COMMISSION MEMBERS:

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

STAFF:

Michael W. Behrens, P.E., Executive Director
Bob Jackson, Interim 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's 9:02 a.m., and I would like to call the August 2006 meeting of the Texas Transportation Commission to order. It's a pleasure to have each of you here this morning.

Please note for the record that public notice of this meeting, containing all items on the agenda, was filed with the Office of the Secretary of State at 3:29 p.m. on August 16, 2006.

As we always do, please join with me in taking a moment to place your pager, cell phone, Booray, and whatever else you carry around electronically that might interrupt us, on the silent or vibrate mode. We'll all do it together. We thank you very much.

It is our custom to open with comments from the commission. Commissioner John Johnson had a family emergency, and at the last minute was unable to make our meeting today. We do have a quorum, three of us being present, and we will begin our comments with Mr. Houghton. Ted?

MR. HOUGHTON: Thank you, Mr. Chairman. I want to welcome all of you here today. I think we have a very interesting agenda. There's a lot of great stuff that I believe will happen today, in my opinion, and I welcome you to the Transportation Commission meeting here today. Thanks for coming.

MS. ANDRADE: Well, I echo Ted's comments. Thank you all for joining us this morning. As I was driving in from I-35, I saw the most beautiful sunrise, and it just reminds me how fortunate we are to live in the great state of Texas. And I agree, Ted, we've got a lot of business to take care of today, and we will just keep on working on moving transportation forward in Texas. So welcome.

MR. WILLIAMSON: And I associate myself with the remarks of my fellow commissioners. We do welcome you. We appreciate you taking valuable time out of your day to participate in advancing the cause of solving the transportation problems facing the state of Texas.

Before we start on the agenda items, please let me take a moment to remind everyone that if you wish to address the commission during today's meeting, we ask that you complete one of two speaker cards which can be found on the registration table to your right in the lobby. If you're going to comment on an item posted to the agenda, we would ask you to fill out a yellow card and also identify the agenda item upon which you wish to comment. If you wish to comment on a matter which is not on our agenda, we will take your comments in the open comment period at the end of our meeting. For those comments, we ask that you fill out a blue card, again giving us the information on yourself and the matter upon which you wish to speak.

In any event, our meetings traditionally last longer than we all wish they would, and it would be considered a favor to us if you would try to limit your comments to about three minutes per person.

Members, the first item on the agenda is the approval of the minutes for the July meeting. Copies of the minutes are included in your briefing materials. Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

Michael, let's skip around just a little bit. I don't want to take up the discussion items just yet. What I'd like to do is go to Aviation and Public Transportation and our Administrative Rules first.

MR. BEHRENS: All right, we will do that. We'll go then to agenda item number 3 which is our Aviation item for the month of August, and we have three minute orders that Dave Fulton, our director of Aviation, will present to you.

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

Item 3(a) is a minute order that contains a request for grant funding approval for 52 airport improvement projects. The total estimated cost of all requests, as shown in the Exhibit A, is approximately $18,600,000: $15 million federal, $1.5 million state, and approximately $2 million in local funding.

A public hearing was held on July 21 of this year, no comments were received, and we would recommend approval of this minute order.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation on this minute order. Do you have any questions or comments directed to staff?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. FULTON: My next item is item 3(b). This is a minute order for the purpose of continuation of the Routine Airport Maintenance Program for Fiscal Year 2006. The program allows the department to match local funds for airport maintenance and small capital improvement work items on a 50-50 basis, up to an approved amount in state funds.

The recommended changes we suggest to the program from the last year are to increase state participation from $30,000 to $50,000 per airport for Fiscal Year 2007. And we would recommend approval of this minute order, and be happy to answer any questions.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation. Do you have any questions or comments for staff?

MR. HOUGHTON: Dave, just one question. How many airports are listed here?

MR. FULTON: Last year we had 169 airports that participated. There are approximately 270 airports eligible but not all participate every year, so I think the listing here -- and I'm not sure exactly how many are in it -- but all those airports are eligible, so it would be something around 270 airports that we have in our system.

MR. HOUGHTON: General aviation?

MR. FULTON: Yes. And the program also covers the smaller air carrier airports like Victoria, San Angelo, and those airports as well.

MR. WILLIAMSON: Hope, do you have questions?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

MR. WILLIAMSON: Hang on a second, if you don't mind. It just struck me. Is there not a general aviation airport in the Austin area, or does Bergstrom not participate?

MR. FULTON: Well, Bergstrom would not be included in the program as it's structured today because it's pretty self-sufficient. The program historically has covered the smaller air carrier airports and the general aviation airports. We do no have an airport in Central Texas; we're continuing to try to work on that; there's some interest that's surfaced recently. We've been up and down on this for a long time, but we're still trying to establish a Central Texas airport.

MR. WILLIAMSON: So I notice Georgetown is listed. We don't consider that an Austin area general aviation airport?

MR. FULTON: Well, they are reliever to the Austin area, as is San Marcos, but it is not what I would consider an Austin airport. As you, I'm sure, recall, the legislature directed us a few years ago to establish a new Central Texas airport to serve the Austin-Travis County area, and it's been a difficult undertaking, we haven't been that successful to date but we're still working on that.

MR. WILLIAMSON: Is that because it's difficult to find a location?

MR. FULTON: It is. It also requires the concurrence of the local governing body, and initially Austin and Travis County were not that interested in a new general aviation airport.

MR. HOUGHTON: They believe Bergstrom is adequate? I don't want to put you on the spot.

MR. FULTON: I don't know what their reason exactly was. I will say that the Department of Aviation at Bergstrom has now been talking with us, communicating that they would like to try help encourage this, so I think maybe things are becoming more positive, hopefully.

MR. WILLIAMSON: Okay. That was all my questions. Further?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. FULTON: My final item is a minute order to recommend reappointment of two members to the Texas Aviation Advisory Committee: Mr. Joe Crawford of Abilene, Mr. Greg Jones of Houston. Both individuals meet the statutory requirements for service on the committee.

Both Mr. Crawford and Mr. Jones had planned to appear before the commission, but were unable to do so due to scheduling conflicts. They both asked me to convey their appreciation for considering their reappointment.

We would recommend approval of this minute order.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation on this minute order. Do you have questions or comments?

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.

And Dave, tell those guys it was nice of them to think about coming, but time is the most valuable thing people have and we understand those things.

MR. FULTON: I'll certainly pass that on.

MR. WILLIAMSON: They've served our state well and they'll continue to do so. It wasn't necessary for them to be here.

MR. FULTON: I'll pass that on.

MR. WILLIAMSON: Thank you, Dave.

MR. BEHRENS: We'll go to agenda item number 4, this is Public Transportation. We have one minute order which will be adding some people to the Public Transportation Advisory Committee, and the other minute order would be amending an award to the Job Access/Reverse Commute Program. Eric?

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

This first minute order appoints four members to the Public Transportation Advisory Committee:

Donna Halstead, representing the general public, this is a reappointment. Ms. Halstead is the president of the Dallas Citizens Council and a former member of the Dallas City Council.

Mr. Kari Hackett, also representing the general public, this is a new appointment for Mr. Hackett. Mr. Hackett is the Transportation Program manager for the Houston-Galveston Area Council and has more than 25 years of transportation planning experience.

Mr. Mark Maddy, representing transportation users, this is a reappointment for Mr. Maddy. Mr. Maddy has been an advocate for persons with disabilities in the Rio Grande Valley for much of the past 19 years, and serves on the Brownsville Urban System Advisory Committee.

And then finally, Mr. Fred Gilliam, representing the public transportation providers, this is a reappointment. Mr. Gilliam is the president and CEO of Capital Metropolitan Transportation Authority here in Austin and has over 43 years of experience managing and operating public and private transit systems. Additionally, he is our 2005 winner of the Friend of Texas Transit Award.

Current terms expire on September 30, 2006; terms for these appointments expires on September 30, 2009. We would recommend your approval of this minute order.

MR. WILLIAMSON: Members, you've heard staff's explanation and recommendation. Do you have questions or comments?

MS. ANDRADE: Eric, I just want to say that we're so appreciative of Donna Halstead willing to serve again, and also Fred Gilliam. They've just been great to this committee.

And I may remind you, Mr. Chairman, Mark Maddy is the gentleman that brought the young students to our commission meeting in the Valley. And I'm so pleased that we now have someone from Houston.

So you've done a great job, and thank you so much, Eric.

MR. GLEASON: Thank you.

MR. WILLIAMSON: Ted, anything?

MR. HOUGHTON: No.

MR. WILLIAMSON: I echo Commissioner Andrade's comments on Ms. Halstead and Mr. Gilliam and to Mr. Hackett and Mr. Maddy. Public service of a volunteer nature is often public servitude, and we appreciate people who are willing to participate in this process.

Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

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

MR. GLEASON: All right. The next minute order awards JARC Program funds for colonias projects. This minute order rescinds and withdraws Minute Order 110571, approved at your June meeting this year, and awards $2,379,023 of Job Access/Reverse Commute funds, as allocated in Exhibit A.

Subsequent to the passage of Minute Order 110571 on June 29, 2006, department staff discovered an error in the calculation of the award to each agency. Correcting the error resulted in additional funds being available to fund more of the projects submitted than originally anticipated. Exhibit A now includes allocations to each qualified project submittal.

Of note, the amounts awarded to the Community Action Council of South Texas, Lower Rio Grande Valley, and the McAllen Express are the result of a collaborative process among these three agencies on how to split up the available funds. The Pharr District staff and Mario Jorge, the district engineer from Pharr -- who is here today as well -- were instrumental in facilitating this agreement.

And then one final change from the previous minute order, on mutual agreement of the agencies involved, LULAC Project Amistad, will be the recipient of program funds rather than the Upper Rio Grande Workforce Development Board.

We recommend your approval of this minute order.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation on this minute order. I have a couple of questions. Do you have questions or comments?

MR. HOUGHTON: I don't.

MR. WILLIAMSON: Eric, I want to observe that every year we get to address the transportation world when we gather for our convocation at that school in Bryan -- no, no -- College Station, and each commissioner tries to deliver a message -- some of us try to deliver it on Jumbotron after today, I think -- each commissioner tries to deliver a message to the staff and the participants that kind of gives guidance to the philosophy of the commission at that time.

And one of the things I've tried to emphasize to all of our employees, and by extension to our family of transportation participants, is that we should not be afraid to take a risk, we should not be afraid of failure, we should not be embarrassed to correct when we make a mistake, we're normal like everyone else.

I want to tell you how much I appreciate the fact that you caught and reacted to the miscalculation. I don't see it as a weakness in our system, I see it as a strength, and I think our ability to do those things and just move forward with business as usual is a compliment to the integrity of our staff. I just want to recognize you for that.

I think you're doing a wonderful job in the position we hired you for, and the state of Texas is blessed with having a foreigner come in and take over the program.

MR. GLEASON: I appreciate that. Thank you.

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

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. GLEASON: Thank you.

MR. BEHRENS: We'll go to agenda item number 5, this is our Proposed Rules for Adoption. We'll go to agenda item number 5(a)(1) and this will be rules concerning the distribution of motor vehicles. Brett?

MR. BRAY: Mr. Chairman, members, Mr. Behrens. This item is a request to publish a proposed rule concerning qualifications for licensees -- I'm sorry -- I'm Brett Bray, director of the Motor Vehicle Division.

MR. WILLIAMSON: We were wondering who you were.

MR. BRAY: Qualifications for licensees of the Motor Vehicle Division specifically deals with criminal behavior and background.

In 1981, the legislature enacted Chapter 53 of the Texas Occupations Code, and it's entitled A Consequences of Criminal Conviction.@ It concerns criminal conduct by licensees and potential licensees of state agencies and it has two main components: it requires the revocation of an occupational license at the time somebody goes to prison which I think you can see the logic in that; and it authorizes boards and commissions to further develop standards and parameters for denying or revoking a license in the particular field being regulated because of past criminal conduct.

The gist of this proposal is to prevent someone from getting a license until three years has passed since serving a sentence for felony conviction or for certain other relevant offenses.

We believe that conviction of a felony is such a serious event and is very important in determining fitness to hold a motor vehicle dealer's license. Furthermore, certain other types of infractions, whether they are legally categorized as a felony or some lesser criminal offense, are also of prime importance. These would include an offense relating to the distribution or sale of vehicles, odometer fraud, title fraud, tax evasion, and vehicle identification number plate tampering.

Each of you can probably think of something else, and in lengthy discussions, it seems that no two people hold precisely the same view as to what is or isn't a relevant criminal conviction for purposes of holding a dealer's license; however, the list that I just gave you seems to be a consensus by all.

The same can be said for the number of years of a waiting period after serving a sentence for committing a felony. Some people say that an individual has paid their debt to society by serving a sentence imposed and should be immediately thereafter eligible for a license; others say that once a person has been convicted of a felony, they should never ever get a license; the rest would pick some time period in between.

And the question is why did we pick three years. It could be any number, really, and of course, ultimately it will be up to your decision what that number will be. We chose three years because we believe it gives someone an opportunity to be out from supervision a sufficient period of time to show that he or she is not prone to recidivism and has, in fact, been informed to the point where Texas can take a chance on them and allow them to get a dealer's license.

Beyond this three-year period for felonies, the proposed rule allows the department to further examine each individual case where the offense was one of the industry-related ones that I told you about earlier to determine if a license should ever be granted.

It could be that some licensees would be caught up in this rule and that's why we drafted a type of grandfather clause that prevents denial where conviction was disclosed to the department by December 1 of this year, 2006.

This rule, I think it's important to note, will apply to corporate directors and officers, as well as partners in partnerships. This follows our enabling statute and it's consistent with the regulatory mission we serve. Also, the rule talks in terms of all licensees which encompasses more than just dealers but virtually all of the licensee types that we administer at the agency.

Two of the department's five core goals are furthered by this measure. The proposed rule enhances safety for the car-buying public by preventing individuals that have been shown to be a threat to consumer safety and well-being from holding a license, and it also fosters expansion of economic opportunity by promoting a dealer body with appropriate credentials to be entrusted with important personal and confidential customer information, as well as funds and collateral belonging to lien-holders. It also encourages a business climate in which law-abiding individuals can fairly compete.

With that, I conclude by asking permission to publish this proposed rule pursuant to the minute order in your packets, and I'm happy to try and field any questions you may have.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation. Do you have questions or comments?

MR. HOUGHTON: Brett, do you think that the centerpiece is the three-year waiting period? Would you call that the centerpiece of it?

MR. BRAY: Yes.

MR. HOUGHTON: And what basis did you derive or come to the three-year, just a number?

MR. BRAY: It's just a number.

MR. HOUGHTON: Like other states or do we know what other agencies in this state do regarding licenses? I know they're quite different.

MR. BRAY: I haven't got an exhaustive study for you, and the examination that we did, it's how you described it, it's all over the board. How people treat chiropractors or beauticians, it's just all over the board.

If I'm not mistaken, three years has been part of the department's policy before. I think Vehicle Titles and Registration's similar rule embodies three years, or at least it used to.

MR. HOUGHTON: What about a driver's license?

MR. BRAY: I'm sorry, I don't know the answer to that. I don't think felons are precluded from driving.

MR. HOUGHTON: If they use a car in the act of a felony?

MR. BRAY: I don't know, other than what I read in the papers, because I think there is something. Obviously there's the trend for --

MR. HOUGHTON: DWI, DUI.

MR. BRAY: Yes, sir, right.

MR. HOUGHTON: I was just curious.

MR. BRAY: Like I say, just to reiterate, in my case the three-year period was picked because we just think that's long enough for somebody to be out. I mean, you can never, I guess, be totally sure unless you say never ever, once you've gotten a felony, you can never ever hold a license. Short of that, it seems to me that if you haven't been in trouble for three years, you're probably not prone to recidivism.

MR. HOUGHTON: Okay.

MR. WILLIAMSON: Any more questions or comments?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BEHRENS: We'll go to agenda item number 5(a)(2). This is another Proposed Rule under Contract Management being the Claims Procedures. Amadeo.

MR. SAENZ: Good morning, commissioners. For the record, Amadeo Saenz, assistant executive director for Engineering Operations.

This minute order proposes the repeal of rules and adds new sections to rules concerning contract claims and contract claims for CDAs. The proposed rules concern dispute resolution under the department's construction contracts. When a contractor or the department files a claim, it is processed by the department's Contract Claim Committee. The new rules will have specific provisions related to how you handle claims in the comprehensive development agreement projects.

Section 9.2 was repealed and reformatted, and current 9.2 adds a new section to 9.2 where we rewrote the rule to put the procedure in more chronological order for ease of understanding and to make the rule easier to use when a contractor or the department files a claim.

This proposed section also has some substantive changes. It adds a requirement that the contractors shall certify the accuracy of the claim. This is modeled after federal law and ensures that the contractor has reviewed the facts, verifies their veracity, and is authorized to file the claim. The section also provides that if the contractor files a false claim, he or she shall forfeit that claim. The provision is meant to preclude any other remedies at law when a person files a claim.

It also changes the procedure when a contract claim is settled by the Contract Claim Committee. The rules will no longer require the executive director to place the matter upon the commission's monthly approval agenda. The executive director can either approve the settlement himself or ask the commission to approve it, giving him the option.

New Section 9.6 is the new process that we're introducing for our comprehensive development agreements. It would authorize the department and a CDA developer to use this new type of contract claim procedure. The Contract Claim Committee would not consider these types of claims. Rather, they would be considered by a disputes board created under the CDA.

The justification is the ability of a developer under a CDA to effectively raise equity and debt financing for a CDA project depends on an administrative process where the disputes are resolved as quickly as possible, and the decision-maker is not a party to the CDA and that produces finality of the decision within reasonable time.

Under the description of what we have in the rules, under the proposed rules, a CDA can provide for the processing of a contract claim in the following manner: the claim shall be referred for some time to the informal dispute resolution process, just like our normal projects, where we at TxDOT and the developer are trying to resolve it as a dispute. If the informal dispute resolution process fails, the claim is then referred over to this disputes board.

The disputes board is a decision-making body created as needed on an as-needed basis. Each party will nominate one member to the disputes board and the other party can object to a nominee. When the disputes board makes a decision on the claim, the decision will be considered final and binding on both parties. There are some exceptions, and I'll go over those now.

The decision by the disputes board may be appealed if the party believes that there was disputes board error. This will be defined in the CDA but generally it will be very narrow. If the parties allege disputes board error, then that issue will be considered in the administrative hearing process of the State Office of Administrative Hearings.

The executive director, similar to his role in our regular claim process considered by the Contract Claim Committee, still approves the final resolution of the claim, but under the CDA the parties may restrict the executive director's discretion. The executive director may only implement a decision of the disputes board.

These rules are proposed. We will receive comments all the way till 5:00 p.m. on October 9, and after we receive those comments, we'll bring them back for final adoption.

I'll be happy to answer questions with respect to the rules.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation. Do you have questions or comments?

MS. ANDRADE: Is this for any dollar amount?

MR. SAENZ: Yes, ma'am. The CDA can set up a mechanism where you handle these different disputes -- and I'm talking for CDAs -- you can handle and set them up under that particular CDA for different dollar amounts that you can handle them differently, but that would be up to what would be negotiated in the CDA process.

The regular Contract Claim Committee is for any amount it follows the same process, for our regular contracts.

MS. ANDRADE: And through this process, the state is protected in that?

MR. SAENZ: Yes, ma'am.

MR. HOUGHTON: And this applies to the most recent negotiated contract?

MR. SAENZ: Yes, sir, it will.

MR. HOUGHTON: So moved -- oh, I'm sorry, Mr. Chair.

MR. WILLIAMSON: Other questions or comments?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. SAENZ: Thank you.

MR. BEHRENS: We have one more rule for proposed adoption, and this is under Contract Management, and this concerns awarding a contract under building improvement contracts. Zane.

MR. WEBB: Good morning. I'm Zane Webb, director of the Maintenance Division.

This item proposes the adoption of amendments concerning highway improvement contracts to allow the department to award a building contract for less than $300,000 to the second lowest bidder if the lowest bidder withdraws its bid after bid opening.

The Transportation Code allows the department to award a maintenance contract for under $300,000 to the lowest bidder, however, department rules require all building contracts to be awarded to the lowest bidder or rebid. Authorizing the award of building contracts involving less than $300,000 to the second lowest bidder, if the bidder agrees to the unit price of the lowest bidder would expedite contract awards for needed building contracts, avoid additional expenses, improve continuity and efficiency of building contract lettings and management.

Staff recommends approval.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation? Do you have questions or comments? I'll have one.

MR. HOUGHTON: None.

MR. WILLIAMSON: Mine is in the nature of a comment, Zane.

MR. WEBB: Yes, sir.

MR. WILLIAMSON: This is the next step in the evolution of creating a Department of Transportation that acts like a business. I appreciate your work on this. I know this is a different world for us but this is the way to become more effective and more efficient with the taxpayers' dollars, and I appreciate your work on it very much.

MR. WEBB: Thank you, sir.

MR. WILLIAMSON: Do I have a motion, members?

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.

MR. WEBB: Thank you.

MR. WILLIAMSON: Mr. Behrens, I see that we have the Honorable Roy Blake, Jr. with us. Roy, I apologize, we jumped the schedule on you. I knew you were going to be here and I didn't realize it, so please accept my apology.

MR. BLAKE: Mr. Chairman, commissioners, Roy Blake, Jr. State Representative, House District 9. I appreciate the opportunity to be here and thank you for allowing me to come before you and express my thanks for already acting on this item on the agenda.

As someone who has worked closely with the city in my role as mayor several years ago, and having worked with the chamber of commerce and the economic development group in Nacogdoches, I certainly understand, Mr. Behrens, the importance of a good airport facility, and now, as a newly licensed pilot, I really am excited about this project.

The airport has got a long history there in Nacogdoches and it's always good to see continued improvements. We have a very active FBO there now that has a flight school, obviously, and we're making improvements out there. They've invested, they have over five or six employees, instructors and mechanics, and so things are looking well out there, and I appreciate your confidence in our community with your actions today.

MR. WILLIAMSON: Well, we thank you for the kind words.

Members, do you have comments?

MR. HOUGHTON: Do you plan on using that new pilot's license to get to and from Austin in a more expeditious way?

MR. BLAKE: Actually, I flew today, and the old saying if you're in a hurry, don't fly, certainly does apply. But we left early this morning and the forecasted winds weren't exactly the actual winds, so it took us a little longer.

MR. HOUGHTON: On the nose of the plane.

MR. BLAKE: That's right.

MR. HOUGHTON: It's pretty bad when the cars, you look down, they're passing you.

(General laughter.)

MR. BLAKE: And the little plane that I flew in, that happens sometimes, you're exactly right. But it was an uneventful flight, so that's what we want.

MR. WILLIAMSON: Thank you, Representative Blake, and thank you for your service to the state of Texas.

MR. BLAKE: Thank you, appreciate it.

MR. WILLIAMSON: Let's go back to 5(b), Mike. I'm not quite ready to start the rest.

MR. BEHRENS: Okay. We'll go to agenda item number 5(b). This is one rule we have for final adoption, and this concerns amendments to our International Bridge rules. Jim.

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

Item 5(b), this minute order adopts amendments to Sections 15.70 through 15.76 to be codified under Title 43, Texas Administrative Code, Part 1, relating to International Bridges. Amendments are necessary to implement the provisions of House Bill 1653, 78th Legislature, Regular Session 2003, to clarify certain terms and definitions, update statutory references, clarify existing information, modify requirements for public involvement, and allow for a comparison of competing applications.

The amendments were proposed by Minute Order 110539, dated May 25, 2006, and published in the June 9, 2006 issue of the Texas Register for the purpose of receiving comments. No comments were received. Staff recommends approval of this minute order.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation on this minute order. Do you have questions or comments?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

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

MR. BEHRENS: Agenda item number 6, and Jim will present you two minute orders, one appointing some new members to our Bicycle Advisory Committee, and the other concerning authorization for some bridge replacements in Jefferson County.

MR. RANDALL: Again, Jim Randall, Transportation Planning and Programming Division.

Item 6(a), this minute order appoints four new members to the Bicycle Advisory Committee. The committee's primary mission is to advise the commission on bicycle issues and provide a forum for communication between the department, bicyclists and the public. The committee functions under Title 43, TAC, Section 1.85 concerning Advisory Committees. Originally Senate Bill 602, 79th Texas Legislature, Regular Session 2005 tasked the committee with advising and making recommendations to the commission on the development of the bicycle tourism trails in the state.

When appointing the members, the commission may consider facts such as geographic desirability and occupational diversity. Upon your approval, the new members will be appointed as follows: terms expiring August 31, 2009: Robert Gilbert of Houston, Kristy Hansen of Austin, Tracey McMillan of Austin, Sheila Holbrook-White of Austin.

These candidates are recommended for the Bicycle Advisory Committee.

MR. WILLIAMSON: Members, you've heard the explanation and recommendation of staff on this minute order. Do you have questions or comments? I will have one.

MS. ANDRADE: Does this include the gentleman that came before us that --

MR. RANDALL: Robin? He's the chair. We have seven already; we're adding four additional members to help us with the Safe Routes to School.

MS. ANDRADE: He didn't resign after all?

MR. RANDALL: We didn't accept, and I don't think the commission did.

MR. WILLIAMSON: No, we didn't accept his resignation.

MS. ANDRADE: I'm glad he stayed.

MR. WILLIAMSON: Ted?

MR. HOUGHTON: No.

MR. WILLIAMSON: I thought Carlos usually brought these kinds of minute orders to us.

MR. RANDALL: The Bicycle Advisory Committee is under TPP's responsibility.

MR. WILLIAMSON: Is that a recent shift?

MR. RANDALL: No, sir.

MR. WILLIAMSON: Is my memory beginning to fail me, as it does with older people?

MR. RANDALL: No, sir. The relationship is that we decided that we needed to expand the Bicycle Advisory Committee to look at the Safe Routes to Schools Program, and help them in judging proposed applicants and stuff like that.

MR. WILLIAMSON: So let me ask you, where's Tommy?

MR. RANDALL: I don't know, we haven't seen him in a long time.

MR. WILLIAMSON: Is he still on our committee?

MR. RANDALL: Yes, sir, he's still on our committee.

MR. WILLIAMSON: But he's not showing up?

MR. RANDALL: Well, they haven't met in a while, to be honest with you, sir. And this fall we intend on starting to look at the tourism trails issue, and so we'll either have a meeting or we'll do some kind of teleconference situation so we can meet with them.

MR. WILLIAMSON: Tell Tommy we miss him.

MR. RANDALL: Okay, sir.

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. RANDALL: Yes, sir.

Item 6(b), this minute order authorizes CONSTRUCT authority for two bridge replacement projects in the Beaumont District in Category 6, Structures Replacement and Rehabilitation Program of the 2007 Statewide Preservation Program. Both bridges are on County Road 257 in Jefferson County.

The first bridge, located over South Fork Taylors Bayou, was recently closed due to accelerated deterioration after the recent flood. The southernmost span is collapsed and the south approach is failed. The bridge is also on a bus route and essential for the movement of local residents and industrial traffic. The increased travel time due to the road closure detour is approximately one hour, and the county requests replacing this structure as soon as possible.

