June 26 Transcript


Texas Department of Transportation Commission Meeting


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

Thursday, June 26, 2008


COMMISSION MEMBERS:

Deirdre Delisi, 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. DELISI: Good morning. It is 9:04 a.m. I would like to call the June 2008 meeting of the Texas Transportation Commission to order. It's a pleasure to have you here this morning.

I 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 1:31 p.m. on June 18, 2008.

Before we begin today's meeting, let's all take a moment to place our pagers, cell phones and other electronic devices in the silent mode.

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

MR. MEADOWS: Well, thank you, Madame Chairman. It's a pleasure to be here again for my second meeting, and I really don't have much to say other than -- which is unusual, by the way -- other than just a couple of thank yous. The first one is to thank the Traffic and Maintenance Divisions for inviting me and Commissioner Underwood to address their meeting in Dallas on Tuesday. I was really impressed with the crowd, it's a great crowd, a great group of people. And I also was extraordinarily impressed with the agenda that they had -- I mean, I started looking at the agenda and I didn't understand half of what the actual agenda items meant, but I hope they do and I know they do.

And the second thank you really is to the North Texas region. I guess I should thank Commissioner Houghton, as well. I was his driver yesterday, giving him an extensive tour of the vast area, the successful area that is the North Central part of our state. I think I did a pretty good job driving, and I was deferential, as you can appreciate, when you're in the presence of a man like Commissioner Houghton.

I'd also like to express appreciation to the NTTA for giving us some time to visit. We had a good visit with them and had an opportunity to see some of their projects.

So with that, I pass it on to whoever is the appropriate person to follow me, I think Commissioner Underwood.

MR. UNDERWOOD: That's affirmative.

I want to associate myself with my colleague's remarks. The Maintenance meeting, they are the backbone of our business or whatnot, they're the unsung heroes, they're the real face of TxDOT, and I want to thank them again. I thought it was a great meeting and whatnot. And welcome everyone here.

MR. HOLMES: Thank you, Fred.

I had an opportunity to meet with that division, oh, I don't know, about nine months ago when they met in Houston. It's a great group that does very good work.

Mr. Houghton, if you'd like a tour of Houston, I'd be happy to provide that as well.

MR. HOUGHTON: It won't be the same.

MR. HOLMES: It won't be the same, clearly not.

(General laughter.)

MR. HOLMES: Thank you all for coming. We've got an interesting agenda today.

MR. HOUGHTON: Well, thank you, Ned, for the offer. I have three children that live down there and I've had an adequate tour of Houston.

And for a guy that didn't want to say much, Madame Chair, on the far right -- my far right, your far left -- he said volumes, and thank you again, Bill, for the tour yesterday. We had very good meetings up in the North Texas area.

And welcome to everybody here today and our friends from Cameron County I see are in the audience and some of our friends from Farm Bureau, and we look like we'll have a lively, extensive discussion, and I think it will be very informative.

MS. DELISI: I just want to echo the welcome to our partners from Cameron County. I had the pleasure of meeting with them yesterday and look forward to hearing from you guys again today.

With that, thank you to everybody in the crowd for coming, and let's get on to business.

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 you to fill out a yellow card and identify the agenda item. If it's not an agenda item, we will take your comments in the open comment period at the end of the meeting. For those comments, we ask you to fill out a blue card. Regardless of the color of the card, we will limit each speaker to three minutes.

The first item on today's agenda is the approval of the minutes of the May 29, 2008 commission meeting. Members, the draft minutes are in your briefing materials. Is there a motion to approve these minutes?

MR. UNDERWOOD: So moved.

MS. DELISI: Second?

MR. HOLMES: Second.

MS. DELISI: The minutes are approved.

Now, Amadeo, I will turn the meeting over to you to take us through today's agenda.

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

Today we will begin the meeting with two discussion items. The first one will be presented by Steve Simmons, deputy executive director, and he's going to talk about establishment of a project management model that is tied to the issuance of bonds to the sale of bonds that will be used to pay for transportation infrastructure, and I'll turn the program over to Steve.

MR. SIMMONS: Thank you, and good morning, Chair Delisi, commissioners, Mr. Saenz. For the record, my name is Steve Simmons and I'm the deputy executive director for TxDOT. I'm here this morning to present a discussion item to you pertaining to the administration's concept on establishment of a project management model for the management of future debt for development of highway improvement projects.

Each month you, as a commission, face the daunting task of allocating of what are scarce financial resources to address the mounting mobility, safety and maintenance needs of this state's vast transportation system. The needs are just too great while the financial resources available to address that need continue to dwindle, and it seems that all too infrequently, we are given the opportunity to start anew with a clean slate on a program area that truly would have an impact upon the manner in which we do business here at TxDOT. I want to take the time to visit with you about one such impending opportunity and our proposed response to it.

During last year's 80th Legislative Session, primarily through the efforts of the chairman of our substantive transportation Committee, Senator Carona and Representative Krusee, the Texas Legislature passed Senate Joint Resolution 64. SJR 64 placed on the November 2000 ballot Proposition 12 which was a constitutional amendment to allow the legislature to authorize the Transportation Commission to issue general obligation bonds in an amount not to exceed $5 billion for the purpose of providing funding for highway improvement projects. Proposition 12 was passed by 63 percent of those voting in that election.

