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Texas Department of Transportation Commission Meeting


Ric Williamson Hearing Room
Dewitt Greer Building
125 East 11th Street
Austin, Texas 78701-2483

Thursday, February 26, 2009


COMMISSION MEMBERS:

Deirdre Delisi, Chair
Ted Houghton, Jr.
Ned S. Holmes
Fred Underwood
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 9:03 a.m., and I would like to call to order the regular February 2009 meeting of the Texas Transportation Commission. 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 4:13 p.m. on February 18, 2009.

Before we begin today's meeting, please place your cell phones and other electronic devices in the silent mode, please.

As is our custom, we will open with comments from the commissioners, and Commissioner Meadows, would you like to begin?

MR. MEADOWS: Thank you, Madam Chair. I just would like to express my appreciation to my friends from Tarrant County who made it down yesterday and today for Tarrant County Day. Really, I think we all appreciate their interest and commitment to transportation issues in North Texas. Their involvement and engagement really does make a difference in the lives of all Texans who live in North Texas. And I'd also like to express my appreciation for them including me in their reception last night. It was very well attended and very enjoyable, and I certainly am going to have to say, before my colleague, Mr. Houghton, does, I certainly understand why they didn't invite him last night because he can be somewhat troublesome.

(General laughter.)

MR. UNDERWOOD: Isn't it fun to be sitting between those two gentlemen.

I just want to set the record straight. I know you see my arm and whatnot. I'm a living example of the problems of having a 16-year-old brain in a 63-year-old body; it's not a good combination. Also, Madam Chair, dealing with the stimulus package, I feel like the guy that's being strangled with a cordless phone.

But anyway, it's good to have everybody here and I'm looking forward to a good meeting.

MR. HOLMES: Welcome to everyone here, and in particular, all the representatives from Pearland. Would you stand up and give us a wave? We appreciate your being here today. That's a big contingency. Pearland is the fastest-growing city in the Southeast Texas area, 125,000 population now, biggest city in Brazoria County. It's great stuff.

And Fred, the Pearland folks did give me an egg timer which I'm appreciative of, and I'm going to pass it to you so that you can replace the smoke alarm that you normally use as your cooking timer.

MR. UNDERWOOD: Thank you, sir.

(General laughter.)

MR. HOUGHTON: What is this, Martin and Lewis, going on over here?

I want to welcome everyone. We've got a couple of groups, Judy Hawley and the TTC crowd is going to talk about their report, and I'm looking forward to that. And Commissioner Meadows, I would like to thank the Pearland folks for inviting me to their event last night. They get anything they want today. And welcome to everybody.

Yes, Whitley, sit down -- Judge Whitley, pardon me.

(General laughter.)

MR. HOUGHTON: But I look forward to discussion on the stimulus, and again, welcome to everyone.

MS. DELISI: Good morning, everyone. I know a lot of people are here for a couple of specific agenda items and I just want to let you know it's my intent to bring up agenda item 6(a), the LBJ project, at 10:00 a.m., and then agenda item 12(e) on the economic stimulus package at 11:00 a.m., so if anyone wants to manage their time that way.

As usual, 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 is not an agenda item, we'll take your comments at the open comment period at the end of the meeting; for those comments, please fill out a blue card. Regardless of the color of card, please try and limit your comments to three minutes.

Our first item of business today is item 1 on the agenda, approval of the minutes for the January 28 and 29 meetings of the commission. Members, the minutes have been provided to you 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.

Amadeo, with that, I hand it over to you to continue with the agenda.

MR. SAENZ: Thank you, Madam Chair. Good morning. Our first agenda item is agenda item number 2 that deals with reports, and Mark Tomlinson will present two very important people that have been helping us for the last few months dealing with the I-35 and the I-69 Corridor Advisory Committees, and they will present kind of their findings so far on some work that they've been doing. Mark.

MR. TOMLINSON: Good morning, Mr. Saenz. My name is Mark Tomlinson, director of the Turnpike Authority Division, and Commissioner Underwood, my friend, David Swinford, state representative in Dumas, would always tell me he did a lot of arm-twisting when he came to Austin -- I hope you weren't a victim of that.

(General laughter.)

MR. TOMLINSON: In March 2008, the commission appointed citizens to the I-35 and I-69 Corridor Advisory Committees. Those committees met about once a month for eight months, they spent a lot of time down here and I have to tell you, from the staff's perspective our approach was to try to supply what they needed and then step back and let them get to work. I would also say you brought together a very impressive group of individuals, true leaders from throughout the state and leaders in their communities, and they formed an outstanding group, with outstanding leadership of their own, and thankfully we have the two chairs of those committees with us today.

They brought a depth of knowledge about transportation and needs in their communities, and their discussions really framed what I think is the most important question facing our state in the coming years which is how do we look at the existing infrastructure that we have, that we know forms the backbone of the economic vitality of our state, and how do we transform that from what it is today, understand the needs that we have moving forward, and create a transportation system that will truly meet those needs.

So it's my honor today to first introduce the chair of the I-35 Corridor Advisory Committee, Mr. Tim Brown. Tim is a Bell County commissioner, has served in that capacity since 1995, and that gives him a great depth of knowledge about transportation, particularly in the Central Texas area. So it's my honor to introduce to you Mr. Tim Brown.

MR. BROWN: Good morning, Madam Chairman, commissioners, Amadeo. I appreciate the opportunity to be here and visit with you about this important initiative. I assume you all have copies of our committee report and that you've had a chance to look over those, and if you've not studied them carefully, I would encourage you to do so. I don't think it's a great report in the sense that we challenged ourselves with trying to find a way to articulate some really meaningful ideas and recommendations on a very complex set of problems, I don't know that we were particularly successful, but there are some good ideas in that report and it certainly reflects the work of a number of very dedicated individuals from up and down the I-35 corridor, and so I think there's some value there as well.

For the benefit of those of you who are somewhat new to the commission, I want to back up and give you a little background. These two committees follow on and I think build on the work of an earlier committee that was convened, what, three years ago, Amadeo?

MR. SAENZ: Yes, sir.

MR. BROWN: It was a statewide committee that was tasked with looking at the original Trans-Texas Corridor concept from kind of a global view, and that committee sat for two years and worked on a very broad unstructured approach, trying to look at everything that we could think of that would help us understand the needs of the state and what the original corridor concept represented. And after two years, I can tell you that we were able to reach a consensus really on only two points. The first is that we have a problem which, of course, we all know, Texas is at least two decades late getting out of the gate on addressing our massive transportation challenges. And the second thing we agreed on was that the original Trans-Texas Corridor concept was not the solution. And I emphasize that phrase that way because we thought that there were some very important tools in that tool set that still need to be available to the state to address transportation needs.

I mention this not to beat a dead horse but to kind of illustrate the complexity of the challenge that we all face. When you look at Interstate 35 as a corridor, you find, first of all, that there's a great deal of variation from one end of the corridor to the other, and I think that was really the original weakness in the Trans-Texas Corridor proposal: it dealt with kind of a one-size-fits-all proposal to solve transportation needs for Texas.

And if you go back into the corridor on a region-by-region basis, you find that the conditions are very different and the needs are very different. For instance, if you look Interstate 35 south of San Antonio, back to the Mexican border at Laredo, you'll find the traffic counts there are operating well below the design capacity of that highway and it's open, undeveloped country. So if you do have to provide additional capacity, obviously the solution there is not to build a new highway, it's to expand what you have in place.

You find a similar set of conditions in the very northern part of the segment when you get north of Denton, going on toward the Red River. When you back into the Metroplex where my friend, Judge Whitley, struggles with transportation issues, you have a very different set of problems. When you look at the interstate between San Antonio and Dallas, you have a very different set of problems.

So we've felt all along that the solutions were going to be complex, they were going to involve a combination of different kinds of approaches, and no single solution would ever suffice.

To back into the discussion on our specific committee's work, we were given a set of charges that were very specific and a timeline -- and Amadeo, I think that was very important because it kept us on task and it kept us moving. One of the first things that we were tasked to look at is the existing issues, needs and conditions that exist today on the ground. I'm not going to bore you with a lot of statistics. I will tell you that Interstate 35 is obviously one of the critical trade and transportation corridors in the mid-continent of the United States, serves not just the central corridor of Texas but much of the mid-continent of the United States. And Texas, as you are aware, is truly a global transportation and logistics hub, and with the explosion in international trade that fuels our economy, Interstate 35 is the backbone that services a lot of the major communities along it.

In looking at existing conditions, as I said, the previous committee came to the conclusion that our existing highway is totally inadequate to meet the needs that we have today, and there's no way that it's going to suffice for the continuing growth that we're going to see in Texas, particularly in Central Texas. Much of the growth, I guess 80 percent of the growth in Texas through the decade of the '90s occurred along the two corridors that we represent here today, I-35 and I-69, and certainly the vast majority of the international trade is carried by those two corridors. So doing nothing is not an option, doing nothing will have enormous negative impacts on the economies of Texas.

That brings us back to a discussion of what do we do about this monster. The solutions that we considered involve a combination of different things. We're not specific but we did come up with a set of protocols or a set of ideas that we think should govern the dialogue. The first is that we look at improving existing highway segments before we go out and build new corridors. There are too many reasons why the investment in the existing corridor should not be abandoned, should be maintained, and if we can, I think the best investment is to try to improve the existing corridor.

In some areas of the state we recognize that that's absolutely impractical, and in those areas, building parallel corridors or building reliever routes will be necessary and should certainly be considered. We believe that rail improvements will be an important part of the solution, and there are a number of different opportunities for rail. We believe that the international freight, particularly what we see coming in through Mexico, is heavily containerized, it puts a great burden on our highway system. If we can shift a significant portion of that tonnage to freight rail through rail improvements, we accomplish two things: we free up and provide for a better means of moving that freight through the state, and we also relieve some of the congestion that exists on the existing highway.

By trying to relocate rails -- and I'll get back into some of this in a few minutes, but rail relocation offers some significant advantages and opportunities, we believe. Not only will it move some of the heavy freight out of some of the most congested urban communities, but it will free up those existing corridors for redevelopment as commuter rail -- which we think will play a more important role in the future as Texas becomes more urbanized. We believe that existing right of way should always be used where possible rather than acquiring new land.

We believe corridor projects should be prioritized according to need. Again, going back to the original concept of TTC which proposed building the corridor from Mexico to the Red River, as I mentioned, in South Texas there's no rationale for doing that, there's no legitimate reason to do that. There are segments of the existing corridor that are fine as they are, there are others that desperately need work, and it's a no-brainer to say that we need to look at the most heavily congested areas and try to focus on those first.

Connectivity is a huge issue. Again, one of the weaknesses in the original concept is that it bypassed our communities rather than connect them. One of the strengths in the interstate system was it connected our major urban areas when it was conceived 50 years ago. One of the weaknesses in the TTC concept was that it bypassed our major urban areas and didn't really address the issue of connectivity. We think in order for any transportation system to function, it's got to integrate into the existing grid on the ground and allow traffic to reach the destination that they're intending to go to.

Decision-making has been criticized, I'm not going to beat that horse. We've got to do a better job and try to be inclusive in the way we develop these projects from the ground up. We believe very strongly that funding that's available, there should be no diversion, any existing funds for the existing interstate alignment should be left there. There was a fear early on that if we went out and built some new parallel corridors or parallel segments somewhere that there would be a diversion of funds and that we would begin to move away from an emphasis on maintaining our existing highway infrastructure. Regardless of what we build, the existing system that we have on the ground today will continue to serve a vast majority of the traveling public in these major communities that exist on Interstate 35.

One of the next things that we were asked to look at was funding, how do we pay for all of these challenges. Obviously, we don't have easy answers. One of the first things that we advocate is continued very concerted emphasis to work with federal leaders, because in many ways this is a federal problem. The interstate system was a national system to begin with. At the risk of being too critical, I believe that our leaders in Washington have dropped the ball and done absolutely nothing to help us in the last two decades on trying to maintain and improve our critical national infrastructure. It is truly a national problem because international trade affects not just Texas or not just some region in Texas but the entire nation, and the fact that some of these key corridors bear the major brunt of the trade that feeds our entire country, it is a national problem.

Again on rail issues, we feel like there are some opportunities for capitalizing the Rail Relocation Improvement Fund. As I said a minute ago, there are opportunities there that we think accomplish several things at once. Interestingly, there may be some opportunities with some of the stimulus dollars that are coming down to work that same way. I think some of the high-speed rail money could actually qualify for some rail relocation projects if those projects are structured properly.

We believe that creating a task force to work more closely with the private sector -- as you know, one of the real challenges we have with rail is the fact that it is a private industry, and finding ways to work with that industry are a real challenge that we're going to have to figure out how to deal with here in Texas. I'm going to skim through. The bottom line on the funding, we don't want to leave any tool off the table.

One of the other segments that we were tasked to look at is the impacts and the benefits for local communities, and this gets into an area that becomes very political and also gets into some of the really sticky little points that we dealt with. As we all know, transportation can be an enormous benefit for economic development. If we look at the growth in our major urban communities in Texas since the creation of the interstate system, it's very clear that the fortunes of many of these major urban areas in Texas were tied very closely to their proximity to the transportation infrastructure, and as we make decisions about improving or creating new infrastructure, the opportunities for economic development are certainly there.

At the same time, there are risks to be faced as well. Sometimes relocation will create a new opportunity for economic development over here and place the existing business community at an economic disadvantage as traffic patterns begin to shift. Small communities particularly in rural Texas, are very sensitive to the idea that major transportation developments may affect their lifestyle. We've seen tremendous opposition in my backyard among small rural communities to the creation of a new parallel corridor that they think will hurt them. I think it's problematic to try to figure out a way to turn that around and to make a positive out of that.

We were intrigued with the model that we've seen right up the road here at Hutto, a small community that had some very farsighted leadership and some very sophisticated planning, and took advantage of the creation of the 130 Loop around Austin in a phenomenal way and has proven themselves to be a wonderful model for what can happen with a small community, given the opportunity with new transportation infrastructure.

We believe that, as I mentioned earlier, connectivity is a very important issue, continuity is another, preserving the integrity of the existing transportation system we have on the ground is enormous, and it's particularly true in the urban areas where people are not worried about getting on the highway and going to Dallas or going to San Antonio or somewhere else, they want to get across the road and go to their pasture over there or run into town to get a loaf of bread or whatever it happens to be. They don't want to be inconvenienced and have to go out of their way to do so.

There is a lot of work, I think, still to be done on how we will establish certain standards for what we do with existing road networks as we step out and have to build some new infrastructure out in undeveloped areas. We think that public-private partnerships should share some of the cost in providing connectivity. That was a concept that we talked about early on, we didn't get very far with that, but for instance, if we're going to have a CDA with a vendor who is going to come in and build a new corridor, we think that if there are critical connections that have to be built to tie back into existing communities just off that corridor, that some of that cost should be shared by that developer as far as the CDA. In many cases, the smaller communities are simply without the means to address those kinds of needs.

Coordination with local groups, again, is a very critical part. We spoke with representatives of the Farm Bureau Association about some of the issues affecting the rural communities out there. It's a very volatile issue and it's a very legitimate issue. When you build a corridor that separates agricultural land, sometimes you place an ag operator at a tremendous disadvantage just being able to move heavy equipment from one side of the highway to the other. That's something that needs to be coordinated and thought through very carefully. We can't dismiss it on the basis that it only affects a handful of people; the fact is it affects an industry, and so we can't lose sight of that.

Public involvement, again we've hammered on that, and I know that you've heard it. One of the reasons that we backed up and started this process over is because the perception early on was that this was a top-down process that was driven by a concept that was hashed by a handful of individuals without proper acknowledgment of the role of local planners, local communities, local leaders and the public at large. So I can't emphasize too much the necessity of trying to involve the local communities and the public at every step of developing these projects.

I'm going to flash through this. I'm going to close with backing up into some of the things that we started with. It's impossible to talk about where we are now without talking about what we did wrong in the first place, and that's the reason I opened my comments that way. I think that the most important point at this point -- and I think this is why we're here today, Amadeo, is breaking this thing down and starting over and looking at it in discreet bites is the way we're going to get something done. I understand that the next step that is already underway is creating segment committees that will break these corridors down into smaller bites, reconvene people from those specific areas. I think that's a great step and I think this is the appropriate process that we need to go through to try to figure out the right way to solve these problems.

