COMMISSION MEMBERS:

Ric Williamson, Chairman
John W. Johnson
Hope Andrade
Ted Houghton, Jr.

STAFF:

Michael W. Behrens, P.E., 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.

AUDIENCE: Good morning.

MR. WILLIAMSON: It is 9:08 a.m.,and I would like to call the June 2006 meeting of the Texas Transportation Commission to order. It is a pleasure to have each and every one of you here with us this morning.

Please note for the record public notice of this meeting, containing all items on the agenda, was filed with the Office of Secretary of State at 11:37 a.m. on June 21, 2006.

As we always do, before we begin today's meeting, the commission would appreciate it if each of you would join with us in reaching into your pocket or your purse or your bag and removing your cell phone, your pager, your PDA, your Dewberry, whatever you carry, and putting it on the silent or vibrate mode so as not to disrupt our proceedings during the day or tomorrow.

MR. JOHNSON: Excuse me?

(General laughter.)

MR. WILLIAMSON: I just wondered if anybody was listening, you know.

Thank you very much.

Our second custom is to open up our meetings with comments from each commissioner, and we traditionally start with the commissioner located furthest to the east, and so Mr. Houghton, followed by Ms. Andrade, followed by Mr. Johnson. Have at it, Ted.

MR. HOUGHTON: My geography was off. Furthest and east I guess is Mr. Johnson; Mr. Johnson said in this building.

Good morning to you all, and good morning to my fellow El Pasoans, glad to have you here. We're going to have some fun today, going to have a lot of new stuff -- when I say stuff, initiatives that will be hopefully approved. But I welcome you all to a very historic day that you may have been reading about in the local media.

MS. ANDRADE: I'd also like to echo Ted's comments and that is to welcome you all, and this is a history-making day in Austin, and certainly I have left San Antonio very happy with what's going to occur today. But I also want to take a few minutes to thank my fellow commissioner, Ted Houghton, for everything that he's done on this project in making sure that we protect the assets of Texas. So Ted, San Antonio thanks you.

And we've got many special guests today but we also have some representatives from a group that's been working on public transportation, on regional coordination, and Mr. Chairman, if it's okay, I'd like to ask them to stand.

MR. WILLIAMSON: Please.

MS. ANDRADE: For all those that are involved in public transportation for the next day and a half, would you please stand?

MR. WILLIAMSON: Thank you for your willingness to participate; we appreciate it.

(Applause.)

MS. ANDRADE: Mr. Chairman, they've done a great job, they've dedicated a lot of time and effort, and this group, as you know, is led by Michael Morris and he's done a great job for us. Thank you all very much.

MR. JOHNSON: I guess what I'm going to do is echo the echo. Pleasure to see so many people here that it continues to amaze me how much of what goes on in this state is dependent upon transportation, and your keen interest in those affairs and your presence here, I think, emphasize that to a great degree.

I'm sorry that I missed the social evening that our friends from the Mountain Time Zone sponsored last night. I had a reception in Houston that I couldn't leave until past eight o'clock, so I was late getting here. I know I missed a blue ribbon, five star event, and I apologize for it.

As my fellow commissioners have referred to, we have a very busy and full agenda, a lot of very meaningful things are going to come before the commission today, and I'm looking forward to the dialogue that we'll have and continuing to accomplish a lot and making the quality of life for all Texans better. Thank you.

MR. WILLIAMSON: Thank you, members. And let me remind everyone that if you wish to address the commission today, we ask that you complete a speaker's card which you can find at the registration table to your immediate right in the lobby. If you're going to talk about something that is on the agenda as posted, I ask that you fill out a yellow card; if you're going to comment at the end of the meeting in the general comment section, I ask that you fill out a blue card.

But regardless of the color of the card, we would hope you would restrict your remarks to the matter at hand and limit your time to three minutes because we have a lot of people who wish to speak today and we do have a long agenda. That restriction, of course, does not apply to our friends from the legislature, and I know we have at least two and perhaps more in the audience, and you may take about as much time as you want.

MR. DILLON: Ric, I don't think it's very fair that the legislative personnel should get more time than the people.

MR. WILLIAMSON: Thank you. I appreciate your comment.

Okay, Mike, I'll turn the meeting over to you.

MR. BEHRENS: Thank you, Chairman.

The first order of business, it's my pleasure to present a service award, and the service award today goes to Chairman Ric Williamson, who has five years now as a TxDOT employee and part of our commission and leader of our commission, and speaking on behalf of all TxDOT employees, we appreciate your service, all that you have done, together with your fellow commissioners in the past five years, and all the things that we will continue to accomplish as we go forward. And your ideas, your innovations, your persistence, we appreciate that, and we hope to add to this as years to come.

MR. WILLIAMSON: Some of my friends in the legislature would say my hardheadedness.

(Applause.)

MR. WILLIAMSON: Well, thank you, Mike, and thank you, fellow commissioners. I didn't know I was in for certification today, and I appreciate that. I've had 20 years of public service and I love my state, this is a great state. My grandparents came here from Louisiana at a time when they couldn't get a job. My parents were blue collar families who worked hard. The state gave me a great public education, the University of Texas gave me a great university education at a price that a blue collar family could afford, and 20 years is a small price to pay in return for that.

Thanks for this; I appreciate it very much.

MR. BEHRENS: Thank you.

Our next item of business will be a couple of resolutions, and the first one will be we're going to recognize one of our invaluable employees that chose to leave TxDOT. His last day will be tomorrow, and so I'd like to ask our general counsel, Richard Monroe, to come forward and we will make a presentation.

Richard, let me read this resolution from the commission. It says:

"Whereas, Richard Monroe has been the director of the Office of General Counsel for the Texas Department of Transportation since 1998;

"And whereas, having first joined the department in 1989 as deputy general counsel, he has demonstrated integrity and wit while providing much needed and respected legal advice to the department and to the Texas Transportation Commission;

"And whereas, he has proven himself a strong and able advocate for various clients and employees in the private and public sectors over three decades, most recently and faithfully with the Texas Department of Transportation;

"And whereas, he has received his bachelor's degree in business administration from Southern Methodist University in 1968 and his doctor of jurisprudence in 1971 from Southern Methodist University School of Law;

"And whereas, his intellect, experience and leadership proved invaluable during the past two sessions of the Texas Legislature as his office drafted monumental laws on toll roads, regional mobility authorities, and comprehensive development agreements, thereby building the legal foundation for infrastructure development in the state for decades to come;

"Now, therefore, be it resolved that the Texas Transportation Commission hereby honors and thanks Richard Monroe for his service to TxDOT and to the people of Texas.

"With gratitude and best wishes, presented by the Texas Transportation Commission this day, June 29, 2006." And signed by all the members of the commission.

MR. WILLIAMSON: Mr. Houghton?

MR. HOUGHTON: I echo the chairman's remarks that we haven't approved this yet, but I guess over our objection, your going to do it anyway.

You've steered us a very steady course, very patiently, calmly have said, No, back this way, and I appreciate that, Richard, and congratulations to you.

MR. MONROE: Thank you.

MS. ANDRADE: Richard, I'm going to miss you. As I told you in the elevator earlier, I look at you, when we're talking about this agency, for guidance, and thank you for the great job that you've done in protecting our agency. So good luck, and if there's ever anything we can do for you, please let us know.

MR. MONROE: Thank you, Commissioner.

MR. JOHNSON: Well, Counselor, most of the times when you come forward, the commission has probably veered off the path and headed toward some legal trouble, and you're attention to that has been greatly appreciated.

I marvel in our conversations that you left sort of the safety net of being a corporate attorney in Midland, Texas to dedicate your life to serving the state and this agency in such a remarkable way and making sure that we dot the I's and cross the T's. It's been a great pleasure and I'm genuinely going to miss you.

MR. MONROE: Thank you, sir.

MR. WILLIAMSON: Mr. Monroe, I hate to see you go, I hate to see you go for a couple of reasons, one of which may be the most important to me. We've dealt with some highly emotional and contentious issues the last five years, and through it all you have conducted yourself as a civilized man. I frequently like to remind myself and remind whoever happens to be having to listen to me at the time that there can be no higher compliment paid than to disagree civilly and to end the day as a civilized man, and you have been the epitome of that and it's been my great pleasure to have worked with you.

MR. MONROE: Thank you, sir. I truly appreciate all the kind words.

MR. WILLIAMSON: We'll miss you, Richard.

MR. MONROE: Thank you.

MR. WILLIAMSON: Let's take a picture.

(Pause for photographs.)

MR. BEHRENS: We have one additional resolution, and that resolution commemorates today which is a very important day in the history of transportation. Fifty years ago today, President Eisenhower signed a bill authorizing the construction of the Interstate Highway System, and I'd like to ask Randall Dillard to come forward and to give us a brief presentation. Randall?

MR. DILLARD: Good morning, commissioners, Mr. Behrens. For the record, my name is Randall Dillard, director of the Public Information Office of TxDOT.

Today, June 29, 2006, marks the golden anniversary of what many people say is the greatest public works project ever. It was a project that changed America and touched virtually every aspect of American life; it improved mobility, it improved safety, it improved our economy; it brought Americans together.

Fifty years ago today, President Dwight Eisenhower signed the Federal Aid Highway Act of 1956, establishing the Interstate Highway System. I'm told that President Eisenhower signed the bill in a hospital room without any ceremony.

Thirty-seven years earlier, as a lieutenant colonel, went on the Army's first transcontinental motor convoy. On the 1919 trip between San Francisco and Washington, D.C., he saw firsthand the poor conditions of our nation's roadways. This slide shows some of the pictures from that cross-country trip. If you notice below the picture of the dirt road at the bottom right, Eisenhower wrote "Lucky to get on a road like this."

Later, during his World War II stint as commander of the Allied Forces, Eisenhower's admiration for Germany's Autobahn highway network reinforced his belief that the United States needed first class highways. He came to the conclusion that the U.S. highway system was, in his words, inadequate locally and obsolete as a national system.

As Eisenhower saw it, there were five consequences -- penalties is the word he used -- of this obsolete system: the deaths and injuries annually from crashes; the waste of money in traffic jams and detours; inefficient transport of goods; the inadequacies to meet defense demands; and the clogging of the nation's courts with highway-related lawsuits. So Eisenhower, a Republican, worked with a Democratic Congress to get legislation that resulted in the National System of Interstate and Defense Highways, what we now call the Interstate Highway System.

The country set out to build 41,000 miles of interstate at an estimated cost of about $35 billion. A final cost estimate of nearly $129 billion was issued in 1991. To build the nation's interstates, Eisenhower brought together a system approach, a design concept, a federal commitment, and a financing mechanism.

States were asked to submit designs for a standard route sign for the interstate system. In 1957, a design by Texas Highway Department traffic engineer Richard Oliver was selected as the winning entry for the now familiar red, white and blue interstate shield.

Here's a quick look at some of the state's early interstates. This first picture, taken in 1961, is of I-35 in Austin, this is at Riverside Drive. Judging from the shadows, this picture was taken in the late afternoon; it is not clear if it was rush hour traffic or not.

(General laughter.)

MR. DILLARD: In 1963, this was the Stemmons Freeway in Dallas. I count ten lanes, five in each direction; here is a rest area and it looks like everyone's high school Oldsmobile Cutlass is parked there on the left; and finally, here's a picture of I-35 in Waco taken back in 1969.

Missouri and Kansas argue over who had the first state to build the interstate. Missouri apparently had the first project to go to construction, Kansas had the first paving project. We're Texas so we don't really care. Texas has the most interstates today with 3,233 miles; that's almost 800 miles more than California, the state with the second most interstates.

The interstate system was not planned and built without controversy. Many property owners did not want to give up their land for a new highway; some cities fought the interstates, others saw the system as government folly, a colossal waste of tax money. Lyndon B. Johnson heard from people who opposed the plan. In the early 1960s, then Senator Johnson received a letter from Mrs. Maude Wilcox of San Antonio. She was upset about the use of eminent domain to purchase right of way, calling it unconstitutional, un-American, and communistic. She went on to liken the right of way process to everything from the Inquisition to the Salem Witch Trials, to the Holocaust.

MR. WILLIAMSON: Sounds familiar.

(General laughter.)

MR. DILLARD: I don't know if we ever bought property from Mrs. Wilcox, I'm sure if we did, we paid fair market value for it. But the interstate system was built and the country has prospered.

I'm not sure who Nick Taylor is, but in 1990 he wrote: "The interstates have knit us together in subtle and unanticipated ways. Just as the railroad first introduced us to the country a century ago, so the interstates have opened it to everyone. We are still pioneers seeking horizons from the driver's seat."

Dwight Eisenhower summed up the importance of a quality transportation system in America when he said, "Our unity as a nation is sustained by free communication of thought and by easy transportation of people and goods."

Today's anniversary provides us an opportunity to honor those that built the Interstate Highway System, it gives us a time to reflect on how the system can remain effective, and it gives us an opportunity to plan for tomorrow's transportation needs. Today Texas has a transportation problem, TxDOT has a plan. We're focused on five goals: to reduce congestion, enhance safety, expand economic opportunity, improve air quality, and increase the value of the transportation assets. As we look to the future, we can learn from the past.

To mark the significance of today's date in history, I am proud to present you with a resolution for your consideration. The resolution, I'll read it for you.

"Whereas, the Dwight D. Eisenhower National System of Interstate and Defense Highways was established 50 years ago today on June 29, 1956;

"And whereas, there now exists more than 48,000 miles of interstate highway in the nation's entirety;

"And whereas, Texas leads all states with interstate highways covering 3,233 miles on 17 routes;

"And whereas, interstate highways have made travel safer, it being estimated that since the inception of interstates in Texas, more than 1.1 million injuries have been prevented and more than 18,000 lives have been saved;

"And whereas, the interstate highways through five decades have propelled the sustained and bountiful growth of the Texas economy;

"And whereas, these highways have provided annual mobility benefits to motorists valued at $6 billion;

"Now, therefore, be it resolved that the Texas Transportation Commission hereby observes and celebrates the 50th anniversary of the United States Interstate Highway System and recognizes the efforts and sacrifices of those men and women who earn our ceaseless respect for their hard work and vision, including TxDOT employees, private sector contractors and partners, elected officials, citizens, and former commissioners, as today we praise those who brought forth and maintain these vital highways that bind our nation in union, that improve the lives of Texans, and that provide a worthy model of the effectiveness and beauty sought in the transportation systems by every person who hopes and works to make real their dream of a prosperous future. With gratitude for the achievements of the past and with the sure knowledge that the future challenges us ever more today than in 1956, the Transportation Commission, as a body, approves this resolution so made by the signatures affixed below on this day, June 29, 2006."

MR. WILLIAMSON: And Randall, we have all affixed, we've all signed the resolution.

MR. DILLARD: Thank you very much.

MR. WILLIAMSON: Thank you, Randall.

MR. DILLARD: Thank you.

MR. WILLIAMSON: Members, we are all having fun celebrating the 50th year of the Interstate System.

MR. DILLON: I signed up to speak on that, about every point in that speech, limit it to three minutes.

MR. WILLIAMSON: Well, we need to approve the minutes and formally open the meeting, Jim. You'll have the opportunity to speak on everything you wish to speak on.

MR. DILLON: Okay.

MR. WILLIAMSON: We need to approve the minutes, gentlemen and lady.

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries, minutes are approved. And Mike, I would like to move item 12 to the beginning point to accommodate some who have to leave unexpectedly.

MR. BEHRENS: Yes, sir, we can do that.

Item 12 is a rail project in Ellis County that we have been looking at, and I'll ask Jim Randall to make that presentation, and then we'll hear from the folks that wish to speak toward that item.

MR. RANDALL: Good morning, commissioners. My name is Jim Randall, director of Transportation Planning and Programming Division.

Item 12, this minute order directs the department to take no further action at this time to acquire a 4.57-mile rail facility in Waxahachie and Nena in Ellis County, known as the "Waxahachie Industrial Lead."

Transportation Code Chapter 91 authorizes the department to acquire abandoned rail facilities. Approving this type of acquisition requires the commission to consider the local and regional economic benefit realized from the disbursement of funds to acquire the rail facility in comparison to the amount of the disbursement.

Pursuant to the legislation, the commission has adopted rules prescribing policies and procedures for the department's acquisition of abandoned rail facilities, and it's codified in 43 TAC, Section 7.20 to 7.22. Those rules require the department to request documentation concerning the local and regional economic impact of abandonment from a municipality, county, or rural rail transportation district in which all or a segment of the rail facility is located. The rules also require the department to conduct one or more public hearings to receive public comment to determine the need to acquire a rail facility.

The Union Pacific Railroad, UP, filed a notice of exemption on November 17, 2005 with the Surface Transportation Board to abandon and discontinue service along this rail line, as shown in Exhibit A in your minute order packet. On January 11, 2006, the city filed a late request for the issuance of a Notice of Interim Trail Use, or NITU, for the subject line pursuant to the National Trail System Act.

TxDOT conducted a public hearing in the city on June 6, 2006 regarding the acquisition of the line. Three people provided comments at the hearing, one in support of the acquisition and two against. A separate written comment was received supporting the acquisition within the required time frame. A summary of public comments is contained in Exhibit B to your minute order packet. No comments received supported continued rail service but instead focused on the acquisition of the facility as it relates to preservation of the depot, tourism, trail development, and commercial development.

The department has obtained information concerning the local and regional economic impact of abandonment from UP and has determined, based on this information and the information contained in the UP notice, that there's only a limited need to preserve the rail facility for future transportation purposes.

The City of Waxahachie has proposed an interim trail use and has filed the necessary documents with the Surface Transportation Board. If approved, the city would assume full financial and legal responsibility for the corridor which would be subject to reversion back to UP to operate as a railroad at such time as the UP deems it's necessary to reactivate the line.

After evaluating the criteria prescribed in Section 7.22 of the rules, and considering comments received at the public hearing, staff has determined that acquisition of the rail facility should not be authorized at this time. We recommend approval of this minute order.

MR. WILLIAMSON: Members, we have three witnesses, and with your indulgence, we'll hear from them first. Representative/Chairman Jim Pitts. Welcome to our house, Mr. Pitts, a great supporter of transportation.

MR. PITTS: Thank you, Mr. Chairman; thank you, commissioners.

First of all, I want to echo what Mike said, Mr. Chairman. Thank you for your service to the State of Texas. You have been a wonderful asset for Texas and Texans, and we may not always agree on everything but I know your heart is in the right direction and you're keeping Texas moving, and I appreciate that.

MR. WILLIAMSON: Thanks.

MR. PITTS: I'm going to be very short. I did bring my bodyguards with me that I knew I had to have coming to TxDOT. Dennis Horak is a landowner and Mark Singleton is president of Citizens National Bank of Texas, who is very interested in the railroad remodeling and reconstruction.

We would ask for you to accept the recommendation of your staff. Thank you very much.

MR. WILLIAMSON: Members?

(No response.)

MR. WILLIAMSON: Thanks for being here.

MR. PITTS: Thank you.

MR. WILLIAMSON: Dennis?

MR. HORAK: He's made all the comments I need to make.

MR. WILLIAMSON: Okay. Mark?

MR. SINGLETON: As well.

MR. WILLIAMSON: Jim?

MR. DILLON: Banks have always been interested in railroads. The robber barons of the 1800s were interested in railroads, that's how they got filthy rich, monopolizing oil, meat packing, transportation of goods, grain and services all across this country at a profit. Similar to the interest the banks now have in bypassing all the small towns in our country with these toll roads and freeways that you're trying to build, the railroads could kill a town 150 years ago by going around it, but if they were paid enough racket money and extortion and ransom, then there might be a stop in your town. So banks have historically been very interested in railroads.

This foreign-owned railroad that you are trying to push down the people's throat --

MR. WILLIAMSON: Okay, Jim, the agenda item is not about that.

MR. DILLON: Oh, I thought he had referred to the banking interest in the railroad.

MR. WILLIAMSON: This agenda item is about whether or not we will acquire right of way from the Union Pacific that they're fixing to abandon, this isn't about building a new one.

MR. DILLON: Well, what do we need the banker here for if it's a giveaway, if it's free, as General Eisenhower originally intended our roads to be free, that's why he called them freeways.

MR. WILLIAMSON: I think he was speaking as a property owner, not as a banker.

MR. DILLON: Oh, he's a bodyguard, he's a banker, he's a property owner.

MR. WILLIAMSON: I think the bodyguard reference was for fun.

MR. DILLON: Okay, all right. This reference to history being made here today, I have a sneaky suspicion that it's going to be bad history.

MR. WILLIAMSON: Okay, but that's not what this agenda item is.

MR. DILLON: Okay. State the agenda item one more time, please. Railroad acquisition for free, that's going to be the only free thing in this whole deal.

MR. WILLIAMSON: It's a rail project, Ellis County. The minute order was whether or not we wanted to acquire it from the Union Pacific, and what our staff has recommended is that we not acquire it.

MR. DILLON: Well, if it's free, why not take it?

MR. WILLIAMSON: Because we would have to spend money maintaining it, we'd have to take your gasoline tax money and maintain it.

MR. DILLON: You're already stealing my gasoline tax money which is earmarked and dedicated to the people's roads, the free roads and being diverted.

MR. WILLIAMSON: Steal is a strong word.

MR. DILLON: Steal is a strong word.

MR. WILLIAMSON: I'm sure you don't intend it to be strong.

MR. DILLON: No, I don't intend it to be that strong, but if it fits, then let's use it. The politicians are known for stealing, they've earned that reputation.

MR. WILLIAMSON: Some people take that position.

MR. DILLON: I've seen it happen over and over. They steal the people's money, they're stealing our roads, our means of transportation, charging us to drive on the roads that we paid for, throwing their exit and entrance ramps down on top of our freeways, alleged freeways that have already been built so that they can have easy access to more revenue with a ramp to get on and off the toll roads.

MR. WILLIAMSON: That's not appropriate to the agenda item, Jim, and your time is up.

MR. DILLON: Okay, we'll stay on topic.

MR. WILLIAMSON: But you're going to be here the day, I'm sure.

Okay, members, you've heard the staff's explanation and recommendation, you've heard the testimony of the witnesses. What's your pleasure?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, each of you, for your testimony; we appreciate it.

Now, so the audience knows, we're going to move items as is appropriate for our furthest away out-of-town guests to be able to catch their planes to get home, however, at ten o'clock, whatever we're doing we're going to stop and take up the matter of State Highway 130, and a lot of you in this room will not have any interest in that and that will be a good time to take a restroom break or coffee break because we'll be tied up for about 15 minutes taking care of that matter.

Having said that, Mike, I would just as soon proceed to item 2(a) and get as much of our general business out of the way as we can.

MR. BEHRENS: Yes, sir, we'll do that.

Item 2 is discussion items, 2(a) is regarding our legislative agenda and looking at recommendations that we are looking forward to take to the next session, and item 2(b) then we'll be looking at our Legislative Appropriations Request. Coby Chase will present 2(a).

MR. CHASE: Good morning. For the record, my name is Coby Chase and I'm the director of TxDOT's Government and Business Enterprises Division.

Today I will further discuss the formulation of the legislative recommendations for the 80th session of the Texas Legislature. As I state every single time after I introduce myself, it's been said before, the Transportation Commission is authorized by law to make recommendations to the Texas Legislature on statutory changes that would improve the operation of the department. The purpose of this ongoing dialogue is to make these issues public, and as I also say every time, this is an open invitation to anybody within the sound of my voice, either here or over the internet or whatever the case may be, they may always contact my division and discuss any of these issues in any detail or whatever the case may be. We'll be happy to walk through whatever we're doing right at that minute with these issues.

Last month I went through an exhaustive listing of statutory changes that would improve department operations. I'll review those issues now but feel free to stop me with any questions you might have.

As far as some of our business processes, we'd like to make it clear in statute that we are not in the social service business when it comes to providing medical transportation, but we are in the medical transportation business. We'd also like the opportunity to share the cost of purchasing billboards with cities when they do not allow us to relocate billboards.

Now I will discuss issues we have previously mentioned related to the agency's funding. The first is currently when the department sells any surplus property, whether it is real property or surplus equipment, the proceeds from that sale are deposited into the states General Revenue Fund. These proceeds should be returned to the Highway Fund. Then there is the continuing evolution in the 2003 change in the point of collection of motor fuels taxes. Distributors of motor fuels are allowed to retain 2 percent of gross gas tax receipts but the burden has been reduced and so should the percentage they keep -- at least that's what our research is indicating.

Now I'm going to discuss a measure designed to enhance the Texas Mobility Fund. The department collects fees from the trucking industry for General Revenue for oversized permits and motor carrier registrations. Since these fees are directly related to transportation, they should be re-evaluated, possibly increased, and redirected to the Texas Mobility Fund.

We have one human resource related issue that we're looking at at the moment. Numerous agencies have express authority pay unused compensatory time to FLSA-exempt employees but TxDOT does not. We should remedy that especially when we have to call them in to work in emergencies, long hours, hurricane evacuations, whatever the case may be, wildfire fighting.

Research on a safer temporary dealer tag continues. In addition, we are studying the possibility of extending the renewal of dealers' licenses to two years.

There are also several issues benefitting our project development process. The first is to grant counties transportation planning authority. This has been discussed, I hear this discussed more and more, not in a scientific kind of polling way but the more I meet with people and the more my staff meet with people, the more this idea comes up. Counties should be able to require developers to set aside lands for future transportation corridors. The second issue would grant us authority to acquire rights of way from a willing seller earlier in the process. And then third, we believe there is a better method of procuring engineering services and recommend a quality based, best value approach to obtaining this vital service.

In addition, we are studying the department's authority to enter property for the purpose of conducting surveys and appraisals. We are also researching what is required of state law in order for us to fully implement the delegation of environmental review given to us in the SAFETEA-LU pilot project.

Two issues on utilities need to be addressed: the costs we pay to relocate them and the right they have to use the state's right of way for free. As we optimize our assets, the policy on the utilities should be revisited.

Although this is certainly a matter up for debate, there is perhaps no more important issue before us this next session than seeking to capitalize the Rail Relocation and Improvement Fund. We know rail relocation is important but also know it is expensive. The state, local communities and rail operators must come together to make this happen. Revenue options are being studied in depth and will be presented to you soon.

I'd like to report that I recently met with some folks from Morgan Stanley. They're taking a lot of time to help us better frame the issue and add some good perspective to our research. We greatly appreciate their assistance on that.

MR. WILLIAMSON: Stop for a second, please.

Ted, in all of your ramblings through the mega-transportation systems that you've been studying for the commission, have you come across any states that levy any kind of flat fee -- I hate to use the word toll but maybe that's the right word -- on either the containers that come in on a railroad car or the railroad cars themselves as they move through a state?

MR. HOUGHTON: Well, the one with the highest profile is the Alameda Corridor where every container that hits the corridor has a fee associated with it.

MR. WILLIAMSON: So if China, for example, loads a container full of stereo components and puts it on a boat and brings it into the port and a crane lifts it up and puts it on a railroad car and it gets moved 15 miles, or however long the corridor is --

MR. HOUGHTON: Twenty-two miles.

MR. WILLIAMSON:  -- the owner of the container or China or whoever pays a fee for the use of that road.

MR. HOUGHTON: Correct. A toll railroad is what it is.

MR. WILLIAMSON: Is it like based on a percentage of value, weight, flat fee?

MR. HOUGHTON: It's based upon the size of the container. A 20-foot unit is $16. Coming back, every unit is $8.

MR. WILLIAMSON: So the rationale for the fee is to pay for that corridor.

MR. HOUGHTON: That's correct, pay for the capital cost of building that corridor.

MR. WILLIAMSON: And we don't want to frighten our business community that's in the rail business, I'm just asking the question, Coby. Have we dialogued with Kansas City Southern, UP and BNSF whether or not they would be willing to support that approach for the Rail Relocation Fund?

MR. CHASE: I don't believe my division has. My division will.

MR. WILLIAMSON: Well, we've got a standing memorandum of understanding negotiated by the governor and former Commissioner Nichols, a great commissioner of TxDOT and soon to be a good senator, that assures the railroads that they will not be made to pay for that which they do not wish to pay for, and I don't want to, in spirit or in fact, violate that MOU, it's been very important to us starting the dialogue and planning process with the railroads.

At the same time, the spirit of this discussion is to give fair warning to our friends in the legislature, to the industry, to the advocates of transportation, both sides of an issue, where we, the commission, think the law ought to be. So I think in the spirit of fair warning, maybe we ought to line up the railroad guys and gals and see if they want to come in and start visiting a little bit about that.

MR. CHASE: Absolutely.

MR. WILLIAMSON: With your permission, members? Let's do that.

MR. CHASE: Okay.

MR. WILLIAMSON: Please continue.

MR. CHASE: Enhancing safety on our highways is, of course, tantamount to all other goals you have established for this agency. Authorizing a system of sobriety checkpoints has proven to lower the instances of drunken driving. These should be established in Texas as well.

Another safety issue pertains to the possibility of authorizing the department to implement a variable speed limit system to address fluctuations in roadway conditions.

And then finally, in the way or recommendations regarding toll roads, I've divided this discussion into two sub-categories: comprehensive development agreements, and other toll road issues.

There are numerous issues regarding comprehensive development agreements, or CDAs, that should be included in your recommendations to the legislature, at least as we see them at this stage. These include the repeal of the CDA sunset date and the statutory cap on CDA-related expenditures. The 50-year cap on concession terms needs to be lifted. TxDOT should be granted the authority to assume the debt of a CDA developer and issue the bonds necessary to terminate a comprehensive development agreement. We should be granted the ability to deposit concession fees into the Mobility Fund. And then, of course, the CDA process should be opened up to non-tolled highway projects as well.

Other toll road related issues include granting the commission the ability to acquire toll roads from other public entities and issue debt for that purpose.

MR. WILLIAMSON: Another stop, please. Recently, in our discussion on State Highway 121 with Denton, Collin, Tarrant and Dallas county officials and officials representing the NTTA, it has come to our attention that while we wish NTTA and HCTRA and CTRMA and perhaps El Paso RMA, Alamo RMA to be in a position to compete head to head with other public sector organizations and/or private sector organizations, there may be some problem with them competing head to head.

Is that a federal restriction that we cannot legally change, or is that a state restriction -- maybe Amadeo needs to speak to this -- that needs to appear on our list? Or maybe Mike knows about it. Who wants to speak to it?

MR. DILLON: (Speaking from audience.) I can tell you the federal government has sole prerogative to control the borders and [inaudible].

MR. WILLIAMSON: Okay, Jim, but it's not comment time. We don't conduct our meetings this way.

MR. BEHRENS: That would be a federal limitation.

MR. CHASE: Apparently it's a federal limitation.

MR. WILLIAMSON: Okay. Well, when that became apparent, I think some with the NTTA felt like they were being -- not intentionally -- cut out of the deal. So I guess on our federal agenda which you'll start talking to us about in the fall, we need to see if we can address that.

What's probably going to happen over the next ten years is there's going to be a growth of these regional authorities that will in turn want to partner with the private sector and basically take us out of the process. That being the case, we need to be sure those public authorities, whether it's NTTA or something to be established later, has standing to do those things where they can move forward with their regional plans. So please remember that when the time comes.

MR. CHASE: Okay. We'll start poking deeper into that on the federal level immediately.

In addition, we should be granted the ability to enforce the payment of tolls through the denial of motor vehicle registration and driver's license renewals. And one issue in particular I'm interested in seeing evolve, seeing where the research takes us is the notion that TxDOT create its own separate entity that can compete in the CDA process. Our research section is digging into that right now.

Since I last addressed you, the agency has been involved in two public hearings with the legislature. On May 26, the administration appeared before the House Appropriations General Governance Subcommittee in which we provided testimony on transportation challenges, the Enhancements Program, and the department's flight services. And then on June 13, Chairman Williamson and the administration testified before the Senate Transportation and Homeland Security Committee and discussed comprehensive development agreements and Trans-Texas Corridor 35.

In addition, I'd like to inform you that my staff has made several presentations to transportation leaders around the state on the subject of my presentation to you here today, in addition with some federal matters as well. We are working to get your message out and Texas is moving forward.

These are my prepared remarks for today and I'll be happy to take any questions you might have.

MR. WILLIAMSON: Members, you've heard Coby's delivery and this is the time in which you either ask him questions about what's on the agenda now or you make suggestions to him about what you wish to be researched to be added.

MS. ANDRADE: Mr. Chairman, I have a question.

Coby, for the benefit of the people here for public transportation, could you just elaborate on the medical transportation, what you said at the beginning, briefly?

MR. CHASE: Yes, I did kind of go through that quickly.

The issue at stake -- and if someone from my staff needs to correct me, please do -- is we are in the business of providing transportation services, not the full array of client services -- I might have this wrong and in principle it's right -- and in two out of three places it needs to be in law, it's in two places and I think it needs to be in marbled more clearly into the Transportation Code or another part of law so it clearly shows people what our duties are and what our duties are not.

MS. ANDRADE: We're just in the business to provide public transportation, not qualified.

MR. CHASE: Yes, ma'am, that is precisely it.

MS. ANDRADE: And the second thing is that I want to make sure that they understand that we will still have time with our recommendations as to what we want to incorporate in our agenda.

MR. CHASE: Absolutely.

MS. ANDRADE: Because they're doing a lot of work and we want to make sure we're included.

MR. CHASE: I will say the first person to show up at our office to take us up on this offer was Ben Herr, and he'll always have a place in GBE in our heart for that one, and we're having a great time talking matters over with him.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Members?

(No response.)

MR. WILLIAMSON: Thank you, Coby. We're not going to take up James at this time.

Jim, have you got comments?

MR. DILLON: Yes, I sure do.

The creation of these so-called regional entities which will supersede our local control of our lives is unconstitutional. Also, unconstitutional is the abdication of all authority to impose fees, duties, tariffs on interstate commerce. That's the sole prerogative of the federal government, although now everything is federal since the state has surrendered its sovereignty and the freedom of the people to the federal goliath/leviathan in Washington, D.C. that now controls everything, including our roads.

But the fact that he said that fair market value is going to be paid for everybody's land and new authorities are going to be created to tax and control and monitor the people's movements, that's just not going to cut it. See, Texas is a free state and we intend to remain free, we intend to drive on free ways, our roads are going to be a free way to travel because the right to travel -- or as you call it, mobility -- has historically been not only a God-given right but a natural right that the people have always possessed. Our freedom of movement is sacrosanct.

We will not surrender to a regional, federal, state or Spanish-owned entity our ability to move about without being held hostage, held for ransom, required to pay exorbitant fees, fines, penalties, duties, taxes and tariffs at every little toll booth you can possibly erect on every road that exists in Texas today. We will not put up with that, and I'm here to tell you that this is a history-making day and it's not going to be a mystery as to what kind of history you make today. You are working, unknowingly and unwittingly, I'm sure, but you are working for the wrong side of history here today.

There is a movement around the world called freedom and the people in this country and this state are joining in that movement. It's a grassroots, fundamental, basic instinct in the human heart to be free, and that includes, but is not limited to, our right and our freedoms to move about and travel from place to place as free men on a daily basis without being penalized and taxed.

MR. WILLIAMSON: Thank you. We appreciate your comments.

MR. DILLON: Thank you.

MR. WILLIAMSON: There's no reason to take action on the item, members. We are going to let James come back because at this time we're going to take up, Mike, agenda item 4, closely followed by agenda item 5(a), please.

MR. BEHRENS: That's correct. Item number 4 is going to concern toll projects in Caldwell, Guadalupe and Travis counties, and would recommend to the commission to exclude Segments 5 and 6 of State Highway 130 from the Central Texas Turnpike System.

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

As Mr. Behrens said, this item would define that Segments 5 and 6 of State Highway 130 as being financially independent of the Central Texas Turnpike System. The indenture for the Central Texas Turnpike System assumes that any toll road owned by the commission will be a part of that system unless designated otherwise by the commission. This minute order provides such a designation and we would then forward this to the trustee and on to the marketplace if you approve. Staff recommends your approval.

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

Jim, this is a process matter. I think you want to speak on the whole idea, and you'll get a chance to do that on the next one, so if you don't mind, we'll pass this one and then we'll go to the next one and you can offer your comments about the whole package.

MR. DILLON: Okay.

MR. WILLIAMSON: Thank you very much.

Members, what's your pleasure?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BASS: Thank you.

MR. WILLIAMSON: And now we'll hear 5(a) and then we'll take testimony.

MR. BEHRENS: Agenda item number 5(a) concerns comprehensive development agreements; 5(a) concerns Caldwell, Guadalupe and Travis counties where we recommend the consideration to the commission to authorize the department to execute a Facility Concession Agreement for financing, development, design, construction, operation and maintenance of Segments 5 and 6 of State Highway 130. Phil?

MR. RUSSELL: Thanks, Mike. Good morning, commissioners; good morning, Roger.

Commissioners, we have been very, very busy over the last several months working on this opportunity, and as Commissioner Houghton announced a couple of weeks ago, we have reached an agreement with Cintra Zachry to deliver this project.

The minute order before you authorizes the executive director to enter into this agreement and would agree to these business terms. I'll say that the agreement is complex, like any contract of this nature would be, so what staff has done is put together a 12 or 15 slide power point and I will try to take you through that presentation.

Chairman, of course, if you or any of the other commissioners have a question during this, feel free to interrupt. If I can't answer the question, I have Amadeo and James and Jack Ingram, who were all instrumental in developing this project, and I think between the four of us we'll be able to answer your questions.

Just as a bit of background, the project, as everybody knows, we had a long, arduous competition between three fine proposals back in the '04-05 time frame. At your March '05 commission meeting, it was determined that Cintra Zachry would be the best value to the state. In fact, in that March commission meeting, March 11, we did execute a strategic partnership with the Cintra Zachry group.

And I will say that certainly people had their own notions of what that did or did not do. The reality is that agreement essentially set the business terms, the relationship between TxDOT and Cintra Zachry group throughout the length of this agreement. It talked a little bit about the process that we'll follow as we develop individual projects all up and down the corridor, both road and rail.

There was some discussion about that Cintra Zachry would have all the work on this project and one of the provisions that they looked at in that March 11 contract was this notion of this $400 million right of first negotiation. Again, that was not guaranteeing Cintra Zachry any work at all, it just provided an affirmative duty for us to first discuss the project with the Cintra Zachry group.

MR. WILLIAMSON: So in other words, if Cintra Zachry said this piece, this asset, this facility inside the corridor is ready for development, the affirmative duty for us to permit to make their case as to why they should build it.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: And then once we reach the $400 million threshold, at that point we had no affirmative duty at all.

MR. RUSSELL: That's correct.

MR. WILLIAMSON: And that would have been available to either one of the other two groups that were competing for the proposal.

MR. RUSSELL: Exactly, absolutely. It was in the original contract documents.

MR. WILLIAMSON: And if we get past the $400 million threshold, and if, for example, the county commission from Dallas County would come to us and say we want you to consider a portion of Loop 9 in southern Dallas County as a feeding facility or contributing facility to TTC-35 and we want you to consider it for readiness to build, we could do that.

MR. RUSSELL: Yes, sir, absolutely.

MR. WILLIAMSON: And it might even be Doug Pitcock and Carter Burgess who ends up with the work.

MR. RUSSELL: Our choice, we would make that decision. And again, even on your example, that first project we had no affirmative duty to give any of that construction to anyone, merely an obligation to visit with them, allow them to bring the idea to us.

MR. WILLIAMSON: And certainly if it wasn't self-performing, it's highly unlikely that we would do it without going out and getting some kind of competitive proposal -- self-performing meaning they put up all the money and we don't have any of the risk.

MR. RUSSELL: Exactly.

And Chairman, you've really led into that next bullet point. As part of that process, the Cintra Zachry group did bring to us an idea that a project was ready for development. We agreed to that in April, and that would be the extension of 130 south from essentially Bergstrom down to Seguin.