As provided for in the constitution, we now await the legislature's enactment of the necessary enabling legislation so that the commission may begin to fund projects using this general obligation bond approach to highway project finance.

On the grander scale, that paints the department's historical financing picture. Bonded indebtedness is a relatively new funding mechanism for the commission and the department. Proposition 12 represents the third broad scope bonding financing authorized by the legislature. When I say broad scope, I'm excluding the toll revenue bond authorization which has not been used since the financing of the Central Texas Turnpike System because of its narrow project-specific authority.

In 2001, the Texas Mobility Fund was created and then capitalized by the legislature in 2003. We issued the first debt from the Mobility Fund in 2005, and to date, we have issued over $5 billion in the Texas Mobility Fund bonds. The amount of Mobility Fund bonds that can be issued is constrained, however, by the revenues coming into the Mobility Fund. And as you know, the primary source of revenue for that fund are drivers license fees, driver record information fees, motor vehicle inspection fees, and the certificate of title fees.

Currently, the Bond Review Board has approved a total of $6.4 billion of Texas Mobility Fund bonds, of which, as I said, $5 billion has been issued. The full $6.4 billion, however, has been obligated to fund projects and the remaining bonding authority will be used as those obligations become expenditures.

Also, in 2003 the legislature and the voters authorized the issuance of debt backed by the State Highway Fund. As originally enacted, the program called for a maximum debt of $3 billion with no more than $1 billion to be issued in any single year. These upper limits were raised to $6 billion and $1.5 billion per year during the 2007 session, and as you know, 20 percent of the amounts issued must go to fund safety improvement projects. To date, we have issued nearly $3 billion in State Highway Fund bonds, and the amount of the State Highway Fund bonds that can be issued is also potentially constrained, in this case by the additional funds the legislature is willing to appropriate for debt service payments on the bonds.

These debt programs have been used to fund billions of dollars worth of highway improvements throughout the state, and although all of these funds have, of course, gone towards the development and construction of projects, the agency historically utilized these funds to assist in increasing the overall lettings of the department -- that is, instead of issuing debt that is tied to one specific project, the department has utilized these monies to pay the bills on what has been a significant increase in the overall letting amounts of the agency within the past several years.

Issuance of Mobility Fund and State Highway Fund, or Prop 14 bonds, is what has allowed us to increase lettings from the $2- to $3 billion per year level that we were at to the $5 billion level of the most recent years. As we have seen and discussed here at commission meetings for months now, these levels of project lettings are a thing of the past unless the agency and commission receive an influx of new revenue sources from the Texas Legislature and/or Congress. We are very fortunate that the legislature and the citizens have taken the first steps towards authorizing issuance of Proposition 12 general obligation bonds.

We have heard from the leadership of the legislature that it is their intent to follow through on these first steps and that they anticipate the legislature will set aside the necessary general revenue funds required to implement the full potential of the Proposition 12 bond program.

To fully fund the Prop 12 bond program, the legislature would need to set aside approximately $400 million per year out of general revenue. Furthermore, Lieutenant Governor Dewhurst has even gone so far to request that we develop cash flow models which include the forecasted receipt of these funds. Lieutenant Governor Dewhurst and Speaker Craddick have also asked the State Auditor's Office to review our cash forecast to determine if, among other things, a Proposition 12 bond program should be considered in our forecast.

I would like to note that the Proposition 12 bond program has been misunderstood somewhat by the public in general, and justifiably so, perhaps. There are many who went to the polls this past November who believe that simple passage of the constitutional amendment itself was sufficient to authorize you to begin issuing this debt. I know it is clear to us, but the legislature must enact the enabling legislation prior to the time the commission may actually issue Prop 12 debt.

What seems now abundantly clear is that the legislative leadership of this state stands ready to provide additional new funding for TxDOT and the commission. The most obvious means of doing this was through the passage of the enabling legislation for the Prop 12 bond program. What the legislature must do this next session is enact the legislation which authorizes the issuance of Prop 12 general obligation bonds and establish how the program is to be administered by the commission and the department.

What appears just as abundantly clear is that the method that we have used to manage our bond program in the past may not be the best model for how to administer the Prop 12 debt program. I'm here today to offer you a proposal from the administration for establishment of a bond management program which would be implemented quite differently than the program-wide models we have used for both the Mobility Fund and the State Highway Fund bond programs. Those programs have been vital in supplementing the available funding for the department's ongoing projects and can continue to fill this role in the future, though on a more limited basis. However, we now have the opportunity for a fresh start for a potentially more effective and more transparent method of putting bond program funds to work using what we have learned from the existing programs.

Let me be clear, the goal here is to establish a bond project management program that will be ready and in place well before the time the enabling legislation for Prop 12 becomes law.

Briefly, through this program we will first identify candidate projects which have a significant degree of impact on the mobility, safety and major reconstructive needs of the highway system. Our objectives here are twofold: first is to achieve greater accountability by completing the selected projects on time and on budget; and then second, we will gain key stakeholder confidence by managing and reporting on this program in a transparent manner, utilizing all available communication methods, including the web. The key tenet of this proposed program is that the administration recommends that this entire program be managed on a very specific project by project basis and not on the program-wide basis of previous bond programs.