I commend you for being sensitive to the interests of the State of Texas and the political -- I hate to bog down in the negative stuff -- but there's been so much out here that it's just almost impossible to get anything done, and the only way we can do that is just go back and try to be inclusive, and that's what you're doing. I commend you all for that.

I'm just going to wrap up with that. I'd be happy to answer a question or two if you have anything, and if not, I'd be happy to come back.

MR. HOUGHTON: Commissioner, I want to, first of all, thank you very much for your service. I appeared before your committee on many occasions, and it was fun, I enjoyed the back and forth, and you all did a lot of work, and there were a lot of issues that got vetted out, and I think your comments regarding the segment committees is appropriate and I believe it's the way to move forward with the corridor design is get the local input and the cost benefit analysis of all of that. I find no argument with anything.

We had a 2030 that talked about statewide transportation needs. People have had a price tag to the 35 Corridor, again, if you have a parallel but we don't know if it's going to be parallel, it could be a looping system, it could be whatever. But I truly want to thank you for taking your time doing this because it has been long and arduous but very beneficial.

MR. BROWN: Well, thank you for those comments, and I was remiss, I have a couple of my committee members here today and they drove down to offer support. I didn't introduce them early on, but we did have a good group of people who came in and dedicated their time, and, again, I think that there's some value in that report.

I did not touch on the one segment that there was a listing of specific projects. Since we were a committee made up of individuals from specific communities, everybody wanted to get their pet projects, and we tried to be very judicious about that, but the fact is that there are some very important local projects that are listed in there and those, I think, are all consistent with what you'll find on the MPO listings for those various communities, and it might be useful. I think it was a prioritization that we did looking at it from the committee level. So again, I just wanted to point that out.

Anything else?

MS. DELISI: Thank you, Commissioner, thanks for all your hard work.

MR. BROWN: Thank you.

MR. TOMLINSON: Our next presenter is a former state legislator and in that capacity she was heavily involved in transportation issues here. Currently she is a commissioner for the Port of Corpus Christi, and served as a great leader on this committee, was a tremendous asset to the committee, and by virtue of that, to TxDOT. So at this point I'd like to introduce Judy Hawley.

MS. HAWLEY: Good morning. Thank you for the opportunity to share our report with you. We're looking forward to doing this.

I want to thank the commission for authorizing, seeing the need for a committee like this, and I'd like to take this time to introduce David Garza, Jim Gonzales and Alan Clark, who are here from our committee. We were 17 very diverse people. Look at the back of the book there, you can see that we spanned the whole coast of Texas, the border communities, from Texarkana to Brownsville, McAllen, all of the ports. So you can see it's a very large and diverse group from lots of different backgrounds. That made the committee's work a lot richer, and I think it provides more value to you as a commission because the recommendations in this report are a consensus of that group.

I also want to thank the district engineers and Amadeo, Steve, Mark, Gaby, all those people that provided support to us as we've prepared this report.

One of the things that was most interesting as we converged was that we had very different perspectives on the needs, and so the process of putting this report together allowed us to do what I think you wanted us to do: be honest brokers, provide you thorough, thoughtful feedback on where we need to go with transportation planning for the I-69 Corridor, and I think that we have done that with these recommendations.

The first thing I'd like to say before I start is that one of our beginning points was we recognized that we are the number one maritime state in the nation. Ned, you know that. You know, Jim Edmonds served on our committee, we spent a lot of time talking about our ports, port capacity, and the ability of our system to move that capacity in and out of the State of Texas. We spent a lot of time talking about our border ports and the ability to move that capacity through those ports, serving Texas, in and out of Texas, and especially for the use of Texans. So before we even get into the heart of this, I-69 is not about moving freight through Texas, it is about moving freight -- it's about commerce coming into Texas, going out of Texas, and from our perspective, primarily serving Texans.

We have six ports in Texas that are in the top 25 in the nation in terms of cargo. We have some statistics in there that certainly we encourage at your leisure. We did not have the time to devote to the freight coming through the border communities, the time to include that and the resources to include that in this report, and that's one of the things we suggest we spend some more time looking at for the follow-on, because I think those numbers, as you start to explore those numbers, it's going to be very compelling, again, the need for this freight corridor.

Our charge was the same as the I-35 charge, and we'll skip onto that -- here's the charge. Recurring themes, and this is where I congratulate the commission and I also congratulate TxDOT in that you were very receptive to our suggestions, and a number of those have already been incorporated into you philosophy and your way ahead.

Remove the moniker "Trans-Texas Corridor" from the project name. We found that it provided an almost insurmountable stumbling block for us in moving forward, and we are so grateful to you that you took the suggestion from many of us that that not be part of what we were about, because we felt very strongly that concept had been replaced by other kinds of concepts, and it made more sense to move forward. Using existing right of way, you all have made a number of statements to establish your intent to do that.

Early in the planning process, engage stakeholders, we are an example of that, the segment committees are an example of that, and we congratulate you for your responsiveness there. And protect private property rights and compensate fairly, I-69 goes through primarily rural areas and obviously there were a lot of concerns about how that was going to impact property rights.

Committee conclusions. I've organized our report a little bit differently than Tim did, and I'm going to share with you those items on which our committee members had consensus. The first one, I-69 is the vital artery. We recommend that it is a critical artery right now to connect the ports of entry with each other and the rest of Texas and the nation. The second addresses the current urgency for additional road, rail and port capacity. It's a multimodal system and we can't enough how all of those not only the financing tools have to be included in where we move forward but also all of the modes have to be included in where we move forward.

I-69 will optimize ports capacity and distribution efficiency. It will make Texas the hemisphere's most competitive location for moving freight, and that's absolutely critical as we move forward. Reduces logistics costs for Texas industries, retailers, importers, exporters, distribution centers, agricultural interests, and the list goes on and on -- it's about economics. And I-69, primarily a freight corridor, will provide environmental and congestion relief for Texas as well, and we would like to pursue that in sort of our next charge, and I'll visit with you about that a little bit more later.

I-69 can be the template to incorporate innovative technologies. Universal freight shuttle was a very impressive concept for us. Prototype is to be built and we have high hopes that this will enable us to move freight very efficiently with a minimal footprint and serve just in time delivery needs of our retailers and distribution centers.

I-69 should be an interstate type facility -- we've already had discussion on that. International coordination was one of the things that we felt was extremely important to consider, and it's an area that we'd like to explore further in our next stages of recommendations, coordinating with Mexico, especially, on those border crossings, make sure that we're optimizing our efficiency with our southern neighbors.

Improvements have to be a systematic approach. Again, multimodal, it is a system, it's not a series of individual communities. I've used the analogy that came from one of my committee members that I-69 is a string of pearls, and the string is I-69. Without that you have a handful of pearls, you have Houston, you have Corpus, you have Victoria, you have McAllen, you have these little isolated areas that are sort of linked together but you don't have a major interstate connectivity for that entire corridor -- extremely important.

Committee conclusions, again, communities, through their segment committees and other stakeholders, should be fully engaged -- following up on what Tim said about the 35. Local connectors, we had a lot of concern about making sure, again, the segment committees can bring that piece in, what local connectors need to be included in the planning process.

Projects currently on MPOs and in transportation plans should be prioritized and built quickly, and we are seeing that you all are addressing that in a lot of your work over the last few days. And improvements must include projects on 59 to 81, 181, 77, 44, other connectors so we have a contiguous facility. Again, it's not about having pieces of a system, it's about having a contiguous system.

Population growth, this kind of ties in with what Tim was talking about: what's the impact on the communities? We know, without a doubt, the proximity to an interstate brings economic value for a community, there is no doubt about that. And we looked at it from a little bit of a different approach, our approach was what does a community need to do to prepare itself to capture the value that proximity to an interstate brings. And we had the Hutto people come in to our committee as well, very impressed with the way they had some foresight in planning and zoning, in planning for their school district's expansion, in planning for increased services, police services, fire services, all those kinds of things which come with an exponential growth which would coincide with being proximate to an interstate. So they had those challenges but they also had those opportunities. And we have a role through this advisory committee, through the segment committees to enable and help communities prepare for capturing that value.

Committee conclusions, we address a little bit of the funding. That wasn't our charge but we could not discuss moving forward with I-69 without weighing in on some of the options that were out there, and the legislature is in session, you all are spending long, agonizing hours looking at funding. Authorization is underway now in Washington, and we just encourage everyone to be at the table for any possible funding tool or funding source, and we will be delighted to work with you in any way we can.

Next steps, and this is what we see as where we need to go to serve Texas, to provide you with information that will be of value to you as you move forward with your decision-making over this next year, and to support getting I-69 built.

One of the things that I cannot leave you without saying is that I-69 should be a priority for Texas. Freight corridors have long been the stepchild of transportation funding, and they have been because of the necessity, the huge demand for safety, congestion relief and all of the other pieces that weigh into our transportation system priorities. But that does not mean to say that I-69 should not be built as quickly as possible.

Our next step, we believe, should be to show the cost benefit of having I-69 completed, and we would like to assess the economic impact of I-69 on statewide manufacturers, industries, agricultural producers, retailers, truckers, taxing entities, et cetera. 2030 was a wonderful report. You all did not have the time to flesh out the freight component of that to the degree that we would like to see that fleshed out, and so moving forward with assessing how that movement of freight impacts the economic vitality of the State of Texas we think is a critical next step.

Again, Ned, you know very much from your history how that impacts not only your corridor, your city, but it impacts Lubbock, it impacts Abilene, it impacts all the rest of the state, and we think there's a very compelling argument -- case -- I shouldn't use the word argument -- case to be made for all of Texas to see the value of having that corridor in place for their economic vitality.

Quantifying, we touched on this and we began to learn that having a freight corridor in place does have tangential value for relieving environmental and congestion issues in other urbanized areas. We didn't really have a chance to quantify that, and I think that would be of value to you to have some sort of substantiation of what that provides especially your urbanized areas.

We feel very strongly that it's important for us to collaborate, to incentivize, to work with, to do everything we can to support your newly formed segment committees. We've got one, I think, in our area that's going to do their initial work in April, and we feel that it's imperative that we share with them our perspective and support them in whatever way we can. We are open to exploring and assessing funding options and working with you and TxDOT in whatever capacity we may do for that.

We would like to develop recommendations for facilitating community opportunity impact planning. Hutto was fortunate in that they were fairly proximate to Austin and there were some Austin groups that wanted to provide them support. Communities that are not so close to an area like Austin are not going to have that advantage of those services, and we think that good planning for these communities is going to entail giving them some guidance, giving them some resources in terms of other agencies. I focus on preparing that way and we would like to be part of that process. And then finally, we see our role is developing any additional citizen recommendations for you all, as you need or as you request, so we truly are at your service.

I commend our committee. They were diligent, thoughtful, agonizingly responsible in the recommendations that they wanted to bring to you, took their jobs very, very seriously. And in response, I want to congratulate you and thank you for your trust and for your responsiveness to the suggestions that collaboratively this group has made. Thank you.

MR. HOUGHTON: Judy, again, as I said to Commissioner Brown, the work that you did was yeoman's work and a labor of love, I know on your part personally because of the Corpus Christi area. And one of the things that's indelibly etched in the image I have of a meeting you had in that back room is you had a map of Texas, the 69 Corridor and all the committee members around, you had a facilitator, and as you started in Brownsville talking about the needs, they were putting yellow post-its with notes all the way up the corridor as to the needs. So these committee members took their charge very seriously and I want to thank you all and the committee for that.

And I hope that you and Commissioner Brown will stay engaged in the segment process because that's where the rubber is going to meet the road -- with no pun intended. But thank you very much.

MS. HAWLEY: You're certainly welcome. And again, we're looking to you for guidance on the way ahead, so as we may be of service to you and to the commission and to TxDOT, use this resource. You have some incredible, dedicated transportation groupies that are ready to weigh in because we all care about what happens to I-35, I-69 and transportation in Texas in general. So again, thank you for your service and we will stand by.

MR. HOLMES: Judy, I'd like to add my thanks as well to both you and Tim and your committees, and I'm very encouraged that you're going to stay involved with the segment committees because there's quite a lot of work to be done. We're really just kind of early days. And I also want to commend the leadership from Corpus down to Brownsville for their foresight in exempting that from the moratorium so we can actually help progress that segment. I think the segments north of Corpus are more challenging and the help and guidance that the segment committees will give and that you and your committee can give are much appreciated and needed.

Some of the items on the stimulus will actually help move that along and will provide a little bit of impetus to maybe make it move a little faster. Thank you.

MS. HAWLEY: Absolutely, and I think once we do, as you said, the rubber meets the road, but as we start to get projects under construction, that greatly encourages and sustains those of us who have been volunteering, obviously, to move these projects forward. So yes, thank you for your astuteness in that, and we look forward to getting these corridors built. Thank you.

MR. HOLMES: Thank you.

MR. HOUGHTON: One more question of Mark. Follow up on the segment committees, where are we in that process, are they all fully impaneled now in the segment committees?

MR. TOMLINSON: No, sir. We have rules we're bringing before you today to add additional entities, and we do have the ability of adding entities. We're about 75 to 80 percent filled on the segment committees, and these rules will allow us to go ahead and fill most of the rest of the spots.

I was just going to ask, with your permission, there are a number of committee members from both committees here with us today, and I'd like to ask them to stand and pass on my thanks to them. They are all leaders in their organizations and their communities and they're all very busy people. They spent a lot of time with it, so I'd like to ask them to stand and pass on my thanks for their participation in the committee. Thanks very much.

(Applause.)

MR. SAENZ: Tim, Judy, thank you for being on the committees and for leading the committees, you've done great work. We look forward to continuing to work with the committee members -- we've just begun.

Moving on, commissioners, to the next item, I'm going to have Dave Fulton come up and present a minute order dealing with our award program for federal projects in aviation.

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

This minute order contains a request for grant funding approval for three airport improvement projects. The total estimated cost of all requests, as shown in Exhibit A, is approximately $8.9 million: approximately $8 million federal, and $900,000 in local funding. A public hearing was held on January 23 of this year; no comments were received. We would recommend approval of this minute order.

MS. DELISI: Are there any questions?

MR. HOLMES: So moved.

MR. UNDERWOOD: 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 items 4(a) and 4(b), Eric Gleason, director of our Public Transportation Division, will present two minutes orders dealing with public transportation funding.

MR. GLEASON: Good morning. For the record, I'm Eric Gleason, TxDOT director of Public Transportation. Agenda item 4(a) awards approximately $3,676,000 of federal funds under the Federal Transportation Elderly Individuals and Individuals with Disabilities Program, ' 5310, and $449,408 in transportation development credits for various public transportation capital projects. The amounts in this minute order are consistent with the published FTA apportionments based on available funds under the current continuing appropriation resolution.

The formula for allocating 5310 funds is established in Title 43 of the Texas Administrative Code, Section 31.31. Following a reduction for state administrative expenses, the remaining balance plus unobligated funds from previous projects is allocated to all 25 TxDOT districts for the selection of projects. The award of transportation development credits is consistent with the commission's intent to make development credits available to support fleet replacement, fleet expansion and capital projects supporting the coordination of services. The ' 5310 Program was envisioned as one of those programs consistent with this intent.

The districts are responsible for public involvement and completion of a transit planning process to establish a network of transit services for elderly individuals and individuals with disabilities in their respective areas. Projects are selected based on the need for service, available funding, cooperation and coordination with area stakeholders. Projects recommended for funding are listed in Exhibit A.

Over 135 providers operate services for elderly and persons with disabilities in Texas. Last year these services carried over 1.2 million riders and traveled almost 7 million miles. Sixty-three of these providers are included in this award. These services are an essential element of regional service coordination plans and stakeholders are actively engaged in each of the planning areas across the state.

We recommend your approval of this minute order.

