August 28 Transcript

Texas Department of Transportation Commission Meeting

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

Thursday, August 28, 2008


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


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


MS. DELISI: Good morning. It is 9:07 and I would like to call the regular August 2008 meeting of the Texas Transportation Commission to order. It's a pleasure having you all here this morning.

Note for the record that public notice of this meeting, containing all items on the agenda, was filed with the Office of the Secretary of State at 4:35 p.m. on August 20, 2008.

Before we begin today's meeting, make sure, please, that all your pagers and cell phones and other electronic devices are on the silent mode.

As is our custom, we'll open with comments from the members, and I'll call on the commissioner from Fort Worth, Bill Meadows, to begin.

MR. MEADOWS: Good morning. Thank you very much. I would like to certainly welcome everybody and express my personal appreciation, and I would guess everybody else, to the citizens of El Paso who made the trip and hosted the reception last night, and certainly we're looking forward to the presentation that you're going to make today, and again, thank you for being here.

The only other comment I'd like to make is just to express appreciation to our staff for taking the time to walk us through the Legislative Appropriations Request this past Monday. I think we all know the most basic foundation from which our agency's business is built is that basic document, and to have had the opportunity to have gone through that and understood it and understood what some of the challenges are that are contained or expressed therein, I think was very helpful to me, and I really do appreciate it. Thank you.

MR. UNDERWOOD: I associate myself with my colleague's remarks. Also, I'm excited to see El Paso all on the same page. Looking forward to hearing the presentation.

MR. HOLMES: Good morning and welcome to all our friends from El Paso. You came a long way, you've worked hard on your projects. We appreciate the hospitality last night. Look forward to your presentation.

MR. HOUGHTON: To all my friends and neighbors from El Paso, thanks for making the trip and it's going to be a lot of fun today. And again, to the chamber, thanks for hosting the event last night. Thank you very much, Richard. Look forward to the presentation.

MS. DELISI: Just want to say welcome to everyone from El Paso. We're very much looking forward to today's action, and we're looking forward to getting some projects going in El Paso.

With that, I'd like to just remind everyone that if you wish to address the commission today during the meeting, we ask that you complete a speaker's card at the registration table up front. To comment on an agenda item, we ask that you fill out a yellow card and identify the agenda item. If it's not an agenda item, we'll ask for your comments at the open comment period at the end of the meeting. For those comments, please fill out the blue card. Regardless of the color of card, please limit your remarks to three minutes.

Before we begin with today's official business, I'd like to ask Amadeo to make some very special presentations and recognitions we have on the agenda.

MR. SAENZ: Thank you, Madame Chair. Good morning.

Today we're pleased to follow a long tradition of the department that recognizes our retiring office and division directors as well as district engineers, and this morning we have two division directors and two district engineers that are retiring, but both our district engineers are from the coast and we've got a hurricane coming towards the Gulf, so I don't know if I'm going to accept their retirement yet. We may have to keep them on for a few more days.

(General laughter.)

MR. SAENZ: But it's my honor today to honor Gary Trietsch, our district engineer in Houston, Craig Clark, our district engineer in Corpus Christi, Diana Isabel who was our Human Resource Division director, and Susan Sampson who was the office director for the Automobile Burglary and Theft Prevention Association -- I think I got it right. We have some resolutions that the commission has prepared for these individuals, and what I would like to do is read the resolutions, have them come up and say a few words, and then present them with the resolutions, and then we can have some pictures afterwards.

The first resolution is for Mr. Gary Trietsch:

"Whereas, the Texas Transportation Commission takes great pride in recognizing Gary K. Trietsch, who has served with Texas Department of Transportation for more than 40 years, most recently as the Houston District engineer, leading the largest reconstruction of transportation infrastructure in Houston history;

"And whereas, Mr. Trietsch earned his bachelor's and master's degrees from the University of Texas at Arlington, joined TxDOT in 1967 and became assistant district design engineer in Fort Worth in 1985;

"And whereas, Mr. Trietsch, in his present position since September 1995, directed many successful projects, including the reconstruction of the I-10 West Loop, US 59 Gateway projects, and the I-10 West Katy Freeway, the Pierce Elevated, the I-45 Galveston Causeway Bridge and the Baytown Tunnel removal project;

"And whereas, Mr. Trietsch helped advance the careers of many young employees through his participation in the mentoring program at Texas A&M University;

"And whereas, Mr. Trietsch has served on a variety of department committees such as TxDOT's business classification committee, a program he supported for several years;

"And whereas, Mr. Trietsch has been presented with numerous awards and recognitions, including: the 1991 Dewitt C. Greer Award for outstanding service to TxDOT, the 1996 Transportation Engineer of the Year Award from the Institute of Transportation Engineers, the 1997 Dr. L.I. Hughes Award from the Western Association of State Highway and Transportation Officials for outstanding contribution to highway development programs, and 2005 Houston Engineer of the Year;

"And whereas, Mr. Trietsch has been a dedicated and loyal member of TxDOT and a true public servant of the State of Texas;

"Now, therefore, be it resolved that the Texas Transportation Commission does hereby extend sincerest best wishes to Gary K. Trietsch, Professional Engineer, in recognition of his professional achievements and a career of loyal service on behalf of the State of Texas and the citizens of Texas.

"Presented this day, Thursday, the 28th of August, 2008."

Gary. Would you like to say a few words, Gary?


MR. TRIETSCH: Three minutes applies to me, too, I suppose.

I would just say it's been a marvelous ride. I worked at several locations, two districts, here in the division in Austin. The one constant I found out are the employees in TxDOT, even when we were the Highway Department or State Department of Highways and Public Transportation, whatever name we had at any given moment. And I will probably offend a lot of people, but you know, our department is made up of individuals that they've given their life to the department and to the State of Texas, but just this past Saturday we opened up the last connectors on Beltway 8 at I-10, 16 months after we started which is phenomenal to tear down an interchange and rebuild it in that amount of time.

I met a young engineering assistant, Julio Salinas, who is the hope of the department and the future; an older hand, Amir Mustafa that's the project manager on that; and people like Jennifer Brock on other parts of the Katy Freeway that have gone way beyond what I think they ever signed up for. But it's those three employees and the other 14,000 that we have around the state that do this day-in and day-out that make people like me look good. I've been very lucky. And I've got a lot of faith and hope in what the department has a long history, but we're going to have a long future too because, as I tell everybody, at the end of the day we're doing a lot of different things, but we've still got potholes to repair and bridges to build and ten years from now or 50 years from now, we'll still be doing that.

Thank you all a lot.


MR. SAENZ: Thank you, Gary, and congratulations.

MR. HOLMES: Amadeo, before you move on, could I make a couple of comments?

Gary, being from Houston -- I see Mark Ellis out in the audience who is a former member of the city council in Houston -- you've earned the respect of the people you've worked for and with and who work for you. If you didn't experience the work that was done on the Katy Freeway and on those interchanges, and the remarkable ease with which the traffic moved in spite of a stunning amount of construction, then you can't really understand the fine work that Gary and his team have done in that region.

You're going to be greatly missed but we hope we get to see you often, Gary. We appreciate everything that you've done for TxDOT and for the Houston District. You've done a great job. Thank you.

MR. SAENZ: Gary, I echo Commissioner Holmes's comments, and we thank you for the great many years of dedicated service.

Gary would always bring kind of show and tell because he always had some very unique and interesting projects. They built a tunnel and after a few years they had to take the tunnel out, so he brought us a video of how that was done, and he brought us video of demolition of some bridges where actually everything was done over a weekend, the video shows the bridge being blown up and then all of sudden tractors come from all over the place, equipment comes from all over the place, they cleaned up the facility. He built that 59 project that I talked about that built those bridges that were very unique. He worked very closely with the community to get that designed and get their buy-in. And just as he was finishing that project, of course, we had a huge storm and he flooded it just to make sure the drainage worked, I think.

So Gary, thank you very much and we're going to miss you, but you're a TxDOT member, you're part of the TxDOT family forever, so we need to keep in touch.

The next resolution is to Craig Clark, our district engineer in Corpus Christi:

"Whereas, the Texas Transportation Commission takes great pride in recognizing Craig E. Clark, who has served the Texas Department of Transportation for 26 years, most recently as the Corpus Christi District engineer;

"And whereas, Mr. Clark, a 1982 graduate of the University of Missouri-Rolla, with a bachelor's degree in civil engineering, began his TxDOT career in the Odessa District the same year and was promoted to area engineer for Pecos Region four years later;

"And whereas, Mr. Clark joined the Construction Division in 1989 as an engineer of field construction responsible for development of policy and procedures across the broad spectrum of operations;

"And whereas, Mr. Clark was named director of Construction for the San Antonio District in 1992, Childress District engineer in 2001, and Corpus Christi District engineer in 2004;

"And whereas, Mr. Clark oversaw the completion of several important projects while serving as Corpus Christi District engineer, including: the JFK Causeway project, the State Highway 286 interchange, and the Spur 3 project, and he initiated projects such as the Joe Fulton International Trade Corridor and the I-37/US 77 flyover, the US 59 improvements, US 181 overpass and rehabilitation work on US 281, together totaling more than $315 million worth of work;

"And whereas, Mr. Clark's engineering and management talents have helped advance our mission to provide the best transportation system possible;

"Now, therefore, be it resolved that the Texas Transportation Commission does hereby extend the sincerest best wishes to Craig E. Clark, Professional Engineer, in recognition for his professional achievements and a career of loyal service on behalf of the State of Texas and its citizens.

"Presented this day, Thursday, the 28th of August, 2008."

Craig, congratulations.


MR. SAENZ: Do you want to say a few words, my friend?

MR. CLARK: Madame Chair, commission, thank you. Amadeo, thank you. As you said, My friend, we are friends. We have been friends in this department, I've been among friends. In an extraordinary act of equal employment opportunity, TxDOT reached across the border and allowed me to join their ranks, coming from Missouri, I was allowed to participate in this organization and I have been truly blessed. I appreciate the confidence that this commission and former commissions have vested in me. I have had great opportunities.

I have been in districts and in the division through various parts of the organization. I probably would be considered the Forrest Gump of district engineers. It's not what I know or my intelligence, it's being in the right place at the right time and being associated with people that were much more gifted and talented than I am, and being blessed by their grace and allowing me to lead them.

This organization has its strength in its people. That's been the focus of my career is to find good people and lead them in the work. Our future is bright and it is bright because of that. There are dark clouds on the horizon here and there, there are always issues that we have to deal with as an agency, but when we lean on the strength of our personnel, we will move forward and we will be successful.

Thank you for a wonderful career and I truly do appreciate all that TxDOT has brought me. Thank you.


MR. SAENZ: Gary, I didn't check, did Bonnie come with you by any chance, or any family members? I know that Linda, Craig's wife is here, and his two boys. Right? Linda, thank you for sharing him with us, and he tells me about the plans. Craig's plans are to sell his home, buy a diesel pickup -- which I don't recommend right now with diesel prices being as they are --

(General laughter.)

MR. SAENZ:  -- and a fifth wheel and then travel the United States. Craig and Linda home school their children, and to travel the United States, what better home schooling when you can experience as you go.

So Craig, good luck, and again, thank you. You left a few projects in Corpus that I think we still need to work on, but we'll let your successor kind of handle those, but you've laid down some great foundation.

Our next resolution is to Diana Isabel:

"Whereas, the Texas Transportation Commission takes great pride in recognizing Diana Isabel, who has served with the Texas Department of Transportation for more than 32 years, most recently as director of the Human Resource Division;

"And whereas, Ms. Isabel began her career with TxDOT in 1976 where she held various positions in the Safety and Maintenance Operations Division, including financial manager, internal review analyst, and director of administration, and in 1998, she was selected director of HRD;

"And whereas, under Ms. Isabel's leadership and guidance, TxDOT and HRD underwent the development and statewide implementation of video teleconferencing training operations which have contributed to significant cost savings and improvements to the training offered by the department;

"And whereas, Ms. Isabel helped consolidate the human resource functions of the Austin Headquarters Division into two campus support centers;

"And whereas, Ms. Isabel assisted in the development of online human resource manual that broadened the availability of the manual to all employees;

"And whereas, Ms. Isabel enhanced HRD service by helping develop and implement online functions for applicants, employees and managers;

"And whereas, Ms. Isabel's knowledge and outstanding leadership have been an essential resource for HRD and the department's management and staff;

"Now, therefore, be it resolved that the Texas Transportation Commission does hereby extend the sincerest best wishes to Diana Isabel in recognition for her professional achievements in a career of loyal service on behalf of the State of Texas and its citizens.

"Presented this day, Thursday, the 28th of August, 2008."

Diana, please come forward.


MR. SAENZ: Thank you very much and congratulations. Would you like to say a few words?

MS. ISABEL: Madame Chair, commissioners, I just want to again thank you for the opportunity to serve the citizens of Texas and the employees of TxDOT. Like my two former district engineers have already mentioned, they are the foundation for the organization and they are outstanding employees, and this organization, I believe, is also one of the greatest in the state government. And I know that we might be going through some trials and tribulations, but I still believe that TxDOT is a great and wonderful place to work, and I believe it's been a honor and a privilege to work for you, and I appreciate the opportunity. Thank you very much.


MR. UNDERWOOD: Diana, a quick question. Thirty-two years?

MS. ISABEL: Thirty-two years, yes, sir.

MR. UNDERWOOD: Did you start when you were twelve?


(General laughter.)

MR. UNDERWOOD: I just wanted to check.

MS. ISABEL: Maybe not quite twelve, but I do feel like I grew up in this place. I appreciate it.

MR. UNDERWOOD: Thank you very much.

MR. SAENZ: Thank you, Diana. Of course, Diana has worked with the department through different areas, and the other day she was sharing some photos of some of her different assignments, and I guess I met Diana when I became assistant Maintenance engineer out of the Pharr District, and she showed us a photo, and everybody looked very young, including Diana, and she still looks young, though. All of us look a lot older now but Diana looks exactly the same. She was there and had a tough job of making sure you had a whole bunch of feisty maintenance folks and keeping them in line at a meeting. So Diana, my hat's off to you.

The next resolution is for Susan Sampson:

"Whereas, the Texas Transportation Commission takes great pride in recognizing Susan Sampson, who has served with the Texas Department of Transportation as director of the Texas Automobile Burglary and Theft Prevention Authority, TABTPA;

"And whereas, Ms. Sampson began her career with the State in Beaumont in November 1988, working as an assistant director of Child Support Volunteer Program at the Office of the Attorney General, and moved to Austin in 1989 as director of the Child Support Volunteer Program;

"And whereas, Ms. Sampson joined TxDOT in March 1994, serving as director of public awareness and was selected as director of the TABTPA in 2001;

"And whereas, Ms. Sampson, during her tenure with TxDOT achieved a significant number of accomplishments, including the creation and implementation of multi-media educational and awareness programs, such as Watch Your Car Campaign;

"And whereas, Ms. Sampson was instrumental in working with the TABTPA grants recipients to monitor and evaluate their automobile theft prevention programs and coordinate their efforts in reducing theft statewide;

"And whereas, Ms. Sampson has shared with TxDOT her many diverse and creative skills throughout her professional career;

"Now, therefore, be it resolved that the Texas Transportation Commission does hereby extend its sincerest best wishes to Susan Sampson in recognition of her professional achievements in a career of loyal service on behalf of the State of Texas and its citizens.

"Presented today, Thursday, the 28th day of August, 2008."



MS. SAMPSON: Madame Chair, commissioners, and Amadeo and the administration, it is with a great pleasure to be here today, and I will have to tell you that at my retirement I said one thing and that is it's not about the work, it's about the people, and if you take care of your people, the work will happen.

I would also, at this time, like to tell you my husband is here with me, Fred, and also Charles Caldwell, who is the interim director for TABTPA -- I can't say it either, Amadeo. I also want to thank Representative Pickett for coming here today for my retirement.

(General laughter.)

MS. SAMPSON: Joe and I walked through, and also Amadeo, we were down at the legislature for many, many years, and Representative Pickett was instrumental in helping us through our difficult times sometimes with the legislature. And also, you know that he has antique cars so he wanted to make sure that the El Paso task force took care of those cars for him -- for everyone.

But I really do want to extend my appreciation to the TxDOT family, it's wonderful. And saying that my husband is here, he has been retired for several years, and on a lighter note, he just wants to know, Madame Chair, when you could hire me back. Thank you very much.

(General laughter and applause.)

MR. SAENZ: And as Susan said, we spent many an hour across the street during legislative session, kind of listening and watching the appropriations process, and it was interesting, and you kept it very cheery. Thank you.

Those were the four resolutions. Before we break and like to take some pictures, I want to make one more presentation so we can hopefully make the meeting flow a little bit more efficiently. We want to present a ten-year service award to Teresa Lemons. Teresa is the executive assistant for Commissioner Holmes. So Teresa, could you please come up and receive your award from our commissioner.

MR. HOLMES: Teresa, you spent 8-1/2 years in relative bliss and then you got to come to work for me for the last 18 months. I greatly appreciate all you do for me, as well as for TxDOT. It certainly makes my life and tasks a great deal easier, and I very much appreciate it. Thank you very much, and congratulations on your ten years. And I have all kinds of goodies up here for you.


MR. SAENZ: Let's take some pictures.

(Pause to take photographs.)

MS. DELISI: The first item on today's agenda is approval of the minute of the special meeting on August 25, 2008 and last month's regular meeting on July 31, 2008. Members, the draft minutes are in your briefing materials. Is there a motion to approve the minutes?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: All in favor, none opposed.

Now, Amadeo, I'd like to turn the meeting over to you to take us through the rest of today's agenda.

MR. SAENZ: Thank you, Madame Chair.

What we'd like to do this morning, since we have our friends from El Paso, is to skip a little bit around the agenda and allow the agenda item where the El Paso Delegation will present their report. Item number 7, and I'm going to have Phil Russell introduce Mayor Cook from El Paso and introduce this agenda item, and then we'll allow the El Paso group to present the report. And then after that we will move on to several agenda items we have that deal with El Paso.

MR. RUSSELL: Thank you, Mr. Saenz. For the record, I'm Phillip Russell, assistant executive director.

As many of you know, for a number of months -- really a couple of years, we've been working very closely with the El Paso group to look at a comprehensive mobility plan. That effort, of course, has been headed up on our end by Chuck Berry, our district engineer. David Casteel, your assistant executive director for District Operations has been instrumental in that as well, trying to spearhead that effort.

And we had a good get-together, I thought, with the El Paso group last night, and there was a lot of discussions about everybody had their critical projects that they were very focused on, and I think what I've seen and what I think will be demonstrated today is that the groups now have come together to build some commonalities, to look at some critical projects that will propel that region into the future.

And I know Representative Pickett and many others are here this morning, but I'm going to go ahead and introduce Mayor Cook who has really taken a leadership role in this area over the past couple of years. I'm going to introduce Mayor Cook, and Mayor, I looked around, but I didn't see your guitar but there's always hope for us, he may still bring up his guitar. Mayor Cook.

MAYOR COOK: Good morning. It's really a pleasure to be here, and I enjoyed seeing most of you yesterday evening as we welcomed our El Paso group to Austin in order to present our mobility plan to you.