In other words, we recommend that very specific projects be identified for funding under the Prop 12 bond program and that Prop 12 bonds be issued to fund only those particular projects and only when work on those projects is ready to proceed. This is very similar to what occurs at the local level where bonds are generally only issued for specific projects to be constructed within a known time frame, and with this information being conveyed to the citizens in a straightforward and timely manner. Again, this proposal will be very different than Mobility Fund and Prop 14 program-wide models.

Obviously, numerous scenarios exist for identifying projects as potential candidates for a Prop 12 program. We would anticipate that through the next several months we would solicit the input of numerous stakeholders, such as MPOs, the legislature, and local leaders, to develop a consensus on which projects are best suited to this program. There are several factors that clearly should be addressed in the identification of Prop 12 projects, not the least of which are the five clear goals of the agency and the commission. In addition, there is the question of whether projects that generate revenue should be considered or weighted differently than others in a ranking system.

Another factor may be the allocation of program funds among mobility projects, safety projects and economic development projects. Keep in mind, it is our intent as an agency, in general, to move forward towards total projects costs which are planning, environmental, right of way, utilities, construction management and the actual construction cost in all of our projects, and the Prop 12 program would be no different. A key component facilitating this move towards total project cost management would be enactment of simple design-build legislation which would provide fixed pricing for both the design and construction of these projects. As an aside, we are fortunate the Sunset Advisory Commission has recommended the granting of such authority.

Once a specific project is identified, a project management and tracking system would be utilized to ensure that key milestones in the project are met and potential problems or issues are identified early and addressed accordingly. These milestones would also establish when it would be necessary to issue the debt. The administration envisions that the majority of the Prop 12 projects will be developed and constructed out of our historical district and division alignments, however, some of these projects could be developed using our pass-through financing or design-build.

We also envision identifying a small group of individuals who are responsible for broad oversight of this program and who will work to ensure that the individual projects are being delivered on time and on budget. Members of this group would have the authority to initiate intervention with our various transportation partners, both at the federal level and state level, followed by solutions to guarantee satisfactory project development.

Although there are aspects of this program that must wait until the actual legislation is enacted, the department and the commission should not wait to lay the groundwork for the program. It is imperative that we work to regain the trust and confidence of the public and the legislature in the programs and operation of the agency. A very significant aspect of the work that we undertake now is to clearly establish the beginnings of the framework for the program for both you and the legislature and have the framework in place prior to the convening of the legislature in January 2009.

We have put together an internal program development team comprised of key staff from the administration and elsewhere and led by myself and Odessa District Engineer Lauren Garduño. We will also be seeking the assistance of those with prior bond management experience from outside of the agency, where appropriate, to assist us in developing this framework. We have begun discussions with the LBJ School of Public Affairs and the Center for Transportation Research at the University of Texas to provide research and recommendations to us as we develop and refine the proposed program.

In closing, I'd like to highlight and reiterate some of what I've stated here. It cannot be emphasized enough, traditional sources of highway funding no longer are even remotely sufficient to address the needs of one of the most economically dynamic states in this country. Debt programs have been a significant part of the trend in the last decade as we have moved to increasingly diverse methods of funding the delivery of highway improvement projects. Bonding initiatives that are tied to very specific projects, and therefore very specific results, are commonly accepted at both local levels as well as the state level and elsewhere around the country.

In our quest to be increasingly responsive and transparent to the public, the legislature and all stakeholders, the administration believes that we should undertake the effort now to develop a bond management program that has its roots in the proper identification of projects and the criteria and framework necessary to ensure the successful delivery of these projects. The emphasis, again, is on transparency and accountability.

We've established the broad-based goals for the program I've mentioned here, and that is to have a program in place that is ready to begin work on projects immediately after the legislature enactment of the enabling legislation for Prop 12 during the upcoming 81st Session.

And that concludes my comments and I'd be happy to answer any questions.

MS. DELISI: Commissioners, does anyone have any questions for Steve? Go ahead, Bill.

MR. MEADOWS: Just an observation. This sounds more like a proposed change in program implementation methodology rather than a change in project management. I mean, you referenced project management as the latter part of this. The focus really is on programmatic implementation. And my only observation about this really is that it's still to be refined. What I really read out of this is you're still thinking about it. I wouldn't reach any conclusions until you had some time to really give some serious thought to the actual program management piece of this, because I think in the end that's going to be the biggest piece.

You reference in here, what I just heard you say, you start talking about we anticipate the involvement -- although that's not specifically defined -- of the existing program management methodology using district engineers. I'd like to talk about this further.

MR. SIMMONS: You bet.

MR. MEADOWS: I think this is extraordinarily important. I think to even be thinking about this and thinking in this manner, I compliment you on it; I think you're a long way from being where it is that you need to be.

MR. SIMMONS: I agree and that's why we're reaching out to folks like the LBJ School and Center for Transportation Research to help us look at the methodology that we use today and move forward. I think one of the other unique things here is to have that quick response team when issues come up that we don't necessarily have today. Their whole focus will be on finding those rocks in the road and the roadblocks to move those projects forward quickly.