MS. DELISI: Any questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. GLEASON: Agenda item 4(b) awards $48,659 of federal ' 5304 State Planning and Research Program Funds and $12,165 in state match to the Midland-Odessa Transportation Organization, MOTOR, to finance a feasibility study of public transportation service between and around Midland and Odessa. The urbanized area operator, Easy Rider, is working with an intercity bus carrier, All Aboard America, on potential service between Midland and Odessa.

We recommend approval of this minute order.

MS. DELISI: Any questions?

MR. HOLMES: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. GLEASON: Thank you.

MS. DELISI: Thanks, Eric.

MR. SAENZ: Agenda item number 5 deals with the promulgation of administrative rules, and I have Mark Tomlinson who will present rules dealing with Segment Committees for final adoption, and Mark, you've got six minutes to stretch it so we can make it perfect timing to ten o'clock for your next item.

MR. TOMLINSON: Okay, I'll try to hit that mark.

This minute order proposes the adoption of amendments to add entities that the commission may designate for the Corridor Segment Committees. It also allows for the addition of individuals to be placed on these committees as well. I know you remember previous conversations as we began to consider representation on Corridor Segment Committees, we went through a two-phase process. We included in the first phase counties and MPOs, then came back and added cities, economic development corporations and chambers and ports, and then the decision was made to add additional entities, and these entities could be entities like other cities who were not on staff recommendations previously, like St. Hedwig's near San Antonio. Also other groups like the Farm Bureau, the City of Holland was on the original city list but declined and we've had subsequent conversations with them to encourage them to come back and participate in the segment committees. So it's that type of sorting out we'd like to do if the rules are approved.

The change gives you the flexibility to add members to the segment committees that represent a wider range of entities, many of which have special interest in transportation in the areas that the segments cover. So we think having these members will add to the richness of understanding of need and understanding of transportation in those areas.

The proposed rules were posted for comment; that comment period ended on February 2 at five o'clock; we didn't receive any comments. So to fill here, I would tell you currently we have on the I-35 Corridor Committees there are four Corridor Segment Committees on I-35, five on I-69. Of the total seats that we have designated -- and keeping in mind we have a couple of seats left on most committees but of the ones that we have previously named entities, we've filled about 77 percent or 64 of the 83 on I-35, and 86 of the 105 on I-69 or about 82 percent.

So if the rules are passed today, we need to come back to you next month with suggestions for additional entities and individuals, and in between time we'll hopefully work out the additional folks previously named and get them onboard for service there. We do have a tentative schedule for proceeding with organizational type meetings in mid April, and if everything falls into place, we hope to do that: have two meetings for the entire I-69 Corridor, one in Corpus and one in Nacogdoches, and arrange the segments around that, and then two for the I-35 Corridor, one in San Marcos and one in Arlington.

After those first meetings, we'll probably then meet in their actual segment areas, cities or different locations within those segments, but we thought it would be important to kind of get everybody started out with the same basic understanding of their mission and what we'd like for them to accomplish.

So I'll be happy to answer any questions for about two minutes, but we would recommend your adoption of this minute order.

MR. HOUGHTON: Let me ask you something, Mark. How many of the people on the original I-35/I-69 will morph over to the segment committees?

MR. TOMLINSON: I don't believe that any will, although it's been our thought that we would definitely involve the Chairs and other advisory committee members as they would choose, kind of in an informal way.

MR. HOUGHTON: I'd like to know can we more formalize it from the standpoint that you don't want to lose that intellectual capital that it has created, because they bring a wealth of knowledge, the members that have participated.

MR. TOMLINSON: Absolutely, and you make the excellent point that we have felt strongly there needs to be a transition between the advisory committees and the segment committees.

MR. HOUGHTON: As a recommendation for your kickoff event, the commissioner closest to that city, like Corpus, a Transportation commissioner ought to attend to kick that off. Personally I think that would be a good recommendation. Like Corpus is close to Houston.

MR. TOMLINSON: I'm waiting to hear a second.

(General laughter.)

MR. HOUGHTON: I have been very involved but I'm willing to pass that baton, and you know, the I-35, there's a commissioner in Fort Worth that may be available. I would think that that would be something to paint the picture, and I know Commissioner Meadows is fast and hard about the issues on I-35, and I would think he would be a great spokesperson to kick that off.

MR. TOMLINSON: I would certainly agree.

MR. HOUGHTON: Just a recommendation.

MS. DELISI: Any other members of the commission have any recommendations for Commissioner Houghton?

MR. HOUGHTON: But again, I think it's very important what you're doing. I think this will go a long way to determine what these assets will look like.

MR. TOMLINSON: We agree.

MS. DELISI: If there are no other questions.

MR. HOLMES: So moved.

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MR. HOUGHTON: And it's ten o'clock.

MS. DELISI: And it's ten o'clock.

MR. TOMLINSON: Exactly.

MS. DELISI: Let's get started.

MR. SAENZ: Thank you, Mark.

Agenda item number 6(a) concerns a CDA for the I-635 project in Dallas, otherwise known as the LBJ project, and Mark Tomlinson will carry us through this project.

MR. TOMLINSON: Again for the record, my name is Mark Tomlinson, director of the Texas Turnpike Authority Division.

In the past few days there was speculation that the stimulus program might overshadow the award of the LBJ CDA that was internal at TxDOT conversations, at least, so I guess I'm the only person in TxDOT who's glad we postponed stimulus for a week because the accomplishment here, I think, is dramatic and is deserving of recognition.

The existing LBJ Freeway, as it is today, is composed of four general purpose lanes in each direction, one interim HOV lane in each direction, and then two- to three-lane discontinuous frontage roads in each direction. Proposed in the CDA is to completely reconstruct all four of the general purpose lanes in each direction to make continuous, and reconfigure/reconstruct, make continuous the two- to three-lane frontage roads in each direction, and then add three managed lanes or six total lanes of new capacity in each direction, and that is particular to the segment there that is circled or highlighted.

Down on the I-35E portion, the proposal is to add two elevated managed lanes in each direction, add four one- to two-lane managed direct connectors at Loop 12, and then add sections of frontage road as well. In the I-35E/I-635 interchange is proposed to add four additional two-lane managed direct connectors there. And then finally over near North Central Expressway, the developer will reconfigure the eastern entry/exit points and add some managed lane equipment for tolling in that area.

LBJ is the top priority project in the Dallas District, it's the most congested corridor in Dallas County. This corridor was originally opened in 1969, designed for 180,000 vehicles per day; existing today they carry about 270,000 vehicles a day; in the year 2020 which is only about five years beyond the schedule for opening the facility that we have today, it's projected that the corridor will carry almost a half a billion vehicles a day. The CDA anticipates capital improvements of about $2 billion that's mainly construction, operation and maintenance of $1.5 billion, and if you add in taxes, financing costs, it's about a $4 billion project.

Historically, this project has been discussed and developed over decades now. My understanding is that through public involvement and local input, the general decision was made that they couldn't stand much of a broadening of the corridor, really couldn't widen too much outside the existing footprint, the idea of elevating lanes in that area was not accepted, so the concept has been to depress the new capacity either through a tunnel system or through a trench section with some cantilever overhang. This vision up in the upper right-hand corner is what is shown in the proposal of the developer that we bring to you today.

And it, again, is roughly estimated at a $4 billion total project cost. At the same time, cobbling together numerous state and local, federal funding sources, there was only about $700 million in public funding available, the bulk of that coming from Category 2 and then $200 million from the State Highway 121 regional toll revenue, but many other sources of that to make up the remainder including the City of Dallas, DART, and a number of other TxDOT funding categories. That is the essence of the CDA: we had $700 million we wanted to build a $4 billion asset.

The history of the procurement, we have used the local RTC managed lane policy. It was incorporated into this CDA as it was into NTE as well. Again, the request for proposals was back in September of 2007, so about a year and a half later, after much work and much interaction between TxDOT and the developers, we received two proposals on January 2009 and today bring to you a recommendation for the apparent best value proposer.

The two proposers, two consortiums, both partners, both proposers are a combination of both foreign and domestic firms, some Texas-based firms in there as well. The LBJ Development Partners is led by Cintra, Meridian, the Dallas Police and Fire Pension System is a possible member of this consortium as they are in the North Tarrant Express as well, and then this is a partial list of the other firms, there are others. And the other proposer is a group led by ACS, Meridian, Kiewit and Zachry, and again, a number of other firms there was well. We received those two proposals on my 50th birthday, and so that was a pretty nice present -- I got a tie too -- not from them.

(General laughter.)

MR. HOUGHTON: Two hundred fifty bucks for that tie?

MR. TOMLINSON: You'll have to ask my wife.

We had pre-established, just like we did on NTE, rigorous evaluation procedure to evaluate the proposals with. We had separate and concurrent pass/fail technical and financial evaluations. The subcommittees brought their recommendation to our ESRC, Evaluation, Selection and Recommendation Committee, which brought a recommendation forward to the Project Steering Committee.

We also wanted to make this process as transparent as possible on a highly confidential, high stakes, high dollar procurement, so we did bring in a number of observers from outside of TxDOT that are Highway Administration, Office of Attorney General, City of Dallas, City of Farmers Branch, Addison, North Central Texas Council of Governments, and TTI were all very active in working with us and observing the process throughout from start to finish.

The best value scoring is based on a 100-point system, it's very similar, again, to NTE: 80 points based on price, 20 points on the technical evaluation, and so price is going to most likely dictate the selection. The apparent best value proposal we bring to you today -- you remember we had $700 million in funds available, they propose only using about $445 million of that total so a little over $200 million will be left for use in the region on other projects. The leveraging of that approximately $445 million will be leveraged into a $4 billion project for LBJ. And for comparison, the other proposal required about $1.82 billion in public subsidy -- of course, we didn't have that much and so the choice, as it unfolded, was really pretty clear.

So our recommendation to you is to select the LBJ Development Partners, a group, again, led by Cintra and other foreign and domestic companies that we think are very well suited to deliver this project.

Just as a reference for comparison, even though we had competition in the procurement, we had our financial advisors develop a comparator bid, if you will, envisioning how TxDOT would do this project if we undertook that direction, and it essentially felt that we would need the entire $700 million public fund subsidy. Our folks thought that we could generate about $300 million in revenue bonds, TIFIA and other financing, so that would leave us about $1 billion short in needed gas tax subsidy which was not available. And another key factor is under that scenario we would absorb all the operation and maintenance costs over the 50-year time within TxDOT which would also be a huge challenge for the Dallas District.

So the CDA does include the 45 years of operation and maintenance of both the tolled and non-tolled, free to drive on lanes, and that's a lot of infrastructure there. We'll have interoperability, any tag that can be used on a Texas toll road today can be used on this road. And at the end of the concession term, of course, there are hand-back provisions that require them to give us back the road in good condition.

Tolling policy, we talked about it last month with NTE. The goal here also is to maintain that 50-mile-an-hour operating speed so the toll will change and go up and down throughout the day based on traffic on the road. The estimates -- and these are estimates only; they come from the financial model of the winning proposal -- foresee a minimum toll of about $1.95 for this 13-mile trip at the day of opening in 2014-2015, and then a maximum toll of about $7. I should note that the RTC policy does allow a toll up to $11.25, but the model, as it exists today, doesn't foresee going up that high. The NTTA will provide all our toll collection services as well.

So our next step, if we are able to gain approval today, there is a public hearing that's required to talk about the project in terms of the CDA that will be held in the Dallas area. We need about 60 days to negotiate final terms of the CDA, we have to have concurrence from FHWA, concurrence from the Attorney General's Office, we have to have approval from the Legislative Budget Board, and concurrence by the State Auditor's Office. I mentioned the public hearing, and finally execution of final close to the CDA, so we hope we can start construction as early as late 2009, possibly 2010, about a five-years construction schedule, so hopefully around 2015-2014 the project will be open for use.

We'd just like to mention it is a huge project and takes a lot of effort over years of time and so we have a number of people. The Dallas District, of course, are our leaders here. This project really does begin with leadership of Mr. Saenz, Mr. Simmons, Phil Russell, our Dallas District engineer, Bill Hale, James Bass here, our CFO, Jack Ingram of OGC. But here are other members that played various different roles, and I have to note Ed Pensock, John Munoz, Bob Brown from the Dallas District, as well as John Hudspeth, the project manager, just worked tremendous number of hours throughout this entire time to bring a great, I think, project to fruition. But there's all the other folks within TxDOT different divisions and the Dallas District that were involved.

So finally, we would recommend award of the CDA as we described. We'd like to point out that as of your approval, the proposals and the CDA contract itself will be posted on our website. The Dallas District has a great website for project information and it's listed below there if anyone would like to see more information on the project. So I'll be happy to try to answer any questions you might have, but we would recommend award of this CDA.

MS. DELISI: Are there any questions?

MR. HOUGHTON: Here we go. Last month we awarded NTE. What was the total project cost of that?

MR. TOMLINSON: About $2-1/2 billion.

MR. HOUGHTON: How much public funds were in the NTE?

MR. TOMLINSON: $600 million.

MR. HOUGHTON: And this one is a $4 billion project.

MS. DELISI: And we have $445 million that they're proposing to use.

MR. HOUGHTON: So we've got a billion we're paying to get how much?

MR. TOMLINSON: That would be about $6-1/2 billion worth of infrastructure.

MR. HOUGHTON: So one gets you six. That's a nice ratio. Congratulations.

MR. TOMLINSON: Well, it's thanks to all the hard work of folks I listed on that one slide.

MR. MEADOWS: Just a couple of observations to follow up on that very good point because it is remarkable leverage that yields to the citizens we serve such expanded capacity. And what's interesting to note in all this is when you really look at the project design and scope, at the same time as you've got managed lanes, you also have significant improvement of free capacity, and I think that's important to note as we go through this process because there is going to be focus on toll.

But the fact is that if you look at the scope and you look at the expansion of the access road and if you look at reconstruction of the free lanes, you have an improvement in free capacity at the same time as you have the toll option, and at a point in time -- and I think the slide that you had that illustrates the fact that, candidly, we don't have the capital capacity to deliver these projects, period, and through the appropriate leverage of state funds, we're yielding $6-1/2 billion worth of projects in these two projects alone in the 30-day period through your good work and everybody else involved.

I think the citizens of North Texas are going to really benefit greatly from your efforts, and I appreciate it.

MR. HOUGHTON: I'd like to put a few things, Mark, into perspective. We've worked long and hard and our staff has and we're very appreciative of the efforts of our congressional delegation, especially Congresswoman Eddie Bernice Johnson, the fact is that we'll get $2.7 billion, this one will yield us $6-, in two months. Now, we've put a lot of years into these projects, they've been waiting around a long time, but I'd like to put that into perspective that I think that we in Texas are moving fast and are using all the tools available to us allowed by the Federal Highway Administration and the U.S. Department of Transportation, and this ought to reflect that we are using those tools.

Where is the winning bidder -- not yet, they're not winning yet, we haven't voted. Nicholas or Jose? Nicholas doesn't speak in public, I noticed. He's over there, I can see him. Come on up, Jose -- either one, I don't care. I'm going to ask you the same question I did the last time. We talked about this seems to be, Commissioner Meadows, a full employment act for North Texas.

When you look at the number of professionals, engineers, designers on these things, Jose, how many people are you looking at over a five-years period?

MR. FUENTES: Yes, it will be generating on peak times in the construction there will be 400 people, but all the suppliers and companies around we plan to use, between 100 and 140 Texas and mainly Metroplex companies that will put together about 1,500 to 2,000 people for seven years of new jobs.

If I may, it's sometimes forgot that we have to fulfill DBE obligations that TxDOT imposes to all their contracts which is barely 12.25 percent of these have to go to DBE companies mainly in the area, and also some training for underdeveloped companies related to construction. And also, if I may, some size of this project that is sometimes forgotten, our customers, our future customers. Our traffic experts are planning that there will be no less than 2 million hours of commuter time saved per year given the actual traffic levels.

MR. HOUGHTON: Well, on the DBE issue there's a big advocate up there that I know well that I've worked with on Loop 9; his name is Commissioner John Wiley Price.

MR. FUENTES: Actually, we were talking, you and us, we were talking to Commissioner Wiley Price four years ago. We know this is very dear to their commission.

