industry, with like the Texas Municipal League and county associations?

MR. CAMPBELL: What we did is when we sent out our invitation to those informal hearings, we included all those types of associations, the municipal associations.

MR. NICHOLS: All right.

MR. WILLIAMSON: John, I think you're aware I lay pipelines for a living, although I never cross a public right of way -- I won't bid on a job if it does that -- but I am curious who in the oil and gas industry or the processing business have we talked to about this stuff ahead of time?

MR. CAMPBELL: Individually specifically I couldn't tell you, but we do deal with a number of the pipeline carriers as a normal course of business, and their associations were also included on the list. As far as individual pipeline operators, we've made no such solicitation.

MR. WILLIAMSON: I only ask the question because I know I've heard mid-size and smaller processing companies frequently complain they're not Exxon, they don't always hear about these changes that Exxon approves in Austin, Texas.

And in the northern part of the state, as most people are aware, the most significant gas field in North America is being developed, pipelines are being laid by the hundreds of miles a week, and I just hope we have talked to mid-size and smaller companies about the impact of some of these changes on their business.

Like I say, it won't affect my business at all, but I think of Republic and Star and Devon and guys that size, $3 billion cap and smaller companies, and I called a few of them and I don't think they're aware that we're going to change some rules.

MR. CAMPBELL: We can make an effort to that end with the public hearing that we're going to have.

MR. WILLIAMSON: And don't call those individual companies, but there's got to be some way to get word to them.

MR. CAMPBELL: Yes, sir.

MR. WILLIAMSON: Other questions or comments?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. NICHOLS: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: Opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. CAMPBELL: Thank you.

MR. BEHRENS: Agenda item 11(a)(4) will be rules concerning Toll Projects and our ability to work with county governments and other toll agencies. Dianna.

MS. NOBLE: Good afternoon, commissioners, Mr. Behrens, Roger. For the record, my name is Dianna Noble, and I'm the director of Environmental Affairs for TxDOT.

Agenda item 11(a)(4) proposes the adoption of amendments to 27.32 concerning Private Toll Roads, 27.43 and 27.44 concerning Regional Tollway Authorities, 27.72 and 27.73 concerning County Toll Roads.

The purposes of these amendments is for clarifying environmental review and public involvement requirements, project approval, and to better define roles and responsibilities.

And if the commission would like, I could read or summarize the amendments, but you do have a copy of the minute order before you.

MR. WILLIAMSON: Let me ask you, Dianna, when we begin preparing these things, do you loop HCTRA and TTA, CTRMA and Camino Board before they were dissolved, do we loop them into our process or do we draft internally and say the public comment period is for that, we'll put these out and let those guys and gals comment?

MS. NOBLE: Commissioner, we did a little bit of both. What we did was we contacted directly the North Texas Toll Authority and through the Houston District we contacted the district and asked the district to supply a copy of the rules to the Fort Bend County Toll Authority. And to my knowledge, that was the limit of contact that we made.

MR. WILLIAMSON: The reason I ask that is we've all been contacted and asked to defer this item to give a few of the toll authorities an opportunity to visit with you before it becomes in the proposed stage, and of course, we try to comply with those requests whenever we're asked.

MS. NOBLE: And yes, sir, Commissioner, I failed to mention that I did receive written comments from Judge Hebert and Mr. Mason, the chairman of the Fort Bend County Toll Authority. I received those October 26.

MR. WILLIAMSON: Members, any dialogue we want to have with Dianna? I know, John, you have some concerns.

MR. JOHNSON: Well, as you referred to, Mr. Chairman, I was contacted by one of the affected parties and they have a interpretive difference as to what is written, and the way they understand it and the way Dianna understands it. Dianna has been great, they had dialogue yesterday.

And I would be hopeful that we would defer this issue so that the affected parties, that everybody can have a mutual understanding as to exactly what the interpretations are.

MR. WILLIAMSON: Without a doubt, we will defer. I'm trying to establish whether or not they were a little bit late in commenting to us or not, and it appears not, so that's okay.

I think the thing to do, Mike, is defer this until November or perhaps December, and give Dianna a chance to dialogue with our transportation partners across the state and make sure we're all comfortable with it.

MR. BEHRENS: Why don't we do that, Dianna. Since we're going to be meeting earlier in November, let's just put it back on the agenda for December.

MS. NOBLE: I will do that, sir.

MR. JOHNSON: Thank you, Dianna.

MS. NOBLE: Thank you so much.

MR. BEHRENS: We'll go to the Rules for Final Adoption, 11(b)(1), final adoption of rules concerning Public Information, and Richard Monroe will present these.