What I want to present to you today, as was mentioned earlier, when we came to Austin last year, we were a community that was divided, so I've spent the last year trying to get the community to come to an agreement as to how to address our mobility challenges, and that's what I would like to present to you today. I did prepare a PowerPoint presentation for you -- I hope I don't PowerPoint you to death -- and no, I did not bring the guitar today.

Last year I brought it because I realized that if I didn't sing you into an RMA, I probably would never have gotten one because, as you might recall, we had members of our city council came and spoke against the RMA and other members of our delegation who didn't want it and had some real issues with it, and unfortunately, I hadn't really done my homework to make sure I had a community consensus, but I think we've changed on that this year and we do now have a community consensus.

I want to really take a moment, though, to thank Representative Joe Pickett. I was elected to political office in 1999 and I quickly came to know that Joe was known as Mr. T, and the T wasn't for the Mohawk haircut or the jewelry, it was for his interest in transportation issues and in TxDOT in particular.

Here's some statistics about El Paso that I think you'll find extremely interesting. As you may know, because of base realignment and closure, El Paso is one of the communities that was most significantly impacted in a very positive way, and if you look on the column that says 2011 up there, you'll notice that we're expecting by 2011 to have approximately 32,251 soldiers and military students 700, for a total of 32,951 soldiers that are coming.

But if you also add the other family members 47,000 and the government service and non-government service employees, we are going to see an increase of 54,728 people to the community. The highlighted box at the bottom is what's significant to us from a mobility challenge, and that's that it will generate about 30,000 additional cars on El Paso roads by 2011.

There's some positive things to that for us too, though: a $20.9 billion impact to our economy due to Fort Bliss in that amount of time. So that's extremely significant for El Paso and for mobility.

Some of the statistics for growth in the area and current population, if you look in the 2007 column, you'll notice in the El Paso MPO area the population is currently about 809,000, but if you remember that our sister city of Ciudad Juarez is just a couple of minutes walk away from us, our population total right now in the area is about 2.1 million. Jump over to 2035 and that number is going to more than double to almost 3.5 million, close to 3.6 million. And if we don't address our mobility issues and really start aggressively addressing them right now, we're going to be in a lot of trouble by 2035. And that's the community I'm going to leave to my grandchildren, so I have to do a good job.

As I mentioned to you, we came as a city divided last year. Well, we still have some division but fortunately now it's only geographic, and if you look at this Google that I've put up there, I think it pretty much displays some of the important things for the El Paso community. If you look at the bottom line, that's the border with Mexico, so all that population that you see over there, almost 1.7 million people right now, is in Ciudad Juarez, Mexico. But look in the center and you'll notice the Franklin Mountains, it divides the east side from the west side, and there's a yellow line to the right of that -- I wish I had a laser here -- the yellow line to the right of that actually shows Fort Bliss Military Installation. So our community is separated, divided and constrained by the Franklin Mountains, the southern border with Mexico, and also by Fort Bliss. So these are just some challenges for us when we try to look at highway systems and our mobility.

And this map here, if you'll notice we have the separation between Juarez and El Paso, but if you'll follow the line, it shows Interstate 10, you can see the Franklin Mountains in the middle of it. Since being elected in 1999, I can tell you that there's been three times that Interstate 10 has been shut down completely by floods, and we have no alternative route, traffic just stops.

Trucks that are going from California to Florida are stopped dead in their tracks. Here we came up with a laser -- how do you like that? So this is our Interstate 10 right here, runs through El Paso. When that gets blocked off for some reason, there is no other alternative. So we have several alternatives that we're looking at.

One would be the Border Highway -- and I think the battery is probably dead on this laser, so we're not going to be using lasers today -- the little red dotted line that you see starting at the bottom right-hand side of your screen, that's the Border Highway. It's not complete at this time, but part of our mobility plan is to complete the Border Highway. Another portion of it is the Northeast Parkway and that's up at the top of the screen, and then also, we want to complete Loop 375 which would be the outer loop for the city of El Paso, so our plan looks at doing that, completing the loop.

We're also looking at some transit and multimodal transit routes. We currently have the only international bus service in the United States which goes from Ciudad Juarez to El Paso. It's a privately run bus company from Mexico. I can tell you the community has been trying to re-establish that route which was politically done away with back in the early '60s, and we finally were able to do that a year ago.

The mayor of Ciudad Juarez is currently looking at putting a bus rapid transit system in that will connect to our bus rapid transit system, so Mayor Reyes-Feliz and I are on the same page making sure we interconnect our bus rapid transit systems. I went to FTA last year and they told me, well, it's going to take you a minimum of five years to establish a BRT system.

I can tell you that I'm not that patient a person, so we ordered the first seven buses already and will be moving approximately 3,000 students that travel across from Juarez to the University of Texas El Paso on a bus rapid transit system that will go from the international bridge to the university. And we're going to extend that bus rapid transit system on its first leg, at least by the year 2011.

We also have some other challenges for us. You'll notice we have some rail issues that almost every major city in Texas is challenged by rail that divides its city, interrupts traffic, and we have a very aggressive plan to look at relocating our rail systems, both in Juarez and in El Paso.

This next screen, I think what it's going to show you is how important we are not only to Texas but also to the U.S. economy. If you look at exports and imports from Mexico and the United States and recall that Mexico is Texas's number one trading partner, Laredo and El Paso combined accounts for about 60 percent of both the imports and the exports, and in El Paso alone, that's about $50 billion a year of imports and exports between Ciudad Juarez and El Paso. That accounts for about 6 percent of the U.S. economy. So not only from the standpoint of El Paso and the State of Texas, but for the United States of America, it's important that we address mobility issues and make sure that we remain a competitive region with other places around the world.

El Paso has other infrastructure needs, as you can imagine, being on the border with Mexico. We have significant challenges with our ports of entry. We have not built a new port probably in almost 30 years. We have two that are being built right now: one is in Sunland Park, New Mexico -- that's the one to your far left -- and then also the green one which is further outside the county of El Paso. We currently have ports of entry, two in the downtown area and then one to the east side on the Zaragosa port of entry, and the spots that are in yellow on that map, the highlighted yellow ones, are where we're trying to add ports of entry and we're working very aggressively on that on trying to get the presidential permits.

We also want to use technology in order to move goods and services back and forth across the border more quickly, and to have freight improvements. One of the most challenging and inspiring ones is a system that instead of moving goods across the border using diesel trucks that we would transport them with a freight shuttle transport system, and we hope to be the community that tries to get that technology implemented first in the country.

You may wonder if we're trying to use all the tools that have been put in the toolbox. That was one of the challenges that we were given last year was are we using the tools that are in the toolbox. Starting from the top of the chart, you'll notice that we have two toll projects that are already incorporated there, and we're looking at modifying our transportation plan to include a third one which would be the Northeast Parkway -- that's the one I made Ted stretch to reach -- and also the Border Highway and Cesar Chavez tollways. So we'll have a total of at least three, maybe four toll projects by the time we're finished.

You may recall that there were transportation reinvestment zones that were set up. Thanks to Representative Pickett, it was included during the last legislative session, and I'm proud to tell you that we're going to be the first community that's going to be using the TRZs and it's a very aggressive program that we have. We have identified -- and Ted just outlined the areas where we're going to be using them -- but you can see almost all of our mobility plans have some component of a TRZ in them.

And then finally, the pass-through financing of the inner loop, Spur 601, this is the largest pass-through financing project in the state of Texas right now, a little over $300 million. That project is well underway right now, construction is going on. And as you may recall, our great governor was the one who spurred that one on -- and that's not supposed to be a pun with a spur in there -- but he spurred that on by making sure that he came up with the initial funding to do one of the overpasses, so we certainly appreciate the governor's interest in El Paso.

Anybody who looks at mobility and congestion mitigation has to realize that we're never going to build our way out of it unless we also look at multimodal solutions, and those multimodal solutions consider things like mass transit systems, bus rapid transit, and this chart actually shows the bus rapid transit systems that we plan on setting up, in hopes that eventually we can convert them into light rail systems and really move into the 21st century. But we have very aggressive plans to get there. As I mentioned earlier, our very first system, the seven buses that are on order will probably be in early next year and we'll implement our BRT.

We had a really great workshop in El Paso. In the upper right-hand portion of that screen you'll see one of the articulated buses that was on its way out to Orange County in California and we asked them if they would stop by and get our community excited about the potential for BRT. And further down the chart you'll notice that we have our international BRT system that we're getting ready to set up. Eventually, I'd even like to take the 8 million people a year that walk from the south side of our border to the north side of our border and put them on some kind of a people-mover rather than asking them to be pedestrians on one of our international bridges.

Multimodal solutions and incentives that we have, we realize that if you really want to address transportation, you're not going to do it with concrete and steel alone, you have to invest in technology, and we're poised to invest in technology. Thanks to TxDOT, we have a great monitoring system of our interstate highway system, and also all of our major streets and intersections. Also, all of our mobility plans that we have right now are looking at multimodal solutions. Every road will be built looking at integrating other kinds of transportation systems, whether that's pedestrian traffic, bicycle traffic, or even mass transit systems. So we're looking at a very holistic approach, including the challenges that we have with rail right now, just like most cities in Texas.

So with that, I want to thank you for the time to listen to our program, and also for the confidence that TxDOT has shown the El Paso community. For those of you who haven't been out to El Paso recently, we have Texas Days that are coming up and a great football game where the UTEP Miners -- which is my alumni -- will be beating the Texas Longhorns from the UT System. And I know them's fighting words, but I've got the microphone right now.

(General laughter.)

MAYOR COOK: So I would welcome you all to join us for Texas Days in El Paso. This afternoon I'm going to be personally delivering some handwritten invitations to some of our representatives and senators and asking them if they would come.

And with that, if you have any questions for me, I'd be more than happy to try to answer them.

MR. HOUGHTON: Mayor, I want to thank you for your leadership. It has been a climb but a worthwhile climb and endeavor, and I thank the city council. It was noted, and I have noted it to a few of my friends, we had an 8-0 vote on the mobility plan which in government today is pretty profound. And as well -- I'll wait and make the next statement in a few minutes, but thank you very much for your leadership.

MAYOR COOK: Well, not only was it an 8-0 unanimous vote on the city council, but also the metropolitan planning organization -- which Representative Pickett is the chair of right now -- that was a unanimous vote.

MR. HOUGHTON: Right, and I was going to mention that when he got up here.

MAYOR COOK: Okay, well, then I won't steal your thunder -- even though I already stole it. God bless you and thank you.

MS. DELISI: Thank you, Mr. Mayor.

Representative Pickett, would you like to come up?

MR. PICKETT: Good morning. I want to kind of start off by telling you just a short story. Yesterday on my calendar I had a reception at 6:30. And prior to that, though, I had gone to a social function at 5:30 over at the Omni Hotel, and while there, I ran into Commissioner Houghton. And we had visited and about an hour had gone by. He had three 7-Ups; I had two Diet Cokes, and he said, At 6:25 I've got to go to this reception. And I said, Well, it's funny, at 6:25 I've got to go to a reception too. So we both left.

I had come in an automobile; he was driving. I asked him where his was, and funny enough, mine was at the same place, so we rode together over to the reception. He gets out; I get out. We go into the same room. And I was kind of taken back by that, and I had it on my calendar by mistake. I thought it was a reception for the commissioners of the Texas Department of Public Safety.

And Ted had also asked me to make a few remarks, and I had to change the remarks I had planned when I thought it was the Department of Public Safety. I was about to tell them how awful and terrible it was and the legislature didn't understand that we needed to stop syphoning and diverting Fund 6 dollars over to TxDOT. So I obviously had to change those remarks.

(General laughter.)

MR. PICKETT: I also want to kind of let you know that your former chairman, as a member of the legislature, understood some things. The mayor had made mention -- gave me credit for the transportation reinvestment zone, and one of the kind of neat things about the legislature is you can do a lot of things sometimes and actually not have your name on it.

If you look up the bill, it's Senate Bill 1266 by the Honorable Ken Brimer, and when the bill came over to the House, the House obviously has to do the due diligence for the people of the state of Texas and fix most things that the Senate sent over, and I served with Ken in the House. I told Ken that I would be deleting everything below his name on the bill and that we would start from scratch and did he mind that, and we worked with some folks in the private sector specifically.

And the reason that I was so interested in it is, with all the discussions over the last several years, in El Paso, after TxDOT had completed the far east side Loop 375 portion, I noticed the tremendous economic growth of that area, and our history shows us that we used to develop along rivers because that's what transported people and goods, and of course railroads, it was people and goods, and since then it's been more asphalt, concrete pavement. And this idea that Senator Brimer had was a very good idea, but I saw a lot of pitfalls and I wanted to keep it flexible, and so I wrote it in mind of possibly using it in El Paso, Texas.

I had gone to the mayor, who was very, very receptive. I wasn't sure how some of the city council members might approach it, because, as you know, it has to deal with dedicating property tax, and the hardest thing for me in trying to promote this has been the misunderstanding of the public that this is a tax increase because so often all the taxing entities nickel and dime and one penny -- the legislature, we threw $14 billion at the school finance and there's nobody naming babies after me; I've heard of a couple of kittens, a dog, but no babies. And so this is not a tax increase and it's still going to be some education by the mayor, the city council members, who ultimately will be dealing with this as they go forward on the ordinance, so I do appreciate the mayor for that.

I also understand TxDOT probably gets more requests for open records than any other state agency, and since it happens so often and going back so many years all the time, I understand that I would come up in all these tapes that people were reviewing, and somebody had found one tape where I was up here saying that El Paso did not deserve to have a bad planned toll project before we got something that the driving public deserved and needed, and that was a completed outer loop.

A couple of months ago, before I took over after the mayor's chairing the MPO as the vice chair and chairing the executive committee, I started a program, and we were actually working on parallel roads, TxDOT, chamber of commerce, interested parties, myself, we were going to redo how we did our project selection, how we kept tabs on what the process was and the production, and the second part was going to be priorities.

We haven't had real priorities for a while since the system has changed -- and for the better, mind you -- but we used to come before TxDOT begging, like everybody did years ago, and that changed when we put a longer term plan together. But in those days we at least got together as a community and we always knew what the priorities were, always had a short list. Well, that's kind of gone away.

So I was trying to relive that, bring that back, and TxDOT had also been reacting to this and trying to put something together, and so what is before you today is -- and I kind of don't want to use it too much, compromise, it's not really a compromise, and I know the mayor said not everybody is happy but not everybody is unhappy -- I think it's a pretty good plan. It includes, again, completing the outer loop, it's got mass transit in there, it's got aesthetics, it's got simple ideas for helping on and off ramps on the interstate, so it's got everything.

So the fact that you found me on tape several years ago stating that I'd be one of the first ones to help try to educate the public on the need in the future to have some type of managed lane facilities but only if and when and after we get some other things settled, so I want to thank the Texas Department of Transportation, our district engineer, the chamber of commerce, the MPO for all that they've done to get us here.

And there's still a lot to do, and I'm committed to, Commissioner Houghton, some other issues and what the MPO can do and our resources, obviously, that we have, so I'm ready to do that. And I keep everything separate, and those of you who know me, know that I'm very direct and I call it like I see it, and if it's a good witch, it's a good witch; if it's a bad witch, it's a bad witch, and I am excited about what is coming up in the next legislative session.

We can't live without you all, you've got some tremendous employees, and I think Sunset is something that we all need to take a look at and really take a step back and see what is the best thing. I think it was funny right after the Sunset report came out and there as the first initial shock, it made it worse than it is. You guys actually came out good in the Sunset report, but it said in there do away with the commission. I had lots of media people stick microphones in front of my face and call me and say, What do you think about doing away with the commission? I said, Oh, that's a little overreacting, they just need to do away with five positions.

(General laughter.)

MR. PICKETT: That sounded like a TxDOT employee that I recognize laughing the most out there.

Again, I do want to thank you for the support. There is always more positives than there were negatives, and I think there's still going to be some healthy discussion in the future. The governor made a good appointment to the regional mobility authority. I'm not a fan, I'm still not a fan, I think there's other ways, better ways. I think we'll try to give the people of Texas some different choices in the future, but because the RMA is there, it's working, they were the finance tool for Spur 601. I realize the fact that they do exist, so I'm trying to work with the evil Harold Hahn as best as I can.

So again, thank you for consideration and I hope you look favorably on what the mayor has presented here today. Thank you, Commissioner Houghton and Chairman and members.

MR. HOUGHTON: Don't leave yet, Joe. Thank you very much. And Part B on the mayor was, again, a profound unanimous vote from the MPO and it's not gone unnoticed of your hand on that unanimous vote, and I thank you very much. And we move forward and look forward to working with you during the session.

MR. PICKETT: Thank you, Commissioner, thank you all.

MS. DELISI: At this time I'd like to call up Richard Dayoub from the Greater El Paso Chamber of Commerce.

MR. DAYOUB: Good morning. Madame Chair, members of the commission, Amadeo Saenz, thank you so very much. For the record, I'm Richard Dayoub, president and CEO of the Greater El Paso Chamber of Commerce.

First of all, I'd like to thank all of you. I know being the positions that you're in and the city that you're located in, every night is another event for you and it's a battle trying to keep them balanced. I deeply appreciate the fact, we all do from the El Paso contingent, that you came in and spent some time with us last night. It was great seeing all of you.

Commissioner Underwood, I'm going to do my very best to emulate you in your brevity of remarks. I'm not sure how you follow comments like Representative Pickett's, but I'll be to the point as best I can be.

The purpose of our presentation to you this morning is to share with you the fundamental growth that's occurring in El Paso. The mayor spoke about the need for all of what we have to have in our community in infrastructure in order to meet our future needs. I thought a couple of slides to just sort of underscore some of the things that we're doing would be of help to you. Also, just in a moment -- this is sort of a tandem presentation -- my colleague, Jim Coleman, who represents the Borderland Mobility Coalition will get up to speak to a couple of points.

And I think this is important to note because the Federal Reserve, with their data recently, supports the statement I'm about to make to you which is El Paso's economy is the fastest growing economy in the state of Texas, so this is just critically important to us as well.

This particular slide just points out some of the growth trends occurring in our community with the dark blue bars indicating the population on a gross basis in terms of growing, and then the net growth is in the light blue, with the net migration occurring with the little bars across the bottom. This is a particularly important slide, and the second piece of that, as you look to the right, the Fort Bliss growth and what that represents uniquely to our El Paso population, and of course, then the far greenish-gray bar above that shows the final growth as that occurs within Fort Bliss.

Now, this is kind of one of our favorite little slides. This is 2005, this is Fort Bliss and Biggs Field what has now become Fort Bliss East. And then I'll pop this up for you, this is what has happened to date at Fort Bliss in terms of growth, and the yellow box at the top underscores what's occurred: $4.1 billion of programmed construction just within the gates.

Thank you, Commissioner. It's not often I make presentations where I have a distinguished guest acting as my laser pointer. Thank you so much for that.

This is just within the installation. Now, this, in terms of population -- our slide doesn't quite match the mayor's slide because ours extends out one further year -- but the total net growth at Fort Bliss, as the leadership of the Department of the Army has indicated to us recently, if you added all those numbers together, the cumulative growth for each category is roughly 80,000 soldiers and their family members. That does not add into it the population of all of the Defense contractors who are locating in El Paso, as we speak, and their families as they migrate to El Paso as well.

