September 28 Transcript

Texas Department of Transportation Commission Meeting

Commission Room
Dewitt Greer Building
125 East 11th Street
Austin, Texas 78701-2483

Thursday, September 28, 2006


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


Michael W. Behrens, P.E., Executive Director
Bob Jackson, Interim General Counsel
Roger Polson, Executive Assistant to the
Deputy Executive Director
Dee Hernandez, Chief Minute Clerk


MR. WILLIAMSON: Good morning.

AUDIENCE: Good morning.

MR. WILLIAMSON: It is 9:06 a.m., and I would like to call the September 2006 meeting of the Texas Transportation Commission to order. It is a pleasure to have each and every one of you here with us this morning.

Please note for the record that public notice of this meeting, containing all items on the agenda, was filed with the Office of Secretary of State at 11:38 a.m. on September 20, 2006.

Before we begin today's meeting, let's all take a moment to reach in our pockets and purses, notebooks and valises and pull out our pagers, cell phones and all of our electronic devices and place them on the silent or vibrate mode so that no one will be interrupted when they're addressing the commission.

And I thank you very much for that.

It is our custom to open with comments from the commission, and we begin with Commissioner Houghton from the far west reaches of our great state. Ted?

MR. HOUGHTON: Just proud to be here, Mr. Chairman. Thank you very much, and thanks for coming today. There's a few noteworthy events on our agenda, and I see some great friends out in the audience. Mr. Chairman, I noted that we don't have a full house today. We must not be giving anything away. But thank you for being here today.


MS. ANDRADE: I also would like to welcome everyone to Austin and to our commission meeting for this month. And I'd like to, if I may, Mr. Chairman, remind everyone, in case you haven't heard, that our slogan "Don't Mess With Texas" is up for a national award and voting ends tonight, and so I would like to encourage you to support this by going to, and place your vote. Voting ends tonight and we're competing with some other slogans like "You Got It" and the Las Vegas slogan about "What Happens Here Stays Here" but I don't think "Don't Mess With Texas" we've all taken ownership and are proud of that slogan, so if you all would support it, we would appreciate it.

MR. WILLIAMSON: Thank you, Hope.

MS. ANDRADE: Thank you.


MR. JOHNSON: Hope, I think that's an excellent point and suggestion. "Don't Mess With Texas" is clearly recognized in a lot of areas and it's been a great slogan for our cleanup efforts around the state, and so I'd encourage you, as Hope has, to get online and vote to support it.

It's wonderful to see so many people here from the Valley. We've got a couple of items on the agenda from the Valley, very important to what's going on all up and down the Rio Grande River. There's just so much commerce going on, it's the gateway to Texas, and we're glad to be able to assist that commerce.

We have some financial issues which I think are exciting which will show you not only is a lot of work going on presently across this great state, but in the next few years even more work will continue to be done.

Welcome and delighted that everyone is here.

MR. WILLIAMSON: Thank you, John. And I associate myself with the remarks of my three colleagues. We appreciate you taking the time out of your valuable day to be with us, whether you have business with the commission or you're simply observing the business of others.

Let me remind everyone if you wish to address the commission during today's meeting, we ask that you complete one of two speaker cards which you can find at the registration table to your immediate right in the lobby. If you're going to comment or discuss an item that's on our agenda, we ask that you complete a yellow card, such as the one in my left hand, and please identify the agenda item upon which you wish to speak. If you wish to comment during the open comment period which will occur at the end of this meeting, we ask that you fill out a blue card, similar to the one in my left hand, and identify, again, the item upon which you're going to be commenting.

Regardless of the color of the card, we ask that you try to limit your comments to three minutes so that everyone will have the opportunity to voice their opinion before the commission.

Mike, before we go to the minutes, let's take a moment and address items of a more personal nature.

MR. BEHRENS: Thank you. We always like to honor people that have put in long service with the department, and I'm going to yield the floor to Commissioner Johnson to make that presentation.

MR. JOHNSON: Thank you, Mike.

It's a pleasure to recognize people who are part of the fiber and fabric of this great agency. There are almost 15,000 employees, and believe me, they do a tremendous job, but today I have the significant honor of recognizing one who has helped me over the course of almost eight years stay abreast of what is going on. She's kept me out of lawsuits and a few other issues that we run the risk of being a party to. And she's devoted so much time on my behalf, I have a personal stake in this, and so I'm delighted to be able to recognize Phyllis Chandler who has been my very able and capable administrative assistant since I was sworn in almost eight years ago.

Phyllis has served this state and this agency for 15 years. She started in the Paris District and then came to the Austin area, and she's just done me a tremendous job and I'm deeply grateful and beholding to her. Likewise, everything she does and everyone she comes in contact with, she represents this agency and this state in magnificent fashion.

So Phyllis, if you would come forward, I have the distinct pleasure of giving you a plaque with your name and 15 years of service, along with a token that our service awards allow us to present to people like yourself who truly have done a great job.

MR. WILLIAMSON: Phyllis, do you want to like take a moment and blast all four of us at once?

(General talking and laughter; pause for presentation and photos.)

MR. WILLIAMSON: Phyllis has worked for John the last few years or worked with John the last few years, and I can't let it go, John, without a comment about Phyllis. We have, as you said, nearly 15,000 great employees, and for the most part, I think, down the line dedicated to the mission and the plan of the agency.

And I think of a lot of adjectives when I think of Mike or Steve or Amadeo or Coby or Jefferson or when I think of Maribel Chavez in my area. The adjective I think about with Phyllis is grace and dignity. In the six years I've been here, you have always conducted yourself with grace and dignity, and that's frequently not easy, particularly in the last couple of years of the firestorm we've had to go through with the new Texas transportation plan. So I add my appreciation for 15 years well done.

Mike, I think that we were going to change the agenda a bit.

MR. BEHRENS: Yes, sir. I'd like to start out with agenda item number 9. Do you want to take care of the minutes before we do that?

MR. WILLIAMSON: Mike, are you telling me I need to take care of the minutes?

MR. BEHRENS: Yes, sir.

MR. JOHNSON: No. He's just advising you.

(General laughter.)

MR. WILLIAMSON: Members, we need to approve the minutes from the August 24 meeting. They're in your packet, you've had time to read them, no doubt. Do I have a motion?

MR. JOHNSON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BEHRENS: We'll take up agenda item number 9 which concerns Finance, and this is recommending approval of financial documents that are needed for issuance of the Texas Mobility Fund bonds. James?

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

Through this minute order, the commission directs the department to execute any necessary documents and to issue no more than $1.3 billion of Texas Mobility Fund bonds.

The finance plan for this issuance includes a constant maturity swap which has been reviewed by and recommended for commission consideration by the Derivative Committee. The commission would also approve the documents in the exhibit which are associated with the bonds and would authorize the department representative to approve any necessary revisions to those documents.

Additionally, the minute order would approve certain entities as swap counter-parties to the commission and would also approve a custodial bank to assist the department with certain investments for the Mobility Fund.

I'd be happy to answer any questions you might have, and staff recommends approval.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation of this agenda item. Have you questions or comments?

MR. HOUGHTON: What is, James, the capacity for authorization under the Texas Mobility Fund?

MR. BASS: Currently the authorization that we've received from the Bond Review Board is the ability to issue up to $4 billion of bonds. After this issuance, although it approves us up to $1.3-, the current plan is for $1.25-. That would put us at having issued $3- out of the $4 billion approved. We do believe there's additional capacity above and beyond that from the revenues coming in, however, that would require us to go back to the Bond Review Board to receive that approval.

MR. HOUGHTON: We know what the capacity might be?

MR. BASS: It varies depending upon various structures that the commission might approve as we go forward. Conservative, I'd say five and a quarter billion, on up.

MR. WILLIAMSON: Other questions, comments, members?

MR. JOHNSON: My observation is that's a great-looking tie.

And I think this is significant because the voters of this state approved the Mobility fund, and it shows what we were able to do in terms of leveraging our resources to get more work done more quickly, and I just salute everybody who has been involved, from our financial advisors to your very capable staff. I think this is a great step.

MR. BASS: Thank you. I would also say the districts have done a truly amazing job of putting this money to work.

MR. JOHNSON: Absolutely.

MR. BASS: And there's billions of dollars of activity in play today that wouldn't be other than for the Mobility Fund.

MR. HOUGHTON: Can we identify that activity by district?

MR. BASS: Yes, we can.

MR. HOUGHTON: And the follow-up question there is with the increasing capacity, it would then increase the amount of capacity to the districts. Do they know that yet?

MR. BASS: We continue to work through that with our financial planning group that meets monthly to discuss that on how to allocate that.

MR. HOUGHTON: But we have not added that new capacity into their allocation to the major metros. Correct?

MR. BASS: Not that I'm aware of.

MR. WILLIAMSON: James, I have a couple of questions similar to that of John and Ted from a slightly different aspect. Recently I've been asked about whether or not we're deploying the Mobility Fund fast enough to address the state's congestion problems. For the audience that doesn't keep up with the arcane-ness of our department, as I understand it, we're basically a cash flow operation, we have three major sources of input: that's the gasoline tax collected at the state level; that's the federal gasoline tax, 70 percent of which we pay is returned to our transportation program; and we have the motor vehicle registration fee. The Mobility Fund is underwritten by a series of fees and taxes not associated with those three cash flow inputs, so this is now our fourth major source of cash flow coming in.

Now, cash flow out, besides the administrative overhead, the transfer to other departments, the things that keep the entire operation working, as I understand it, breaks into two pieces: a distribution to our districts based upon plans they develop with local and regional leaders; and a smaller, perhaps in the range of 15 percent, distribution directly from the commission primarily targeted at pass-through toll and military base expansion operations.

When someone opines that the Mobility Fund has not been deployed fast enough, would they most likely be making that observation based upon the cash coming in without realizing that the contracts are being executed to spend that money going out on the district side?

MR. BASS: I would agree. I think it's a misunderstanding of how the department operates and that we are truly operating on a cash flow basis. For example, the amount of activity that is going on that has been advanced through the Mobility Fund is roughly $5 billion. There's $5 billion in our accounting system that's targeted and working from the Mobility Fund. However, I mentioned after this issuance we will have only issued $3 billion from the Mobility Fund, and that's what a lot of people tend to focus on is when we issue the bonds, therefore, there must only be $3 billion worth of work going on.

As we all know, the larger construction projects take two, three, four years sometimes to build and complete, therefore, we only issue the bonds as the cash flow of those thousands of projects dictate, and that's why the projects, the dollar amount that's been advanced today exceeds the amount of bonds that we've issued, however, over the next 18 to 24 months we think those two will catch up as all those projects come to completion.

MR. WILLIAMSON: It's like two disconnected but parallel lines: they'll cross occasionally, they'll separate, and they'll cross.

MR. BASS: Almost always the amount of projects advanced will lead the amount of bonds issued out of this program.

MR. WILLIAMSON: And Ted asked for some information and I want to echo that, and I know Hope has spoken to me several times about wanting to know some of this data on a detailed level, and that is we all know that, for example, in Montgomery County there is a tremendous pass-through toll program soon to be started that's a direct result of the department's financial ability to make guarantees to Montgomery County. We know that State Highway 121 in North Texas will soon probably be awarded to a private sector consortium. All of those things are possible because of the cash flow in the department has and projects it will have.

I think it would be very interesting to know -- and I may need to be directing this to Coby if he's not left the room; he must have anticipated I was going to call him up -- I think it would be interesting to know the economic impact, not just on highways, Ted, but on the state's employment base, the result of this expansion of highway construction over the last six years. It would be interesting to know the probable reduction in congestion and the probable improvement in air quality. If we can quantify the enhanced safety, the number of jobs -- again not related to construction -- that we've brought in, and how much we've been able to preserve our system as a result of this. I think perhaps if the financial and GBE divisions can work on that data and produce it for us, I think we'd like to see it.

MR. HOUGHTON: Well, there's kind of two components to it. One is the Mobility Fund as we ramp up and you have kind of when you peak out on the Mobility Fund, but then you have your CDA program that's going parallel with that. But from a Mobility Fund standpoint, there's a bubble there that we're going to hit that the revenue stream is going to be able to support so much of debt.

MR. BASS: Correct. At some point we will fully leverage the first wave of the Mobility Fund and then we'll have to wait a period of time as that debt is retired before we can issue additional, or receive additional funds into that we could then leverage as well.

MR. HOUGHTON: The other question is I'll go back to one of my original questions, if you have the capacity based upon the revenue sources, the tickets and things like that, is the increase to the eight major metros under the Mobility Fund, what they will see, realize in cash to leverage projects.

MR. BASS: There's, as in most cases, always good news and bad news. The good news is we believe there's additional capacity from the Mobility Fund because the revenue is coming in, the estimate is continuing to grow as Texas grows. The thing that's combating that, that we face not only in the Mobility Fund but in all of our programs, is the increased construction cost. And so how much does that additional money truly equate to additional projects or is it helping us come closer to matching inflation over time. And that's going to vary on a region-by-region basis, but that's the other I want to, I guess, tell you the cloud associated with the silver lining as well.

MR. HOUGHTON: Good news/bad news.

MR. BASS: Right.

MS. ANDRADE: Mr. Chairman, if I may say, I'm glad that you're asking for information as to how we can translate what this means to the normal citizen about that it does create many more job opportunities, and it does bring economic opportunity. The last tour that I took of our SH 130 from the helicopter, I could see lots of people working, I could see lots of new roofs which means it's attracted new development, and I would appreciate you translating that into what does this mean for the districts that we live in. Thank you.

MR. BASS: And Chairman, you mentioned pass-through tolls and Montgomery County. I'm not sure if they've closed the initial issuance of their debt to advance that project that will then partially repay over time. If they haven't, they're very close to it. And I know Williamson County, as well, is very close to providing the initial funding for their project. So even that program is advancing projects throughout the state and delivering those years ahead of otherwise.

MR. WILLIAMSON: And hopefully our Cameron County partners are fixing to kick it up into about fourth gear and get after it down in -- what did I call you, the far west end of the state -- that would be the far southern entrance to the state.

Anything else members?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BASS: Thank you.

MR. WILLIAMSON: Thank you, James.

MR. BEHRENS: Now we'll move to agenda item number 2 which will be a report given to you by Amadeo on TTC-35, about the comprehensive development agreement procurement process, and also other activities that are happening along the TTC corridor. Amadeo?

MR. SAENZ: Good morning, commissioners. For the record, Amadeo Saenz, assistant executive director for Engineering Operations. I apologize for my voice this morning. I think I'm coming down with a little bit of a cold. And I thought I sounded bad until I talked to a couple of our guys this morning that sounded much, much worse, so I feel I'm better off.

But the agenda item number 2 is a status report that I would like to give you on the activities that are going on with our Trans-Texas Corridor 35, we've reached a couple of milestones. But before I start, I wanted to go through and give you a status. I will have some PowerPoints, it will start kind of in the middle of my presentation; I didn't have PowerPoint for the whole thing. We'll get to it in a minute.

I wanted to kind of give you a status of where we're at on some of the different projects that we have been developing through the TTC-35 procurement process. The first one I want to talk about is the State Highway 130 Segments 5 and 6. If you all recall, at the end of June, our June commission meeting, TxDOT signed a commitment agreement approving the facility implementation plan and moving forward to agree to enter into a facility agreement with Cintra-Zachry, provided that the 23 elements that were outlined in the commitment agreement were delivered. We have been working on those diligently to get those approved.

The biggest item was, of course, the re-evaluation of the environmental for 130 Segments 5 and 6, and I'm happy to say that that's moving forward. We have been having some public hearings. We had a public hearing on the 26th, we had a public hearing yesterday, and we have a public hearing tonight, and that will complete the public involvement process of that re-evaluation of that document. And we anticipate having clearance from Federal Highway by Thanksgiving of this year. That will clear one of the biggest things that needed to be looked at.

There's also Cintra has been working on some of the requirements that they have, Cintra-Zachry. Of course, they had to submit some interchange justification reports for connections to Interstate 10. That has to have Federal Highway approval and that's been done.

We've been finalizing the price reasonableness evaluation, and a value engineering report and study that has to be done for the project because of the size. Those are well underway and will be completed this month. Preliminary schematics have been submitted to Federal Highway for them to review and approve; that's also a requirement. So we're well underway to completing all our 23 items that were pending as part of that commitment agreement.

Where we go from here, of course, the environmental will be cleared. Once that's done, we will finalize the facility management plan that Cintra is also developing, and sign the concession agreement, and then Cintra will have the time that was allowed for them to close financing and get the project moving. So that project is well underway and is moving just like we had planned.

If you recall, also we did receive from Cintra-Zachry -- they're able to bring projects forward -- they identified a railroad project from north of Dallas-Fort Worth down to Laredo as a project that was ready for development. We agreed with them, and on July 31 we did reply to them that we agreed that that rail project was ready for development, and we have been working closely with Cintra-Zachry to put together the facility implementation plan or where they will put a facility implementation plan together that basically outlines how they plan to develop or plan and develop that project and implement that project.

At the same time, we are working closely with Federal Highway Administration and the Surface Transportation Board. This project of constructing rail is a project that has never been done before, at least a project of this magnitude, so we have been working and trying to coordinate with Federal Highway Administration and the Surface Transportation Board because Surface Transportation Board is the federal agency that approves the construction of rail projects.

We have a meeting next week in Washington, meeting with both federal agencies to finalize the process of how we clear the environmental and get that project moving. At the same time, as I mentioned, Cintra-Zachry is doing their agreement and facility implementation plan, and then those processes will merge together and we'll move forward on that process.

The last project that I wanted to bring up on here, a project that we did receive from Cintra-Zachry, a letter that Loop 9 in the southern part of the Metroplex was ready for development, and they identified a project from Interstate 30 east of Dallas, then south and west around Dallas and Fort Worth, and come back to Interstate 30 west of Fort Worth. They've also said that this was a project that falls under the connectivity projects that the facility agreement allows them to bring forward.