MR. HOUGHTON: It's near and dear to his heart, and I would hope that you would communicate with him.

MR. FUENTES: Yes.

MR. HOUGHTON: He's a great person and he is very focused on what transportation assets can do for a region.

MR. FUENTES: We were impressed in that visit that we thought we were going to a normal city council where they have their needs and they want to explore. They were very prepared and Commissioner Price was incredibly vocal and forward on this project.

MR. HOUGHTON: He's a true advocate and a good friend to transportation. Thank you, Jose.

MR. FUENTES: Thank you, sir.

If I might add, with these figures here, you can understand we didn't have time to even buy a tie for our friend, Mark -- even if it were legal.

(General laughter.)

MS. DELISI: Are there any other questions, commissioners?

(No response.)

MS. DELISI: With that, is there a motion?

MR. MEADOWS: Move approval.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. HOUGHTON: Congratulations.

MS. DELISI: Congratulations.

MR. SAENZ: Thank you, Mark, and thanks to all the TxDOT employees that worked on this project, all of the financial advisors and legal consultants and tax consultants and everyone that worked on it. You all did a yeoman's job and I appreciate it. Thank you very much.

Agenda item 6(b), Phil Russell will present a minute order that will authorize us to execute the project development agreement for the State Highway 161 between us and NTTA.

MR. RUSSELL: Thank you, Mr. Saenz. Good morning, everyone. For the record, I'm Phil Russell, assistant executive director for Innovative Project Development.

As Mr. Saenz said, the minute order before you would authorize entering into a project agreement on State Highway 161. Just to provide a little backdrop to it, there will be several more minute orders that will be coming your way in the intervening months. There are really two project agreements that we will need on 161. The first one, of course, is this one, the project agreement which provides for the responsibilities and the sharing of responsibilities on the development of the 161 project. Mr. Bass will be coming back to you probably in the summer to bring the financial assistance agreement. I believe you all gave Mr. Bass a preliminary approval last October and he'll be coming back to you in the summer to get the final terms and hopefully get that approval.

There will be a few other minute orders that will be coming your way on this particular project. Next month we anticipate we'll be coming forward with a minute order which would authorize the NTTA to actually do construction work on the state highway and connect to the state highway -- it's something that's required under statute.

As these projects, these individual pieces -- for instance, the piece from 183 to I-30 and I-30 to I-20 -- as those individual pieces are substantially complete, as they're complete from a construction standpoint, we'll be transferring those projects over to NTTA, and again, that will require minute order action and statutorily there's a process, we'll have to have a public hearing, go through that approval, and I think ultimately the governor probably has to sign off on that. But again, we anticipate those will be coming over the next few months and probably over the next couple of years.

Commissioners, the agreement, again, I think really brings together this project. As you all know, we've been working on this for a couple of years. At times it's been pretty acrimonious, but over the last few months I think we've really developed a good working partnership, we've worked closely with Rick Herrington and all of his staff at NTTA, of course, Bill Hale and Bob Brown, and all the guys here, James Bass, have been working with us closely on this project.

Again, without going into too much detail, this current project between 183 and I-30 is currently under construction by TxDOT. The NTTA is now in the process of buying the toll gantry equipment and all that sort of thing so that it can be installed and ready to open to traffic. I think the first piece of it will probably be open to traffic at the end of the summer. The second piece, the one from I-30 down to I-20, is the piece of the project that NTTA will be developing. They'll be moving forward with a design-build contract probably in the latter part of this year or early next year. So we'll be working jointly with them.

Our guys are working on the UP Railroad agreement and plans. NTTA has agreed to include those in their set of design-build plans. So again, I think suggests that we really have a good partnership as we're moving forward.

So commissioners, I'd be happy to address any questions that you might have on this.

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, Phil.

Agenda item number 6(c), Mark Tomlinson will come back -- where is he, we lost him. Well, I guess we can't do this El Paso minute order.

MR. HOUGHTON: So moved.

(General laughter.)

MR. SAENZ: Here he comes. Mark Tomlinson will present a minute order dealing with the preliminary approval of a toll equity request for projects in El Paso County.

MR. TOMLINSON: Sorry for the delay. This minute order grants preliminary approval of a request for financing from the Camino Real Regional Mobility Authority for the purposes of project management, data collection and evaluation, and really, it's to craft a regional toll plan for El Paso and that region, and specifically addresses development of Loop 375, Phase I, II and III, the Southern Corridor projects, and development of the Northeast Parkway Phase I Corridor.

The RMA submitted a request for $1.1 million. Again, this can also be used for administrative and other expenses relating to development, acquisition, construction, maintenance or operation of the projects. Financial assistance is in the form of a loan, and these projects, you may remember, were a portion of the region's 2008 Comprehensive Mobility Plan which consists of projects throughout the region, but these focus on Loop 375 most specifically.

We feel the projects would accomplish accelerating the delivery of the toll plan from which projects can be taken, and most likely will be --

MR. SAENZ: Mark?

MR. TOMLINSON: Yes, sorry.

MR. SAENZ: Can I get you to stop for a little bit?

MR. TOMLINSON: Yes, sir.

MS. DELISI: Sorry. The Chair screwed up, the Chair forgot to call up Rick Herrington who was signed up to testify on the minute order we just approved. So Rick, do you still wish to come testify?

MR. HOUGHTON: He trumps El Paso? Wait a minute.

(General talking and laughter.)

MR. HERRINGTON: Madam Chair.

MS. DELISI: I'm sorry, I apologize.

MR. HERRINGTON: That's quite all right. I just wanted to thank the leadership of Commissioner Houghton and Commissioner Meadows with our board members on getting this moving, and your staff did a great job. We were under a pretty short time frame to get this done, considering everything else that's going on, to meet the date that Commissioner Houghton had set up for us is commendable to your staff as well as our staff. And as you can see from the region, we're trying to use every tool we have available, whether it's public-public partnerships or public-private partnerships, and we thank you for your action today. Thank you.

MS. DELISI: Thanks.

MR. SAENZ: Hey, Rick, have you ever done a design-build before?

MR. HERRINGTON: This is our first one.

MR. HOUGHTON: First one?

MR. HERRINGTON: Yes, sir. Got that legislation in 2007.

MR. HOUGHTON: You're stepping out, aren't you.

MR. HERRINGTON: We are, and so far, so good.

MS. DELISI: Sorry, Mark.

MR. SAENZ: Okay, Mark, back to you.

MR. TOMLINSON: No problem at all. We'll start over -- just kidding. Really I think that's it, we think the plan is solid, we just need to enable the RMA to have the resources to dig in and do a solid toll plan and that will get us another step down the road to actually having these projects put on the ground. So staff would recommend your approval of the minute order.

MS. DELISI: Any questions?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. TOMLINSON: Thank you.

MR. SAENZ: Agenda item number 6(d) will also be presented by Mark and deals with a toll equity request from Grayson County.

MR. TOMLINSON: Grayson County RMA, this minute order grants preliminary approval of a request for financing from the Grayson County RMA, paying costs associated with the development of a potential toll facility from Collin County line up to US 75 north of Denison. You're probably aware that the Dallas North Tollway is under consideration by NTTA for extension up to the Grayson County line. This project would take that and go on up past Sherman to the Denison area, very preliminary, though, in its development, so the Authority has asked for a total of $10 million to secure financial advisors and perform engineering work on the future project.

Through discussion with the RMA, staff has worked out an arrangement to kind of break the request into two parts, the first being about a $6.5 million grant for the purposes of developing preliminary engineering documents, public outreach, and education efforts, and this will be accomplished through addition to the Paris District's consultant budget, and the district itself, working with the RMA, will develop a consultant project to do that work, preliminary engineering and public outreach. Then the $3.5 million would be a loan from TxDOT to the RMA for their financial advisory services, TNR studies, and project management services.

So based on that breakout of work and division of funds, we do recommend that you approve the request for toll equity. We think the project is definitely going to be needed in the future in that region and think the RMA is taking a very proactive leadership approach in exploring this project with us, so we would recommend approval.

MS. DELISI: Any questions?

MR. MEADOWS: Move approval.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. TOMLINSON: Thank you.

MR. SAENZ: Thank you, Mark.

Commission, agenda item number 6(e) is deferred; that was addressed through the economic stimulus process we went through yesterday.

Moving on, agenda item 6(f) Phil Russell will present a project development agreement that we've been working with Harris County on the Grand Parkway Segment E.

MR. RUSSELL: Again, thank you, and for the record, I'm Phil Russell, assistant executive director.

As Mr. Saenz mentioned, the minute order before you is an advance funding agreement for Segment E of the Grand Parkway. Just to pull back slightly to provide a bit of perspective, of course, the Grand Parkway has been a critical project for the area, we've been working in concert with the Harris County Toll Road Authority, Harris County, all the other six or seven counties that the Grand Parkway runs through. You get yearly updates from the Grand Parkway Association of the different stages of the project.

Over the past six or eight months, we have had very good discussions, again, with HCTRA, we've agreed to the business terms, we've agreed to waive the market valuation. As part of that process, the one thing that's become very apparent to us is that is a massive project and we're probably going to have to look at some cross-collateralization between all of the segments of that project. We know that certain segments will come online first but we have to have the end in mind as we enter into these agreements. So we want to make sure we've got a financial plan that will allow for the eventual development of the entire corridor.

So with that in mind, we've had that discussion with Harris County. I believe on Tuesday they had a board resolution to accept primacy on this project, a conditional primacy, so that they will continue to move forward, look at the financial aspects of the project, and hopefully come back to us with a plan of how they will implement the overall project.

That being done, there is a piece of the project, Segment E, that's ready to go. It's a critical project. Harris County Toll Road Authority is also ready to move forward with the design and construction of that individual project. So what this minute order would authorize, it would authorize the Harris County Toll Road Authority to move out and begin developing that project. If for whatever reason in our overall discussion on the Grand Parkway, at the end of the day if it was decided that TxDOT should develop that project rather than the Harris County Toll Road Authority, then we, in turn, would reimburse HCTRA for the costs that they would be expending on Segment E.

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

MS. DELISI: Any questions for Phil?

MR. HOUGHTON: I was going to say, Commissioner Holmes, progress is being made -- slow but it's being made.

MR. HOUGHTON: Slowly but surely. Congratulations. So moved.

MS. DELISI: You're trigger happy. We've got a couple of speakers.

MR. HOUGHTON: Trigger happy, I'm sorry.

MR. HOLMES: Just for the record, Phil, I think that there's a very small portion of this project that is in Segment D as well. What we identified is from I-10 to 290.

MR. RUSSELL: Yes, sir. There is a small kind of direct connector from that interchange.

MR. HOLMES: It's all of E and a very small bit of D.

MR. SAENZ: Yes, sir. It's considered as a transition or a connector.

MR. RUSSELL: Just that little part of that interchange just north of I-10.

MR. HOLMES: I just wanted to make sure that that was all covered.

MR. RUSSELL: Yes, sir, absolutely.

MS. DELISI: At this time I'd like to call up Maria Piacentini. I hope I pronounced your name correctly.

MS. PIACENTINI: Closer than most people. Good morning. I am Mary Anne Piacentini. I'm the executive director of the Katy Prairie Conservancy. We're a non-profit land trust that's working to protect a sustainable portion of the Katy Prairie for the benefit of its wildlife but also for all Texans.

The conservancy neither supports nor opposes the Grand Parkway, but we are very concerned about the environmental impacts that the roadway will bring, not only the primary impacts of the road and its associated right of way, but the secondary impacts because it will encourage increased development in that area and the cumulative impacts that will be caused by the entire roadway, the fourth loop around Houston.

What remains undeveloped of the Katy Prairie is approximately 35 minutes west of downtown Houston, at least as the goose flies. If you have to take I-10 it takes a little bit longer. Segment E is proposed to go approximately three miles west of the conservancy's east-most preserves. It will pass through a relatively unpopulated stretch of the Katy Prairie and will divide it into east-west sections.

The Katy Prairie remains an ecological treasure, a working landscape of farms and ranches, interspersed with remnant and restored tall grass prairie and wetlands, as well as riparian corridors in the Cypress Creek and Buffalo Bayou watersheds. It is home to 300 resident and migratory water fowl, 110 species of mammals, reptiles and amphibians, and 300 species of plants, grasses and wildflowers. It's also a phenomenal recreational resource, offering hunting, birdwatching, hiking, biking, wildflower viewing opportunities, along with just a chance to get out and enjoy nature. It also provides amazing environmental benefits: reduced flooding downstream for Houstonians, as well as air and water quality benefits.

We've already protected 18,000 acres, that's almost 30 square miles, about a tenth the size of the City of Austin. Our goal is to create a major anchor park and preserve that benefits all Texans and that is accessible to all Texans, it is not just a preserve system for wildlife.

The Segment E, as proposed, will not only negatively impact the prairie with its footprint, but it will unleash powerful pressures for development and will lead to escalation of land prices to an extent that will compound the difficulty of preserving a sustainable part of the landscape. We believe that the mitigation for the proposed Grand Parkway is not adequate as it does not take into account even all the primary impacts, let alone the secondary and cumulative impacts.

We hope that if you do go forward with the Segment E of the Grand Parkway, whether it's TxDOT doing it or it's HCTRA doing it, that you will carefully consider these impacts and require carefully focused proactive and robust mitigation. We believe that there is no acceptable margin for error. We believe that present and future Texans will not thank you if you don't do that. Thank you.

MS. DELISI: Thank you very much.

I'd like to call up Jay Blazek Crossley.

MR. CROSSLEY: Hello. Thank you for this opportunity. My name is Jay Blazek Crossley and I am from Houston. I do program development and research for Houston Tomorrow, an independent, non-profit focused on improving the quality of life in the Houston region. I am here today because we are worried about the environmental, social and economic costs of the proposed Grand Parkway. I want to be very clear to you that many Houstonians are opposed to this concept and there is no public support for this project.

Voters in Houston have repeatedly expressed their desire for denser connected communities and the preference for walkable infrastructure and transit over new roads. We believe that the Grand Parkway is a development project, not a transportation project. Segment E will pave through uninhabited, environmentally sensitive prairie lands, will connect no urban centers, and will undoubtedly increase vehicle miles traveled, congestion and air pollution in the Houston region.

Harris County commissioners expressed on Tuesday that they do not want to proceed with this project and that other real transportation issues take precedence over the Grand Parkway, but they feel, however, that TxDOT is forcing the project on the Houston region and that if it's going to happen, Harris County wants to do it, but they would rather not pursue this project.

I would request that you reconsider the feasibility and utility of the Grand Parkway and that you hold this agreement until such time that there is an actual transportation need for such a thing and the people of Houston actually want it. Thank you.

MS. DELISI: Thank you, Mr. Crossley.

Is there any other comments or questions? If not, is there a motion?

MR. HOLMES: So moved.

MS. DELISI: Is there a second?

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you.

MR. HOUGHTON: Phil, don't run off. One thing, as an initiative, Amadeo, and I've been kind of focusing in on what these major transportation projects bring as far as employment. It seems the stimulus package is focused on employment, getting people to work. I think it would be in our best interest, along with our partners -- and I'm glad you stayed, Rick; I should have asked you the question also, the 161 project, how many people will it employ up and down the employment ladder from engineers to designers to laborers, et cetera -- I think it would be in our best interest to show the federal government exactly how many people we put to work by approving these projects.

MR. RUSSELL: Commissioner, we do have some anecdotal information on the Central Texas Turnpike and I'd be happy to get that data for you. My memory is that it created, at its peak, probably 4- to 5,000 design and construction jobs, it was a $3-1/2 billion project, and it was somewhere in the neighborhood of 4- to 5,000 design and construction jobs. And then, of course, as Commissioner Brown talked about in his 35 presentation, you look at those long term economic stimulating jobs that are occurring up and down from Hutto, Round Rock and Georgetown.

MR. HOUGHTON: I really think it would be in our best interest to promote that, and I mean to give that information that gets lost. We see the dollars but the actual direct employment by this agency and our partners, whether they be the design-builder or us as contractor.