I think this kind of touches on the growth. Now, most of these numbers came from the University of Texas El Paso and the Institute of Policy and Economic Development, a $21 million additional economic impact to El Paso between now and 2013 with over $210 million in new property taxes alone. The troops, 43,000 jobs will be added to our economy, with an annual impact of $3.3 billion, and $3 billion additional in military construction. 2013 is what the Army refers to as end-state. That's where they will have completed all of the work necessary to prepare the post and the ranges.

And for those of you who have not been to Fort Bliss, we have roughly about 4 million square acres of mud to space controlled by the Department of Defense where they do testing. A lot of that is on White Sands Missile Range which is contingent and contiguous to Fort Bliss, and beyond that, looking at those bottom numbers, I think an important note to bring to you is you have $37 million in property taxes per annum, an estimated $8.2 million in sales tax -- which is important to all of us -- and a total economic output per annum of $3.7 billion to our economy.

This picture just kind of showcases to you some of the work that's already being done. We have the J.D. Abrams Company doing the public-private partnership with the Spur 601. You see the Section A-1 which is just about complete, summer of 2008, and then we have the other Section B, off to your far left, in winter of 2011, and then the middle section also in the winter of 2011 to complete the so-called inner loop which will link 54 with Loop 375, part of our outer loop on the far east side and continuing on into northeast El Paso.

And then this is just to simply identify for you, in terms of Highway 54, US 54 connects to Interstate 10, as you can see that towards the bottom of the red line, but they are in the middle of construction right now adding two inner lanes, one north and one south, for that highway project. It's already become one of the major thoroughfares connecting northeast El Paso with the rest of the community. And of course that connection will bring together, when the inner loop is complete, that feeder, if you look to the far right you see the Purple Heart Memorial Highway and Loop 375.

And the last point I would make to you as it pertains to these highway construction projects, before I turn it over to Jim, is that in partnership with TxDOT, the chamber, the Borderland Mobility Coalition, the RMA, we are working together in putting together a speakers' bureau so we can go out in the community and educate and inform our citizens in a proactive fashion so that they understand the importance of all of the various solutions that the mayor presented to you with regard to funding our very much needed highway projects throughout the entire community and our entire mobility efforts.

And that concludes my brief presentation. I wasn't quite as brief as you, Commissioner Underwood, but I tried. Thank you for your time.

MR. COLEMAN: Madame Chairman, commissioners, good morning. My role here today, as executive director of the Borderland Mobility Coalition, is to take two minutes more of your time and my objective is to hopefully introduce you to perhaps two of the heretofore unrecognized high points regarding the actual impact that El Paso's tri-state manufacturing environment has imported not only on the rest of Texas and the nation, but perhaps even more pointedly, also upon that critical transportation arterial corridor that we call Interstate Highway 10.

First, there is the now quantifiable impact of El Paso's tri-state manufacturing environment relative to the national and global scenes, and I'll give you a picture of this. United States, Texas, we come down to the largest production-sharing location in all of North America, that is the El Paso tri-state production-sharing region.

That region produces and ships out a volume of goods and services to all corners of the state, the nation and the world that leave in its wake a $50 billion local GDP annually. In fact, it's interesting, according to data obtained from Manpower, Inc. that on a global scale this enormous manufacturing phenomenon right here in Texas's own backyard is possibly only rivaled today by Shanghai, China.

Conservatively summarizing the down-to-earth impact of this enormous production-sharing capability and capacity via data developed by the FHWA and their national IH-10 Freight Corridor Study, we also hope you will recall after today that mathematically speaking, in the slightly more than 90 seconds it has taken me to convey this information to you this morning, yet another 18-wheeler will already have started its engine in preparation to depart El Paso and enter into the IH-10 corridor with another 80,000-pound load of finished goods bound for elsewhere, a never-ending process that continues in our community 24-7, 365 days out of the year.

Madame Chairman, commissioners, thank you again for having the Borderland Mobility Coalition this opportunity to speak briefly to you. We hope you found this information both informative, and more importantly, memorable. Thank you.

MR. SAENZ: Do you have any questions or comments for Phil or the presenters?

MR. HOUGHTON: Have we laid out the program?

MR. SAENZ: What happened to Phil? I can get Chuck up here; I think Chuck can probably lay out the program. Tell Phil he owes you ten bucks.

MR. BERRY: Just ten bucks, Amadeo?

MR. SAENZ: You can negotiate with him.

MR. BERRY: Good morning, Madame Chairman, members of the commission. I'm Chuck Berry, your district engineer in El Paso. It's good to see you all again, and thank you for showing up last night. Appreciate that very much.

MR. SAENZ: Do you want to lay out the program that you have been working on?

MR. BERRY: Don't know if we have an overhead to show you that.

MR. HOUGHTON: This is called flying by the seat of your pants, isn't it, Chuck?

MR. BERRY: Yes, sir.

The plan that we've put together cooperatively was we named a 2008 Comprehensive Mobility Plan for El Paso. The plan responds to the community's needs. We went to many of our partners throughout the region, listening to what the needs were, describing what the solutions could be, and it consists of two main components: one is the projects that everyone said were necessary, and the other main component is the delivery of the projects in the very near future, not the five to ten years that we had talked about in the past but projects that we could actually put on the ground next year, the following year and the year after that.

We put together our Category 2 program with the estimated volumes of funding that were going to be available to us. We put that together with the Transportation Reinvestment that we suggested to the City of El Paso may be possible, and they were extremely receptive in helping to develop, even to the point of suggesting that El Paso County may be also able to participate similarly in the future, although that's not a part of the plan yet, we anticipate that that could be possible in the very near future.

It has roadway projects, it includes transit projects, there's an aesthetic component that the City of El Paso was almost insistent upon, and I've told a couple of stories in El Paso about that. The city manager and myself across the meeting table from each other, and the city manager, Ms. Wilson -- who I respect very highly -- twisting my arm and telling TxDOT just how important this is for the quality of life in the entire region and how important Interstate 10 is to the El Paso community.

Listening to all those needs, we put together a very comprehensive plan, developed it to the other partners, and for the first time that I can think of and for the first time that I know of during the six years that I've been in El Paso as the district engineer, we were able to put together an entire partnership: it was the City of El Paso, it was the RMA, the Camino Real Regional Mobility Authority, and the El Paso MPO and TxDOT.

We came together with a comprehensive plan that not only is comprehensive in its nature of the modal delivery in highways, transit, and I'm very focused on pedestrian and transit, but also comprehensive because the entire community put it together.

Let's go to the table screen, if we could, please. Death by PowerPoint: the PowerPoint is requisite that you have something that you can't read; this is my slide that you can't read. Excuse the detail on the table, but this is really what the plan is about.

It puts together the funding categories across the type of the screen, the years of delivery, and the description of each project along the vertical part of the table and at the bottom of the yellow field and the blue field, the totals of the projects that we are proposing to deliver in the very near future -- if you would notice, on the ready-to-let years, years like 2009, 2010 and 2011.

And then on the right side of that table, the project developers, not only TxDOT developing those projects but the RMA, not only developing the toll revenue projects but also the RMA and the City of El Paso stepping in together to deliver the projects that would be funded, not only with traditional funds out of Category 2 -- and you'll see CBI under there; that's our Coordinated Border Infrastructure program -- but also the TRZ bonding which necessitates the relationship with the pass-through financing program and our chair of the RMA led for his RMA board to accept this program as the project developers.

We've got about nearly $300 million worth of traditional projects in red, green and yellow fields. The projects in the green field I believe to be very new. They're the transit projects that Mayor Cook and Representative Pickett brought to your attention. One of them is actual bricks, mortar and facilities for a bus rapid transit system along State Highway 20, connecting up the university with one of its important corridors for people who are attending the university, and it would also provide access along State Highway 20 to the central business district, and it's a north-south flow of commuters and visitors from Mexico to their destinations along State Highway 20. I believe this to be possibly one of the first times that we've brought to you BRT transit program, funded in large extent through the traditional Category 2 program.

The blue field represents the RMA projects. We set the bar up very high for the RMA. We made available the Category 2 funding level, a very large proportion of our entire Category 2 program estimates, and we have made available our estimates for the toll revenue for the highways that they selected, together with everyone else, for the first priorities that exceed the $250 million toll revenue projections, far exceed the $151 million of Category 2 funds that have been provided to the program. And setting the bar up very high, challenging the RMA to go out and seek in excess of $300 million in either cost savings through projects and/or additional funding, potentially from private sources or others.

We've committed to work together. I don't remember hearing to this point, but the four parties have signed a memorandum of understanding committing to work with each other, and one portion that we worked very hard to include is that we would work with each other to make those deadlines and assist each other with the delivery of each other's responsibilities, very comprehensive in nature and putting the money where their mouth is, saying we're going to work together but actually inking that. And that was, I believe, completed just last week with the signing of the MPO and my signature at the TxDOT district office in El Paso.

That memorandum of understanding is more of a symbol, than anything else, of the entire region working together. We are committed to the delivery of this program, we are committed to make the dates as equally as committed to making the projects work. And I think the memorandum of understanding indicates that everyone is willing to work together to make it happen together.

I'm available for any questions you might have, we can talk about specific projects, but I think what the nature of this presentation is, the region is working together, you provide us the resources, we will deliver the projects and we will deliver them expediently on this schedule as a commitment. Thank you very much.

MR. HOLMES: Chuck, I'm trying to kind of sort through the numbers. It's about a billion dollars worth of construction?

MR. BERRY: There's a combination, yes, sir. Yes, Commissioner, there's about a billion dollars worth of construction if we include the $300 million that the RMA is challenged to go out and either find cost savings and/or funding to address them.

MR. HOLMES: And do you add engineering and right of way, et cetera, on top of that?

MR. BERRY: Yes, sir, especially on the RMA projects, these are total project cost estimates. The district office has been working on the red field up there, ensuring that we have all the resources that are available, and I'm pretty confident that we're going to be able to fit all the resources, total project costs, even in the red project cost estimates.

MR. HOLMES: So the $247- includes engineering and right of way and construction, total project cost?

MR. BERRY: Yes, sir, it will. This table does not represent it, but within that $247 million we've already done some additional detail on that and we'll be presenting it throughout the community as total project. We've had to re-scramble some of the numbers to make all the details work out; the total is still $247-.

MR. HOUGHTON: Chuck, I want to thank you for your help and your leadership on making this thing possible. This is monumental for the city. The integration between the RMA and TxDOT is going to be critical to making all this happen. When you look at the let dates on there, it's pretty ambitious.

MR. BERRY: It is, and we've developed a sense of urgency and a commitment to deliver some really needed work throughout the region, and I think equally as important as the projects are the delivery dates to show to the community, show to the region, demonstrate to the entire metropolitan area that it can be done and will get done.

MR. HOUGHTON: I'd like you just to move to your right just a little bit -- if you don't mind, Madame Chair -- and ask Mr. Hahn, the chair of the Camino Real RMA, to jump up here. Don't sit down, Chuck, he's going to need lots of support.

MR. BERRY: And he's got it.

MR. HOUGHTON: Name for the record.

MR. HAHN: Yes. I'm Harold Hahn, I'm chair of the Camino Real Regional Mobility Authority. Madame Chairman, commissioners, thank you for having us today.

I just have to tell you that a lot of times the staff does not get the accolades that they should. You know, we saw four career people today that were retiring. I'm sure probably in the last year some of you wished you had retired too.

(General laughter.)

MR. HAHN: I pretty much wake up every morning and the first thing I think of is how did I ever let Ted Houghton talk me into doing this, but I also have to tell you that it's probably one of the most exciting time periods in my 34 or 35 years in El Paso, and just for the record, regardless of what Representative Pickett might say, I know that he really does like me. I don't have -- at least noticeable -- horns growing out of my head, and I do have to say that when I got involved last February, compared to where we are as a community today, it's 180 degrees different. Chuck and his staff, particularly Eduardo Calvo, has been marvelous, very helpful, and we're very excited about this program.

Now, I'm still kind of scratching my head thinking about where I'm going to come up with the extra $300 million, but Ted has assured me that that should be no problem. And we are enthusiastic and we think that we will be successful. And anytime that you have the synergy that we have now and the desire of everyone to work together, including Representative Pickett, who historically has been pretty adamant about a lot of this stuff, but it's probably better today than it was last year. And as you can see, it's a well thought out plan and I think one that we can certainly be successful in accomplishing in the timeline.

There is one thing I'd like to do is just introduce our executive director -- he actually goes to work on Monday. Raymond, could you just stand up. This is Raymond Telles. He, before, was assistant city attorney for the City of El Paso. I just am very excited to have Raymond onboard and I think he's going to be a welcome addition to the RMA.

So any questions that you might have, I guess you'd have to ask Chuck. He's the knowledgeable one.

MR. HOUGHTON: I just want to thank you, Harold, for taking the leadership role, and you've done a marvelous job on coalescing the different factions and parties in the city of El Paso, and Governor Perry had great insight into appointing you to your current position. And the coordination between the two of you and the MPO, Representative Pickett, is going to have to be stellar to make all this work on those dates that I see up there. So I want to thank you all for the leadership. My heartfelt congratulations and wishes.

MR. HAHN: And Commissioner, thank you, and as long as we have the support and the money, we'll be happy to move ahead.

MR. SAENZ: Thank you, Chuck, thank you, Mayor, thank you, Representative Pickett and everyone that presented. This was a report from the El Paso area on their mobility plan. I'm going to now move on to several items on the agenda today that are tied to the mobility plan that would require commission action, and I'll start with item number 9(b) which is a minute order that will amend our current unified transportation plan to incorporate some of the mobility plan projects that were identified by the group, and James Bass will present that.

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

This minute order would amend Category 2 projects for El Paso listed in the 2007 UTP by replacing the previous project list with the projects of the 2008 Comprehensive Mobility Plan, as shown on Exhibit A to this minute order. Staff would be happy to answer any questions, and if there are none, staff recommends your approval.

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. BASS: Thank you.

MR. SAENZ: Thank you, James.

Agenda item number 9(c) is a minute order that will be presented by Mark Tomlinson.

MS. DELISI: Representative Pickett, we had you signed up for 9(b), the one we just passed. Did you want to speak about that?


MS. DELISI: Okay, you covered it. Mr. Coleman, the same with you? Okay, thanks.

MR. SAENZ: Agenda item 9(c), Mark Tomlinson will present a minute order that authorizes the department to work with the Camino Real Regional Mobility Authority on the development of some of these projects.

MR. TOMLINSON: Thank you, Mr. Saenz, commissioners. My name is Mark Tomlinson, director of the Texas Turnpike Authority Division.

Further planning does remain in bringing this great plan together and working out the details of how to deliver these projects, so this minute order authorizes the Camino Real Regional Mobility Authority to conduct a study, and in coordination with the department, present proposals for the joint development of various tolled and non-tolled projects in the El Paso 2008 Comprehensive Mobility Plan.

The purpose of that plan, as you have heard very adequately stated, is to accelerate delivery of very important transportation improvement projects throughout the El Paso region that will enhance mobility and continue to improve air quality, safety and provide an environment to support economic development. All of these objectives are consistent with the goals that the El Paso MPO and TxDOT share as part of their long range planning and strategic plans.

There exists the potential for expediting the completion of this plan by the CRRMA by financing a portion of these projects' development, design, acquisition, construction, maintenance and operation costs through the use of turnpike financing and transportation reinvestment zone development, so staff recommends execution of this minute order.

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. TOMLINSON: Thank you very much.

MR. SAENZ: Thank you, Mark.

Commissioners, agenda item number 10 was also dealing with the El Paso projects and it was set up to request competing proposals towards an unsolicited proposal that we received to constructing one of the projects. As we worked on the proposal, we identified that additional coordination needs to be had with the University of Texas at El Paso and staff just ran out of time and we could not fully flesh that out, so staff would recommend that that minute order be deferred.

MR. HOUGHTON: Madame Chair and Amadeo, with discussions with Representative Pickett last night, chair of the MPO, he has asked to involve himself into that process, negotiations with UTEP, help coordinate that on a more comprehensive approach to the solutions at UTEP, Schuster, I-10. Is that right?

MR. SAENZ: Yes, sir, we will do that. We'll bring this at a later date.


MR. SAENZ: Those are all the minute orders that I had for El Paso.

MS. DELISI: I'd like to go ahead and take a five-minute break so the folks from El Paso can go on with their day and we'll get back here in about five minutes.

(Whereupon, a brief recess was taken.)

MS. DELISI: Please be seated. We're going to get back on with the regular agenda.

MR. SAENZ: Thank you, Madame Chair. Going back to the regular agenda on agenda item number 3 we have some reports; agenda item 3(a) is a report that give us a little bit on what are the developments of our internal compliance program, and of course, we have brought back Richard Monroe, our former general counsel, as interim internal compliance coordinator, and Richard will present kind of where he's at on the internal compliance program.

Richard, welcome back.

MR. MONROE: Thank you. For the record, my name is Richard Monroe. I'm the head of the Compliance Office, been in it about a week and a half, so I am fully informed and I'm sure will be able to answer any questions you may have. For the record, my name is Richard Monroe, the new head of the Compliance Office. I know that previously Steve Simmons gave you a report, and I don't want to add to that, so I will be brief and tell you the latest development.

Notice was posted in the Texas Register on July 4, 2008 requesting comments about certain rule changes that were contemplated, most particularly to the State Infrastructure Bank, contractor sanctions, metropolitan planning organizations, transportation corporations, Safe Routes to School Program, traffic safety, regional mobility authorities, financial assistance for toll facilities, aviation facilities, and just a few others.

We received three comments. One was from Nueces County. They were somewhat concerned about the cost this program might cause them. They estimated a cost of $60,000. They didn't do too much elaboration about how they came up with that figure; I think by its very nature you can see it would be an estimate.

We also got a comment from the city of Clifton which wanted us to do a cost benefit analysis. Now, I'm not sure exactly how one would do that on an ethics program. However, far more disturbing to me was the ending of the city manager's letter. The last sentence reads: "Frankly, unless there's evidence to the contrary, it looks more like lip service than a real attempt to make a difference." I find that statement and that perception somewhat disturbing, and I intend to do what I can to dispel that impression that he may have.

The other comment was from the Grand Parkway Association, saying don't see anything wrong with this, as a matter of fact, we already have such an ethics program.

Also, our Aviation Division reminded us all that application of such policy might be inappropriate for their programs. They reminded us that they have sole authority -- the division, that is -- for all grant management and fiduciary oversight responsibilities for grants issued by the department to local governments. Therefore, it has been the conclusion of the administration that no changes need be made to the aviation rules in our departmental rules.

With regard to contractor sanctions, I believe the director of the Construction Division will later be appearing before you with certain proposed changes to our contractor rules, particularly regarding sanctions. Meanwhile, I can tell you that we hope to very soon post the employee code of conduct on our internet site and to set up a dedicated call line to receive calls in response to that posting.

Those are the latest developments. I will try to answer any questions you may have, but frankly, I would be very interested in any words from the commission about where you would like to see this program go and what you would like to have me do. So with that, I will conclude my remarks.

