February 28 Transcript

Texas Department of Transportation Commission Meeting

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

Thursday, February 28, 2008

COMMISSION MEMBERS:

Hope Andrade, Interim Chair
Ted Houghton, Jr.
Ned S. Holmes
Fred A. Underwood

STAFF:

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

PROCEEDINGS

 

MS. ANDRADE: Good morning.

AUDIENCE: Good morning.

MS. ANDRADE: It's 9:11 a.m., and I would like to call the February 2008 meeting of the Texas Transportation Commission to order. We have a full agenda for today's meeting, touching on many aspects of the work of this commission and the department, including a very special dedication that we will be doing in just a moment. We welcome all of you to this meeting and look forward to your participation.

Please note for the record that public notice of this meeting, containing all items on the agenda, was filed with the Office of the Secretary of State at 1:25 p.m. on February 25, 2008.

As is our custom, we will open with comments from the other commission members, beginning with Commissioner Fred Underwood, followed by Ned Holmes and Ted Houghton. Commissioner.

MR. UNDERWOOD: Good morning . It looks like we have a full house. I see we have the prettiest ladies on the front row. I want to welcome the Williamson family.

MR. HOLMES: Thank you, Fred. Welcome. It will be an interesting meeting today and an important meeting today honoring our former chairman, and we appreciate Mrs. Williamson and daughters being here today. Thank you.

MR. HOUGHTON: And I echo those remarks, and good morning to everyone, welcome to those who have come in from other parts of the state. And to the Mary Ann Williamson family, welcome. Looking forward to this; it's going to be a lot of fun today.

MS. ANDRADE: Thank you, commissioners, I would also like to associate myself with the remarks of my colleagues and would like to extend a very special welcome to Mary Ann, Katherine and Sarah. We're so honored to have you here with us this morning. Thank you so much.

Let me remind everyone that if you wish to address the commission during today's meeting, we ask that you complete a speaker's card at the registration table in the lobby. To comment on an agenda item, we ask that you fill out a yellow card and identify that agenda item. If it is not an agenda item, we will take your comments during the open comment period at the end of the meeting. For those comments, we ask that you fill out a blue card.

Regardless of the color of the card, we request that each speaker please limit their comments to three minutes. In addition, we know that a number of you are here this morning because of your interest in the adoption of our new billboard rules, and it is our intention to take up that item, number 9(b)(4), at 10:00 a.m., or as soon after that as possible.

We will also have an executive session scheduled for this afternoon to receive information from the Attorney General's Office concerning some litigation in which the department is involved. We will have that executive session at the conclusion of the business today prior to the open comment session.

Let me get to our first item of business today which involves a very special and heartfelt recognition the department would like to make in memory of Ric Williamson, our former chair of this commission. We had our first meeting without Ric last month in Victoria and we all miss his leadership and his wisdom. I know that this room will never be the same without him, but we will honor his memory every day by continuing the work that was so important to him.

I would like to read a resolution from the commission that we will be offering you today.

"Whereas, it is inherent that a government's power and authority are granted by the people it serves to be used for the public benefit;

"And whereas, democracy is advanced when citizens monitor and participate in governmental deliberations and decisions;

"And whereas, the Texas Transportation Commission is a five-member board appointed by the governor, with the advice and consent of the Texas Senate, to oversee and govern the Texas Department of Transportation;

"And whereas, Ric Williamson devoted his time and talents to public service through his appointment by Governor Rick Perry to the Texas Transportation Commission in April 2001, and as he guided TxDOT as chair of the commission from January 2004 to December 2007;

"And whereas, in his capacity as chair of the commission, Ric Williamson used commission meetings as an opportunity to discuss, at great length, transportation challenges facing Texas and to publicly explore possible solutions, insisting that discussions with TxDOT staff be conducted in order that citizens could easily understand the issues and proposed department actions;

"And whereas, Ric Williamson championed civil public dialogue and debate, welcoming the exchange of ideas and differing opinions, always striving to treat people with courtesy and respect;

"And whereas, Ric Williamson's passion for open and responsive government remains intact within the transportation commission and department despite his sudden passing on December 30, 2007;

"And whereas, the commission typically meets the last Thursday of each month at the Dewitt C. Greer Building in Austin, located at 125 E. 11th Street, in a room known as "the big" hearing room;

"Now, therefore, be it resolved that the Texas Transportation Commission, in honor of Ric Williamson's legacy of public service to the citizens of Texas, hereby renames "the big" hearing room as the "Ric Williamson Hearing Room."

"Presented with pride and gratitude by the Texas Transportation Commission on this, the 28th day of February 2008."

We're going to ask the members of the commission if you'd like to step down and take a photo with the family.

(Pause for photographs; applause.)

MS. ANDRADE: We also have a photo for the family; we also have a photo that we'd like to present of Ric Williamson.

MRS. WILLIAMSON: Oh, that's a good pose. I'm sure you've seen him do this quite a bit.

(Pause for photographs.)

MS. ANDRADE: Now I'm going to ask the family if they'd like to join me outside as we unveil the Ric Williamson Hearing Room, and I'm going to ask the audience if they would please stay here and we'll watch it on the video. And then ask the family to come back and if you'd like to say a few words, we'd welcome them. Thank you so much.

(Pause to unveil sign; applause.)

MRS. WILLIAMSON: Hope and the commissioners, thank you so much for this wonderful, wonderful honor in Ric's memory. This will be a great legacy for his children and for his grandchildren. He so enjoyed the time he spent here, this meant so much to him, working with you, working with all of you TxDOT people, whether you're here in this building or anywhere around the state. He was incredibly proud of this agency.

Those of you that got to cuss and discuss with him, let me tell you, my family knows exactly what you've been through.

(General laughter.)

MRS. WILLIAMSON: He enjoyed that. I know there were a lot of you that probably got really frustrated in dealing with him, but actually, his ultimate motive was to get you to think, to get you to talk, to get you to see. He didn't always agree, he changed his mind, but he was very proud of this process, and I encourage you to keep going forward with what you have started, even if you don't care for some of these things, I don't think we have a choice.

Thank you so much for those of you that have spent time with him and dealt with him, and all of you TxDOT people, you've been wonderful to us, the family, I appreciate this very much. Thank you.

Now, the Frito story, these are the only chips that Ric would eat, I bought them in bulk, and when he came here they tried to offer him other kinds of chips. Well, at least he was graceful enough not to make a comment that, as we know, he was capable of making, so he left all the chips around and then they finally realized that the Fritos were the chips of choice for the commissioner, so that's why you all have chips this morning.

The other little story for you TxDOT people, remember the coffee mug that we couldn't find and you looked and looked and looked. It was the coffee mug from hell, we all called it eventually, because we had to do it up at my house as well. Turns out Rob Johnson has the coffee mug, he just 'fessed up last night. So we have found the mystery coffee mug.

Anyway, thank you all so much. This was a wonderful honor for Ric. I appreciate it and my family does. And my daughter Melissa is sorry she can't be here but someone has to watch the business, so that's what she's doing. Thank you so much.

(Applause.)

MS. ANDRADE: Mary Ann, Katherine and Sarah, you're more than welcome to stay throughout the meeting, and thank you so much. You know, Ric may be gone but he will never be forgotten. Thank you.

The next item on today's agenda is the approval of the minutes of the regular meeting held in Victoria on January 31. Members, the draft minutes are in your briefing materials. What is your pleasure?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: Opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you.

Before I turn the agenda over to Amadeo to proceed through today's business, I would like to briefly recognize a group in the audience today from Pearland, one of the formerly small towns in Texas that has experienced explosive growth recently and is expecting more of the same in the future.

There is a group of civic leaders here in Austin this week to visit with state agencies and legislators, and I want to thank you for the warm reception and hospitality last night, and I would like to recognize Carol Artz, who is the head of the chamber of commerce in Pearland. If you would please come up and share a bit about the challenges and opportunities you are facing. Kevin Cole.

MR. COLE: It's the other Carol.

MS. ANDRADE: Oh, okay. I was expecting Carol, but that's fine.

(General laughter.)

MR. COLE: Carol is here and our contingency is here, and we will try to keep this brief, and we thank you for the opportunity to speak with you this morning.

Good morning, Madame Chair and commissioners, Director Saenz and Mr. Polson. I am Kevin Cole, a council member from Pearland. I am here today to give you a brief presentation on our city and introduce you to the 60 citizens from Pearland that have come to the state capital for the Second Annual Pearland Day in Austin.

As you may know, Pearland is located south of Houston in Brazoria, Harris and Fort Bend counties. Our total footprint one day will encompass 75 square miles. Recently, Forbes Magazine listed Pearland as the 34th fastest growing city in the U.S. and the ninth fastest in Texas. Based on our current population and the latest survey data, Pearland is now the third largest city in the Houston-Galveston area. You can see in the handout provided, we have more than doubled in population since 2000. From 2000 to 2010, we will almost triple in our population.

This explosive growth has put a huge strain on our city's infrastructure. The citizens of Pearland approved a $115 million bond program in 2001 to address mobility and drainage issues. Those projects are nearing completion and the citizens have once again approved a bond program that totals $162 million of local money. Mobility projects account for $89 million alone. The citizens in Pearland believe in stepping up and paying for their fair share of the cost. Mobility solutions don't stop with just adding more roadways or lanes to a road. The City of Pearland has entered into agreements for VanPool services; we are currently talking with Metro about park and ride solutions. The city council just recently set a goal to connect Metro light rail to Pearland at Kirby and Beltway 8. This will help the 4,000-plus employees in the Texas Medical Center without using State Highway 288.

I would be remiss if I came here today to promote our great city without also saying thank you to the Texas Department of Transportation. With the recent announcements of budget shortfalls, TxDOT has not cut the frontage roads from moving forward in State Highway 288, Dixie Farm Road Phase 2 is still moving forward as planned, and the State Highway 35 widening project has been delayed but not cut, and I'm here to say thank you for that.

I would give a hardy Pearland thank you to Director Amadeo Saenz and Houston Regional Director Gary Trietsch and their staffs for working with us to move our Cullen Parkway project forward. Monday night, the city council voted on an advance funding agreement with TxDOT for this project. The agreement is a good example of the two organizations working together to achieve a common goal.

Finally, in conclusion, I would like to invite the commission to come to Pearland to see for yourselves the growth we are experiencing. We have submitted a request to host one of the commission's meetings in our city in 2009. We hope to have the opportunity to serve you as hosts.

With that, I would like to recognize Senator Jackson, who would like to make a few statements, and he will recognize Representative John Davis.

SENATOR JACKSON: Thank you, Madame Chair.

MS. ANDRADE: Senator, welcome.

SENATOR JACKSON: Good morning. I want to thank you for what you did for Ric Williamson. It's very impressive. I served with Ric back in the Texas House of Representatives before his hair was that gray, and he always thought about ideas in depth, and we'll all miss him.

And I, too, just want to say thank you to the commission. I know we're probably, what would you call it, headed down a little bumpy road right now at the present time with the commission and the legislature and all the things that are going on right there, but this commission is so important to the future of the state.

I'm fortunate enough to represent Pearland, and as the speaker just said, the growth there is just -- it's not out of control, it's just huge. We've got Dr. Jack Harris back here that served in the legislature in the '80s when Pearland was on old Highway 35, and now it's really on Highway 288, and now Highway 288 has just got so much traffic that we're having to do things to keep the traffic moving there, such as the access lanes and that type of thing. And I want to thank you for not shutting that project down. We've got Cullen Boulevard that is a project that's going on right now.

As the council member said, we in Pearland are willing to pay our fair share to get these projects going. Mobility is the key to economic growth -- I don't need to tell you guys and girls this -- we've got to be able to keep moving.

Of particular interest to me is their willingness to work with Metro because there is quite a large number of citizens that live there that work in the Medical Center, and they're even talking about maybe looking at some type of rail connection to keep people off of the freeways and transport them into the Pearland area from the Medical Center, and I think that kind of thinking is very forward-thinking.

So we're here today to say thank you for working with us in the past, we know we'll work together in the future, we'll have to work together in the future to get some of these issues behind us, and just here to say thank you and look forward to working with you.

MS. ANDRADE: Thank you so much, sir, for joining us this morning, and thank you for what you do for the state of Texas.

SENATOR JACKSON: And for the Fritos. And State Representative John Davis is here as well.

MS. ANDRADE: Good morning, sir.

MR. DAVIS: Thank you, ma'am. Madame Chair and commissioners, Commissioner Holmes, good seeing you guys.

I just want to second what Senator Jackson said, in that Pearland is a vibrant, vibrant community. One of my kids went to school off of Hardin Jackson right there in Pearland, and I tell you, going down Broadway and 518, that place is growing and booming and busting, and they're very progressive-thinking folks, they're very proactive. And just please listen to their concerns and their issues on transportation to have the proper infrastructure in place so they can continue to grow and develop, have economic development to get our goods to market and move people.

So I just thank you very much for allowing me to say a few words. But they're some good people and would appreciate your interest in their concerns. Thank you.

MS. ANDRADE: Thank you very much.

Now, Amadeo, I will turn the meeting back to you to continue working through today's busy agenda.

MR. SAENZ: Thank you, Madame Chairman. The next item on today's agenda is a continuing series of discussion items concerning our federal legislative priorities. Jefferson Grimes will present this month's report since Coby Chase, our division director, is in Washington, D.C. today. Jefferson is the deputy director of our Government and Public Affairs Division. Jefferson.

MR. GRIMES: Chair Andrade, commissioners, Mr. Saenz, Mr. Polson, good morning. For the record, my name is Jefferson Grimes and I'm the deputy director of the Government and Public Affairs Division.

As Mr. Saenz indicated, I am going to continue the ongoing discussions that have been before you over the previous months regarding federal activities and the agency's involvement in those. I'm going to limit my prepared comments this morning to items that have occurred since you all were in Victoria last month and that may be of interest to you. I'm going to discuss three separate items that have occurred since then: the first is the unveiling of the president's proposed 2009 budget which there are some issues there that I'd like to bring to your attention; then I would also like to discuss briefly a couple of the reports that have been issued at the federal level that were the result of work out of SAFETEA-LU; and then I'm going to close with some commentary on the status of the Highway Trust Fund.

First, the president's budget. Back on February 4, the president released his recommended fiscal year 2009 budget for all federal agencies. As far as transportation goes, some news in the budget is that he is recommending a slight cut, but still a cut nonetheless, in monies going to highways, airports and to Amtrak as well, to the tune of about $2 billion less than what was in FY 2008. And of course, it's up to Congress to act on the budget for the transportation agencies, and it's, of course, possible that Congress will ignore those recommendations as they did for his 2008 budget. They could keep highway funding at the guaranteed SAFETEA-LU levels and keep Amtrak and airport funding consistent as well.

MR. HOUGHTON: Let me ask you something, Jefferson.

MR. GRIMES: Sure.

MR. HOUGHTON: When you say cuts, is this above and beyond SAFETEA-LU, the proposed?

MR. GRIMES: Yes.

MR. HOUGHTON: In those, can you specifically identify what in that request by the Congress of $800 million.

MR. GRIMES: Well, let me be clear, this is the president's recommendation to Congress; Congress hasn't acted on it yet.

MR. HOUGHTON: Right. I guess you're going to talk about Texas, what that meant to Texas.

MR. GRIMES: Nationwide, the president recommended about $800 million below what was the 2008 numbers. Now, the president's argument for this is that -- and Secretary Peters commented on this previously -- was that the overall $286 billion payout of SAFETEA-LU has been met. Well, okay, that's one way of looking at it, but regardless, we're looking at, nationwide, if you look at all hundred-some-odd transportation programs at the federal level, you're looking at about a $2 billion recommendation less than FY '08, and on the highway side of things, it's about $800 million.

MR. HOUGHTON: Okay.

MR. GRIMES: But again, that's left up to Congress to enact.

In looking at the president's proposed budget in just a couple of specific program areas -- and this is not Texas allocations in total -- we would look at about $550 million in FY 2009 for the Surface Transportation Program, $520 million for the NHS System, $416 million for Interstate Maintenance, and then about $150 million for the Bridge Replacement Program. And again, these are specific programs among the myriad of other federal programs that we have.

This next item in the budget that I want to discuss is one that's been repeatedly before you over time, and that is federal rescissions. In the president's proposed budget, it includes a $3.15 billion rescission nationwide. This rescission for FY 2009, if enacted by Congress, would be in addition to the $8.5 billion rescission that is in SAFETEA-LU proper. Now, if you look at Texas's standard 7-1/2 to 8 percent share of federal money, you could be looking at, in FY 2009 alone, as much as a $1 billion rescission of apportionments to Texas.

The president's recommendations also include a $725 million rescission nationwide of contract authority for earmarked projects from TEA-21 from ten years ago that have not yet gone to contract. There was just yesterday released a list of those projects. There's 152 earmarked projects in TEA-21 that have yet to go to contract nationwide.