MR. MEADOWS: I don't want to belabor the point, but the fact is that the project management piece is so extraordinarily important in terms of really being effective and efficient, and there are other ways to do it, there are other models that have yielded greater success than perhaps we've been able to yield. And everybody fears change, and change isn't bad, in and of itself. I think that we all have the same goal and that's to produce these projects in a more efficient and effective manner. And I just would encourage you to really do that and have broad parameters in which you are thinking.

So that's my reaction to this and that's the first I've heard of it, so I'd like to talk about it a little some more.

MR. SIMMONS: Thank you. Okay, great.

MR. HOLMES: Steve, on page 10 you had a sentence that said, "In addition, there's a question of whether projects that generate revenue should be considered or weighted differently than others in a ranking system." Can you expand on that just a little bit?

MR. SIMMONS: Well, when we start trying to come up with a list of projects that will be funded with Proposition 12, there's a lot of criteria that's going to come up, and I know that one of the things that we looked in the Texas Mobility Fund bonding was to leverage that money to try to bring additional revenue into the system, and the question is going to be what are those things that we're going to look at when we weight the projects that are recommended to us by the MPOs and the locals when it comes to it. And so it's just a question of what are we going to consider, how much weight are we going to give to it, and things like that.

MR. HOLMES: Given the severe constraints on the overall program, it would seem that at least a portion of this would be utilized for projects that are leveraged and can help pay for a portion of their cost.

MR. SIMMONS: Yes, sir.

MR. HOLMES: Clearly, you wouldn't do that with all of it. Right?

MR. SIMMONS: Yes, sir.

MR. HOLMES: I look forward to hearing more, like Bill.

MR. HOUGHTON: Steven what is our annual letting for new mobility on an annual basis?

MR. SIMMONS: Amadeo, about a billion?

MR. SAENZ: Well, for new mobility about a billion dollars a year.

MR. HOUGHTON: One billion out of Category 2?

MR. SAENZ: 2, 3 and 4.

MR. HOUGHTON: So new mobility, new capacity is a billion dollars.

MR. SIMMONS: Right, and what John just mentioned to me is that the UTP that you approved last month would really only sustain about half a billion dollars, but we have been doing about a billion.

MR. HOUGHTON: So we're talking about this is four years of new mobility. Is that accurate?

MR. SIMMONS: Yes, sir.

MR. HOUGHTON: And our need, have we refined the need for the state of Texas over the next 20 years? Remember that $86 billion number we were floating out there.

MR. SIMMONS: Yes, sir, we have a group.

MR. SAENZ: We have several groups that are working right now on the determination of development of the need. We have one that we call our 2030 Group -- in fact, they had their first meeting earlier this week -- and they're working closely with CTR and TTI to come up with what the transportation needs are for the state of Texas between 2009 and 2030. That report, hopefully, will be completed by the end of the year. And of course, they're going to continue from where the MPOs had come up to when we came up with the $86 billion gap, and look at those reports and work with them to identify what the needs are.

As a second task, we have Cambridge Systematics and Dye Management that we're looking at some short term looks at identifying some of the needs out there right now, and those reports were requested, remember, of you and me when we were in El Paso by Senator Shapleigh, and those reports are almost completed within the next two weeks and we'll be sharing them with the commission also.

MR. HOUGHTON: So the need, let's just say if it's the Governor's Business Council report of $66 million or ours of the old $86-, this is kind of a drop in the ocean to that but it's very welcome to get this new capital into the system.

You mentioned something about the legislative leadership wanting to look at this and review how we're going to implement this plan.

MR. SIMMONS: I think that we want to work with them to make sure that we are developing a program that matches their expectation when it comes to accountability and transparency and reporting on the projects.

MR. HOUGHTON: When you say matching their expectation, as to expectation in?

MR. SIMMONS: What I've heard in the various hearings is that right now when they give us some money, they don't know what project that is going to be used for and then be able to track it through the system, where it is in the environmental, right of way and things of that nature. So it's being able to monitor it.

MR. HOUGHTON: So when you say they give us money, they track it, are they going to have any input as to what projects get picked?

MR. SIMMONS: Well, that's up to the legislation out there, but it's just like Proposition 14 where they said 20 percent had to be spent on safety projects and things of that nature.

MR. HOUGHTON: In general terms.

MR. SIMMONS: In general terms is what we're looking at, but that we would work with our transportation partners, the MPO, the planning organizations to identify the projects that would be funded, such that once the funding was identified for it that there was a method to track the particular projects.

MR. HOUGHTON: Well, that begs the question that this sounds like there may be some earmarking here?

MR. SIMMONS: I don't particularly see the earmarking component of it. I think the broad categories that you're talking about, so much needs to be spent on safety, so much on mobility, and then going through the normal process to select it, but once TxDOT is given the $5 billion, they would like to see what projects it's being used for rather than that broad programmatic, the way we do things today.

MS. DELISI: Can I just say in my conversations with legislative leadership, I think Steve is on point in terms of their concern about being able to watch how the money is being used but there is a sensitivity on leadership's part as well to not go down the path of earmarking. Clearly -- well, I can't speak for the rest of the commission -- I think that would be a problem and I've heard that from legislative leadership that they don't want to go down that path as well, so there is a sensitivity out there on that issue.

MR. HOUGHTON: And we have seen on the federal side earmarking, not necessarily here in the state of Texas but other places, that things get earmarked, load up that budget, but projects that never make it to the finish line -- I mean, there's not enough money. So your criteria of MPO support, environmental clearance, adequate resources to get that project.

