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 is now 9:10 a.m. and I call the June 2005 meeting of the Texas Transportation Commission to order. It is a pleasure to have all of you here this morning and please note for the record that public notice of this meeting containing all items on the agenda was filed with the office of the Secretary of State at 1:33 p.m. on June 22, 2005.

Before we begin today's meeting, as we always do, please take a moment to join with me and reaching into your pocket or purse and pulling out your pager, your telephone, your dewberry and whatever else you carry to remind you about life’s travails and put those items on the silent or vibrate mode so that we might not be rudely disrupted in our deliberations. Thank you very much.

This is a sad and joyous day. Normally we would recognize each commissioner for remarks and see what their business, but we have some special business to take care of and at this time I would like to recognize Commissioner Nichols who will have a statement to enter into the record.

Mr. NICHOLS: Good morning. Also I appreciate all of you being here as the Commission does its business. I sent a letter to Governor Perry this morning as well as copies to the Executive Director Mike Behrens and the other commissioners and the department and I think I’ll just read the letter and I think it will be self-explanatory.

"Dear Governor Perry, it is with great regret but no hesitation that I resign my position with the Texas Transportation Commission effective June 30 -- that’s today, at 8:00 a.m. It has been one of my life’s greatest honors to have been appointed by both you and former Governor George W. Bush to this position of responsibility that impacts the daily lives of Texas citizens and businesses.

"It has been an honor to have been confirmed twice by the Texas Senate and have served with six distinguished commissioners. I have made clear my intention to announce for Texas Senate District 3 if and when Senator Staples makes a formal announcement seeking another office. While the Attorney General’s opinion indicates that I do not need to resign until I file for a place in the Republican primary, I do not consider it ethical or proper to vote on projects within that district, or approve contracts, while seeking elective office.

"I’ll leave with the confidence and knowledge that the department is in its best shape in decades. During the past eight years, the department has tripled the number of roadway construction projects being built each year; brought more local control and input into the project programming and selection process, including funding allocation; dramatically increased safety projects; approved the establishment of five regional mobility authorities for the acceleration of transportation projects under local control; accelerated reconstruction of bridges both on and off the state system; funded and scheduled ninety percent of highway projects planned for the next twelve years to be built in half the time; established and accelerated construction of corridors throughout the state on the Texas trunk system; passed historic rail legislation and signed working agreements with major railroads for the relocation and preservation of rail corridors; improved the overall physical condition of the existing state system; given Texas voters a choice in clearing traffic congestion by offering an historic constitutional amendment resulting in the immediate construction of the 55-mile, 2.7 billion dollar Central Texas system with more to come; begun implementation of the Trans-Texas Corridor with the signing of the development agreement for the 6 billion dollar concession proposal paralleling I-35.

"Instead of costing taxpayers it will add an additional 1.2 billion dollars to transportation along the corridor while insuring property rights protections for landowners. Currently, a project is underway, either large or small, every six miles on the Texas highway system. Most importantly, without additional employees or raising fees or taxes, the commission has increased production and safety to the benefit of Texans.

"These accomplishments would have not been possible without the policies, programs, new legislative tools with which you have been instrumental. The administration, under the leadership of Mike Behrens, is outstanding. The men and women running the divisions, districts and other offices of TXDOT are intelligent, motivated and stable.

"The employees of the Texas Department of Transportation are some of the most dedicated with which I have ever worked. Their willingness to go the extra mile for the system of Texas is unmatched and I will truly miss them. As I travel, I will never look at a highway or road crew the same again. I thank you for the confidence you have shown me."

MR. WILLIAMSON: We’re going to have the opportunity in a moment to continue to say our thanks to Robert. At this time I need to recognize the fellow commission member on my immediate right, or my far right, Ted Houghton. Ted.

MR. HOUGHTON: This is extremely difficult for me. When I first came on to the commission, I looked for a godfather and he sits right down to my left here, and he has served as a great mentor to me, and yesterday was the first time that I sat in a Trans-Texas Corridor negotiation meeting that Robert and I have been working on over the last, what year, a little over a year, a year, and he wasn’t there. And we had a room full of people, a conference call going on.

I said, Folks, there’s good news and bad news about all this. The good news is I’m not the detail person and I do not have the panache for detail like Commissioner Nichols does. But the bad news is when he’s elected as your state -- as a state senator and he is in charge of a committee of infrastructure and transportation, there'll be no BS-ing this guy.

And I want to offer my congratulations and I look forward to working with you in another capacity, Robert. Thank you very much for your leadership.

MR. WILLIAMSON: Hope Andrade.

MS. ANDRADE: Commissioner, I think there is a reason that somebody put a box of Kleenex here in front of me, but as I told you earlier, thank you for everything that you have done for this department. You certainly have left your mark here. And thank you for everything that you did during my new year as a commissioner.

Everything that we see and we hear is something that you either started or that you looked at or that you felt that needed attention and you will be missed. And as I told you earlier, it must be wonderful for you to feel the void that you are going to leave here and that all your friends are missing you and that when you’re across the street we’re going to look forward to going over there and asking for help. But good luck, and I wish you the best and remember that you have a good friend in San Antonio.

MR. WILLIAMSON: At this time I am going to hold my remarks as I do for last. At this time I would like to recognize Kris Heckmann personal representative of Governor Perry.

MR. HECKMANN: Good morning. I actually think in the four years that I’ve been here this is the first time that I’ve stood at this podium. So it’s very good, a good action. The Governor couldn’t be here this morning. He’s traveling the state working on school finance and such but he wrote a little note that he asked me to read you, Robert.

It says "Dear Robert, as you resign your post as Commissioner I would like to express my appreciation for your eight years of service on the Texas Transportation Commission. Throughout your tenure on the commission you have played a major role in the formation and implementation of the most remarkable transportation policy in the nation.

"You embraced the job of commissioner like few before you. Your intelligence, engaging personality and strong work ethic are well known across our state. In the last eight years I think you are the only person in Texas who has traveled more places, eaten more chicken dinners and spoken to more people about state business than I have.

"I am grateful for your contributions as a member of the commission and look forward to your next endeavor. Thank you for your service to the Lone Star State. Sincerely, Rick Perry." Thanks.

MR. WILLIAMSON: Mr. Behrens, I think you have something you need to say.

MR. BEHRENS: Yes, thank you Chairman. I’m honored to read a resolution that was prepared for you commissioner and if you’ll bear with me I’ll read this resolution. It says, "Whereas the Texas Transportation Commission takes great pride in recognizing Robert Lee Nichols for his vigor, good humor and insistent drive to ensure that Texas be known for its excellence of its transportation systems. And, whereas Mr. Nichols, often called the employees’ commissioner, wasted little time after his appointment to learn about the department and to taste the bread. He traveled the whole 25 districts listening to the men and women in the trenches and through his genuine concern earned their respect by identifying mosquitoes. And, whereas Mr. Nichols in the role of transportation commissioner for eight years has provided creative insight, helpful guidance and focused leadership in the development of policy in all operational areas of the Texas Department of Transportation. And, whereas Mr. Nichols has devoted his time and talents to public service with TXDOT since his initial appointment by Governor George W. Bush to the Transportation Commission in May, 1997, and his reappointment by Governor Rick Perry in June, 2003. Whereas Mr. Nichols successfully worked to change the method of collecting motor fuel taxes, moving the point of collection from the distributor/marketer level to the terminal rank, thereby increasing the revenue for transportation and education without raising taxes. And, whereas Mr. Nichols is known as a champion for reducing traffic congestion and increasing traffic safety through effective management of highway access, and he was instrumental in developing the nation's first memoranda of understanding with two rail companies to address rail relocation to areas outside metropolitan boundaries in Texas, and he has worked diligently to help create the Texas Rail Relocation and Improvement Fund. And, whereas Mr. Nichols has shown wisdom in business matters as he has helped lead the Department through the sale of bonds to finance TXDOT’s first toll road, State Highway 130, and as he is in the vanguard of those future-oriented Texans advancing the state’s Trans-Texas Corridor, and as he has devoted his professional life to improving the quality of life for all Texans. Now, therefore, be it resolved that the Texas Transportation Commission, on the occasion of his departure from imminent and active role with the commission, hereby recognizes and thanks Robert L. Nichols, affectionately known as "El Nino," for his effective service on behalf of Texas and its citizens. Presented with pride and gratitude of the Texas Transportation Commission this the 30^th day of June, 2005." And, Commissioner Nichols, signed by your fellow commissioners and endorsed by all the employees of the Texas Department of Transportation.

MR. WILLIAMSON: We would normally offer applause at this time but I have asked you to hold it. We’ve got a few candid photos that Robert’s wife provided us that show you the real Robert Nichols. So maybe she didn’t, maybe they were department photos. We’d like to share them with you.

That’s just sort of a smaller version of what we will share with the public here in about a month or two when we show you an appreciation dinner. The way, this is a very unusual situation so we had to kind of work out the timing of who said what. I normally reserve the right to speak last but in this case, I think it’s appropriate that we permit Robert to give his last remarks and then we can, again, thank him for his service to the state.

I came into the legislature in 1985 with John Willey and Jack Harris and I think 36 other relatively young and fairly conservative people, so I’ve been in public service 20 years. I remember when Governor Perry asked me to retire and take a role in his campaign for Lieutenant Governor and how difficult it was for me at that time to leave doing something I truly loved, as Jack and John will remember and as I guess a current House member or current Senator would affirm, there is no greater feeling of satisfaction than voluntary, non-professional public service, particularly in the state that you love. And I know for Robert to leave this position at this time I know is an emotionally draining time.

Robert seeks other office and I have no doubt he will be successful so he will be able to apply his public service talents in a different arena but it is constructive, I think, when I have control of this forum, to point out that this one great state, from the booming Republican suburbs of Brazoria to the teeming Democratic suburbs of Brownsville and Harlingen, from the plains of Amarillo to the hustle and bustle of East Dallas, from little old Weatherford to El Paso to San Antonio and all the points in between, we are one great state because men and women like Robert Nichols lay down their private lives and for virtually no money come to this capitol and work hard to promote public policy which sometimes doesn’t make people happy, sometimes makes people mad, but in the end advances the cause of civilization in our state.

We would not be what we are if it weren’t for men and women such as Robert. I’ve thought about the remarks I would want to be in this record when I am long gone and I have decided the best thing I could say about Robert Nichols is a phrase a close friend of transportation shared with me just this morning and that is everyone in this state and particularly the House and Senate members who have watched Robert work the last eight years recognize that this guy is not a show horse but he is the absolute best workhorse transportation has ever had and it is with regret that I watch him leave and it is with joy that I know the entire state will soon have the benefit of his leadership.

Robert, you may say whatever you wish, the floor is yours.

MR. NICHOLS: I think I have pretty much said it. I have truly enjoyed you know the last 8-1/2 years. It’s just been a great time. I regret that I did not get to every single field office in the state. I went to all the districts, I kept a list, I had this map and I had everything marked and whenever I was in an area of the state I would pop in and I made it to 156 of our field offices, little maintenance, they call them barns, that a lot of people never go to.

I appreciate all the support the communities, the industry and the department has helped together to get this job done and I will truly miss all of you. That’s about it.

MR. WILLIAMSON: We thank all of you very much for helping us with this. And we're going to take a couple of minute break. We need to take some pictures. Robert refuses to come back in here after he leaves. So we're going to take our pictures now. And you're welcome to coffee, Cokes, the restroom -- whatever you need to do. We'll take us about five minutes.

(Whereupon, a short recess was taken.)

MR. WILLIAMSON: Resume after our brief recess. At this time I need to approve the minutes of the last meeting -- the meeting of May 26, 2005. Do I have a motion?

MR. HOUGHTON: So moved.

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: Opposed, no.

(No response.)

MR. WILLIAMSON: The motion's approved. Minutes -- the motion carries. The minutes are approved.

We seek -- ladies and gentlemen who don't appear with us every month, we seek to accommodate all special requests for people who are on a schedule to return back to home. At the request of my very close friend Kyle Janek the Brazoria County delegation was put at the first and will be permitted to make their presentation first except another Senator and a House member who are on even closer schedules than yours have asked to make their remarks about some items on our agenda. And with your indulgence I would appreciate it if you would let me recognize first Senator Seliger, who represents an inner city Houston area. Oh, no. Maybe that's Amarillo. And, Senator, it's always good to see a friend of transportation at our podium.

SENATOR SELIGER: Thank you, Mr. Chairman. I appreciate the indulgence of Senator Janek while we talk about the inner city West Texas.

And, while it was not part of my remarks, I want to express my great appreciation and admiration for your service to the people of the state of Texas who have to get around the state of Texas and must get their wares and services around the state of Texas. I believe you've had significant impact for the entire state and the people who live here. And I would like to express my appreciation --

MR. NICHOLS: Thank you.

SENATOR SELIGER: -- of your service. And while my remarks refer to an agenda item not yet considered, it is my understanding that there has at this point been a favorable review of the toll credits that were applied to the Midland and Odessa Transportation Authority and how important this is and these environmentally very clean vehicles and the services they will provide the people of this area who, as do all people in West Texas, greatly depend upon their modes of transportation -- and all Texans who depend and will depend in the future on environmentally responsible modes of transportation.

And this will be a program that will be a substantial success for the people of Midland-Odessa, the Permian Basin, and the people of the state of Texas, and for this commission.

And I wanted to express my thanks to all of you and the thanks of the people of Midland-Odessa, Permian Basin, for your consideration of this most worthy project and for projects around the state that bode well, I think, for the future of transportation in the state of Texas.

And Senator Janek will not indulge me for very long. So I just wanted to say thank you and the best of luck to you, sir.

MR. WILLIAMSON: Thank you, Senator. Members, any questions of the Senator?

(No response.)

MR. WILLIAMSON: We, again, thank you for being so aware of the transportation needs of the state. Thank you.

House member Scott Campbell. Are you here, Scott? (Pause.) Also a publisher and an author of note in my home part of the state.

REP. CAMPBELL: Mr. Chairman, members. Thank you for the work you do. I wanted to brag on Commissioner Nichols before he left, but I'll brag on him anyway. Commissioner Nichols has -- I know, as all of you do, understand rural issues which are quite a bit different than some of my colleagues in Dallas and Houston and places.

But Commissioner Nichols visited with me many times about the need to improve our rural roads. And I know Mr. Behrens has been out to see us many times, as have most of you.

But we have a little project that has had some personal -- is a personal project of mine that I have really been pushing for. And I know the folks at the -- at our district office agree that we have an intersection -- I think it's listed in your agenda as Loop 306 and FM 388, which is an area near our Goodfellow Air Force Base, which thankfully we were able to keep open. And those employees use it on a regular basis, as do our folks that work out at Ethicon.

And it's on the Texas trunk system and Ports-to-Plains project. But it was slated I think for 10 or 12 years down the road, and we have been working with the folks out at our district office trying to figure out a way to get this project moved up.

One of my daughter's friends was killed in a terrible accident out there right after she had a child. We've had many, many folks killed and seriously injured. It's a very dangerous intersection that I travel when we go out to our ranch at Paint Rock.

And I know personally how dangerous it is, regardless of -- I don't know exactly what criteria you use, but this is just something that I know we need because of my growing up in our area out there. And I believe that -- I think Commissioner Nichols and I have had talks about this many times.

I think -- we're just really asking for half of the funding from you all. I think our local folks have figured out how to use their discretionary funding to come up with the rest of the money.

But it's something we need desperately to save lives. It's something we need to improve our infrastructure. And I just ask for your favorable consideration for this project. And we just don't want to see anybody else killed out there. There are crosses on every corner already, and we don't need any more out there.

And so we appreciate your consideration of this and just ask that you keep us in mind. And thanks for everything you do for the rural folks of Texas and for the rest of the state as well.

MR. WILLIAMSON: Representative Campbell, we thank you. Are there any questions or dialogue, members? (No response.) We thank you very much.

The Governor at the beginning of our terms made it clear that strategic priority money should be focused on partnering in the state with new initiatives, pass-through tolls. It should be focused on safety matters and on assisting with retaining our military presence in the state.

And, certainly, the overpass you speak of today falls under the safety and the military matter criteria. I would be surprised if the Commission didn't act favorably later on.

REP. CAMPBELL: I appreciate that. And I'm about to use some of your good roads to head home in just a minute. So thank you again for what you do and thanks for allowing me to speak to you.

MR. WILLIAMSON: Thank you. And we thank the Brazoria delegation for permitting us to let these two members speak. Mike?

MR. BEHRENS: I think we'll go to the delegation.

MR. WILLIAMSON: Very good. Who wants to take control?

JUDGE WILLY: Thank you, Mr. Chairman, members, Mr. Director. I want to thank -- I want to take one moment just to say that we also join you in thanking Commissioner Nichols for the work that he's done. He's been a great friend, and we will certainly miss him in Brazoria County. But we'll keep in touch with him I can assure you.

Brazoria County is before you again today to bring before you our concerns on projects that we feel are important to Brazoria County, both from the evacuation, from the expansion and growth that we're having.

First of all, I'd like to, because the senators are waiting for a bill to come out of committee, allow Senator Jackson and Senator Janek to speak first. So at this point in time, without further ado, I'd like to ask Senator Jackson to step forward.

SENATOR JACKSON: Thank you, Judge Willy and Commissioners, Chairman. I appear before you today -- we were here about two years ago I think it was -- and were talking about some of the needs of Brazoria County -- some of the concerns that I had and I still have. And I know you do as well.

And mainly what's going to happen when we get a Category 3, Category 4, Category 5 -- hopefully not -- hurricane out in the Gulf of Mexico and we have to evacuate Houston and the surrounding area. And it's really going to be a nightmare. And I know our Governor's come up with a plan. We're working on trying to streamline that.

But there are two areas in Brazoria County -- there are really two north-south main evacuation routes that we talked about here a couple of years ago, and that being Highway 36 and that being Highway 288.

Brazoria County is experiencing a huge amount of growth. Pearland area in the northern part of the county is one of the fastest growing areas in the state of Texas.

Highway 288 works very, very well coming out of the south end of the county until you get up to the Pearland area and congestion every day of people commuting in and out going into Houston.

That area I think can be streamlined and work well with some frontage roads and some better access ramps that could be put there that would make that a whole lot more safe and usable for people. And we talked about this a couple of years ago.

I think the Commission suggestion to our delegation at that time was to go back, make some plans, see if you can come up with some local money -- matching money -- to make these projects work. And we have done that. I think you'll hear a lot of testimony following me on a lot more of the details there. We're here. We're ready to go. And we're ready to see how we can partner and make these projects go as quickly as can be.

We've been very, very lucky over the last 20 years on storms in the Gulf. And it's not a question of if; it's just going to be a question of when. It's going to be one of these days we know we'll have to deal with that.

It was very interesting last night discussing with Commissioner Houghton on some of the tools that are in the tool box now to utilize. We talked a little bit about rail and the ability to take on and put in rail projects. And I'm sure we want to discuss that further as we go forward and see if there's a potential there.

But we've got in Brazoria County huge petrochemical investments with some of the major petrochemical complexes there. The Port of Freeport is growing leaps and bounds. There's a new LNG facility that's being built down there now. The dirt excavation work is being performed.

We still have a lot of tourism in the area. The cities and the growth that they are experiencing is really -- it's great for the economy. And we just need to make sure that we can do everything that we can to keep them mobile, as Senator Seliger said a moment ago. That's kind of the lifeblood of the economy is being able to move your goods and services from one place to another.

So as we have to leave and go take up a school finance bill because -- you know, that's a very important element of our state government, too, to make sure that our kids have a -- have the best education that they can possibly have. I think the Senate's going to take this bill up here at ten o'clock. So I'm going to be very, very brief.

But I want to express my appreciation for the work that you all have done. I know over the last year or so with all of the e-mails that I've gotten from people in Travis County about toll roads that you guys have had a long, tough row to hoe in trying to develop policy and making some things happen in ways that are non-conventional to what's happened in the past. So --

MR. WILLIAMSON: I saw a quote in the newspaper today -- this morning about an unrelated topic, but it made me think of the toll road thing. The guy was quoted as saying, this company had whipped him into guacamole, and that's kind of how we feel sometimes. We've been whipped into some smooth cream.

SENATOR JACKSON: Well, I appreciate the work that you guys and girls do. And I know it's not an easy deal. You have a whole lot more requests than you have the resources to deal with.

And my message today is that, pursuant to the advice that the Commission has given our county, we have I think done our part. We're ready and willing and able to ready to go. So we appreciate.

MR. WILLIAMSON: Members, questions or dialogue with Senator Jackson?

MR. HOUGHTON: Senator, I look forward to working with you. I had a nice visit with you last night about all the available -- we call it tools in the tool box -- up for your county -- and not only your county, but counties across the state of Texas to make them have the competitive edge that we need in this global market and economy that we are dealing with. And thank you for your support of transportation.