We have been reviewing their submittal and agree with them that because a lot of environmental work had been done on a portion of that project, the portion in the Dallas District that goes from about 35 East all the way to 30, because we have a lot of environmental investigations that we have done, that project, we agree, is also ready for development and we want to initiate moving forward with that project.

The portion of the project west of 35, from west of 35 West all the way to 30, no environmental work has been done to date, so we have been in communication with the RTC and are looking at initiating the environmental study so that we can have more data before we proceed with that portion of the project. So in that case, what we're doing is basically breaking the project into two where we will initiate the environmental study to catch up the western leg but not slow down the eastern leg because the western leg has not been done. So we will approach that project in two different scenarios but move it forward.

That's what we've been doing on project-specific for TTC-35. I'll be happy to answer any questions. Then I'm going to jump into our master development agreement, but I'd like to see if you have questions on these first.

MR. WILLIAMSON: Members, please feel free to ask or comment. I'm going to have an extensive -- not extensive -- I'm going to have a list of questions for Amadeo that are designed to establish certain things for the record and they can wait till the end. So please if you have questions, go ahead.

MR. SAENZ: Well, I'll be happy to go through and we'll just do the questions at the end.


MR. JOHNSON: Well, my question was what I interpreted, Amadeo, is the treatment as the TTC-35 approaches the Metroplex that both elements we're proceeding on, we're just in various stages: environmental on the western leg, if you will, and then we're actually proceeding further than that on the eastern leg. But we're not neglecting one for the other, it's just one is further along.

MR. SAENZ: Yes, sir. What it is is one portion of the project was further along than the other, we want to be able to do the environmental so that we can make the right decisions as we move forward on the western leg. But both projects will be moving forward.

MR. JOHNSON: Thank you.

MR. HOUGHTON: And this is, for lack of a better word, the donut concept that the RTC has been endorsing, as well as the locals.

MR. SAENZ: Yes, sir. The Loop 9 project has been a project that has been in the Metroplex long-range plan as an identified need.

MR. HOUGHTON: And had not been able to fund that project.

MR. SAENZ: Not been able to fund it. They had identified it, and through some commitment with Dallas County, had decided to move on that southeastern leg. The southwestern leg, they had not initiated any environmental studies, and that's why that one is a little bit further behind, but it is a project that the Metroplex had identified and has been looking at. And of course, when we look at it and we look at the grand scheme, those projects are projects that are potential connectivity projects. With respect to whether they will be designated TTC-35 or not, the environmental process will determine that as we get to the completion of that process.

MR. HOUGHTON: And Cintra-Zachry has determined that that project will self-fund?

MR. SAENZ: Yes, sir. In their letter they said that the project was a project that was ready for development and they felt that it could self-perform.

MR. HOUGHTON: Which means that the transfer risk for building that is to the private sector, not on either Dallas County or the State of Texas. Correct?

MR. SAENZ: That's correct. And then, of course, this is based, as always, on preliminary studies, preliminary financial information, kind of 30,000-foot view. As we drill down into the project, we'll be able to have a lot more detail, but most of the time our original numbers are very conservative and they only get better.

MR. HOUGHTON: And we've decided this is about the same footprint project as 5 and 6 on 130, would you not say?

MR. SAENZ: Yes, sir. What the Metroplex had been looking at developing on Loop 9 was a controlled access expressway type facility on about 400 to 500 feet of right of way.

MR. HOUGHTON: And how many miles?

MR. SAENZ: I believe it was over 140 miles.

MR. WILLIAMSON: Well, that's not this project.

MR. HOUGHTON: I'm just talking about the Loop 9 on the southeastern side.

MR. SAENZ: Yes, the southeast side.

MR. HOUGHTON: From Interstate Highway 20 down to 35.

MR. SAENZ: Okay. I'm talking about the whole thing that was submitted.

MR. HOUGHTON: I'm just talking about the one.

MR. SAENZ: About 40 miles.

MR. HOUGHTON: Right. About 40 miles?


MR. HOUGHTON: And I understand you've committed to have a facility implementation plan done by December 31. Is that correct?

MR. SAENZ: Some people are going to have to work a lot of hours to do that, but we are going to work diligently to move this project forward.

MS. ANDRADE: Amadeo, remind me how long --

MR. SAENZ: Excuse me, Commissioner, but one of the things is we have been working to put together a program where we have identified business terms and technical requirements and specifications that will allow us to be able to move forward through those procurements at a much faster pace than we have in the past without having to reinvent the wheel every time.

MR. HOUGHTON: As a result of our experience on the 130, 5 and 6.

MR. SAENZ: Yes, sir.

MS. ANDRADE: Amadeo, remind me how long these projects have been waiting for funding.

MR. SAENZ: I don't know exactly.

MR. WILLIAMSON: Loop 9, 35 years.

MR. SAENZ: Loop 9, about 30-35 years, and it was not funded in the next ten years. It was in their plan as identified over the next 25 years, but it was not funded within the next ten years, so it was 35 plus ten, 45 years before they could get to it.

MR. HOUGHTON: I may be stretching this out a little bit, Amadeo, but what is the back-of-a-napkin type of cost estimates to build this project, this southeastern portion of Loop 9?

MR. SAENZ: I will have to ask staff and get that to you, sir.

MR. HOUGHTON: I'm just curious.

MR. SAENZ: Forty miles, I would say somewhere between about $400- to $600 million for that first segment, ballpark figure based on $10- to $12 million a mile.

MR. JOHNSON: Amadeo, to follow up on Hope's question about time, how long has this project been in the wishful stage, if you will, have we or can we make a calculation as to projects of that nature that have been around for a long time but unfunded that are going to come to fruition as a result of the development of these corridors and the way that we're able to do it, and in essence, are coming at no cost to the people -- not the people who drive the roads, but at no cost out of our normal funding mechanisms.

MR. SAENZ: Yes, sir, we can. Of course, we have just asked the eight metropolitan areas to update their Metropolitan Mobility Plan, and now they're taking and identifying these projects that are what I call revenue-positive projects or self-performers which means that this project can be built without any public money. And of course, a lot of these projects also will result in an additional concession fee, and that concession fee they can then apply to a second tier of projects.

So we're getting to that point where the MPOs, and in this case the RTC will identify if I build 121, if I build 161 through a CDA process, I'll be able to generate a billion dollars more and now I can apply that billion dollars to these other projects.

So we'll be able to come up with a list of what I would call the second tier projects -- well, the first tier and second tier projects that can be done without any public money, and we'll be able to provide that to you.

MR. JOHNSON: I think, one, the total amount of dollars is staggering, but also the amount of time, as Hope mentioned and you said, that we have had these projects literally in abeyance waiting on funding, that that answer is going to be staggering too, and it's incredible what is going on in terms of moving projects and corridors through the pipeline and getting them done so everybody can benefit.

MR. SAENZ: Right. If I remember correctly, about three months ago when the Metroplex folks were here with us making their presentation, Michael Morris in his presentation identified that the new tools were bringing in about $5 billion worth of projects that they could not do prior to implementing some of the new tools. So it's a staggering number, it's a great number.

MS. ANDRADE: Amadeo, and I think that's a key message that we need to communicate to our public, because I know that even to me that I'm involved in everyday transportation, it's astounding to hear that these projects have been waiting for 30 years and that if we don't do it this route, that we would probably wait another ten to 15 years, and I don't think that's quite a message that's communicated as well because I'm surprised when we hear that.

MR. SAENZ: Well, I think a couple of things that you all have done have really helped, and one is for, I guess, the longer past when the commission was the one that selected all the projects statewide for mobility, the region never knew when a project was going to get selected, or if a project was going to get selected, or maybe a portion of a project was going to get selected. When you all initiated the change that now we are allocating to them the resources and we let them put together their plan and identify their priorities, they now realize that the money that's available can only carry them so far and they have to learn and they have to utilize all the tools to be able to leverage those.

And now they get to prioritize. They use the Fund 6 for their priorities, leverage that Fund 6 to catch the next set of projects that will bring in that additional resource so they can do the future projects. And now they can see in their plan how their system is going to evolve by one project, in essence, helping the other, very similar to the system financing that the toll agencies use, they take one project to help another.

The next item that I'd like to talk about is give you a status report on the development of the master development plan that was part of the requirement of the TTC-35 procurement. And of course, just as a little bit of history, what we tried to accomplish with our CDA is we wanted to bring on board a long-term strategic partner to work along with TxDOT, we wanted to minimize the public sector financing contributions that would be required to develop a corridor like TTC-35, and maximize the private sector financial contributions, and we also wanted to see how we could accelerate the delivery of that project. We've been working on all of those.

The master development plan is a 50-year partnership that shows near-term projects, mid-term projects and long-term projects that will be developed for Trans-Texas Corridor from Oklahoma all the way down to Mexico. The CDA was only basically put in place and we had the first item of work, and the only item of work that Cintra was required to do was for $3.5 million they were committed to putting together this master development plan which is what we're talking about right now. And the master development plan included a project development plan, it included a project financial plan for the projects that would be developed over the 50-year period, and then as well as some quality plans and some project management plans on how they would do the projects.

The CDA did not authorize Cintra-Zachry to construct any named facility in the MDP. It did have a requirement or a commitment that they would have the right of first negotiation on at least $400 million of the CDA.

The master development plan was basically broken up into milestones of how we wanted to accomplish this thing. Our first milestone was kind of basically a planning document. We want them to tell us how you're going to approach projects through a project management plan, tell us how you're going to ensure that what you give us is done with quality and how you would manage that, and of course, give us a schedule of how you're going to put together this master development plan. That was done very early on in the project; we reached milestone one very quickly.

The second milestone, basically we asked them to tell us and show us the demographics that they were going to be using, what are the trends, what's the population demographics, what's the population growth rates that you're going to be using, what are your traffic growth rates you're going to be using, so that we could make sure that as we're putting something together we get something that is realistic and not something that's not realistic.

The third part is basically once you have your demographics, we want you to then apply and list the potential projects that need to be developed or that would be developed under this master development agreement, and also put together some draft financial models of how you would finance these projects.

The fourth milestone was basically to take those projects in milestone number three, do a risk and financial analysis on each of those projects, do some sketch level traffic and revenue studies, do some conceptual engineering, kind of drill down and get as much information as you can, and apply it to those projects so that we can see exactly, with the best information we have, how much will the project cost, what will the financial requirements be, and how could we do that.

And then, of course, under milestone five we started phasing the facilities into which facilities should be done first, which should be done second, which should be done in a longer term. The near-term facilities are the facilities that could be developed in the first five years; the mid-term facilities are from year five to about year ten; and the long-term facilities are facilities that are after year ten.

Milestone number six then took all that information that we got and all the research and work that was done, and it was put together and we updated the documents that were part of the earlier milestones in two through five, as well as updating the conceptual financial plans and conceptual project management plans that were part of the CDA document. Those were then all put together and submitted to us in one document that identified the near-term projects, the mid-term projects, and the long-term projects, as well as the financial.

Milestone number seven, because this master development plan is a living document, as we go through and other projects are identified, or as we go through and the environmental process determines where projects are located that are different than the assumptions that were made as part of this plan, then this plan needs to be updated to conform to that. If you have a different route that requires a different length of project, of course, the project will have a different cost. As we go through time, you have to update estimates. So this document will always be a living document and we have to have a methodology in place so that we can update the document in the future.

Some of the elements of the plan, for all the potential projects -- or facilities, as we call them in the plan -- the master development plan identifies their characteristics: kind of where is it going to be located; what mode is it, is it rail, is it highways, is it truck lanes, is it utility corridors; if it's highways, how many lanes will it have. From that we come up with conceptual design and cost. We look at phasing and sequencing, how would you phase and sequence the project. And then also we look at the revenues that this project can generate over time, and in addition, what potential funding sources are available to finance the project. We did that for all of the projects.

Now, as we look at the projects, the near-term projects are the projects that we would say are ready to go in the short-term. They're projects where the need is there and the financial is there, so for near-term projects, we did a more comprehensive financial model which included the estimated concessions that could be realized if the project was built.

All the proposed planning in this document is based on what Cintra-Zachry identified in working with us, where they thought, and we agreed, that the project may go. As I said, this is a living document. NEPA will determine where the final location of each one of those facilities will be, and if it's different from the assumptions that were made in this document, then this document will have to be updated.

We have to make sure that all our projects will comply with all the environmental approvals; we'll have coordination with the MPOs, the cities, the counties; Federal Highway will also have to approve all our; and of course, we ourselves do a lot of review and approvals. The final traffic and revenue forecast will depend on the financial models of the final projects. So the document is a living document and will be subject to change.

Just in moving forward, if you recall when the proposal came in and Cintra-Zachry's proposal had identified projects from the Metroplex all the way down to San Antonio and they stopped at Interstate 10, and those were their near-term projects. And if you recall, they identified that the cost of those projects at the time was about $6 billion and the concession fee that they would be willing to provide for the right to operate over a 50-year concession was about $1.2 billion.

The near-term projects that the facility agreement identified starts up from north of the Metroplex, connecting 35 over east around Dallas, continues east around Dallas and south, and when we look at all these projects, there are several things that I need to show you on this slide. One, these are the near-term facility projects that are part of TTC-35, those are shown in the green. And then, of course, the lines that are shown in the dash are some of the connecting projects that they've also identified at this time and they're working.

So you see the Loop 9 projects is shown as a connecting project that is being worked on. The final numbers have not been determined for that project, but at this time it's not TTC-35, it's a connectivity project. The environmental process will determine whether Loop 9 in the future becomes TTC-35 or remains as a connectivity project, but they can both be developed under this procurement.

Then around the Austin area you see the black dashed line, of course, that's the 130, 1 through 4, that's being developed, and of course, the green is the 130, 5 and 6 that's shown on there. And of course, the new projects that were added to near-term projects are the loops around the San Antonio area.

When we take a look at these projects and we total them up, these projects total to about $8.8 billion which would be the cost of the facility, and under the development plan those projects can be built, and in addition to getting those projects built, we would get almost $2 billion of potential concession fees.

What you will notice in this list that some of the projects have parentheses around them, and these show that not every project has a positive cash flow or every segment of the project has a positive cash flow. But if you look at the corridor as a whole, the corridor as a whole does result in an additional almost $2 billion. This is just kind of a recap.

MR. WILLIAMSON: I have a series of questions I'm going to ask, Amadeo, but just one pops up as appropriate right now.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: What will happen to that $2 billion? Take your time, go slowly.

MR. SAENZ: The $2 billion, of course, can be used to address connectivity projects.

MR. WILLIAMSON: Well, don't talk in engineer-ese. How will the $2 billion be spent?

MR. SAENZ: The $2 billion, of course, comes to the department as a concession fee, it goes into Fund 6. Commission will work with the locals to identify other projects. We can either extend the corridor to other parts along the 35 corridor, we can use it to build connection projects from the corridor back into the metropolitan areas. For example, the plan identifies some projects that connect Waco to the corridor, that connect Temple to the corridor, the Loop 9 project, there's other connectivity projects in the Metroplex. Some of this concession fee can be used for that.

The concession fee can be used to fund other modes of transportation projects, like some of the rail projects and such that are needed for the corridor.

MR. WILLIAMSON: So two points to be made. First, we frequently hear, well, this is just a revenue scheme. Well, it's a revenue scheme to do what? Solve transportation problems. It's not a revenue scheme to pump up other state government, it's not a revenue scheme to help higher education. The $2 billion will be used to address the state's transportation problem.

MR. SAENZ: That's correct.

MR. WILLIAMSON: That's the first point to be made.

The second point to be made is that local and regional leaders will identify which problems most address their congestion, air quality and safety goals, and together with us will decide which projects to build to address those problems.

For example, if Temple, Austin and San Antonio were able to persuade those corporate citizens, the Union-Pacific Railroad to abandon their tracks through the city center to permit the various transit systems to take those tracks over for commuter rail and move to a higher speed freight rail in the corridor, that would be an appropriate project for the concession revenue to be targeted towards. Yes or no?


MR. WILLIAMSON: Please continue.

MR. SAENZ: Okay. Just as a summary, the plan, as it's updated now, identifies $8.8 billion in the near-term transportation construction projects, and also provides for a concession fee above and beyond that of $1.9 billion for TxDOT to use as we've just discussed.

Looking at the plan, we have less information or less detailed information for the mid-term and long-term projects, so what I tried to do here is just basically identify. And of course, they did identify the rail project that they had submitted earlier as ready for development in their mid-term projects, but that's because rail projects will take much longer to develop. We spoke earlier of the coordination that will have to happen for the environmental side between the Surface Transportation Board, Federal Highway Administration and ourselves, so they did place that project, to be a little bit more realistic, that it could be done but would be done probably as a mid-term project.

MR. WILLIAMSON: Can higher speed freight rails, steel rails, can they also be used for higher speed passenger rails?

MR. SAENZ: Higher speed passenger rails and higher speed freight rails use the same facility.

MR. WILLIAMSON: So what is possible in terms of a interregional rail system between Dallas-Fort Worth and San Antonio: 90 miles an hour non-stop?

MR. SAENZ: Between 80 and 90 miles per hour non-stop, yes, sir.

They also showed some additional connectivity loops east and around Dallas to TTC-35, and also some connections in Hillsboro and some other projects that are identified in the plan. There's a countless number of other projects that are in there.

In the long-term projects they did show the need for the high speed rail facilities between Dallas-Fort Worth and San Antonio, and some of the primary roadway work south of San Antonio to Laredo are shown as long-term projects. And that makes sense in that if you look at the congestion that we're seeing on 35 south of San Antonio to Laredo, we still have a lot of capacity on the existing facilities. They also showed the western loops around Dallas-Fort Worth to be on the longer term, again because there's less of a need there. And of course, they also identified some of the utility facilities.