MR. WILLIAMSON: Is this the one we're going to charge $19 a page?

MR. MONROE: Yes, it is. Amazing no comments were received; we slipped one by the public.

(General laughter.)

MR. MONROE: For the record, my name is Richard Monroe, general counsel for the department.

Two things made this change in rule advisable. One, we had listed a number of officials and they only were allowed to call someone on repetitious requests and deny them. We've changed that to the TxDOT personnel most closely associated with the records so someone who will actually know what they're doing. Also, we have changed our fees because the law has changed.

Those were the changes, the rules were properly published for public comment in the Texas Register, and no comments were received, so the rules are as they were approved for publication by the commission. My recommendation would be that the commission pass the minute order.

MR. WILLIAMSON: Mr. Nichols indicated he had no questions or comments.

Questions or comments, Mr. Johnson?

MR. JOHNSON: Hope did you have anything.

MS. ANDRADE: Nothing at all.

MR. JOHNSON: Do you get a discount if you have a toll tag?

MR. MONROE: We can always further amend, Commissioner, if that's the will of the commission.

MR. JOHNSON: It might be a marketing ploy for the toll tags.

MR. MONROE: As of now, it's not there.

MR. WILLIAMSON: I want to know if I can charge my meals to my toll tag, just pull up to the Sonic and get my hamburger and we're off.

(General laughter.)

MR. WILLIAMSON: Any other questions for Mr. Monroe?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. JOHNSON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. MONROE: Thank you, commissioners.

MR. WILLIAMSON: Thank you, Mr. Monroe.

MR. BEHRENS: Agenda item 11(b)(2) has rules for final adoption concerning some new Contractor Sanctions. Thomas.

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

Item 11(b)(2) are rules for final adoption regarding Contractor Sanctions. The primary changes to these rules are: one, they give the executive director the authority to sanction contractors for both construction and maintenance contracts; and two, it would reorganize the level of sanctions to better address multiple offenses.

The rules were published in the Texas Register and we received no comments. Staff recommends approval.

MR. WILLIAMSON: Do we know if Robert had any questions about this one, Mike?

MR. BEHRENS: He didn't have any questions.

MR. WILLIAMSON: Questions or comments, members?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

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, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Agenda item 11(b)(3) Final Rules for Adoption concerning Erection of Off-Premise Signs. John.

MR. CAMPBELL: Again for the record, my name is John Campbell, director of the Right of Way Division.

I'd like to present for your consideration this minute order, item 11(b)(3) which provides for final adoption of an amendment to 43 TAC, Section 21.441 relating to the criteria for permitting off-premise signs on state rural roads.

No comments were received. Our comment period ended September 13, and as I said, no comments received. Staff recommends your approval.

MR. WILLIAMSON: You know, John, I'm the only commissioner that likes billboards, so what are we doing here to private property owners?

MR. CAMPBELL: We're not going to do anything to private property owners. The specifics of what we're correcting here was our statutory authority and our practice were in step but our rule was out of step with both our authority and practice.

MR. WILLIAMSON: So no one is going to scream day after tomorrow that we're taking away their rights.

MR. CAMPBELL: No, sir.

MR. WILLIAMSON: Without compensating them.

MR. CAMPBELL: Not on this issue they won't scream tomorrow.

MR. WILLIAMSON: Now, Mr. Johnson loves billboards and he's going to ask you are we sure we're not making it easier to erect a billboard, I'm sure.

MR. JOHNSON: I think I asked him that at the last meeting.

MR. WILLIAMSON: Other questions or comments for John?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Agenda item number 12(a), this is concerning Turnpike Projects and this is authorization to publicize a request for detailed proposals for the State Highway 183/Loop 820 project in Fort Worth. Phil.

MR. WILLIAMSON: This is why all those guys have been hanging around.

MR. RUSSELL: Good to see you again, commissioners. For the record, I'm Phillip Russell, director of the Turnpike Division.

On March 30 of this year, the department received an unsolicited proposal from the Managed Lanes LP group, a subsidiary of Peter Kiewit Sons. The proposal related to the development of proposed managed lanes on the 820/183 project, generally between I-35W and I-35E in the Dallas and Tarrant County areas.

At the Waco commission meeting in April, you authorized the department to publish a request for competing qualifications and proposals. The department issued that request on May 21 and received in response four total proposals, the original Kiewit as well as three competing proposals.

Staff evaluated in accordance with those evaluation processes and criteria that were prescribed in the original request.

Staff recommendation would really be two-pronged: number one, that we would go forward with a request for detailed proposal --

MR. WILLIAMSON: Hold on a second.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: Mike, is there any reason we should wait for Robert to hear this, or do you think we can move ahead? Because I know Robert is going to have some questions.