SENATOR JACKSON: Thank all of y'all.

MR. WILLIAMSON: Well, I didn't know when I was addressing your delegation you were hiding behind one of the bigger fellows in the front, so I didn't realize you were back there -- that your constituents need to know that you were as insistent about starting at ten o'clock as Senator Janek was. And we listen when senators insist.

SENATOR JACKSON: Well, we're going to be over there voting on a -- I think nearly a 400-page bill. And we've got to have about five minutes to read it --

MR. WILLIAMSON: Five minutes to look at it? Yes.

SENATOR JACKSON: Yes -- before we vote.

MR. WILLIAMSON: Things just never change, do they, Mike?

SENATOR JACKSON: Thank you, Commission.

MR. WILLIAMSON: Good to see you, sir.

JUDGE WILLY: Mr. Chairman, members, I'd like to ask Senator Janek to come forward, please. Senator?

SENATOR JANEK: Thank you, Judge, Commissioner, and members. Mr. Chairman and members, I want to thank you. I tell my three young boys that please and thank you go hand in hand. So, first, let me say thank you, not just for the global service that you provide to the people of the state, but for the specifics of what you've done for the Texas Gulf Coast and southeast Texas.

We had a nasty little brouhaha brewing along 610 Loop in Texas -- in Houston because it splits the city of Bellaire. Mr. Trietsch and TxDOT did a tremendous job in dressing up the 610 Loop, putting some aesthetic sound walls and other niceties over there that made it not only more palatable to the people that live there, but a lot nicer for the people that use the freeway.

That's one small example of the work that you do, and I'm grateful for your daily tasks. I don't envy your job, having to pick amongst so many worthy causes. It's one of the toughest jobs in the state. I put it up there with little league coaches and school board members having to say yes or no to so many worthy causes.

The merits of the argument that we're going to make on behalf of Brazoria County are before you. And they're going to articulate what their needs are in Brazoria County far better than I can do.

I would just say this. It is a pleasure to represent the people of Brazoria County. They're good, hard-working, hard-playing, God-fearing people down there. I love them. I love campaigning down there. When they tell you something -- they look you in the eye and tell you something you can pretty much take it to the bank.

They're a pleasure to represent. They rarely ask things of me. I try to make these little visits with you as few and far between as I can. I show up when I think it's important. I'll tell you what you're going to see with Brazoria County is important for mobility, for public safety, for the hopefully distant event that we may have hurricane evacuation needs in that area. It is extremely important.

I'll thank you in advance for your indulgence that I do need to leave to get back over for House Bill 2. The House has sent over a wonderful education reform bill. The Senate's going to see if we can mess it up a little bit.

MR. WILLIAMSON: Members, any dialogue? (No response.) Senator -- and I guess Mike's already left. He's not waiting on me. Oh, no. Both of you have been -- as with Senator Seliger, been stalwart supporters of the transportation needs of the state. And we appreciate that more than we can say.

SENATOR JANEK: It's our pleasure.

MR. WILLIAMSON: You all have been good friends of transportation, and we appreciate it.

SENATOR JANEK: It's our pleasure. Thank you, Mr. Chairman.

MR. WILLIAMSON: Good to see you, sir.

JUDGE WILLY: Thank you, Senator. We appreciate it very much your being here.

At this time, Mr. Chairman, I'd like to call on Representative Glenda Dawson.

REP. DAWSON: Thank you, John. Mr. Chairman, members, I have been asked to speak with you today, not because I am a Representative, but probably because I taught most of these Brazoria County people here.

I was a high school teacher for 33 years. And John Willy and I started transportation needs a long time ago. We went to school together in Angleton. We rode that big old yellow school bus and the school driver -- bus driver would say to us, I will drive home whomever wins this race. So John Willy and I would be put out of the yellow school bus and we would race. And I'm glad to say that I outraced him every time.

This is called in some cases Brazoria County and in some cases it's called Brazoria County. And we call it home. And when I started teaching 36 years ago and taught for 33 years, ladies and gentlemen, I want you to know in Pearland, Texas, of Brazoria County some of my students rode horses to school.

We do not ride horses to school in Pearland any more. We drive cars and we drive lots of cars. And I'm telling you we are inundated with growth. The news is out. And Brazoria County is the place to be. And transportation needs have just become overwhelming.

I am delighted to be in this capacity as a State Representative and to represent such a neat district -- but to be able to appeal to you sincerely and say, we are in need. We need your help, and we appreciate all your efforts.

I will close by simply saying with the group of people we have in leadership in Brazoria County you can depend on us working in a very ethical, sincere manner. We may not have it all together, but together we have it all. And I'm telling you we'll work together and we'll work with you and we thank you sincerely for all the consideration you might give to us. Thank you, ladies and gentlemen. We appreciate it.

MR. WILLIAMSON: Oh, thank you. Members?

REP. DAWSON: You're certainly welcome.

MR. WILLIAMSON: Thank you, Representative. REP. DAWSON: You're certainly welcome.

MR. WILLIAMSON: We appreciate it.

REP. DAWSON: Yes, sir.

JUDGE WILLY: Thank you, Representative. I appreciate that. If I may indulge the Commission, Representative Bonnen was not able to be here. He had a short letter he asked me to read if that's all right.

It says, Dear Chairman and Commissioners, I'd sincerely appreciate your consideration of the vital transportation needs of Brazoria County as presented to you today by the Brazoria County Economic Development Alliance and my fellow legislators representing this community.

I offer my full support of the proposed improvements to State Highway 36 and encourage the Commission to complete construction funding of State Highway 36 from Freeport to Interstate 10. As you are aware, the Governor has designated this highway, along with State Highway 288, as major arteries for hurricane evacuation for the Gulf Coast region.

Additionally, improvements to State Highway 36 are imperative to addressing the congestion caused by significant growth in Brazoria County. By taking these necessary steps to improve mobility we can achieve a better quality environment for southeast Texas.

Again, thank you for taking the time to meet with representatives from Brazoria County who are working to increase awareness of the transportation needs of the county and surrounding communities.

Please do not hesitate to contact me if I can be of assistance to expediting the improvements to State Highway 36 and State Highway 288, which will be of great benefit to the entire region. Sincerely, Dennis Bonnen, District 25.

If I may give this to the --

MR. WILLIAMSON: Yes, sir.

JUDGE WILLY: I would also like to at this time recognize one person. We have Commissioner Stavinoha from Fort Bend County here to show his support for the Highway 36 project coming from and through Fort Bend County. If you would, please.

COMMISSIONER STAVINOHA: Thank you, Judge, Commissioners, Mr. Director. Highway 36 splits my precinct in half, starting at Damon, going through Rosenberg, and going all the way into Wallace Orchard area.

I've always lived within probably four miles of Highway 36. At one time when I first got married my driveway was on Highway 36. Right now I live two miles off of Highway 36. I'm very familiar with the traffic flow down that corridor.

I dread this weekend. The people from Brazoria County will be evacuating to go up to the Hill Country to their deer lease. The people in the Hill Country will be going to their condos on the beach. And it's going to be impossible to get across Highway 36. I've noticed this every weekend when there's a holiday the traffic flow back and forth down 36.

Until 99 gets funded 36 is the corridor that most people use to get in and out of that area. And right now 99 -- it's in limbo how it's going to be built. But, again, 36 is very important, not only to Fort Bend County, but certainly to Brazoria Country, and certainly it needs attention as quickly as possible. Thank you.

MR. WILLIAMSON: Wait, wait, wait, wait. Members, any questions of the Commissioner? (No response.) Oh, okay. Good to see you again.

JUDGE WILLY: Thank you very much. At this time I would like show just a quick video, if I may, sir.

(Showing of video.)

JUDGE WILLY: Members, in the essence of time, I'd like to introduce Commissioner Jack Harris at this time and ask him to step forward.

COMMISSIONER HARRIS: Thank you, Judge. Mr. Chairman, Commissioners, we thank you so much for you allowing us the time to be here today.

I would like to quickly go over some of what we need in regard to Highway 288. You've seen the video presentation. Let me assure you that our growth is not slowing down in our area. The 2000 census we had 241,000 people -- residents in our county. The estimate now for -- through 2004 is over 275,000 and growing rapidly.

You heard about the 22,000 platted new lots that we have in our county ready to be developed. We have another division -- one subdivision of 11,000 acres that will soon be the home to 150,000 more residents.

This thing is not stopping. We're in an unusual situation in that we're just south of the Texas Medical Center, which draws a tremendous number of people to our county to reside. And we're not that far from NASA. And, as a result, we have a number of people who live in our county who go over there.

So, obviously, we need help. 288 is already crowded, as we told you last year. It's gotten worse. It's not going to get any better.

So, you know, besides hurricanes, as you saw also, we have to worry about tropical storms. Allison was a tremendous blow to our area, and it really did stop our ability to move around for several days. That's going to always be with us, and we understand that. When you're 40 feet above sea level you've got a problem.

So, anyhow, we'd like to do this first. We'd like to thank you for helping us begin to build the service road from 2234 to Beltway 8. That's in the process, and we appreciate that. It's going to help relieve some. But we need to also do from 518 to 2234. Otherwise, we're going to have a major traffic jam at the Beltway every morning and every evening. We also need direct connectors from 288 to the Beltway.

The other thing that we need we think rapidly -- we've already passed a resolution in the Commissioner's Court -- is to take a look and hopefully do something in regard to two lanes either way in the middle of 288. We think that the traffic now warrants it, and certainly it will, as I say, only get worse as time goes by. So we'd like very much for you to look at that with us and let's see if we can't do either some type of controlled access or whatever is possible in that area. But we need those four lanes and we need them now.

These projects I'm talking about on 288 will certainly aid our economic growth, and, as you can see, would definitely protect our citizens in a catastrophe. And that's the thing that we worry about the most.

So we need your help. We need it now. And we hope you can help us. Thank you so much.

MR. WILLIAMSON: Questions of former House member Harris -- Dr. Harris?

COMMISSIONER HARRIS: And, by the way, Mr. Chairman, I've mentioned to Commissioner Nichols that I was really surprised that you as a former House member did not tell him how terrible the Senate is.

JUDGE WILLY: Thank you, Commissioner Harris. One thing that the videos did not show with regard to the evacuation routes -- first of all, there's two ways out. According to the Governor and the Department of Emergency Management through the Texas Department of Public Safety there are two ways out. East of the Brazos you go 288 to the Beltway and on up to College Station. West of the Brazos Highway 36 to Brenham -- or did I get that backward. Anyway, that's your two ways out.

But let me show you something that really brings to heart where we really are on an evacuation situation. The Texas Department of Public Safety, at the direction of our Governor, asked the Department of Public Safety to use a scenario that would tell us what would happen.

What they did they used the 1961 Hurricane Carla scenario where it was a Cat 4 storm with gusts up to 175, which would be a Cat 5. And the surge that occurred there created 34 deaths in Brazoria County and over $400 million in 1961 dollars.

What they did, they moved the hurricane from the Palacios area as a direct hit. They moved it up to Brazoria County to do a scenario and show what would happen. Now, what I'm going to show you does not include the damage from rainfall and flooding such as we received from Allison.

This is your base coastline map. Note that the Freeport industrial complex is right in the -- well, won't work on that -- is right there where it says Coastline Freeport. Then you have your Chocolate Bayou Plant and industrial complex over at Chocolate Bayou. That's your Monsanto/Solutia/Equistar/Lyondell. And then, of course, Sweeney is over to the west.

Here's what happened. Just -- I'm going to take the categories. A Category 1 storm with a 4.9-foot storm surge will cause some immediate damage. Note the inlets and the rivers starting to build.

Now, let's move to a Category 2, which would cause a 9.9-foot surge. Your petrochemical industry in Chocolate Bayou is under water. Fortunately, the area in Freeport has a levee that's going to keep it out of the water for a while longer.

Go to a Cat 3 with a 15.3-foot surge. See, already you're approaching West Columbia. Lake Jackson is going to be really suffering. Your plants at Chocolate Bayou are just about under water. Now, here we have -- where you have two-thirds of the total petrochemical activity in the United States in this area -- one-third of it's in Brazoria County. You've just inundated a portion of it.

Now we go to a Cat 4 with 18.8-foot surge. And you see it's almost up to West Columbia and pushing toward Angleton and pushing toward Alvin.

Then in a true Cat 5, according to the Texas Department of Public Safety Emergency Management Office, a 22.4-foot surge would inundate even the Dow complex and the industrial complex in the Freeport area. And we have to move these people. That's where we are.

Now, that -- just in that scenario with Hurricane Carla it was 13,900 people that were affected -- over $3.5 billion in damages. And this just reinforces the need to try to save lives in the future.

If we started now it would take four to five years to get fully ready for a full evacuation in Brazoria County. That's five years of hurricane seasons or 30 months of sitting and waiting to see if it's going to happen. Each year we're not hit increases the probability of a storm for the following year.

In 1998 we were funded for Highway 36. In 2004 -- Highway 36 was scheduled for letting in 2004 for the entire corridor from Highway 59 to the Port of Freeport. This project was pulled in 2003 and rescheduled for 2014, except for that portion from Fort Bend to Highway 35.

We came to see you in HGAC -- our Council of Governments -- and said, Here's our problem. We need help on the State Highway 288 expansion and the State Highway 36 widening. Two years ago TxDOT told us we -- what we needed to do, and we came back to make sure we heard you right. Last year we were told that we had every reason to be successful, and we appreciate the positive comments.

We took to heart when we were told that all indications -- we had this right to be successful. We didn't make a pledge to our voters without input and approval from the MPO and overlaying our plans on that of TxDOT. We didn't make a pledge to our voters without the input and positive feedback from TxDOT.

TxDOT and HGAC score their projects on the basis of regional significance. So I present to you a unanimous resolution of support from HGAC and our MPO signed by Judge Eckles.

TxDOT and HGAC have scored projects based on leveraged value. So I present you a check for $50 million on behalf of the citizens of Brazoria County. With the special districts chipping in I present you a check for $100 million. I think we've satisfied that leveraged value.

MR. WILLIAMSON: Hey, if you're in the Legislature that's one check for $150 million. That's what that is.

JUDGE WILLY: Well, that's why we wouldn't let the House or Senate have a hold on it. What we're asking for us to move Highway 36 and Highway 288 expansion into the TIP for 2007 or at the latest 2008 funding cycle. Ideally these funds would -- and I'm hurrying because I'm running out of time. Ideally these funds could be secured from funds available through HGAC on the 288 freeway project from Category 2 funds and evacuation funds for Highway 36. But, if necessary, we're asking you to make up the difference from your discretionary funds at your control.

Our county and the safety of 276,000 people and our future growth depends on your action. We believe that we've done our part. We're asking for TxDOT to do its part.

I'd like to have the members of the Brazoria County delegation stand. Gentlemen? Ladies? These are the people that represent.

MR. WILLIAMSON: It looks like a --

JUDGE WILLY: And we thank you for letting us be here.

MR. WILLIAMSON: -- good cross-section.

JUDGE WILLY: And if you have any questions I'll be happy to answer them, sir.

MR. WILLIAMSON: First of all, thank you for a great presentation. Please be seated. I'm going to have a couple of questions.

JUDGE WILLY: Okay.

MR. WILLIAMSON: Pretty all-encompassing. Good presentation all the way around.

JUDGE WILLY: Thank you.

MR. WILLIAMSON: Mr. Houghton?

MR. HOUGHTON: The shortfall is -- if I'm -- my addition is correct, is about 30 million, Mike? Or Amadeo? Who's in charge here? What's the shortfall --

MR. WILLIAMSON: That would be Gary.

MR. HOUGHTON: Gary?

MR. TRIETSCH: Well, just on Highway 36 it's about $50 to $60 million. And 288 -- that doesn't have any funds. But to make it -- add four lanes to it is about another $140 million.

MR. HOUGHTON: So we're talking about $200 million?

MR. TRIETSCH: Yes.

MR. HOUGHTON: Give or take?

MR. TRIETSCH: Yes. Give or take.

MR. HOUGHTON: Give or take.

MR. TRIETSCH: On the projects.

MR. HOUGHTON: And, Judge, your contribution is obviously --

JUDGE WILLY: Obviously, it's $100 million. We have on the books and planned about $400 million in projects, of which some of those are totally county projects. We're not even counting those in the till.

But, just for instance on Highway 36, we have $10 million that we're willing to hand over right now, you know, for whatever purpose that Gary needs it. And, believe me, with regard to Gary, we wouldn't trade him for two speckled puppies. He has been good to us. So when I fuss at TxDOT I'm not fussing at this guy.

MR. WILLIAMSON: Two speckled puppies.

JUDGE WILLY: He's tried very hard to help us. But, in answer to your question, we're willing to do whatever you all wish us to do. We're -- on the expansion of 288 freeway, let us work together on a pass-through toll. Let us work together with HCTRA -- with Harris County Toll Road Authority and create a toll road.

I don't care how we do it. There's -- I know that -- Ric, we talked last night -- or Mr. Commissioner --

MR. WILLIAMSON: No, no. Ric.

JUDGE WILLY: -- talked last night and -- about several ways that we could approach this. There are a lot of ways it can be done. We just need to think outside the box and get the dang job done.

MR. WILLIAMSON: And get it done.

JUDGE WILLY: That's it.

MR. WILLIAMSON: Absolutely.

JUDGE WILLY: Now, Highway 36, that's a Cat 2 -- well, it was Cat 4 until somebody changed the designation to Cat 2. But, you know, that's one that we really need right now. It's already in the -- it's not in the TIP, but we're at least scheduled for down to 35. It's that lower part that we need to get done. That's where you're going to be bringing all those people out.

MR. HOUGHTON: Gary, I'm still confused a little bit by the number. What's the total project cost -- the total project cost --

MR. TRIETSCH: Total project cost --

MR. HOUGHTON: -- without the input -- I mean, the contribution by Brazoria --

MR. TRIETSCH: 120 million on Highway 36. (Pause.) The total on 36 is roughly 170 million. And we've got about 30 million funded. And that includes the right-of-way cost.

MR. HOUGHTON: Right.

MR. TRIETSCH: That's construction and right of way.

MR. HOUGHTON: That's everything.

MR. TRIETSCH: Yes.

MR. HOUGHTON: Including the other --

MR. TRIETSCH: Oh, no, that's just State Highway 36.

MR. HOUGHTON: Okay.

MR. TRIETSCH: 288 -- if my memory is correct that's 100 to $140 million.

(All talking at once.)

MR. TRIETSCH: Oh, okay. On 36 -- it's in Fort Bend and Brazoria County. So I'm talking about the whole project.

MR. HOUGHTON: Okay.

MR. WILLIAMSON: Again, thanks.

COMMISSIONER HARRIS: Mr. Chairman, you and I got elected in 1984. We started serving in 1985. I represented the southern part of Fort Bend County at that time. 36 went through that area. I was promised in 1985 that 36 would be taken care of. It's been that long that road's been sitting there.

MR. WILLIAMSON: Sounds like a familiar story. Yes, sir.

COMMISSIONER HARRIS: Not unusual.

MR. WILLIAMSON: Hope?

MS. ANDRADE: Judge?

JUDGE WILLY: Yes, ma'am.

MS. ANDRADE: Congratulations. You certainly -- your community listened to what we said last year, and you've come back with one solution. You know, this is not the answer to everything that you need.

But I'm sorry that I missed last night's event. I got into Austin about 10:30 I think. Our District Engineer failed to inform me that I-35 had two lanes closed last night, so it took me quite a bit to get here.

But your community is certainly progressive in thinking -- innovative in what you've done. And I congratulate you and I'm extremely proud of what you've done in this short time.

I think that, you know, the fact that you mentioned pass-through tolls -- the fact that you mentioned it -- we still can't get it done as it is now, but we're still willing to sit at the table all together. And so I'm very committed to supporting and working with you on this and seeing if we can't resolve the problem that you have out there. So thank you all so much.

JUDGE WILLY: Thank you very much, Commissioner. And, like I said before -- and I have said before -- if you can't get out of the box they're going to bury you in the box. We think outside the box in Brazoria County and we'll watch other people be buried, but we want to move forward.

Mr. Chairman, if there's no further questions may I give you a handout?

MR. WILLIAMSON: Well, I'm going to have just a couple, John.

JUDGE WILLY: Okay. Certainly.

MR. WILLIAMSON: First of all, I'm just curious. Who's the predominant electric provider in this part of the state? Is it --

JUDGE WILLY: You have two providers. Predominantly, it's Texas/New Mexico Power Company and Reliant -- or the old Houston Lighting and Power.

MR. WILLIAMSON: Is Reliant also known as CenterPoint?

JUDGE WILLY: CenterPoint. That's correct.