I must remind you all that if you look at 2017, it is only ten years away from here, so long-term is just post ten years.

MS. ANDRADE: I have a question. When you say primary roadway between San Antonio and Laredo, could that possibly be truck lanes?

MR. SAENZ: Yes, ma'am, that could be additional truck lanes or additional multipurpose lanes that they can add capacity within the median like we're doing on some of the other projects.

The environmental process will determine where the final route for TTC-35 is going to be along the entire corridor, but if you remember on the draft EIS, it showed that south of San Antonio the preferred draft EIS corridor was parallel to the existing 35, so it would be expansion of 35, if it stays that way through the environmental process.

And as we move forward, and as I mentioned earlier, the MDP is a dynamic document that will be changed as needed. The final route for TTC-35 will be determined during the environmental process and we're committed to including public involvement in every step of the process, as we've been doing already. And we must continue to do the planning now rather than wait for congestion to grow out of proportion and then try to stop the gap later.

That pretty much concludes my presentation. I do have a couple more comments, but I'd ask for questions before we move forward.

MR. WILLIAMSON: I'll ask a few and then rest a moment.

A great deal has been made about -- a great hubbub has been raised by some members of the free press and some candidates for public office about the unusual secrecy connected to this contract. For the record, I want to establish what this contract is. We asked for proposals from the private sector to develop a master development plan. The plan was the core of a contract that had a cost of how much money?

MR. SAENZ: The cost of that contract was $3.5 million.

MR. WILLIAMSON: That's million with an M?

MR. SAENZ: Million with an M.

MR. WILLIAMSON: It's not a $7 billion contract, as some have assumed.

MR. SAENZ: It's a $3-1/2 million contract.

MR. WILLIAMSON: It is a $3-1/2 million contract to develop a master development plan.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And there were three proposers, and the partnership of Cintra, a Spanish firm, and Zachry America, or whatever they're called, a third-generation San Antonio construction firm, had, in our judgment, the best approach to developing this contract. Is that correct?

MR. SAENZ: That's correct, sir.

MR. WILLIAMSON: Had we not been able in the time line specified to reach an agreement with Cintra-Zachry on the development plan, would we have then moved to our second choice and begun negotiations with them to develop a plan?

MR. SAENZ: No, sir. What would have happened, because we did execute the comprehensive development agreement, we would have to reopen and re-procure the entire CDA.

MR. WILLIAMSON: And when we did that, had we exposed the Cintra-Zachry proposal, the Fluor proposal, and the other one -- the name escapes me -- we would have exposed their proprietary and financial data to their competitors, who would then be re-proposing for the second procurement. Correct?

MR. SAENZ: That's correct.

MR. WILLIAMSON: In your engineering judgment, given that this is a complex transaction, have you handled this contract any differently than you would have handled a typical design-blind bid-build contract?

MR. SAENZ: They're handled exactly the same way.

MR. WILLIAMSON: And why has the commission instructed staff and reminded themselves to generally remain silent and not argue with those who have lodged illogical and inaccurate complaints?

MR. SAENZ: If we were to move forward and release the data, we, in essence, would not have anyone that would want to propose to us because they would not be able to bring in any innovation, bring in any ideas on how to develop projects, and in essence, the program would die.

MR. WILLIAMSON: And in your experience in state government, Amadeo, do other agencies headed by elected officials screen and protect the intellectual and financial data of their private sector proposers in much the same way?

MR. SAENZ: We do everything exactly like all the other agencies.

MR. WILLIAMSON: So we haven't treated this contract any differently than we have treated other contracts or as other contracts in other state agencies in this state are treated?

MR. SAENZ: That's correct, sir.

MR. WILLIAMSON: Has there actually been a secret contract?


MR. WILLIAMSON: Thank you for that.

Now, I am told that we are doing an internal study on the amount of money which will be saved on the maintenance -- this is very critical to distinguish this -- not the expansion of Interstate 35 but the maintenance of existing lanes and future expanded lanes, we're doing a study on the cost savings of maintenance as a result of traffic shifting to this parallel road.

MR. SAENZ: Yes, sir. We've got a consultant that's working on that, they've submitted some preliminary information that's still being reviewed by our folks.

MR. WILLIAMSON: And let's assume for a moment that that figure is going to be in the, say, $500 million on the low end, $750- on the high end -- I think that's a good range -- is that $500- to $750 million money that would have been distributed out of the taxpayers' tax revenue to maintain 35?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: So to the extent that we're eliminating $500 million of maintenance on 35 as a result of traffic patterns shifting to the parallel, that's $500 million we have to invest in solving other transportation problems in the state.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And is it also my understanding that we have a congestion relief study ongoing to determine what percentage of traffic moves off of Interstate 35 and onto the parallel?

MR. SAENZ: Yes, sir, it's part of the same study that's looking numbers.

MR. WILLIAMSON: Is it safe to say that no less than 2.5 percent and no more than 10 percent of the traffic is going to fall somewhere in that range?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: So for those who live in, for example, Hillsboro who believe that Interstate 35 is their economic lifeblood and the parallel might have the same impact on their city as Route 66 had on some cities in Oklahoma, we can represent to them that it appears, least case your traffic shrinks 2-1/2 percent, worst case it shrinks 10 percent, and in no circumstance should that be enough to markedly impact your local economy?

MR. SAENZ: That's correct. The other thing that I think we need to continue to stress is people will always have a choice: they can come on the toll road if they so choose, but if they don't want to, they can stay on the existing 35.

MR. WILLIAMSON: Well, you're leading into my next series of questions. We've been studying for two years now the actual cost and tax revenue associated with the state's transportation grid. At this point in time is it safe to say that we've identified no tax road in the state that generates enough revenue to pay for itself?

MR. SAENZ: So far, in all the work that we've done, we've not been able to find a road that pays for itself.

MR. WILLIAMSON: Some roads get as high as 57 percent, most roads are around 21 percent, as far as we can tell right now.

MR. SAENZ: The one that I've seen that has the most was around 55 to 60, most of them run somewhere in the teens to low twenties.

MR. WILLIAMSON: And is it safe to say in our demographic studies we've determined that the flat rate gasoline tax is one of the single most regressive taxes the state levels because there are no exemptions, the state doesn't recognize rich or poor, it collects the same fee from everybody?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Whereas, TTC-35 will be paid by someone volunteering to pay the toll to achieve whatever purpose they wish to achieve.

MR. SAENZ: That's correct.

MR. WILLIAMSON: Leaving the tax road to be used by those who don't wish to volunteer to pay that toll.

MR. SAENZ: That's correct.

MR. WILLIAMSON: My final question before a I rest a moment. Is it accurate to say, after three years on this mission, that we've determined that high speed rail, higher speed rail and the transfer of freight out of downtown Texas could not possibly occur unless we moved to the side and built it on a parallel with private financing?

MR. SAENZ: That's correct, we'd not be able to do it.

MR. WILLIAMSON: I'm going to rest a moment. Please ask whatever questions you wish to. I've got a few more I need to establish for the record but I want to think about it.

MR. HOUGHTON: We need to spend a little bit more time on something the chairman just brought up on the rail piece as a mid-term. We have a letter from Cintra-Zachry believing that that project is ready for development. Is that correct?

MR. SAENZ: Yes, sir.

MR. HOUGHTON: And we're analyzing that or we agree with them that that project is ready for development?

MR. SAENZ: Yes, sir. As I mentioned earlier in the early part of the presentation, we agree that that project is ready for development. We're working to coordinate with Surface Transportation Board. Because of the rail project, the cost, the type of project, the different type of development it was put in as a mid-term project which means that it's between five years and ten years instead of between zero and five years, but it is a project that is being worked on now. But we feel that probably it will take us a little longer to put that project in place than it would allow us in the first five years.

MR. HOUGHTON: And this is a project you can't really build in stages, Amadeo, because you can't stop a rail line at Seguin.

MR. SAENZ: You have to build segments of independent utilities so that someone is willing to use it, because if you build it and stop it, we just can't get anywhere. It's very hard to make the railroad do a U-turn.

MR. HOUGHTON: Yes, pretty tough to get a freight train to go the other way.


MR. HOUGHTON: So from the standpoint of air quality and what we're trying to accomplish, especially in the San Antonio, Austin and the Tower 55 issues in Fort Worth, would you say this is a significant project?

MR. SAENZ: Oh, this is a significant project that will allow for the movement of freight rail from the metropolitan areas, improve air quality, improve safety, improve congestion, and of course, by moving it over, you would allow for economic opportunity along the new corridor. There could be some instances, as you develop this master rail project or this long rail project, that you can break it up and have some usable segments that will allow you some short-term gains that will even help finance the project.

And I'll give you an example off the top of my head. This is not in the plan, but off the top of my head, I say okay, if we do something to Tower 55 to separate those two railroads and you're able to then charge a tax or a toll on the movements that go across this grade-separated structure, that money then can be used to expand the rail somewhere else. So just this one little idea that may be able to be used to piece together the bigger project.

MR. HOUGHTON: So those trains sitting at Tower 55 waiting to cross --

MR. SAENZ: Now they can just go straight across, there's no stopping them.

MR. HOUGHTON: -- degrading the air, now we're talking about significant economic opportunity.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Hope, anything?

MS. ANDRADE: Amadeo, I was in Chicago this week at a seminar and I learned that Cintra actually currently manages 47 projects worldwide, so I'm glad to hear that we have such an experienced partner.

MR. SAENZ: Yes, ma'am.

MR. WILLIAMSON: John, anything?

MR. JOHNSON: I asked my questions before.

MR. WILLIAMSON: Okay. Then my last series of questions are about the contract itself, Amadeo. Again, I'm establishing some things for the record.

Much has been said about what was originally $6.9 billion, what is now $8.1 billion -- and I'll get back to that in a moment -- construction --

MR. SAENZ: $8.8 billion.

MR. WILLIAMSON: -- $8.8 billion enuring to the benefit of a firm that's located in Spain. When we execute plans with this development agreement, that $8.8 billion will be forwarded by or be the legal obligation of the private sector. Is that correct?

MR. SAENZ: That's correct.

MR. WILLIAMSON: And that $8.8 billion will be spent on what?

MR. SAENZ: Building a state asset, building TTC-35.

MR. WILLIAMSON: Will they have to hire people?

MR. SAENZ: Oh, yes.

MR. WILLIAMSON: Will they hire people in Spain and bring them across on a boat and house them here?

MR. SAENZ: I don't think so. I think that a project of that size they're going to go out and contract with people there locally to get the project built.

MR. WILLIAMSON: So they'll probably hire Texas citizens or United States citizens who move to Texas to work on this particular project for ten years, much like the Alaskan Pipeline.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Will they go mix the concrete up in Spain and bring it across on a boat?

MR. SAENZ: No. Everything will be done here.

MR. WILLIAMSON: So the concrete will probably be purchased, or the asphalt -- I don't want the asphalt guys to go nuts; we don't know what they're going to use.

(General laughter.)

MR. WILLIAMSON: They'll probably mix the concrete or concoct the asphalt locally in the state of Texas.

MR. SAENZ: That's correct.

MR. WILLIAMSON: Well, what about the iron, what about the long steel rods that go into the concrete, will they bring that in from maybe France?


MR. WILLIAMSON: Because France is right next to Spain.

MR. SAENZ: That will also be here. There are some requirements. Some of the financing that is being used is through TIFIA loans -- which is just a loan that they will borrow, it's a source of money that's available to anyone, including the private sector.

MR. WILLIAMSON: But not from the state of Texas, it's from the federal government.

MR. SAENZ: It's from the federal government, it's a federal program. When you use TIFIA, in essence, you federalize the project and then there's federal requirements with respect to steel products of Buy America, that you have to be able to show that the product that you are using is 25 percent cheaper if you're bringing it from abroad. So you will still have a lot of product that is here from the U.S., maybe not Texas but here from the U.S.

MR. WILLIAMSON: So we've established that most of the $8.8 billion will be spent paying Texas citizens and purchasing products made or manufactured in the United States of America.

MR. SAENZ: Yes, sir. One other thing that we have added into this agreement that regardless of where the project has federal dollars or no federal dollars that it will have compliance with DBE programs, extensive training programs. This is going to require a lot of people to work on this project, and we want to make sure that, one, we have a trained workforce, but we don't want to go out there and take people from other contracts that are doing work on other projects to do this project.

MR. WILLIAMSON: Driving up the cost of the tax-supported projects that we have across the state.

MR. SAENZ: That's correct.

MR. WILLIAMSON: A few more questions along the same lines. Which entity or which organization or which individual will hold title to the ground beneath the asset?

MR. SAENZ: It will be the State of Texas through the Texas Department of Transportation, just like any other highway.

MR. WILLIAMSON: And who will actually own the asset itself?

MR. SAENZ: We will.



MR. WILLIAMSON: So the State of Texas, acting through its designated agent, the Texas Department of Transportation, will actually own the asset.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: So when someone says toll roads owned by somebody from Spain, that is actually a misstatement of the truth.

MR. SAENZ: That's correct.

MR. WILLIAMSON: Now, much has been said about well, okay, so the money is going to be spent here and you're going to hold the title but they're going to control it all. Who sets the toll rates on the corridor?

MR. SAENZ: By agreement, through statute requirement, you all, the Texas Transportation Commission. When you approve the contract, you approve the toll rate as well as the toll escalation rate process that was incorporated into that agreement.

MR. WILLIAMSON: And are we guaranteeing any of their debt?

MR. SAENZ: No, sir.

MR. WILLIAMSON: Now let's talk about the only privately financed toll road in the state that we're aware of to date. That would be the Camino Colombia in South Texas.

MR. SAENZ: Yes, sir, that was built.

MR. WILLIAMSON: Did the state put any money into that toll road when it was built?

MR. SAENZ: No, sir.

MR. WILLIAMSON: Much like TTC-35, the private sector put the money up.

MR. SAENZ: That's correct.

MR. WILLIAMSON: Now, did those private sector entrepreneurs perhaps make a bad decision to build that toll road, or did they perhaps put more money into it than they should have, or did the economy not advance like they thought it would?

MR. SAENZ: I think they made some assumptions as to what was going to come forward with respect to development in traffic, and based on those projections, they didn't get their return because the traffic did not come up.

MR. WILLIAMSON: So they put their money up and they took a risk, and they risked wrong. And did that cost the State of Texas anything when they went under?

MR. SAENZ: No, sir.

MR. WILLIAMSON: Did the State of Texas have the opportunity to buy that asset?

MR. SAENZ: We did and we have.

MR. WILLIAMSON: What was the original cost of that asset?

MR. SAENZ: Original cost of the asset, I think, based on the financing, was close to $90 million.

MR. WILLIAMSON: And what did the State of Texas pay for that asset?

MR. SAENZ: We paid right at $20 million.

MR. WILLIAMSON: And what would it have cost the taxpayers of the state to build that asset had that asset not been there?

MR. SAENZ: If it had been built just as a regular road of that type, about between $35- and $40 million.

MR. WILLIAMSON: So the private sector took a risk, they guessed wrong, they lost maybe $70- or $80 million, the state got the asset at less than what the state would have paid to build the asset in the first place, and the road is being used today.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: If these fellows from Spain, who appear to be intelligent men, have guessed wrong, will the State of Texas have to pay their liabilities?

MR. SAENZ: No, sir.

MR. WILLIAMSON: Will we have the opportunity to purchase the asset?

MR. SAENZ: Yes, we will.

MR. WILLIAMSON: And do we have an agreement on how we would value that, or would we just simply pay whatever in our judgment was what we could afford to pay?

MR. SAENZ: The only one that we have that is for 130, 5 and 6, because each agreement will have its own buy-back or default clauses. For 5 and 6, should the company go bankrupt because the traffic is not there, then we have no responsibility at all, we just take it over. Very similar to Camino Colombia, it would go through foreclosure and then we would have the opportunity to procure it.

MR. WILLIAMSON: Very good. And then the last question -- which I know will relieve the audience greatly -- much has been said about the taking of private property and we have spoken, we hope clearly, from this position that we understand how painful that is, but that we also understand that if you make a decision to expand your road system, whether you expand the existing footprint or whether you build parallel to the existing footprint, you're probably going to be taking someone's property.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: You're either tearing down the restaurant and the service station and the church in downtown Waco, or you're taking somebody's property on the outside edge of Waco. There's no way to escape that.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: But in parallel to the criticism that the project will take land unnecessarily, it is often said, and we will get not benefit from that. I was attending a meeting in Rockwall County about a month ago and a county commissioner, who I know and who I believe to be an intelligent person, looked me straight in the eye and said, Why would we want you to build this when you're not even going to put an exit in Rockwall County? And I looked at this person for a moment and I said, Whatever are you talking about? And she said, Well, everyone knows the contract provides for no exits and entrances.

And I looked at her for a full five seconds and I said, Now, does that make sense to you, is that logical to you that someone would build a road that they need to entice individuals and companies to use in order to get their money back and then would not provide exits and entrances to it, does that make sense? And this person thought for a moment and said, Well, no, I don't guess it does.

I said, are you sure you're not confusing the definition of a controlled access road which means no frontage roads and limited entrance and exit with this idea you have in your head of no ramps? And after a moment, this person had to admit that this person had not given a lot of thought to this person's concern.

So my question to you is: Are there entrances and exits on this road, if it's to be built?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And how will those entrances and exits be determined, the location of those?

MR. SAENZ: Part of those have already been identified through statute that says that we will connect all of the major highways, State and U.S., but then through the engineering study, all the other major roads, both on the system and some of the major ones that are off system, based on traffic, we'll have to connect to them and allow people to be able to get on and get off.

MR. WILLIAMSON: But there will be no frontage roads.

MR. SAENZ: There will be no frontage roads. There will be some local access roads to allow people to get to their property where we severed property.

MR. WILLIAMSON: And the reason that we take the position that we should not build frontage roads on the corridors, not just 35 but 69, 20, all of them, is because the cost associated with that. Is that correct?

