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Texas Department of Transportation Commission Meeting

Ric Williamson Hearing Room
Dewitt Greer Building
125 East 11th Street
Austin, Texas

Thursday, December 17, 2009


COMMISSION MEMBERS:

Deirdre Delisi, Chair
Ted Houghton, Jr.
Ned S. Holmes
William Meadows

STAFF:

Amadeo Saenz, Executive Director
Steve Simmons, Deputy Executive Director
Bob Jackson, General Counsel
Roger Polson, Executive Assistant to the Deputy Executive Director
Dee Hernandez, Chief Minute Clerk

PROCEEDINGS

MS. DELISI: Good morning. It is 9:09 a.m., and I call the regular December 2009 meeting of the Texas Transportation Commission to order. 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 2:44 p.m. on December 9, 2009.

Before we begin today's meeting, please take a moment to place your cell phones on the silent or off mode, please.

As is our custom, we'll start with comments from the commissioners and we'll start with Commissioner Meadows.

MR. MEADOWS: Thank you very much, Madam Chair. I'd just like to take this opportunity to extend to all best wishes for Christmas and the holiday season, and in a concession to the season, I would extend that to my colleague, Mr. Houghton, as well.

MR. HOUGHTON: Very nice of you, very kind.

(General laughter.)

MR. HOLMES: You know, there's something about the holidays that makes people gentler and kinder.

Welcome, glad to see all of you today, look forward to working through our agenda. Happy Holidays and Merry Christmas.

MR. HOUGHTON: I echo those same remarks, and I accept that holiday greeting from you, Commissioner Meadows, and Merry Christmas, Happy Hanukkah and Happy Holidays to all.

MS. DELISI: I just want to remind everybody before we begin that there are cards in your seats announcing the Fifth Annual Transportation Forum to be held in Austin, January 6 through 8. Please take an opportunity to register for the conference, it's a great opportunity for anybody interested in transportation in Texas.

As a reminder, if you wish to address the commission during today's meeting, please complete a speaker's card at the registration table in the lobby. To comment on an agenda item, please fill out a yellow card and identify the agenda item; if it's not an agenda item, we'll take your comments at the open comment period at the end of the meeting, and for those comments, please fill out a blue card. Regardless of the color card, please try and limit your comments to three minutes.

Our first item of business today is approval of the minutes for the November 18 and 19 meetings. Members, the draft minutes have been provided in your briefing materials. Is there a motion to approve?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

Before we go into the business of the agenda, I'm going to call on Amadeo who has a resolution to present.

MR. SAENZ: Thank you, Madam Chair. Good morning, commissioners, and also Merry Christmas to all of you, including Fred, who is not here with us today.

I'd like to present a resolution today for an employee in the Childress District that was killed in the line of duty, and our district engineer, Terry Keener, will come up and receive that, and Terry, if you would present that to the family on behalf of the department.

I'd like to read the resolution. It says:

"Whereas, it is with profound sorrow that the Texas Transportation Commission acknowledges the death of Hector Dominguez, Jr., who tragically lost his life on the evening of November 3, 2009 while performing his duties as an employee of the Texas Department of Transportation;

"And whereas, Hector served the Childress District for eight years and he loved performing his job as a construction inspector;

"And whereas, Hector enjoyed life, his family and friends;

"And whereas, Hector demonstrated his dedication and loyalty to the State of Texas and its citizens in the work he performed on a daily basis to help accomplish the goals of the agency;

"And whereas, this incident will forever serve as a reminder of the sacrifices our employees make on behalf of the department;

"And whereas, it is the desire of the Texas Department of Transportation to honor his memory;

Now, therefore, be it resolved that the Texas Transportation Commission does hereby extend its sincerest sympathy to the relatives of Hector Dominguez, Jr. and that this resolution be sent to the family.

"Signed this day, Thursday, the 17th of December 2009."

Terry, if I could give this to you, if you could please pass it on to the family.

MR. KEENER: Yes, sir.

For the record, my name is Terry Keener, I currently serve as the district engineer for the Texas Department of Transportation in the Childress District, and on behalf of the family of Hector Dominguez and the employees of the Childress District, it is my honor to accept this resolution.

Just recently the Dominguez family shared with me that one of Hector's wishes had been one day to meet Mr. Saenz, and Amadeo, your traveling to the district to speak with the family was a tremendous tribute to Hector and his loved ones. I want to thank you for taking the time and rearranging your busy schedule to make that endeavor.

I'd also like to express my appreciation to this Transportation Commission for recognizing and honoring the employees of this great State of Texas, and especially this agency that lose their life in the process of their duties with the department. Thank you very much.

MR. SAENZ: Thank you, Terry.

Commission, we're going to continue with our agenda. Agenda item number 3, Dave Fulton will present a minute order dealing with our Aviation Program.

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

This minute order contains a request for grant funding approval for five airport improvement projects. The total estimated cost of all requests, as shown in Exhibit A, is approximately $3.2 million: approximately $500,000 in federal funds, $2.4 million in state funds, and approximately $300,000 in local funds. A public hearing was held on November 12 of this year, no comments were received. We would recommend approval of this minute order.

MR. HOLMES: Dave, on the Burnet and Navasota ones land acquisition, is that for extension of runways?

MR. FULTON: It is -- and work on the existing runways. We do the engineering and land in year one, usually, followed by construction in year two. But yes, it extends the runway to 5,000 feet.

MR. HOLMES: In both of those cases, in both Burnet and Navasota?

MR. FULTON: Oh, Burnet, no -- I'm sorry, I misunderstood you. We have long range plans, long term plans for Burnet for an upgrade of the runway, but they have such serious encroachment issues, we're suggesting initially that we use these funds to buy property along the main highway that fronts on the airport and remove some of the non-compatible land use. If you've flown in there, you've probably seen how it got developed, unfortunately. The prime land for the airport has been used for other purposes, so we're having to rectify that.

MR. HOLMES: And then the Navasota project is to extend the runway?

MR. FULTON: It is, 5,000 feet, yes, sir.

MS. DELISI: Is there a motion?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. FULTON: Thank you.

MR. SAENZ: Thank you, Dave.

Agenda item number 4, commission, is a couple of minute orders that Eric Gleason will present dealing with public transportation. Eric, if you could present all of them.

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

Agenda item 4(a) awards federal Section 5304 State Planning and Research Program funds and state matching funds in support of regional public transportation coordination planning, as shown in Exhibit A. This action today rescinds and withdraws Minute Order 111883, dated July 30, 2009. Twenty-one of 24 regional planning areas statewide are included in this minute order. A total of approximately $1,341,000 and $1,387,000 is awarded for fiscal years 2010 and 2011, respectively.

Regional coordinated public transportation planning is a requirement under state statute as well as for several federal transit programs. The department has supported this effort for the past five years. This minute order is the first to provide funding for a two-year time frame.

Fiscal year 2011 funding identified in Exhibit A is contingent on the expected appropriation of such funds by Congress and subsequent apportionments by the Federal Transit Administration in amounts sufficient to sustain this program. State matching funds have been appropriated for fiscal year 2011 and their award is contingent upon those federal funds being available.

Three of the 24 regions statewide are not represented in this minute order. The Public Transportation Division will continue to work with representatives from each of those regions to support regional public transportation coordination planning and may recommend funding awards in support of that effort in the near future.

Staff recommends approval of this minute order.

MS. DELISI: Questions?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. GLEASON: Effective January 1, 2010, Caprock Community Action Association, CCAA, will merge with South Plains Community Action Association, SPCAA. Agenda item 4(b) awards the remaining balances, not to exceed, of approximately $871,000 in federal funds, $305,000 in state funds, and $13,000 in transportation development credits under several FTA grant programs previously awarded to Caprock Community Action Association and these will now be under contract with South Plains Community Action Association. These amounts are shown in Exhibit A.

Staff recommends approval of this minute order.