MS. DELISI: Any questions, comments?

MR. HOUGHTON: And maybe Bob needs to get up here. This thing has been not languishing but it's been out there for a while, we start/stop, and now here we are and now we're talking about sanctions. What is the goal and objective, Richard, of this internal compliance operation?

MR. MONROE: The goal is to establish clear and definite ethical standards for our employees and to let the contracting community know what those standards are and also what we expect from the contractors, both engineering firms and construction firms. We expect them to have their own ethics policies, we expect adherence to those policies, and as far as sanctions go, I don't know how much detail you want me to go into, but as I understand it, before I got here there was much discussion about enforcement, and it was concluded that sanctions were probably the way to go -- in other words, reduction of bidding capacity, suspension of ability to bid on contracts, that sort of thing. That's it in an overview.

MR. HOUGHTON: And is there something that's happened out there in the last year or two years that has brought this to the forefront? Are we having problems, are we seeing problems, or is this a preventive measure, are we getting in front of the curve? I've never experienced any problems ethically with this department, I really haven't. So what is spurring this on, is this proactive on our part to get out in front of it?

MR. MONROE: It is somewhat proactive. As we all know, the Sunset Commission had various concerns about the department. In part, it's my understanding, that this is an attempt to address some of the concerns that the commission might have -- Sunset Commission, that is -- and perhaps address some of the perceptions, whether they are real or merely perceptions, in the legislature.

MR. HOUGHTON: Let me give you one -- and I'm not picking on anyone -- AGC has lunches all over the state and our employees go to those lunches and they are, I think, hosted by AGC. Are we going to continue to allow that, is that a compliance issue, are we going that far, have we had those problems, those kind of deals?

MR. MONROE: All right, I can address that issue. We have a draft of the ethics standards and expectations as to conduct out there -- hope it will soon be in the final form. There is a specific exception allowed for true working meals. I don't know if you want me to say anymore than that, but yes, they would still be allowed under the policy.

MR. HOUGHTON: Well, I went to the El Paso function last night and I'm assuming the chamber of commerce paid for it and I partook of their food and beverage. Is that an ethics compliance issue?


MR. HOUGHTON: See, I'm trying to figure out where the lines are, Bob, if you understand, I'm just trying to figure out where all these lines may be, and the trepidation people may be having, saying, well, wait a minute, is that a compliance issue.

MR. MONROE: I think the directive concerning these standards will make it clear that no, that is not included.


MR. HOLMES: Richard, I think I understood you to say that the Construction Division would have some comments and revisions that they would want to see. Did you say that?

MR. MONROE: Yes, sir.

MR. HOLMES: Can you amplify on that just a little bit?

MR. MONROE: They will be presenting --

MR. HOUGHTON: Mr. Jackson keeps creeping to the front.

MR. SAENZ: Commissioner Holmes, we have an agenda item under Proposed Rules where we are proposing some items to that portion of our Administrative Code.

MR. JACKSON: Those rules are kind of the opposite of where we're heading with these other sets of rules. With the construction or highway improvement sanction rules, we currently have sanctions rules where for various reasons we can debar/suspend a highway improvement contractor.

We're proposing some changes to the rules for a number of reasons on the agenda today, but another thing we're doing is we're going to say if you have a compliance program -- and we're describing the minimum of what we would consider a compliance program -- if you meet that, if you do get in trouble for some reason under our rules and Mr. Saenz is considering sanctioning your business, if you have a compliance program, he will consider that as a mitigating circumstance and may let you off the hook or lower the level of your sanction because you have a program. So that's an incentive to have a compliance program.

MR. HOLMES: And were there additional changes that we were going to hear about from the floor?


MR. HOLMES: That are not in the book?

MR. JACKSON: No, they're in the book. Yes, there are a number of other things we're changing to the sanction rules that have nothing to do with the internal compliance program. But the other rules that we're talking about that we discuss in the book for this report are the opposite which is if you're going to be getting money from the department, whether it's toll equity, a SIB loan, a grant, we're going to be drafting rules to say you're not eligible unless you have a compliance program. And we posted a notice in the Register suggesting that. We sent individual notice to most anybody who could be affected. We received very little comment, but they'll get another chance if we do in fact propose those rules, and we're looking at October.

MR. HOLMES: I'm assuming that the vast majority of the large contractors, vendors already have ethics policies in place. How will this impact some of the very small ones that may or may not?

MR. JACKSON: I think that was our major concern was the small ones. If you're looking at an RMA or a local toll entity getting toll equity, I don't think we're going to have a problem. It's the little guys we were concerned about, particularly in our grant programs, and we were waiting to see if we had any comments. We didn't the first round, we'll look at the second round. The two negative comments that we got were in relation to our aviation program where they said, We're a tiny little airport, this is going to be costly to us. And we went back and looked at it and saw there's really not a benefit anyway, so that's off our list.

MR. HOLMES: Well, I think we need to continue to be vigilant as to how we impact some of the very small vendors that do business with the department.

MR. JACKSON: Yes, sir, absolutely. And when we define a compliance program, what we did is we took the federal definition out of the U.S. Sentencing Guidelines which is one of the purposes of our internal compliance program is to meet that. If you have a compliance program that the fed think is a compliance program, if you get into trouble, it's like a get-out-of-jail-free card, similar to what we do with our construction rules today, they will lessen the penalty because you had a compliance program.

So what we're suggesting is there's about seven items with lots of flexibility on how you comply with those seven requirements. So we don't think they're burdensome but we're interested to hear if somebody thinks they are.

MR. HOLMES: There are kind of two phases to it: the get out of jail free card that you were referring to --

MR. HOUGHTON: That's an interesting use of terms.

MR. HOLMES:  -- is one, but on the front-end, assisting some of the smaller ones that don't necessarily have the staff to develop the program, but giving them some assistance so that they have an opportunity to comply.

MR. JACKSON: Yes, and two more things on that front. One is if we do adopt these rules, have an effective date that's way out in the future, give them six months, nine, twelve months to comply. Also, we may be requiring an ethics and gift policy like we have only not near as complicated as ours, so we can come up with a model policy that we can distribute to everybody that they can use if they wish to.

MS. DELISI: Any other questions?

(No response.)

MR. SAENZ:  Thank you, Bob. Thank you, Richard.

Agenda item 3(b) deals with a report by John Barton on our implementation of some of the Sunset Commission staff recommendations that we are working on. John.

MR. BARTON: Thank you.

Good morning, Madame Chair, commissioners. For the record, my name is John Barton and I have the pleasure of serving you and the citizens of Texas as the assistant executive director for Engineering Operations here with the Department of Transportation.

I'm here today to share with you some information about the department's action plan to implement the Sunset Advisory Commission's recommendations for improvements to our agency and the way we serve citizens here in Texas, and my goal today is to update you what TxDOT's staff has been doing in this regard to embrace and implement the recommendations that Sunset provided to us in their initial report.

As you know, on June 3, 2008, the Sunset Advisory Commission issued a staff report containing a list of recommendations that included potential improvements to the Texas Department of Transportation's processes and business functions and how we can implement those to improve our services to the citizens here in Texas. Also, during the Sunset Advisory Commission's hearing that was held on July 15, 2008, members of the commission asked the department to move forward with implementation of any of those recommendations that we felt we could do without changes to statute.

So in response to that request and through a thorough review of those recommendations, at the direction of Chair Delisi, Mr. Saenz has assigned TxDOT staff the responsibility of taking a look at these recommendations aimed at our areas of responsibility and expertise, and then developing strategies to implement those suggested revisions. Thus far we've focused on 27 charges that were contained in issues 2, 3, 4 and 6 from the Sunset Report and the issues covered by those particular areas included topics for the Texas Department of Transportation's planning and project development process, our public involvement processes and practices, our contracting practices and procedures, and the regulation of our outdoor advertising industry.

Mr. Saenz instructed us to focus on a quick implementation timeline with these recommendations, to explain the cost of implementing each recommendation, and to note of legislative changes would be required in order to implement them. So as I stated earlier, we are taking these measures seriously, in response to the direction provided by Chair Delisi and the Sunset Advisory Commission, and in no way are we attempting to preempt the legislature or their decisions as they look forward to the recommendations from Sunset as they convene later next year to take up those recommendations.

All of our staff members have embraced the importance of this effort and have begun development of these draft implementation plans. These plans are currently being reviewed by Mr. Saenz and Mr. Simmons, and each draft plan includes a detailed timeline for implementing the recommendation to enable us and others to track our progress as we move forward through this implementation process.

So what I would like to do now is provide to you a brief overview of each of these recommendations, what our draft plans are and our estimated time frame for being able to implement them. And if you'd like to follow along, I believe in your briefing documents there's a draft document entitled "Summary of Sunset Recommendations Implementation Plan" that contains a small amount of information about each recommendation. They're referenced by number, followed by a timeline for our implementation.

The first issue is labeled 2.1 which calls for the redevelopment of our long range Statewide Transportation Plan, and to clarify for you, this is the plan that looks at the big picture of transportation here in the state of Texas over the next 25-year period. The recommendation from Sunset calls for regular updates to this plan as well, and staff thinks we can accomplish this through the development of a work group of department personnel as well as stakeholders from outside the agency, such as members of our metropolitan planning organizations and other industry leaders, to work on a plan that is beneficial to all of Texas.

Mr. Simmons has already formed a work group through the Texas Association of Metropolitan Planning Organizations to work with our staff to develop some baseline estimates of what future forecast of revenues might be, and we estimate that staff would be able to bring forward to the commission for consideration in February of 2009 a draft of this plan and hope that perhaps by May of 2009 the commission could take formal action to adopt this new Statewide Transportation Plan.

Issue 2.2 would develop a new and improved Unified Transportation Program that perhaps has been one of the most important issues that people have been focusing on, in an attempt to be more transparent and more easily understood by the public and the people that use it. The department obviously thinks that we need to take a different approach in developing this new UTP by involving our stakeholders outside the department to receive their input into the process. This document affects many different communities and entities across the state and we believe they deserve the ability to have input into how the document appears.

Staff currently estimates that a new format could be accomplished and presented for consideration by June of 2009, and already this year we believe that we've taken steps in that direction as we've had excellent public dialogue and discussion with the commission earlier this spring about the funding levels of the UTP, and building upon that discussion, we believe that we can take great steps moving toward a new UTP and a new format as we can create a document that's much more understandable and transparent to those that use it.

Issue 2.3 would require our districts to develop detailed work programs and milestones for the projects that they are developing. Staff believes we can address this particular recommendation in two parts. The first would be to create milestones for all of the projects that are currently being developed on a project-by-project basis in each district, using an automated software tracking device that we've created. The second part of the plan would be to create a web-based interface into this tracking system that would greatly increase the transparency of our processes on all projects and allow others outside the department to view the status of projects at any time.

We anticipate having limited operational ability of this process by the end of October 2008, with statewide full implementation by September of 2009. And again, we have already made considerable progress on this issue as each of our districts have developed schedules with milestones for most of their projects that they're currently working on and expect to go to contract with during the next three years.

Issue 2.4 would require the department to create a series of report cards on how well we are reaching the milestones I just mentioned on the projects that we have under development. And this is something that we believe we can do through the creation of three different accountability documents, if you will.

They would be a State of Texas Transportation report, a Legislative District report, and a TxDOT District report. All of these could be created with the help of outside stakeholders such as MPOs and others who are interested in the progress of work within the department, and we anticipate completing these reports in the spring of 2009 and making them available on our website by June of 2009.

The next issue which is issue 2.5 requires the department to establish and provide funding and support for transportation in rural areas of our state. The department has been actively studying this concept of rural planning organizations since early in the last legislative session and as late as the spring of 2008. Therefore, we feel that we have already accomplished the intent of this recommendation and doing so by submitting a recommendation to the House Transportation Committee Subcommittee on Planning Authorities earlier this year in May of 2008, addressing our opinion regarding the creation of rural planning organizations here in the state of Texas, and that report actually recommended that rule-making authority be established to allow us to do that.

Issue 3.1 requires the department to develop and implement a public involvement policy that encourages more public involvement efforts statewide. We believe that in addressing this we will be able to reevaluate our current practices and policies and look at other agencies, entities, and departments of transportation for best practices and how they involve the public in their transportation decision-making processes, as well as considering public involvement efforts of private industry.

We will then develop a better plan based on these identified best practices and processes, new ideas that have been identified, and conduct internal training of our staff so that they'll better understand ways to engage and involve the public. We also believe that we can create a better public outreach process via tools such as the internet, e-mails, mass mailings and other media strategies that would attract more participation in our public meetings, hearings and our decision-making process. This is a critically important recommendation of Sunset and staff feels that a revised policy and practice could be created and implemented regarding our public involvement processes as early as January of 2009.

Issue 3.2 requires the department to do a better job in documenting our public comments and complaints. We have started this process already and are currently revamping our existing constituent comment tracking software. This will enable us to track public comments by more strategies or categories of issues and in a more precise manner, and we anticipate that we'll be able to roll out this tool statewide in January of 2009.

The next issue is 3.3. It requires the department to provide a formal process for our staff that holds similar responsibilities to share information with one another about best practices they've incorporated into their management and business models. We believe that we can address this recommendation in two parts again. The first would be to include a discussion item at all the department's meetings, conferences, seminars and other similar events to allow our staffs an opportunity to discuss best practices and ideas, as well as at routine district engineer staff meetings that are held with the administration.

Also, I'd like to point out that under the administration structure Mr. Saenz has created and implemented under his regime, he created the position that Mr. David Casteel currently holds which is the assistant executive director for District Operations, and Mr. Casteel is responsible for overseeing all of our field operations within the department, and under his leadership, he has implemented a peer review process among the districts which allows them to identify best practices statewide and is also conducting quarterly meetings with the district engineers where these best practices are discussed and encouraged for implementation throughout the department.

The second part of this process would be the creation of a best practices website or page and chat rooms on the department's highway intranet sites that would allow our employees to use this tool to post their ideas and questions, to chat about their successful experiences and challenges they've faced, and to seek the advice and input of their coworkers, colleagues and other experts within the department to help them with the issues and challenges they face in their daily business, and we anticipate rolling out this enhanced tool in October of 2008.

Issue 3.4 requires the department to provide central coordination of the departments' major marketing campaigns. The department will accomplish this by consolidating all of our marketing efforts under one group and providing a centralized marketing effort through a single vendor. After we've gone through the request for proposal process, staff feels that this could be accomplished and implemented sometime in September of 2009.

Issue 3.5 requires the department to make its website more user friendly, and staff has already begun working on this process as well by looking at improving our website and we'll accomplish this recommendation again in two parts. The first will be to use our internal resources to improve our existing website and web pages, and secondly the department will conduct a complete redesign of our website by bringing in outside assistance from a vendor to help our own internal staff to rebuild the site from the ground up, and believe that we can accomplish this by September of 2009.

Issue 4.2 requires the department to remove provisions and rules that require the department to advertise for its contract solicitations in local or statewide newspapers. Our legal staff is working with other department personnel to identify the laws and rules that do require this advertisement and are positioned to craft proposed changes to statute and rules for consideration by the commission and the legislature, and we anticipate that we'll be able to accomplish these activities by October of 2008 for further consideration by the legislature and the commission.

Issue 4.3 asks the department to develop a clear communication policy regarding our contract solicitation for professional services, and staff believes we can accomplish this by meeting with all of our contract offices around the state to collaboratively develop a uniform process, policy and forms for the solicitation of professional services, and we are currently working on this and believe that this can be accomplished by September of 2008.

Issue 4.4 requires the department to provide additional information on overhead rates to our districts and ensure that they use it when they're negotiating contracts for professional services with consultants and other vendors. Staff would accomplish this by defining what acceptable expenses are that companies may include in their overhead rates and then providing that information to the department personnel that are working on contract management. We also would ensure that this particular information is provided in our current training program and that that training program is updated to include this information. Staff feels that these documents can be prepared by the end of September 2008 and that our training program can be updated by October of 2008.

Issue 4.5 requires the department to set time frames for each major step in the development of our professional services contracts. Staff feels that these steps could be identified, that the time frames can be established for each of them, and that our manuals regarding this matter can be updated by October 2008, so obviously we believe we're well along the way in getting this particular issue and recommendation addressed as well.

Issue 4.6 requires the department to consider providing additional professional staff to support our Consultant Contract Office. We believe that an additional allocation of FTEs to this particular office is appropriate and we can make that change by September of 2008. We also think that by consolidating consultant management functions throughout the state, as discussed in the next issue, will help greatly improve the efficiencies that we have in this particular area of our business.

Speaking of the next issue, issue 4.7 requires the department to strengthen our oversight and accountability of professional service contract solicitations within our district offices. We believe that we can accomplish this through the restructuring of some of our operations to house our procurement processes and specialists at a regional level. These individuals would then receive specialized training and work closely with the division staff responsible for managing this program, so that the overall professional services contract program is more consistent and uniform across the state. This particular structure is being considered for implementation and we believe we can have it fully implemented and functioning by July of 2009.

Issue 4.8 recommends that the department require contract management training for all of our professional service project managers and other employees that are involved in the solicitation and selection of professional service contracts. The recommended training program has already been developed and Sunset staff had an opportunity to review it. They've highly commended it for being a very good and effective training course, and staff feels that the development of a schedule to provide this particular training to all appropriate department personnel could be established by October 2008, and are also working on software that would assist our professionals that do these particular services for us that would also be implemented by January of 2009.

Issue 4.9 would require the Contract Advisory Team to review the department's development of comprehensive development agreements and would allow the CAT to have the authority to stop solicitations at their discretion. Staff is still reviewing this recommendation and will prepare a response and strategy for your consideration by January of 2009.

The last issues are from issue 6 which deal with our outdoor advertising program. Under issue 6.1 there is a recommendation that the department centralized our outdoor advertising regulatory program to allow the program to be managed under the oversight of right-of-way professionals rather than by district engineers.

Staff has developed a plan that would transition the oversight of this program to our Right of Way Division and has crafted the required revisions to our rules to enable the centralization of this function. The commission may consider these rules as early as September of 2008 and if they are approved by the commission, then staff is confident the oversight of this program can be implemented by November 2009 as a centralized function.

Issue 6.2 would require the outdoor advertising license for companies placing signs on rural roadways equal to the license requirements that are currently required for companies placing signs on our federal aid roadway system. Staff agrees with this recommendation and we encourage that this issue be discussed with the public and the outdoor advertising industry as the proposed rules that I just mentioned are being considered for adoption by the commission. We need to note, though, that changes to existing statutes would be required to allow this recommendation to be implemented.

Issue 6.3 calls for the development of a standardized appeals process for sign permit requests that are denied by the department and for the elimination of the existence of the Board of Variance. The proposed rule revisions that I mentioned earlier would standardize our appeals process for the outdoor advertising regulatory program.

Issue 6.5 would require the department to deposit all fees collected from our outdoor advertising program into the General Revenue fund for the dedicated Texas Highway Beautification account. Staff agrees that these fees should be deposited into one account but we recommend this account be the State Highway Fund to allow the department better use of these funds for the purposes of staffing and managing the outdoor advertising regulatory program. This particular recommendation, if it was to place the deposits into Fund 6, would require change in statute, however.