MR. SAENZ: The cost associated with that, but also more important is to be able to preserve that this is a through corridor and not necessarily a local collector street corridor.

MR. WILLIAMSON: Because what we really want in building our parallels is we want Interstate 35 to remain the local and regional boulevard of choice for the taxpayers of the state, while the corridor becomes the regional and national transportation corridor of choice.

MR. SAENZ: That's correct.

MR. WILLIAMSON: I have finished establishing the facts I wished to establish for the record. I appreciate your patience, Amadeo.

MR. SAENZ: I do want to just cover a few more items, really because they've been in the news. Of course, this master development plan took the original conceptual financial plan and the original conceptual project management plan that were part of the proposal requirements, and we have updated them and now we make them part of this plan as we accepted this plan. And this morning we were able to get Mr. Behrens to sign off and we have let Cintra-Zachry know that the plan is accepted and now becomes property of the department. The master development plan is a public document and will be released to the public.

MR. WILLIAMSON: So he's signed it?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: You're in agreement?

MR. BEHRENS: Yes, sir.

MR. WILLIAMSON: Good. I'm glad to get that out of the way.

MR. SAENZ: What this does is basically that plan becomes public document and it should be available on our website, and whoever wants it, I think can get it.

Now, in looking at this and in our conversations with Cintra-Zachry, because these are updates to their conceptual plan that were part of litigation that has been going on and is ongoing, since this plan is an update of the original plan and now it is completed and incorporated and accepted by TxDOT and a public document, then our recommendation to Cintra, and they're also in agreement, is that the matter of the lawsuit that we were pursuing due the proprietary property and the intellectual property that was part of the original proposal is really no longer needed, so we are moving forward with the dropping of that lawsuit.

MR. WILLIAMSON: Okay. Well, obviously that's an administrative decision, not a decision for the commission to make, and I don't think we want to interfere with that, but I just want to be sure in the process of doing this we're not frightening anyone away from making proposals to us in the future.

MR. SAENZ: No, sir, because this basically follows the same process on any contract. Once we have everything, nothing that is protected or nothing that is proprietary, then the document becomes a public document.

MR. WILLIAMSON: One more time the amount that Cintra originally suggested they would spend in the state of Texas to build roads was?

MR. SAENZ: Was $6 billion for near-term projects from San Antonio to north of the Metroplex.

MR. WILLIAMSON: And that's now how much?

MR. SAENZ: $8.8-.

MR. WILLIAMSON: And the original concession fee was how much?

MR. SAENZ: $1.2- and it's now $1.9-.

MR. WILLIAMSON: So it would be fair to say that we are soon to make a $10 billion dent in our $86 billion problem.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Which one great young American walked up to me this morning before the meeting and said, I said I woke up this morning worrying about how to close the gap -- which is what I like to hear.

MR. HOUGHTON: Let's do some math here. It's a $6-, $7-, $8 billion road project and you layer in on top the rail.

MR. SAENZ: Yes, sir.

MR. HOUGHTON: So if you layer in on top the rail, you're looking at another $6- to $7- billion worth of transportation assets being built for the state of Texas.

MR. SAENZ: Yes, sir, because I don't have the rail in the original numbers, true.

MR. HOUGHTON: And at the same time, I want to make sure of one thing. Does Cintra-Zachry have a leg up on building any of these assets?

MR. SAENZ: No, sir, because, of course, they have completed the requirement of the plan, the plan is now ours. They're our partner, our long-term partner for 50 years. They have the right to submit projects from this plan that they say are ready for development, but the final decision-maker whether we proceed with Cintra-Zachry or we open it to an open procurement rests on you all.

MR. HOUGHTON: Open procurement would be something like we do today?

MR. SAENZ: Yes, sir.

MR. HOUGHTON: We procure it based upon a blind bid.

MR. SAENZ: Procured based on a blind bid.

MR. HOUGHTON: Or what we've done on 130, a design-build?

MR. SAENZ: Yes, sir.

MR. HOUGHTON: We could do one or all or a multiple of those.

MR. SAENZ: We could pursue the project in whole different methods, either design-bid-build which is our normal process, or a 130 design-build, or a separate individual concession.

MR. HOUGHTON: So at the end of the day you're looking at about $14- to $15 billion worth of projects that somebody else is going to pay for.

MR. WILLIAMSON: You know, I'm glad you started asking that question because that triggered something in my mind. I had a conversation with a guy in Dallas -- I won't name the guy -- but he asked me about the Loop 9 proposal that the Cintra people put in, and he said, Well, isn't that just politics? And I said, Well, no, what do you mean politics? And he said, Well, aren't you just doing that because there's an election? And I kind of laughed and I said, You know, I think these guys want to build stuff whether there's an election or not. And he said, Well, I won't believe it till I see it -- I think his exact words were: I'll believe it when I see the contract. And if that fellow is watching, he knows who he is.

Is it not the case, Amadeo, that when they notify us under the plan that an item is ready, that's the beginning of the process?

MR. SAENZ: That's the beginning of the process.

MR. WILLIAMSON: It's not a matter of we'd like to go do this, it is we are ready to put the money up to build this asset right now, give us the environmental document, we're ready to go.

MR. HOUGHTON: And I wasn't being flippant when I discussed having a facility implementation plan by December 31. That comes from our partner that says we would like to get to the table to start negotiating the terms of that Loop 9. So I'm not saying we'll do it by December 31, but I think we need to do it as soon as possible. That came from our partner.

MR. WILLIAMSON: Well, I know that we have a great transportation in southeast Dallas County, North Texas, Grady Smithy, and I know Grady was just apoplectic because he knew that this was a real deal and no one seemed to be paying much attention to it. And this conversation I was having with this particular individual, I was not successful in persuading him that this is how the process works: when the developer says this is ready to go, it's them saying we'll do it and no one else will and it won't cost you anything.

MR. HOUGHTON: Well, I think somebody needs to talk to Commissioner John Wiley Price about handing the keys over and him believing and endorsing the concept that he believes that this can get done.

MR. WILLIAMSON: Hasn't he been a wonderful partner to deal with, John Wiley Price?

MR. SAENZ: Yes, sir.

MR. HOUGHTON: Outstanding.

MR. WILLIAMSON: It's been an amazing thing to deal with that guy and see his commitment to southeast Dallas and improving that part of the county.

MR. WILLIAMSON: Anything else? This requires no action of us, this is an administrative matter?

MR. SAENZ: No, sir. This was a report and just for your information to let you know where we're at in the project.

MR. WILLIAMSON: For the commission, I want to express to Mike, who has made many trips up and down 35, to yourself, to Steve Simmons, who has caught some of this, to Coby -- who else has caught a lot of this grief?


MR. WILLIAMSON: Phil Russell.

MR. SAENZ: Of course, all our district folks.

MR. WILLIAMSON: Everybody in the districts and in the public hearing process, for the commission, we deeply appreciate the patience -- and I'll use the same word I used with Phyllis a while ago -- the grace and dignity with which we've all handled at times some pretty rough treatment over something that we've all been rather confused about because this contract has been handled no differently than any other contract, nor will the next one be handled any different than any other contract. You've done well in a difficult situation.

I also want to publicly thank Mr. Cintra and Mr. Zachry for suffering the indignities you have suffered during this process as well. You can't build those assets fast enough for us, if you are out there in the audience.

MR. HOUGHTON: So we've determined today there's no black helicopters running up and down 35?

MR. WILLIAMSON: I was going to have a line of questions about that, but I'm afraid it would just trigger more confusion than it's worth. The only black helicopter is the one Behrens uses to fly around to the public hearings, owned by the State Aircraft Pooling Board, the subject of a recent audit.

MR. SAENZ: I thank you, for all our folks. We have a lot of great people that are working on this project, that spent countless hours with great dedication, and we appreciate your comments, and I will pass that on to them.

MR. WILLIAMSON: We're going to take a break and let everybody kind of catch up with their personal business. We'll be back in 17 minutes.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: We'll return from our break and we thank you for your patience. Mike, do we have some friends from the southern entrance to our state that wish to speak?

MR. BEHRENS: Yes, we do. I would suggest that we take agenda item number 6 under Transportation Planning, and that will address several items which will include items that pertain to Hays and Travis County, and also to Cameron County.

So Wayne, if you will go ahead and take your items under agenda item number 6, starting with 6(a) which is our district discretionary programming authority.

MR. DENNIS: Good morning, Mr. Chairman, commission members, Mr. Behrens. For the record, my name is Wayne Dennis. I'm the deputy director of the Transportation Planning and Programming Division.

The minute order that we're bringing before you today provides additional district discretionary programming authority for project development, as shown in the attached Exhibit A. Minute Order 105320, dated April 27, 1995, established district discretionary programming authority for project development. District discretionary programming authority gives the districts the flexibility to prepare plans and purchase right of way for projects with high local interest.

Subsequently, Minute Order 106304, dated October 26, 1995, and Minute Order 108177, dated April 27, 2000, increased this programming authority to help the department achieve its projected letting goals. As construction costs have continued to increase statewide, so has the need for increased DEVELOP authority.

With your approval, this minute order would provide additional DEVELOP authority for each district for project development. The program will be distributed to the districts based on the allocation formula for Category 11, District Discretionary Program of the 2006 Statewide Mobility Program. Statewide, this would increase the programming authority from $3.3 billion to $4.75 billion.

Projects will be identified and programmed for the entire construction cost estimate within this program, however, no project will be funded for construction until authorized funds are identified from one of the department's categories.

Staff recommends approval of this minute order.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation on item 6(a). Do you have questions or comments?

MR. JOHNSON: Wayne, the formula that was used in the calculations to determine the allocation for each of the districts, has that formula been one that we've used historically for this?

MR. DENNIS: Yes, it is, and it's 70 percent vehicle miles traveled and 30 percent registered vehicles.

MR. WILLIAMSON: Ted or Hope, anything?

MR. WILLIAMSON: I have just one and that's more in the nature of a comment and a compliment to you, Michael Behrens. This agency has evolved, the focus of this agency has evolved a lot in the last six years, and I want to tell you how much I appreciate you and the staff constantly escalating your focus on an entire corridor, on planning ahead, on working with local and regional governments, in development complete solutions as opposed to just figuring out which projects can be laid down within the cash flow. This is exactly what the state needs to solve its problem by 2030, and this is a good move, this is a great move, shows good staff thinking, I think.

What's your pleasure, members?

MR. JOHNSON: So moved.


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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. DENNIS: Item 6(b). This minute order tenders a proposal to Brazoria County to authorize the purchase of right of way and utility adjustments for a project on State Highway 36 from the Fort Bend County line to FM 1495, a distance of approximately 31.35 miles.

State Highway 36 is a hurricane evacuation route and serves as a major transportation corridor in Brazoria, Fort Bend, and Austin counties. Improving this corridor is essential and will facilitate traffic flow in these counties during an evacuation.

If this minute order is approved, the county will acquire 100 percent of the necessary right of way and utility adjustments once the project receives environmental clearance. The department will obtain environmental clearance and work with the county in developing the project. Staff hereby recommends approval of this minute order.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation on item 6(b).

MR. HOUGHTON: Is this the contribution by Brazoria County on the pass-through that they're proposing, Amadeo? Right? Okay. So moved.

MR. JOHNSON: This is a hurricane evacuation route. Correct?

MR. DENNIS: Yes, sir.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. DENNIS: Item 6(c). This minute order amends Category 6 Structures Replacement and Rehabilitation Program of the 2007 Statewide Preservation Program. With your approval, three off-system bridges will be authorized CONSTRUCT authority in the Austin, San Antonio, Childress and Paris districts.

The first bridge is located on County Road 240, also known as Sculls Crossing, over the San Marcos River between Caldwell and Guadalupe counties. This structure is on a direct route to the closest emergency facility, the Central Texas Medical Center, located in southern Hays County. It is a one-lane, wooden structure that is load posted and frequently floods. This bridge is functionally obsolete. The State Office of Rural and Community Affairs awarded a grant to the reconstruction of three bridges in Caldwell County. There's approximately $100,000 remaining in the grant and it is being reserved for this bridge. If project development is not underway by the end of the year, the grant money will no longer be available.

The second bridge is located in the Childress District in Hollis Road over the Red River, and it spans between Hardeman County in Texas and Harmon County in Oklahoma. The bridge is structurally deficient but was not included in the 2007 Statewide Preservation Program due to the issues related to the bridge's ownership. The ownership problem has been resolved and Hardeman County owns their half of the bridge in Texas. Each state will be responsible for 50 percent of the project cost.

The third bridge is located in the Paris District and is on County Road 1410 over the Little Mustang Creek Relief in Red River County. The most recent inspection in June of this year determined the structure was unstable and it required it to be closed. Since the inspection, a large scour hole has developed and water levels have fallen, exposing an additional three feet of abutment support.

Approving this minute order will facilitate project development before the next update of the Statewide Preservation Program. Staff recommends approval of the bridge projects listed in the attached Exhibit A for an estimated construction cost of $5,050,000.

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

MR. JOHNSON: So moved.


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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. DENNIS: Item 6(d). This minute order authorizes the department to provide $1,838,000 to the National Railroad Passenger Corporation, also known as Amtrak, to fund the Heartland Flyer Passenger Rail Service. The Heartland Flyer is a state-supported route and provides daily passenger rail service between Fort Worth and Oklahoma City, with an additional Texas stop in Gainesville. The Heartland Flyer travels over the BNSF Railway line.

Since the Heartland Flyer route is not part of the Amtrak system originally designated in 1971, the State of Oklahoma funded this service through a contract with Amtrak to cover operating losses. Oklahoma has covered these losses since service was established in 1999. Due to budget limitations in Oklahoma, the DOT can only provide $2,138,000 of Amtrak's projected total loss of $3,976,000 for fiscal year 2006. This leaves a funding shortfall of $1,838,000.

In order to continue this service, it is necessary for Texas to provide $1,838,000 to offset the operating losses on the Heartland Flyer. Staff recommends your approval of this minute order.

MR. WILLIAMSON: Members, you've heard the staff's explanation and recommendation on item 6(d).

MR. JOHNSON: I have a question. Wayne, is this a common occurrence where states or departments of transportation or local jurisdictions might subsidize Amtrak rail service?

MR. DENNIS: Yes, it is in some states. There's Amtrak's base system, again, that was established back in '71; there were several other later coming state-supported routes that are funded by the federal government, but there are also some routes that are funded by the states. In other words, the states came to Amtrak desiring this service. In this case, Oklahoma has been doing a lot of rail development on the Oklahoma side to improve track operations, and they just have a budget shortfall.

I guess the other issue is, a concern that we have is once you tend to lose these passenger routes, you're going to have difficulty re-establishing them. The freight companies will come in and they'll use those time slots to move more freight. They can be re-established and Amtrak has that legislative authority, but it's very difficult once you lose that slot.

MR. WILLIAMSON: And what time element, how long are we guaranteed that this passenger route will remain open by our taking this action?

MR. DENNIS: This will take care of federal fiscal year 2007 which starts October 1.

MR. JOHNSON: And ends?

MR. DENNIS: September 30.

MR. JOHNSON: September 30 of '07?

MR. DENNIS: Yes, sir.

We've done some analysis on this roadway, and what we've seen due to the ridership that is there, we estimate that there is a retail tax impact of about $2.2 million to the State of Texas. Also, based on the ridership that they have, you're going to be taking about 50,000 per year cars off the road between here and Oklahoma City.

MR. JOHNSON: That's a good point. So moved.


MR. WILLIAMSON: All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. DENNIS: Item 6(e). This minute order tenders a proposal to the City of Buda in Hays County to construct a new location facility on the state highway system from I-35 at Main Street to State Highway 45 southeast. It realigns FM 2001 and it constructs interchanges at I-35 and FM 2001, and at I-35 and Main Street.

Minute Order 110508, dated April 27, 2006, tendered this same proposal to the city and the county, however, due to a series of complex transactions required for the project, the city informed us that they would not be able to meet the original July 27 acceptance deadline that was established in that minute order. This minute order proposes the same provisions as the previous minute order and gives the city and county 90 days to fulfill the agreement requirements.

Both the city and the county continue to have a considerable interest in development of these projects as the area is becoming increasingly urbanized and is experiencing rapid development. The proposed projects will provide for north-south mobility by enhancing utilization of State Highway 45 and State Highway 130 toll roads. In addition, the projects will provide improved access to area developments and facilitate incident management along Interstate 35.

The estimated cost to the department is $22.4 million and the cost to the city and county are $23.2 million. If agreed to by the city and county, the local governments will submit a SIB loan to the department, not to exceed $15 million, for the construction of the Main Street extension project.

Staff recommends approval of this minute order.

MR. WILLIAMSON: You've heard the staff's recommendation and explanation on item 6(e).

MR. HOUGHTON: This is a timing issue then, Wayne. Right?

MR. DENNIS: Yes, sir. When we originally submitted it, it was pretty complicated and they came back and asked for some more time.

MR. HOUGHTON: Just need a little bit more time.

MR. DENNIS: And there's really no way to extend a tender minute order without bringing it back to you.

MR. WILLIAMSON: And we do have a witness, the mayor of Buda. Would you like to hear from the witness first?

John -- that's easy to pronounce. I'm sorry. I know you've been here before and I was sitting here trying to remember how to pronounce your name, and I apologize.

MAYOR TRUBE: No problem. Thank you, Chairman, commissioners, staff. Appreciate the opportunity.

We would, first off, like to apologize. It is a complicated minute order, it took a little more time than we had anticipated to work out the moving parts in terms of financing this particular project, as well as working with the county and the other parties involved. But at this time we're glad to say that we have gotten the minute order passed at the county level, the city level, we have our financial agreements all written in place and placed through a variety, an agreement and a SIB loan as well.