The second bridge, located over Mayhaw Bayou, was recently inspected and it has extensive damage and deterioration to the pilings, bed cap and beams. The bridge is load posted at 24,000 pounds which restricts truck traffic serving a petroleum reserve of strategic national significance in the area.

In order to provide Jefferson County citizens with a safe and efficient transportation system, it is necessary to advance these bridge replacement projects to CONSTRUCT authority at a total estimated construction cost of $1.1 million. We recommend approval of this minute order.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation on this minute order. Do you have questions or comments?

(No response.)

MR. WILLIAMSON: What is 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.

MR. RANDALL: Thank you, sir.

MR. WILLIAMSON: Mike, I think for purposes of letting the audience know where we're headed, I'd like to take up at this time Mr. Chase and find out about our legislative program, and then we'll ease into Mr. Saenz on comprehensive development agreements, if that's okay with you.

MR. BEHRENS: That's fine. We'll go to 2(a) then, and as you know, for several months Coby has been bringing recommendations for you to consider that we take to the legislature in the next session. Coby.

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'll further discuss the formulation of the commission's legislative priorities for the 80th Session of the Texas Legislature.

For the benefit of those in the audience, let me point out that while we've had these discussions once a month here at the commission, my staff and I have been traveling the state, speaking to anyone who will listen about what the commission is considering. Not surprisingly, there has been some push-back but there's also been a lot of active engagement in what we're doing.

And as I reported at the last commission meeting in El Paso, we've mailed it to a number of interest groups, cities, counties, to over 1,800 organizations this week and last week. We didn't do that two years ago but we did it this year, and we'll see what kind of feedback we get from that. And we probably missed somebody, it's a big state with a lot of people and a lot of organizations, but we'll see. It's almost 1,900 letters that we sent out this week and last.

Clearly, there are those who have a deep interest in how TxDOT conducts its business. We work very well with both our public and private sector partners, and there's a healthy back-and-forth that we have when it comes to proposing change. While we strive to find a common ground on details on any given issue, let me emphasize that we need to be clear up front about what our goals are and what problems we are trying to solve. Any compromise that can be reached must remain faithful to our goals.

With that, I have organized some of the major issues you are considering based on the goals that they are designed to attain. This is not a comprehensive listing of all the issues -- I've done that in the past two months -- rather, this is a rundown of our major issues.

Clearly, those issues that enhance the department's ability to expand capacity in the highway system will help us achieve all five goals. I'm talking about more resources for transportation.

One measure we've discussed is a proposal 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. By depositing these fees in the Mobility Fund, we can leverage this revenue in order to get projects on the ground faster.

Another issue that impacts our bottom line is the expense associated with relocating utilities along the interstate and US highways. Whether the utility was there first or whether they jumped into our right of way for free, taxpayers pick up the tab when it is time to move utilities from one strip of free right of way to another strip of free right of way.

We have started some active and interesting, and I will say animated discussions with the utility industry about that concept, and you'll be hearing more, and I imagine quite a bit, about that issue as we press ahead.

MR. HOUGHTON: Let me stop you, Coby.

MR. CHASE: Yes, sir.

MR. HOUGHTON: On that animated conversations with utilities, what kind of utilities?

MR. CHASE: Right now it's been telecom and then an energy company.

MR. HOUGHTON: Okay.

MR. CHASE: And I believe we're going to be creating a working group to discuss that and the value of those things that occur in the right of way, the value of things that are transmitted or moved, or whatever the case may be. As the commission has pointed out over and over again -- that's not to put too fine a point on this -- that there is no free ride on the state highway system. There's been one for many, many years and utilities that are in the right of way need to understand that as well too, because it can cost many hundreds of millions of dollars to move these utilities and put them back.

MR. HOUGHTON: Well, I'm sorry the chair is not here, I was going to ask him, since he's in the business, and maybe our legal counsel knows. But when you transmit -- not transmit -- oil and gas through a pipeline, there's got to be a transportation cost to that product. I would imagine we would be looking at a transportation cost through hard wire and digital and fiber optics that may lay in our right of way.

MR. CHASE: I think that's a good point, and we will certainly bring that up in our discussions and dig into that deeper, so to speak.

MR. HOUGHTON: Thank you.

MS. ANDRADE: So Coby, are we considering leasing?

MR. CHASE: Yes, that is certainly something we're talking about.

MS. ANDRADE: That's been brought to my attention before.

MR. CHASE: And not to be one-sided, it's not all just the department's version of this is correct, the utility side of the table certainly has some legitimate issues related to this, but it has been a very expensive relationship over the years, and leasing is certainly something that's going to be at the top of our list of things to try to resolve.

MS. ANDRADE: Thank you.

MR. CHASE: An alternative to increasing our resources would be to receive better prices. This is accomplished by ensuring greater competition. Competition improves our bottom line, certainly, but it also increases the productivity and effectiveness of our program. The competitive process provides the means for finding out who can offer the best ideas, designs, technology, delivery, and quality of products and services. Competition motivates potential contractors to offer better value if they are to obtain TxDOT contracts. All of these factors contribute toward our five goals.

The proposal to establish a quality-based, best value method of procuring professional services certainly enhances competition and therefore meets all five of your goals.

There are also opportunities to ensure greater competition for TxDOT projects by enhancing the comprehensive development agreement process. There are numerous issues regarding CDAs that need to be included in your recommendations to the legislature. These include the repeal of the CDA sunset date and the statutory cap on CDA-related expenditures, and the 50-year cap on concession terms, and a few other issues that we've discussed previously.

MR. HOUGHTON: What are we talking about concession terms, Coby, going to, 100, 99?

MR. CHASE: I don't have that number in front of me, but it is definitely lifting the cap, and 70 years -- and I'm not saying that's the number, but I know that's one that's been used quite a bit.

MR. WILLIAMSON: I think our challenge in explaining that to the legislature is unlike other ways of approaching business in state government, the comprehensive development agreement contemplates that you will negotiate, and I don't know if you've touched upon making sure that, for example, the NTTAs or the HCTRAs of the world have this same authority, but we're going to support that.

The notion that you would tie our hands or NTTA's hands or HCTRA's hands or CTRMA's hands, or whoever it is, in how they negotiate the best value deal for their community is sort of contra to our idea of extending authority to local and regional governments to solve problems. I think the fear in government always of privatization is people don't know what they're doing and they'll make bad deals, but that's a fear that all of us live in our private lives every day, those of us who are in the corporate world live in our corporate life every day, and the reality is you don't become stronger as an individual or as an organization if you're protected from the impacts of your own decisions.

So what we have to convey to the legislature is the laudable goal of protecting people in the end makes everyone weaker and results in a higher cost transportation asset.

MR. HOUGHTON: Well, not only higher cost, but undoable, not doable deals.

MR. WILLIAMSON: Possibility of not getting the transaction done at all.

MR. HOUGHTON: Right, can't get a transaction with some of these things that we're now finding out.

MR. WILLIAMSON: As you know, Hope, if we were in a relaxed mode in San Antonio, if we had all of the road space and public transportation and clean air we could stand in San Antonio, we wouldn't be worried about these things, but the reality is when I woke up this morning, Coby, what did I first think about?

MR. CHASE: You had an $86 billion problem.

MR. WILLIAMSON: I had an $86 billion problem between now and 2030.

MR. HOUGHTON: That's not what I thought about.

MR. WILLIAMSON: And if we don't do something, that problem is going to get worse, not better.

MR. HOUGHTON: It's that LED legislation we're talking about.

MR. WILLIAMSON: I read about that. What's the deal with you're A&M kids and that LED thing? We'll talk about that in a minute.

MR. CHASE: Okay. Other toll road related issues include granting the commission the ability to acquire toll roads.

MR. WILLIAMSON: Before you get off CDAs, I need to ask you another question.

MR. CHASE: Yes, sir?

MR. WILLIAMSON: Is it my understanding -- and Bob Jackson may have to answer this -- is it my understanding that our position is a unit of government, whether it's an elected unit, Harris County, or whether it's an appointed unit, NTTA, cannot themselves propose a comprehensive development agreement, law prohibits them from competing for a contract?

MR. CHASE: I believe so.

MR. WILLIAMSON: Bob, can we talk about that for a moment?

MR. JACKSON: That is correct.

MR. WILLIAMSON: Okay. I understand -- I don't agree with but I understand the government rationale of we don't want TxDOT competing with Kiewit to construct a project for TxDOT, and I understand that. Like I said, I don't agree with it but I understand it. But I'm not sure I understand the rationale that says the Permanent School Fund cannot, after thoughtful consideration, propose a comprehensive development agreement that is, in effect, a financial transaction, not just a construction contract. Are we sure about our position on that?

MR. JACKSON: Yes, sir, we are. Under state law, TxDOT's CDA statute only applies to the private sector. I don't think that was done purposefully to exclude the public sector, I don't think anybody thought about it at the time that law was enacted in '03. There are federal regulations restricting public-private competition.

MR. WILLIAMSON: Is it possible for us to recommend or is it possible for the legislature to pass statute? And I want to give you a real world example because we have some people from Dallas here today. I read where my friend, Margaret Kelleher, voiced some concern about transactions occurring in North Texas that might result, in her view, of Dallas County maybe needing to think about withdrawing from NTTA and taking their Dallas-based assets and running their own toll authority -- which I happen to think is not a bad idea. If I lived in Dallas County, I would be thinking about that also.

But it occurred to me that as the county judge or Mr. Blades, as a city council person, if they saw a transportation project in the city of Dallas or in Dallas County that they legitimately believed was beneficial only to them and felt like they should compete for a solicited comprehensive development agreement to build that project for the region of the state, if I understand the law, they couldn't do that.

MR. JACKSON: That's right, they cannot.

MR. WILLIAMSON: And I think that's silly. I mean, I think people elect city council persons and county government persons to make those kinds of decisions. So can the State of Texas redefine its laws where they can do that?

MR. JACKSON: Yes, with some federal restrictions.

MR. WILLIAMSON: Federal restrictions being we couldn't get reimbursed from the federal apportionment for any money the state spent on that project?

MR. JACKSON: At the least, yes.

MR. WILLIAMSON: Thank you, Bob.

Coby, I would think we would want to do some research, I would think we would want to notify stakeholders and begin to educate -- from Jerry Patterson to Bill Blades, we would want to begin to educate people. Again, that's in direct contravention to our strategic plan to encourage competition, to empower local and regional government. We ought not to be afraid of that.

MR. CHASE: Oh, no, absolutely not.

MR. HOUGHTON: Also, Mr. Chair, I would like to encourage looking at not only concrete and steel but transmission, electrical transmission in the corridors, water transmission. I think we're restricted there also under the CDAs in those corridors. I think we need to look at the cap to make those economically viable for the private sector.

MR. CHASE: Okay.

MR. WILLIAMSON: That's a very good suggestion, because in light of the current water crisis, if I understand the law correctly, for example, Tarrant County Water Board couldn't give us a CDA to build and operate a water line inside the corridor.

MR. HOUGHTON: We have a great opportunity in the very near future with Trans-Texas Corridor and water transmission from different parts of the state, electrical transmission. Are we restricted, Amadeo, as to the concession we can give, the terms of the contract under, what, 75 years?

MR. SAENZ: The Trans-Texas Corridor, the concession is 50 years.

MR. HOUGHTON: Fifty years. I'm sorry. So I think that precludes a lot of the private sector from being involved in those types of transactions.

MR. CHASE: And just to clarify just because this is something that comes up quite a bit when we're talking about water being moved around the state, it is not the state taking somebody's water --

MR. WILLIAMSON: Yes, we're not empowered to take water.

MR. CHASE: Right, and we're not being empowered. That just gets misinterpreted.

MR. HOUGHTON: Right. It's a private sector initiative.

MR. WILLIAMSON: And we don't even want to be empowered, that's one we don't want.

MR. CHASE: This does not give us the authority to require anybody to send any water anywhere. I just wanted to make that clear.

MR. HOUGHTON: It's a private sector initiative to transmission water from one sector to another and we're providing that right of way, but at the same time, we're participating in the transmission of that through fees.

MR. CHASE: Yes. Just like we could take nobody's electricity or nobody's oil or nobody's gas. That issue just kind of gets misinterpreted and spread around that we are in the business of taking people's water and reselling it.

So yes, absolutely, we'll dive deeper into that, certainly.

There is perhaps no more important issue before us this next session than seeking to capitalize the Rail Relocation and Improvement Fund, and this matter certainly impacts all five goals. We've started initial discussions -- let me put it this way -- with some of the big rail companies and are pushing some ideas back and forth. There's been some active discussion about some of the ideas that were originally put forth by us through a study that an engineering firm did.

Our rail partners are digesting those and seeing what works for them and what doesn't, and then we're kind of re-igniting the discussion of why the legislature created the Rail Relocation Fund and the voters overwhelmingly approved it. BNSF in particular has really done a lot of outreach to understand that better and see how they can make that work.

MR. WILLIAMSON: My understanding, also, is that Kansas City Southern is most aggressive in trying to seek funding for the rail relocation.

MR. CHASE: Yes. I personally haven't met with them yet, but yes, you're exactly right, Mr. Chairman.

And enhancing safety on our highways is, of course, tantamount to all other goals you have established for the agency. Authorizing a system of sobriety checkpoints is proven to lower the incidences of drunk driving. It should be established in Texas as well.

Like I said, this is a very short version of my usual comments, that's not ever single issue that we're pursuing. Like I said, we hope to get some active participation from the 1,800 or 1,900 letters we sent out this week and last.

I want to end on one thing, unless there are any questions. Posted yesterday on our website is our new Strategic Plan -- this is a poorly printed version of it -- and the printed copies will be available tomorrow and they will go out to everywhere, all the districts, everyone else. This was the Strategic Plan that you approved at the El Paso meeting, and it will be hot off the presses, but right now it is on our website.

MR. WILLIAMSON: Complete with goals, strategies, tactics, time lines, environmental solutions?

MR. CHASE: Yes, sir.

MR. WILLIAMSON: External factors, a real plan?

MR. CHASE: Some maps, some pretty pictures.

MR. WILLIAMSON: As opposed to the word plan.

MR. CHASE: Absolutely.

MR. WILLIAMSON: Members, other questions or comments directed to Mr. Chase?

MR. HOUGHTON: Good job.

MR. CHASE: Thank you so much.

MR. WILLIAMSON: Coby, we don't want anybody to be surprised, no one needs to be able to say we didn't warn them or we didn't tell them, we didn't disclose where we thought we should be.

For purposes of scheduling for the audience, I want to make you aware of what's fixing to happen. We're going to take up items -- unless Mr. Behrens objects -- we're going to take up items 2(b), 7(b) and 7(a), and we don't want to run anybody off, but it's going to take a little longer than the time we've taken to snap through the administrative items we've just moved through. And in conjunction with taking those items up, I need to read into the record the following statement which is very important for the commission and the agency. If you'll bear with me.

The public involvement phase for the Tier One Draft Environmental Impact Statement for the Oklahoma to Mexico element of the proposed Trans-Texas Corridor project, or TTC-35, ended on August 21. The report and the discussion which will follow this statement are all intended as a means to inform the commission of the nature of the oral comments received during the public hearings, not only in the Dallas-Fort Worth area but in the state. Any comments received from the public today will not be made a part of the record for the Draft Environmental Impact Statement.

The commission will not be acting on this item. Any opinions espoused by a commissioner today are the commissioner's individual opinion and will not be a part of the record for the Draft Environmental Impact Statement. Commissioners, no doubt, will make statements during the day but they will be only and solely their individual opinion, not intended to influence the decision by the Federal Highway Administration.

Having said that, Michael, I would like to take up item 2(b), please.

MR. BEHRENS: Okay. Item 2(b) is another discussion item, and the purpose of this one is to inform the commission of the status of identifying the next generation of comprehensive development agreements for toll road projects in Texas. Amadeo will lead that discussion.

MR. SAENZ: Good morning, commissioners. Again for the record, Amadeo Saenz, assistant executive director for Engineering Operations.

Agenda item 2(b) is a discussion item where we provide you some information as to what we are doing in the area of developing and looking into potential future CDA projects across the state.

We have put in place a procedure and a main goal of our procedure is we basically look at accelerating projects to improve mobility. We want to take these projects and we analyze these projects under some different criteria, the criteria being: readiness, qualitative risk, mobility needs that the project addresses, and also the financial feasibility of that individual project. We take these projects that we have identified across the state that come from metropolitan mobility plans and projects that also our districts submit, and we run them through these criteria and try to identify if these projects are good potential CDA projects, and then when these projects would be ready to move forward. We want to develop a priority project pool so that we can direct our resources more effectively.

MR. WILLIAMSON: Amadeo, we all know what some of those things mean, but I want to be sure that the audience understands. What do you mean, at an executive level, when you say readiness?

MR. SAENZ: Let me jump to that.

MR. WILLIAMSON: Well, if you're going to explain it later on, don't.

MR. SAENZ: It's part of my presentation.

MR. WILLIAMSON: Then continue.

MR. SAENZ: Projects will be screened for suitability as potential concession CDAs or what type of CDA we will try to move forward with. The screening exercise is a work in progress. As we gather more information on the project, as we drill down and get more detailed information with respect to financial traffic and revenue studies, engineering costs, and such and so forth, we're able to refine and determine which way the project goes.

The project pool to be screened will evolve over time and new projects will continue to be added to this project pool, and of course, these projects include those projects that can be developed by TxDOT or projects that can be developed by others such as regional mobility authority or the NTTA or HCTRA, depending on where that project is located.

The first of the screening criteria we call readiness, and the readiness basically means it's an estimate of the earliest time a procurement could begin either for the entire project or for a portion of the project. The primary drivers that we look at for the readiness criteria is we look at: how long is it going to take us to have environmental clearance; what additional traffic and revenue studies do we need to do; what additional engineering studies do we need to do; and then what kind of regional support is there for the project.

What we're trying to do here is we're trying to look at this project, we're trying to run the environmental process and the environmental time line with the potential for when we would need to start the CDA procurement process with the goal being that we want to have the project environmentally cleared and also the project go through the six-month potential appeal process before we execute the CDA, the goal being that once the project goes through the environmental appeal process and we bring onboard a CDA developer, there is no more delay and basically the CDA developer can move on that project. It's important to have those coordinated.

The area of risk assessment, the qualitative risk assessment. Basically we look at the system interface, we see how is this project integrated with other existing and planned projects and infrastructure that's being developed in the area. What is the level of design that has been done on this project; what is the level of planning that has been done on this project; have all the geotechnical studies been done; have all hazardous materials; what is the project schedule.

We look at the operation and maintenance cost of the project, how are those going to be handled. We look at the traffic demand on the project. We look at the acceptability, does this project have the local support. You notice it was also in our readiness category. Does this project have the local support; is it in a plan of the particular metropolitan area. We look at what approvals and what scheduling needs to happen so that we can determine the risks this project has with respect to its development.

We look at what mobility this project addresses. Is it a critical mobility need that has been identified for an immediate congestion issue to resolve; has it been identified as a regional priority; is it a near-term project, something that needs to be done early, or is it something that maybe can be done in the long term. Does it meet the anticipated needs for a near-term facility when it's expected to open, what is this going to do from a mobility need when it's open.

And the final criteria that we look at, and it is very, very important, is that we do a financial analysis because what we want to do here under the financial analysis, we want to assure that this project, if it's been identified, that there are resources enough, if we move it through the CDA process, and if the process, for example, is a revenue-negative process that requires toll equity, that there are necessary funds allocated through the planning process that will cover that toll equity requirement so that the project can then proceed with the private equity and the toll equity complementing each other and be developed. If the project is a revenue-positive project, then we don't have to worry about trying to find other resources to make up that delta.

We look at the analysis to determine what the project will do, how much money will it bring, if it's going to bring some, or how much money will it need, and that will be a factor in determining how fast this project can move forward. If the project needs money, for example, and the locals have not addressed any resources to this project, then it may not be as high of a priority for them, this project may have to sit and wait.

We determine the net present value, and what we're trying to do is determine how much money do we need either in toll equity or how much concession fee could this project bring and what else will this address by bringing in a concession fee.

What we've done so far is we've identified some projects that are currently under development and they've come before you all, and these projects are being developed by other parties. I'll go over that list in a minute. We've also gone through and evaluated quite a few projects and we've identified some projects that are ready to begin procurement within the next two years. That means with respect to the readiness criteria, they're ready to go, they're moving forward, they're low to medium risk projects, these projects are critical or they meet near-term mobility needs, and they can result in an expected concession fee or they have the required toll equity already assigned to them that will allow these projects to move forward.

The second list of projects are projects that are a little bit further down the road, they're more than two years away from being ready for a CDA procurement because either the environmental is not ready or we do not have enough information to move those projects forward to determine exactly where they fit in the analysis. As I mentioned, this is an ongoing process, and as we drill down into the project and we get more data, we're able to do a much better evaluation.

Looking at the projects that are currently being worked by others, of course here in Austin the Central Texas Regional Mobility Authority has taken the lead and is working on 290 here east of town from 130 back to 183, and they're moving forward with a CDA, a design-build type CDA, and it's well underway.

In the Dallas-Fort Worth area, pending your approval of the protocol minute order that we have under another agenda item, agenda item 7(b), then in that case the 190 eastern extension of the President George Bush Toll Road, as well as the Lake Lewisville Bridge and the 121 Southwest Parkway in Tarrant County, those projects will be developed by NTTA under the terms of that protocol.

And of course, in the San Antonio area we've worked with the Alamo RMA and they're working on the development of the Wurzbach Parkway, State Highway 16, and the I-35 Northeast project.

The projects that we've identified as priorities, these projects are ready for development within the next two years. They may be ranked using the following criteria: they're already ranked for readiness, they focus on what project is ready for procurement first; they're ranked by financial, they focus on the project that generates concession or has the required toll equity; and then they also are ranked based on where these projects fall with respect to mobility, focusing on is this a critical project, is it a near-term or a long-term project.

This table here shows what projects we've identified as projects that are ready to move forward. For example, when we look at an extension of the 121 project that I spoke of earlier, it's ready for development now because we should have environmental clearance by early next year. When we ran the financial feasibility, that project is a concession project, it brings in enough revenue for a concession fee. It's a near-term project, and of course, it may be done through NTTA or it may be done through the CDA process, depending on the protocol.

We have other projects that we've identified in the different areas of the state, and these projects are kind of what I would say are projects that we're ready to move forward.

MR. HOUGHTON: Amadeo, I counted nine projects in the Dallas-Fort Worth Metroplex, if I know how to count, and five or so in the Greater Houston Area, a significant amount of projects.

MR. SAENZ: Yes, sir. We've been working closely with the Dallas District, the Fort Worth District, the RTC. As they've identified their plan, they've really taken the lead and are moving forward with putting together their comprehensive plan that includes both tax roads and toll roads, and these are some of the projects that are moving forward. We're now running them through the analysis, and our next steps with respect to these projects -- which I'll cover in a few seconds -- is going back to them and identifying and moving those projects forward to see what impact it has on the transportation system that they're trying to develop.

MR. WILLIAMSON: Later on in the morning -- in fact, I would suspect rather shortly -- we're going to have a public discussion on the RTC's proposal to expand the study area for TTC-35 in the northern part of the state. Which projects on this list that we're looking might reasonably be thought of as portions of the final product potentially or as connectors or supporting arterials to the RTC's view of the north end?

MR. SAENZ: Right now I don't have a project on this list here, I have it in the next list of projects. These are projects that I call future projects. And the reason I go back and say that, these projects are basically screened and ranked based on the readiness criteria. These are projects where the environmental process has moved forward, and we've got under readiness environmental clearance within two years.

The project that I'll talk about in a few minutes, Commissioner, to answer that, if you bear with me, will be a project that we call Loop 9 that's being developed in the Dallas-Fort Worth area. And that project is in various stages, it's a long project, it's a 200-mile loop project. Part of the project is under environmental work right now, some of it is just beginning, some of it is still in the planning phase. So because it's not really completely ready, we don't have, but we will be looking at that and collecting more data and seeing how we can evaluate the readiness criteria, the financial assessment criteria, and the mobility need I think we've already identified -- they have it in their plan and they need and they've identified it as a priority. But we can see how we can make that project move forward.

MR. WILLIAMSON: So it falls in the second group you're talking about?

MR. SAENZ: It will fall in the second group that we'll be talking about.

There's some projects, Commissioner Houghton, you mentioned about Houston, if you recall, last month in El Paso we asked you to pass a minute order to allow us to move forward with some of the projects in Houston that we felt are ready for development to go through the CDA process, and if you notice, these projects fall under this priority list. We have been working on those projects, collecting the necessary information and running the analysis, and those projects are ready to move forward through a CDA process.

What's the next step for these priority projects? The next step these priority projects is basically we're going to continue requiring environmental approvals because, if you notice, there were some that we still needed a little bit more information. We're doing the environmental process. Some of them need to be done over the next two years, we need to get that done. We're going to continue the discussions with the regional stakeholders. We're going to go back and visit with the people in Dallas and Fort Worth, the RTC, go back to Houston, visit with HCTRA and visit with the Houston District, go down to Pharr and visit with the MPOs and the RMAs in Cameron County and in Hidalgo County, and kind of put in place a mechanism on how these projects will move forward.

Who is going to take the lead and develop the CDA and what model brings the most resources back to the region is what we're going to try to do. Try to resolve those issues so that then we then assign someone to be the champion and take the lead on that project.

We're going to identify a project team to continue working on these projects. We're going to discuss project-specific policies; what approach to tolling, what are the toll rates going to be, we're going to be looking at toll rates and toll rate regulation; what is the business terms that we want to apply to this project from our programmatic terms; and then are there any unique circumstances on these projects that need to be addressed a little different than the normal way we've been doing CDAs.

At that point that gives us the opportunity to move forward putting out a request for qualifications and the other project documents to move the project forward through the CDA process. At the same time, the environmental process continues in parallel with the idea that both of these processes come together by the time that we receive the final proposals.

MR. HOUGHTON: Amadeo, this then begs the question. We've, in the past, looked at a CDA project in general as Point A to Point B. If there's value in the real estate in that piece of property, that then begs the concession, get the value out, spread it to the region. My understanding is -- you and I have talked about it -- instead of just looking at Point A to Point B, bring your intellectual capital, private sector, and tell me what else you can do in the greater region, whether it's connectivity to maximize the transportation assets. Is that something else?

MR. SAENZ: That's something that we're looking at. In fact, we are setting up some one-on-one meetings with potential developers to put in place exactly that mechanism where we identify a project but we want to be able to give them the flexibility. They proposed that project, but add to that project and make that project a much better project using your intellectual property, your ideas, your innovations, and what do you bring to that project. And the way we'll evaluate is we'll evaluate on the base proposal but also what else you bring and how fast you can bring it.

At the end of next month, September, we're scheduling some one-on-one meetings to go over that. Some of the push-back that we're getting from what we hear on some of the developers has to do with environmental risk, and it says I can't commit to bringing you the next project unless I already know that it's environmentally cleared, because how do I do that. We're going to try to get past that and find out how we do that.

Well, one way you do that is if the project is already in the plan, it's been modeled by the region, if it's in a non-attainment area, it's been modeled in their conformity plan, and if environmental has been done or is underway, there is a manner that that risk can be managed so that the developers will bring those projects.