Issue 6.5 requires that the department take steps to ensure that the fee revenues that are generated from the collection of license and permit fees for outdoor advertising signs be sufficient to cover the department's expenses that we incur in managing and overseeing this regulatory program. Staff has calculated the estimated annual expenses for managing this program under a centralized operation and have recommended adjustments to the fee structure for licenses and permits for outdoor advertising in the proposed rule revisions that I've spoken of previously. If adopted, these will provide sufficient revenues to cover the anticipated expenses.

Continuing on with issue 6.6, the department is recommended to be authorized to deny the renewal of licenses for outdoor advertising holders who fail to keep and maintain their license in good standing. Staff agrees that this is an important part of an effective outdoor advertising regulatory program and have included the language to provide this authority in our proposed rule revisions.

Issue 6.7 requires the department to develop a complaint process that is easier for the public to use and that allows the complaints to be tracked and monitored and reported on. Staff is developing, as I previously mentioned to you, a department-wide customer complaint process as part of issue 3.2 that would be able to be used for this particular purpose. The rule revisions that I've spoken of previously also contain language to address making this process more readily known and available to the public.

Issue 6.8 recommends that the department establish standardized penalties for outdoor advertising violations on both our rural and federal aid roads and that the fines collected from these violations be deposited, again, into the General Revenue fund dedicated Texas Highway Beautification account. Staff agrees with this recommendation, however, it would require changes to existing statute in order for us to implement these standardized penalties.

And finally -- yes, finally -- issue 6.9 suggests that the department should impose enforcement actions related to outdoor advertising rule violations commensurate with the seriousness of the offense. Staff embraces this recommendation and will propose statutory language for consideration by the legislature during the next session to provide the department with the required authority to impose and enforce many of the penalties that are suggested by this issue.

This concludes my comments on the staff's plans and efforts to implement the Sunset Advisory Commission's recommendations. It is the intention of the staff to update the commission each month on the status of our progress on these measures and to provide to you any information that you might be interested in regarding these recommendations.

I think it's important for you to know that as an agency we embrace the Sunset recommendations for improved operations and we are working diligently to implement these on your behalf. I'm hoping to provide to you a prototype website enhancement and a project scheduling management tool at the September meeting for your observation and comment.

With that, I would like to thank you for your attention and I will be happy to try to answer any questions that you may have.

MS. DELISI: John, is this information also being shared with the Sunset Commission staff and members?

MR. BARTON: Yes, ma'am.

MS. DELISI: Okay. And do you know what the intention of the Sunset Commission is in terms of the timeline for this agency going forward?

MR. BARTON: Well, the only direction that we have received, I think, was from Representative Isett at the hearing when he asked us to move forward with the implementation of all of these recommendations as soon as possible and not to wait on the legislature to take action. But other than that, I'm not sure, Mr. Saenz, if you have anything else to add.

MR. SAENZ: Checking on the website, it said that action was going to be taken at the September meeting, but later on we found that action for the department was going to be taken at the December meeting.

MS. DELISI: Okay. And just to be clear, this represents every recommendation that the agency can take at least some action on, if not complete action, without legislative authority. Right?

MR. BARTON: Under issues 2, 3, 4 and 6, not issue 1 or 5, and those obviously are issues that deal with other matters kind of beyond the control of staff.

MR. SAENZ: And even some of these recommendations, Madame Chair, will require some kind of legislation.

MS. DELISI: I saw that.

MR. HOUGHTON: There's a lot to do with billboards in here.

MS. DELISI: There is a lot.

MR. BARTON: A lot to do with billboards. But good for us, we were already in the process of trying to address that issue at the discretion and direction of the commission, so we were, I think, well along the way of making the steps to implement the recommendations from Sunset.

MR. HOUGHTON: One of the issues in 2.1 describes -- and I'm paraphrasing -- planning describing total system needs, establishing overarching statewide transportation goals, and measuring the progress, and then 2.2 understanding system project programming, well defined, understandable, on and on and on, and 2.3. My question is Monday we approved an LAR to go across the street or to input the information, and in that LAR we have various levels of funding, and we get to the exceptional items and we say we can do all of these if we have the money. Does this meet, what we're looking at here, what we're going to send over across the street as a request under exceptional items, are these the most profound programs or -- what's the road I'm looking for -- assets to be built under a total needs, under prioritizing by the districts, by the MPOs? Are we flagging those as to these are high upon the Richter Scale because it meets congestion issues, safety issues, air quality issues, et cetera, et cetera?

MR. BARTON: The answer to that question is yes. We're taking the goals that have been established for the department which is to reduce our congestion, enhance our safety, improve the value of our assets, to provide for economic opportunities, and to improve our air quality. And we have been and continue to measure our projects that are prioritized by our districts, our MPOs and our other partners against those measures. So to answer the question, the LAR and the information contained in it brings forward an opportunity to address the projects that most effectively do that. And these particular recommendations I think call for us to continue to build upon and improve our process of identifying those projects that meet those goals.

MR. HOUGHTON: So when we send that LAR across the street and we have the backup information and an astute legislature decides to call the Houston-Galveston MPO and says is this project your top priority project, and they'll say yes, that's our top priority project.

MR. BARTON: That's our belief.

MR. HOUGHTON: In that list.

MR. BARTON: Yes, sir. And we did ask and gave the opportunity to the Houston-Galveston MPO and all others the opportunity to prioritize their projects so we would move forward with those that are the highest priorities for those regions as the first top projects.

MR. HOUGHTON: So it becomes a needs-based document. Correct?

MR. BARTON: It's a document that certainly identifies our greatest needs first. I would step back a little bit from saying it identifies all of our needs because we certainly have more needs.

MR. HOUGHTON: Not all, partial.

MR. BARTON: But it is based on our highest and greatest needs, yes, sir.

MR. HOUGHTON: I wanted to make sure because the 2.1, 2.2, 2.3 point out that we have that kind of coordination and ranking and goals and objectives, et cetera.

MR. HOLMES: John, the list is also not just needs-based but developed by the local entities but it's also the ones that actually could be delivered within that time frame. Isn't that one of the conditions on including them?

MR. BARTON: That's correct. The list specifically is what we feel like we can deliver through a checks and balance system over the next three years, not only will the right of way be available, will the utilities be adjusted, will the plans be developed, will the environmental documentation be approved, but can the industry, our contracting partners and our consulting partners do the work necessary to be able to deliver those projects, will NTTA and HCTRA and others be able to help us get that done, and we measured all those projects against that standard and those are the ones we can move forward with.

Now, having said that, there obviously may be projects out there that are crucially important to our state but just wouldn't be ready to implement within the next three years, and by no means are we saying that those projects are less valuable than ones in the list.

MR. HOUGHTON: But we do have the backup and the support to justify that.

MR. BARTON: Yes, sir.

MS. DELISI: Thanks, John.

MR. BARTON: Thank you.

MR. SAENZ: Thank you, John.

And as John said, what we want to do, we're moving forward with the action plans, we've developed a timeline for each of the action items in the plan, and we'll be presenting to the commission on a monthly basis the status of where we are on the implementation of some of these recommendations.

Moving on to agenda item number 4 is another discussion item that will be presented by Mark Tomlinson dealing with recent developments with the Trans-Texas Corridor.

MR. TOMLINSON: Thank you, Mr. Saenz. My name is Mark Tomlinson, director of the Texas Turnpike Authority Division.

I believe it's true that any great vision evolves over time as it's put into practical application. The Trans-Texas Corridor has been shaped by five years of rigorous planning, legislative development and extensive public involvement. The program has changed significantly since its original vision which was outlined in the 2002 Crossroads of Americas document. TxDOT wants to develop and share an updated, more focused look at the corridor vision with the public. A broad theme I hope you'll see as we talk about this is that we continue to listen to the public and respond to their comments.

The updated vision will convey the following key messages:

The TTC program decisions will be based on regional needs, not a one-size-fits-all approach;

TxDOT will work cooperatively with corridor and segment advisory committees and local committees to identify needs and potential solutions;

The TTC guiding principles you previously passed reflect the spirit of respect and collaboration in which TxDOT intends to develop any TTC project;

TTC projects will be considerably narrower than the original 1,200-foot wide corridor -- as you know, that has been an item of intense consternation throughout the state. While we intend for the program to be flexible enough to try to address those regional needs, we anticipate that the footprint of the corridor can be reduced possibly as much as by half;

TTC projects will likely accommodate only one of the transportation modes individually but might be able to host a combination of modes, depending on needs and the wishes of the public in those regions;

When and where possible, TxDOT will consider improving existing routes, roadways, rail lines, and already acquired right of way before breaking new ground, thereby minimizing the need to acquire additional right of way;

And a bit of a tie-in to the Sunset recommendations, this division is continuing to look for innovative ways to increase the quality of our public involvement.

The intent of the updated vision is to convey the evolution of the TTC, how it's envisioned today by highlighting significant changes and provide the current program details based on the work efforts to date. In addition, it addresses the public's common questions and concerns voiced at the town hall public meetings and as expressed by our corridor advisory committees as well as feedback on the original Crossroads document which we continue to receive even today.

Laying that foundation, the vision update describes the growing needs of Texas and presents the traditional funding mechanisms inability to keep up with growing demands. The document emphasizes alternative funding mechanisms that regions may choose to take advantage of to meet their needs and clarifies that those mechanisms enable them to partner with the public and private sectors in order to meet specific needs.

Equally important to conveying the need for TTC planning alternatives and funding mechanisms to deliver them is an explanation of public involvement processes that the program will advance through. The updated document presents the development of increased public involvement in the TTC process, from open houses to town hall meetings to the formation and active participation of TTC corridor advisory committees, the corridor segment committees that we're forming, and we will constantly strive in particular to look at more technology-based public involvement, hopefully interactive, and increasingly meaningful to the public.

The plan update document reaffirms TxDOT's commitment to partnering with regions, local communities and other stakeholders in the continued development of TTC in a manner that best meets their needs. Toward that end, the document concludes that the TTC guiding principles which embody TxDOT's promise of commitment to and collaboration with the public in the TTC process.

The document is intended to stand alone, however, it's also designed so that it can be linked in a web-based context to supportive documentation including data and sources on topics such as population, congestion, legislation, funding mechanisms, planning processes, tolling, freight demand and various different issues of the like. The updated document presents the now more focused vision of the corridor plan, highlights the program benefits to Texas, and conveys TxDOT's desire to continue working collaboratively with all stakeholders to proactively prepare for Texas's future needs.

I'd be happy to try to answer any questions you might have, but I would, in particular, invite you and ask you to share any thoughts or guidance you would like to with us as we continue the development of this document and really the focusing of the TTC vision for the future.

MS. DELISI: Any questions or comments?

MR. HOUGHTON: Just a question regarding where are we on the segment committees.

MR. TOMLINSON: On both of the corridors have been invited the nomination of individuals from various entities throughout those segments and we've actually gone through a couple of iterations now in prompting even more -- where we didn't hear the first round, prompting those folks to get an individual to us. We have been assisted by our corridor advisory committees, they've gone back home and helped to move that process along. I think at this point we are very close -- in fact, I believe September -- to coming to you to have your selection of additional entities to be named so that those entities can name further committee members. I believe that is planned for September.


MS. DELISI: Thank you, Mark.

MR. TOMLINSON: Thank you.

MR. SAENZ: Thank you, Mark.

Agenda item number 5 deals with aviation, and Dave Fulton, our division director for the Aviation Division, will present two minute orders dealing with our Airport Maintenance Program, number one, and the second one is the Airport Improvement Program.

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

Item 5(a) is a minute order for the purpose of continuation of the Routine Airport Maintenance Program for Fiscal Year 2009. The program allows the department to match local funds for airport maintenance and small capital improvement work items on a 50-50 basis, up to an approved amount in state funds. No change in the program is recommended for the coming year. We would recommend approval of this minute order.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. FULTON: Item 5(b) is a minute order containing a request for grant funding approval for 27 airport improvement projects. The total estimated cost of all requests, as shown in Exhibit A, is approximately $9.4 million: approximately $6.3 million federal, $1.7 million state, and $1.3 million in local funding. A public hearing was held on July 24 of this year; no comments were received. We would recommend also approval of this minute order.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. FULTON: Thank you.

MR. SAENZ: Thank you, Dave.

Agenda item number 6, commissioners, deals with Public Transportation, the appointment of members to the Public Transportation Advisory Committee. Eric Gleason will present the minute order.

Good morning, Eric.

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

Agenda item 6 appoints three members to the Public Transportation Advisory Committee. The Public Transportation Advisory Committee is an eleven-member committee formed to advise the commission on the needs and problems of the state's public transportation providers, including the methods for allocating state public transportation money, commenting on rules or rule changes involving public transportation matters, and advising the commission on public transportation policy matters. Members of the committee represent the general public, public transportation users, public transportation providers, and specifically, health and human service programs. Members serve staggered three-year terms; three members have terms expiring on September 30 of 2008.

The three appointments are:

Janet Everhart, representing public transportation providers; this is a new appointment to the committee. Ms. Everhart is from Lamesa, Texas, and is currently the executive director of West Texas Opportunities, one of our 39 rural transit districts. Ms. Everhart was also the recipient of the department's 2007 Friend of Texas Transit Award.

Claudia Langguth, representing health and human service programs; this is a reappointment to the committee. Ms. Langguth is from Austin, Texas, and is currently president of Reagan North America, a software development company, and has over 25 years of experience in state and local government services with an emphasis on health and human service programs.

Our final appointment, Alan Abeson, representing public transportation users; this is a new appointment. Dr. Abeson is from Fort Worth, Texas, and is currently an independent contractor for the Small Urban and Rural Transit Center at the Great Plains Institute, North Dakota State University, and for Easter Seals Project Action, a leading agency in the national effort to improve coordination between public transportation and human service programs. He's on the faculty at the National Transit Institute and is the former director of Easter Seals Project Action.

The terms for these three appointments will expire on September 30, 2011. We recommend your approval of this minute order.

MS. DELISI: Is there a motion?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thank you, Eric.

MR. GLEASON: Thank you.

MR. SAENZ: Agenda item number 8 deals with our promulgation of administration rules. Agenda item 8(a) deals with final adoption, we have two rules for final adoption today. The first one deals with Chapter 15 dealing with Transportation Planning and Programming and new product evaluation. Rick Collins, office director for the Research and Technology Office will present.

MR. COLLINS: Good morning. For the record, my name is Rick Collins, director of the Research and Technology Implementation Office.

This minute order before you adopts amendments to the rules in the Texas Administrative Code concerning new product evaluation. Some of the provisions of the rules are unnecessarily specific and in need of revision. These revisions will provide the department with the flexibility needed to more efficiently evaluate products that are beneficial to department needs. The commission, by minute order 111366, dated May 29, 2008, proposed the amendments. No comments were received and staff recommends your approval.

MS. DELISI: Is there a motion?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thank you, Rick.

Agenda item 8(a)(2) deals with Transportation Planning and Programming also, and James Bass will present the final adoption of some CDA Projects Corporation rules.

MR. BASS: Thanks, Amadeo. Good morning again. I'm James Bass, chief financial officer at TxDOT.

This minute order would adopt rules to establish a limited purpose transportation corporation for the issuance of private activity bonds. At the federal level there is $15 billion of PAB allocations available for surface transportation projects that are awarded by the U.S. Secretary of Transportation. Even though the proceeds of PABs would be utilized by the private sector to finance the projects, the PABs must be issued by a tax exempt issuer. The rules would establish such an entity for the limited purpose of issuing PABs for TxDOT CDA projects, subject to commission approval. In order to avoid possible confusion in the market with other bond programs of the commission, the rules establish the separate entity for the purpose of issuing those PABs.

The proposed amendments were published in the Texas Register and no public comments were received. However, the department became aware of the potential need to issue private activity for the financing or refinancing of a transportation project that may have already been developed; therefore, the final proposed language you see before you differs from what was posted in that one section where it had read: "transportation projects to be developed under a CDA" was changed to read "transportation projects developed or to be developed under a CDA" to allow for these refinancing opportunities.

Staff would recommend your approval, and I'd be happy to answer any questions.

MS. DELISI: Is there a motion?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. BASS: Thank you.

MR. SAENZ: Thank you, James.

Agenda item 8(b) deals with proposed adoption of rules and our first rule deals with Chapter 1, Management, dealing with digital certificates. Ed Serna will present.

MR. SERNA: I looked at my watch to make sure I could still say good morning, Madame Chair, commissioners -- and it is still morning.

The first minute order that I'm presenting proposes adoption of a new subchapter and section in the Texas Administrative Code concerning digital certificates. Currently when transacting business with the department, signatures must be hand signed and paper copies delivered to the department. With your approval, as we proceed once we implement digital signatures, then documents can be submitted electronically and they can be electronically signed with the same force of law as a paper signature.

It's pretty simple. We intend to use it in all of our divisions as much as possible, both with external documents as well as internal communications and communications in intra-government communications as well. Staff recommends approval of this minute order.

MS. DELISI: Is there a motion?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thank you. Ed will present the next item also dealing with our Employment Practices, some proposed rules dealing with Chapter 4.

MR. SERNA: Again for the record, my name is Ed Serna, assistant executive director of Support Operations at the department.

This minute order proposes the adoption of amendments to Chapter 4 of the Texas Administrative Code to update the department's Substance Abuse Program. The revisions are necessary to align the text with recent changes made to the U.S. Coast Guard's regulations and the U.S. Department of Transportation's regulations and to improve the department's administration of its Substance Abuse Program by making it more equitable and by taking steps to prevent possible manipulation of the standards by employees to defeat the intent of the program.

Basically, what we're trying to do is align the rule and then our internal policies concerning substance abuse, along with the U.S. Coast Guard changes and the U.S. Department of Transportation changes. We'll post both sets of rules but we'll post these for comment by both the public and our employees as well before we bring them back for final adoption. Staff recommends approval of this minute order.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thank you, Ed.

Agenda item 8(b)(3) deals with some proposed rules concerning Chapter 9, Contract Management, that Thomas Bohuslav will present.

MR. BOHUSLAV: Good morning, commissioners. My name is Thomas Bohuslav, I'm the director of the Construction Division.

Item 8(b)(3) are proposed rules to accommodate electronic submission of bids and to address changes needed for bidding by affiliated businesses. You have had some discussion about this already today. Regarding the bidding by affiliated businesses, by rule currently the department does not accept bids for the same project by affiliated businesses. The proposed rules provide for an appeal to the rule if contractors are affiliated based solely on family relationships. If an appeal is received from a contract for bidding due to family affiliates, the department will evaluate the business ties to determine whether an exception can be granted.

These rules also provide procedures for submission of electronic bids from contractors. This is the procedure part of it. We are currently receiving bids, of course, by mail and by hand delivery. These rules will allow for a secure process for contractor electronic bid submission. We expect to have the system available for trial this coming winter and full implementation sometime in Fiscal Year 2009. Staff recommends approval to publish for the comment period. Any questions?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thomas will present the next item 8(b)(4) dealing with Chapter 9 also, dealing with contractor sanctions.