MS. DELISI: Is there a motion?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. GLEASON: Thank you.

MR. SAENZ: Thank you, Eric.

Agenda item number 5, commission, deals with administrative rules. Agenda item 5(a) deals with final adoption of rules. Glenn Hagler will come up and present agenda item 5(a)(1) dealing with Contract Management

MR. HAGLER: Good morning. For the record, my name is Glenn Hagler, director of Purchasing with the General Services Division.

Before you is a minute order for final adoption of amendments to Section 9.3 under Title 43 of the Texas Administrative Code relating to the Protest of Purchases under the State Purchasing and General Services Act. These amendments accommodate organizational changes resulting from the regionalization effort within TxDOT. Amendments to 9.3 reflect the transfer of purchasing responsibilities from the district engineer to the regional service director and streamline the procedures by removing agency titles and direct resolution of the protest to the director of Purchasing or other individual as designated by the director of the General Services Division. In the past, the protest of a local purchase was previously handled by the district engineer.

No comments were received on the proposed amendments and approval is recommended.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. HAGLER: Thank you.

MR. SAENZ: Thank you, Glenn.

Agenda item 5(a)(2) deals also with Contract Management. Toribio Garza, director of the Maintenance Division, will present a minute order on final adoption of rules dealing with Historically Underutilized Businesses.

MR. GARZA: Good morning, commissioners, Mr. Saenz. For the record, my name is Toribio Garza, the director of the Maintenance Division.

This minute order adopts rule amendments to change the conditions required under the Historically Underutilized Business Program for building contracts. The change modifies the administrative procedures for submission of the HUB's subcontracting plan required of contractors. The rule change requires a HUB subcontractor plan from the conditionally awarded bidder. The department will continue to comply with all HUB requirements, goals, contractor obligations of the program. These changes will also allow us to utilize our electronic bidding system for building contracts.

No comments were received on the proposed rules, staff recommends your approval.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Toribio.

Agenda item 5(a)(3) is a minute order for final adoption of rules concerning corridor advisory committees and corridor segment advisory committees. Mark Tomlinson will present the minute order.

MR. TOMLINSON: Good morning, Mr. Saenz, commissioners. My name is Mark Tomlinson, director of the Turnpike Authority Division of TxDOT.

This minute order is for the final adoption of amendments to Section 15.9 concerning Corridor Advisory Committees and a new Section 15.10 concerning Corridor Segment Advisory Committees. The amendments extend the Sunset date for those committees of this year to December 31, 2011. The new Section 15.10 authorizes the creation of corridor segment advisory committees that will, along with the advisory committees in the entire corridors, assist the department in planning and development of the projects along I-35 and I-69.

We had an open comment period through December 14, 2009, no comments were received, so staff recommends acceptance of the minute order.

MS. DELISI: Any questions?

MR. HOUGHTON: So moved.

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Mark.

Moving on to agenda 5(b), commission, agenda item 5(b) deals with proposed adoption of administrative rules, they'll be published in the Texas Register for comments. Agenda item 5(b)(1) deals with Finance and the Pass-Through Toll Program, and John Barton will present this minute order for proposed rules on the Pass-Through Toll Program.

MR. BARTON: Good morning, Madam Chair, commissioners, Mr. Saenz. For the record, my name is John Barton, I'm the assistant executive director for Engineering Operations here at the Department of Transportation in Texas.

The minute order before you today does, as Director Saenz pointed out, propose the adoption of amendments concerning our Pass-Through Toll Financing Program to authorize the department to solicit proposals from private entities for highway projects and to make payments to the private developer as reimbursement of costs are incurred in connection with the financing of a toll project.

Transportation Code 222.104(b) authorized the department to enter into such agreements with a public or a private entity and provides for this reimbursement through the Pass-Through Toll Program that we currently have in place to reimburse for the design, development, financing, construction and maintenance operation of tolled or non-tolled facility that's part of the state highway system.

The amendments that are before us today under these proposed rules will allow us to do several things: it will create a new section that will allow the department to solicit pass-through proposals from private entities in circumstances other than through our normal call under Title 43 of our Administrative Code Section 5.54; and will allow the department to make payments to a private developer from the revenue generated by that toll project as reimbursement for financing costs; and to provide a return on their investment for the project.

The amendments and new sections will also facilitate the timely financing and development of many critical highway transportation improvement projects that currently would not be possible due to the cash flow and current available financing available to the department. Specifically, amendments to Section 5.58 would authorize the department for a toll project that's procured under the new section 5.61 to approve payments of pass-through tolls that exceed the department's estimated cost to perform the work that's being proposed by the private entity, and then to reimburse the private entity's financing costs and to pay a rate of return on any private investment that they make into the project.

Under the existing program, the department is currently limited only to reimbursing a private entity for costs that the department would have incurred to construct the project if the pass-through toll agreement was not in place. As I mentioned already, there are many critical highway improvement projects around the state that we are not able to develop under this current program and through our currently available insufficient funding for transportation, and this would provide us a financing method that is not currently available to us.

There also exists the potential to use this pass-through toll agreement to obtain private financing for many of those projects and the department, of course, would need to reimburse the private entities for their financing costs and a reasonable rate of return on their investment which is currently prohibited under the existing program. These payments would be paid from the revenues from the project because it would be associated with a toll project.

Section 5.61 which was a new section would authorize the department to solicit private pass-through proposals from private entities for highway projects and prescribes a method by which we would do so by the issuance of a request for qualifications and then an evaluation of a short-listed group of proposers through a request for proposals process.

It also authorizes the department to make milestone payments in terms of an annual, monthly or other periodic payments to the private entity under the Pass-Through Toll Program, and it establishes that those amounts to be paid by the private entity could be based on the availability of the facility to the traveling public and performance measures that would be established in the process, and if the entity fails to provide those performance measures, then the reimbursements could be reduced.

Staff is presenting this minute order to you today in response to your direction to us to determine if there was opportunities to use this particular mechanism for the advancement of many critical infrastructure projects around the state, and we would recommend your approval of this minute order.

MR. HOUGHTON: Are these, John, for all pass-throughs, or a pass-through with toll booths on it?

MR. BARTON: As it's currently crafted, it would only amend the proposed rules to allow us to establish this new method for pass-through projects that have a toll element with them.

MR. HOUGHTON: With a toll booth on it, okay. So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. BARTON: Thank you.

MR. SAENZ: John, we will be having a public hearing?

MR. BARTON: Yes, sir. The preamble to the rules that will be published in the Texas Register will require and call for a public hearing, and we'll be having that in front of you in the future.

MR. SAENZ: Thank you, John.

MR. BARTON: Thank you.

MR. SAENZ: Agenda item 5(b)(2) deals with Chapter 26, Regional Mobility Authorities, and Ethics and Compliance Programs, and Steve Simmons will present that minute order.

MR. SIMMONS: For the record, I'm Steve Simmons, deputy executive director for the department, and for agenda items 5(b)(2) and 5(b)(3), I will be making the presentation in my capacity as the department's internal compliance officer. Since the histories of these two agenda items are similar, I will present the background for both items and then talk about the specific issues for the individual agenda items.

TxDOT's Internal Compliance Program has been developed with the mission to exercise due diligence to prevent and detect criminal conduct and otherwise promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law. The United States Sentencing Commission established guidelines for the appropriate structure of internal compliance programs within organizations and that structure is being followed by TxDOT.

The U.S. Sentencing Guidelines application notes state that: "As appropriate, a large organization should encourage small organizations, especially those that have or seek to have a business relationship with the large organization, to implement effective compliance and ethics programs." Therefore, TxDOT is considering various rule changes to require certain organizations that receive funds from the department to certify that it has an ethics and compliance program that meets the minimum requirements set forth in the U.S. Sentencing Guidelines.