MR. BEHRENS: We could just go ahead and take a couple of other agenda items.

MR. WILLIAMSON: I think Robert is going to have some questions and we're going to be short enough time as it is, I think we would be dragging it out if we had to go through it twice.

MR. BEHRENS: Why don't we just go to 12(b).

MR. WILLIAMSON: Let's just lay 12(a) aside, we'll return to it in a moment. Mike, go ahead.

MR. BEHRENS: We can just keep going right now.

MR. RUSSELL: Chairman, would you like for me to rewind from the top or continue?

MR. WILLIAMSON: Mike introduced 12(a), we went through the initial introduction and then stopped and said let's wait for you. If we're just going to pick one and by inference award this thing, I wanted you to be here.

MR. RUSSELL: Rewind from the top or continue?

MR. WILLIAMSON: Start from the top.

MR. RUSSELL: Start from the top.

Mr. Nichols, on March 30 of this year we received an unsolicited proposal from the Managed Lanes LP group, a Peter Kiewit subsidiary. The proposal related to the development of managed lanes on the I-820/State Highway 183 project between Dallas and Fort Worth, Dallas and Tarrant Counties.

As you remember, at the Waco commission meeting, you authorized the department to publish a request for competing qualification statements. We received three proposals in response to that request in addition to the Kiewit proposal.

Our team has evaluated those qualification statements and today would recommend two things: number one, that we go ahead and move forward to the detailed proposal stage; and that number two, we short-list all four of those teams.

MR. WILLIAMSON: All four of them?

MR. RUSSELL: Yes, sir, all four. And I'd be happy to try to address any questions you might have.

MR. WILLIAMSON: Well, that's not going to be quite enough for us to operate off of, and Mr. Monroe will do a good job of stopping us if we ask you the wrong things. So why don't you tell us a little bit about generically what you saw that inspired you to conclude you should negotiate with all four.

And I'm no longer joking around. Mr. Monroe, when you see us wondering, please stand up and stop us.

MR. RUSSELL: And I will rely on Richard stopping me if I get in, because it is an open procurement potential and so we do have to be careful.

I think philosophically these groups heard the comments from the dais in Waco that we expected plans and options that would leverage state and federal dollars. I think the message that came down in Waco was that if this is simply a project that the groups expect the department to pay 100 percent of it, then we probably wouldn't be interested in it.

I think all four teams came with different concepts, different ideas on how we might develop that project, so based on that, the recommendation was that we move forward to the next stage.

MR. WILLIAMSON: So without saying the wrong thing, you can relate to the commission that all four had a unique approach; any one of the four would have been worthy of continuing to talk. All four of them had a unique approach which would make any one of them worthy of continuing to negotiate.

MR. RUSSELL: We think so, yes, sir.

MR. WILLIAMSON: Do you think all four realize how serious we are about the equity component?

MR. RUSSELL: I think so, yes, sir.

MR. WILLIAMSON: And let me ask you -- and if you don't know, maybe Mr. Monroe can tell us -- if we authorize you to go ahead and you can't make a deal that you feel comfortable with presenting to us, or in the alternative, you present it to us and we don't like it and reject it, what happens at that point? Does Mr. Kiewit then have some sort of priority claim on that project forever or does it just get dropped off the radar screen and we go on down the road, so to speak?

MR. RUSSELL: Chairman, is the question after we completed our evaluation of the detailed proposals? Is that the nature of the question?

MR. WILLIAMSON: Right. Let's say we approve you to go to the next step and one of two things happens: you can't make a deal with one of them that you feel comfortable about; or you make a deal with one of them, you bring it to us and we say no. My question is has Kiewit acquired some sort of priority claim on the contract, as in the old days, or is it just over and who knows what happens.

MR. RUSSELL: I think, Chairman, there's two things that come into play here. One thing that we haven't talked about, the issue of stipends. That will be an issue that we'll deal with probably in a couple of commission meetings. If we pay stipends to the unsuccessful proposers, we would, in effect, purchase their intellectual property and we could utilize that however we saw fit.

As to the case of the successful proposer, if you authorized us to go to detailed proposals, we select a single proposer, whomever it might be, and we were unable to come to terms to sign a contract, then in my view -- Richard, correct me if I'm wrong -- then we would have the ability, once Mr. Behrens okays it, to go to number two. If we sign some sort of contract with that successful proposer, in my view, that's where it would invoke having to go back and re-propose.

I don't think in either case that the successful proposer would have some sort of right to that idea or it would not disallow us to go ahead and develop it, I think we could develop it.

MR. WILLIAMSON: The first proposer would not have acquired, by virtue of having been the first proposer, some sort of priority right to do it.