So it's another opportunity that you can compare where they can bring additional elements to the project that will make not only this project better but also put in place improvements to the transportation system instead of just bringing cash.

MR. HOUGHTON: And are we going to involve our partners like RTC and Alamo RMA and others as to our thinking about the vast intellectual capital that some of these --

MR. SAENZ: Right. The first meetings, I'm trying to get the feedback from the developer side, and then as I get the feedback to address our concerns, then I want to bring in our partners, like the MPOs and the RMAs and the NTTA, to try to see how we can come up with a mechanism to solve those problems.

MR. WILLIAMSON: What I hear him saying is he's kind of asking for at least a nodding assent from us -- this isn't a minute order, we're not voting on it -- to proceed with -- and don't let me put words in your mouth, let me be sure I understand it -- your objective is to be sure that you've got the most amount of information about these projects that you can then share with the MPO and local governments so to sort of put you in a position of saying: Here's a project, we think the concession investment in your region will be X, if you choose that route; if you don't choose that route, that's your business, but we want you to know fully what the possibilities are with this project because we think that somebody ought to be moving forward with it, whether it's us or you or someone else.

MR. SAENZ: That's exactly our goal. We're trying to identify what is the highest potential for this project. We'll meet with the MPOs and say: Look, you have these projects that are in your region that you've identified; if we use this model, it will bring you this, if we use this model, it will bring you that, and we can weigh the differences.

If we develop a project, for example, that they've identified and it's a high priority project and we're willing to fund this project all with our local allocation, if we can bring this project as a toll project and free up some of their allocation, the different models that we can use or the different schemes that we can use in putting this project together with maybe intellectual properties or additional projects will maybe allow them to not only free up that money but bring in additional money or projects to the table.

So we want to get as much information as we can to see how we can improve, and our goal is to, in essence, build a transportation system in an area and help them as much as we can.

MR. WILLIAMSON: That's our objective. Our goal is to reduce congestion.

MR. SAENZ: Yes, sir.

MS. ANDRADE: I have a question, Amadeo. And I'm glad when I hear that we're going out to communities and talking about this, but I just want to make sure -- and you and I have had these discussions before -- that we give the respect to the RMAs that are set up already in making sure that they understand what we're doing in their particular communities, but also, as I understand correctly, they also have a choice of taking this project on.

MR. SAENZ: Yes, ma'am, that's exactly right.

MS. ANDRADE: But they need to know that the way we see it is it's a very CDA-appropriate project.

MR. SAENZ: We're trying to give them as much information so that they can make the best decision that is possible.

MS. ANDRADE: For their community.

MR. SAENZ: Yes, ma'am.

MS. ANDRADE: But I do want to make sure that we give them the respect that they're owed, that they are the mobility authority.

MR. SAENZ: We want to treat them as partners. We see that an RMA, in essence, can do everything that we can do, they have the same authority with respect to CDAs. What we have is we have the manpower and the resources already here and we have the data that we can evaluate the project. We want to share that with them to show them the potential those projects have.

MS. ANDRADE: And then they can choose.

MR. SAENZ: And then they can choose.

MS. ANDRADE: Okay, thank you.

MR. WILLIAMSON: What does the second list look like?

MR. SAENZ: Before we go to that second list, one of the things that we woke up this morning, we had an $86 billion problem, we go to bed tonight, we still have an $86 billion problem, we're not selecting any projects today. So what I did is I looked at the projects that we approved --

MR. WILLIAMSON: But when we open State Highway 130, Segments 1 through 4, we're only going to have an $82 billion problem.

MR. SAENZ: Right.

MR. WILLIAMSON: Well, it's important for people to understand. We've got a plan, we can close the gap. Closing that gap requires that we do certain things.

MR. SAENZ: Right.

MR. WILLIAMSON: Not just talk but do certain things.

MR. SAENZ: This list is the same list I had a little while ago but I've highlighted in yellow the projects that we had identified last month in Houston, and I also highlighted the 121 project in Tarrant and Johnson counties. And those projects, if you look under the financial assessment, they show that they bring in a concession fee.

So the areas have already identified in their area what their funding gap is, so if I look at Houston, HGAC has identified a mobility funding gap of $13.1 billion. These projects from the list before are projects that bring in a concession fee. The projects cost almost $3.4 billion to construct. They also will bring in a concession fee, or if it's in parentheses, they require a little bit of toll equity but since it was so close to zero, I left it as I'm showing it. These six projects will bring in $950 million additional concession fee. So when I look at Houston's gap, that $13.1 billion is reduced by the cost of the project. The project can be built by the private developer without any tax dollars, and it also could pay up to $950 million in a concession fee. So in essence, we lower the gap by $4.3 billion in Houston just with these projects.

MR. WILLIAMSON: And our gap doesn't include a value for the time Houston drivers would save if these projects were built. That's a question I'm asking you: that $4.3- doesn't include any value for that.

MR. SAENZ: No.

MR. WILLIAMSON: That $4.3- doesn't include any increase in the property tax rolls for those areas served by the new transportation infrastructure. That value doesn't assume any additional sales tax collection for businesses that expand or move into the area because of that. And does that include any value for the cleaner air that occurs because congestion is reduced?

MR. SAENZ: These projects will result in cleaner air.

MR. WILLIAMSON: But is there any value in that $4.3 billion?

MR. SAENZ: That's not included in the $4.3-, that's above and beyond.

MR. WILLIAMSON: That's just cash.

MR. SAENZ: This is just cash, this is just cash to build the project and cash to build other projects.

These numbers are still early numbers. As I mentioned, as we get more into the project and we're able to get higher level traffic and revenue studies and are able to refine the design, we're able to adjust those. These are also based on a 40-year -- I have to say that because that's what my staff told me -- they're only based on a 40-year concession, not the normal 50 or more, and they're set on certain interest rates.

So these, we think, are some preliminary numbers that we can use in the planning phase to make some decisions on this project and also to plan what other projects can be brought in, and as we go down, we feel these numbers will probably go up.

Next project that I have, a real simple example, I did the same thing for Fort Worth, and I just took this 121 project that is south of the project that we were talking about earlier. And that project, Maribel, costs about $250 million, am I correct? About $250 million. And when we ran up the numbers, this project, because it's such a low cost, can bring in additional concession fee of up to $635 million.

So just this one project now can be built with no tax dollars and we've got another $635 million to invest in other projects. This project we think has a tremendous impact. We're able to lower the gap that the Fort Worth District identified of $7.5 billion by almost a billion dollars. This is what some of these CDA projects can do for the area.

Now let's talk about the future projects. Future projects are those projects that because of where they're at in the project development are probably more than two years away from a CDA procurement because maybe the environmental is not there and we haven't carried them that far. And of course, we have a list of projects, and Mr. Chairman, you asked me about what project in Dallas-Fort Worth, and this is where we show that Loop 9 project.

MR. WILLIAMSON: Well, I was just curious if any lay in the footprint envisioned by the transportation leadership in North Texas.

MR. SAENZ: This project here is the project that the RTC has identified in their long-range transportation plan as their Loop 9 project.

MR. WILLIAMSON: So it doesn't just lay in it, it is the footprint.

MR. SAENZ: It is the footprint.

MR. WILLIAMSON: That they would envision. 

MR. SAENZ: Yes.

MR. WILLIAMSON: So would it rationally be called a connector or the actual footprint?

MR. SAENZ: It could be a connector or it could be the footprint. We don't know what it will be until the environmental process goes through its full course, and that won't happen until we get through Tier Two.

But the project could be developed as a stand-alone project and it could be developed as a connector project to the TTC corridor.

These projects, like I said, are projects in Houston, a couple of projects in Houston, the Bolivar bridge that replaces the ferry system. Hidalgo County, we're looking at a couple of loops in Hidalgo County that we'll be working with the Pharr District and also with the Hidalgo County RMA. Of course, we have the second causeway on South Padre Island that we're looking at, also with the Pharr District, and that would be a Cameron County RMA project that we would be working with.

These projects are more than two years away. They need a long-term need that's been identified. We don't have enough financial information yet to be able to make a full detail. As we gather more information, these projects could jump into the priority projects as we move forward and we also move the environmental forward. So these projects would be the ones that are ready to jump into the priority projects, you might say.

These are also some future projects that really we're working on this thing. As I mentioned, we're working on a lot of projects, over 40 projects that we're working on. We don't have enough information to really fully assess these so they're a little bit further behind. Based on our preliminary evaluation, these projects look like they have good potential, that they can have good potential to develop these projects.

Some of the projects that we show here, for example, we show some of the projects that we're working with San Antonio on Wurzbach, the projects on Interstate 10, both on the west side and the east side of San Antonio.

MR. WILLIAMSON: With a great deal of respect, Amadeo, we're at the time mark I need to stay with to make it through the day.

MR. SAENZ: I've got about one page or two pages and we'll finish this item.

MR. WILLIAMSON: If you could shorten it up, please.

MR. SAENZ: Yes, sir.

And this is the last list of projects. These are projects that were just brought in and we've just started our investigation, and as we move forward, we will provide you all updates of where we're at.

As I mentioned, we're looking at over 40 projects. The projects are at various stages of preliminary screening. We're assessing the readiness and looking at all the different criteria, then we'll characterize the projects for further analysis. We're going to continue to do T&R work for the priority projects. We'll be visiting with the MPOs, RMAs, NTTA, et cetera, and we'll be identifying how we move the project.

In essence, this is what we're setting up because we wanted to identify a program that will help our partners plan those projects and do better planning and get those plans into their long-range plan. It will help us in that we can allocate our resources. It will also help the private industry in that they can see kind of what projects we are looking at out there and what potential projects could be coming down the pipe.

That is a brief discussion on where we're at and what we're doing in the CDA process to kind of keep our program going. I'll be happy to answer any questions.

MR. WILLIAMSON: Members, I think what Amadeo wishes is to at least observe as to whether any of us object to this path of activity on the part of the staff, and I would like to reserve, if you don't mind, giving him any indication of that until we work through 7(b) and 7(a) so that we can fully understand the impact of what he's working on.

MR. HOUGHTON: Reserve comments.

MR. WILLIAMSON: That being the case, Mike, I would like to move to 7(b) and I would ask Mr. Morris if he has his team ready. Let's do something new in the world of transportation, Michael.

In order for the audience to be fully informed, we're going to try this and we're most comfortable trying it with our partners from North Texas because we've had the most interplay with North Texas over the last year in matters of regional agreement and disagreement. And if this works, this may well set the pattern for a lot of things that we do in the future, and that is on certain discussion items and in the resolution of certain differing positions that might reflect a legitimate state's interest, a legitimate region's interest, and a legitimate local interest, we're going to just start sitting down and talking during our commission meetings and air out our views and our opinions about different things in a way that maybe can bring us to resolution faster.

If this fails, it's my fault; if it succeeds, it succeeds to the credit of a governor who has a vision about transportation that he intends to deliver during his time in office.

Amadeo.

MR. SAENZ: Thank you, Mr. Chairman, commission members, distinguished guests. Amadeo Saenz, assistant executive director.

Item 7(b) is an action item. The minute order approves a protocol that has been negotiated between the NTTA and the Texas Department of Transportation for the development of projects in the Dallas-Fort Worth area. What I've done, I've prepared a power point because I think that we need to maybe fully hash this thing out.

The department has the Strategic Plan, as Coby talked about earlier. It's based on five goals and four strategies. Our goals are to: reduce congestion, enhance safety, expand economic opportunity, improve air quality, increase the value of our transportation assets. And the strategies that we'll use to meet those goals or to accomplish those goals is: we're going to use all the financial tools that are available to us that we've been given by the legislature; we're going to empower local and regional leaders to be able to go out there and identify and solve your problems; we're going to make sure that whatever we do we always include competition to ensure that we get the best value for the project; and we want to demand consumer-driven decisions be made as we develop those projects.

MR. WILLIAMSON: Let me interrupt you, Amadeo. I know that particularly our guests here at the table who know us so well hear us talk about our plan over and over, but not everyone who watches what we do gets a chance to see it. And it's just real important to the commissioners to emphasize all of us have experience at some levels of government and we know that a lot of people in the world of government use words without really understanding what those words mean or really serious about the words they use.

When we talk about having a plan, it's very important to us that you understand that we really have a plan. Now, it may not be the best plan, somebody might have a better plan; we might not have the best strategies, there might be better strategies; somebody else, Grady Smith might have a better tactic that needs to be executed than what we choose. But we do have a plan to solve the $86 billion problem this state faces, and this department is completely committed to the implementation of that plan in order to solve our problem. We are really serious. We're not doing anything around here if it doesn't reduce congestion and we're real serious about surrendering authority to local and regional government, we're not afraid of that.

I saw a PBS show about George Washington a few weeks ago up in the North Texas area -- I don't know who else in North Texas watches PBS besides me -- but it was real interesting to watch the portrayal of our first president in a context that I never thought about. In his times he was the first political military leader to lead an army to victory and then turn over the power of the purse to someone else. That had never occurred in the history of the world until President Washington did that. He led the military to a victory, had the entirety of the United States in his hands, and gave it to someone else and went home.

And that's an instructive lesson for the Department of Transportation. Rick Perry believes in local and regional government and we don't have any hesitation to hand that power to you.

Go ahead, Amadeo.

MR. SAENZ: As I mentioned, the purpose of the minute order is the minute order approves the protocol agreement with NTTA that implements basically a procedure to allocate and speed delivery of transportation projects in the region.

I guess if you look at it, the old relationship that existed between us and NTTA, as projects have been developed in the past -- and I'll use the example of the President George Bush Turnpike -- is that the taxpayers of the state provided NTTA with about $834 million in gas tax receipts to develop the George Bush Turnpike. NTTA then went and got the toll payers that use that facility, financed the additional $850 million so that they could build this project. With that, they were able to set the toll rates at 10 cents a mile. These toll rates would have been at least 15 cents per mile if the $834 million had not been provided and if we depended solely on the toll payers to pay for that asset.

The 15 cents a mile is pretty close to what the RTC has done in the last few months in identifying, under their CDA business terms, the toll rate that they want to use, so it's pretty comparable to what that is.

MR. WILLIAMSON: Let's let us stop and talk about that for a moment. One of the things that's come up in the last few months as a point of, Jack, sometimes some contention between us is this business of the toll rate. And this is our opportunity as commissioners and as staff to explain, we completely understood all along this transaction and didn't object to it. I mean, this is what the leaders at the time decided to do and no one faults anyone for that.

I think our view is our Strategic Plan requires us to begin to be as honest as we can with the taxpayers of the state and say it doesn't matter if we go to the market and borrow the money and build the road, it doesn't matter if you borrow the money and build the road, and it really doesn't matter if Cintra borrows the money and builds the road, the toll rate is going to be somewhere around 14-1/2 to 15 cents if you're going to finance 100 percent of the asset.

The problem this state has faced is we've been financing 180 percent of our assets on the backs of our children. By using a gasoline tax that only yields about 20 percent of the true cost of an asset, we are, in effect, shoving off to the next generation the inevitable cost of building new roads and maintaining the roads we've got built.

So I think this is our opportunity to say to you we maybe regret the hard feelings between us but our view all along was it's just a cash flow deal. We just have to all recognize what the true cash flow ability of these assets are and if the cash flow comes from gasoline tax, well, that's okay, if it comes from tolls, that's okay, but somebody has got to recognize that building assets is a matter of cash flow.

MR. HOUGHTON: And the other part, Mr. Chairman, is there's value in the real estate that's been purchased by the State of Texas that needs to be realized and monetized for the greater region, we just can't leave the value in the ground. And that's some of the things, Michael, you and I have talked about, getting that sunk value out and spreading it to the region.

MR. WHITLEY: Well, I think as we go forward, also, we've had a lot of discussion on the RTC with regards to this toll rate and I think there's a lot of fair about someone can just be able to take the tolls where they want to take them. I think ultimately, when you're looking at the tolls, the reason someone is willing to pay a toll is because they can get on that road and reliably go from Point A to Point B at what they think will be an appropriate speed.

So if we set the tolls too low and we end up with congestion on the toll road, then we've really not accomplished that purpose, and I think that's what the RTC has said. We've got a mold that we're starting with and we've set how we think we would like to increase those but I think ultimately we've got to look at what's going on in the corridor.

MR. MORRIS: Commissioner, would you read your name into the record, and then when we speak the first time, we need to say our names.

MR. WHITLEY: I'm Glen Whitley, Tarrant County commissioner and member of the Regional Transportation Council.

MR. SAENZ: To make it easy, when they do speak just repeat their name, that way the court reporter can pick up who's talking.

MR. MORRIS: Michael Morris. Let me add, Mr. Chairman and Mr. Houghton, to this particular question. During this particular discussion, I think there's two phases to this. The Regional Transportation Council, because of a broader view of responsibility of creating a financially constrained plan, there was a lot of pressure put on the Regional Transportation Council to have a similar view, probably as this commission would, to try to get as large a rate as possible and still not alienate the customer as part of that particular process.

The role of a transportation authority, say the North Texas Tollway Authority, doesn't necessarily have that same view because they don't have the same responsibility. So we can't be critical of a transportation authority, or frankly, an RMA that would set the rate at a different rate because their goals and objectives are completely different.

The next hurdle we're facing is between now and 2012 our region proposes to go to time-of-day pricing, and we will lower the off-peak period and we will raise the peak period. Why? Because our officials on this side of the table have an added responsibility, more so than even you, not just the financials of the system but the air quality obligations of air quality conformity. So we will have to do before and after studies to see what people's behaviors will be, but we have to reduce single occupant vehicle traffic if we're going to sustain ourselves in that non-attainment situation.

So if you increase the price during the peak period, you encourage car-pooling or transit usage, or discretionary trips to the off-peak period. We just need to do the before and after studies to be able to understand that particular behavior. If your goal is to reduce congestion, you should be charging higher in the peak period than in the off-peak period. It's an old school notion. Private sector doesn't use it, you know, if you want to use your cell phone during the peak.

I tried to get a rental car yesterday. The rental cars were used because there's a lot of things going on right now with conventions and people going back to school, the cost of that rental car was significantly higher than if they had 5,000 rental cars.

So you're going to see even the Regional Transportation Council get into a peak period pricing situation because of their goal towards transit, air quality, reliability and other structures, and I think what's critical, Mr. Chairman, is to communicate our objectives. Amadeo led it with this presentation. We need lots of time to talk to a region of 6 million people when between now and 2012 we introduce a time-of-day pricing situation.

MS. KOOP: I'm Linda Koop and I'm the chairman of the Transportation Committee for the City of Dallas and Dallas City Council member and the secretary of RTC.

I think what Michael is saying is true, and an interesting side light to that is when we did some focus groups and found out that the folks that live in our region didn't think that air quality was a problem, so it is a huge education that we have to be doing right now because we know that we're not going to meet attainment by 2009.

Some of the things that Mr. Whitley had said are very true about raising the price and having time-of-day pricing. We know that we're going to be moving to that, but our region doesn't necessarily know why and they don't understand how this could help their air quality. So I think the two go hand in hand and I think we do have a huge education before us.

MR. WILLIAMSON: Amadeo, have you got some gas tax stuff in your presentation?

MR. SAENZ: Yes, sir.

MS. ANDRADE: I have a comment. I'm Hope Andrade, TxDOT commissioner. The only thing that I would say, Michael, is that it's easier if the public knows that you've got planned toll rate increases than waiting around ten years and then all of a sudden hitting the public with what it has to be current. And then the other thing that I want you to think about is that this is a revenue source that I know, as we look at it, can be applied also for other modes of transportation so it's just hopefully not just for road-building, but as you and I know, Michael, public transportation.

MR. MORRIS: I'm going to talk about that in my presentation.

MS. ANDRADE: Good. And so just keep that in mind that this can be a revenue source for that too. Thank you.

MR. SAENZ: I think Mr. Chairman talked about the revenue and we've been looking at our projects and looking at our roadway, looking at our gas tax that we collect, and we have found that probably there's not a single road -- I haven't found one yet, there might be one -- so far I have not found a single road that generates enough gas tax revenue to pay for its operation and maintenance.

And we do what we call this tax gap analysis, and I've got a couple of examples here, and you've probably seen them before because I've used them in a prior presentation, I didn't want to reinvent the wheel. We look at a particular segment of highway, we have the capability, and over a 40-year period we look at what revenues the people that drive on this road generate in the form of gas tax and a percentage of their vehicle registration fees. We look at the cost of that facility to build it and maintain it for 40 years as well as adding capacity. We take the difference of how much the costs are from the revenues and we determine what we call is a tax gap ratio.

For example, for this project here in Collin County in the city of Frisco, over a 40-year period we can generate almost $41 million in revenue from the gas tax. We look at the cost and it's almost $80 million. So we look at the gap, we're short $39 million. That $39 million comes from somewhere else, it comes from gas tax that's collected elsewhere to help pay for addressing this project.

MR. WILLIAMSON: Or it comes from increasing congestion, decreasing air quality, increasing traffic safety problems, and loss of jobs.

MR. SAENZ: That's correct. When you look at it, the ratio is .51, 51 percent. So this is a good road.

So what would the equivalent gasoline tax have to be, if this road was the only road and that's all we had, what would be the gas tax we would need so that we could break even? That comes out to about 57 cents.

Most of our roads kind of fall under this other category that we see across the state.

MR. WILLIAMSON: This is a great one.

MR. SAENZ: This road here, 2251, also in Collin County, over a 40-year period we only generate $14 million of revenue, the cost is almost $107 million, so the gap is almost $93 million. The ratio is only 13 percent, we only cover 13 percent of the cost with the revenue that the users of this road are paying.

So what would be the equivalent gasoline tax if this road was the only road? Well, it would be $2.80. This is what the gas tax would have to be to cover so that this road could be self-sufficient.

MR. WILLIAMSON: Let's stop and explore that a second, Amadeo. And the reason I want to do this -- I don't see Ben -- one of our transportation reporters that watches us like a hawk is a fellow here in Austin, Ben Weir, who is also trained as an engineer -- a lot of people don't know that -- and he made the observation to me that the $86 billion we talk about, Michael, that, well, isn't that pie in the sky, isn't that what it would cost if everybody got what they wanted. And I said, No, remember the goal, the goal is to reduce congestion, not to be satisfied with what we have now and live with it, but to reduce congestion, improve air quality, improve safety.

I said, One of the problems we face, Ben and Gordon, is that people who write about transportation, frequently it's not interesting enough to write about the financial analysis of transportation, as Glen Whitley, a CPA, would. One of the things, when I was in the legislature, that struck me about the transportation world, being from a CPA family, is that no one ever sat down and said what is the cost and what is the revenue of this asset, no one ever does that, because they kind of think about, well, we're all paying gas taxes and putting it into the pot and there's plenty of money, right; just go down there and get your share.

But if you're really a good business person, if you run a successful barbecue restaurant franchise, if you have to manage a successful engineering firm, you look at your cost and your revenues to see if you're creating wealth or diminishing wealth.

And the truth is in Texas there are three revenue streams to build roads: the state's gas tax, its share of the federal gas tax reimbursed, and motor vehicle registration. We don't get a piece of the increased property value in Dallas County; the state transportation system doesn't get a piece of the sales tax; we don't get a piece of the corporate franchise tax; we have to build and maintain roads on those three revenue streams.

So it's real easy to do the number of cars that drive across your road, do the miles per gallon, do the average age, do the registration fee, and then do an apportionment to see which roads are paying for themselves. And I'm here to tell you there ain't a road in Texas that pays for itself. You can pick any point A to any point B and it doesn't matter, there's not a road in this state that pays for itself. The question is how bad is the subsidy in the out years.

And one of the reasons it's important to this discussion is getting back to the toll rates. You know, if you don't have a toll system that makes sense, you'll be right back in the same situation that we're in right now. You'll be undercharging tolls and subsidizing the future and suffering increasingly poor air quality and congestion.

MR. SAENZ: Moving on a little bit, so the minute item goes back that this is a protocol, this is basically a partnership that we're putting in place and identifying a relationship of how we're going to work from now on. You might say it's a new wave, how we're going to do it the new way.

The protocol basically does four things:

It specifies projects that are going to be procured as CDAs for which NTTA will not be submitting competing proposals or comparatory proposals, they'll be providing services, and I'll discuss that in a little bit.

It also specifies certain projects that NTTA will use their delivery system to bring this project forward, provided that we sit down, and along with the RTC, come up with an acceptable revenue-sharing mechanism for those projects. Again, those are the projects that probably have had toll equity that the RTC has put money, so in essence, you all have a partnership in there that both of you are funding that project so you've got to have a proper revenue-sharing mechanism so that as the project is paid for, then you get your share or a share of that project back, and you're able to use that revenue to do other projects.

It also commits and sets up a procedure of how we're going to work together in identifying and how we get and help each other in developing projects in the future. Who is going to do those early financial studies or preliminary studies, environmental studies? How do we identify and set up procedures so that instead of duplicating efforts, we, in essence, sit down and work together and say, okay, you take the lead on this, these are the parameters that we want you to apply to this project, and then at some point you bring that study back and we'll validate that study and then we all jointly decide which way and what direction to go next, who does the project and how is it going to be done.

And then, of course, the protocol is also put in place because we realize that NTTA is there and they already have a great base in their current toll system, we're going to require our CDAs for the first five years to use NTTA as their back office, providing the back office service, to provide toll collection services, and that includes providing the back office, the clearing house services and customer services that they're doing for their current projects. At the end of that five-year period, the successful developer that has that CDA will then sit down and negotiate a price for them to continue or will bring in their own resources.

The price that we will have will be agreed upon prior to -- will be based on what is normally what we think or what we agree upon as a fair price to provide those services, to make sure that that service does not really force the region to maybe lose some money up front because that service is very high.

MS. DICKEY: You mean the cost per transaction.

MR. SAENZ: The cost per transaction, yes, ma'am, that's correct.

MS. DICKEY: I'm Maureen Dickey, Dallas County commissioner.

MR. SAENZ: We will sit down with NTTA, they will give us a cost per transaction to provide those services, we will agree to that, we will set some standards and some guidelines that have to be followed with respect to how fast you pay each other, how fast you pay back after the transaction, and how do you treat violations, is it different from what you're doing, and this and that. All that will be in place in the CDA, all the developers will have that information and will prepare their proposals based on those terms and conditions, and all parties have to abide by those conditions for five years. At the end of five years then they can sit down and renegotiate and set new standards to move forward.

That has nothing to do with the setting of the toll rate. The setting of the toll rate was already done through the recommendation of RTC and is included in the CDA based on what you all recommended and the commission approved.

The goal of the protocol is basically to establish a partnership between RTC, NTTA and TxDOT to develop projects in the North Central Texas COG area, within the MPO area, and try to do that, and also it's geared to defining roles and responsibilities, and allows the region to utilize all the project delivery methods available, all the tools available to them to put projects out in the field and put projects on the ground -- one of our strategies, we want to use all the tools.

Why do we need to do that? Well, right there in that area right now TxDOT works with two partners, we work with NTTA in developing projects. Right now NTTA is only in the four counties, Collin, Denton, Tarrant and Dallas, but they have the flexibility of expanding to a much wider area, they can expand over an additional ten counties.

Now, some of those counties are not part of the RTC regional area, they're not part of the COG area, I believe. Right, Michael?