These two proposed minute orders are a second phase in meeting these U.S. Sentencing Guidelines. By publication in the Texas Register on July 4, 2008, TxDOT provided notice of a possible rule change to require an organization that receives funds from the department to certify that it has an ethics and compliance program in place and it has a minimum, including the basic requirements set forth in the guidelines.

Rules were passed in January 2009 to require transportation corporations and toll facility organizations that after the effective date of the rules, those entities who receive funds from the department are required to adopt and enforce an internal compliance program within twelve months. To assist these organizations, we sent them sample ethics and compliance program documents to assist them in developing a solid program for their respective agencies. To date, we've received programs from the Alamo RMA and the Grand Parkway Association, and we expect to receive the remainder in the next few months.

In regards to the specifics of agenda item 5(b)(2), this proposed new Section 26.56 states that a regional mobility authority shall adopt an internal compliance and ethics program that satisfies the requirement of Section 1.8 of this title before the latter of April 1, 2011 or the first anniversary of the date on which the regional mobility authority is created. Again, packets of information were sent to all regional mobility authorities to assist in the creation of an ethics and compliance program.

Staff recommends approval of this minute order and I'll be happy to answer any questions regarding this agenda item.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SIMMONS: Thank you. Agenda item 5(b)(3) deals with requiring our public transportation providers that receive state or federal public transportation funds to also adopt an internal ethics and compliance program. Suzanne Mann met with the Public Transportation Advisory Committee to discuss the department's internal compliance program and the direction we are moving in adopting rules requiring effective compliance and ethics programs. At their meeting on October 23, 2009, PTAC passed a motion supporting this commission action before you today.

Proposed new Section 31.39 states that to be eligible to receive state or federal public transportation funds awarded by the commission after January 1, 2011, an entity must have adopted an internal ethics and compliance program that satisfies Section 1.8. The requirement in Section 1.8 complies with the U.S. Sentencing Guidelines.

Again, staff recommends approval of this minute order and I'll be happy to answer any questions.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Steve.

Agenda item number 6, commission, deals with the American Recovery and Reinvestment Act, or the Economic Stimulus Program, and John Barton will present the status of where we're at on the Economic Stimulus Program and present a minute order.

MR. BARTON: Again for the record, my name is John Barton, assistant executive director for Engineering Operations, and just wanted to quickly share with the commission and the public our status report for December on the American Recovery and Reinvestment Act. I believe that Mr. Chase shared with you yesterday that there's a Jobs Creation Bill currently voted out of the House of Representatives in Congress and will be moving over to the Senate, so we may get to enjoy this opportunity all over again in the not too distant future.

MR. HOUGHTON: What was the amount last time, $36 billion, something like that?

MR. SAENZ: $27-.

MR. BARTON: $27.2 billion.

MR. HOUGHTON: And what was the last one?

MR. BARTON: Almost identical, and for Texas for highways and bridges, it's almost the exact number $2.25 billion.

MR. HOUGHTON: And the Senate doesn't have it on its calendar right now to take that up? They do or don't?

MR. SAENZ: Not till after the beginning of the year.

MR. HOUGHTON: Okay.

MR. BARTON: Just real quickly to recap where we stand today, to date we have obligations of about $1.7 billion through the federal process, have awarded for highway projects about $1.5 billion worth of work, and to date have created a little over 7,000 jobs through the projects that you've approved, metropolitan planning organizations have approved, and we've moved forward with. So we're making substantial progress in that regard.

On the Transit Program, Eric Gleason and his staff have done a tremendous job working with our rural and small providers, and have all of their funding obligated and have created a little over 57,000 man hours of job opportunities through the 68 grants that they have executed for this, and I believe they'll be making some revisions next month as we move forward with the program.

And then in the Aviation Program, Dave Fulton and his staff have been working very hard to get the six projects that were selected under construction, and in doing so, have created a little over 15,000 hours of job opportunities for citizens of Texas to work on these projects.

A quick update on where we stand on our Mobility Program, these are the remaining projects to be obligated. You'll notice the one on I-35 in the Waco District. I met with FHWA and district staff earlier this week and that project appears to be on track and we don't foresee any troubles getting it obligated before the March 1 deadline. The two in San Antonio also are receiving good news on their environmental clearances and project development and expect both of them to move forward as well.

And of course, the one in Cameron County, the State Highway 550 project, I met with the developer, their RMA last week, and they are very close to getting that project obligated and out to bid so we're looking forward to that and don't foresee any trouble or issues with it as well.

The Americas Bridge project in El Paso is currently on track and we expect it to be obligated before mid January and soon to be under the development/construction phase. And then the projects shown there in the East Region, we, as you know, last month took action to substitute the top two projects for the State Highway 99 project that was removed. Both of these projects are well under development and we expect them to be obligated and out to bid in the February-March time frame, as well as the project on Interstate 10 in Orange County in the Beaumont District.

So all of these remaining mobility projects, we are very confident we'll meet the mark and be able to move forward and obligated within the time frame, as will all the remaining funding for the program here in Texas. And we continue to work with our metropolitan planning organizations and district staff and federal partners, meeting with them on a weekly or biweekly basis to monitor this, and are ramping up our efforts as we near the end of the program.

Just the time lines again. We do have to have everything obligated before midnight on March 1. I will assure you that that will occur. We are continuing to select some projects that are able to be moved forward because of the underruns we've received on other projects, and I'm proud to share with you that the largest of those recently that I'm proud to announce that because of an underrun on a project here in the Austin area, US 290 and 183 interchange, we will now be able to fund a project on State Highway 36 from Sealy, Texas on Interstate 10 to Brenham, Texas and be able to make that project move forward. It's the development of a four-lane divided highway where we currently have a two-lane highway, it's a major evacuation route for South Texas, the Greater Houston Area, and we'll be excited about moving that project forward. So that's just one example of projects that are moving forward.

I thought to close, I would quickly, before I share the minute order with you, show you some pictures of some of the work that you have approved and is moving forward. This is some capacity improvements near the entrance to Fort Hood in the Waco District. This is an amazing couple of pictures, this is in downtown Belton, a project that you approved for funding for resurfacing, you'll notice the condition of the pavement and the traffic, and once we resurfaced it, all the traffic went away, so it was a congestion mitigation project as well.

(General laughter.)

MR. BARTON: But that's just an example of one of the projects you funded.

Here's some work in the Atlanta District on State Highway 11, a project that is improving capacity for a community there in our north and east part of the state. In Fort Worth we did some bridge repair at some deteriorated joints so you can see most of that work was done at night but it's certainly a much needed improvement for the Bridge Preservation Program in North Texas.

This is a bridge replacement project on a county road in Denton County. Many of you may have had an opportunity to visit with Denton County in the past about the status of some of their off-system bridge projects and the Recovery Act has allowed us to move forward with a couple of bridges up there that we're very, very proud of.

This is a rehabilitation project for a bridge and roadway in Lubbock, and you can see that they're progressing very well in both terms of the bridge repairs and the pavement repairs as well. And then this is a project out in the Odessa District in near West Texas, Commissioner Houghton, to resurface as section of roadway through a sealcoat operation. And then in San Angelo in the Mertzon area, we're moving forward with a resurfacing project there.

This is some work on the South Orient Rail that you approved to move that rail project in place and be able to make the operation speeds on that much higher and certainly improve the efficiency of that rail system.

This is a before picture of a project here in the Austin District on State Highway 80, pavement deterioration, and then as you can see when it was finished, a much improved roadway. Similarly, in Lee County on FM 180, before we were able to do the work and then during the process, resurfacing that project that was much patched up, and now has a good riding surface and will last for many, many years to come for that particular community in Lee County. And in the Tyler District, another resurfacing project, just showing some of the work that's going on. And then just here in Austin, yes, asphalt is black at night as well as it is during the daytime, so they're actually paving out there and you can't see anything.

But I just thought it would be nice to see some of the projects that you've funded and some of the work that our employees and contractors and consultants are allowing us to move forward with.