MR. RUSSELL: Yes, sir. Commissioner, I'll make a note of that and I think that's pretty easy for us to assimilate all that data, both direct and probably a pretty good snapshot of those indirect job creations on the Central Texas Project. Be happy to do that.

MR. HOUGHTON: Thanks.

MR. HOLMES: Just as one last note, I'd like to acknowledge David Gornet back there in the back -- wave at us, David -- and Delvin, who I think just walked back into the other room, for toiling for how many decades, David, two, two and a half. We appreciate all of your work and tenacity and perseverance in helping bring this forward.

MR. HOUGHTON: No one in Houston wants that project?

MR. HOLMES: Some of us do.

(General laughter.)

MR. SAENZ: Moving on, commissioners, agenda item number 7, Ed Serna will present a recommendation dealing with our project management and business requirements service work that we're doing.

MR. SERNA: Good morning, Madam Chair, commissioners, Mr. Saenz. For the record, my name is Ed Serna and I'm the assistant executive director for Support Operations at TxDOT. In December of 2008, the commission approved a minute order authorizing staff to enter into negotiations with selected vendors to secure project management and business analysis services. These negotiations were conducted in January and February and have been concluded. A firm has been selected and a contract price of approximately $14 million has been negotiated.

However, during the time the negotiations were being conducted, the situation has changed such that it wouldn't be prudent to proceed with the services we're attempting to acquire. Most significantly, the following events have occurred: the department has been asked by the chairman of Senate Transportation to conduct a thorough management and organizational review similar to the one DPS recently completed. This review will likely result in changes to TxDOT that affect its requirements for information, reporting and systems.

In addition, two bills have been introduced in the legislature, each of which creates a new state agency by transferring divisions of functions out of TxDOT. This would also affect the project because the business or information needs of those divisions in the new environment are unknown, and also, if a new agency is created that would be a constituent or partner to TxDOT, that organization's needs are unknown.

And then finally as a major issue, funding for both the statewide enterprise resource planning project and TxDOT's systems improvements projects is still going through the legislative review and approval process, and given the current economic situation, we cannot assume that funding will be authorized.

Improving our management and financial systems in order to improve TxDOT's transparency and accountability is something that's still very important to us, however, given the current situation the department finds itself in, we do not believe it's prudent to execute a contract and spend money for services to analyze and gather requirements for an environment that will be changing.

Therefore, staff recommends that we not proceed with executing this contract. In support of this recommendation, we've prepared an alternative minute order that's already been distributed to you for the commission to consider that supports this recommendation, and I'll be available to answer any questions that you'd like at this time.

MR. HOLMES: Ed, I'd like to offer my thanks and appreciation for the staff work on this. I know you've worked a long time on it, bringing forward this RFP to look at our transparency issues, and I appreciate the work of the proposers that also spent time and effort on it. It's unfortunate that circumstances have changed. It clearly is still an important project, and as we have clarity on what the shape of TxDOT is going to be and what we're actually studying, I think hopefully we'll be able to bring this back.

I would note, though, that I was surprised at the cost of just the study. I mean, it was more than half of the cost that we estimated for the solution, and I'm going to be pretty sensitive to that. We have to have an effective and efficient answer and just the absolute study cost, if it consumes more than half of our budget for it, we'll never get to the actual implementation.

MR. SERNA: Yes, sir, we'll keep that in mind, sir.

MR. UNDERWOOD: Ed, I also want to reinforce the fact that we appreciate all the work that staff has done and everybody that's involved in this process, from those that are proposing to those that actually were studying the proposals. But it is critical that we do remember that we do need this transparency and I understand the ramifications and the hamstring that we feel right now as to finding out what the will of the legislature is. But I just want to remind everybody that we will be going forward with this, we just need guidance from the legislature.

MR. SERNA: Yes, sir, we'll keep that in mind. And I'll convey to the staff that have worked very hard, General Services Division, that you have complimented them on their hard work because I know they did kind of want to get stuff done very quickly but things just kind of changed underneath us.

MR. HOLMES: Also, Ed, convey to Susan Combs' staff our appreciation for their effort and assistance and that we'll be back to them.

MR. SERNA: Yes, sir, I'll do that today.

MS. DELISI: Commissioners, one thing I want to make sure I brought to your attention that's in the revised minute order. It was something that came up during the Senate Transportation hearing last week where the chairman of the committee asked me if we would be willing, as a commission, to start the process of entering the agency onto a similar path as DPS went through with a management review of the agency to bring forward recommendations, and so I told them that we would, of course, be happy to start that process immediately.

MR. HOLMES: Madam Chair, we discussed this to the point that we would probably try to develop this into the transparency also because you would want it to all flow together. As you make your management changes, then that will affect your transparency.

MS. DELISI: Right.

MR. SERNA: Madam Chair, if I may, just to support your statements to the chairman, we've already started developing a request for proposal, and because of its significance, we'll probably come back to the commission as we move forward with that, but we have already started developing our request for proposal to accomplish that review, so we're moving forward.

MS. DELISI: Good. If there are no other questions, is there a motion?

MR. HOLMES: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SERNA: Thank you very much.

MR. SAENZ: Thank you, Ed

Commissioners, agenda item number 8 deals with our Safety Bond Program. Carlos Lopez will make a presentation of a minute order authorizing the safety projects that are part of the Proposition 14 Safety Bonds.

MR. LOPEZ: Thank you, Amadeo. Good morning, commissioners. My name is Carlos Lopez and I'm director of the Traffic Operations Division.

The minute order before you authorizes the 2009 Safety Bond Program in an amount of approximately $600 million. The program will fund 355 separate projects. State law authorizes the commission to issue bonds and other public securities to develop projects on the state highway system with a maximum amount of $6 billion. Of this total, at least 20 percent must be used for safety related projects that reduce crashes and correct hazardous locations.

In December of '04, the commission approved the first Safety Bond Program that was 644 projects totaling $605 million. We estimate that those projects can save 90 lives per year and prevent 1,100 serious injuries. In December of last year, TxDOT districts were asked to submit candidate projects for this particular program. We evaluated each of these projects to ensure that the proposed projects would produce the maximum safety benefit in the most cost efficient way possible.

The proposed funding list before you consists of: 164 projects to widen 617 miles of narrow highways; 290 miles of new cable or median barrier between the main lanes of divided highways; 105 new left-turn lanes or two-way continuous left-turn lanes on rural highways; 9 projects to convert existing four-lane undivided roadways to four-lane divided with shoulders; and 23 overpasses at existing highway intersections.

We believe that this program has the potential to significantly improve transportation safety in our state. We recommend approval of this minute order.

MS. DELISI: Carlos, can you talk a little bit about timing of these projects? I think everyone is so focused on the shovel-ready aspect of the stimulus package, and when do you think these projects will get done?

MR. LOPEZ: I think very soon. What we're going to ask our districts in the transmittal memo is that half of their allocation be brought to letting by August of this year, the other half by August of '10. Obviously the ones you'll see next year are probably going to be more of those overpasses, but a lot of these widening jobs, these cable barrier jobs, they can be put together really quick and get to letting real fast.

MR. UNDERWOOD: Also, Carlos, this will address some of the problems on 71 too, won't it?

MR. LOPEZ: Yes. There are a few key projects on Highway 71 that will be addressed through this particular program to put a continuous left-turn lane, provide some separation on that road, and get full ten-foot shoulders. It ought to really help safety on that particular highway.

MR. UNDERWOOD: And also actually dividing it too. Isn't that correct?

MR. LOPEZ: Right, that turn lane is going to provide some separation, and of course, also it's going to help handle the development we're seeing out on that roadway.

MR. UNDERWOOD: Right. Thank you.

MS. DELISI: Are there any other questions? Is there a motion?

MR. HOLMES: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. LOPEZ: And commissioners, if you will indulge me, I would really like to publicly thank a couple of people that have worked real hard on getting these projects put together. First of all, I think we have Meg Moore in the back, she's our engineer of traffic, and Debra Vermillion, she should be back there. They worked real hard getting all these projects put together, and we call Debra the Safety Queen. If she says a project doesn't go, it doesn't go. So I wanted to just publicly thank them for all their work in putting this program together. Thank you.

MR. SAENZ: Thank you, Carlos. Thank you to you and to all of your staff.

Agenda item number 9, commissioners, is a minute order presented by Phil Russell dealing with our pass-through toll program.

MR. RUSSELL: Again for the record, I'm Phil Russell, assistant executive director.

This is kind of an add-on to our discussion item yesterday afternoon on the pass-through program. Again, not to go back over all of that ground, but the minute order before you would authorize several things, but three fundamental issues that will come up. First off, it would authorize the executive director to go out with a program call where we would open it up to competition throughout the state. You would authorize a certain funding level and the discussion last night in the minute order would be $300 million total for the program, whether that was reimbursed over the 10- or 15-year time period or longer.

The third component and probably the real adjustment that we made on the minute order, the discussion I heard from you all yesterday afternoon was that you would prefer, rather than having eligible all project costs to limit solely to construction, and so we've adjusted the minute order based on what I think I heard yesterday afternoon. So the minute order before you would authorize us to go out with a program call, authorize a funding level of $300 million, and would limit it to just construction costs. And again, the reason for that it kind of helps us from a transparency and an audit trail and it also would allow you all to spread that out and hopefully select a few more projects.

Just real quickly, again, you should have this timeline in your books. Just for the members of the audience, it may be interesting, we have a very aggressive schedule. We think it's achievable but it's very aggressive. Assuming you give us permission today to move out with a program call, we would issue that publication; we would request proposals back in our office 60 days later -- that's May 12. Our committee, led by Mark Marek and Rene Garcia and others, would be working long hours to get all those reviews done in 28 days. We would bring it back to the commission in June with the selection of the individual projects and then with the terms in July which would allow us to execute those agreements, with a bit of luck, by the end of August.

And again, the last thing, commissioners, my worry always is that $300 million sounds like a ton of money, and it is, but when you talk about the needs and the potential projects that are out there, we really don't have a good idea on whether we would get three proposals or fifty proposals, and so I always worry about overselling and under-delivering. So I'm trying to kind of keep expectations under somewhat control, I guess.

MR. UNDERWOOD: I didn't want to cut you off.

MR. RUSSELL: No, sir, I'm finished.

MR. UNDERWOOD: A couple of questions. Basically, this will take three-fourths of the Category 12 money.

MR. RUSSELL: Under the present allocation, it would take three-fourths of it, yes, sir.

MR. UNDERWOOD: The second part is does this stop an entity from actually helping pay for part of the construction?

MR. RUSSELL: No, sir. That's a good question. What you would be doing if you approve this minute order would say we're only going to have as reimbursable costs the construction costs. If an entity, as you say, would want to come in and say, hey, I tell you what, we'll put a little skin in the game --

MR. UNDERWOOD: They already are by doing the other part.

MR. RUSSELL: They already are with the other part.

MR. UNDERWOOD: But if they turned around and said, Not only that but we're willing to put up X amount of dollars on construction for this project, they could do that and it would still make it a viable project.

MR. RUSSELL: They could do that and it would make it a viable project, but moreover, our criteria will be that will be one of the factors we look at so it would help their proposal compete very effectively.

MR. UNDERWOOD: That's my point.

MR. RUSSELL: Yes, sir.

MR. UNDERWOOD: Because I noticed in some of the other deals in our workshop yesterday, some entities were on the list for the simple fact that they actually put a lot of money up, they almost funded half of the project.

MR. RUSSELL: Absolutely.

MR. UNDERWOOD: So we as TxDOT get much more bang for the buck, we can do many more projects, because there's actually, as Ted likes to say, skin in the game.

MR. RUSSELL: It would be skin in the game and it makes their project much more competitive.

MR. UNDERWOOD: Thank you, sir.

MR. RUSSELL: Yes, sir. Three minutes left, Amadeo.

MS. DELISI: Any other questions? If not, is there a motion?

MR. HOLMES: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: We'll go ahead and do agenda item 10 next, commissioners. Brian Ragland will come up and present several minute orders dealing with department financing.

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

Agenda item number 10(a) is a proposed minute order which accepts the annual report of the financial information and operating data with respect to the outstanding bonds secured by the Texas Mobility Fund. Under the resolution for these bonds, this is required to be done within six months of the end of the fiscal year, and as part of this disclosure, you've already seen the audited financial statements that you accepted in the December meeting. 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. RAGLAND: Item 10(b) is a proposed minute order to accept the annual report of financial information and operating data with respect to the outstanding bonds on the State Highway Fund. Again, the resolution calls for this to be done within six months of the fiscal year, and again, you have already seen the financial statements which were filed in December. 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. RAGLAND: Item 10(c) is a proposed minute order to accept the annual report of financial information and operating data with respect to the Central Texas Turnpike System, and again, this is required, per the indenture, within six months of the fiscal year. Included in this disclosure are the audited financial statements that were accepted by the commission December, as well as the preliminary official statement for the sale of some bonds that is occurring today. And 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: Commission, since Brian is already up there, I'm going to ask him to go ahead and present his next two agenda items dealing with 11 dealing with our State Infrastructure Bank. He's got a minute order for Hays County and a minute order for Cass County.

MR. RAGLAND: Item 11(a) is a proposed minute order providing for preliminary approval of a SIB loan to the City of Kyle, $11 million to construct improvements to I-35 southbound frontage roads and ramps between County Road 210 and FM 1626. 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. Hold on, sorry. Jeff Barton.

MR. BARTON: I will be very brief. I am Jeff Barton, county commissioner from Hays County, representing Kyle and six other communities.

I just want to thank you for your partnership. This is part of a broader effort where the state, you all, and the citizens of Hays County are partnering to make I-35 improvements to join in a pass-through financing project with you all, and I wanted to let you know that we are taxing ourselves to put in $207 million into this program. So we appreciate your help. Without you and the catalyst you've provided, it wouldn't be possible. I just want to thank your staff and thank you again for the help to make these safety and mobility projects happen.

MS. DELISI: Thank you. There was a motion. Can I get second?

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RAGLAND: Item number 11(b) is a proposed minute order to give final approval of a SIB loan to the City of Domino who is requesting $60,000 to pay for utility relocations along FM 3129 for a railroad grade separation. Staff recommends approval.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. HOLMES: Where is Domino?

MR. SAENZ: It's in Cass County.

MR. RAGLAND: I'm sorry. I can get back with you on that. Thank you.

MR. SAENZ: Commissioners, it is just after eleven o'clock, we're going to bring forward agenda item 12(e) dealing with the economic stimulus program, and John Barton will make this presentation.

MR. BARTON: Good morning. For the record, my name is John Barton, assistant executive director for Engineering Operations working here for you at the Texas Department of Transportation.

Yesterday you heard me talk for probably longer than you would care, as well as along with a panel of district engineers on the economic recovery package, specifically it's the American Recovery and Reinvestment Act, and we refer to it as the economic stimulus package here in Texas. We provided you with a history of the bill, the intent of the bill, the timelines associated with putting projects out and kind of a wrap-up of the information I shared with you previously in the January meeting.

The bottom line for Texas, as I shared with you yesterday, is that about $2.25 billion will be available for highway and bridge transportation projects with an underlying goal of putting people to work here in Texas and our goal of implementing those was discussed with you in some great length yesterday.

The department's engineers have been working very diligently with our local leaders, our metropolitan planning organizations, our regional leaders and our other transportation partners and have developed a number of much needed projects that are available for contract and that would comply with the requirements of this act. Based on the work of our district engineers and these regional partners, we were able to identify -- as I shared with you yesterday -- a little over 1,500 projects that would be valued at a little over $13 billion that can meet the requirements of the act.

Continuing to work with our transportation partners, we've obtained direction from you and staff has developed the criteria and a plan for narrowing down that large universe of projects down to a list that could be funded and made available through the American Recovery and Reinvestment Act funding.

The minute order that is before you today is a step towards taking action on this particular item and making planning efforts become reality and turning projects into reality, making dirt being moved on projects and allowing thousands of construction workers here in the State of Texas to either retain their job or to be gainfully employed across the State of Texas.

There are three parts of this minute order, and specifically those are: an element for road and bridge preservation, maintenance and rehabilitation projects; aviation projects that Dave Fulton, the director of our Aviation Division is here to answer questions about; and then the transit program that Eric Gleason, our director of Public Transportation Division is here to answer questions about.