MR. RUSSELL: I don't think so.

MR. WILLIAMSON: Mr. Monroe is saying no, so I feel better about it.

Okay, members, questions. Mr. Houghton?

MR. HOUGHTON: Not necessarily a question, but to reconfirm what we talked about in June and to what I said earlier today, the comment or the question earlier today, is that equity is a significant key component to this project. That's a correct statement, consistent with what we said in June?

MR. RUSSELL: I think so. Without getting into detailed proposals, all four proposers have ways to mitigate state and federal dollars and leverage those dollars.

MR. HOUGHTON: And tolling existing lanes is something that the department, as we have talked about earlier here today, is something that we are not interested in.

MR. WILLIAMSON: He's just making a statement, you don't have to agree or disagree.

MR. RUSSELL: I think basically our group, our division, the districts are very conscious of that. We understand that very well, yes, sir.

MR. HOUGHTON: And minimizing the investment by the Texas Department of Transportation is another key component.

MR. RUSSELL: Yes, sir.

MR. HOUGHTON: You keep moving in your seat, Richard.

MR. WILLIAMSON: He's ready to bolt.

MR. MONROE: I would just like to remind the commission that by a law that we wanted the terms, except for the most basic information, are under law considered privileged before someone is chosen, so Mr. Russell is not at great liberty to say very much at this point about any of the individual proposals.

Certainly I think we all know how the commission feels about these various subjects.

MR. HOUGHTON: If I could make one more comment. Richard, you can stay right there. It's this commissioner's desire if possible to see us as a revenue participant in projects going forward, that is permissible to talk about -- that is a desire on my part, maybe not the other commissioners -- exploring those possibilities.

MR. WILLIAMSON: I think that's probably directed at me.

MR. HOUGHTON: Thank you.

MR. WILLIAMSON: That might be more comfortable for him. So if I understand you, Commissioner, you're very focused on being a revenue partner on these equity transactions.

MR. HOUGHTON: Correct, or possibly if it is in the best interest of this department.

MR. WILLIAMSON: Hope?

MS. ANDRADE: No.

MR. WILLIAMSON: John?

MR. JOHNSON: No questions.

MR. NICHOLS: We had the initial unsolicited, we advertised, we got three additional.

MR. RUSSELL: Yes, sir.

MR. NICHOLS: Do you feel comfortable that all four of these do have the capability and the qualifications to handle a project like this?

MR. RUSSELL: Absolutely.

MR. NICHOLS: Okay. That's why all four of them are on the list. But the actual point at which we are on this list was not the point that you have enough detailed specific information to sign a contract, so what we've got to do now is go to the next level which is much more detailed, which probably will include what we refer to as a stipend because of the detail, but at the end of that process we will have the detail cost, financial, whatever the detailed proposal is; that with that information, administration will have the detailed information to choose one or recommend one and have a matrix of how that was calculated.

MR. RUSSELL: Yes, sir.

MR. NICHOLS: And then it's not a matter of really negotiating at that point, it's a matter of locking in, and then if we want to incorporate some of the other features.

MR. RUSSELL: That's correct.

MR. NICHOLS: But you've got enough detail at that point to lock in.

MR. RUSSELL: Yes, sir. By authorizing this today, we would invoke the stipend issue, you are correct.

MR. NICHOLS: Okay.

MR. WILLIAMSON: Ted, I heard what you said and I share your concern for inspiring our vendors, our industry partners to understand how serious we are about equity.

I would hope our staff would take into consideration in their grading of these documents, these proposals how important the commission has consistently been about equity. We can't build the things we want to build if at some point our industry partners aren't willing to invest something in the future of the state. So I think I concur down the line with what you said.

This occurs late in the day. This would be a really big deal if we pursued this. I don't know the magnitude of the dollars but I think it would be large, so this is no small step for the Texas Department of Transportation to take.

Okay. Do I have a motion?

MR. NICHOLS: I so move.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

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

MR. RUSSELL: Thank you, Chairman.

MR. WILLIAMSON: Good luck. We need it in north Texas in the worst way.

MR. BEHRENS: We'll go ahead with 12(b).

MR. RUSSELL: Yes, sir. 12(b) relates to our eighth Quarterly Consultant Report on the Central Texas Turnpike Project.

As you know, PBS&J is our general engineer consultant. Overall, I think this report gives a good, healthy report card. On the traditional side 45 and Loop 1 continue to make outstanding progress. All seven construction projects are underway, all are ahead of schedule.

On the State Highway 130 project, again, I think they're making good progress. I had the chance last week to take a helicopter view of it with some of our congressional folks, and it was really amazing at the progress that's being made all up and down that corridor.