MR. HOUGHTON: We need to elaborate on that.

MR. HOLMES: Do we have any idea how many of those are in Texas and what they are and what the dollar amount is?

MR. GRIMES: We have the list, and there are nine. The dollar amount is -- I saw it this morning -- I would probably say $10- to $15 million, probably around $15 million in projects.

MR. HOUGHTON: That haven't gone to contract.

MR. GRIMES: That have not gone to contract yet. And again, if you go back to your discussions previously as we have had on earmarks over time, there could be a wide variety of reasons for that, whether it was insufficient funding in the first place, whether the project, as you know, was down the list as far as priorities go. And we are, as many of you know, working with members of Congress to elevate their understanding of the planning process at the local level and what goes into it so we can make better choices in the future.

MR. HOLMES: Jefferson, I apologize for interrupting.

MR. GRIMES: No, please.

MR. HOLMES: But just so that I really understand this, the rescission of those earmarked projects that have not gone to contract, that money is not shifted back into another category, it's simply erased.

MR. GRIMES: Correct. And let's keep it all in perspective. This is simply the president's recommendation. Okay. Those projects, Commissioner, are of members of Congress, so the reality of something happening on them yet is still before us. But if you think about it, it's an interesting concept to be floated out there, especially at a time when we're all strapped for money, as you well know. Should Congress act upon it, we'll see where the money goes from there.

Not only did this year's budget include recommended funding levels for FY 2009, but it recommended two different policy proposals for Congress to consider. The first is the taking of rescinded monies and move them into two federal programs which are of particular interest to the president and to the secretary of transportation, and one is to move $100 million of the rescinded monies into the Urban Partnerships Program for 2009, to extend that for another year. That program is designed to address pricing demonstration projects nationwide. There were no projects in Texas chosen in 2008, although Dallas was a finalist for participation in that. And then also, as far as redirecting the rescinded monies, the president's budget recommends that $75 million go to the Corridors of the Future Program which includes Interstate 10 and Interstate 69, as well as several others, obviously, nationwide.

The second policy recommendation in the president's budget that I'd like to discuss proposes the authorizing of funds to be moved from the Federal Mass Transit account to the Highway Trust Fund in FY 2009 if two things happen: if the Highway Trust Fund itself, if there is insufficient funds in there, and then if in the Mass Transit account receives deposits greater than projected, then the Highway Trust Fund could essentially borrow money from Transit account.

The president's Office of Management and Budget estimates that the Highway account will require an advance of $3.2 billion, the Congressional Budget Office, CBO, reports that the amount could be lower, around $1.1 billion, but everyone agrees that in 2009 is the year that the Highway Trust Fund will run insolvent.

Now I'd like to shift just quickly to several reports that have been out in the public realm for the last month, or since Victoria, two SAFETEA-LU reports and then also one from the General Accounting Office.

First of all, the release of the National Surface Transportation Policy and Revenue Study Commission report -- which is also called the 1909 Commission -- was reported last month and it set off a flurry of activity in D.C. Both House and Senate transportation committees have met twice to review the report and to hear from the participants in the report, as well as others. The commission's idea to restructure the federal program to be less process-driven and more results-driven has been well received, as you would expect.

At hearings on the Hill recently, most interest groups and congressional leaders agreed with the general concepts presented by the 1909 Commission. However, overall there is disagreement, of course, on how to pay for the transportation funding problem that was identified in the 1909 Commission report.

If you look at U.S. DOT, they believe that much of the federal program could be streamlined, making way for those funds to be utilized for congestion relief. Others, including the 1909 Commission, believe that a gasoline tax increase and a large federal role are the only way to meet this shortfall.

Directly on the heels of the 1909 Commission report, the other SAFETEA-LU established committee, the National Surface Transportation Infrastructure Finance Commission -- which there's no snappy short name for that one, I guess; they were charged with reviewing transportation financing options -- released an interim report with little fanfare. Some of the observations, though, read directly from what you here at the commission level deal with in Texas every day, so none of this will be, I think, news to any of us.

The first observation of this commission was that the transportation system demands are outpacing required investment; maintenance costs are competing with necessary expansion of the system; the fuel tax, which has been the key federal funding source for our system, is no longer sufficient at current rates; more direct user charges should be explored; and we need not only more investment in our system but more intelligent investment complemented by better operation of the system. Again, to me, that reads from your play book as well.

The General Accounting Office has also weighed in on this subject. They provided testimony to the Senate Committee on Environment and Public Works recently that provided for Congress three principles for evaluating any transportation program restructuring efforts. The first would be to clearly define the federal role based on areas of national interest; secondly, incorporate performance and accountability for results into funding decisions; third, ensure fiscal sustainability and employ the best tools and approaches to improve results and return on investment.

A second study released by GAO reviewed the utility of public-private partnerships. They found that public-private partnerships are indeed a viable option where appropriate, but as we all know, they are not a panacea for meeting all transportation needs. Potential federal restrictions must be carefully crafted to avoid undermining the potential operational benefits associated with public-private partnerships.

The GAO further recommends that in order to protect the federal interests, Congress should direct the secretary of transportation to develop objective criteria for identifying a national public interest, such as interstate commerce or homeland security, as a part of any public-private partnership pursuit. In addition, policies should be set to ensure that the public interest is protected, including setting policies that govern the use of excess toll revenue and private rates of return -- again, items that we are familiar with here in Texas.

I'd like to segue now into a very brief discussion of the Highway Trust Fund. Mr. Chase has, for months now, been discussing with you the outlook as far as the insolvency of the Highway Trust Fund in 2009. Up in D.C. and behind the scenes, some congressional leaders understand the fact that over the next several months the highway trust fund will shift from a surplus to a deficit. Everyone agrees on that. While most lawmakers would prefer that the issue be dealt with in the context of a larger surface transportation bill in 2009 -- or if passed as a prologue, 2010 -- others understand the risk of crises if Congress procrastinates until it's too late.

Congressional leaders looking to act ahead of a trust fund crisis recognize that there's no one silver bullet solution. The administration's budget recommendations are insufficient to bring the Highway Trust Fund into balance, and Congress is unlikely to approve a tax increase to address this during a presidential election year. But discussions among House and Senate leaders on the necessity of a short term patch for the trust fund have begun, and that is good news. This early in the conversation, no one can accurately forecast what those results will be.

In concluding, I'd like to say that the unreliability, again, of federal funding is very real. The Highway Trust Fund is going insolvent and it will depend on Congress elevating the issue on their hierarchy of important issues to enact a fix soon. Several members have spoken out on problems in Highway Trust Fund fixes but have not yet been successful in enacting reforms that could bring the fund to parity.

In addition, given the presidential election and the subsequent process of staffing a new administration, it is likely Congress could only enact an authorization bill on time by leaving the president out of the process. Instead, it is more than likely that FY 2010 funding levels will be set in a short term extension -- very common -- in the budget authorization process. Given the situation with the trust fund, we may see funding levels that are dramatically reduced in 2010.

However, despite these unknowns, one thing is very certain: people are discussing transportation issues, it is in the media, it's on the minds of national interest groups, and Congress cannot afford to ignore the problems anymore. We are fortunate in Texas to be at the forefront of many of these discussions and involved in several interest groups. Together we will work to find funding solutions.

And I'll be glad to answer any questions that you may have.

MS. ANDRADE: Thank you. Members, do you have any questions? We do have a citizen that has signed up to speak on this agenda item. John Shackett.

MR. SHACKETT: Good morning. Hello. My name is John Shackett. I'm a Texan, born and raised, and I swear Coby and I have never taken steroids.

Let me make one public comment very clear. I'm a strong supporter of TxDOT and toll road agencies. Based on the last presentation, we cannot rely on the federal government. In my opinion, we're in our current situation due to a breakdown of trias politica, otherwise known as a breakdown in separation of powers at the state level. It's easy to blame people but the fact is our system let us down.

A simple solution would be to have the governor appoint the presiding officer of the commission, have the Senate appoint two commissioners, and then have the House appoint the remaining two commissioners. That way, if the politics bleed into the agency, there will be fair representation and we can keep the lines of communication open.

While Texas is dealing with internal politics, the federal government is moving swiftly to avoid an economic crisis. Their stimulus bill is basically cranking out $100 billion and throwing it up in the air. It will be interesting to see if we get a check or a bucketful of Yen. At the same time, we're seeing significant cuts in interest rates outside of regular scheduled meetings. Please be assured that these actions are based on expert opinion that we're on the verge of some economic issues.

Back to Texas. While the federal government is trying to hold the economy together, Texas cuts over a thousand engineering job opportunities overnight, Texas has taken away a billion dollars in mobility projects, Texas is talking about moving more money from mobility to maintenance, Texas is spending millions studying a long term mobility plan that is generating a lot of anti-toll sentiment.

Don't get me wrong, I do believe we need to preserve our assets and have a long term mobility plan, however, we might need to re-evaluate our priorities due to the fragile state of the economy.

Now, there's a really cool book out there called "Freakonomics." It's about economics and math. I think that might apply here so let's ask the following hypothetical questions. Please note that I'm not looking for answers, these are just hypothetical questions.

If our current pavement score is 87, didn't we accomplish that with inflation over the last five years? Shouldn't that budget only increase by the 2007 inflation index? If we want to keep up with inflation, shouldn't we be letting $7 billion next year? If the federal government can throw 100 million yen -- I mean dollars in the air, should we be concerned with nominal Federal Highway Trust Fund deficit?

Here's the Freakonomics: a minuscule change in your assumptions can have a drastic impact on the outcome and the numbers. Another way of looking at it is you can ask the same question with just a slight variation and get a totally different answer. That's exactly why you have to keep politics away from the numbers. We need a system in place that will allow the agency to clearly communicate facts, regardless of political consequences.

The unfortunate thing is we're not doing that. Instead, we're sacrificing people at the mercy of politics. We're sacrificing Mr. Saenz and Mr. Bass, we're sacrificing the great employees of TxDOT, we're sacrificing the people of Texas by shutting down mobility projects. What's ironic about that is we should be grateful for the people who dedicate their careers to the State of Texas.

If we would just repent and apologize, it would take less than a day for the Senate Finance Committee to sit in a room with TxDOT personnel and regain confidence in this agency. TxDOT has good people, no need to call in the state auditor. Let's work together and focus on things we have in common, that's what Texans are supposed to do. One thing we all have in common is we believe there is no better way to stimulate the economy than by investing in mobility projects. Look at 183A, 1431, look at the Toyota plant, look at the economic development of Plano and Frisco.

We owe it to the people of Texas to be prepared, do our best to do our duty to God and country, and help other people at all times. These are the fundamental principles of the governor's new book. It's uncanny how they apply to us today. In my opinion, all parties involved should respectfully request the governor to call a two-minute special session in order to take a look at diversions, enable Proposition 12, address TxDOT short term borrowing concerns, and come up with a better plan to joint venture with RMAs and toll road agencies. Deals are being cut as we speak.

And I actually do have a plan for a two-minute special session that would take about two minutes to explain it but I'm out of time. I'd love to explain it to you now, or I could just send my thoughts directly to you. Do you have a preference?

MS. ANDRADE: Please send us your thoughts.

MR. SHACKETT: Send the thoughts, you bet.

In conclusion, the people of Texas are not concerned if someone makes a mistake, we all make mistakes, the people of Texas are concerned about making a living. Let's work together as we move forward. Thank you.

MS. ANDRADE: Thank you so much. We always enjoy hearing you and you give us food for thought. Thank you.

Any other questions?

(No response.)

MR. SAENZ: The next item on the agenda is a report by Phil Russell on the status of our market valuation process and the status of the 87 toll projects that we've identified.

MR. RUSSELL: Thank you, Amadeo, and good morning, commissioners, Mr. Saenz and Roger. For the record, I'm Phillip Russell, assistant executive director for Innovative Project Development.

The discussion item before us, the market valuation update, what I thought I might do is give you a bit of a snapshot in time, where we are right now, and provide a little bit of a history. I think as most of you know, market valuation is a creature of Senate Bill 792. We spent some time last summer digesting exactly what that entails. Market valuation is a fairly set piece process. 792 depicts a process for regional mobility authorities, Chapter 366 toll authorities, as well as county toll authorities, Chapter 284.

The process essentially is we sit down, we agree to the business terms, then we select a market valuator, and the market valuation is completed, and there's a 90-day time line that we can fine tune that market valuation before it becomes finalized, and then, of course, six months is the time line that toll authorities have to decide whether they want to develop the project or not.

And so going forward from last summer, TTA, working in concert with GPA and OGC, developed some training aids and we went out last fall and began training our district staff, those staff members that would be involved in these market valuations. We also provided this input to the regional toll authorities throughout the area and have completed all of those training sessions.

The attempt, of course, is to prioritize those 87 projects which are of a critical nature to the state. Many of those, of course, don't require market valuations because they occur in areas, for instance, like Corpus that doesn't have a regional mobility authority or any other toll authority. But the three projects that we have initiated and furthest along are, of course, in San Antonio, Dallas and Houston. The Grand Parkway project, of course, was the primary project in Houston, those efforts are ongoing. Gary Trietsch, of course, is the TxDOT representative in that process. I think the last schedule I saw, it was about September when they think that market valuation is to be completed.

Now, part of the discussion, as everyone has heard -- and especially sensitive in the Houston area is the notion of the market valuation -- is the valuation predicated on a municipal debt model or is it predicated on a concession model. And what I think we're learning, what I hope we will be doing is kind of getting beyond that and focusing on those business terms, whether it's toll rate, toll escalation rate, or whatever the case may be. And at the end of the day where I think it really comes out is that traffic and revenue analysis: is that traffic kind of a standard municipal debt traffic model, or is it a bit more aggressive that a lot of the concessionaires utilize. So I'm hoping that we can focus on the traffic model itself and hopefully through that process we'll be able to move through the market valuation and come to a final decision on that.

The 281 project down in San Antonio has been completed and finalized, and the 161 project was the critical project in the Dallas area. Bill Hale, of course, is our TxDOT negotiator in that area, and I would anticipate that that market valuation will be completed at any time.

Now, one of the other elements that is a potential roadblock -- it's at least a critical issue that we have to work through -- is, again, the traffic analysis, and with 87 projects out there, and we've talked before that there's limited horsepower in the private sector model as far as generating that traffic and revenue forecast. So TTA went out pretty aggressively, assigned all those projects to the various traffic and revenue firms, and looking at traffic analyses that were completed previously or those that have been completed since then, they have over 50 of those traffic and revenue analyses completed now out of those 87 projects. So again, that's kind of an early stumbling block. You at least have to have the baseline traffic and revenue analysis before you can get into the market valuation itself.

The other critical areas are moving along as well. The Austin District now is beginning to initiate their projects for the Austin and the CTRMA projects -- I think there's five projects in this area that will be looked at. Of course, Pharr, Tyler, all the other areas now are jumping in as well and trying to get those market valuations up and running.

And so I guess my message is it's been a little slow getting through these first market valuations, but like anything, there are a lot of challenges that you have to work through: what's the definition of a business term, is this it, is it not it. And I think we've learned a lot, both TxDOT and the toll authorities, and I would anticipate that these market valuations will start moving at a little more rapid pace from here on out.

Be happy to address any questions you all might have.

MR. HOLMES: Phil, you said that 50 out of the 87 TNR studies were complete. Did I understand you to say that?

MR. RUSSELL: Yes, sir.

MR. HOLMES: Well, that's pretty remarkable. Does that presume that the business terms have been agreed as well?

MR. RUSSELL: No, sir. First step, again, just to complete the traffic and revenue analysis, and what we kind of looked at is you have to get that baseline traffic and revenue studies completed, and so we tried to make sure that those analyses, or as many of those as possible, were completed even before we get in and sit down and start talking about the market valuation. So that's not to suggest that those business terms have been worked out on all those other projects. Again, the three projects that I mentioned are the projects that have been focused on and we're just now getting into that business term analysis, for instance, here in the Austin area.

MR. HOLMES: To make sure that I understand this, you were able to do a traffic and revenue study without pricing and without business terms?

MR. RUSSELL: Yes. I think you can probably provide some basic estimates because the traffic and revenue process itself is a lot of number crunching and it takes a long time, and of course, without getting into too much of the details, there's essentially three different levels of traffic analysis. Each one requires more effort and more analysis, more calculation.

The goal, obviously, would be to be able to get the most detailed, the Level 3. It's the level that we typically would take to the bond market. But the reality is to move forward quickly on these projects, we're not going to be able to wait that long to get a Level 3, an investment grade analysis on every one of those projects. So we tried to look at how many of the traffic analyses had been completed, even if it was a rudimentary Level 1 analysis, and then try to use that as a baseline.