In the area of road and bridge maintenance and preservation, staff is submitting to you a program of approximately $500 million worth of projects that would be funded through the act. This will allow the state to continue to preserve our system and make an investment in the current transportation system that we enjoy and have the privilege of maintaining here in Texas. The funding levels that were established with this $500 million were provided to each district based on a calculation using population, the number of lane miles within that geographic region, the vehicle traffic in that area, and its current pavement conditions.

After we established those funding levels we provided that information to our district engineers, who in turn, worked with their local community leaders and their own staffs to identify much needed bridge and pavement rehabilitation projects to make sure that there was some coordination throughout the region and geographic distribution of the projects.

In this minute order there are 266 road and bridge maintenance projects that are valued at a little over $500 million, as I shared with you. These include 182 road maintenance projects valued at approximately $370 million; 27 major rehabilitation projects valued at approximately $73 million; and together those 209 projects would be working on approximately 2,600 miles of lanes here in Texas.

Also, there are several bridge projects valued at approximately $31 million, 20 of them off of our state highway system and 27 of those on our state highway system. And then ten projects that are local and regional safety enhancements that are valued at approximately $30 million to provide much needed safety improvements to our system.

As you can see from the map that I have here to my right, your left in the hearing room, projects have been selected from across the state, representing all regions, and the blue dotes are the representation of the projects and where they're located in our state.

We believe that this methodology meets the intent of the act, that we have an equitable and fair distribution of projects around the state. This minute order does not -- and I want to reiterate that -- there's a picture of the map, and Texas is kind of leaning to the east today for some reason and I don't know why that would be -- nonetheless, as I said, this minute order does not authorize the construction of the approximately $1.2 billion in mobility projects that we discussed yesterday and that our district engineers and MPO directors commented on.

I understand that it is the commission's intent that those projects will be considered by a separate minute order at a special called meeting next week that you are considering and that you would receive additional comments and input from our transportation and other partners from around the state as we continue to deliberate those projects.

A description of those projects, as well as the ones that are authorized by this minute order, I wanted to point out, can be found on our website, so it's available for anyone's information.

In addition to the highway and bridge rehabilitation and preservation projects that are contained in Exhibit A of this minute order, there are also, as I mentioned, some aviation and transit projects. On the transit side of things, Texas' share of the transit funding is estimated to be at $372 million. The commission has been designated by the governor as the administrating agency for the Federal Transit Administration and has the authority to award approximately $50 million in the non-urbanized or rural area fund category.

Mr. Gleason, as I mentioned earlier, has been working on this and has coordinated submission of grants for our transit partners from across the state, and this minute order does contain an Exhibit B which lines out and enumerates staff's recommendation for the submission of 39 transit projects valued at $32.8 million to our ' 5311 Non-Urbanized Fund to rural program operators, and it will allow them to do things like purchasing of capital fleet facilities and other information technology equipment that they would use for transit services.

On the aviation side of things, Texas' share of funding for aviation is not yet determined and it will be based on a competitive discretionary grant process that the Federal Aviation Administration is managing.

Mr. Fulton has been working diligently to coordinate a submittal along with his partners for the selected airports across the state, and contained within this minute order, shown as Exhibit C, is staff's recommendation for the submission of ten aviation projects that are valued at approximately $50 million. These projects were selected for submission in consultation with the selected airports to the Federal Aviation Administration for their consideration and approval on the priority list of projects that they will fund through the Airport Improvement Program.

Of the ten, seven of those projects have previously received consideration and approval by the commission in previous minute orders to be further developed and funding to be paid for under the Federal Aviation Trust and Local Match Program and three of them are new projects to be approved by the commission.

So in summary, the American Recovery and Reinvestment Act requires that 50 percent of our discretionary funding that's allocated to the State of Texas for highways and bridges needs to be obligated within 120 days of receiving our apportionment from the Federal Highway Administration and I received an e-mail this morning that that funding is estimated to be $787.5 million -- that's the 50 percent requirement, and so we have a little bit more clarity on that. The act also requires that 50 percent of our transit funding be obligated within 180 days following apportionment and that the FAA shall also award grants totaling not less than 50 percent of their allocation within 120 days of enactment.

So this minute order will allow us to begin to respond to those timelines and meet the requirements of the act in a very proactive and productive manner while putting Texans to work and helping boost the economy of our state. So with that, I will conclude my remarks and staff recommends your approval of this minute order.

MS. DELISI: Unless you have any pressing questions, I've got two members of the legislature that I'm going to bring up to testify at this point.

MR. HOUGHTON: Let me ask one clarification real quick. Of the $350 million for transit, you said we're allocating how much?

MR. BARTON: Approximately $50 million.

MR. HOUGHTON: And what happens to their balance, is it allocated by formula?

MR. BARTON: If you don't mind, I'll ask Eric Gleason to come forward and answer that question.

MR. HOUGHTON: I want to make sure we understand because there's a balance sitting out there.

MR. BARTON: That's correct.

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

The State of Texas is allocated $372 million of transit formula funding as a part of the package. There are two pipelines for those funds, if you will. There's an urban area pipeline which has about $322 million in it and those funds go directly to the urban areas, small, mid-size and large, of the state who work with their MPOs to make those decisions. We are not the designated recipient for those funds so this commission has no approval authority.

MR. HOUGHTON: It goes directly to the MPOs.

MR. GLEASON: That's correct.

MR. HOUGHTON: That's all I needed.

MS. DELISI: Thanks, Eric.

At this time I'd like to call up Representative Richard Raymond.

MR. RAYMOND: Thank you, Madam Chair. Richard Raymond, state representative, Laredo.

First of all, let me say I was one who worked hard to have the opportunity to look at more than three of you up here, so I'm very happy to look at more than three of you up here and I'm glad that we got that done.

Let me also say I am one who worked very hard against a Sunset recommendation that you turn into one because I don't think that's the way we ought to go, and it's my hope that we'll prevail on that as well.

Thank you very much for accommodating us. We're in session right now, Madam Chair, as you know, but I wanted to come before you because that map that just got put up doesn't have any blue dots on Webb County, and we know that these are staff recommendations for the stimulus mobility projects, but we in Laredo and Webb County are proud to be the first ones to stand up and say want to do what we can to help interstate commerce, to help commerce in the State of Texas. As you know the crossings that we have every day, thousands and thousands of 18-wheelers, moving commerce, creating jobs in this state and in this country. As a result of that, we take a beating locally. A lot of those 18-wheelers go through our neighborhoods and that gets picked up by our local taxpayers, but we're the first ones to do whatever we can to make sure that our economy is strong.

But as we continue to grow -- and we're growing fast, have been for a long time -- we have challenges regarding transportation and one is a project that we've been working on, and thanks to Mr. Saenz and others, Mario Medina and others who have helped us on the Cuatro Vientos project, we're here today to ask you, as you look at the staff recommendations and try to come to a final determination on what you'll do with the stimulus money that you will look more closely at the Cuatro Vientos project. Mr. Saenz knows it well and I'm sure he can get into great detail discussing this with you.

Representative Guillen will be here in a second and also our city manager, Carlos Villareal, can give you a little bit more detail. But we hope that you'll look at this. We, as we put the project forward, know that needed $83 million to get this thing done. The staff recommendations have nothing for this project, and we hope that as you look at it more closely that you will reconsider that staff recommendation and see, hopefully, if we can't get $83 million, maybe $82-.

(General laughter.)

MR. RAYMOND: We're willing to negotiate here because we do it all the time. But seriously, we are very proud of the role that we play, commissioners, in helping Texas commerce, and the role that we play we take an extra hit locally and we suck it up and we pay for it, whether it's there on our streets or at the bridge where we have to spend a lot of money for local law enforcement to do things that really the federal government ought to be taking care of or even the state government ought to be taking care of and they're not. So we hope you'll look at that.

With that, Madam Chair, I'll sit down, and thank you, again, very, very much for letting us come up. I'm glad to answer questions if you have any of me, but I'm sure your staff is very familiar with this. Mr. Saenz has always been very, very willing to work with us for many years now and I'm sure you will on this as well. Thank you. And it's my great hope that the next time I come before you, you won't be just one.

MS. DELISI: Thank you very much, Representative, thank you for coming.

I'd like to call up Representative Ryan Guillen.

MR. GUILLEN: Thank you, Madam Chair and commissioners. Appreciate the opportunity to come before you. My name is Ryan Guillen and I too represent Laredo. I stand before you today because I'm concerned that the needs of Laredo and of Webb County have been overlooked in the rush to spend the economic stimulus money from the federal government.

Laredo grew by 50 percent in the '90s and has grown at a greater rate since then, according to the U.S. Census. Most major transportation companies have a facility in Laredo; Laredo is the largest inland port in the United States with an estimated 18,000 trucks a day sharing space on local roads and highways with the regular commercial traffic of a city of over 200,000 people. There is a huge influx of regular passenger vehicles into Laredo from Mexico every day to add to congestion and slow economic activity and the general growth of the community.

These stimulus funds were distributed on the basis of need and population but the vehicular activity in Laredo and Webb County is far higher than the population by itself reflects and the need is therefore greater. The Cuatro Vientos project is vital to ease the congestion and increased traffic flow in the south and east sides of Laredo. This area has been choked and limited by the single entry point along Highway 83 for many years creating both dangerous situations for pedestrians and drivers and a real economic bottleneck, limiting growth and economic development in the area.

This is vital, this is a very, very important project to Laredo and to Webb County, and I ask the commission to please consider the serious needs of Laredo and Webb County. I ask that you work with the staff, and Amadeo has been great to work with and they very much know the importance of this project, and I ask that you work with them to look at the very real need of this project to advance this project and find a way to provide the funds to solve these problems and promote growth and development in the area.

Thank you again for the opportunity to come before you.

MS. DELISI: Thank you, Representative.

At this point I'd like to call up Carlos Villareal.

MR. VILLAREAL: Good morning, Madam Chair and honorable members of the commission.

I won't rehash basically what some of the state representatives have indicated, but I think we are very disappointed that one of the major projects, Cuatro Vientos, in one of the most highly congested areas in South Texas was not included as part of the economic stimulus package that is being allocated by the state.

This is the only route into the City of Laredo. The route that we're recommending would be the other route that is coming from the southern portion of Webb County into the City of Laredo. Right now we only have 83. We handle from 30- to 35,000 vehicles a day, there's no grade separation so it's a tough problem to be able to handle for a city such as us.

We have always volunteered to be the first line of defense as far as security and safety and with our police force on the border. We handle 13,000 18-wheelers a day. I was having dinner with a friend of mine from Oklahoma last night and said how many did you say, 13,000 vehicles or 18-wheelers; I haven't seen 13,000 18-wheelers in my life, much less in one day. But this is the type of infrastructure that is needed to be able to handle international commerce on the border, and this is what we're doing in Laredo.

I know that there's problems that we're currently addressing, but again, when it comes to funding, we see no blue dots for Webb County. We have been meeting with Mr. Amadeo Saenz to hopefully work out some sort. We know that, yes, there's a lot of need and very little money, but at least to be able to put a financing mechanism in place, and we've been working with Mr. Saenz to hopefully get something to make sure that we get this road built. We know that we can't come in here asking for four or five projects, we're asking for one, and that hopefully out of the $1.2 billion that's coming to the State of Texas that the tenth largest city in the state that handles a lot of traffic that other cities don't handle that we at least work with the staff hopefully to come to a solution so that we can get this project constructed.

I know there's a lot of needs, we're not asking for a pie, we just want to sit at the table and partake with the rest of the communities in this great State of Texas. Thank you, Madam Chairman and members of the commission for the opportunity to address you this morning.

MS. DELISI: Thank you, Mr. Villareal. Do you have a question?

MR. HOUGHTON: Yes, I do. Not knowing the region, could you describe the project a little bit more in detail?

MR. VILLAREAL: Yes, sir. This is a project that parallels Highway 83. Highway 83 in south Laredo is heavily, heavily congested. As a matter of fact, when school lets out, that is probably one of the most congested areas in all of South Texas. This project would be to the east of Highway 83 and would parallel, would be a twin road that would take traffic south of Laredo and then ultimately connect it to Highway 83 as we move in the southern portions of Webb County.

We only have one way to get in and one way to get out, and that is the area of the City of Laredo, commissioner, that is growing the fastest. Before I became city manager, I used to work for Webb County. We had to allocate additional justices of the peace because that is the area that is growing the fastest and is one of the most congested areas, again, of the whole southern part of the State of Texas. It would be a parallel road, Bob Bullock Loop, that would take us with an overpass and then connect with Mangana Hind Road that would ultimately connect with Highway 83.

I know that next week when you meet in your session to approve, I know that there will be other members, including our congressman, Henry Cuellar, who indicated he wanted to come and speak before you, the mayor and the county judge and everybody else, but we're not asking for the whole, we know that everybody thinks that their projects are high priority, we're just saying that this is a project that is not only important to the City of Laredo but the State of Texas and the whole country. We handle things that are normally not responsibilities of local government.

MR. HOUGHTON: Thank you very much.

MS. DELISI: I'd like to call up Judge Whitley. Did we scare him off? We'll give him a second. At this time I'd like to call Clyde Melick.

MR. MELICK: I'm with the City of Waxahachie. Thank you for allowing me to address you this morning.

I'd like to speak on behalf of 35E, the 35E section that is south of the Dallas-Fort Worth Metroplex that runs through the City of Waxahachie. We're looking for possible freeing of funding or some dollars through the stimulus package to allow that to be widened and the rehabilitation of 35E, it's in dire need of it. The volumes through Waxahachie are tremendous: it's 63,000 trips a day on that 35E corridor; 43 percent of those are trucks, so it's very indicative that that is a true NAFTA corridor that runs into the Metroplex and down to South Texas.

That is the southern bottleneck of the Metroplex, and sections to the north and south of this portion have been completed or are nearing completion. This is one of the puzzle pieces of the 35 NAFTA corridor and the City of Waxahachie hopes that you can take a better consideration of this project. Thank you very much.

MS. DELISI: Thank you.

Did Judge Whitley come back? Can't find him? Okay.

MR. HOUGHTON: John, let me ask you a question. Yesterday you talked about the Department of Transportation Secretary Discretionary Fund.

MR. BARTON: That's correct.

MR. HOUGHTON: Of $1.5 billion, no more than $300 million per project or per state?

MR. BARTON: Both. No state can get more than $300 million and no project can be more than $300 million.

MR. HOUGHTON: Well, that's a disproportionate allocation. If a state doesn't use it, does it go back in the pot, or do we have that limitation of $300- period?

MR. BARTON: It's $300- period. The way it was written is kind of a weird statement is that the project sizes had to be between $20- and $300 million, knowing that no state could receive more than 20 percent of the funds from that $1.5 billion which equates to $300 million. So projects can be submitted but if you had, for instance, the State of Texas submitted $500 million worth of projects and they picked all of them, they'd say all you get is $300 million.

MR. HOUGHTON: Do you intend to submit?

MR. BARTON: Absolutely. Once we get the final rules which are required to be out 90 days from the date of enactment, on determining what the nomination package must contain, we'll begin to work with local communities to put together packages on projects that they feel are worthy and as well as that we as staff have identified as worthy projects from around the state. And we will do everything in our power to ensure that Texas gets $300 million, no less. If it takes $305-, I've got support from Commissioner Holmes that he'll put in the extra five.

MR. HOUGHTON: I'm in.

MS. DELISI: Are there any other questions or comments?

MR. HOUGHTON: We're voting on the aviation package?

MS. DELISI: It's the aviation, the transit and the maintenance. It's a three-part minute order.

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. BARTON: Thank you.

MR. SAENZ: Thank you, John.

Commissioners, going back to agenda item number 12(a), we have the final acceptance of the 2030 Committee report, and David Casteel and Dr. Walton will lead us in that presentation.

MR. CASTEEL: Thank you. For the record, my name is David Casteel. I work for you as the assistant executive director for District Operations.