But just to illustrate the point to the audience, and not anything else, is the 130 5 and 6 project that we had contracted to build. What's the total contract project cost of that, Amadeo?

MR. SAENZ: $1.3 billion.

MR. HOUGHTON: And what's the project cost of the Katy Freeway in Houston?

MR. SIMMONS: Close to $2 billion.

MR. HOLMES: Or more.

MR. HOUGHTON: So you can see the magnitude of these projects, and spreading $5 billion across the empire of the state of Texas is going to be challenging.

MR. SIMMONS: Yes, sir.

MR. HOLMES: I think just to amplify that point, Commissioner Houghton, this represents about 18 months of construction. It is a band-aid, a very welcome band-aid but it does not eliminate the need to fix the funding in our program on a permanent basis.

MR. SIMMONS: I agree. And I think what we're trying to accomplish is to get that transparency, accountability back into our relationships.

MS. DELISI: If no one else has any comments or questions, let's move on to the next discussion item.

MR. SAENZ: Thank you, Steve.

Our next discussion item is item 2(b). Jefferson Grimes will give us our federal legislative update.

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

Today I would like to provide you with another in what has become the periodic updates to you on our federal activities here and in D.C., and since we were here, I think, two or three months ago, there have been several items that have come up that I would like to convey to you and discuss somewhat at this time.

The first of which is recent activity by Commissioner Meadows and Commissioner Holmes in D.C., and I'm going to touch on that a little bit. There is also the issue that is receiving a tremendous amount of attention -- as it should be -- and that is the status of the Federal Highway Trust Fund, I will touch on that; SAFETEA-LU Technical Corrections Bill that recently was signed by the president; and then touch on an interesting component of what is the Amtrak re-authorization that I think is of interest or will be of interest; and then close for opening it up for any kind of questions that you may have.

As I stated, earlier this month Commissioners Holmes and Meadows, along with Deputy Executive Director Steve Simmons, ventured to D.C. to continue our outreach with congressional leaders and our national partners in transportation. Mr. Meadows and Mr. Simmons met with most of the congressional delegation, either individually or in a group setting, to discuss transportation issues, and then Mr. Holmes led a press conference in D.C. in which the focus was the announcement of a diverse group called the Transportation Transformation Group, or T-2, which is focusing on re-authorization.

Let me start with Mr. Meadows' meetings. The meetings were positive. We had three goals as we went into the meetings. One was to build relationships or continue to build relationships with members of Congress, express the willingness to have open communications with our members of Congress, and then encourage their pursuit of a national transportation strategy.

Some of you may be familiar with our previous discussions on this, but the congressional delegation has formed a working group, a transportation working group among members that are interested. This group met several times last year to hear from us, they heard from TTI, they heard from other interest groups as well. Mr. Meadows' visit was the first time this calendar year that they have met, and we had the opportunity to show our intentions of working very closely with them as they work on re-authorization.

It was clear that we all, in the Texas congressional delegation, share an interest in advancing the transportation issues facing Texas. Most importantly, perhaps, thanks to the leadership of Commissioner Meadows, was that the delegation continued their thoughts or discussions about coming down to Texas to hold a meeting here in Texas to discuss transportation issues that are similar across business lines, government lines and that would affect the state.

We've offered to help in facilitating that meeting. It will likely take place in the Dallas-Fort Worth area, hopefully sometime in July of this year, next month. Members of the delegation are reviewing their calendars now to see if that is workable, and we certainly hope that that will be the case. So thank you to Commissioner Meadows and Steve for your work on that.

Also, in D.C. at the same time, Commissioner Holmes, like I said, led a press event at the National Press Club, announcing the formation of this group called the Transportation Transformation Group, T-2. TxDOT has joined T-2 because it is truly, in looking at all of the coalitions that are forming on re-authorization, I can safely say that it is the one group that truly represents initially a diverse group of interests that are focusing on re-authorization.

What we would like to do with T-2 is focus on creating expert dialogue and establishing a knowledge base for Congress and the incoming administration as they draft the next generation of re-authorization. This group is chaired by Commissioner Holmes. The purpose of T-2 is much broader than simply focusing on Highway Trust Fund issues or the traditional donor-donee relationship between states and then also more than public-private partnerships as well.

Membership in T-2 so far includes DOTs, we have a toll entity, we have a port authority that's a member, we have technology companies that have joined, financial banking interests have joined, engineering companies have joined on as well. These organizations obviously bring a great many different interests to this discussion that are, again, beyond fuels tax and the private sector investment in our system.

Everyone in this organization has one thing in common: we all agree that the current federal focus on transportation needs to be fixed. There is no set standard well embraced or significantly embraced transportation goal or strategy at the national level, and the group feels like the Congress and the incoming administration should focus on identifying and renewing the national interest in transportation policy. There is unquestionably a lack of real focus at the federal level as far as goals go. The national dialogue has shifted from simple discussions about the gas tax to alternative means of financing. I think it would be unwise if Texas was not at the table, and thanks to Commissioner Holmes, we are as far as the interest in T-2 goes.