MR. BOHUSLAV: Item 8(b)(4) propose amendments to Chapter 9 relating to sanctions for affiliates and consideration of a contractor's internal compliance program for determining the level of sanction, and you've had some discussion on that already today, again. Sanction rules are used to address contractors when integrity of the highway improvement program is in jeopardy. These rules were entirely rewritten to bring better organization, and I'm going to talk to you about the primary changes to the rules now.

These rules do provide for consideration of a lesser sanction if a contractor has an internal compliance program. It is an option to the contractor, and if they do, we would consider that when we go through the sanction process and what level of sanction they would receive.

These rules also provide for an opportunity for a contractor affiliated by family relationship only to appeal the application of the sanction to that affiliated business. In our rules currently, the sanctions that apply to one contractor apply to all the affiliates of that contractor. When the department determines there is no business ties, an exception may be made to the application of the sanction to the affiliate if it is based solely on a family relationship.

These rules also remove the sanction level of indefinite debarment and replaces it with a maximum five-year debarment.

Staff recommends approval to post the rules for a comment period. Any questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thank you, Thomas.

Agenda item 8(b)(5) deals with proposed for Right of Way dealing with utility accommodations, and John Campbell, director of the Right of Way Division, will make this presentation.

MR. CAMPBELL: Good morning. My name is John Campbell, I'm the director of the Right of Way Division.

I'd like to present for your consideration this minute order item 8(b)(5) which provides for the proposed adoption of amendments to several sections of Title 43 of the Texas Administrative Code with regard to utility accommodations, both on highway rights of way and on railroad rights of way.

The purpose of the rules revisions are to: one, clarify existing language such that intent that's implied is more specifically described; enhance consistency between federal and state regulatory requirements; and more accurately reflect our current actual practices.

We will have a public comment period that will go through October 13 of 2008, and staff recommends your approval of the rules as proposed.

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thank you.

Agenda item 8(c) deals with a minute order dealing with Rule Review. Bob Jackson, general counsel, will present.

MR. JACKSON: The Government Code requires agencies to review their rules every four years to consider whether rules need to be readopted. Notice was posted in the Register for 30-day public comment period; no comments were received. Staff recommends adopting the minute order that will continue rules concerning Right of Way for another four years.

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thank you, Bob.

Agenda item number 9 deals with Transportation Planning. Agenda item 9(a), Jim Randall will present a minute order that will authorize us to enter into an agreement to fund part of the Heartland Flyer passenger rail service.

MR. RANDALL: Still good morning, commissioners. I'm Jim Randall, director of Transportation Planning and Programming Division.

Item 9(a), this minute order authorizes the department to provide $2,035,000 to Amtrak to fund the Heartland Flyer passenger rail service for the Federal Fiscal Year 2009. The Heartland Flyer is a state-supported Amtrak route which provides daily passenger service between Fort Worth and Oklahoma City, with an additional Texas stop in Gainesville. The Heartland Flyer travels over the BNSF rail line.

Since the Heartland Flyer route was not a part of the Amtrak system originally designated in 1971, state support is required to cover Amtrak's operating losses. The State of Oklahoma funded these operating losses from Federal Fiscal Year 1999 to 2006. In FY 2007, Oklahoma provided $2,138,000 and Texas provided $1,838,000 of Amtrak's projected loss of $3,976,000. In FY 2008, Texas and Oklahoma each provided $1,998,500. For FY 2009, Oklahoma plans to provide $2,035,000 for continuance of the service and Texas is being asked to provide the same. Staff recommends your approval of this minute order.

MR. MEADOWS: This is in the LAR. Isn't this an exceptional item?

MR. SAENZ: Yes, in the LAR we have it as an exceptional item.

MR. MEADOWS: That's what I thought. I move approval.


MR. HOLMES: I have a question. What is the frequency of this service?

MR. RANDALL: It's daily.

MR. HOLMES: How long does it take to get to Fort Worth from Oklahoma City?

MR. RANDALL: Four hours; three hours by car, we figure.

Some statistics. In 2006, 64,000 rode the train; in 2007, 68,246 rode. As of July of this year, it was at 67,141. If they continue on that pace, we're looking at maybe 79,000 riding the train.

MS. DELISI: Can you break that up by Texans versus Oklahomans?

MR. RANDALL: I don't have that with me now but we could try.

MS. DELISI: Just curious.

MR. RANDALL: On the schedule, the train departs Oklahoma City at 8:25 in the morning, it arrives at Fort Worth at 12:39; it leaves Fort Worth that day at 5:25 p.m. and gets back to Oklahoma City at 9:39 that night. So a lot of it is people coming from Oklahoma City to spend their dollars in the Metroplex. Any other things you need?

MS. DELISI: Questions? We had a motion. Was there a second?


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Moving on, commissioners, agenda item 9(d), Jim Randall will also present some appointments to the Border Trade Advisory Committee.

MR. RANDALL: Thank you, sir. This minute order reappoints seven members to the Border Trade Advisory Committee. The purpose of the committee, created in 2001 by the 77th Legislature, is to define and develop a strategy and make recommendations to the commission and the governor in order to address the highest priority border trade transportation challenges. The committee must include the presiding officers of the MPO policy boards from the Pharr, Laredo, Odessa and El Paso transportation districts, the person serving in the capacity of executive director for each port of entry in the state, and a representative each from at least two institutes or centers operated by a university in the state that conduct continuing research on transportation and trade issues.

The commission appointed 29 members on June 29, 2006. Ten committee members' terms expire on August 31, 2008. Of these ten, two have requested not to be reappointed and one no longer is working at the institution of higher learning which he represented. Upon your approval, the seven individuals named in the minute order will be appointed as members of the Border Trade Advisory Committee, with terms expiring August 31, 2011. Staff recommends approval of this minute order.

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thank you, Jim. Jim has another couple of minute orders. The next minute order deals with authorizing the use of transportation development credits to handle the non-federal match for our metropolitan planning funds and the statewide planning and research funds.

MR. RANDALL: Okay, sir. This minute order authorizes use of $17.3 million in transportation development credits, or TDCs, to provide for the non-federal match of federal metropolitan funds and statewide planning and research funds. Title 23, USC, Section 134 establishes a metropolitan planning program for each state. The 25 MPOs in Texas receive federal metropolitan planning funds to carry out the provisions of the program. These federal funds must be matched by non-federal funds. Non-federal funds can either be local or state.

Title 23, USC, Section 505 reserves a portion of federal apportionments for activities related to statewide planning and research activities. These federal funds must also be matched by non-federal funds.

SAFETEA-LU permits a state to use certain toll revenue expenditures, known as transportation development credits, as a credit toward the 20 percent match. In the past, the department has provided the match for both of these programs, however, due to current fiscal constraints, the department wishes to substitute the match with transportation development credits. Approximately $5.6 million in TDCs is required to provide for the match of the Fiscal Year 2009 metropolitan planning program and $11.7 million is required for the SPR work program.

Staff recommends approval to utilize the transportation development credits in support of both programs for FY 2009 in an amount not to exceed $17.3 million.

MS. DELISI: Motion?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thank you, Jim. Moving on, agenda item 9(f) deals with certification of the counties that fall under the 2009 Economically Disadvantaged Counties Program.

MR. RANDALL: This minute order certifies the counties eligible to participate in the Economically Disadvantaged Counties Program for Fiscal Year 2009, as shown in Exhibit A of your minute order. Transportation Code Section 222.053 directs the commission, when evaluating a proposal for a highway improvement project in a political subdivision that consists of all or a portion of an economically disadvantaged county, to adjust the minimum local matching funds requirement after evaluating the political subdivision's effort and ability to meet the requirement.

In addition, the commission is also required to annually certify a county as economically disadvantaged as soon as possible after the comptroller reports on the economic indicators specified by law. The comptroller has provided the necessary data to determine the eligible counties for the 2009 program. The counties' efforts and their ability to provide a local match have been considered in determining the adjustment for each county using criteria contained in 43 TAC 15.55.

Staff recommends the list of counties shown in Exhibit A for certification under the Fiscal Year 2009 Economically Disadvantaged Counties Program and establishment of the local match adjustments.

MS. DELISI: Is there a motion?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thank you, Jim. Nice tie there.

Moving on, agenda item number 11 deals with Toll Projects, and deals with the removal from the state highway system of State Highway 121 in Denton and Collin Counties, and Mark Tomlinson will present the minute order.

MR. TOMLINSON: Thank you. Again, my name is Mark Tomlinson, director of the Turnpike Authority Division.

This minute order provides for the removal from the state highway system and transfer to the North Texas Tollway Authority of a portion of State Highway 121 comprising mainlanes and associated right of way from FM 2281 to Hillcrest Road. On July 16, 2008, NTTA submitted a request for this removal and transfer of the portion of Segment 2 of State Highway 121 to be used by the authority for design, financing, construction and operation and maintenance of a turnpike project.

As part of the request, NTTA has complied with the requirements of 43 TAC 27.13. Under the request, the removal and transfer would be effective upon the service commencement date for Segment 2, estimated to be on or about September 1, 2008.

The department conducted public hearings on August 18, 2008 in Plano, Texas, and on August 19 in The Colony, Texas, on this issue. No written or oral comments were received. Staff recommends approval of this minute order.

MS. DELISI: Any questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Motion passes.

MR. SAENZ: Thank you, Mark.

Agenda item number 12 deals with Finance, and James Bass, chief financial officer, will present the minute orders.

MR. BASS: Yes, six. Item 12(a) seeks the adoption of the department's Fiscal Year 2009 Operating Budget in the amount of $8.3 billion. This operating budget is in accordance with the appropriations bill passed by the legislature back in 2007. Staff recommends your approval.

MR. HOUGHTON: I have a question, Mr. Bass. I have a new one, an insert?

MR. BASS: No. That is for item 12(d).

MR. HOUGHTON: As in dog. The levity up here is just breathtaking.

MR. BASS: That is to come later.

MR. HOUGHTON: I see. Let me ask you a question, Mr. Bass.

MR. BASS: Yes.

MR. HOUGHTON: Now that we're all honed in on finance and LARs and because of past experiences, I see your name at the bottom as chief financial officer, submitted and reviewed, and then I see it recommended by our executive director. Who has authority over the operating budget?

MR. BASS: Through this action and the last paragraph of the minute order, the commission is delegating and designating the executive director to carry out the day-to-day operations of that operating budget in accordance with the provisions of the General Appropriations Act.

MR. HOUGHTON: My question would be do you not believe -- and others on this board have a lot more experience than I do in the private sector as a result of corporations around this country and its reporting, or lack thereof, that there be a minimum of a dual responsibility by our chief financial officer? I shouldn't ask you the question; this is my opinion. Well, I didn't ask; I caught myself.

Responsibility, a minimum dual responsibility, I would recommend dual responsibility of the operating budget of both the chief financial officer and the executive director. That is in the form of an amendment is the last paragraph: And further ordered that the CFO and executive director. I would say take two signatures under the operating budget.

MR. HOLMES: In both of those paragraphs?

MR. HOUGHTON: Yes, sir.

MS. DELISI: I want to be clear what you're saying. So to require both signatures of both positions for changes to the operating budget.

MR. HOUGHTON: I think we've seen it in the private sector.

MR. HOLMES: I don't have a problem with that. To just amplify it a bit, this is the budget on the expenditure side. Right?

MR. BASS: Yes, sir.

MR. HOLMES: One of the areas of difficulty was that we didn't conform the expenditure side to the funds available side of the equation, and so I think part of your goal -- and I don't want to speak for you -- would be to ensure that there were actually funds available to meet the budget requirements.

MR. HOUGHTON: Correct.

MR. BASS: And I would say that particular concern has previously been addressed by Mr. Saenz's organizational changes within the department that before reported letting, either annual or monthly, goes out that the chief financial officer sign off on those, certify those amounts before they're issued publicly.

MR. HOLMES: So the expenditure side under this proposal would require, before a change of budget, both signatures.

MR. HOUGHTON: Correct.

MR. HOLMES: Currently we already have established that the CFO signs off that the funds are available.

MR. BASS: Right, on the obligation side, the initial obligation side.

MR. HOLMES: On the obligation side. And what would happen there, there are times in the operating budget, as allowed by the General Appropriations Act, for certain transfer of funds from one of these line items into another one. If I understand the amendment, before the department could move money from line 5 to line 7, assuming it was allowed by the General Appropriations Act, your amendment would require dual signatures on such a transfer.

MR. HOUGHTON: Correct. And let me amplify a little bit more. Mr. Jackson, we talked yesterday about certifying -- and I think it will come up later in 12(d), I think, or (b) or whatever it is -- I'll look at it in a minute -- the certification of that revenue by the CFO and we were going to put that in the form of a minute order I think next month or when we can do that, in a rule, or I don't know how you interpreted that on Monday.

MR. JACKSON: Yes. We can do it by rule or we can do it by minute order -- I would suggest by minute order and we would bring that back to you at a later time. On this particular minute order, keep in mind that it's implied by statute and explicit in commission rule, Amadeo is the CEO. The CFO at this point reports to the deputy who reports to the CEO. To require dual signatures would be structurally somewhat awkward. We can certainly bring back other ways to do this to resolve your concerns in a way that it's more structurally sound, such as a certification by the CFO that money is available.

MR. HOUGHTON: I'm all ears as far as those protections and checks and balances.

MR. BASS: Just for your information, right now whenever we have requests such as that dealing with the operating budget, districts, divisions, offices submit in a request, Finance Division reviews it to see if there's money available to move from one line item to another. If there are funds available, we provide a recommendation and it does go to Mr. Simmons, who I believe then coordinates with Mr. Saenz before any such movement is made.

So we're deeply involved in that process right now. I would say the signature authority on those right now is at the deputy executive director and executive director currently. I'm not aware of any issues with that.

MR. HOUGHTON: That's fine, but I think the CFO, at a minimum, should be signatory to that document, along with the CEO. That's my opinion.

MS. DELISI: Bob, can you come back up? You had talked about some structural issues. Can you talk about that a little bit more, please?

MR. JACKSON: Amadeo is the chief executive officer of the agency and that's explicit in commission rule.

MS. DELISI: Right.

MR. JACKSON: Under our organization as set up by the CEO, he is over Steve Simmons, the deputy executive director, who employs and supervises James, the CFO. So I am concerned that in such a critical document by which Amadeo runs the agency, that to make important changes he would require a co-signature of James, that may be awkward and there may be other ways to do this. If your concern is we want to make sure the money is available, requiring a certification of the CFO would be perfectly valid.

MR. HOLMES: Would you draw that distinction for me? It seems like a distinction without a difference, and I'm kind of trying to understand. I'm happy for it to be a certification.

MR. JACKSON: I think it would be more appropriate to be more specific in what you want to do here. What do you want James to approve and why?

MR. HOUGHTON: The movement of monies between these disciplines.

MR. JACKSON: To a degree, that's a policy decision, to a degree, that's a legal-financial call that we're authorized to do that and we have the funds to do that. The second is CFO, the first is CEO, and you can have a situation where the CFO is preventing the CEO from doing what he needs to do, and when he's preventing him from doing that for financial reasons, that's appropriate.

MR. HOLMES: I think the goal really goes back to address the problem that occurred several months ago, and whether that's accomplished through a certification or dual signature is not -- I don't have a strong feeling about that, but it seems to me that from my perspective, I'd like to see more eyes on it and make sure that the CFO is involved in that process, not necessarily where it's spent but that it is available for expenditure.

MR. JACKSON: Absolutely, and one recommendation would be to adopt this minute order, since we're at the end of the fiscal year heading into a new one next week, to come back next month with an amendment to this minute order that more precisely accomplishes that goal.

MS. DELISI: I'm hearing two separate things. I'm hearing you want certification before there can be transfers between line items. Correct? Is that what you're saying, Ted?


MS. DELISI: And Ned, you were saying that as long as the money is there, not necessarily from one line item to the next?

MR. HOUGHTON: Then there's two issues.

MS. DELISI: Those are two very different issues.

MR. HOLMES: That's right.

MS. DELISI: Okay. I just wanted to make sure that was clear.

MR. HOUGHTON: And I'm willing to hold off until next month if you can come back and give us that degree of, as Ned has talked about.

MR. JACKSON: If staff can work with the two commissioners, and if other commissioners have concerns along this line, to make sure we completely understand the concerns and address it in an amendment to this minute order.

MS. DELISI: Fundamentally, the concern is that there is certification by the chief financial officer that funds exist for whatever purpose.

MR. HOUGHTON: That's one.

MR. HOLMES: That's very critical, from my perspective.

MS. DELISI: Right.

MR. HOUGHTON: Right, that is critical.

MS. DELISI: Is there something else there?

MR. HOUGHTON: The second is this as to movement of funds as to sign-off, Ned. This is the expenditure side.

MR. HOLMES: Right.

MR. HOUGHTON: We have the revenue side, and the expenditure side is that we have that same set of eyes and certification that those funds have been moved.

MR. HOLMES: To what extent is the commission involved in moving funds between categories?

MR. BASS: Historically they have not been.

MR. HOUGHTON: The commission?

MR. BASS: The commission has not been; historically it's on a small scale. Some of the strategies, when you look at them in scope, are relatively small to others, and so when an unforeseen event transpires in the biennium, if the administration agrees that yes, this is unforeseen, it's something we need to do, we need to find funding, we would have transferred it from one line item into that one. Again, I believe your initial concern on the obligation standpoint and the issue from several months ago has already been addressed by the reorganization that Mr. Saenz implemented. This operating budget I see as a different issue, potentially a different concern.

MR. HOLMES: James, aren't there relatively tight restrictions imposed by the legislature for moving funds?

MR. BASS: Right, there are certain strategies the way we refer to it, because there is a rider that goes into the detail, there are certain strategies that we refer to being inside the box, and those strategies are contracted engineering, contracted maintenance, right-of-way acquisition, and transportation constructions. Those four strategies have a couple of things in common: number one, they're very large, and number two, they are all payments to external parties, to people outside the department. There's no salary, there's no travel, there's no anything. Those four can transfer money amongst themselves.

MS. DELISI: With no limitations.

MR. BASS: With no limitations.


MR. BASS: The other 19 strategies that are outside the box, they can transfer amongst themselves as well. The 19 outside the box can move money in if we need it, but the four cannot move money outside the box. So the key, the provision is, in my opinion, driven towards those four key core functions of the department: contracted maintenance, right-of-way acquisition, contracted engineering, and construction and you can add to those, and we have the most flexibility in those. The other 19, we have more constraint on where we can get funding to transfer.

MR. HOLMES: I think there is a certain flexibility that the executive director needs in order to accomplish the goals of the department, and moving in some fashion, I think, helps facilitate that. When you say that there is an unlimited ability to move --

MR. BASS: Right, within those four areas, and primarily the reason that is, highway construction -- and I realize this is an unpopular answer because I've given it many times over the years -- even when we award projects and we award them on schedule, we literally have little to no control as to how they pay out. If it rains and rains and rains, the contractor is not able to perform work and we don't pay as fast; if it's much drier than historic averages would tell us, the contractor can do more work.