Now, Commissioner, of course, you're exactly correct, when you start looking at the business terms, then that local area, for instance, may choose to have a 14 cents per mile toll rate, then that traffic model would have to be tweaked a little bit, but the fact of the matter is a lot of the number crunching, a lot of the effort has already been completed, so it's relatively easy to get in there and start tweaking those numbers.

And I think, Commissioner, again, that's a really good point. Say, for instance, that we only have a Level 1 analysis, well, obviously, when we get down to that market valuation, both sides are going to want a little more data, and whether it's an enhanced Level 1 or enhanced Level 2, the fact of the matter is a lot of that early number crunching would have already been taken care of and we can start from day one of really getting into the business terms.

MR. HOUGHTON: What was the traffic and revenue analysis on State Highway 130 when the department did it on Segments 5 and 6 before?

MR. RUSSELL: As far as what the gas tax requirement would be, it was, Commissioner, in the area of about $700 million of gas tax that would be required for that billion three project.

MR. HOUGHTON: So an investment by the State of Texas of $792 million?

MR. RUSSELL: Yes, sir.

MR. HOUGHTON: What was the traffic and revenue study on State Highway 121 in the Dallas-Fort Worth area?

MR. RUSSELL: How much gas tax would be required?

MR. HOUGHTON: Originally.

MR. RUSSELL: Well, originally, if you go back three or four years ago, I think the early calculation was that it would require $150- to $190 million of gas tax dollars to make that project solvent, toll-viable.

MR. HOUGHTON: And what is the end result of the State Highway 130, Segments 5 and 6?

MR. RUSSELL: The end result is that we've got a $1.35 billion project with no state gas tax dollars attributed to the project, and then, of course, on top of that we're getting a concession fee, $25 million and some change up front, as well as a revenue share that we conservatively estimate at about $240-, $250 million, present value.

MR. HOUGHTON: And State Highway 121, the end result?

MR. RUSSELL: I think the end result is -- and I was up there for a groundbreaking last Friday morning -- that NTTA provided essentially a benefit of about $3.1-, $3.2 billion to that whole Metroplex area to build additional projects.

MR. HOUGHTON: So there's a big disconnect in what we look at or our advisors and what the private sector looks at in traffic and revenue studies.

MR. RUSSELL: I think that's a fair statement.

MR. HOUGHTON: Are all the ongoing or the ones that have been completed traffic and revenue on the roads that you talked about, are they the investment grade municipal model, or are they looking at other models?

MR. RUSSELL: Well, Commissioner, that's a good question, and when I talked about the 41 traffic and revenue analyses that had been completed, a lot of those, again, were traffic analyses that TTA had completed out over the last two or three years, and so a lot of those may have been more of a municipal debt type traffic analysis, and then some of the more recent ones would be a concession, more aggressive traffic pattern.

And so I think ultimately, again, as you get down and start discussing, negotiating that market valuation, the first thing that you really hone in on is traffic, what level of confidence do you have in that traffic: is it a 50 percent confidence level, is it a 95 percent confidence level, and how aggressive is that traffic. And that's why I'm trying to kind of shift that debate from is it concession or is it muni market based, and I'm trying to get folks just to focus on that traffic and see what's plausible and what's reasonable for those traffic projections and let that kind of be negotiated at that level.

MR. HOUGHTON: So our view of the world or our consultants' view of the world on traffic and revenue have one view, and the two successful ones that we have been associated with, the private sector has another view, or NTTA, as a public sector, has another view of that.

MR. RUSSELL: Yes, absolutely.

MR. HOUGHTON: And successfully we have put in the bank how much money?

MR. RUSSELL: $3.1-, $3.2 billion.

MR. HOUGHTON: And $25 million from the 130 that is now under what, they're acquiring right of way?

MR. RUSSELL: Yes, sir. And the only bit of clarification I would say on that, Commissioner, is on 121 -- and we've talked about that in previous commission meetings -- our original model, our original estimate put the value of 121, using an aggressive traffic model, really slam-bam between the second and third proposer.

MR. HOUGHTON: Right.

MR. RUSSELL: The Cintra proposer came in much over that, about a billion dollars increase. So our model really hit perfectly -- and James Bass can do a better job explaining this than I can -- but our model hit perfectly between Proposer 2 and 3 on 121, and so Cintra's traffic was even more aggressive than that.

MR. HOUGHTON: And we're recording all of these negotiations?

MR. RUSSELL: Yes, sir.

MR. HOUGHTON: Every one has been recorded?

MR. RUSSELL: Yes, sir, to my knowledge, every one has.

MR. HOUGHTON: Okay. Thanks.

MS. ANDRADE: Members, any other questions?

(No response.)

MS. ANDRADE: Thank you very much.

MR. RUSSELL: Thank you, Chair.

MR. SAENZ: Thank you, Phil.

Commissioners, it's right after ten o'clock, and as you mentioned, you wanted to do agenda item 9(b)(4) which is final adoption of rules dealing with LED signs, so we'll go on to item 9(b)(4), and I'll have John Campbell present that.

MS. ANDRADE: Thank you.

MR. HOLMES: Madame Chair, before this starts, let the record reflect that I have a conflict of interest in this and am not able to participate and abstain from all discussions and voting.

MS. ANDRADE: That is correct. Commissioner Holmes did mention that he would be abstaining on this agenda item.

Both (4) and (5), Commissioner Holmes?

MR. HOLMES: On the LED which is (4).

MS. ANDRADE: For the record, let it be known.

MR. CAMPBELL: Thank you very much. For the record, my name is John Campbell, the director of the Right of Way Division, and I'd like to present for your consideration this morning item 9(b)(4) which provides a minute order for the final adoption of amendments to Sections 21.142, 21.150, 21.154, 21.441, and 21.551 of Title 43 of the Texas Administrative Code. It also contemplates a new Section 21.163 providing for the limited use of electronic outdoor advertising signs.

These rules, as proposed, accomplish two fundamental things. The first is that Sections 21.150 and 21.441 implement the provisions of House Bill 2944 passed by the 80th Legislative Session in 2007. HB 2944 amends the Texas Transportation Code Section 39.068 to provide that the commission may not issue a permit for an outdoor advertising sign within the jurisdiction of a municipality of a population in excess of 1.9 million unless the municipality has first issued local permission for that outdoor advertising sign.

The second feature of these rules is to propose changes to Sections 21.142, .154, .551, and new Section .163 to establish criteria for local control over the regulation of electronic outdoor advertising signs within the boundaries of and at the discretion of local jurisdiction.

Comments on the proposed amendments and the new sections were accepted until 5:00 p.m. on December 6 of 2007, reflecting an extended 90-day comment period. We also conducted a public hearing on November 28 and took additional public comment at that time.

The rules will take effect on the 1st of May of 2008 if they're received favorably by the commission. Staff recommends your approval of the rules.

MS. ANDRADE: Members, we have a few citizens that have signed up to be heard. Would you like to hear them first?

MR. HOUGHTON: I'd like to ask John a question, please, Madame Chair.

MS. ANDRADE: Of course.

MR. HOUGHTON: John, during that comment period, the extended comment period, what kind of comments did we get?

MR. CAMPBELL: We received a great number of comments. First of all, this is probably the largest volume of comments that we've received on rules in recent memory. We had somewhere just 800 comments received.

The general nature of them was general. We typically were receiving comments that expressed a general position in favor or opposed to the notion of LED rules. We actually received a very small number of substantive recommendations for revisions to the rules.

I've got those breakdown numbers if you'd like to get more specific.

MR. HOUGHTON: I'd like to hear the breakdown numbers, but I'd also like to ask you a couple of questions to set up the testimony.

MR. CAMPBELL: Sure.

MR. HOUGHTON: But go ahead.

MR. CAMPBELL: There was a total of 794 comments received. Those were distributed amongst, we categorized them as comments received from the general public at large, comments received from employees of the regulated industries, comments received from public officials, and comments received from associations or interest groups. As I said, the total was about 794, and if you broke that down just in a general tally of those in favor and those opposed, we had about 349 in favor of the rules as proposed and 419 opposed.

MR. HOUGHTON: Now let me ask you a couple of questions regarding what we're going to be voting on today. As I understand it, LEDs, what we're talking about is not restricted but authorized within jurisdictions of municipalities in their jurisdiction and their ETJ. Is that an accurate statement?

MR. CAMPBELL: That is correct. These rules only contemplate allowing electronic signs within the jurisdictional boundaries of a municipality and then only with the prior approval of that municipality.

MR. HOUGHTON: Does this allow LEDs on state highways, interstate highways outside those jurisdictions?

MR. CAMPBELL: It does not. In fact, the rules explicitly establish that prohibition for LEDs to be permitted along Texas rural roads.

MR. HOUGHTON: And are we, in fact -- I think one of our philosophies on the commission here is to deflect to local leadership to determine whether they will allow LEDs in their jurisdiction. Is that an accurate statement?

MR. CAMPBELL: That is correct. The intent, the letter of these rules were put together to defer to local control and local determination as to whether or not they wanted to allow LED signs.

MR. HOUGHTON: We set a baseline and they work from that baseline.

MR. CAMPBELL: And we established that baseline in conformance with the recommendations and the guidelines that have been promulgated by the federal regulations, as well.

MR. HOUGHTON: On state highways and interstate highways on the state highway system in the rural areas outside jurisdictions, current billboards or signage comes to this department. Correct?

MR. CAMPBELL: That is correct.

MR. HOUGHTON: Applications are made and we either grant or otherwise. Is that an accurate statement?

MR. CAMPBELL: That's correct.

MR. HOUGHTON: So again, this does not authorize LEDs on the rural state highway, interstate highway outside those jurisdictions.

MR. CAMPBELL: Correct.

MR. HOUGHTON: How many cities in the state of Texas are going to allow or are allowing LED currently off the state highway system?

MR. CAMPBELL: I'm unaware of the actual number. I would comment that the general trend within municipalities has been towards stricter enforcement of outdoor advertising rather than less restrictive enforcement.

MR. HOUGHTON: Madame Chair, that's all I have.

MS. ANDRADE: Thank you, Commissioner Houghton, for reminding us that it's local leaders making local decisions for their communities.

MR. CAMPBELL: That is correct.

MS. ANDRADE: We'll start with Carroll Shaddock.

MR. SHADDOCK: I'm Carroll Shaddock. I'm with the law firm of Locke, Lord, Bissell and Liddell. We represent Harlan Crow. Also, I'm the founding chairman of Scenic Texas and I speak on behalf of that organization, and at the end of my very brief comments, I would like to speak personally just for myself.

I speak to ask you to delay acting on this proposal. The lieutenant governor has called for an interim study of billboards before the 2009 session of the legislature. Senator Carona, the chairman of the Transportation Committee of the Senate, has written to you, it's in your public record, questioning the need to act on this proposal now. Two primary issues he mentions are the huge consequences to taxpayers that will result from the dramatic increases in condemnation costs which will result from the construction of LEDs in the state, and secondly, concerns about safety with respect to which an independent study remains to be done, and FHWA is currently conducting such a study, the results of which will be announced in 2009.

Notwithstanding what happens with these issues, the direct result of your action today, if you act -- and I ask you not to act -- will be to create a huge bundle of private property rights which will result in LED construction which will never be reversed in this state. There is simply no public purpose in acting now. Acting now can only be a response to special interests. I call on you to do the right thing and delay action on this item.

Finally, I'd like to make a personal statement which is not on behalf of the people whom I mentioned. I would like to do so as a person who proudly considers myself to be a Republican and a conservative. This is exactly the kind of governance which is undermining the conservative movement in the country today, and I think this action will do no favor for the principles that I cherish and that I would hope that you cherish.

Secondly, I would like to speak as the grandfather of five seventh generation Texans, on both their mother's and their father's side, who are under the age of twelve. We've had billboards in Houston proclaiming messages like: Hey, you virgins, thanks for nothing. Now in California LEDs are beaming the message: Dirty, Sexy Money. Free speech considerations do not allow you or anybody else to permit limitations on these kinds of expressions if you choose, due, I believe, to the requests of private interests, to permit this medium to be created to enhance these messages to the children of this state.

I urge you to delay and not take action.

Thank you for considering my thoughts.

MS. ANDRADE: Thank you very much, sir.

MR. HOUGHTON: Carroll, I want to thank you. I had a great opportunity to visit with you yesterday, and I appreciate your passion. It was a very beneficial meeting yesterday.

MR. SHADDOCK: Well, thank you very much. I very much appreciated your time and your consideration.

MR. HOUGHTON: Thank you, sir.

MS. ANDRADE: Mara Eurich.

(No response.)

MS. ANDRADE: All right, we'll put it on the side. Daniel Boone.

MR. BOONE: For the record, I am Daniel Boone, not the original. I want to thank the commission for the opportunity to speak to the issue of the signs.

And one thing that was commented on was that this is to return the power to local control, and there are two issues there. This commission approves something, it's highly respected -- though you might doubt that sometimes -- you're highly respected and the local folks assume that if you approve it, it must be safe, and what I want to speak to is the safety of it.

The change where the signs are going to be placed locally, the traffic will cease being high speed traffic and go to lower speed traffic, and that, of course, is a transition that has some difficulties of its own safety-wise. And the speeds at which they travel at 60 miles an hour, as I mentioned in the last session of this commission, about the time that you would see a change in the sign is about the length of better than three football fields, and diverting your attention for that long a period of time and that distance is certainly a danger.

The question is is there a danger, and the proponents have offered you two pieces of research which they suggest says that there is no danger. Now, I've had a chance since that last meeting to review that research and it is severely flawed. It is so severely flawed that it would not pass muster at our local university in a research methods course. And I can give you all kinds of data on that, if you'd like, but I don't have time and I don't think you want to hear it.

But I urge you not to approve this at this time. I respect the desire of the sign people to make a living and make as much profit as they can, and that's perfectly legitimate, but it should not exceed the concern for the safety of our citizens, our young people who will be driving. And I think that really, to me, is the major issue that is of concern, that the data that they have offered you is flawed and that there are good reasons to feel that there's a great danger in the areas in which they want to place these signs.

And that's really basically my comment. I thank you very much for your attention and I'll be glad to answer any questions you might have.

MR. HOUGHTON: I just want to say thank you for showing up, but I will dispute one fact with you, that anything we say other people listen to out in the hinterlands. I hope you've been noticing the toll road debates, or traffic transportation debates that over the last several years will dispute the fact that not all listen to us, Mr. Boone. And that's a humorous issue.

MR. BOONE: We may not always agree but we do very much respect your decisions.

MR. HOUGHTON: I appreciate it. Thank you for coming.

MS. ANDRADE: Thank you, Mr. Boone, very much.

V.J. Smith.

MR. SMITH: (Speaking from audience) I'm here for the purpose of answering questions.

MS. ANDRADE: All right. Same for Blake Custer?

MR. CUSTER: Yes, ma'am.

MS. ANDRADE: Frank Burney.

MR. BURNEY: Madame Chair and members of the commission. My name is Frank Burney. I'm a lawyer in San Antonio, and for the better part of the last 18 months, I've worked with Clear Channel Outdoor to create a local solution that permits digital signs in the San Antonio city limits.

This process was a long process. We had over 60 meetings with various members of the city council and the staff and every affected neighborhood group, and we finally came up with an ordinance that was passed by ten of eleven city council people, including the mayor of the City of San Antonio, just recently. We designed a San Antonio solution to this problem that either meets or exceeds the state and federal guidelines, the state regulations which you're proposing today and the federal guidelines issued by the Federal Highway Administration.

The result was a compromise that was well received, I think, by the community, evidenced by the fact that we got ten of eleven votes from the city council and the mayor's position.

The two issues that have been raised today, one is condemnation. The way we dealt with that on a local basis is that we worked out an arrangement with the city that in the event there was a condemnation of a sign is that we would be allowed to relocate the sign. Thereby, there would be no additional cost whatsoever that the City of San Antonio would have to pay because of the digital unit on that sign.

The second issue that was raised today was related to safety. The San Antonio Police Department, the traffic engineers with the Public Works Department and Transportation Department of the City of San Antonio all looked at every available study that was out there, and they came to the conclusion that there was no measurable risk in installing digital signs within the city limits of San Antonio.

It was referenced that there was a Federal Highway Administration study that was going to be evaluating this in the year 2010. We could find no evidence that there's been any appropriation or any effort by the Highway Administration to conduct that study, in fact, and I don't think it will be done. But basically everything that was available in the public today was reviewed by the City of San Antonio and they found that there was no measurable risk in installing digital signs.

As the Chairwoman said, this statute, proposed ordinance, regulations will give the opportunity for local leaders to come up with local solutions on a local basis and come up with a framework that works for each city in Texas. And so I recommend passage of these recommendations.

MS. ANDRADE: Thank you.

Margaret Lloyd.