And if I could, Chairman, I know there's some confusion about this, that 130 is part of the Trans-Texas Corridor. That's not the case. 130 has been conceived for 20 years as an independent project to relieve congestion in this area. On all of our comprehensive development agreements, we always allow a certain amount of latitude to these proposers, so whatever the project is, we always allow them other projects that they may need for connectivity purposes or for financing. All proposers always come in with other ideas.

In this case, the Cintra Zachry group said, Hey, the State Highway 130 project, don't know if it will be part of Trans-Texas Corridor, you've achieved environmental clearance, we think it will be important to develop that project, we think it's ripe to be developed, and we agreed in April of last year.

MR. WILLIAMSON: And their rationale is the successful construction of that asset will feed willing customers to TTC-35, if they so choose.

MR. RUSSELL: Right.

MR. WILLIAMSON: So the state's interest here is not only in getting a road built that it doesn't have the money to pay for to build itself, but the state's interest is also in increasing the value of what might be available on the parallel as it gets started.

MR. RUSSELL: Exactly. And again, as to the same issue -- not to belabor the point -- we don't know whether State Highway 130 is going to be part of the Trans-Texas Corridor, it could, but the environmental process will determine whether it is or is not part of the Trans-Texas Corridor. And to some extent, that's in response to public comment we've heard on all of our public meetings. The general public said, Please first look at existing assets first before you look at a parallel or another facility. And clearly in this case, State Highway 130 would be an existing asset, so it is in response to those comments.

Just a little bit on the description. State Highway 130, again what we call Segments 5 and 6, is about a 40-mile stretch from 183 there in the Creedmoor area all the way down to I-10 east of Seguin. It would marry up with the section of 130 that Bob Daigh is constructing currently from Georgetown down to this section there on 183. We estimate it to be about a billion three, a billion three five total construction cost. That would be construction, right of way costs, design costs. We'd be looking at a 50-year lease after it's open for traffic, and depending on any environmental issues, that estimate would be about 2012 when it's open for traffic.

The overall goals, again, for the department: reduce congestion, enhance safety, expand economic opportunity, improve air quality, and increase the value of transportation assets. And I think, in our opinion, commissioners, this project handles all five of those goals and more.

Benefits to the state, some that we've looked at and quantified. We would own a new asset, a $1.3 billion asset, a state highway, public infrastructure that the State of Texas would own. Private investment, as you pointed out earlier, it would be no cost to the state, state or federal dollars, gas tax dollars. Preserve local resources. Originally when State Highway 130 was envisioned, there was a discussion with two of the counties, Guadalupe and Caldwell counties, and to an extent Travis County, that they would be providing a certain amount of the right of way cost, and of course, all that now would be removed and it would allow them to use those resources on other needed projects.

We constantly talk about going to bed at night and waking up in the morning thinking of an $86 billion shortfall for the state, and clearly this project would reduce that shortfall, and obviously would attract more economic development to the region as well.

MR. WILLIAMSON: Let's explore that for just a moment.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: It reduces the shortfall in two ways, I think, but I need for you to decide whether we agree on this or not. It relieves from us the contingent liability of having to build a road at some point in the future, part of our $86 billion.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: So that's a billion three that we reduce the $86 billion down to $85.7, in theory. But we also -- I think you're going to tell us in a few minutes -- share in the revenue from day one and we've conservatively projected that our share over 50 years would be in the billion six range.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: So in a sense, we could feel, the commission, where it could move forward with this, take the position that we've reduced our $86 billion gap by $3 billion and we've now got an $83 billion gap.

MR. RUSSELL: That billion six is out over 50 years if you PV it.

MR. WILLIAMSON: But the $86 billion is also. When we developed the gap, one of the things we focused on was what is it really over the next 25 years.

Now, I'm kind of curious. Michael Morris, you're here? I thought he was here. Is there anyone from Collin or Dallas or the NTTA or RTC out there? We've been having a spirited discussion, Mr. Pickett, about the 121 matter in North Texas, and I've had it said to me that this is the most lucrative toll road in the state of Texas -- 121 I speak of. If it's the case that 121, the subject of so much fun discussions we're having, is the most lucrative toll road available on the state system right now, and if it's the case that Segments 5 and 6 has a $3 billion value, then I'm kind of curious what is the real value of the 121 toll road.

MR. MORRIS: Since we're approaching a competitive process on 121, I'd like to speak in general terms.

MR. WILLIAMSON: Yes, sir.

MR. MORRIS: From the traffic and revenue studies done on 121 in Denton and Collin counties, we think each of those is in excess of a billion dollars, so the 121 project in Denton, since it will have higher volumes as it approaches the airport, is anticipated to be about $1.5 billion, the 121 Collin County piece is anticipated to be a billion, and the 161 piece is anticipated to be a billion.

Now, with regard to 161, we still need $500 million to finish that project. 121 Denton was pretty well funded with gasoline tax, small amounts of money for technology with regard to reading toll tags, and then $350 million or so is needed to complete 121 Collin, so if you add that up, you're looking at a surplus of $2.2 billion of toll revenue available to build other transportation projects, and we're working through those MOUs at this particular time with this office.

I think it's quite possible, when CDAs or NTTA look closer at those details and actually go through the competition beyond the traffic and revenue and look at those further bandings that occur in what are two high-growth counties, I think the revenue could be in excess of that.

MR. WILLIAMSON: Thank you very much for your remarks.

And Phil, the reason I interrupted you and asked Michael --

MR. MORRIS: Michael Morris, MPO director, Dallas-Fort Worth.

MR. WILLIAMSON:  -- the reason I asked Michael to comment because I know Michael is deep into the analysis of this. It's been interesting -- and I'm admittedly laying the groundwork for the El Paso discussion in a moment that will occur -- it's human nature to see the future through the prism of your past, and I can remember it was just four short years ago when we could not persuade organizations in parts of the state to build any of these toll roads unless we agreed to front half the money with gasoline tax because they couldn't possibly pay for themselves. In fact, we're looking at one on the board right now.

Just two years ago, a contractor who had an opportunity, at our option, to build this road told us that we needed to put $200 million of state gas tax money into this toll road, and yet we know as business people who have been focused on this for a while -- not because we like toll roads but because we have an $86 billion problem and that problem has got to be addressed either with taxes or tolls, one of the two -- we've known for a while that the numbers are much different than we think they are looking at the future through the prism of our past.

And it's refreshing for you to lay this out, and it's refreshing for Michael to share with us some of his initial findings, and it's instructive for all of us as we go through the day to kind of remember that, because we've all got some difficult decisions to make today that are really about how we finance the transportation system in our future.

Please continue.

MR. RUSSELL: Chairman, just a couple of other points I'd like to make on this slide, and you kind of touched upon it, I don't think anybody ever doubted the need for this extension down to Seguin. Commissioner Andrade has been very clear to us about the needs of the Austin-San Antonio area, so it wasn't a matter of need or importance, what it came down to, as you point out, was a lack of gas tax dollars to finish the deal. And as I'm always talking about, it's not that the department wouldn't have some money, but somebody would have to give up needed projects in their area to complete this. We'd have to essentially shift gas tax from somewhere, Dallas-Fort Worth, Houston, El Paso, the Valley, Amarillo, and guess what, nobody is willing to give up their projects because they have so much need.

So it's difficult. I guess I always cringe when people say you would have built this project anyway someday, but it wouldn't have been in the near future, we simply didn't have the money for it.

The other thing I think is important to talk about that people miss sometimes, even if and when we could fund the up-front project costs, construction, design and right of way, the long term maintenance cost is significant, and on a project like this, it would have been millions and millions of dollars. I'll talk a bit more about it, but it would relieve us of that long term maintenance cost as well.

Just some of the benefits again -- and we've talked about many of these -- it would improve mobility and safety on the 35 corridor itself, transfer project risk to the private sector -- I'll talk a little bit more about this -- operation and maintenance costs would be paid by the partnership, accelerate this project by decades, and then the concession fee and any revenue-sharing -- and again, I'll talk a bit more about that -- could be utilized to advance other projects.

The project agreement itself, Texas would receive a $1.35 billion project, state highway, public infrastructure at no cost to us. What we envision in this agreement is an up-front $25 million concession fee, again that could be utilized for other transportation projects; an estimated, in present value terms, $245 million of revenue-sharing out over the 50 years, and that relates to the figure that you mentioned earlier, Chairman; and of course, a long term source of maintenance for this project. In return for that, Cintra would receive the right to collect tolls for 50 years, and in return, they'd have the obligation to design it, build it, finance it, operate it and maintain it.

Now, the design and the construction standards would be to state/federal standards. We will be overseeing that, we're not going to shirk from our duty, we will be overseeing that general process. It will be designed as a high speed facility and state of the art.

MR. HOUGHTON: Phil, before you move on, can you go back?

MR. RUSSELL: Yes, sir.

MR. HOUGHTON: Are you going to talk about -- and I know you have numbers, Amadeo, on the maintenance -- what are we shifting to the private sector in maintenance in real dollars?

MR. RUSSELL: Commissioner, I don't know if I have that. Amadeo, do you? Let us get back to it. It will be millions and millions of dollars, but we should have done that.

MR. HOUGHTON: And the other thing -- Mr. Chairman, you alluded to it -- we have from a contractor a firm negotiated design and build that was about $200 million.

MR. RUSSELL: Yes, sir.

MR. HOUGHTON: If we're getting $245- back, the swing there is close to half a billion when you talk about the swing that just occurs.

MR. WILLIAMSON: And I don't want to confuse anyone in the audience that's kind of new to this discussion -- I particularly don't want to confuse our fellow citizens in the free press -- but $245 million is cash value.

MR. HOUGHTON: It's cash value.

MR. WILLIAMSON: Our $86 billion problem is extended over time. If we netted the $86 billion back to cash and said what would it take if we could spend it right now and solve our problem, it would be something like $31 billion. So this is a huge chunk out of our problem whether you look at it at present value or whether you look at it over time, as our $86 billion problem is over time. And you touched on something, the reduction in maintenance costs is also a huge reduction of that problem.

MR. HOUGHTON: We don't focus on that enough. Because currently state gas tax revenues no longer cover maintenance on the system. Is that an accurate statement?

MR. RUSSELL: Correct.

MR. HOUGHTON: So all of our state gas tax is being sucked up by maintenance.

MR. RUSSELL: Every penny and more.

A little bit on the revenue-sharing -- we've had some discussion on that. Part of the effort, a lot of the effort is exactly what would be the best for the state of Texas. When we started this procurement process, we tried to create an apples-to-apples comparison, and so we told all three proposers for purposes of this procurement please tell us what an up-front concession fee might be in your game plan, and I think people kind of naturally gravitated to that and assumed that's ultimately what we would want, all that money up front. But I think as we've gotten through this, what we've ultimately determined to be appropriate is we want some fee up front, that $25 million concession fee, but we kind of like being partners out over the long haul and it provides a revenue source out over the 50 years.

And so ultimately what we've designed here is a mechanism -- and we call them bands, and I think Michael mentioned it as well -- where we have different bands, and essentially -- I'll try to do this in everyday terms -- we know that the private sector is in business to make money, they want a return on their equity, no surprise there. I think there's some public push-back of is there any protection or any limitations of their rate of return. So essentially we've come up with this banding mechanism, and what it says is we think that they should have a reasonable opportunity to have a return on their investment, their equity investment, so for the first band up to an 11 percent equity return, we want right off the top from the first car that comes through we want 4.65 percent of that revenue coming in.

So think of it this way: we get about a nickel on every toll revenue that comes in right off the top, first thing, up to the point where they achieve 11 percent equity return. Now, we could get a lot more traffic than anybody anticipates and we want to guard that situation --

MR. WILLIAMSON: We want the citizens of the state of Texas to share in that benefit.

MR. RUSSELL: Yes, absolutely, and it's revenue, again, that we can use for other transportation projects.

So contractually, if there's more traffic, if there's more congestion relief off 35, there's even more traffic that comes on this project, and say their equity return would jump up to 15 percent turnabout, then we want a little higher percentage as well, so our revenue percentage would jump up to 9.3 percent, almost a dime apiece. If their rate of return exceeds 15 percent, then we would be into it for a 50-50 sharing in that revenue throughout the life of the project. And again, we estimate the present value of this at about $245 million.

MR. JOHNSON: Phil, I missed one point.

MR. RUSSELL: Yes, sir?

MR. JOHNSON: Are we talking revenues here or are we talking about cash flow?

MR. RUSSELL: We're talking revenues.

MR. JOHNSON: Gross revenues.

MR. RUSSELL: But again, we'll be getting our nickel right up front, we'll be first in line.

MS. ANDRADE: From day one.

MR. RUSSELL: From day one.

Other agreement terms. Revenue-sharing is based on 70 miles per hour speed, and increased speed limits would result in additional revenue-sharing. The idea behind this -- and I talked about it earlier -- there is a possibility that State Highway 130 could become part of the Trans-Texas Corridor, don't know that yet, environmental process will determine that. If the environmental process deems that State Highway 130 should become part of the Trans-Texas Corridor, then we would have the ability to increase those speeds up to 80 and 85 miles per hour.

In case anybody is thinking about asking the question, we're ensuring that this facility will be designed as a state of the art facility where we can safely transport folks 85 miles per hour. So it will be designed to accommodate that higher speed if the decision is ever made to make it part of the Trans-Texas Corridor. Now, if that occurs, then there will be an incremental increase in traffic from 70 to 80 and 80 and 85. And so we've captured that in this contract that if that speed limit is increased, more traffic will occur, and that we want one of two things: either we want to increase that up-front $25 million to a higher level, or we want a higher percentage of that revenue-sharing in each one of those three bands. So we'll have the option either way to increase our up-front cost, our up-front payment, or to increase our percentage throughout the 50 years.

Yes, ma'am?

MS. ANDRADE: So those will be our standards, our construction standards?

MR. RUSSELL: Yes, ma'am.

Capacity improvements. C-Z will be required to maintain specific levels of service. You know, the chairman has spoken previously about if you ask anybody if they really wanted to pay a toll, probably everybody would say no, but the realities are this may be an option for folks to kind of get a bit of congestion relief. Well, if we're asking people to pay a toll to drive on this roadway, it's only fair that they get to maintain a good quality of service, and so the contract is specifically detailed so that if traffic speeds start dipping down, say below 60 or below 55 miles per hour, then that will invoke certain requirements on C-Z to improve that level of service, very likely could be additional lanes would be added.

So to say it again, if traffic speed starts deteriorating, if we start having congestion problems -- and we will, obviously, over the length in the future -- then C-Z will be required to add additional lanes to ensure that the motorists have a good high speed facility.

Non-compete clause, that's always something that generates a lot of excitement and interest. We think we've got extensive protections in this to maintain flexibility. Just as we did on the 130 project, Segments 1 through 4, we ensure that all projects that are in our current long range plan will be built as planned, period. What I think is of special note is there will be no limitations on our ability to do work on 35. All the work that our district engineers have been working on to add additional lanes, all of that continues abated. Frankly, we can add additional lanes in the future if we so desire. So no future roadways are delayed, no prohibited.

The contract does establish something called a competing facility zone, and I'll try to explain it. Essentially it's a ten-mile wide band and if the state chooses to develop projects in that area that have either a negative or a positive effect on the overall revenue, then we will analyze that and take that into consideration. Now let me stop and say this isn't talk about a city or county or somebody else that we have no control over adds a facility, this is if TxDOT chooses to add a project.

And I think when you look at it, if we add a project, it could be deemed to be a competing facility that would drain cars off the State Highway 130 project, or it could be bringing more traffic from 35 to 130, so it could actually be increasing traffic on 130, and again, that's a good thing. We want to make sure that we can relieve congestion on 35 and that everybody has an option. So it could be the pro or negative, pro or con, and the contract establishes an ability to analyze that and take that into account.

MR. JOHNSON: Who makes that determination?

MR. RUSSELL: We'll look at it. The burden of proof is on C-Z, and we'll look at the data and either agree or disagree.

Toll rates. Let me start off by saying I've read stuff, heard stuff that there will be no cap, there will be no constraint -- I think Commissioner Andrade heard some of that yesterday -- but the reality is that we will have a cap on what the increase in toll rate can be. Ultimately, though, market rates I think will pretty well be based on consumer demand.

You've heard me in the previous slide indicate that we have no limitations on the work we can do on 35, and even if we didn't have a cap on the toll rate, we would argue that Cintra Zachry wouldn't be increasing toll rate. All that's going to do is chase people off 130 and put more and more people on 35. So they're always going to look at it as a market-based situation and they're not going to increase toll rates to the extent that they're going to chase people away, they want to incentivize people to utilize the roadway.

MR. WILLIAMSON: In other words, the argument for controlling tolls as a public policy is entirely defensible when you're building a road that's a person's only choice between point A and point B, it's totally without defense when you're building a parallel road and your taxpayers always have the choice to drive the tax road they're paying a low gas tax rate for or to drive the toll road that they would pay a market-based or consumer-driven rate.

MR. RUSSELL: Absolutely.

MR. WILLIAMSON: And one of the arguments -- I noticed in the previous slide you touched on it before I got back -- I need to re-emphasize one of the arguments that is often advanced by those who are concerned about this transaction is that a Spanish company is controlling the road. It's clear from the slide that is not the case.

The other argument is that we will cease our commitment to Interstate 35 because -- not to be too repetitive, but we do tend to see our future through the prism of our past -- we compare the Trans-Texas Corridor and its impact on the interstate system to the devastation that occurred in some communities when the interstate system was built, but what people forget was there was no competing open free tax road for the interstate to compete with. That is the primary reason those communities no longer had any traffic. In this case we're paralleling an existing open, non-stop interstate system, so the same impacts could not be expected.

MR. RUSSELL: I would agree completely.

The reality is, Chairman, on 35 the struggle is not going to be to keep people on 35, the struggle is going to be to get them to move off to a parallel connection. 35 will continue to garner a huge amount of the traffic that's occurring north and south, but people will always have the option. If Commissioner Andrade drove up yesterday, she will always have the option to choose 35 or choose State Highway 130 as a toll road, her option.

Now, we talked a little bit about market-demand and consumer-based decisions, but the reality is state law under House Bill 2702 does require that the department, the commission approve the toll-setting methodology. It doesn't say that you have to individually on a yearly basis set the toll, but it does require you to set the methodology that Cintra Zachry would utilize to increase that toll.

MR. WILLIAMSON: Or any other toll road operator.

MR. RUSSELL: Or any other toll road operator, that is correct, exactly.

And so the process, what we thought was probably the best, the most fair escalation ability was something that's based on what the Texas economy is doing, good or bad, and so we selected something called Gross State Product, and we think that's probably a pretty good indicator of how the Texas economy is occurring on that particular year. So that would be the methodology. They could increase it no higher than that Gross State Product. It's not to say that they would, but that would be the cap, the limitation that they could utilize on any one year.

And again, my sense is they're going to be very much market-driven, so they know what the cap is but my sense is they're going to be very careful in increasing that toll and chasing customers away, they want them on the roadway.

MR. WILLIAMSON: They might even go out and market lower toll rates in order to incent certain types of people to go over.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: For example, they might go to UT and offer a bonus to UT alumni.

MR. RUSSELL: Well, that's something that I would fully support, I think it's a very good idea.

MR. WILLIAMSON: No offense, Mike.

MR. RUSSELL: He's not too excited. We'll throw in a 50 percent discount for Aggies.

MR. WILLIAMSON: That's correct, and a surcharge for Aggies.

MR. RUSSELL: He said that, Mr. Behrens. I said a 50 percent discount for Aggies.

(General laughter.)

MR. RUSSELL: Risk transfer. And you know, commissioners, this is something -- again you're talking about looking at the prism of the past -- I think all of us that have worked for the department for a number of years kind of look at risk transfer at least early on and we kind of scratched our head. Those are things that we were just accustomed to in government of accepting that risk. We didn't think of it as a big deal, that's just something we do as our everyday job function, but the reality is that's a substantial, substantial transfer of that risk when we can get the private sector to take over some of those matters.

For instance, construction delay. Again, estimated opening at 2012. They will be held accountable and the idea will be that it will be open at 2012. We talk about inflation risk and other price uncertainties. You know, Chairman, when we really originally looked at extending this project in 2002, I don't remember offhand but the construction cost was a lot less, and over the past few years, particularly the past year or so, we've had some huge increases in construction cost, whether it's attributed to steel, concrete or petroleum, but the reality is the private sector in this case will be absorbing that risk.

MR. WILLIAMSON: Let's use that as an example, again laying the groundwork for our discussion with El Paso in a few minutes. When you talk of risk transfer, we speak of it generally at multiple levels, not just at one level. There's the risk of how much more we'll have to pay for a road if we wait to build it as a tax road 25 years from now versus letting someone else build it as a toll road today -- that's one kind of transfer of risk. But is it also not the case that we're transferring the risk that the traffic projections and the population projections upon which we're basing our plan turn out to be not correct, we've transferred the risk of taking gasoline tax money and building a road that's not heavily used to the private sector and we're permitting them to make a profit from having taken that risk, so that's another kind of risk transfer.

MR. RUSSELL: That's exactly right, and that's the fourth bullet point: Traffic demand and toll revenues. When I talked to, in earlier slides, about those revenue bands, up to 11 percent rate of return or 15 percent, there's absolutely no guarantee that they'll ever achieve those. That traffic risk is all theirs, they're absolutely absorbing that traffic risk.

The most obvious one that's not on the page that we wouldn't ask Phillip to market, but the one that we have to consider is the risk we run every day of the federal government continuing to rescind our apportionment of the gas tax, forcing us to reduce projects because our reimbursement from the federal government shrinks.

MR. HOUGHTON: What is that number today, Mr. Chairman, the rescissions?

MR. WILLIAMSON: I think the rescissions this year totaled $250 million, and we have been given preliminary notice that another $125 million is on the way.

MR. HOUGHTON: And that will be allocated, Amadeo, across the system?

MR. SAENZ: (Speaking from audience.) We'll be looking at that.

MR. WILLIAMSON: So that's another form of risk. We're transferring the risk that the money available to us projected ends up being less, meaning less tax projects we can buy which also means our $86 billion gap grows as opposed to shrinks. We're transferring that risk to the private sector.

MR. JOHNSON: Phil, can we highlight bullet point number 3 or at least focus on it for one moment?

MR. RUSSELL: Yes, sir.

MR. JOHNSON: One of the things that I'm particularly drawn to about this partnership is the entrepreneur's ability to make certain decisions, and the road surface is one of those decisions. We are not going to dictate the type surface that they build. It makes sense to me that if they go concrete, they're up-front costs are going to be more but their maintenance costs are going to be less, and if they go another surface, their up-front costs are going to be probably less than concrete but their maintenance bills are going to be higher.

How do we make sure that the standard of maintenance, standard of the surface of that facility is in keeping with the standard that this department has always sought and maintained in our system across the state?

MR. RUSSELL: That's a great question, Commissioner. As we entered into this agreement, what we deemed to be appropriate was to make sure that they had guidelines of which they could propose on and which we had some expectations of how the project would be developed, including maintenance standards. We provide those, we say this is what we expect. It could be ride score, it could be a number of different engineering elements, but we set those standards.

But just as important is we have to step back, they're trying to run it like a business. And I'll pick on Thomas because I think I saw him here earlier. When we first started talking about this a year or so ago, some of the folks in Construction, the way we have always designed or constructed a project, once a contractor left, if we started having problems on it, then that kind of came back to us, and so the discussion was if we let them have more control, what happens if we start having problems on the pavement.

My response is not our problem, that will be somebody else's on the private sector problem. It will be in the contract that they have to maintain certain ride score or whatever it is. They will be responsible for fixing that.

The only thing, Commissioner, that we made very, very straightforward to the private sector that we absolutely won't even move out on a day-to-day basis, anything related to safety. Anything that's related to safety, TxDOT absolutely will be there on a day-to-day basis to ensure that we have a good, safe, efficient roadway.

MR. JOHNSON: Well, you know, I asked about the determination of whether a facility, a new facility competes or doesn't compete. Who makes the determination on is the ride score or whatever satisfactory, keeping with the standards that this department sets for itself?

MR. RUSSELL: We'll have an independent engineer that will be looking at all of the data, from a ride score, just a whole bunch of things, maintenance, construction. That independent engineer will be providing information to both us and the Cintra Zachry group, and so they'll be making an independent analysis. We can either agree or disagree with it, and then there's a process in place of how we solve any sorts of concern or come to some sort of resolution.

MR. JOHNSON: Let's hypothetically assume that in the type of pavement selected we have a disagreement on the safety aspect of that pavement. How do we reconcile a difference like that?

MR. RUSSELL: Well, I mean, you're right, there could be a gray area. We could have a ride score that kind of looks like some sort of maintenance issue but in reality it's a safety issue. I think in the interest of safety we'll have a bit more leverage in that contract document to take care of business quickly. That's obviously something that can't languish for a week or two weeks or three weeks while we kind of sort it out internally, so if there's a safety issue, we'll have the ability to move in quickly and fix it and move on.

MR. JOHNSON: I just want to make sure that we're not neglecting our responsibility in passing that responsibility of the standard of safety and the standard of the maintenance of the ride score, et cetera and letting somebody else make those decisions when clearly we are giving somebody a right here but they have to live up to a certain very high standards.

MR. RUSSELL: Commissioner, I guess we started on all of this program with baby steps first, and again, I would still look at the project that Bob is constructing, 130, the northern section, and we had that dilemma early on. Any project that we'd ever designed on a design-bid-build basis, we absolutely designed, we said whether it was going to be concrete or asphalt, and we did the design, and then we asked a construction company to design it. With 130 we started changing that paradigm, and we said, Really, guys, we don't care whether you use asphalt or concrete because we know every proposer, every company will have different expertise, you all do what you do best, but we do have some expectations of the end product, the performance product.

And this one really is a natural progression to where we are in a concession base, and we think on a lot of those day-to-day activities we can step back a little bit, let the private sector run their business, but we will have standards, we'll monitor it. Federal Highway Administration is okay as well, they've approved this general process.

MR. JOHNSON: Thank you.

MS. ANDRADE: Phil?

MR. RUSSELL: Yes, ma'am.

MS. ANDRADE: As Commissioner Johnson brought up safety, it reminded me that we need to remind the public that it remains a state highway, Department of Public Safety will continue to patrol our state highway. Right?

MR. RUSSELL: Yes, ma'am.

MS. ANDRADE: Okay.

MR. RUSSELL: I was going to bring that up as well. Through the chairman's earlier comments, I think there's some discussion. First of all, it's private, it's not state highway, and at the end of the day the Department of Public Safety is still the group that's policing this state highway just like any others.

MS. ANDRADE: Okay, thank you.

MR. RUSSELL: We talked a little, I think, on most of those. Financing, the interest rate risk, that's another area of substantial risk transfer that Cintra Zachry will be taking into account.

Chairman, you thought we weren't listening to you for the last five years. We were, we heard very clearly that you absolutely expect all of our TxDOT roadways to be all electronic. There will be no inconvenient toll booths to stop and dig in your pocket for quarters, it will be an all electronic. You all have been consistent for the last three, four, five years that you want to have an all electronic system. This will be it.

It will be interoperable, another critical issue for the commission, with all the toll roads in the state. We'll be looking at TxTag again. If you want a toll tag sticker, that's fine. We've also put together a process for video billing where we'll be able to handle that either way through a TxTag or just through video billing. We retain the customer service center, what we call kind of the back room, all the business operations, the day-to-day discussions with our TxTag customers. Cintra Zachry will assume all the toll equipment operation. To say it another way, they'll be the guys installing the equipment on the overhead gantry that will read the TxTags and all that, send the data to us, and then we'll be responsible for collecting those revenues, handling that, and then sending the money back to the private group.

Alternate funding scenario. And Chairman, we've talked a little bit about this, but Amadeo and Mike wanted us to kind of look at it from a public sector standpoint and say okay, there's always a lot of discussion, what happens, can TxDOT just do this project ourselves, why would we need the private sector involved. And so we asked our financial guys, James and KPMG and all the financial guys to kind of run some numbers, and we asked them to be very, very, very conservative on their estimate.

And essentially what they came up with is that if we built the project today without Cintra Zachry, if you all commanded us today to go out and build it, we'd conservatively have to come up with over $700 million in public funds, gas tax dollars.

MR. WILLIAMSON: Which is why we wouldn't have built it because we don't have an unplanned for $720 million.

MR. RUSSELL: Unless somebody else is willing to give it up.

I will also say, in my opinion, they did what we asked, it's $720-, it's conservative. If you actually gave us that commandment to go build it, you'd probably see me stuttering and hesitating because I think actually it would be closer to a billion dollars. But for our conservative basis so nobody could say we're exaggerating, we said it would come up with about $700 million of extra gas tax dollars to build this as a TxDOT toll road.

And again, we talked a little bit earlier about some of the right of way costs. That was a huge issue four or five or six years ago. Commissioner Johnson remembers those discussions very well. It would relieve a huge burden from those counties. Caldwell especially is a county that's rural in nature, they don't have a lot of financial means, yet they're getting caught up in a lot of the growth in Austin and San Antonio and it's reflected in those right of way values.

MR. WILLIAMSON: Now I want to explore that just a second.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: Because I think if a Caldwell County judge were here or Guadalupe County judge were here, they would say well, you can't count that as a cost toward it because we haven't got that money, we weren't going to pitch it in the pot anyway, so those are funny numbers. They wouldn't say it negatively but they would just say those are funny numbers.

Is David Casteel here? Is Bob Daigh here?

MR. RUSSELL: Bob is here; Bob may be in the outer room.

MR. WILLIAMSON: He no doubt heard me because Bob listens to what we're doing.

Let's play a game.

MR. RUSSELL: Here he comes. I knew he was in that outer room.

MR. WILLIAMSON: Let's play a game a minute, members. Let's assume that we weren't willing to do this but the pressure on us through the legislature reached the point that we had to build this road. Is it the case, Bob, that the Austin District and the San Antonio District, because of the way we apportion our funds now -- we don't approve projects here, we apportion funds to districts -- is it the case that the Austin District and the San Antonio District would have to work the cash flow to build this road out of their apportionment?

MR. DAIGH: That's correct, sir.

MR. WILLIAMSON: So if you lived in Caldwell County and you had a state highway you needed improved, and the need to finish State Highway 130 became so intense it had to be done, in effect, a project that would have been built in Guadalupe County would not be built in order to transfer the cash to this project to pay for it.

MR. DAIGH: That's correct, and vice versa.

MR. WILLIAMSON: So really, if you were in Caldwell or Guadalupe and at one time Comal County and you didn't have the cash to pay for this right of way and contribute your share, one way or the other you were going to suffer the loss of this $80 million either through paying it in cash or through deferred transportation projects that would have occurred.

MR. DAIGH: Yes, sir.

MR. WILLIAMSON: Thank you very much.

MR. DAIGH: I would like to also point out that that alone is several years of our total allocation, so that would be a very long time in coming.

MR. HOUGHTON: How many years of your allocation is that number?

MR. DAIGH: In 2017 our allocation is approximately $24 million, so you're looking at four years of the total allocation in 2017.

MR. HOUGHTON: Would be sucked up into this.

MR. DAIGH: Would be sucked up into that one project.

MR. WILLIAMSON: I don't think we would have afforded the highway.

MR. JOHNSON: You know, another way to look at this right of way issue, the right of way has got to be acquired, somebody is going to pay for it.

MR. WILLIAMSON: One way or the other.

MR. JOHNSON: That's right.

MR. DILLON: We could just take it by eminent domain.

MR. JOHNSON: You still have to pay for it.

MR. WILLIAMSON: Wait, Jim, you'll have your chance in a minute. Everybody gets their chance.

MR. RUSSELL: Commissioners, again just a summary of the agreement itself. The concession would be for Cintra Zachry to design, build, finance and operate and maintain this project, and collect tolls for up to the next 50 years. Toll rates are market-based with an escalation methodology that would be approved by the commission. All those substantial project risks that I talked about in the previous slides will be transferred to Cintra Zachry.

The state, in return, would receive a $1.35 billion project many, many years earlier with no public funds. We would receive an up-front $25 million concession payment. Over the 50 years we would receive, it's estimated, a substantial amount of revenues, what we've present valued, what if we got the money today, it would be worth $245 million and a long term funding source for operation and maintenance.

And in conclusion, again, it's a new asset, no cost to the state; revenue-sharing will accelerate other needed projects; we'll enjoy less congestion whether we choose 35 or whether we choose State Highway 130; it furthers those state transportation goals; encourages private investment; preserves local resources; accelerates those projects, as has been pointed out, with safety and mobility that promotes that productivity and quality of life that I think all of us as Texans enjoy.

Commissioners, I'd be happy to address any questions you might have.

MR. WILLIAMSON: Have we touched upon everything we want to with Phil at this time?

MS. ANDRADE: I have a question.

MR. WILLIAMSON: Please.

MS. ANDRADE: Phil, on the concession fee that we're getting and the money that will be earned throughout the 50 years, is that money being applied or are we projecting to apply it for projects in that region?

MR. RUSSELL: I think obviously that would be the call of the commission. There's some statutory language I think applies and it's something like to TxDOT districts, I believe, is how that's related.

MS. ANDRADE: And those monies, can they be applied for projects other than just road-building?

MR. RUSSELL: Other than just roadway projects? Oh, you're saying other transportation projects?

MS. ANDRADE: Yes, other transportation projects.

MR. RUSSELL: Yes, absolutely.

MS. ANDRADE: Okay. Thank you. Oh, and I had one other. When I came to you on the commission, I think it was clear that this region wanted 5 and 6 to be completed, and it was always planned that it would be a toll road. Right? So there was never any question whether it was going to be a toll road, not a toll road, they just wanted it to be completed.

MR. RUSSELL: Right. Twenty years ago they just wanted the project and they were frustrated because it couldn't be delivered.

MS. ANDRADE: All we were looking for was relief from congestion.

MR. RUSSELL: Clearly.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: I'm going to have a couple of other questions, but I think it would be appropriate to permit testimony at this time, unless, Ted, you or John want to talk with Phil? Okay, we're going to take testimony at this time on this discussion item, and you're up.

MR. DILLON: There was about a million points on that power point thing he just went through. I wish I could rebut each item.

The assertion that the goal of this panel and the rest of the gang that is trying to tax us out of existence is not to reduce congestion on our roads. If that were the case, four and probably six entrance and exit ramps on I-35 -- which is already a parking lot -- would not be scheduled to close this year in Round Rock to the detriment of traffic flow.

Now, I think I heard him say that the Spanish-owned company is going to generate all the profits. Is this thing on?

MR. WILLIAMSON: Oh, yes.

MR. DILLON: Good -- all the profits from the tax road, but that the state and the people are going to be responsible for collecting the money for these foreigners, and then you're also going to allow Department of Public Safety to toll and patrol this new road, generating even more revenue at the expense of the traveling public, and the assertion that speeds of 80 to 100 miles an hour could enhance safety when we don't know really who's responsible for maintenance on these roads. Well, actually we do, it's the people. The Spanish-owned company is responsible for collecting profits, the people are responsible for the maintenance. The people's employees --

MR. WILLIAMSON: Well, I hope they weren't confusing about that.

MR. DILLON: They were.

MR. WILLIAMSON: The Spanish company has to pay for the maintenance.

MR. DILLON: They won't do it. You're not maintaining our roads now.

MR. WILLIAMSON: I mean, I know some people say that, but I think we're maintaining them as best we can, given the limited cash flow we have.

MR. DILLON: Well, you're not including a provision for safety when you close four and probably six exits on I-35 in Round Rock so that the toll road can sweep in with their own exit that is a profit-maker. Speaking of profit --

MR. WILLIAMSON: Now, that toll road up there, that's not a Spanish toll road, it's a Texas toll road.

MR. DILLON: They're all the same, it's all Morgan Stanley, the guys at the top.

MR. WILLIAMSON: Not Morgan Stanley. I don't think we do business with Morgan Stanley up there. I mean, if we're going to involve personal names, we need to get them right; otherwise, they might sue you and me, and we don't want that to happen.

MR. DILLON: Now, the matter of whether or not this foreign-owned toll road company can be held to a standard of safety that would protect the people of Texas when they travel is pretty clear in my mind. General Franco was a close friend of Adolf Hitler, his buddy, King Juan Carlos is primary stockholder in Cintra, and they were the original -- with their buddy Hitler -- designers in on the war roads called the Autobahn that General Eisenhower used as a model to create our interstate system in America.

He imported thousands of Nazi engineers and architects after the war, as did Truman and the rest of them, to design our own Autobahn system 50 years ago -- their Freedom Road. He even called it the National Defense Highway Act as a euphemism for that other term. But as they were bringing in the architects, engineers and designers for our freeway system 50 years ago, they also brought in other war criminals from Nazi Germany under the Operation Paperclip Program whereby the medical experimenters, the big money guys, Prescott Bush from Connecticut, all of that --

MR. WILLIAMSON: Let's keep restricted to --

MR. DILLON: Okay, we won't mention President Bush's father.

MR. WILLIAMSON: I'm giving you double time because our presentation took so long, but you've got about a minute to wrap up.

MR. DILLON: Okay. Yes, I won't mention the Bush crime family in this at all, even though there's a panic on the board apparently that some of our money that we send to Washington, D.C. may not be returned to us unless we're in full compliance with all their mandates, unfunded mandates that they impose on us such as mandatory seatbelt use, mandatory speed limits --

MR. WILLIAMSON: Motorcycle helmets.

MR. DILLON:  -- the helmet laws, unfunded mandates requiring compliance from the sovereign state and people of Texas in order to get our own money back.

MR. WILLIAMSON: Can I infer that you're against this?

MR. DILLON: Yes, sir.

MR. WILLIAMSON: Well, that was six minutes and that's twice as long, and I appreciate it.

MR. DILLON: Okay.

MR. WILLIAMSON: But don't leave, we've got more agenda items.

MR. DILLON: Okay. I'm not leaving.

MR. WILLIAMSON: Did Hope abandon ship?

MR. JOHNSON: I think she just had to take care of a personal matter.

MR. WILLIAMSON: We don't want to vote without all of our members present, so do we have any other witnesses, Mike?

MR. HOUGHTON: Are we going to vote right now?

MR. WILLIAMSON: I think we're going to vote.

MR. HOUGHTON: Are we finished with testimony.

MR. BEHRENS: We don't have any other witnesses.

MR. HOUGHTON: No more witnesses?

MR. WILLIAMSON: No more witnesses.

MR. HOUGHTON: I'd like to recognize the folks that put this together. This was a yeoman's job.

MR. WILLIAMSON: Is your mike on?

MR. HOUGHTON: Yes, it is, my mike is on. I would love to have all of the folks that represented TxDOT to come forward, to stand up in the audience and come forward.

MR. WILLIAMSON: That would be Amadeo, where's Mr. Ingram, James Bass, Jeremiah.

MR. HOUGHTON: Where are you guys? Get out of the back room.

MR. WILLIAMSON: Now, this takes the place of your bonus this year, just so you know.

(General talking and laughter.)

MR. HOUGHTON: Well, I'd just like to recognize, ladies and gentlemen, Mr. Chairman, we set a high standard, this group met the high standard. The first CDA program approved in the state of Texas, 5 and 6, one huge, huge success.

MR. WILLIAMSON: Before we do congratulate them, let me add something, because almost everyone in the audience is a transportation player at some level, either a House member, Mr. Pickett, an HNTB engineer, an Austin Road & Bridge Company constructor, a Morgan Company -- not Morgan Stanley -- a Morgan Company financier, an Association of Good Roads advocate, almost everyone in our audience is a transportation player at some level.

All of us get approached by all of you individually about different aspects. Dalton Smith, my good friend, calls and says I'm concerned about this, Kris Heckmann with the Governor's Office calls and says I'm concerned about that, people call John, people call Hope, Justin calls Hope and raises Cain about something, but the chairman almost always gets most of the calls that go as follows:

All of your employees are bureaucrats, they're moving too slow, you guys are in over your head, you don't know what you're doing, you're too cautious, and particularly for me because I'm probably the most -- well, I won't say probably, I think I might be the most libertine, entrepreneur there is because I do believe in a totally market-driven economy without any controls, and I get these calls all the time. And I want to tell you, as a taxpayer in this state, you can be very proud that all across this nation today people are talking about a group of state employees who get it, who understand the balance between entrepreneurial action and protecting the public's interest, and they have striven mightily to get that perfect balance.