So at this time we would like to, A, really make sure and express our appreciation and our enthusiasm for doing another partnership with TxDOT. Mr. Behrens and Bob Daigh, our district engineer, have been very, very good partners to us, very productive for the Hays County, particularly northern Hays County transportation needs. We are here standing by for anything that we can do for you as well. Thank you.

MR. WILLIAMSON: Questions or dialogue with the mayor?

MR. JOHNSON: Appreciate your being here.

MR. HOUGHTON: And his service on CAMPO. I understand he's got that tour of duty also.

MR. WILLIAMSON: Well, I wasn't sure about this, so I went down to northern Hays County last night and drove all around just to make sure that it's still a congestive nightmare, and I can tell you, Mayor, that we're probably not doing enough to help you fix your problems.

MAYOR TRUBE: We have experienced a lot of congestion and growth in our area, all the way down to San Marcos. But I'm glad to say, in my opinion and I think in the opinion of at least my city council and the county, TxDOT has stepped up, and again, with the team we've got and the leaders we've got in the area, the district engineer, Mr. Behrens and this board, we're not feeling left out, we're feeling like we have the attention that we need and we're accomplishing our goals and hopefully accomplishing some of your goals as well.

MR. WILLIAMSON: I was amazed at the houses, the businesses, it's incredible.

Members, What's your pleasure?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MAYOR TRUBE: Thank you very much.

MR. WILLIAMSON: Thank you, Mayor.

MR. BEHRENS: Amadeo is going to present item 6(f) concerning the Brownsville West Rail Relocation Project in Cameron County.

MR. SAENZ: Thank you, Mr. Behrens. Again for the record, commissioners, Amadeo Saenz, assistant executive director for engineering.

Item 6(f). The minute order before you tenders a proposal to Cameron County for a project to construct the Brownsville West Rail Relocation Project.

Minute Order Number 110479, dated March 30, 2006, authorized three grade separation projects on US 281, FM 802 and FM 3248 in Category 6, Structure Replacement and Rehabilitation under the railroad grade separation replacements of the 2007 Statewide Preservation Program.

Title 23, USC Section 130 states that railroad relocation costs may be reimbursable expenses when the relocation of a portion of a railroad eliminates the hazards of railroad highway crossings and therefore, the need for the grade crossing or the grade separation and the cost of the relocation is less than what the grade crossing would have cost.

The county has considerable interest in developing the Brownsville West Rail Relocation Project. The project will improve the transportation network of the area through the proposed rail system improvements and thereby improve the safety and traffic flow of the three named highways. By relocating the rail, the existing rail line will no longer be needed, will be abandoned for another transportation corridor, thus, the grade separations will no longer be needed.

If approved, the minute order will then be tendered to Cameron County that within the next three years they would have to obtain all the necessary agreements with the railroad that states that they will relocate to the new rail line proposed location; they will obtain from the railroad company, in the State's name, the railroad's property interest along the current location of the line from which the service is being relocated; they will notify the department that the international bridge and the connecting facilities of the rail line in Mexico is under construction.

In turn, the department will amend the Unified Transportation Program to authorize no more than $13 million from eliminating the grade separations and apply them to this project, and then we will also cancel development and construction of the railroad grade separation projects on 281, 802, and FM 3248 along the existing rail alignment.

Staff recommends approval of this minute order.

MR. WILLIAMSON: Members, to refresh your memory, this minute order was before us either last month or the month before.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And we had collectively some concerns about the committing resources for an indefinite period of time when we weren't sure of the commitment from the Republic of Mexico. I think that Amadeo has visited with local officials, I know the governor has, I think my good friend Rene Oliveira has done some visiting as well, and I believe they're ready to represent to us that we can make this thing work.

We do have two witnesses, the county judge of Cameron County, Gilberto Hinojosa, and David Allex with the Cameron County RMA. Do you want to hear the witnesses first, do you want to deal with the letters first?

MR. HOUGHTON: I was going to ask Amadeo the total cost of the project, Amadeo, on the relocation. We're going to put $13 million at the maximum.

MR. SAENZ: We're putting $13 million. I believe the total cost of the project, including half of the international bridge -- and I'm going to look back and ask the Cameron County folks to help me a little bit -- about $25- to $26 million is the cost of the project to build half of the international bridge plus the rail line to connect to the existing line that's in Brownsville.

MR. HOUGHTON: And we're re-allocating $13 million to that project.

MR. SAENZ: Yes, sir, we are re-allocating $13 million of railroad grade separation dollars that will no longer be needed and applying them to this project. And the $13 million was what we had allocated for those railroad grade separations.

MR. HOUGHTON: Right. And as a result, the Union Pacific, I believe, will then exit that facility and the facility will be in the name, the title in the name of the State. Is that correct?

MR. SAENZ: Yes, sir. The right of way under which the roads and the railroad cross will be transferred over to the name of the State.

MR. HOUGHTON: What about the rail bed?

MR. SAENZ: The existing rail bed?

MR. HOUGHTON: Right of way.

MR. SAENZ: The existing rail bed is going to be used and developed under a transportation project that the district and Cameron County and the City of Brownsville are working to develop that they call the West Loop project.

MR. HOUGHTON: And where do we derive the authority, or under what legislation do we derive that authority to do this?

MR. SAENZ: The elimination of the rail crossings -- let me get back to my notes -- of course, we're eliminating the railroad crossings which is what we were doing with the grade separation project, and by relocating the line, that will also eliminate the rail crossings, so it accomplishes the same thing.

MR. HOUGHTON: And they will build a transportation facility inside the old rail bed?


MR. HOUGHTON: Is that the RMA project?

MR. SAENZ: That's one of the projects, that was the project that was submitted by the RMA, the West Loop project.

MR. HOUGHTON: Under what legislation was that derived, RMAs?

MR. SAENZ: RMAs were so many numbers: 3588, 2702.

MR. HOUGHTON: Which one of the visions of Governor Rick Perry. Correct?

MR. SAENZ: Yes, sir.

MR. HOUGHTON: Okay. Thank you.

MR. WILLIAMSON: Other questions or comments, members?

(No response.)

MR. WILLIAMSON: Let's hear from the witnesses and then we'll read some letters into the record.

Judge, I'm going to let you decide who goes first.

JUDGE HINOJOSA: I'll go first. Thank you very much, Mr. Chairman and members of the commission.

This railroad relocation project, I believe, is probably the first in the state of Texas, and it's consistent with what Governor Perry has proposed to the legislature and that the voters voted recently to work on a statewide program for railroad relocation projects. It's only about a four- to five-year project, it will move all rail lines in Brownsville to the west about six miles, moves an international bridge to the west as well. The minute order talks about three at-grade crossings that will be eliminated. In reality, when it's all said and done, it will eliminate a total of seven at-grade crossings that were in the future scheduled for construction.

At 1998 costs, the total cost for the seven at-grade crossings were $48 million, so it's significantly more today. You were talking about closing that gap just a little while ago. If you calculate at 1998 costs, the savings to the State of Texas by the accomplishment of this project, it's something like $27 million, probably a lot more today. We already have the $13 million in place that you are matching, essentially.

We believe that this project will fast-track, given what this commission has done today, and we will be able to get a diplomatic note to begin construction on the bridge relatively quickly and have this project well on its way when the next legislative session gets underway. So that you can use it as a model to begin working on projects all across the state of Texas and greatly enhance the safety and the railroad traffic's ability to move products in and out of different communities without creating the congestion that some of these rail lines have created and the dangers that are associated with hazardous materials, flammable materials that could create significant problems in congested communities.

So thank you very much for your help on this project, and I think the vision of this commission and the governor to move forward on this project is to be commended.

MR. WILLIAMSON: Members, questions or comments for the judge?

MR. JOHNSON: I've got a question.


MR. JOHNSON: Judge, you mentioned some of the benefits, and clearly there are several benefits that the community is going to benefit from. When we visited in April, we came and had our commission meeting there in Brownsville, we spent time at the port and came to recognize what a great resource the port is for your community and the region. How does this rail relocation affect the port and the multimodal aspects that the port has? Is there any effect, and what are sort of the future plans that relate to surface transportation, be it rail, vessel?

JUDGE HINOJOSA: There's been a lot of discussion on that issue with the port in recent years. The port, you probably have read in the news, spent about $21 million trying to develop an international bridge at the Port of Brownsville crossing into Mexico. That was not successful. I think the clear indication from Mexico is that they're not interested in a rail bridge at that particular point because of the problem that it would cause in going all the way around Matamoros. And so the Port of Brownsville really is in need of an alternative method by which it can move the rail that is moving products from the Port of Brownsville into Mexico and back.

And this will allow them, I believe, a much better transportation corridor for their rail traffic because it takes all the rail out of Brownsville, it gives them the ability to put together longer trains that will move faster without any danger that there might be any collisions with automobiles, and it will, I believe, enhance their ability to do business.

You know, we think this is a win-win thing for Brownsville, Cameron County, Mexico, the Union Pacific, obviously, because they get a new rail and a bridge, and the Port of Brownsville.

MR. JOHNSON: Can the customers of the port be cost-competitive by utilizing this freight rail? I mean, it occurs to me that that's sort of out of their control which is going to possibly affect the competing ways of moving freight.

JUDGE HINOJOSA: Well, one of the things that is going to happen with the bridge that is going to be constructed, you remember that the bridge that is already there today is 100 years old, and that bridge can only handle certain types of cargo, of railroad cars. The large container vehicles cannot cross through that bridge, so the port is very limited in being able to bring container cargo that would be transported on rail because it can't cross it under the current rail system that they've got today.

MR. JOHNSON: And the port is outfitted for containerized cargo?

JUDGE HINOJOSA: Well, they're working in that direction. They've got proposals before Congress to allow them to deepen the port and build a turn basin that will allow them to bring in large containers, and this works perfectly into their future plans. The new international bridge that will be built will be able to handle the container cars that they're hoping to bring into the Port of Brownsville. So it actually enhances their attractiveness as a port internationally.

MR. JOHNSON: Thank you.

JUDGE HINOJOSA: I forgot to mention, also we have with us today our commissioner from Precinct 2 which is in the area, Commissioner John Wood; and you mentioned David Allex, the chairman of the regional mobility authority -- in my opinion, the best in the state of Texas; Richard Ridings from HNTB, the engineers that have put this project together in record time -- we got our presidential permit with their efforts, and they're in the final stages, if they haven't already completed the engineering plans for that project; Pete Sepulveda, Department of Transportation director; David Garcia, his assistant; Charlie Cabler who is the city manager for our partner, the City of Brownsville; and our city commissioner, Commissioner Carlos Cisneros.

Thank you.

MR. WILLIAMSON: Thank you, Judge. We appreciate you being here.


MR. ALLEX: Thank you. For the record, I'm David Allex, chairman of the Cameron County Regional Mobility Authority, serving at the pleasure of Governor Perry.

I want to express my deep appreciation on this item on your agenda to the governor of the State of Texas, who has intervened on our behalf to some degree, but most importantly, to each one of you, individually and collectively, for your support for the Cameron County Regional Mobility Authority and what we've tried to achieve over the last two years.

I want to digress for just a moment, but the vision of the Trans-Texas Corridor, the crystallization of projects in Cameron County were so far off you could hardly see them. We can almost start to touch them now. And this is one of the things I think that the vision of the governor and what you have implemented over the last couple of years, because of RMAs is something that will create hundreds, if not thousands, of jobs in areas like Cameron and Hidalgo counties along the border.

Let's not forget -- and I keep harping on this every time I get before you all -- that the engine that fuels our economy in South Texas and in Cameron and Hidalgo counties is indeed Mexico. I work Mexico three days a week, and if you eliminate 23 intersections that the rail is going to go through Matamoros and through the city of Brownsville, and you save an hour or hour and a half time on rail, that's the money we're going to save, commissioners.

You know, you talk about what's the value of having a new rail. Well, you eliminate all that traffic going through Matamoros and Brownsville and you save time for freight going through there. So this is one of, I think, most important projects as far as economic impact to our area.

Pete Sepulveda and I met with some individual businessmen in Mexico just a couple of weeks ago. They're building an intermodal freight terminal that will have cargo and freight on the Mexican side of where this bridge is going to be, this new rail bridge. We estimate there will be hundreds, maybe as many as a thousand jobs over the next five or six years on recent development of industrial parks on the Mexican side. In fact, we know of two industrial parks on the west side of Matamoros that are under development as we speak.

Those jobs will translate into retail sales for Brownsville and for Cameron County; those jobs will provide for warehousing and distribution facilities in Cameron County; those jobs that are created -- 3,700 is projected right now -- in those new industrial parks and at the container and trucking terminal on the Mexican, will be the economic generator that will have economic impact on Cameron County. And your RMA is going to do it and we're going to do it with your leadership, and thanks a lot for that.

The second thing, there's been a lot of talk about -- and we've done some projections on this -- the Cameron County Regional Mobility Authority, if you include everything that we're going to do in the next ten years, it's going to be in excess of about a billion dollars, that's a lot of money. But when you consider that that's a billion dollars worth of construction and over a ten-year period -- and I'm the eternal optimist and I'm probably a little bit liberal in my projection of population growth -- in the next ten years to 15 years we'll have 10 million people in South Texas and northern Mexico, as we know it today with only 4 million.

And I've said this to Commissioner Hope a million times, the only thing that divides this area is a street with water in it. Our cultures, our education, our families, what we do as everyday activity is no different than walking across the street and buying a hamburger in that place next door. That street with water in it is no barrier at all, and you know that as well as I do in the El Paso area. So anything we can do on either side of that street with water in it is going to have an economic impact on both areas.

If we're going to do a billion dollars worth of construction work over the next ten years, that will be 20,000 in construction jobs over the ten-year period, not all at one time, but 20,000 construction jobs over the next ten years. If we're successful in doing that in the next ten to 20 years, ten to 15 to 20 years, it will create another 20- to 40,000 permanent jobs, hot dog stands, hotels, restaurants on South Padre Island, on the mainland, all over the place. So you're looking at some real significant economic impacts that the RMA and the leadership of Cameron County, with the leadership of the state government can do to create jobs in an area that needs the jobs.

So I can preach this all day long because I live it every day; that's my job is to create jobs in Mexico and Cameron County. So I just wanted to bring that up to you.

The 19,000 you have working in the Texas Department of Transportation, this is one of the most valuable assets you have. And Mr. Chairman, when you start talking about how great they are, they've spent 15 years working for you, Commissioner Johnson, these are the most important assets that this department has. And I can't say enough about your regional engineers, Amadeo, Mike, and everybody else who has helped us at the Cameron County RMA to make a success. We would not be here today if it wasn't for them, and I sincerely appreciate their time and their effort and yours too. Thank you very much.

MR. WILLIAMSON: Questions or comments for David?

We do appreciate so much the work you do with your RMA, in addition to the work you do in your community and your business.

MS. ANDRADE: David, I just want to echo that. Your commitment, your leadership has just been incredible out there. Thank you for everything that you do. To Commissioner Wood, thank you, and the judge and Pete, it's been a pleasure to work out there with you. And I just love the fact that you're creating jobs and improving safety for your citizens. You're doing a great job, so we're very happy to be part of it.

MR. ALLEX: That's what it's all about, and I'm honored to be part of it myself.

MS. ANDRADE: Working together.

MR. HOUGHTON: And David, I appreciate you allowing Pete to come out to El Paso a week or so ago for our RMA educational conference. We had both your and the NET RMA, and I hold you all up as the poster child of RMAs in the state of Texas. You got out there, got out there quick, and took it by the horns, and I appreciate very, very much what you're doing for the State of Texas.

MR. ALLEX: Thank you, commissioners.

MR. WILLIAMSON: Thank you, David.

Members, I also want to make you aware we have received some letters from people that are significant to our daily lives. Without reading all of them, Rene Oliveira, who is a House member from the area, a close friend of mine, wrote saying: Today we'll consider the minute order; there's a sizable funding gap; the final phase of the international bridge will enhance safety in our area; thank you for your consideration.

Senator John Cornyn wrote: As we move forward with the planning of the West Rail Relocation Project, he wants to reiterate his strong support for the project, and the impact of the international bridge component. We'll put his letter into the record.

The chairman of the House Transportation Committee, a great friend of this body, Mike Krusee, wrote and spoke about goals -- things we like to talk about around here -- the impact on Brownsville as well as Matamoros, and the impact on safety. He was very eloquent in his letter. That will be part of the record.

And then finally, our boss, Mr. Perry wrote. After talking with some people down in the area, he considered it to be of highest importance and directs us to please proceed. That letter also will be part of the record.

Members, you've heard the staff's explanation, the witnesses' testimony, you're aware of the letters. What's your pleasure?

MS. ANDRADE: So moved.


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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no. Motion carries. Thank you.

Thank you for your patience and thanks for coming halfway up the state again. One day we're going to just move the transportation department down to the southern entrance to the state and then everybody will have to come south and spend some money to talk about transportation.

Good to see each one of you. Thank you very much.

MR. SAENZ: Mr. Chairman, we also received letters from the State of Tamaulipas, where they're endorsing the project, as well as the City of Matamoros.

MR. WILLIAMSON: That's good.

MR. SAENZ: I'll also pass them along to Roger to put in the record.

MR. WILLIAMSON: We'll put them in the record also.

MR. SAENZ: Thank you.

MR. WILLIAMSON: Thank you, Amadeo.

Mike, do you want to return to the agenda, or do we need to do any more skipping around?

MR. BEHRENS: No. I think we can go back to our regular ordered agenda, and we go back to agenda item number 3. We'll have Coby come up and continue his discussion and talk about recommendations that the commission might consider for our next legislative session. Coby?

MR. CHASE: Good morning. For the record, my name is Coby Chase and I'm the director of TxDOT's Government and Business Enterprises Division. Today I will further discuss the formulation of your legislative agenda for the 80th Session of the Texas legislature.

MR. WILLIAMSON: And you wish to announce that you wore that tie in honor of Michael Behrens. Right?