MR. MORRIS: That's correct.

MR. SAENZ: Cooke, Grayson and Fannin.

We also partner very closely with the COG and with the RTC, and your area is a little bit different than theirs, but for all practical purposes, there is a big overlap in those areas. And I'll show you some statistics and some data here with respect to what happens. That area is growing in population, is growing in vehicle miles traveled, and we need to look at and plan and work over the entire region instead of working over little particular areas, and it's more efficient to do that because you are doing some planning, they're doing some planning, we're doing some planning, and it's better if all of us work together and combine our efforts so that we can do a much better job of it.

If we look at the region -- and I've got a whole bunch of slides here, I'll probably bore everybody, but let's look at some factors -- we're going to look at population and then we'll look at vehicle miles traveled.

If you look at all the counties within the study area -- and I'll just call this whole area the study area -- all of the counties are experiencing tremendous growth. Cooke County's population in 1980 was less than 30,000; in 2030 it's going to go over 45,000; that's a 59 percent growth.

MR. WILLIAMSON: You know, the important thing about that number compared to, say, Collin County, it's quite obvious that Collin County is going to grow with more people, as is actually Dallas County, Tarrant County and Denton County, but the problem is that percentage increase on the infrastructure that's in Cooke County is as much a burden for that part of the region, for those individuals, not for the numbers of people, as the burden in Collin County is with the 700 percent.

MR. SAENZ: That was my next county. Collin County has experienced a 700 percent increase from 1980, Dallas County, 81 percent increase. And of course, what it is, if you really look at it, if you start from a center, you have a population center, you have growth in the center, you have high density in the center, people expand, they start moving out, and your outlying areas are beginning to now gain and you'll see large percentages increase. So in essence, your congestion bubble is growing.

I have a slide here that I borrowed from Michael that probably shows that in a little bit.

Denton County, 658 percent; Ellis County, 651 percent; Fannin County, 63 percent -- that's one of the outlying counties; Grayson County, 50 percent; Hunt County, 131 percent; Johnson County 557 percent. We talked about the 121 project that extends into Johnson County; that's one of the reasons that project shows that it's much needed, there's a tremendous need for transportation in that area. Kaufman County, 611 percent; Parker County, 636 percent; Rockwall County, almost 900 percent; Tarrant County, 166 percent; Wise County, 286 percent.

When I look at the region, the region has experienced and will experience over a 200 percent increase in population, and what it is is the whole area is growing. And of course, you all have, through RTC, identified that because you've done that.

When we look at vehicles mile traveled, I just showed the population, I tried to put them on the same chart and I can't fit the scale without making them bigger, so I kind of went off the scale. But if you look at that, your vehicle miles traveled in 1980 was about 60 million vehicle miles traveled in the region, and by 2030 it's going to be about 170-. You've got a tremendous growth. It parallels: you see population, you see vehicle miles traveled. The scales are a little bit different and that's why you can't really judge them, but if you really put them to the same scale, you can tell the difference.

MR. WILLIAMSON: Let me stop for a second.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: One of the reasons that we focus on that vehicle miles traveled versus population chart, kind of like we focus on our gas tax analysis and our strategic plan, is we think the resolution of some of these problems can be boiled down to focusing on several just real easy to understand bits of information. And one of the easy to understand bits of information is that gap between population growth and vehicle miles traveled.

The traditional way of looking at it, if I ask my engineering director to explain that, he would say well, more people are driving more cars and more families own more cars. And I don't disagree with that, some of it, but my view as a business person, the real reason that gap exists is that reflects the number of non-residents moving through your area more than anything else. In other words, I suspect you could take vehicle miles traveled for just Palo Pinto County and just look at vehicle miles traveled and the population of that ring rural county and you would find that the bars would not be very far apart and they grow pretty consistently.

But when you take the entire region, North Texas, Houston-Beaumont-Galveston, Laredo, Brownsville, El Paso, those gaps get wildly apart, and the answer is those are people passing through your area that don't live in your area. And Grady Smith, you made the point better than anybody else just three weeks ago in a newspaper article I read, because the gasoline tax is only 20 percent of what's necessary to build our road system, we're, in effect, letting people use our transportation network at an 80 percent discount. That's what it amounts to. Did I lose you?

MR. SAENZ: The next slide that I'm showing here is really a slide that I added kind of what transportation expenditures and transportation investment has happened over time, and if we look at from 1980 to 2005, it kind of was a pretty flat line, but if we see kind of what's happening, we changed in 2005 and through basically an allocation to the region, now the region has the resources and you all identify your priorities and identify how you're going to build your plan. And looking at your plan, we can see that over the next 30 years, between 2005 and 2030, you're able to plan. That's what the red line says, this is what you're able to do with the gas tax, with the Fund 6 money allocations.

As I mentioned earlier in my other presentation, there's a lot of innovative financing that you are looking at with respect to leveraging your resources through toll roads and such -- and I'll use the data that I got from Michael the last time that you all were here, the region was here -- and you're able to use the tools and you're able to come up with almost $5 billion more of projects using the tools, and that's that gap between that red line and the blue line.

The vehicle miles traveled is just what I carried before, what you're trying to address, but you've been able to expedite that and you do it by being able to put in place a regional transportation system. You've put in place and identified a system of tax roads and toll roads for the region that addresses your need, and you see that a lot of them are still in the central area but you're also starting to look further and further out, and that's good and you need to do that. And that's why we need some kind of a system through the protocol or through partnering planning that we address those future needs and we address them today, because if not, we'll be that further behind.

I've asked Michael to kind of give us a presentation.

MR. WILLIAMSON: So your whole point is this has got to be viewed on a regional basis.

MR. SAENZ: Everything has to be viewed on a regional basis and we have to bring all the players together and all the players need to work in partnership instead of duplicating efforts or not working in partnership.

MR. WILLIAMSON: The point of the protocol, that's a step toward that regional basis.

MR. SAENZ: The protocol is a step in getting to that area.

MR. WILLIAMSON: Just real quickly because I want to get to Michael's piece, but real quickly, what are the key differences between an NTTA and an RMA, or an NTTA-like organization? As far as we know, can the NTTA do comprehensive development agreements?

MR. SAENZ: I'm going to rely on our general counsel to help me answer.

MR. WILLIAMSON: I'm not asking whether they think that, I'm curious about our viewpoint.

MR. SAENZ: And I think I probably can give you an answer but I'm going to ask Bob Jackson.

MR. JACKSON: Did you want to discuss all major differences or project delivery?

MR. WILLIAMSON: Touch on the ones that you think the commission would consider to be key.

MR. JACKSON: First, geographic region, NTTA has four counties, they can expand to the ten contiguous counties and be as large as 14 counties. An RMA can be one size: it can be one county, it can be 254 counties, the counties don't have to be contiguous, it just can continually grow.

Project delivery, RTA has a statute subject to interpretation that mainly gives them design-build powers, maybe even gives them concession powers, while RMA has very recent legislation that gives them clear, comprehensive powers to do design-build or operation, maintenance, financing, any type of concession.

The type of projects that they can do, NTTA and RTA, is limited to roads, while an RMA can get into type of mode: it does a road, passenger and freight rail, water, air, public utilities, transit, and air quality improvement initiatives, and it can also spend surplus revenue off of one mode on any other mode within the region.

For the commission regulation, the commission doesn't regulate an RTA except to the extent that it would have to approve any connecting road. The commission does regulate an RMA for certain items: it approves the creation, it also approves connections to the state system, it sets design and construction standards for those type of projects, it sets minimum audit and reporting requirements, minimum ethical standards for employees and directors, regulates any contract with Mexico, approves changes in county membership, and it can dissolve an RMA.

The board of directors have different structures for an RMA versus an RTA. For an RMA, upon creation each county within the RMA appoints two members; new counties, as it grows, get one member. When you have an operating project, the county with that project gets another member. The governor appoints the presiding officer of the RMA.

I do want to point out that for an RMA that includes Dallas or Collin County, the law allows the RMA and the commission to agree on a completely different structure.

For an RTA, each county gets one director. The governor appoints one member from an adjacent county but the presiding officer is chosen by the membership, by the directors. Counties can get more appointees if there are operating projects within their counties.

I think those are the major differences between an RMA and an RTA.

MR. WILLIAMSON: So as Michael pointed out earlier in the colloquy, the mission of NTTA is different than the mission of an RMA or the RTC or TxDOT which explains a lot of how we view the world differently.

MR. JACKSON: Yes.

MR. WILLIAMSON: Okay. Thank you, Bob.

MR. MORRIS: Michael Morris, director of Transportation, North Central Texas Council of Governments.

A few introductory remarks. Mr. Chairman, thank you very much for your patience over the years with regard to this particular topic. I'm very happy we're here because we've had conversations like this so much in our region, it's nice to maybe move forward with a direction.

Mr. Houghton, thank you very much for all the time you've spent in our particular region. You invited me to El Paso one time and I think you've been more than one time to our region. We very much appreciate that.

And Commissioner Andrade, I think this fall you will see some statewide efforts on transit and other things that you have led. You've gone all over the state with regard to that particular legislation, and I think you'll see some tremendous progress this fall as those transit plans from across the state come back in front of the commission.

I would like to, just a personal note, thank the district engineers, Maribel and Bill. A lot of hard work has been done over the last two months to get this protocol and toll roads and newspaper reporters and TV stations and a bunch of other things to the correct posture. Allan Rutter, who is here, and Mayor Miller, I'd like to publicly thank them as they have proceeded with this particular protocol.

The region has brought county judges and RTC members today. I know these are all elected officials from our region. If you're an elected official or a policy official in our region, would you please stand so the commission can see.

MR. WILLIAMSON: Man, lots of North Texans.

MR. MORRIS: Now, with regard to the topic, regional mobility authority partnership, I think there's three things that we need to focus on. Dallas-Fort Worth, is this going to be a nine-county initiative, is it a 14-county initiative, is it a 16-county initiative, 17 counties? When we leave here, either today or in the coming months, what is the expectation with regards to the delivery of toll type projects? That would be point number one.

Point number two is do we focus on RMA as the tool or do we focus on partnership as the tool. If we can convince you today that it's the partnership, then what are the institutional legislative regulatory items necessary to prepare for a legislative delegation that begins in January. If it's an RMA and you don't like the partnership approach, then I think we need to know that today as we go back home and see where we go from here.

My hope today is to argue that it's the partnership strategy for Dallas-Fort Worth that I think will bring the most success.

Today we're talking about roadways under this new approach for solving problems. We could just as easily have brought you a partnership program today from transit authorities and how we're developing seamless rail, and we have transit authorities from our region who are here today. We could bring you a goods movement presentation on how we're working with Burlington Northern, UP, and KCS on Tower 55 and seamless goods movement delivery. We could bring you a land use sustainable development partner from our Center for Development Excellence in the RTC Sustainable Development Program. We could have brought you a program on air quality; we could bring you a program on freeway management.

Every time I stand here, I always get nervous that you think our region may only be about innovative finances for toll roads, but I can assure you there's lots of things going on with regard to delivery of lots of regional transportation.

The focus here, in our view, especially with regard to the protocol, is on the word partnership. This morning it dawned on me maybe the reason why we've had some of the issues we've had in our region is because why we're bringing forward a partnership approach to you. North Texas Tollway Authority, in my opinion, is one of the strongest toll agencies in the United States with regard to its ability to deliver and construct and operate toll roads.

Amadeo and I, and in other work I do, I've had the pleasure to talk to other states across the country. Texas Department of Transportation right now is probably the strongest state DOT in the nation. Our partnership that we propose is to increase and strengthen our relationship -- I don't think it can be any more than it is now with your districts -- with divisions and the Finance Division, with your headquarters, with the commission. As you'll see in a moment, in addition to the North Texas Tollway Authority, we have a large number of projects on CDAs on toll roads, on managed lanes, and what hopefully someday will be the Trans-Texas Corridor. And then I think, somewhat biased, the Regional Transportation Council is maybe one of the strongest MPOs in the country.

So reflecting here, I was going to argue the strength of our proposal to you is we have the strongest state, we have the strongest toll road operator, and we have the strongest MPO. I think that's our strength, I think that's our strength today. I think over the last few months maybe that was our Achilles heel as we tried to straighten out the rules and responsibilities before you today.

We are a very large region. We understand at this particular point in time we may not have all the legal mechanisms in place to implement this partnership approach. Our proposal is to work with you in a legislative program to do that, increase the tools of the North Texas Tollway Authority, increase whatever elements TxDOT would need to help us be our provider, continue to work with addressing CDAs within the region.

Transportation in large metropolitan regions is different than smaller metropolitan regions in the state. The sophistication and the specialty necessary to get rail start money, like DART did, working with the RTC for $700 million, or brokering what will be a complicated cost allocation deal at Tower 55, these are very complicated procedures which I'm arguing today need specialty services in a partnership.

I think if you had one RMA in the Dallas-Fort Worth region, 16 counties, I think it would be very detrimental because of the specialty not there, and I think it would be very detrimental in not delivering the projects as fast as these RTC members are going to tell you are necessary to deliver those particular projects.

In the spring, the Regional Transportation Council approved a procedure that I think is very consistent with this particular protocol. I won't spend a lot of time on it. There are four buckets that are important to understand in this particular approach.

Bucket number 1, comprehensive development agreements. Right now we have three of them as stand-alone toll roads in front of you. The RTC has finished its last public meeting on 161. We have 121 in Denton, 121 in Collin, and 161 in Dallas County, and I'll show you the potential revenue from that in a moment. That is three.

Bucket number 2 is our North Texas Tollway Authority partner. Right now we have three, and Amadeo already presented those to you: the George Bush extension, the Lake Lewisville Bridge, and the Southwest Parkway. With this protocol, if you approve it today, we will be going to the Regional Transportation Council to send the first of the three new projects to go through this examination. They could include the Trinity project, State Highway 360 in Tarrant County, State Highway 170 in Tarrant County. The three that North Texas Tollway Authority has is the beginning of more projects that are going to be done with your approval today. That's bucket number 2.

So three in bucket number 1, potentially six projects in bucket number 2.

We now go to managed lanes. This is a partnership we have largely with your districts, working with comprehensive development agreements. Our highest priority in the region is the LBJ project in the east; our second highest priority project is the 183/120/820/35W project in the west. Those two projects are already slated as that CDA process. The third one that you've already approved and is moving ahead is the Funnel project north of the airport. That's three.

We have dozens of projects falling behind those three because it's the policy of the Regional Transportation Council when a roadway is reconstructed, the median facility will be a managed facility that is tolled. The Regional Transportation Council has already developed a policy that bucket number 3 will be dynamically priced. It will be priced based on the amount of congestion that occurs in that particular corridor.

Now we're up to three plus six plus three, we're up to twelve projects.

Fourth is the Regional Transportation Council is suggesting to you today that the RTC is very interested in creating a new loop around the region and has divided that into several pieces, nine specifically, which I'll come back and share those with you.

Commissioner Andrade, in the bottom right-hand corner, as you track these funds when we refer to on this table, figures other projects. These are projects that we would devote funds to that are not on the roadway system. This could be funds that go to the goods movement system to help resolve Tower 55, these could be projects that go to our transit authorities to help move other passenger rail initiatives. We have already come before you, thanking you for permitting us to use Texas Mobility Funds where we allocate a portion of those funds to transit. That same philosophy is integrated in this particular approach.

So think of this partnership as four funding mechanisms, all building projects at the same time, not stepping on each other's toes, because a CDA on 121 can work parallel to NTTA building the George Bush extension, can work parallel to TxDOT working on the LBJ managed lanes, can work parallel to a CDA building a Loop 9 corridor in our particular region. It is this desire from pent-up congestion, leveraging innovative finance to deliver more projects faster that leads us to this partnership philosophy.

Let me focus just on the first bucket. These are the three CDAs. If you look at the columns on the bottom row, after construction -- we've subtracted out the construction in Denton County, we've subtracted out the construction of the Collin County 121 project, we've subtracted out the construction of the Dallas County project -- you build three projects and you would have $1 billion plus $600 million plus $800 million, plus almost $100 million, you'd have close to $2-1/2 billion of additional transportation funds needed to leverage to build more transportation projects.

That is what you have been saying to the state for close to three or four years now, this is what you're hearing back from our particular region. We have a meeting on Friday. If I go back to this chart, if you look at managed lanes, LBJ is in item number 3, we're $200 million short. We're meeting with the elected officials in Dallas County and we're going to ask them, the Regional Transportation Council wants to know of that $790 million of revenue still anticipated to be allocated for Dallas County projects, elected officials in Dallas County, can we back-stop the LBJ project with $200 million so LBJ can go to construction parallel to these other particular projects. And the Regional Transportation Council will hear whatever direction we want. And we call that the credit union ledger where we invite all the policy officials from any of these counties to weigh in and be partners on what's the transportation priorities in that particular case.

Continuing to focus on this multi-dimensional approach, you look at rail and bus, we're proposing to put $8.3 million, and having conversations with the legislature and with our partners on how to deliver 300 miles of more rail within the region. That $8.3 million is shocking to most when we're putting $12.4 billion into the freeway toll road system. People think, if you just hear inches of discussion in the region, that $12 billion would be 4300 times more than the rail because the press covers the controversy on the toll much more than what we're doing on the rail, but $8 million on rail and $12 billion on toll roads.

Look down further, goods movement, rail freight. We have a $7 billion initiative on the Trans-Texas Corridor to help us with the freight issue, as you see in the bottom right-hand corner.

The issue remains we have a financial crisis in transportation which is why our policy officials in the region spend so much time on trying to resolve the questions that are before us today, and do we move out in a traditional RMA approach to think it works for the region, or do you have enough confidence with us to try a partnership approach and work through the legislative issues to maximize these strategies.

Now let me tell you what's at stake which is significant. This is how you interpret these graphics. In the year 2000, 1.29 was our congestion index which means it took 29 percent longer to travel during the peak period than it did in the off-peak period -- you see that in the bottom left-hand corner of the table.

Our goal, back to your point, Mr. Chairman, we're not proposing to eliminate all congestion in the region, our goal is to eliminate all the level of service F, or the flunking grades of the region. We would like to get to a 1.20 where we understand we're not going to eliminate all the congestion but if it took only 20 percent longer to travel during the peak period, that would be a successful day for us.

Look at the 1.56. Three million people come to the region. In 2030 it's going to take 56 percent longer to travel during the peak period in our metropolitan transportation plan than it is in the off-peak period, and that's without using all these tools. We then have gone in and proposed the tools that you're hearing today and this partnership -- these are North Texas Tollway Authority projects, CDA projects, managed lanes, and Trans-Texas Corridor -- we think we can get down to 1.43.

1.56 to 1.43 is almost a 40 percent reduction in our congestion.

So what we're talking about today compared to what we're going to talk about in the next 25-30 years in our state, as we can best guess, today's discussion is a partnership program that will eliminate almost 40 percent of the anticipated congestion within the region.

MS. DICKEY: Mr. Morris, could I make a comment to that?

MR. MORRIS: Yes, ma'am. Commissioner Dickey, for the record.

MS. DICKEY: Yes. I just wanted to emphasize what you have said, that in 24 years, utilizing these tools, we're going to have 40 percent less congestion with 3 million more people.

MR. WILLIAMSON: That's amazing, phenomenal.

MR. MORRIS: That's the magnitude of the leveraging.

Now, as part of that, the Regional Transportation Council is moving out on what is needed is a new loop, and it's critical in our discussions with the City of Dallas and all of our communities, and back to another hat we wear which is the sustainability of the region. We wish to build this loop in a logical sequence so we don't prevent -- for example, Section H which is in Wise County which is currently outside of the RTC boundary, if Section H -- I hope you don't own property, Mr. Chairman, in Wise County --

MR. WILLIAMSON: I don't think so.

MR. MORRIS:  -- if Section H was built prematurely, we may jump a whole bunch of people to move out to Wise County and it won't help us in air quality and other things. So there's a logic to this particular strategy.

MR. HOUGHTON: But, Michael, you want to talk about getting that right of way secured.

MR. MORRIS: Right. What my suggestion is to you today -- which I think is not necessarily an action item but maybe a nod in a direction -- my suggestion to you is as part of this partnership we partner with you to work with the Regional Transportation Council and your staff to go out and secure this corridor as soon as possible.

MR. WILLIAMSON: Now, this corridor looks a little bit familiar to me.

MR. MORRIS: If you squint your eyes a little, it will look just like the map that we have been presenting at public meetings on the Trans-Texas Corridor.

MALE SPEAKER: You need some rose-colored shades as you look at it.

(General laughter.)

MR. MORRIS: There's a lot of engineers here. Does someone have a pointer?

MR. WILLIAMSON: Did you have a reference for that earlier in the month when you were talking about this?

MR. MORRIS: Yes. You don't recognize this map because this map is always shown to you -- this isn't getting color. Give me one that picks it up. To use Chairman Williamson's third grade math stick, the red color coming up from the Hillsboro-Austin-San Antonio area remains red, and then it hits a loop straight up at 360 right there, and then you typically see that colored section as a red circle around the region. Starting at Loop 9 and heading to the east -- we'll go counter-clockwise -- over Interstate 20, a new roadway north-south through Kaufman; we've already worked with Rockwall County and their thoroughfare plan to get it to 30; Collin County has taken the leadership to do work on their particular loop that gets you up and over to US 75; DNT, North Texas Tollway Authority is working with Collin and Denton counties on that particular location; Denton County has taken the leadership on their loop to the north.

We support in the region an Interstate 35 corridor which then extends to Oklahoma further to the north. The loop would need to be continued, especially in the rail freight -- and we very much applaud your efforts, working with the memorandum of understanding with rails, the Cintra-Zachry notion -- we've got rail now coming heavily down on the west side which will need a new corridor.

Tower 55 is right there. That is the largest bottleneck in the United States right now with regard to rail freight delivery, as said in testimony with me by UP and Burlington Northern to Mr. Krusee and Senator Carona's committee, that the railroads are looking at.

So we are suggesting to you that there's opportunities for a new bypass with regard to freight rail on the table; you have the opportunity of building a within-region route that the region needs; that potentially in the future could become a Trans-Texas Corridor to help meet the intercity improvements that you are seeking to connect those two red lines.

I think what's really important to understand, if you look at this distance, from my house to Austin -- which I usually drive -- is 190 miles, that loop around the region is 210 miles.

MR. WILLIAMSON: What do you call that loop?

MR. MORRIS: Well, I'm having conversations with a lot of people what that loop should be called.

MR. WILLIAMSON: I thought you had some kind of reference for it.

MR. MORRIS: Loop 9 is the reference that is used.

MR. WILLIAMSON: Somebody has used a description for it in the newspapers.

UNIDENTIFIED SPEAKERS: The Donut.

MR. WILLIAMSON: The Donut, the magic word.

(Donuts were brought in; general talking and laughter.)

MR. WILLIAMSON: We have to give credit where credit is due. We don't do a lot around here without Mr. Perry knowing exactly what we do, and we were visiting a little bit about that, and he said, You know, if you're going to be giving them a donut, you need to give everybody a donut, so it was his suggestion that donuts be served.

(Whereupon, a brief recess was taken.)

MR. MORRIS: Mr. Chairman, thank you very much for that.

What I want to just flag quickly is in our particular region we had started RTC working on some of these routes, the counties have been working on some of these routes. If you go through the four colors, we've got some projects that are underway under NEPA, we've got location analysis, general evaluation, and then obviously some further away in time.

So the point is the region has been working on this need for some time. This region, when it's 9 million people, will need this particular loop. I think the planets are aligning where the state, on its own, has said Interstate 35 cannot be the backbone of our system forever, there has to be more, we have to worry about electric transmission and water -- and, you know, our electric rates in Dallas-Fort Worth are higher than most because the transmission loss of power -- we've got high speed rail, we've got trucks, we've got freight. Our region has said some time that after the hurricanes clearly the system is broken.

And I think the planets are aligning, at least in our region, indicating the need for this type of transportation system within our region -- and we've divided this into A through I, and this will go through further refinement working with our cities and counties, and your desire to connect Oklahoma to Mexico, a very well justified position as well -- the hope within the region is at some point in the future we can come to a partnership with regard to this.

And I think we're also saying to you, as a commission, that we do need to get a partnership to get these right of ways nailed down as soon as possible as part of a regional system because if our generation doesn't do it, this loop is going to be another 10-20 miles further out and it won't be meeting the needs that our customers have to have in seamless delivery of transportation.

My final slide is to recap what I think are the benefits of this RMA focused on partnership, not a traditional partnership structure but one that focuses on the talents that we have within the region. And remember, this is just on the roadway side. We think we have the equal talents on the rail side, equal talents working on the goods movement side, and others.

I think if you approve this protocol today, we will have clarified the roles within our particular partners, and if you send us some direction with regard to your interest, not as part of the Trans-Texas Corridor but as part of our regional facility, we would like to strike some partnership, either the RTC is asked to lead the environmentals or help pay for them or we take some of our funds from the CDAs and give them to cities and counties to get things cleared, whatever direction we take, but we suggest between now and Thanksgiving that we need to get these particular corridors nailed down because there are private sector CDAs and others knocking on your door that may have some interest with regard to these particular projects -- strictly from a regional standpoint.

I think with this protocol -- and you've heard me stand here and say this before -- we're focused on the customer. We need to stop saying what's in the best interest of whatever, TxDOT or the RTC, we're trying to put together a way to streamline delivery of projects for the customer. I think we can build projects faster by having these four buckets and having institutions and procedures working on each of these four initiatives at the same time. CDAs on toll roads, NTTA delivering projects as part of the protocol, CDAs and managed lanes and the Trans-Texas Corridor delivery -- if it is superseded at some point in the future from our regional initiative within the region.

We want to build more projects. I think you see from this leverage, both on the rail, the roadway, and the goods movement side, we're adding 160,000 people a year, we're going to have build more and build more diversity.

One key point I'd like to leave you with today is our region is proud of building the important projects. Too many people have come before us on the tough projects and said, You know what, we can't get that amount of money, or we can't fight that particular issue, so we move all the wagons and we go fund some other particular item. The Regional Transportation Council has stayed focused on getting LBJ over the goal line, it's staying focused on getting Airport Freeway in Tarrant County over the goal line, it's staying focused on -- if it takes another 100 meetings -- getting CDAs, NTTA, the loop and the managed lanes into parallel systems for them to be delivered.

We think the planets are aligning on an integrated, intercity and regional facility being co-terminus, we think it's a more efficient way to build a system. We think we're building revenue to help us on goods movement resources at Tower 55 as part of this financial initiative, and we think we're building resources to help on multimodal opportunities in the future as well as we look at rail and sustainability.

Mr. Chairman, what I'd like to do is stop my comments there, and I know Amadeo has more, but I'd like to see if any of our policy officials today want to add or subtract anything that I've said here today. That may give you some focus from our elected officials and not just from staff, if that's permitted.

MS. DICKEY: Well, I just want to add to some emphasis on what you've said, Mr. Morris, that we want to change the paradigm here today. We all want the same thing, we want to move forward quickly, we want to reduce congestion, we want to get the most revenue possible. And I think if we empower all of these institutions involved, if we all work together as partners, it's not as traditional but I think you'll see results, I think you'll see us having open communication. We want to have these meetings frequently, we want to keep the doors open always, and we want you all to tell us what you're thinking and we will do the same.