MS. LLOYD: Thank you, Madame Chair and commissioners. My name is Margaret Lloyd. I'm the policy director for Scenic Texas, and I appreciate you allowing me to speak for a great number of citizens on this issue today.

I'm speaking on behalf of those -- who I think are all of us -- who want to preserve the beauty of our state and I ask that you either oppose these rules or delay these rules until after the Federal Highway Administration has published its safety study in 2009 that it is currently doing as we speak. There has been an appropriation and it is underway.

I know you all are busy and you don't focus on this issue very often, and I appreciate you taking a few minutes to just think about this because this is a big deal, this is a very big deal. Allowing the lead visual polluter in Texas to pollute in a more aggressive and invasive manner is wrong. Not only is it wrong, it is opposite from what congressional intent is and what the state legislative mandate is: controlling outdoor advertising.

Your vote today will allow a new technology across this state without a publicly funded safety study to support it, that will allow one ad -- excuse me -- seven ads in one minute, 42 ads in one hour, and over 10,000 ads on one face in one day. That's what you're voting on today. You need to be very sure you want this before you vote. And I know you have to have doubts, in your hearts I know you have to have doubts about this.

Over 86 percent of the people in Texas that are polled don't want to see new billboards along our highways. We fight hard in our cities to preserve the community character. You're changing a policy that has worked.

I ask you to please consider how you will explain this to your kids and your grandkids. Is this the right direction for our state to take? Be sure it is, be very sure it is.

You're going to have higher construction costs, you're going to have uncertain safety, you're going to vote against what the overwhelming majority of the citizens of the state want. And you know what, everyone says to me you don't care. They say, Margaret, you're wasting your time, don't bother. I don't believe that. I get up every morning thinking that every one of you cares and that you will do the right thing. I believe that you will not allow this industry to control the beauty of our state and to dictate policy along our highways. I hope you don't disappoint the citizens of the state, I hope you don't disappoint me.

And I want to also mention that a great man died last night, who many of you will know, a great conservative, William F. Buckley, Jr. And when William F. Buckley, Jr. and Lady Bird Johnson agree on something, we probably ought to listen. William F. Buckley, Jr. said in 1966 that billboards are an act of aggression against which the public is entitled, as a matter of privacy, to be protected. And he was right in 1966 and he's right today.

Thank you for your attention.

MS. ANDRADE: Thank you very much.

Don Riley.

MR. RILEY: (Speaking from audience.) I'm here to answer any questions.

MS. ANDRADE: Thank you. Lee Vela.

MR. VELA: Good morning, Madame Chair and commissioners, and I'm here as well to answer questions, but I did want to make a couple of comments about the public good for this particular measure that we are looking at currently.

It is about the future of Texas. It is also about the public service aspect, and I wanted to be sure that we emphasize that, that we join 22 other states in the union in allowing this technology that has been so instrumental in catching wanted criminals, in Amber Alerts, and so important to us in South Texas and throughout Texas in evacuation information and natural disaster information.

These boards will create a network throughout the state that will allow law enforcement and public agencies to be able to instantly communicate to the public -- just that aspect alone is certainly important to all the citizens of Texas -- as well as the many, many businesses that use outdoor advertising, approximately 70 to 80 percent in some markets, are locally owned businesses, Texas businesses that depend on this kind of advertising to reach the traveling public to sell their goods, to sell their services which stimulates the tax base which drives the economy of Texas.

So we urge you to continue to look favorably upon these rules and to allow the local control, as we've seen in San Antonio, taking a very responsible look at allowing this technology to enter in Texas. Thank you.

MS. ANDRADE: Thank you very much.

Robbi Boone.

MS. BOONE: I'm Robbi Boone. Thank you, Madame Chairman and Commissioners for the opportunity as just a citizen to speak with you today because this is so terribly important.

In talking with other people in the communities about this and about other signs that are going up in our little unincorporated Hill Country areas, I don't find people who are in favor of them. It's strictly a business interest. And we all want limited government, we all want a successful state with people able to make a living and to have economic prosperity, but we don't want it to the detriment of people, of stress, of disfiguring the landscape, and certainly not for a lack of safety.

When John Campbell presented his report, he indicated there were 974 comments received, and he broke those down by categories. We might find it interesting to know what categories the yeses and the nos were in, because 349 to 419 opposed sounds very even. It would be very interesting to know what the citizens of our state think.

I just hope that you will realize there's great feeling in our communities about this. People are interested right now in politics and what is going on; it's the most interest people have shown in a long time. People have felt that government doesn't care, and I know you all do care, we all care, we are all supposed to be in this together, and I hope you will listen to the citizens of this state. Thank you.

MS. ANDRADE: Thank you very much.

We have a couple of people that have signed up and I'm going to mention their name just for the record, but they've chosen not to speak, and they are against this agenda item. Lynne Anderson, Betty Karnes, Heidi Goodwin, and Mary Sawyer.

Are you Ms. Eurich? All right. Mara Eurich. We called you at the beginning, so we put you on the side, so we waited for you.

MS. EURICH: Hi. My name is Mara Eurich and I live out in an unincorporated area of Hamilton Pool Road, and I'm extremely concerned about this.

Allowing digital billboards is wrong on so many levels, I cannot cover them all. The roads of Texas are not Times Square, New York City. The only people that these billboards will serve are very few and these very few are already being served by a dearth of other types of advertising. Our culture is weighted down by all the multitudes and avenues that advertising is delivered to us from radio, TV, magazines, billboards, new places, T shirts, our children's classrooms. We, the people, have to bear the weight of all this excess, and now we again have to pay with a further eroding of our beautiful countryside so these very few can put their brilliant but oh so tired messages, and for what social benefit, pray tell.

Here are some of the costs: a destruction of the innate beauty of our beautiful state, a damaging of our tourist industry, a proven distraction of drivers making our roads less safe. Three and four seconds of watching these signs will truly increase accidents on a busy road. I tried to read the pecan sign west of Bastrop on Highway 71 and nearly ran up the tailpipe of the truck in front of me. My addled brain could not take my eyes off of it. Is this a distracted public that you want behind the wheels on our highways? Please consider our safety when you put your heads together and vote.

I am also amazed that during this time of spiraling energy costs, you are considering developing a whole new market niche for the wholesale wasting of our limited resources for no social benefit. Not only is there no true benefit, there are numerous health and safety detriments that will be empowered by this wasteful use of our power.

The lumens emitted by this country have steadily increased just since 1990 and these signs will only add to it, bringing light to more neighborhoods, fields and hills. I don't know, did any of you read an article in The Washington Post, it was just not long ago? Anyway, there have been studies that have taken satellite maps of our lumens and the bright areas and in a very detailed manner have put them on top of neighborhood things, and they have studied the effect on breast cancer rates, and they have found that they really do mesh.

So when you decide to put all these different -- if you decide to put -- somebody decides to put a sign right across from my house, I'm at danger from that. I think it was 25 percent deviation rate in breast cancer. Now, it wasn't true about lung cancers and other things, but you know, I don't smoke but I've got two breasts.

So I am just asking you to think about the unintended consequences. And this was a study, I'm amazed The Washington Post took so long to actually talk about this because this information has been out on the internet for several years now. The Dark Skies Movement has all been behind it.

And I don't know, this is definitely a health and safety issue and I underline health, I mean, I really do. It's one thing bringing light into areas that already have light, that might not deviate the norms, but where you bring light into areas that have no light, that's already been proven to upset how animals move. It's an ecological and environmental upset.

So please take that into consideration when you vote today. Thank you.

MS. ANDRADE: Thank you very much. Thank you for taking the time to come address us.

Members, you've heard input from the public. Do you have any other questions for John?

MR. HOUGHTON: Again, John, what we're talking about today is allowing the municipalities to determine their own destiny, incorporated areas.

MR. CAMPBELL: That's correct.

MR. HOUGHTON: And these digital signs are not permitted under our rules and regulations in the rural areas currently.

MR. CAMPBELL: That is also correct.

MR. HOUGHTON: There seems to be some confusion in the testimony that these signs are going to be out in the rural areas. I'm hearing that, and I need to make that very, very clear.

MR. CAMPBELL: I'd clarify that its effect is in the incorporated areas of municipalities and within their ETJs if they choose to enforce within their ETJs.

MR. HOUGHTON: Okay. Madame Chair, with your permission, can I ask, John, if you'd stand aside and ask Carroll and Margaret to come up, please?

MS. ANDRADE: Please.

MR. HOUGHTON: Margaret, I too, as I did with Carroll, want to commend your passion for your interest and it's not taken lightly by me.

MS. LLOYD: Thank you.

MR. HOUGHTON: We had a very lively discussion yesterday in the former chairman's office, Ric Williamson, and it would be very befitting, he should have been there to see that lively discussion. But my sense is that you see this as a potential -- and I'm putting words in your mouth but here is my assessment -- potential intrusion into the rural areas along our interstate, state highway and rural roads. Is that an accurate statement?

MR. SHADDOCK: Yes, it is.

MR. HOUGHTON: John, I want to ask a couple of questions here. I'm going to make this statement, I understand the concern, I enjoy driving through Trans Mountain Road in El Paso, Texas and through Hueco Tanks and the mountainous area of the state and having that vision not blocked by anything except the magnificent beauty of this state, as you well do in the Hill Country here and other points.

John, we issue permits for all other billboards outside the ETJ incorporated area. Is there a way to tighten up our rules and regulations to, how would you say, allow Texans to observe that beauty unobstructed in the future, without violating property rights, without doing the things that we Texans love as our cars and our property rights?

MR. CAMPBELL: I would say yes is the answer to that question. There are certainly things that we can do in both practice and with regard to our future review and evaluation of rules to make them both easier for us to enforce consistently and stricter, to preserve those features that are the intent of the Highway Beautification Act. The Highway Beautification Act is there to control and to prevent the unbridled proliferation of outdoor advertising, it is not intended to prohibit or do away with that particular form of free enterprise.

Our responsibility is one as the regulator, and so we have, first and foremost, a responsibility to that industry that we regulate to hear their concerns as well.

MR. HOUGHTON: I harken back to the days -- and I don't drive as much as I used to when I was taking five kids across country -- when we used to do that and we used to come on a series of 20 billboards: The Thing, 10 Miles, Come See the Thing, and you'd have these series of billboards and I still remember that from those days.

What I am proposing, Madame Chair -- where are you, Bob Jackson? I've got to get all my lawyers up here. We talked about looking at these rules going into effect at a point in time but to allow you and others to talk about how we would look at the rules and regulations in the rural areas outside the incorporated and the ETJs regarding billboard applications, signage, those sorts of things.

MR. JACKSON: Yes, sir, we did.

MR. HOUGHTON: Is there a recommendation, can we move the implementation of these rules to is it May 1 we're looking at?

MR. JACKSON: Yes, sir.

MR. HOUGHTON: So that would give us all of March, April, can we move the implementation of the rules to July or June to allow review of our rules?

MS. ANDRADE: Well, I think that what we've done is we've allowed more time than the 20 days -- is that correct, Bob -- so that local municipalities would make those decisions, that they would have time if they wanted to put an ordinance to protect their communities, that it would give them the time to do such.

MR. HOUGHTON: I understand that, Madame Chair, but I'm talking about outside the ETJs, our rules, our regulations regarding billboards on interstate highways that we control outside the ETJs and the incorporated areas.

MR. JACKSON: Are you asking to postpone these rules or are you giving us a date on when you want us to --

MR. HOUGHTON: The implementation. We have a May 1; can we move that to June 1?

MR. JACKSON: That's at the will of the commission.

MR. HOUGHTON: We would review the rules and regulations outside the incorporated and ETJ, give us that kind of time, and then bring those rules back to have them coincide with these rules and regulations regarding LEDs.

MR. JACKSON: It's up to the commission.

MS. ANDRADE: Bob, are those different rules?

MR. JACKSON: They're partly these rules and some other rules.

MS. ANDRADE: But they're different from the rules that we're considering right now.

MR. JACKSON: Some of them are, yes.

MS. ANDRADE: Fred, any comment?

MR. UNDERWOOD: (No audible response.)

MR. HOUGHTON: What I would propose, Madame Chair, is implementation of the rules for June 1, and at the same time, we go back and look at our rules and regulations regarding our application billboard policy outside the ETJs and incorporated areas.

MR. JACKSON: I want to make clear when you say implementation, that means the effective date of these rules will be June 1.

MS. ANDRADE: Versus May 1.

MR. JACKSON: Yes.

MR. HOUGHTON: And we bring back to this commission proposed rules and regulations outside the ETJs and incorporated areas.

MR. JACKSON: Yes.

MR. HOUGHTON: That would be my motion for the commission.

MS. ANDRADE: Do we have a second?

MR. UNDERWOOD: Second.

MS. ANDRADE: All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: For the record, Ned Holmes abstained.

MR. SHADDOCK: Commissioner, I have one thought that might be helpful, if I could try to state it very succinctly. You're focusing on rural areas, and I'm sorry this is a thought that hasn't really occurred to me until now, but I think it might be one to consider now or later. I think when you talk about the rural areas, the effects of permitting this in incorporated cities and in the ETJs of incorporated cities are two different matters, and I think that we have -- for example, my hometown is Orange. I drove over to Orange recently and they've extended the city limits about two or three miles toward Beaumont and there the same billboard company has constructed perhaps 10 to 15 billboards which are in what a driver would look at and say is a rural area.

What's happening in a lot of towns is they're prohibiting billboards in the towns but where the state highway comes by on the outskirts of town or outside of town, they permit billboards there because it doesn't affect their citizens. I think, though, especially it's the ETJ areas that are really to the driver often rural in character.

MR. HOUGHTON: I appreciate it. I think what we have come to, in my opinion, is a pretty good compromise. I listened to you, Carroll, yesterday, and Margaret and Scenic Texas. I believe in the same issues that I would like driving through the beautiful parts of this state -- they're all beautiful in their own right -- that we can tighten some of these things down. And we do believe in local control -- at least I do -- and I'm going to deflect those decisions to the municipalities.

MR. SHADDOCK: Thank you. We appreciate your consideration and offer to be of any assistance we can.

MR. HOUGHTON: I would hope that you will be, and I bet you will.

MS. ANDRADE: Bob, would you like to come up and clarify what we just did so that the public understands? We did approve these rules as they are presented.

MR. JACKSON: I would suggest taking another vote. I think the motion was to change the effective date from May 1 to June 1. It was not clear that that was the actual vote to approve the minute order.

MS. ANDRADE: I agree. That's why I wanted to clarify it. So do we have a motion where the only change is to make the effective date May 1 to June 1?

MR. HOUGHTON: And our staff bring back to us proposed rules and regulations.

MR. JACKSON: That's a direction to staff to bring back proposed rules.

MS. ANDRADE: All right. So let's get another motion.

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: Thank you very much for clarifying that. And for the record, Commissioner Holmes abstained.

MR. HOUGHTON: Thank you, John.

MS. ANDRADE: Thank you, John, very much.

MR. SAENZ: Thank you, John.

Commissioners, I'm going to move to item 14, some State Infrastructure Bank approvals, and I'd ask James Bass to come up. We have some people that came in that because of scheduling conflicts need to leave, and they wanted to be here for this item.

MS. ANDRADE: Of course, we'd be happy to do that.

MR. SAENZ: So James, if you'd come up, we will cover three minutes orders: one for preliminary approval, and two for final approval of requests for State Infrastructure Bank loans.

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

Covering agenda item 14, the first one, 14(a), seeks preliminary approval of a loan to the City of Greenville in the amount of $2 million to pay for local match requirements for construction of the Monty Stratton Parkway overpass at Interstate 30.

Staff recommends your approval so that we may begin negotiations with the city.

MS. ANDRADE: Members, do you have any questions of James? We also have a citizen that has signed up from the City of Greenville. Would you like to hear Mr. Compton first

MR. HOLMES: Yes.

MS. ANDRADE: Okay. Stephen Compton.

MR. COMPTON: Good morning. I appreciate you taking the item out of order. A pretty drive down this morning but it reminded me a lot of California where I come from, and Wisconsin.

We are here and have requested a loan that has a particular term that's more than I think I've seen in most of your loan applications that have been approved. We're looking at a term that would be out 20 years, and that's the only reason I really rose to speak is that I, as the finance director, have looked at the city's long term financial plan and its general fund and so forth, and we're running around that 15 percent mark, and our mayor and our city council have expressed to us that we seek the SIB loan application.

And that's really the only purpose we're here this morning, I know it's preliminary approval. And I put the application together. Also, the public works director is here if you have any questions.

MS. ANDRADE: Thank you.

Members, do you have any questions for Mr. Compton?

(No response.)

MS. ANDRADE: Thank you very much, sir.

MR. COMPTON: Thank you.

MS. ANDRADE: James.