The minute order before you today does a couple of things. As I mentioned, the State Highway 99 project in the Houston District has been replaced with a couple of projects from the Houston District, one on Interstate 10 and the other on Interstate 45. The minute order just recognizes that and memorializes that, and so we're removing the State Highway 99 project and adding the two that I just mentioned.

And then Exhibit C adds some additional enhancement projects. As you know, 3 percent of the total package had to be committed to enhancement projects, we have taken bids on several of those projects and underruns had occurred, and so this allows us to move forward with some additional projects for enhancement work in the State of Texas to commit those dollars to the Enhancement Program before the March 1 midnight deadline.

So that concludes my brief presentation I wanted to share with you, and staff would recommend your approval of the minute order that's before you, and I'll be happy to answer any questions that you might have.

MR. HOLMES: John, in anticipation of a Stimulus 2 -- which could be a similar amount to Stimulus 1 of $2-1/4 billion -- we've been informed that there might be an extremely tight time frame to get under construction.

MR. BARTON: That's correct.

MR. HOLMES: In anticipation that that may occur, what are we planning to do to prepare for that?

MR. BARTON: The current plan we have in place, under David Casteel's leadership, he has put Mario Medina, our district engineer from San Antonio, as well as some of the regional staff and division staff in place, with Mr. Medina serving as the team leader, to identify the projects that we currently have within our system that we believe would be ready to move forward to contract execution within 90 days -- those are going to be primarily preservation and maintenance type projects -- and then the other 50 percent of the funds, if you will, to move forward to be under contract within one year.

And so as we speak, we started this activity on Monday of this week, we've started getting our district staffs to tell us which projects they have available that they think they could have under contract within 90 days, or around the April 1 time period. We've also put some additional time lines in place, what would we have available by August 1, December 1, and then a year from now, February 1 of 2011, so we can gather a list of projects.

We are meeting with our metropolitan planning organizations next Tuesday -- I believe it's Tuesday, yes, the 22nd -- we'll be talking about this issue, we'll engage them again to identify any other projects and we'll continue to monitor the bill as it moves from the House to the Senate and perhaps makes its way to the president's desk.

But because of the apparent need to have this done quickly, we won't have the same opportunities as we did under the Recovery Act to take a little bit of time to identify projects and bring them to the commission, and for all intents and purposes, unless these time lines change, we'll have to have a pre-prepared list of projects that we would bring to you for consideration, and then once the bill is signed, we would have to present those to the federal government under the process that they have predetermined and defined, get their endorsement, and then seek obligation, take bids immediately, probably have a special called meeting of the commission to award those bids, and then execute the contracts, because a 90-day time frame is much shorter than what we normally deal with.

MR. MEADOWS: John, one of the challenges, obviously, with that is the contrast of having the luxury of a little more time during the first ARRA distribution or allocation of funds where you had a process that was perceived as and was, in fact, very inclusive, the challenge with this certainly is how do you engage those local partners who, I can assure you, will fully expect to have their opinions listened to and a process by which those opinions can weigh in.

So I think we need to at least give some thought to that, if nothing else, in a preemptive fashion getting ahead of the curve, you might anticipate building a component in there to say here's the opportunity, describe it as we understand it today, and commit to keep them informed and engage them as is possible or appropriate, or both.

MR. BARTON: Very good points, and we certainly will do that, Commissioner.

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: John, I believe you've got a meeting on the 22nd with the MPOs and local leaders that probably you could start that dialogue on the process, kind of what if this happens, this is kind of what we need to get started.

MR. BARTON: We will do that, Director Saenz, and also Coby Chase has given his staff the direction to develop a one-page summary report of what we believe the bill holds, and as soon as we're comfortable that we've gotten that fully analyzed and with some caveats we can release it, we'll probably send that out as well, as much information as early as possible.

MR. HOLMES: And John, in Stimulus 1, you did engage MPOs and counties and toll road authorities, et cetera, and you had, if I recall, nominated significantly more projects than we were able to select. That would be a candidate list, I presume, that you would review again to determine which ones are ready to go and which ones would rise to the top of the list. Do I recall that there was another $3-, $4- or $5 billion worth of projects on that list?

MR. BARTON: There were, and as we've moved forward since last February till today, many of those projects on that original list obviously were funded through the Recovery Act, others have been funded through other funding mechanisms, Proposition 12 and others, and our recent survey that we responded to, just a push of a button out of our database system revealed at that time to be able to get projects obligated within about a 180-day period of time -- again, obligated, not under contract -- we had over $3 billion worth of projects.

So your point is very well taken that we have the beginning of a list, we can review all of that information, see if there are projects that are still on that that were not funded, ready to move forward, and build a good database of available and eligible projects.

And again, this bill is similar but different than the previous bill, as our first blush review has those different time lines, one of which is much different is that all the money would have to be spent by September of 2011, so even the duration of the types of projects you can fund is different, we'd have to have shorter length projects in terms of total construction time if, in fact, that's something that holds true as the bill is moved to final passage and execution by the president.

MR. HOLMES: And does it appear in the current bill that the modes that could be addressed, whether it's rail or aviation or port or highway, is there restriction on modes of transportation projects, or is it exclusively highway?

MR. BARTON: Our initial reading of it -- my initial reading of it, and Mr. Chase may want to add if he's had a better opportunity to evaluate it -- is that the restrictions or actually the flexibilities provided under the initial Recovery Act are almost identical to the ones in this particular Jobs Creation Bill, so we would be able to use the highway and bridge portion to do not only highways and bridges but transit and rail and other types of projects, if we chose to do so, and there are components within the larger dollar amount that are set aside specifically for rail and for other activities, aviation and other activities.

MR. HOUGHTON: The timing and all of those sorts of things as far as 90, 120 and half now and the other half, is pure speculation, or is that ground in some fact?

MR. BARTON: Well, it's based on the bill that was passed out of the House, but again, the Senate hasn't taken it up, they could obviously offer amendments to it and it could change dramatically between now and the time that any bill, if a bill is ever executed.

MR. HOUGHTON: But when you talk about rail projects or transit, that's going to be tough to obligate

-- not obligate but contract in 90 days.

MR. BARTON: And the component piece that I mentioned with those time lines was for the highway portion only. Those same time lines may or may not apply to the rail and other parts of the program. I focused my attention for the last 24 hours simply on that highway component.

MR. HOUGHTON: And that highway component is 90 days, I mean, you're talking about rehab work or overlays, stuff that you were basically showing up here.

MR. BARTON: Yes, sir, because it's 90 days to contract execution, so we'd have to get federal approval, take bids, have the commission award those bids, and then execute the contract.

MR. HOUGHTON: In that 90 days federal approval.

MR. BARTON: Yes, sir.

MR. HOUGHTON: Have they streamlined their process at the federal level?

MR. BARTON: Actually, under the Recovery Act we have seen some improvement, but in order to do a 90-day window, we would have to, in my personal opinion and professional opinion, we would only be able to move forward with projects that are what we call grouped and therefore don't have to be listed specifically within a Statewide Transportation Improvement Program, and those, by nature, are maintenance projects.

MR. HOUGHTON: Maintenance projects is what we're looking at.

MR. BARTON: Yes, sir.

MR. HOUGHTON: Well, Fred will be happy with that, Commissioner Underwood will be happy.

MR. BARTON: Probably he's out celebrating today rather than being here, I'm sure.

(General laughter.)

MR. HOUGHTON: I want to make sure we have it clear, there's an expectation out there that people are within an earshot of this meeting that it's not going to be major transportation, new mobility projects -- maybe a onesie, twosie.

MR. BARTON: In the second half of the program there would be an opportunity for that, and as Deputy Executive Director Steve Simmons just reminded me, as we did under the Recovery Act, this would give us an opportunity to fund some of our much needed work and free up the funding we would otherwise have to commit to those projects to be used on other projects, so you could take this opportunity to parlay into an opportunity to do some of the more extensive mobility or congestion-relieving type projects.