MR. CHASE: As long as I have at least one Longhorn up there, it's not to career limiting to wear this tie. It's also kind of autumnal, it is the beginning of fall.

MR. HOUGHTON: Looks like a University of Tennessee tie to me.

MR. CHASE: Well, okay then. Anybody else want to weigh in on what I wore today? I'll start clearing the fashion choices before I appear.

MR. WILLIAMSON: Well, John had a comment on a tie, I'm sure Hope and Ted are going to have a comment later on today, I wanted to get mine in.

MR. CHASE: Thank you. I do appreciate that, Horn to Horn.

(General laughter.)

MR. CHASE: As mentioned in past meetings, statutory changes that would improve the operation of the department, recommended to the Texas Legislature by the Transportation Commission, are authorized by law. The purpose of this ongoing dialogue is to make these issues public.

Since January you have listened each month as I've described our in-depth development of the legislative agenda. Throughout this process, my staff and I have reviewed and researched several issues, all the while keeping in mind how these issues assist the department in reaching the goals outlined in our strategic plan. Not only are we correlating these issues and their relevancy to reducing congestion, enhancing safety, expanding economic opportunity, improving air quality, and increasing the value of our transportation assets, we are also looking for opportunities to incorporate strategies to meet these results-driven goals. We also try our best to make choices that do not limit options in the state's mobility future.

We began this process by soliciting input from you, TxDOT staff, and members of the legislature through interim hearings and through conversations. As I mentioned last month, we decided to take this process further by sending letters to over 1,900 interested parties, detailing the issues we are considering for inclusion in your legislative recommendations. While the response has not been overwhelming -- but from a marketing standpoint, it would have been a success -- we heard back from a little over 3 percent of the recipients.

Of that 3 percent, about one-third actually did comment on the list of issues, and the others pretty much just wanted their addresses updated which is actually very valuable information to us, it actually served another purpose.

We sent out this information hoping not only to reinforce our message to the state but also to get a pulse of what is going on in Texas. We have heard from a good cross-section of recipients, including groups like the Houston-Galveston Area Council and smaller municipalities such as Nacogdoches.

Last month I detailed some of the major issues being considered for the agenda. This month I would like to focus on the issues that seem to have created the most direct reactions from the responses we've received from our mail-out.

Several municipalities have expressed their concern over the outdoor advertising relocation issue. As you may recall, sometimes the removal of a billboard is required when improving a highway. When this happens, the department and the owner often compromise on a relocation of the billboard, however, many cities have ordinances limiting the placement of new billboards, thereby requiring the purchase of it at a cost to taxpayers or to the highway system, as the case may be.

This is an expensive endeavor and it would be helpful to see a variance in city ordinances allowing for these relocations, or cities could opt to purchase the billboard to be removed if they would prefer to enforce their own ordinance. All this would not result in a net increase in the number of billboards in a given area. Many cities view this as an expensive solution to a problem they currently do not have to deal with, meaning it's pushed back on the state to deal with and to pay for.

We have received very positive feedback on several issues. It is widely agreed that fees collected from oversize/overweight trucks should be deposited into the Texas Mobility Fund as opposed to the current process of depositing these fees into general revenue. One can certainly argue that these fees are directly related to transportation and we'd also like to investigate re-evaluating and raising these fees.

We've also seen consistent support for the early acquisition of right of way. As opposed to waiting for the environmental work to be completed before acquiring right of way, it would assist the department greatly to be able to acquire property sooner if the owner is willing to do so, again, only in a willing situation, not to condemnation.

Several of the respondents also agreed with the prospect of local transportation planning authority. Allowing counties the ability to designate property as part of a future transportation corridor would most certainly save the department and taxpayers funds which could be utilized in other areas.

As a matter of fact, I was in Lufkin with Phil Russell and Denise Pittard a couple of Fridays ago, talking to the I-69 Alliance there, and one, I understand, fairly new county commissioner of one of the member counties, I don't think he heard me exactly right. He thought I said that this priority exists and he wanted to know how he could get it started right away. And so that was actually a good sign, and we'll build on that enthusiasm, mark my words.

Of course, we have several issues to be considered, and one of our top priorities will be to capitalize the Rail Relocation and Improvement Fund. This strategy will certainly help TxDOT in meeting all of our goals. I have nothing new to report on this front since my last report, but we will continue to work on a solution and keep you informed on any developments.

In an effort to enhance safety on Texas roadways, we have researched several options for your consideration. Some of these include the establishment of sobriety checkpoints as a tool to be utilized by local municipalities to assist in the enforcement of drunk driving laws, the implementation of variable speed limits to help motorists respond to changes in roadway conditions. We've also researched the benefits of exclusive truck lanes and how they can not only enhance safety but reduce congestion and increase the value of current transportation assets.

All of that being said, we are nearing completion of the research on all the issues which have been brought to your attention so far. At this point I would speculate that we would have a draft report available to you for your review in the month of November, with an eye towards final adoption in December. We will amend that schedule if you would like us to, but looking at everything we have in place, we should be able to have something to your offices and to your staffs and in front of you in early November. We can discuss it at greater length at the November commission meeting, and then December adoption. If you want to change that, let me know and we'll be happy to do that, and as I wrote in here, however, if the commission has a different preferred future, please let me know.

And to follow up on something raised at the last meeting, Commissioner Houghton requested an update on the Oregon Road User Fee pilot program. This program is being explored in Oregon as an alternative to traditional funding methods through the development of a revenue collection system funded by a pay-as-you-drive method. As part of the pilot program, vehicles are equipped with a GPS device which tracks miles driven at certain times of the day. Motorists would be charged accordingly based on the time of day and the average daily traffic of the roadway traveled.

We are currently working with our own executive staff and the staff of the Oregon Department of Transportation to coordinate a visit to further discuss this program and other ideas. Commissioner Andrade will be participating in that visit with us.

These are my prepared remarks for today. I'll be more than happy to answer any questions you may have.

MR. WILLIAMSON: Members, you've heard Coby's explanation of where he is in his process at this time. Do you have questions or comments for Coby?

MS. ANDRADE: My only question, Coby, as you know, Public Transit will come before the November meeting with the outcome of their study group also. Will this give you enough time in 30 days to include that in the draft?

MR. CHASE: Yes. Our preferred future for November, it's still an open, living, organic document at that point, we consider our final draft a draft, and if it needs to be amended. And we will work with the Public Transportation Division, so kind of like doing a master development plan for Trans-Texas Corridor, we will have an idea of what happens when we all come together.

MS. ANDRADE: I just wanted to remind you and make sure that you're aware that's coming.

MR. CHASE: Yes, ma'am, absolutely.

MR. HOUGHTON: Coby, we talked about the opportunity of researching the cap on CDAs being raised to 99 years.

MR. CHASE: Yes, sir, still there. I just didn't touch on all the issues today, but yes, sir, that is still there. If I've said it before, it's still there, absolutely.

MR. WILLIAMSON: Anything else? John? A few things, Coby. Am I given to understand there is no fuel tax on bio-diesel, or do you know?

MR. CHASE: I don't know off the top of my head; I don't believe that there is.

MR. WILLIAMSON: What about ethanol?

MR. CHASE: There's a federal tax on it.

MR. WILLIAMSON: I'm not proposing and wouldn't want anybody in the audience to not understand the nature of my question. I want to know two things in order to see if we want to add it to our list. I want to know the extent to which alternative fuels are taxed in the same manner as traditional fuels at the state level, and I want to know the extent to which railroads, public transit agencies, airlines, and whatever other mode of transportation I have left out, are or are not subjected to the same clean air standards as are the internal combustion machine burning traditional gasoline and diesel.

MR. HOUGHTON: Could I add to that list a little bit?


MR. HOUGHTON: Rail companies, diesel for locomotion, my understanding, is not taxed in the state of Texas.

MR. WILLIAMSON: So maybe amend, this is a semi-research and possible discussion point for next month.

MR. CHASE: What about all fuels that propel all forms of transportation?

MR. WILLIAMSON: If we're going to stand for using the one thing in common that everything has, that is the cost of something, as a matter of addressing congestion, improving air quality, then it's incumbent upon us to consider everything that happens in our state and decide whether or not we want to discuss that with the legislature.

Again, I'm not suggesting we tax, necessarily, bio-diesel, I'm generally not a tax guy, but if bio-diesel is being consumed in ever greater proportions and there's no significant difference in the emissions of bio-diesel and traditional diesel, then there's no reason for us not to at least put on the table the impact of bio-diesel on the air quality and whether or not it's paying its share of the road it consumes and the air it dirties.

MR. CHASE: Sure. Do you want us to add aviation fuel in there too? That's not taxed.

MR. WILLIAMSON: Yes. So aviation fuel input and aviation exhaust output, we want to kind of know about those things.

MR. CHASE: I don't think they pay for the roads.

MR. WILLIAMSON: Then the second thing is part of the reason we started this several years ago was so no one could honestly accuse of catching them by surprise when we went to the legislature with proposals. I know that Bob Jackson, our head lawyer, has some recommendations that will be made at some point on administrative matters about RMAs. Lest I have overlooked discussing this with him, I don't want us to forget we want to make an examination of how boards are reformed when counties are added to an existing RMA. That might be a weakness in the law we didn't anticipate four years ago.

But to be more specific, it is my understanding that the North Texas Toll Authority, and perhaps the Harris County Toll Road Authority, might wish our partnership and assistance in expanding their existing authority with some of the flexibility of regional mobility authorities, and while we want to be partners with those two groups in addressing the state's problems, we don't want to be on record as supporting changes in the law which, in our view, will act to restrict regional planning and execution as opposed to expanding it.

So as you do your research and as you communicate with your NTTA and HCRTA partners, we don't want to indicate for a moment that we're interested -- you know, we have four strategies to solve the state's transportation problem, one of those strategies is empowering local and regional leaders to act locally and regionally. We view regions more like our department districts or combinations of our districts, we don't view regions as just one, two, three or four counties that choose to call themselves a region, and I don't think any of us want to mislead them into thinking that we do -- for what that's worth.

MR. CHASE: What I hear in there, we don't want to make sure we're not doing anything that would limit the transportation future of a region.

MR. WILLIAMSON: We're very sensitive to that. And we don't want to mislead them into thinking that we would.

MR. CHASE: Right, absolutely.

MR. WILLIAMSON: As we've been four things over the last six years, we've tried to be professionally clear about the things we're not for, we're not for any more demo projects, we're not for piecemeal building things, we're not for continuing to localize the power and thus the problem, we are interested in regionalizing the authority to solve those problems.

MR. CHASE: Absolutely.

MR. WILLIAMSON: Anything else, members?

(No response.)

MR. WILLIAMSON: Okay, thank you, Mr. Behrens.

MR. BEHRENS: Thank you, Coby. We'll forgive that tie today.

Going on to agenda item number 4, Aviation, Dave Fulton will recommend projects to be approved for funding for the month of September.

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

This minute order contains a request for grant funding approval for eight airport improvement projects. The total estimated cost of all requests, as shown in Exhibit A, is approximately $3.3 million: approximately $1.2 million federal, $1.8 million state, and $300,000 in local funding.

A public hearing was held on August 17, no comments were received. We would recommend approval of this minute order.

MR. WILLIAMSON: Members, I don't see the Robert Nichols Memorial Airport in here anywhere.

MR. JOHNSON: Fortunately, it's not memorial.

MR. WILLIAMSON: You're right.

(General laughter.)

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. FULTON: Thank you.

MR. BEHRENS: Agenda item number 5 is our rules for this month. Agenda item 5(a)(1) would be proposed rules concerning Chapter 2 and our Environmental Policy. Dianna?

MS. NOBLE: Good morning, commissioners. For the record, my name is Dianna Noble, director of Environmental Affairs for TxDOT.

Agenda item 5(a) proposes a repeal of Subchapter A concerning Comprehensive Policy on the Environment and the repeal of certain sections in Subchapter C concerning Environmental Review and Public Involvement for Transportation Projects, and simultaneously proposes new subchapter titled Environmental Review and Public Involvement for Transportation Projects.

The new subchapter redefines the policy, reorganizes the rules, restates several of the requirements from the repealed rule, and creates new provisions regarding federal and state environmental requirements that affect environmental processing for transportation projects.

The new sections continue to implement the requirements concerning environmental processing for federal aid projects and satisfy Transportation Code 201.604 that the department provide for, by rule, the environmental review of the department's transportation projects that are not subject to review under the National Environmental Policy Act.

New 2.1 provides for general procedures and emergency actions, including the policy. New 2.2 is a definition section and defines terms used in this chapter. New 2.3, the federal aid transportation project section, restates requirements repealed in 2.42; it also includes new provisions to implement portions of SAFETEA-LU. This new sections recognizes that the Federal Highway Administration and the department may enter into a memorandum of agreement under which the Federal Highway delegates to a state transportation agency the authority to issue approvals of environmental documents and take other actions. The new section authorizes the department to request that Federal Highway publish in the Federal Register a notice that issues a permit, license or approval is final, and therefore, that any claims on the project must be filed within 180 days.

New 2.4 also is related to project coordination. It restates the duties of the districts and Environmental Division on exchanging information with other governmental entities concerning projects. This section also implements SAFETEA-LU and establishes new requirements for environmental processing that apply to federal aid projects and that are classified as environmental impact statements for projects.

New 2.5, Public Involvement, restates the requirements for public involvement concerning a project, and there are also new provisions. For federal aid projects, the SAFETEA-LU requirements apply if the original notice of intent -- which is for an EIS type project -- was published in the Federal Register after August 10, 2005. For purposes of consistency for a state project, the requirements apply if the original notice of intent was published in the Texas Register after August 10, 2005. The new section also provides additional requirements for the notice of availability of the final environmental impact statement for the Trans-Texas Corridor project.

The next three sections deal with public involvement. New 2.6, Meeting with Affected Property Owners, new 2.7 dealing with Public Meetings, new 2.8 dealing with the Opportunity for Public Hearings, all restate the requirements for these types of public involvement.

New 2.9, related to Public Involvement/ Public Hearings, restates the requirements for this type of public involvement. It also lists the types of projects for which a public hearing is mandatory.

New 2.10 deals with Categorical Exclusions, and it restates the environmental review requirements for a project classified as a categorical exclusion. New 2.11 deals with Environmental Assessments and restates the environmental review requirements for a project classified as requiring an environmental assessment.

New 2.12 relates to Environmental Impact Statements and restates the environmental review requirements for a project classified as requiring an environmental impact statement. It also includes new provisions on developing the preferred alternative to a higher level of detail. This implements SAFETEA-LU. It also adds new requirements for preparation of a draft environmental impact statement for the Trans-Texas Corridor project.

New Section 2.13 relates to re-evaluations and it restates the environmental review requirements for when a project must undergo a re-evaluation.

New 2.14 is related to Supplemental Environmental Assessments and authorizes the department to prepare a supplement environmental assessment. This new section requires the preparation of a supplemental environmental assessment when there are changes to the project that were not evaluated in the environmental assessment or when there is new information or circumstances that were not evaluated in the environmental assessment.

New 2.15 is related to Supplemental Environmental Impact Statements and restates the requirements for a DIS.

New 2.16, related to Mitigation, restates the requirements for mitigating the environmental impacts of a project and there are also new provisions that before the department acquires by purchase or condemnation real property to mitigate an adverse environmental impact that the department, if authorized by the regulatory authority, must offer to purchase a conservation easement from the owner of the real property.

New 2.17 which deals with Special Right of Way Acquisition restates the requirements concerning the acquisition of right of way under certain circumstances, including the acquisition of private land having an agricultural conservation easement and the taking of certain public land in public or private historic sites. Subsection (e) concerns Early and Advance Acquisition and specifies a method for conducting the environmental review for early and advance acquisitions.

New 2.18 relates to the Maintenance Projects and Programs and restates the requirements concerning the environmental review and approval for maintenance type projects and programs.

New 2.19, Rail Transportation Projects, restates the requirements concerning the environmental review and approval for a rail transportation project.

New 2.20, titled Public or Private Entity Receiving Financial Assistance from the Department for a Project, restates the environmental processing requirements for such projects, including the information the entity must submit to the department.

If proposed for adoption, the department would conduct a public hearing on November 9, 2006 to solicit comments on these proposed rules.

That concludes my presentation and I'll be glad to answer any questions.

MR. JOHNSON: Any questions of Dianna?

MR. HOUGHTON: I do have. Dianna, these are by statute and by rule under SAFETEA-LU?

MS. NOBLE: Yes, sir, Commissioner. It's, in essence, accomplishing two things: one is implementing requirements in SAFETEA-LU, and the other one is implementing a state requirement that requires the department to have environmental procedures for projects that are not covered under NEPA which is a federal provision.

MR. JOHNSON: There is going to be a public hearing on November 9?

MS. NOBLE: Yes, if the commission so chooses to propose the adoption.

MR. JOHNSON: And it's most likely place would be where it would be held?

MS. NOBLE: It would be here at the Greer Building at, I believe, nine o'clock would be when we would have it.

MR. JOHNSON: And should this be passed, comments will be accepted till November 13?

MS. NOBLE: That is correct. And so they will be posted, of course, in the Texas Register.

MR. HOUGHTON: What kind of attendance do you get at these types of hearings?

MS. NOBLE: Generally when there is attendance, it tends to be from those that tend to be environmental advocacy type groups are the ones that generally attend the meetings.

MR. JOHNSON: Any questions, Hope?

MS. ANDRADE: I have a question. There's something in here that says about published in newspapers in English. Do we publish these notices also in Spanish? I realize that the dominant language is English, but is there an opportunity for us to get more people to participate?

MS. NOBLE: I didn't state the full requirement indicates that the notice must also be published in any other languages that might be dominant in the area. For example, in Houston there tends to be a lot of dialects, either Chinese or Vietnamese, so in essence, it would require the publication in at least another newspaper to announce that public meeting or hearing. And of course, Spanish is another language that we likely also publish another notice.