There have been times when our legal staff had to say -- and thank God they did -- Whoa, boys, slow down a little bit, think about this. And then there's been times when our financial group has said that may look good right now but it won't look good 20 years from now when we're all gone and we shouldn't do that. And I'm not being negative to Cintra or to Mr. Zachry and family, but they have their interests and we have the public's interests, and this group of men and women have stricken, we think, the perfect balance between those two, and we have laid, in our view, the template for El Paso if and when they do this, for Dallas if and when they do this, for San Antonio if and when they do this, for Austin if and when they do this, for Brownsville if and when they do this, we've laid the template for how to find that perfect balance between transferring risk and receiving benefit, between getting the asset we can have but having to pay for it as we should as opposed to how we've been trying to pay for our highway system the last 50 years and doing a pretty poor job of it.

I'll turn it back over to you.

MR. HOUGHTON: I can't add on to that, Mr. Chairman.

MR. WILLIAMSON: Sure you can.

MR. HOUGHTON: No way.

MR. WILLIAMSON: Well, then let's recognize these people.

MR. HOUGHTON: Yes.

(Applause.)

MR. WILLIAMSON: Good job. Thank you very much.

MR. HOUGHTON: And with that, Mr. Chair, I move to approve.

MS. ANDRADE: I 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. Let's move forward. And we're going to take about a ten-minute break for those of you that need to do so, and we'll be back on our agenda.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: Let's return from recess. For the audience to fully appreciate your schedule for the day, we will be doing a little bit of jumping around. Mike, I'd like to go to item 6, and then we're probably, Hope, going to go ahead and advance to some of the public transportation issues right after that.

MS. ANDRADE: Thank you.

MR. BEHRENS: We'll go to item number 6, Regional Mobility Authorities, we'll go to item 6(a) which is a final approval for a request for financing from Cameron County Regional Mobility Authority. Phil?

MR. RUSSELL: Thanks, Mike. And for the record again, I'm Phillip Russell, director of the Turnpike Division.

The minute order before you, item 6(a), as Mike said, relates to Cameron County Regional Mobility Authority. If you remember, back in April you all approved the first step, a preliminary approval for this financial assistance to the Cameron County Regional Mobility Authority. This would be the final step for the approval of that financing.

The agreement itself would be in the form of a loan for $21.6 million that the Cameron County Regional Mobility Authority would utilize to pay certain costs for preliminary engineering, financial planning, and preliminary development of the West Loop project on the west side from US 77/83 all the way down to Palm Boulevard in Brownsville. The rest of the money would be utilized for environmental studies, some design and legal services, and some preliminary development costs for the South Padre Island second causeway bridge which we've talked about for a number of years.

Staff would recommend approval of this minute order.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation. We do have two witnesses, with your permission, our friends, Pete Sepulveda and David Garza. Pete, who goes first? And they are our friends.

MR. GARZA: Mr. Chairman, commissioners, David Garza, and I'm honored to be here. I can't believe our chairman passed up on this opportunity, but David Alex asked me that on behalf of the chairman and the entire board of the Cameron County RMA that we thank you for this opportunity for the consideration of the toll equity grant application or loan application.

And as you all will remember firsthand when you visited Brownsville in your April commission meeting, Cameron County and South Texas is a rapidly growing region with promising opportunities for years in the future, and our Cameron County RMA is pledged to contribute to its economic sustain ability by planning accordingly and accelerating transportation projects that will enhance the economic vitality of this international region.

Today is a first step in moving forward with this goal in mind and we thank you for your support and we look forward to continuing a great working environment. Thank you.

MR. WILLIAMSON: Members, anything for David?

MR. HOUGHTON: David, congratulations. My questions to you are the loan is for the West Loop project. Specifically what is the RMA doing on those projects? We'll ask Pete. Okay.

MR. WILLIAMSON: Any other questions for David?

MS. ANDRADE: Not other than thank you and give my best to your chairman.

MR. GARZA: I will. Thank you.

MR. WILLIAMSON: Thank you, David.

MR. SEPULVEDA: Good morning, Mr. Chairman, commissioners, Mr. Behrens. Thank you for the opportunity to be here.

I'll take just a few minutes and give you an update on what the RMA has done the last couple of months. We have completed a strategic plan that the board has outlined eight goals that they want to accomplish between the year 2007 and the year 2011. In developing the strategic plan, we worked very closely with our neighbors on the Mexican side with the state of Tamaulipas and with Secretaria de Camiones y Transportes in Mexico City, and ensuring that our transportation infrastructure network on the U.S. side lined up with future transportation infrastructure projects that either the state of Tamaulipas or Mexico has for the next five years.

We have also completed the first phase of the public involvement plan and we're in the process of moving forward to the next phase of that plan. Both of these will be available on our website and will be distributed throughout the community and in Mexico as well.

One of the things we did was a strategic plan and we have a draft, we don't have the final, but we've translated it to Spanish and we're going to use that to promote the regional mobility authority throughout Mexico.

After your approval of our agenda item today, we'll begin preliminary development on two projects. One of the projects that I'll talk about this morning, Cameron County is our sponsor -- not our sponsor but our partner on, and on the second causeway project, in addition to the county and TxDOT, we're going to partner with the town of South Padre Island and the city of Port Isabel, and this involves a second causeway linking South Padre Island to the mainland. The funding that we receive will be utilized for preliminary environmental analysis, public involvement, traffic and revenue studies.

The West Loop project is a project in the Brownsville area that we are going to develop as a toll road. It's about an eight-mile stretch of road that we are in the process of negotiating the scope with our GEC to begin the environmental assessment. Once we do that, then we can proceed with the preliminary engineering of this project.

The local district office in Pharr has done quite a bit of work on the environmental assessment, along with the county, so we're hoping that we can reduce the amount of time that it takes to complete the environmental assessment and receive a finding of no significant impact.

One of the interesting projects that we just became involved with, partnering with Cameron County and the cities of Harlingen and San Benito, the RMA is now spearheading a rail relocation project in the Harlingen-San Benito area that the project entails relocating the rail away from the urban areas to a more rural area. Our partner is also Union Pacific. We started working about 30 to 45 days ago, but we feel very strongly that in the next 90 days we're going to have a plan that includes Union Pacific's concurrence on different corridors that we can relocate that rail, and in addition to that, we believe we're going to come up with a plan that will relocate the switch yard from downtown Harlingen to the switch yard in Olmito north of Brownsville. In speaking to the local UP officials, they believe that about 70 percent of the congestion in downtown Harlingen is created because of the location of the switch yard.

So it's a major project that the RMA is heading and we just feel very honored to be able to work with the county and the local communities in making that project a reality.

In addition to that, we are working on a north loop, and this involves a loop between the cities of Harlingen and San Benito. What this is, there is an existing farm to market road that begins at the Free Trade International Bridge and goes north about 15 miles, and then ends at the intersection of another farm to market road. And the project is already underway, our consultants are working on the environmental assessment and the corridor analysis, but we're going to take this project about 18 miles northwest to connect to Expressway 77. In the meantime, Hidalgo County is coming in with a loop that's going to connect with our project.

What we've done here, we have created a transportation corridor that has both a rail component and a highway component, and we will try to see if there's a way we can create one environmental document that has both the rail and the highway component. We're working very closely with your local district office in Pharr.

In addition to that, we're partnering with the city of Brownsville, city of Harlingen, Cameron County, and the Port of Brownsville in working on pass-through financing projects in the Brownsville-Harlingen area, one that would connect with the Port of Brownsville to an international bridge as well as to Expressway 77.

So we've had quite a bit of success the last couple of months. We've worked very closely, keep the communities within Cameron County, as well as the county involved. Obviously the county is extremely helpful to the RMA, not only in providing cash contributions but also in-kind support services.

So just wanted to take a few minutes to brief you, and I can tell you this, that one of the main reasons why the Cameron County Regional Mobility Authority has had the success that we have had is because of your staff at the Pharr District office as well as your staff here in Austin. Every step of the way your staff in Pharr has been with us and guided us and we just can't thank you enough for that.

MR. WILLIAMSON: Members, you've heard the testimony. Questions now?

MS. ANDRADE: Pete, I just want to thank you. I keep hearing you say we're partnering, we're partnering, and that's great. I'm very proud of that. Also, I was in Monclova last weekend and your port director was there exploring more business opportunities, so I know that you're very proactive and growing, and I think the region has just got a lot of momentum right now, so keep up the good work. Thank you so much.

MR. SEPULVEDA: Thank you. I should have done this at the beginning, but I'd like to acknowledge, we have another RMA director in the audience, Laura Betancourt.

MR. WILLIAMSON: Laura, come on up.

MR. SEPULVEDA: Laura is a judge-elect to the county court at law district court. We also have County Commissioner John Wood with us, and then one of our staff is David Garcia.

MR. WILLIAMSON: Questions, Ted?

MR. HOUGHTON: What's the reception of the RMA in Cameron County?

MR. SEPULVEDA: To this point, very well. Probably twice a month we go to different rotary clubs or chambers of commerce and make presentations, and we're trying to keep all our partners abreast, all the communities within Cameron County abreast of the projects we're working on. When we go to the next phase of public involvement, it's going to entail a lot more detailed working relationships with the different communities and the news media so that we can put out that information to the public. But we've had excellent reception up to this point.

MS. BETANCOURT: And commissioners, we've also begun meeting in different cities throughout the county.

MR. WILLIAMSON: That's always fun.

MR. GARZA: And we've received a lot of positive reaction from the different cities, from different committees. I think that our RMA has actually helped the cities and the counties all work together. They seem to really appreciate the work that we're doing and it's going to help speed projects along. Thank you.

MR. WILLIAMSON: Very good.

MS. ANDRADE: Congratulations.

MR. HOUGHTON: Congratulations, guys.

MR. WILLIAMSON: John?

MR. JOHNSON: You know, one of the things that sort of resonate in my mind is I've been around this commission a little longer than my colleagues, and the projects that you're bringing forward are ones that we have discussed with not only the local district people but also as a commission for a long time, and they're very worthwhile projects, but it takes the formation of an RMA which is a wonderful tool and mechanism for getting local involvement and how we can move these projects forward.

But we've talked about the West Loop and talked about port access, not only the international bridge but also over to 77, and we've been studying alternative routing for the Isabella alternative to South Padre for as long as I've been a commissioner, and I just think this is a marvelous day, and it shows one of the huge benefits of being able to advance these projects with local involvement.

So I congratulate you. I think this is a great step for your neighbors, the business people of the Valley and it's going to show remarkable progress as we get these projects actually open.

MR. GARZA: Exciting times.

MR. WILLIAMSON: You know, one of the governor's objectives when he ascended, before he was elected and began the process of refashioning transportation according to his vision, one principle that's very important to him is to lay the groundwork for any community in the state, no matter where they are -- Lower Rio Grande Valley, Upper Canadian Valley, doesn't matter, El Paso, Texarkana, doesn't matter -- lay the groundwork for communities to deal with their own local and regional issues, put TxDOT in the position of being a partner, not big daddy, and let those communities turn them loose to form their own partnerships in regional matters to solve their problems.

And you know, I'm just really proud, particularly proud of your RMA because it is exactly what Governor Perry intended, exactly, and we will be here to be your partners, to steady you when you need it, but not to tell you what to do -- that's your business, not ours.

MR. WOOD: May I make a comment on that, Mr. Chairman?

MR. WILLIAMSON: You may comment on anything, sir.

MR. WOOD: For the record, my name is John Wood and I do serve as a county commissioner for Cameron County. Just what you're saying, I've been a public servant, elected public servant for the past 12 years in the Brownsville area, and for 15 years before that I served as chairman of the chamber of commerce and all these types of things, and until the last few years we have not had the benefit of being able to really set our own destiny and decide what we needed locally, it oftentimes seemed to come down from somewhere up above, and we really appreciate the opportunity that we've had the last few years to work with TxDOT staff with the attitude they have, with the way they want to help and work with us, not only in the Pharr District but here in Austin. Certainly with you, commissioners and Mr. Chairman, it's been a real pleasure to do that.

We're proud that we've gotten as far as we have with the RMA. We think, as county commissioners and county judge, that we appointed excellent people to our RMA and that's a big part of getting it done, and they're very representative of the entire county. And so the other cities are falling into line, we're all falling into line to work together, to partner, as Pete talked about, and commissioners, you mentioned. That's the only way things are going to get done anymore because there's no pots of gold out here anymore. It's all going to take hard work, partnering, working together, coming up with new ideas, thinking outside the boat, finding those stones to step on, and making our way.

And we do appreciate everything you have done for us and helped us with and we look forward to working with you in the future. You know, today I couldn't be any prouder if I was that blind hog that found that acorn. It's been great. Thank you very much.

MR. WILLIAMSON: Thank you, John. It's always good to hear from you.

Pete, anything else? David?

MR. GARZA: No, thank you.

MR. WILLIAMSON: Members?

(No response.)

MR. WILLIAMSON: Jim, do you feel like you need to comment on this?

MR. DILLON: Yes, I certainly do. You know, Governor Perry has this vision of controlling where we can travel and how much we're going to pay. He needs to have his eyes checked. What he doesn't see is that when you pretend like, you know, you're being generous by releasing a little bit of local control to the people, we see through that. These entities and taxing authorities, layer on layer of control mechanisms that are imposed on the people, for example, CAFTA, NAFTA, GAAT, FTAA, the Free Trade Area of the Americas -- which, by the way, is not trade at all -- we're bringing in illegal Mexican workers and Chinese junk, we're sending out money.

And you know what, these regional mobility authorities that you're so proud of are going to be the bane of our existence. You're bringing in MS-13, narco-terrorists from south of the border.

MR. WILLIAMSON: But our regional mobility authorities aren't doing that.

MR. DILLON: They're unelected, they're unaccountable to the people. You weren't elected, the people didn't vote for you to control their destiny, yet you do.

MR. WILLIAMSON: I know that, but you know --

MR. DILLON: There's a conspiracy with Mexico to ruin our country, and they're bringing Canada and the rest of the hemisphere in on the game. Now, it's too soon to call it hemispheric or global in nature because that would alarm some people who aren't awake yet.

MR. WILLIAMSON: You know, we listen to this observation all the time, people running for office use these observations.

MR. DILLON: That would be me. I'm running for governor as a write-in candidate and I need you to vote for me.

MR. WILLIAMSON: And other folks who run for high office use these same sort of probing arguments, but you know, the system we live under kind of anticipates that we'll elect city council persons and mayors, county commissioners and judges, legislators --

MR. DILLON: Who are all bought and paid for.

MR. WILLIAMSON: Well, not every one. Now, be careful about painting everybody with a broad brush. It's easy to throw rocks, it's easy to try to paint everybody with the same brush unless you stop and just kind of think about it for a minute. Not everybody falls into those categories.

MR. DILLON: Well, the majority do, and if we do elect an honest person to government, it's no time at all before the corruption, the temptations are presented before that honest politician and converts him over to the other side, it doesn't take long.

MR. WILLIAMSON: Are you saying politicians are tempted like everyone else?

MR. DILLON: Yes, and they succumb to temptations.

MR. WILLIAMSON: Like everyone else.

MR. DILLON: Yes. The alignment and integration of our road system with Mexico should not be one of our goals, should not be one of our goals. Our goal should be to make it as hard as possible for the gangs, the murderers, the drug runners, the coyotes, the kleptocrats that run the Mexican government, including Fox, the narco-terrorists, MS-13, our goal should be to make it as hard as possible for them to enter our country, not align our roads and our railroads in the position where they can be integrated with the Mexican roads and they don't even have to slow down for a traffic light.

MR. WILLIAMSON: Can I assume that you are against this agenda item?

MR. DILLON: After I finish you might make an assumption.

MR. WILLIAMSON: Well, you're one minute past your three minutes.

MR. DILLON: Well, to integrate our roads with Mexico's roads -- which is patently illegal and unconstitutional -- is to also integrate our language, our culture, our national identity into a homogenous glob that will only benefit the very wealthy who are illegally exploiting the cheap labor to their own advantage.

MR. WILLIAMSON: Okay. So time is up and you're against this agenda item.

MR. DILLON: Yes, you can put me down as against it.

MR. WILLIAMSON: Thank you very much.

Do we have any other witnesses?

MR. BEHRENS: No, sir.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation, you've heard witnesses speaking for the agenda item, you've heard one witness against. Anything else, Phil?

MR. RUSSELL: No, sir.

MR. WILLIAMSON: What's your pleasure, members?

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, members; thank you, witnesses.

MR. BEHRENS: Phil, let's do 6(c) and then we'll go to 6(b).

MR. WILLIAMSON: El Paso is going to take us a while, so we're going to go to 6(c).

MR. BEHRENS: 6(c) is an RMA that we have existing in East Texas, the North East Texas Regional Mobility Authority, and this particular minute order is a request to add additional counties to that RMA.

MR. RUSSELL: Thanks, Mr. Behrens.

MR. WILLIAMSON: Someone wants to join an RMA?

MR. RUSSELL: More than just one.

MR. WILLIAMSON: Not form one but actually join one?

MR. RUSSELL: That's correct.

Commissioners, as Mr. Behrens just pointed out, the North East Texas Regional Mobility Authority, one of our earliest RMAs, composed of Smith and Gregg counties, has been working very well over the past year and a half under the great leadership of Jeff Austin -- I saw Jeff at the back. They're moving forward with their Loop 49 project. But they have been petitioned by four adjoining counties -- those would be Cherokee, Harrison, Rusk and Upshur counties -- to join the existing two counties on the NET RMA.

This minute order before you would approve that expansion. Each one of those additional four counties would receive an additional board member. There's seven on the board as it stands now; there would be eleven board members through the addition to the RMA.

So staff would recommend approval of this RMA and I'd be happy to address any questions you might have.

MR. WILLIAMSON: Members, you heard the explanation and recommendation by staff. We have one witness, Jeff Austin, a good friend of transportation in Texas.

MR. AUSTIN: Good morning, Mr. Chairman, commissioners.

MR. WILLIAMSON: You thought it was going to be afternoon but we got to you faster.

MR. AUSTIN: That's right. For the record, I'm Jeff Austin, III, chairman of the North East Texas Regional Mobility Authority, and I also have Linda Thomas who is our vice chairman from Longview with us.

I'd like to say we are excited. This is an exciting day, I think, for transportation in Texas and especially East Texas. We are proud to be the first RMA to grow. Believe it or not, there are people that do believe that there are different ways to accomplish things on a regional basis with partnerships and with coalitions.

We have tried to focus on how can we, and I'd like to start, as you mentioned, with our initial project, Loop 49. Our leaders, not just the elected officials, the city, the MPO, the chamber, the county judges, even the school districts, economic development corporation, and many large businesses came together and said, We have a priority and that is to complete an outer loop in Tyler. Everybody was reading off the same sheet of music with that vision is how we were able to form successfully the RMA, and we are proud that in August we will be opening our first section of our toll road -- which each of you have been inviting -- using the new TxTag.

We have also been able to expand some projects that were ranked way down low, building consensus, and we have adopted a philosophy, since we all have the same end point in mind of getting these projects completed, it doesn't matter who does it just as long as we can get it done, no matter which way we fund it, as long as we can find something that's financially feasible, look at public-private partnerships.

We're here today, because of that model we have had four surrounding counties petition us to join. We share a lot of projects. Some of the counties do not necessarily have a toll viable project, but we share pieces of it, we share rail concerns, we share the corridor of I-69, share several trunk system routes, and we're also looking at potential airport intermodal hub projects, and others purely from an economic standpoint of pulling together.

Senator Eltife, right after he was elected, challenged our region: As a region, come up with the priorities, we can better represent you in Austin. Came back education and transportation as the top two.

You have heard me over time talk about moving beyond the boundaries of Friday night football. I'm here asking for forgiveness, I had to eat my words Monday. Linda and I gave a presentation to Panola County which is not one of the counties coming in, they would like to eventually come in, and we spoke before the commissioners court and the industrial foundation for the county. I had a confession to make. Going back to fall of 1978, I was a junior in high school, I had one of the worst hits laid on me on the football field by Mr. Audrey McMillan, and in 1979 we were 9-and-0, they were 8-and-1, they beat us 13 to 6. So I had to put that aside where we can all work together.

We do share a lot of common visions but economic development is the underlying engine to first protect what we have, and if we have the roadways, the infrastructure, whether it's roads, rail, airports, and the connectivity locally, wow, our region is poised for tremendous growth. And we're excited and hope for your continued support as we move forward, and we're really excited to grow and we will probably be back. Thank you.

MR. WILLIAMSON: Members, any dialogue with Jeff?

MR. JOHNSON: I've got a question.

MR. AUSTIN: Yes, sir.

MR. JOHNSON: Jeff, I want you to be very honest with me now. Is Cherokee County in the mix because that's where former Commissioner Robert Nichols is domiciled, or do they really want to be in the mix?

MR. AUSTIN: They really want to be there, and after we went to the commissioners court, then we went and shared with him what we were doing, but he is in support. And Representative Chuck Hopson, who has been a tremendous support, represents Cherokee and Rusk counties, and we're fortunate to say that our elected officials, Representative Merritt, Representative Hughes, Leo Berman have all been very supportive of our endeavors in working together, as our three senators.

MR. JOHNSON: I think this is a marvelous example of how flexible areas can be. You can start with a small nucleus and the others can recognize the advantages of joining together and basically attach themselves on, and regions then begin to benefit.

MR. AUSTIN: We want to be careful that we're not over-promising that there's a big pot of money, and we hear this among ourselves and working with the department that we are also a facilitator to help bring consensus on a regional basis and at a county level using what I shared with Smith County, what are those priority projects, how can we lay them out over the long run, and what is the best tool to help us accomplish the end result.

MR. JOHNSON: Good point. I mean, Commissioner Wood mentioned they recognize that there is no pot of gold, there is no pot of money, and we've got to work together to solve these challenges.

MR. AUSTIN: And there's more than one right answer.

MR. HOUGHTON: Jeff, what is the acceptance of the RMA in the multi-county area, what's the attitude?

MR. AUSTIN: Wow. Anywhere from the chambers to the county judges to the commissioners courts, the cities, the press. And I would like to say something about the press, they have been our friend, and that's not by accident because we've been able to share a longer range vision for economic development. And as we look in that perspective, we're not the whole answer but we are part of the puzzle to partner with the different agencies and bring new tools to all work together.

One other thing, next week when we have our meeting, we're also having a workshop. We will be looking at forming a rail subcommittee because of the different -- we've been listening. Companies need rail spurs, we have some advocates for commuter rail, high-speed rail, and preserving the corridors, so we're going to form a rail committee, listening from the bottom up to help do this. So in answer to your question, our communities, our different silos have all been extremely supportive.

MR. HOUGHTON: Has former Commissioner/Senator-elect Nichols bought his TxTag yet, do you know?

MR. AUSTIN: I'm trying to think. I pulled out one and I showed mine, I participated in the Beta test, and he pulled out one and I think it had all zeroes on it, so I believe it's on.

And I will say my daughter, who was going to the airport yesterday in Dallas, she ran through, she called me between the toll gate and up there and said, Why didn't you tell me my TxTag didn't work at DFW yet? So she has been using it in the beta test. I encouraged them to go to Dallas, these are two teenagers, they said, Dad, we'll go shopping, and you've got some smiley faces on the test log. But it's well received in East Texas, a lot of people are already excited that travel to Dallas, Houston and Austin, when it opens up, to use the TxTag. We've got a great marketing campaign ready to go when we open.

MS. ANDRADE: Congratulations, Jeff, and I think you're truly setting an example for the rest of the RMAs, and that's what we had hoped is that the RMAs would be inclusive and would be representative of several counties, not just one, so you're certainly doing a great job.

Thank you, Linda, for all your work too. Say hi to Robert Nichols for me.

MR. AUSTIN: Sure will. Thank you.

MR. WILLIAMSON: I think we're all pleased that you're here and pleased that you're expanding. I spoke earlier about the governor's desire to elevate each community across the state to equal status and let them determine their own fate. His other desire, his concern was with kind of the growing -- what he perceived to be the growing tension in certain parts of the state between core urban area, near suburban and far suburban, and in the cases of some communities, concentrated cities and rural counties. He seeks ways, methodologies to bridge those tensions to work in common, and I can't tell you what a good example expanding your RMA is of that.

What he wishes is to understand that Jacksonville and whomever are always going to have a football rivalry, but they don't have to have a transportation rivalry, they don't have to have an economic development rivalry, they can work together, even while they're battling on Friday nights.

MR. AUSTIN: You talk about transportation rivalries. I think it is very appropriate to one of the earlier slides when we were talking about the transportation system to link states and major cities. In our region our trunk system routes, our farm to market roads, our rail and other things do that same thing on a regional basis. That's what we have in common, one, just for the safety of the folks playing in football on Friday nights or our vendors that come to see us, suppliers, or people just passing through.

So we have an obligation and we are accountable to our counties, to our judges. In fact, I could almost say we're probably more accountable because we see them at lunch, we see them in the morning, we see them at church, we see them at school, driving by they'll wave at you, they know who we are and where to find us. In a rural area you can't run and hide.

Linda has a great example, if we may, of what the RMA has been able to do in Gregg County as far as building consensus. If I may yield to her?

MR. WILLIAMSON: Sure.

MS. THOMAS: Commissioners, Chairman, thank you so much for letting us be here today because it is an exciting time for us, an exciting time for RMAs in the state of Texas, in Gregg County.

My county judge says to me every day -- because, of course, the focus has been on Loop 49 and that's been the project that's really given us the opportunity to do this, but Gregg County is a participator, and so the judge says to me about once a week, What have you done for us today? We found this project that looks like it's going to be a possible pass-through financing project, Highway 42, and our county, to be such a tiny little county geographically, is very strong in competition between Longview, Kilgore and Gladewater.

Well, this Highway 42 which goes from Highway 80 to I-20 goes right through the heart of the East Texas oilfield which is, of course, very active right now, but it does connect north Longview, Gladewater which goes very close to Gladewater city limits, and the city of Kilgore, not to mention the fact that it's going to connect us, the beginning of a connection to Tyler and Smith County. So we're really excited. That project was way, way down on the list, nobody had even given it much consideration, but it has risen to the top like cream, so that's an exciting thing for Gregg County.

Once again, we're just delighted to be here. Jeff has done an outstanding job of visiting with the East Texas people so that we have an East Texas-plex, if you will. And of course, you know, you realize that about 75 percent of the state will come through East Texas on their way to the northeast, and we want the roads to be wonderful and our area to be very inviting, so you'll come back and come through many times. Thank you.

MR. WILLIAMSON: Thank you, and it's good to see you again.

MR. AUSTIN: Mr. Chairman, I wanted to mention one other thing, the importance of moving beyond Friday night football, specifically with the MPOs of Tyler and Longview, and also with our TxDOT partners we are entering into two TxDOT districts, Tyler and Atlanta. So we have Bob Ratcliff and Mary Owen, our DEs, have been tremendous, and our MPO directors.

And when I say that, we have submitted a draft recommendation to the districts, TxDOT and to the MPOs for interlocal agreements that should we look at alternative financing proposals or should we receive one, that we're all at the table together as partners to find out what's best for the region and how we can partner going forward, and I think that's an important and critical piece. We can't do it without them, they're large stakeholders, and they've been very receptive so far.

MR. WILLIAMSON: Very good. Thank you very much.

MR. AUSTIN: Thank you.

MR. WILLIAMSON: Jim? Easy on our microphone now.

MR. DILLON: Okay. I brought my own microphone, if you'd rather me use that one.

MR. WILLIAMSON: No. I just don't want to break that one.

MR. DILLON: Okay. He was very wrong about how happy the people will be to be micro-chipped, RF ID tagged, tolled, taxed, and have their whereabouts as they travel monitored, filmed on camera, tickets mailed to them routinely. That's all an invasion of privacy. So his daughter may have a smiling face when she passes through that dark scanner, but the rest of us won't.

And I notice on 16(b) or (d) that you're trying to negotiate and fund an agreement with a supposedly top ranked design-build firm for construction of a facility on state-owned property in exchange for existing properties. Now, why wouldn't --

MR. WILLIAMSON: Now wait, you'll have a chance to talk about that in a minute.

MR. DILLON: Yes. I'm just curious, why wouldn't a top ranked design-build firm, whether it's architectural or engineering or whatever design means -- I hope he's not an interior designer --

MR. WILLIAMSON: That's a good point.

MR. DILLON: Yes, because we're not doing that in Texas either. Now, wouldn't they have their own facility, and since they don't, why would --

MR. WILLIAMSON: We need to stay on 6(c). The way this is organized, we've got to stay on it.

MR. DILLON: All right, let's go to that one. What have you got over there?

MR. WILLIAMSON: That's the one we're on, that's what he just testified for.

MR. DILLON: Okay, 6 or 16?

MR. WILLIAMSON: Six.

MR. DILLON: All right, we'll go to 6. I'm sure there's something wrong on that one.

MR. WILLIAMSON: Well, there doesn't have to be.

MR. DILLON: 6(c), Various Counties.

MR. WILLIAMSON: Not everything is wrong.

MR. DILLON: Authorizing various counties, including Cherokee, Rusk, Harrison to become part of a regional mobility authority. Well, we don't want to be a part of that. There is no clamor, there is no public outcry to sign on to this program. It's being imposed on us against our will but we're not voluntarily submitting to it out of love and affection and a recognition that it's going to be a benefit.

MR. WILLIAMSON: But you don't live in that part of the world, do you?

MR. DILLON: I live in Texas.

MR. WILLIAMSON: I know, but not these four counties.

MR. DILLON: Well, it won't be long before you try to impose a regional mobility authority on me, and we used to control our own destinies at the local level, the federal government restricted its activities to protecting our borders which they've since abdicated that responsibility, and imposing tariffs and duties on international commerce and interstate. That was all they did, plus they minted coins and a few other little things, but the layers --

MR. WILLIAMSON: Can I assume you're against item 6(c)?

MR. DILLON: Well, I haven't made that clear yet.

MR. WILLIAMSON: I know, but it's time to wrap up.

MR. DILLON: Well, I tell you what, we don't want either the regional mobility authority, the hemispheric or the global, or even at the county level. There is enough control on the people from where and how they travel and how much they pay to get in their car and go somewhere to every other system of control that the state and the regional authorities are trying to impose and we're very tired of it.

MR. WILLIAMSON: Thank you very much. I will assume you're opposed to 6(c).

Anything else, Phillip?

MR. RUSSELL: No, sir.

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: We'll go to agenda item number 6(b) now, Phil, El Paso County, the recommendation of the City of El Paso to create a Camino Real Regional Mobility Authority.

MR. RUSSELL: Thanks, Mike. And commissioners, on May 15 of this year, the City of El Paso did file a petition with the commission to form the newest regional mobility authority. The city has identified Loop 375, also known as the Border Highway, as its initial project.

Now, as required by law, the department held a public hearing on June 12, 2006. Notice of the public hearing was published in the Texas Register and the local newspaper there in El Paso. At the public hearing we had 15 individuals who spoke in favor of the creation of the regional mobility authority, five opposed to the creation of the RMA. We also received, subsequently, written comments, eight of which were in favor of forming the RMA, and one of which was opposed to the creation of the RMA.

On June 23 of this year, the regional metropolitan planning organization took this issue up and voted against the creation of the Camino Real Regional Mobility Authority. I believe the vote was about twelve to eight, if memory serves me correctly.

Commissioners, I'll be happy to address any questions you might have.

MR. WILLIAMSON: I need to establish a few ground rules because I think this one is going to take a while. Hope, is it the case that you have to leave at one o'clock, or you need to leave as close to 1:00 as possible?

MS. ANDRADE: Sir, I have to leave but I'll be right back. It should take me no more than 20 minutes or 30 minutes. 1:30.

MR. WILLIAMSON: At 1:30?

MS. ANDRADE: Yes. It starts at 2:00.

MR. WILLIAMSON: Okay, I think we have time. We also have a number of witnesses, and we have a really unique situation, this will be the first municipal or city RMA to come before the body, and that's a slightly different law than the law governing the RMAs we've dealt with in the past, so there's going to be some technical questions directed toward staff all through this. My guess is we're going to be going back and forth between staff and testimony through most of the next hour or so.

I'll try to arrange the testimony in a way that makes sense without showing prejudice one way or the other. I don't think any of us have any idea where we stand on this at the end. We're going to listen to what everybody has got to say.

Jim, can I assume you're going to be opposed to this? It's the creation of a city RMA. If you're going to be opposed to it, I'm going to go ahead and let you speak now.

MR. DILLON: Okay. Yes, I'm opposed to it, because I've got to leave anyway.

MR. WILLIAMSON: I mean nothing from this, I'm just curious, is that your daughter?

MR. DILLON: Yes, Savannah.

MR. WILLIAMSON: You have a great smile, you've been very patient and you've been watching everything and learning.

MR. DILLON: You saw that movie "Savannah Smiles"?

MR. WILLIAMSON: No.

MR. DILLON: Oh, it's excellent, "Savannah Smiles." She's only eleven, she does not want an RF ID tag to drive on Texas roads, she does not want to be micro-chipped or filmed so you can get on the highway.

MR. WILLIAMSON: Just so you know, I suspect all of us are pretty much that way. There's probably not any of us that want that.

MR. DILLON: Before I leave -- which will be right after I'm done talking -- and in an effort to garner some votes in the November election, I'm going to summarize what I think is wrong with the program.

MR. WILLIAMSON: Try to keep it around RMAs.

MR. DILLON: Right, absolutely. This scheme to build a unifying road that would tie Canada, Mexico, the United States and all of South America into a one homogenous glob of open border, heritage and identity destroying mass of un-American, revenue-generating joke that's going to wipe out tens of thousands of acres of rich farmland in East Texas -- and I know the governor cares deeply about that -- which has been in Texas families for generations and which is producing a product, namely food, that we all will need much more than we need the Chinese junk that is going to come in on the road that takes the place of these farms, even though there's an addiction to that. The oil, the Chinese junk and the cheap Mexican labor is what our leaders in Texas are addicted to.

Now, to satisfy their heinous need to fix this addiction, they've decided to build a road that the people will pay for to import more illegal Mexicans and more Chinese junk into our country and at the same time wipe out, like I said, tens of thousands of acres of farmland that belongs to Texans that have had that land in their families for generations.

Now, that land won't be surrendered easily, so what you're going to have to do then is pull out your eminent domain and in Kilo v. New London, Connecticut, the Supreme Court said that no longer is eminent domain restricted only to the taking of private property for public use but also for private use. Now, Cintra and Zachry, profiteering privately off of Texas roads while having our DPS patrol those roads for them and state employees collect the tolls for them at a nickel on the dollar, you should negotiate a better deal than that. You're getting a nickel from that Spanish guy?

MR. WILLIAMSON: Well, we're getting a nickel and we're getting a road we couldn't build otherwise.

MR. DILLON: You don't need that road if you would keep the 50 million illegal Mexicans in Mexico and the trucks that are carrying the Chinese junk through Mexican ports up into our country in China -- you wouldn't need that road.

MR. WILLIAMSON: Can I assume you're against this one also?

MR. DILLON: Yes, you can.

MR. WILLIAMSON: I want to tell you that you know you will always be welcome here.

MR. DILLON: Thank you, Ric.

MR. WILLIAMSON: You've been very respectful and we're respectful of you because you're a citizen of this state.

MR. DILLON: Thank you, Ric.

MR. WILLIAMSON: We wish you the best and we look forward to seeing you again.

MR. DILLON: When is the next meeting, by the way?

MR. WILLIAMSON: A month from now.

MR. DILLON: About a month.

MR. WILLIAMSON: It's nice to meet you, Savannah.

MR. HOUGHTON: Jim, it's in El Paso, the meeting, if you'd like to come out.

MR. DILLON: I don't know. Is there a toll road between here and there?

MR. HOUGHTON: You can throw coins out on the interstate.

MR. DILLON: Thank you.

MR. WILLIAMSON: It's good to see you. Thank you for being here, thank you for standing up. It's important that every Texan be heard.

MR. DILLON: Well, I have to.

MR. WILLIAMSON: I understand.

I think the way I want to approach this, Mayor, if it's okay with you, we always show deference to the mayor of a city when a city is involved, and if it's okay with you, Mayor, I would like to start with you. I saw your tool and I was hoping you would bring some levity to the moment. You know, my poor ticker, I've had some trouble and I've got to be very careful I don't get too stressed out.

MAYOR COOK: Chairman, commissioners, it's good to be before you today.

Almost every city in the state of Texas wants to be first for something, and I'm hoping that we're not the first petition for an RMA to ever be denied. Six years ago I finished my first year as a city council representative, and served three terms, then decided to run for mayor. Not being the smartest guy in the world, I decided I would surround myself with smarter people, so I created six economic development cabinets, one of those being an economic development cabinet for transportation issues, and I got experts in transportation issues to look at the possibility of forming an RMA.

I also studied some of the Code -- the Texas Administrative Code 43, Chapter 26.13 was the first one that I looked at -- to make sure that when we presented our petition to you that we met all the requirements of the Code, and I'm going to summarize some of those right now.

You have two things in the Code that I thought were extremely important to us. First of all, in order for us to create an RMA, we had to request that you make two findings. Those findings were, number one, that the RMA has sufficient public support -- and I'll come back to that issue in a moment -- but also the second issue that we had to approve was that the candidate projects and all the projects that we would bring to you through an RMA were going to be consistent with the Texas transportation plan, the metropolitan transportation plan, the metropolitan mobility plan, and the statewide transportation improvement plan, and also that they would benefit the traveling public.

It was mentioned earlier that our MPO voted against the RMA. Technically that's not true. What they did, we had a resolution before them to request that the RMA be established, and the actual motion that was made was to deny the resolution which is not the same, and that's an important distinction and I'll get to it as I discuss the public support.

Significant public support, according to the Code, is determined by, number one, public comments received at the public hearings, and as was pointed out to you earlier, the public hearing actually had 15 people speak in favor, five against, eight people wrote letters in favor and one against.

And just as Jim has proven to you today by coming and suggesting that he's opposed to regional mobility authorities and toll roads and micro-chipping and all kinds of other things, you're going to find the same thing even amongst elected officials, you're not going to have a unanimous decision. In running for political office, I'm usually happy for 50 percent plus one, and I think that if we can get a majority of people to support an issue, then that's very important.

The second thing that we had to do to show significant public support was to present a resolution of support from the affected political subdivision, and this is a clear legal argument that we have to make sure that we met because you had a resolution from the City of El Paso and it was supported by five out of eight council people. Once again, it wasn't unanimous support but the majority of the council supported this action.

Rule number 26.11(6)(b) which you alluded to, sir, mentions that -- El Paso is in a unique situation because that rule says that the cities of El Paso, Laredo, Brownsville, McAllen, or Port Aransas may petition the commission for approval to create an RMA in the same manner as any county, and there's a reason that that law was passed. The reason is El Paso finds itself in a very unique position especially by the makeup of our metropolitan planning organization. We have four members of the MPO that are in New Mexico, and this project does not benefit New Mexico at all. Three of those members were present and voted against the project.

Eighty-five percent of the county of El Paso is within the city limits.

MR. WILLIAMSON: Is that dirt or population?

MAYOR COOK: Population and dirt, I imagine.

MR. WILLIAMSON: Is that the geographic county or just population?

MAYOR COOK: It's population-wise, but also, I think almost the majority of the dirt also is within the city limits, and we're growing at a fantastic rate too. For example, right now Fort Bliss is getting ready to triple in size. We're expecting to increase the population of El Paso by 60,000 people within the next five years just from Fort Bliss growth alone, and we know that other growth is going to take place. Some conservative housing estimates show that that number could be as high as 80- to 100,000 people in five years.