MR. WILLIAMSON: Okay. And the Legislature recently extended the TERP program and funded that extension out of some removals of state highway fund money. Does the TERP program affect you all directly or just as part of the Houston/Galveston area?

JUDGE WILLY: More the Houston/Galveston area. I think the program that you're talking about actually was the expansion of those lines to the south. If that's what you're talking about that went around Brazoria County through Fort Bend County.

MR. WILLIAMSON: I was curious though. One of your legislators seemed to be particularly interested in helping CenterPoint Energy at the cost of the Department. And I was just kind of curious if there was a reason.

JUDGE WILLY: No. I'm not familiar, nor have I been advised what the member you're talking about is up to.

MR. WILLIAMSON: No, and we would never mention that member's name publicly.

JUDGE WILLY: No, sir, we wouldn't.

MR. WILLIAMSON: I've just been curious about it. You know, when -- one of the most difficult things in dealing with my former colleagues is to help them understand that every time they take a dollar out of the department for school buses or every time they cost us an additional dollar to reimburse utility companies for their right of ways that is, in fact, a dollar that can't be spent in Brazoria or Harris or Parker County on a road.

JUDGE WILLY: Mr. Chairman, it's dollars that --

MR. WILLIAMSON: It's just hard to get those people --

JUDGE WILLY: It's dollars that we can't multiply. It's not just one dollar. It's lots of dollars that we can't multiply when it's used that way.

MR. WILLIAMSON: It's a difficult thing. Also I would want the new faces in the Brazoria/Fort Bend County area to be sure that we didn't make a mistake on what we had to do in 2003. I know the Judge knows about this, but I want all of you to know.

When Mr. Perry became Governor and we were advising him of the status of the transportation system in the state one of the things we pointed out to him was the construction plan was overcommitted across the state.

JUDGE WILLY: Yes, sir.

MR. WILLIAMSON: And every year every MPO and every county judge and every mayor and every business leader was getting this book -- this happened while you were in Atlanta -- that said, Your project's in the book. You're promised your project. But when you added up the cost of all the projects in the book it exceeded our most optimistic revenues by like 50 percent.

So we were in effect every year -- I don't mean to say this personally about the department -- we were misleading the taxpayers of the state into thinking that their projects were going to get built at some point.

And the Governor didn't want that. He said, I want you to strip it out and make it honest and we'll just go ahead and take the hits and everybody will get mad -- and they did -- people got mad all across the state. But the document's now honest. It's fundable.

I think, Alan, you all did the same process we did all across the state. You internally through local leaders decided which projects to move around. And I think that when 36 got taken back out it was a part of that process and not because we didn't want to honor our word. And now it's time for us to figure out how to put that back together, and we're going to try to do that.

I think you made a great presentation. I think the need is clear. And you know, John, we don't make these decisions here. But I think you and your community can expect that the Governor is most interested in addressing your concerns.

JUDGE WILLY: Well, we thank the Governor and we thank the Commission for allowing us to be here. And anything we can do to be of help to help create new ways of doing things we're going to be first in line to be there with you --

MR. WILLIAMSON: Yes.

JUDGE WILLY: -- when you --

MR. WILLIAMSON: Yes, you all are pretty innovative. Fort Bend County and Brazoria County has been pretty spectacular over the last few years.

JUDGE WILLY: Well, don't forget old Bart Sadler up at Montgomery County. He's been pretty good, too.

MR. WILLIAMSON: Well, and they have -- yes, in the last year they've just -- man, they --

JUDGE WILLY: He's getting one of the first pass-through tolls, so I admire him.

MR. WILLIAMSON: It's good to see you and Jack again. Thank you. And we're going to take a few minutes and let you all excuse yourselves. Gary and Alan, thanks for coming up with the bunch. And take a few moments to stretch and we'll come back in.

(Whereupon, a short recess was taken.)

MR. WILLIAMSON: Michael, the agenda's in your hands.

MR. BEHRENS: Thank you. We're going to agenda item number 3. That's our aviation minute order for the month on various airport improvement projects. Dave?

MR. FULTON: Thank you, Mike. For the record, my name is Dave Fulton, director of the TxDOT Aviation Division.

This minute order contains a request for grant funding approval for four airport improvement projects. The total estimated cost of all requests as shown in Exhibit A is approximately $1.4 million, approximately $1.2 million federal and $140,000 in local funding.

A public hearing was held on May 20, 2005. No comments were received. We would recommend approval of this minute order.

MR. WILLIAMSON: Members, are there questions of Dave?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

MR. WILLIAMSON: I have a motion and 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.

MR. FULTON: Thank you, sir.

MR. BEHRENS: We'll go to agenda item number 4, which will begin some public transportation agenda items, and the first being a discussion item to lay before the Commission the distribution of toll credits and how that program works. Bobby Killebrew.

MR. KILLEBREW: Good morning again. Commissioners, Mr. Behrens, and Roger. For the record, I'm Bobby Killebrew, Public Transportation Division interim director.

Today I have the pleasure of leading a discussion on item 4, criteria for the distribution of toll credits. (Pause.) I think I -- there it is.

MR. WILLIAMSON: Are we doing --

MR. KILLEBREW: Wrong presentation. (Pause.) As we're bringing this up I'll go ahead and begin. On June 29, 2000, the Commission authorized using toll credits on transit projects. And this is by way of a historical recap of what we've done so far as an agency.

The following August history was made in Texas with the first award of toll credits for a transit project. Hill Country Transit District, operating a small organized system, serving the areas of Killeen, Copperas Cove, and Harker Heights, received a toll credit award for the procurement of transit capital for that new system.

In November 2003 the most recent award of toll credits for transit projects was made to Beaumont and Port Arthur for vehicle procurement.

And on February 24, 2005, the Commission indicated their intention to make toll credits available for the JARC -- that's Job Access Reverse Commute -- Colonias Project, which TxDOT is in the process now of issuing an RFP for project proposals.

The past toll credit awards for transit projects to date total approximately 27 million. The amount of power and innovative financing has or will allow the leveraging of is almost $108 million in federal funds to carry out over 300 transit projects.

Projects benefitting from the use of toll credits range from buses in Killeen, Mesquite, Victoria, Beaumont, Port Arthur, and others, facilities in Lubbock, Longview, Bryan/College Station, and Waco, rail projects in Dallas and Galveston, as well as TxDOT-administered grants which assist nonprofits, rural, and small urban transit systems and the elderly and disabled program and the rural program and in our vehicle capital replacement program.

The Texas Transit Association and the Department have both conducted various surveys over the past several months. A quick review of the survey results for projects where systems have indicated the lapse of their federal funds due to their inability to provide match, and thus the need for toll credits, are in fiscal year '05. We have one system that is scheduled to have a federal grant lapse because of their inability to match.

MR. WILLIAMSON: And what's that system?

MR. KILLEBREW: That system is Midland/Odessa.

MR. WILLIAMSON: And will that be put in local funds -- if we were to approve toll credits today would they be put in local funds with that?

MR. KILLEBREW: Commissioner, I believe there's some representatives from that system here today that would like to speak on that subject regarding their local match ability.

MR. WILLIAMSON: Okay.

MR. KILLEBREW: In fiscal year '06 we have -- found out through the survey that there will be seven systems that will have grants that will lapse because of their inability to match, and they're also requesting toll credits.

Likewise, in fiscal year '07 there's an additional four systems that will have grants that will lapse at that time.

The projects funded with federal funds identified in this table include vehicle replacements, new vehicle fleet expansion, facility construction for maintenance and administrative operations, and facility renovations.

Presented for discussion matters today is a process which involves an annual call for projects. As the points outlined in the discussion are tied to elements which may not currently exist, the approach is phased so that in the short term projects can be considered using criteria applicable for today, and in the long term using criteria which is currently being developed.

And before you now is a table that lists some criteria -- some screening criteria that the Department might consider in addressing proposals in the short term versus the long term. And I'll just go through this table quickly.

The first item in good standing. Currently in the Texas Administrative Code in the public transportation area there is a definition for good standing. And it's recommended that the same be applied to toll credits. And that particular definition reads, A status indicating that the department's Director of Public Transportation has not sent a letter to an entity signifying the entity is in noncompliance with any aspect of a program.

Application as the oversight agency, the Department should be involved from the get-go. Systems which intend to use toll credits should involve the department very early in the process, specifically if these plans are requesting and securing federal earmarks for which the system plans to request toll credits in lieu of local match for funds.

The Federal Transit Administration requires systems to identify at the time of application what their match rate's going to be. Once a system files an application with the Federal Transit Administration they lock in a match ratio. So if a system indicates to FTA we're going to use local funds as the match, a match ratio is locked in. They can't come back after the fact and apply toll credits retroactive and has to be there from the get-go.

Regional endorsement -- as the Department moves forward with regional service planning transit projects should be linked to the local service plan. Until such plans are formalized it's recommended that the regional service planning partners confirm support for the projects.

ITS Projects -- projects falling under the ITS must conform to regional architecture plans as a federal requirement.

Improvements to service delivery and also the business plan -- as short-term criteria transit system would allow the improvement -- excuse me -- as a short-term criteria transit systems would outline the improvement to service delivery. As the department develops and adopts a business plan it's recommended that the transit system -- or that the system detail -- how the project will support or carry out the business plan.

And local contribution -- toll credits are recognized by the Federal Transit Administration as an innovative financing tool. As such, it is recommended that the request assure that the use of toll credits will not decrease overall local funds.

Evaluating the project -- the criteria outlined in this table -- an attainment plan. As provided by House Bill 3588 the department is charged with furthering the state's efforts to reduce air pollution.

Performance and efficiencies -- also provided by House Bill 3588. The legislation speaks to eliminating waste and the provision of public transportation services and generating efficiencies that will permit increased levels of service.

Other Health and Human Service programs and Workforce Commission programs -- as TxDOT's public transportation role has evolved and continues evolving so much the project's funded through the department. Projects should be considered if they can exist and provide benefits outside of the traditional silo programs.

Coordination -- the importance of having a coordinated project, one that will share transportation resources, responsibilities, and activities of various agencies with each for the overall benefit of their community.

As a matter of process, department staff could screen and evaluate projects considering and discussing the requested project's potential benefit to the public -- Texas public transportation system. Each project could be evaluated using the aforementioned criteria as a measure of the quality of the project. Those projects meeting or exceeding an appropriate level or quality could be considered by the commission contingent on the availability of toll credits and other commission priorities.

And, with that, I'll end the discussion and I can answer any questions.

MR. WILLIAMSON: First of all, Bobby, I want to thank you for distilling a complex discussion item to the bullet points the commission needs to focus on.

Members, we do have one person wishing to offer comment in this discussion item. Would you like to question Bobby now or would you prefer to --

MR. HOUGHTON: I'll wait to hear.

MR. WILLIAMSON: Okay. Well, if you'll just sit down for a second, Bobby. We'll hear from Glenn Gadbois. (Pause.) I think -- don't you represent the AGC?

MR. GADBOIS: Exactly. How did you know? Commissioners, Chairman, my name is Glenn Gadbois, and I'm with the Just Transportation Alliance. And we look forward to that time where we will have as good a working partnership with AGC as we apparently have with the department.

As you will notice -- let me just pass these out. (Pause.) Notice, with some conversations with Bobby with PTN -- Killebrew -- and Steve Simmons and Michael Morris and some of the public transportation providers, we have come to much the same conclusion -- or at least same recommendation -- that Bobby has.

Although we want to encourage you to expand out the conversation or at least in terms of thinking about the use of toll credits to expand that to their full application.

What we have done here -- because toll credits are going to become -- we have absolute faith that things are going to fall into place such that toll credits will become in the future one of Texas' more valuable tools in terms of getting all sorts of transportation projects done.

As a consequence we encourage you not to think just about transit when you're thinking about how you implement your rules or how you consider investing toll credits either in the short term or the long term.

As a consequence I ask your indulgence for a moment. I know we e-mailed these to you, but what I'm going to do is just kind of walk you through the highlights of some concepts here that I think are worth noting and thinking about as you move forward.

The first is that toll credits are a valuable investment tool for a number of different kinds of transportation. Those who do rail are very excited and enthusiastic about toll credits. And that could draw down many more toll credits than the state has available right now in terms of the projects that are moving forward.

As we look to the future and the passage of a constitutional referendum and the development of plans and the implement of the rail relocation and improvement program -- or whatever that's going to be called -- as we look forward to regional public transportation planning and how that evolves toll credits will become even more valuable.

As a consequence -- and then I guess we also have in place for now a couple of years -- and certainly evolving, maturing, developing is the Texas Metropolitan Mobility Plan. I think on all of those fronts toll credits will become more and more valuable as the department has more of them and those become more regularly available.

As a consequence what I proposed here is thinking about those different categories of places to invest. And then looking both in the short term and the long term to encourage a structure that promotes or has people coming to you in the way that you want.

As a consequence -- and I'm not tied to these percentages -- I mean, basically, they're kind of rough guesses. I'm not sure anybody -- but I certainly don't know what good percentages for each one of these categories would be in actual fact.

But what I tried to do is develop a structure that showed you, if you invest some in the Texas Metropolitan Mobility Plan in the short term, if you invest some in regional planning and/or transit in small urban in the short term, if you invest some in rail relocation in the short term -- what that does is -- what that is likely to do is to encourage people to work together if they need more money than is in that category.

Or, if they're smart and playing well, then that will encourage those transit folks or those rail folks that are in the metropolitan area to apply to this commission for both.

We have also created a category for commission strategic funding because we think it is in important, especially over the short term, that the commission maintain some -- or as much flexibility as is possible.

As this evolves out, however, and you get the rail plan in place, as you get the regional service planning, for which you have worked so hard, Commissioner, in place, then that will allow us to move from kind of competitive allocations statewide, which are never as strategic, to a strategy of supporting and implementing the plans that these local folks have worked on so hard, in which case you could consider where those plans make sense allocating regionally, in which case, if you will notice on that box on the first page, the long term -- the Texas Metropolitan Mobility Plan category goes way up because what we have done is recognized that there will be needs for rail and there will be need for transit and there will be need for implementation of the Texas Metropolitan Mobility Plan that could all be allocated in one bundle to those regions.

There will also, however, be rail outside of that. There will be transit outside of that. The regional plans outside of that still retain some percentage.

That's the basic layout of the structure that we think -- well, we want to encourage you to think about because we think, much like our political system, that will encourage people to work together and not simply come to the State with their own individual or singular project and concerns.

We do completely agree with what you heard from the department on the idea of making sure you're clear on some up-front eligibility. When this department has done other competitive processes -- and I'll name one -- the enhancement program -- and that wasn't clear in the front end you have all sorts of problems on the back end that I think the department is well aware of now. And I'm sure, you know, when you put out that competitive process you'll make sure that, you know, there's clear enough guidance on the front end.

But to the extent that you can articulate we want you working together. We want to make sure that there is a maintenance of effort in terms of local contribution. We want to make sure those things are in place that will help you in the long run.

The only other thing that I'd like to mention about this is that our assumptions on this are really, you know, made out as clearly and in bullet point fashion as we can make it. We still need to pass a federal transportation bill that brings Texas more toll credits. And we still encourage, because we have been encouraged, to make sure everybody in this room understands how important it is to articulate that that still needs to happen when this bill occurs -- and this bill needs to occur quickly.

The -- you know, that the planning has to evolve and get in place for both the rail and for the regional public transit. But we do encourage you as these assumptions start falling in place. That will allow you to evolve this, that will allow you to sub-allocate, which we encourage you to think of as a much more strategic investment than simply doing statewide competitive granting.

That's the short remarks on this. If there are any questions I will -- or things that I passed over that you saw and didn't understand, I'll be more than happy to answer them. Otherwise, I'll let you get on with your busy agenda.

MR. WILLIAMSON: Questions, members?

MR. HOUGHTON: So you're -- I have a question. Where's Bobby? Bobby, what's our balance as far as toll credits are today?

MR. KILLEBREW: I had to ask the almighty guru of the finance division that question yesterday. And the answer I got back was 114 million.

MR. HOUGHTON: $114 million. And we could suck all that up in one or two projects. Correct?

MR. KILLEBREW: If the project were substantial they could go quickly.

MR. HOUGHTON: Quickly. Okay. You did -- you talked about -- and correct me if I say this wrong -- diminished local match. So we want the locals to have -- is what you're talking about is blood in the game. Correct? I call it that.

MR. KILLEBREW: Yes, sir. What I was referring to that there is -- I don't know if it's tempting to do this, but if you get something such as toll credits, which would supplant your local match, that local match could go away -- could go for something else, say, in the city government -- could go for public works, it could go for sidewalks, play parks, whatever.

What we are advocating that we'd like to see is that, if it's not using this to match this capital that that investment remains in the transit program for operating, for --

MR. HOUGHTON: As a requirement? Can we require that?

MR. KILLEBREW: I'd have to ask legal counsel if that could be a requirement we could put in on the system or not, sir.

MR. HOUGHTON: See, the fear I have is we have these toll credits but we do not require that match. I mean, they take the money and put it into general revenue and it goes into parks. Can we require that -- I call it displacement. We're displacing dollars somewhere else. It's a movement of money.

MR. KILLEBREW: Speaking, not as a lawyer but as a contractual thing, I would think we could probably write something to the contract saying, you know, our understanding is these toll credits are going to free up local match, which we contractually want you to agree that you'll keep in the program.

MR. GADBOIS: The federal rules on toll credits already require maintenance of effort in terms of assessing the toll credits. And all we're now looking at is -- or suggesting I think is that the department look at making sure people don't go backwards in their investment in transit because they're getting this investment that should be a short-term help to fix a problem. It should never be a long-term substitution for the overall investment in transit.

MR. HOUGHTON: Okay.

MS. ANDRADE: Bobby, if we can't require it can we strongly encourage it?

MR. KILLEBREW: Yes, ma'am, I think we should be able to do that.

MS. ANDRADE: Okay. Because, you know, my fear is that, like Ted says, 114 million, you know, will go soon. So we can strongly encourage that any application would be seriously considered if local contribution came along with it.

Now, when you're establishing this criteria are we thinking we're going to award these toll credits at a certain period every year or are we going to take application for requests? I mean, how are you envisioning that we're going to do this?

MR. KILLEBREW: What I laid out this morning was on the lines of an annual call for projects --

MS. ANDRADE: Okay. And I --

MR. KILLEBREW: -- that we kind of annualize this process or semi-annualize this process so we're not doing these every other week -- having people plan ahead.

MR. WILLIAMSON: So what we might do -- what you might recommend is we have a call for maybe 75 percent of -- in other words, we might announce based on last year's activity we have available this year 200 million -- the commission has authorized the department to distribute these credits two-thirds or three-quarters based on this call -- the balance they would reserve much as they reserve the strategic priority funds for emergency cases. That would be an acceptable approach.

MR. KILLEBREW: Yes, sir.

MR. WILLIAMSON: Thank you. And what I hear you saying, Glenn, is the department's recommendations are okay, but don't stop there -- blend it into the regional service planning concept we're trying to implement on transportation across the state.

MR. GADBOIS: Yes, sir. And the other things that we obviously know are coming down the pipe -- the rail improvement, for example.

MR. WILLIAMSON: So, in effect, let Alan Clark and Michael Morris have some authority to figure out how to use these as they would any other tool in the toolbox to address transportation issues in their area.

MR. GADBOIS: In the short term I think that you have -- I encourage you to think about rewarding them -- those who have gone through great struggle to try to implement the Texas Mobility Plan because they then could come back and say, See, it is already rewarding us to have done this. And in some places that has been a terrible struggle, as I'm sure you are aware.

But then as things evolve, yes, I think that -- I would hope that you would have more and more confidence in that planning process -- regional transit plans and rail plans in the mobility plan such that where that's possible you can wrap them together and allocate to -- one allocation to the whole bunch.

MR. HOUGHTON: Yes. Alan -- and the thing that might piggyback the Chairman's remarks is, as long as we're not displacing dollars into general revenue to go to some other thing other than non-transit issues -- transportation issues, whether it's roads, TM -- the mobility fund.

If we can put that in some type of contract form -- that we can see it and track it, that it's not going over here to sidewalks, then I'm for it. But, other than that, then I wouldn't be for it.

MR. WILLIAMSON: Bobby.

MR. KILLEBREW: If I can clarify just a couple of remarks, if I may. One, for Commissioner Andrade, what we find most often in systems, in order to match capital they end up taking out of their operating budget, which means that's fewer rides that they provide because they have to buy a new vehicle because the old vehicle wore out. So, you know, right now they're playing that little shell game. So that's a good -- this is a good assistance to help keep their shell game from happening.

And, in regards, Chairman, to the -- say, an annual call for projects, typically FDA has a -- they produce annually in the Federal Register their annual apportionments.