MS. ANDRADE: So we do do that?


MS. ANDRADE: Thank you.

MR. JOHNSON: Any other questions? What would your pleasure be?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

MR. JOHNSON: There's a motion and a second. All in favor of the motion, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Those opposed, no.

(No response.)

MR. JOHNSON: Motion carries. Thank you, Dianna.

MS. NOBLE: Thank you.

MR. BEHRENS: Agenda item number 5(a)(2) is proposed rules under Contract Management that deal with amendments to the Disadvantaged Business Enterprise Program. J.D.?

MR. DOSSETT: Good morning, commissioners, Mr. Behrens. For the record, my name is James Dossett. I'm the director of the Business Opportunities Program Office.

This minute order proposes adoption of amendments concerning the DBE Program to conform to the federal rules for the administration of the DBE Program. The Federal Highway Administration performed a compliance review on the department's DBE Program last fall and raised several issues and provided recommendations to address the issues. The proposed rule revisions are intended to comply with the recommendations and specific federal rules. The current rules do not now comply with federal rules and the revisions will amend 9.53 to comply with federal rules and Federal Highway Administration recommendations.

Staff recommends approval.

MR. JOHNSON: Any question, comments?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

MR. JOHNSON: There's a motion and a second. All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Those opposed, no.

(No response.)

MR. JOHNSON: Motion carries.

J.D., it's nice to know that your name is James.

(General laughter.)

MR. DOSSETT: Thank you, sir.

MR. BEHRENS: Agenda item 5(a)(3), more proposed rules, these under Traffic Operations concerning our Logo Sign Program. Carlos?

MR. LOPEZ: Thank you, Mike.

Good afternoon, commissioners. My name is Carlos Lopez and I'm director of the Traffic Operations Division.

The minute order before you provides for the preliminary adoption of revisions within our existing Logo Sign Program rules. This amendment proposes revisions to Sections 25.401, Definitions, and 25.406 concerning Major Shopping Area Eligibility.

We recently became aware of some errors in our existing rules related to two definitions. The definitions for Major Shopping Area and Eligible Highway did not totally conform to that contained in the statute. This proposed amendment is designed to ensure that these definitions, as contained in the rules, accurately correspond to state law.

We recommend approval of this minute order.

MR. WILLIAMSON: Now, Carlos, is this the one that's going to permit us to put billboards up on our property without having to apply for a permit with the state?

MR. LOPEZ: I think that may be under John Campbell's purview.

MR. WILLIAMSON: I know Mr. Johnson is interested in that.

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

MR. JOHNSON: Carlos, I noticed that one of the things that this affects is the way we identify shopping malls. Does this narrow or widen our ability to do that? And what is an IAW statute?

MR. LOPEZ: Well, what it's going to do is make the rule correspond to the statute. The statute is a little tighter than what we have in our rules, but we have been signing for the malls that are under the rules right now through a variance process. We wrote in our rules that if you had 650,000 square feet and didn't have to be under a covered roof, that opened it up to the outlet malls, so we've been signing for the outlet malls and we think it's a good thing because they generate a lot of traffic. We'll continue to be able to do that but we'll have to do it by a variance now.

MR. JOHNSON: And this program for shopping malls will fall under our new contract for all the logo signs which is a little more advanced in terms of the mechanism, the way the state receives their compensation.

MR. LOPEZ: That is correct. It's bundled in with our regular Logo Sign Program and a new Tourist-Oriented Destination Sign Program.

MR. JOHNSON: Now, would a filling station or a restaurant pay the same amount that a shopping mall would for their identification?

MR. LOPEZ: No. The mall signing is a little more costly simply because they are typically located on highways with higher traffic volumes. In fact, this time around the payment structure for various logo signs is dependent on the amount of traffic on a road which makes sense.

MR. JOHNSON: Well, it does, and I think that's a tremendous advancement. But what my question is if Exit 34 on a particular roadway and there's a filling station there and a fast food restaurant and a shopping mall, would, in essence, they pay the same amount or is there a difference because the shopping mall has 650,000 square feet and a service station might have 25,000 square feet and the restaurant 12,000 square feet.

MR. LOPEZ: In most cases it's going to be a difference in cost because the mall sign will not be part of that blue sign with all the logos, it will be its own sign, have a lot bigger lettering, and stand on its own structure.

MR. JOHNSON: So there are some variables involved besides the traffic counts.

MR. LOPEZ: That's correct.

MR. JOHNSON: Thank you.

MR. WILLIAMSON: Other questions or comments, members?

(No response.)

MR. WILLIAMSON: What's your pleasure?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. LOPEZ: Thank you, commissioners.

MR. WILLIAMSON: Good to see you, Carlos.

MR. BEHRENS: Agenda item 5(a)(4), proposed rules concerning Oversize/Overweight Vehicle Loads. Carol?

MS. DAVIS: Good morning. I'm Carol Davis, director of TxDOT's Motor Carrier Division.

The minute order before you proposes amendments to Chapter 28 concerning Oversize/Overweight Vehicles and Loads. Specifically, these amendments clarify policies concerning manufactured housing permits, update statutory citations, and streamlines the process for permits issued by Chambers County to transport loads with Cedar Crossing Industrial Park.

We are recommending approval of the proposed amendments at this time.

MR. WILLIAMSON: Okay, members, you've heard the staff's explanation and recommendation on item 5(a)(4). Do you have questions or comments?

MR. HOUGHTON: We're not talking about small home movers this week?

MS. DAVIS: No, sir. I thought I'd give you a break.

MS. ANDRADE: I must say we missed you.

MS. DAVIS: Thank you. I'll be back next month.

MR. HOUGHTON: You're becoming very familiar on that podium.

(General laughter.)

MR. JOHNSON: So moved.


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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MS. DAVIS: Thank you.

MR. BEHRENS: Agenda item 5(b)(1) is a rule for final adoption. This would be concerning Access Management. Mark?

MR. MAREK: Thank you, Mr. Behrens, Mr. Chairman, commissioners. I'm Mark Marek, director of the Design Division for TxDOT.

This minute order proposes final adoption of amendments to 11.50 through 11.52 and 11.55 and a new section 11.56 relating to the connection of a regionally significant highway to the state highway system, to be codified under Title 43, Texas Administrative Code, Part 1.

Transportation Code Chapter 203 provides that the Texas Transportation Commission may lay out, construct, maintain and operate a modern state highway system. Access management is one method of preserving the substantial investment in the ground transportation system by preserving the roadway level of service.

Senate Bill 637 of the 79th Legislative Regular Session 2005 amended Transportation Code 203.032 to allow a county with a population of 3.3 million or more or a county adjacent to a county with a population of 3.3 million or more to adopt access permitting authority on the state highway system in a manner similar to that delegated process available to municipalities. Counties meeting these requirements are defined as eligible counties.

Sections 11.51 and 11.52 are amended to allow the delegation of access permitting authority to these eligible counties. 11.52(f) is amended to require compliance with the department's environmental review rules. 11.55 is amended to expedite the approval process for entering into agreements to provide local access roads in conjunction with department projects.

The new Section 11.56 is added to provide a uniform means by which public and private entities, with the authority to construct and maintain and operate regionally significant highway facilities, may obtain permission to connect those facilities to the state highway system. While most such entities are required to obtain commission approval to construct regionally significant highways, certain entities with independent authority may construct a regionally significant highway and not necessarily conform to the Transportation Improvement Program, or the TIP. Adding regionally significant highways that are not in the TIP, especially in non-attainment areas, can threaten the entire area's transportation conformity under the Federal Clean Air Act, resulting in sanctions that could severely hamper the state's Federal Highway Program.

The current rules govern connection to the state highway system but do not give the department the ability to deny connections based on these conformity concerns, design and construction issues, or non-compliance with federal requirements. This new rule will ensure that proper statewide planning is employed in the construction of major highway facilities that connect to the state highway system and that those facilities are properly designed and constructed in compliance with federal laws and that environmental impacts are adequately considered.

No comments were received on these proposed rules. Staff recommends approval of this minute order.

MR. WILLIAMSON: Member, you've heard the staff's explanation and recommendation on item 5(b)(1). Do you have questions or comments?

MR. HOUGHTON: Just one. How many counties meet this?

MR. MAREK: There are about seven of those counties.


MR. MAREK: Yes, sir.

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BEHRENS: Agenda item 5(b)(2) is another rule for final adoption in our Vehicle Titles and Registration area dealing with specialty plates. Rebecca?

MS. DAVIO: Good afternoon. For the record, my name is Rebecca Davio. I am the director of the Vehicle Titles and Registration Division.

We have before you requesting final adoption of amendments to 17.28. These rules deal with how we administer the Special License Plate Advisory Committee. We posted the rules and didn't get any comments, and so we request your approval.

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

MR. HOUGHTON: How many specialty plates do we have now?

MS. DAVIO: We have approximately 119.

MR. HOUGHTON: What's the most popular?

MS. DAVIO: What's the most popular?

MR. HOUGHTON: Number one.

MS. DAVIO: The State of the Art.

MR. HOUGHTON: Number two?

MS. DAVIO: The Animal Friendly.


MS. DAVIO: And we've actually sold, collectively, the most personalized license plates. There's still a few good ones out there, though, if you're interested. I'd be happy to take your order.

MR. JOHNSON: In your calculations, have you included the universities?

MS. DAVIO: Yes, sir. All the university plates have sold about 16,000, collectively.

MR. HOUGHTON: Where would that be included in that one, two, three, four, five calculation?

MS. DAVIO: It would probably come up about number five.

MR. WILLIAMSON: Where does Vanderbilt sit on that one?

MS. DAVIO: I have that information here for you; let me look. I was ready for you this time.

MR. JOHNSON: Just out of curiosity, the universities, how do they sort of fall, the top four or five?

MS. DAVIO: The executive director's alma mater is number one.

MR. JOHNSON: Okay. And who might be number two?

MS. DAVIO: The University of Texas is number two.

MR. JOHNSON: They moved back into the number two slot ahead of the Texas Technological College or University in Lubbock?

MS. DAVIO: Yes. They're number three.

And our newest plate that we just started receiving orders for is the Texas Rangers plate.

MR. WILLIAMSON: Is that Rangers as in the gun-toters, or Rangers as in the guys that don't have any pitching?

(General laughter.)

MS. DAVIO: The last one. We'll also start selling Texas Astros.

MR. JOHNSON: Texas Astros plates. We have a new team.

MS. DAVIO: Houston Astros. Same thing.

MR. JOHNSON: They have pitchers and no hitters.

MR. WILLIAMSON: I don't know. They hit last night.

MR. JOHNSON: Well, it took them a long time.

MR. HOUGHTON: Took them a long time to win.


MR. HOUGHTON: So moved.

MR. JOHNSON: Seconded.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. You notice that we didn't embarrass Steve Simmons by asking you about the University of Houston.

MS. DAVIO: I would have been ready.

MR. JOHNSON: Rebecca, one other question. Just for the record, so my good friends from Lubbock might know how many more plates they need to subscribe to so they can move back into the number two position. How far is Texas Tech behind the University of Texas?

MS. DAVIO: About 700.

MR. HOUGHTON: What's Mr. Behrens' alma mater?

MS. DAVIO: 6,138 plates. UT Austin, 3,510.

MR. HOUGHTON: Two to one.

MS. DAVIO: Texas Tech, 2,806.

MR. WILLIAMSON: And University of Houston?

MS. DAVIO: 558.

MR. WILLIAMSON: I didn't know you had that many cars, Steve.

(General laughter.)

MS. DAVIO: Thank you.

MR. BEHRENS: We've taken care of agenda item number 6, we'll go to agenda item number 7. This will be a comprehensive development agreement and a recommendation to issue a request for proposals for detailed proposals on TTC-69. Phil?

MR. RUSSELL: Thanks, Mike.

Good afternoon, commissioners and Roger. For the record, I am Phillip Russell, director of the Turnpike Division. And I probably should state right off the bat, not to preempt any of your questions, but I should state this morning when I woke up and looked at the agenda item being for 69 and that it ultimately would go through or could go through Louisiana, that I selected the color of my tie, I think it's representative of LSU, and I certainly didn't want to use my burnt orange tie, I knew I would irritate either Mr. Behrens or Commissioner Houghton, so it seemed to be the better part of valor to choose a nondescript tie color.


MR. RUSSELL: I think it's LSU.

MR. JOHNSON: So the record will be perfectly clear, what color do you have on your tie?

MR. RUSSELL: Uh-oh, you're calling my bluff. I think their colors are kind of yellowish and blue.

MR. JOHNSON: They would prefer purple and gold probably.

MR. RUSSELL: I was close, though. But actually, I was going to ask what are Vanderbilt's colors now?

MR. JOHNSON: I deflect that question ahead of our Aviation Division. They're old gold and black.

MR. RUSSELL: Okay. I was thinking through but I couldn't recall.

MR. WILLIAMSON: I thought they were orange and black. No?

MR. JOHNSON: They only get orange scuff marks on their headgear about the third Saturday of November.

MR. RUSSELL: That would be Tennessee, Mike.

(General laughter.)

MR. RUSSELL: Very well. Commissioners, as Mr. Behrens pointed out, the minute order before you relates to TTC-69. As you recall, earlier this year we initiated a process to bring onboard a long-term strategic partner for Trans-Texas Corridor 69, similar to the one that we've currently employed on 35.

We have initiated the process, request for qualifications earlier this year. We received two submittals. We have thoroughly reviewed both of those submittals and determined that both should be short-listed.

The minute order before you, should you choose to approve it, would essentially do two things: number one, it would authorize us to go out with a request for detailed proposals to these two developers; second, it would set the stipend amount at $750,000 to the unsuccessful proposer. Again, that would be a cap of sorts. It would authorize payment for the intellectual properties up to an amount including $750,000.

Staff would recommend approval, and I'd be happy to address any question you might have.

MR. WILLIAMSON: Phillip, earlier in the morning a member of the free press came up and asked me a couple of questions about this. I fear I might have misled her into thinking that this would come sooner on the agenda than it did. I was going to apologize to her if she's still here, but I think she's left.

She did ask a couple of probing questions about the stipend, and I want to repeat for the record in case she's watching by video or she watches the tape later, we have two issues we have to sort of confront with the stipend. One is the fact that engineers under the law of the state really can't work prospectively, they have to work on a product, and the tight-fistedness of the commission won't permit us to disburse money unless we receive something for it. So this is a method we've developed to assure that the engineering component of these consortia are paid something for their work, and to also assure that the taxpayers of the state get something of value for the payment.

Could you kind of clarify for the record and for whoever might be watching, live or the tape, what it is we will buy when we pay this up to $750- to the consortia that might not be selected.

MR. RUSSELL: Right, Chairman. And she visited with me at the break, as well, and so I was able to discuss that issue with her. And you're right, it really does two things: it defrays some of their cost, but ultimately what it does for us is it provides us that intellectual property on that proposer. So we have free use of that information that we can impart on the successful proposer on that project or any other project that we deem appropriate. So it essentially purchase the intellectual property rights up to an amount of $750,000.

MR. WILLIAMSON: So one of the things that we think happens in this process, members, is each individual competing or each consortia looks at the same objective differently. One might think that the trade corridor between Laredo and Corpus Christi is more valuable than any other piece of the system and so they might spend a lot of time and money looking at truck routes, freight company routes, how much Wal-Mart or Target or H.E.B. uses rail as opposed to truck along that route, and that information is incorporated into their proposal. Whereas, the other consortia might believe that the Port of Houston to extreme northeast Texas route is more important because of the number of cars that are willing to get off of congested 59 onto a toll road might be.

In either case, the State of Texas, the taxpayers will receive the benefit of that data when they make that payment. We'll know what that truck traffic is between Laredo and Corpus Christi, and we'll know what that probable passenger toll traffic is between Texarkana and Houston. Just so everyone knows, we don't pay things for nothing around here.

MR. RUSSELL: That's exactly right.

MR. WILLIAMSON: Okay, members, this is a fairly significant event in our lives. Do you have questions or comments?

MS. ANDRADE: I have a question. Phil, would you once again walk me through the time line of the process? Is this going to happen in December? How long will they have?

MR. RUSSELL: Yes, ma'am. We'll work with those two consortia during the intervening couple of months to make sure our documents are correct and appropriate. We anticipate issuing the actual request in December. We typically give about 90 days for their return submittal. We'll evaluate those carefully, and I would anticipate probably somewhere around next mid-year we'll have a developer selected and we'll bring it back to you all for an award.

MS. ANDRADE: So mid '07?

MR. RUSSELL: Yes, ma'am.

MR. JOHNSON: Phil, I'm under the impression that you've recently received an award. Is that correct?

MR. RUSSELL: What's that now?

MR. JOHNSON: I'm under the impression, I've got it in the cobwebs of my mind that you have recently received a recognition or an award. Is that correct?

MR. RUSSELL: I'm not sure. The one up in the Little League ballpark in Georgetown?

MR. JOHNSON: So I have you confused with someone. Is that what you're telling me? I wanted to congratulate you for whatever you've been recognized for in the Little League ballpark or wherever.

MR. WILLIAMSON: Tell us about that.

MR. RUSSELL: Mike might know more than I.

MR. BEHRENS: The award is still forthcoming.

MR. JOHNSON: Obviously you shouldn't have let me know.

(General laughter.)

MR. RUSSELL: Thank you.

MR. JOHNSON: Only two consortia submitted proposals?

MR. RUSSELL: Yes, sir.

MR. JOHNSON: I find it fascinating that Cintra and Zachry have taken their experience along TTC-35 and each has gone out, and in essence, recruited, organized and developed their own separate teams and now they're in competition with one another. I do think that's exceptional for many reasons, but primarily the benefit is they are the most experienced in terms of using this approach in the state of Texas and we will benefit from their experience and their competition one with the other -- we being the people who utilize these corridors and travel the roads of this state. So I'm fascinated by that and I'm going to be curious to see how this unfolds.