The actual launch itself at the Press Club was well attended by reporters. I think we got good national exposure. General Barry McCaffrey and former Majority Leader Dick Gephardt were among the featured speakers. After the press event, several T-2 members participated in a radio media tour to take the concept of T-2 nationwide. This strategy allowed us to reach approximately 7-1/2 million radio listeners during that time. We received good coverage in the news as well. Ned Holmes, Bill Meadows and Steve Simmons were invaluable during this stretch of time in D.C. and we appreciate it.

Now, having discussed our recent outreach with Congress, I'd like to focus for just a moment on a subject that continues to receive a significant amount of attention and that is the status of the Federal Highway Trust Fund.

We have been talking for months now about -- and I think the first reports came out in maybe '05 or '06 -- about 2009 being the year in which really the Highway Trust Fund reaches a critical point where forecasted outlays from the trust fund coming out of SAFETEA-LU from '05 would exceed revenues coming into the trust fund. Those estimates of what the deficiency is have ranged from $1-1/2 billion on the short side to as much as $8 billion over a two-year period. The president's proposed budget expects a larger deficit than what some have forecasted, and that is $3.3 billion for '09.

Regardless of the methodology used to establish the number, unless Congress takes action, highway spending will have to be cut significantly, possibly by up to a third next year. Keep in mind, as well, that there are other influences going on as far as the amount of monies going into the trust fund, it's not just pay-outs. People, as you know, are driving less. I saw a figure the other day that nationwide we've got X billion miles less of vehicle miles traveled as a result of increases in gas prices. So there are other things that we face as far as fluctuations in what goes into the Highway Trust Fund.

Since highway funding is expended on projects over several years, the president's projected $3.3 billion shortfall would result in a federal program cut of four times that amount. The American Association of State Highway and Transportation Officials have reported that this represents approximately a 34 percent reduction in the federal highway program and would put numerous jobs in jeopardy across the nation and Texas. AASHTO estimates that congressional inaction would cause Texas to lose about $859 million in obligation authority for '09. What this would mean is that we would have to ratchet down lettings in '09 even further than what we are anticipating and what we have been discussing even this morning.

As far as trying to address it goes, there have been numerous attempts on both the House and the Senate side in trying to address this. Most of these fixes have focused on movement of money from general revenue into the Highway Trust Fund, either for a one-year or a two-year period. There have been different flavors of this. Some of the proposals have focused on backfilling general revenue, others have been just a straight transfer of monies from general revenue to the Highway Trust Fund. As we wind down here with this Congress, what is clear is that we are running out of vehicles to get this done with and we're running out of time to get it done.

Just as recently as yesterday, again, the temporary extension of the Federal Aviation Administration program passed the House without this language being attached to it. So again, we are facing a critical period here.

This week, Congress attempted twice to add the $8 billion direct transfer from general revenue with no required offsets in the budget for GR, again, for the short term FAA House bill and for the longer term Senate bill. The $8 billion would have allowed the Highway Trust Fund to remain solvent through 2010 which is key as we're looking at re-authorization in '09. That would have allowed a two-year period, basically, for the Highway Trust Fund and allow Congress time to enact re-authorizing legislation which might actually address the issue in a more holistic manner.

Both of these failed for various reasons. Senate appropriators objected to the $8 billion, for instance, because they disagreed with the fact that they were not backfilling general revenue. The FAA extension must be enacted by this coming Monday and so in conference they are going to be working on that and there is not a Highway Trust Fund fix there as well.

Fortunately, we have a very well informed congressional delegation on this due to the work of Mr. Saenz, Ms. Delisi, our leadership here. We have spoken with all members in D.C. and their staff on this, and specifically Senator Hutchison is among those that are working diligently to try to reach a compromise and a fix on this.

However, Congress, as we look forward to re-authorization, we're still dealing with some of the offshoots from SAFETEA-LU, and there was recently, as I mentioned, I think, two or three months ago, SAFETEA-LU Technical Corrections that was finally signed by the president and there were different components of it, but one of the most significant things that we mentioned earlier is, once again, Congress has added to the amount of rescissions that we expect in '09, even more so than what we were expecting.

If you go back to SAFETEA-LU, again, we anticipated and everyone knew that in '09 there would be a rescission of a certain amount of money. What the technical corrections bill did was increase that even more nationwide, about $100 million, Texas's portion of that being around $9 million. We're now looking at a rescission at the end of the life of SAFETEA-LU of about $729 million. In addition, I remind you that in February the president proposed his budget for '09 and that included a very significant rescission as well.

Just real briefly, there was some action on the Amtrak re-authorization bill that I think is of interest to the agency. The House and Senate have passed separate bills and they're heading towards conference now, but there are two programs in the Amtrak re-authorization which Texas might find of interest. One of them deals with intercity rail, the other one deals with high speed rail.

What the bill does is set aside for high speed rail $1.75 billion in grants to states or to Amtrak to develop high speed rail, and then approximately $2.5 billion for intercity rail, and those would be, at least the way they're set up statutorily, grants to states for development of rail of this type. Again, like I mentioned, these bills are heading into conference now.