MS. DELISI: As I recall, the first stimulus had shorter time lines when it came out of the gate and it changed dramatically out of conference.

MR. BARTON: Chairman Obserstar has been very consistent, his first opportunity under the Recovery Act, the one that we have in place today, had some very aggressive time lines, and it was finally executed, they were extended somewhat.

MR. HOUGHTON: And we're engaged in that process to help extend that process a little bit?

MR. BARTON: I believe that Coby Chase and his staff are engaging in discussion opportunities for us toward doing that.

MR. HOUGHTON: Are we outwardly doing that, Coby, or are we covertly doing that?

MR. SIMMONS: Just say yes.

MR. CHASE: Yes.

(General laughter.)

MR. HOUGHTON: Coby is not happy because you get to read your speech and he doesn't anymore. Did you notice that?

MR. BARTON: Actually, I have the agenda of the meeting in front of me, that's what I'm reading from.

MR. HOUGHTON: Yes, well, he's unhappy with that. He's over there pouting.

(General laughter.)

MR. SAENZ: Agenda item number 7, John will present a minute order to authorize the executive director to negotiate and execute some final pass-through toll agreements based on our program call this year.

MR. BARTON: Thank you, Director Saenz.

As you will recall, under Minute Order 111977 in September of this year, you authorized the executive director or his designee to negotiate final pass-through toll agreements with certain entities from across the state. Just to recap very briefly, we had 31 applications submitted for a total program call of about $274 million; ten projects were selected for negotiation but at that time we also asked that you give us the authority to be able to move forward with additional projects, four additional alternative projects, should we fail to be able to successfully negotiate on the first ten projects.

Last month I presented to you a minute order to authorize the final execution of seven of those successful negotiations and then began the negotiation on those remaining four alternative projects this month. I'm proud to share with you that we have successfully negotiated terms with all of those four entities and this particular slide just recaps those.

It's one in Bowie County, a much sought after project by Judge Carlo and others there in Bowie County on US 82, and you can see that we've reached a negotiated value of $26.2 million for those improvements.

Also for two projects in the City of Midlothian, they presented one for an overpass at Rail Port Parkway/Miller Road with US 67, and then an additional project on FM 663, a local roadway that intersects with the recently completed and under traffic US 287 relief route. Those two projects will provide some significant benefits for those communities and we were able to reach terms as presented in this minute order and shown on this slide for those two projects.

And then with the City of Victoria, Victoria County and the Victoria MPO, we reached agreements on a project on Loop 463 on the east side of the City of Victoria to build an expressway facility between Salem Road and Mockingbird Lane on Loop 463 which currently has at-grade crossings, frontage road-only configuration.

And so I just wanted to share this information with you today and ask for your approval, recommend your approval for the minute order to allow us to complete formal agreement on these negotiated pass-through toll projects.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, John.

Agenda item number 8, John will also present a minute order dealing with our Proposition 14 Bond Program.

MR. BARTON: Thank you, Director Saenz, and as they pull up the slides here, this is a minute order before the commission that would allow us to continue to use the $2.9 billion of remaining Proposition 14 Bond proceeds that were made available to us by the commission through action in October of 2008. I know that the information on this slide is difficult for the audience to review, but this is shown in your packet, it's the first exhibit in the minute order which is a reconciliation of the $2.9 billion used to date.

If you approve the minute order that is before you, it will commit an additional $47.2 million for two particular projects, one here in the Austin community, another in the Midland-Odessa area, and by doing so, your balance that's available to the commission for the use of funding contingencies and overruns on other projects as they occur as they're being developed, and as the reserve is now in total of $343.8 million balance. Again, that is if you approve the minute order that's before you today.

The minute order before you today would authorize Proposition 14 Bond proceed funding for two projects, as I said. One is on State Highway 71 here in the south and east area of the community of Austin. It's to provide an extension of the expressway that's locally referred to as Ben White from where it currently ends just west of Riverside Drive through Riverside Drive, connecting to US 183. It's to build an overpass, frontage roads and mainlanes for the continuation of that expressway, relieving the congestion that is currently gridlocking the 183-71-Riverside Drive area, and the value of that is $42.85 million.

The other project is a commitment that is a carryover from past commission actions. Previous commissions had authorized the expenditure of Category 12 funding for the construction of State Highway 349 which is locally referred to as the Midland Bypass -- I think it was recently named after one of our state representatives. This would allow us to --

MR. HOUGHTON: Who would that be?

MR. BARTON: Representative Craddick. This would allow us to build an overpass at the intersection of State Highway 158 and State Highway 349. Again, previous commitments were that if any money was left over from the construction of the loop through the Category 12 funding obligation, we would allow them to use it to build this overpass. That did occur and because of our cash flow situation right now, in order to move forward with the project, we need to honor that Category 12 commitment through the use of these Proposition 14 Bond proceeds.

So staff recommends your approval of this minute order, and I'll be happy to answer any questions you may have.

MS. DELISI: Any questions for John?

(No response.)

MS. DELISI: I'd like to call up Joseph Cantalupo.

MR. CANTALUPO: Good morning. For the record, my name is Joe Cantalupo and I'm the executive director of the Capital Area MPO here in Austin.

I'll be very brief. I wanted to let you know that your approval of the reallocation of funds to State Highway 71 is going to help us solve a couple of big problems. As Mr. Barton mentioned, the 71-Riverside intersection is a huge bottleneck for our region, but I also wanted to let you know -- which I'm sure you already know -- that 71 is a major connection, our probably only major connection out to the airport and 71 also serves as an evacuation route for this part of the state.

So I'm done with my comments, I just wanted to come up here and thank you for your consideration of the reallocation of funds and to see if I could answer any questions that you might have.

MR. HOUGHTON: Is this project right there by the airport?

MR. CANTALUPO: It is a little bit west, it's Riverside.

MR. HOUGHTON: It's further west, it's on the west side of 35?

MR. SAENZ: No, it's on the east side of 35, it's between 35 and airport, it's the Riverside intersection.

MS. DELISI: You may come in from downtown.

MR. SAENZ: This will result in, Commissioner, once this is built and if you're heading to the airport from 35 --

MR. HOUGHTON: You don't have that traffic light there.

MR. CANTALUPO: Yes, sir, it removes both traffic lights, you'll have a straight shot from 35 out to the airport.

MR. HOUGHTON: Is that supposed to be a toll road someday?

MR. CANTALUPO: It was currently planned to be, yes.

MR. HOUGHTON: Currently planned or is?

MS. DELISI: It was.

MR. HOUGHTON: Is going to?

MS. DELISI: Was.

MR. CANTALUPO: Was.

MR. HOUGHTON: It didn't make it.

MR. CANTALUPO: No. So this project will be a huge help in getting relief for that area of the world and for helping our region.

MR. HOUGHTON: What are the long-range plans, Amadeo or John, for 71 out to the airport out to our road? Joe, don't sit down. What is the long-range plans for 71 out to 130?

MR. BARTON: After this project is completed, then there will be one remaining project which would be to go from the airport out to State Highway 130, specifically. Obviously there may be needed improvements beyond that. The current roadway configuration from State Highway 130 to the airport is an at-grade facility, it has a couple of farm to market road intersections and city street intersections with a couple of traffic lights. The CAMPO area plan calls for extending the freeway out there, building overpasses and having frontage roads, there's extensive right of way to be purchased in order to accommodate that, and then it would provide connections to the toll road directly as well as the continuation of 71 on to Bastrop.

MR. HOUGHTON: Thanks. Thanks, Joe.

MR. CANTALUPO: Thank you.

MR. SAENZ: Thank you, John.

MS. DELISI: I need a motion.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. BARTON: Thank you.

MR. SAENZ: Thank you, John.

Agenda item number 9, Brian Ragland will present minute order -- well, will not present a minute order, we are deferring the minute order, but he will present the audited financial statement preliminary reports.