MR. BASS: Again, staff would recommend your approval and we're available for any questions you may have.

MR. HOLMES: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: Opposed, nay.

(No response.)

MS. ANDRADE: Thank you very much.

MR. BASS: Item 14(b) seeks final approval of a loan to the Olmito Water Supply Corporation in the amount of $600,000, with a contingency of another 20 percent, to pay for utility relocation due to the expansion of Farm to Market 511 from a two-lane to a four-lane divided highway. Interest will accrue from the date funds are transferred from the SIB at a rate of 3.85 percent, with payments being made over a period of no more than 20 years.

Staff recommends your approval.

MS. ANDRADE: Members, any questions for James?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you, James.

MR. BASS: And lastly for the State Infrastructure Bank today, item 14(c) seeks final approval of a loan to the Liberty City Water Supply Corporation in the amount of $1.16 million, again with a 20 percent contingency, to pay for utility relocation along State Highway 135 in Liberty City. Interest will accrue from the date funds are transferred from the SIB at a rate of 4.22 percent, with payments being made over a period of no more than 15 years.

Staff recommends your approval.

MS. ANDRADE: Members, any questions?

MR. HOLMES: (No audible response.)

MR. BASS: I'm sorry. 14(b)(2). Thank you.

MS. ANDRADE: Thank you for clarifying that.

MR. HOLMES: Move approval.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Thank you.

MR. HOUGHTON: What was so important?

MR. BASS: I believe there were visitors with us today who may have other issues and so we were able to address those and they can meet their other obligations today.

MS. ANDRADE: Mr. Compton needed to get back.

MR. BASS: That's what I was told when I ran down the stairs. Thank you.

MR. SAENZ: Thank you, James.

MS. ANDRADE: It is 10:54 and this commission is going to take a ten-minute break. We will return at 11:05.

(Whereupon, a brief recess was taken.)

MS. ANDRADE: All right, let's continue. Amadeo.

MR. SAENZ: Thank you. Next Dave Fulton will present a minute order dealing with our Aviation Program.

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

This minute order contains a request for grant funding approval for twelve airport improvement projects. The total estimated cost of all requests, as shown in Exhibit A, is approximately $12.8 million: approximately $5.9 million federal, $5.2 million state, and $1.6 million in local funding.

A public hearing was held on January 24 of this year. No comments were received.

We would recommend approval of this minute order.

MS. ANDRADE: Members, any questions?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. ANDRADE: Where's Fred? This is always important to him. All right. We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: Thank you very much. Motion passes.

MR. FULTON: Thank you.

MR. SAENZ: Thank you, Dave.

Item number 6 deals with Public Transportation, awarding of some Federal Nonurbanized Area Formula funding, and Eric Gleason will present the minute order.

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

Agenda item 6 awards $347,117 in federal funds under the Federal Transit Administration Nonurbanized Program to 36 of 36 rural transit districts for rural public transportation.

Five counties in West Texas, Brewster, Culberson, Hudspeth, Jeff Davis, and Presidio, with no previous history of Nonurbanized Program services, have elected to join the West Texas Opportunities Agency and begin receiving Nonurbanized Program services. Including these counties' land area and population in our Nonurbanized Program funding formula for the first time resulted in a reduction in funding for many of the other rural transit districts as overall funding levels remained fixed. This one-time award addresses this unforeseen funding anomaly, consistent with criteria established in Title 43 of the Texas Administrative Code, Section 31.36.

Staff recommends your approval of this minute order.

MS. ANDRADE: Members, you've heard staff's recommendation. Any questions or comments?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Thank you very much.

MR. GLEASON: Thank you.

MR. SAENZ: Thank you, Eric.

Agenda item 7, Rebecca Davio, our Vehicle Titles and Registration Division director will present to you the new general-issue license plate design.

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

And I am absolutely thrilled to be able to tell you about the results of the E-vote that you allowed us to take where we polled citizens of Texas, allowed them to express their opinion and help us help you choose a new general-issue license plate design.

The image that you see on the screen is a screen shot from TxDOT's website. This is when it shows the five plates that citizens had the opportunity to choose among. They included the Traditional Texas plate, the Natural Texas plate, the Lone Star plate, the New Texas plate, and what we've referred to as My Texas which is the actual current general-issue design.

You'll see here the results shows that the Lone Star Texas was the most popular plate by an overwhelming majority. We had more than 1.1 million citizens who took time out of their very busy schedules to express their opinions here, so Lone Star Texas got almost 50 percent of that vote of the total. And these numbers do reflect that there was a little bit of scrubbing that we had to do on the votes where there was somebody that was real enthusiastic and wanted to come in and vote multiple times, many, many times. We scrubbed out about 2,000 to 2,500 votes.

You'll see that the Natural Texas plate came in second, followed by Traditional Texas, then the New Texas, and the current general-issue plate design came in.

One of the things that we offered for the folks that were voting was the opportunity to submit a comment to us and tell us why the plate that they selected was so significant to them, why they made that choice, and I'd just like to share a few of those with you. We received almost 10,000 comments, and to me that was very significant. Reading these comments just did a whole lot to increase the pride of a native Texan here. But I would like to share a couple of them with you.

Cindy from Mason said of the Lone Star plate: "Lone Star Texas represents the majesty of Texas, the wild, vast rugged beauty that you can only find in the Lone Star State. It also has the colors of the Texas flag and the Lone Star that makes true Texans swell with pride. I think this plate has just about everything."

I don't know about you all, but I get chills just reading that.

There's just a couple more. Albert in Fredericksburg said, "I like the Lone Star design because it is bold and dramatic. The very photographic landscape adds just the right additional touch. The large Texas letters go along with the size of the state. It all works together to make you proud to be a Texan."

And I think the pride in Texas was a very, very common theme in the comments, no matter what the design was.

And there's just one more -- I knew I didn't have time to share all 10,000 with you -- and this is from Cheri in Baytown: "This plate with the brushes of red and blue across half of the plate is rather elegant. The Lone Star State is larger and the whole appearance of the plate is clear and very easily recognizable, but Texas is that way, isn't it? Thanks for the opportunity to vote."

And that was also a reoccurring comment was the citizens of Texas thanked you because it was you that allowed us to go out and do the E-vote, they thanked you, thanked TxDOT for the opportunity to express their opinion about our new general-issue license plate design.

There was actually one more comment. I had to squeeze this one in because it was from a first grade teacher in Gilmore, Texas. She said, "I teach first grade and my class voted on the one that they liked best." So she actually submitted their vote, and I just thought that was wonderful. It was a civics lesson and they're learning about TxDOT at first grade.

So what I'd like to do is real quickly acknowledge, because while this seems like a simple project, it took a great deal of effort to coordinate, and I'd like to thank David Gonzalez in our Electronic Publishing Center in the General Services Division; he was actually the designer of the Lone Star plate. Other designers include Lisa Malmin and Jason Hranicky. Also in the Electronic Publishing Center, the Technology Services Division, they were pulling their hair out trying to make sure that we didn't crash the system because the response was so incredible, so James Pennington and Alex Gutierrez. And then also Michael Sledge and Carlos Gieseken from the Government and Public Affairs Division, and there were several folks in my division, including Christina Flores and Kim Sue Lia Perkes, who worked very, very hard to make sure. And so I just wanted to make sure that they were recognized.

MS. ANDRADE: Absolutely. They make us very proud.

MR. HOUGHTON: Where's David? Is he here?

MS. DAVIO: I don't think David is here this morning. I wrote him a note and told him so he may be watching. I wrote him a thank you note.

MS. ANDRADE: Tell him that was my favorite too.

MR. HOUGHTON: Congratulations, David, if you're watching. Does he get his picture on the license plate or something?

(General laughter.)

MS. DAVIO: This presents the enlarged size, the image of the winning plate, and I would like to request the commission's approval, the adoption of the new proposed general-issue design.

MS. ANDRADE: Members, you've heard staff's recommendation. Anyone else?

MR. HOUGHTON: Just one point, be it noted that the plate that was chosen has the mountains of West Texas in there.

MS. DAVIO: Yes, sir, the Davis Mountains.

MR. HOUGHTON: Thank you.

MS. DAVIO: I will mention to David that you were especially appreciative of that.

MS. ANDRADE: This was a great idea to include our public in this. Thank you very much to the staff, we're very proud of them.

MS. DAVIO: Thank you, we appreciate that.

MS. ANDRADE: Members, what is your wish?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you very much.

MS. DAVIO: Thank you.

MS. ANDRADE: We've got a new plate.

MR. SAENZ: Thank you, Rebecca.

Commissioners, item number 8, Jim Randall will come and present. We are going to defer agenda items 8(a) and 8(b). 8(a), we're still working on the 2009 Statewide Preservation Program and Statewide Mobility Program format, and staff would like a little bit more time before we come and present to you that, as well as the comments that we received from the public meeting, and of course, 8(b) is tied to that, so we're at this time recommending to defer the first two items. Jim will present agenda items 88 and (d), dealing with the appointment of Port Authority Advisory Committee members, and then also report on the local matching for the Economically Disadvantaged areas. Jim.

MR. RANDALL: Thank you, sir. Jim Randall, director of the Transportation Planning and Programming Division.

This minute order appoints two members to the commission's Port Authority Advisory Committee. This seven- member committee provides a forum for the exchange of information between the Texas Transportation Commission, the department and committee members representing the Texas Port Industry and others who have interest in Texas water ports. These members need to be appointed to fill two of the lower coast positions which are currently vacant.

The following individuals are recommended to serve for a three-year term, expiring on February 28, 2011: Eduardo Campirano with the Port of Brownsville and Michael Wilson with the Port Mansfield Willacy County Navigation District.

Staff recommends your approval of these appointments.

MS. ANDRADE: We have a citizen that would like to speak, Mr. Wade Battles, who is the managing director of the Port of Houston.

MR. BATTLES: Thank you, Madame Chair, commissioners, Commissioner Holmes. I'm Wade Battles. I'm the managing director of the Port of Houston Authority. I'm also president of the Texas Ports Association and chairman of the Ports Advisory Committee to TxDOT.

On behalf of Texas ports this morning, it is my desire simply to reaffirm our desire to continue to work with TxDOT and you to find solutions to our mobility issues, and to ensure that Texas ports continue to be the great economic engines they are for their local communities and for the state of Texas at large.

It is also important to note that, contrary to many common perceptions, we do much more than just handle import cargos. For example, last year 60 percent of the cargo that went through the Port of Houston Authority were exports, but not exports of Texas jobs, the exports, rather, of goods and products produced by Texans and grown by Texans that were shipped via Texas ports to markets worldwide.

Thank you very much.

MS. ANDRADE: Thank you, Mr. Battles, very much.

Members, any questions?

MR. HOLMES: Just a brief comment, Madame Chairman.

Wade, on behalf of the Port of Houston and all the ports in Texas, we appreciate the job that you do in expediting the movement of cargo in and out of our state. You do a great job and we appreciate it.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, state by saying aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: The motion carries.

MR. RANDALL: Item 8(d), this minute order approves the fiscal year 2007 annual report on the Economically Disadvantaged Counties Program. Transportation Code Section 222.053 requires the commission to report annually on the program to the governor, lieutenant governor and the speaker of the House of Representatives. The annual report documents the use of matching funds and local incentives as well as savings granted to counties participating in the program. During fiscal year 2007, participating counties were granted over $1.7 million in relief from local match requirements.

Staff recommends approval of the fiscal year 2007 annual report on the EDCP, as shown in Exhibit A. Upon your approval, the report will be presented to the governor, the lieutenant governor and the speaker of the House of Representatives.

MS. ANDRADE: Members?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second, all in favor, state by saying aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you so much.

MR. SAENZ: Thank you, Jim.

Moving forward, agenda item number 9 deals with the Promulgation of Administrative Rules. 9(a) deals with Proposed Adoption of rules, and our first presenter today will be Glenn Hagler who will present rules on Chapter 9, Contract Management. This is Glenn's first time here, I think. Glenn works in our General Services Division.

MR. HAGLER: Good morning. My name is Glenn Hagler. I'm the director of purchasing with the General Services Division.

This minute order proposes adoption of amendments to Section 9.3 concerning protest of department purchases under the State Purchasing and General Services Act. The amendment does not contain any controversial elements and addresses cosmetic changes, resulting from the transfer of state purchasing duties from the Texas Building and Procurement Commission to the Comptroller.

Government Code 2155.076 requires state agency protest rules to be consistent with protest rules adopted by the Comptroller. Amendments to Section 9.3 update agency titles and statutory references to reflect the transfer of state purchasing responsibilities from the former Texas Building and Procurement Commission to the Comptroller.

Changes to the definitions, deadlines for filing a protest and an appeal, and document retention requirements are made to make the rules consistent with the rules adopted by the Comptroller's Office. Various minor grammatical amendments have also been made to clarify existing provisions of this section. The agency's chief financial officer has determined there will be no fiscal impacts for state or local governments as a result of administering this section. Staff recommends approval of this amendment and will be glad to answer any questions the commission may have.

MS. ANDRADE: Members, any comments or questions for our staff?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Thank you very much.

MR. HAGLER: Thank you.

MR. SAENZ: Thank you, Glenn.

MS. ANDRADE: You did good on your first time.

MR. SAENZ: Wait till you come back for the final.

(General laughter.)

MR. SAENZ: Agenda item 9(a)(2) deals also with Chapter 9, Contract Management. Mark Marek, the Design Division director, will present some amendments to Section 9.38.

MR. MAREK: For the record, my name is Mark Marek. I'm the director of the Design Division for TxDOT.

This minute order proposes the adoption of amendments to Chapter 9 concerning Contract Management. Chapter 2252 Government Code, Subchapter Z, was amended by Senate Bill 924 of the 80th Texas Legislative Session related to rules and policies adopted by state agencies regarding engineering and architectural errors and omissions. These recently passed legislative amendments did not provide for a claims process with respect to errors and omissions. The existing rule 9.38 describes the claims process for errors and omissions recovery. Since the recently passed legislation did not provide for a claims process, the existing language in the rule related to a claims process can be deleted. Standard contract language is sufficient for errors and omissions recovery.

Staff recommends approval of this minute order.

MS. ANDRADE: Members, any questions or comments for our staff?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you so much.

MR. SAENZ: Thank you, Mark.

Agenda item 9(a)(3) deals with some proposed rules for Chapter 17, Vehicle Titles and Registration, and Rebecca Davio will come back up and present.

MS. DAVIO: More license plate issues. Last time we talked, you adopted the new what we refer to as general-issue license plate design. That's the plate that everybody gets unless they choose to have a specialty license plate. Now I'd like to turn your attention to specialty license plates. Those are the plates that people purchase that support a particular cause or express their personality through the personalization.

In 2005 the legislature directed TxDOT to enter into a contract to hire a vendor to design and market specialty license plates, and we signed a contract with My Plates, Inc. in November of 2007. This is the first contract of its type in the country where the state legislature has directed to hire a vendor to market specialty license plates.

Just to go over some of the highlights with you about this contract, the contract has already been awarded, as I mentioned, there is a $40 million minimum guarantee over the initial five-year term of the contract that the vendor will pay to the State of Texas, and that $40 million will go to the General Revenue Fund.

There are no changes to the existing specialty plate prices, they will all remain exactly the same, and as a result of the negotiations, the existing and the new plates will all be offered on a single website. We feel like that's great for customer convenience, so if you and your spouse each want a specialty plate and one wants an existing specialty plate and the other one wants a new plate, you have a single place to go to. We feel like that will also be advantageous for existing plate sponsors because My Plates is going to spend a lot of money to market plates and generate interest and awareness of that website.

We also did a lot of work to develop this contract. We developed some new standards for law enforcement legibility, that's to make sure that that plate remains readable, and also to develop a reflectivity standard. You may not be aware, but license plates actually contribute to safety, and if the vehicle runs off the road and it's dark and the reflectivity of that license plate may be the only thing that enables a passerby to see them. So we developed those two new standards for legibility and for reflectivity.

The reason that we are here before you today -- as I mentioned, the contract was awarded in November of 2007 -- what we are bringing to you today for your consideration is the new fee schedule. There is a requirement that the commission approve the vendor's proposed fee schedule. So the vendor is currently proposing three different categories of license plates: Category A is color or themed plate, and that one-year plate cost is $95; the Category B, the limited edition plate, is $195 for a one-year plate; and Category C is $395 for a plate.

Just to remind you, the existing specialty plate price is $30 per plate, so they're going to be limited edition and prestige plates and offer new colors and new themes. You'll also notice that on their fee schedule, My Plates has requested to sell five-year plates and ten-year plates, and so the price for a ten-year plate is $795 for the prestige plate, just to give you an example.