We've had a little bad spot here the last year and that's behind us. We're going to go forward in a positive way. I assure you for my part, and I think for these other people, we are going to be partners henceforth, and I hope you all will accept us as such.

MR. WILLIAMSON: I don't think there's any doubt about it. Ted?

MR. HOUGHTON: No doubt about it.

MS. WHITE: Cynthia White, Denton County commissioner. I would like to emphasize that point as well. I think the beauty of this protocol is the partnership and capitalizing on the strengths of each of the entities. And when you look at these entities, North Texas Tollway Authority, as Michael alluded to earlier, brings a lot to the table as far as their operating system and delivering projects; when you look at TxDOT and what they're wanting to emphasize in this, the competition and the delivery of these projects; and when you look at the Regional Transportation Council, the strength there is it represents the region, and they represent a broad area and it has the local officials on that committee and they are the ones that are actually representing the people, the grassroots people, they're accountable to the people.

So when you bring all of those elements together, it's really a very innovative and strong protocol, I believe. And it is different but I think it will be very successful.

MR. WILLIAMSON: Well, one thing about this group is different doesn't bother us, change and different is okay, and I think that -- I can't speak for Hope and John and Ted, but I think our constant pushing of the RMA was more in the context of we believe in regionalism and we hope not in the context of we don't think NTTA can do it. I personally am persuaded that this is a path that we can go down and be successful at.

And I know it's difficult, I do, it's difficult for Denton and Collin and Tarrant and Dallas counties to figure out a way to expand NTTA, if you choose to do that, because you've got a lot of money in those deals. I saw Margaret back there a while ago, I don't think she was frowning at me. I really do understand the notion that if you live in Dallas County and somebody starts talking about taking away your NTTA, I think if I was a county judge in Dallas County or a county commissioner or city councilman in Dallas or even Tarrant County, I think I would kind of be like wait a minute, I'm not real sure I want to share that with Parker County. I completely understand that.

I think from our perspective, we've never been interested in the cash flow that comes from the existing projects, what we are interested in is helping you share the cash flow in your future projects. If we've given any indication that we were trying to mess with your Dallas County revenues, that's not the case.

MR. HOUGHTON: I think we're a little bit smarter than that. We just want to maximize the value up there, and the regional approach is the key.

MR. WHITLEY: We all come in with different hats on, but I really believe that for the most part we leave those hats at the door. I've been amazed at what we have been able to accomplish, and I have no fear from Tarrant County's side of going in and saying we're going to work at this and look at it as a region, and I feel very good about the people that are on there, they make a very genuine effort.

I also want to applaud you all. I think this right here is a great opportunity. You've been very open-minded about this. I can remember, I can actually recall one of the earlier days when you just got on TxDOT, we talked about formulizing the funds, and you said you just didn't ever see that happening. But we sat down and we continued to work through it, and I think just like a lot of this stuff, we start at one point and we end up someplace else, and we do it through challenging the way we've always done it.

You have empowered the RTC and for the eight or nine or ten years I've been on there, I've seen us go from a one-hour meeting where the goal was to get out in one hour to where we're now spending two and three hours, and we wouldn't be doing that if we weren't making decisions that you are allowing us to make.

MR. WILLIAMSON: Well, you know, you've heard me say it, and I try not to politicize my position too much, but the truth is we're appointees of Governor Perry, and he sent all four of us some pretty clear instructions, and I think you've heard them before: no more begging, and we've got to solve this fair share problem, people that feel like they're paying gas taxes in Dallas and it's going to Houston, we've got to find a way to solve that problem, and we need to empower people to take care of their own problems and you just be standing by to be partners. And when the governor tells us something, we do it, we are very responsive to the guy that appointed us.

JUDGE HORN: Mr. Chairman, this is Mary Horn, Denton County judge. While we're appreciative of the empowerment of the RTC and their being able to work these things out, I think we'd be remiss if we didn't also acknowledge the empowerment we've gained by having these tools that the governor and the legislature gave us. If we didn't have those, we wouldn't be sitting at this table now.

MR. WILLIAMSON: I'm glad you said that, Mary, because those of us who have been through this, as you and I have had some personal experience, and Krusee over there, these guys have had to make some tough votes, and these gals have had to stand up and defend that which sometimes appears to be not defensible because of short thinking, and they're to be commended for what they've done.

MR. HATCHELL: Mr. Chairman and members of the commission, I'm Jack Hatchell, Collin County commissioner. And I think I can't add much to what's been said by the rest of the people up here, but I appreciate this opportunity. And I know there's been several comments going back and forth between the commission and Collin County in particular and some of the cities, and that's behind us, we're regional players, and we appreciate what you do and we're moving forward and we're going to work with you as close as we can through the RTC.

I've probably been on the RTC longer than any member, I've been on there 16, 17 years nearly now, and it's a great group to work with. We're regional players and we want to be partners with TxDOT. And we thank you for Maribel and Bill Hale, they're a really important part of the region. Thank you.

MR. WILLIAMSON: Yes, they're good folks.

MS. ANDRADE: I'm Hope Andrade, TxDOT commissioner, for the record. And I am delighted to see us at the table together. I guess I was always confident that if we could just sit at a table together, we could reach some agreement because at the end of the day, we all want the same, we want the best for our state. And you have every right to be protective of your region, Commissioner Whitley, because you have a great region and it's very important to the state of Texas.

I hope that this is only the beginning of us working together and I hope that you all will remain open on what else we can do because we do have a great future together. Together we can make it happen. So thank you all so much, I really do appreciate it.

A couple of months ago I made a comment about trusting us and some people laughed at that because I guess there was some mistrust. But let's not spend time on the past and spend our energy on the future. So thank you so much, and welcome.

MR. WILLIAMSON: Amadeo, do you have some wrap-up?

MS. KOOP: Can I just say something, Mr. Chairman?

MR. WILLIAMSON: Please. How's the toll project, Woodall Parkway?

MS. KOOP: Well, it's coming along. We have all sorts of interesting projects in the city of Dallas, that's for sure.

I'd be remiss if I didn't say something about our regional transit initiative, and that is a partnership, and that's a formalized partnership, as a matter of fact, between our three transit agencies in the region, and that's one of the reasons we feel so strongly about perhaps not going to an RMA but sticking with an RTA because we already have a policy that we've crafted amongst the entire region for transit. And as you know, federal funds come down to each individual authority and not, in my knowledge, to a structure such as an RMA. So that would probably have been difficult for us.

I think the other thing, and I just wanted to throw this out there, is the thought of one of the things that NTTA and the challenges that we have before us -- and believe, me, it was very difficult, especially this last month or so, it was a very difficult process that we went through, especially on the east side of the region -- is that we have a toll road authority that there are appointees on the toll road authority that don't have toll roads in their counties, and so that remains to be a problem for us and it might take legislative relief to solve that problem. Maybe increasing the board size, I don't know, but that does continue to be a problem for us, and we have members that don't have toll roads in their area and have representation on the toll road authority. So I just wanted to throw that out so that we get everything out on the table, the kinds of issues that we'll have in the future.

MR. WHITLEY: If we do the building that we're building, we're going to have somebody in a whole lot of different areas. But the other thing, as Linda mentioned, when we look at the regional rail initiative, this just kind of points out why, as Michael mentioned earlier, it's a cooperative effort between the rail and the toll and the highways, before we can really move forward with the transit, we've got to get the Tower 55 problem cured. Well, the Tower 55 problem, the Loop 9, the agreement that you have on your desk right now from Zachry, I believe, regarding the freight, I mean, we need to move forward with that with all haste because we can't do anything. Union Pacific and Burlington Northern have both said until we get Tower 55, we really don't even think about getting access to any of that right of way because we've got trains that are backed up for six or seven hours.

MR. WILLIAMSON: I think our staff, just by way of touching base on that, will be through with their analysis of the Cintra-Zachry rail proposal in the next few days. We hope to have their decision in front of us pretty quick. We set up a wall between us because we're the political side, they're the administrative side, and we really don't need to know what their staff analysis is until they hand it to us. But my understanding is when they initially laid it out they gave enough evidence in their letter -- which has been made public, by the way -- to suggest there's not any question that it's self-financing and they're ready to move ahead.

MR. WHITLEY: And again, with regards to the Loop 9 plan, from our region's standpoint, we're going to stand here prepared to do whatever we can from the region's standpoint to finish our Loop 9 study and analysis and if eventually it becomes a connector or eventually becomes a part of TTC-35, that would be great, but if we can speed this thing up and move it forward quicker and relieve some of that congestion, that's what we're sitting here trying to make sure we're accomplishing.

MR. WILLIAMSON: Well, I think we're going to probably ask Amadeo a few questions about the proposal.

MR. HOUGHTON: Let me chime in on our rail issue, because we do have a letter by Cintra-Zachry on the 35 rail initiative, they believe it self-performs. That means no state dollars would be put into that project. I hope that UP and BNSF are sincere about their efforts and their intentions about moving and fixing Tower 55, I hope they're sincere.

MR. WILLIAMSON: One of the values we always thought in taking the master development approach that we took on the corridor was that it put someone, whoever won -- in this case on 35, Cintra -- in the position of being a developer, not just a constructor. So from a developer's standpoint, as our developer partner, they're kind of almost that neutral third party that's looking at assets and saying, you know, this thing will pay for itself, no offense to UP and BNSF, but we really don't care what they say, we've done a market analysis, we know it will pay for itself, we're prepared to put the deal together and we're confident that they will participate even though they say they won't.

So we've caught some criticism from some sources about the way that we've approached the corridor contract, but we've done it, it was a well thought out approach. We didn't want to hack this thing up into 27 different construction contracts, we wanted a well thought out planned corridor that would make sense for the entire state that required the least amount of state dollars invested in it.

I think Ted's right, we hope UP and BNSF is as serious as they say they are because we think our developer partner is ready to roll on that rail piece, although we haven't had the staff analysis yet.

I do want to get back to something Linda said, though. This will be the third time I've picked on Margaret. We're friends and we talk about transportation stuff all the time, when she made that comment about Dallas County residents recovering their investment in NTTA, that really rung true with me because if I lived in Dallas County, that's exactly the position I would want my county judge to take.

So it got me to thinking about, okay, get in the other person's shoes and try to see it through a Dallas County resident's eyes, and what could you do to help the NTTA paradigm change and expand, at the same time guaranteeing that Dallas and Tarrant and Collin and Denton County citizens feel like they've been treated fairly, and Margaret actually gave us the answer, sort of, which was take our part and go. Well, there's different ways to take your part: one way is to physically take it, the other way is to cash it out. And it may well be the case that what we want to work together on is some sort of approach to the legislature that says TxDOT will purchase the assets of NTTA and immediately turn over to you an expanded NTTA, and the purchase price will be distributed to the counties based on vehicle miles, population, or whatever you work out, in recognition of the, in effect, taxes your citizens have paid by tolls and you got to put those into your local and county roads, basically refinance the whole deal using us.

I'm not proposing, that's just one idea that would kind of make it work.

MR. WHITLEY: Again, that was one of the things that as Michael showed in his slides where, you know, we've talked a lot about if the toll road is in one area, should it all stay in that one area. But I have a lot of my citizens from Tarrant County who are driving on that, they're working in Dallas, that allows Dallas to be bigger buildings, more tax base, bigger employers. So there's benefits to both sides of this deal. If they couldn't get there, then my people may decide --

MR. WILLIAMSON: They even have their own airport.

MR. WHITLEY: Yes, they do.

MR. HOUGHTON: You could have gone all day without saying that one.

(General laughter.)

MR. WHITLEY: And DFW Airport, we're going to bring this high speed rail in and one of your buddies is really promoting that high speed rail stuff. It will all work itself out from that standpoint.

MS. DICKEY: And also there's an advantage to having an NTTA that's done a very good job and is very well run that will be a good competitor with the CDAs on down the line.

MR. WILLIAMSON: Absolutely.

MS. KOOP: Linda Koop. I do think still, though, the structure for the NTTA, we need to look at that, because as we expand --

MR. HOUGHTON: That's up to you all.

MS. KOOP: Well, I guess it is.

MR. WILLIAMSON: I think what she's saying is they may come up with a recommendation and we may help them. There's no reason for us not to want to help do that, whatever the region decides is best for the region.

MR. MORRIS: Michael Morris. Mr. Chairman, I know you probably want to get back to Amadeo. One thing that I think is important is between now and the legislative session -- and Chair Krusee is here -- if in fact you do pass the protocol today and you do want to move ahead with the partnership with Cintra-Zachry, and you do want to pursue a partnership program, then we have an action agenda then that we need to start identifying what legislative items may need to be explored to see if there's mutual interest.

For example, we think the interest on concession checks that are written by the CDAs, that interest on those funds should go back to the particular region in which those CDAs were generated.

MR. WILLIAMSON: We agree completely with that.

MR. MORRIS: That will require working with Chairman Krusee to try to accomplish that, and that may be an uphill fight and we all need to be prepared to try to accomplish that.

MR. HOUGHTON: Try to keep it up in his region, his representative region?

MR. MORRIS: I was thinking about keeping it more in the region that generated the CDA, but we haven't spoken to him yet.

(General laughter.)

MR. WILLIAMSON: Chairman Krusee might want to just pass through Round Rock and stop for a few days on his way up to Dallas.

MR. MORRIS: A couple of our elected officials made the sign of the cross when they came into the building today and said, We made it through Round Rock.

(General laughter.)

MR. SAENZ: Commissioners, Michael discussed kind of how the region has identified their long range projects and one of the long range projects is that Loop 9 project -- I went back a slide just to kind of tie back the presentation -- and how they have taken the initiative through partnerships between themselves and RTC and the counties on developing some of those environmental projects.

When we look at that, that's also what the region recommended, that somehow the Loop 9 should be the route for the 35-TTC corridor, and they did that for a reason, and this is important. Because they've identified Loop 9 as a regional project and at the same time they're looking into how working together through partnership you can, in essence, put a partnership together, we address both the statewide and the regional goals, and this is one of the reasons that they came up with it.

By being able to do that you're, in essence, by building one transportation system, address the needs and concerns of both. It will allow the private sector to assist in addressing the region's needs as well as the statewide needs. It would allow them to complete their loop a lot sooner. It would allow the relocation for the freight rail, it would allow the expansion of passenger rail service where the freight rail has relocated from. And of course, by building that loop earlier, it would allow them to control the growth and control the sprawl that could happen in that part of the county.

You can see it also has some additional benefits. If it's built in the COG region, then there will be some additional benefits of reducing congestion, improving air quality, improving safety, and also, of course, as I mentioned, addressing the rail.

When we look at each individual one, looking at the congestion side, Michael talked about the reduction of congestion that they're addressing with their mobility plan. Well, if you just look at this thing, there would be an additional 6 percent reduction in congestion by construction of that Loop 9 project as part of either the Loop 9 or the mobility plan.

MR. WILLIAMSON: One second, Amadeo. Do we have a comparative? That would be 6 percent reduction in congestion of somebody putting the money up and the toll payers paying for it versus what kind of tax money would it take to get a 6 percent reduction in congestion in Dallas, or do we know?

MR. SAENZ: I don't have that but Michael probably does.

MR. MORRIS: Michael Morris. Mr. Chairman, I showed you a 13 percent reduction in peak period travel time. This is equivalent to almost half of what that other items were, so I inventoried the LBJs and you're looking at the equivalent of two or three of those type of projects, two or three Airport Freeways, two or three LBJs. You notice on this graph we prepared for Amadeo that the vehicle miles traveled does increase because people are now willing to travel further to avoid what is horrible congestion within the central core, but their vehicle miles traveled decrease tremendously because they have the capacity now on that particular case.

The other thing that's important, Mr. Chairman, to point out is the value of time to trucks is often four to five times what it is to cars, so one would have to translate for you -- which we didn't do, unfortunately -- one hour of congestion of a truck could have an economic value of $80 or $100 an hour where to a person it's less. And I think more and more as you look at tying business and economic growth -- which is one of your objectives -- and just in time delivery and the value of goods and commodities, maybe we need to all spend a little bit more time on translating what is our traditional transportation performance measures to real economic measures as goods movement people would measure them.

MR. WILLIAMSON: I think that's a good idea. Okay, Amadeo, continue.

MR. SAENZ:  Continuing on, this graph here, also taken from Michael, depicts kind of what they've done through the planning process. As you see, from 1985 where they're looking at their congestion levels, how they've grown though the years to 2005, 2025, part of their metropolitan mobility plan, but then when they address and use the tools through the Texas Metropolitan Mobility Plan, they're able to reduce those congestion levels by using these tools. And again, it just reinforces that working together and using the tools, you're able to address some of the congestion needs that the region is realizing.

In the area of air quality -- we also took this from Michael. Michael, we want to thank you for giving us all of these charts.

MR. MORRIS: You're welcome.

MR. SAENZ: But you can see that based on their plan and their conformity determination, they're able to show that they are steadily decreasing both the VOx emissions as well as the NOx emissions for the region by being able to implement more of the plan through use of the tools.

Hazardous materials, of course by building Loop 9, basically we can allow for traffic that's going through the Metroplex to, in essence, have an alternate route to go around the Metroplex. And of course, DPS has determined that if a facility is built around, over 2,000 HAZMAT trucks could be rerouted over to that facility, whether it be 35-TTC or a Loop 9 type of facility.

In the area of freight rail, of course, the TTC has the capability and we have received a proposal as part of the TTC-35 to look at building a new freight rail corridor from the North Texas area down all the way to Laredo, and that will have an impact. And of course, we are working on an environmental study for the corridor for the rail element, and we're also working with Cintra-Zachry on their proposal to see how we move that thing forward.

Freight rail, based on what was submitted and looking at this, they showed it as a self-performance, that it would require no public money and could be built as early as 2011. And of course, if that's in place, up to 40 percent of that long haul inner city freight traffic would be removed from the inner city and be able to use it on the route that goes around the Metroplex.

MS. DICKEY: Amadeo, may I insert a question here? Commissioner Dickey. I would be remiss if I didn't ask you. When you talk about page 23 on HAZMAT and diverting that traffic from I-35 to the Trans-Texas Corridor -- which certainly is a good idea for congestion -- but since the North 35 south of Beltline in Dallas County is District 1, I am concerned and would like some assurance from you all that that will still be on your radar screen as far as improvements, maintenance. As you may know, there are no access roads along North 35 and it's a real problem because it backs up traffic all the way up onto the freeway.

Even though this may seem a little bit off this subject, it really directly impacts so many of our citizens in Dallas County. I don't want you to lose sight of that area and the improvements that need to be done there.

MR. WILLIAMSON: We take the instruction, and we do view it as instruction. We received it from Senate members, House members, county commissioners, city council persons, county judges regularly and we regularly try to say we won't lose sight of those things. We understand we have a lot of things we need to do in our state to bring the infrastructure to the point that it will deliver everything we want to our citizens, and as long as you'll keep reminding us, we're not going to forget it.

MS. DICKEY: I will.

MR. WILLIAMSON: It does trigger me to ask you a couple of questions, though, Amadeo. One of the criticisms of TTC-35 and the point of this discussion -- and this question is not to affect the public record but just simply to ask -- one of the criticisms is we'll abandon Interstate 35.

MR. SAENZ: No, sir, we're not.

MR. WILLIAMSON: Do you have, off the top of your head, any information about our commitment to Interstate 35 at this time?

MR. SAENZ: Of course, 35, for example, between Austin and Hillsboro through the Waco District is a project that is currently in our UTP and identified to add additional lanes, to go from four lanes to six lanes or six lanes to eight lanes, very similar to the same footprint that we have been building and are just about to complete between San Antonio and Austin. That's been a commitment by the commission and we're moving forward with that. There are certain projects that are under construction and certain projects that are planned.

Projects like 35 within the Metroplex fall under the umbrella of, as you all remember, the commission has allocated to the region the resources so that you can plan and set your priorities for the next 20 years and 30 years. And the districts work very closely with the RTC to put together and identify those priorities so that those improvements for capacity improvements, as well as the districts have their money for maintenance and rehabilitation to make sure that those facilities are kept in good shape, will be addressed through the RTC process.

So I guess for that part you almost have it under your control under the RTC, you need to kind of squeeze Michael and Bill.

MR. WILLIAMSON: Well, the UTP commitment you talked about on 35, recently I read something about we had a plan developed in 1999 to expand Interstate 35.

MR. SAENZ: There was a study done in 1999 that looked at the entire 35 corridor through several states. That study identified what the needs were going to be on 35, and then it had some strategies of what you could do to add capacity to 35. If I remember correctly off the top of my head -- it's been a while since I looked at it -- it identified that, for example, between Austin and San Antonio we needed to expand to ten to twelve lanes, in the Austin proper area we needed to go up to 14 to 16 lanes, and then when you started looking at the Metroplex, those needed to be up to 14, 16, 18 lanes -- I don't remember the numbers exactly.

MR. WILLIAMSON: Was there any cost analysis associated with that?

MR. SAENZ: There were some costs that were identified for the corridor. It talked about the entire corridor but it talked about $10- or $11 billion to do those improvements.

MR. WILLIAMSON: And that was when?

MR. SAENZ: I think those were based on about 1999, so there would have been earlier numbers for their cost, about '96 or '97.

MS. DICKEY: You mean in the Metroplex, is that what you're referring to?

MR. SAENZ: Well, I don't have the study for the individual areas, I kind of had the studies for the corridor as a whole. But it showed that those improvements needed to be done, in the Metroplex you'd have to expand the current 35 to 16 to 18 lanes. But how do you expand it? You certainly can't go out there and just wipe out the rest of it and add those additional lanes, so you've got to find alternate routes and alternate solutions.

MR. WILLIAMSON: Man, that would take an ad valorem tax base, wouldn't it.

MR. SAENZ: So that's one of the alternatives.

MR. WILLIAMSON: What would it cost to double deck Interstate 35 from San Antonio to Dallas?

MR. SAENZ: Just looking at what it costs, and I'm making the assumption that it would be a bridge structure so that you could separate it, it would cost somewhere between $30 million and $40 million a mile, and the $30- is if you have no exits or entrances, the $40- probably you do have some, you've got to see what happens at major interchanges. At $30- to $40 million a mile, you're talking between $10- and $12 billion to go from San Antonio to the Metroplex.

Now, if you start looking at those interchanges, you're going to add more money, it maybe would go up to $18-, $19-, $20 billion.

MR. WILLIAMSON: Would you put the railroad track up on a double deck?

MR. SAENZ: I'm not even looking at putting rail on that. All this is basically separating and would be adding about three additional lanes.

(General talking and laughter.)

MR. WILLIAMSON: Please continue.

MR. SAENZ: We were talking about rail. Of course, by being able to address the freight rail, you can also then address the passenger rail that could be used to address public transportation through rail methods. If you had it along the corridor, we see the possibility that the proposal for TTC-35 would also allow us to use that rail to handle passenger rail for higher speed rail.

MR. WILLIAMSON: Let me see if I remember the sequence of events. If you build a road, you can acquire the right of way for the rail and utilities cheaper than if you do the rail and utilities by themselves. If you build the rail, you can build the road cheaper than if you build the road by itself. And if you build the road and the rail correctly, you can use the same rail for freight as you can for high speed which brings commuter rail to downtown Dallas and between Fort Worth and San Antonio, beginning 2011 and finishing whenever.

MR. SAENZ: And of course, the higher speed rail that we're talking about is not the bullet trains but the trains that travel like 70-80 miles per hour.

MR. WILLIAMS: So one step leads to another.

MR. SAENZ: One step leads to another, one step complements the other.

Of course, how fast it comes will be how much commitment we get from our partners which is the region. And of course, just looking at some of the area statistics that we've looked it, we think that daily ridership would be a little bit over 9,000 by 2030 for a rail corridor.

MR. WILLIAMSON: Now I want to focus a minute on Michael's presentation. Do I understand our contract, our agreement with Cintra-Zachry that portions of Loop 9, as we understand it from Michael's map, probably are connectors to TTC-35 wherever the footprint is?

MR. SAENZ: Right. The contract with Cintra-Zachry allows them to bring forward projects that are for financial feasibility or connectivity within the study area. That is how we were able to develop and move forward on the 130 project, Segments 5 and 6, between Austin and Seguin. So within the study area, the developer can identify and bring forward these projects that can be connectors and they can be developed as independent projects.

MR. WILLIAMSON: And there's nothing that prevents A to B from being thought of as a connector today, a main lane tomorrow, a combined utility lane a year from now, there's nothing that prevents that. In other words, if we move forward with the protocol or if we move forward with the suggestion of the North Texas leadership on a different way of looking at partnering, and if we give Michael assurances that we need him to be serious about Loop 9 right of way while we're being serious about finishing and getting the Tier Two, they should have every comfort that it's our belief at some point somewhere to there somebody is going to walk through the door and say Let's build.

MR. SAENZ: That's exactly right. A Loop 9 can be developed as an independent project. The region has already taken the first steps in that they're doing the environmental, they're at different stages, but there's nothing to keep anyone, including the Cintra-Zachry proposal because it's within the study area, that would allow someone to come forward with a proposal and say, This project is a good project, it's a good CDA project, and we'd like to move this project forward.

What's important is that we know that the environmental needs to be done and then the CDA could then proceed, and the right of way could be purchased.

MR. HOUGHTON: Acquisition of the right of way is important.

MR. SAENZ: It has nothing to do with 35-TTC. 35-TTC will go through its motions and the environmental process will determine if in the future that actual element is designated part of the TTC or not, but we can move forward with that project as a Loop 9 CDA project.

What's important and ties back to the protocol is the protocol puts in place the mechanism that you can partner with the region and the players in the region to advance projects. And that kind of led me to my last slide. I'd be happy to answer any more questions before I make the motion on the protocol.

MR. WILLIAMSON: Can we hear your report on DFW? I think it might help our partners at the table if we understand what our viewpoint on that is.

MR. SAENZ: Then we'll go ahead and move on and item 7(a) is a report on the public comments that we received from the Dallas-Fort Worth region concerning the Tier One Draft Environmental Impact for the proposed Trans-Texas Corridor from Oklahoma down to the Gulf of Mexico.

We just went through a total of 54 public hearings that were required as part of moving forward from the draft EIS that was presented last April that were held on 35. We had two overflow public hearings because the hearing that we had scheduled for that particular area was not capable of holding all the people in one meeting so we had an overflow meetings, so we had two additional overflow meetings.

A little bit of statistics. As far as attendance at the public hearings, there were 13,600 people attend our public hearing, number of public officials that attended the public hearings were around 372. And within the Metroplex region we had 16 public hearings and one of the overflow public hearings was in Gainesville, so we had a second hearing in Gainesville -- that's not counted in the 16. Total attendance in the DFW area was 4,300, the total number of public officials that attended the public hearings in the Metroplex area was 172, and we had 396 general public members that made oral presentations in the DFW area at those public hearings, 48 of the public officials made oral comments at the public hearings. We are receiving more written comments and they're coming, so I don't have the final count on that. So far we've received 35 letters, 35 written comments from the DFW area public officials.