MR. RAGLAND: Thank you. For the record, my name is Brian Ragland, director of the Finance Division.

Actually, this agenda item is going to present the unaudited financial statements. We found out from the State Auditor's Office just within the last week that they would not be able to finish their audit by today, so we are presenting to you the draft unaudited financial statements, and we will get the audit prior to the submission deadline at the end of this month, submit those to the trustee, and then come back to you in January and have you formally accept the audited financial statements of the Central Texas Turnpike System. So you have the financials in front of you and that's all I have on this item. Thank you.

MR. SAENZ: Agenda item number 9(b), Mark Tomlinson will present a minute order to accept the report on the Actual Traffic and Revenue for the CTTS project here in the Austin area.

MR. TOMLINSON: Good morning again. My name is Mark Tomlinson, director of the Turnpike Authority Division of TxDOT. As Mr. Saenz mentioned, this minute order does accept that actual TNR for the Central Texas Turnpike System as of November 30, it's the first quarter of this year, as required by our indenture of trust.

The report compares current traffic and revenue with the prior fiscal year 2009, as well as the TNR projections from the 2002 study. The system is doing very well overall during this first quarter. We generated more than 19.2 million transactions and $16 million in revenue. These amounts exceeded the same month totals for 2009 by 14 percent and 8 percent, respectively. For the first quarter also, as compared to that 2002 TNR study, we're 8 percent over the revenue that was projected back at that time.

As an aside, we currently have 432,000 TxTag accounts with 740,000 active TxTags out there, so those totals are progressing very well also.

Staff would recommend your approval of this minute order if there are no questions.

MS. DELISI: Is there a motion?

MR. MEADOWS: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you. Mark will now present a minute order for agenda item 9(c) dealing with the designation of portions of the toll road on the 821/183 project in Dallas and Tarrant counties.

MR. TOMLINSON: Yes, sir, this is known as the North Tarrant Express, NTE, Segment 2. This minute order authorizes the designation of the tolled managed lanes of that roadway along State Highway 121 and State Highway 183, Airport Freeway, from Interstate 820 to State Highway 161 -- it's known in the project as Segment 2 of NTE. It includes all the managed lane connections as a toll project on the state highway system. The department received final environmental clearance from FHWA and FAA in October of 2009.

Staff would recommend your approval of the minute order

MR. HOUGHTON: So moved.

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Mark continues, agenda item 9(d), Mark will present a minute order to designate the toll lanes on State Highway 99, a portion of the Grand Parkway.

MR. TOMLINSON: This does designate Segment F1 of the Grand Parkway from US 290 up to State Highway 249 in Harris County as a tolled project and a controlled access highway facility. In November of 2008, the department received final environmental clearance, a record of decision for this roadway. Due to an alignment change on Segment F1, a re-evaluation of that environmental clearance had to be done and it was received in June of 2009. Segment F1 is a proposed 12-mile, four-lane, controlled access tollway with intermittent frontage roads.

Staff would recommend your approval of this minute order as well.

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you. Mark will also present agenda item 9(e) that designates the tolled mainlanes on State Highway 550 in Cameron County.

MR. TOMLINSON: Down in the Valley, this roadway from US 77/83 to State Highway 48, this minute order will designate it as a toll project on the state highway system. We received final environmental clearance on November 10, 2009 for the project, and staff would recommend your approval of this minute order as well.

MS. DELISI: Motion?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. TOMLINSON: Thanks very much

MR. SAENZ: Thank you, Mark.

Moving on to agenda item 9(f), commission, Brian Ragland will return and present a minute order on a toll equity approval for the CCRMA, Cameron County RMA as part of the American Recovery Act.

MR. RAGLAND: Thank you. For the record, Brian Ragland, director of the Finance Division.

This proposed minute order allows for approval of a request that was submitted by the Cameron County Regional Mobility Authority for $36.49 million in the form of a grant to pay for certain costs related to the construction of Segments 2 and 3 of the proposed toll road in the SH 550 corridor which is at the new Port of Brownsville entrance. This minute order grants preliminary approval of the request that's financed with economic stimulus dollars.

Staff recommends your approval.

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you. Brian will present agenda item number 10 dealing with the financial statements for the Texas Mobility Fund.

MR. RAGLAND: Yes, thank you. This proposed minute order accepts the financial report on the Texas Mobility Fund for the year ending August 31, 2009. The State Auditor's Office conducted the audit and did issue an unqualified opinion just a couple of days ago, and the report itself is prepared and submitted annually to comply with the resolution associated with the bonds on this fund.

Staff recommends your approval.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you. Brian will now present agenda item number 11 dealing with final approval of a State Infrastructure Bank loan to the Camino Real Regional Mobility Authority.

MR. RAGLAND: This proposed minute order provides for the final approval of the application submitted by the Camino Real Regional Mobility Authority for $35 million to pay for four direct connectors at I-10 and Loop 375 in El Paso, otherwise known as Americas Interchange, and for aesthetic improvements to the I-10 corridor. You granted preliminary approval of this loan in September and the loan is going to be secured by revenues generated and assigned to the RMA by a transportation reinvestment zone in El Paso.

Staff recommends your approval.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Brian.

Agenda item number 12, commission, Carol Rawson, interim director for the Traffic Operations Division, will present a minute order approving some restricted lane use for trucks on I-35.

MS. RAWSON: Good morning. For the record, I'm Carol Rawson, interim director of the Traffic Operations Division.

This minute order allows for a left-lane restriction for trucks on designated sections of I-35 in Bell and Williamson counties. These restrictions would prohibit trucks from operating in the far left lane for sections of these highways in the two counties. Trucks would still be allowed to use the left lane to pass other vehicles and exit the highway.

The department, working with local jurisdictions, has conducted traffic studies and determined that these restrictions would be beneficial. We have also worked extensively with the local jurisdictions in the development of the proposed restrictions. These types of lane restrictions improve safety by increasing the number of vehicles traveling at the same speed and decreasing lane changes and other types of passing maneuvers.

The department published a notice requesting public comment in the September 18, 2009 edition of the Texas Register and also held a local public hearing on September 29, 2009. There were no comments received.

We recommend approval of this minute order.

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Carol.

Agenda item number 13, we have our new Rail Division director, Bill Glavin, presenting a minute order for Coleman, Runnels and Tom Green counties dealing with the South Orient Railroad.

MR. GLAVIN: For the record, my name is Bill Glavin, I'm the director of the Rail Division for the Texas Department of Transportation.

This minute order authorizes the department to expend $3 million appropriation for infrastructure rehabilitation on the state-owned South Orient Rail Line from San Angelo to Coleman. Rider 64a of the department's appropriation bill set side $3 million for Strategy A(1)(2), Contract Planning and Design, to be used on the rehabilitation and track improvements for the South Orient Rail Line.

The rehabilitation of this line is necessary for continued rail service and to provide adequate rail infrastructure for economic development efforts in the region. The majority of the planning and the design of the project is already complete since the funds appropriated to Strategy A(1)(2), Contract Planning and Design, are not available for construction activities, the department has requested the transfer of the $3 million appropriation to Strategy C(1)(2), New Maintenance contracts. The department has made this request of the Legislative Budget Board and the Governor's Office of Budget Planning and Policy by a letter dated November 9, 2009.

The staff recommends the approval of this minute order subject to the final approval of the Legislative Budget Board and the Governor's office of Budget Planning and Policy. Thank you.

MS. DELISI: Bill, you need to know something, this is your first commission meeting, this project is a pet project of Commissioner Houghton.

MR. HOUGHTON: I'm extremely interested in this project for a variety of reasons. But a question I have is the $3 million is on top of the $14 million that we allocated out of the ARRA money.

MR. GLAVIN: That is correct.

MR. HOUGHTON: Okay, and this $3 million --

MR. GLAVIN: Is essentially our matching portion.