What it also seems like we've found is if the rest of the economy slows, oftentimes what contractors do is move more of their crews on to our projects, the flight safety, everybody puts them on their state projects. More ants on the anthill, more work is done in a month, our pay-outs go up faster, at the same time our revenues are stagnant or going down, and in those cases it provides the flexibility to move right-of-way dollars to construction to continue to fund those payments so we don't have to suspend projects and leave barricades up. So again, that flexibility is provided for those four core functions of the department.

MR. HOUGHTON: And I think with that is why I would say you would want that kind of check and balance as of the description that James just went through.

MS. DELISI: All right. So we're going to work with staff to come up with a minute order to amend this and bring it back to us next month. Correct?

MR. HOLMES: We need to approve this one.

MS. DELISI: Yes, sir, we still do. So can I get a motion on this minute order then?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes

MR. SAENZ: Agenda item 12(b), James will present the annual review of investment policy.

MR. BASS: The commission is required by the Public Funds Investment Act to review and readopt the investment policy and strategy at least annually. Staff has reviewed both and I would highlight the recommended changes.

One is to add the Finance Division director position as an authorized investment officer. Because of the recent reorganization, the CFO used to be the Finance Division director, now it's two separate positions. We want to add the finance director as a position. We would also recommend a change in the rating threshold for the commission to enter into investments with financial institutions for longer than six months from simply a AA rating or higher to the AA category or higher rating.

We've updated the qualified financial institution list based upon credit quality and business status, and we've also eliminated the Houston Headquarters certificates of participation investment strategy as that debt is no longer outstanding.

Staff would recommend your approval.

MS. DELISI: Any questions?

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Agenda item 12(c), James will present the minute order dealing with the debt and derivative management policies.

MR. BASS: Item 12(c) is the annual review of the debt and derivative management policies for the commission. The debt management is an umbrella policy that contains guidelines to manage the various debt programs of the commission. Part of this management may involve the use of derivative products and guidelines for the prudent use of those products are covered in the derivative management policy. Again, staff has reviewed and I would highlight the following recommended changes.

In the debt management policy, we would recommend that we eliminate the private activity bonds as a commission financing program to preclude any potential confusion with the new conduit transportation finance corporation that was approved earlier in this meeting. We have added a section on Proposition 12, general obligation transportation bonds, as a future program, highlighting that it's contingent upon enabling legislation and an appropriation for debt service, but we went ahead and incorporated that into the debt management plan.

Moving on to the derivative management, it again specifies that these policies do not apply to any conduit issuer for private activity bonds of the commission. That would be a separate entity, and the structure and financing of any private activity bonds would be more so directed by the private entity rather than the policies of the commission. In addition, there's some added language to further delineate and clarify the roles and responsibilities of the CFO position and the Derivative Committee. And lastly, it further stipulates that a qualified counter party must not be on rating or credit watch in order to enter into a transaction with the commission. They always say write a policy for your successor, not yourself, so we want to be sure and cover that.

Staff recommends your approval.

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Agenda item 12(d) deals with the adoption of our Legislative Appropriations Request for FY 2010 and FY 2011. James.

MR. BASS: Item 12(d) proposes adoption of the department's Legislative Appropriations Request, or LAR, for Fiscal Years 2010 and 2011. The minute order has been prepared in accordance with our discussions from Monday. I would like to highlight a couple of updates from that briefing book.

If you'll recall from our conversations, we had some discussion on a series of exceptional items for rail. What had happened, in the briefing book on Monday, the numbers had been changing as we got more information. The exceptional items, the detail on that was correct, it had not been fully reconciled with the strategy summary pages in that briefing book. So what is different from the briefing book, strategy A.1.2, Contracted Design, is $3 million lower in 2010 and $750,000 lower in 2011 from the figures we discussed on Monday because of reconciling it to that exceptional rail item, so they match up.

In addition, for that same reason, strategy B.1.1, Construction in 2010 is lower by $1.37 million and in 2011 it's $26.5 million lower, again to get it fully reconciled.

There is another one in strategy C.1.2, Routine Maintenance dealing with our Highway Beautification Program. We learned that some of the estimates that were in the document were based upon increased fees for that program that the commission has not yet considered, and so we moved it back, dialed it back down to current fees. If the commission in future months decides to amend those fees, we'll come back and update and revise it. What happened on that one, again strategy C.1.2, it lowers the dollar amount from Monday's document in 2010 by just under $2.3 million and in 2011 about $2.45 million.

MR. HOLMES: I'm sorry to do this, but it looked like it was more like $300 million.

MR. BASS: Right. The differences I spoke of -- and I apologize -- were from Monday's briefing book. And part of the internal filing deadlines for minute orders for the commission meeting, there had been an earlier draft minute order with numbers in it. One of the things that it did not include, the $300 million I believe was the $300 million of General Revenue that the department received this time, but that minute order that you had previously predated the briefing materials we discussed on Monday.

MR. HOLMES: So we've got three different sets.

MR. BASS: I tried to limit the various versions -- at least three. Unfortunately, you've seen three, there are many more, but you have seen at least three. I was trying to reconcile the one we had the most discussion on Monday into what you currently see before you today.

MR. HOLMES: Yes, I was looking at the book.

MR. BASS: There was one other item I wanted to highlight and revisit from our discussion on Monday and it was on a rider. It's not in the minute order but it's under the broad umbrella of legislative appropriations requests, and I wanted to revisit it because we have, in the past couple of days, gotten additional information. It was on Rider 34 which was one that directed the department to spend certain amounts to maintain paved surfaces on the Capitol grounds, to do Camp Mabry, health and human services, UT Permian Basin, and Parks and Wildlife.

The additional information we got in the past couple of days is other than this rider, there is statutory language that directs the department to work with Parks and Wildlife, so even if this rider went away, the statute obviously would still be there.

What we would now recommend, based upon that, is rather than deleting the entirety of Rider 34 is that we would keep in the subparagraph for the Parks and Wildlife Department -- and let me read that out -- it directs the department to expend no more than $5 million each fiscal year to construct and maintain state park roads.

Our recommendation would be to retain that portion of Rider 34, delete the remainder of the ones I talked about, but to retain that one in order to set the expectations of all interested stakeholders as to what the workload level would be between the department and Parks and Wildlife Department each year.

Having said all of that.

MR. HOLMES: Is the $5 million in the statute?

MR. BASS: No, sir, I don't believe there's a dollar amount listed in the statute. Historically, I think during the session, the department, Parks and Wildlife and members of the legislature discuss an appropriate level and that gets included into the rider language.

MR. HOLMES: It's been at $5 million for a long while.

MR. SAENZ: There was an agreement between the executive director of the department and the executive director of Parks and Wildlife, I think, at that point to set that as the funding level.

MR. HOUGHTON: Do we use it all?


MR. HOUGHTON: Do they use it all?


MR. HOLMES: They have use for about five times that, but the actual agreement between the executive director of Parks and Wildlife and I think Mike last session was $15 million but then it got changed.

MR. SAENZ: Right. Right before this last session we worked with Texas Parks and Wildlife and had come up with a funding level of about $15 million. During the session it did get changed to $5-.

MR. HOUGHTON: So there is no cap. Is it statutorily capped?

MR. BASS: I do not believe so.

MR. SAENZ: There is no cap in the statute. There's a statute that says we maintain and construct the roads. The amount was set by rider.

MR. BASS: There is no minimum or no maximum.

MR. HOLMES: I think it should go back to the agreement from the last session of $15 million.

MR. BASS: Before I have Mr. Jackson run up here, we've certainly heard the comments of the commission on that issue, and since it's not an official minute order, I'm not sure we need a first and second on that.

MR. HOUGHTON: You've got your LAR that we have to approve -- oh, we already did.

MR. BASS: No, we have not yet.

MS. DELISI: We haven't done it yet.

(General talking and laughter.)

MS. DELISI: We can also work with the budget riders to increase that number during the budgetary process.

MR. HOUGHTON: You're much more astute in that process than I am.

MR. HOLMES: I'm afraid if we only ask for $5-, though, that that's what it will be.

MR. BASS: It depends upon your perspective, yes.

MR. HOUGHTON: I'm here to support you, Ned, whatever you need.

MR. HOLMES: I move that it be $15-.


MR. HOUGHTON: And I second that.

MR. BASS: What you have before you is the adoption of the --

MR. HOUGHTON: I'm amending the LAR.

MS. DELISI: Okay. Since I'm new at this, if we want to amend the LAR, do we take a vote to amend the LAR?

MR. SAENZ: Yes, ma'am. You approve the LAR subject to that you want to change the $5- to $15-.

MR. BASS: There is a paragraph at the end of this minute order that allows for the numbers up above here to be modified through Amadeo, and so I would think -- I don't see Bob walking up behind me.

MS. DELISI: Well, can we do a motion?

MR. BASS: I would imagine you can direct staff to do that.

MS. DELISI: How about this, Bob, can we do a motion to approve at the appropriate time the LAR subject to this number changing to $15-?

MR. JACKSON: Yes, you can, but James, could we not also change our comments on that Rider 34 to say $15-?

MR. SAENZ: Yes, that's all you have to do.

MR. JACKSON: So you can do that too.

MR. SAENZ: Just change the rider from $5- to $15-, and in essence, that's submitted.

MS. DELISI: So are we going to take one vote on one motion. Is that how we do it procedurally?

MR. JACKSON: You can do it any number of ways. Probably easiest is when you approve the whole document, you can say with one change.

MS. DELISI: Okay, we will do it.

MR. BASS: I have nothing further.

MS. DELISI: You're done. Okay. Are there any other questions, comments, riders to give away more money?

MR. HOUGHTON: I do have a few more.

(General laughter.)

MS. DELISI: The motion before us then is to approve the LAR subject to staff changing the description of Rider 34 to increase the number to $15 million.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Agenda item 12(f) deals with the adoption of the annual operating budget and annual maintenance budget and annual capital budget for the Central Texas Turnpike System.

MS. DELISI: We've got (e).

MR. SAENZ: Okay, I got ahead of myself. Sorry about that.

MR. BASS: I can do either one.

MR. SAENZ: Let's do (e) first, James.

MR. BASS: We spoke briefly about this issue last month at the commission meeting. Item 12(e) would authorize the CFO to pursue refunding of the $150 million of variable rate debt issued as part of the initial financing for the Central Texas Turnpike System in an effort to achieve a lower debt service cost. This would include filing a notice of intent to issue with the Bond Review Board. The variable rate bonds are insured by Ambac, and due to the credit rating downgrade of Ambac, the bonds are bearing interest at a weekly rate higher than typical. That would be 9.5 percent when our other debt this week reset at about 1.82.

Final documents will be presented to the commission at a subsequent meeting for final approval, but this direction would allow staff to begin the process to work on that refunding. Staff recommends your approval.

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Now agenda item 12(f) deals with the adoption of the annual operating budget, annual maintenance budget and annual capital budget for the Central Texas Turnpike System project.

MR. BASS: This minute order approves the Fiscal Year 2009 operating, maintenance and capital budgets for the Central Texas Turnpike System which consists of State Highway 130, State Highway 45 North, and the Loop 1 Extensions. The indenture for the system requires that on or before August 31 the commission adopt these various budgets for the coming year. I'd be happy to answer any questions you may have, and staff recommends your approval.

MS. DELISI: Questions?

MR. MEADOWS: Move approval.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thank you, James.

MR. BASS: Thank you.

MR. SAENZ: Agenda item number 13 deals with Contracts. 13(a)(1) deals with Highway Maintenance and Department Building Construction Contracts, and Thomas Bohuslav will present.

MR. BOHUSLAV: I feel like we need a feed sack so that when we come up here, Bob Jackson will come up here with us and we'll just put our legs in that same feed sack and hop up here together.

(General laughter.)

MR. BOHUSLAV: You do a great job, Bob, always a great help.

Item 13(a) is for the consideration of the award or rejection of Highway Maintenance and Department Building Construction Contracts let on August 7 and 8, 2008 with an engineer's estimate of $300,000 or more. Sixteen projects; average number of bidders at five per project. We have one project we recommend for rejection. It's in Hidalgo County, project number 4017. There was just one bidder on the project; it was 53 percent over; low bid was about $537,000. It's a sweeping contract in the Pharr District, in three counties in the Pharr District. The district would like to go back and do some redesign and see if they can get more bidders and get reduced costs.

Staff recommends award of all the maintenance projects with the exception noted. Any questions?

MR. HOUGHTON: I do. Where is James? James, are you in the room?

MR. BASS: Yes.

MR. HOUGHTON: We have a percent over, 7.28 percent. Is that what I'm reading here?

MR. BOHUSLAV: On the maintenance contracts?

MR. SAENZ: On these contracts it's 3.5.

MS. DELISI: You're ahead of yourself.

MR. HOUGHTON: Okay, I'm ahead of myself. Excuse me. This reflects a certification of funds so we're 3 percent over, something is going to fall off on the bottom of this sheet.

MR. HOLMES: Thomas, can you give us a sense of kind of the direction of the industry as it is reflected in your division? Are you seeing more bidders; are they being more aggressive; kind of what's happening in the industry?

MR. BOHUSLAV: You kind of have two things happening: besides the material cost going up significantly in the area of asphalt and steel primarily, and fuel, of course, that impacts our bid prices, that's going one direction and they're significantly up since January -- in fact, really January is when prices started kind of coming up quick and all of a sudden about April or May, we really started hitting some hard prices. Steel prices have said that by this fall they will have doubled, raw steel, plate steel and reinforcing steel. Asphalt, you've seen like fuel and everything else, is going about the same way. Our asphalt prices last year were about $300 a ton and our prices today are $600 to $700 a ton. It's just a huge impact to our operations and percentage of our program.

In regard to contractors, with lettings going down, they're really getting hungry and we are seeing definitely this number here that we have of 5.68 bidders per project on our construction program. That's significant. We've been in a low of just over three and we somewhat hang in that four area of bidders per project, but we are seeing in some cases ten bidders on projects.

That may be a little bit rare but we're seeing an average of 5.7, 5.6 bidders per project, that is good, we like seeing that, but they're definitely hungry out there trying to get work. Their volumes have gone down significantly because of the increase in prices for suppliers and everybody out there, for that matter. We have good competition now and so we're kind of seeing both ends, the material price increases and then the competition with contractors trying to get work and keep their crews busy -- that's one of the things a contractor tries to do out there.

MR. UNDERWOOD: Thomas, one other thought, wasn't there an asphalt company that went out, that went under? Is that part of the problem?

MR. BOHUSLAV: Simm Group went out -- and I'm going to be outside of my area of expertise here -- but essentially what I've been told is they went out because they have a trading group and they were trading futures and they went way beyond what they could do and the banks called their margins. That took down all of Simm Group which is about six or seven different companies, including Simm Materials which is one of our asphalt suppliers, and now they're under Chapter 11, I believe, going through reorganization, and probably will sell off is what I am told.

MR. UNDERWOOD: But that also is one reason why we're seeing an increase in our asphalt, or not?

MR. BOHUSLAV: No. The increase in asphalt was the reason that Simm went down more so than it is the reason we're seeing asphalt increases.

MR. UNDERWOOD: Okay. Thank you.

MR. BOHUSLAV: And there are other suppliers that are struggling with this now, as well, not just Simm Group.

MR. UNDERWOOD: I thought I heard a lot of the subcontractors were counting on getting a product from them and all of a sudden now they can't make their commitments to us.

MR. BOHUSLAV: And contractors as well. When Simm went down, their supplier went away and now they have to go to a new supplier that's going to get in that $700 a ton price for asphalt.

MR. HOUGHTON: At the risk of giving bad numbers out, in El Paso we're seeing those asphalt prices, what, double?


MR. HOUGHTON: And we don't have that company as a distributor so it's really the commodity issue more than it is anything else.

MR. BOHUSLAV: For asphalt, yes.

MR. HOUGHTON: My question to you, Thomas, I've had contractors, suppliers talk about indexing. Is that something that is viable or not? Uh-oh, here comes Mr. Jackson again.

(General laughter.)

MR. BOHUSLAV: It is something we have been discussing with contractors, and probably for the last several years whenever we started seeing increases in asphalt prices. They are discussing it amongst themselves right now to come out with something that they would like to do, and that is we kind of put the industry to task to say what do you think would be best for how we continue our program forward. It is something that's done in other states.

Contractors in the past have not wanted indexing, they have said we like the competitive market because typically what happens as the market goes up, everybody wants indexing, and then the market goes down and you can't recover. It's always a bad time to start discussing it after the prices go up. And so that's where they are now; they're still discussing the issue.

MR. HOUGHTON: That's when they do discuss it, when the prices go through the roof.

MR. BOHUSLAV: Yes. Any other questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Agenda item 13(a)(2) deals with our Highway and Transportation Enhancement Building Construction.

MR. BOHUSLAV: Item 13(a)(2) is consideration of the award or rejection of the Highway and Transportation Enhancement Building Construction contracts let on August 7 and 8 of this year. We had 53 projects, and again, I mentioned 5.7 bidders per project, and that is an increase. Overall, we were about 7 percent over, but we do recommend all the projects be awarded. Any other questions?

MR. HOLMES: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Agenda item 13(b)(1) and (2) deal with the award to a second low bidder for a maintenance contract, and Thomas will present, filling in for Zane Webb. Go ahead and present both, Thomas.

MR. BOHUSLAV: Yes, sir, thank you. The first minute order is for Hidalgo County in the Pharr District. You have the authority to award to a second low bidder when the first bidder is unable to move forward with the project. This project BPM 6181-06-001, bridge preventive maintenance project is for cleaning and sealing of joints, was let on July 8 for Hidalgo County in the Pharr District. The low bidder claimed an error in bidding, and upon review, the department concurred in his claim. The second low bidder has indicated in writing that they are willing to perform the work at the unit prices set forth in the lowest bid. Based on that, we recommend that the contract be awarded to the second low bidder.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Motion passes.

MR. BOHUSLAV: The second project where we're recommending award to a second low bidder is in Sabine County in Lufkin District, contract number 0708-1102. This is for picnic area and ground maintenance. It was let in July 15 this year for Sabine County in the Lufkin District but the contractor was unable to execute the contract because they were unable to fulfill the bonding requirements.

The second low bidder has determined in writing that they are willing to perform the work at the unit prices set forth in the lowest bid and that the unit prices are reasonable and there is a specific need to expedite the completion of the project to protect the safety of the traveling public. Again in this case, we recommend that the contract be awarded to the second low bidder. Any questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. SAENZ: Thank you, Thomas.

Agenda item number 14 deals with our Fiscal Year 2009 Project Obligation Limit Estimate, and James is going to present that. This will also present how we're going to be tracking, and answering maybe to your question, Commissioner Houghton, that talked about what happens to projects on a month-to-month basis.

MR. BASS: Again, I'm James Bass. This minute order establishes, to my knowledge, for the first time with the commission a fiscal year project obligation limit. This limit would apply to contract lettings, change orders, new toll equity commitments, and new pass-through toll commitments, and to any project overruns due to differences between actual and bid quantities.

The limit to be funded from the State Highway fund is $2.53 billion and to revisit that, a few months ago when we did the target allocation for the UTP, it also was $2.53-. We went through some additional steps, Commissioner Houghton, to address, I think, some of your concerns. The $2.53- back in March and April assumed a certain amount of letting and commitments to be made in 2008 that were going to take some of that available revenue and needing to assign it to them. Well, what happened through the end of 2008 overall, we awarded around $108 million less than what that assumption was when we initially came up with $2.53- for 2009. Sounds like good news: $2.53- goes up.