A couple of the things that I think are noteworthy, the completion of the design is a range between the four segments of 94 percent and 60 percent. The general engineering consultant reports that all four segments are on schedule for completion at the end of '07 with one exception. Segment 2 is several months ahead of schedule, so again, I think the report card there is very well.

On the right of way front, as you remember from our last report, we have slight in excess of 400 parcels that will need to be acquired for the development of State Highway 130, and as you look through the milestones of the life of the acquisition of a single project, in my view once we get to the point of making an offer, that is a significant milestone. There's a lot of work that has to be done before we get to that point.

I think it's noteworthy that out of those 400 parcels at the end of August the district had made 270 offers, so again, I think that's a good milestone. Overall, by the end of August we had 147 parcels that were available for construction.

So overall the prognosis is good. I'd be happy to address any questions that you might have.

MR. NICHOLS: Does anybody have any questions?

(No response.)

MR. NICHOLS: A requirement of the bond covenant is that we do have a public review and report and that it be accepted by the commission every three months on this project. It's part of the bond covenants.

Do I have a motion to accept this report?

MR. JOHNSON: I move.

MS. ANDRADE: Second.

MR. NICHOLS: All in favor, say aye.

(A chorus of ayes.)

MR. NICHOLS: Any opposed?

(No response.)

MR. NICHOLS: Motion carries.

MR. RUSSELL: Thank you, commissioners.

MR. BEHRENS: Agenda item 13 under Finance, the first being 13(a) is recommendation to accept the Quarterly Investment Report, and 13(b) will be to authorize us to negotiate a pass-through toll agreement in Parker County with the City of Weatherford. James.

MR. BASS: Good afternoon, commissioners. For the record, I'm James Bass, director of Finance at TxDOT.

Item 13(a) is the partner report, if you will, from the one that you just heard from Russell. It presents the Quarterly Investment Report for the Fourth Quarter of Fiscal Year 2004 which is the period of June 1 through August 31 of 2004.

During this fourth quarter the value of our investments declined by just over $140 million. This is simply the net of the cash inflows comprised of receipts from additional local contributions and interest earned on our investments compared to the cash outflows which were the payments to the contractors, landowners and bondholders during that time period.

So as the project progresses, we would anticipate and expect the book value of our investments to decline as the project gets closer to completion.

The last item that I would point out is that at the end of this quarter we had an unrealized loss on our investments of $735,000 and what this means is that on the last day of that quarter the market value of our investments was less than the book value by $735,000.

However, this should not be an issue or concern to us as we expect to hold our investments until maturity and so we would have no realized loss on any of those investments.

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

MR. NICHOLS: The terminology you used where the value reduced, I've never liked that term. We've discussed that and I know that's the proper accounting term. Really the payouts, we've spent the money, so in effect, we have an offsetting asset which is the toll road property itself being developed.

MR. BASS: Correct, and a reduction of liability in payments to the bondholders.

MR. NICHOLS: Any questions?

MR. HOUGHTON: Some of those the community could construe that completely differently.

MR. BASS: I'll work on it.

MR. HOUGHTON: Like the 40 to 45 percent cost to collect tolls.

MR. JOHNSON: Move acceptance.

MR. NICHOLS: Second? Were you through with the questions?

MR. HOUGHTON: Second.

MR. NICHOLS: All in favor, say aye.

(A chorus of ayes.)

MR. NICHOLS: Any opposed?

(No response.)

MR. NICHOLS: Motion carries.

MR. BASS: Agenda item 13(b) seeks authorization to begin negotiations with the City of Weatherford on a pass-through toll agreement. If negotiations prove to be successful, we would then come back to the commission for final approval.

The city submitted a pass-through toll proposal providing for the city to make improvements on a number of roadways, including State Highway 171/Farm to Market 51 intersection, Interstate 20 frontage roads, an overpass on Interstate 20 and Holland Lake Road, and Farm to Market 2552.

In their proposal the city listed pass-through tolls totaling just over $35 million to be paid over periods of time ranging from as little as five years to as many as 33 years. That would vary depending project by project.

Your approval today would in no way be an agreement to these specific terms but would allow the department to begin negotiations with the city to arrive at mutually beneficial terms, and to then then bring these back to the commission at a later date for final approval.

Staff would recommend your approval so that we may enter into negotiations.

MR. NICHOLS: You said a dollar figure? I don't remember seeing a dollar figure.

MR. BASS: I don't believe it's in the minute order; I went back to the application. Again, one of the main points is this particular minute order is just entering into negotiations so the $35 million is just really for your information, but it is not officially a part of the minute order.