MR. WILLIAMSON: Uh-huh.

MR. KILLEBREW: So there's kind of a place and a time line that most of the money is probably known and that cycle would have to coincide with that.

MR. WILLIAMSON: You think you've got enough reaction from commission members to begin to develop a more concrete recommendation?

MR. KILLEBREW: I believe so.

MR. WILLIAMSON: I think, unless I hear objection, colleagues, we'll ask him to go ahead and start preparing some criteria for our consideration.

MR. BEHRENS: We will move forward with that.

MR. WILLIAMSON: With some teeth.

MR. BEHRENS: We'll move forward with that. Yes, sir.

MR. WILLIAMSON: Thank you, Bobby.

MR. BEHRENS: Bobby, if you would, we'll go to your agenda item number 5. And if you would present those proposed minute orders.

MR. KILLEBREW: Again, for the record, I'm Bobby Killebrew, Public Transportation Division interim director. As follow up to our previous discussion, before you for your consideration is a minute order which awards toll credits to the Midland-Odessa Urban Transit District.

The Transit District responded to TxDOT in a recent survey that they expect to lose $983,679 in a federal earmark for four alternatively-fueled buses planned for their fleet expansion.

Midland-Odessa is requesting 201,476 in toll credits. The Federal Transit Administration has issued a letter to Midland-Odessa Urban Transit District stating that their application for funds must be submitted by June 2005. And if my calendar is correct today's the last day of June 2005. And failure to submit a timely application will cause their earmark to lapse on September 30, 2005.

In light of the difficulty in securing a federal earmark and the local impact these federal funds have for the Midland-Odessa area staff does recommend approval for this minute order.

MR. WILLIAMSON: Members, we have a couple of witnesses. Do you wish to hear from witnesses first?

MS. ANDRADE: Please.

MR. WILLIAMSON: I always pick wrong, so who goes first, Ken or Bill? Ken. Ken Smithson.

MR. SMITHSON: Good morning, Mr. Chairman, members of the Commission. It's a privilege to be here today. And we've enjoyed working with you and -- including Commissioner Nichols on transit projects over the years.

My name is Ken Smithson for the record. I'm the general manager of Easy Rider in Midland-Odessa. I'm also on the board of directors for the Texas Transit Association.

On behalf of the board I'd like to thank you for considering the use of toll credits for transit capital projects that will serve to sustain and grow public transportation across the state. This will not only help transit projects in the large cities where the majority of toll credits are generated, but also the small urban and rural areas of the state where operating funds are already in short supply.

Midland-Odessa is just one example of the latter. And we appreciate being on the agenda today for consideration. As you know, Easy Rider has enjoyed outstanding success as a new start transit system in the state -- just under two years in service now. And we can hardly keep up with the growth. We're experiencing 36 percent increase in fixed route ridership over our first year.

On our paratransit service our ridership has increased by almost 200 percent. That's the type of public transportation that hasn't been seen in West Texas in a long time.

Public transportation and health and human services have long coordinated their services in West Texas. And Easy Rider has quickly folded into those efforts. We have a seat at the table of a 5310 advisory committee, so we sit with the rural provider, the elderly and disabled transportation provider, and other providers in the area. And we plan programs for the elderly and disabled transportation service.

MHMR in both cities has been able to put a lot of their clients on our buses instead of transporting them in their small vans. One agency in one of the cities that serves seniors was able to not purchase more vehicles because there's now public transportation and those seniors are using our service.

And we've hooked up with a regional 2-1-1 center so that the people have one number to call for transportation information, including ours. We're providing summer bus service for kids to the Boys and Girls Club. And Workforce Network has -- instead of handing out cash to their job seekers, are now buying bus passes and tickets and putting their folks on our service as well.

And we anticipate that Easy Rider will be one of the -- at least one of the lead agencies in regional service planning. And our goals are to optimize coordination and provide for seamless service amongst the transportation providers in our area.

So, for these reasons and more, we believe that Midland-Odessa is a prime candidate for toll credits at this time so that we can purchase more vehicles to keep the system growing. One way of using those vehicles that we've talked about locally is even providing some type of intercity service between the two cities which are separated by 20 miles. There's a lot of people that need to commute back and forth, and that's one idea that we had for using these vehicles.

So we think the project will serve well -- and not just the citizens of West Texas, but the interest of public transportation across the state. And we appreciate your consideration.

MR. WILLIAMSON: Questions of this witness, members?

MR. HOUGHTON: Yes. I'll go back to what I -- the thing with Bobby. If you're experiencing the growth is it my understanding -- are you coming up with a dollar match or are you going to use the toll credits as your match?

MR. SMITHSON: We'd like to use the toll credits for the match on this particular project. But to comment on your earlier question, the two cities are not reducing any contribution toward this project. In fact, both -- the two cities combined have contributed more to public transportation than the state has, including fiscal year '05.

As an example, the state provided $307,000; the two cities provided $339,000. And that's not even counting the fare box revenue and other locally generated revenues. So they're not reducing their contribution, but they've intended to keep it at the same level. And that goes toward operating.

MR. HOUGHTON: That answers my question.

MR. WILLIAMSON: Okay. Thank you, Ken.

MR. SMITHSON: Thank you.

MR. WILLIAMSON: Bill Dingus?

MR. DINGUS: Yes. My name is Bill Dingus. Thank you, Commissioners. I'm a City Councilman at large in Midland. And as -- so I'll be talking from the Midland perspective. But, of course, we're talking about Midland-Odessa.

And I came down specifically for two reasons today. One is I can't think of a better way to say thank you for helping us start this bus system than coming here personally to tell you that. I do not think we'd have it today -- I know we wouldn't have it if it weren't for federal funds, and I don't think we'd have it without the state funds we've received, not just because of the value of the money, but because it shows that at the state level and at the federal level there is a recognition of the importance of public transportation. And I think that additional funds would enhance that message from the state.

But I want to give you a little history about why Midland has a very young bus system. There are those in Midland who don't like the bus system. They're not the riders of the bus system. And when we -- when I was pushing for this -- I ran for mayor and lost, in part because I was a big proponent of public transportation, which we did not have at the time. And later I spent a lot of political capital and we got it in. I'm proud of that.

But there are people who said it will never work. It's going to fail. It's -- people aren't going to ride these buses. You just don't understand Midland. And I was afraid that might be the case. And I watched buses every time they went by, counting heads in those buses. And was I relieved that it has been a success.

I want to thank Ken Smithson, who just talked here. It's partly due to his oversight of this project. But, also, he did a very savvy thing. He was very conservative in his numbers. He told us he thought it'd cost Midland -- not Midland-Odessa -- but Midland about a quarter of a million dollars a year in local monies. It's cost us about 225-. And so it hasn't cost us quite as much as we thought. The ridership is above what we thought it would be.

I think it's a huge success. I'm very proud of it. And it really benefits the people of Midland, who don't have a lot of political clout.

However, just recently we had this discussion about buying new buses and it came up again -- you know, how is it working --

MR. WILLIAMSON: They must have some political clout. They elected you.

MR. DINGUS: Thank you. And I'm here for them today. But there are people who don't listen to them as vehemently as other people who say, Well, who's riding these buses. And I won't go into it.

I just want you to understand that the people in West Texas need these buses. And every encouragement we can get from the State makes it that much easier to maintain it.

I think in another five years this will become a fabric of the community and it won't be at the risk it is now of going away. It's still new and people are saying how valuable is it. It's extremely valuable.

And I think in, like I say, five years it's going to be part of Midland and won't be in any danger at all. But right now it's -- I wouldn't say it's treading on thin ice, but any type of encouragement we could get from the State would be greatly appreciated. And I thank you for your time.

MR. WILLIAMSON: Questions of this witness, members?

MS. ANDRADE: Thank you for what you do for public transportation. It's great to have you as a champion there.

MR. DINGUS: Thank you.

MS. ANDRADE: And I certainly would support this. Thank you.

MR. DINGUS: Good deal.

MR. WILLIAMSON: Thanks for your courage in stepping out there.

MR. DINGUS: Another reason I came today is because I can't expect Ken to say these things. He's always supposed to be upbeat --

MR. WILLIAMSON: Thanks for your courage.

MR. DINGUS: -- about everything.

MR. WILLIAMSON: Thanks for stepping out there.

MR. DINGUS: Thank you.

MR. WILLIAMSON: Because it's important to the State of Texas and the people of the state to move them around.

MR. DINGUS: Thank you very much.

MR. WILLIAMSON: Did you want to say something? (Pause.) You had a question on your face so I thought maybe you had --

MR. JOHNSTON: Oh, no --

MR. WILLIAMSON: -- you might be one of those guys that didn't like the bus.

MR. JOHNSTON: I didn't sign up to speak, but I'm certainly here to answer any questions. But in -- I'm Marcus Johnston, assistant city manager for the City of Midland.

And, certainly, we -- as a city we do support public transit. It's been very successful. We are continuing our commitment to supporting public transportation. We're keeping our level of funding level from the current year to next year. And we certainly appreciate your concerns that funds are not diverted to other uses. We're keeping our money in public transit and we appreciate your support. And I thank you very much for your consideration.

MR. WILLIAMSON: Questions of this witness, members?

(No response.)

MR. WILLIAMSON: Fill a card out for us, if you would.

MR. JOHNSTON: Sure. Will do. Thank you.

MR. WILLIAMSON: Okay. Members, you've heard the presentation by our staff. You've heard the witnesses' testimony. Do I have a motion?

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Okay. Bobby, if you would, continue with agenda item 5(b).

MR. KILLEBREW: Again, for the record, I'm Bobby Killebrew, Public Transportation Division interim director. For your consideration this morning a minute order which provides the state funding -- state formula funding for small urban and rural transportation systems for fiscal year 2006.

This minute order would allocate state funds of 28,741,068. These funds have been allocated according to the formula approved by the Commission on May 26. According to the formula 10,059,374 has been allocated among 30 small urban providers and 18,681,694 has been allocated among 39 rural providers.

I'd like to highlight some recent changes in the rural provider community. San Patricio Community Action Agency dissolved itself as a rural transit district effective November 8, 2004, and San Patricio County now receives transit services from Rural Economic Assistance League.

Fort Bend County established itself as a rural transit district in accordance with Chapter 458 of the Texas Transportation Code effective May 24, 2005.

And, finally, effective September 1, 2005, Rockwall County will change its affiliation from Hunt County Committee on Aging to Kaufman Area Rural Transportation.

Your consideration and approval of this minute order would be appreciated.

MR. WILLIAMSON: Do you have witnesses?

(No response.)

MR. WILLIAMSON: Members, we have no witnesses. You've heard the staff explanation and recommendation. Do I have a motion?

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Continue, Bobby.

MR. KILLEBREW: Continuing, Commissioners, with the next item, for your consideration this morning is a minute order which approves funding for intercity bus transportation in Texas.

By regulation 15 percent of the 5311 rural federal funds are to be set aside to enhance and improve intercity bus service unless the Governor certifies that intercity service is adequate in the state.

The projects recommended for approval were selected based on responses to a request for proposal issued on February 11 of this year. Twenty-three proposals were received requesting $2.7 million for operating, facility construction and renovation, vehicle lifts, computer software and hardware, and planning.

The proposals were reviewed based on their technical merits and the projects and the quality of the entity. Fifteen projects are recommended and are listed in Exhibit A in alphabetical order by the project sponsor.

The well-publicized closures of intercity bus routes across the United States, including Texas, have highlighted the critical need for this service. The amount requested for immediate commencement is in Category A -- is from the combination of unobligated amounts from previous years and the available appropriations from fiscal year 2005 totaling $726,983.

Projects listed in Category B would be funded with the expected balance of fiscal year '05 funds totaling $821,061.

And the project listed in Category C represents a multi-year project and would be financed with future appropriations totaling $249,747. A total for all categories is a little bit under 1.8 million.

Your consideration and approval of this minute order would be appreciated.

MR. WILLIAMSON: Are there witnesses, Mike?

MR. BEHRENS: No, sir.

MR. WILLIAMSON: Members, there are no witnesses. You heard the staff recommendation -- explanation and recommendation. 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 signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Commissioners, we'll close out our public transportation portion of the agenda by having a discussion item on our Public Transportation Business Plan. Bobby?

MR. KILLEBREW: Again, for the record, I'm Bobby Killebrew, interim director of the Public Transportation Division.

The discussion item before you now is item 6, the Public Transportation Business Plan. And I have before me on the podium is my copy that I keep in my office. And just to show you -- I know copies have been provided to you and your staff. This plan's big. This is double-sided, and this plan is big.

The cover is of our own design. It matches my presentation today. It's not a design by the consultant or a design meant to keep for the department's final plan. But this is huge. And, to borrow something from Michael Morris, if this is the onion then we're going to have to start peeling back the layers of the onion, and I hope to do that this morning with my presentation.

In September 2004, after a competitive proposal process, TxDOT contracted with the KFH Group, Incorporated, to prepare a Public Transportation Business Plan. The proposal submitted by KFH included Cambridge Systematics as a subcontractor to the work that they would perform on the project.

The Business Plan, as it's commonly called, includes four deliverables, a strategic plan, a review of best practices, an operational review, and an operational plan. Each deliverable was presented as a draft for review and comment by TxDOT staff. The final document was presented to TxDOT on May 2, 2005.

The first deliverable, the strategic plan, provides the "Big Picture." The second deliverable, the best practice review, focused on all 50 states in regards to best practices for state coordination of public transit and human service transportation. It further identifies and assesses best practices in state program management and administration of public transit with particular interest in practices that respond to current program management issues in Texas.

The third deliverable, the operational review, describes what is happening now by assessing the current program functions, identifying issues that should be addressed, and developing recommendations for improving how TxDOT does business.

The fourth and final deliverable, the operational plan, details a plan of action to delineate the task necessary to accomplish the recommendations of the operational review.

The strategic plan -- the strategic plan main body details the process in preparing the strategic plan, including creating an updated mission statement, assessing the external environment in which the public transportation function of TxDOT operates, assessing its internal environment, and outlining a framework of goals, objectives, and strategies.

The plan provides a blueprint for organizational and business development and leads into the operational plan. The strategic plan includes an executive summary highlighting key points of the strategic plan and five strategic goals.

Strategic goal 1 -- provide timely delivery of resources to clients and stakeholders, including funding and purchase transportation, technical assistance, and information. This goal and related objectives speak to the fundamental role of TxDOT in providing a variety of resources, including financial, to Texas transit operators and human service transportation providers.

Strategic goal 2 -- build and maintain effective communications with and collaborative relationships among stakeholders. This goal and related objectives speaks to the importance of open and broad-based communication and collaboration, not only within TxDOT but among the full range of stakeholders that share responsibility for achieving outcomes of the transportation service delivery.

Strategic goal 3 -- encourage and foster service coordination, effectiveness, and cost efficiency in local service design delivery. This goal and related objectives discuss the need to develop a shared sense of purpose and direction and clear responsibilities for making progress to streamline and enhance delivery of programs and services and to increase coordination.

Strategic goal 4 -- encourage and foster expanded transit service availability and increased use. This goal and related objectives detail the need the more regionally based and well-documented process for expanding and improving services.

And, finally, strategic goal 5 -- establish and maintain a positive and supportive work environment. The final goal and associated objectives speak to the critical need for a shared sense of purpose, clarity and roles and responsibilities, and logical relationship and how responsibilities and functions are organized within TxDOT.

The purpose of a mission statement is to provide a clear framework for what must be accomplished to successfully perform required goals and fulfill expectations. The strategic plan proposed mission statement is: The mission of the TxDOT Public Transportation Division is to support, facilitate, promote, and monitor the planning, delivery, and coordination of safe, reliable, effective, and cost-efficient public transportation services.

Moving on to the second deliverable, the best practices review. Developed by reviewing all 50 states to identify those states who have made significant progress in the coordination of public transit with human service transportation, states that have relevant experiences or best practices, and programs that, because of their size and complexity, may be considered peer to Texas.

State management and administration of public transit systems -- or transit programs involve a range of procedures, processes, and mechanisms to ensure that the state meets federal requirements in overseeing federal programs and to ensure the provision of the effective support of subrecipients and their compliance with program requirements.

The review focused on planning, grant management, training and support, outreach and stakeholder involvement, use of technology, and coordination of transportation. In the area of grants management the review specifically included an analysis of guidance to providers on applying for grants, cost allocation and costing methodologies, monitoring of service, and possible use of performance measures and funding allocation.

The conclusion on the best practices review is that there are ten states which have made significant progress in transportation coordination -- California, Florida, Georgia, Iowa, Kansas, Kentucky, Maryland, North Carolina, Ohio, and Washington.

Conclusions on best practices review -- there are five states which may be considered peer to Texas in terms of program management and coordination -- California, Florida, Illinois, New York, and Pennsylvania.

In addition to looking at other states the report also details local best practices of Texas transit providers in the areas of coordination, generating new revenue sources, service design and operations, and use of technology.

The operational review -- the operational review report focused on the assessment of the current program functions -- identification of issues that should be addressed and development of recommendations for improving how TxDOT does public transportation business.

The practices of public transportation management in Texas was analyzed in 14 areas. Each area is a section in the report and each section includes descriptions, analysis, and recommendations.

There are 99 recommendations among the 14 analytical areas. Planning has 6; service coordination, 15; contract management, 5 -- and that's the contract management for the medical transportation program; management of the transportation service centers, 6; stakeholder involvement, 11; grants management, 19; internal coordination and structure, 4; performance measures, 4; information management, 4; cost and methodologies, 2; resource allocation, 4 recommendations; technology, 4 recommendations; training, 7; human resource management received 8 recommendations -- 99 recommendations in all.

The operational plan -- the final component of the Business Plan is the operational plan. The operational plan was developed in cooperation with hundreds of stakeholders which the consultant either met with and/or interviewed, as well as TxDOT staff.

The purpose of the operational plan was to delineate the task necessary to accomplish the recommendations of the operational review. The operational plan is a comprehensive three-year plan of goals, actions, and tasks. Each task has a detailed implementation steps stated -- linked to the strategic plan, risk assessment, time line for implementation, and measures.

Some highlights of the operational plan -- the tasks include items that are already being implemented by TxDOT, such as actively contribute to a regional planning process, initiate regional coordination activities, and develop coordinated reporting and record keeping procedures. Other tasks are being evaluated for implementation.

All four deliverables put together make up what we call the Business Plan -- a strategic plan, a review of best practices, an operational review, and an operational plan.

Conclusions -- the proposed planning process outlined in the four deliverables includes many recommendations that may lead to improved coordination of transportation services in Texas. Some recommendations may require changes in state statute before they would be feasible.

Additional work by TxDOT staff, input from administration and the Commission, and coordination with stakeholders is required to determine which segments of this process are desirable for Texas and how best to implement them.

And, with that, Commissioners, I present to you what we received as the Business Plan for public transportation.

MR. WILLIAMSON: Members, I'm going to have several questions. I know each of you have questions. I'm going to want to ask Glenn to come up and have a dialogue with me, even though I don't think he's prepared to. He may not even be here.

Glenn, are you still out there? (Pause.) Do you wish me to ask my questions first so that you can see where I'd like to take this? (Pause.) Okay.

Glenn, I know you're not signed as a witness, and I know that you'll fill out a card when you get through, and I know you're not prepared to speak on this. But, nonetheless, I know you're familiar with this process and that this has a major impact on the clients you represent.

MR. GADBOIS: Depends on what you're going to ask me.

MR. WILLIAMSON: There are a couple of things about -- first of all, I did -- I read the plan page-to-page, Bobby. It was a slug. It is more than I anticipated we would be purchasing six months ago.

Two things jumped out at me. One was the absence of a discussion of any kind of market-based competitive pressure to force the competing interest groups -- those that Glenn represents and others -- to participate in the process. As I ask Glenn this question think about how you would answer it. Do you perceive that absence in this Business Plan as well, Glenn, or are you --

MR. GADBOIS: Yes, sir.

MR. WILLIAMSON: -- prepared to comment on that?

MR. GADBOIS: I do. And if that's the question then let me try to formulate as concisely as I can. I have great faith in the regional service planning process that we have started together here and that you all have fully supported.

I do see -- and I think Michael even stated a few of them -- Morris -- in terms of the June 14 rollout -- see some possible conflicts or at least some places where you need some resolution between this strategic plan and that -- the strategic plan that was developed.

In short, it looks a little topped out. And what I -- but what I do see happening is you all have allowed 24 experiments to start, and I don't think those experiments will be easily stopped. And I think those experiments will tell us a lot in terms of your question.

I mean, I think that they will show us where the partnerships are more easily developed and where the problems are -- where the challenges in working together, whether it's the protection of turf, you know, or anything else.