But anyway, that Rule 26.11(6)(b) was specifically designed for the city of El Paso, knowing our unique geographic and political makeup.

The third thing that we have to do to show sufficient public support is we had to get -- and this is a quote -- "the express opinion of any of the affected MPO." Now, I would point out to you that Hidalgo County, for example, I looked at the minute order for the creation of their RMA and they did not submit a resolution from their MPO supporting the creation, and that was as late as 2005, if I recollect when that minute order was written. So it's not necessary that the MPO actually give their endorsement of the project, and that's why you had the specific terminology: the express opinion, if any. The action of the MPO was actually not to express an opinion because they voted against the resolution that asked for support of the RMA being established.

Under the public outreach or public support, let me tell you what we did. It was read into the record earlier about some of the meetings that were held, but we held two Legislative Review Committee meetings and our Legislative Committees of the city council have four out of eight of the members of the council that sit on that, and those are public posted meetings, by the way. We also had one special city council meeting just to talk about regional mobility authorities. We had one regular city council meeting where it was discussed, and at that meeting we decided to have a special meeting to invite the public to it and be more open about the establishment of an RMA.

We also had numerous public informational meetings by my transportation cabinet. Those are those experts in transportation that I talked to you about. We sent them out into the public to talk about an RMA, to educate the public as to what they were. The transportation cabinet also participated in four TxDOT meetings where they held open houses to discuss regional mobility authorities.

My transportation cabinet also had involvement in numerous neighborhood association meetings. We had actually sent out over 66 notices, mailed notices to 66 neighborhood associations and told them that we were going to be holding these meetings.

As was earlier mentioned, we had the official TxDOT hearing and the subsequent written comments that were made. For that meeting, we posted two separate notices within our local newspaper, The El Paso Times. We also posted notice two weeks in advance on our city's website so that people would know that that meeting was going to be held. We issued press releases to the media; there were two press releases that were issued to them so the media would come cover the event and let the public know that the meeting was taking place. And we also provided notices to local business organizations.

I would also like to mention another issue. Last night you made some very astute remarks, sir, and that's not just to compliment you, but you told us last night that some communities want to grow and other communities do not. You said that some communities want to use all the tools in the toolbox and others do not.

I remember a year and a half ago I came to this commission meeting and I wrote down a quotation of yours at that time, and that was that there are going to be three kinds of roads built in Texas, there are going to be slow roads, no roads, and toll roads. El Paso is going to grow, I told you 60,000 just from Fort Bliss alone. That's not an option for us, we can't wait for slow roads, and we can't accept no roads, we're ready to embrace toll roads, and we want to use every tool that's in the toolbox in order to make sure that our transportation infrastructure is second to none in the state of Texas. We have some unique challenges in El Paso, and we're hoping that you will approve the formation of our RMA today.

You did request last night that I bring my guitar because I told you I'm not the world's best public speaker, and my daddy told me that I should always end whatever my public speaking engagement is with a song so people at least can remember something positive, so last night I took the liberty of writing a song about RMAs.

(The mayor played and sang a song, followed by general applause and laughter.)

MR. WILLIAMSON: Lord God, 20 years, Richard.

We're going to wait on dialoguing with the mayor to hear the senator, and then we're going to hear one of the city councilman and the House member, and then we'll rotate after that. So Senator Shapleigh?

SENATOR SHAPLEIGH: Mr. Chair, members of the commission, everyone watching on the internet, democracy is alive and vigorous in the TxDOT Commission today. I've been to a lot of these in the last decade, I've got to say this is the most lively one I've ever been to.

El Paso, Texas today -- and I've been coming here for a decade to share our story, our hope with you -- is going to be the most going place in the country in the next decade. We're going to add between 60- and 80,000 troops and dependents to Fort Bliss, and to the extent that we can get those troops to the theaters of war and do their training, that's how we're going to be measured.

On our western side we're going to have another 70,000 in a town that's springing out of the desert in New Mexico that affects our infrastructure. We are going to have to provide the infrastructure not just for the El Paso part of this unique sliver of land that we occupy, but the infrastructure for New Mexico as well.

I was on the conference committee of both of these major bills that provided these tools, 2702 and 3588, and I'm pleased to say that everyone you're going to hear from today in our delegation, Senate and House, voted for 2702, every single one of them, and every single person you're going to hear from today voted for 3588 that you're going to hear from today from El Paso. So they voted and are on the record for the entire toolbox, including tolls.

And I mention to you that when we came to a vote on the MPO with respect to the one project, the southern relief route, it went through with a nine to three vote, with tolls, four lanes that are free that exist now, and two fast lanes so that trucks and others can come through the very unique piece of geography that we occupy and get from east to west.

You've heard in this commission what's going to happen in Long Beach, you know what's happening with double stacked, double track trains. We're going to have 130 trains a day moving through El Paso, Texas and we're going to have all the collateral truck traffic going with it.

That very unique piece of geography means that the Franklin Mountains -- which is the tail-end of the Rockies -- comes within 3,000 yards of the Mexican border, and everything goes right through that corridor, and what it's created is a very unique traffic logistical problem in El Paso which is I-10 which for whatever reason did not get the access roads that it should have gotten back in the '60s.

Our community, Fort Bliss, our entire region is invested in finding an alternative route. When there is congestion on I-10, if you've got a truck wreck or you've got a hazardous waste spill -- which is another issue we're going to need to visit on on this border -- it shuts down literally everything moving from Los Angeles to Houston, and so it is not just an El Paso issue to find an alternative route on I-10, it's a state of Texas issue.

We in El Paso are there geographically for five reasons: the military, Mexico, movement, manufacturing, and medicine. That's why we're there. When you look at Houston, it's energy primarily is why Houston is there. When you look at San Antonio, it's got military, biotech, entertainment, but when you look at El Paso, we're there for five reasons. Four of those relate to mobility and the ability to move people and product through that port, and I submit to you there is no region in Texas that will get more value from controlling our destiny with an RMA.

The RMA that was written for El Paso, I know all about because I participated in writing nearly every piece of that statute. We were the first to say let's let a city do it because we're 85 percent the city of El Paso, the first to say let's move some of this infrastructure and use some of the money to complete the loop into New Mexico, the first to say that truck congestion at the bridges is going to cost us jobs so how about using some money to put weigh stations in Mexico, the most creative approach to any RMA in the state of Texas.

We have had a vote on the southern relief route and it went through nine to three, and the issue, interestingly enough, was not tolls because everyone that is going to come talk to you here today is on the record for supporting tolls, in some manner or another, they support tolls. The project that we're talking about has two tolled lanes and four free lanes, so a truck or someone on the east side of town can have the choice of being in the fast lane and pay a toll or being in existing lanes on I-10, or the Border Highway, and get through our community.

With the growth that we have ahead of us, here's the basic choice for El Paso: we can use an RMA to finish our inner and outer loops in a decade, or we can reject an RMA and finish our inner and outer loops in a lifetime. We're the only Texas city that does not have a completed inner or outer loop of over 500,000. And when you think about what has to happen in El Paso, Texas, top priority -- and we've been talking about this, Mr. Chair for many hours -- the top priority for an area that's been as lucky as we have to get Fort Bliss, has got to be to finish our loops.

So that's the simple choice in El Paso, Texas: you do it, you take the $100 million that the RMA is going to generate of new money, you finish your loops in a decade, or you don't do it and you wait a lifetime. And the question is what does that do to El Paso if you don't do it, and I think the choice before us is as clear as any community in the state.

The City of El Paso has done everything it needs to do legally to make this happen. The project that has been voted on is the only thing that federal law requires to be voted by the MPO, and so the question is will our community seize its destiny by having an RMA to essentially double the transportation money in our region. That's the question before us today.

And I've been coming here for a long time, and I'm pleased to see great commissioners, particularly from our area of the state, participate in this discussion. But we've spent a lot of time fixing up these tools for every community to come and say this is how we want to seize our destiny and get this thing done and no community in Texas will be better off than El Paso, Texas with an RMA.

MR. WILLIAMSON: It's always good for you to be here, Senator, and you know you're welcome here.

Members, the senator will have to leave, and so if you need to dialogue with him now, this is the time to do it.

MR. HOUGHTON: I'll go last.

MR. WILLIAMSON: I'll be brief, Senator. I think it's safe to say that each of the four commissioners are very uncomfortable being placed in the position of having to mitigate what we perceive to be a disagreement in the western district of the state. I think we understand, based on the information our staff has given us, why the disagreement occurs, but I think we're uncomfortable, I think it's honest for us to say that.

But I also think that I'm an appointed guy and you're an elected guy and it's not my role to lecture you or Mr. Pickett about your business -- in fact, I'll never do that, in fact, I'll never argue with you publicly. You can say the nastiest, vilest, meanest things about me in the press you want to and I'll never say a word because you're an elected guy and I'm an appointed guy, and when I was an elected guy, I didn't like it when an appointed guy argued with me, and so I ain't going to do it.

I know you're headed back home. I want you to head back home knowing that all four of us are going to listen to what everybody has got to say today, we're going to ask our staff a lot of questions about the history of certain laws, and we're going to try to reach a judicious decision about what's best from our perspective. But I've got to tell you we're not comfortable in the position we're in right now at all. And that's all I feel like I need to say.

MR. HOUGHTON: Well, I wanted to tell the senator just generally thank you for your vision on transportation, and your support of this commission, 2702, 3588. You've had that vision. It's obvious now, with the RMAs that came before us earlier in the day, they're utilizing all the tools in the toolbox: tolling, pass-through tolling, Prop 14. They're going through those and they're integrating all of that in the planning, and with your help, again, that was made possible, and thank you for that from this commissioner and from the commission.

MS. ANDRADE: Senator, thank you for your leadership, and I'm so glad that the chairman brought out the discomfort because we don't like to get in the middle of communities and we enjoy when a community comes so united because we're all trying to do what's best for the state. And I come from a community that's taking advantage of every tool in the toolbox and I see what can happen, and when you say you want to seize your destiny, you want to get your loop done in a decade versus a lifetime, I have a hard time understanding what the disagreement is. So I just wanted to let that out.

Thank you for your leadership and I hope that we do what's right for your region and for this state because El Paso is very important.

SENATOR SHAPLEIGH: Well, Hope, I love your name and I hope you leave us with hope when we leave here. Your community is very similar to ours: you have military bases, you've got rail going in five directions, we've got rail in five directions -- that's a big blessing in today's world -- you've got freeways coming in and out, north, south, east, west. And those communities in today's world that make mobility happen are the ones that win, especially if you've got a military base.

And I do hope that we arrive at a point. We thought we were there a month ago with a fair degree of consensus with maybe one or two critics. I think there's an issue in El Paso where you've got a state next to you that has a different constitution. I would hope that they would let us evolve our own destiny and not participate in the kinds of things that are under our state law and constitution.

But when we look at communities in the future in this state and you look at the choices San Antonio has made at Kelly, the redevelopment of Kelly, the inland port concept at Kelly, the rail that you're focused on now to move goods from Monterrey right up to San Antonio, the freeways that you're putting in now, the rapid growth of your technology sector, you are what we hope to be someday. And I'm hoping that those listening to you will reflect on the lessons that you give us because San Antonio offers a lot of lessons for El Paso, Texas.

The great thing we have going for us, we've got a decade of the best growth in Texas, and we are going to be judged on how well we manage it, and if today passes without getting an RMA, we will rue the day that we didn't seize the opportunity to move people, product and troops faster, safer and more efficiently.

MR. WILLIAMSON: John?

MR. JOHNSON: Senator, it's always good to see you, whether it's here or in El Paso. I'm an idealist, a dreamer in a way, and so I think to amplify a little bit on what Ric said that we hate to put our own personal selves in what we view as a family feud. I mean, these things are called regional mobility authorities for a reason, and as the dreamer in me wants so much that there be harmony or at least consensus of harmony, there's another side of me that says, as you well pointed out, you have a very legal right to follow through on this, it's in the law, and you have every right to do that.

So that's the dynamic tension that I'm struggling with and I want to hear what the other people who want to give discussion or testimony on this issue have, but I think you can sense that's my personal feeling. I think we're all subjected to those close of competing thoughts. Appreciate your involvement in transportation around the state, and it's not limited just to your area, it's statewide, and your interest has been sincere and over the last almost eight years I've enjoyed working with you.

SENATOR SHAPLEIGH: Thank you.

MR. WILLIAMSON: Thank you, Senator.

SENATOR SHAPLEIGH: Thank you, Mr. Chair.

MR. WILLIAMSON: I think the closest equivalent I've got to the mayor would then be the county judge-elect. Mr. Cobos, I think if you don't mind, I'll let you lead off the other side, and we'll ask Mr. Pickett to follow as we asked Mr. Shapleigh to follow the mayor.

MR. COBOS: Thank you. Good afternoon, Mr. Chair, commissioners. My name is Anthony Cobos, county judge-elect, County of El Paso, Texas. It's an honor to be here to discuss RMAs and the impact they're going to have on our community.

There are six municipalities within the limits of El Paso County, nine school districts, the county of El Paso abuts New Mexico. I served as an El Paso city councilor for eight years, I represented the district that abutted New Mexico. New Mexico, Sunland Park is building a port of entry that will use El Paso roads to get to I-10, so New Mexico's opinion is extremely important and very valuable on this issue.

I'm the only elected official who will come before you today who represents the entire county of El Paso. I just got off the campaign trail, knocked on a lot of doors, visited with a lot of people, and the opinions, the consensus that I heard was people are concerned, they're not trusting and they need more time on this RMA issue, and toll roads. Toll roads is one component of the RMA.

I had the honor of serving with our excellent mayor, John Cook, for four years. He's a man of integrity, I respect him very much, and I'm just glad I didn't come up after he sang that song because I would have had some big shoes to fill, but we disagree on this issue. I don't believe that the public comments have been significant, that they have been appropriate. When you have two public meetings, you have 15 people in favor, five against and you get eight letters for, one against, that's hardly reflective of the opinions of the people in El Paso County.

And you all are in a very difficult position. What you're being asked today is to create an RMA in the city of El Paso where there is much controversy on this issue. El Paso is very divided on this issue.

I was impressed, item 6 (c) you had Cherokee County, Harrison County, Rusk and Upshur that support this. It was said that the chambers of commerce support joining an RMA, the county judges support joining an RMA, the MPO supports joining an RMA. You don't have that in El Paso County. The MPO voted against. You can jazz it up however you want, they voted against a resolution creating a regional mobility authority. We need more time.

If you vote for this RMA today, you're going to be fanning the flames, you're only going to be adding to the controversy. We're all going to have to go back to El Paso, we'll remain divided, the opposition will continue to grow, it won't be a good thing if you vote for this today.

If you vote against it, we can go back, we can reconcile, we can discuss it, we can come back to you next time, if appropriate, if we so decide to come back as a united voice, as a united county. And I would ask that you vote against this because I would love to see the headlines in tomorrow's paper reading: The Texas Transportation Commission voted against creation of an RMA to give El Pasoans more time. I would hate to see a headline that read: The Transportation Commission voted for El Paso because they couldn't agree on it.

I respect your time. Thank you very much, and please vote no. Thank you.

MR. WILLIAMSON: Thank you, sir. Mr. Pickett?

MR. PICKETT: Good afternoon.

MR. WILLIAMSON: Good afternoon, sir.

MR. PICKETT: Always a pleasure. I'm going to say a few things that are off the subject, so hopefully you'll at least remember what I said because everything else I'm not sure.

Going back to Randall's presentation about Eisenhower and the 50th anniversary of the highway, a fun fact for you to remember there involved in transportation, Dwight also realized when the Autobahn was being built by the Germans, they had airplanes stashed along the Autobahn at various locations, and Dwight decided that when we did this highway that there would have to be certain sections that were absolutely straight for a specific distance so that the United States Air Force could land or take off on this highway. Just thought I'd throw that in.

Now, since that's the only thing most people will remember, let me start the other. I too must respectfully disagree with the mayor and Senator Shapleigh. Jim that was here -- and I apologize, would you apologize to Jim for me, I'm going to use him as an example -- after about the third or fourth time Jim got up, most of the people in the audience -- I won't say the committee, we've all been there -- kind of tuned him out. If he said something a little different or funny, we laughed, but we knew where he stood, we've heard it over and over. And the mayor was trying to make a point that the public is supporting this because of the meeting held June 12. The public in El Paso was tired of the issue by June 12, they had enough.

I had been personally to I don't know how many meetings and invited, and if you want to see numbers or show numbers -- and I don't want to put any of your staff on the spot -- at one particular meeting on the east side in a police station that I was invited to speak to along with TxDOT, and I didn't start this, I didn't ask for this to happen, at the end of the meeting after all sides were debated, someone said would someone do a show of hands who would support this, one hand went up, one, and there was over 50 people there, one hand went up. But those other 49 people didn't go to the subsequent meeting on June 12, they'd had enough.

This is the only place in Texas that Texas Department of Transportation spent $100,000 on buying commercials selling a product. It was no longer outreach. In the past it was we're going to have a public meeting on June 12, come on down. This was if you don't use a toll, you won't have to pay. Well, wait a minute, is that absolutely true?

In the action that was presented to the MPO last month, a lot of the members didn't realize until afterwards -- and that's why the subsequent vote last Friday -- that this is going to cost people who don't use a toll. In that action the month before, money was deleted from projects that the people in El Paso are expecting; the people from El Paso are expecting $80 million to be in the Northeast Parkway. That's no longer there, that was taken out.

So go back to the June 12 meeting and hold it again and say are you for an RMA if we delete $80 million out of Northeast Parkway, will you be for the RMA if we delete the money out of widening Interstate 10 on the west side. Let's be fair about this, let's go back and give them all those choices.

The senator has brought this up before and other people and they're trying to make me feel bad that I voted for 3588 and 2702. I thought transportation folks would be glad I voted for those, I'm proud of voting for those, but he uses it that he was proud but because I voted for it, it's a bad thing. Of course I voted for those things, they're great tools.

And Senator Shapleigh's Senate version must be different from the House version, though. I don't remember anywhere in 3588 or 2702 that says the law says you have to create an RMA, I believe it said here are the options, try this one, try that one, you all decide in your community what works, what doesn't work.

This is one of the few places where we can discuss in detail and people can follow the conversations. In El Paso it's gotten down to are you for or against tolls, and that isn't the issue. I know TxDOT has got a copy, I don't know if you've looked at it yet, Friday's proceedings. I thought it was pretty good discussions. We had some people say I'm against tolls, on the board and in the public; we had some people on the board who voted no to creating an RMA say I'm not against tolls, I'm against the RMA. So it was refreshing to hear that some of the information has started to get out at least and even some of our own board members are now splitting this and saying it's not a one issue deal.

And it's in the record we've been told that pass-through financing was for small projects, and every month I'd see you guys approving -- and gal, sorry -- projects in the multi-million dollars, and said why is it only a small for El Paso, why can't we do a big one, and then somebody proposed an unsolicited proposal and that you're wrestling with whether that's a good thing or not. I hope you support that, I support that on the record again. It's not new money, but is it one of the tools? Yes. Is it trying to fill in the gap? Yes, absolutely.

So when the mayor said that the public supports this, that is not the case, in my opinion, it is not the case. I thought we were done with this. I keep getting asked to go places, we want to understand this. Another one? They've already made up their minds.

And when you go to these outreach meetings, the first thing that TxDOT does is put up a graphic and they've got this oval and the center of the universe is the MPO, and they've got a little bullet off there that says RMA and a little bullet that says TxDOT. Well, the center of the universe last Friday said no. It doesn't matter to me whether you're going to quote verse and chapter, there's a lot of time when we pass laws as human beings, those technicalities. I was asked from the attorney general just a week ago: Would you tell me what your intent was on this amendment, Representative Pickett, because we're having some questions about what was your intention, so even though that statute is there, what was the intention?

So the mayor is saying because technically he doesn't have to get the MPO's permission, or technically the MPO didn't say no, they just rejected the resolution, put it on next month's agenda as an item: Do you support or reject an RMA? Okay, we'll see if everybody can go garner their votes and see what happens then at that point. I do believe that the people who voted on our MPO board said no to the RMA, they just didn't reject the resolution at that point.

The county judge is here saying that he, as a newly elected official, isn't wild about this. Our congressman -- and I got credit for writing the letter and it was a pretty good letter -- the congressman weighed in from our area and he said he is not in support of an RMA. He didn't say he wasn't in support of Chapter 43 or line 26, he just says I am not in support at this time -- I'll at least put that caveat in there -- I am not at this time supporting an RMA. And I believe that he thinks he has the pulse of his constituency, as I hope I do, I know the mayor does, I know Senator Shapleigh does.

So it is tough for you, no one likes to be in this position of splitting the baby. But I would tell you that you already know the facts: if you deny this request for an RMA, that does not preclude that from happening in the future, that does not preclude us from doing tolls. I do take offense from the way this was presented in my community, I take offense to the way the public was basically told that this is how it's going to be without both sides of the argument.

And I do believe there is a place for tolls. I'm fine with that being on the record; I have a plan that would include tolls. We've got a great MPO staff, one of the best in the nation, and we can come up with a good proposal.

If you were to poll all the members that were present last Friday, again, just a straw poll, do you absolutely realize what was adopted as a southern relief route? And I don't want to embarrass my colleagues, but a lot of them came to me afterwards and had no idea of the detail that was in there, they didn't know. And you can say that's an excuse, they should know, but there is trust. I know that the county judge says there's some mistrust, and that is true, but there's also some trust, and when somebody from TxDOT gets up and it's a friend of yours and somebody that you've known for a long time and they offer you a bottle of water and a nice little table for you to pick up a key chain, there's a lot of trust there and there's a lot of people trusted you all in what you are presenting, and I think you abused that. And I think it's time that we try to trust each other.

And I did agree with the judge's comment about fueling the fire on this issue. You said the MPO is the center of the universe, the MPO said no. If you violate that trust, you'll have to go back and tell all those people at those outreach meetings, public hearings that what we put up there was not what we really meant. That's it. Thank you.

MR. WILLIAMSON: Thank you, Mr. Pickett.

Richard, we're going to be for and against, for and against. Richard?

MR. DAYOUB: Good afternoon. For the record, I am Richard Dayoub, president of the El Paso Chamber of Commerce.

Chairman Williamson, Commissioner Andrade, our El Pasoan, Commissioner Houghton, Director Behrens, Mr. Polson, thank you so much for this opportunity to speak to you this afternoon. I'll do my very best to respect your time by being as brief as possible.

MR. WILLIAMSON: We reserved the day for El Paso, so take your time.

MR. DAYOUB: The whole day? I think we have a flight at five o'clock, so we're at least assured of being out of here by that.

First of all, let me thank you all for participating in last evening's event. It was our pleasure to host you and we look forward to hosting you in El Paso in late July.

With me today are several people from El Paso, business people mostly who support this initiative to move forward with an RMA, and I'd to recognize a few of them by name but I'd also like all of them to stand and be recognized who are here. Paul Foster, representing Western Refining; Stanley Jobe; Veronica Callaghan; Terry Bilderback, who is the chairman of the chamber's transportation committee, as well as he serves on the mayor's transportation cabinet. If I've left anybody out, I certainly apologize for that, but if you would just be recognized so that everyone does know that you're actually here.

MR. WILLIAMSON: Welcome.

MR. DAYOUB: My comments, while brief, are reflective of and are supported by our nearly 1,300 members in El Paso. Our membership reflects the diversity of our population. We are 80 percent Hispanic; 85 percent of our members are small business with fewer than 20 employees; they are situated across El Paso.

For those of you not intimately familiar with El Paso, our city spans nearly 30 linear miles across the community, east to west, with I-10 intersecting throughout our community. And I-10, I might add, not so ironically maybe, a few weeks when we came down for the first Annual Transportation Conference, one of our leaders, Terry Bilderback, missed his flight -- and I think this is somewhat humorous today -- because he was stuck on I-10 because of an accident and he couldn't make his flight on time. Had we had our southern relief route completed, that would have been a non-issue.

MR. WILLIAMSON: But the record will reflect all of us use that excuse every day for why we're late.

MR. DAYOUB: That's precisely right.

MR. WILLIAMSON: In Texas it's the greatest excuse in the world because we're all always late.

(General laughter.)

MR. DAYOUB: That's very true, sir. Thank you for pointing that out.

We are in El Paso, as has already been pointed out by our mayor and by our state senator, we are a growing community, and while the numbers seem to vary and sometimes perhaps exaggerate, we are, in fact, in a major growth mode. The chamber was the lead organization in helping to recruit the growth of Fort Bliss, and while we spent some seven or eight years diligently laboring in that arena at the Pentagon and Washington, with the help of our congressman, I might add, as well as our senators, Cornyn and Hutchison.

We thought that was a lot of work, but it pales in comparison to the work we have before us today as we prepare our community for the receipt of those many thousands of soldiers and their families and the other growth that's occurring around Fort Bliss, as well separately from that, the manufacturing community across the border in Ciudad Juarez.

We have roughly 350 Fortune 500 manufacturers and many of them in a growth mode to the point where the unemployment rate in Ciudad Juarez is almost virtually zero, it's lower than 10 percent. They are cannibalizing each other in trying to recruit employees. They're recruiting across the country to bring people to El Paso, to live in El Paso and work in Ciudad Juarez, all of it adding to our burden on our bridges, our already over-burdened bridges.

As is stated in the folders that I provided to you, the Greater Chamber supports House Bill 3588 and all of the tools provided within, including the formation of an RMA. It was stated that the position in our community is not so much supportive of the formulation of an RMA, and I respectfully disagree with our elected officials who have opposed this. I think our 1,300 members speak otherwise. They're all over the city and they are facing challenges getting their goods and services across the community as it continues to grow.

And one of the great things about our great city has been under our quality of life initiatives for a number of years we've had the pride of stating that we are one of the least congested communities in the nation, major communities. That can no longer be said, and certainly if the RMA is not approved, in the near term we will not be on that list any longer, to our great disappointment.

Now, Fort Bliss cannot speak on their behalf because they are prohibited from lobbying initiatives, but I can speak to the initiatives that we work with them constantly. I'm at Fort Bliss almost as much as I'm at my office, and they are constantly concerned about the infrastructure needs that we have, and perhaps our inability to continue to meet those needs, and they look to the chamber and they look to the business community to help facilitate those processes.

We have a rare and unique opportunity to prepare our community for this growth, most importantly by providing transportation infrastructure ensuring the exceptional quality of life for El Pasoans and what they currently enjoy. Part of that quality of life is the ability to navigate our roads without the congestion normally synonymous with large metropolitan areas.

It was my hope that today I would address you as a part of a group that's considered a team and finding ourselves in consensus. That, unfortunately, is not the case, but I will tell you that irrespective of your decision today, the chamber and myself, as a spokesperson for that organization, will work diligently with our elected officials, both in support of this and opposed to this, and hoping to find a unified voice coming before you.

I was captured earlier, as I listened to our friends from Brownsville and Cameron County, to speak of their partnerships and to speak of their successes, working with Mexico, working with Union Pacific Railroad. We have similar challenges in El Paso. We have the Union Pacific, we have Southern Pacific, we have Burlington Northern, and we also have them stacked in the middle of our community running parallel to our Interstate 10. So we have the same challenges that they face, but I was particularly impressed by the fact that they've taken an approach utilizing the tools of the RMA and working on those solutions and how to move the railroad transportation process out of downtown central which is a challenge we are facing as well.

I attended the first Annual Conference hosted by the Transportation Commission, and while there were many good things that came out of that and I learned a lot, I was particularly struck by the address by Secretary Mineta as he gave the keynote address at lunch, and I thought he was extremely eloquent. And what he basically touched on was we can no longer afford, if we are a growing community, to address our needs in transportation in the fashion that we've always done in the past. To do so is to put ourselves at risk.

The phrase that comes to mind to me, and we use it probably too often: If we always do what we've always done, we will always get what we have always gotten.

I think I was brief, I hope I was brief. I am available for any questions or comments. I thank you all again, on behalf of the El Paso Chamber of Commerce, for your time.

MR. WILLIAMSON: Don't leave. I think we're going to do questions and comments after we hear from everybody. Thanks.

Council Member Lozano.

MR. LOZANO: Good morning. Of course, our regional mobilities are regional, it doesn't have any borders. Anyway, I'm Jose Alejandro Lozano, District 3; I represent 77,000 citizens in El Paso. And of course, with all due respect to Mr. Richard Dayoub, he represents the great citizens, business owners of our community which I respect, Mr. Paul Foster, Mr. Stanley Jobe, and many others that really provide a lot of good to our community.

But it's about our community in general, Honorable Chair and commissioners. Every Tuesday we sit in the chambers in El Paso and hear the requests of citizens, their cries, their hurts, their situations, but many times we only hear them and we don't listen to them, we just do what government wants many times. And this is about our citizens in general, all of them, the region: New Mexico, El Paso, the surrounding communities, Ciudad Juarez. We have to work together. Today I hope that you listen to our concerns.

I agree two weeks the vote of the MPO for the RMA. You have to remember there was 15 elected officials in that commission, the other ones are city employees, and I have a problem with that. Out of the 15 elected officials, eleven voted no, only four elected officials voted for it. These are the voices of the citizens of the community of El Paso, of the whole county, all the mayors and the representatives.

Today I will also ask you don't take any action today. We need to work out our differences, we need to go back to El Paso and maybe consolidate the MPO and the RMA and make it elected officials, by the whole community, by the whole county, and be members of the voice of the community, the elected officials. We need citizens to be responsible and responsive and accountable to the voters of this great state.

Thank you very much. I'm against, of course, you know; if you cannot take any action.

MR. WILLIAMSON: Thank you, sir.

Council Member Ortega?

MR. ORTEGA: Good morning, commissioners, Chair Williamson. And a special good morning to Ted Houghton, who I want to thank all that you've done for the city of El Paso and the great state of Texas. I happen to represent Mr. Houghton on the El Paso City Council, and I support the RMA.

And just taking a look at the tenor of the debate, I feel it's come down to whether or not the MPO is a proxy for public support, and I will submit the answer to that is no. There are 15 elected officials on the MPO but the way that I view the selection process, a lot of times the government leader, and in our case the mayor, will select which council members sit on the MPO. For the city of El Paso, in our case we have three selected in addition to the mayor. This can be manipulated and it can be manipulated with the other government entities in El Paso County as well.

The sponsoring organization here is the City of El Paso and the eight representatives and the mayor were all publicly and properly elected by the citizens of the city of El Paso. Of all the elected officials that sit on the El Paso City Council, you have six of the nine public supporting the RMA, two-thirds of the city council publicly supports the RMA. We're held accountable to the citizens that we represent. We have spent a lot of time going out to the community.

I think if you take a look at some of the measures that have been taken in El Paso, we've exceeded the requirements, we've exceeded due diligence and community outreach, and I think there's something to be said for that. Some of the elected officials have said, Well, let's wait for there to be community consensus. And if you take a look at the history of El Paso and the politics in El Paso, if you wait for community consensus, you'll be waiting forever, it's not going to happen. I think the time to act is now.

We've had the senator, we've had the mayor state the burden that El Paso is now facing with increased population from Fort Bliss which is artificially induced, and you also have a very high natural population increase. El Paso is the 24th fastest growing city in the United States of America and our transportation infrastructure needs are not being met.

So in asking and questioning these issues of community support, I would ask you to take a look at the makeup of the council members, take a look at the support from the mayor who was properly elected by the citizens of the community, who is held accountable to those folks, and I think there is public support for this.

I'd finally just say a couple of comments were made concerning the discomfort, and I will be the first to agree. Going out to the community initially and talking about the RMA, there is a lot of discomfort, there's no doubt about it. At the beginning of the meeting we had a presentation on Dwight Eisenhower and the national transportation network that he embarked upon, and I'm sure he had discomfort too. But after doing due diligence, I think we've done our due diligence, after you take a look at the arguments that have been made, I hope that you will find that although there is discomfort, at the end of the day it's the right thing to do.

And so I, for one, am asking you for your support on this petition. Thank you very much.

MR. WILLIAMSON: Thank you. Eddie? Now, I've got to ask you, is it your father that's the transportation guy?

MR. HOLGUIN: No, sir.

MR. WILLIAMSON: I met him, he's a nice guy.

MR. HOLGUIN: Mr. Chairman, honorable commissioners. I'm Eddie Holguin, Jr., city representative for the Mission Valley in El Paso, Texas. I'm here to speak on behalf of the 77,000 people of my district that I represent on the important issue of regional mobility authority.

To date, the members of our very own regional metropolitan planning organization, our state delegation, the bulk of the cities in the region, as well as county elected officials oppose the implementation of a regional mobility authority. Frankly, we agree with those that have serious concerns about the impact of implementing an RMA. Regarding the accountability of a new government, my constituents do not want an RMA and they completely reject the idea.

Do not misunderstand, El Paso wants to move forward with important projects and we'll explore every avenue of financing, however, we feel an RMA at this time is not the right vehicle for our region, it will not help us go where we want to go. We want to keep the maximum flexibility with maximum accountability, but we need taxpayers and voters in control of the process and their decisions. We do not need an authority with potential conflicts of interest and little local accountability.

Today you will hear and you've heard from some elected officials that purport to represent the majority of our region, and make no mistake, they do not speak for the people of El Paso. Every poll that has been conducted shows clearly that the people in El Paso do not support an RMA.

Furthermore, my own view is that we must let the people decide; the decision should not be in the hands of a few but in the discretion of the many. That is the American way. Allow our people to vote for or against an RMA. Most of the elected officials already have and we've said we do not want one. So if you're not going to listen to the elected officials, then let's listen to the people of El Paso.

Texas has always demonstrated its independence and our history is one of fighting tyranny. Let's respect the democratic process, and on behalf of the 77,000 people that I represent, I respectfully request that you do not approve an RMA for El Paso today.

MR. WILLIAMSON: Thank you, sir.

Now, Hope, we have to make a decision. It's 1:15, we have a variety of public transportation matters we have to take up, I know that you want to take them up with public transportation persons who are here to participate, I know they're going to take longer than 15 minutes. Do you wish for us to lay this matter aside for a moment and proceed with that, or do you wish to proceed with this which I judge is going to take probably about 45 minutes, or would you rather me just make the decision and take you off the hook?

MS. ANDRADE: Mr. Chairman, I would like to participate, and my concern also is that I have to take the staff with me. So if it's all right with you and if you think we can take care of this by 1:40, I'd like to take care of those issues.

MR. WILLIAMSON: The El Paso or the PTN?

MS. ANDRADE: PTN. And then come back and it might be that we'll still be in the El Paso discussion.

MR. WILLIAMSON: I think it will be about 45 minutes of El Paso.

Okay. Well, Mike, I want to rest on this matter for a moment to give all the members a chance to kind of digest what they've heard and form their questions, and I want to move to the first PTN item on the agenda.

MR. BEHRENS: That would be agenda item number 8, and this we're talking about public transportation and looking at awarding the various federal programs that are available for funding. Eric?

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

This minute order authorizes the allocation of $5,682,411 of Federal Transit Administration Metropolitan Planning Program funds, Section 5303, and $1,666,210 of State Planning and Research Program funds, Section 5304, for public transportation.

Section 5303 funds are allocated using the latest census data so that metropolitan planning organizations receive funds based on the ratio of each MPO's population to the total population of all MPOs. They are used to support a variety of activities, including management and economic feasibility studies, evaluations of previously funded projects, development of transportation plans, TIPs and other related activities preliminary to and in preparation for improvements to public transportation systems, facilities and equipment.

Section 5304 funds are used to offset eligible department administrative expenses and to provide financial assistance for planning support in a variety of ways in a variety of different areas throughout the state, either by department direct expenditure or grant award. And should grant awards be needed under this program, those awards will be recommended under a separate minute order.

We recommend approval of this minute order.

MR. WILLIAMSON: Any testimony?

MR. BEHRENS: Not on this one.

MR. WILLIAMSON: Okay, members, you've heard staff's explanation and recommendation, we have no testimony. What's your pleasure?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

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

MR. BEHRENS: 8(b) will be concerning federal funds that are available for Job Access and Reverse Commute programs, and Eric will make a recommendation on that particular program.

MR. GLEASON: This minute order authorizes the allocation of Fiscal Year 2004 U.S. Department of Transportation funds for Job Access/Reverse Commute -- what we call JARC -- projects for transportation operations, administration and capital for colonias.

In 2004 the department received a congressional earmark totaling $2,379,023 for JARC for colonias projects. These funds were to be used to establish transportation for colonias residents for access to employment, job training and childcare. Following receipt of the earmark, the department conducted a comprehensive outreach process with local stakeholders and potential partnering agencies to determine the best use of the requested funds.

Additionally, in February of 2005, the commission expressed its intent to award up to $1,104,000 in toll credits, known now as transportation development credits, for vehicle purchases associated with projects under this grant. Project awards are based on identified needs, the extent to which projects address these needs, documented level of coordination between human service and transportation planning, and documentation of financial commitments.

A contingency list is established, and should funding de-obligations in the corresponding transportation development credits become available, funds will be offered to the agencies in the order in which they are listed.

We recommend approval of this minute order.

MR. WILLIAMSON: Do we have witnesses?

MR. BEHRENS: No.

MR. WILLIAMSON: Members, I'm going to have one question. You've heard the staff's explanation and recommendation. Do you have questions?

MR. JOHNSON: I have one. Eric, there's some specific recipients named for the JARC projects. Is that correct?

MR. GLEASON: That's right.

MR. JOHNSON: And then there's some others that are not on the recipient list but are named as I'll call them alternates. Is that correct?

MR. GLEASON: Contingency list, yes, sir.

MR. JOHNSON: Is the contingency money distributed pro rata, or is it distributed on a first, second, third, fourth basis?

MR. GLEASON: We have proposed to distribute it on a first, second, third, fourth basis. The order in which you see the contingency list, that would be the order in which, as funds become available, we would distribute those funds.

MR. JOHNSON: So is Brownsville the first alternate, if that's the appropriate nomenclature?

MR. GLEASON: That's correct.

MR. JOHNSON: All right. Thank you.

MR. WILLIAMSON: I'm sure, members, you've all been contacted, as have I, by certain House and Senate members particularly concerned about, I think, the McAllen position.

And I think we're sometimes criticized for this but we put a great deal of trust in our staff and we have no less trust in you than we do anyone else on our staff. We believe that we approach things correctly and we think you've approached this one correctly.

I think the message we want to send from the department is we want everybody to be able to compete for these things and we have observed that your application perhaps isn't as strong as it should be and we want to reach out and help them in future applications so that they can compete. And I don't want you to hesitate to tell us what resources you need to do that because I think it's pretty important.

MR. GLEASON: Okay.

MR. WILLIAMSON: And I know that you think it's important as well.

MR. GLEASON: Yes, sir.

MR. WILLIAMSON: As I said to one of my friends in the legislature, I wouldn't want you to think that your community was ignored because it was your community, we're just very competitive here now at TxDOT and we do things according to a competition-based decision-making, and maybe we need to help out some parts of the state compete better. Tell us what you need to help get to that spot.

MR. GLEASON: Okay, sure.

MS. ANDRADE: Mr. Chairman, and I want to echo that, and thank you and the commission for the support, because we did have some new ideas and I think that we're on our way to make the most of the monies that we have, but we are committed to reaching out to those communities and helping them when they apply for these grants. So we'll work closely together. Thank you very much.

MR. GLEASON: Yes, ma'am.

MR. WILLIAMSON: Any other questions or discussion with Eric on this item, members?

(No response.)

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation and explanation in response to questions. What's your pleasure?

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

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

MS. ANDRADE: Thank you.

MR. BEHRENS: Now another item that pertains to public transportation will be in our rules and this will be Rules for Final Adoption, agenda item 9(b)(2), and these rules pertain to our formula programs for some of our programs in Public Transportation. Eric?

MR. WILLIAMSON: Another non-controversial topic taken up by the Texas Department of Transportation.