MR. NICHOLS: Do you have any questions, comments?

(No response.)

MR. NICHOLS: Do I hear a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

MR. NICHOLS: All in favor, say aye.

(A chorus of ayes.)

MR. NICHOLS: Any opposed?

(No response.)

MR. NICHOLS: Motion carries. (Mr. Williamson abstains. See line 16, page 314.)

MR. BEHRENS: Agenda item number 14 is our SIBs for the month, and this will be a SIB loan final approval for the City of Kyle.

MR. BASS: Agenda item 14 seeks final approval of a loan to the City of Kyle in the amount of $14 million to pay for the construction of Farm to Market 1626 from Farm to Market 2770 to Interstate 35 in the city of Kyle.

Interest would accrue from the date funds are transferred from the SIB at a rate of 4.55 percent, with payments being made over a period of 20 years, with no payments being made the first two years of the loan.

Staff would recommend your approval.

MR. NICHOLS: If we approve this -- which I have no doubt that we probably will -- how many dollars will be left in our current balance on the SIB account?

MR. BASS: We currently have about $28 million that is uncommitted, so that would take us down to $14-, and it would take the pending applications down to the neighborhood of $20 million.

MR. NICHOLS: Questions?

MS. ANDRADE: What size of project is this?

MR. BASS: It is $14 million.

MS. ANDRADE: Thank you.

MR. HOUGHTON: Wasn't the project bigger than that? I thought they were coming in with $26-. Are they financing it through other means?

MR. BASS: Initially that was the estimate. There's more than just the $14 million in the overall part of it; this is just one element.

MR. HOUGHTON: Right, okay. Move to approve.

MS. ANDRADE: Second.

MR. NICHOLS: All in favor, say aye.

(A chorus of ayes.)

MR. NICHOLS: Any opposed?

(No response.)

MR. NICHOLS: Motion carries.

MR. BASS: Thank you.

MR. BEHRENS: Agenda item number 15 is our Contracts for the month of October.

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

Item 15(a)(1) is for consideration of award or rejection of Highway Maintenance Contracts let on October 14 and 15, 2004, whose engineers' estimated costs are $300,000 or more. We had five projects; staff recommends award of all projects.

MR. WILLIAMSON: Members, are there questions or comments directed to Thomas?

(No response.)

MR. WILLIAMSON: Are there any trends you see that you need to make us aware of, Thomas?

MR. BOHUSLAV: We might talk a little bit on the construction side, on the maintenance side. Maintenance prices are up as well, it seems.

MR. NICHOLS: Move we accept.

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: Opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

Roger, I did not leave to avoid the vote, I left for other reasons, but even though I'm not affected at all by the pass-through application for the City of Weatherford, I would choose to be shown as having abstained from the vote.

MR. BOHUSLAV: Item 15(a)(2) is for consideration of award or rejection of Highway Construction and Building Contracts let on October 14 and 15.

We had 51 projects. We do show in your cover page an overrun of 15 percent, but we're actually flat this month, and the districts and the Design Division did work together to try to increase our engineers' estimates on projects.

The reason that you see an overrun there is a number of projects had a "B" component to the bid. A "B" component is a time component whereby they bid the number of days in a project, and we apply a what is your cost per day.

In this case it was a Bexar County project and the total "B" component for that project was about $43 million and that's why you see the overrun the way you do. But the actual award will be about $152-, $154 million, I forget, one of the two. So that's why you see the overrun the way you do.

So our actual overrun is less than 1 percent this month.

We have one project we recommend for rejection, and that's Project 3006 in Bee County. We only had one bidder on this project with a 32 percent overrun. We'd like to go back and consider some redesign and see if we can solicit some more competition.

In addition, in regard to our costs, I looked back in October of last year, 2003 at what our Highway Cost Index was and it was about 140, and today our Highway Cost Index is about 161, so a 20 point increase or a 15 percent increase in our Highway Cost Index.

MR. NICHOLS: And that's in one year?

MR. BOHUSLAV: That's in one year, yes, sir.

MR. NICHOLS: So we have had just kind of a cross-section across the categories. Would you say that's weighted, or is it just a summation?

MR. BOHUSLAV: It is weighted, it's a summation of all the past 12 months; that's our 12-month weighted average is what it is.

Now, we have had several large projects let over the past year, and what that does is knowing those are large projects, the contractors have to estimate their prices not based on today's prices but what they're going to be in maybe four years, depending on the duration of the project. So you can see that would have an impact as well.

So our increase could be spread out over a longer period and not just one period in regard to how they bid their projects.