With respect to what we heard from the public and what we've seen so far, the oral comments that were made focused on mainly the following concepts: One, there was opposition to the project in general in that they were preferring the No Build alternative. Two, use I-35 for the Trans-Texas Corridor or use I-35 to meet the transportation needs of the future, don't build a corridor, use 35 instead. The third concept that came out was there is support for TTC-35 but suggested that a proposal that is supposed to represent the regional position be the one that be carried forward -- which goes back to my slide that I showed earlier that brings the TTC into the center of the Metroplex and then connects the full route around the RTC that was shown.

Those were the major comments that we received. As I mentioned, 36 public officials made oral remarks, to date we've gotten another 30 letters, written comments are still coming in. The comment period ended on the 21st but we still have some that are postmarked prior to the 21st that are coming in, we'll receive those.

Kind of what follows is we will take all of these comments that we received for the entire corridor, we will prepare a report that responds to all of the comments that we received and those comments will then be incorporated with any recommendations and changes back to Federal Highway Administration, and they, as the decision-maker, will give us the go-ahead to move forward, either go back and do a supplement draft EIS because the changes are too great, or they say okay, we agree with what you've come forward with or with the changes that you've made, they're not substantial, and we will issue a record of decision.

That will allow us to move forward to the final EIS for the corridor, for the study area. Once we have that, that gets me to second base. I then start working on identifying the actual alignments under Tier Two for the different modes of transportation on the 35-TTC corridor. So we still have a ways to go but we're moving forward.

I'll be happy to answer some questions with respect to this.

MR. WILLIAMSON: This is connected to 7(b) but I wanted to hold it until this report was finished. We formed ourselves at the beginning of the meeting -- anything we say to exchange with each other our particular viewpoints about how we see the expanded study area, our individual viewpoints, so this is just me talking to you individually.

MR. HOUGHTON: Yes, sir.

MR. WILLIAMSON: It looks to me like if we're focused on our strategic plan, it doesn't really much matter to us whether the study area is small or large, as long as it catches the area that will work best for the citizens to be served by the asset. That's my first observation.

My second observation is it's real hard to build anything new without disrupting somebody. You're either going to be tearing down Baylor University but not UT, or you're going to be going outside of Waco. Now, I made that statement before and others will remind me that's not the only alternative. You can build a loop around Waco, but we looked at the loop idea and when we added up all the loops, it became just almost a straight shot so it was about as much money one way or the other.

It's real important to be able to keep the rail, the utilities, the trucks and the cars separated in the same or no more than a couple of corridors; otherwise, we lose the cost efficiencies and we can't afford it.

But I don't know, just me and you talking, I don't know that I much object to the study area being broadened or narrowed or moved. What are your thoughts?

MR. HOUGHTON: Nor do I. I think you have to listen not only to the locals but how it pertains to the bigger picture of the state of Texas, the economic engine, the trade corridor of the Western Hemisphere, and it seems to me, Mr. Chairman, Ric, that it is consistent with our goals and objectives, and that's the key that we look at the bigger picture and the locals have said this fits the bigger picture and they've made a great statement in arguing for that.

MR. WILLIAMSON: And I guess why would it really matter to us in the end, as long as it sticks to the plan.

MR. HOUGHTON: As long as it's consistent to the plan, right.

MR. WILLIAMSON: Hope, what are your thoughts about it?

MS. ANDRADE: Well, I agree that I think it's consistent with our plans. I have a question for Amadeo. What kind of delay are we going to face if we do a new study on this loop? Is there going to be any delay from our time line?

MR. SAENZ: With respect to doing a study on a loop as Loop 9, there's no delay because that's an independent study. You're developing a loop that the Metroplex has identified as a priority. Just like other CDAs that we've been looking at and we talked in the earlier presentation this morning, they've identified this project, and those studies need to be done for that project, so it does not impact anything.

I guess to kind of carry the question, as we go forward and the Federal Highway Administration and what we move forward to them and our recommendations to the final EIS, they say you have to do a supplemental, then that would require us to go back and have another series of public hearings on the differences so that we can get comments on that information, and then carry it back forward to them. So that would slow down the 35-TTC project.

MS. ANDRADE: Right, and that was my question, the TTC-35 project.

MR. WILLIAMSON: And it might not necessarily slow down loops, connectors, arterials. They're all reducing congestion on their own and all support whatever the final footprint may or may not be. Someone was kind of thinking ahead when all this was designed, it sounds like.

MS. ANDRADE: I'm glad we listened.

MR. WILLIAMSON: Well, let's close down things one at a time by saying thank you for your report on TTC-35. And with our guests indulgence, we'd like to ask does Jack want to come first, David want to come first?

MR. BEHRENS: We have a commenter on 7(a).

MR. WILLIAMSON: George Williams. Let's talk with the mayor of Seagoville first.

MAYOR WILLIAMS: I don't have anything to say to you guys.

MR. WILLIAMSON: Okay. Thank you, sir.

MR. BEHRENS: The next ones are on 7(b).

MR. WILLIAMSON: Okay, I closed 7(a). I'm on 7(b) now.

MR. BEHRENS: This will be testimony on 7(b).

MR. WILLIAMSON: Allan or Jack, which one? Mr. Miller, Mr. Rutter? Mr. Miller. I'm sorry I held you off but I wanted you to be able to hear the entirety of the testimony.

MR. MILLER: No. Very interesting. It shows us once again that we made the right decision, that the partnership is so important, and all the things we're talking about here are critical to solving the mobility needs of our state. We really appreciate this.

David Blair, our chairman, would be here but he's traveling up in New England. In fact, he's on his way back.

MR. WILLIAMSON: In order to watch the trees, isn't it?

MR. MILLER: I think he spent time at the Big Dig to see our federal tax dollars at work up there, and he's probably taken every toll road between Boston and here to come back . But we really do appreciate it.

I'm Jack Miller, vice chairman of the Tollway Authority, and Chairman, commissioners, we appreciate your indulgence with us.

Commissioner Andrade, when you talked about the sunrise this morning, I told a story, I voluntarily left the mayor's job six years ago, choosing not to run for re-election because my wife and I thought that it was time for me to get out of politics and away from all these kinds of issues, and so I planned to ride off into the sunset, and what happened was I got stuck in traffic, and so I've been working on transportation issues pretty much ever since then because I just couldn't let go.

Commissioner Houghton, we really appreciate the leadership you've given in working with us in terms of developing this protocol. To your staff, to Jeremiah, to Bill, to Maribel, to Michael, also to Allan Rutter. Everybody did a huge job. We know that there were some interesting times during the whole process.

And you talk about change and you used the term paradigm shift. We understand that. In fact, think of the shift that took place in the North Texas Tollway Authority board of directors over a period of about two months because within the previous two months, a majority of our board voted to proceed with being a proposer on the 121 and 161, the majority of the board. What happened two weeks ago, after all of the discussions were had and what the staff came up with and all the issues we were looking at, it was a unanimous decision to approve and adopt the protocol subject to your approval. Now, that's a shift.

What does it mean? It means we are dedicated, we understand that it's a different world. We are proud of our past, we're extremely proud of our past. I couldn't agree more with those who said that we have an outstanding authority, we really do. From 1997 when it was formed, and the people, you know who were involved in it, both from the leadership, the policy-makers and also the staff. We've got an outstanding staff. This staff is committed to making this work; this board of directors is committed to making this work.

Now, does that mean that we won't have differences? Of course it doesn't. Bill used the analogy, when we were considering this two weeks ago, he used the analogy of a marriage and you can think of all the issues of marriage and think well, wait a minute, do we really want to do that, use that analogy?

My wife and I have been married a little over 53 years and I can tell you with a good marriage it's not the good times that the marriage really means something, it's in the difficult times. It's the times when you have disagreements, it's the times when it's time for change, it's when the children reach teenagers and then the grandchildren reach teenagers. I mean, you can just go through time after time, the financial difficulties, when you have differences of opinion, when you're coming from different directions. Those aren't signs of a weak marriage, those are signs if the marriage holds together and you get over these things, then it makes it work.

So we're dedicated to make sure that whether we use the analogy of the three-legged stool, the marriage or whatever, we thank you, we are prepared, and we are dedicated to work collaboratively -- that's an easy word for you to say -- but anyway, together with the Regional Transportation Council, TxDOT and all the citizens and elected officials of our region.

So thank you, and I assume you will also have an unanimous approval of the protocol today. If there are any question, I'll be happy to answer them.

MR. HOUGHTON: No, there's no questions. Thanks for your leadership. We've had some interesting dialogue over the last couple of months and very fruitful. And to your leadership, to David and Allan. Thank you very much, Jack.

MR. WILLIAMSON: Okay. Allan.

MR. RUTTER: The boss has said all I needed to say.

MR. WILLIAMSON: That was Allan Rutter who is the executive director of the North Texas Tollway Authority.

MR. HOUGHTON: I do want to thank Allan for the TxTAG logo. I appreciate that, Allan, very much.

MR. WILLIAMSON: Amadeo, we've still got item 2(b) open, and I want to go back to that for a second, and it would appear, listening to the commissioners as they dialogued, that we're comfortable moving forward with the approach you've suggested which is take the projects, take them out to the community, start talking about the value, see how the community reacts. Every time you get there, remind them there's an $86 billion problem and it's not going to go away unless we start doing some of these things, and we can't continue to under-subsidize transportation assets forever, our grandchildren are going to be in buggies and wagons.

MR. SAENZ: Thank you, sir. We will do that. And there's a lot of people that are working on this CDA screening criteria and they're putting in a lot of work, and I think this is just going to complement that and give them a little bit more reinforcement to what they're doing.

MR. WILLIAMSON: Mr. Saenz is going to ask us to approve the protocol. Before I do that, I need to permit you and all of yours, is there anything else we need to discuss, anything else we need to get on the table, anything else we need to talk about?

MR. MORRIS: No, sir.

MR. SAENZ: Okay, commissioners. The protocol is an important step to implementing the strategy of regional empowerment and partnership. Since we've been talking and we've covered a lot of ground and a lot of areas, I'll go back and this minute order adopts a protocol that was included in the exhibit. The minute order also supersedes the minute order that we passed last month in July with respect to the 190 project in Dallas County and the 121 project in Tarrant County where we said we were going to do CDAs because now under the protocol they will be done subject to the revenue-sharing agreements through the NTTA.

With that, staff recommends your approval of this minute order.

MR. WILLIAMSON: I want to thank you, each of you, for participating in this experiment. I think it worked out okay. We may do this some more, this is a good idea. And I also want to thank you for your time. I know you had to change a lot of schedules to be here, and as we're fond of saying around here, time is the most valuable thing one has. We appreciate it.

Members, you've heard the staff's explanation and recommendation. Do you have questions or comments for staff? 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 signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. New day in North Texas.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: We're going to return to our regular order of business. I'd like to thank everyone for their patience.

MR. BEHRENS: We're going to continue on, we're going to be on agenda item number 2 which is our discussion items. We have a discussion item that's listed on your agenda, 2(c), that's going to be deferred to another meeting, most probably it will be in November. And then we're going to go now then to discussion item number 2(d) which will be discussing the potential revisions to our rules that would allow light emitting diode signs in Texas under the Federal Highway Beautification Act. John Campbell will present that.

MR. CAMPBELL: Good afternoon. For the record, my name is John Campbell, director of the Right of Way Division.

The discussion topic that we're here to talk about today, I'd like to make just a few comments to put into context what we would be proposing to do. First of all, we're not considering any action specifically on any rules that are currently drafted or in place.

The control of outdoor advertising is subject to the Federal Highway Beautification Act, and as such, we at TxDOT have the very unique responsibility of being the federal government's regulatory arm for enforcement of the Highway Beautification Act, and the control of outdoor advertising falls within that.

I say these comments because as we start to discuss this, it can very quickly get complicated and confusing because of the way that federal law overlaps with state law, and then when you put local ordinances that are associated with outdoor advertising in place, it can get pretty distracting.

MR. WILLIAMSON: And let me interrupt you, John, because I sense this is going to be a topic we're going to take up and discuss many times over the next year. Now, what you just said was the control of outdoor advertising, and I want to be sure you mean all outdoor advertising, or do you mean the control of billboards as defined today are controlled by the Beautification Act?

MR. CAMPBELL: I'm speaking regarding the control of billboards as they're defined today.

MR. WILLIAMSON: Because my understanding is one of the confusing points we face is that these light emitting diodes don't necessarily fall into anyone's definition.

MR. CAMPBELL: That's correct. The light emitting diode, being a new technology, is another one of those shiny new objects that we really don't have a definition on yet in the context of advertising control.

MR. WILLIAMSON: Okay, thanks.

MR. CAMPBELL: In order to pursue this discussion, we're talking about another generation of technological development associated with the historical use of outdoor advertising. We went through a similar series of discussions about eight years ago when I first took over as the Right of Way Division director. We had at that time another development in outdoor advertising technology that we were considering, and that was what is now commonly referred to as Tri-vision or a changeable message sign.

At the time we looked at our regulatory responsibility, very black and white. The federal government was doing some nationwide research the end of determining the distractive effect of a changeable message sign and driver behavior, and so at that time we put off incorporating that technology into the Texas rules, wanting to defer to any conclusions that they came up with on the Federal research. The Federal research, as you might imagine, was inconclusive because you could not make a one-to-one correlation between existence of these changeable messages signs and the incidence of accidents associated with.

So then time has gone by and now the next generation of new technology that's applicable and attractive to outdoor advertisers involve these LED signs. The kinds of issues that should probably be looked at or talked about amongst the DOT in consideration of this kind of thing are associated with the placement of these LED signs if they would be allowed because the federal and the state laws do have a lot of specific criteria associated with location, size, distance from the traveled ways.

The other issue that becomes very quickly discussed in the context of the safety and the distractive effect of this would be the rate with which you change messages. And I think in current existence, I think those change rates are anywhere from six seconds to once every twelve hours.

The other kinds of issues to look at would be the effect on the connection with intelligent transportation systems, and of course, that would potentially afford an opportunity to incorporate this kind of technology into emergency evacuation kinds of information or posting Amber alerts, those kinds of things. So there is obviously a connection also with intelligent transportation systems, potentially.

The fees associated with outdoor advertising and its current regulatory role, again, it's a regulatory function, we receive a General Revenue appropriation associated with the state's responsibility to enforce the Federal Highway Beautification Act, and so there would have to be some discussion associated with would implementation of a new technology require additional costs associated with our permitting and licensing fees. Outdoor advertising is supposed to be a self-supporting regulatory function in that the permit fees, the license fees should pay for administration of that enforcement.

MR. HOUGHTON: Excuse me, John. What is the limit of our jurisdiction?

MR. CAMPBELL: That's a very good and it's not a very simple question. Right now when I'm speaking in terms of the Federal Highway Beautification Act, that is control of outdoor advertising associated with the interstate and federal aid primary system.

MR. HOUGHTON: Any jurisdiction of the City of Austin or outside its city limits?

MR. CAMPBELL: Both. And the City of Austin is a good example, because that is, again, that layer of local ordinance that sometimes also impacts this control. There's a notion called a certified city. A certified city is certified as such by the Texas Department of Transportation, and then what that allows them to do is to enforce the Federal Highway Beautification Act on behalf of the department. They can also, in doing that, impose a lesser or a greater standard to the criteria utilized for controlling outdoor advertising. The City of Austin is not a certified city.

So there are some differences associated with some of these placements, size issues associated with being in the municipal boundaries of any municipality regardless of whether they're a certified city. But there is a direct correlation to the question you asked with the article that, coincidentally, appeared in the newspaper today regarding the Godzillatron, I believe it was, at the University of Texas.

MR. HOUGHTON: The Gigatron, I believe, it's called now.

MR. CAMPBELL: What is it called now?

MR. HOUGHTON: Gigatron, Gig 'em-tron.

MR. CAMPBELL: The Gig-em-tron. Well, I'll go ahead and straddle that fence and reveal my own bias. I'm a 1984 graduate of Texas A&M University, officially for the record. Whoop! But I also happen to have been a '92 graduate of the UT system, so I'm going to be firmly right on top of that fence.

With specific regard to that sign, just anybody's interest, I don't personally oversee the Austin District's control of outdoor advertising, I do interpret the rules for the districts. My off-the-top-of-my-head interpretation would be that's an on-premise sign, and as such, it would be exempted from control under the Federal Highway Beautification Act.

MR. HOUGHTON: Do you work directly for Amadeo?

MR. CAMPBELL: Yes, sir, I do.

MR. HOUGHTON: Okay, thank you.

MR. WILLIAMSON: An on-premise sign would be a sign defined as wholly within the confines of someone's private property.

MR. CAMPBELL: More specific to that, it's a sign which can also include advertising content but it is to advertise activities on the premises that it exists. So there are further limitations to that description that you gave.

MR. HOUGHTON: You can't advertise a car dealership on your sign on your premise and be exempt or have it classified as an on-premise sign.

MR. CAMPBELL: If it's on the premises of a car dealership.

MR. HOUGHTON: My property who is not a car dealership, it's a parking lot, let's say.

MR. CAMPBELL: If that was the case, that would not be classified as an on-premise sign.

MR. WILLIAMSON: Except it wouldn't be classified at all because we don't have any rules about it.

MR. CAMPBELL: About?

MR. WILLIAMSON: An LED.

MR. CAMPBELL: At the current time, LEDs are not even mentioned. In the past discussions on these types of changeable message sign technology, it's really a specific criteria that's in our state-federal agreement. It's not even criteria that exists in the federal act, it's in the agreement between the state and the federal government that we've executed since the origination of the Federal Highway Beautification Act that puts those specifics in there.

The changeable message interpretation that the state has taken has been done under the category of the lighting and they refer to those types of signs as intermittent signs, a sign that would be able to show more than one sign.

MR. HOUGHTON: I'm still trying to get, Mr. Chair, my hands around the issue of the jurisdiction of outdoor advertising inside a jurisdiction. Now you've added another layer of complexity, Austin versus El Paso, and I don't know if El Paso is conforming or approved -- what was the terminology?

MR. CAMPBELL: Certified.

MR. HOUGHTON: Certified, versus San Antonio versus Houston, where does a jurisdiction lie. Our jurisdiction, if Austin is not certified, El Paso is.

MR. CAMPBELL: And that is the case, El Paso is a certified city, Austin is not a certified city. That means that we have really deferred our jurisdiction for control of outdoor advertising to El Paso in the certified city case. They can impose a lesser standard, and let me give an example of what I mean by a lesser standard.

One of the criteria in the state-federal agreement has to do with the actual size of a sign, the square footage of the advertising faces. In the federal act, 1,200 square feet is the standard, or in the state-federal agreement, 1,200 square feet is the standard. The Texas regulations impose a much stricter standard and it's a maximum of 672 square feet.

So in the case of El Paso, they would be able to go out there and locally allow a square footage that would be up to that federal cap of 1,200 square feet, but it would be beyond the 672 square feet that we would otherwise impose.

I can add an additional layer of complication if you'd like me to answer further.

MR. WILLIAMSON: It sounds to me like we just need to tell Lee Vela and Margaret Lloyd that there is no regulation, it's a private property matter, and move on. Right?

MR. CAMPBELL: It's a difficult question to answer right.

MR. WILLIAMSON: I'm sure John Johnson would want to do that.

MR. CAMPBELL: You're correct in the fact that the technology of LED signs is not specifically excluded. Again, we take a very strict interpretation of our role because as the DOT our interests are best served in making sure that we don't upset the sensibilities of the Federal Highway Administration, who has us enforce or effectively control outdoor advertising at the threat of up to 10 percent of our highway funds. So we always want to be very certain when we make those kinds of determinations that our interpretation is consistent.

MR. HOUGHTON: Is Dallas certified?

MR. CAMPBELL: Yes, Dallas is certified.

MR. HOUGHTON: Fort Worth is certified?

MR. CAMPBELL: Yes.

MR. HOUGHTON: Austin is not. Houston is certified?

MR. CAMPBELL: Yes, Houston is.

MR. HOUGHTON: El Paso is certified. San Antonio?

MR. CAMPBELL: I believe San Antonio is.

MS. ANDRADE: They're not.

MR. CAMPBELL: No, San Antonio is not a certified city.

MR. HOUGHTON: So I guess my point is that they are in charge, for lack of a better word, of regulating their sign ordinances, and we take a secondary role to that. Correct? Is that an accurate statement?

MR. CAMPBELL: Yes, I think that's accurate.

MR. HOUGHTON: So it seems to be our jurisdiction lies outside these city limits.

MR. CAMPBELL: Yes, it does.

MR. HOUGHTON: On the interstate/state highway system, or federally funded state highway system, out there in the hinterlands between Weatherford and El Paso.

MR. WILLIAMSON: I think the answer to this dilemma is to invite the Outdoor Advertising Association of Texas to build a huge LED sign advertising the scenic places in Texas, changing the picture every 30 seconds, and then let them sue each other and go to court and then let's find out what's right or wrong.

MR. CAMPBELL: That's sounds like a very novel approach.

MR. WILLIAMSON: We don't spend much money, let the court tell us what to do, scenic Texas gets nice places advertised, outdoor sign industry gets the problem resolved, everybody is happy.

MS. ANDRADE: Well, before we get there, can I ask a question?

MR. CAMPBELL: Yes, ma'am.

MS. ANDRADE: You touched safety. I think it would not help our safety on our highways. I mean, have studies been done in other places or any information you can provide for us?

MR. CAMPBELL: The only study that I'm just tangentially aware of was the federal research that I referred to which occurred, I think, about five to seven years ago, and the conclusions of that research were inconclusive. Naturally, you would assume that anything that distracts the driver's attention from the job at hand, piloting their vehicle down the road, of course could have a negative impact on safety. And that always becomes the first point of view that the DOTs look at the issue of outdoor advertising from.

MS. ANDRADE: I'd be very concerned about that, Mr. Chairman.

MR. WILLIAMSON: I think I'll be in the minority on this one again, I'll get run over.

What guidance do you wish us to give you, John?

MR. CAMPBELL: Well, I wasn't really looking for any action by the commission, I was really just wanting to get this topic out in front of you for discussion. It is a national discussion, this is not specific to Texas. Some of the outdoor advertising industry larger firms have been carrying on this dialogue with the Federal Highway Administration. So there is a lot of dialogue going on.

The reality is that LED signs do exist out there in exempted locations, they exist in areas that are not under control, so balancing that safety concern, you also have the concerns for consistency of implementation, and when there is inconsistency, there's always an impression that we're not necessarily doing our job consistently.

MR. WILLIAMSON: Do we wish to give John guidance?

MR. HOUGHTON: Well, I think it seems like our jurisdiction is limited to outside city limits on the interstate highway and state highway system which I'm trying to remember, driving from El Paso to Austin on Interstate Highway 10 and 290, not a whole lot of signs out there. I mean, I'm not telling the industry what to do, but putting an LED sign up is a pretty expensive proposition.

MR. CAMPBELL: True.

MR. HOUGHTON: I just don't see a proliferation of them, personally.

MR. CAMPBELL: They would very likely -- and again, I'm speculating -- they would occur in population centers where it would be cost-effective to invest that kind of money.

MR. HOUGHTON: Like Ozona?

MR. CAMPBELL: I don't know that Ozona would have quite the traffic that would justify the cost.

MR. HOUGHTON: It's halfway between here and there.

MR. WILLIAMSON: Well, here's the dilemma -- and I'll give you a perfect example I deal with at least once a week -- on the east side of Interstate 35 near the fine city of Burleson, Texas there is an always-changing LED sign advertising a high school that's located right there on the road. The sign is announcing sports events or it's announcing whatever, and when you come over the hill one mile south, headed south, that light emitting diode bright red looks like a set of brake lights, and you're a little bit sleepy and it's midnight, as it normally is when I return home from here, it will do one of two things: scare the heck out of you or wake you up and make you focus, but it is in your eyes.

I don't think we're going to pass regulations that tells school districts they can't put signs up, and that's not in a certified city, it's out in the country, and it's dang sure advertising its business so I guess it could be called an on-premise sign.

MR. CAMPBELL: I would think it might be in one of those exempt categories.

MR. WILLIAMSON: I also think there's a pretty good chance that the current congressional makeup is such that Lady Bird's law can never be passed again, I don't think that will ever happen again. Thus, I don't think, unless it's a freak of nature, the Highway Beautification Act is going to be amended to include LEDs.

I think it probably wouldn't be a bad thing to advise John that by a three-to-four vote the commission is concerned about signs.

MR. HOUGHTON: You're being presumptuous.

MR. WILLIAMSON: No. We've had these billboard fights. You and John and Hope, you are for swiping the private property rights of all people off the face of the map, and I'm for letting people sell their signs.

MR. HOUGHTON: I've never expressed that opinion.

MS. ANDRADE: I don't have a problem with billboards per se, I mean, I travel I-35 all the time and I just would hate to think I'm coming in at night and you've got a highway of lights flashing. I'd feel like I'm in the city of lights.

MR. WILLIAMSON: Kind of like Las Vegas?

MS. ANDRADE: Yes, and I'm not sure that's what I want to turn our highways into. But foremost, my concern would be safety, and I do believe that that would deter a driver. You know, they're trying to read what's flashing out there versus concentrating on the road, so any time that it's going to hurt safety, I'm not going to support it.

MR. WILLIAMSON: They could be used for hurricane evacuation emergencies.

MS. ANDRADE: But like our IT system right now, those are situated in the middle of the road.

MR. WILLIAMSON: They're also non-evasive. They're not LEDs, are they?

MR. CAMPBELL: I don't believe so.

MR. WILLIAMSON: I don't think they are. I think that they're muted incandescent that get brighter at night.

MS. ANDRADE: Because we've got them all over San Antonio, and now I saw them in Corpus Christi, but when you're driving you look up immediately and down. With a billboard or an LED sign, you'd be looking off the road.

MR. HOUGHTON: Let me ask a question. If technology continues to evolve, and it will continue to evolve -- and I'll have to ask the industry this -- if I have a choice of ten billboards or one LED, I'm going to take the one LED. If there's a ratio on their industry that says you look at the cost-effective of one LED versus ten billboards -- and I'll bet they've done this analysis -- I'll take that one LED over ten billboards any day. So I'm going to be open to looking at LED signs as a ratio, as a replacement for the big billboards sitting out there. Now, that's one company, I'm thinking one company; there could be ten different sign companies.

MR. WILLIAMSON: Hasn't Dallas -- and maybe a lot of cities -- haven't they had a pretty aggressive program of going along and buying up billboard sites and then destroying them?

MR. CAMPBELL: Yes. The general trend in the municipal ordinances is dramatically in favor of limiting outdoor advertising in the municipal limits.

MR. WILLIAMSON: So it's okay for the Longhorns to advertise their football team on their premises but it's not okay for the Aggies to have a Jumbotron right next to it advertising A&M football.

MR. CAMPBELL: I think the Jumbotron at A&M would probably receive the same kind of exempt status.

MR. WILLIAMSON: No, I'm talking about right next to. You know, they go over and bought the little gray house across the street from the baseball field and put their sign up that advertised A&M football opposite the Longhorn Jumbotron. Their sign would be maybe illegal but the Jumbotron over on our field would be okay.

MR. CAMPBELL: That would be correct.

MR. WILLIAMSON: We have two witnesses, members. Would you like to hear their thoughts?

MR. HOUGHTON: Sure.