MR. HOUGHTON: Our matching portion.

MR. SAENZ: Commissioner, this is General Revenue that was appropriated by the legislature.

MR. HOUGHTON: By Representative Darby?

MR. SAENZ: Yes, sir.

MR. HOUGHTON: Do we get a spike engraved from this rail project, a golden spike or something like that?

MR. GLAVIN: That could be arranged.

MR. HOUGHTON: I'd like that.

MR. SAENZ: I think right now we'll get you a rusty spike.

MR. HOUGHTON: A rusty spike, based on current economic conditions.

MR. SAENZ: Based on current economic conditions, we'll get you a rusty spike.

(General laughter.)

MR. HOUGHTON: Well, Bill, welcome aboard. Nice visiting with you yesterday and we look for good things out of the Rail Division. Thank you very much.

MR. GLAVIN: Thank you, appreciate it.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Bill. Congratulations on getting your first minute order. You'll probably get another rusty spike.

MR. GLAVIN: Thank you.

MR. SAENZ: Agenda item number 14, I think Brian Ragland will present the Obligation Limitation Report.

MR. HOUGHTON: Where's James Bass, what's wrong with Bass?

MR. SAENZ: James is at an ERP meeting.

MR. HOUGHTON: Not AARP?

MR. SAENZ: ERP.

MR. HOUGHTON: He's that old, AARP?

(General laughter.)

MR. RAGLAND: Thank you. For the record, Brian Ragland, director of the Finance Division.

This is the monthly report on the status of the 2010 Obligation Limit and how the amounts are impacting that limit year to date. I will point out that we've changed the allocation this month. The heading of the column should really say District/Division. We've added the Bridge Division, the Traffic Division and the Design Division; those three divisions are going to be responsible for managing Categories 6, 8 and 9, respectively, on a statewide basis, so we've pulled those amounts out of the districts and put them down on a row for those divisions.

Year to date, we've let $321 million that's impacted the cap and we've scheduled another $839 million so we've got a little room there to schedule some more.

I think James also, during this presentation, usually speaks to the motor fuels tax situation. For December, we saw a decline of 6 percent as compared to last December. We're hoping that's a timing issue and it corrects itself next month, but we'll have to wait and see. That brings year to date, I believe, to about 1.2 percent down.

MR. HOUGHTON: Year to date meaning September 1.

MR. RAGLAND: Four months.

MR. HOUGHTON: What about the calendar year, or do we know?

MR. RAGLAND: I don't have that on me but I can send that around.

MR. HOUGHTON: That would be interesting from January to November.

MR. RAGLAND: Yes, we can do that. In our cash forecast we've estimated a half a percent growth for the year, and we were tracking that through the first three months but this 6 percent decline threw that off.

MR. HOUGHTON: Do we have the vehicle miles traveled also?

MR. SAENZ: We can get that from the counters. James usually will work with TP&P.

MR. HOUGHTON: It would be interesting to see if people are driving the same, driving more, less, and if this is fuel efficiency too, or a combination of both.

MR. BARTON: We'll circle back on that.

MS. DELISI: Well, is this being driven by the gas tax or diesel?

MR. BARTON: I don't have that split. I know James usually keeps those things in his head, but we can circle back with each of you and get that information to you. That's all I have. Thank you.

MR. SAENZ: Thank you, Brian.

Agenda item number 15, commissioners, is our contracts. Agenda item 15(a) is the award or rejection of highway improvement contracts; (a)(1) deals with highway maintenance and building maintenance construction contracts, and Ken Barnett will present that minute order.

MR. BARNETT: Good morning, commissioners. For the record, Ken Barnett, Construction Section director in the Construction Division.

The first item, agenda 15(a)(1) is award of maintenance contracts. We had 23 projects let on December 8 and 9, 2009; we had an average number of bidders of 5.3; had a 10.73 percent underrun on the maintenance projects. We are recommending award of all the maintenance projects included in this recommendation for award.

We did have submission of a bid error on one maintenance project in Wharton County. For that particular project, it included an item for installation of flexible base material. In computation of their bid, the contractor failed to include the cost of the base material itself, he essentially bid the cost just to install it, but did not bid the cost of the material itself. In accordance with our bid error criteria outlined in the Administrative Code, I cannot say this represents exercise of ordinary care; therefore, we are recommending to you that you reject the error and award this contractor the project.

And with that, I'd be happy to take any questions if you have them for this one.

MR. HOUGHTON: I see that we're getting back in line on the over/under.

MR. BARNETT: Yes, sir, we are, we are doing much, much better.

MR. HOUGHTON: The estimators are using exact science now, huh?

MR. BARNETT: Yes, sir. We've changed our estimation, as we discussed at the workshop a couple of months ago where we're using three-month averages and we're looking at some of the futures, and we're doing much, much better.

MR. HOLMES: So moved.

MR. HOUGHTON: Second. Do you have somebody to speak?

MS. DELISI: Yes, we have someone signed up. I'd like to call up Steve Scott, please.

MR. SCOTT: Yes, for the record, my name is Steve Scott, and I'm a senior estimator for Brannan Paving, and in this business for 35 years as an estimator, doing TxDOT jobs for 20 years, and this is the first time I've ever had to come see you.

I regret that we meet under this circumstance, but in the Texas Administrative Code, the commission will consider the following criteria, and under that criteria, we meet the (a), we meet the (b), the only one that I see that is in the gray area is the amount of care that you put into a bid. It's obvious that no contractor wants to make a bust and that we strive hard, and although I work as hard as I can, my wife says I'm not quite there yet, being perfect.

So I wish that you would consider that it is possible to make a mistake and that as far as item (d), the last letter, as far as delay of the project or significant amount of safety that it would incur, that's yet to be determined. But I would appreciate your consideration in this matter, and thank you very much. Any questions?

MS. DELISI: Any questions?

(No response.)

MS. DELISI: Thank you. Is there a motion?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. BARNETT: Commissioners, agenda item 15(a)(2) is consideration of the award or rejection of highway transportation and enhancement building in our construction contracts let on December 8 and 9, as well as the Travis County project that was deferred from the October letting. We have 73 projects; we averaged 6.78 bidders per project; we had an underrun of 13.95 percent. Staff are recommending award of all the construction projects.

Built within this recommendation of award, we received two bid errors: one was on the Travis County project which was deferred from October; and then we received a second one on a project in Blanco County.

Let me lay out the Blanco County one for you. This is a sealcoat project. On one particular item, AC25TR which is the asphalt we shoot on the roadway, the contractor received a bid by phone immediately prior to the letting and he was quoted a price of $2.65 a gallon. In computation of his price, he used $265 a ton, so he failed to convert the quote in gallons to the bid item in tons, and that error is fairly significant because when you make that computation, that price is $622.75 a ton he bid $335 a ton.

In looking through this, it's clearly material to the work, but again, we cannot recommend to you that ordinary care was exercised for omitting a crucial part of the computation. Clearly, you can't get asphalt today for $265 a ton, he just completely omitted part of the computation. So we can't recommend that ordinary care was exercised on this particular item.

On the next one, the project that was deferred from the October letting, this is for construction of direct connectors here south at Ben White and I-35. For that particular project, in computation of the lane rentals that will be assessed, the contractor failed to use the right table and failed to calculate based on the correct number of lanes. So when he did this, he assumed one lane on I-35 -- there is not one lane on I-35 -- and he used tables that we use for the frontage roads for the mainlanes. The mainlane frontage road is $15,000 an hour, he used $900 an hour.

What that results is he gets charged every time he closes a lane on I-35 during construction of the project, so if he goes out and closes the freeway, we charge him $15,000 a hour per lane for when he closes the freeway. During the course of the project he's set up with a certain balance, an amount of money -- for this case for I-35 is about $15 million. During the course of the project he can close I-35 as he needs to complete the project and as long as he stays above that bank balance that he was provided, no money will be charged to him. As soon as he exceeds the number of lane closures that are allotted in that bank balance, that money starts getting deducted from his estimate.