As I conclude, the outlook has not changed. Transportation funding at the federal level is, as we know, in a state of crisis. The good news is that among the relevant committees and our delegation, we are reaching out for a consensus on new financing mechanisms that will be a part of the next re-authorization. Chairman Oberstar himself has, in fact, publicly stated that we not only need to preserve the motor fuels tax and the trust fund, but he is beginning to indicate that he is willing to supplant that with other revenue sources like a vehicle miles traveled fee based on time and day. The House Transportation and Infrastructure Committee continue to do their work. In the past couple of weeks they have looked at several different proposals for addressing transportation infrastructure and have held hearings on those.

We have been effective thus far and we will continue working with our congressional leaders and interest groups across the nation to make our message clear and heard. We need the adequate tools to be able to do our part to reduce congestion, improve air quality, expand economic opportunity, enhance safety and increase the value of our infrastructure.

That concludes my remarks and I would be glad to answer any questions that you may have.

MS. DELISI: Are there any questions or comments? There are none.

MR. SAENZ: Thank you, Jefferson. You were very thorough.

I would say on the shortfall of the Highway Trust Fund, we have been working at the state level with some of our key transportation folks and key legislators and they have been very helpful in contacting Washington, as well as several of our commissioners, our chairman, and Commissioner Holmes, I think you've been also instrumental. It's important the issue here is if the fix is not made, 2009 will result in us having to, in essence, cut back projects because we will not have the federal dollars to be able to pay for those projects.

MR. HOUGHTON: In your heart of hearts, do you believe that will happen, do you believe they will allow this trust fund to go negative?

MR. SAENZ: In my heart of hearts, I don't think so. It's going to be like all things, one of those last minute fly-in solutions.

MR. HOUGHTON: I mean, you guys were up there, what's your sense, Bill and Ned?

MR. HOLMES: Do you want to go first, Bill?

MR. MEADOWS: No, I'm not inclined to speculate on it.

MR. HOUGHTON: I mean, we've got partners, we were just talking about $5 billion in Prop 12 and now we go forward two steps and we drop back one step, or we're back to the same place we were.

MR. SAENZ: Go forward one and back two.

MR. HOUGHTON: In your heart of hearts, do you believe that?

MR. MEADOWS: The only comment I would make is just factually, the members of the Texas delegation that I met with are absolutely cognizant of the issue, they are keenly aware of what the challenges are, they are a strong supporter of a strong transportation system for this state, and I put those two things together and I reached the conclusion that we've got people that are willing to work with us, that are willing to help us, and I think that that sort of effort is likely to result in a positive conclusion. Now, that's about as speculative as I want to be.

MR. HOLMES: Ted, it seemed to me that Bill's observation is absolutely right on, people understand the problem. The argument is about the fix, how do you fix it and how do you correct it, and unfortunately, it looks unlikely that it will be addressed before September-October, and so that time line for a fix keeps being pushed back.

MR. HOUGHTON: Amadeo, when do you have to, from a budgetary standpoint and to our MPOs and to our partners around the state have to say: Whoops, stop?

MR. SAENZ: I think as we move forward and we're developing our 2009 letting schedule, we're going to have to approach this thing with the possibility that we could lose $859 million, what projects are we going to identify to be put, what I would say, below the line. So we would create a letting schedule for the whole thing but we would have identified where the $859 million would have to come from and what projects would be delayed.

MR. HOUGHTON: So Jefferson, have we fully informed our legislative delegation of this possibility? I mean, I just got to thinking about we're going to talk about $5 billion and now we're going to talk about taking it back again.

MR. GRIMES: We have fully discussed this with the legislative leadership. The agency has not yet put out an all points bulletin to all 181; we've discussed this with the lieutenant governor, we've discussed this with the speaker's staff.

MR. HOUGHTON: Don't you think we ought to?

MR. GRIMES: Yes, I think so. For instance, as a recommendation -- not to get this settled here -- there is the letter that is for your signature could easily be sent to the entire delegation, and we will do that.

MS. DELISI: I think the more information, the sooner the better.

MR. SAENZ: We will get it out.

MS. DELISI: Plus, they can help, they can be effective with their representative.

MR. HOUGHTON: Yes, they can be effective with their own congressional representative in their area.

MR. GRIMES: Absolutely.

MR. HOUGHTON: In other words, thank you for the $5- but here's what's coming back.

MR. GRIMES: And to go back to a different statement here, I think just to expand on what Amadeo said as far as lettings go, the state of funding here, whether it's at the state level or federal level, all of that is in play here and in flux, so I think we would be remiss to put everyone at least somewhat on notice that '09 and what we're forecasting to go to contract on may need to be modified if things don't come through at the federal level.

MR. HOUGHTON: Thanks.

MR. SAENZ: Thank you, Jefferson.

Moving on to agenda item number 3, we have David Fulton, Aviation Division director, will present the minute order approving some airport improvement projects.

MR. HOUGHTON: Are you authorized?

MR. FULTON: Authorized in what way?

MR. HOUGHTON: Aviation. They were just talking about aviation, we don't have an aviation bill?

MR. FULTON: What happened is there's been two extensions up to a nine-month and we got 75 percent of the funding. I was listening intently to Jefferson. I hope the continuing resolution contains the other 25 percent to complete the year.

MR. HOUGHTON: So you get affected too.

MR. FULTON: Absolutely. It would have passed but the highway amendment weighted it down and so that's why it hasn't gone forward. So anyway, I'm very hopeful they both make some progress.