(General laughter.)

MR. BEHRENS: If you would lay those out, please, Eric.

MR. GLEASON: This minute order adopts amendments concerning the Public Transportation state allocation formula and federal grant funds. These amendments affect state funds allocated to small urban and rural public transportation providers and Section 5311 federal funds for non-urbanized area or rural area public transportation providers.

A public hearing on the proposed amendments was held on May 4, 2006, and during the comment period we received comments from three sources focusing on the following areas proposed for amendment:

An increased emphasis on performance. There was some expression of support for this while others highlighted the need for consistent and reliable data and raised concerns over the diversity of rural system operating environments and the validity of comparison among those systems. We have engaged the services of the Texas Transportation Institute to address the quality concerns and believe that the mix of performance indicators included in the rules address the concerns about varying operating environments.

The second area of comment on the proposed amendments went to the proposal to eliminate the transition period that is called for in the current rules. The rules support the desire to continue to minimize the impacts of dramatic swings in funding by establishing a no more than 10 percent reduction cap from one year to the next for any individual provider on a permanent basis.

And finally, there was support for establishment of funding tiers within the state urban program that are proposed.

Additionally, a number of comments addressed portions of the Administrative Code not proposed for amendment, and no changes to the rules were made as a result of these comments.

The Public Transportation Advisory Committee met on May 19, 2006 following closure of the public comment period, and by motion recommended adoption of the amendments. We recommend your approval.

MR. WILLIAMSON: Members, you've heard the explanation and recommendation. We have three witnesses, with your permission. I think we'll take them -- since I don't have clear guidance -- in alphabetical order. Ben, you're first.

MR. HERR: Good afternoon, Chairman Williamson and members of the commission. For the record, my name is Ben Herr. I'm executive director of the Texas Transit Association. The Texas Transit Association represents the 77 transit operators in the state, to include the metros, the small urban, and the rural operators. In addition, we have over 50 associate members such as manufacturers, consultants and management companies that support the transit industry in our state.

I'm here this afternoon to convey Texas Transit Association's support of these new funding formula rules. I would like to thank the members of the commission for providing the leadership and direction to ensure that the transit providers have a well defined, well researched funding formula that will provide an equitable distribution of both state and federal funding.

I would especially like to thank the staff from TTI, the members of the PTAC, and the Public Transportation Division for their hard work and dedication to improving upon previous versions of the funding formula and coming up with a version that has drawn relatively few complaints and voices of concern from the transit community.

Yesterday, Eric Gleason announced at the PTAC meeting that the department has contracted with TTI to conduct performance measure training verification. This is extremely good news and I thank the department for taking this approach.

During the rule-making process, several transit operators expressed to me their concern about the accuracy of performance measures and the impact this would have on their future funding. The department has taken a proactive step in the right direction by contracting with TTI to assist with ensuring accurate and reliable performance measurements.

I believe that this contract will help to reduce some performance measure anxiety and will help to provide a level playing field for all the transit operators affected by the increasing emphasis on performance measures.

Once again, I'd like to thank the commission for its support of transit providers. Public transportation provides a valuable service to the citizens of Texas and the transit industry is a strong contributor to the department's five stated goals, especially in transit's ability to help reduce congestion, expand economic opportunity, and improve air quality.

MR. WILLIAMSON: Very good.

MR. HERR: Thank you for all that you do for transit and thank you for giving transit the opportunity to contribute to the department's goals. The Texas Transit Association would like to recommend the commission approve this minute order. Thank you.

MR. WILLIAMSON: We thank you, Ben. Are there any questions of Ben?

MR. HOUGHTON: I think Ben gets a bonus for that. Right?

MR. WILLIAMSON: Absolutely.

(General laughter.)

MR. WILLIAMSON: The closer we can weld public transit to building highways, to building roadways, to building steel roads, the better off we all are. Everything is transportation.

MR. HERR: Thank you, Mr. Chairman.

MR. WILLIAMSON: Thank you, sir. Ken Smithson?

MR. SMITHSON: Good afternoon, Mr. Chairman, members of the commission.

MR. WILLIAMSON: How are you doing?

MR. SMITHSON: I'm fine, thank you. My name is Ken Smithson, I'm the general manager of Easy Rider in Midland-Odessa, and I just wanted to thank you for your consideration of this item today, and your support of public transportation in general. I also appreciate the stature that you've afforded to the Public Transportation Advisory Committee and the value that you place in their recommendations.

I got to sit in on one of the workshop sessions held earlier this year at the local district office, facilitated by the Texas Transportation Institute, on the funding formula, and I really appreciated that opportunity as well. I thought that was very beneficial, and those were held in many places across the state.

I think the proposed funding formula is a big step forward in establishing a more equitable distribution of limited dollars, and it appropriately places greater emphasis on performance indicators, including greater investment from local governments rather than exclusively relying on federal and state resources.

So I appreciate your consideration of this matter.

MR. WILLIAMSON: That's kind of you. The statute is elevated because of the class and aplomb with which Commissioner Andrade conducts herself. She lifts us all.

MR. SMITHSON: I agree.

MR. WILLIAMSON: Has anybody got questions, comments?

MR. HOUGHTON: I got to ride in one of their buses in Lubbock last week -- not Lubbock but Midland-Odessa last week.

MR. SMITHSON: And those were partially purchased with transportation development credits. We appreciate that.

MR. WILLIAMSON: Yes, forced out of me.

MS. ANDRADE: And I have to acknowledge that he called me while he was on the bus and he sounded very proud. Thank you, Commissioner Houghton.

MR. SMITHSON: I heard his phone call; I was driving.

MS. ANDRADE: I saved it.

(General laughter.)

MR. SMITHSON: Thank you very much.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Thank you, sir. John? Good to have you back, John.

MR. WILSON: Thank you very much. Mr. Chairman, members of the commission, good afternoon. My name is John Wilson, I am the general manager of Citibus in Lubbock. I also currently serve as the vice chairman of the Public Transportation Advisory Committee and president of the Texas Transit Association.

I would like to express my support for the proposed revisions to the public transportation funding formula being considered by the commission. In my capacity as vice chair of the Public Transportation Advisory Committee, I know that a significant amount of time and effort was invested by the committee, by the staff, and by others involved in the process of developing the proposed formula. I believe the department utilized a thoughtful process to develop a meaningful formula that advances statewide goals.

I would like to express my gratitude to department staff and to all members of the PTAC for the work that went into producing this version for the formula for the commission's consideration.

In my capacity as general manager of Lubbock Citibus, I would like to point out that Lubbock will continue to experience decreases in state funding flowing from the formula, however, I know that the proposed formula represents the best effort to date to consider a variety of needs and interests while pursuing legitimate goals, therefore, we are supportive of the proposed formula revisions.

Finally, I'd like to take this opportunity to provide some comment in my capacity as president of the Texas Transit Association. There are many systems like Lubbock who have sustained decreases from previous formulas and will continue to experience decreases in this revision. Losing funding at a time when costs are accelerating is always difficult and creates a greater burden upon local funding. The Texas Transit Association understands these concerns and the general importance of local funding as part of local transit budgets. Therefore, the association will be undertaking the efforts to educate and inform members of ways to enhance local funding and to maximize the benefit of local funds that are available.

While serving in a leadership position with TTA, I have worked to bring together the diverse interests and positions of many members and stakeholders with that of the department. Thank you for the opportunity to address the commission and thank you for all the stuff you do for the state.

MR. WILLIAMSON: John, you're too kind. Any questions or comments for John?

MR. JOHNSON: I think, John, it's very rare when someone comes before any disbursing agency and says look, I'm getting less money but we understand what the big problem is, and I congratulate you for the realism and making that point well known but also understood.

MR. WILSON: Thank you.

MR. WILLIAMSON: Well, I think what sometimes gets lost in the conversation is we are striving -- that's the second time I've used that new word today -- we are striving to lay the groundwork to go to the legislature together and ask for a healthy increase in general revenue, and one of the ways that we can defend that position -- well, the first way we can defend it was to be assured that a good transportation person like Robert Nichols got elected to the state senate, the next thing we could do is bring formulas across the street that says okay, after all these years we've resolved, we've got a base system, we've got a reward system, we're focused on performance, this is as good as it gets, now we need an investment in the process.

So I think you're going to find that we'll be glad that we did this, however painful it is, but like John, I appreciate the fact that your words mean something.

MR. WILSON: Thank you very much, appreciate you all.

MR. WILLIAMSON: Thanks for being here.

MS. ANDRADE: Thank you very much.

MR. WILLIAMSON: Those are all the witnesses, members. You've heard staff's recommendation, you've heard the testimony. What's your pleasure?

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

And Hope, I'd really like the El Paso persons start again, I know there's a couple of other things that you're kind of interested in.

MS. ANDRADE: Mr. Chairman, thank you for accommodating us, and our staff and representatives are going to go to the meeting, and I've already sent them a message that I will be delayed so that I could participate in the El Paso vote.

MR. WILLIAMSON: Well, I know they're back in the back, or some of them, not all. We're going to take exactly three minutes to kind of stretch, and then we're going to start with Chuck. Chuck Berry, are you here? I'm assuming Chuck Berry is someplace. I'm going to start by asking Chuck and Amadeo and Phil some questions, if you don't mind.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: We'll come back to order from a brief recess, and Mike, let's return to the item on the agenda concerning El Paso. With your indulgence, I'd like to visit with Chuck Berry, our district engineer.

Chuck, I have a few questions. This is one of those rare times where I don't have a sense of where the commission is, and so we're going to have to kind of flesh things out from the darkness of ignorance perhaps to the sunshine of revelation.

Much has been made by some of the testimony about whether or not the establishment of a city RMA is supported by the public, and I made notes on the testimony, there was a considerable amount of reference to the MPO vote. What percentage of people who live in El Paso County, as far as you know, live inside the city limits of El Paso?

MR. BERRY: We've been reporting 85 percent.

MR. WILLIAMSON: Do you know off the top of your head the percentage of people who live in El Paso County who were represented by mayors or other locally elected officials that voted to not support the resolution?

MR. BERRY: No.

MR. WILLIAMSON: Would that be something you could calculate?

MR. BERRY: Right here, right now, probably not. Most of those areas, if not all of them, were represented at that meeting, including the area that's represented in southern Dona Ana County, Dona Ana being New Mexico. So there was a good representation at that MPO meeting for people that were outside the city limits of El Paso.

MR. WILLIAMSON: And do you have any idea what percentage of people live outside the city of El Paso that don't live inside of one of those cities? In other words, if 85 percent live inside of El Paso, do the other 15 percent live inside other cities or does 10 percent live in the country and 5 percent live in incorporated cities?

MR. BERRY: It's probably close to split; that would be my estimate: split between the people that are inside the incorporated areas and those that are not. Because there are several communities that are out there that are not incorporated areas and yet they're pretty good sized groupings of people.

I'm now remembering that our Montana Vista area in the northeast part of the county along 62/180 is a huge population center that's growing out there that is not represented by a city, they would be inside the El Paso County.

MR. WILLIAMSON: The project that is referenced in the RMA application has been represented to us to have been approved by the members of the MPO. Is that correct?

MR. BERRY: That is correct.

MR. WILLIAMSON: Was that project approved as part of their normal plan?

MR. BERRY: The approval was for the purpose of including it in the metropolitan transportation plan. The project had been included in parts but we needed to have it included with the mobility proposals, the express toll lane part of the project that was to be a major part of the funding, so we needed to have that incorporated into the planning.

MR. WILLIAMSON: And when that was done, was there any context of the RMA? What was the discussion at that point about who would sponsor the toll lanes, who would come up with any equity if necessary? Was it going to be a TxDOT project?

MR. BERRY: There was very little discussion on the finances of the project. Typically it was just the numbers for the cost, where the money was coming from, but not who would be sponsoring the project. When the RMA issues would come at that point, we were deferring them to a later date because although they complement each other, we don't have to have it as a part of the program, it could run in a couple of different options.

MR. WILLIAMSON: The beginning and the end of the project, are they both located inside the city limits of El Paso?

MR. BERRY: That is correct, yes, sir.

MR. WILLIAMSON: Members, I'm no doubt going to have some more questions for Chuck, but if you have some questions you want to ask of him, please do so. You don't have to.

MR. HOUGHTON: I do. Chuck, it's been represented that money was spent on a public awareness campaign. Can you talk about that a little bit from your perspective?

MR. BERRY: Yes, sir. Typically the El Paso District tries to go out and accomplish as much public involvement as possible. This was a huge issue in trying to inform the public about what our proposal was for the I-10 southern relief route. We had evaluated over 150 options in the region for what might be the best way to resolve our mobility concerns, and had developed a recommendation for improving Loop 375 through the southern part of the county up against the international border with Mexico as a parallel route for Interstate 10 that would provide an option to that.

We have never considered a project of that magnitude in our history. From end to end, when you do go outside the city limits, if you were to consider the project from the New Mexico state line to beyond the city limit in El Paso County, we are talking about on the order of an $800 million program, and that's simply for construction. Something of that magnitude had to really get out and get to the people.

We had over three dozen public meetings with neighborhood associations; we put advertisements in the newspapers trying to tell people of when our four open house meetings were going to be held; we took the step to place this information also on the radio and purchased TV spots for presenting this information on what was the proposal, what was it like, and then these TV spots would close with the information on the next public meeting. The TV and radio spots were right at $100,000 for that part of the campaign.

MR. WILLIAMSON: One of the persons testifying indicated that the tenor of the ad was to sell an idea as opposed to inform the public. Was that because the ad appeared to be positive in that way? I mean, clearly the person who testified to that believes that.

MR. BERRY: It was intended on what is the recommendation and what is it not. This is the recommendation to create a parallel route to Interstate 10 along the southern relief route and that the information campaign would say what it was and what it wasn't, because it was a lot of misinformation about what was being proposed by TxDOT out in the public and we felt a very strong need to inform as many people about it as possible.

I got a number of comments that it was helpful, I got some comments also that were questioning hey, we've never done that before. My typical response was we've never proposed an $800 million program of construction before either.

MR. WILLIAMSON: Okay, can you stop for just a second?

You're going to hate me for this, Mr. Chase, but I want to talk to you. I never give him any warning. I neither wish to protect nor wish to not protect good employees when they do things entrepreneurially, by my recollection is in our focus groups on the Trans-Texas Corridor and on toll roads generally -- which your division was intimate in setting up and conducting -- our public hearings, not focus groups, we were told repeatedly: TxDOT, you do a bad job of advertising what toll roads are and what they are not. Is that correct?

MR. CHASE: For the record, my name is Coby Chase. The answer to that is yes.

MR. WILLIAMSON: And as a result of that, through at least two -- that I'm aware of -- district engineer meetings we tried to emphasize to division directors and district engineers that we had to become more expressive in explaining what the toll program was and what it wasn't.

MR. CHASE: Yes, sir.

MR. WILLIAMSON: Thank you.

Chuck, is it the case that you had been incented from the commission and from administrative staff to not be afraid and to be entrepreneurial and to approach it that way?

MR. BERRY: Yes, sir, that's part of the program.

MR. WILLIAMSON: And was the advertising, as far as you know, reviewed here in Austin?

MR. BERRY: Yes, it was.

MR. WILLIAMSON: After complaints were received?

MR. BERRY: During and before, yes, sir.

MR. WILLIAMSON: I think the decision was it was dang sure entrepreneurial and a little bit different from what TxDOT had done but we felt like it was objective.

MR. BERRY: Yes.

MR. WILLIAMSON: I'm through with you for a moment.

MR. HOUGHTON: Can I ask one more question?

MR. WILLIAMSON: Oh, please, yes.

MR. HOUGHTON: The only question I have other is the Northeast Parkway was alluded to as being pulled off the plan.

MR. JOHNSON: I heard two projects.

MR. HOUGHTON: Why would the Northeast Parkway not be feasible at this point in time?

MR. BERRY: It hadn't been pulled off the plan. The Northeast Parkway, along with other portions of the mobility study that has been performed in El Paso County continue to be included in the plan. What we had recommended to our El Paso MPO was that we re-prioritize projects to build the most urgent, most needed projects first. Our analysis showed that the most benefit to relieving congestion along Interstate 10 would be gained by constructing two portions along Loop 375, what's now called the I-10 southern relief route, and that the other projects would stay on the plan but their construction would be deferred to a later date. We wanted to build the most important stuff first.

MR. HOUGHTON: What's the obstacle on the Northeast Parkway?

MR. BERRY: It's a 20-mile route from where it leaves out State Highway Loop 375 to where it reconnects with Interstate 10 in southern New Mexico, Dona Ana County, at New Mexico State Highway 404 interchange with I-10, about 20 miles. Nearly exactly ten miles of the proposed route is in Texas, nearly exactly ten miles of the proposed route is in New Mexico. We've coordinated with New Mexico, and New Mexico has some existing two-lane highways that comprise the proposed route, Texas has nothing. It would be new location in Texas, it would be proposed expansion in New Mexico if the expansion were deemed to be necessary.

We planned a ten-mile construction project for Texas because New Mexico was not able or not willing to include that ten-mile section of the project in their statewide development plan. I believe that Mayor Cook was involved in discussions with New Mexico, I was involved with discussions with my New Mexico counterparts to try and get them to prioritize that work, but we were unsuccessful. It's not a priority in New Mexico. I think some of the words that were reported in El Paso were that it's not a priority in New Mexico to take care of an El Paso problem.

We developed a project that was ten miles long and essentially a super two. I think you are familiar with the super two design because the four-lane divided wouldn't make sense unless we had a four-lane divided for the other ten-mile route in New Mexico. The super two design was developed, we performed traffic analysis on it, and lost like 50 or 60 percent of the traffic that otherwise would have taken the route if we had a four-lane divided all the way through from Texas into New Mexico. It did not turn out to be very productive with toll revenue and toll-bonding capability was very, very low.

MR. HOUGHTON: So you just made a statement that New Mexico indicated it was a Texas problem and they were not interested in helping Texas with its problem.

MR. BERRY: Those are the reports that I heard of others that heard those replies; I did not ever hear that directly.

MR. HOUGHTON: But they vote at the MPO level to block certain Texas initiatives.

MR. BERRY: Our metropolitan planning area is established by the Federal Highway Administration and includes southern Dona Ana County. Southern Dona Ana County has four representatives on our El Paso MPO Transportation Policy Board that consists of about 25 members or so -- it's 24 or 25 members, I believe. Three of them voted on the RMA resolution.

MR. HOUGHTON: Voted which way?

MR. BERRY: They voted in favor of not -- I'm trying to get that straight -- they voted against the RMA resolution. The motion was actually not to support to the resolution, so they voted in favor not to support.

MR. HOUGHTON: My next question is who is chair of the MPO now.

MR. BERRY: State Representative Joe Pickett is the chair of the El Paso MPO.

MR. HOUGHTON: Who will be the chair when he rolls off?

MR. BERRY: The elections are held in July of each year. I don't recall if it's part of our by-laws or if it's traditional. The chairperson is elected at that July meeting and that's yet to be held.

MR. HOUGHTON: Who is vice chair?

MR. BERRY: The vice chair is Mayor Ruben Segura from the city of Sunland Park, New Mexico.

MR. HOUGHTON: What's the population of Sunland Park, New Mexico?

MR. BERRY: I'd have to estimate, I don't recall it off the top of my head. It must be 10,000 or so, if it's that big. The delegation from El Paso is telling me it's about 5,600 population in Sunland Park, New Mexico.

MR. JOHNSON: Chuck, the changing in the prioritization of certain projects on the program, the timing of it, did it have anything to do with the consideration by the City of El Paso to form an RMA?

MR. BERRY: No, sir, none whatsoever. The re-prioritization of projects is what we continuously do to try and make sure we're addressing the most important projects first. The Northeast Parkway had been considered for a long time to be a very viable and beneficial project to proceed with, but when we couldn't build the other ten miles of it, it became much less beneficial to helping reduce congestion along Interstate 10. We're talking about on the order of 230,000 vehicles a day at the maximum point of traffic volumes on I-10 in El Paso, 230,000 vehicles every day.

MR. WILLIAMSON: I'm sorry, John. I need to follow up, though, what you just said. I was of the impression, listening to the testimony -- and maybe I assumed and I shouldn't have -- that the MPO action of moving the northeast road down the priority list was specifically to free money up for the RMA and their project.

MR. BERRY: That's partially correct. It was to free up the money for that project regardless of who developed the project, whether there would be an RMA or not.

MR. WILLIAMSON: So one could not use that as an argument against the RMA. What I heard a while ago was -- and again, I could have mis-heard -- was well, they want to form this RMA and look what they've done, they've already taken money away from another project in order to get it done.

MR. BERRY: Sir, the El Paso MPO voted for that re-prioritization at TxDOT's recommendation. What we feel very strongly is our responsibility out there is to come up with the technical recommendations for our policy-makers to approve of. We made that recommendation and the Transportation Policy Board approved it back in May of this year.

MR. WILLIAMSON: Now, we're not going to lose Chuck. You don't need to ask him all your questions unless you're on point. Anything else with Chuck?

MR. JOHNSON: Well, while we're on this issue, the 375 which is the initial project, is it 100 percent toll-viable?

MR. BERRY: No, sir, not at all. It's a $466 million construction cost estimate and the preliminary toll-bonding capability was right at $190 million.

MR. JOHNSON: So there's a gap, if I can use that word, of $270 million or thereabouts.

MR. BERRY: The two projects that you asked about earlier were projects that we used to help close that gap. One was $81 million -- might have been $80- -- from the Northeast Parkway, and the other one was approximately $90 million from an expansion project that had been proposed on Interstate 10, much of which coincides with the work that's being proposed on the southern relief route. I don't have the percentages of how much we would actually be building on Interstate 10 as a part of the southern relief route, but I'd have to say it would be at least 50 percent of the work that had been proposed under the I-10 widening project will be accomplished anyway as part of this I-10 southern relief route.

MR. HOUGHTON: So Chuck, my math says you're still about $100 million short. How are you filling in that gap? Is that Mobility Fund money?

MR. BERRY: We got to the point where we were approximately $50 million short of the construction funding amount for the I-10 southern relief route, so there's another project in there somewhere.

MR. HOUGHTON: Is it Mobility Fund money that's programmed in there too?

MR. BERRY: That's the $80 million from the Northeast Parkway, and I believe now it's $88 million, if I'm not mistaken, so that helped close that gap.

MR. HOUGHTON: Okay.

MR. BERRY: We're within about $50- or $52 million of being able to account for all the funding for construction that's necessary.

MR. HOUGHTON: What's the largest project you've ever let in El Paso?

MR. BERRY: The largest single construction project?

MR. HOUGHTON: Yes.

MR. BERRY: I believe we bid a $48 million construction project for rehabilitation along Interstate 10 outside El Paso County because it was like 20 miles long, concrete construction. That's the largest project to my knowledge.

MR. HOUGHTON: So this is ten times the size and within the city limits.

MR. BERRY: If my memory is correct for that being the largest project we've ever done, yes, sir.

MR. WILLIAMSON: Man, this guy is protecting himself.

MR. BERRY: I didn't want my staff to say, Chuck, you forgot that $65 million job.

MR. WILLIAMSON: Okay, take a seat for a second.

Amadeo? Permit me to display my lack of information as a member of the Transportation Commission. The boards of MPOs, how does the El Paso area decide the makeup of its board?

MR. SAENZ: The makeup of the board of the MPO is, in essence, determined by the board themselves through by-laws.

MR. WILLIAMSON: Well, how does it first get determined? In the beginning, God created heaven and earth. In the beginning, how did it get created?

MR. SAENZ: That was before my time.

(General laughter.)

MR. WILLIAMSON: Well, you've got the most gray hair, I thought you'd be the one to be able to answer the question.

MR. SAENZ: We'll have to compare.

MR. WILLIAMSON: Well, you damn sure got more hair than we do.

MR. SAENZ: My guess would be that at the time when MPOs were formed -- of course, they're made up of elected officials -- it was supposed to be made up of mostly elected officials of the region of this urbanized area and you have the members of the city, you have the members of the county, they then become kind of members of the MPO. Then they decide through by-laws to identify their board membership. At least, that's kind of what we did in the Valley.

MR. WILLIAMSON: The reason I ask is I notice in El Paso and in Austin there are a lot of elected officials on the MPO board compared to my part of the world where there's very few. I'm just kind of curious how that works.

MR. SAENZ: Well, if you look at the federal guideline, it says that the membership of the MPO needs to be made up of a majority of elected officials, and they're elected officials that are within the metropolitan boundary. So based on that, they would have identified a metropolitan boundary, then elected officials would then become members.

Bob may probably know a little bit more.

MR. WILLIAMSON: Does our crack legal staff know the answer to my question: In the beginning, who created the MPOs?

MR. JACKSON: Federal law gives it to the governor and the local officials to decide membership of a board. The state transportation agency, by federal law, is on the board, and otherwise it's locally elected officials and transit agencies. And I'm Bob Jackson, deputy general counsel.

MR. SAENZ: Bob, hasn't there also been some state statutes, state laws that have put in place statewide elected officials on MPOs? I seem to remember something.

MR. JACKSON: No.

MR. WILLIAMSON: Okay, thank you, Bob.

Phil? Why would anyone want to form an RMA?

MR. RUSSELL: What was the question, Chairman?

MR. WILLIAMSON: Why would anyone want to form an RMA?

MR. RUSSELL: That's kind of an open-ended question, Chairman.

MR. RUSSELL: You know, ultimately I think it's all the things we heard about this morning: people like to have control over their local affairs, they like to be the master of their own destiny.

MR. WILLIAMSON: Well, if the City of El Paso didn't form their RMA and if this wasn't approved as a project, could the Department of Transportation pursue those toll lanes as a project?

MR. RUSSELL: Sure.

MR. WILLIAMSON: Would the MPO have to agree to let us do that?

MR. RUSSELL: The MPO ultimately will have to approve any of these projects regardless of whomever does it.

MR. WILLIAMSON: Would the MPO have to do that even if we came to El Paso next month and said, Tell you what, we're going to solve the problem, we're just going to build it for you, you're not going to spend any of your allocation on it, we'll put up all the money? They would still have to approve it?

MR. RUSSELL: One way or another, whether federal money or projects of regional significance will have to be approved by the MPO.

MR. WILLIAMSON: You quit bobbing your heads. I'm establishing a record here. Come on, you've seen this before.

So it doesn't matter, RMA, TxDOT, Cintra Zachry, that Spanish firm, doesn't matter who it is, if they wanted to build these toll lanes, the MPO would have to approve.

MR. RUSSELL: Any project with federal funds or a regionally significant project, yes, sir.

MR. WILLIAMSON: So no one can go build this road if a majority of the MPO doesn't want it.

MR. RUSSELL: Correct.

MR. WILLIAMSON: Who all do you want to talk to?

MS. ANDRADE: I have something to say to Phil on the question that you asked, Mr. Chairman. You know, again I say that I come from a community that has an RMA and I've been there, I've been there when I've witnessed what can happen when you establish an RMA, and that is that we at TxDOT become the support and the RMA becomes the one that tells the community what the plans should be, and of course the final deciding factor will be the MPO.

But it's great to have a group of people that this is what they're thinking, this what they're looking at, this is what they're studying in transportation, and I have to tell you that it works. And God knows that my community also went through a period of whether they should keep the RMA after they had established it or not, but it was all because of misunderstanding and mis-communication.

And Chuck, I have to tell you that on your marketing or trying to educate the community on the RMA, I know you were doing it because you see what can be done, and so I have to tell you that I know this is difficult, but boy, am I big supporter of RMAs because I've seen it, I've been there, and I know what can happen, and it's great to have local people making decisions about their local communities instead of the state.

I just had to add that, Mr. Chairman, because I've lived it.

MR. WILLIAMSON: Thank you, Phil.

Hey, Chuck, what percentage of people who use Interstate 10 from the east side of El Paso, or south side, depending on how you look at it, to the west side or north side, depending on how you look at it, what percentage live in El Paso County but don't live in the city of El Paso, would you guess that use Interstate 10?

MR. BERRY: That use Interstate 10?

MR. WILLIAMSON: Well, maybe we need to back down from it a different way. What percentage of people use Interstate 10 that don't live in El Paso County, they're just El Paso-ing through?

MR. BERRY: Through traffic? The east county limit in our region carries about 30,000 vehicles a day, the western limit of our region carries about the same, 20- to 30,000 vehicles a day. If all of those people were driving through, it would be about 30,000 vehicles that are driving through the region out of that 230,000 average annual daily traffic that we have at the maximum volume point on Interstate 10. I can't do the arithmetic in my head, we're talking about 15 percent or so.

MR. WILLIAMSON: So rule of thumb, three twenty-thirds, roughly 11 percent.

MR. BERRY: Yes, sir, 10 or 15 percent, in that range.

MR. WILLIAMSON: And so the balance should live in El Paso County.

MR. BERRY: Regional traffic that's moving around the area, from one side of town to the other, north, south, east and west.

MR. WILLIAMSON: Okay. Is there anyone else, staff? I don't want to re-institute testimony, I want to talk to staff.

(No response.)

MR. WILLIAMSON: Okay. Do we want to state positions, do you want to hear me first, what do you want to do?

MR. JOHNSON: You're the chair.

MR. WILLIAMSON: Let me tell you what I think we ought to do. First of all, I want to state again that I am very uncomfortable that this is before this commission, and I think perhaps some anticipated that we would be uncomfortable with this.

I wouldn't say I know more about the law than Mr. Pickett or Mr. Shapleigh, they're sitting members of the legislature. I will say that I have been intimately familiar with this approach to changing transportation for several years and that the role of the MPO is more focused on the projects and not on the creation of a quasi- or governmental body authorized by the legislature.

I think, based on my own knowledge and based on the testimony, that what I heard was that the City of El Paso, as evidenced by its representatives, wishes to create an RMA, and that under the law they're permitted to do that, and that the law was specifically written to permit they and others that opportunity.

I believe the law says that in order to petition us they have to do certain things and identify a project, but we've established now through dialogue that no project can be started in El Paso County without the approval of the MPO. The law also provides that if we approve the RMA, there are certain things they have to go back and do and then they have to bring their project back to us for approval. So if there's no approved project, an RMA is a structure but it has no impact on people's lives -- in other words, it can't be activated without the project.

I think the resolution of this belongs at home, not here. I think that if we defer this, it will be back here and it will always be back here, it will never stop. I think the only way to stop it is to approve the RMA and to look the mayor in the eye and say, We will not put your project on our agenda ever until the MPO approves your RMA. I think that places it back home where it belongs.

I think it doesn't completely give Mr. Shapleigh what he wishes, I think it doesn't completely give Mr. Pickett what he wishes, I think it doesn't completely give the mayor and the city what they want, I think it doesn't completely give the county judge-elect and the other mayors what they want, but I know for certain they'll never be back with their application again because we will have approved it and they won't be able to do what they need to do because we won't take their project up until the MPO approves, and that is a rational way for us to set this back in the community where it belongs.

And Ted, if you're uncomfortable with this, I don't blame you. I'm not comfortable that this is before us.

MR. HOUGHTON: Well, I'm not uncomfortable, I'm disappointed extremely in this community that I come from, that I was born in.

MR. WILLIAMSON: Well, I don't mean to start a fight with you, I just think this is the way to resolve it.

MR. HOUGHTON: No, I'm not starting a fight, I'm extremely disappointed in the community, in the leadership, or the lack thereof, in this community.

MR. WILLIAMSON: I don't want anyone to go out there and say we're forcing toll roads down people's throats because that is a currently often repeated false statement. Whether or not communities choose to toll themselves is up to those communities.

But I see this approach as we'll approve the structure, the law permits you to apply, there's really no reason for us to say no, but we're not going to put the project on our agenda until the MPO approves, and you just need to go home and hold hands and get things patched up. I just think that's the way to approach it.

What do you think, Mr. Johnson?

MR. JOHNSON: Well, my initial thought was that I'm very uncomfortable voting on this particular agenda item today, as presented, because I weigh a lot of the same issues that you do, and what worries me about what you propose is that there is no assurance that the communities out there will ever come to agreement, and as you are aware, there are statewide issues here, and that concerns me. But given the way you have crafted the proposal, I can vote on it today. I think the city has the legal right to form an RMA, by majority I assume their elected representatives have voted to do that, and I don't think that we should stand in the way of that.

But back to my original statement, I'm a dreamer and an idealist and I hope that harmony can come out of this because everybody is going to benefit together and everybody is going to not benefit together. And as Hope said by her remarks and experience thus far in the Bexar RMA, these tools were created to help areas, regions, communities, and they should be taken advantage of, and so I hope they are.

MR. WILLIAMSON: Hope, do you have anything you want to say?

MS. ANDRADE: No.

MR. WILLIAMSON: What's your pleasure, gentlemen, lady?

MR. JOHNSON: I would make the motion that basically you stated, we approve the RMA, and the caveat be that the project needs to be ultimately approved here, the initial project, and until the community can come together with a unified voice that we put them on notice that we're not going to approve the project that they bring forward.

MR. WILLIAMSON: Okay. We have a motion. Is there a second?

MR. HOUGHTON: Second.

MR. WILLIAMSON: Have a motion and a second. I'm not going to call for a vote because Mr. Pickett wishes to address us.

MR. PICKETT: You said earlier that this isn't what Senator Shapleigh would wish for, this isn't something I wish for. This is exactly what Senator Shapleigh or the mayor would want. By this vote you're saying the MPO means nothing, you're saying that the city will create this RMA, that until their project is approved by the MPO -- I mean, I know what the technicalities are that you're getting at.

MR. WILLIAMSON: No, I didn't say that, Mr. Pickett. I said until the MPO approves the RMA. Listen.

MR. PICKETT: I listened, Chairman, and you're not listening. This is what you are set out to do, you planned to do this, this was the decision that you are going to make because it doesn't matter what the public wants or the MPO wants. I know the political reality of this, I know the threats that have been offered to the community if this isn't approved. And it's not a local issue, you're not making this a local issue, you're deciding here and you're telling my community you have no say.

And the only thing that's going to be reported after this vote is we came up here as the majority representing the people of El Paso and the MPO, said no, and it was overridden, and yes, El Paso, you create this regional mobility authority. There's no going back, it's not going to ever not go away after this, and you're just going to wear down the MPO or the individual members until they approve. It won't matter after that.

As far as most people are concerned, all they're going to hear is the RMA was created, so the effect is the same.

MR. WILLIAMSON: Thank you. We disagree.

MR. PICKETT: I guess I'll join Jim at the next meeting.

MR. WILLIAMSON: Thank you.

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. Thank each of you.

Mayor, I would have liked to have given you what you wanted, but despite what the previous affiant said, I think you have a tough hill to climb.

MAYOR COOK: Chairman, with all due respect, I don't think I did get what I wanted, even though Mr. Pickett thinks I did, and now the onus is on me to go back and try to get consensus in the community to petition you to support the project. And as I understand it, you're asking that we get the MPO to agree to support the RMA --

MR. WILLIAMSON: That's correct.

MAYOR COOK:  -- not to support the project, that you would not approve any project that's in our petition until such time as I come back to you with the consensus.

MR. WILLIAMSON: I'm telling you it will not appear on our agenda, I won't permit it.

MAYOR COOK: Thank you very much. I appreciate the courtesy you gave me, and I won't give you the encore song.

MR. WILLIAMSON: Thank you. And we appreciate everybody from El Paso that came here to voice their opinion one way or the other.

Proceed.

MR. BEHRENS: Now we're going to go back on our regular agenda, agenda item number 3, and this will be -- I'm sorry -- I saw James Bass, we overlooked you earlier -- we're going back to agenda item number 2(b), and this is to continue our discussion items, and James Bass will address you on issues on the Legislative Appropriations Request.

MR. BASS: Thank you, Mr. Behrens. Again, for the record, I'm James Bass, chief financial officer at TxDOT.

This month is one in a continuing series of our discussions on the preparations of the department's Legislative Appropriations Request, and I don't have a whole lot of detail to provide you with today other than just to remind you of some of the things we've talked about over the past several months: looking at the department's riders, simplifying those riders, eliminating some of those that are duplicated elsewhere in state law.

We've looked at General Revenue funds that used to come to the department to partially fund some of our programs that over recent years have been moved out and been replaced with State Highway funds. We're also looking at rather than having a hard cap on the number of FTEs for the department, to replacing that with a percentage of our overall budget that we can spend on salaries and wages, and taking the same approach for capital budget projects as well.

One thing I'll note that we've talked about in the recent past, the MAINTAIN IT area of our budget, we're seeing the costs increase, primarily due to fuel which is also leading to utility costs going up. That's reflected and showing an increase in needs of funding just to maintain the existing system, however, in 2008 and 2009, we still see an increase in both the PLAN IT and BUILD IT area of our budget. Again, that primarily is due to the tools the legislature has provided to us, the Proposition 15 bonds and the Texas Mobility Fund.

I will point out again that those are not perpetual funding sources for transportation in the state and they will eventually run out, however, it appears that they will still continue to be a large benefit in 2008 and 2009.

The last thing I'll point out is earlier this month each of your offices should have received a draft of the Legislative Appropriations Request for TxDOT. It's a draft, not all of the required schedules from the LBB are in there. I think the instructions came out a day or two before we delivered the copies to your offices, and so we're working to incorporate those new schedules into the LAR, but we welcome any comments, questions that you or your office may have.

The LAR is due at the end of August, so it will come before you for final approval at the August meeting, so we have roughly two months to go over it in detail and make modifications to, however the commission may so direct us.

I'd be happy to answer any questions or again just make myself and Finance staff available to you and your staff to go over any questions you may have on the draft document.

MR. HOUGHTON: When you talk about MAINTAIN IT, the increase in the MAINTAIN IT, we always index it to the State Highway Fund gas tax, and now it's superseding that number. What is that increase? What do we project the MAINTAIN IT to be?

MR. BASS: For this current biennium, 2006 and '07, roughly the MAINTAIN IT expenditures are about $2.8 billion per year. The gas tax is closer to $2.2- that it's bringing into the State Highway Fund. Going into 2008 and '09, the average for the MAINTAIN IT expenditures is about $2.9 billion, so going up roughly $100 million a year. And again, one of the large increases is the fuel because fuel impacts a lot of things on the maintenance, the roadway materials and driving the heavy equipment, and also the utilities that we have out on the system and in our offices.

MR. HOUGHTON: That's not a pretty picture as far as shaving off that aging system.

MR. BASS: Correct. And the more that we maintain the existing system, the higher those costs go which, of course, draws more money away from mobility needs of the state, and again, for 2008 and '09, it looks like those will be addressed primarily, it not entirely, through the Mobility Fund and Proposition 14 that will eventually one day dry up.

MR. JOHNSON: James, you mentioned the impact that the bond funding has had on the current biennium and the '08-09. Does the repayment of the bond out of the gasoline tax or the Prop 14 really start hitting in the '10-11 biennium?

MR. BASS: It will start hitting probably in '08 and '09. We've issued $600 million out of the Proposition 14 Interstate Highway Fund bonds. That first large principal payment will show up in 2007, and then as we issue more principal amount up to the current limit of $3 billion, you're right, one year later we'd start to really see that increase. And so I think it's probably more in the 2009 or so time frame where we see it really start to kick in the debt payments.

MR. HOUGHTON: I may have missed something on that, James. Where is the peak in the structure over the next between now and 2011? What is that number when it peaks out and when?

MR. BASS: There, of course, is a lag between when the project is awarded and started and allocated to the different regions and then how it pays out over time, and what we see in the state's budget is how that pays out over time, and what we see the big increase laid out right now is the peak is in 2008, and it's showing roughly in that BUILD IT category just under $4.5 billion in 2008, and then it drops to about $4.1- in 2009 is what we currently have in our draft document.

MR. HOUGHTON: And that doesn't include, obviously, the RMAs, what they're doing?

MR. BASS: Correct. Does not include private investment because they're not state funds so it does not show up in our appropriations.