And in the course of the negotiations to award this contract, we came up with revenue-sharing for the State. I told you that the State was guaranteed $40 million and the next slide will show an example of how that's going to work. We took the example of the $95 plate. The $95 plate, the way that works is that the State -- and this is TxDOT here -- gets the $8. That $8 cost is what we've established is the cost that it actually costs TxDOT to get the license plate, to ship it, to do all the functions to have that plate produced. So that leaves $87 then when you take that out. On a plate that costs less than $150, the State gets 30 percent of that $87. And so that means that on a $95 plate, the State, the General Revenue Fund, gets $26.10.

I took the other end of the price schedule and showed you on the $795 plate, that was the ten-year prestige plate. And so that $8 cost for the plate is taken out and that leaves $715. On the higher cost plate, the General Revenue Fund gets 45 percent of that plate sale, so the State General Revenue gets $321.75. So total money for the $795 plate that goes to the State is $401.75.

So we feel like this is a great idea because it's going to offer a lot of new plate designs for the general public to choose from, and it will also generate revenue for the state, while still maintaining the basic purposes of safety and reflectivity for the license plate.

We would request your approval of these proposed rules.

MS. ANDRADE: Members, any comments or questions?

MR. HOLMES: Rebecca, do you know much about other jurisdictions that actually auction off specialty plates?

MS. DAVIO: I might have seen the same. I think it was a CNN report about Dubai where they were auctioning off plates. In the Middle East, as I understand it, and Asian countries, license plates sell for millions of dollars and they actually do auction them off.

MR. HOLMES: The one I actually had heard about was a U.K. plate that was auctioned off and went for it wasn't millions but it was something like 200,000 sterling. Have we considered how we deal with multiple requests for the same plate?

MS. DAVIO: To this point in time, multiple requests for the same plate are handled on a first come, first served basis, but as I mentioned, this was a new contract, there are lots and lots of things for us to explore, and auctions may be something that is considered at a later point in time.

MR. HOLMES: How long is this contract for?

MS. DAVIO: The initial term of the contract is for five years. It is possible, if everything is going well, to renew it for two additional five-year terms.

MR. HOLMES: So the sale of a ten-year plate, if this contract is not renewed, what happens to that second five-year period?

MS. DAVIO: Well, the state has gotten their money for that plate up front and so the customer has their ten-year plate and they would have the option to renew that if they chose. As part of this contract, we have negotiated that all the intellectual property, the designs that are created here in Texas will become TxDOT property and we can continue to offer those plates.

MR. UNDERWOOD: One quick, Madame Chairman.

If you have the very fancy plate -- if I can remember the name --

MS. DAVIO: Prestige.

MR. UNDERWOOD:  -- prestige and it's either stolen or damaged, how do they go about replacing that one?

MS. DAVIO: We'd handle that the way we --

MR. UNDERWOOD: Would they pay the same amount again?

MS. DAVIO: No, sir.

MR. HOLMES: Well, what is an example of a prestige plate versus a limited edition?

MS. DAVIO: For that perhaps I should introduce the head of My Plates, the president of My Plates. He could speak a little better about the designs that they're considering. We've seen initial sketches, so with your permission?

MS. ANDRADE: Please.

MS. DAVIO: James Power is the president of My Plates, Inc.

MR. POWER: Madame Chair and commissioners, just for the record, my name is James Power and I'm the president of My Plates.

It's a very good question. Limited edition plates are typically offered a specific number, and while we're still working through the ultimate designs that we want to propose to TxDOT, an example might be the characters TEX, T-E-X, 000 to 999. We think that's possibly a combination of characters that would have great appeal here in the great state of Texas. Another example might be USA-000 to 999, and once again, because there's a limited range of those plates, we would offer them at a slightly higher price than the standard plate that we're offering at $95 a year.

The prestige is any combination of up to six characters, so for instance, obviously the name Ned or James or Hope obviously has more value than say just three letters and two numeric characters as you currently get on an existing specialty plate. So we feel that there should be an appropriate premium attached to that price.

We may also offer a slightly expanded range of colors in the prestige or luxury category, for instance, silver and gold which typically sort of create a perception of value in the mind of consumers.

MR. UNDERWOOD: You said six letters. It was seven, isn't it?

MR. POWER: I understand under the legislation -- and I'll defer to the record if I'm incorrect -- we have the option to go up to seven characters and that is something that is anticipated being done in the future.

MR. UNDERWOOD: Okay. Present is six. Correct?

MS. DAVIO: I'm sorry?

MR. UNDERWOOD: Six is what the present amount of characters is.

MS. DAVIO: Six is what the present is, and we will likely come back to you again with an amendment to the fee schedule when we look at the seven character plates. You can spell more things with seven characters than you can with six.

MS. ANDRADE: Members, we do have a citizen to be heard, but I also have a question for Rebecca. I just want to make sure that we understand that the $8 that comes to TxDOT is only to cover the expenses and that all other revenue from this contract goes to the General Revenue and not to TxDOT.

MS. DAVIO: That is correct, that was the way it was written in statute.

MS. ANDRADE: Just wanted to make sure. And on some of these specialty plates, if two people ask for the same color or theme, they will have different characters and so that will be able to identify who the car belongs to.

MS. DAVIO: That's correct.

MS. ANDRADE: We do have a citizen to be heard. Rebecca, if you'll let us hear our citizen.

MS. DAVIO: Absolutely.

MS. ANDRADE: Robin Stallings, executive director of the Texas Bicycle Coalition.

MR. STALLINGS: Hello, Chairwoman Andrade, commissioners, Director Saenz.

Well, actually, the Share The Road license plate generates about $50,000 year -- you may have seen it with the yellow jersey on it -- and that is matching funds. TxDOT gives it to TEA, TEA gives it to us for our education programs which is the largest children's safety education program in the country. So we take that money and turn it into several hundred thousand dollars, matching federal funds, working very closely with TxDOT on that. And we're one of about 100 beneficiary organizations that include parks, arts, universities that benefit from the existing special plates. So there's quite a bit of interest but not everybody is quite as up to speed on it as we are, and we really depend on this to fulfill our mission.

This was based on House Bill 2894, and there's three different points that I'll mention and then I'll suggest some solutions. We're not trying to tank the whole deal, we're just trying to figure out how, along with the legislation, the new contract and the new vendor and the new plates may not compete with existing plates. Now, that's pretty general but it says it may not compete. It says that TxDOT must certify the estimates of the expenses to TxDOT, indirect and direct, to the Comptroller of this contract. I don't know if that's been done yet, but I'll get to why that matters when I make my other comments. And then there may be some problems with the minimum guarantee based on the legislation as well.

To start with that, the minimum guarantee is $40 million over five years that the legislation says that money may only be paid from the plate revenues by the vendor. And so that means that they're not actually allowed to pay outside of that, it's payable only from amounts derived from the collection of the fee established under Subsection (b). So I'm not a lawyer, but that looked pretty straightforward to me.

So what we would request is that because of the potential impact, there has been no example of a vendor coming in in Australia or in the U.S. when there's a large number of existing specialty plates. That didn't happen in Australia. Texas has chosen to fund a lot of very important things for the state, including parks, arts, university functions, Girl Scouts, lots of stuff, and bicycle safety education for children, through user fee of a license plate, optional, voluntary. People can pay a little bit more and most people don't really know what the cause is, they might if it's Girl Scouts and it's real obvious, but mostly they buy a plate that they think is going to look good on their car.

And the advice I got from TxDOT that was very valuable, before we did our design, we had a statewide contest, we had a few less than a million respondents but we did the same thing where we surveyed out there, and it's really about the look of the plate. So in a way, the more plates you get, great looking plates, there's inherently competition, we realize, on that whether there's intention or not.

The contract has been approved but the fee schedule has not been approved, and so if you were to postpone decision on this, it would give more time -- I realize this is only preliminary approval but this would give time to resolve some of the issues that I'm bringing up and to make sure that we're in compliance with the legislation which is to not compete with the existing plates.

And I believe that you all may have received a letter that I sent you all yesterday. I also copied Ms. Davio, who has been extremely helpful, the License and Titling Division has been great, the people have been very pleasant with personal plates, Queensland which is the parent company of My Plates, and My Plates, they've all been very helpful. We didn't have a chance to comment on this until after the contract was already signed. We understood in 2006, when this was shelved after the first contract, that we were going to be consulted, so we kind of all went to sleep on this because it's been in the legislation. It's been very important to Senator Deuell and Representative Phillips and to TxDOT that the existing plates not be hurt, but unfortunately, we didn't have a chance to weigh in, and we're the only people that have experience selling these kind of specialty license plates. It's a little bit different than what My Plates has done, and certainly in Texas.

And the Texas Bicycle Coalition, for one of the Tours de France, we actually took souvenir plates to France and we've actually sold specialty plates in another country, and we've got some experience with the price sensitivity and major changes from one country to another. It's not directly translatable. So they may find some of that here as well.

But we'd like to see a guarantee to the existing plates so that ideally it would be proportionate so that if they're going to grow the market, it doesn't inherently mean that all the other plates are going to do better because the market gets bigger. Think about some of the soda pop brands that you drank as a child that are gone, even though the soda pop market is much larger. You could look at the cars that disappeared as the car market got larger, but General Motors and Ford got bigger and other brands just went away.

So it's the same thing with this, just because you grow a market doesn't mean that all ships will rise, but it is possible out of the $40 million, for example, to guarantee that there will be no harm.

There's no appeals process right now. For example, if a plate is approved by the working group at TxDOT, the legislation says that TxDOT needs to approve these new designs, there's no appeals process if we disagree. For example, the marketing materials -- which I know how much work TxDOT did on this and everybody did on this because it's a ton of documents, and I'm, again, no attorney -- there's no appeals process so that if we happen to disagree and we think it's competing -- for example, they use Lance Armstrong and Willie Nelson, examples of great Texans that could help sell plates. Well, Lance has been behind the cancer plate and also approved his image on our plate, so anything you do with Lance is competing with at least two existing license plates. And anything you do with Willie Nelson is probably competing with the Texas Music plate, that funds the Texas Governor's Music Office, with Blind Lemon Jefferson on it. So people may not think there's a conflict but yet there could be.

If you get a burnt orange plate -- which was also in their marketing materials -- as a background, is that competing with the UT plate? And they also had the same example for Texas A&M and whatever their colors are. As a UT grad, I've blocked that out.

(General laughter.)

MR. STALLINGS: So anyway, that's a concern that this body could insist on an appeals process that included existing specialty plate holders. And then the working group itself that approves the new designs is made up, according to the contract, of two people from My Plates and two people from TxDOT, no existing plate beneficiaries. So in other words, they're there to approve their own designs. And having sat on advisory committees and knowing how important it is to avoid conflicts of interest, or the appearance thereof, that's a little bit of a concern.

Then the leveling the playing field, this one website that's going to benefit everybody, may. In fact, it's possible that somebody would buy a Share The Road license plate when they go to the My Plates website. Right now, finally -- and we're so happy -- TxDOT has online license plate sales. We've hoped and waited for this for years. Well, they're going to shut down that site, and the same site, I guess, that got a million respondents on this, so it can really attract people. But they're going to actually have it at My Plates so they will control all of the online sales, and this is kind of a last century idea because if we want to do any online sales, we actually have to promote their website, and then according to My Plates' marketing materials, they're going to have Amazon.com type attracters, so you like that, try this one. Just like we would, if somebody came to our site and we'd say, You like that plate, how about buying these gift cards that have the same design. That's natural and that's the way you do web marketing.

So we're very concerned that all of the plates, arts, everybody, and so we would like to see a level playing field where TxDOT would be either a neutral place or that there would be a provision that we could make those online sales on our own website so that we could spend our very limited marketing dollars on that.

They have an inherent advantage in marketing. While all the existing plates are prescribed by statute and how the money has to be spent, ours must be spent on cyclist and motorist safety education, it has to be spent on arts, it has to be spent on parks, well, they can't spend money on marketing --

MR. HOUGHTON: Robin, are you going to breathe, are you going to take a breath?

(General laughter.)

MR. STALLINGS: Thank you. I'm sorry. I respect your time, and if that means I'm trying to go too fast, that's only out of respect so I can get through this because I know you have a lot of things on your plate.

MR. HOUGHTON: No, that's not it. I just need Rebecca to answer your questions. I'm not sure she has all the questions written down, you went so fast.

MR. STALLINGS: Well, I have given her these in advance and we have talked about these, so that may help a little bit. And we just had another very helpful talk before we started.

So there's a difference between the Legislative Budget Board estimate in 2005 which said there would be a $3 million benefit to the state. That estimate was provided by TxDOT. Now there's going to be a $40 million benefit to the state but that hasn't really been reconciled. Like how could it be that big a difference, because My Plates and PPQ has been there since 2003 on this legislation, what information was available now that wasn't available then. And so that's where we would request that the Comptroller kind of look at this to see are these estimates consistent.

TxDOT also estimated a $216,000 hit on existing specialty plate holders, while we were assured by Ms. Davio and My Plates that it's going to really benefit us.

MR. HOUGHTON: Who said that, you're going to take a what hit?

MR. STALLINGS: A $216,000 annual hit.

MR. HOUGHTON: Who said that?

MR. STALLINGS: TxDOT. And the Legislative Budget Board for the existing specialty plate holders. The State would benefit by $3 million --

MR. HOUGHTON: Wait a minute, Robin, in my opinion, you're rambling on and on.

MR. STALLINGS: Excuse me, I'm sorry.

MR. HOUGHTON: If you don't mind, Madame Chair, I think we need to start clarifying all of the things you're asserting. Tell me who said we're going to take a $216,000 hit.

MR. STALLINGS: TxDOT and the Legislative Budget Board.

MS. ANDRADE: I'd like Rebecca to answer that.

MS. DAVIO: This was a document that was prepared in 2005 that Robin actually showed me. I wasn't in this position in 2005. It looked like it had a projected loss from hiring a vendor, a marketing vendor. I really can't speak to how that was done, and I didn't get an opportunity to look at it.

MR. HOUGHTON: A loss to whom?

MS. DAVIO: To the existing specialty license plate sponsors.

MR. HOUGHTON: So in other words, that university he won't mention, Texas A&M, their plate will take a pro rata share reduction?

MS. DAVIO: And that was included in the fiscal note that Robin showed me.

MR. HOUGHTON: And was there any protest to that?

MS. DAVIO: I'm sorry, I don't have the history to be able to relate that. The problem with looking at this is you're dealing with projected numbers, and we don't know. This is the first contract of its kind where a state has gone out and hired a company to market specialty license plates.

MR. HOUGHTON: Where's my lawyer again? Can I ask you a question, Robin and Bob? Do we have a choice on this? This is mandated by the legislature, this is one of those things that we just went through that we amend our rules based upon legislation. Do we have a choice?

MR. JACKSON: No, we don't.

MR. HOUGHTON: Thank you.

MR. STALLINGS: Actually, the choices are in the nature of the contract -- you must do a contract -- and the choices of the timing, TxDOT must approve the new prices which aren't as big as they seem. For example, $395 over ten years is a $39 plate, it's not quite as vast a difference.

MS. ANDRADE: Thank you, Robin. We need to move on.

Rebecca, have any other organizations visited with us about this?

MS. DAVIO: We actually had two meetings with existing plate sponsors in January, I believe, and we talked to them. We had My Plates make a presentation so that they understood what was going to happen, and we told them that there would be no change to their price. When this contract was awarded previously, that vendor had suggested changing the prices of all the existing plates, and we did not allow that in this contract to make sure that they were protected.

MR. HOUGHTON: I'm sorry, is it Jim?

MS. DAVIO: James.

MR. HOUGHTON: James,

MR. POWER: That's fine, Commissioner, I get called that all the time.

MR. HOUGHTON: Are you familiar with the University of Texas?

MR. POWER: Yes, I am, sir.

MR. HOUGHTON: How are you going to enhance the revenue to the University of Texas?

MR. POWER: Well, sir, I can speak from experience elsewhere. We have a very extensive marketing campaign that we're planning and going to be spending millions of dollars promoting specialty and personalized license plates in the state of Texas. My experience from that is that the general market increases overall, and that's been the experience in Australia and in other jurisdictions such as New Zealand, and you referenced before the United Kingdom.

MS. ANDRADE: They're going to sell more of their plates?

MR. POWER: I think everybody is going to sell more plates, I think the sponsoring organizations are going to make a lot more money, and the State is going to make a lot more money, and I think it's a very positive program for Robin and all the other wonderful sponsoring organizations.

MS. ANDRADE: Thank you very much.

MR. STALLINGS: But they won't actually be marketing any of the existing plates. If we wanted to do a partnership with them, we may spend another $8,000, get a new plate, and start from scratch with an agreed upon cut. But all the existing specialty plate holders may not spend their money on marketing because it's been prescribed by statute, they have to spend it on good causes.

MR. HOUGHTON: Robin, it's going to be on their internet, that's marketing.