And those will be identified if we do a good job of making sure and collecting data and making sure that we are paying close attention as those regional plans are developed. And I think we're set up to do that -- or moving in that direction.

And so that's I think the short answer to it. There's, you know, a lot more that we could talk about, but I'm -- you know, you're going to have to instruct me.

MR. WILLIAMSON: That was one of the things on my mind. And if you don't mind staying close --

And, now, Bobby, I would ask for your observation about my same concern. Am I correct in assuming there's very little focus on competitive market-type mechanisms in the plan?

MR. KILLEBREW: My observation of the plan -- of what it addressed in the areas where there would be a time to have a competitive process, the plan didn't seem to take that route. It took other routes instead.

MR. WILLIAMSON: Is the contractor available to answer questions?

MR. KILLEBREW: I don't believe the contractor's here today.

MR. WILLIAMSON: Was that by plan or did he just decide not to show up?

MR. KILLEBREW: I'd have to defer to my administration as to why the contractor didn't present this and I did for you today. Their contract has ended. It ended some time ago. They completed the project and --

MR. WILLIAMSON: Well, maybe as we explore this further in future meetings we can persuade them to come back and perhaps answer some questions.

MR. KILLEBREW: Yes, sir.

MR. WILLIAMSON: My second observation or question -- and I'll start with you, and then if Glenn wants to respond that's fine. Glenn actually touched on it in his answer to my first, and that is, I think it's extremely important for us to have this plan in place before the next legislative session. And I think it's important for our Government Affairs people to make sure the Legislature knows we've done this because there are some members who are focused on this.

But it did appear to me, as Glenn said, to be -- the recommendations appear to be a bit heavy on Austin to the regions and whoever's running the regions down as opposed to grassroots up. And I hope as we move towards adopting a final plan that we'll take into consideration that that's not where the Governor wants us to be. The Governor wants to drive decision making out to the regions. And --

MR. KILLEBREW: Yes, sir.

MR. WILLIAMSON: -- this plan should reflect that. Want to comment on that?

MR. KILLEBREW: Yes, sir. I agree with you on that. And even though we've stuck this plan out on our website as draft I totally agree that we need to have grassroots communications. There are ideas out there in the -- as I call it the field, that me sitting here in Austin, I'm not the best person to come up with those ideas or implement those ideas. Those people --

MR. WILLIAMSON: Or us.

MR. KILLEBREW: -- have been wonderful. They have wonderful ideas out there -- workable ideas. They know what's going on in the communities. They have the solutions. Let's support them.

MR. WILLIAMSON: Did you want to add any more to that, Glenn?

MR. GADBOIS: I will do as the city council member in Midland did and say some things that Bobby may not be at liberty to say.

MR. KILLEBREW: And I didn't pay you.

MR. GADBOIS: And Bobby hasn't paid me, and I'm not even sure he's going to agree with what I say. It seems to me, Chairman, that we all know and intuitively agree with, you know, the direction you're encouraging us to go.

As I think Michael Morris, who jumped into the middle of this and chaired for Commissioner Andrade the study group, observed after four meetings, he was absolutely amazed at how quickly we came to agreement -- this must really be broken.

There are a number of us who -- and no fault to anyone -- have inherited a system that is very broken, that is very disparate, that, you know, doesn't have the communication, the trust, the relationships -- a lot of stuff that it needs to work well. But we all recognize that and we're now working towards it, and the department is no shyer or less energetic in that than anybody else.

And so I think that as we move forward with regional service planning you will -- I mean, I think that you will be proud of us.

MR. WILLIAMSON: Those are my questions, members. Hope?

MS. ANDRADE: Well, I must say that we've referred to the workshop we had on June 14. And I'm happy to report, Mr. Chairman, that we had an extremely successful workshop. I thank you -- everyone that's in the audience that participated in this workshop.

And I think that, you know, we've heard some pretty good ideas out of this workshop already. And I guess one of the things that I'd like to hear from you, Bobby, is what are we -- what's going to be our time line with this Business Plan. And, I must say, Mr. Chairman, that the contractor was present at the workshop on this Business Plan for a brief presentation.

But are we going to -- we've posted it on our website -- okay -- and is it going to be open for public comment?

MR. KILLEBREW: If it's Bobby's wishes, yes. I would like to go into a town-meeting environment going throughout the state and getting public comment on this. I have a new boss that starts I believe tomorrow, and so I would like to encourage my new boss to join me and trying to get the public comment on this.

MS. ANDRADE: You'll keep us informed as to --

MR. KILLEBREW: Yes, ma'am.

MS. ANDRADE: And are we going to establish a time line as to what we'll do with -- once we get public comment and --

MR. KILLEBREW: Yes, ma'am. And the plan has a time line itself for implementation. Of course, that may be contingent on when we do these public outreach efforts and begin that time line.

MS. ANDRADE: I must say that there are some items in the Business Plan that I question and that I'm still trying to figure out if they're right for the State of Texas. But I'm glad we did this. I don't know that the timing was exactly right with us also doing a workshop on planning. But, together, I think we can work on improving public transportation in Texas. And thank you so much for all your support and the staff for supporting the workshop on June 14. Thank you.

MR. WILLIAMSON: Yes, ma'am.

MR. HOUGHTON: Do we know how many people use public transportation in Texas on an annual basis?

MR. KILLEBREW: We do have the riders sub-stats and -- we have the number of riders -- passengers trips. It doesn't necessarily mean if a person uses them on a daily basis they get counted every time they get on the vehicle.

MR. HOUGHTON: How many riders?

MR. KILLEBREW: Passenger counts and -- as I look behind me. Commissioner, I'll be happy to provide you a stat report. I can't do this off the top of my head. I apologize.

MR. WILLIAMSON: Great answer.

MR. HOUGHTON: Good answer. My next question is, when you talked -- the Chairman talked about top down, who's in charge of transportation in Texas -- public transportation. That's top down. Who's in charge in the local level?

MR. KILLEBREW: It should be the will of the people. As this is federal and state programs -- these are subsidized programs. It should be the will of the people. They should have a voice in this process. If we need public transportation we should say so as people -- where we need it, when we need it, how we need it.

MR. HOUGHTON: Is it the MPO? Is it the City Council? Is it the Transit Board? Is it -- who's in charge?

MR. KILLEBREW: Locally, various -- depending on the systems, various different entities have oversight of the transit systems. We here at TxDOT have oversight of transit operators. Urban systems are typically controlled by their City Councils. Rural systems have Transit Boards. Nonprofit transportation providers typically have some type of a board that directs their operations.

MR. HOUGHTON: My next -- my last question is, when you look at and you get the number of riders and the -- how would you say, contribution either by the state or locals, what is the effective cost per trip? What does it cost you? I'd like to know that number at some point in time.

MR. KILLEBREW: Yes, sir. We'll provide that information to you.

MR. HOUGHTON: That's all I have.

MR. WILLIAMSON: I recognize, Hope, that it was a little bit disjointed the way it flowed. But I think we actually started the Business Plan process a little over a year -- almost two years ago I guess -- at the tail end of the '03 legislative session because the legislative leadership then involved in it -- rather strongly suggested we develop a Business Plan. And it just happened that they came together at the same time the workshop was going on. Yes, Glenn?

MR. GADBOIS: Commissioner Houghton did not ask this of me, but may I -- may you indulge me for just a moment --

MR. WILLIAMSON: Please.

MR. GADBOIS: -- to answer one part of your question?

MR. HOUGHTON: Which one? Who's in charge?

MR. GADBOIS: The who's in charge. The -- right now churches provide transportation. Schools, as you have mentioned today already, provide transportation. You have nonprofits from Red Cross, United Way either providing or purchasing transportation. You have small urban systems. You have people that are providing Head Start.

And part of the reason I said it was broken is because all of those are working independently of each other right now for the most part. And so your question of who's in charge depends completely on what exactly you're talking about.

Now, the real problem for that is the customer should be in charge -- I mean, if we're talking about a market-based system. But the customers are not even in that calculus for the most part. They may have a relationship with their church fathers to provide transportation to church. They may have a relationship with a particular service. But, besides that, they have to shop around to figure out how to make it work -- I mean, even to know how to get the transportation they need to go where they need to go.

And that is one of the things I think regional service planning is attempting to struggle with and figure out a better way for.

MR. WILLIAMSON: That's precisely what the Legislature -- that was precisely the Legislature's intent when they handed all this to us -- was to figure out a way to coordinate this -- to eliminate, where we could, the duplication -- the overlap and the service gaps and to develop a bottom up system that was driven by the consumer and not an agency head or TxDOT or whoever. I think that's the correct answer.

Okay. Well, then, let's -- subject to our new employee arriving tomorrow --

MR. BEHRENS: He's actually not arriving tomorrow. And let me comment on that, Chairman. First of all, I thank Bobby for being the interim director and all the work and having to come before you all and present these discussion items and issues.

But tomorrow we will have on our payroll Eric Gleason who is coming to us from the state of Washington. Most of his work in July will be telecommuting, and then he will arrive August 1. But he will be working with the good folks of Public Transportation Division and Glenn and others.

And we're anxious to get him on board and to have his interpretation of the Business Plan and things like that hopefully start bringing all of this together. So -- and we will -- as soon we get him here we will introduce him to you.

MR. HOUGHTON: Did you say he's on payroll tomorrow?

MR. BEHRENS: Yes.

MR. HOUGHTON: And he starts work August 1?

MR. BEHRENS: Right. But he will be telecommuting --

MR. HOUGHTON: Oh, okay.

MR. BEHRENS: -- for the month of July since --

MR. HOUGHTON: I thought he had a 30-day vacation starting.

MR. BEHRENS: -- since Seattle is -- we have some logistics we have to work out.

Thank you again, Bobby.

MR. WILLIAMSON: Thank you, Bobby. It was a good job.

MS. ANDRADE: Mike, at this point I'd like to also say, Bobby, thank you so much for filling in.

MR. HOUGHTON: Thank you, Bobby.

MS. ANDRADE: You did a great job. Thank you.

MR. HOUGHTON: Appreciate it very much.

MR. KILLEBREW: Thank you very much.

MR. BEHRENS: And then we'll move on to agenda item number 7, our transportation planning items for this month. And, Jim, if you would present those two minute orders on our preservation program and our strategic priority projects.

MR. RANDALL: Good morning, Commissioners. My name is Jim Randall. I'm director of the Transportation Planning and Programming Division.

Item 7(a) -- this minute order approves the 2006 Statewide Preservation Program of the Unified Transportation Program, or UTP. The UTP, which is updated annually, is the basic transportation planning document that guides and controls project development for the department.

The SPP represents the department's effort to maintain the existing transportation system and contains programs for Category 1, preventive maintenance and rehabilitation, Category 6, bridge rehabilitation and replacement, and Category 8, safety.

The safety category is new to the Preservation Program and was previously authorized in the Statewide Mobility Program. It's been determined that this category more appropriately addresses system preservation efforts rather than mobility.

Exhibit A of the minute order outlines the policies related to the allocation of funds, along with criteria restrictions for the selection of projects in these three categories.

Exhibit B contains the annual program amounts for preventive maintenance, rehabilitation, and safety.

Exhibit C and D lists individual on and off system bridge replacement and rehabilitation projects.

Exhibit E lists individual railroad grade separation projects.

And Exhibit F reports anticipated preservation efforts through maintenance budget expenditures.

Exhibit G describes preservation projects on the waterway and railroad networks for which the Department is responsible.

Exhibits H, I, and J list bridge projects who are awaiting letting for fiscal year 2005.

The draft 2006 Preservation Program was placed on the department's website on May 20, 2005, for public comment. Districts were instructed to inform metropolitan planning organizations and local officials of its availability. The 20-day comment period ended June 8, 2005, and no comments were received.

With the approval of this minute order the department may continue project planning and development for fiscal years 2006 and beyond. Staff recommends approval of this minute order.

MR. WILLIAMSON: Members, you've heard the explanation and recommendation of staff. Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. RANDALL: Thank you. Item 7(b) -- this minute orders amends Category 12, Strategic Priority, of the 2005 Statewide Mobility Program. Strategic priority projects generally promote economic development, provide system continuity, increased efficiency on military deployment routes, or address other strategic needs.

Two additional projects are proposed in Bell and Tom Green counties for the amounts shown in the attached Exhibit A. The first project located in the San Angelo district includes the construction of an interchange on Loop 306 and FM 388. The second project is on Loop 363 from I-35 north, or Temple, to the intersection of State Highway 36 and State Highway 53, to include the construction of a north frontage road to provide an interim four-lane divided facility.

We recommend approval of the projects selected as shown in Exhibit A.

MR. WILLIAMSON: Members, you've heard the explanation and the recommendation of staff. Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

MR. WILLIAMSON: And I withdraw my request and ask you to withdraw your motion and second because, as Executive Director Behrens has pointed out to me, that we have a very important guest, a City Council person from the Temple area, who normally doesn't like to express an opinion on anything, but has sat through our entire meeting to come up here and tell us, I think, that we're all crazy. So, Jim, if you'll sit down we'll listen to Councilperson Tyroch. We're doing the wrong thing by spending this money in your part of the world?

MS. TYROCH: Oh, no, sir. Chairman Nichols -- Chairman Williamson, Commissioner, Mike Behrens, Roger, I'm here to say the following. Thank you for being our lifesaver in Temple, Texas.

MR. HOUGHTON: Mayor pro tem.

MR. WILLIAMSON: Thank you.

MS. TYROCH: I want to say thank you for the money -- I want you to know, not only for the citizens of Temple, Texas, but also for the State of Texas. Ric, you will be coming through these four lanes because these four lanes are going to be the alternate when I-35 is under construction. When it's under construction you'll go right through our industrial park.

Also I want to say thank you for Commissioner Nichols. He came to Temple. I said, Please come take a look. We're really concerned. And he did. And, you know, you and I have discussed that he kind of spoke out of turn and then came and said, Hey -- because there's definitely a need.

At this time I would also like to recognize Senator Frazier's office, Representative Jay Brown; Diane Delisi's office, Alicia Winniger; our other council member, Patsy Lenna; our city manager, David Blackburn; our district engineer, Richard Skopik; and John Obr.

So, again, I want to say thanks for being our lifesavers.

MR. WILLIAMSON: Well, you know how it works -- Skopik shoehorned Nichols. Of course, Skopik will go to dinner with Nichols. He won't go to dinner with me. He shoehorned Nichols. And he said, We've got to have this. And it was kind of a plot between Skopik and Nichols to get this money.

MS. TYROCH: Well, I can't thank you enough because it's really interesting. When you see the traffic that's obviously on I-35 -- yes, I sit there, too, just like you do. I'm coming from the north to the south and you're coming the opposite way. It's very much needed. And so I thank you very much. And we've already made sure that you've gotten our money.

MR. HOUGHTON: Let me ask you a question. Does Fort Hood have an impact on Temple?

MS. TYROCH: Oh, very much so.

MR. HOUGHTON: Didn't they just announce 4,800 new troops --

MS. TYROCH: Yes, sir.

MR. HOUGHTON: -- from the 3rd Cav out of Colorado, coming down?

MS. TYROCH: What -- don't hold me to these numbers, Ken. But, basically, what they're going to do is maximize that base. I think it's III Corps that going to be moving to Fort Carson. But those -- that whole area is just very, very busy. We're on more of the rural area versus they're the metropolitan area. But we're all one big county.

MR. WILLIAMSON: Bringing a bunch of tanks out of Fort Carson is my understanding --

MS. TYROCH: Yes, sir.

MR. WILLIAMSON: -- down your way.

MS. TYROCH: Yes, sir.

MR. WILLIAMSON: Well, I think one of the things that got the Governor's attention when he was in Temple -- when he called and -- because he called all of us and expressed his wishes -- was the notion that we've got the military buildup occurring at the same time we're fixing to be tearing up part of 35 to expand it.

MS. TYROCH: Uh-huh.

MR. WILLIAMSON: He didn't see how that wouldn't create a national bottleneck.

MS. TYROCH: Yes.

MR. WILLIAMSON: So I think all these years of you all arguing your case probably was helped along by that.

MS. TYROCH: Uh-huh. Well, again, thanks for being our lifesavers.

MR. HOUGHTON: Thank you.

MR. WILLIAMSON: We appreciate you having the patience to sit through the entire meeting and watch what goes on in transportation. We know that you've learned from it and you'll go back and carry the message out to people of Central Texas.

MS. TYROCH: Thank you.

MR. WILLIAMSON: No, thank you, Martha.

MS. TYROCH: Bye-bye.

MR. WILLIAMSON: Anything else?

MS. TYROCH: That's it.

MR. HOUGHTON: Congratulations.

MR. WILLIAMSON: Okay. Now, we've heard the staff's recommendation. We've heard from the public. 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 signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Thank you. Agenda item number 8 concerning toll projects -- these two minute orders dealing with proposed toll projects in Bexar County. Amadeo Saenz will present.

MR. SAENZ: Good afternoon, Commissioners, Mr. Behrens. Agenda item 8(a) is a minute order before you that authorizes the designation of toll main lanes on US 281 from 1604 to Marshall Road. It includes the direct connectors to and from 1604 as a toll project on the state highway system.

We have completed the environmental assessment and have received environmental clearance to develop this project as a toll road. And this minute order recommends your approval so that it can be designated. Our project -- our first project on 281 is scheduled to go to contract about September this year. And it will be developed as a toll road. Staff recommends approval of this minute order.

MR. WILLIAMSON: Now, is there a recommendation here for going ahead and naming that toll road?

MR. SAENZ: No, sir, unless you want to add something.

MR. WILLIAMSON: I'm torn between naming it the Danny Shields Toll Road and the Bill Thornton Toll Road -- affectionately known as.

MR. SAENZ: We will be coming back to you all as we clear the environmental segments of 281 to the north, because 281 from 1604 all the way to the county road will be a toll road. As those environmental clearances is gained on those projects then we will come back and designate those projects prior to construction.

MR. WILLIAMSON: I guess I just want to ask, Amadeo, clearly for the record, and particularly since Patrick Driscoll from the San Antonio area is down here writing, would these projects be advancing today if they were not toll projects?

MR. SAENZ: No, sir. I think the San Antonio MPO and the RMA and TxDOT put together their Metropolitan Mobility Plan, and this project would have been delayed I think about 10 to 12 years if they had not been developed as toll roads.

MR. WILLIAMSON: Frequently we hear -- and I think it's a legitimate question, but frequently we hear the question, Well, but you really have the gas tax money someplace else, you're just choosing not to spend it in San Antonio.

What percentage of projects in the state at the same level of disaster could we purchase with our current cash flow if we weren't tolling? In other words, if we took all the projects in the state that fell into the same category as 281 and said, We're going to not toll, we're just going to take our gas tax money and we're going to spend it on those projects, what percentage of those projects --

MR. SAENZ: We can --

MR. WILLIAMSON: -- in your estimation --

MR. SAENZ: -- do about one-third of the projects with our funding without implementing any of the innovative financing such as toll. So we can address about one-third of our mobility needs with the current cash that we have.

MR. WILLIAMSON: And that would includes roads that go all the way up into Comal County.

MR. SAENZ: That's correct.

MR. HOUGHTON: What's the cost of this project?

MR. SAENZ: This project here I believe is --

David, are you here?

MR. CASTEEL: Yes, sir.

MR. SAENZ: About $70 million. We've been using 70 million all this morning.

MR. HOUGHTON: How much of it's toll viable?

MR. SAENZ: Toll viable? I think -- the starter system for San Antonio I think had -- or the 281 portion of the starter system had a --

MR. CASTEEL: -- had a really high -- let me get to a microphone.

MR. SAENZ: Let me get the numbers a little closer that I have.

MR. CASTEEL: David Casteel. I work in San Antonio for TxDOT. The starter system --

MR. WILLIAMSON: You notice he didn't admit to being the district engineer. He's keeping a low profile today.

MR. CASTEEL: I'm just hoping to still be there tomorrow. The starter system of the whole includes 281 plus the interchanges at 281 and 1604, which are the two that you're voting on today, plus some work on 1604 plus an interchange at 10 and 1604. I think we've shown on that map before.

That project as a whole under our studies is around 50 percent toll viable -- all of them together. The 281 portion is probably the strongest of those individual projects --

MR. HOUGHTON: What's the total cost?

MR. CASTEEL: -- as far as toll viability.

MR. HOUGHTON: What's the total cost?

MR. CASTEEL: The total cost of --

MR. HOUGHTON: Of all those things you just talked about.

MR. CASTEEL: -- all of it? About 1.3 billion.

MR. HOUGHTON: How much?

MR. CASTEEL: Of the total starter system?

MR. HOUGHTON: Right.

MR. CASTEEL: It's currently estimated at $599 million. The starter system plus the extension on into Comal County plus extensions east and west -- that whole system would be about 1.3 billion.