MR. HOUGHTON: Like this one we approved today.

MR. BASS: Like the $1.3 billion earlier today.

MR. HOUGHTON: So if somebody had a crystal ball, and I want to say dart board or got close to a target, in 2008 what would be the total mobility? And we don't know the RMAS on how fast the ramp up or what's going on, but does anybody have an idea, including this one?

MR. BASS: Including that one? Again, if we take it not as total work underway but what would be expended for the work done in that one year which is how this is laid out, I would say you could add, with all the ones that are in process right now, including 130 that was earlier today and all the ones in the Dallas-Fort Worth region, once those get going you could likely easily add another $1-1/2 billion of expenditures in 2008 from those other sources, the private investment.

MR. HOUGHTON: Big number.

MR. WILLIAMSON: Anything else, John?

MR. JOHNSON: No.

MR. WILLIAMSON: James, any indication from our partners across the street as to whether or not the transfers out of the Transportation Fund might be diminishing?

MR. BASS: In the state budget term there's an item called Exceptional Items that has historically applied to only General Revenue funds, and the concept was in the current biennium -- in our case 2006 and '07 -- that established a threshold and if you wanted to ask for more General Revenue above that threshold in the upcoming biennium, you had to put it in a special section of the LAR called Exceptional Items.

For the first time ever, the instructions say that concept of Exceptional Items will not only apply to General Revenue, but it will also apply to State Highway funds for agencies other than TxDOT. So we will be allowed to request more money out of the State Highway Fund through just the basic reports and schedules, but any other agency who receives State Highway Fund appropriations, if they are seeking an increase, they will have to highlight that in a separate section of the appropriations request.

MR. WILLIAMSON: So the LBB basically is saying be careful about asking for any more money out of the State Highway Fund.

MR. BASS: It appears that a new approach will be taken when looking at that.

MR. WILLIAMSON: We'll all need to thank them every chance we get.

I think that's all the questions we've got for James at this time.

MR. BASS: Thank you.

MR. BEHRENS: We'll go to item number 3, our Strategic Plan, and Coby will come up and give you a presentation of our 2007-2011 Strategic Plan and ask for you to consider it to be approved.

MR. CHASE: Good afternoon. For the record, my name is Coby Chase and I'm the director of TxDOT's Government and Business Enterprises Division.

Agenda item 3 is a minute order for the formal adoption of the official 2007-2011 Strategic Plan, as required by the Legislative Budget Board and the Governor's Budget Office.

A proper Strategic Plan begins with a vision of how you'd like your world to be at a defined moment in the future. It then identifies goals that when reached in total will result in that vision becoming a reality, and in order to reach your goals you define strategies and buttress them with unlimited tactics. What I am presenting to you today doesn't really do that.

MR. WILLIAMSON: You did it that way on purpose.

MR. CHASE: I just wanted to build you up a little bit there, Chairman.

(General laughter.)

MR. CHASE: I wanted you also to know that I do listen, I wanted to put things in their proper places.

This version of the Strategic Plan provides data about the department's projected performance in terms of the adopted budget structure prescribed by the Legislative Budget Board. The Strategic Plan required by the LBB and the Governor's Budget Office is built around the automatic budget and evaluation system of Texas, or ABEST. ABEST applies the agency's definitions of performance measures against rather limited and inflexible outcomes and strategies. The primary purpose of this document is to allow the LBB to measure an agency's performance from year to year, using the measures and objectives essentially identified when the system was created in the early 1990s.

We must submit this official document to the Legislative Budget Board by July 7. In reality, the ABEST approach does not make room really for agency's to respond to changing needs, or more importantly, to focus on what the public demands.

We've had back and forth with the LBB on this, we've talked at, to, around, with, and I have started a conversation with people at the LBB who watch us full time to sit down and explain this even further, and they seem receptive to talking about this, what we believe is appropriate for the Strategic Plan.

Given the rigid structure of the ABEST approach, and directing agency strategic planning, TxDOT, for the second period in a row, is suggesting a new approach. While the official Strategic Plan that this minute order is asking you to vote on today contains a very brief summary and discussion of the agency's mission, vision, goals and strategies, the body of that document focuses on its rigid budgetary reporting structure.

However, in order to truly reflect an agency's goals and strategies, we at TxDOT believe that the Strategic Plan should be about addressing the public's demands for more than just an accounting of, for example, the miles of pavement receiving a seal coat across the state. Strategic planning should drive the budget process, not the other way around.

To that end, for the second cycle in a row now, TxDOT will produce, with input from the commission and administration, a separate corporate plan -- at least that's what we're calling it for right now -- that expands upon and explains the agency's goals and strategies and tactics in ways that more directly address the public need. We will present the corporate strategic plan for your approval at the July commission meeting.

We intend for this plan to speak more effectively to the public, our private sector and public partners, and state and federal legislators regarding what we really are about as an agency and how we plan to tackle the transportation challenges facing Texas over the next 25 years.

That plan will focus on the five goals the commission adopted in April for the agency: reduce congestion, enhance safety, improve air quality, expand economic opportunity, and increase the value of our transportation assets. Those are very hard goals to attain, sometimes we're not going to meet them, quite frankly, but we need to know why and we need to explain it.

TxDOT's attainment of these goals will be discussed in terms of more realistic and dynamic performance measures currently being formulated, and I would venture to say I believe formulated by a task force under the leadership of Amadeo Saenz. This task force has determined the best measures and how these will be calculated. The intent is for these measures, or indices, to be used both as criteria for project selection as well as for reporting progress towards the five goals.

These overarching goals which we see as the true measure of progress for the department are supported by four strategies. They are: use all the financial options to build transportation projects; empower local and regional leaders to solve local and regional transportation problems; increase competitive pressure to drive down the cost of transportation projects; and demand consumer-driven decisions that respond to traditional market forces.

As I mentioned earlier, the corporate plan will be presented for your approval next month and it will be the primary document we use to discuss our Strategic Plan with the public. We believe that this is the model for state agency strategic planning that the public demands. The public demands more and TxDOT is prepared to deliver.

So today I am requesting that you approve submission of the official Strategic Plan to the LBB and the Governor's Budget Office. I recommend approval of the minute order before you and I'll be happy to take any questions that you might have.

MR. WILLIAMSON: Questions, members?

(No response.)

MR. WILLIAMSON: Coby, I don't have a question so much as I have a request. I certainly hope we send this across the street with a letter once again stating that we believe our Strategic Plan will look differently and we're going to give them a copy of, and we think our budget ought to match it, and we're happy to comply with the law but we just really don't think this is a plan.

MR. CHASE: The fine folks in the GBE Research Section just actually completed a draft of that letter yesterday, and they took a snapshot approach of looking at other comparable state agencies and what they do and do their strategic plans kind of match up with their realities, and we'll marble that in with the letter and prepare it for your signature. You should see that in a day.

MR. WILLIAMSON: I appreciate that, and I'm sure Mary Ann appreciates it.

Members, anything?

(No response.)

MR. WILLIAMSON: You need a vote, don't you, Coby?

MR. CHASE: Yes, sir.

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

MR. WILLIAMSON: Motion carries. Thank you.

MR. BEHRENS: I think now we can go to agenda item 5(b).

MR. WILLIAMSON: Don't want to miss that.

MR. BEHRENS: This also pertains to comprehensive development agreements; this one pertains to Collin and Denton counties. Phil?

MR. RUSSELL: Thanks, Mike. Again for the record, I'm Phillip Russell, director of the Turnpike Division.

This minute order, as Mike pointed out, relates to State Highway 121 in Collin and Denton counties. Should you all approve this minute order, you will essentially do two things: first off, you would authorize the issuance of a final request for detailed proposals for this project; you would also approve the process whereby we accept and evaluate an independent public sector alternative, that being developed by the North Texas Toll Authority.

Let me take just a brief moment to describe each one of those actions. As to the detailed proposals, just to refresh your memory, we did receive an unsolicited proposal on 121 last year from the Skanska Group. By law, we opened it up for competition, received four competing qualifications, short-listed three of those, so we have a total of four proposals going forward. We anticipate going out, if you approve this minute order for detailed proposals next month.

Now, one of the things that we've been working very closely with Michael Morris and the MPO is to get those folks to help us with the criteria and evaluation elements itself. We've done that, Michael has worked very closely with us, and they've helped to do a couple of things. First off, in the proposal itself we'll have to put in there what the maximum toll rate would be, what the escalation methodology would be, all those sorts of things, timing of payments.

We discussed earlier this morning on the 130 project how we wanted a small amount of money up front but we wanted to revenue-share out over the length of this term. The situation is a bit reversed in the Dallas-Forth Worth area with their Near-Neighbor/Near-Time policy. They need an infusion of cash right now to develop their many other needed projects. So the Regional Transportation Council has requested that 75 percent of that money from a concessionaire be made available from day one up front, and the remaining 25 percent be submitted out over the life of the concession, so it's kind of the reversal of where we are on 130.

You heard some discussion as well that the private sector would not have a cap on the toll rate and that sort of thing. Clearly, the Regional Transportation Council has set what they are willing to allow on any toll road in that area -- it's about 12 cents, I think, in the off-peak hours -- but they will set the toll rate and they will also set the escalation, how a private sector concessionaire would escalate that toll rate over time.

So Michael and the MPO have worked very closely with us setting all that criteria. They also have provided the input that we needed on how ultimately we're going to judge those proposals coming in, the weighting factors.

Essentially, again, as a reflection of needing that money, that financial plan up front, we will be placing 80 percent of the weighting of the evaluation on their financial plan up front. The remaining 10 percent will be on their schedule, how quickly they can deliver this project, and the last 10 percent just on their overall project development plan. So those will be all the critical criteria that we'll have in the request for proposals that hopefully will go out next month.

Now, the second part of that, the second prong is the process that we'll utilize in receiving and approving, receiving and evaluating the independent public sector comparator from the North Texas Toll Authority. The process that we've developed essentially will be we'll get all of our private sector proposals coming in from those four firms. We anticipate those will be due in here November.

We'll go through the evaluation using these criteria that the RTC has put before us, and we'll select what we deem to be the best apparent value to the State of Texas, a single proposal. Then we will look at the NTTA proposal and evaluate it using the same exact criteria, and the intent is to create a level playing field between the private sector or an independent public alternative. We'll utilize the same criteria in evaluating the successful private sector developer as well as the NTTA proposal.

At the same time, we're going to ask the RTC to do the same thing. We want them to independently use the same evaluation criteria, go through the same process. And then we'll make a recommendation to the Transportation Commission, hopefully the first part of next year, of who we think represents the best value to the region.

MR. WILLIAMSON: And I know neither nor can any commissioner push you past your professional limits, but Phil, I hope it's not the first part of next year. This area desperately needs this asset no matter who builds it, and I just hope that within the limits of professionalism we move as aggressively as we can. That area is drowning in congestion.

MR. RUSSELL: I would agree.

MR. HOUGHTON: When are the proposals due?

MR. RUSSELL: November.

MR. HOUGHTON: November?

MR. RUSSELL: Yes, sir.

MR. HOUGHTON: Okay.

MR. JOHNSON: Phil, did I understand correctly that the primary consideration is going to be the size of the concession fee?

MR. RUSSELL: Their financial plan. The weighting that the RTC has given us will be that 80 percent of the evaluation for either the NTTA alternative or a private sector developer, 80 percent of their rating would be based on their financial plan.

MR. JOHNSON: The financial plan is the base of the concession fee of which 75 percent is to be paid up front.

MR. RUSSELL: Up front, yes, sir.

MR. WILLIAMSON: And John, it's reflective of the region, and I think the RTC went through a lot of pain to decide that what they need more than anything else is this facility built as a toll road and as much cash as possible to immediately put into non-toll facilities in the area. I could be wrong -- and please correct me if I'm wrong, Phil -- but I think the region decided on this criteria.

MR. RUSSELL: Yes, sir. I don't think they had much compunction about it. To support their Near-Neighbor/Near-Time they need that infusion of cash very quickly.

MR. WILLIAMSON: I think their viewpoint was if we're going to ask -- this is not unlike the El Paso situation where probably 90 percent of the toll payers are within a four-county area that live right along the edge of it, and in order for the public to support this decision long term, each one of those counties and each one of those communities have got to see an instant improvement in congestion or safety or air quality in their area in exchange for the tolls they're going to be paying.

MR. HOUGHTON: And a re-investment of the concession back into the area for other projects, whether it be toll or non-toll.

MR. RUSSELL: Yes, sir. Clearly, their Near-Neighbor/Near-Time is predicated on that, both toll and non-toll.

MR. HOUGHTON: Correct.

MR. RUSSELL: But Commissioner Johnson, I don't think there was much equivocation on what those numbers. The RTC developed those numbers, I think they had quite a bit of public involvement, and they set the toll rate, the escalation methodology, and the idea that they needed 75 percent of that concession fee up front.

MR. HOUGHTON: And then the rest over time.

MR. RUSSELL: Yes, sir, 25 percent equally out over the 50-year term. There were some other things in there. They want to limit the concession itself to 50 years and there were a number of criteria that they established for us that we can utilize in our procurement.

MR. WILLIAMSON: Other questions, members? We're comfortable that we're putting NTTA on as level a playing field as we can, given the law?

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: I mean, I don't know that they'll ever like the position they're in, but I don't want them to be able to say that they didn't have the opportunity to compete, but I don't want the private sector to say that we show preference for someone else either.

MR. RUSSELL: I think Chairman, we're very clear. We like competition but we want to make sure we have an equitable playing field for all, whether you're on the private sector side or on the public sector side.

MR. WILLIAMSON: Okay. Anything else, members?

(No response.)

MR. WILLIAMSON: What's your pleasure?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. RUSSELL: Thanks, commissioners.

MR. BEHRENS: Agenda item number 7, our Aviation item for this month, this is recommendation to improve various aviation projects around the state. Dave?

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

This minute order contains a request for grant funding approval for eleven airport improvement projects. The total estimated cost of all requests, as shown in Exhibit A, is approximately $7.8 million, approximately $6.4 million federal, $600,000 state, and $800,000 in local funding.

A public hearing was held on May 18 of this year, no comments were received. We would recommend approval of this minute order.

MR. WILLIAMSON: Members, do you have questions of Dave after he laid out and made his recommendation?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second. That's a nice looking tie.

MR. FULTON: Thank you, sir.

MR. JOHNSON: Is there anything aeronautical there?

MR. FULTON: No. It's just flags.

MR. WILLIAMSON: We have a motion and a second and we're going to hold off the vote because I just discovered that we have a potential witness, and it's not Jim Dillon. Victoria Koenig? And Victoria has caught her plane and flown back home. She was here from the city of Nacogdoches and she was here to tell us that she would answer any questions and she was for the agenda item.

Okay, members, what's your pleasure?

MR. JOHNSON: I think we've already moved.

MR. WILLIAMSON: Oh, I'm sorry. We 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. Dave, thank you for your patience today.

MR. FULTON: My pleasure. I'm just glad our items are not quite as controversial.

MR. WILLIAMSON: Well, not yet.

MR. HOUGHTON: Is McKinney on there?

MR. WILLIAMSON: McKinney is coming.

(General laughter.)

MR. BEHRENS: Agenda item 9 is our rules for the month. Agenda item 9(a)(1) is Proposed Rules in Design and this concerns access management. Amadeo?

MR. SAENZ: Thank you, Mr. Behrens. Good afternoon, commissioners. For the record, Amadeo Saenz, assistant executive director for Engineering.

The minute order before you proposes amendments to Sections 11.50 through 11.52 and also 11.55 and adds a New Section 11.56 relating to the connection or regionally significant highway on the state highway system, to be codified under Title 43 of the Texas Administrative Code, Part 1.

Transportation Code Chapter 203 provides that the Texas Transportation Commission may lay out, construct, maintain and operate a modern state highway system. Access management is one method of preserving the substantial investment in the ground transportation system by preserving the roadway levels of service.

Senate Bill 637 of the 79th Legislature Regular Session 2005 amended Transportation Code 203.032 to allow a county with a population of 3.3 million or more, or an adjacent county to a county with a population of 3.3 million population or more, to adopt access-permitting authority on the state highway system in the manner similar to that delegating the process available to many municipalities in the prior session. Counties meeting these requirements are defined as eligible counties in the proposed rules.

Sections 11.51 and 11.52 are amended to allow the delegation of access-permit authority to those eligible counties. Section 11.52(f) is amended to require compliance with the department's environmental review rules. Section 11.55 is amended to expedite the approval process for entering into agreements to provide local access roads in conjunction with department projects. And New Section 11.56 is added to provide uniform means by which public and private entities with authority to construct, maintain and operate regionally significant facilities may obtain permission to connect those facilities to the state highway system.

While most such entities are required to obtain commission approval to construct these regionally significant highways, certain entities with independent authority may construct regionally significant highways that do not necessarily conform to the Transportation Improvement Program. By adding regionally significant highways that are not the TIP, especially in the non-attainment areas, that can threaten the entire area's transportation conformity under the Federal Clean Air Act and result in sanctions that could severely basically hamper and put the state's federal program in jeopardy.

The current rules govern the connection to the state highway system but do not give the department the ability to deny connections based on these conformity concerns, design and construction issues or non-compliance with federal requirements. These proposed new rules will ensure that proper statewide planning is employed in the construction of the major highway facilities that connect to the state highway system, that the facilities are properly designed and constructed and comply with federal laws, and that the environmental impacts are adequately considered.

The rules will be posted in the Texas Register, comments will be received until 5:00 p.m. on August 14. Staff recommends adoption of this minute order and I'll be happy to answer any questions.

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

(No response.)

MR. WILLIAMSON: Can I have a motion?

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BEHRENS: Agenda item 9(a)(2) is Proposed Rules in our Vehicle Titles and Registration area. This concerns specialty license plates. Rebecca?

MR. DAVIO: Good afternoon. My name is Rebecca Davio, I'm the director of the Vehicle Titles and Registration Division.

MR. WILLIAMSON: Is this your second time?

MS. DAVIO: Yes, sir.

MR. WILLIAMSON: So we can't give you a hard time this time?

MS. DAVIO: That's correct, sir. I'm glad for that. It made it a little easier to come before you today.

MR. WILLIAMSON: Mike kicks me if I get too far out of line.

(General laughter.)

MS. DAVIO: These rules are fairly simple. As Mr. Behrens told you, they are clean-up on the specialty license plate rules. They relate specifically to the Special License Plate Advisory Committee and how that group will work. These rule modifications, we believe it will help make it easier for the entities that are interested in applying for the creation of a specialty license plate, we clarify what they are supposed to do, how the process will work for them. We believe that these rule modifications will also make it easier for the staff to be efficient in that process.

We request your approval.

MR. WILLIAMSON: Now, is this the set of rules that will require that all bicycles in the state be registered by January 1, 2007?

MS. DAVIO: Well, yes, that is a component of this -- actually, no.

(General laughter.)

MS. DAVIO: We would request your approval.

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

MR. JOHNSON: Rebecca, how many different speciality license plates are there?

MS. DAVIO: There are currently better than I believe about 120 different specialty license plates. They're in the area of universities, of charitable organizations, different groups, military. There's qualifying plates and non-qualifying plates.

MR. JOHNSON: What are the leading sellers?

MS. DAVIO: The leading sellers are -- I thought you all were going to be easy to me -- the leading sellers are the State of the Art plates that are for the Arts Commission, I believe that the bike plate is a big seller.

MR. JOHNSON: Which one?

MR. WILLIAMSON: The bicycle plate.

MS. DAVIO: The bicycle plate. It's known by different things, the Lance plate; it's Lance Armstrong's image on it. There's also university plates that are big sellers; A&M and UT are among the top.

MR. JOHNSON: Top three.

MS. DAVIO: Yes, among the university plates.

MR. JOHNSON: Isn't there one that snuck ahead of the University of Texas into number two? Didn't sneak, they just passed them.

MR. WILLIAMSON: No way.

MR. HOUGHTON: I think Mike Behrens could probably give us that.

MS. DAVIO: I know Steve Simmons would want me to say that it was the University of Houston but I'm not comfortable committing to that on public testimony.

MR. HOUGHTON: What's number two?

MR. JOHNSON: Texas Tech.

MR. BEHRENS: You haven't got to number one yet, have you?

MR. WILLIAMSON: They're always number three.

MS. DAVIO: I'm sorry, I cannot quote those statistics to you.

MR. WILLIAMSON: You can't tell me more Aggies buy custom plates than Longhorns.

MR. JOHNSON: Oh, easily.

MR. WILLIAMSON: You know, I forgot, most of our guys buy the State of the Arts plate, that's what it is. We're claiming that as our number.

MR. JOHNSON: Probably a lot of them buy the Read to Succeed plate.

MR. HOUGHTON: Oh, man.

MR. WILLIAMSON: It's getting tough up here today.

(General laughter.)

MR. WILLIAMSON: Any more questions or comments?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MS. DAVIO: Thank you.

MR. BEHRENS: Agenda item 9(a)(3), this is in our Motor Carrier area, Chapter 18, and this is going to be some recommendations in proposed rules on changes to our insurance requirements for household goods carriers. Carol?

MS. DAVIS: Good afternoon. For the record, I'm Carol Davis, director of TxDOT's Motor Carrier Division.

The proposed rule package before you amends Chapter 18 concerning motor carrier registration. The primary change is in the area of auto liability insurance limits for household goods carriers operating equipment of less than 26,000 pounds. These amendments are necessary to implement the provisions of House Bill 2702 which was passed during the 79th session, and was effective September 1, 2005.

The amendments were initially proposed at the November commission meeting, published in the December 2 issue of the Texas Register, and posted on TxDOT's website. The public comment period for those amendments expired January 2. These amendments, the portion relating to the auto liability limits, were removed from the rules package as adopted during the April commission meeting to allow TxDOT time to further study the issue of minimum vehicle liability insurance levels.

At this time we have completed that study. To complete that study we contacted other states and federal agencies to analyze insurance information, traffic accident studies and crash data, and we also conducted a public hearing concerning this issue.

What we found during our research is that national statistics support our contention that vehicles weighing 26,000 pounds or less incur at least as many incidents as do larger trucks, and that light trucks are involved in serious accidents that result in significant losses to injured parties. We also found that most states either adopted the federal limits for their insurance levels or they have no backup data to tell us why they selected the limits that they selected.

Based on our research and based on our findings, we are again recommending that the minimum level of liability insurance for household goods carriers operating equipment with a gross weight of 26,000 pounds or less be set at $300,000 combined single limits. We are further recommending that once FMCSA completes their current study regarding insurance limits for motor carriers that TxDOT go back and do a complete review of all TxDOT required limits for motor carriers.

And at this time we're recommending approval, or if you have any questions, I'd be happy to answer.

MR. JOHNSON: Carol, I guess we're going to ask our speaker on this issue to come forward and make his comments, and then if there are any questions. Is that okay, Ted?

MR. HOUGHTON: Sure.

MR. JOHNSON: Rod Johnson? Rod, you've become a familiar face and we're delighted to have you here.

MR. ROD JOHNSON: Thank you. Good to be back.

My name is Rod Johnson. I own a small local moving company called The Apartment Movers. We move people from one apartment to another one, using small utility trailers pulled by normal pickup trucks. These pickup trucks are owned and operated by independent contractors. Today in Texas, as you know, there are still two classes of movers: Class A which is the people with large semis, typically the larger big companies; and then the Class B which are typically the people like myself with small box trucks or pickup trucks pulling trailers.

MR. JOHNSON: Is there a differentiation in the size of a moving vehicle that separates Class A from Class B?

MR. ROD JOHNSON: Yes, sir. If I understood your correctly, 26,000 pounds is the divider.

MR. JOHNSON: That's the number we're dealing with.

MR. ROD JOHNSON: That's the number.

MR. JOHNSON: And is that pretty much a nationwide number?

MR. ROD JOHNSON: In terms of --

MR. JOHNSON: I mean do other states, do they differentiate, do they say 26,000 pounds?

MR. ROD JOHNSON: No, sir, none of the other states.

MR. JOHNSON: By axles?

MR. ROD JOHNSON: No, sir. This is the only state that has these kind of requirements or rules that we operate in. It's different here, very different here -- not bad different, it's just different.

And my characterization of those Class A and Class B is not typically just the size of the vehicle, it's also the size of the companies. Typically your large van lines are the guys with the big semis over the road, and your small mom-and-pop kind of operations with one or two trucks are typically your Class B. Even though a lot of your Class As have a Class B operation to get around some of those requirements because the requirements are lower for Class Bs, you don't have all the reporting requirements, and that's really where a lot of the burden is.

The minute order before you today proposes publishing new rules on insurance requirements for small movers, the Class B, such as our company. We do not oppose insurance to protect Texans. For example, we currently carry $1 million of insurance on all of the vehicles operated by independent contractors. This is far in excess of the proposed requirements.

The problem is the way the requirements in the rules are structured. It will increase my cost of operation by up to 10 percent of my gross. In an industry that hopefully operates on a 3 to 5 percent profit margin, that is devastating, it simply puts you out of business.

We have asked in the past, and still, that TxDOT study these negative small business impacts. This study is required by Texas law, Chapter 2006, Agency actions affecting small businesses. And I provided each of you with a copy of that -- I hope you have it there -- and I've underlined some of the sections of it because Chapter 2006 has very specific requirements for this study on adverse small business impacts before the agency files proposed rules with the secretary of state for publication in the Texas Register. There are no exemptions, there are no exceptions except for the Tax Code.

Specifically, Chapter 2006 requires a comparison for the cost of compliance between the largest businesses and the small businesses. The comparison must be made on one of the following standards: (a) cost per each employee; (b) cost for each hour of labor; (c) cost for each $100 of sales. The MO before you does not meet any of these requirements, none of the standards were met.

As a highly impacted small business man, I must request that the study be conducted, that the Texas law be followed before the rules are published. I am sure this is not intentional, I never would want to imply that, I love working with the people at the Texas DOT, I applaud their efforts at beginning this impact study -- and it is a beginning and there will be an end to it, and hopefully there will be a middle where we resolve all this.

I could stop right there and just say you shouldn't publish it because it's not legal, in my opinion -- I'm not an attorney -- but Chapter 2006 goes further, it requires a resolution of this, and that's what I'm really here for, and that's why I've always tried to come up and say I'm not against it or for it, I'm talking on it, because I'd like to have this resolved.

Chapter 2006 also requires the agency to reduce the effect on small businesses as feasible, and quoting from Chapter 2006, "Adoption of rules with adverse economic effect. A state agency considering adoption of a rule that would have an adverse economic effect on small businesses or micro business shall reduce that effect if doing so is legal and feasible, considering the purpose of the statute under which the rule is to be adopted. To reduce the adverse effect on small business, an agency may: (1) establish separate compliance or reporting requirements for small businesses; (2) use performance or standards in place of design standards for small businesses; (3) or exempt small businesses from all or part of the rule."

Now I'm going to quote from the preamble which addresses that. "To provide an alternative reporting system, establish a separate compliance process, or exempt small and micro businesses from the requirements would be, in effect, returning to the process in place prior to the statutory change."

Now, I paraphrase that, I'm a simple guy, I paraphrase that as: it ain't broke, why are we trying to fix this? You've got a set of rules over there essentially established for small business to keep from crushing them, and you're trying to take -- not you, but this process is taking those rules and it's crushing the small business, and your own department's analysis of it as the only way to stop that is don't do it. It ain't broke, I don't know why we're trying to fix it. And that is a separate issue.

Today I have the liability insurance, I have the cargo insurance, I comply with the same consumer business protection requirements. So what do the new rules do that the old ones don't do? They simply put me out of business.

MR. JOHN JOHNSON: What does the new rule do to your business in terms of the additional insurance that requires you to purchase?

MR. ROD JOHNSON: It's the process. I believe a lot of you are small business men, and you have a business owner's policy.

MR. JOHN JOHNSON: You have a blanket policy for all the subcontracted people.

MR. ROD JOHNSON: Yes, any hard non-owned vehicle, the same kind of policy that almost any business owner has. And it's been audited by the Texas DOT and it's been found to be in compliance, and it's a million dollars, it's not any $40,000, $50,000 limits, it's a million because I don't want to go away, I've worked long and hard at this. But the catch is that that process, we have a lot of these independent contractors, and they come and they go. This is no secret to anybody. We have that policy in place to protect the people of Texas and me, and it works, it works very well.

What's the difference? Well, the new process is I've got to take out a policy on each one of these independent contractor's truck and I've got to take his VIN number down and I've got to submit it, I've got to get a cab card. Well, there's a reason the law is there in the first place.

MR. JOHN JOHNSON: Well, am I to believe that your subcontractors, some of them don't carry any insurance at all on their vehicles?

MR. ROD JOHNSON: No, sir. What we do is we require their insurance company -- we have a form that we call Additional Insured and we submit it to their insurance agent and we require that we be put on their policy, but to be sure, we carry the business owner policy, the hard and non-owned, and that's pretty effective, we've not had any problems with that to this point.

But that's where we are today. That doesn't fit in the new rules anymore. The new rules weren't designed for the small guy like me, they were designed against us. And this isn't a consumer-driven thing, this is a Southwest Movers Association, big moving vans versus the small guy who is not well organized, not well represented, they're not here. The small Class Bs outnumber the Class As two to one in this state, it's not like they're not there, it's not like they're hiding behind the curtains or something, they're just small business men.

And pardon me for rambling on, but yes, the process is what's the problem. You start trying to force that into the process that we have, the way that most of the small moving companies operate, into the other one, it just won't work, it becomes phenomenally expensive.

MR. HOUGHTON: When you say process, are you talking about the time element?

MR. ROD JOHNSON: Some of it's the time.

MR. HOUGHTON: The time and the cost of the process?

MR. ROD JOHNSON: Well, number one, here's an example, and maybe this is not a good example. You've got a policy and you go down and you rent a car, say you're a business person and you go down and rent a truck, you rent a car, that's automatically covered under your policy if you rented a box truck to do something or you hired somebody to do something for you. But today if you went down there and you decide you're going to start putting them on your policy, your insurance company would see you totally differently, you're starting to register vehicles, this is a completely different game here.

And maybe it is in a way. But it isn't broke, I don't know why we're trying to fix it like this. Just an opinion. But that process of the cab cards, of registering the VIN numbers, all those things fit the big moving company, they own the trucks, they have employees. That's not the way the majority of the people operate, they don't operate that way, they operate with independent contractors.

MR. JOHN JOHNSON: Well, given the fact -- I believe it's a fact -- that we've been statutorily directed by the legislature to address these rules, if you were us, how would you comply with their directive?

MR. ROD JOHNSON: I think the agency has put it forth right here very clearly. It simply says --

MR. JOHN JOHNSON: You're talking about this agency?

MR. ROD JOHNSON: Right. In the preamble it says what is the solution to the impact to small businesses, and that is that there's nothing wrong with the rules the way they are. That's what they say, that's TxDOT's own analysis of the situation because essentially they were set up to reflect the large van lines and the small moving company, the guy who uses independent contractors, and these people do turn over, and this guy over here, he has a fleet of big trucks that he owns and these people are employees, and they're not the same, they're just not. And trying to make them the same, yes, it levels the playing field if you like leveling it with a steamroller. That's what happens, that's what will happen.

They were conducting hearings to explain all this to the small movers. They called them off, no one was showing up. It isn't that they don't care, they're dead, this is a gun in their head. They called them off halfway through it and they sent it out to everyone who wasn't even in compliance. You know, they're just discouraged, they feel like they're dead. They call them off halfway through it; TxDOT couldn't even get the people to show up to listen to it because there's no solution there for them, they're going to go underground.

And forgive me for rambling on, but there really isn't a good solution. The problem is it's not driven by logic, it's not driven by consumers, it's driven by a large group of moving companies trying to eliminate the small mover. Now they may wind up doing that, and I have sat on the other side of boards like this, and it really is tough and you are a judge in a way.

And I think this can be resolved, I know it can be resolved. I've listened to what went on here today, I know it can be resolved. But a lot of it is the agency is bound to resolve this, that's what the law says: Don't kill the small guy, just because he's small, don't kill him because you can.

MR. JOHN JOHNSON: Well, I can assure you nobody up here wants to kill the small guy, the entrepreneur, we thrive in that environment. But you know, we've been directed by statute, I assume, to do something.

MR. ROD JOHNSON: And I think some of it is probably a really good idea, and I'm not against the insurance. I wouldn't carry this insurance if I thought it was a bad idea. Does everybody else out there carry it? No. And I don't think that you'll get to it, personally, by the process that's going here. Half of these people, from what I understand from the insurance agents, will go underground. It's a small mom-and-pop operation.

MR. JOHN JOHNSON: A lot of them are probably there anyway.

MR. ROD JOHNSON: I think they're there now, I think that's why they called off these sessions where they were trying to explain it to everybody. That just didn't work. That didn't work for me, I don't like competing against somebody else out there with no insurance, you can't find them. You can't even turn them in to the Texas DOT; they've got a cell phone that they bought for 20 bucks. My gosh, you can't even find them to fine them.

And that's the other part of the problem with compliance. I don't know how you solve that. I don't think that we're going towards more, though, we're going towards less, we're driving people underground with this. That's a bad idea. If you're going in the wrong direction, the trend is not changing, it's time to stop and slow down, at least think about it some, in my opinion.

MR. WILLIAMSON: Well, we've been thinking about it for a while.

MR. ROD JOHNSON: So have I. I think about it probably more than you do, with all due respect.

The issue here that I have today is that as the MO is drafted, it doesn't comply with Texas state law, and that's the first part of it, and I don't think it can be published. There is a requirement that the adverse effects be addressed, and I think that they can be, and I'm more than willing to be part of any process and help in any way.

MR. WILLIAMSON: And you expressed this view to our staff ahead of time?

MR. ROD JOHNSON: This MO here went out last night; I got it this morning at 7:23 a.m. and I read it and I'm standing here before you. I wrote this sitting out there in the lobby. If I'd have known about it, I'd have called you. We called every day to Mike Ellis to ask for it. And it's not his fault he doesn't have it, they didn't print it up until 2:15 yesterday afternoon -- that's the date on the bottom of it. I can't give you advance notice of something that I don't know about.

MR. WILLIAMSON: You can't?

MR. ROD JOHNSON: I will give you some advance notice.

(General laughter.)

MR. WILLIAMSON: Anything else, Ted?

MR. HOUGHTON: No.

MR. JOHN JOHNSON: I have a question of Mr. Monroe. I'd hate for you to leave without having to answer a question. Richard, is there a limitation on when rules actually take effect, is there a requirement?

MR. MONROE: This is Richard Monroe, general counsel for the department.

Rules have to be promulgated and approved within a six-month period -- in other words, they're first published. And I would emphasize that what we're seeking from the commission today is not approval of the rules, it's only for approval for publication and an invitation for public comment.

MR. JOHN JOHNSON: But my question is if we go through this and 45 days from now -- which I think is the limit -- and this comes back two meetings from now which would be August for final adoption, can part of this be that this takes effect on January 1, 2007 or April 1, 2007 as opposed to immediately when the rule is passed and approved?

MR. MONROE: Frankly, I'm not familiar with that process. Generally it's published in the Texas Register, you vote to approve, and it would take effect a certain number of days after it is published in the Texas Register.

MR. JOHN JOHNSON: Even if in the body of what you publish in the Texas Register is --

MR. MONROE: You could do that, yes. It's unusual but you could do it.

MR. JOHN JOHNSON: All right. Well, this is an unusual group.

MR. WILLIAMSON: Oh, right, he's fought a good running battle for this, this has been great.

MR. ROD JOHNSON: It's not a battle. We're all on the same side of this, or I thought we were.

MR. WILLIAMSON: I meant running battle against Billy and his bunch. You're certainly not on the side of Billy and his bunch, there's no doubt about that.

MR. ROD JOHNSON: I like to think we are, but the law just says that you have to do this study before it gets published, and I think you'd probably confirm that that's what the law says, it says you must.

MR. WILLIAMSON: But we don't say those things antagonistically to you, we're enjoying this.

MR. ROD JOHNSON: I hope so. I mean, I could have spent my day some other way, but this has been very educational for me.

MR. WILLIAMSON: We sense that a stronger Texas citizen has emerged from all of this.

MR. ROD JOHNSON: From under a rock.

MR. WILLIAMSON: From under your truck that you work on.

MR. ROD JOHNSON: From under my truck that I work on all day long.

MR. WILLIAMSON: I better go fix these brakes, I'm fixing to have to register this damn thing. Listen, I used to say that to myself.

(General laughter.)

MR. ROD JOHNSON: We work at them, we have those programs.

I guess my point, in trying to close -- if you want me to -- is that the law is very specific, you must do the small business impact study before they're published, and that's why I provided you with a copy of it. It's not an if, it's a must.

MR. WILLIAMSON: I do have a question about that, Richard. Rod's position is, and self-acknowledged not a legal position, a layman's position is this section of the Government Code he referenced says you've got to go do this impact on small business study before you publish for comment. What's your viewpoint?

MR. MONROE: Yes, and also my viewpoint is we did such a study. I have been informed of that by the division.

MR. WILLIAMSON: And your response would be a study not suitable to me.

MR. ROD JOHNSON: It's not that it's not suitable to me, but there are three standards that you've got to do this study based on: cost for employee, cost for hour of labor, cost for each $100 of sales. They didn't do it. There aren't any exceptions, there aren't any other standards, it is must use one of those standards.

MR. WILLIAMSON: And how do we respond? I'm just curious.

MS. DAVIS: Can I bring Joe Barnard up here? He can talk a little bit more about this study.

MR. WILLIAMSON: Hey, Joe, is this your first time here?

MR. BARNARD: I've been here before, sir, however, you know, have fun. I'm Joe Barnard, I'm the manager of the Motor Carrier Operations section, I work for Carol.

MR. WILLIAMSON: Where are you from?

MR. BARNARD: I'm from Abilene, Texas.

MR. WILLIAMSON: You are?

MR. BARNARD: Yes, sir.

MR. WILLIAMSON: When did you graduate from high school?

MR. BARNARD: 1969.

MR. WILLIAMSON: Where did you go?

MR. BARNARD: Abilene High.

MR. WILLIAMSON: I went to Cooper.

MR. BARNARD: I took some courses over there.

MR. WILLIAMSON: Class of '70, but my mom went to Abilene High, class of '54.

MR. BARNARD: I wasn't there, sir; I wasn't even in elementary school then.

MR. WILLIAMSON: Well, how did you end up down here?

MR. BARNARD: I was very fortunate.

MR. WILLIAMSON: You weren't the guy that sent me a fine for not registering my truck on time last month, were you?

MR. BARNARD: No, sir, but did you not register your vehicle on time?

(General laughter.)

MR. WILLIAMSON: I think we didn't send our hub odometer reading in on time and we got a fine. That's okay, I'm just a guy, I want to be treated like every other Texan.

MR. JOHN JOHNSON: It was probably an insurance issue.

MR. WILLIAMSON: It might have been an insurance issue. I know what this guy is talking about, though, because when we were making the transition from being a little bitty company to a larger company, there's some things that large companies get stuck into the law that are pretty complicated for small guys. I think not for Rod; I think Rod's bigger than he leads us on to believe, but for really, really small guys, it's pretty tough sometimes.

Like for example, my favorite state agency still is struggling between when is it a registered vehicle and when is it something other than a registered vehicle going down the road that needs to pay a permit.

Do we have a rule that says if you remove the right-hand front seat, you don't have to register the vehicle? Because every oilfield vehicle going down the road now, everybody is ripping out the rider's seat so that there's only that one person operator seat, and I'm thinking that must be a state law someplace.

MR. MONROE: I have no earthly idea.

(General laughter.)

MR. WILLIAMSON: Well, Joe, what did you want to talk to us about?

MR. BARNARD: We did do a study and we do have a study based on revenue, and it does look to us it is going to be expensive for the people to comply with this, and I believe laid that out in the preamble, it is an expensive thing for these people to apply and comply with this new law.

MR. WILLIAMSON: Will it be so expensive that we would not want to adopt rules about it?