Last spring our Chair requested that a group of leaders from across the state independently assess the transportation needs of Texas. That group worked with researchers from Texas A&M University, the University of Texas Austin and the University of Texas San Antonio to comprehensively assess the needs of this growing, dynamic and diverse state. This was no easy task. These leaders presented their draft findings to the commission in December of 2008. Since then they have taken public comment. Today the final report from the 2030 Committee is being submitted for commission action.

Dr. Michael Walton served as the elected chair of this committee and we're honored to have this esteemed and internationally recognized expert in transportation planning and policy with us to present his observations on the final report. Dr. Walton.

DR. WALTON: Thank you, David. Madam Chair, members of the commission, Mr. Saenz. It's my pleasure to make a very brief statement of the report. You heard the more detailed report in December. Since that time, as indicated, we've had the opportunity to gather additional input and to finalize the report, and let me quickly go through that with you.

Just to refresh your memory, these are the members of the 2030 Committee, and I might state again, up front, that I was very privileged to work with this outstanding group of people who gave freely of their time and energy and resources and they were committed to the task at hand and it was a pleasure to work with such a distinguished group.

The process, as you recall from the charge, with a request from the Chair back in May to participate in this activity, the first meeting was in late June in Austin and then we presented our report to you on December 17, preliminary report.

As you also know, the charge was to develop the transportation needs for the state through the year 2030. We had an outstanding project team and I'd like to commend the groups from TTI, from the Center for Transportation Research at University of Texas Austin and from the University of Texas San Antonio who gave generously of their time and effort to make this the priority that it deserved, and obviously it was a very quick time frame.

We had six committee meetings, there were six public hearings held around the state, and then following our presentation to you in December, the report went online and there was an opportunity for additional public input. In that period of time we received additional suggestions, recommendation and guidance which was incorporated into the final report. It gives you some idea or the hits or the statistics associated with the report being on the website, and as suggested, there were a number of recommendations that we received outside the website as well.

The scope, as you recall, was first and foremost comprehensive update of our maintenance -- in other words, what will it cost to perpetuate the system that we have in place and protect the investment that we've made, under the rubric of maintenance but in fact it was preservation, and then an estimate of the mobility needs, both urban and rural, for the state.

There was an overview of other needs, especially the other non-highway modes, and while addressed in the report, there are recommendations relative to what you might choose to do in subsequent areas.

The goals, as suggested there, are outlined. The first two speak to the scope and the third one is safety and safety was at the forefront of all of our discussions and a priority for us, and then lastly, begin the discussion, if you will, of the strategic role of other modes in transportation.

As you recall, we broke out the estimate in terms of pavements, bridges, urban mobility, rural mobility/safety. The total needs from the year 2009 to 2030 was estimated at $315 billion. The state improvement needs requirements, about $250 million and that's because historically two-thirds of the urban mobility needs are the responsibility of others and has been estimated a third local. So in essence, you can see the estimates that are broken out and the annual investments required and the like. Those numbers were reassessed and updated as required.

So in essence, that is the report. We've concluded, we believe, our task. I might mention that we are receiving a number of requests to meet with groups around the state. There are a dozen or twenty or so requests from a variety of groups from around the state and the committee members, again, are giving of their time to participate in providing briefings or presentations of the report, as well as key members of the study team.

So Madam Chair, that concludes an overview. Again, let me say it was a privilege to work with an outstanding group of people, thank you for the opportunity. And I should highlight that there were two people who did an exceptional job in organizing and developing the team that did the work: Bill Stockton from TTI and Rob Harrison from the Center for Transportation Research. They're both here, and I know that you know them but let me ask them to stand and be recognized. Thank you. And that concludes our report.

MS. DELISI: Are there any questions?

MR. HOLMES: Thank you very much.

MS. DELISI: Thank you very much.

DR. WALTON: My privilege, thank you.

MR. CASTEEL: Thank you, Dr. Walton. Again, David Casteel. Staff will use this report in the integral development of the next phase of the Texas transportation planning effort. This is an important and meaningful contribution to the body of knowledge concerning transportation in the State of Texas. A minute order lies before you for adoption of this report as presented, and staff recommends 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, David. Thank you, Dr. Walton.

Agenda item number 12(b), Brian Ragland will come back up and present an amendment to the 2007 Statewide Preservation Program.

MR. RAGLAND: For the record, I'm Brian Ragland, director of the Finance Division.

This proposed minute order authorizes CONSTRUCT authority in Category 6 for a bridge replacement project over State Highway 6 in Brazos County. Estimated cost is $6-1/2 million. 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 12(c) calls for the approval of the local matching funds for the Economically Disadvantaged Counties Program. This is a report with a minute order from Jim Randall.

MR. RANDALL: Good morning, commissioners. Jim Randall with the Planning and Programming Division.

Transportation Code Section 222.053 requires the commission to report annually on the Economically Disadvantaged Counties Program to the governor, the lieutenant governor and speaker of the House of Representatives. The annual report documents the use of matching funds and local incentives as well as the savings granted to counties participating in the program. During fiscal year 2008, participating counties were granted over $6.7 million in relief from local match requirements. Since the program's inception in 1998, the department has granted adjustments to over 600 projects totaling over $4 million.

Staff recommends approval of the fiscal year 2008 annual report on the Economically Disadvantaged Counties Program as shown in Exhibit A. Upon your approval, the report will be presented to the governor, the lieutenant governor and the speaker of the House of Representatives.

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Jim.

Agenda item 12(d), Phil Russell will come back up and present a report that we were requested to do by the Sunset Commission on the South Orient.

MR. RUSSELL: Thank you, Mr. Saenz, and again for the record, I'm Phil Russell, assistant executive director.

Commissioners, late last fall the Sunset Commission asked us to do some research on the South Orient Rail Line and they asked us to put together a report and submit it to them by February 28 on three basic issues: what's the current value of the South Orient Railroad Line; in its current condition is it possible, is it feasible to sell it; and the third issue is knowing that they want to keep the line open and not abandoned, is it possible to sell it to someone who will continue to operate and move forward on the railroad.

What I thought I might do before I answer those three questions is give you a bit of a historic perspective, a quick view of the road. I don't know how much you all know of it. I'm lucky today I've got Jim Randall and Wayne Dennis here, our division director and our deputy division director in TP&P, and Mario Medina was here earlier -- I don't know if Mario is still here or not, our San Antonio District engineer -- he used to be responsible. Between the three of them, they know a lot about railroads and they make pretty fair bodyguards if you ever need that sort of help. I think between the three of them, I probably could have used them on some of those Trans-Texas Corridor outreach meetings. Right, Commissioner? They would have been very helpful.

The project itself, the railroad is about 391 miles, it runs from Coleman, connecting up with the BNSF line up on the right-hand page of the map, runs through Ballinger -- and I'll talk a little bit more about Ballinger -- San Angelo, going all the way through Fort Stockton, down to Alpine. There's a 10- or 11-mile stretch, I believe, there out of Alpine that has joint trackage rights with the UP Railroad Line, and then it ultimately goes down and connects there at Presidio.

The department originally got involved in this project way back in 1991, the old Atchison Topeka & Santa Fe Railroad was preparing really to abandon the line, so the legislature stepped in, appropriated some money, and working in partnership with the rural rail district, I think it was the first one, the South Orient Rural Rail District, we were able to kind of save the line from abandonment and to move forward. By 1999 it really hadn't worked out, they were having trouble putting enough money into rehabbing the rail line and attracting customers, so by 1999 the legislature again acting, and working in concert with TxDOT, purchased the remaining rights from that rural rail district and that short line outfit and we have, of course, a lease agreement with the Texas Pacifico Company now to operate on it.

What I thought I might do again is just give you a quick view, this just gives you a few quick snapshots of a little bit of the track. If you haven't been through that part of the country, you ought to take a chance at it and you will enjoy it, I assure you. Jim or Wayne would love to take you out on the high rail, I got to do that a couple of months ago and it was quite a trip.

This gives you a little bit of a sense and you can see some of the ties and some of the issues, some of the rehab issues we've experienced. This is the northern segment up toward Coleman. Of course, this is back out west between Alpine and Presidio, fairly rugged country. And Commissioner Meadows, before you ask, no, you can't hunt on it. It does have a lot of wild game but you can't hunt on it.

Some of the more eclectic, if you remember the movie, "There Will be Blood" with Daniel Day-Lewis, they essentially built this Old West town right there next to our railroad, so it's kind of cool. That's, of course, the train station that you see in that movie and, of course, that's the Old West town.

Let's talk about some of the other issues that we have there. Of course, this was the bridge connection across the Rio Grande in 2005 and about a year ago we had a little problem. It kind of goes back to what you were taught when you were kids: Don't play with matches. We lost the entire bridge all the way across the river to the Mexican side, and to date it's been cleaned up and after the floods it's been washed out, but that's pretty much it. Our rail line stops right there at the river.

Some of the rehabilitation needs that we see -- and again, this is a picture up north -- we have been able to spend some money, we spent about $6-1/2 million, I think, in the last seven or eight years. Texas Pacifico I think has chipped in another $8 million or so trying to rehab, and for the most part, the way to rehab it is get in there take out those old ties, a lot of those are probably 50-60 years old, and replace those with new ties, and obviously you can see the before and after, the new alignment helps considerably.

Some of the estimates that we've looked at, to rehab the entire line would cost on the order of probably close to $150 million. We've got sections of that roadway that you can only move at ten miles an hour, it's not conducive to attracting much interest from the railroad folks or anyone else.

Now, again, I think you all are probably familiar with that, the Martifer Company -- and yes, it's a foreign company but it's attracting local jobs so it's a good thing. The Martifer Company, I think out of Belgium, has situated their plant outside San Angelo and their reason for being is they develop the windmills that we're seeing so prevalent from Sweetwater to El Paso and on up into the Panhandle. Now, one of their problems is they need to ship those components in down the line from Coleman into their plant and we've got a little bridge there at Ballinger that's just about this much too narrow. It could almost fit but it won't fit the size of those components, and obviously if you've seen them, those fins that come are very large. So to be able to bring those components in to that new Martifer plant, we're going to have to reconstruct that Ballinger rail bridge.

And again, going back to our map, if you look at it, that Martifer plant is up there between San Angelo and Ballinger, the bridge I just showed you is there at Ballinger. When you look at the color there, the red and the green and the red, the red denotes that we can only put ten-mile an hour rail traffic, at that time I think the green you could go up to 25 miles per hour. I don't think even that would be achievable now.

We talked about the other issues down at Presidio, the bridge there across the river has burned out, there are two or three other spots about where the pointer is now, just slightly north of Big Bend State Park, and even north of Alpine where we've had some washouts, the track has been washed out with some of those heavy rains we had last year. So there would certainly be some need for those rail bridges to be rehabbed.

So when we start looking at usable sections of the road, I think Mr. Saenz mentioned yesterday that a potential project, one that's on that list for stimulus package money, is to put in about $15 million that would be utilized up on the northern end of this line, about $3-, $3-1/2 million of that would be to replace that Ballinger bridge and the remaining would be to upgrade that track. And of course, what that would do would be to incentivize the shipments of goods not only to that Martifer plant but to other shippers in that area.

I think it's of interest that Mr. Saenz had kind of a shippers' conference there in San Angelo -- when was that, Amadeo, December, November? -- and we had a lot of interest, there were probably 30 or 40 or 50 different groups of people there that were very interested. If they just had good rail service, they felt like they could generate a lot of economic development. A lot of those were existing plants that were currently utilizing trucks to ship out their goods, and obviously you've heard about that, the wear and tear on our roads, and they would prefer to have a rail option on that.

So I think there is some discussion about if we can improve, first off, that northern section, we could really open that up and have a viable rail concern where folks could get in there and receive their goods. And then ultimately, if we start working our way south and improving and rehabbing that track, taking care of those washout areas, and then ultimately to really achieve international trade and traffic, we'd have to ensure that that bridge over the Rio Grande was replaced as well.

Now, to get back to the report, and the minute order before you would be to accept the report so that we could submit it to the Sunset, but they asked three questions. First off, what's the value, what's the current value of the South Orient Railroad, and again, it's interesting, there's two different ways that you can evaluate it, you can look at it pure salvage value or you can look at it as a going concern. Well, we had Richard Streeter, who is our attorney that is very closely involved in STB issues, he's an outside counsel that helped put this report together, and as you look through the report, the answer is currently its valued at about $20- or $30 million, $30.2 million.

And it's kind of interesting, when I asked this question last fall, the estimate was about $51 million, and the difference is the steel prices have dropped. And what they're really saying is the only real value, because the track right now is not going to attract many customers, so the only real value to this line is if you scrapped that steel, and even that price dropped $20 million just in a few months based on those steel prices. So the first question is what's the current value of the South Orient Railroad? $30 million.

Second question is: Is it feasible to sell the South Orient Railroad line in its current state to private interests? And I think what we're saying is no, you're not going to attract anybody that will come in here and buy this unless significant funds are put into the rail line itself.

And the third is: If sold, is it possible for the South Orient to be a viable functioning railroad? And again, I think the answer is probably no. Realistically, unless we can put some additional money into that rail line and help improve it, I think it's going to be a struggle to attract people to that rail line.

Now, Mr. Saenz and I, Mr. Randall, Mr. Dennis, we've had several meetings with a lot of different folks that are interested, there are a lot of groups that would love to open up a short line rail business either on the northern segment, even a couple down south, but again, it always comes back to somebody is going to have to look at infusing some money into this line to really make it a viable, good economic corridor for West Texas.

Mr. Saenz, would you like to add anything to that?

MR. SAENZ: No.

MR. RUSSELL: Commissioners, I'd be happy to attempt to answer any questions you might have.

MR. UNDERWOOD: I want to make sure I understand something. Part of that rail is ten miles an hour?

MR. RUSSELL: Yes, sir, the vast majority of it.

MR. UNDERWOOD: My Segue goes faster than that, just for the record.

(General laughter.)

MR. SAENZ: And Commissioner, that segment which is the segment shown in red on the slide up there, not only is it ten miles per hour, they're also restricted in the number of hazardous material rail cars that they can haul at any one time.

MR. UNDERWOOD: But that's because of the restriction of the speed or whatnot.

MR. SAENZ: Yes, sir.

MR. UNDERWOOD: But actually, if you fix the road up, then it has some value, if you fix the rail up.

MR. SAENZ: Yes, sir.

MR. UNDERWOOD: Then you can haul hazardous cargo, you can haul other commodities or whatever, and then it really may have a much better value. Because I agree with you, the scrap value, I've seen this happen in our area, the real value of that rail right now is just scrap iron, or you can find some mine up in the north that's willing to buy those rails so they could put them in their mine.

MR. RUSSELL: And you know, the Sunset group I thought were very clear, they were not interested in scrapping the line or abandoning, they want to keep it as a viable concern, but to be candid and honest, money will have to be infused in that.

MR. UNDERWOOD: Otherwise we're just trying to sell them a car that doesn't have any wheels.

MR. HOUGHTON: What's the demand?

MR. RUSSELL: You know, again, like everything, Commissioner, it's difficult to assess precisely, but I think the shippers meeting we had out in San Angelo at least gave me, as a neophyte, a pretty good sense that there is a lot of interest. There are a lot of folks out there but for a lack of rail service, they could either grow their existing business, and of course, a lot of the chambers and other groups feel like they could attract more business, so I think at least on that northern section, we could have a lot of folks that would be utilizing, and again, we've had at least one rail group that would be interested in moving into that section down to San Angelo if it was updated.

MR. HOUGHTON: So this is one of those if you build it, they will come?

MR. RUSSELL: I think so.

MR. SAENZ: It's kind of like the chicken and the egg: we'll move but you've got to provide better rail service, and then the railroad says we can't spend money because nobody has moved.

MR. RUSSELL: And again, Commissioner Houghton, to some extent it's build it and they will come, but part of the situation there is the business is already there, they're just shipping it out on trucks across our roadways, and I think they would love to make a business decision and put it on a rail if it was an economic decision.

MR. UNDERWOOD: Amadeo, question for you: Why do we do maintenance on our roads? That's a loaded question.

MR. SAENZ: So that people will use them.