MR. HOUGHTON: So 50 percent viable.

MR. CASTEEL: On the starter system portion, yes.

MR. HOUGHTON: On the starter system. Okay. So you've got about $300 million of --

MR. SAENZ: Of tolls --

MR. HOUGHTON: Of tolls.

MR. SAENZ: -- leveraged, yes. David, start --

MS. ANDRADE: I'm sorry.

MR. CASTEEL: Yes, Commissioner.

MS. ANDRADE: David -- and so it's going to be let out September 2005 --

MR. CASTEEL: Yes, ma'am.

MS. ANDRADE: -- and completed?

MR. CASTEEL: We have a few utilities to move and a -- and still a gas station to buy. So we think we could probably start the actual construction in about six months after September. Then it looks like about a 32- to 36-month construction window on that project.

MS. ANDRADE: About three years. And yesterday our Governor was in San Antonio announcing --

MR. CASTEEL: Washington Mutual.

MS. ANDRADE: Washington Mutual. And this was -- this project was planned even before that announcement. So any of us that travel on 281 understand that it was much needed back then, and now more so.

MR. CASTEEL: Right. Yes, ma'am. Washington Mutual will be located at the corner of Stone Oak and 281. And, of course, the county judge is back there. He knows actual job numbers. But it's another 5,000 jobs or so when it's all said and done over the next seven years. And those will be traversing this corridor as well.

MR. WILLIAMSON: David --

MR. CASTEEL: Yes, Chairman.

MR. WILLIAMSON: -- now aren't we doing some work on -- aren't we trying to get to the point where we can map or project about where we think the people who will move to the Bexar County area as a result of things like Washington Mutual are probably going to live? Aren't we --

MR. CASTEEL: Yes, sir. We work with the MPO and the Council of Governments on the demographics of where they'll live and how they'll travel.

MR. WILLIAMSON: How likely is it that some of those people moving into the Bexar County area that work at Washington Mutual or its support offices are going to live in Comal County?

MR. CASTEEL: I would say a lot of them will. Comal County, you know, is a pretty attractive area because you can develop your house on a pretty decent size acreage up there still. So -- and, you know -- and the Judge knows -- again, knows better than I do. But I would say, you know, since some of these people are relocating from Seattle and that area they might be able to buy a little more property in Bexar County and Comal County than they were able to afford up in Seattle. So they might buy a little piece of property down here.

MR. WILLIAMSON: I was just curious.

MR. CASTEEL: Yes, sir.

MR. WILLIAMSON: I'm real curious about roads in Comal County right now.

MR. CASTEEL: Yes, sir.

MR. HOUGHTON: Don't leave yet. Don't leave yet. I'm still back on the 600 million/300 million stuff.

MR. CASTEEL: Okay.

MR. HOUGHTON: The balance, Amadeo, is coming from -- or, David -- Category 2?

MR. SAENZ: Yes, sir.

MR. HOUGHTON: Which is our contribution --

MR. SAENZ: I'll let David address that because it ties into the whole plan that they put together.

MR. HOUGHTON: Well, I guess what I'm getting to is where -- this is an RMA project. Correct?

MR. CASTEEL: We anticipate it will be part of the RMA system. Yes, sir.

MR. HOUGHTON: We have not conveyed that to the RMA?

MR. CASTEEL: No, they haven't adopted it yet. We've been working under the understanding that we -- you know, we -- since they were pretty new we and the MPO have been -- and the RMA have been working on finances together and trying to get these things kick-started.

MR. HOUGHTON: Okay. And we'll obviously have an equity contribution to this project. Correct?

MR. CASTEEL: Yes, sir. On the starter system that we call -- which includes 281 -- that's interchanges and 1604 -- that is -- currently as we have it it's funded with -- I believe there's Category -- there's $10 million worth of Category 12, which is Commission Strategic Priority on 281. There is 164 million --

MR. HOUGHTON: Have we approved that yet?

MR. CASTEEL: Yes, sir. You did that several years back.

MR. HOUGHTON: Okay.

MR. CASTEEL: We've got $164 million in the whole system of Texas Mobility Funds. And we have the remaining coming out of Category 2, which is the Metropolitan Mobility funds that you sub-allocate to the MPO that they chose to put on this. And those state funds total up to about $449 million for the starter system total, with the remaining that's needed from that coming from bond sales.

MR. WILLIAMSON: Any other questions or discussion? (Pause.) Okay. You're not laying this out. You got something else you want to say to us?

MR. SAENZ: I'm done.

MR. WILLIAMSON: You'll all did good. You want to make a recommendation?

MR. SAENZ: Staff recommends -- I made a recommendation -- staff recommends approval of the minute order that will designate this portion of 281, as well as the interchange as a toll project.

MS. ANDRADE: So moved.

MR. HOUGHTON: Second. It's your district. I'm sorry.

MS. ANDRADE: I'm sorry. Please, allow me. Give me this honor.

MR. WILLIAMSON: Commissioner Andrade moves and Mr. Houghton seconds. 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. Did we name that toll way?

MR. SAENZ: Oh, we didn't name that -- we'll have to come back with another minute order.

Agenda item 8(b) is an agenda from requesting to go out for competing proposals to develop toll and managed lanes along 1604 from 151 to I-10 East on the east side of San Antonio and also on 281 from 1604 north to Borgfeld Road.

The department has received an unsolicited proposal for the -- from a consortium led by Zachry & Cintra -- the consortium is known as Zachry American/Cintra -- for the development of proposed toll projects along 1604 from 151 to I-10 on the east side of San Antonio and also along 281 from 1604 north all the way to Borgfeld Road -- almost at the county line.

Staff has reviewed this proposal. We have been working also with the Alamo RMA because they're the RMA in that area, as well as the MPO, to look at the financial feasibility impact of a proposal like this on their Metropolitan Mobility Plan and their financial plan that they have put in place.

We are also looking at wanting to make sure that we do not delay any of the projects. And that's why we moved forward with the previous minute order to designate that first portion as a toll road so that we can let it according to our schedule.

And then one of the requirements of the process when we do -- we are working with them also in developing a memorandum of understanding between TxDOT and MPO and the RMA on the potential of transferring this project over to the RMA in the future since the RMA would be developing this project as part of the starter system.

All these things are going in line. Looking at the financial impact, as I mentioned, and -- so as to keep all the things going. Staff at TxDOT reviewed the proposal and we feel that it meets the requirements and would recommend continuing with the process, which would -- asking your approval to publish for competing proposals and qualifications in the Texas Register that we will ask the other firms to submit proposals to us.

We will work with the MPO and the RMA in determining how the proposals will be evaluated. We'd like to post this out for 90 days and see what else it can bring to us so that this project can move forward. This will allow us to expedite the whole starter system much quicker.

MR. WILLIAMSON: And, members, Chairman Thornton is already here to protest not naming this tollway after him. He's already mad that we haven't named the tollway after him. He wishes to speak on that. We'll recognize Mr. Thornton, Amadeo -- Chairman Thornton -- excuse me. (Pause.) Look, you're narrowed down to one of two. It's either you or the county judge up in Comal County.

MR. THORNTON: I suggest we name it for Daniel Shield. He can come ride on it when he wants to get somewhere fast. I have a business in New Braunfels, and they need help. Congestion is an issue today.

MR. WILLIAMSON: That would make me a good straight man for that line.

MR. THORNTON: By the way, I've tried to get that vest. And if that lady's going to make me one in Kevlar I'm coming once a month over here. And I think that little addition would be helpful.

Let me say this. We've got Jim Reed, who was leading --

Jim, I don't think you've been to one of these Commission meetings. Stand up and let them see you.

He's one of our volunteer board members who's leading the planning process.

We have our judge -- county judge. Ric, this will make you happy.

Nelson is here, and he is -- my job is to make you just as happy as I can get you because they're next on the item. And how many -- how much are you asking for, Nelson? Hundred-and-some-odd --

MR. WILLIAMSON: It's a --

MR. THORNTON: -- million.

MR. WILLIAMSON: -- bunch.

MR. THORNTON: For 100 million I can be real nice -- or I will try to be. Let me say, Jim and I met -- Tom Griebel met with Amadeo Saenz today, and I want to thank him for that -- and Mr. Behrens. We had a good meeting in his office, which I think was very helpful.

The local staff -- David Casteel, Julie Brown, Clay Smith, Frank Holtzman, Jennifer Moczygemba -- every one of them seems to be here today except for Julie Brown. I guess she's back in charge.

But those here in Austin -- Mike Behrens and Amadeo I mentioned -- Phil Russell we've had communications with -- Doug Woodall and James Bass and James Ingram -- Jack Ingram.

Our Commissioner, Hope Andrade, is someone that we're proud of that's serving. And I asked back there a while ago how much do you guys get paid a year to peel onions because you all are spending a lot of time and a lot of work and there are those of us who appreciate what you're doing.

Let me be as brief and to the point of what we're doing -- and I make reference back, Mr. Chairman, to the letter that was signed by the mayor of San Antonio, the county judge, and me on April 25.

And just from that letter regarding this motion before you today -- because I think it still holds, not only the essence, but the specifics of what our feelings are. Near the end of the letter it says, We cannot speak to the merits of TxDOT accepting this CDA submission, which is what's before you.

But we ask should a submission be made it would best be -- it would be best if referred to and considered for -- and I emphasize these two words -- final approval. And let me add one more word -- final approval/disapproval -- by the Alamo RMA.

The last sentence in that paragraph says, Submission of the CDA to the Alamo RMA would allow -- promise local control, which is a big issue in our part of the world, to be maintained.

Let me just say what you're doing is your business. This is your meeting and you all can do anything that you want -- and we recognize that. I will tell you that our interest is in local control and basically approval or disapproval of what will be done.

And, as we spoke with Mr. Saenz today, for us to participate -- the possibility of a toll equity grant to have those intellectual resources on our behalf -- the consultants, financial, engineering, legal -- to deal with this.

I end with this. I still think when the history of the highway department, as I used to know it, is written someday this transformation over to RMAs is going to be one of the most significant things that you all have done. It's a complete mind shift of how things are done in Texas.

And I do believe that we in San Antonio are going to be one of the boards that will have done it correctly for you. I don't think our requests are -- request for approval/disapproval is out of order. That was the intent of the RMAs -- is to push decision making down to the local level.

And I can assure you, as we're now starting to get some efforts towards opposition -- or organizing opposition that would be probably dealt with better if were dealt with locally. If not -- you know, if it's not done locally with the RMA making that decision then those folks will tell them they need to come to Austin.

But we're prepared to do it. We'd like to do it. We're not afraid of public debate because we think the project is filled with merit that warrants the support.

But we would ask those questions. We are meeting with Mr. Saenz and his staff. Those meetings are going well. Our legal departments are meeting through I think under Mr. Behrens' direction. And we would make those two requests.

MR. WILLIAMSON: Members?

MR. HOUGHTON: I'm confused. Are you opposing or -- this agenda item?

MR. WILLIAMSON: Don't get him started.

MR. THORNTON: That's right. I'm looking at the Chairman. What do you want me to say, Ric?

MR. WILLIAMSON: Chairman Thornton, who is a valued partner in the transportation world of Texas, has some concerns that this process should be handed directly over to the RMA and taken out of our hands. And we just are going to have to agree as gentlemen that we don't believe that's possible that we can be partners and work it together.

And I'm not uncomfortable with the word "approval or disapproval" at all. Because in the end if the project doesn't make sense to them then it's not going to go forward.

MR. THORNTON: This road -- as Commissioner Andrade mentioned, this is dead center in so much of the activity of our community. The growth -- Washington Mutual, which is -- even those of us that are fairly literate in what's happening are finding it's a bigger project than we even thought.

Placing a toll road in Bexar County where there's never been one before, having it owned by a company that's Cintra out of Madrid, and people asking questions of where is the money going, how much are we paying, where is it going -- those are issues that we think local citizens ought to be the ones making those.

My understanding of the RMA process is it would be pushed down -- the projects would be pushed down to the local level where they would be made locally.

In this transition time -- at this point the proposal was submitted to TxDOT here in Austin. And we're standing here today saying we're prepared to take it if you give us the money -- we don't have any money -- to do the work to evaluate it properly. We are prepared in terms of work effort, of consultation with those people that can help us make that decision, and we think that's where the decision ought to be made. And if it's not made by us then why -- what are we doing -- what are we doing here. Why is our RMA meeting?

MR. HOUGHTON: Well, Bill, I don't think there's any decision being made. I'm glad Austin and Dallas and Fort Worth didn't have this attitude on the CDAs that are being proposed in their areas. And we're not deciding who's going to be the ultimate -- if there is an ultimate. You're presuming that Cintra is going to be the successful proposer, which is beyond, you know, fact.

Now, let me just tell you where -- my perspective I come from. I sit on the selection and evaluation team for the Trans-Texas Corridor 35, and have been involved with that with Commissioner Nichols the last year.

And it is an involved, tremendously time-consuming process that very few -- if maybe one or two states in this -- I think -- excuse me -- we may be the first state to look at this type of process. And we're using our wherewithal to evaluate these proposals see what's best in the interest of the state of Texas.

I don't think we're making any decisions. I think we're allowing competing proposals based upon some criteria we set out. So I don't -- I'm really confused -- I'm really dismayed at the thought that there would be opposition to moving forward.

MR. THORNTON: Let me be real blunt.

MR. WILLIAMSON: I don't know that Bill's opposed. I think Bill's concern is that --

MR. THORNTON: I'm not opposed.

MR. WILLIAMSON: -- is that he's not as involved --

MR. THORNTON: I would like the decisions --

MR. WILLIAMSON: -- as he'd like to be.

MR. THORNTON: -- to be made -- the final approval decision to be made locally.

MR. WILLIAMSON: Great.

MR. THORNTON: And we're not -- the truth of it is, do you know what notification I had of this meeting, Commissioner? Do you know what notification I had that this item was on the agenda, even though it's dead center in our project? (Pause.) None, other than through personal communications or phone calls.

And so I'm a little uneasy to know where my place at the table is as chairman of the RMA is what I learned is hearsay from a reporter from the newspaper these ways. I -- you can probably gather we're a little uncertain as to how this ought to be done. The way for us to be comfortable is for the decision to be placed on our table in our arena with it being our decision.

And let me say about the work -- we're not afraid of work and we're not afraid to make decisions. And if we have the resources to hire the consultants we would welcome that opportunity. In fact, we're asking for that opportunity.

MR. WILLIAMSON: We may work that out.

MR. THORNTON: I think we will.

MR. WILLIAMSON: But I saw my lawyer jump up. And when my lawyer jumps up I say --

MR. THORNTON: Yes, I kind of think that, too.

MR. WILLIAMSON: -- lawyer, do we need to hear something?

MR. THORNTON: Well, my lawyer's headed for Alaska, and that's not fair. And I'm glad he is. You all know who he is. He's a good man and I think he deserves that.

MR. MONROE: For the record, Richard Monroe, general counsel to the department. Our rules put the decision as to what to do with CDAs with the Commission. Therefore, I would advise as a lawyer to the department that it not be left to another government entity. Certainly understand their concern, but I don't believe that's appropriate.

MR. WILLIAMSON: Thank you.

MR. THORNTON: May I respond, Commissioner -- Chairman? If that's --

MR. WILLIAMSON: I'm watching my lawyer to see --

MR. THORNTON: If that's what you follow here's the consequence. The decision will be made in this room by these commissioners to place a toll road in Texas that is owned -- or managed by CintraZachry, and then --

MR. WILLIAMSON: Someone.

MR. HOUGHTON: Bill, that is the farthest thing from the truth. We can't do that unilaterally. We've got to go out for competing.

MR. THORNTON: I'm sorry.

MR. HOUGHTON: We have to have competing.

MR. THORNTON: I understand.

MR. HOUGHTON: That's what we're doing today.

MR. THORNTON: I understand. We're saying at the beginning of the process it would be unfair to you if we have these concerns today that at the end of the process for approval/disapproval that that did not rest with us, we should as friends tell you that at the beginning and avoid that, why didn't you tell us at the front end?

We're telling you today that the first domino falling in this process -- this being the request for proposal --

MR. HOUGHTON: I would advise you to talk to Michael Morris in Dallas and Bob Tesch here in Austin about our partnership -- our ongoing partnership on CDAs and evaluations and the true partnership we have had in this process. And we have a process with them and a relationship -- a good one -- and they have input. So that's my advice to you.

MR. THORNTON: I will follow your advice.

MR. WILLIAMSON: Bill, you might could help me. I have a letter here from Art Hall. Unless --

Art, are you here? (Pause.)

MR. THORNTON: No. What is today? Thursday? Council day.

MR. WILLIAMSON: Is Art -- is this letter basically focused on this same area --

MR. THORNTON: I have no idea. I know there was a letter being circulated yesterday. And we -- there was -- not initiated by the RMA staff or Council or --

MR. WILLIAMSON: You're not familiar with a young man by the name of Kevin Wolff, are you?

MR. THORNTON: One of the nicest young men you'll ever meet.

MR. WILLIAMSON: Oh, listen to you.

MR. THORNTON: Got a full head of hair and just a really happy guy. Let me say what that falls from my thinking, Mr. Chairman. We are funded by two loans, one 500,000 a year from the county, 500,000 a year from the city -- and these are our Council members. And they feel ownership in this.

And we gave a report under Tom Windorff who is the director of public works -- or title of that nature -- and questions arose from this. And it goes back to public control over this. And that, Commissioner, is what I'm -- I think the more the perception and the reality can be that this decision being made -- even this one today being made locally, the smoother this process will go.

It is not an automatic that Bexar County will receive toll roads without comment. We're getting people from Austin, we're getting people from Comal County -- Judge Shield's county -- who are coming to our county now to organize against this. And we're prepared to defend the projects.

But if we're going to defend them we would like to be the ones making the decisions. I don't want to defend what someone else is doing. I want to defend a decision we've made.

MR. WILLIAMSON: I want to -- is that it, Bill?

MR. THORNTON: Good to talk to you.

MR. WILLIAMSON: Good to talk to you, too. Good to see you. I got this letter from Art Hall. I don't want to read it in the record. I just -- his concern was if the process is to proceed he hopes that it will proceed under three conditions -- that RMA and the MPO be involved in the procurement process, that the selection criteria place high priority on local concerns, and that the financing, design, construction, operation, and maintenance be open to all alternatives and not linked to one particular method.

And I think -- just again for the record, I'll be sending Councilperson Hall a letter saying I appreciate you doing this, and, you know, please be advised that TxDOT has no intention of doing anything, whether the law requires it be only us or not, that doesn't comport with the goals and objectives of the RMA and the City Council and the County Commissioner's Court. We don't wish to start a argument that will disrupt one of the most important construction projects in the state.

Although I guess, you know, the alternative is to go back to the old way, but, you know, that was why I had Amadeo put into the record for about the fiftieth time -- you know, I appreciate the Danny Shields of the world. They pay taxes; they have a right to be heard. I appreciate the David Stalls and the Corridor Watches, Sal Castellos, and all of the panoply of toll opponents that exist. They are Texans. They have a right to be heard.

But in the end the backdrop is simply this. There are -- I think the number is $37 billion in 281 projects stacked up in the state waiting to be built. North Houston is no more and no less important than north San Antonio. South Dallas is no more and no less important than San Antonio.

We can choose to wait 10, 12, 18, 20 years to build these roads or we can choose to move forward as we are. If we choose to move forward as we have then we can finance them with the public's debt or we can take private sector partners and finance it with the private sector's debt leaving our debt capacity something -- I know you know something about, as a former city government person, leaving our debt capacity free to build other things.

There is no road fairy, there is no godfather waiting to deliver cash from Washington, D.C., to make our life better, there is no hidden pot of gold at TxDOT. Anyone who says that is simply misled or not telling the truth. Those are our choices.

It's stark, it's difficult, it's the way life is. I don't know how else to deal with it.

MR. THORNTON: Let me comment. I captured your vision. I agree with you completely. My presence today is to say only this -- that the decision be made locally. Your dream and your vision that was thought of years ago -- and the legislation that created RMAs is creative -- it's clever, it's good. My comment today is that the decision be made locally.

MR. WILLIAMSON: I'm all for that.

MR. THORNTON: In other counties that don't --

MR. WILLIAMSON: [indiscernible].

MR. THORNTON: You know, I think we're stepping forward -- and we've worked hard. We're ready to take these things. And that's why I don't back away from work because we're -- our RMA's established well; we've I think positioned ourselves to do it. I'm just stating that we would like to make that approval/disapproval.

Second thing, Mr. Chairman, I was in Weatherford and I tried to text mail you from the Downtown Café.

MR. WILLIAMSON: Didn't work.

MR. THORNTON: Didn't work. But I messaged you at least a couple of weeks ago.