The other thing that we knew when we did the $2.53 initially was existing projects in the system had X billion dollars remaining to be paid on them, so they were going to take future revenue to that amount. What happened since February is we've processed almost $106 million of change orders, so the revenue needed for existing projects has gone up almost an equal amount that lettings were under.

The third thing we looked at was well, we assumed we were going to get so much revenue into the State Highway Fund primarily from our state sources. Local and federal sources, in my opinion, are more of a timing issue, so we looked and focused on our state revenue sources, and we have some estimates in there for the remainder of August, and that was just under $2 million different than what we had when we initially came up with that number.

So even though the $2.53- is the same as it was a number of months ago, I just wanted to share with you that we looked at those other factors and assumptions and adjusted because of what actuals have occurred in the second half of '08 and adjusted that. Just so happens just this one time we still ended back up at $2.53-.

MR. HOUGHTON: What is the percentage, what is that number, $106 million, did you say?

MR. BASS: Of change orders?

MR. HOUGHTON: Of the total.

MR. BOHUSLAV: Of which total, the $2.53-?

MR. HOUGHTON: Right, total construction. The number of change orders percentage-wise.

MR. BOHUSLAV: I think change orders are in the neighborhood of 7 to 10 percent, and I think that's consistent with what we've seen the latter half of '08.

MR. BARTON: Traditionally our change orders have ranged from 5 to 7 percent over the last several years, and I think that that figure will probably trend downward because we've recently implemented measures in our district engineers performance reviews that indicate that they need to try to work those down, get better plans when we let projects, be more diligent about change orders we do, that are only those that are necessary to complete the work and protect the safety of the traveling public, not those that that would be kind of nice if we don't have to do another set of plans, let's just add a little work to it. So that 5 to 7 percent, I think will trend downward, and some states who have implemented similar measures have much lower change order percentages.

MR. BASS: The other thing I would highlight is that the $2.53- includes zero dollars from the Texas Mobility Fund as it has already been previously obligated to its current capacity.

MR. HOUGHTON: But we haven't issued all the debt.

MR. BASS: Correct. We fully obligated the $6.4-, we've only issued $5.1- because we're awaiting those projects to have the cash payout and then we issue as those projects generate the cash payments.

MR. HOLMES: James, what about the Prop 14?

MR. BASS: The number here, this initial limit, includes in the minute order before you $1.73 billion to come from Prop 14 during the year. And I want to point out at this point our intent is for, I guess, me to come back every month and update the commission on where we're at in these different changes on a month-to-month basis. So right now the $1.73- has been included from Prop 14. Again, your first question may be I thought there was a $1-1/2 billion limit on Prop 14. The $1-1/2 billion limit is on issuing the debt. We can obligate, start more than that, as soon as possible start more work than that during 2009 because whatever we start will not pay out all that fast, so we can get to work on more of it sooner.

And that is definitely the plan, and I believe in September we'll come with a more detailed plan for the entire year showing all of the projects scheduled to move forward during the year. What we've done in this month, in this minute order as an informational item, is listed those projects that are scheduled to receive bids in September through the letting process, and that shows the projects, the engineer's estimates, and you see a couple of blank columns. Our intent is to then show next month what the actual bids were and how that compares to the engineer's estimate, either upper or lower, as well as the number of bidders per project.

MR. HOLMES: Could you also give us kind of a running total as we go through the year?

MR. BASS: Yes.

MR. HOLMES: And how it comes off the $2.53-?

MR. BASS: What we'll do, my understanding and intent for September, not only will it be one number for the year, it will be a number by month for the year, and then we'll be able to plot that and show how actuals are matching up against that.

MR. HOUGHTON: Of the $2.53-, how many new mobility projects does that represent?

MR. BASS: Without anything from Prop 14, just the baseline $2.53-, there would be three mobility projects, large mobility projects in the state that would start in 2009 and '10 and '11 and '12.

MR. HOUGHTON: Where are they located?

MR. BASS: They're in the Metroplex: North Tarrant Expressway, DFW Connector, and LBJ.

MR. HOUGHTON: But we have commitments, written commitments on those projects, to a certain amount.

MR. BASS: They are in procurement.

MR. SAENZ: They are in procurement.

MR. HOUGHTON: We have committed to funding at some level.

MR. SAENZ: Yes, sir.

MR. HOLMES: Does that mean, James, that there would be zero mobility dollars for the rest of the state until did you say 2012, 2013?

MR. BASS: I want to clarify. That assumption is no additional Prop 14 -- which I'll be back before you in a little under about 20 hours to receive direction from you on that. It also would assume no Prop 12, so it's kind of a half empty approach, but yes, at $2.53- current revenue sources to the State Highway Fund, yes, it would be those three projects would happen and those would be the only three in 2009, '10, '11, '12, and depending upon what the bids come in, it would be perhaps in the summer of '13. If the bids are not good, it could be -- what sometimes happens on other ones, all bids might be rejected and then that project has to be re-looked at and re-scoped. But it would be those three projects.

MR. HOUGHTON: This is somewhat profound from the standpoint that our friends across the street need to understand that out of the $2.53- of new money -- new money because $1.7- is not new money, that's just a fast-forward on your revenue sources -- we can issue three projects, brand new projects in the state.

MR. BASS: Not making any assumption what the commission will direct tomorrow, but that's where I believe -- and you're right, there's no additional money through the $1.7- but it allows the acceleration of critical projects that you hear about month after month, it allows those to be not only started earlier but delivered sooner so people get to use them on a daily basis.

MR. HOUGHTON: But we will pay a price for that.

MR. BASS: It brings forward benefits, but yes, there is a price.

MR. HOLMES: I want to make sure that I understand what the limitations will be. Assuming that we approve the issuance of the $1.5- tomorrow, did I understand correctly that there's about $800 million of capacity left that is uncommitted?

MR. BASS: No. Similar to what happens on Mobility Fund or our existing Prop 14, we will go out and issue bonds as the projects need it. Well, we don't issue one month at a time, what will happen is we will issue six or nine months worth, so right after we've issued it will be up and then it will come down over the next six to nine months and we'll go reissue, spend it, reissue. So we always have some proceeds on-hand. Those proceeds are committed and obligated, but yes, it is cash on-hand but it's not available cash on-hand, in my opinion.

MR. HOLMES: And so the only additional funding that we would have available for projects in excess of the three that are in the Metroplex would be represented by the additional Prop 14 $1.5 billion for 2009, and then assuming that the legislature approves Prop 12.

MR. BASS: Correct, and then we'd have $5 billion. On the Prop 12, without the enabling legislation, don't know if there will be an annual cap or anything like that.

MR. HOLMES: How it's approved, if it's approved.

MR. BASS: How it's directed and how it's approved.

MR. HOUGHTON: That wouldn't take effect until 2010.

MR. BASS: Theoretically, it could be, given certain voting levels, it could have immediate effect.

MS. DELISI: It could have immediate effect.

MR. BASS: Potentially, if enough members vote.

MS. DELISI: Where there's a will, there's a way, Ted.

MR. HOUGHTON: I'm with you.

MR. BASS: It could have immediate effect.

MS. DELISI: It could have quicker effect.

MR. BASS: Generally it would be September 1, 2009, the first day of Fiscal 2010, but there are possibilities that it could be sooner than that.


MR. SAENZ: And James, I guess we also have an additional $1.4- of Prop 14 that could be available in 2010.

MR. BASS: Correct. Out of the $6 billion statutory authority for the Prop 14, we've committed $3.1- so there's a remaining $2.9-, and again, I believe we spoke about it briefly on Monday and this will be further confirmed further discussions with the commission, but the initial thought from staff is $1.7 billion going to accelerate projects, the other remainder of that $2.9- of Prop 14 being used to acquire right of way, go through the environmental process, and do design work so there are additional projects ready and waiting when the proceeds from Prop 12 become available. It's just fitting that development cycle and funding together.

MR. HOLMES: It would be useful, certainly for me and maybe others on the commission that were not present when the three projects in the Metroplex were progressed, to kind of review those so that we have a full understanding of what those parameters were.

MR. BASS: Generally -- and we can certainly go into more detail, individually or greater -- the Metroplex was one of the -- in my opinion, one of the areas of the state that had been pooling together, saving up their UTP funds for high priority, large, very large projects. They all got to the finish line about the same time. Unfortunately, the timing -- they got to the finish line was when those that had accelerated delivery of their projects and used other money, that reality came to everyone's attention.

And so those that are behind were allowed to continue to go forward, and these projects all have some element of a comprehensive development agreement, a public-private partnership associated with them. But at this point, the assumption and the estimates are that they will require some state participation in those projects.

MR. HOUGHTON: James, a question on the minute order. The word "estimate" gives me a little heartburn. Isn't it a hard number? I mean, you've got a cap, you know what it is, $2.53-, that's not an estimate.

MR. BASS: I think the intent is that that $2.53- is based upon a number of assumptions: not only what revenue was going to be the second half of '08 but what revenues will be in 2009, and if they drop down, we won't be able to do much. I think there may be a better word. I think the intent was to say that during the year that $2.53- might be adjusted up or down, and if it is adjusted up or down, that will be part of subsequent minute orders and discussions with the commission to either raise or lower that annual cap.

MR. HOUGHTON: You don't need the word "estimate"; we're going to raise or lower it based upon what you come back to us and certify.

MR. BASS: We can remove that next month or this month, if you'd like.

MS. DELISI: All right. Any other questions, comments?

(No response.)

MS. DELISI: So is there a motion?

MR. UNDERWOOD: So moved.


MS. DELISI: All in favor?

(A chorus of ayes.)

MR. SAENZ: I'd ask James to cover that portion in the minute order that talks about that the $2.53- does not include the 121 money.

MR. BASS: Correct, it does not include 121 money. I mentioned it doesn't have any of the Mobility Fund in there because it's fully committed; it does not include any of the 121 money or the 130 5 and 6 money because those will come before the commission and we'll adjust as necessary for that, but did not want to give the impression that we were trying to constrain what the Metroplex would be able to do.

The other thing I want to highlight, after the fact, just keep in mind the remainder of the Prop 14 bonds, at least $600 million of those proceeds must go towards safety projects throughout the state. That's part of the statutory language. The initial $3 billion said at least $600 million must go towards safety; that was accomplished very early on. When the statute raised the overall cap from $3 billion to $6 billion, the safety portion got increased from $600- to $1.2-. So some of those proceeds will need to go towards safety projects as well.

MR. HOUGHTON: Have we identified those safety projects?

MR. BASS: Not yet. What was done previously, in the initial round there was a program call and the Traffic Operations Division, Carlos Lopez's group, went through their safety index formula to rank projects is how the initial $600- was handled a few years ago.

MS. DELISI: All right. Any other questions? So there was a motion, there's a second, let's go ahead and take the vote.

MR. HOUGHTON: Strike "estimate." So moved with the striking of "estimate."

MS. DELISI: So the motion is with striking "estimate" and was there a second?


MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

MR. BASS: Thank you.

MR. SAENZ: Agenda item number 15 is our Routine Minute Orders that deal with donations to the department, eminent domain proceedings, highway designations, load postings, right-of-way dispositions and donations, speed zoning, and staff recommends the approval of those in an order as a whole. We'd be happy to answer any questions should you have one.

MS. DELISI: Is there a motion?

MR. JACKSON: Amadeo, do we want to take out 15(a)(2)?

MR. SAENZ: No. We've looked into that and it's -- well --

MS. DELISI: Now Ted is interested.

MR. HOUGHTON: 15(a)(2), what does that mean?

MR. SAENZ: It was a donation that we received for department employee travel. We were looking at it and one of our employees stayed a motel here in a conference. There was no payment of anything.

MR. JACKSON: Excuse me?

MR. SAENZ: And John is here, John can explain.

MR. HOUGHTON: Does this come under ethics?

MR. CAMPBELL: This was an attempt in total transparency for us to just reveal that this employee, he works for the Right of Way Division, he's the current president of the local chapter of the IRWA, and as such, when they hosted the international conference, he received a free room at the Hilton Hotel so he could stay there and cover the conference. So he made no direct payments and received no direct reimbursement, but we wanted to acknowledge that there was that value to the department.

MS. DELISI: Bob, you're shaking your head.

MR. JACKSON: Our rules provide that to accept a donation where you're acknowledging it after the fact, you have to do that within 60 days.

MR. HOLMES: When was that?

MR. SAENZ: It was June 22nd through the 25th, so it's beyond the 60 days.

MS. DELISI: So Bob, if we approve this, are we violating our own rules?


MS. DELISI: So there we go.

MR. SAENZ: Staff recommends that you approve all except 15(a)(2).

MR. HOLMES: Well, if we don't approve it, what happens?

MR. JACKSON: Two choices: one, we can look into it, if he spoke, it's an honorarium, maybe we're okay; otherwise, we would pay back the donor.

MR. SAENZ: And I think, really, him being the president of the local chapter is that he was required to be there.

MR. JACKSON: We can see if he actually spoke, maybe we can classify this as an honorarium and then we don't have to do anything.

MR. HOUGHTON: We're caught up in our underwear over $700 over whether it was within 60 days or not?


MR. HOUGHTON: You know, this is, Bob, what I was trying to bring up earlier on the ethics and my example was AGC luncheons and things like that, and there was -- with all due respect -- there was a memo put out waiving ethics regarding AGC luncheons.

I'm not poking at anybody but either it is or it isn't, and what we need to do is under these sort of things put it in our budget and just pay for the stuff -- I mean, just budget for it, budget for AGC luncheons, let the district budget for that. They know how many luncheons they have a year. Budget for these types of things, these conferences and pay for it and let's not worry about donations.

I'm with Commissioner Holmes, we're going to see more and more of this stuff. Amadeo, I would just have the district engineers budget for an AGC luncheon. We pay for it. Can we do that?

MR. SAENZ: Unfortunately, you can't do that. We can't budget because we cannot buy meals for our employees.

MR. HOUGHTON: We can't?

MR. SAENZ: No, sir.

MR. BASS: James Bass. You can't use appropriated funds to purchase food unless you're on travel status which means you're not in your hometown.

MR. HOUGHTON: Oh, man.

MR. SAENZ: The memo that went out is our rules allow us to set some standards and allow some leeway, and that was to clarify.

MR. HOUGHTON: I'm all for this, and the more good relationships that we have with our partners, I'm all for it. I'm just trying to find a way not to get hung up in all of this stuff.

MR. JACKSON: And also, on donations, to give you some history, the legislature passed a law saying you have to have a statute to be able to accept donations. We got that; TxDOT got that. Then they said if it's a donation valued at $500 or more, you have to accept it in an open meeting. So the legislature did that, and they said you could acknowledge it within 90 days after the fact. The commission thought that was awkward to acknowledge something afterwards because what if the commission didn't want to. So our initial rule said, no, you've got to accept it, the commission must approve it beforehand.

We went along that way for a number of years before we had all these travel situations, they were minor, they were annoying, they would come up suddenly, so the commission amended the rules and said okay, we will provide an exception just for travel only, that's the only one we can acknowledge after the fact, but it's got to happen quickly and you set a deadline at 60 days. And we've had trouble with that. So if you're going to overlook that, you might want to make sure that we make a point that we follow this very closely.

MR. HOLMES: How often do we have a problem that occurs between the 60th day and the 90th day?

MR. JACKSON: Well, typically we shouldn't ever have a problem. We know enough in advance that to handle within 30 days.

MR. HOLMES: Would we be well advised to conform our timeline to the legislative timeline, instead of 60 days, 90 days? Would that help?

MR. JACKSON: I don't really think it's a problem. We can handle this administratively and deal with 60 days, we can deal with 30 days. If the commission wanted to extend it to 90, we could do that.

MR. HOLMES: We didn't in this case, though.

MR. JACKSON: Right. We didn't make our 60-day deadline that you have in your rules now. To change it to a 90-day policy, we'd have to go through a rule-making.

MR. SAENZ: Not passing this minute order is not accepting the donation is just that we're not accepting the donation from the entity.

MS. DELISI: And so we would end up paying for it.

MR. SAENZ: We would pay for it.

MR. HOLMES: Can we pay for it?

MR. HOUGHTON: We can't do it.

MR. SAENZ: Well, the other thing is explain honorarium.

MR. JACKSON: State law and department policy allows you to accept an honorarium, so if a state employee is asked to give a speech, through that speech he's given food and travel, he or she can accept that, and that doesn't require commission action, and that happens all the time.

MS. DELISI: All right. So the motion is except for this one.

MR. SAENZ: Item 15 (a)(2).

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed; the motion passes.

At this time we will recess the open meeting so that the commission can meet in executive session. We will be meeting under Agenda item 16(b), Section 551.074 of the Government Code, to discuss the creation of a performance plan for the executive director.

(Whereupon, at 1:17 p.m., the meeting was recessed, to reconvene this same day, Thursday, August 28, 2008, following conclusion of the executive session.)

MS. DELISI: The meeting of the Texas Transportation Commission is reconvened. For the record, the time is 1:46. The commission has concluded its executive session during which no action was taken on any matter.

We will now enter into the open comment period of the meeting. Are there any speakers signed up for open comment?

MR. SAENZ: No speakers are signed up, ma'am.

MS. DELISI: No speakers have signed up. Is there any other business to come before the commission?

MR. SAENZ: I just wanted to mention a couple of things. One is we were hit by Hurricane Dolly a little while back, hit the South Texas coast, and our people, just like they always do, stepped up to the plate and did a great job. It was a joint venture between not only the people in the Pharr District where it hit directly, but Corpus, San Antonio, Yoakum, and of course the Maintenance Division and our Travel Information Division, they did a great job and we're very proud of our folks.

I guess that was probably a warmup because we're in the process of right now we've got Hurricane Gustav that's coming into the Gulf Coast, and just wanted to let you know that our folks are ready. We prepared well for Katrina and Rita, but no matter where it hits, if it hits in the Louisiana border, we'll be impacted because you'll have people that will be moving out into our area.

So just wanted to reassure you that we've got our maintenance people -- David is out working with districts coordinating, and we're going to be ready to handle whatever comes to us out of this hurricane.

The other thing that I wanted to mention real quick -- and I will give you copies -- one of the things that we're trying to do is to try to get as much information to the commission as possible, as we develop the commission agendas for the future meetings -- in this case, we always do two months in a row, we had August and September.

We're now adding a little bit of a description to each item that will allow the commissioners to read them on early to find out if you have any concerns or issues with some of the things that are happening, and I'll give you a sample so you can start seeing it. And that's just to try to get as much information to the commission out as early as possible.

And with that, Madame Chair, that's all that I have.

MS. DELISI: There being no more business, I'll entertain a motion to adjourn.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. We are adjourned. It's 1:48.

(Whereupon, at 1:48 p.m. the meeting was concluded.)


MEETING OF: Texas Transportation Commission
LOCATION: Austin, Texas
DATE: August 28, 2008
I do hereby certify that the foregoing pages, numbers 1 through 180, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Leslie Berridge before the Texas Department of Transportation.

(Transcriber) (Date)

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


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