MR. WILLIAMSON: They're probably back there thinking that we're making light of this topic when they're not too happy about it.

Margaret, we'll let you go first. Margaret has been up here before us many times.

MS. LLOYD: I have some handouts. Is that appropriate?

MR. WILLIAMSON: You're a citizen of the state, whatever you've got, we'll read it.

MS. LLOYD: I do have a good sense of humor, Commissioner.

MR. WILLIAMSON: Do you share my view that we need to leave those alone, let them proliferate across the landscape of Texas?

MS. LLOYD: Sorry, I can't agree with you on that one -- not to your surprise.

Thank you for having me speak to this important issue. My name is Margaret Lloyd and I'm the policy director for Scenic Texas, an organization dedicated to the preservation of our glorious Texas scenic views, especially those seen from our roadways.

Even though I'm here by myself today, I represent thousand of citizens who are concerned about the erosion, the continued erosion of our scenic views. I'm here to speak against permitting LED technology to be used on billboards along our highways. If you choose to allow LED technology, it will be a choice that will have long-lasting effects on our landscape for generations to come.

I was very happy to learn from your website that your mission is to provide safe, effective, and efficient movement of people and goods, and your vision, at least in part, is to provide comfortable, safe, durable, cost-effective, environmentally-sensitive, and aesthetically appealing transportation systems. We applaud that mission and we applaud that vision, and we are in complete support of those.

It is with this as a backdrop that I want to emphasize three issues that our members are concerned about regarding this technology and that directly relate to your mission and your vision.

First is safety, that one of your members has already raised. I passed out a traffic safety evaluation of video advertising signs. I don't know that this technology is exactly what the industry is proposing here, so I want you to be aware of that, but it is changeable messages and I do know what they're proposing is changeable messages. It's the only safety study that I could really find that was directly on point.

A couple of the conclusions, although they did not determine whether these signs would be safe or unsafe, they couldn't conclude either way, they made several observations and conclusions. First they said the video signs are distracting, without question. Therefore, it's prudent to limit the distractions to drivers, particularly in areas where the driving task is demanding, and a second or two lapse in attention could have serious consequences.

Research has proven that these signs are attracting more and longer glances than other static signs, so that's the difference between your static billboards and this. With longer glances, the driver has less time to check the roadway environment for the necessary information to make the next maneuver.

Other things that this study pointed out, they did a public survey -- which we think is very critical to any study that you all might engage in because the public is very interested in this issue -- the public survey revealed that nine drivers out of 152, nine out of 152 had experienced rear-end collisions that they associated with video advertising signs. As noted in the study, this is surprisingly high due to the small polling sample.

The public survey also indicated that these advertising signs were rated close to the same as road construction in terms of distraction. And as I know that you're aware, there are many studies that show an increase in accidents due to road construction. Sixty-five percent of the public survey respondents stated that these signs have a negative effect on driver attention to pedestrians or cyclists, 75 percent said they should not be placed at intersections, and 62 percent said they should not be placed on our highways. That study is from Toronto, Canada.

Something a little closer to home that I passed out too is a news article from Dallas-Fort Worth where American Airlines settled a lawsuit where a jury assessed $14-1/2 million in actual damages and $10 million in punitive damages against the airline for what the jury found putting up a sign that they knew before they allowed it to go up would cause a traffic hazard. Again, I don't know that this is directly the same technology but I think these are things that you should consider when you're thinking about allowing this technology to occur.

Second thing is cost. Is this cost-effective? I've heard you all talk at length about being concerned about your transportation systems being cost-effective. Each year TxDOT, or I guess I should say the taxpayers, have a huge burden simply because billboards have to be purchased, they have to be relocated, or they have to be condemned every time you widen a highway. Millions of dollars are now spent of the taxpayers' monies on these projects. Surely LED billboards, that I understand cost a minimum of $450,000 to erect only one, will turn into a billion-dollar problem for future condemnations.

The third area that I think you need to be concerned about which is my passion in my heart is the public concerns and the scenic beauty. Allowing any billboards, LED or otherwise, is contrary to the will of the majority of Texans and contrary to good public policy. We have found that the trend, as Mr. Campbell noted, is to stop new billboards, not allow them. Four states have no billboards, over 300 Texas cities have stopped new billboards, and each legislative session there are local communities asking for their state representatives and senators to protect more and more roads from new billboards.

Today, after only 24 hours notice, I have petitions that show over 130 signatures from Johnson City, Driftwood, Spicewood, Austin, Kerrville, Blanco, and Cypress Mill asking that you not approve this technology. Those people are mainly concerned about the night sky. It's the Hill Country, that's what they sell, that's why tourists go there. This would be a huge negative impact on their economic development plans.

This is a hotly contested issue, as you have noted.

MR. WILLIAMSON: Wait a minute. They won't let us build any roads out there, and you're talking about economic development?

MS. LLOYD: Well, if you don't put roads out there, then they can't put billboards out there.

MR. WILLIAMSON: They're not relying on that economic development argument to prevent billboard regulations, surely.

MS. LLOYD: Well, I'll let them speak for themselves.

MR. WILLIAMSON: It was a nice try.

MS. LLOYD: We believe that adequate signage along our highways should exist only if it's designed to direct the traveling public to travel to related services and goods. The blue Texas Logo signs and the brown tourist-oriented directional signs are ideal for travelers. On the other hand, an off-premise billboard might be helpful to a person if it happens to be advertising the hotel or restaurant that they're looking for, however, it could just as easily be advertising one of my personal favorites, 1-713-REVERSE vasectomies, and I don't know about you all, but that is not a service that my family is looking for when we travel.

I'm really not sure why you're considering this technology unless you've gotten complaints from the public that they can't find their way or they can't find goods and services they're looking for, but if they are complaining about that, it would be our recommendation that you look to expanding the Logo system, expanding the tourist-oriented direction signage system that is designed for the traveling public, not designed to sell commercial goods and services.

On a personal note, Texas roads are your legacy that you're going to leave your children and your grandchildren, and it's because of that that I'm confident you will be deliberate and thoughtful about this choice and in the end you'll make the best decision for the most people.

I'm happy to answer any questions.

MR. WILLIAMSON: Ted, Hope?

(No response.)

MR. WILLIAMSON: We've kind of treated this lightly, but I think John brings it to us because one day somebody is going to go put one of those signs up. The absence of regulation tends to imply no regulation as opposed to the absence of permission implies you can't do something. We're still a private property rights state. My guess is one day somebody as a test case will go put one up and say let's go.

MS. LLOYD: I think that's already happened, Commissioner, in Corpus.

MR. WILLIAMSON: So we'll have a test case pretty soon, and I think that's why John is doing it, to sensitize us to the fact that it's going to be in front of us and we need to start thinking about it.

MS. LLOYD: Well, I don't have a problem with you developing rules to ban them. I believe that's what your rules say right now. I don't think you don't have rules, maybe I'm wrong about that. I believe that your rules, as they're written as between the state and the federal contract, disallow these to occur, so you would have to have a rule to allow them, possibly even a change in the state-federal contract.

MR. WILLIAMSON: Well, that won't pass this commission, I don't think.

Anything else, guys?

(No response.)

MR. WILLIAMSON: We have another witness. Thank you, Margaret. It's always good for you to be here.

MS. LLOYD: Thank you.

MR. WILLIAMSON: Lee.

MR. VELA: Good afternoon, Mr. Chairman and members of the commission. Thank you so much for allowing us to present our views on this very important issue for not only us but the state of Texas as well.

As you well know, and we've already talked about today, extensive controls for the Texas billboard industry are set by state and local levels to ensure that the federal regulations that are set out by the Highway Beautification Act are followed, and rules and interpretations for the federal regulations are administered by the Federal Highway Administration, the FHWA.

From time to time all regulations must be looked at to reflect changing technologies. Today technology is rapidly changing in most industries, as you've already noted, and the billboard industry is no different. From hand-painted to printed messages to the future of electronic static messages, technology is catching up with our industry.

In 1996, the FHWA issued a policy memorandum that advised states and the outdoor advertising industry that states could allow changeable message technology if states enacted legislation to allow it, issued regulations, policy or legal interpretations for such messages, or a court of competent jurisdiction allowed such technology. And I have a copy of that memo for you as well.

Our position is that changeable message signs, regardless of the technology that's going to be used, are acceptable, and if an interpretation of the state and federal outdoor advertising agreement allows such signs, but that flashing, intermittent or moving lights should not be allowed unless conveying public service messages such as time and temperature, and that follows the federal guidelines.

Changeable static messages are no different from the current message boards that are operated by TxDOT or for traffic or weather conditions except that, of course, they would carry commercial messages. They could, however, carry important public messages as well. In the case of emergencies, natural or manmade, the essential communication could be transmitted to evacuation such as in the case of weather emergencies or plant explosions, and of course, non-commercial messages such as Amber alerts could be immediately on the streets.

Currently 42 states allow some sort of changeable message technology. Six of those states, including Texas, only allow tri-action or mechanical message changes, as you've already talked about. More than 200 digital billboards are operating across the country right now, featuring static messages that are typically changed every six to eight seconds. Regulators accept this technology since static copy does not flash and it does not feature motion pictures or emit intermittent light.

Over the years, governmental agencies have conducted numerous studies on the correlation between driver behavior and billboards. They have found that drivers can be distracted by a number of factors, in and out of the vehicles. A study by the American Automobile Association found that the overwhelming factor in driver distraction comes from inside the car.

Years of study, expert testimony, as well as state and federal court decisions point to no correlation between outdoor advertising and traffic accidents. Virginia Tech's Transportation Institute, the Center for Crash Causation and Human Factors, found in 2003 that billboards do not measurably affect driving performance. Traffic safety experts have studied the relationship between outdoor advertising and traffic accidents since the 1950s and found no scientific or authoritative evidence that billboards are linked to any traffic accidents.

The U.S. Department of Transportation, state transportation agency, and property casualty insurance statistics indicate no correlation between billboards and traffic accidents. A sampling of law enforcement agencies found no evidence as well. And of course, state transportation agencies, such as TxDOT, routinely use roadside signs and message boards to provide information to motorists, including information intended to enhance safety.

In conclusion, allowing new technology is good for Texas business. Local businesses depend on our advertising to reach the traveling public, and likewise, the traveling public depends on billboards to direct them to food, gas and lodging and other services. Studies have found that Texas businesses would lose a substantial amount of their sales without billboard advertising. Our sole purpose for existence is to boost the business of other businesses, and that is good for the Texas economy.

I'd answer any questions if you'd like.

MS. ANDRADE: I didn't know who you represented, sir.

MR. VELA: I'm sorry. Lee Vela, president of the Outdoor Advertising Association of Texas.

MR. WILLIAMSON: Ted, anything?

MR. HOUGHTON: I go back to my question of John Campbell is in the industry when you look at the capital investment of an LED sign.

MR. VELA: It's not $450,000, it's around $250,000.

MR. HOUGHTON: Well, whether it's $250-, it's significantly more than what you're doing today.

MR. VELA: Yes, sir.

MR. HOUGHTON: And of course, with technology those prices continue to drop.

MR. VELA: And it's LED now and it could be something totally different in the future.

MR. HOUGHTON: Yes, it could be something different in the future. But I guess my point is now I have ten static signs within two, five, ten miles that one company owns. Is there a ratio of signs coming down versus an LED sign going up?

MR. VELA: The LED or static changeable message sign boards would certainly be worth more than traditional billboards today, so yes, there is a possibility there would be less billboards, but more technologically advanced billboards.

I do have a DVD that was produced by our national association on digital billboards. If you have a chance to take a look at it, it would give you a visual of what it does on the roadways. We have some test markets that are in the rest of the country, particularly in Cleveland, Ohio, that's featured in this particular film, and there's also some folks interviewed in this. So I'll leave a copy with you guys if you have a chance to take a look at it, and we'll send you each a copy, as well, to take a look at that. It might give you a more visual atmosphere of what the boards are. It is something that is important to not only us but the state.

MR. WILLIAMSON: What do you think we ought to do?

MR. VELA: I think you should allow them. And it's a code change is what it is, it actually changes some language. When the regulations were written, this didn't exist.

MR. HOUGHTON: Do you think we ought to allow them unfettered, or should we look at -- and I've got to be careful that you don't put regulation on an industry because I'm a free industry type of person, but if I've got ten LED signs in a row -- which I don't think is going to happen --

MR. VELA: I doubt it.

MR. HOUGHTON:  -- I'm still looking at the replacement ratio based upon what you have to do if you go out there and put a new sign up that McDonald's or a gas company or whatever they want to do versus having that change every six, eight seconds, or whatever it may be.

I side with Hope on one side where I don't want to see it go completely unfettered, but on the other side, is there a ratio?

MR. VELA: Well, we're certainly not shy of regulation. As you've heard from Mr. Campbell, there's a lot of regulation on outdoor advertising where it can be and where it can't be. Much of it is set up by the state and certainly by the local municipalities.

MR. HOUGHTON: Well, most of ours is outside the city limits.

MR. VELA: Well, but inside city limits you usually have dual jurisdiction with the city, so we follow both sets of rules, although whatever is more restrictive prevails, and that could be the city, it could be the state, depends on where it is.

MR. HOUGHTON: Would the industry be willing to take down a ratio of five to one?

MR. VELA: Anything is on the table, and we would certainly take a look at any kind of proposal, and we'd love to take a look at what we can do together and make sure that it's the right way to move forward.

MR. WILLIAMSON: You say one of these signs cost about $250-. What does a regular billboard cost?

MR. VELA: It depends on where you erect it.

MR. HOUGHTON: But comparable.

MR. VELA: You're talking about the structure itself? To erect one is usually $60-, $70,000 and that doesn't include the land cost.

MR. WILLIAMSON: So the $250- is comparable to say $75,000 and the difference is.

MR. VELA: You sell it differently because you're selling a network as opposed to a static sign.

MR. WILLIAMSON: You transmit those messages by telephone?

MR. VELA: It's all done by computer, very similar to the way we do the Texas Lottery right now. The Texas Lottery, the numbers change the same way.

MR. WILLIAMSON: Well, by golly, Margaret, that's another example of these LED signs that are already out there.

MR. VELA: The Texas Lottery.

MR. HOUGHTON: Well, I'd sure be willing to sit and have your council --

MR. VELA: And will say that Virginia Tech is producing a new traffic study right now, it is due out any day now that's directed just to these kinds of signs, these digital signs.

MR. HOUGHTON: Well, we seem to be the forerunner in transportation and we may want to be the forerunner in this as I'm all for technology advances if it enhances the transportation experience.

MR. VELA: Absolutely.

MR. HOUGHTON: And if the transportation experience in the city of El Paso or Dallas-Fort Worth is you're removing five to get one, I might be for that.

MR. VELA: Well, that's certainly a possibility. And the other thing to look at is it is a network of communications as well, as I mentioned, for emergency information and also for things like Amber alert that could be instantaneously out on the streets, whereas, if you rely just on the media, sometimes it works and sometimes it doesn't.

MR. WILLIAMSON: Are you familiar with the Jumbotron at UT's practice field?

MR. VELA: I saw it in the paper today.

MR. HOUGHTON: It is the practice field, I think.

MR. WILLIAMSON: Is it on the practice field or is it on the playing field?

MR. VELA: That would be pretty much an on-premise sign, I think, because it's in their facility, but it looks big. I think these are limited to 14 by 48, 672 square feet for what we're talking about, off-premise.

MR. WILLIAMSON: I told you we were going to be hearing a bunch about this, and we will.

MR. HOUGHTON: I know we will. It's the technology.

MR. WILLIAMSON: It's a very interesting topic.

MR. VELA: It is. And when you see them, actually see the video of them, it's pretty amazing because it's not motion pictures. I don't know what the study was that was referred to, but that sounded like it was moving pictures or something like you have in Las Vegas which there are actually moving pictures on some of those signs. It's not that. These are static messages, it changes every six to eight seconds with a whole new static, flat message.

MR. HOUGHTON: I'd want to ask a question to our previous presenter. If you can, in fact, reduce the net number with new technology, net number, are you willing to start thinking about reduction?

MS. LLOYD: I would love to see anything in place that would reduce the number of billboards we have on the highways right now. Our estimates are around 30,000; we think that's way more than enough.

What I do think you have to have is something coupled with that idea, and I think you have to have no new billboards at all coupled with bringing --

MR. HOUGHTON: I don't think you're going to get no billboards.

MS. LLOYD: Because if you don't stop the new ones from going up, then it's just going to be more of the same.

MR. HOUGHTON: Well, I think that with technology you get advances to reduce, and I think you can look at any industry on masses versus -- whether it's numbers of people have to manufacture something, big huge assembly lines that now take one person versus 30 people to do, it's the same technology. So I think you have to look at those advances that get you to a point to where you're going this way with what you're seeing, and I think if we close our eyes to that, I think we're kidding ourselves.

MS. LLOYD: I think in cities that have local governmental entities where citizens can appeal to them and they can make those decisions, I think there could be a place for this where they might want to do some trade outs with the industry. Outside of cities, I think this technology is completely inappropriate on our rural scenic highways, and I would very strongly object to it there.

MR. HOUGHTON: If I have ten signs within a ten-mile and I get to reduce it to one or two, just hypothetically, which one would you take?

MS. LLOYD: You know, I'd have to see it, I really would have to see it. I can't visualize how that would be. I know 71, that red pecan sign that scrolls on 71 --

MR. HOUGHTON: That's an on-premise.

MS. LLOYD: Well, regardless of what it is, it's an LED. But the point is, it's the same technology, so you would have to be extraordinarily careful about what you do.

MR. HOUGHTON: Well, I think that's where your group and this industry need to start working together to find a common ground that if it's in fact a reduction in the net number, then I'm going to vote for it, I'll vote for that. I'm with the chair as to saying the industry and technology ought to start kind of not dictating and compromising how you get that net number down.

MS. LLOYD: Well, we would love to have conversations with anyone, including the industry, about reducing the numbers of billboards in the state.

MR. WILLIAMSON: So what about the Jumbotron, are you for or against it?

MS. LLOYD: I don't know. I guess I missed that today, I missed the news splash on it, so I can't comment on it. It sounds like something I wouldn't approve of, but I don't know what it is. Lee says I wouldn't, so I trust his judgment on that. And I'm from Alabama originally, so I don't have any feeling one way or another about Texas.

MR. HOUGHTON: John, is this an action item on the Godzillatron or Gigatron?

MR. CAMPBELL: No, sir, there's no proposed action on the Godzillatron.

MR. WILLIAMSON: Do you want to propose that we take it down? Do you have a motion you want to offer?

MR. HOUGHTON: James Huffines, chairman of the board at the University of Texas System would take exception to my motion, along with the chair, along with Amadeo, along with Carlos, so I could find my furniture outside this afternoon.

(General laughter.)

MR. WILLIAMSON: Well, John, I guess the conclusions we can reach are that we need to know more about this, the Gigatron is going to stay up on the UT campus, the Scenic Texas people hate them, the outdoor sign people love them, and here we are. Things don't much change. But keep us advised about what the feds tell you and what the other states do.

MR. CAMPBELL: Yes, sir.

In terms of just closing to put us in context of where we are, our currently regulatory rules do prohibit this type of changeable sign, and so unless I received explicit direction from the commission to pursue another avenue, we'll continue to enforce outdoor advertising accordingly.

MR. WILLIAMSON: I'll work on all three of them.

MR. CAMPBELL: Thank you.

MR. WILLIAMSON: Thank you.

MR. BEHRENS: Thank you, John.

We will now go to agenda item number 8, Pass-Through Tolls. We have two pass-through tolls for the commission to consider, one in Val Verde County and one in Bexar County. Amadeo.

MR. SAENZ: Thank you, Mr. Behrens. Good afternoon, commissioners. For the record, Amadeo Saenz.

Item 8(a) is a request for approval to negotiate a pass-through toll agreement with Val Verde County for a relief route around the city of Del Rio. US 277 around Del Rio is also part of the Ports to Plains Corridor. The project is a $137 million project. Currently there is some money available through the district in the amounts of about $35 million. Val Verde County has submitted a pass-through toll proposal to build this bypass with the understanding that they're looking at ensuring that adequate right of way would be there to expand for the full potential of a facility that could fall in line with Trans-Texas Corridor because the Ports to Plains is one of the priority corridors.

In looking at the application, with respect to our indices, this project is a regional and statewide significant project. The project provides a long-term solution in that it will remove traffic from the city of Del Rio, thus it's going to have a high impact on congestion in the city. Air quality will be improved a lot because you're moving all that traffic that's going through the Del Rio area up on 277 out of the city. It will have a possible impact on safety which is the middle of our indices, and then, of course, it will provide for a high impact for economic opportunity because it does allow for areas to be developed and also allows for an additional access to the military base.

When you look at the asset value or the gap analysis for the project, because the amount of traffic today on the corridor is not high, it only has 10 percent return of that gap analysis.

Preliminary review of the project shows that it is a viable project. Staff would like permission from the commission to move forward to try to negotiate a pass-through toll agreement. I'll be happy to answer any questions.

MR. WILLIAMSON: Members, we have one witness. Do you care to listen to the witness? Beau Nettleton. Beau, thank you for your patience. I've been watching you all day and I appreciate you hanging around.

MR. NETTLETON: Thank you very much. My name is Beau Nettleton, Val Verde County commissioner, and I certainly appreciate the opportunity to come before you with this project.

This is a project that we've been discussing in Del Rio for probably 20 or 30 years and is finally coming together as something that we can get accomplished, and we're looking at several different opportunities here for the economic development end to put some mechanisms in place that will give us some long-term funding, mechanisms to expand this into four lanes divided, and others as we move along. And we are definitely excited about this opportunity and hope that we can move together forward to get this project done.

I would hope for your support, and I'll answer any questions you have.

MR. WILLIAMSON: Members, any dialogue with our witness?

MR. HOUGHTON: Well, I've worked with Sid Kaufman in your area, a great transportation advocate, and he's talked about this project and I think it's a very worthwhile opportunity.

MS. ANDRADE: And congratulations. I'm glad to see it come before us. I know you have been waiting a long time for it.

MR. NETTLETON: Yes, ma'am. Thank you very much.

MR. WILLIAMSON: Thank you, Beau. And again, thank you for staying all day. I know it's been a long slug for you.

Amadeo, would the completion of this asset support the Ports to Plains program?

MR. SAENZ: Yes, sir, it would.

MR. WILLIAMSON: Do we have other facilities being built along the Ports to Plains route?

MR. SAENZ: We have several projects that are under construction or in planning and development on the Ports to Plains Corridor scattered throughout the different districts. The actual list, I would have to do some research to get that for you.

MR. WILLIAMSON: So we could legitimately say that we're moving forward on the Ports to Plains as market conditions permit us, and this is the next step in that process?

MR. SAENZ: Yes, sir. If you approve the minute order, it will allow us to negotiate with the county and if we reach final terms, come back to you all so that you all could give us final approval.

MR. WILLIAMSON: Members, you've heard the staff's comments and recommendations. Do you have questions or comments for staff?

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. Go to it, Beau.

MR. SAENZ: Commissioners 8(b), the minute order before you provides for final approval for the department to execute a pass-through toll agreement with Bexar County for improvements on two highways in the San Antonio area. The first one is FM 3487, Culebra Road, 3.2-mile project from Interstate 410 to FM 1471; and the second project is FM 2696, Blanco Road, a 3.8-mile project from Glades Crossing to West Oak Estates.

We have met with Bexar County and negotiated the project and have come to agreement and the terms. The projects, as was submitted by Bexar County, at a construction cost, both projects together, of almost $54 million. Because the projects, in reviewing them, are more regional to local in nature, we're reimbursing only 62 percent of the eligible cost, the county is putting in that additional money to cover their cost.

When we reached our final terms, we have to come to agreement on a total of $37,527,600 to be paid out at a per-mile rate of 10 cents per vehicle mile traveled to be paid out and reimbursed with a minimum amount of $3,752,760 per year and a maximum of $7,505,520 per year.

If you look at the traffic on these projects, the traffic will allow these projects, based on projections, in between five and six years.

We've looked at the indices on these projects and looking at the asset value on the projects, the FM 3487 project had an asset value cost ratio of 25 percent, as well as the Blanco project. They both, like I said, are regional to local projects. They do provide some mid- to long-term solutions to the traffic problems. They do have high impact on improvement on the congestion side and the air quality side and also some good impact on the safety side.

Staff would recommend approval of this minute order.

MR. WILLIAMSON: I forgot to ask you, what was the probable tax road impact to the Val Verde matter, or we haven't gotten to that point yet?

MR. SAENZ: The project in Val Verde, in our first look, only had a tax road impact of 10 percent. We will look at that project as we get through and do our numbers and come back to you with our final recommendation.

MR. WILLIAMSON: And even if it's that low, it's probably more focused on safety and economic opportunity.

MR. SAENZ: We have safety, economic opportunity, air quality, and as well, it's also on one of the high-priority corridors and it's providing some corridor impact and statewide impact.

MR. WILLIAMSON: Members, you've heard staff's explanation and recommendation on this minute order. Do you have questions or comments for staff?

MS. ANDRADE: Mr. Chairman, the only thing I have to add to that is I'm awfully proud of my community taking advantage of every tool that House Bill 3588 gave us. And this is a perfect example of a community that came together, raised their own sales tax to contribute to this project, and so it's about working together we got it done.

MR. WILLIAMSON: No question about that in my mind.

MR. SAENZ: And this is how the community came together. They passed their ATD, they're using their ATD to leverage to bring in more resources, and at the same time, because we don't have the resources to do it now, they're willing to go out there and build it first and take the risk and then get only a portion of the return back, the ATD covers the rest.

MR. WILLIAMSON: San Antonio, a city on the move.

MS. ANDRADE: I move.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Congratulations, Hope and San Antonio.

MS. ANDRADE: Thank you. Mr. Chairman, I'll offer my assistance to Mr. Houghton. If I can help you in El Paso, let me know.

MR. HOUGHTON: Come on out, all comers welcome.

(General laughter.)

MR. BEHRENS: Agenda item number 9 is our Finance matters for this month, the five minute orders that deal with Finance policies and also several that deal with budget matters. James?

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

Item 9(a) presents the debt and derivative management policies for the commission. The debt management policy is an umbrella policy that contains general guidelines in order to manage the various debt programs of the commission and the department. Part of this management may involve the use of derivative products and guidelines for the prudent use of those products are covered in the derivative management policy.

I would like to point out that neither of these documents changes the need to receive the commission's approval for individual specific transactions.

Staff would recommend your approval and I'd be happy to answer any questions you may have.

MR. BEHRENS: James, why don't you go ahead and just lay out the others, and then when we get the quorum back, we'll vote.

MR. HOUGHTON: Well, let me ask you a question. On the derivative it's a policy, it's an overall policy, and you will come back to the commission on a specific item.

MR. BASS: Correct. It's looking at general guidelines and such cases, what amount of savings would we be looking for as a general guideline in order to enter into such an agreement. It also establishes a Derivative Committee and lays out the minimum membership duties, and before any product or an agreement was brought forward to the commission, this Derivative Committee would have to give its concurrence to that before it was brought forward to the commission.

MR. HOUGHTON: Not to pick an old scab from years ago, but derivatives got a bad name in public financing out in Southern California.