MR. WILLIAMSON: They even have a phone down there?

MR. THORNTON: No, I carry my own. You won't believe this. These are wireless phones and you can use them almost anywhere in Texas except the Downtown Café in Weatherford.

MR. WILLIAMSON: I'm aware.

MR. THORNTON: Thank you very much.

MR. WILLIAMSON: Thank you. I appreciate it.

MS. ANDRADE: Mr. Chairman?

MR. WILLIAMSON: Please.

MS. ANDRADE: On this letter received from Art Hall, I received a call this morning that we have a new mayor in San Antonio, and he's now changed the Council meetings to 9:00 a.m. Otherwise, Councilman Wolff had planned to be here.

MR. WILLIAMSON: Ah.

MS. ANDRADE: So that's why this letter was delivered by fax.

MR. WILLIAMSON: Do you know Councilman Wolff?

MS. ANDRADE: Absolutely.

MR. WILLIAMSON: Is he any kin to that rapscallion county judge, Nelson Wolff? I heard he was kin.

MS. ANDRADE: He's kin, and he's just like his daddy. He's going to be a great leader for San Antonio.

MR. WILLIAMSON: Amadeo, before we vote --

MR. ANDRADE: I wanted to clear something else, Mr. Chairman.

Amadeo, on this minute order would you clarify what is it -- the only thing that we are doing with this minute order --

MR. SAENZ: The only thing we're doing with this minute order -- our -- the statute, as well as the rules, require that when we receive an unsolicited proposal, and if we look at it, and on face value it looks good, before we can continue to evaluate that proposal we need to go out to the public to see if there are other firms or developers that want to submit a competing proposal.

So we go out for -- all we're doing is requesting to see if there is anybody else out there that is interested in submitting a proposal to be able to develop this project.

MS. ANDRADE: So no decisions are being made. The only thing that we're doing is we're opening it for public process.

MR. SAENZ: Yes, ma'am -- to see who else is out there and what else -- what those people may be able to bring to developing this project.

MS. ANDRADE: And everything else is moving forward as planned.

MR. SAENZ: Everything else would be moving forward as planned -- the financial impact analysis. We've been working closely with the RMA and MPO. Just a couple of facts on that. When you look at the -- compare the original plan that the MPO had put together for developing the starter system through the RMA it was 22 miles.

And they were going to be able to build a starter system by 2013. And then, of course, after some time you start generating revenue and you could build the extensions to the starter system by 2022.

And then the other toll project that they had identified in San Antonio was I-35. But that was not going to be able to get to -- they were not going to be able to get to that till 2025.

If you bring in a developer or someone that brings in additional revenue or additional resources you probably will not advance the starter system by much. Our estimate is that the starter system will be put in place about the same time frame, but it would free up money that you could do the extensions -- instead of after 2022 by about 2016. And the 35 project could be done after 2016 instead of after 2025.

So it will allow to accelerate the program in the San Antonio area. We will need to look at some things to see what impact it has on cash flows and stuff like that. But that's something that we can continue to work. We can continue to work on that as we get -- allow potential developers to submit competing proposals over the next 90 days, and that will allow the project to continue to keep going. And, of course, at any time the request for competing proposals or the CDA procurement process can be stopped.

My understanding -- and I'll yield to Richard if he thinks I'm wrong -- but the project can be transferred to the RMA. And I think at the point of transfer -- I'm not sure if we can transfer the CDA procurement. Richard, I ask that.

MR. MONROE: It would depend on our contractual agreement with the person who we contracted with under the CDA. But Amadeo is quite right. You could transfer the project.

Once again I'd like to emphasize that both -- we are following the law as passed by the Legislature, and we're following our own rules when we do this. We are not making any decisions about what gets built, when it gets built, by whom it gets built, or even if it gets built.

MS. ANDRADE: And, Amadeo, two weeks ago David Casteel and the staff arranged for a public workshop where you and Phil Russell came in. And we had, I believe -- Was it three or four, David, during the day -- I lost count. (Pause.) Three?

We had three workshops. And they were all well attended. And we did our dog-and-pony show.

And how would you -- or what would you say was the reaction at the end of the meetings when we explained the process and how we would work together and our commitment? And also at that time did we not say that we -- if the staff concluded the work that it would come before the Commission meeting on June 30?

MR. SAENZ: That's correct, ma'am. We said exactly that. We said we were moving forward. I guess the first question -- the meetings were very well attended. I think there was 30, 40 people in each one of those. We had them scattered throughout the whole day.

The reaction that I -- I guess thought that I saw that I heard is that people were -- they're very interested in getting the infrastructure in San Antonio in place and getting it in place as quickly as possible. So they see this as a potential way to be able to do that. And that's kind of what I heard.

And, you know, as far as rolling out the process where we're working together. I think that they were very receptive to that also. One thing that we bring in working together is we do have the experience and we do have the manpower and resources that we can provide some assistance to the RMA. That's what we had proposed to them, is that we could jointly continue to look at it.

The memorandum of understanding that we're trying to draft at this time will outline the roles and responsibilities and the checks and balances, you might say, for this whole process. That does not really impact what we're trying to do today -- is to keep the process going. During this same 90-day period we can massage and fix all of that.

MS. ANDRADE: And our commitment remains to working with the community. But also, Richard, we said that we could only do so much within our guidelines because we have legal guidelines to abide by when we're reviewing a CDA. Is that correct that we cannot have a non-TxDOT staff person involved?

MR. MONROE: I do not say we could not have people involved form the local community. I certainly think that is appropriate and I think that's what we've done in the past as the Chairman said and as Commissioner Houghton said.

What we cannot and should not do, according to both the law and our own rules, is allow in effect a local government body to say to a state agency, You can't do that.

MS. ANDRADE: Okay.

MR. MONROE: That's turning the State Constitution on its head.

MS. ANDRADE: Thank you. That's all.

MR. WILLIAMSON: I love Richard Monroe.

MR. SAENZ: I guess I'll go back to the Commission -- I guess must authorize the department to publish in the Texas Register that we intend to evaluate the unsolicited proposal submitted by Zachry American/Cintra and that the department will accept for simultaneous consideration competing proposals. And that starts the process. And staff recommends approval.

MR. WILLIAMSON: I know that we had a great dialogue here today. This has been good. We permitted Bill, an appointment of Governor Perry, to get on the record his concerns about some things. And we've been allowed to place on the record our remarks about that.

I do want to add two more things -- a Chairman's prerogative to finish up. You know, there is going to be -- until the comprehensive development agreement approach has worked its way into the fabric of the state's contracting cloth there will continue to be questions I think immaterial, but, nonetheless, questions raised, about -- how did Ben put it yesterday -- I don't know how to ask about what I don't know about -- I think it's how he put it.

Amadeo, just so that the free press and those who are not familiar with the way we spend the taxpayers' money or educate it, if we were building this highway -- if we were expanding 281 as we normally would, and if we had the money, which we don't -- I want to emphasize that -- which we don't, would we send out a form -- a bid document form to the 200 contractors that we know are interested in building that highway?

MR. SAENZ: No, sir. Normally what we do -- we post in the local newspapers or at least to newspapers across the state. They also -- so that's our bid notices. And the contractors -- of course, they also work with the districts in --

MR. WILLIAMSON: Wait, wait. That's our notice that we're going to build something.

MR. SAENZ: Yes.

MR. WILLIAMSON: But when we get ready to ask Mr. Pitcock and Mr. Young and Mr. Fluor to propose the price to us don't we present them a document or a form --

MR. SAENZ: Yes. The normal --

MR. WILLIAMSON: -- that they fill out?

MR. SAENZ: Our normal process is design, bid --

MR. WILLIAMSON: Wait, wait. Answer that question, Amadeo.

MR. SAENZ: Okay. We --

MR. WILLIAMSON: Do we send them a form to fill out?

MR. SAENZ: He -- we post a form on the internet and he requests that form and brings it out.

MR. WILLIAMSON: Okay. And then when he brings it out is it broken down as to material and labor?

MR. SAENZ: It's broken out by work item and unit. And, of course, then he bids a price for that work item based on that unit.

MR. WILLIAMSON: Okay. So Mr. Pitcock, for example, might bid $100 for one work item and $1,000 for one item and $600 for one -- for the material.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And Mr. Fluor might bid $300 and $400 and $900.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And then Mr. Pitcock might bid certain day/night or certain A/B contract considerations, and Mr. Fluor might bid different A/B considerations.

MR. SAENZ: If we had an A-plus/B type contract they would have that option.

MR. WILLIAMSON: And would we dare take Mr. Pitcock's bid and discuss the terms and conditions of his bid publicly while Mr. Fluor was still preparing his bid?

MR. SAENZ: No, sir.

MR. WILLIAMSON: And, see, Patrick and Bill -- you see the dilemma that the free press and you, Bill, ask of us. You want to satisfy the public's desire or curiosity to know about what its government's doing, which is good, but in the process we would end up exposing competing business persons' pricing to build the public's assets.

And there is a very little difference in the way we approach the CDA process than in the way we approach our normal process of getting a contract. We can't let Pete Zachry make a proposal to us that has terms and conditions in it that are proprietary to his bid and then expose his terms and conditions to the competitive pressure of Hope Andrade Construction Company, therefore, giving her an advantage. We can't do that.

And it is not -- the public's money is contracted every second of every day following these types of processes. Otherwise, you would never get anything built for the public if you did it the way that is sometimes suggested to us about this process.

What we're going to approve today is authorizing our staff to ask --

MR. SAENZ: To post in the Texas Register --

MR. WILLIAMSON: And I'm looking for somebody to pick on -- Tom Griebel Construction Company for an alternative proposal.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: That's what we're doing. We're not accepting --

MR. SAENZ: And then following --

MR. WILLIAMSON: -- that Zachry's proposal is good. We're not accepting that it's affordable. We're not accepting anything but the fact that we intend to address Bexar County's transportation problems. Whether it's with Zachry or Griebel or us or the RMA we are not going to sit here and let congestion destroy the economic livelihood of the northern sector of Bexar County. We're not going to do it.

We don't care what the county judge in Comal County says, what Corridor Watch says, or anybody else. We are going to address the transportation problems of this state. Do I have a motion?

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: 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. SAENZ: Thank you.

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

MR. BEHRENS: Going to agenda item number 9 concerning pass-through tolls. We have two counties that are interested in negotiating with us on pass-through toll agreements. And I'll ask James Bass to present those two minute orders.

MR. BASS: Good afternoon, Commissioners. I'm James Bass, Director of Finance at TxDOT. Agenda item 9(a) seeks authorization to begin negotiations with Bexar County on a pass-through toll agreement. If negotiations prove to be successful we would come back to the Commission at a later date with terms for your final approval.

The county has submitted a pass-through toll proposal providing for the county to make improvements to three state highways in the area. In their proposal the county listed pass-through tolls amounting to in the neighborhood of $120 million to be repaid over time based on actual traffic on the various projects.

Your approval today in no way would be an agreement to any of these specific terms, but, again, would merely allow the department to begin negotiations with the county. Staff recommends your approval of this minute order.

MR. HOUGHTON: James, what is -- or, Amadeo, what's the total cost of all the projects involved?

MR. BASS: 120 million --

MR. SAENZ: I believe it was 120 million.

MR. HOUGHTON: Total cost?

MR. SAENZ: Yes, sir. For the --

MR. HOUGHTON: Are they putting up money -- local money?

MR. SAENZ: Let me review --

MR. WILLIAMSON: I think they're going to front all of this, aren't they?

MR. SAENZ: I'm sorry?

MR. WILLIAMSON: They're going to front all of this and we're going to reimburse them.

MR. SAENZ: Right. They will build the projects, and they're asking for reimbursement of 120 million.

MR. HOUGHTON: Of 120 million.

MR. SAENZ: As we move forward -- if you all approve this and if we move forward through the negotiation we will look at what benefits both the department and the county and the city will get and look at this. But they are using their -- what is the -- Advanced Transportation District dollars to front the money.

MR. WILLIAMSON: This was a bond election, wasn't it?

MR. SAENZ: Yes, sir. So that the --

MR. WILLIAMSON: Sales tax.

MR. SAENZ: It was a sales tax --

MR. WILLIAMSON: I'm sorry. Sales tax. I think one of the concerns -- I don't want to tear the scab off too quick, but I think one of the problems we created by Bill and Nelson and the new mayor is they went to the public and got the public to agree to this bond issue. And they want to be sure that we're not doing anything down here that will get them caught between what they -- promises they made to their public and what ends up being the case.

And we're not going to let that happen. I mean, the record needs to be clear. We're not going to let that happen.

MR. SAENZ: Advanced Transportation District has an increase in sales tax. So much money is set aside to transportation projects. That is what they're using as their revenue source to be able to build these projects now and then asking the department to reimburse them back over time based on traffic. And the cost of the project is about 120 million.

MR. HOUGHTON: Every one of these is different, so it's --

MR. SAENZ: Yes, sir.

MR. HOUGHTON: -- you know, clarification on where the revenue -- source of funds was.

MR. SAENZ: Right.

MR. WILLIAMSON: As you start negotiating with them, Amadeo, for the State will you take them down a path of let's look at what Montgomery County did, let's look at what Parker County did and --

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Because -- and I know it was a little pricier for us -- the Montgomery County deal over the long haul because of the revolving nature, but I -- the more I've thought about that process the more I've liked it -- the notion that we would, in effect, be financing a revolving fund for those counties to continue to build out of.

MR. SAENZ: And I think by them using their -- the Transportation District monies will give them the opportunity and then they can come back. In fact, the application for -- from -- this application has a Phase 2 -- that is later. We're basically addressing Phase 1 at this time. So we could be able to go back and do something like that.

MR. HOUGHTON: Yes, as that gets paid off what are they going to do with the proceeds of those funds.

MR. SAENZ: Yes, sir.

MR. HOUGHTON: They're going to come back into transportation or they just get sucked up somewhere else?

MR. SAENZ: They have -- they're dedicated to transportation. So they would come back to transportation at a future time. And we could use them, say, in the second phase or --

MR. HOUGHTON: Right.

MR. SAENZ: -- in a new pass-through toll project.

MR. HOUGHTON: Right. Right.

MR. SAENZ: So, in essence, we do have a revolving door because they have a source of money or -- that they can use for transportation. We'll have lots of pass-through toll projects.

MR. WILLIAMSON: And we also have Kevin Wolff's older brother, Nelson Wolff, who wishes to comment on this side of the --

Judge?

JUDGE WOLFF: It's nice to see you this morning. And I'm glad Bill handled the other issue and I'm handling this one.

MR. HOUGHTON: Would you care to comment on the other issue?

JUDGE WOLFF: Well, you know, I -- there is an agreement that was tentatively entered into -- or just a document signed by Tom Griebel or David Casteel and Joanne Walsh. And in alternative 3, where they have the possible implementation, was drawing some relationships between the RMA and TxDOT. And, hopefully, this local decision making authority, if we have any, can be clarified there about how we are operating and what will the local RMA have to say about that. And I think as you negotiate those terms hopefully they'll be able to get worked out where everybody's satisfied.

MR. WILLIAMSON: I think it will work out to everybody's satisfaction.

JUDGE WOLFF: Where everybody's happy about that. Because I think we're all --

MR. WILLIAMSON: Because nothing's worse than getting those upper case eight-pitch e-mails from Bill Thornton chewing your rear end out.

JUDGE WOLFF: Well, Bill's never been one to be bashful about anything. And, you know, in a way when you have little conflicts usually something good comes out of it --

MR. WILLIAMSON: Oh, yes.

JUDGE WOLFF: -- for everybody that stays attached to it and gets them done. But I think hopefully that's going to be able to get worked out and draw that relationship between what the RMA will be responsible for and what this department will be responsible for.

Let me thank you, Chairman, for allowing me just to say a few words. I'm currently Bexar County Judge, and I also chair -- Chairman of the San Antonio Mobility Coalition, which is a public/private partnership that is addressing the transportation needs.

And, Commissioner, we did have a ATD election that I chaired, and it was a sales tax election. And it provides for an ongoing forever of at least $8.5 million a year dedicated to highway projects. And so it starts out at 8.5-. As sales tax goes up that will continue to be plowed back in to matching funds with the department.

So it's a source of funding for us that will grow and be able to leverage as these years go by. And if we finish these projects with the bonds that we would issue using the pass-through, using the ATD funds, then we could go to another project as that gets completed. And we do have some other funds I think tucked away on some of the other projects that would match some of the state funding.

And our idea is exactly what you all have pointed out from the start -- is to accelerate the construction of these projects. Because as you accelerate construction with all the pricing from cement to steel to everything else going higher it makes a lot more sense to issue debt, get your project going, and save more money in the long term.

And that's part of this package that we're presenting to you in three specific projects that would -- we would at the county level issue the bonds for and move forward for based on those -- on the funding mechanism -- the ATD and the pass-through.

David Casteel -- let me tell you, I think we've got the best district engineer of anywhere in the state. I've been around politics in San Antonio for some about 30-some-odd years now I guess. And he has really been a bright star with us, and we appreciate him working with us and with the MPO and the Alamo RMA and the City of San Antonio via -- everybody's been trying to pull together to be a partnership and accelerating construction of highway projects.

Sam Dawson is going to present some of these more specifically to you. Sam is the former chairman of the Mobility Coalition -- continues to be a leader in transportation. Sam?

MR. DAWSON: Thank you, Judge Wolff.

Mr. Chairman, members of the Commission, Mr. Behrens, good to see you all.

As Judge Wolff already emphasized, I think you know in San Antonio we have been investing in ourselves. And so this plan that we have before you today not only brings money to the table, but I hope that you will find it is bringing creative and innovative solutions to the table.

We've talked a little bit about the quarter-cent sales tax for San Antonio. That was a tremendous effort. And legislatively we went back and got legislation approved so that forever 25 percent of that money will be set aside for matching and leveraging state funds. And then we went back and got additional legislation that allows us to use that money to pay down interest and pay off bonds. So we've made a tremendous effort with that.

Some other additional items that we've done recently -- obviously the creation of our RMA. And then also with our own MPO we have in policy a plan where 25 percent of our STPMM funds will always be set aside for leveraging state funds.

Some of the tools in the proposal that we have before you today -- we've tried to utilize all the tools that you've given us over the past few years. We're using Proposition 14 bonds, we're using pass-through financing, we're using straight-dollar leveraging with our ATD funds, which is what we just talked about, we're using the Texas Mobility Fund bonds, and then hopefully the Alamo RMA toll revenue. And then, as just discussed, we even have the potential for private sector dollars being incorporated into our comprehensive plan that we're looking at.

We also believe that our plan is comprehensive when it comes to benefits. It does not just benefit our community. We believe that it benefits the Texas Department of Transportation.

Several of those benefits -- first, the plan does accelerate construction of our area priority projects, everywhere from three years up to eleven years.

Second, the proposal includes a significant local financial contribution of $282 million from the future Advanced Transportation District revenue and Category 2 and 7 funds.

Third, the plan does fulfill the commitment that we made to the voters with our Advanced Transportation District, not just the number of projects but the timing of the projects. And I think you'll also see that the plan includes good geographic distribution of our projects.

Fourth, as outlined above, we believe that our proposal fulfills your request for additional matching funds.

And then, finally, we estimate that by accelerating these priority highway projects road user savings will exceed $1.9 billion and approximately $200 million will be saved through the avoidance of expected increases in construction costs.

So, not only have we put together this plan, but we also bring you formal endorsements from our community. This plan has endorsements from the Alamo Regional Mobility Authority, Bexar County, Bexar County-San Antonio MPO, the VIA/ATD Board of Directors, the Greater San Antonio Chamber of Commerce, the North San Antonio Chamber of Commerce, the Hispanic Chamber of Commerce, and the San Antonio Mobility Coalition.

So the proposal that we're providing you we hope is innovative. It's creative. It's bringing money to the table. And it comes with full community support. With that, I'm going to ask David Casteel to come forward, who's going to go over some of the details. Thank you.

MR. CASTEEL: Quickly I will. The projects are shown here.

MR. WILLIAMSON: Do you work for TxDOT?

MR. CASTEEL: Yes, sir. My name is David Casteel. I work for TxDOT San Antonio as the district engineer.

MR. HOUGHTON: You're the guy.

MR. WILLIAMSON: You're the guy.

MS. ANDRADE: Mr. Chairman?

MR. CASTEEL: Some days. Sometimes we close lanes to build roads. Yes, sir. Yes, ma'am. The projects shown in red are the three pass-through proposals. And those are -- they're kind of distributed around town, and they're all in some fast-growing areas and some areas to continue our projects that we've had going in the past. They're all part of the MPO's plan.

The projects shown in yellow are -- those at one time in this process were also part of a pass-through proposal. The county was willing to step up and look at all these projects as possible pass-through. But most of those are on the interstate. And, you know, we as staff felt maybe that we should handle those on the interstate.