MR. UNDERWOOD: That's right. Well, to protect an investment is my point, and basically we have an investment that needs to be protected, and to do that, we've got to fix it up.

MR. SAENZ: Yes, sir, and of course, based on current statute, current law, we can't spend any of the Fund 6 money. The money that we've expended on this has been either federal dollars that came down through an earmark specifically for the Texas Pacifico or money that the operator has put in out of their pocket.

MR. UNDERWOOD: If you could take Category 12 money which we just gave up three-fourths of it.

MR. SAENZ: We can't spend any Fund 6 money on this project. --

MR. UNDERWOOD: Oh, that's right. Thank you.

MR. SAENZ: Remember, commissioner, when we put together the Legislative Appropriations Request, we did request some General Revenue to be able to make some of these improvements and we also have a survey out to the shippers to try to get some method to quantify what kind of growth we could see, and we did put a placeholder in the economic stimulus money because it does qualify for rail use.

MR. HOUGHTON: Well, this seems like we've got a patient that we're keeping on life support.

MR. RUSSELL: Just to give you a sense, just kind of doing the numbers, it looks like since 1991, 18 years, we've expended about $15.4 million on the entire line, either in purchasing it or some sort of rehab. And then again, the various districts or short line outfits that were operating it expended, by my math, probably another $14 million. That's on 391 miles of rail.

MR. HOUGHTON: How many trains go across that track right now?

MR. RUSSELL: There are none south because of the bridges that are out. Even the ones up north -- do you remember?

MR. SAENZ: I think up north between San Angelo to the north, I think they make a trip every three days or four days.

MR. HOUGHTON: So when do we pull the plug on the patient?

MR. RUSSELL: Twenty-four hundred cars a year is what Mr. Dennis tells me.

MR. HOUGHTON: When do we pull the plug on the patient?

MR. RUSSELL: That will be the decision, I guess, of you all and the legislature.

MR. HOLMES: Twenty-four hundred cars a year?

MR. RUSSELL: That's it, up north.

MR. HOUGHTON: You know, the cost-benefit analysis here doesn't match.

MR. SAENZ: That's part of the purpose I think the Sunset Commission wanted to look at the report to make a determination.

MR. HOUGHTON: Don't we have money from the stimulus on this one?

MR. SAENZ: We put a placeholder of money from stimulus for this so that we could make some of the improvements; that's the only way we would make them.

MR. HOUGHTON: What, $11 million of stimulus?

MR. RUSSELL: About $14-, I think.

MR. HOUGHTON: $14 million of stimulus.

MR. SAENZ: The other thing is the operator has said that they have $5 million that they're willing to invest of private equity money also on making improvements.

MR. HOUGHTON: The cost-benefit analysis just doesn't match. I hate to be a bad guy but this just doesn't work. If we're going to put $14 million and what are we going to get: another train every fourth day?

MR. RUSSELL: Well, again, if you look at those surveys and at that shippers meeting there were a lot of folks that were very interested. Hurricane Steel is there in San Angelo.

MR. HOUGHTON: But that's not a pledge.

MR. RUSSELL: Right, no guarantee.

MR. SAENZ: One of the operators that visited with us told us that if the line was upgraded to 25 miles per hour, then they could provide daily service and they would make money of that because they would generate enough traffic. But the problem is right now at ten miles per hour, you've got to switch crews before you get from one end to the other.

MR. HOUGHTON: I don't see this personally.

MR. HOUGHTON: This is a report. Right?

MS. DELISI: This is just a report. This is answering a question that was asked to the agency by the Sunset Commission.

MR. RUSSELL: Those three questions.

MR. HOUGHTON: Well, I guess the bigger question we're going to vote on the stimulus next week, we have $14 million?

MR. RUSSELL: $14.1 million.

MR. HOLMES: And that's for the bridge.

MR. RUSSELL: $3 million of that is for the bridge, a little over $3 million; the rest would be for rehabilitation.

MR. HOUGHTON: And do we have a promise from Martifer that they will use the rail line?

MR. RUSSELL: They're building a plant.

MR. HOUGHTON: No, that's not the question. Are they going to put their fins on the rail line? Do we have a contract that they will put their --

MR. RUSSELL: I don't think we have a contract, I think it's a commitment.

MR. HOUGHTON: And if not on the rail line, they're going to put it on the roads -- which they come through El Paso right now, those fins.

MR. RUSSELL: Well, they come from everywhere, I see them coming up from the coast.

MR. HOUGHTON: Those fins are all over the place.

MR. RUSSELL: And I think it's probably the fins and the unit. There was one parked out here in front of the Capitol last week, whatever they call that, the generator portion of it.

But again, as the Chair said, this is simply a report that was requested to be submitted to them February 2 answering those three questions: the value; is it possible to sell it in its current condition; and can you sell it to a going concern, could you sell it to an outfit that's actually going to use it rather than trying to scrap it.

MR. HOUGHTON: Put a sign on it and see what happens.

(General laughter.)

MS. DELISI: Can I get a motion on approval of the report?

MR. HOLMES: So moved.

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. RUSSELL: Thank you, Commissioners.

MR. SAENZ: Thank you, Phil.

Agenda item number 13, James Bass will provide us a status report on our obligation limitations.

MR. BASS: If I'm quick, I can still say good morning. For the record, I'm James Bass, chief financial officer at TxDOT. And this is the monthly update to the commission on our obligation limit out of the traditional state highway funds for 2009 which is, if you'll recall, $2.53 billion.

We are on target to meet that. One of the things I will highlight is through the month of January through the actual letting we've utilized about $680 million of that through the letting process, but in addition, some of the commitments on the CDA projects of roughly $585 million will be added to that. So we're halfway through the year and about halfway through that obligation limit for 2009.

Again, to highlight that obligation limit of $2.53- applies to our traditional funding of state highway funds and our federal funds, and that's highlighted really, if you look at the March 2009 planned letting, I'd call your attention to the fact that the statewide letting is scheduled to be over $490 million but only roughly $180- of that will count against our cap. The reason for that is around $310 million will be funded by Proposition 14 bonds, so through the earlier action of the commission some months prior, we're beginning to see a heavy wave of projects funded by the Proposition 14 bonds moving forward.

In addition to that, included in your packet near the back is a tracking chart that we've developed and are continuing to work on for a variety of reasons. One is in response to the State Auditor's audit on our funding allocation but also through concerns expressed by the commission and others, and it's, again, near the back, it has some yellow highlighted columns on it, and this is to show the original obligation amount, any adjustments and that may be transfers from one district to another, because if you recall, we're no longer allowing a particular district to use future year's dollars to fund a current year project, we're going to show transfers between the districts within the current year. That's what that adjustment column would show and we'd arrive at a revised obligation amount.

We will then show the total statewide letting amount and the local let amount that goes against that, by then since we show in reports statewide total letting figures, those two statewide let amounts and local let amounts would be all inclusive. So for March it would add up to $492-, and then we would back out the no impact to the State Highway Fund obligation. That would be, as an example, any project funded by Proposition 14 or any project funded by economic stimulus, any project funded by the 121 sub-account does not count or impact against the $2.53 billion for '09.

There are other obligations that don't go through the letting process, for example, the commitments of state funding on CDA projects is a commitment or an obligation of those funds. That will be tracked on this sheet, as well as change orders during the life of the project and once we final out the project.

The reason those columns are highlighted goes back to some of our other conversations on the need to upgrade and update the management information systems within the department. We have different systems that were prepared and created for different reasons, some have different data elements concerning projects than other systems do. We're working with our Automation Division to automate this process, so right now this is still manual. It's taking a lot of hours to go through and get the needed information between those two different systems to come up with a reliable and verifiable number on the variances on these final payments. We continue to work on that, hope to have it operating in an automated environment by the end of this fiscal year in the September time frame.

Other than that, just to give you a continued update on motor fuels tax, we are still down almost 3 percent from the prior year. A potential glimmer of hope would be that for the month of February our deposit this year was actually 1.4 percent higher than February of last year, but again, for the first six months, September through February, we're still running about 3 percent behind where we were last year, but because of the operational adjustments the department has made deferring capital equipment purchases, not filling vacancies, we still think we're on target to be able to award or commit that $2.53 billion for fiscal year 2009.

MR. HOUGHTON: Well, the other question, James, I fast-forwarded in the book and I looked at the contract awards or what we're going to vote on here hopefully in the next minute order is we're down as far as the actual estimate versus bids about 13 percent in one and 22 percent in another. Is that covering that adjustment or the receivables?

MR. BASS: That's part, and if we commit $2.53 billion -- see if this answers your question -- based upon our estimates, that was going to fund X number of projects. If those projects come in lower than anticipated and we still have the $2.53 billion available, there may be additional projects that we can get across the start line, the award line this year.

MR. HOUGHTON: Because every month we've been awarding for the last six, they're significantly down. So it's got to be covering something of that shortfall in the revenue.

MR. BASS: Right. And I haven't looked at the data for this month that you're going to vote on here in a minute. We've had a high number of contractors bidding on projects more so than normal, and one of the things that's come up in one of our hearings last week, and Thomas may have slightly different numbers, as far as the amount that is under contract and then the percentage of those contracts that's remaining to pay, we are down to about only one-third of those contracts are remaining to be paid, the dollar value of those contracts. Typically to have things run most sufficiently, if you will, it would be around 50 percent.

MR. HOUGHTON: It's getting real tight, isn't it?

MR. BASS: Yes, when it gets below that, a number of firms do not have projects that they're able to schedule their crews on three months from now, four months from now, so you're going to get more aggressive pricing. If it's higher than that, then they may have their crews scheduled and you may not see as many people bidding on it. And so with one-third of the remaining to be paid on existing contracts, you can see the need for the economic stimulus money to get additional projects out there. I think what will help in addition to that is the Proposition 14 bonds that will be funding, again, roughly over $300 million in the March letting to get additional work out there and get more of those crews working, if you will.

And again, this is merely a report. There is no action item to be taken other than to inform the commission and answer any questions you may have.

MS. DELISI: Any other questions?

(No response.)

MR. BASS: Thank you.

MR. SAENZ: Thank you, James.

Agenda item number 14, commissioners, Thomas Bohuslav will come up and present our monthly letting projects for you all to award contracts.

MR. BOHUSLAV: Good afternoon, Commissioners. My name is Thomas Bohuslav, director of the Construction Division.

Item 14(a)(1) is for consideration of the award or rejection of Highway Maintenance and Department Building Construction contracts let on February 10 and 11, 2009. We had 25 projects. An average number of bidders for those maintenance projects were six bidders per project; an underrun there of 13 percent for maintenance for about $2.7 million overall -- actually, it's about $3.1 million if you look at the recommended awards today.

We have one project we recommend for rejection. It's a project in the Abilene District in Taylor County, project number 4026. This is a vegetation management performance-based contract and it was for a two-year period, came in about 20 percent over. We did have a good number of bidders on it but it's 20 percent over. The district went back and did an analysis of what they thought they could do through conventional means, just regular mowing contracts and so on, and they found they could save about $300,000 a year if they let it that way. So they want to recommend rejection of that project.

We recommend award of all the other projects. Any questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. BOHUSLAV: Item 14(a)(2) is for consideration of award or rejection of Highway and Transportation Enhancement Building Construction contracts let on February 10 and 11, 2009. We had 55 projects and we had over seven bidders per project and that's moving up again from previous months. Again, as mentioned a while ago, we're 22 percent overall under this month, about $30 million under the estimate. Now, that's not the program amount; that is the estimate amount that comes to the letting.

We have one project we recommend for rejection. It's a project in Montgomery County, project number 3013. This is for some ITS in the district there in Montgomery County, and we're going to recommend rejection based on what occurred during the letting. We had a late addendum on this project. Addendums are issued for changes that need to correct the plans to keep them competitive, to make everybody's bids the same or to correct some issue we had that could create a problem if we tried to award it and we went to work out there.

And our goal, as we issue addenda, we push hard to get projects to the table, to be able to let them, and our goal is to try to keep those projects onboard for the letting, make sure that they meet the letting so we issue late addenda, and when we issue those late addenda, we call all the contractors. We either fax to them or we get on the web the actual addenda and they go look there to see what the details of the addenda are and they make adjustments to their bid.

This one, we did a call on the last day and we worked to try to salvage them on the last day even if we have to do that, and what we had was a contractor or two that were not in Austin, so by the time they turned around and got back here, it was ten minutes after one o'clock, the bid opening. We don't think that's fair; we don't think you should have to be in Austin. They deliver their proposals either by mail or by hand, sometimes a day or two before. So to be fair to all the bidders, we want to go back. We want to reject this project and go back and rebid it.

And with that, I'll entertain any questions.

MR. HOUGHTON: I'll ask the same question I asked James Bass, for the fiscal year, what is the over/under as far as construction projects?

MR. BOHUSLAV: The actual value, I can't tell you. We did provide a summary.

MR. SAENZ: John is working on that to determine to see if he has any additional projects that can be brought forward or are we going to have to have some projects that will be reduced.

I would probably venture to say for the year we are probably about 10-11 percent under what our engineers' estimates were on an average.

MR. HOUGHTON: On an average versus revenue. Revenue is down too.

MR. SAENZ: This is just based on engineers' estimates. Our revenue has come in at much less.

MR. HOUGHTON: It's a net issue.

MR. SAENZ: And we will get you that.

MR. HOUGHTON: It's a net issue, where are we. Because of the competition, obviously, prices are down and commodities are down but revenue is down. What's the net issue?

MR. SAENZ: We have realized savings because of competition but we have less money to work with, so we'll get you that number.

MR. HOUGHTON: Okay.

MR. BOHUSLAV: Just as a note here, through the history of lettings, we normally are always underrunning. There's been a few years, 2004, 2005 maybe, 2006, where we did have some overall in the year overruns because if you remember, those are the years where prices really spiked between steel, fuel and asphalt. So it's a rarity where we did not underrun overall; normally we underrun overall.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MR. SAENZ: Thomas, I guess just to make sure, the project that we're rejecting because of that, we are going to modify it enough so that all the contractors now when they bid on a new project can bid on even slate. Because you read that bid. Right?

MR. BOHUSLAV: Yes, all contractors will be able to bid on the project.

MR. SAENZ: Right. But some contractors that submitted their bid, that bid was read, and their number is public now, their bid price is public.

MR. BOHUSLAV: Yes, sir.

MR. SAENZ: If we let the project exactly in the same form, somebody already knows what I bid if my bid was read. We need to work with the district to modify that contract enough so that all the new bids will be completely different.

MR. SAENZ: Yes, sir. And we're talking to the district about that.

MS. DELISI: There's a motion and a second. All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: Thank you, Thomas.

Commissioners, agenda item number 15 is the Routine Minute Orders that we go through every month dealing with donations to the department, dealing with eminent domain proceedings, load zones and postings, right-of-way dispositions and donations and speed zoning. I'll be happy to answer any questions on any individual minute order; if not, staff recommends approval of all minute orders in one shot.

MS. DELISI: Is there a motion?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. UNDERWOOD: All in favor?

(A chorus of ayes.)

MS. DELISI: The motion passes.

MR. SAENZ: There is no executive session.

MS. DELISI: We'll enter into the open comment period. Is there anyone signed up?

MR. HOUGHTON: I have a question of Amadeo; John is not in the room or somebody can answer this question. Does Webb County have an MPO?

MR. SAENZ: Yes, sir.

MR. HOUGHTON: What kind of allocation from the stimulus was the Webb County MPO?

MR. SAENZ: The Webb County MPO is a small MPO. It's small urban. They got about $8.2 million, and they had submitted they were willing to contribute $5 million. They had a couple of other project needs that they needed to address.

MR. HOUGHTON: Okay, that's what I needed. Thank you, Madam Chair.

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

MR. HOLMES: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Please note for the record that it is 12:13 p.m., and this meeting stands adjourned.

(Whereupon, at 12:13 p.m., the meeting was concluded.)

C E R T I F I C A T E

MEETING OF: Texas Transportation Commission

LOCATION: Austin, Texas

DATE: February 26, 2009

I do hereby certify that the foregoing pages, numbers 1 through 151, 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.

 

 

 

3/03/2009

(Transcriber) (Date)

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