MR. BASS: Correct, and on the Orange County, it was more so on the investment side of it, but a lot of those same risks are present and need to be fully understood before the commission moves forward. That's why this lays out general parameters but each specific deal would need to come individually before the commission before we'd enter into it.

Minute order 9(b) authorizes the department to submit an application to the Bond Review Board for the issuance of just under $2.4 billion of bonds from the State Highway Fund revenue program, otherwise known as Prop 14. The department is limited to issue no more than $1 billion in bonds from this program in each fiscal year, but we hope to receive a programmatic approval for the remaining portion of the statutory cap of $3 billion in issuance. So rather than going to the BRB each time we want to issue, we'd rather go forward and get approval for the remainder of the program.

And staff would recommend your approval on this one as well.

MR. HOUGHTON: When do we anticipate going back to the issuance of that next tranche?

MR. BASS: We would anticipate a billion-dollar issuance in the October-November time frame of this calendar year.

MR. HOUGHTON: We get triple A again?

MR. BASS: Yes, sir. And then after we did that issue, we would have to wait until after August 31 of '07 before we could issue anything else.

Agenda item 9(c) proposes adoption of the department's Legislative Appropriations Request, or otherwise known as the LAR, for Fiscal Years 2008 and 2009. We've discussed many items on this document over the past several months and a few that I'd like to highlight is within this document we will be requesting just over $55 million of General Revenue funds, and they will be in a special section of the LAR called Exceptional Items.

The majority of these funds are going back and requesting that the legislature undo something that was done back in 2004. In 2004 there were a number of items within TxDOT's program that had traditionally received funding from the General Revenue fund, and due to the General Revenue funding crisis back in '04, those were switched to the State Highway Fund. Undoing those results in almost $55-1/2 million of requests to come from the General Revenue Fund.

In addition, in 2008 and '09, we will be requesting budget authority of about $1.1 billion more than what we plan on spending in 2006 and 2007.

MR. HOUGHTON: That's a result of?

MR. BASS: That is a result of the proceeds from our two primary bonding programs, State Highway Fund Revenue Bond Program and the Texas Mobility Fund. Of our requests in 2008 and '09, almost 25 percent of that will be funded by those two programs. Another 5 percent of that overall budget will be to pay the debt service on those two associated programs.

MR. HOUGHTON: So our annual budget would be?

MR. BASS: Our annual budget would be about $8.3-, $8.4 billion; it will be different in those two years.

MR. HOUGHTON: Right.

MR. BASS: One thing I want to point out is that those programs which are generating a lot of the expenditures in 2008 and '09 will almost completely be exhausted by the time we reach the end of Fiscal Year 2009. So there would normally be an expected large drop-off in 2010 as those resources have been expended or exhausted, however, from a number of the projects that you heard earlier described today, we would expect that those projects will be in place and online and bringing in additional revenue to the department and to the state in 2010, and so we hope the program will stay at a constant level, if not increase, but the funding sources would change over time, and that would likely occur in 2010.

MR. HOUGHTON: From traditional Mobility Fund Prop 14 to CDA.

MR. BASS: Concession payments, revenue-sharing.

MR. HOUGHTON: Et cetera.

MR. BASS: Yes, sir.

MR. HOUGHTON: Which shaves off that $86 billion.

MR. BASS: Bringing new money into transportation.

MR. HOUGHTON: To the system.

MR. WILLIAMSON: Go ahead and lay out (d) as well.

MR. BASS: Agenda item 9(d) seeks the adoption of the department's Fiscal Year 2007 Operating Budget in the amount of just under $7.4 billion. This operating budget is in accordance with the appropriations bill passed by the legislature back in 2005, and staff would recommend your approval.

The last item under 9, 9(e) approves the fiscal Year 2007 operating, maintenance and capital budgets for the Central Texas Turnpike system which initially will consist of State Highway 130, State Highway 45 North, and the Loop 1 Extension, otherwise known as the 2002 project.

The indenture for the system requires that on or before August 31 the commission adopt these various budgets for the upcoming year, and staff would recommend your approval.

MR. WILLIAMSON: We'll approve them one at a time, that's my preference. On 9(a) I have no questions, and I presume your questions were satisfied while I was out. You've heard the staff's explanation and recommendation. Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

On item 9(b), I have one question that catches (c) as well, although I have another question on (c). As I understand it, James, you'll file an application with the Bond Review Board to issue the bonds, and then the case derived from the sale of the bonds will be fed into the Legislative Appropriations Request that we might approve in 9(c).

MR. BASS: Correct.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation on 9(b). Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

9(c), James, I heard you explain what will happen in 2010. Just to repeat and reinforce, we put parts of a plan together and started implementing that plan four years ago. '09 would be the fourth year and '10 would be the fifth year and the plan is fully developed and implemented and in play. It's important for the commission and its employees to understand that in order for 2010 to continue to grow our program across the board, and it's important for us to express to our partners in the districts in order for the program to continue to grow, we have to stay focused on that plan and on those projects that will generate concession payments, toll revenue, or in some other way growth in the value of our assets that can be monetized in 2010 so we can continue to increase our lettings. We can't solve the problem if we don't continue forward with the plan.

MR. HOUGHTON: With that comment, I'd like to piggyback that comment that we reinforce that with our partners, Mr. Chairman, whether it be the MPOs, the RMAs, at some point from this dais and this environment that we get reports back on where they are with their plan, their Texas Mobility Fund, Prop 14, CDAs from the MPOs, RMAs and those regions, because we still have to have that buy-in and that focus.

MR. WILLIAMSON: Mike, refresh my memory, are we here in Austin in September, October and November? We're not traveling until January next year, are we?

MR. BEHRENS: October we're in Denton, the rest of the year we'll be here.

MR. WILLIAMSON: September would be too quick. I think in November, James -- and maybe I need to be directing this to Mike -- I think in November, Mike, probably we need to hear three things: one, where we are on the metropolitan mobility plans that started four years ago, even if those MPOs want to come in and report themselves, it's fine with me; I think second, where we are cash-flow-wise generally; and then third, we probably need a pretty in-depth report and discussion on the gasoline tax, and you might notify Coby that a derivative of that is whatever is happening in Washington, D.C.

I know that we've had several rescissions in the last few months that have impacted how we deal with the future, and I've got to think that $3 gasoline is starting to affect gas tax collections both at the federal and state level. So probably November would be a very good time to hear about all of that. That gives staff plenty of time to prepare it. That, in turn, gives us plenty of time to warn the legislature before the session starts. That's a good suggestion, Ted.

Members, you've heard the explanation and recommendation on item 9(c).

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.

Members, you've heard the explanation and recommendation on item 9(d) concerning the Operating Budget.

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

And 9(e), adopting the annual budget of the Central Texas Turnpike System, you've heard the staff's explanation and recommendation. Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

MR. WILLIAMSON: I have a motion and a second. All 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, James.

MR. BASS: Thank you.

MR. BEHRENS: And James, if you'll continue, Item 10 is our State Infrastructure Bank. We have three minute orders that concern the City of Kerrville, City of Haskell, City of Center, all that have applications in, one for preliminary approval in Kerrville and the other two for final approval.

MR. BASS: Would you like me to present all three of those?

MR. WILLIAMSON: No. We're going to do them one at a time.

MR. BASS: One at a time.

Item 10(a) seeks preliminary approval of a loan to the City of Kerrville in the amount of $2.8 million to pay for roadway and drainage improvements to Holdsworth Drive. Staff recommends your approval so that we may begin negotiations with the city.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation. Do you have questions or comments of staff?

MR. HOUGHTON: I have an umbrella question to all of these. The fund balance that we have in the Infrastructure Bank.

MR. BASS: We're sufficient in there. The available balance right now, there's some that's in the cash balance that has already been approved, just not transferred out, but the available balance is in the neighborhood of $30 million, and each month we're continuing to receive payments on existing loans.

MR. HOUGHTON: So moved.

MS. ANDRADE: 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, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BASS: Item 10(b) seeks final approval of a loan to the City of Haskell in the amount of $500,000 to pay for water line adjustments on US 277 and US 380. Interest will accrue from the date funds are transferred from the SIB at a rate of 4.3 percent, with payments being made over a period of 25 years.

Staff recommends your approval.

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

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: Item 10(c) seeks final approval of a loan to the City of Center in the amount of $475,000 to pay for water line relocation and upgrade on State Highway 7. Interest will accrue from the date funds are transferred from the SIB at a rate of 4 percent, with payments being made over a period of ten years.

Staff recommends your approval.

MR. WILLIAMSON: Members.

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

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

MR. BEHRENS: Item 11 is our contracts for the month of August, both Highway Maintenance and Department Building Construction, and also our Highway Transportation Enhancement Building Construction. Thomas.

MR. BOHUSLAV: Good afternoon commissioners. My name is Thomas Bohuslav, director of the Construction Division.

Item 11(a)(1) is for the consideration of award of Highway Maintenance and Department Building Construction contracts let on August 8 and 9, 2006. In addition to that, we have a correction from last month's award from the July 27 commission meeting, as well.

We had 15 projects, an average of 3.5 bidders per project. We recommend award of all projects.

The correction from last month was that the exhibit had the wrong contractor and the wrong amount award in one of the listings. What happened was this we had an apparent low bidder and in the process of bidding they had to submit their documentation to verify they filed a subcontracting plan requirement. They failed to do so, and so we went to the next bidder, and we failed to replace that name on the exhibit when we did that.

And with that comment, if you have any questions, we recommend award as shown.

MR. WILLIAMSON: Let's hang on a minute. I was looking at this last night and something about it bothered me. Well, first, members, you've heard the staff's explanation and recommendation. I'll have one question. Do you have questions or comments to staff?

MR. HOUGHTON: I do not.

MR. WILLIAMSON: I think the thing that bothered me, Thomas, we go in and we say we've got this project in Ellis County that's 24.8 percent over and it's a single responder bid but we need to go ahead and do it, and we have ten that are 28, 29, only slightly more over and we recommend reject. Now, I'm not contesting your decision or your recommendation, but I'm trying to justify in my mind is there something unique about the Interstate 35/US 77 project besides being a few percentage points less than the others? Do we have other construction going on on that stretch of 35? Is the congestion or traffic count in that area so much more that we just can't afford the holdup? Is that the 10 percent amounts to $100,000 and the cost associated with waiting to the traveling public would exceed that?

Now, I'm not challenging your computation so much as I want to understand it.

MR. BOHUSLAV: I'll talk about that. Let me talk about it in general first, if I could. You asked us last month to be more thorough and accurate in our estimating. Of course, by the time we met last month, the estimates are released and basically the projects are already out there ready to let within a week or so, so we really didn't have a chance for other people to get involved in reviewing estimates prior to this month. So we're working on that for the September letting, seeing if we can get better estimates.

So part of the projects that you see coming in here today -- and we're talking in the Construction side especially, I'm looking at prices even today that reflect work that we're doing maybe six months ago, we're putting prices such as $50 a ton for hot mix, and hot mix is going for $75 a ton, at best. And so we're still not catching up with our estimates, and we're working on that, but for September we hope to have those corrections made. So part of the answer is that is the case.

Other cases where we do lettings for projects in times of year. For instance, mowing lettings are done normally in the wintertime after you've finished your yearly cycles on mowing, so you don't know exactly what the price is going to be at that time so you estimate best you can, but sometimes they come in a little higher. So we haven't quite caught up and we don't have a good history for those, and a lot of our estimating is based on historical prices. That's the other part of it.

Another aspect is future volatility. For instance, we might estimate what our product would be done if it were done in the next year, but the asphalt work is going to be done three years from now or two years from now, and the contractor prices may reflect a lot higher cost than what we might expect for that work because they just don't know what's going to happen in that time frame, and it's difficult for us to capture that or apply that risk.

And that goes further to the aspect of competition. In discussing that issue with contractors, there are certain parts of the state that we don't have good competition and we'd like to see better competition, and so we may see only one bid or maybe two bids in those locations, and material source may be the reason for it or there may be other issues for it. When we see lack of competition, we have some concerns but other contractors say we just can't beat them so we tend to not even bid over there or spend our efforts in that area. And so you might be seeing some inflation due to that due to price increases for materials as well as maybe lack of competition.

And Amadeo is asking us to address both trying to see what we can do to reduce our costs, to reduce our maybe contract requirements, to look at a more prudent design for some of our projects, as well as seeing what we can do to increase competition. So we've kind of got some tasks ahead of us in addition to doing a better job on our estimates, to also work on our project scoping, our material requirements, and our other design requirements.

Now, specific to this project, we didn't have a good estimate on this project. The 28 percent over is an Ellis County project. We feel like it's a good estimate. We don't have a lot of bidders, we had one bidder on the project. We've re-let jobs in a lot of cases, we've gone back and re-let, and sometimes we'll go back and change the scope, reduce the scope, reduce requirements in the contract, and we'll save money, but just going back and re-letting a maintenance contract like this, we don't see always a lot of savings. There may be cases where we might get savings, but we just didn't feel we would in this case, and we feel like more probably in this case we just didn't get a good estimate out there.

I think in some of the discussions we had with our transmittal memo to you, we don't talk a lot about we missed our estimate. Well, we did miss our estimate on some of the jobs, and that should be more evident in some of the stuff that you read, but we just didn't have good estimates.

MR. WILLIAMSON: And that's okay, there's nothing wrong with saying we just missed the estimate, as long as you're comfortable that a closer examination of current prices would have produced an estimate that was closer.

I look at these pretty carefully every month. I don't normally raise a lot of objections because I'm very familiar with our process and I think it works real well, but it just jumped out at me. It's not a lot of money but on a percentage basis we're approving one that's 24.8 and we're turning down ten that start at 29.76. I know that's 4 percent but it kind of just struck me as well, tell me again how we don't turn down the 24.8.

I assumed it was because I thought there was some work going on along that stretch of 35E. Is there not?

MR. BOHUSLAV: Well, this Ellis County project is for some full-depth concrete repair in Ellis County, so that work is not attractive to big contractors, there's only a select few that like to do that kind of work, and small contractors don't like getting out in the middle of the highway and traffic and doing that kind of work, it's dangerous work, and it's tough work.

MR. WILLIAMSON: Questions, members?

MR. HOUGHTON: One question regarding the commodity pricing and the problem the contractors do with commodities, the asphalt, concrete and steel. Have we thought about using an index on asphalt? I guess I've seen something to the effect, Amadeo, we've looked at Arizona, they index the asphalt so everyone is pricing off of that index instead of my best guess.

MR. BOHUSLAV: We have talked about that. If Amadeo wants to come up, if he's still here, but we have been discussing that with contractors. And thus far, generally contractors prefer that we not do it because when you have high escalation like you have right now, you can never recover when you put an index in place. For instance, when the steel market got hit with recycled steel, there was a shortage of scrap steel -- not a shortage but China, I guess, was buying up all the scrap steel -- the steel has doubled in about two years. If we had applied an index after everything had already happened, the suppliers, who are really the ones that are mainly impacted, would never have a chance to recover. They basically would have been stuck with future jobs with an index on it, and so if they had put a higher price in, they would be indexed down because steel came back a little bit.

So the contractors have said we think we're better off taking the risk for those types of things. There are a lot of states that use indexes for fuel, for steel, asphalt.

MR. HOUGHTON: That's what I talked about.

MR. SAENZ: This group that I asked Thomas to put together is going to look at our projects from are we making good designs, do we have some savings and some proficiency there. And then eventually we will get to a point that we look at an alternate way to be able to bid. Because we're so volatile right now that we can't estimate or they can't get quotes for somewhere three years down the line, all they can do is hedge, take their best shot, and they either make it or break it.

Some contractors don't like that because they have relationships with some of the suppliers and they're able to get good prices, other contractors are hurting right now.

So we'll be looking at the possibility and that's one option to look at and that is to set up some kind of index where we can say, Okay, you're bidding your price based on $70 -- what is it now, Mr. Chairman, oil?

MR. WILLIAMSON: Well, last night it was $72 but this morning it was $70.50, so it's getting closer to $70 again.

MR. SAENZ: Well, let's just use $50. Based on $50 and then depending on what it is when we use it, then it will be adjusted up or down. The contractors, because they've been having to take chances all this time, if we started tomorrow -- Federal Highway will not let us go back and adjust their contracts, but going forward, they never have an opportunity to be able to recoup some of the losses is the arguments that they've been giving us, and so we're looking at that.

MR. WILLIAMSON: Okay, members, you've heard the explanation and the recommendation and the dialogue with staff.

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.

MR. BOHUSLAV: Item 11(a)(2) is for consideration of award or rejection of Highway and Transportation Enhancement Building Construction contracts let on August 8 and 9, 2006. We had 110 projects, average number of bids is 2.98. We have ten projects we recommend for rejection.

The first project is in Bastrop County, project number 3251. There were two bidders on it; it was 32 percent over; $1.5 million approximate bid; it's for culvert widening and safety work. This is a high price and it's a safety project. It pushes us over the index so the district would like to go back and reconsider the project and how they might scope it to meet the safety index so they have enough funds to pay for it.

The next project is in Brown County, project number 3034. One bidder; 28 percent over; about $758,000 bid for three off-system bridges. Of course, the county is going to have to participate in these overruns. We need more bidders on this and we hope to re-let and get better competition and reduce price.

Goliad County, project number 3257. Two bidders; 29 percent over; low bid of about $7.6 million; safety work in six counties. Again, this is a safety project and it's over the safety index so the district would have to find some other funds, they don't have those available, so they're going to go back and they're going to have to look, and they just don't think right now it's going to be cost-effective to do this project because it's outside the safety index and they don't have the funds to cover the overruns.

Grayson County, project number 3027. One bidder; 32 percent over; $1.6 million approximate bid; this is a widening of left-turn lanes on FM 131. They want to go back and solicit more bidders in the hope of getting better prices.

Henderson County, project number 3006. Four bidders; 29 percent over; $12.9 million low bid; this is a grade separation on Loop 7. Another safety project and the district just didn't have the additional funds to cover the overrun, it doesn't meet the safety index with that amount, so they're going to have to go back, and they are actually telling me, I believe this is the one that the community may not even support anymore with that cost.

Jefferson County, project number 3020. There was one bidder; 67 percent over; $1 million approximate bid; sidewalk work in Port Arthur. The city is going to have to participate in that overrun and they're not going to have the money for it.

Parker County, project number 3214. Six bidders; 52 percent over; $2.2 million approximate low bid; it's a main street revitalization project in Weatherford. The city will be unable to fund the overrun so they're going to go back and see if they can re-scope and redesign it to get it within their budget.

Smith County, project number 3048. Three bidders; 37 percent over; $10.9 million; intersection widening and concrete pavement median and storm drains on this project. HES funding again and it's another one they're going to have to reconsider and re-scope, redesign, see if they can get it within the safety cost funding that they have.

Tarrant County, project number 3215. One bidder; 50 percent over; $1.9 million approximate low bid; this is for cleaning structures. The district didn't have the budget for that and they'd like to see if they can solicit more bidders and get better competition, and then also find another alternative funding source for this project.

The last project recommended for rejection is Williamson County, project number 3212. Two bidders; 38 percent over; approximate bid of $970,000; this is safety treatment work on State Highway 29. We'd like to go back and advertise it and see if we can get more bids on it and get better costs on this project as well.

Any questions?

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation. Do you have questions or comments for staff?

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, Thomas.

MR. SAENZ: Commissioners, going back to the question from Commissioner Houghton. We are doing a pilot project with our seal coat programs this year where we, in essence, are letting two contracts. We're letting a contract for the aggregate. What we have in the seal coat is we have a volatile price in the asphalt and we normally have to let our contracts in the fall so that the contractors have enough time to get their materials, stockpile their materials, and then do the project in the following spring and summer.

So what we did in the San Antonio District and the Yoakum District, we set up a pilot program where we're letting two contracts. We're letting the aggregate contract first and then in the early spring we will let the asphalt contract that will provide for the actual placement and doing of the seal coat work. We think this will help us generate some savings. We're doing it as a pilot project this year and if we have good results, then we can implement it. Those are some of the things that we're trying to look at.

MR. BEHRENS: Agenda item number 11(b), this will be a recommendation from J.D. Dossett to set the statewide annual participation goals for our Historically Underutilized Business Program, and then the next one,
11(c) will be also to establish the participation goals of the Small Business Enterprise Program. J.D.

MR. DOSSETT: Good afternoon, commissioners, Mr. Behrens. For the record, my name is James Dossett.

Item 11(b), this minute order establishes Fiscal Year 2007 Historically Underutilized Business goals of 26.1 percent for building construction contracts, 57.2 percent for special trades contracts, 20 percent for professional service contracts, 33 percent for other service contracts, and 12.6 percent for commodity purchases.

The annual HUB goals are established under Title 43, Texas Administrative Code, 9.54, and the HUB goals were established based on the availability of qualified businesses. The department has used the disparity study described in Government Code 2161.002(c) and other data to establish goals for its state HUB program. Making use of this disparity study is the basis for establishing our HUB goals for state-funded projects.

Staff recommends approval.

MR. WILLIAMSON: I have one question, members. You've heard the staff's explanation and recommendation. Do you have questions or comments?

(No response.)

MR. WILLIAMSON: J.D., are these goals higher or lower or the same as last year?

MR. DOSSETT: They're the same as last year.

MR. WILLIAMSON: How well did we do in reaching our goals last year?

MR. DOSSETT: In the area of building construction, our goal that we met in Fiscal Year 2005 was 10.7 percent; in special trades we reached 19 percent; professional services we went over the goal, we were at 24.9 percent; other services we approached the goal at 24.4; and commodity purchases we were right up under the goal at 11.2 percent.

MR. WILLIAMSON: So if we're getting close to being where we want to be, then is it time for us to raise our goals higher?

MR. DOSSETT: I think it's time for us to really market our program a little bit stronger and make sure that we get more people involved in the process.

MR. WILLIAMSON: This may be an unfair question at this point and you may want to come back and answer it later. As we enter the world of public-private partnerships and we have less direct not control but maybe contact with the day-to-day operations of our contractors -- I guess in a sense we'll have less direct contact, we're separated by the developer -- how are we going to assure that we honestly report to the legislature and the congress -- how are we going to know our goals are being near reached?

MR. DOSSETT: Are being what, sir?

MR. WILLIAMSON: Reached or near reached.

MR. DOSSETT: Well, what we're doing right now, we've tried to make a concentrated effort to get around the state with our small business briefings trying to give people information about how we actually operate and how we actually do our business, trying to identify areas where there's some real potential for small businesses to participate, and so far we've gone to Houston and Dallas and Lubbock. We're scheduled in September to go to El Paso and we'll have a small business briefing as well in Austin.

So what we're trying to do, effectively, is to provide information about the types of tools that it takes to actually be successful in doing business with the department. We've been partnering with the Governor's Office, with the Texas Building Procurement Commission, with the Department of Information Resources. So we're trying to work not only with our own division and office and district staffs but trying to partner with other agencies as well and get the word out.

MR. BEHRENS: And J.D., I think in our CDA proposals, the ones we have worked so far, we also have provisions in there that will cover the participation that they need to have as far as HUBs.

MR. DOSSETT: Yes, sir.

MR. SAENZ: DBEs and also Comprehensive Training Program.

MR. WILLIAMSON: Well, I just know that some of the senators and House members who have been some of our strongest advocates in this brave new world are also some of our strongest question-askers about our compliance, and I think their confidence is we'll do the right thing, their theory is we're entering into a world where the rules aren't clear and we don't want to have several years of slipping back while we adjust.

MR. SAENZ: Yes, sir, and that's why in our business terms for our CDAs, regardless of whether the project is funded totally with private equity, or of course, if it has any state or federal dollars, then we have that requirement, but even if it doesn't, we are requiring that they need a DBE or a HUB goal. We're calling it a goal and we also have a Comprehensive Training Program that we're asking the developers to meet. It's in our developer agreement, they pass it on to the design-builder, but then we have mechanisms, as those things are being done, to be able to get the data to make sure that they're complying. So it's part of the agreement.

MR. WILLIAMSON: Go ahead, Hope.

MS. ANDRADE: How are forums going? Are they well attended?

MR. DOSSETT: In the three that we've done, I think we've approached 500 people in attendance. I think we had a little more than 200 in Houston, about 226; we were about 196 in Dallas; and we had 97 in Lubbock.

MR. WILLIAMSON: That's a good turnout in Lubbock.

MR. DOSSETT: We were surprised. We started out right after we got back from Dallas, we only had about ten but we went out to the TMAC convention that was held out in El Paso and made some contacts out there and were able to use those contacts to get the numbers up from ten to 97 in a week's time.

MR. WILLIAMSON: That's great.

MR. DOSSETT: We're a little bit concerned about El Paso but we're making a real strong effort right now. We sent out 1,500 pieces of information this afternoon to get the word out to try to get more people involved.

And one thing I understand, I just got back in town, but the Governor's Office has had some concerns about the weather hazard that occurred out there, so they're wanting to partner with us pretty strongly out in El Paso to also talk about some relief that the small businesses might have, so we think that might be a good carrot to get people out and participate.

MS. ANDRADE: And I'm going to be meeting with the TMAC leadership so I may be asking you for some assistance in that.

MR. DOSSETT: Yes, ma'am.

MS. ANDRADE: Because they're very interested in spreading the word throughout their organization about the opportunities that we may have.

MR. DOSSETT: Yes, ma'am.

MR. WILLIAMSON: Okay, 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. Thank you.

MR. DOSSETT: Item 11(c), this minute order establishes a Small Business Enterprise goal of 23 percent for Fiscal Year 2007. The annual SB goal is established under Title 43, Texas Administrative Code, 9.45 and is applicable to highway construction and maintenance contracts funded with state and local funds. This SBE goal was established based on the availability of qualified bidders.

Staff would recommend approval.

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

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, J.D. Good to see you, sir.

MR. DOSSETT: Thank you.

MR. BEHRENS: Agenda item number 12 is our Routine Minute Orders, all listed for you, Donations, Eminent Domain, Highway Designations.

MR. WILLIAMSON: Raising the executive director's salary.

MR. BEHRENS: No, sir.

(General laughter.)

MR. BEHRENS: Load Zones, Right of Way Dispositions, and Speed Zones. I've looked at all these minute orders. I don't think any of them affect any of the commissioners directly. If you have any questions on any of them, we'll be glad to talk about it. With that, I recommend approval of the Routine Minute Orders.

MR. WILLIAMSON: Members, you've heard Mr. Behrens's explanation and recommendation of the Routine Minute Orders for the month.

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. Jackson, do we have any reason to enter Executive Session?

MR. JACKSON: No, we do not.

MR. WILLIAMSON: Do we have any testimony in the Open Comment Period?

MR. BEHRENS: We have no one signed up.

MR. WILLIAMSON: First of all, I once again thank the entire staff, including Steve Simmons, who is not here, Bob Jackson, Coby Chase's group. Amadeo, you did a great job getting the North Texas deal. After the governor's letter, we all had to kind of shift gears and I appreciate everybody doing that. Sorry for the cancellation of plans.

The most privileged motion is in order.

MR. HOUGHTON: Go ahead, Hope.

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second that we adjourn at 2:42 p.m. All of 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 stand adjourned at 2:42 p.m.

(Whereupon, at 2:42 p.m., the meeting was concluded.)