MR. RUSSELL: Yes, sir. Commissioner, there have been several comments about that. My experience on not just these procurements but whether you're talking about consultants or anything, all of those guys try to team up with appropriate members that will give them the advantage on that particular project. So from one standpoint, I'm not particularly surprised. I think what you'll see, whether it's 121, 161, whatever the next project is, you'll see all sorts of different permutations between equity partners, designers, contractors, and again, their goal is to try to create a team, ultimately, that will be successful and they'll win that competition.

So I think you'll see more of that, and I think the offshoot is exactly what you're saying: you're going to have a cross-pollenization out there through the industry, ultimately we're going to grow the industry, and create more competition. That's pretty good for all of us.

MR. JOHNSON: Well, the keener the competition, the better served we all are.

MR. RUSSELL: Absolutely.

MR. HOUGHTON: What can be released to the public regarding the developers? Can their teams be released?

MR. RUSSELL: Yes, sir.

MR. HOUGHTON: When you look at the teams, it's fascinating to see who's on them and you kind of get an inkling what's going to happen in the transportation business, especially multimodal types of transportation.

MR. RUSSELL: Yes, sir, I think you're exactly right. Again, we're transitioning from the way we've traditionally done business to something that's a bit different. As Amadeo whispered to me just a second ago, it's already on the website, so this information is out, but clearly you'll see certain components on all these teams, whether it's design, construction, financing, traffic and revenue guys.

MR. HOUGHTON: Some non-traditional transportation folks are on those teams which is fascinating in itself.

MR. RUSSELL: Absolutely. And it seems to always be that mix, that Commissioner Johnson was alluding to, of different folks, whether they're domestic partners or folks from global markets, they're all coming together for this unique project trying to bring the best and the brightest. I think it's a pretty good deal for us.


MR. WILLIAMSON: Anything else, members? I, too, am fascinated but from a different perspective. And obviously 69 is a different asset than 35, but this is a pretty significant deal and it's drawing far less attention the second time through, and it fascinates me that having once gone through the fire and brimstone of 35, it may be the case that as TTC-20 and TTC-45 and ultimately TTC-10 and whatever other Ports to Plains ends up being -- and I'm sure there will be one -- perhaps it will become everyday business for the department and we can go about our business of solving the transportation problem.

MR. RUSSELL: Yes, sir.

MR. HOUGHTON: It's becoming old hat, I think is part of the problem. They've cut their teeth on 35 and this is nothing new. It's unfortunate because this is big, it's huge.

MR. RUSSELL: Well, I think step by step, brick by brick we're kind of re-educating. Mr. Behrens and I talked about a meeting I had this morning, and you know, there's still a lot of misunderstanding and myths that are out there, and as we go through piece by piece and let people understand clearly what we're talking about, some of the transportation challenges we have in front of us, they get it, but it takes a lot of that one-on-one discussion for people to fully understand a very complex subject.

But I think you're right. As they become more familiar, slowly but surely we're going to be gaining momentum on this.

MR. WILLIAMSON: Any other questions or comments, members? Do I have a motion?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, Phil. Godspeed, buddy.

MR. BEHRENS: Agenda item number 8 under Right of Way, this is a recommendation to allow the use of options for advance acquisition of right of way in the Dallas area. John?

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

I'd like to present for your consideration this morning agenda item number 8 to authorize the use of option agreements to secure the right for potential purchase of required right of way along the proposed route for two separate IH-35 projects in the Dallas County.

The minute order provides the authority for the Dallas District engineer to negotiate the execution of option contracts and to expend funds for option fees and related administrative costs.

Staff recommends your approval of the minute order.

MR. WILLIAMSON: Members, you've heard an explanation and a recommendation regarding the agenda item. What's your pleasure?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries, John.

MR. CAMPBELL: Thank you.

MR. WILLIAMSON: All that waiting for just 41 seconds.

MR. CAMPBELL: It's my pleasure to be here, sir.

MR. HOUGHTON: He can talk about billboards if you want him to talk about LEDs real quickly.

MR. CAMPBELL: Didn't Carlos cover billboards for me earlier in the program?

MR. WILLIAMSON: How are on going ahead and codifying the fact that LEDs are not the same as paper billboards?

MR. CAMPBELL: How far are we along that end?

MR. WILLIAMSON: I know we're working on that, I've told John that.

MR. CAMPBELL: We're in the dialogue on that topic.

MR. WILLIAMSON: We're in the dialogue stage?

MR. CAMPBELL: We're in the dialogue stage.

MR. HOUGHTON: Demonstration projects.

MR. WILLIAMSON: Well, you're so unflappable, it's the only thing that I've ever seen you flap over.

MR. CAMPBELL: Over LED signs?

MR. WILLIAMSON: Billboards, any billboard.

MR. HOUGHTON: Have we determined whether that Godzilla over there is in compliance?

MR. WILLIAMSON: I think we have an official determination that it is an on-premise sign.

MR. CAMPBELL: It's an on-premise sign, therefore exempted from regulation.

MR. HOUGHTON: It's an on-premise sign, John?

MR. CAMPBELL: Yes, sir.

MR. WILLIAMSON: Over the objection of our Aggie administrator.

MR. CAMPBELL: And technically, it probably exceeds the limit from the controlled highway.

MR. HOUGHTON: It does? Even though you can see it from the top of 35?

MR. CAMPBELL: It's big, isn't it?

MR. WILLIAMSON: Coby Chase said he sat under it during a ball game and got a suntan.

MR. JOHNSON: It was a night game?

(General laughter.)

MR. WILLIAMSON: Thank you, John.

MR. BEHRENS: Okay, we'll go on. We've covered 9, we'll go to agenda item number 10. This is our SIB loan with the City of Kerrville. James?

MR. BASS: Good afternoon. Again, for the record, I'm James Bass, chief financial officer at TxDOT.

Item 10 seeks your final approval of a loan to the City of Kerrville in the amount of $2.8 million to pay for roadway and drainage improvements to Holdsworth Drive. Interest will accrue from the date funds are transferred from the SIB at a rate of 4.1 percent, with payments being made over a period of 20 years.

Staff recommends your approval.

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

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

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

MR. BEHRENS: Agenda item number 11, our contracts for the month of September, both our highway maintenance contracts and building construction, and then the second part will be our regular construction projects.

MS. BOSWELL: Good afternoon. For the record, my name is Elizabeth Boswell. I'm the director of the Construction Section of the Construction Division.

Reference agenda item 11(a)(1), authorization of this minute order provides for the award or rejection of highway maintenance projects let on September 7 and 8, 2006 whose engineers' estimated costs are $300,000 or more.

Staff recommends rejection of one project as follows. This is a two-year project located in Bowie County and consists of the installation of traffic signals at various locations. Staff recommends rejection of this project so that it may be redesigned as a one-year contract to attract additional bidders and lower bid prices.

Award is recommended for all remaining projects as shown in Exhibit A.

MR. WILLIAMSON: Hang on a second, I'm looking at the one that's over and you're recommending to accept.



MR. WILLIAMSON: I've seen what I needed to see. Members, need to keep looking?

MR. JOHNSON: So moved.


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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MS. BOSWELL: Construction projects. Reference agenda item 11(a)(2), authorization of this minute order provides for the award or rejection of highway construction projects let on September 7 and 8, 2006, as shown in Exhibit A. Staff recommends rejection of two projects as follows.

The first project is located in McLennan County and provides for the non-site specific installation of traffic signals at various locations throughout the district. Staff recommends rejection of this project so that the project may be redesigned to clarify bidders' uncertainty and attract additional bidders.

The second project recommended for rejection is located in Starr County and provides for the reconstructing, widening and extending Atkins Street from US 83 at FM 650 to US 83 to Aurora in the city of Roma. Staff recommends rejection of this contract due to insufficient competition as only one bid was received on this project and the bid submitted was approximately 66 percent over the engineer's estimate. In addition, staff feels a redesign is in order to reduce cost and attract additional bidders.

Award is recommended for all remaining projects as shown in Exhibit A.

MR. HOUGHTON: I have one question that's semi-related to this, Amadeo. We just completed our fiscal year. Correct? What was the total amount of awards for construction projects in the fiscal year '06?

MR. SAENZ: For the record, Amadeo Saenz. It was around $5.3 billion.

MR. HOUGHTON: Is that a record?

MR. SAENZ: So far that's the highest we've done.

MR. HOUGHTON: We did not publicize that at all, did we? I don't remember seeing that number.

MR. WILLIAMSON: No, but we should have.

MR. HOUGHTON: $5.3-?

MR. SAENZ: Around $5.3-, I think, is the last report I saw.

MR. HOUGHTON: What is that over fiscal year '05?

MR. SAENZ: About $300 million.

MR. HOUGHTON: $300 million?

MR. SAENZ: Yes, sir. I think 2005 was right at $5-. We will get numbers because we let projects that we let through the commission, and that's what I'm talking about the $5.3-, the projects that are let and awarded here. We also have projects that are awarded locally in the maintenance area for projects less than $300,000, and then we also have some projects that are being awarded through a local entity, a city, a county, some of those are enhancements. So when you sum up those, I think we'll be up in almost $5.4- or $5.5-.

MR. HOUGHTON: That is something significant, Mr. Chairman.

MR. JOHNSON: I tell you what makes it as much significant as the raw numbers is that we're doing that with the same number of full-time equivalents that we've had for a decade At one time I think we had 17- or 18,000 in the early '90s and now we've got 14,000, and our full-time equivalent numbers has remained pretty constant, and yet the volume of business that comes through here has increased substantially. So I think that's remarkable and a tribute to the people of this agency.

MR. SAENZ: Yes, sir. And this is the first month of the fiscal year so we can still put something out to let you know what we've done in fiscal year 2006.

MR. HOUGHTON: I think this should be a big issue across the state.

MR. SAENZ: We'll do that.

MR. WILLIAMSON: Wait a minute, don't leave. I'll call for a vote on this item in a minute, but I have a couple of questions. Is my memory failing me, or am I seeing an unusual number of in excess of engineer's estimate and recommend that we go ahead and approve the contract?

MR. SAENZ: Go ahead and answer.

MS. BOSWELL: Are you referencing for this month an excess of over the engineer's estimate recommending award? I would say our numbers are less this month. We had fewer projects that required justification.

MR. WILLIAMSON: Recommend award of nine construction projects, multiple bidders, 20 percent or more, and above engineer's estimate. So this is down as opposed to up?

MS. BOSWELL: It was down from last month.

MR. SAENZ: It's down from prior months.


MR. JOHNSON: What's the dollar amount of those contracts? Are they fairly small by comparison?

MR. WILLIAMSON: Well, it may just be because they've been rising over the last six months that I'm paying more attention to it, John. I'm aware that with all of the innovation that the legislature has permitted us to have and with all the activity at the local level, there's still a finite amount of cash flow available to invest in this stuff, and I just am growing more concerned, Mike, about the cash flow commitments we're making to our partners and balancing that against the known cash flow of the state. The worst thing that can happen to us is to have to cut a letting or have to cut three or four lettings in a row by a large amount, as opposed to recognizing the cost is going up right now and choking back a little bit at a time.

John, you and I are in the business and we know the price of oil and gas rises and falls, but the price of oil and gas isn't the only reason these prices are going up. I'm paying three times today for concrete what I was paying a year ago, and I'm paying almost twice as much for steel, and I suspect that's where a lot of the increase in price is.

MR. BEHRENS: And even actually going back to the August letting in September, and that's on the letting side, it's not on the Construction Division side, we actually are looking at each month's letting and we've actually decreased the amount of letting to try to stay in balance with our cash flow.

MR. JOHNSON: Elizabeth, in our books we have a one-page summary which has a total number of projects, total number of bids, et cetera, and when we lump together all of these projects from let's say $100,000 to $50 million, we're sort of getting a distorted picture because in all probability there are going to be more bidders for the lesser amount of contracts than let's call them the super contracts, and it would be helpful to me if we went through the same thing but broke the contract amount size into categories. I don't know what the right thresholds are but I'm thinking under $5 million and then $5- to maybe $20- or $25-, and then $25- and above, but where we catch a number of projects that has meaning and we can follow the chairman's suggestion of over and under, but also how competitive these things are in terms of the average number of bidders, et cetera.

MS. BOSWELL: We can do that.


MS. ANDRADE: I have one comment.


MS. ANDRADE: Amadeo, I know that we want to let the state know how much money we're putting out there, but also in the local district offices. I know in San Antonio we celebrate because the local district office is having record-breaking construction years. We might want to encourage our district offices so that communities take ownership of the fact that we are having record-breaking years in local communities.

MR. SAENZ: And I think a lot of our districts are doing that. I know San Antonio has done it for the last two years or maybe three years -- three years at least, and I think a lot of our districts are already doing the same thing.

We review every project that is over the engineer's estimate by 10 percent when we only have one bidder, and we review every project, no matter how many bidders, when it's over 20 percent and evaluate and make a recommendation on those projects. Some we recommend for rejection and some we recommend for award.

I guess when we look at the total projects -- and they may be distorted because we've lumped everything together -- I think we'll be able to present you a much better picture by breaking up the projects. We are still getting almost four bidders per contract in total, and really our bids, based on what we are awarding, we were almost 7 percent under our estimates. We do have some projects that either we missed the estimate or we had some errors in it. For example, we talked about the Starr County project. That project also had some errors in quantities that showed the difference that was not included in the presentation. But we will look at that.

One of the other things, and I mentioned it earlier, is this used to be a much bigger problem because when we were selecting projects and people would get their project and say that's my project no matter what it costs, but now as the regions get their allocations, it's like they have their checkbook and they're balancing and keeping their checkbook, so as projects overrun, they're keeping track of the impacts to their allocation based on those overruns and underruns.

I have a request from a district that says my project underran by a million dollars, does that mean I still have my money available? Yes, you do. But by the same token, another district says my project overran by a million dollars, where do I have to get it from? But by giving it to them and making them and holding them accountable, they're beginning to see and understand how they manage their resources.

MR. WILLIAMSON: Can't be a bad thing.

MR. JOHNSON: Good stuff.

MR. WILLIAMSON: Do I have a motion?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MS. BOSWELL: Thank you.

MR. BEHRENS: Agenda item number 12 is our Routine Minute Orders. They've all been duly posted, as required. I went through all of these minute orders; I don't see any that would affect or where there's anything associated with any of you individually as commissioners. So I recommend approval of the Routine Minute Orders.

MR. HOUGHTON: Where are they going to spread seed for Keep Brazos Beautiful, on what highways?

MR. JOHNSON: Most of them are going to be around El Paso.

MR. HOUGHTON: I was going to say we've had enough rain out there to sprout something.

MR. BEHRENS: It's going to on various highways in Brazos County.

MR. WILLIAMSON: They're going to spread it on Highway 6 right next to all of those electronic devices we're fixing to put up.

(General laughter.)

MR. WILLIAMSON: Speed limits, where is that?

MR. BEHRENS: Speed limits would be 12(e).

MR. WILLIAMSON: We haven't raised anybody's speed limits, have we?

MR. BEHRENS: I don't think we have any.

MR. HOUGHTON: I hope so.

MR. BEHRENS: We have a number of construction speed zones in there, and the other is just regular speed zones that are being adjusted.

MR. HOUGHTON: We need to go faster in far west Texas.

MR. WILLIAMSON: Okay, members, what's your pleasure on this one?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

Mike, do we have any reason to go to executive session?

MR. BEHRENS: I don't have any reason. We may ask our new general counsel if he has any reason.

MR. HOUGHTON: Did everyone sign the appointment? Is he general counsel yet?

MR. WILLIAMSON: I think we appointed him general counsel, and didn't we put him in charge of the Amarillo Maintenance Division as well?

(General laughter.)

MR. WILLIAMSON: Bob, do we have any reason to go to executive session?

MR. JACKSON: No, sir, we don't.

MR. WILLIAMSON: Do we need to say welcome aboard?

MR. JOHNSON: Congratulations.

MR. WILLIAMSON: We can congratulate ourselves.

I was thinking about the continuity of the employee base when we were recognizing Phyllis and the different spots that she's been in, and then thinking about Bob and the different places he's been, and now we look up and he's our head lawyer. Pretty impressive, head of the best engineering and construction law firm in the state.

Do we have any open comment testimony?

MR. BEHRENS: We have none.

MR. WILLIAMSON: This is not a record but it's close. The most privileged motion is in order.

MR. JOHNSON: Before I proceed to make that, I do want to set the record straight. To the best of my knowledge, Vanderbilt and the University of Texas at Austin have met eleven times on the gridiron, and the University of Texas at Austin has won two of those games.

MR. WILLIAMSON: You know, John, I think your memory is absolutely perfect, although it must have taken some time to dig back all the way into the '20s to find all those records because I think it was '28 when we last played, wasn't it?

MR. JOHNSON: It was in that neighborhood, but we were dominating the series so much that the University of Texas at Austin didn't want to schedule us anymore. In lieu of us, they now have Sam Houston State.

MR. WILLIAMSON: They didn't think they were scheduling Vanderbilt all those years, they thought they were scheduling the University of Mississippi. I don't know how they confused Vanderbilt and the University of Mississippi, but back then things were probably different.

MR. JOHNSON: Vanderbilt was just a little farther away.


MR. JOHNSON: By anything.

(General laughter.)

MR. WILLIAMSON: Did you make that motion?

MR. JOHNSON: Move we adjourn.


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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. We are adjourned, Mr. Jackson, at 12:47 p.m.

(Whereupon, at 12:47 p.m., the meeting was concluded.)


MEETING OF: Texas Transportation Commission
LOCATION: Austin, Texas
DATE: September 28, 2006
I do hereby certify that the foregoing pages, numbers 1 through 170, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Carol Oppenheimer before the Texas Department of Transportation.

(Transcriber) (Date)

On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731

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