MR. NICHOLS: Let me ask another question. The percentage of let's say 15 percent, would you say -- I know sometimes people say as we try to accelerate projects and kick the volume of construction projects up, with the limited supply of contractors, it literally just drives the price up, or are we dealing with a situation that statewide or nationwide or worldwide the prices of concrete, cement, asphalt, rebar and all that have shot up quite a bit?

Is it really true material increases is the primary?

MR. BOHUSLAV: Well, first off, when we establish time on projects, we maybe misused the word "accelerated." In some cases we established time requirements such that they are tight and requires the contractor to continuously prosecute the work, and if you don't meet that schedule based on a very tight time, it's not really accelerated, it's just a very tight time. And so that's a lot of our projects.

There are some that are accelerated 24/7 where there are added costs due to overtime requirements, nighttime work and other factors that the contractor may have to include in their costs.

But I would say that the acceleration of projects is probably secondary to material price increases, to hauling, to cost of asphalt, cost of fuel.

MR. NICHOLS: I wasn't referring to the acceleration of a particular project like what I call we've been putting a premium time to get a particular project done in a period of time. What I was referring to is the number of contracts or the dollars of contracts we're letting each year, stepping up.

We've gone from under $2- to $3 billion a year, and now we're knocking out $4- and we're shooting to go higher. Is that driving the prices up 15 percent or is it primarily the raw material and the energy and those kind of things?

MR. BOHUSLAV: I'll answer this from a director of Construction Division standpoint in that I don't know every detail of the contractors' business out there. But their responses to me in that regard is that there's a larger market out there than just highways, there's a private industry, residential industry and so on, and that may have a bigger impact than we do as a department.

Though we've, over the past several years doubled our letting from $2 billion to $4 billion now, there is much more pull on the market out there, but the contractors seem to be able to handle all we can give them. And based on what they tell me, I don't believe that our increase in workforce needs here in the state are affecting or driving our prices up.

MR. NICHOLS: Okay, that's the opinion. Thanks.

MR. WILLIAMSON: Other questions or comments, members?

Thomas, I have one question about the item that had a "B" component. Just so I'm refreshed in my memory, that means that we've let a contract that basically forces a contractor -- incents a contractor to work nights and weekends and get the job done ahead of time. Is that correct?

MR. BOHUSLAV: In some cases we will set up a job so that they can work 24/7 and we'll squeeze the time down such that they have to work 24/7 and we may require some of the work at night.

On this project a contractor did not have to work 24/7, they could have put in whatever time they thought it would take to work the job five days a week maybe ten hours a day. They could have bid it any way they wanted to and determined their ultimate cost to the department or to the public.

And so in this case actually some of the lowest contractors had the shortest time. In fact, I think their bid time -- 933 days I think is the winning contractor -- was maybe a year or two less than what we had originally estimated the job to be.

So whether they work 24/7, I don't know, but they think they can finish the job in a much shorter time period than we had scheduled.

MR. WILLIAMSON: But the point is we're paying a higher price in order to get the project finished faster however he or she does it.

MR. BOHUSLAV: We may be paying some increase in cost for overtime and other aspects of night work and 24/7 work. The ultimate cost to the public --

MR. WILLIAMSON: I'm not saying it's a bad thing; I actually think we should be doing a lot of that. People's time is valuable and the less amount of daylight day hours that a contractor is disrupting traffic on Interstate 35, the better off we are.

MR. BOHUSLAV: In the case of this project we actually provide in the contract a price per day, and whereby if they exceed the time that they bid in their project, we'll charge them dollars per day, and this project is $47,000 per day. So that's a cost that we consider, that's based on a road user cost of delay to the public out there in not having the project come in on time.

MR. WILLIAMSON: Well, I think it's a good thing, not a bad thing.

MR. BOHUSLAV: This is the Bexar County project.

MR. WILLIAMSON: Well, I'm sure that Commissioner Andrade also appreciates it being done faster.

MR. BOHUSLAV: The district is very happy with the way the bids went on that job.

MR. WILLIAMSON: I like the style, the format that I'm seeing the contracts come out in. I don't know that the other commissioners find it easier, but I find it much easier to quickly understand what it is we're awarding.

MR. BOHUSLAV: Referring to the attachment?

MR. WILLIAMSON: Yes, sir. I like it greatly.

Anything else, members?

(No response.)

MR. WILLIAMSON: Can I have a motion?

MR. NICHOLS: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Agenda item 15(b) and (c) will be presented by Steve Simmons, standing for Amadeo.

MR. WILLIAMSON: Did you make Wes show up with you?

MR. SIMMONS: Tried but he wouldn't come.

MR. WILLIAMSON: The next Halff Associates contract, I want Wes Heald here to personally face the heat.