MR. BARNARD: Well, we may not like to. I'm not sure, I'm not an attorney, I don't know how we would not adopt some type of rule to comply with the law.

Now, the insurance level is where we have looked at to soften this as much as we can. We can certainly set a higher amount of insurance as a minimum requirement. We looked at setting it as low as we can at $300,000, at least until we have to come back again, with the feds reviewing the insurance levels. That's one way that we've looked at it trying to soften it, and it is expensive.

MR. HOUGHTON: Out of 100 percent, is it the insurance level that's driving the cost? Where Rod is talking about a process, you're talking about an insurance level that may be driving the cost?

MR. BARNARD: There's two costs. I think one of them is his procedural cost, and registering the vehicles with us and having to file insurance with us at any level I think is a cost for him because of the type of insurance that he will have to have in order for the insurance company to file insurance with us. There's also a cost of the insurance level itself. We can't seem to get around him filing the insurance with us, that looks to us that's pretty much set in statute. The level of insurance that's required, the minimum amount of automobile liability insurance, that's something that we do have some jurisdiction on.

MR. HOUGHTON: And we pegged it at $300,000.

MR. BARNARD: Right now, yes, sir.

MR. HOUGHTON: To try to mitigate those.

MR. BARNARD: Yes, sir.

MR. JOHN JOHNSON: Is the limits on my car, I've got two-five-two in the back of my mind, $200,000, $500,000, $200,000. In my foggy memory, am I recalling what my limits on my policy are?

MR. BARNARD: On your personal policy?

MR. JOHN JOHNSON: On my car.

MR. BARNARD: Yes, sir. That would be the individual limits. Generally the $200,000 would be for a single injury, and I believe you said $400,000?

MR. JOHN JOHNSON: Two-five-two.

MR. BARNARD: The $500,000 would be for multiple injuries, and then the $200,000 would be for property damage. And what our rules are set up is we combine all of those limits together, that's the type of insurance that we have combined. You have a total combination there of about $900,000.

MR. JOHN JOHNSON: And what you're saying is $300,000.

MR. BARNARD: $300,000 combined single, and that way that $300,000 floats between single injury, multiple injuries, or property damage.

MR. JOHN JOHNSON: Per occurrence.

MR. BARNARD: Yes, per occurrence.

MR. HOUGHTON: So we have, in fact, done the survey as far as the impact financially.

MR. BARNARD: Yes, sir.

MR. HOUGHTON: You're wagging your head no and he's saying yes. There's a disconnect, or you think there's a disconnect.

MR. ROD JOHNSON: It's black and white, [inaudible].

MR. BARNARD: We did, he hasn't seen it.

MR. HOUGHTON: He hasn't seen it. Well, I think, Rod, you need to see the survey.

MR. ROD JOHNSON: It's required to be within this thing, everybody has to see it, citizens of Texas have to see it, that's what the law says.

MR. HOUGHTON: Well, I mean, Richard, in fact do we have to do that? Obviously it's full disclosure.

MR. MONROE: Well, it is a public document.

MR. HOUGHTON: Right. Have we disclosed it?

MR. MONROE: Have we disclosed the document?

MR. BARNARD: The statute that Mr. Johnson is referring to doesn't require you to put the whole study in the preamble but just certain boilerplate language that the statute specifically requires stating the results of the study, and that's what we did. The study itself, of course we can release to anybody who wants it.

Also, he talked about three standards and I believe you can choose one of those standards, you don't have to do all three. That may be the disconnect here.

MR. ROD JOHNSON: You didn't choose any of the standards.

MR. WILLIAMSON: Okay, Joe, where did you live?

MR. BARNARD: I lived on Hickory Street.

MR. WILLIAMSON: I lived on Sells Boulevard.

MR. HOUGHTON: You're really going for a record today, aren't you.

MR. WILLIAMSON: Well, we're so close, we might as well.

Thank you, Joe.

MR. BARNARD: Yes, sir.

(General talking and laughter.)

MR. WILLIAMSON: Okay, Rod, anything else?

MR. ROD JOHNSON: I want to be sure that I was clear on that. The law requires them to pick three standards and to publish those, and you must show a comparison between the largest business and the smallest business on one of these three standards, the cost for each employee, the cost for each hour of labor, the cost for each $100 of sales. They did none of those, and if they did, I would love for somebody to show it to me. I'm getting old, my reading is poor, it's simply not there, gentlemen, it's not there. And it isn't there, is it? There isn't any place that it has cost for each employee, cost for each hour of labor, cost for each $100 in sales, it's just not there, Carol.

MS. DAVIS: Well, as our attorney said, we published the results.

MR. ROD JOHNSON: But it requires you to put those in the preamble.

MS. DAVIS: I follow what our general counsel says for us to do, I wouldn't presume to make decisions over him.

MR. ROD JOHNSON: If I could, I could just read that whole paragraph to you so I'm not taking anything out of context: "A comparison of the cost of compliance for small businesses with the cost of compliance for the largest business affected by the rule using at least one of the following standards: cost for each employee, cost for each hour of labor, cost for each $100 of sales. The agency shall include the statement of effect as a part of the notice of the proposed rule that the agency files with the secretary of state for publication in the Texas Register."

MS. DAVIS: And we included that statement of effect in the preamble.

MR. ROD JOHNSON: But not based on these.

MR. WILLIAMSON: Okay. Anything else, Rod? I mean, I think we know what we're going to do.

MR. ROD JOHNSON: Okay.

MR. WILLIAMSON: Anything else, Carol?

MS. DAVIS: Well, if you have any questions, I can clarify some issues, but if not, then we're fine. I would like to say that Joe worked for the Railroad Commission, and I'm sorry, but he's worked with some pretty tough commissioners, so I don't think anything you could say to him would scare him.

MR. WILLIAMSON: He kept smiling, I couldn't get him rattled at all. I thought having to admit he lived on Hickory Street might get him. He knows what I mean.

(General laughter.)

MR. WILLIAMSON: You know, Rod is a pretty straightforward guy, and we've held all this stuff up for him before because we've all been small business guys and we understand his concerns. On the other hand, Rod, we really trust our staff, we very seldom, if ever, evidence public non-confidence in our staff, so here's what we're going to do, I think.

I think we're going to vote to publish these rules, I think that Mr. Behrens has assured me he's going to be sure that we've done things according not just to the law but what the law intended us to do, and I think we're going to give you plenty opportunity to argue your case. We're not going to be in a rush to pass rules if we think that we're not doing things right, either from a legal standpoint or from a practical standpoint.

So have confidence in your government, it's going to work, but we think we need to go to the next step and publish these rules, and it will be fine, it really will be fine. We like seeing you every month. We won't put you in a category with Mr. Dillon.

That's what I think we should do, members, and do I have a motion?

MR. HOUGHTON: So moved.

MR. JOHN JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, say no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MS. DAVIS: Thank you.

MR. WILLIAMSON: Don't disengage, stay plugged in. We like you around here, we like active citizens, and we really do. We'll do the right thing. We're going to start tolling haul trucks.

MR. BEHRENS: Agenda item 9(b)(1) is a rule for Final Adoption. This is concerning traffic operations and our Safe Routes to School Program. Carlos?

(General talking and laughter.)

MR. LOPEZ: Good afternoon, commissioners. My name is Carlos Lopez, I'm director of the Traffic Operations Division.

The minute order before you proposes revisions to the existing rules for the Safe Routes to School Program to implement the new federal program created under SAFETEA-LU. The proposed revision will allow us to create a program that is in compliance with both the new federal law and guidance issued by the Federal Highway Administration.

This will be a comprehensive program designed to encourage children to walk and to bike to school, promote safety, reduce traffic, reduce fuel consumption, improve public health, and improve air quality near schools. The program will also include funding for non-infrastructure projects such as public awareness and outreach campaigns, traffic education and enforcement, and student education. This is a 100 percent federally funded program with no local match requirements.

We are also proposing expansion of the existing Bicycle Advisory Committee to allow for members with experience related to public health, traffic enforcement, child safety and other areas. This expanded range of expertise will help us in implementing this program.

The proposed rules were published in the April 14, 2006 edition of the Texas Register and comments were received from the Texas Bicycle Coalition. The TBC provided 36 comments regarding the proposed changes; six of these comments were incorporated into the final rules. Many of the TBC comments that we proposed for rejection deal with organizational responsibilities or funding limitations that we believe could reduce the department's flexibility to manage the program. In addition, many of the comments involve actions that are already allowable, in our belief, under the rules.

We recommend approval of this minute order.

MR. WILLIAMSON: Well, you've heard the staff's explanation and recommendation, and we have one witness. There was a paperclip on this thing. Was there more than one?

MR. BEHRENS: No.

MR. WILLIAMSON: We have one witness, our friend Robin, with your indulgence. Robin?

MR. STALLINGS: Mr. Chairman and commissioners, Mr. Behrens, Mr. Polson. My name is Robin Stallings, I'm the executive director of the Texas Bicycle Coalition. Thank you for the opportunity to comment on behalf of the Texas Bicycle Coalition regarding the proposed rules for Safe Routes to School.

In order to avoid any current or future appearance of conflict of interest, I've chosen to resign, effective now, from the TxDOT Bicycle Advisory Committee. Thank you so much for giving me the opportunity to have served there.

The Texas Bicycle Coalition is regarded as a national leader on Safe Routes to School. We worked with the Texas Legislature to pass Safe Routes to School in 2001. In the last seven years, working closely with the Traffic Operations Division, we have trained almost 3,000 Texas elementary school teachers with our nationally recognized bicycle safety curriculum. In turn, those teachers have trained 500,000 Texas children in bicycle and pedestrian traffic safety.

Most importantly, we are managing the largest Safe Routes to School non-infrastructure program in the country, funded by the U.S. Department of Education. We took this experience to Washington, D.C. and working with the Texas Congressional Delegation, and the U.S. House Transportation Committee leadership, we assisted in drafting and passing Safe Routes to School nationally.

We now serve on the National Safe Routes to School Partnership Steering Committee. In that capacity we have assisted the Federal Highway Administration in the development of the guidance for state departments of transportation. Nationally we serve as a resource to DOTs and other state agencies and non-profit organizations for the development of their Safe Routes to School programs.

With this experience and knowledge, we provided TxDOT with written Safe Routes to School recommendations and detailed supporting comments based on the federal guidance from FHWA which we submitted at 5:00 p.m. yesterday. Sorry you didn't have more time with that.

Our comments can be bundled easily into two main categories. Detailed explanations for each item are in those written comments. Number one, maximize impact of funds; number two, accountability.

In maximizing the impact of funds: number one, we would say we recommend that you commit 70 percent of Safe Routes to School funds to infrastructure and 30 percent to non-infrastructure; number two, please -- just understand please in front of every one of these -- separate the programs and calls for applications; three, solicit applications on a competitive basis for one statewide five-year, non-infrastructure reimbursement grant; four, use the working capital advance program management tool as directed by the federal guidance; five, provide incentives to contractors or political subdivisions for timely completion of infrastructure projects.

Accountability, you have five items there: include meaningful input in the program, from design to evaluation, by increasing, not diminishing the role of your Bicycle Advisory Committee; two, require annual reports to the commission and the legislature, not just Federal Highway Administration, as required by the guidance; number three, allow for outside evaluation of Safe Routes to School programs by an impartial entity such as a university or transportation institute; four, do not remove the entire state-owned road network from consideration in Safe Routes to School project applications; five, remove for-profit organizations for eligibility -- that appears to be in conflict directly with the federal guidance.

In conclusion, we're asking you to table these rules for one month to reconsider the rule language. We or other national experts are available to work with the staff to get Safe Routes to School right from the beginning for the safety and health of Texas children. I eagerly await your questions.

MR. WILLIAMSON: Is this the first Carlos has seen of this?

MR. STALLINGS: Actually, that's a reiteration of the things that we had given Carlos in the first comments, and the response to the comments, he didn't get before you all did yesterday, and then I gave him that about four hours ago when we first got here.

MR. WILLIAMSON: And Carlos, you must certainly agree with most of these.

MR. STALLINGS: A couple of little additions I made as I realized what I'd left out while we were waiting. It would have been shorter if we hadn't had so much time.

MR. WILLIAMSON: And so you probably agree with Robin that we need to postpone these rules?

MR. LOPEZ: Not exactly.

MR. WILLIAMSON: You know, Robin, first of all, I regret that you resigned.

MR. STALLINGS: Well, there's been some concern I've heard from a number of TxDOT staff that it looked like by the -- we care a lot about these rules and the Safe Routes to School Program, and that's actually why I resigned -- not that I couldn't be talked back onto it because I really appreciate that and being able to serve there -- but it looked like that we might be trying to set up something in the Bike Advisory Committee and to give them more authority that would somehow help the Texas Bicycle Coalition where I am employed, so I wanted to make sure we took that off the table right away.

In fact, I believe there is no conflict of interest with the infrastructure program and there could be a conflict of interest with the non-infrastructure program. In that case, I would recuse myself from those type of discussions.

MR. WILLIAMSON: Well, let us compliment you for your sense of ethics. We appreciate that. That's why we need guys like you on the committee.

Speaking of guys like you on the committee, what's happened to Tommy.

MR. STALLINGS: Tommy eagerly awaits the next meeting. In fact, Tommy, as many of the Bike Advisory Committee members have said, really after that first round two or three years ago, really wanted to participate in the design of the new program and in advance and to look at how we could improve the application process and that whole scoring process, because we all recognize, Carlos's shop and all of us recognize that there is definitely room for improvement, that was a pilot program.

MR. WILLIAMSON: We miss Tommy. He owes you an apology. Did he ever apologize to you?

MR. JOHNSON: No, but that's long gone and forgotten.

MR. WILLIAMSON: No, it's a matter of principle.

MR. JOHNSON: He thought he was doing the right thing.

MR. STALLINGS: Tommy is probably on line right now so we could probably wave to him.

MR. WILLIAMSON: Hey, Tommy.

MR. JOHNSON: Hi, Tommy.

MR. WILLIAMSON: Well, Tommy is a good guy. I see him around Austin occasionally.

MR. STALLINGS: He works really hard and really cares about these issues of bicycling in Texas.

MR. JOHNSON: And that's great.

MR. WILLIAMSON: Questions, members, of our good friend, Robin.

MR. JOHNSON: Robin, first of all, the Texas Bicycle Coalition and you personally, are a very class advocacy group and do marvelous work, hopefully always working within the system and working with this agency to make things safer for bicyclists around the state, and I salute you for your effort. I know you're very dedicated to what you do.

I'm curious on these five points on the maximize use of funds and the accountability, and you just mentioned you might have thought of a couple of others after you printed this up. Do you have specific parts of the rules that you would modify to incorporate or to at least get these goals into the rules?

MR. STALLINGS: In fact, we submitted it all and our comments are in highlighted colors and stuff, so we actually have already done that.

MR. JOHNSON: And that was done between the meeting two months ago when the rules were first presented and now?

MR. STALLINGS: Right. And then Carlos -- which I really very much appreciate -- last week gave me the current set of responses to our comments which gave us enough time to work on them, so some of those we accepted with no problem. They accepted a few of ours and we have accepted a few of theirs, but the concern is -- and I don't disagree with Mr. Lopez, Carlos, that many of these things could be done -- he's just not old enough for me to call him Mr. Lopez, I'm sorry.

MR. WILLIAMSON: Yes, he is, he's going to retire this year.

MR. STALLINGS: I could call him Mr. Director, no problem.

(General laughter.)

MR. STALLINGS: Some of these things, especially with the Bike Advisory Committee which is set up nationally, virtually every state -- I could pretty much tell you what's going on anywhere in the country right now -- they're setting up citizens task forces to get all this input in advance in the development of the program and setting a vision for the program and the direction, and this process right here before you is the only time that we really have a chance to make an influence on that because everything else is going to be developed either written by TTI or that the next time the public and the Bike Advisory Committee will see it will be after the call for applications has already gone out, so it's very late in the game to make an influence on it at that point.

So it was necessary for me to get this laundry list that is probably a little more detailed than the rules need to be, but some of the things we feel so strongly about, and we're not just helping other people set up their programs but we're learning from them every day and there is quite a body of knowledge out there now on Safe Routes to School and what works.

And what we're concerned about is that we've got this opportunity, it's one of the most highly effective dollars you could spend here to do something about congestion mitigation, air quality, the health of children, doing something about obesity. This may be the first transportation program that ever came out of Washington that's got sort of transportation people and health people at the same table, and it's a great opportunity.

And of course, Carlos's division is a great place to be doing that, they have a lot of experience with these things, but the devil is in the details, so that's where we're concerned about what is the split going to be between what is infrastructure, what is not infrastructure, are the programs going to be kind of thrown together, because it's very confusing to people, Safe Routes to School infrastructure, Safe Routes to School non-infrastructure, constantly everybody is getting confused. So we see that should really be separated and have two separate calls because it will make the programs better.

But there's quite a number of details like that that I would love if you'd toss this back to the drawing board and we could all roll up our sleeves, bring in a few people to the table and work it out with Mr. Lopez, I think that we could have some of this worked out by next meeting.

MR. JOHNSON: And the rules as proposed, infrastructure, non-infrastructure are combined, they're not separated into two calls?

MR. STALLINGS: Actually they're not separated into two calls. The current plan is to have them in one call but to have them with separate application processes. We support that.

MR. JOHNSON: Is there a percentage breakdown in the rules, though, 70-30? Obviously not.

MR. STALLINGS: No. By federal guidelines there's a minimum 10 percent and a maximum 30 percent. But we'd really like to be able to make our case that like, for example, with 30 percent, if this is a statewide program, whoever does it, we're going to be competing for that but it's going to be competitive. You can touch almost every single child in Texas and make a huge difference in their lives in the next four or five years.

And of course, we're all about accountability, we've learned that from Traffic Operations and also from the U.S. Department of Education, so we believe that it will be measurable, significant impacts that there won't be if we don't plan it out front, and that if it gets lost behind the infrastructure, we're a little concerned that the non-infrastructure is going to become the stepchild. There's going to be hundreds, or even thousands of applications for infrastructure and if they're bundled together, it's going to get lost.

Also, if it's not a plan for what is going to be spent and what type of applications you're really looking for, in the non-infrastructure if you get 300 applications and people don't know if they should be applying for $50,000 or $3 million per year, that there's no incentive for anybody to spend the $10,000 or more it would take to develop a good statewide program that can hold up over five years. It's almost like asking people for construction bids and they don't know if there's going to be 100 bicycle trails built or one Trans-Texas Corridor. So that needs to be worked out a little bit in advance.

MR. WILLIAMSON: That's a good idea; I like that idea.

MR. STALLINGS: I thought you'd like that one.

MR. WILLIAMSON: The only thing that would be better than that would be to restore historical bicycle museums with that money.

MR. STALLINGS: Well, we fully support the tendency of TxDOT staff to wanting to see that money go to transportation facilities, and so we're all about transportation facilities, and of course, they have done studies and they've actually already seen the impact in some places where in, say, California they've put in $150 million already on the ground in non-infrastructure, that anywhere they did not have the non-infrastructure work, where it was only sidewalks, crosswalks, flashing beacons, nobody used it. That is so important there are now communities and neighborhoods that have those facilities and the kids aren't out there again. We have lost that for a generation.

In 1969, 50 percent of the children biked or walked to school. We didn't have an obesity problem with our children then. Now only 15 percent bike or walk to school and it has been just one piece of that problem that the kids aren't being active. And this is a family program. From the experience around the country that you get the parents involved in those trips to school, that you make a stronger school community, and even the seniors in some places sit on the porches to watch the kids go to school. That doesn't happen with a radio ad necessarily, and it sure doesn't happen if you put it all into sidewalks.

And if we do 10 percent, that's going to make a difference in Dallas and Houston and maybe we get McAllen or San Antonio, but that's leaving out most Texas kids from this program for the five years that we know we have. We don't know if we'll ever get this money again in the Federal Transportation Bill or have another chance, but we have a chance now to get this thing kicked off.

And one last thing I'll say about infrastructure is that there are many sources of funds for infrastructure. As you all have already recognized in the Enhancement Program, a lot of times those million dollar type grants can make a big difference and help get kids to school. CEMAC funding, North Texas Council of Governments has done a great job of spending that for bicycle and pedestrian facilities and that can also help that trip to school. So there are Safety funds, lots of opportunities for infrastructure but this is the shot for non-infrastructure and we may miss it if we don't plan.

MR. WILLIAMSON: Okay, thank you.

MR. STALLINGS: Thank you very much.

MR. WILLIAMSON: Carlos, how do you respond?

MR. LOPEZ: First of all, I don't want Robin to resign, I think he ought to stay with the Bike Committee. I think the best solution is for him just to recuse himself whenever we grade Safe Routes projects because there's going to be other opportunities, for example in Jim's division, where they're going to need some advice on other bike issues, and I don't know if we'd find a stronger leader than Robin, so I think he ought to stay on. I just want to put that on the record. And I do want to thank him for his work at the national level because we wouldn't have had a program this big and following a Texas model if he hadn't worked it so hard on The Hill in D.C.

In regard to the 70-30 split, we can do that now the way the rules are drafted. We would like the flexibility to see what kind of projects come in and determine if that ought to be 75-25, 80-20 or 90-10, or that real good big project comes in and we go with the 30 split, depending on what the Bike Committee thinks and what our internal TxDOT panel thinks. So our position is we ought to keep that flexibility now in place before prejudging that amount before we see any projects come in.

Regarding the separate calls for applications, that's a good idea. We're definitely going to have different types of applications, different processes for the construction projects versus the traffic safety type projects. We have that in our office every day so we're going to use that as a model, so we'll definitely have different calls for projects.

If we do one statewide call, then we are maybe shutting out other folks that have some real good ideas that we just haven't heard of yet, and my position is we ought to hear out those ideas, see what other kinds of things we might be able to fund before making that decision just to go with one statewide project.

Regarding using the working capital advance, that's already in the Code of Federal Regulations. We are going to follow all the Code of Federal Regulations, so there may not be a need to even put that in the rules because we're going to have to follow those particular rules.

Regarding providing incentives, our plan at this time is to provide lapse dates to the folks that get the funds and say if you don't have your project brought to fruition by this time, we're going to pull that money, save it for a future call, and that would get folks moving. We're also encouraging the districts to not allow locally let projects and for TxDOT to develop them, and that tends to get projects moving a little quicker.

Regarding the accountability part, getting input from the Bicycle Advisory Committee, that's definitely what we're going to do, and it ties into Robin's third point about allowing an outside entity to be involved. The TTI Safety Center is right now looking at our application, our selection criteria, and looking at best practices for states all around the country. Before we go out with that application to people, we want the Bike Committee to look at that to make sure it all makes sense, and we want other folks besides the Bike Committee to also look at it to make sure it all makes sense. So we want to get that input before that call goes out.

Regarding annual reports to the commission, we'll be glad to do that if that's what the commission so desires. We'll probably use the one we send to the FHWA; we're going to have to be doing that anyway, we'll be glad to furnish that to anybody that wants it. Again, I don't know that's necessary to really be put in the rules.

As far as removing the entire state-owned network from the Safe Routes to School, we're not doing that. All we're saying on the state-owned network is we don't want to see certain traffic-calming devices like speed humps or chicanes on roads that tend to have higher speed limits because a lot of schools are located adjacent to roads with higher speed limits, so we want to engineer those and make sure it's the right thing to do. So we're not precluding the state highway system.

So that would be my response to the comments. I do appreciate Robin giving these to me earlier today and giving me a chance to look at them. We did have other discussions earlier, as he alluded to, and we're always willing to have that open dialogue with him.

MR. WILLIAMSON: Members, do you have questions or comments for Carlos?

MR. JOHNSON: Carlos, what if we were to defer action on this for four weeks, is there any harm done?

MR. LOPEZ: It will delay the call. We want to try to do a call as soon as possible after the school year to make sure that folks get plenty of time to look at the applications, and I assume the federal government wants us to spend this money as soon as we can, we just want to go ahead and get going on this process.

MR. WILLIAMSON: Plus, I think, John -- and Richard, correct me if I'm wrong -- it would be for the purpose of considering the adoption of some of Robin's comments. If we adopt anything that's significantly different from what we posted, we're going to have to turn around and re-post.

MR. MONROE: Every now and then the courts help you, Commissioner, believe it or not. A couple of years ago the Texas Supreme Court issued a decision that said if you change the rules pursuant to comments, then you need not republish, it's just if you think it up at the last moment yourself.

Now, what concerns me is are all the changes the gentlemen proposed, were they in the comments that we got during the comment period as opposed to these that he just handed in.

MR. LOPEZ: They were during the comment period.

MR. MONROE: So yes, that could be done.

MR. WILLIAMSON: Would you be offended, Carlos, if we follow Mr. Johnson's suggestion and wait four weeks?

MR. LOPEZ: No, not at all, I wouldn't be offended, but I'm not exactly sure what extra we might accomplish because I think a lot of the things that Robin has suggested, we have that flexibility now. I don't know what other specific provisions.

MR. WILLIAMSON: So you wouldn't be prepared to recommend we do that?

MR. LOPEZ: No, I would not recommend we do that, that's correct.

MR. JOHNSON: Can I ask Robin a question? Robin, isn't it our mutual best interest that we get about this call as quickly as possible, and if we put these back four weeks, we're just delaying the initiation of the process by another four weeks or longer?

MR. STALLINGS: Well, I've been working on Safe Routes to School since 1999, so there's nobody in a bigger hurry than I am, but I understand to get it right. If, for example, we had a bit of time over the course of this month to incorporate some of the things that Carlos has said, and there's little minor details like if you were to take it now I believe it would include for-profit entities, that's not consistent with the federal guidance, minor little clean-up details. And of course, we could get some of our stuff out so that the changes would be minor, but of course, we would like to see the substantial stuff is the nature of the calls.

I'm concerned that if you put out a call and leave it wide open, you get 300 responses back for non-infrastructure, how do you tell 299 of them no because you got one really excellent one. That's very difficult to do, then nobody is going to get funding except this one over here, but if you put it out there clearly or if you decide to set aside some pilot money, okay, let's put aside a few hundred thousand dollars over here so we're going to do some small pilots and see what people can come up with, they also know what they're competing for. They realize they've got a shot at getting $50- or $100,000 rather than have it completely wide open.

A lot of this stuff could probably be worked out over the course of the next month and we should still be able to hit our school year goal without any problem.

MR. JOHNSON: But what you've described, couldn't that be worked out in basically the structure of the call as opposed to the rules?

MR. STALLINGS: Well, there's a few things that might need to be tweaked. For example, the Bike Advisory Committee, the changes are in there now that they only report to the division director rather than, for example, the last call, you may recall, you got two sets of recommendations and you all were able to pick from them two rather than have them merged before you get the list. And so for the Bike Advisory Committee, they felt very respected and appreciated for that but still completely agreed that you all had the big picture and were going to pick whatever you wanted. It feels substantially different in that we don't see the benefit of having it go -- to basically have it bundled before you all saw it.

So those are some little details that if you pass them today, they're in, not to mention for-profit entities, or there may be some things that I didn't realize they were prepared to do and could have been my misunderstanding that don't have to be incorporated into this, and we'd try to work on it with the most constructive posture possible.

MR. WILLIAMSON: You're our bicycle expert, John, what do you want to do?

MR. JOHNSON: Well, I'm just an optimist and hopeful that people can resolve their differences, like El Paso, but it may not come to pass. It sounds to me like Carlos, in the way we're going to function, has taken into consideration and into account a lot of what Robin has brought before us in these recommendations, but you know, there's another side of me that says four weeks from now we're going to meet in El Paso, are you going to bike out there.

MR. STALLINGS: Yes, I'll try to take a shower before I walk in the door. We are the statewide Texas Bicycle Coalition, I'd love an excuse to go to El Paso any chance I get. They've become quite rabid about bicycles these days out there. I've been getting a lot of calls about local plans for bicycling.

MR. JOHNSON: I'm just stating there's a side of me that says in four weeks we're not going to lose a whole lot and maybe we can reconcile this. I certainly respect the work that the coalition does. But you know, the staff does a great job and they take into consideration a lot of things so I don't want to say the staff has been out of place.

MR. HOUGHTON: I'll go with John's recommendation.

MR. WILLIAMSON: We're just trying to figure out what that is.

MR. JOHNSON: I think to defer for four weeks. He's a chamber guy, he wants more hotel and motel tax if Robin comes out to El Paso.

MR. HOUGHTON: And I'm a bicyclist too so I bike every Saturday and Sunday.

MR. WILLIAMSON: Actually, to put the icing on the cake, we could say if 5,000 bicyclists show up in El Paso next month, that would really help out, wouldn't it.

Hope, have you got something?

MR. STALLINGS: Let's get Carlos out on a bicycle, let's go for a little ride in El Paso next month. I've been trying for years to get him on a bike.

(General laughter.)

MS. ANDRADE: No, I'm fine. I support what John has said.

MR. SAENZ: Just an observation. Amadeo Saenz, for the record. Normally what we try to do in the rules is to give us the flexibility in the programs and if we start putting percentages into we're going to spend 70 percent for this, 30 percent for that, we in essence tie ourselves in the future that we will have to change rules to be able to make any of those changes.

MR. HOUGHTON: Amadeo, let me stop you. I don't agree with that part of the recommendation. I agree with what Carlos said, the flexibility. I just think there are some other issues there that need to be vetted.

MR. SAENZ: One of the ways to be able to, I think, address all of the concerns would be that if the rules were passed as proposed as final today, then as each of the requests for proposals or requests for program calls, we could identify those terms and conditions that were going to be pertinent to that program call. All it would require is for Carlos's division to come to you all before and say we're going to do a program call for this and these are the terms, or this is the way the split is going to be, this is the way the applications will be submitted, and this is the way that the applications will be evaluated. And that might be able to resolve and address so that everybody up front knows what the particular program call is going to entail.

MR. JOHNSON: Well, please don't misinterpret what I'm saying. I'm not saying that we should go back and adopt every one of these verbatim, these recommendations, I just think there's some discussion points. And I believe statutorily we've got a 10 percent minimum -- is it ten/thirty?

MR. STALLINGS: Ten or thirty.

MR. JOHNSON: Or somewhere in between.

MR. HOUGHTON: Thirty-max.

MR. JOHNSON: Ten minimum, thirty max. I think we need to maintain as much of that flexibility as possible because you've got to try to address need versus what you have in terms of resources, and if we arbitrarily pick a number, whether it's ten or whether it's thirty and we find out the need is not in that proportion, I think we haven't done justice to the entire program.

MR. HOUGHTON: And I echo those remarks. I don't think you take these as listed and incorporate them, but I do think there may be some tweaking that needs to be done. The 70-30 I'm not for at all, not fixed; I think the flexibility is the key.

MR. WILLIAMSON: When did you receive these, again, Carlos? Just initially, you got them some time ago?

MR. LOPEZ: A lot of these are reiterations of the comments we got during the public comment period, and then Robin provided further clarification, we had a discussion. A lot of these we just had to agree to disagree, specifically on the 70-30 split or anything that might take away Mr. Behrens's flexibility from organizational situations. So there's some of those, I don't know about it; after discussion I could come back. But I'm hearing Commissioner Houghton say and everybody else they don't want to see anything like that in the rules. I don't know how many more different things we could put in the rules that we haven't already discussed, but we will be glad to talk to Robin more and see if there's any other room there.

MR. WILLIAMSON: Well, I think what's in the back of my mind, Ted and John, Carlos is gently trying to tell us there's not a whole lot that staff would support changing, so what's to be gained by waiting 30 days, better to move ahead, and they pledge to work with Robin. We're already refusing Robin's resignation so he's got to stay on the advisory committee.

MR. HOUGHTON: I'll yield to the chair.

MR. WILLIAMSON: Well, I'm not suggesting, I'm just trying to interpret.

MR. HOUGHTON: No. I'll yield to the chair, I'm not going for the record today.

MR. LOPEZ: If there was something I heard that could be germane to the rules to change, I'd be glad to recommend that. I just think a lot of these things we're going to be able to do with the rules as written.

He mentioned one more on the for-profit effort, that dimension. The guidance doesn't talk about for-profit per se but it does talk about development of media campaigns as a possible non-infrastructure program, and typically advertising agencies can do that.

MR. HOUGHTON: I'll yield to you, Carlos, if you sing the Aggie War Hymn right here.

MR. LOPEZ: Let's wait a month then.

(General laughter.)

MS. ANDRADE: So Carlos, you're not disagreeing with anything that he's recommending, it's just the way it's stated.

MR. LOPEZ: Well, I'm disagreeing in having a certain split in rules.

MS. ANDRADE: But that's because we want the flexibility.

MR. LOPEZ: Exactly.

MS. ANDRADE: And I agree we should have flexibility.

MR. WILLIAMSON: Do you want to wait?

MR. JOHNSON: I move we accept the rules as presented.

MR. WILLIAMSON: I have a motion.

MR. HOUGHTON: Second.

MR. JOHNSON: I think the relationship, Robin -- hopefully you understand -- the advocacy group is supportive of what we're doing, just trying to improve what we're doing, and we have a mutual interest and goal there. We appreciate your input and good work and we hope it continues, and I'm sorry, but as the chairman said, we're not going to accept your resignation.

MR. HOUGHTON: That's subject to he withdraw his resignation.

MR. WILLIAMSON: Do you withdraw your resignation?

MR. STALLINGS: I'll withdraw my resignation. I'd like to reserve the right to explain why I don't have a conflict of interest on the infrastructure side, if we could kind of keep that part open. Non-infrastructure, absolute conflict of interest.

MR. HOUGHTON: You can recuse.

MR. JOHNSON: Recuse yourself, state the reason why, and the record will show that.

MR. WILLIAMSON: We have to do that all the time up here.

MR. STALLINGS: By the way, thank you so much for taking all the time to listen to this when you're talking billions and billions of dollars on other stuff, so thanks so much.

MR. HOUGHTON: Are you in cahoots with the chair to go for the record today? Is that what was going on here?

MR. WILLIAMSON: No, but Robin knows, like the public transit guys know, we're trying to create a department of transportation. We want the world to know even though sometimes we disagree that bicycle routes are important. If you can get somebody out of a car and on a bicycle, you can relieve congestion.

MR. HOUGHTON: I may have a conflict, I ride a bicycle.

MR. WILLIAMSON: I do too but I don't have to tell anybody.

MR. STALLINGS: Sometimes we say as I'm driving my big truck, I'm not worried about the people who are behind me but I want 10 percent of those people in front of me to get out of their cars and get on a bicycle so I've got more room. So we're clearing the way for you big truck guys too.

MR. WILLIAMSON: I have a motion. Do I have a second?

MR. HOUGHTON: I think I seconded.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

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

MR. LOPEZ: And thank you, commissioners.

MR. HOUGHTON: Are you going to get to sing the Aggie War Hymn, Carlos?

MR. WILLIAMSON: How does that start: The eyes of A&M are upon you?

(General laughter.)

MR. BEHRENS: Agenda item 10, Pass-Through Tolls. This is a pass-through toll request for US 290 in Bastrop and Lee county. Amadeo?

MR. SAENZ: Good afternoon. How late do we have to go, Roger, so I can kind of stretch it for the record?

MR. POLSON: About six hours longer.

MR. SAENZ: I'm not going to go that long.

MR. SAENZ: Commissioners, this item I bring to you is a minute order that would authorize the department to issue notice for a request for competing proposals to private entities for a pass-through toll agreement for the design, construction, finance, and maintenance of 24 miles of US 290 from just east of Elgin which the exact location is one mile east of FM 696 in Bastrop County all the way to Giddings at Navarro Street, and also then a little section just the other side of Giddings from .5 miles east 141 to 2 miles east of 141.

The request for competing proposals is as a result of an unsolicited proposal for a pass-through toll project that was submitted by Zachry American Infrastructure. The department evaluated the proposal that was submitted and determined that it had merit, and under our rules we now have to go out for competing proposals.

The minute order before you gives us the authority to go out for competing proposals and we will evaluate those proposals to determine the best value, and at that point the executive director would be authorized to begin negotiations with the proposer that provided the best value, and then of course, we would have to come back one more time to the commission with the final terms and conditions of the pass-through toll agreement for your approval.

The project is on 290; 290 is on the Trunk System, it's also on the National Highway System, it is on the Hurricane Evacuation Route System. I realized that I was probably going to be asked about the indices and the indexes, so I did a little bit of work on that. Of course, it's a statewide corridor; as I mentioned it's on the Trunk System and Hurricane Evacuation Route. If you look at the project, it's going from what I call four-lane undivided or a four-lane poor boy because we have no shoulders to a four-lane divided highway, so you're not adding increases in lanes, so with respect to long term, short term or mid term project, it's more of a short to a mid term.

Your biggest benefits will come in the area of safety because you're separating that facility and putting in a median. Our plan would be that we would require the contractor to get enough right of way so that in the future that median area could be used to add the managed lanes as traffic builds up so that the managed lanes or tolled lanes could be constructed in the future. But in the short term, we would go from an undivided four-lane to a four-lane divided facility.

It will have improvement on air quality. It's out in the rural area but you do get reduction in congestion so therefore you get improvement in speed and you do get some air quality improvement, not very much. Safety is where we get the biggest bang for the buck. Economic opportunity, you would now have a four-lane divided corridor through rural areas coming into the metropolitan area of Austin, so you do have some economic opportunity. When we looked at the asset value of the facility, because of cost it only had a 13 percent or .13, but the benefits with respect to safety and economic opportunity as well would probably make this project a good project.

MR. WILLIAMSON: And does our district engineer understand what that .13 means?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: So he or she can explain it to the House and the Senate member and the county judge and everyone that we're attempting to educate about and what it means to build these roads?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Now, I'm not normally too interested in a .13 road but I understand the value associated with human life, and in my view, this project is more about safety than it is anything else. I appreciate our attempt to figure out if something adds jobs or reduces congestion, but the reality is this is a safety asset and that makes the .13 tax recovery acceptable, whereas, under other circumstances it just wouldn't be. I mean, we've got projects that Mark drives on every day that would be a .45 or .50 in the Austin District that he probably wishes would be addressed.

MR. SAENZ: As I mentioned the safety, the safety benefit would be the controlling factor as well as that we do have this as one of our Hurricane Evacuation routes.

MR. JOHNSON: Amadeo, didn't a group, a coalition of counties surrounding Travis County basically come up with their priorities, and 290 East was number one?

MR. SAENZ: Yes, sir, this was one of their priorities. This project was also the district had been working with the counties, both Lee and Bastrop counties about the possibility of doing a pass-through toll through the county through those public entities. The counties' tax base is not that great and they could not afford it. The private sector coming in gives us another opportunity to be able to address those transportation issues.

MR. JOHNSON: Is Lee County in the Austin District?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Ted wants to know which part of America is Zachry American from. South America or North America?

MR. SAENZ: Texas America.

MR. WILLIAMSON: Oh, from Texas America. We just figured it was another one of those Spanish firms.

MR. HOUGHTON: How many miles?

MR. SAENZ: It's between 23 and 24 miles.

MR. JOHNSON: Isn't a portion in there under construction right now to go four-lane divided?

MR. SAENZ: Yes, sir. This project would start immediately east of the portion that's under construction right now and continue east all the way into Giddings.

MR. HOUGHTON: I have a question, though. If, in fact, there's consideration -- I don't know if I'm getting outside my boundaries here -- to toll 290 from 35 to 130 by the CTRMA or others, if there is a concession, cannot that concession be used partially to build out this facility as part of an agreed-to condition?

In other words, instead of using 100 percent pass-through financing on this, one of the stipulations in negotiations could be that up-front concession or a piece of it go to building this to supplement the pass-through financing and reduce the amount of pass-through we would use?

MR. SAENZ: Yes, sir, that can be done. Of course, the CTRMA is taking the lead on the 290 project, but that could be something that we could work out where CTRMA, as part of their concession agreement, could provide part of the funding for this so that it does not all require payback.