MR. STALLINGS: Every book on Amazon.com doesn't sell, only the ones that they're promoting.

MS. ANDRADE: Commissioner Holmes, you had a question.

MR. HOLMES: Yes. Where is Bob again? Bob you said we didn't have a choice. I assume you mean we don't have a choice but to approve some type of contract.

MR. JACKSON: Yes, sir.

MR. HOLMES: But was the language of the contract actually dictated by the legislature?

MR. JACKSON: No. We were required to enter into a contract, and then we're required by rule to adopt a fee schedule consistent with the contract.

MR. HOLMES: And so the fee schedule is a negotiated piece, not mandated by the legislature.

MR. JACKSON: Yes, sir.

MR. HOLMES: Did the legislature specify the treatment of the existing plate issuers like the parks and the bicycle group and arts, et cetera? Did they mandate how that was handled?

MR. JACKSON: No, sir.

MR. HOLMES: And so while we may not have a choice but to issue a contract, the contents of that contract have some leeway in respect of negotiation?

MR. JACKSON: Yes.

MR. HOLMES: And have we fully accounted for the concerns that the other entities have, the other specialty plate issuers have, whether it's UT or A&M or whoever they are.

MR. JACKSON: I defer to Rebecca who did hold two meetings with those.

MS. DAVIO: The other organizations, I think that what's happening here is there's just a lot of uncertainty: it's the first time, we don't know what's going to happen. The experience that we have from Australia says that it looks like marketing and the general increase in awareness of the availability of specialty plates helps everyone, but we can't guarantee that, we just don't know. I think that Robin and the Bicycle Coalition has a great deal of very adamant supporters for their plates and for their cause and they will continue to buy their plates even though there are new options for them to select from.

MR. HOLMES: And Rebecca, to your knowledge, have some of the issuers of specialty plates actually seen and commented on the contract?

MS. DAVIO: I believe Robin has done an Open Records request so he has seen the contract, and he's making his comments.

MR. HOLMES: But there are a number of specialty plate issuers. Right? Do we have any idea how many there are?

MS. DAVIO: There's 112 specialty plates, current existing specialty plates.

MR. HOUGHTON: How many are issued in the state of Texas, total specialty plates?

MS. DAVIO: Approximately 250,000.

MR. HOUGHTON: Out of how many registered vehicles?

MS. DAVIO: About 21 million. It's a very small percentage and that's one of the reasons why we feel there's such potential here to increase the sale of specialty plates, both new plates and existing plates.

If I may -- I'm sorry, Commissioner.

MR. HOLMES: I would agree that there is an opportunity to significantly increase. Obviously James believes that to. Right?

MS. DAVIO: That's right. Other states do have higher percentages of plates sold.

MR. HOLMES: My concern is that unless the legislature has mandated that the specialty plate issuers are of no consequence, they are perfectly happy for their revenue sources to decline, then I'm sensitive that they don't decline and that we accommodate that.

MS. DAVIO: Absolutely. So are we, and we took steps in the contract and during the negotiations to try and protect that. For example, if there was going to be a competition on price, and there's not with this proposed fee schedule, but if there was, we said that My Plates could not undercut the existing price for specialty plates so they wouldn't have that advantage. We negotiated with My Plates to be able to offer all plates, so they're offering, in a sense, their competitors' plates on their site at no charge to TxDOT or their competitors.

MR. HOLMES: One more question and then I'll turn it back to you, Madame Chair. We conducted the negotiation with My Plates on behalf of not just TxDOT but also the 112 specialty plate issuers?

MS. DAVIO: I don't think we could say we conducted the negotiations on behalf. I don't think that TxDOT has the authority to conduct the negotiations on behalf, and I'll defer to Bob Jackson.

MR. HOLMES: With sensitivity to what we perceived their needs were?

MS. DAVIO: Absolutely.

MR. HOLMES: And that was done in consultation with the specialty plate holders or by our perception of what their needs were?

MS. DAVIO: By our perception and also by the feedback that we had received. This contract had been previously awarded and there was feedback received at that particular point in time, and so we considered that feedback during the negotiations. Things like I mentioned the previous contract had raised the price for all existing specialty plates. That recommendation was made without consultation to the specialty plates, and we expressly prohibited that.

MS. ANDRADE: Rebecca, would you remind us how long we've been discussing this?

MS. DAVIO: The initial legislation was passed in 2003 allowing TxDOT to enter into a contract to hire a marketing vendor. In 2005 that was made into a directive. My very first official action to come before this commission was in January of 2006, the contract was canceled in February of 2006, and I have spent a great deal of my time personally over that period of time to make sure that the request for proposal was fair, allowed the broadest possible benefits to the State, while protecting the rights and interests of the existing specialty license plates. It's been a very, very long process.

MS. ANDRADE: Any other questions?

(No response.)

MS. ANDRADE: Members, you've heard staff's recommendation.

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye. Is silence an aye?

MR. HOLMES: (No audible response.)

MS. ANDRADE: We have a motion and a second, so we need to either vote it up or vote it down.

MR. HOUGHTON: I withdraw my motion.

MR. HOLMES: (No audible response.)

MS. ANDRADE: Bob, do you want to give us some direction here? We had a motion and a second and we only have two ayes, but now we're having a motion withdrawn.

MR. JACKSON: Commissioner Houghton is withdrawing his motion, so you can start over.

MS. ANDRADE: So the motion and the second have been withdrawn.

MR. HOLMES: I'm sorry. I want to be certain that specialty plate holders have their concerns addressed, but I accept the belief that private marketing will significantly increase sales of specialty plates. But I am concerned, and we've heard from Robin but we haven't heard from others, and that's why I asked how involved were they, did you get any kind of guidance, sign-off, acceptance from some of the other specialty plate issuers, from the arts people, from the parks people, from the school people, whoever they all are.

MS. DAVIO: I've had conversations with the representative from the arts plate, I've had conversations -- I just talked yesterday to Parks and Wildlife, and once I talked to Parks and Wildlife yesterday, I said, Okay, we don't know how this is going to work.

MR. HOLMES: But they also have not seen the specific language in the contract. Is that correct?

MS. DAVIO: I believe that both of those organizations have seen the language, they both seemed to indicate that they had seen the contract.

MR. HOUGHTON: What's the largest specialty plate issuer?

MS. DAVIO: State of the Arts.

MR. HOUGHTON: That's number one. What's their revenue to State of the Arts, do you know?

MS. DAVIO: They have a representative here. I'm not sure.

MS. ANDRADE: We need to make sure he signs a card.

MR. HOUGHTON: We'll have him sign it after he talks.

MR. GIBBS: I'm Gary Gibbs, the executive director of the Texas Commission on the Arts. I just started in October, but we budget every year around $400,000 of income from the specialty license plates, in answer to your question.

MR. HOLMES: Have you seen the proposed contract that is before the commission?

MR. GIBBS: I have not seen that contract. I'm aware of the concerns that were expressed by Robin, but we have purposely not made a decision, awaiting your leadership.

MR. HOUGHTON: Well, we would sure like to do it the opposite way.

MR. GIBBS: I have some of the many concerns that he expressed. Just from a pure marketing standpoint, as you well know, any kind of pro bono work, if that's not your main mission, that's not what's driving you to sell, then you don't promote that as you do other things.

The other issue is that we have all kinds of marketing materials that are already produced. That would be an administrative cost to us to reproduce in order to let the general public know that now you have to go somewhere else to get your license plate.

MR. HOLMES: The fact that we've been at this for five years -- is that right? -- is somewhat disturbing to me because it doesn't seem like that weighty an issue that we would spend five years to resolve. Having said that, if you haven't seen the language, you have expressed some concern but they're nonspecific, as I understand it -- at least I'm not sure what your concerns are.

MR. GIBBS: Mainly it's the fear of loss. We have the highest selling license plate in the state of Texas and that's something we're very proud of. I think it's mainly because of the design, as was expressed earlier, because it looks very similar to the Texas flag and people like that. And so I am concerned that having many other plates competing against that, in a specialty type plate sense, that it could have some impact on our revenues.

MS. ANDRADE: Members, is it your wish to defer this item until Rebecca has a meeting with these not-for-profit organizations, or do you want to continue with voting?

MR. HOLMES: That would be my preference, Chairwoman.

MS. ANDRADE: Rebecca, how do you feel about us deferring it for another 30 days and you getting the not-for-profits together to further discuss this and come back with a report to us at the March meeting?

MS. DAVIO: Okay. I'm happy to do whatever you direct. I would remind you that we've had two meetings with the existing plate sponsors, and you know, we're happy to continue to try and work with them. I would suggest that perhaps we could work at that while the rules are being proposed and considered. They'll still have a formal comment period. The reason that I'm encouraging you to consider adopting the proposed rules at this point in time is because the adoption of the fee schedule is critical in order to begin generating revenue for the State. My Plates cannot market a single plate and generate a single dollar for the State without the approval of the fee schedule.

I think the difficulty here is that there are so many unknowns that we don't know. I don't believe anyone can provide a guarantee to the existing plate sponsors that their plates will not be harmed. What I could say is that evidence that we have from another country doesn't indicate that that will be the case, that, in fact, their plate sales will increase. And it's a very difficult situation. We're conscious and very sensitive to their concerns, and some of the things, I think, if you'd allow me the time to try and address some of the things that were raised, I believe that the fiscal note that Robin referred to was actually the LBB fiscal note. Many times they don't accept TxDOT projections, and as I mentioned, I can't speak to exactly what our projections were but it may have been LBB's projections of a loss.

MR. HOUGHTON: Let me ask you a question, since we're all airing things out here. I am a little confused, the prestige plate, was this part of the legislation or part of what you all came up with?

MS. DAVIO: The idea for the prestige plate?

MR. HOUGHTON: Yes.

MS. DAVIO: That was actually what the vendor came up with. They have done research in the state of Texas to look at and to survey citizens and say: What do you think, what would you pay for a plate, what kind of designs and things would you be interested in.

MR. HOUGHTON: What if Ned Holmes wanted a specialty plate and he was willing to pay a half million dollars for that specialty plate, could he do that?

MS. DAVIO: I would hesitate to speak for My Plates, but my guess is they would certainly enter into discussions.

MR. HOUGHTON: And he wanted to put University of Texas on there, specialty plate, only one of a kind.

MS. DAVIO: Well, that would require permission from the University of Texas.

MR. HOUGHTON: If it's a half million dollars.

MS. DAVIO: That would still require permission from the University of Texas.

MR. HOUGHTON: My point is how much revenue does the University of Texas receive from that.

MS. DAVIO: At this point in time, we can't tell you that because --

MR. HOUGHTON: He's going to be paying a half million dollars. Tell me what they're going to receive, one plate, one time. Please, James, tell me.

MR. POWER: The answer is very simple, Ted. We can't use anybody's symbol or logo or trademark without their permission, and I presume the University of Texas would enter into a negotiation with My Plates.

MR. HOUGHTON: Right, that's my point. Can you do that?

MR. POWER: Well, I'm not a lawyer, but we certainly do that elsewhere and we'd be happy to do so here.

MR. HOUGHTON: I think we ought to go back.

MS. ANDRADE: Thank you. Rebecca, let's go ahead, and it's apparent that we still need to discuss this further, so we're going to defer this for the March meeting, and Amadeo will get together with you and will hopefully answer all the questions that the commission has.

MR. HOUGHTON: Well, Madame Chair, with all due respect, I think we're missing -- Ned brought this up, I was unaware of what happens in Dubai and the U.K., and there may be opportunities like that that need to be allowed in this contract.

MS. DAVIO: And we are fully supportive of that. In fact, we have already had discussions regarding auctions, and what we are trying to do, because this is brand new, we are trying to work through some of this sequentially, and we have agreed that this is a starting place. My Plates said that this is what they'd like to propose. We fully anticipate coming back to you on a regular basis for rules consideration and amendments to the fee schedule, and auctions is something that we fully anticipate.

MR. HOUGHTON: Well, I think you ought to do it now while we're talking about these sort of things and that the State of the Arts back there may have a great idea on an auction that would increase their revenue, they can see an opportunity for revenue enhancement instead of looking at us to say we're not quite sure if revenue is going down because Robin throws a number out there in the LBB and scares everyone half to death -- which is not fair -- but the point is let's look at all enhancements. Why not?

MS. DAVIO: And we're fully supportive of that, we would love to bring to you a complete schedule, it's just that every single one of these things takes a great deal of time and effort. We have to look at, just on an auction, the implications for the customers, what impact is that going to have on TxDOT, how can that best be situated.

MR. HOUGHTON: I'm willing to wait until you get that done and enhance the revenue to those charities, universities, not-for-profits all over the state. If they want to come up and let their mind wander on how we can market these type of auction plates to enhance revenue, that's a great opportunity for State of the Arts to enhance the revenue. If they have an auction and he's worried about revenue drop, here's an idea for a marketing person to come in and say we've got an idea for an auction. Right now under the contract he can't do that.

MS. DAVIO: I would defer to Bob, but I don't believe that State of the Arts or any other existing specialty plate can have an auction.

MR. HOUGHTON: They can work with James.

MS. DAVIO: They can certainly work with James.

MR. HOUGHTON: Bingo. But under the current contract we can't do that.

MS. DAVIO: Yes, sir.

MR. HOUGHTON: Working with an auction?

MS. DAVIO: It is not restricted, we can do auctions, and it is very possible.

MR. HOUGHTON: Why don't we research all of that and come back.

MS. ANDRADE: I think you need to prepare to be able to answer the commissioners' questions, and so let's defer this to March and we'll take it at that time. The item is deferred. Thank you, Rebecca.

MR. SAENZ: Commissioners, moving on, item 9(a)(4) deals with Traffic Operations. Carlos Lopez, division director of Traffic Operations Division, will make the presentation on the proposed rules.

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

The minute order before you proposes amendments to the existing rules for the Information Logo and Tourist-Oriented Directional Sign programs. The amendments implement House bill 3441 of the last legislative session.

House bill 3441 allows the commission to establish by rule the definition for an eligible highway for logo and major shopping area signs, as long as those rules are consistent with federal law and regulation. The legislation also allows the commission to define what constitutes a major shopping area.

Other proposed changes are designed to reinforce and clarify existing provisions in the rules, such as the number of sleeping rooms for hotels and that campgrounds be able to accommodate all types of vehicles. The term "urban" is also removed from the portion of the rules dealing with major shopping area signs, as per House Bill 3441. This change reflects the current operation of the program that has been accomplished through variances and will have no impact on participants.

We recommend approval of the minute order.

MS. ANDRADE: Members, you've heard staff's recommendation. What is your pleasure? Do you have any comments or questions?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you very much, Carlos.

MR. LOPEZ: Thank you, commissioners.

MR. SAENZ: Thank you, Carlos.

Commissioners, moving on, agenda item 9(b) deals with the Final Adoption of rules, and 9(b)(1) deals with the State Infrastructure Bank, and James Bass will make the presentation.

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

This minute order would adopt revisions to the State Infrastructure Bank rules by removing the requirement that entities performing the work have an annual project audit performed by an independent CPA, adding a requirement for annual project reports, and by also stating that SIB loan proceeds are not eligible to fund expenditures that occur prior to the execution of the agreement.

Proposed rules were published in the Texas Register on November 30 and no public comments were received. Staff recommends your approval.

MS. ANDRADE: Members, you've heard staff's recommendation. Any comments or questions?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you very much, James.

MR. SAENZ: Thank you, James.

Item 9(b)(2) deals with final adoption of rules to Chapter 8, Motor Vehicle Distribution. Brett Bray will present.

MR. BRAY: Madame Chair, members, Mr. Saenz, I'm Brett Bray, director of the Motor Vehicle Division.

The minute order before you provides for final adoption of rules related to the transfer of Motor Vehicle Division hearings to the State Office of Administrative Hearings, commonly known as SOAH, pursuant to House Bill 3601. Cases filed before this last September 1 remain at MVD, cases filed after that go to SOAH; therefore, it's necessary to keep some existing rules in place until all the cases on MVD's docket have been heard. We will bring you a proposal to repeal those rules once the docket is cleared.

The additional rules create a case management framework for SOAH cases, set out the responsibilities of both departments, and inform SOAH judges, licensees, attorneys and the public of the procedures we have developed with SOAH.

The proposal was published in the November 16 edition of the Texas Register and no comments were received nor did anyone attend the public hearing held December 12. We recommend approval of the minute order.

MS. ANDRADE: Members, you've heard staff's recommendation. Do you have any comments or questions?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Thank you very much.

MR. SAENZ: Thank you, Brett.

Agenda item 9(b)(3) deals with final rules for Chapter 17, Vehicle Titles and Registration, and Rebecca will come back up.

MS. DAVIO: I feel like I'm monopolizing your time today, but I'll try and keep this very short. For the record, my name is Rebecca Davio, director of the Vehicle Titles and Registration Division.