MR. SIMMONS: Yes, sir.

MR. WILLIAMSON: Is that appropriate, Mike?

MR. BEHRENS: That will work.

(General laughter.)

MR. SIMMONS: Good afternoon, commissioners. Once again for the record, I am Steve Simmons, the deputy executive director of the department.

The minute order before you approves a contract between the Texas Department of Transportation and Halff Associates, Inc. Halff Associates, Inc., employs Charles W. Heald, a former executive director of the Texas Department of Transportation.

Government Code Section 669.003 requires that in order to enter into a contract with a company that employs a former executive director within the first four years after he's served in that position, the Texas Transportation Commission must also approve this contract in an open meeting.

The department advertised for engineering services and Halff was chosen to be the provider in accordance with the competitive selection and negotiation procedures set forth in the Government and Administrative Codes. The contract is a standard $750,000 contract for engineering services to be performed in all counties in the Fort Worth District.

Staff recommends approval of this minute order.

MR. WILLIAMSON: Are there questions or comments, members?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. NICHOLS: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

You did a great job of filling in for Amadeo.

MR. SIMMONS: Thank you.

Item 15(c), the minute order before you approves a claim settlement for a contract by Dan Williams Company for Project IM 10-1(232) in Hudspeth County in the El Paso District.

On September 8, 2004, the TxDOT 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 approval.

MR. WILLIAMSON: Man, you're not nearly as hard as old Amadeo; you're easy.

MR. SIMMONS: Amadeo did it, I'm just reading it.

MR. WILLIAMSON: Withdraw that comment.

(General laughter.)

MR. WILLIAMSON: Questions, members?

(No response.)

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Agenda item 16 is our Routine Minute Orders for the month. They were all duly posted as required. We'll be happy to go through any of them. I went through all these minute orders; I don't think they impact any of the commissioners, to my knowledge, and I would recommend approval.

MR. WILLIAMSON: Members, I'll give each of you a moment to look at your notes.

MR. NICHOLS: I have one.

MR. WILLIAMSON: Mr. Nichols.

MR. NICHOLS: In my e-mail that I sent, this relates to the donation and exchange of real estate, it's either in Brewster or Bastrop and Lee counties. Both of these are relocations. I asked the same question in both: Did the county approve on whether there were any other property owners affected?

As I recall, Brewster, the county was neutral and there were no other property owners affected. It's all within one property owner so I had no problem with that.

In Bastrop and Lee Counties, there were five property owners affected, and I didn't really know what the effect was or impact was to those five property owners.

I see our counselor coming this way. I just want to make sure that if it did impact them, that they were okay with it.

MR. MONROE: I have just been informed that yes, they will be impacted and that they are still trying to reach an agreement with Alcoa. So the deal, as far as they are concerned, is not done.

MR. JOHNSON: They being?

MR. MONROE: The five property owners, private property owners.

MR. NICHOLS: Do you understand what my concern is?

MR. WILLIAMSON: I understand this ought to be withdrawn is what I understand.

MR. NICHOLS: That would be my suggestion until it's resolved.

MR. WILLIAMSON: Is there any reason why we should vote on this this month?

MR. BEHRENS: No, sir. We can wait till they resolve that.

MR. WILLIAMSON: I have a motion to drop item what, Mike?

MR. NICHOLS: Sixteen. Wait a minute. Is that related to that?

MR. WILLIAMSON: That may be the first time an employee of the department has whistled at the commission during a commission meeting. That's great. This is an all-time first.

MR. NICHOLS: Is that related to this?

MR. BEHRENS: I would recommend that we go ahead and approve all the minute orders except agenda item 16(b)(2). That will be deferred until we have more information.

MR. WILLIAMSON: Are there other things that give us heartburn about this motion, members?

(No response.)

MR. JOHNSON: I move approval.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries, as amended.

MR. BEHRENS: That concludes our agenda and I don't think we have any reason for an executive session.

MR. WILLIAMSON: Mike, how much longer do we have to go to set a record, Mike? Too long?

MR. BEHRENS: Hour and a half.

MR. WILLIAMSON: Members, the most privileged motion is now in order.

MR. NICHOLS: Well, first I'd like to comment you don't have to break the record because you set the last record.

(General laughter.)

MR. NICHOLS: I move we adjourn.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and three strong seconds. All those for the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

Let the record reflect, Mr. Monroe, we adjourned at 4:57 p.m.

(Whereupon, at 4:57 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: October 28, 2004

I do hereby certify that the foregoing pages, numbers 1 through 210, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Penny Bynum before the Texas Department of Transportation.

__________12/02/2004
(Transcriber) (Date)
On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731