MR. HOUGHTON: Because this is rural counties and they don't have a lot of wherewithal to throw in cash to supplement our strategic priority.

MR. SAENZ: Yes, sir. And of course, as we looked at the project early on, the first thing we looked at is could we make this portion of 290 a toll project. The problem is it's out in the rural area, we have access issues that we would have to address, so that's the reason that we phase it in and we go from a four-lane undivided to a four-lane divided with a wide enough median so that as traffic builds up then you can continue those express lanes and those lanes would be the toll lanes.

MR. HOUGHTON: I sure would like to explore that, Amadeo. I know that there's consideration, that we're talking about the 290 toll process and the concession potential up-front payment.

MR. WILLIAMSON: Well, you might can use the concession in urban Austin to pay for improvement in rural Austin District, but at a .13, that sucker is a long way away from being toll viable.

MR. HOUGHTON: Yes, but we can use that concession to go on a free road.

MR. SAENZ: All we would be doing with this project would be preparing for the future so that in the future we do have that flexibility should this area continue to grow.

MR. WILLIAMSON: Well, respectfully -- and I'm prepared to support this -- I see it a different way, I see us as preparing for the future, putting toll lanes down the middle to get people from Houston to Austin faster, that's what I see.

MR. SAENZ: And that's what we would be preparing for.

MR. HOUGHTON: Well, I would like to, if there's a way, Richard, to amend. I would say we need to consider all sources of funding to look at to supplement this pass-through financing application.

MR. SAENZ: I think we can do that.

MR. MONROE: Sure. This minute order can be amended from the dais, that's one of the reasons we're here.

MR. HOUGHTON: I hope somebody accepts my amendment.

MR. WILLIAMSON: So you want to amend the minute order to authorize the executive director to issue a request for competing proposals, et cetera, to include not to exclude any proposal on the use of concessions to offset the cost.

MR. HOUGHTON: Other forms of financing, it doesn't have to be concession, it could be, but all forms. Tell me how you want it worded, Amadeo, to give you the flexibility.

MR. SAENZ: I think we have the minute order as it stands right now is to request competing proposals that would include the design, finance, so finance is already in the minute order.

MR. HOUGHTON: But the intent of the commission that they look at all of the available tools.

MR. SAENZ: All available financing.

MR. HOUGHTON: Right, and that could mean concessions off of 290.

MR. SAENZ: Yes, sir.

MR. HOUGHTON: Could mean.

MR. WILLIAMSON: You're going to make Bob Tesch have a coronary, he thinks you're going to give away his project.

MR. SAENZ: We want to add to his project.

MR. WILLIAMSON: You're going to call him and tell him he gets to build all the way out to Bastrop now.

MR. SAENZ: Yes, sir. We will take that into the minute order to be able to add the intent of the commission that the staff consider all forms of financing in the development of this project.

MR. HOUGHTON: Yes, sir.

MR. WILLIAMSON: As amended, Mr. Houghton moves.

MR. JOHNSON: Second.

MR. WILLIAMSON: And Mr. Johnson seconds the minute order. All those in favor of the minute order, as amended, please say aye.

(A chorus of ayes.)

MR. WILLIAMSON: Opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, Mr. Houghton.

MR. BEHRENS: Agenda item number 11 is Transportation Planning. 11(a) would be the recommendation to appoint a new member to the Grand Parkway Association Board of Directors. Jim?

MR. RANDALL: Jim Randall, director of Transportation Planning and Programming Division.

Item 11(a), this minute order appoints a member to the Grand Parkway Association Board of Directors. Section 15.85 of the Texas Administrative Code states, in part, that the commission will review an individual's application, financial statement and letters of reference and may appoint members of the corporation's board of directors.

Lori Quinn of Houston was originally appointed by the commission in June of 2000 and has been nominated for a second six-year term to the board. She has submitted the required information to the department. Based upon review and consideration of all relevant information, as documented and filed with the commission, and based upon the board's recommendation, it appears the nominee is fully eligible and qualified to serve as a member of the board.

We recommend your approval of Ms. Quinn to the Grand Parkway Association Board of Directors with a term expiring on June 29, 2012.

MR. WILLIAMSON: Is there anybody from the Houston District here?

MR. BEHRENS: I don't think so; I don't see anybody.

MR. WILLIAMSON: I don't think there's much disagreement with the minute order.

MR. HOUGHTON: So moved.

MR. WILLIAMSON: Well, but I hate to do that. This is Johnny's area and I hate to do that without Johnny in the room.

MR. HOUGHTON: Oh, he left. Sorry.

MS. ANDRADE: Well, while we're waiting, can I ask a question?

MR. WILLIAMSON: Sure.

MS. ANDRADE: Their meetings have been canceled and we haven't heard why.

MR. RANDALL: I talked to Mr. Gornet about that, and at first they decided to a board meeting every other month rather than every month, and then one meeting they did not have a quorum of the board, and I believe that was in March.

MS. ANDRADE: So they're still excited about what they're doing.

MR. RANDALL: Yes, ma'am.

MS. ANDRADE: Okay. I was worried.

MR. WILLIAMSON: I think they may be slightly disrupted by the kind of tension right now that might exist between our department and the Harris County Toll Authority. That's why I asked if there was somebody from Houston. I think the tension is going to exist for a few more months until we can kind of get settled between the department and HCTRA about how we want to proceed, because sort of like 121 in North Texas, no one was really interested in it for a long time and now suddenly everyone is interested in it. It's probably going to be a while.

Why don't we let this rest a moment, Mike, and go to 11(b).

MR. BEHRENS: That would be fine. Jim, if you'll lay out 11(b).

MR. WILLIAMSON: Because we're getting to the point where we've either got to decide to break the record or get this puppy closed down.

(General laughter.)

MR. BEHRENS: Jim will bring you some recommendations on the Border Trade Advisory Committee.

MR. RANDALL: Yes, sir. Item 11(b), this minute order appoints 25 members, shown in attached Exhibit A, to the Border Trade Advisory Committee. The purpose of the committee, created in 2001 by the 77th Legislature, is to define and develop a strategy and make recommendations to the commission and the governor in order to address the highest priority border trade challenges.

Senate Bill 183, 79th Legislature 2005 amended Transportation Code Section 201.114 by providing additional guidance to the commission with regard to the committee's composition. The amended section provides that the border commerce coordinator, designated under Government Code Section 772.010, shall serve as the presiding officer of the committee. Additionally, the committee must include the presiding officers of the MPO Policy Board from the Pharr, Laredo, Odessa or El Paso transportation districts, the person serving in the capacity of executive director for each port of entry in the state, and a representative of each from at least two institutes or centers operated by a university in this state that conduct continued research on transportation or trade issues.

The commission will appoint committee members to staggered three-year terms expiring on August 31 of each year, except the commission may establish a term shorter than three years for some members in order to stagger the terms.

Upon your approval, the individuals or the positions named in Exhibit A are appointed as members of the Border Trade Advisory Committee. Staff recommends approval of this minute order.

MR. WILLIAMSON: So now, John, what's been laid out is 11(a) and 11(b) and we held off on moving on 11(a) because it's the Grand Parkway Association. What was that person's name again?

MR. RANDALL: Lori Quinn.

MR. WILLIAMSON: I didn't want us to move forward if there was any reason for us to be concerned about Lori Quinn.

MR. JOHNSON: She's a present member, is she not?

MR. RANDALL: Yes, sir.

MR. WILLIAMSON: Staff has explained and made a recommendation on item 11(a).

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

Now 11(b), Jim has laid that out. Hope, I'm assuming you're okay with all this.

MS. ANDRADE: We've got a great group here.

MR. RANDALL: They helped the commission staff with the GBE, they helped us with that tremendously.

MS. ANDRADE: That's a great group I'm looking forward to hearing about.

MR. WILLIAMSON: Staff has explained and made a recommendation on item 11(b).

MR. JOHNSON: Could we, since he's not here, put Robin on this group too?

MR. WILLIAMSON: And Tommy.

(General laughter.)

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

MR. JOHNSON: That was not in the form of a recommendation, Mr. Johnson was just observing.

MR. RANDALL: Thank you.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. RANDALL: Thank you.

MR. WILLIAMSON: Thank you, Jim.

MR. BEHRENS: We've taken care of agenda item number 12. Agenda item number 13 is our State Infrastructure Bank, and this will consider a loan to the City of Haskell for preliminary approval. James?

MR. BASS: Good afternoon again. I'm James Bass, CFO at TxDOT.

MR. WILLIAMSON: You know, James, I grew up in this part of the country, me and Mr. Barnard. You know what we say when we pass through this part of the state?

MR. BASS: No, sir.

MR. WILLIAMSON: Man, that was brief.

MR. BASS: Are you telling me you're going to have to recuse yourself from this?

MR. WILLIAMSON: I'm telling you this can be a brief explanation.

MR. BASS: Item 13 seeks preliminary approval of a loan to the City of Haskell in the amount of $500,000 to pay for water line adjustments to US 277 and US 380. Staff recommends your approval so that we may begin negotiations.

MR. WILLIAMSON: That is a brief recommendation.

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BASS: Thank you.

MR. WILLIAMSON: Thank you, James.

MR. BEHRENS: Agenda item number 14 under Traffic Operations, Carlos will bring you recommendations for the 2007 Highway Safety Plan.

MR. LOPEZ: Good afternoon, commissioners. My name is Carlos Lopez and I'm director of the Traffic Operations Division.

The minute order before you seeks approval of the FY 2007 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 2007 program consists of a budget of about $41 million that will fund 184 traffic safety projects that cover such areas as occupant protection, selective traffic enforcement, DWI countermeasures, and roadway safety.

We recommend approval.

MR. WILLIAMSON: Very good. Members, you heard the explanation and recommendation.

MR. HOUGHTON: So moved.

MR. WILLIAMSON: I have a motion.

MS. ANDRADE: Second.

MR. WILLIAMSON: 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. Thank you, Carlos.

MR. LOPEZ: Thank you, commissioners.

MR. BEHRENS: Agenda item number 15 is our Contracts for the month of June, both Maintenance and Highway and Building Construction. Thomas?

MR. BOHUSLAV: Good afternoon, commissioners.

MR. WILLIAMSON: Good afternoon, Thomas.

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

Item 15(a)(1) is for consideration of award or rejection of highway maintenance contracts let on June 8 and 9, 2006 whose engineers' estimated costs are $300,000 or more. We had eleven projects, average number of bidders was about 3.3 bidder per project. We recommend all projects be awarded. Any questions?

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

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BOHUSLAV: Item 15(a)(2) is for consideration or rejection of construction and building contracts let on June 8 and 9, 2006. We had 106 projects, an average of about 3.3 bidders per project. We have eleven projects recommended for rejection.

The first project is Project Number 3027 in Bell County. We had one bidder on this project, 25 percent over, the low bid was about $2.7 million. It's for ramp work on US 190 with turn lanes on FM 3470 and another at W.S. Young Drive. The district believes they can change traffic control and solicit more bidders to reduce the cost.

The second project recommended for rejection is Project Number 3226, Fort Bend County. Two bids received, 37 percent over, $389,000. This is for a Southern Pacific Railroad depot in Richmond. On this project we failed to deliver a proposal to a prospective bidder, and we did find that that was the case, they requested it late, the Wednesday before Friday letting. We had everything executed except for the final mailing process and we didn't get their proposal, and the proposed bidder had filed a protest that they didn't receive their proposal, and we do have a speaker on this one, I believe, today.

The next project recommended for rejection is Project Number 3047 in Hays County. We had one bid on this project, 24 percent over, the low bid was about $441,000. It's a left turn lane at Autumn Sage in Kyle. Prices are high and we'd like to go back and solicit more bidders and see if we can get some reduced costs.

The next project recommended for rejection is in Hill County. We had one bid, it was 48 percent over, the low bid was about $1.7 million. It's safety work on State Highway 22. Again, prices are high and we'd like to go back and solicit more competition for that in hopes of reducing costs.

The next project recommended for rejection is in Hunt County. We had one bid on this project, it was 73 percent over, the low bid was $279,000. This is a signal installation on State Highway 34. Again, we'd like to go back and solicit more bidders and hopefully get better prices from other contractors.

The next project recommended for rejection is 3055 in Kaufman County. We had three bidders, it was 82 percent over, a low bid of $157,000. This is safety work for left-hand lanes and overlay on State Highway 274. We'd like to repackage this with another project, hopefully get economy of scale and reduce the costs in that way.

The next project recommended for rejection is Project Number 3052 in Robertson County. Two bids, 30 percent over, the low bid is $1.4 million. It's safety work including left-turn lanes at various locations in the county. We're considering redesign for this project for different pavement and materials to reduce the costs and hopefully attract more bidders again.

The next project recommended for rejection is in Starr County, Project Number 3023. One bid, 62 percent over, $13 million job, adding a one-way pair on US 83 in the city of Roma. We're looking at a redesign there, possibly splitting out some utility work and to aid in getting more competition and in the process get more bidders for the project and hopefully reduce our costs as well.

The next project recommended for rejection is in Travis County, Project Number 3249. We had one bid, 83 percent over, low bid $393,000. This is for a turn lane and shoulders on a Ranch to Market 3238. Prices are high, again, we'd like to go back and solicit more competition as well and get better costs hopefully when we go back and rebid it.

The next project is 3030 in Walker County. We had one bid, 70 percent over, $2.6 million bid for safety work on FM 230. We're considering some redesign and relet, also to solicit additional competition.

And the last project I have recommended for rejection is in Webb County, Project Number 3040. We had one bid on this project, it's 15 percent over, the low bid is $2.9 million for median barriers and bridge rail safety end treatments on IH-35. In addition to the overrun, we left two bid items out of the project in error, and it would add another $400,000 we'd have to address somehow and negotiate with the contractor. We feel like if we went back and rebid it, hopefully solicit more competition, we might get better prices and we wouldn't have to negotiate a price for those additional items.

Any questions?

MR. WILLIAMSON: Members, we have one witness on item 15(a)(2), Larry Deavers. Larry? Larry, thank you for having been so patient throughout the day. Is this the first time you've been with us?

MR. DEAVERS: Yes, sir. It's been about five years since I've been before the commission, yes, sir.

MR. WILLIAMSON: So it's not the first time.

MR. DEAVERS: No, it's not the first time.

MR. WILLIAMSON: First time in five years.

MR. DEAVERS: First time in five years. I think it's a whole different bunch up there. Maybe Mr. Johnson was the last time, I'm not sure.

MR. JOHNSON: I remember your face.

MR. DEAVERS: Yes. My name is Larry Deavers and I own RDV, Incorporated, and we're a small highway contractor in the Houston market. We're actually in Fort Bend County, Rosenberg, Texas. This particular project is in Fort Bend County, it's a railroad restoration in Richmond right behind the courthouse.

For the record, I'd like to say that this job has been bid three times. The first time was approximately August of last year. There was a contractor that bid approximately half the estimate and didn't move forward on the contract. The second time the contract was put out for bid, I believe February this past year, which they got no bids on whatsoever. This particular job was bid June 9 of last month which we bid, we were the low bidder, $389,600, as I recall. Another company by the name of Bass Construction Company which is a local commercial contractor there in Rosenberg also bid on the job and they were like about another, I think, $25,000 higher than we were. We are a TxDOT-qualified contractor, we are prepared to enter into a contract to do this job.

Since I'm the only contractor that's talking today, I'd kind of like to go through the proposal process. Getting a proposal from TxDOT to me is a two-way street. It's a two-way street in the sense that the contractor initiates the fact that he does want a proposal, TxDOT responds by either sending it to them or respond that they are going to send it to them. In our particular case we usually get ours FedExed so we make sure we got it or we have a tracking record. I would say in the last 12 months we typically get five proposals in a month and there's probably been three or four situations to where we never received our proposal from Austin. It's not a common occurrence but it does happen.

On two occasions I picked up the proposal here in Austin. Again, back the contractor's effort to make sure he wants to bid the job. One particular proposal I picked up an hour before we bid, we filled it out, turned it in, and completed our bid. On the other proposal, I needed it in Houston, it was printed in Houston, I picked it up in Houston, brought it the next day and turned in our bid.

I guess my point to say all that is that if a contractor wants to bid a job, he has every opportunity that's presented to him to bid the job, but he also had an obligation to carry through and make forth the effort to do whatever it takes to get the proposal in.

We put our number out there. We didn't bid the other two times because a lot of these railroad depot restorations there's I'll say non-competent contractors that bid them. You guys that are real low that come in there and won't perform it, or you get guys that get all types of bids. We are qualified, we do hike-and-bike trails like you were talking about the last hour while ago. We have a slip-arm paver run in Houston today paving hike-and-bike trails. We do bridge work, we do all types of TxDOT work.

We ask that the job be awarded. We feel like we did everything: we got the proposal, we got the bond, we filled out the bid form, we got it here on time, and we put our best number on the contract, and we ask that the job be awarded. Thank you, sir.

MR. WILLIAMSON: Wait. We're not through with you yet.

MR. DEAVERS: Oh, okay. Yes, sir?

MR. WILLIAMSON: Members, questions of this valuable vendor to the State of Texas?

MR. JOHNSON: My question, when you came before the commission last time, what was the matter then?

MR. DEAVERS: We were a new contractor -- I don't really want to go down that history trail, but it was a deal on an addendum, and this is a very similar situation. That particular month it was a job bid here in Austin District, we bid it, our bid was not read off, and it was a particular seal coat addendum that was like a blanket addendum. That was just when you were initially getting online and it supposedly went out and we never received the addendum, and I objected not being awarded. We were actually the low bidder, we submitted the low bid, and Abrams ended up getting the contract -- Mr. Abrams was here at the same time -- and that was what we objected to because we never received the addendum.

I think this is a completely different situation. Like I said, we are a responsive bidder, we probably have five or six active contracts right now with TxDOT. I talked to the Houston District, I talked to Mr. Gary Trietsch, the district engineer there, he is supportive of it being awarded. Delvin Dennis, the assistant, Jim Hunt, the area engineer, they want to get it done and they want it done by somebody that has done contracts for them before, and I guess that's what we're requesting. We have a good track record of doing jobs, we have a track record of doing jobs on time.

MR. JOHNSON: I believe this is an enhancement project.

MR. DEAVERS: Yes, sir, it is.

MR. JOHNSON: Have you done other enhancement projects?

MR. DEAVERS: No, sir, we have not, but I do commercial work also, we build apartments, we build residential construction, so we're familiar with what it takes. We spent time and effort putting the bid together, I have subcontractors lined up to do a lot of the restoration type stuff, and we're just prepared to enter into a contract, and that's all I'm asking.

MR. WILLIAMSON: What do we estimate the price to be, Thomas? This gentleman bid $389,650.

MR. DEAVERS: Mr. Williamson, can I address that?

MR. BOHUSLAV: Thirty-six percent over, I believe.

MR. DEAVERS: Well, I would like to address that. If you go back to the first advertisement, and I think, from my memory, the first advertisement came out -- like the fourth advertisement -- and that first advertisement when it first come out was within say $15,000 of what my bid was. For some reason, when the sixth advertisement come out, it dropped it like $100,000. So I'm not sure if anybody knows what the estimate is.

And again, you've got a bunch of historical restoration people what it costs to do work, and I don't think it's like pouring a square yard of paving or laying a ton of asphalt or laying a ton of base, nobody knows what it's going to cost. And these jobs historically -- we looked at one last year down in Dickinson, they're historically long, drawn-out projects.

MR. JOHNSON: That's a depot also?

MR. DEAVERS: Yes, sir, that was a depot also. We didn't bid it, we looked at it. And you know, the guy was real cheap that got it, he's still on it 15 months later, there's no way he can possibly make any money.

My understanding, I'm not sure about the man that made the objection, but I understand that he's not a qualified TxDOT contractor in the sense that this is a waive project in the sense that you can sign up a letter or sign a statement that you can do the work and they'll let you bid the job, but he's not financially secure -- that's my understanding, I'm not sure that's the case, it was my understanding, so I just want to make clear.

But you know, we're financially secure, we can do it and we can get the bond and perform, and that's what I'm asking for.

MR. WILLIAMSON: Other questions of this vendor?

(No response.)

MR. WILLIAMSON: Thank you, sir. Appreciate you taking your time to come down here.

MR. DEAVERS: One other thing I'd like to say. I've really enjoyed it. Every contractor ought to have to come live through one of these things, but it's been a pleasure. I don't know any of you except Mr. Johnson, and of course Mike I've known forever and Thomas forever, it seems like. It's really been a learning experience and it makes contractors appreciate what you do. Thank you.

MR. WILLIAMSON: Thank you, we appreciate that.

MR. BOHUSLAV: Just a couple of comments. He made a statement about the two bids before. These were let by the city before. Is that right, Larry?

MR. DEAVERS: No. It was TxDOT let.

MR. BOHUSLAV: Local let?

MR. DEAVERS: It was let three times: August of last year, you let in February and you got no bids; I think August of last year was like maybe two or three bids and the guy that was low was like half of what the estimate was.

MR. BOHUSLAV: Did we let it or did the city let it?

MR. DEAVERS: You let it.

MR. BOHUSLAV: The second time it was let by the city, though.

MR. DEAVERS: No. The second time it was let by TxDOT too. This is the third time, so if you don't award it, you're going to be letting this job four times and there's no guarantee you're going to get any bids on it the next time.

MR. BOHUSLAV: I don't have facts on it but I'm told something different. But he did say something that concerned me, that contractors are not getting proposals, and this occasion we know what happened, but what you said a while ago about your not receiving the proposals. Are you talking about recently?

MR. DEAVERS: I'm talking about in the last 12 months.

MR. WILLIAMSON: He's talking about during the time you've been doing it, so he's kicking dirt on your shoes.

MR. BOHUSLAV: Well, that concerns me so we need to check into that.

MR. WILLIAMSON: Coby told me you're spending too much time on your trombone.

MR. BOHUSLAV: Oh, my gosh.

MR. WILLIAMSON: I've loosened old Tommy up in five years. Remember how dry he used to be? Tom Bohuslav.

(General laughter.)

MR. BOHUSLAV: The complaining contractor with the complaint, they requested their proposal on a Wednesday, they called us and said they had contacted us before, we have no record of that. And we keep records there of all the requests for proposals; they do it by phone, by fax or they can do it actually by internet. They contacted us on a Wednesday, we were going to overnight it to them, they were either going to get it Thursday or Friday and they had to get their proposal in to us by one o'clock on Friday, and we found afterward that they never got their proposal.

There are other things that we could have done to get them an information proposal, they could have pulled one off the internet, we could have discussed some things like that. The fact is we did not get the proposal to them and we had an opportunity to do that.

MR. WILLIAMSON: Tom, do you think that we're at fault for the guy not getting his proposal? I mean, Mr. Deavers makes a good point about everybody knows what the rules are.

MR. BOHUSLAV: Well, let me say that I bear some responsibility in that, in getting a proposal to a contractor.

MR. WILLIAMSON: Well, that's a fair answer. Thank you very much for that. Do you think to the point that we should not move forward?

MR. BOHUSLAV: I think you have discretion in this situation to award or not to award.

MR. WILLIAMSON: I guess what I'm asking is are you looking for us to just look at the facts?

MR. BOHUSLAV: I provided you a recommendation of how we approach it, but I think you have discretion in this case to decide on your own as to what you see.

MR. WILLIAMSON: Because you know, it's a rare occurrence for us not to do as you recommend.

MR. BOHUSLAV: We are very strict on how we handle these proceedings, we are very strict, and I think you have to take other things into account on how you act.

MR. WILLIAMSON: I'm prepared to think about this one, so do you want to ask questions, Ted?

MR. HOUGHTON: The overriding question is, Tom, if we've done it three times, we're going to do it a fourth time, there seems to be a disconnect on this.

MR. BOHUSLAV: I will research this.

MR. WILLIAMSON: I mean, what you're telling me is it's been out there three times and we're all about getting projects built and getting it over with, and enhancement money.

MR. HOUGHTON: I'd like to defer it till next month where they can do the adequate research on that issue alone.

MR. WILLIAMSON: Can we do that: defer the decision and then award it to Mr. Deavers if we decide that things are okay?

MR. HOUGHTON: If, in fact, what is stated is true, and if, in fact, Thomas bears --

MR. BOHUSLAV: Well, I'm wondering if you want to defer because it's been let --

MR. WILLIAMSON: Amadeo walked up and Richard started walking off. I think we're in trouble.

(General laughter.)

MR. SAENZ: Amadeo Saenz for the record. We can defer the contract. This is also an enhancement project for which the overrun money needs to come from the local entity.

MR. JOHNSON: Which is the City of Rosenberg.

MR. SAENZ: Which is the City of Richmond.

MR. DEAVERS: Amadeo, that has been approved. I talked to Mr. Trietsch about that.

MR. SAENZ: We would need to verify. We could defer so that we can verify all of these things and then bring it back to you next month.

MR. WILLIAMSON: John, are you okay with that?

MR. JOHNSON: Well, I knew this was an enhancement project and the amount of the award, the enhancement money was not sufficient to cover the entire cost, and so the locals were having a little bit of heartburn, if you will, about that.

MR. SAENZ: Right, and that's what we would check with the city.

MR. JOHNSON: So the arrangement is that everything in excess has to be provided by the sponsor. There's also part of the enhancement money goes to TxDOT for administration.

MR. SAENZ: That's correct.

MR. JOHNSON: So that's taken out, so the locals are on the hook here for a fair amount of money.

MR. SAENZ: I think we can recommend that we can defer this one and that we can research it and get the buy-in from the city that they're willing to cover the overruns, whatever they are, and at the same time we can research some of the other information that was provided by Mr. Deavers.

MR. WILLIAMSON: Mr. Deavers, do you understand why we're having this discussion?

MR. DEAVERS: I understand.

MR. WILLIAMSON: Enhancement money is a little bit different from gasoline tax money.

MR. DEAVERS: Yes, I understand and I confirmed that with Mr. Trietsch yesterday that he had already talked to the locals, but you need to confirm all that.

MR. WILLIAMSON: And Tom, I'll kind of ask you the same way I asked Carlos, we don't want to give you the impression that we're not accepting your recommendations.

MR. BOHUSLAV: I have no problems.

MR. WILLIAMSON: We see unusual things like this and we just ask questions.

MR. BOHUSLAV: If we defer to next month, it will give the other contractor with a complaint the opportunity to come and discuss it with you as well. I just wanted to remind you and we will notify them.

MR. WILLIAMSON: Okay. Well, I think that Mr. Johnson suggests that he moves to approve item 15(a)(2) with the exception of the matter concerning that contract number -- I want to cite it correctly --

MR. BOHUSLAV: 3226.

MR. WILLIAMSON:  -- 3226 which we will defer action upon in the motion.

MR. JOHNSON: Can we talk about the Calatrava Bridge? Isn't that part of this?

MR. BOHUSLAV: Yes, sir. The Calatrava Bridge, estimated at $51 million, it came in at $113 million.

MR. JOHNSON: Did you bid on that one, Mr. Deavers?

MR. DEAVERS: No, but my former boss did.

(General laughter.)

MR. BOHUSLAV: The city is looking for ways to fund their overrun, they primarily fund the overrun on that. They're looking for ways to fund it and they are working on that now and they hope to have something here by the time you meet next July. This is a conditional award, they have to bring that money in before we can do a formal award to the contractor.

MR. JOHNSON: So in other words, what we're approving is conditional award depending on the city filling in the gap between the $51- and the one whatever it was.

MR. BOHUSLAV: Yes, sir, $113 million.

MR. JOHNSON: Thank you.

MR. WILLIAMSON: Well, I'm glad you asked the question because I was going to ask it as a matter of general reference after we presumably passed item 15(a)(2), but I think I'll ask it now. I wouldn't presume that the commission would do anything unusual. We've been fairly self-disciplined on what we do with our money in the last few years, but I know this is an important project to that city and to that administration, and it may well be the case that we'll be asked to help more. Is there anything in approving this that would prevent us from doing that later on?

MR. BOHUSLAV: Say it again.

MR. WILLIAMSON: Is there any reason why approving the item as it's written would prevent us from helping the city out with the cost of this bridge later if the commission was so moved?

MR. BOHUSLAV: That would prevent us from approving, there's nothing.

MR. WILLIAMSON: Because I suspect they're going to get the cost down but I think it's not going to get it down enough, and I suspect all four of us are going to be visited -- which is okay.

MR. BOHUSLAV: In regard to the award, we have to make the award at the full amount, and we award it at the amount and if there's anything that occurs afterwards, we don't deal with that at this time.

MR. WILLIAMSON: But we're not prevented from doing that. That's my question, Amadeo. If they come to us and ask us for more help, if we're inclined to do that in exchange for something that we need from them, I just want to be sure we're nor preempted from doing that.

MR. SAENZ: No, sir. We can certainly do that. We do have a letter from the city that they are committed to coming up with the funding, and that's why we conditionally award. If they come through and part of the funding that they've come up with is that they've convinced us to provide some additional, that's perfectly all right.

MR. WILLIAMSON: Well, I just think we've got a lot of things brewing in Dallas right now and I think the NTTA 121 project is kind of calming down where we can speak rationally with everybody, and I think we'll have a chance to help them and they'll have a chance to help us.

MR. SAENZ: I think we can accommodate that.

MR. WILLIAMSON: Okay. So Mr. Johnson moves 15(a)(2), amended to defer action on the contract number Thomas previously read into the record having to do with the enhancement project in Richmond. Mr. Houghton seconds.

MR. HOUGHTON: Yes.

MR. WILLIAMSON: All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Mr. Deavers, your government at work.

MR. DEAVERS: Thank you, I appreciate it.

MR. BEHRENS: Agenda item number 15(b) is a Contract Claim in Karnes County. Zane?

MR. WILLIAMSON: How are you feeling?

MR. WEBB: Good, sir. Yourself?

MR. WILLIAMSON: Good.

MR. WEBB: Commissioners, good afternoon. I'm Zane Webb, director of the Maintenance Division and chairman of the Contract Claim Committee.

The minute order you have before you approves a claim settlement for a contract by T.D.M., Ltd. for Project STP 2003(372) in Karnes County in the Corpus Christi District. On May 11, the Contract Claim Committee considered this claim, made a recommendation of settlement to the contractor, and the contractor has accepted. The committee considers this to be a fair and reasonable settlement of the claim and recommends approval.

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

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

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

MR. WEBB: Thank you, sir.

MR. BEHRENS: Item number 16 concerns Building Construction. There's four recommended minute orders; I think all of those are about the same in explanation. You can sort of craft that and then you can name those individual locations.

MR. WEBB: Yes, sir. If you don't mind, what I'll do is I'll make a single explanation because all four minute orders are exactly the same in what you're authorizing us to do, and then I'll give you some specifics as you pass each one, if that's all right.

MR. WILLIAMSON: Yes, sir.

MR. WEBB: You're authorizing us, under this minute order, to issue a request for qualifications and proposals to rank, select, negotiate a development and exchange agreement with a firm for the design and construction of a new facility on state-owned property in exchange for existing properties.

In a kind of straightforward explanation of what we're doing, we've got some properties that have been surrounded by commercial properties or schools and we've already bought property in other locations, we simply don't have the capital funds to put buildings on those properties. What we'd like to do is enter into a private-public cooperation to leverage the capital funds that we've got through trading the properties that we're on for buildings on the new properties. In some cases we'll come out of it whole, we think, in that we will get enough money out of the existing properties to complete a building, in other cases we may not quite get there, and we may have to supplement the building of that building with some of our capital funds.

MR. JOHNSON: Why are we considering this? I mean, it looks like these are in the Waco District and in the Dallas District, two in each.

MR. WEBB: Yes, sir.

MR. JOHNSON: We have a process that we're reviewing all of our area maintenance offices and trying to update them, and why these in particular? Are they outdated, are they too small? What's the cause of this?

MR. WEBB: Yes, sir. The answer is yes. We've already done a review of all the properties that you're talking about, they do need to be replaced, and that's why we've already purchased property there. We simply haven't had the capital funds in the past to build those buildings yet. What this does is give us the ability to leverage what capital funds we've got with private money for those existing properties to go ahead and make the move now rather than waiting several bienniums for the capital to come in.

MR. JOHNSON: Do you foresee that we're going to have sort of a stream of these past these four?

MR. WEBB: Yes, sir, I do. I think if the administration agrees, we'll probably have a couple more next month, and I think you're going to get a few, and then as time goes on and we develop those and see how things go, then you're probably going to get some more.

If there aren't any questions, I'll go directly to the specifics of each one. Item 16(a) is three properties we own: a Belton office on the southeast side of the city of Belton is an area office; on the north side of Temple on I-35 we have a maintenance office; and over at Killeen near Fort Hood we have another maintenance office. We'd like to send out an RFP to trade all three of those properties for improvements on a piece of property that we own by the Expo Center in northwest Belton.

MR. JOHNSON: So are we consolidating three maintenance offices into one location?

MR. WEBB: That was already done, Commissioners, substantially. We still have a few people in the Temple office; it was an area engineer and maintenance office; we've only got a few people that work on signal controllers. In the Killeen office it has gone from a full maintenance section down to a subsection. So a lot of that consolidation has already taken place over at the Belton office.

MR. HOUGHTON: So we're taking an asset, selling it and rolling it into construction or expansion of a new facility.

MR. WEBB: Correct, sir.

MR. HOUGHTON: Okay. On obviously all three of these.

MR. WEBB: Yes, sir. Staff recommends approval of item 16(a).

MR. WILLIAMSON: Okay, members, we've got item 16(a), (b), © and (d) in front of us, and as you know, I prefer to vote on items individually, so you've heard the staff's recommendation and explanation.

MR. HOUGHTON: So moved.

MR. WILLIAMSON: So moved on 16(a).

MR. JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second on 16(a). All in favor of the motion, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Thank you. Motion carries. Item 16(b)?

MR. WEBB: Thank you, sir. We want to relocate the Grand Prairie maintenance staff with the area engineer in Dallas at the Greenville area office. We have a piece of property at Cedar Hill already purchased and we'd like to take the property in Grand Prairie and trade it for some improvements on the Cedar Hill property. Staff recommends approval.

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. WEBB: Item 16(c), at the Waco area office, the existing office on State Highway 6 on the west side of Waco, that property is surrounded by commercial property. We also have a site that we've purchased on the loop on the southeast side of Waco, and we would like to move that area office by exchanging the property on Highway 6 for improvements on the property on the loop that we already have. Staff recommends approval.

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

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. WEBB: Item 16(d), we've proposed to relocate the area engineer from the district headquarters now in Dallas, along with the Rockwall maintenance section to a site that we presently own in Garland, Texas. Staff recommends approval.

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

MR. WILLIAMSON: We 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: Item 16(d) carries.

MR. WEBB: Thank you, sir.

MR. WILLIAMSON: Thank you.

MR. BEHRENS: Agenda item number 17 is our Routine Minute Orders. They've all been duly posted as required. I would like to bring your attention to 17(a)(4) which is a donation connected with our Vehicle Titles and Registration Division. We have some people here from State Farm, and I'll ask Rebecca to present them and introduce them and maybe a little explanation of this particular minute order.

MS. DAVIO: Okay, great. Commissioners, we are here today to ask for your permission to accept a donation from State Farm Insurance Company. This donation is in support of the "Put Texas in your corner" campaign. As you probably are aware, the "Put Texas in your corner" campaign is a positive educational campaign that encourages folks to register their vehicles on time, and as you also know, registering vehicles on time yields money to reduce congestion and to increase economic development, to improve air quality, to increase safety, and so we're excited about this campaign.

We're also excited about this campaign because it's had a number of successes in its short tenure. The contract was only signed last March, a year ago March with Think Street, a company that has demonstrated a lot of creativity, and we have had a lot of success on this. One of the first successes is that we've had a five-to-one return on investment on our radio advertising dollars. They created a very creative campaign, very creative ads that generated a lot of interest that also got a lot of air play.

Then we came back with another success to win awards for these creative campaigns. We have won seven American Association of Motor Vehicle Administration awards, and that includes regional awards and international awards for the radio, and the TV commercials and the brochures that have been produced for that. We also have recently won eight Telly Awards for those broadcast commercials.

This campaign is targeted at new Texans and at 18- to 34-year-olds which research has demonstrated are non-compliers, and we're happy to report that another success is a very high level of awareness, particularly for a new campaign. The overall awareness of the message, "Put Texas in your corner/Check the Date, Love Your State" was at 16 percent, and at 32 percent in the target market of 18- to 34-year-olds.

The last success that we're excited about is that of partnerships and that's why Mr. Ronnie Lee Vandivier is here. He's the Texas Zone marketing manager, and he is here today to tell you just briefly a little bit about what State Farm is willing to do to participate to support the "Put Texas in your corner" campaign.

MR. WILLIAMSON: We are glad you're here, we're glad you stuck with us. We thought that row was a bunch of interns back there.

MR. VANDIVIER: Bless you. I look like an intern. Thank you. It's a pleasure to be here this afternoon, and I did get to see Texas government at work. I am not a native Texan but I got here as fast as I could, and I'm very impressed how you all have handled this today.

We were surprised when we were approached. We thought that a project of this magnitude would have been taken over by someone else. We find it very important for us as an insurance company to make sure that we have safe vehicles on the highway, and the way you are doing it in this state, it lends help to support us.

Our other initiative, too, of course, is we want to keep our name in front of young drivers and that's who you're targeting. That's very beneficial. We look at this as similar to "Don't Mess With Texas" which has now been used in other states in a lot of different ways, and we believe that Texans will embrace the campaign wholeheartedly.

We have 1,400 agents and with agents and staff and employees, it's almost 10,000 people. We're going to roll the program out to them and encourage them to do the same. I was in front of our executive office and we will be putting the Texas Pride decals on all company vehicles which is about 200 to 300 vehicles.

So we're very much behind the program and we just would like to work with the Department of Transportation any way we can.

MR. WILLIAMSON: We're so happy to hear you say that and we appreciate your kind words. Where did you get to Texas from?

MR. VANDIVIER: I may be in the witness protection program. I was born in Kentucky, I lived in Illinois, I lived in Iowa, now I'm in Texas.

MR. WILLIAMSON: Well, we're glad you're here and we hope you stay.

MR. VANDIVIER: I would like to.

MR. WILLIAMSON: We need all the Texans we can get.

MR. VANDIVIER: Thank you for your support.

MR. HOUGHTON: Thank you very much to State Farm.

MR. WILLIAMSON: We really do appreciate it, and thank you for being so patient today.

MR. VANDIVIER: I learned a lot.

MR. BEHRENS: And commissioners, I think you'll notice that that will be an in-kind donation of about $1.5 million.

MS. DAVIO: Yes. Thank you.

MR. WILLIAMSON: We appreciate it a lot.

MS. DAVIO: It's a very successful campaign.

MR. HOUGHTON: Do you need to know how to spell my name?

MR. JOHNSON: Small, unmarked bills.

(General laughter.)

MR. WILLIAMSON: Thank you, sir. Good to see you.

MS. DAVIO: Request your approval of the minute order.

MR. BEHRENS: With that, commissioners, I would move to approve that minute order as well as the other routine minute orders that are before you.

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. That's it, Mike?

MR. BEHRENS: That is it.

MR. WILLIAMSON: Richard, to your knowledge do we have any reason to go into executive session?

MR. HOUGHTON: Wait a minute. We've got half an hour to get the mayor back here to sing.

MR. WILLIAMSON: Half an hour we can break the record.

MR. HOUGHTON: That's my point.

MR. WILLIAMSON: You know, we've already said it, and everybody is gone, Richard, but sincerely, we will miss you. We wish you the best on your retirement, and lots of fun and all of that.

(General talking and laughter.)

MR. WILLIAMSON: Don't be a stranger, come see us.

The most privileged motion.

MR. HOUGHTON: Move to adjourn.

MR. JOHNSON: I second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. We are adjourned at 5:13 p.m. Thank you, members.

(Whereupon, at 5:13 p.m., the meeting was concluded.)

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