This is final adoption of a number of clean-up rules and to implement legislation. The item of most significance was the refusal to renew registration if child support was behind, and we did receive two comments from the Texas Association of Automobile Dealers and the Texas Independent Association of Automobile Dealers, and their comments really dealt with they were concerned that title transactions would be stopped as a result of this legislation in the rules that are proposed, and we clarified that that was not the case, that it's only the registration of the vehicle that won't be able to be renewed.

We request your approval.

MS. ANDRADE: Members, you've heard staff's recommendation. Do you have any questions or comments?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you so much, Rebecca. Thank your staff for all the hard work.

MR. SAENZ: Moving on, agenda item 9(b)(5) deals with some final rules for Right of Way. John Campbell will present.

MR. CAMPBELL: Good afternoon. For the record, I am still John Campbell, director of the Right of Way Division.

I'd like to present for your consideration item 9(b)(5) which provides for the final adoption of new Subchapter P, including Sections 21.921 through 21.930 of the Texas Administrative Code. The purpose of these rules are to implement a Prepayment Funding Agreement Program, developed in concert and cooperation with the utility industry to reimburse a utility for the costs of relocating certain utility facilities required by the improvement to a segment of the state highway system. The commission, by Minute Order 111145, dated November 15 of 2007, proposed this new subchapter.

No comments were received during the public comment period, and staff recommends your approval.

MS. ANDRADE: Members, you've heard staff's recommendation. Any comments or questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you so much, John.

MR. HOUGHTON: John, is there any truth to the rumor that you're going to have the first picture on the LED boards around the state, your picture, your image?

MR. CAMPBELL: There's absolutely no truth to that rumor, and I'll do everything I can to prevent that from happening.

MR. SAENZ: Thank you, John.

MS. ANDRADE: If your picture was on it, it meant you were kidnapped.

(General laughter.)

MR. SAENZ: Agenda item number 10 deals with a contested case concerning an outdoor advertising sign permit, and Rich O'Connell, from our Office of General Counsel, will present.

MR. O'CONNELL: Good afternoon. This item is about John Gannon v. TxDOT. The Office of General Counsel recommends the commission approve the administrative order that you have before you concerning an outdoor advertising sign owned by John Gannon, Inc. in Fayette County.

The department issued a sign permit to Gannon in May 2006. After some concerns in February of 2007, the department hired a contractor to survey the actual constructed sign and found that it was constructed in violation of our rules. The department took action to cancel the permit, and Gannon asked for a hearing. After the hearing conducted by an administrative law judge by the State Office of Administrative Hearings, the ALJ recommended that the department and the commission cancel the permit.

We recommend you approve the proposed order canceling the permit.

MS. ANDRADE: Members, you've heard staff's recommendation.

MR. HOUGHTON: I have a question. Is this outside any ETJ or municipality?

MR. O'CONNELL: Yes.

MR. HOUGHTON: This is what we've been talking about in the rural areas, this is our authority, we're exercising our authority on signs?

MR. O'CONNELL: Commissioner, no. This is on I-10 so this is on the interstate and primary system.

MR. HOUGHTON: But it's outside anybody's jurisdiction.

MR. O'CONNELL: That's right. It's direct jurisdiction of the department, it has not been delegated to the local governments.

MR. HOUGHTON: Okay, good. Thanks.

So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you so much.

MR. SAENZ: Thank you, Rich.

Commissioners, moving on to agenda item number 11 dealing with Toll Projects, item 11(a) is an item that will transfer part of the US 281 to the Alamo Regional Mobility Authority, and Phil Russell will present. Item 11(b) will be deferred. We're still working on our financing and we're going to defer item 11(b) so that we can continue to work on that.

MR. RUSSELL: Thank you, Amadeo. Again, for the record, I'm Phillip Russell, assistant executive director for Innovative Project Development.

As Mr. Saenz just mentioned, the agenda item before you, 11(a), is related to a critical project in the northern San Antonio, Bexar County area, US 281, the limits being from 1604 up to the county line. The minute order before you would do two things, if approved today: it would eventually lead to removing this project from the state highway system and ultimately to the transfer of this project to the Alamo Regional Mobility Authority.

Commissioners, staff would recommend approval of this minute order, and I'd be happy to address any questions you might have. I know Chairman Thornton is here and I think Terry Brechtel from the RMA as well.

MS. ANDRADE: Thank you.

Members, you've heard staff's recommendation. Any questions or comments?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. ANDRADE: We do have Bill Thornton and Terry signed up to speak. Do you want to hear them speak before we vote on it, or do you want to vote on it and then hear them speak? What is your pleasure at this time?

MR. THORNTON: Your pleasure, Madame Chairman.

MS. ANDRADE: Since we're in the middle of a vote, all in favor, say aye. We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

Anything you'd like to add, Chairman Thornton?

MR. THORNTON: (No audible response.)

MS. ANDRADE: Thank you.

MR. SAENZ: Thank you.

Madame Chairman, as I mentioned, item 11(b) is being deferred so that we can continue working on the financial issues that we're dealing with in the department.

Moving on, item number 12 deals with Pass-Through Toll projects. Mark Marek will present a minute order authorizing us to execute an amendment to an existing pass-through toll agreement with Hays County.

MR. HOUGHTON: Mark, why are you doing pass-through? I thought this was Bass's area.

MR. MAREK: We trade out now and then, sir.

For the record, my name is Mark Marek. I'm the director of the Design Division for TxDOT.

This minute order authorizes the department to amend a pass-through financing agreement with Hays County. Because the county is unable to move forward at this time with one of the projects in the original agreement, they've asked to amend the agreement to substitute other needed improvements that serve the public interest, are in the best interest of the state, are compatible with existing and planned transportation facilities, and serve to further state, regional and local transportation plans and goals. The total reimbursements for all projects remains unchanged.

This minute order would direct the executive director, or their designee, to negotiate the final terms of the amendment and to execute the negotiated agreement to the previously approved pass-through agreement with Hays County.

Chairman, I would note that it takes somebody to keep these agreements working, keep them moving along, and that person has been Hays County Judge Sumter, and the judge is in the audience here this afternoon.

Staff recommends approval of this minute order.

MS. ANDRADE: Members, we do have several citizens that have signed up to speak. Would you like to hear them first?

MR. HOUGHTON: Sure.

MS. ANDRADE: And also, the judge, if she'd like to come up. Judge Sumter, thank you so much for being with us, and thank you for waiting.

JUDGE SUMTER: And I really appreciate the time that you've given us today, and also, your patience and perseverance as we've been working through these issues in Hays County.

I want to let you know that this program, I think that what we're removing and adding into it certainly does speak to the congestion in our area and certainly the safety issues in our area, and I think it's an excellent package that's being presented today to the commission.

I've been going around the county for the last, oh, month or so, talking to at least five community meetings. I have two left, and quite frankly, transportation is number one on their minds and we are ready to start turning some dirt. So I hope today that you will vote the approval of this getting done so that we can move forward. Thank you.

MS. ANDRADE: Thank you so much, Judge. Any questions for the judge?

(No response.)

MS. ANDRADE: We have County Commissioner Jeff Barton.

MR. BARTON: Madame Chairman, members, I'll be very brief. Jeff Barton. I represent a district along Interstate 35. We're one of the fastest growing areas in the state. We very much appreciate your willingness to partner with us. I think this is a model for the future. We're stepping up and bringing money to the plate, but I want to thank you and your staff for your perseverance in working through these issues with us. I'm here to tell you that our state representative, our local cities are united in this effort, and to ask you for your approval. Thank you.

MR. HOUGHTON: Commissioner, who is your state rep?

MR. BARTON: Patrick Rose.

MS. ANDRADE: Thank you very much.

County Commissioner Debbie Ingalsbe. Is she still here?

MS. INGALSBE: Thank you so much. I really didn't ask to speak, but I appreciate you considering this, I think it is very important. We feel that these roads are very important. This package that you have allowed us to put together is a great substitute for what we had, and I appreciate your consideration. Thank you.

MS. ANDRADE: Thank you, and thank you for being here.

Commissioner Will Conley.

MR. CONLEY: Thank you, Ms. Chairman, for the opportunity. I, too, would like to thank the commission for their patience and for them working with us to work through these issues. This is my fourth time in front of this commission. I started negotiations on this deal, and hopefully this is the final time in front of this commission in this particular issue. We are moving forward. These projects are desperately needed in our county.

I'd like to personally thank Mr. Saenz for all the work that he's done for us in Hays County, and would appreciate your approval here today.

MS. ANDRADE: Thank you very much.

MR. CONLEY: Thank you.

MS. ANDRADE: We also have the mayor of the City of San Marcos, Mayor Narvaiz, who has just signed up for it and said she doesn't need to speak. Mayor, thank you so much for being here.

Brad Hagen.

(Inaudible response.)

MS. ANDRADE: All right. Members, any questions or comments?

MR. HOLMES: What TxDOT district is this in?

MR. MAREK: The Austin District, Bob Daigh, district engineer.

MS. ANDRADE: And I want to clarify that this was an existing pass-through that we had already approved prior to our current financial situation.

MR. MAREK: That's correct.

MR. HOUGHTON: I have a question for the county judge. Judge, what's the population of your county?

JUDGE SUMTER: We're sitting at about 125,000 right now.

MR. HOUGHTON: With or without students at Southwest Texas -- Texas State University?

JUDGE SUMTER: That is actual residents who are living there. I think with students you might want to add maybe about another 20,000.

MS. ANDRADE: Members, what is your pleasure?

MR. HOLMES: Move it.

MR. HOUGHTON: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Thank you. Motion carries. Congratulations.

MR. MAREK: And to add to your question there, Chairman, that agreement was approved by the commission in May of 2006.

MS. ANDRADE: Thank you very much.

MR. HOUGHTON: Congratulations.

MR. SAENZ: Thank you, Mark.

Agenda item number 13 deals with Finance and the acceptance of an annual report on the Central Texas Turnpike System project. James.

MR. BASS: Good afternoon. Once again, I'm James Bass, chief financial officer at TxDOT.

As part of the indenture for the Central Texas Turnpike System, the commission agreed to present an annual update of financial and operating data to the bond market. This agenda item asks that you accept these items so that we may distribute them to the market.

And although the exhibits to this minute order are quite voluminous, I would point out that many of the exhibits are items that have either already been accepted by the commission or already distributed to the commission. I would be happy to point out to you which ones haven't, if you would like. Absent that, staff would recommend your approval.

MS. ANDRADE: Members, you've heard James's report. Any comments or questions?

MR. HOUGHTON: Question, James, at least the one I have, is where are we in the budget on this, over/under?

MR. BASS: I believe the last quarterly report I think is in the neighborhood of $300 million under budget. Again, as we've spoken, some of that will be shared with the local entities for cost savings on right of way and some from the State. As you're well aware, the State had committed to fund $700 million towards the construction of that project and we've transferred about $370-, like I said. About $160- of that we have not distributed because of the underruns on the project. The general engineering contractor said that those additional funds would not be needed. And so out of the $700-, we've transferred about $540- towards that and do not expect to have to transfer the remaining to the project.

MR. HOUGHTON: Great. And we anticipate the project being completed?

MR. BASS: I believe it's in April of this year.

MR. SAENZ: The report that Phil presented to you all last month in Victoria, I believe the latest estimate of that report showed that Segment 4 would be open by April.

MR. HOUGHTON: The final segment.

MR. SAENZ: The final segment that will complete the CTTS project.

Just as an aside, I think we're also working on the State Highway 45, what we call the Southeast Project, and that project, I believe, will be open by the end of the year, Phil?

MR. HOLMES: The end of this year?

MR. SAENZ: Bob was telling me the other day -- and I can say that because we're not bonding that project, we're paying it out of Fund 6 -- is we think we can open that project by the end of this year which would open it, I think, a year ahead of schedule.

MR. HOUGHTON: Congratulations.

MS. ANDRADE: Members.

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you so much.

MR. BASS: Thank you.

MR. SAENZ: Thank you, James.

We've already covered item 14. Item 15 deals with the award or rejection of Highway Improvement Contracts. Thomas Bohuslav will present two minute orders for our consideration.

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

Item 15(a)(1) is for consideration of the award or rejection of Highway Maintenance and Department Building Construction Contracts let on February 7 and 8, 2008. We had 26 projects; an average number of bidders of 5.7 bidders per project; and no underrun significant amount. We recommend award of all the Maintenance contracts.

Any questions?

MS. ANDRADE: Members, no questions or concerns?

MR. HOUGHTON: Yes, I have a question. James, are we within the anticipated budget for lettings match cash flow?

MR. BASS: Yes.

MR. HOUGHTON: Thank you.

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you very much.

MR. BOHUSLAV: Item 15(a)(2) is for consideration of the award or rejection of Highway and Transportation Enhancement Building Construction contracts let on February 7 and 8, 2008. We had 40 projects; average number of bidders is 5.3 -- those numbers are up, by the way, from previous months -- and an overall underrun on the projects. We recommend award of all the projects in the exhibit.

Any questions?

MS. ANDRADE: Members?

MR. HOUGHTON: Same question as to James, does this match our cash flow forecast?

MR. BASS: (No audible response.)

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you very much.

MR. HOLMES: Madame Chairman, I wanted to make a comment and thank Thomas for a tour that he provided for Teresa and myself of the testing facility, lovingly called the Hog Farm. For those of you that haven't been out there, I think it's really an interesting tour, very dedicated people. We looked at some of the paving testing equipment which I found to be really helpful in my understanding of the process that we go through.

Thomas, I thank you and all the staff out at the testing facility.

MR. BOHUSLAV: That staff did a great job out there.

MS. ANDRADE: I welcome any time that we can thank our staff, and you're absolutely right, Commissioner Holmes, we have a lot of brainpower over there.

MR. HOLMES: It's a smart bunch.

MS. ANDRADE: Thank you very much.

MR. BOHUSLAV: We welcome any of you to come out and have a look at what we're doing.

MS. ANDRADE: That always brings a smile to my face. Thank you.

MR. BOHUSLAV: Good. Thank you.

MR. SAENZ: Thank you, Thomas.

Agenda item number 16 deals with the Routine Minute Orders that deal with donations to the department, approval of eminent domain proceedings, highway designations, load zoning and posting on the various highways and bridges, additional right-of-way dispositions and donation of right of way, and also speed zoning.

We have reviewed the agenda items. We don't see any item where any commissioner may have been impacted, so we recommend approval of those minute orders. We'll be happy to answer any questions, should you have some.

MS. ANDRADE: Members, what is your pleasure?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: At this time, we will recess in order for the commission to meet in executive session. It is approximately 12:37.

MR. HOUGHTON: Clarification.

MS. ANDRADE: I'm sorry?

MR. JACKSON: You need to state the reason for going into executive session.

MR. HOUGHTON: Madame Chair, are we going to state all four reasons as listed?

MS. ANDRADE: No, just the consultation with and advice from legal counsel regarding pending and contemplated litigation, including a briefing by the Office of the Attorney General on Texans Uniting for Reform and Freedom v. Texas Department of Transportation.

MR. HOUGHTON: I would like to add item (d), if the Chair would permit.

MS. ANDRADE: Not at this time.

MR. HOUGHTON: To discuss in executive session.

MS. ANDRADE: Not at this time, only the 17(b), Section 551.071.

MR. HOUGHTON: We cannot add that? Can we add that?

MR. JACKSON: At your pleasure.

MR. HOUGHTON: I would like to add that item (d).

MS. ANDRADE: Okay. Give me guidance. Now I know how across the street feels with surprises, as that was not brought to my attention before by Commissioner Houghton, and I would have liked to have given it some thought.

MR. JACKSON: You can do that if you want to, read what (d) says into the record.

MS. ANDRADE: I'm not going to divide the commission.

MR. HOLMES: My personal feeling, Madame Chair, is it's at your discretion.

MS. ANDRADE: Not at this time.

(Whereupon, at 12:38 p.m., the meeting was recessed, to reconvene this same day, Thursday, February 28, 2008, following conclusion of the executive session.)

MS. ANDRADE: The meeting of the Texas Transportation Commission is reconvened. For the record, the time is 1:45 p.m.

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 left?

MR. SAENZ: No, ma'am.

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

MR. UNDERWOOD: So moved.

MR. HOUGHTON: Second.

MS. ANDRADE: A motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: Motion carries. Thank you very much.

(Whereupon, at 1:45 p.m., the meeting was concluded.)




C E R T I F I C A T E


MEETING OF: Texas Transportation Commission
LOCATION: Austin, Texas
DATE: February 28, 2008
I do hereby certify that the foregoing pages, numbers 1 through 158 inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Stacey Harris before the Texas Department of Transportation.

3/03/2008
(Transcriber) (Date)

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

back to top