This is the item he made the error on. He assumed when he was going to close 35 and 71 it would cost $220,000, it, in fact, cost $919,000, so what that means is every time it closes, it costs more than he thought it was going to cost. But there again, that just comes out of the bank balance: provided he stays, keeps his bank balance positive, the error will cost nothing; if he closes it more than that, though, the error could become significant.

With the multiple computation errors, we can't recommend to you that this meets the bid error criteria. With the fact that I don't really know what it's going to cost him, it may cost him zero, I can't tell you this is material to the project either. So for those reasons, we're recommending award of both of these contracts and not accepting the bid error. And if you have any questions, I'll be happy to take those.

MS. DELISI: Any questions for Ken?

(No response.)

MS. DELISI: All right. I would like to call up Clay Wagner.

MR. WAGNER: Good morning. My name is Clay Wagner. I'm here on behalf of my father, Ronnie Wagner, and our company, Ronald Wagner & Company. I'd like to talk to you about item 15(a)(2) which is Blanco County on US 290 in which we made a mistake on the AC25TR item, converting from the gallon to the ton. It's an easy mistake, especially when there's the amount of work being let on one particular day.

The last two months, in November and December, all sealcoat work has been let on one day. It's very hectic and very confusing for two estimators to bid on all this work on one particular day, especially when all the material suppliers, asphalt and rock, are calling in by phone and cutting prices, cutting numbers because they're trying to get the work too.

Therefore, being a respectable contractor for the State of Texas for 33 years -- I am third generation, my grandfather is Raymond Wagner, has worked for the State of Texas all his life -- we're humbly asking for the return of our bid check back on this particular project. We feel this request in these hard times is not anything out of the ordinary. Considering the past, other contractors in our field of work have done the same mistake and have also received their bid checks back, not to mention a few, but F.M. Plough Construction, Clark Construction, Brannan Paving, Northeast Pavers last month on the Brownwood District sealcoat.

This honest mistake we made is very easy, like I said before, and in conclusion, I'm just here on behalf of us requesting that you guys consider returning our bid check to us. It is an honest mistake. Thank you.

MS. DELISI: Thank you.

Let me see, Mike McWay.

MR. McWAY: Good morning. My name is Mike McWay, I'm the president of the Texas Division of McCarthy Building Companies, and appreciate the opportunity to have a few minutes to speak with you all.

McCarthy submitted its bid for the Travis County US 290 project on October 21. We were the apparent low bidder with a bid of $36,112,140, though because this was A plus B bidding format, taking into account the completion time, the "A" amount of the resulting contract would be $24,412,140.

Unfortunately, our bid contained a significant material clerical bid error which necessitated us to withdraw our bid by letter sent October 27, as permitted by Texas law when the bid error relates to the following consideration: the bid error relates to a material item of work, the bid error is a significant portion of the total bid, the bid error occurred despite the exercise of ordinary care and the delay of the proposed work would not impact cost and safety to the public.

Our situation meets each of these considerations, contrary to the findings of the department as set forth in their December 7 letter. The clerical error occurred in the calculation of the lane closure hourly rental rates and the number of multiple lanes for the three weekend lane closures for the erection of the northbound-westbound, and westbound-southbound structural steel tub girders.

When creating the spreadsheet to be used to understand the lane closure costs and risks, a clerical error occurred when the wrong lane rental schedule and rates were used and was then compounded by not multiplying the one lane rate by the factor of three for closure of all mainlane traffic in each direction.

As a result of the incorrect rates inadvertently being used on the spreadsheet, McCarthy calculated and assessed its three weekend lane closure costs as a cost of a total $220,500. If the correct rates would have been accurately entered on the spreadsheet, the cost of one event would have totaled $919,800. Please see our October 27, 2009 letter for more details and the attached exhibits.

In its December 7 letter, TxDOT states they do not believe the criteria for establishing the bid errors stated by the Texas Administrative Code in 2.15 of the standard specifications have been met because McCarthy indicated that the department's anticipated number of closures -- or the bank, as they refer to it -- used to establish the rental credit amounts appeared reasonable to McCarthy. This statement is not true and mischaracterizes our position.

Our position is that it is not reasonable to bid this work with only three lane closures when any additional necessary closures would cost McCarthy $919,000, approximately. This is not a cost nor risk we would assume without covering such cost or risk in our given bid, given the likelihood on a project of this complexity would require at least one additional closure and with such a significant amount of money at risk, almost 80 percent of our profit for the project.

This is the only argument, we understand, TxDOT makes in its December 7 letter relating to a material item of work and the bid error being a significant portion of the work, and is clearly without merit. The December letter also states that McCarthy did not exercise ordinary care in preparing its bid. We disagree. McCarthy did provide many details of how the bid was assembled in our post-bid meetings with TxDOT. The portion of the work involving the bid error was assigned to one of our most seasoned estimators, a 35-year construction industry veteran with 28 years with McCarthy, working on some of our biggest and toughest estimates.

In addition, we had multiple experienced people, familiar with the specifications, reviewing the estimates during our bid review who had an opportunity to catch any error which is how we double check our estimates. Our chief estimator reviewed the spreadsheets and then made a recommendation of costs for this project.

It is clear the error occurred when the rates were transferred from the wrong rate column in the table of rates provided by TxDOT. This clerical bid error is similar to other types of clerical errors involving the transfer of numbers from one source to another that has been recognized as remedial bid mistakes as shown in the cases cited in our attorney's letter dated November 30.

Obviously, TxDOT envisions that despite the exercise of ordinary care, bidders may make mistakes, and therefore, the rules in 2.15 have been established. The mere fact that we made a clerical bid error does not show by itself that we failed to exercise ordinary care. Multiple people reviewed this bid and none of them caught this error. McCarthy exercised ordinary care in the preparation of this bid, we believe.

I've addressed the points in the department's December 7 letter. Clearly, McCarthy's bid error relates to a material item of work and is a significant portion of our total bid. The clerical error occurred despite our exercise of ordinary care. By our letter of October 27 we withdrew our bid because of the clerical bid error. We ask that award not be made to McCarthy and our bid bond be returned. We are available to answer any questions. Thank you.

MS. DELISI: Are there any questions?

(No response.)

MS. DELISI: Thank you. Any questions for Ken?

(No response.)

MS. DELISI: All right, is there a motion?

MR. HOLMES: So moved.

MS. DELISI: Second?

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Commission, agenda item number 16 is the routine minute orders that we handle every month dealing with donations, eminent domain, highway designations, load zones and postings, right of way disposition and donations, speed zones. Staff would be happy to answer any questions on any individual minute order but we request approval of all minute orders.

MS. DELISI: Is there a motion?

MR. MEADOWS: Move to approve.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

We will not be having an executive session today. We'll now enter into the open comment period of the meeting. Are there any speakers signed up for open comment?

MR. SAENZ: No, ma'am.

MS. DELISI: Is there any other business to come before the commission? There being none, I will entertain a motion to adjourn.

MR. HOUGHTON: Can I ask a question?

MS. DELISI: Sure.

MR. HOUGHTON: On that Ben White 290 project, is that ARRA money?

MR. SAENZ: No, it's Prop 14.

MR. HOUGHTON: Okay, thank you.

MS. DELISI: Is there a motion to adjourn?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes. Please note for the record that it is 10:30 a.m. and this meeting stands adjourned.

(Whereupon, at 10:30 a.m., the meeting was concluded.)

C E R T I F I C A T E

MEETING OF: Texas Transportation Commission Workshop

LOCATION: Austin, Texas

DATE: December 17, 2009

I do hereby certify that the foregoing pages, numbers 1 through 74, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Nancy King before the Texas Department of Transportation.

 

 

 

12/22/09

(Transcriber) (Date)

On the Record Reporting

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Austin, Texas 78731

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