So instead of making those part of the pass-through we decided that maybe it would be best if we just made a request for those funds. And maybe there might be some way through negotiations we come up with a way to finance all of it somehow innovatively with this -- the big deal is we do have that ATD money available to us to work through some kind of innovative financing process. The county and Senator Madla and some others have been working to make that flexible for some bonding capacities.

And all these projects are good, important projects. I know Senator Madla has commented to you guys before about project 3, which is some safety lighting on the 410 Loop there.

So the projects altogether -- you know, there's about -- like Sam said, there's about $225 million in local MPO and ATD dollars available. And what we're asking for is for those first part -- you know, probably be around 122 million. That second part -- there's about $73 million of MPO and ATD funds sitting there that were -- we would use to cover any overruns and to cover the financing. And so we're looking for about $120 million there.

We've been working on some of these projects all along at TxDOT. And we think that the plans could be ready to let all these projects on the dates that you see there where -- and advance them through if the money were available from the years that we can afford them in the Metropolitan Transportation Plan to the dates you see on the front. And those dates range from, you know, ten years -- up to ten years on that.

So we certainly -- we like working with the county. And Judge Wolff is -- he's a great leader in our area. And he's asked us to do all that we can and be as innovative as we can. And this is one way to do it. And if there's another way to do it I'm sure we'd look at that, too. And Judge Wolff would like to finish up.

JUDGE WOLFF: Well, thank you, Sam and David. And let me say that all of these projects that we've been working on Commissioner Andrade's been right in the middle of it and also trying to resolve the differences with the RMA. She picked a good time to come into office and get caught in the middle of all this. But she's doing a great job trying to work all these things out. And we appreciate very much the fact that she's representing the great state of Texas on this Commission.

What we ask of you today is to authorize the TxDOT staff, through your executive director, to negotiate a pass-through financing agreement with Bexar County for our Group 2 projects as listed in our proposal.

And, second, we would respectfully request at an appropriate time in the future your consideration and approval of Category 12 discretionary funding for the remaining priority projects in our proposal. We've been advised by TxDOT staff that most of those remaining projects are not eligible, as David said, for the pass-through financing as they're located on the interstate highway system.

Again, we thank you very much for your consideration, and, hopefully, you'll be able to support us in this effort. Thank you.

MR. WILLIAMSON: And I notice that you started using the term "pass-through financing."

JUDGE WOLFF: Is that what I said? Did I use the wrong thing?

MR. WILLIAMSON: I'm just curious. I just noticed it.

JUDGE WOLFF: Instead of tolls?

MR. WILLIAMSON: Is there a Tom Ellis here?

MR. ELLIS: Mr. Chairman, members of the Commission, Mike Behrens. My name is Tom Ellis. I represent the Greater San Antonio Chamber of Commerce and am presently the chairman for the Transportation Committee.

The Chamber has worked closely with SAMCo, TxDOT, and Bexar County in reviewing the pass-through financing projects and are very supportive and commend their efforts in developing this plan.

Our community is a big believer in investing in ourselves, as stated earlier by Judge Wolff and Sam Dawson. We have established an Advanced Transportation District voted by our citizens in November of 2004 and the creation of the Alamo RMA, just to name a few. Our community is united in this proposal.

Lastly, I would like to commend our district engineer, David Casteel, for his vision and leadership, and not only this pass-through financing plan, but his urgency to get projects completed. Acceleration is his middle name. He's done a great job. Thank you, Dave, and your staff for all that you do for San Antonio. Thanks.

MR. WILLIAMSON: We've heard from several witnesses, members. All of them are subject to coming back up if you have questions or comments for any of the four.

MR. HOUGHTON: Ready to go.

MR. WILLIAMSON: Man, you did get off easy. Easy. Okay. Well, members, we have the staff's explanation and the staff's recommendation. What's your pleasured.

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: Commissioner Andrade moved and Commissioner Houghton seconded the motion. 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. It's a big one.

MS. ANDRADE: Mr. Chairman? Judge, thank you so much for driving to Austin. I know that you might have gotten stuck this morning a little bit.

JUDGE WOLFF: Did you get caught?

MS. ANDRADE: No, I came in last night. But I also got delayed.

JUDGE WOLFF: Good reason for S.H. 130.

MR. WILLIAMSON: And we do thank you for taking the time to be with us all morning long. I know --

MS. ANDRADE: Thank you.

MR. WILLIAMSON: -- Tom made a valiant effort to get the schedule changed, but it wouldn't work this time. Thank you very much.

MS. ANDRADE: Thank you. Be safe.

MR. BEHRENS: We go to agenda item 9(b), which is another pass-through toll agreement -- or the authorization to negotiate for an agreement with Grayson County.

MR. BASS: Yes. Agenda item 9(b), as Mr. Behrens stated, is another example of the first step in the pass-through process, this one for Grayson County.

And, again, this would merely allow the department to begin negotiations with Grayson County. And if we are able to come to agreeable terms we'll bring those back to the Commission for final approval at a later date.

In this case the county submitted a pass-through toll proposal providing for a nearly 12-mile extension of State Highway 289. In their proposal the county listed that the project is at the cost of $63 million, a portion of which would be repaid over time based upon actual traffic on the project.

The exact mix of that total cost -- how much would be contributed by the county and/or how much would be eventually repaid by pass-through tolls is one of the many things that we would work through in our negotiations with the county.

Having said that, staff would recommend your approval so we may begin negotiations.

MR. WILLIAMSON: I want to make sure I understand this, James. We previously authorized staff to negotiate with the RMA. And now the law's changed, which permits county governments to do some things that the RMAs previously could do.

MR. BASS: Correct. And so the county commissioners -- it's their opinion that they will be better served by having the county be the applicant -- or proposer of the project. So another thing this minute order would do is rescind an earlier minute order that allowed us to enter into negotiations with the RMA. It would rescind that minute order and we would now be allowed to have -- begin negotiations with the county.

MR. WILLIAMSON: And I know that -- at least I saw at least one of the county persons involved with the Grayson County project out in the audience. There may be more. But he probably had to leave to get back.

MR. PATE: Unfortunately, Mr. Chairman, they had to go catch a plane to get back.

MR. BASS: And Amadeo pointed out to me the RMA passed a resolution in support of the transfer over to the county. So the RMA has no concerns with this proposal as well.

MR. WILLIAMSON: So, members, we don't have any witnesses unless Gerry Pate wants to come up and add five but --

MR. PATE: I'll be glad to answer questions.

MR. WILLIAMSON: He is available for questions. Do we have questions?

MR. HOUGHTON: Same question I had prior, too, on a pass-through toll. Gerry, what is the revenue source? I mean, the county going to issue instruments -- debt instruments?

MR. PATE: They would -- yes, they would -- in order to back up any of their -- any gap that they would have to do, they'd have to fund it in traditional ways. Whether they'd do COs or bonds or whatever, you know, remains to be seen. That's part of the negotiating process I think.

MR. HOUGHTON: What is the amount?

MR. PATE: Well, I think the amount is still being developed very candidly. I think the 63 million in there is from the old RMA application. But I really think this is going to be a bigger project. So we're -- I think actually the number that we've been -- worked with Amadeo on is a little bit bigger number.

But I would have to say candidly the negotiation is still going on with the district engineer down there. And so we're in meeting with them now to finalize the numbers.

MR. HOUGHTON: Okay.

MR. WILLIAMSON: Okay. Thank you, Gerry.

MR. PATE: Thank you, sir.

MR. WILLIAMSON: Staff has laid out and made a recommendation. Do I have a motion?

MR. HOUGHTON: So moved.

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. Would you express to --

Gerry, if you don't mind, tell them that we're sorry they had to leave, but we understood. And we hope they understand we do the way things we do and we understand when they have to leave.

MR. PATE: Yes, sir. They're just sorry that they didn't have a later flight.

MR. BEHRENS: We'll go to agenda item number 10. It will be our State Infrastructure Bank minute order concerning the City of Round Rock.

MR. BASS: Item 10 seeks preliminary approval of a loan to the City of Round Rock acting by and through their Round Rock Transportation System Development Corporation in the amount of $7 million to pay for the cost of improvements along Interstate 35 from Chandler Road to Westinghouse Road in Round Rock.

And staff would recommend your approval so that we may begin negotiations.

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

MR. HOUGHTON: So move.

MS. ANDRADE: Second.

MR. WILLIAMSON: 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.

MR. BEHRENS: Agenda item number 11 is the -- Carlos will present our recommendations for the 2006 Highway Safety Plan.

MR. LOPEZ: Good afternoon, Commissioners, Mike.

MR. WILLIAMSON: Now, is that your gas station that they haven't bought up there on 281 yet?

MR. LOPEZ: Which gas station?

MR. WILLIAMSON: Didn't you tell me you have a little gas station out there north of San Antonio and you were just waiting for 281 to be expanded where you can make a fortune on the condemnation?

MR. LOPEZ: No. But I used to work at a gas station when I was in high school. But I don't think it was on 281.

MR. WILLIAMSON: I've been waiting to ask him that for a year.

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

The minute order before you seeks approval of the FY 2006 Highway Safety Plan, which is designed to reduce the number and severity of traffic crashes, injuries, and fatalities through enforcement, training, and education efforts.

The 2006 program consists of a budget of about $36 million that will fund 170 traffic safety projects that cover such areas as occupant protection, selected traffic enforcement, DWI countermeasures, and roadway safety.

The FY 2006 federal traffic funds have not yet been appropriated by Congress. If federal funds aren't available by October 1 we will still be able to implement a limited traffic safety program using carryover funds from previous years. We recommend approval of this minute order.

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

MR. HOUGHTON: Move to approve.

MS. ANDRADE: Second.

MR. WILLIAMSON: We 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.

MR. LOPEZ: Thank you.

MR. WILLIAMSON: So you had forgotten that you told me you spent some time on the northern part of San Antonio? I haven't forgotten that. I've been waiting for that service station question for about two years.

MR. LOPEZ: Okay. Thank you, Commissioners.

MR. BEHRENS: Agenda item number 12 is our contracts for the month of June. Thomas Bohuslav will present our maintenance and our highway and building construction contracts.

MR. WILLIAMSON: Everything down this month, Tommy?

MR. BOHUSLAV: No, sir. It's up a little bit as far as letting size and our costs. Good afternoon. My name is Thomas Bohuslav. I'm director of the Construction Division.

Item 12(a)(1) is for consideration of award or rejection of highway maintenance contracts let on June 7 and 8, 2005, through the engineer's estimated costs are $300,000 or more. We had 13 projects, an average of 2.7 bidders per project -- about $11 million and about a 2.8 percent overall overrun.

We have two projects we recommend for rejection. The first one is project number 4014 in Bexar County, San Antonio District. We had one bidder on this project -- was 70 percent over -- for some slope repair on I-37. We'd like to go back and solicit some more bids for the project.

The second project recommended for rejection is project number 4011. It's in Fort Worth District, Tarrant County. We had four bidders on the project. It was 44 percent over. It is for some thermoplastic stripe with the performance requirements. We'd like to reject for the overrun. We just can't afford it. And we'd like to go back and reduce the scope of work.

Staff recommends award of all projects with the two exceptions noted.

MR. HOUGHTON: So move.

MS. ANDRADE: Second.

MR. WILLIAMSON: All those in favor of the motion signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BOHUSLAV: Item 12(a)(2) is for consideration of award or rejection of highway construction building contracts let on June 7 and 8, 2005.

We had 119 projects averaging 3.5 bids per project. And overall we had about a 6 percent overrun on the projects.

We have two projects we recommend for rejection. The first one is in Houston District, project number 3228. It's in Fort Bend County. We only had one bidder on this project. It's 50 percent over. It's some work to repair some storm lines. And actually it includes inspection to determine what work needs to be done and then also to do the work. And we're going to separate that out into two separate projects so we can better define the scope of work and hopefully get more bidders on the project as well.

The second project recommended for rejection is project number 3218. It's in San Angelo District, Reagan County. One bidder was 52 percent over. This is in the city of Big Lake for some landscape, sidewalks, storm water, signal work. I'd like to combine this -- reduce the cost by combining it with another project -- hopefully get more bidders on it and get economy of scale by doing that.

Staff recommends award of all projects with the two exceptions noted.

MR. HOUGHTON: I notice that it's a month of $523 million. That's a big month, isn't it?

MR. BOHUSLAV: Yes.

MR. HOUGHTON: How does that rank?

MR. BOHUSLAV: It's close to the top. I think we've surpassed that either last August or recently. I don't remember what our June number is right now.

MR. BEHRENS: We -- on the projects that we had delayed in April and May --

MR. HOUGHTON: Is that what this is?

MR. BOHUSLAV: Move those some now.

MR. BEHRENS: -- had to move those into June.

MR. HOUGHTON: Coming back in?

MR. BEHRENS: Right.

MR. WILLIAMSON: I want to say last August was our single largest month, wasn't it?

MR. BEHRENS: I think that's correct.

MR. BOHUSLAV: Last August had been. I'd have to go back --

MR. SAENZ: This is about third or fourth. It's up there.

MR. BOHUSLAV: It's pretty high in the ranking. I did talk to, by the way, South Dakota and North Dakota yesterday. And they said they were real busy up that way, you know. And I told them what we let and they just -- their jaw dropped, you know, on the phone. I could hear it drop.

MR. HOUGHTON: How busy are they?

MR. BOHUSLAV: About -- you know, if they let $200 million I think that's a good year for them over there.

MR. HOUGHTON: A year.

MR. BOHUSLAV: A year.

MR. HOUGHTON: Puts things in a little perspective, doesn't it?

MR. WILLIAMSON: Few more roads and a few more people in the great state. Okay, members, you've heard staff's explanation and staff's recommendation.

MR. HOUGHTON: So move.

MS. ANDRADE: Second.

MR. WILLIAMSON: 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.

MR. BEHRENS: Agenda item number 12(b) is the recommendation to award a maintenance contract to the second lowest bidder in Bosque County. Zane?

MR. WEBB: Good afternoon, Commissioners, Mr. Behrens. I'm Zane Webb, Director of the Maintenance Division.

The minute order before you, Item 12(b), is to award a contract to a second low bidder on a maintenance contract. The first low bidder on this contract in Bosque County, Waco District, notified the District in writing that they could not execute the contract or perform the work.

Our rules in the Transportation Code allows the Commission to award this contract to the second low bidder if the second low bidder agrees to do the work at the low bidder's price. That is the case. The second low bidder has agreed to do the work for the price of the first low bidder.

The District and the Maintenance Division feel like that if we allow the second low bidder to do this work we will save the administrative cost of rebidding the contract. Additionally, because this is delineation work the work will be done quicker. Therefore, public safety will be enhanced. Staff recommends approval.

MR. WILLIAMSON: Is this the first time you've made this recommendation under the new law?

MR. WEBB: No, sir. We have new legislation -- the 79th Legislature that allowed us to go from 100,000 to 300,000.

MR. WILLIAMSON: That's what it was.

MR. WEBB: And we've not prepared those rules yet. But this falls under the 100,000 rule. So we have done this on occasion.

MR. WILLIAMSON: I think this is good management practice. I like this. This saves money -- kind of stuff taxpayers ought to love.

MR. HOUGHTON: So move.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. WEBB: Thank you, sir.

MR. BEHRENS: Agenda item number 12(c) is the recommendation of approval of an award of an engineering services contract. Amadeo?

MR. SAENZ: Good afternoon, Commissioners. For the record, again, I'm Amadeo Saenz, Jr., assistant executive director for Engineering Operations.

For item 12(c) the minute order before you approves a contract between the Texas Department of Transportation and Halff Associates, Incorporated. Halff Associates, Incorporated, employs Charles W. Heald, the former executive director of the Texas Department of Transportation.

Government Code 669.003 requires that in order to enter into a contract with a company that employs a former executive director -- in this case, Mr. Heald -- within the first four years after he served in that position the Texas Transportation Commission must also approve this contract in an open meeting.

Mr. Heald was here during the week and he said he would remain in spirit, but he didn't want to wait that long before going back to Brownwood.

MR. WILLIAMSON: Are you here to tell me that we're fixing to pack up this whole circus and take it to Brownwood, Texas, and he couldn't stay in Austin just one more day for us to quiz him about these contracts?

MR. SAENZ: He said Brownwood is heaven and he wanted to get back to heaven.

MR. WILLIAMSON: Then you need to call him and ask him what he was drinking when he said that.

MR. HOUGHTON: So move.

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. SAENZ: Just in case, so that we can get it for the record, staff recommends approval of this contract.

MR. BEHRENS: Agenda item number 13 concerning building construction. And this concerns the Houston District headquarters. And James will present the recommendation to approve of a lease with option to purchase and moving this project forward.

MR. BASS: Good afternoon again. I'm James Bass, Director of Finance. Item 131 provides for the award of the design/build contract for the Houston District headquarter complex project to Gilbane Properties.

The minute order also is the approval of the lease with option to purchase, the development agreement, the ground lease, and the financial terms associated with the closing related to the project. Staff would recommend your approval.

MR. HOUGHTON: Finally?

MR. WILLIAMSON: Finally.

MR. HOUGHTON: I move to approve.

MS. ANDRADE: Second.

MR. WILLIAMSON: Finally.

MR. HOUGHTON: You sure?

MR. BASS: This took more work than the 4 million from the Mobility Fund, yes.

MR. HOUGHTON: So Gary Trietsch gets a new home? All of this work for him?

MR. BASS: Yes. We're happy to do it.

MR. HOUGHTON: And Houston says they're not getting its fair share, huh?

MR. WILLIAMSON: We're going to name this the John Whitmire Office Building.

MR. BASS: Maybe if we could put John Munoz Whitmire in there that would be -- that would do the job.

MR. WILLIAMSON: Okay. We've got a motion and a second. All those in favor of the motion signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: Agenda item number 14 are our routine minute orders for the month of June. They've all been duly posted as required. I'm not aware of any of those that have any impact on any of the Commissioners and their area of the state, so we would recommend approval of the routine minute orders.

MR. WILLIAMSON: Mike, who are these distinguished guests we have in the third row in front of me?

MR. BEHRENS: I do not know those folks. I've noticed them out there.

FROM AUDIENCE: From Tomball, Texas.

MR. WILLIAMSON: You all just watching?

FROM AUDIENCE: No, sir. You just approved the last -- 12(b), State Highway 249 Bypass -- after 18 years. So we're excited -- funding for that bypass.

FROM AUDIENCE: We wanted to come thank you.

MR. WILLIAMSON: You didn't think we weren't going to approve it, did you?

FROM AUDIENCE: We didn't know.

FROM AUDIENCE: You never know.

FROM AUDIENCE: We came to thank you.

MR. WILLIAMSON: Oh.

FROM AUDIENCE: All your courtesies and allowing us over the years to lobby you and --

MR. HOUGHTON: Would you like to control this highway?

MR. WILLIAMSON: Citizens of the state. You're who we work for. Sometimes it doesn't seem that way. Let's see. Routine minute orders.

And, Mike, as far as you know -- you just got through saying that. No conflicts that you're aware of.

MR. BEHRENS: None I'm aware of.

MR. WILLIAMSON: And none that any of us are aware of I don't think. Okay, members, you've heard --

MR. HOUGHTON: So move.

MR. WILLIAMSON: I have a motion.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: That concludes our list of the agenda items. Turn it back --

MR. WILLIAMSON: Just like that -- Tomball, Texas. It's done.

MR. HOUGHTON: After how many years?

FROM AUDIENCE: Eighteen.

MR. WILLIAMSON: Eighteen. And, Michael Behrens, do you know the most important historical footnote about Tomball, Texas?

MR. BEHRENS: I don't think I do.

MR. WILLIAMSON: They had the only high school softball team to beat the Weatherford High School softball team over a two-year period from 1999 to 2000 -- beat us in the state playoffs and then we won the next year. It's the only game we lost in two years. They have a hell of a girls' softball program in Tomball, Texas. Some good folks, too.

FROM AUDIENCE: Thank you.

MR. HOUGHTON: Thanks for coming.

FROM AUDIENCE: Thank you.

MR. HOUGHTON: Thanks for coming.

MR. WILLIAMSON: Well, members, it's been a stressful day. The most privileged motion is in order.

MR. HOUGHTON: Move to adjourn.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: Motion carries. We are adjourned as of 1:21 p.m.

(Whereupon, at 1:21 p.m., the meeting concluded.)

C E R T I F I C A T E

MEETING OF: Texas Transportation Commission

LOCATION: Austin, Texas

DATE: June 30, 2005

I do hereby certify that the foregoing pages, numbers 1 through 35 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.

__________07/12/2005
(Transcriber) (Date)
On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731