For the record, my name is Dave Fulton, director of TxDOT Aviation Division.

This item is a minute order that contains a request for grant funding approval for five airport improvement projects. The total estimated cost of all requests, as shown in Exhibit A, is approximately $16.1 million: $12.7 million federal, $800,000 in state funds, and approximately $2.5 million in local funding.

A public hearing was held on May 22 of this year, no comments were received. We would recommend approval of this minute order.

MS. DELISI: Any questions?

MR. HOUGHTON: I had a question of Dave again.

MS. DELISI: I figured. Go ahead, Commissioner.

MR. HOUGHTON: I meant to ask this earlier on. If, in fact, the continuing resolution does not contain that 25 percent, where does that affect you in the process of funding, when?

MR. FULTON: Well, it will affect us immediately. We've already advised in writing and orally to our clientele that this is a possibility, then we'd have to move the projects into the next fiscal year, everything would just slip that amount of projects, 25 percent.

MR. HOUGHTON: Have they contacted their congressional delegate?

MR. FULTON: That I don't know. I guess it's certainly something we could pass on to them; we'd be happy to do that.

MR. HOUGHTON: I think so.

MR. FULTON: We'd be glad to do that. I guess this is going to happen imminently, but we'll certainly try to do that right away, put out an alert.

MR. HOUGHTON: Their communities become affected.

MR. FULTON: We'll certainly do that.

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

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

(A chorus of ayes.)

MS. DELISI: No opposed. Passes.

MR. FULTON: Thank you.

MR. SAENZ: Thank you, Dave.

Agenda item number 4 deals with five minute orders dealing with public transportation. Eric Gleason will present all five minute orders, and we'll start with 4(a).

MR. GLEASON: Good morning. For the record, my name is Eric Gleason, and I'm the director of TxDOT's Public Transportation Division.

Agenda item 4(a) awards $28.7 million in state funds to small urban and nonurbanized or rural public transportation systems for fiscal year 2009. These funds are for both operating and capital expenses and are used to leverage federal funding for the same purposes. There are 30 small urban and 39 nonurbanized or rural public transportation systems eligible for state funding. These systems carry 22 million passengers and travel over 41 million miles of service each year.

The allocation among these systems shown in Exhibit A is consistent with the funding allocation formula adopted by the commission in the Texas Administrative Code. We recommend your approval of this minute order.

MS. DELISI: Members, are there any questions or comments of Eric?

MR. HOUGHTON: Have you got any continuing resolutions out there that you need support on?

MR. GLEASON: We're fine for this '08 fiscal year but we're concerned, as well, about '09 and anticipating that we'll be into a continuing resolution format. Typically for us, sir, what happens is they award portions of a program amount as we go through the year, and so we have to scale our efforts accordingly.

MS. DELISI: There are some speakers signed up to speak on this agenda item. The first I'll call is Vastene Olier.

MS. OLIER: Good morning to the commissioners. I'm Vastene Olier and I'm with Colorado Valley Transit. I'd like to, first of all, thank you for your continued support. I listened to you all earlier, and how depressing, and I want you to know that I say that sincerely because I have a lot of empathy for what you're going through but I want to share with you the other side of it that I go through.

Colorado Valley Transit is who I work with; it's a rural public transportation system; it serves Austin, Colorado, Waller and Wharton counties. I have been with the agency 23 years; it is something that I dearly enjoy. We provide door-to-door service, we also have some fixed routes, and I can tell you that in 23 years I've been before the commissioners court numerous times and each year it looks bleaker and bleaker, and when I listen to you talk about a band-aid, I've worked with a band-aid for 23 years, it's worn out.

I don't know how you do it. I don't know what the magic is, and when you talked about what's going to happen with the Texas two-step, you have money here and where are you going to go, where do you get it from. What I want you to do is when you think about the request and the funding that you're approving today, and when we come back to you asking for additional money for '09, think about what this phase is in terms of public transportation in the rural area.

I no longer can go into the store and shop when I've been bombarded with people wanting transportation to go to work, begging for transportation to go to work. I can't do it, I can't do it anymore than what you all can do. But when I look at my funding, in '04 we had 530-some thousand dollars; this appropriation that Eric is referring to today is $348,000, approximately. That's $182,000 less from '04 to now for next year.

Fuel costs, roughly, for us back in '04 was about $8,000; we're at about $30,000 a month. Eric is going to come to you in a few minutes and he's going to ask you about some fuel money. I think our agency is scheduled for $45,000. When I look at $45,000 and what we spend every month, it's not possible.

We are trying a number of different things, and I know the commission has asked us in the past to look at coordination. We've had 23 years of that. I sat through a meeting yesterday, different agencies, human service agencies trying to come up with solutions, and I think we did a very good job, but what rose to the top out of each one of them was that there is not enough funding.

When we look at the state of Texas and what we're doing in terms of building roads, we have issues, but on the other side, when you look to public transportation which is the vehicles that should be helping as a partner to take some of those individuals off the road -- we're not going to be adequately able to address that. We've lost employees; we're raised fares; we have tried different things, but really, without the adequate funding for rural transportation -- and I speak not just for our agency, I speak for other agencies. And when you look at what will be presented to you later by one of the others, Texas Transportation Association, you will see that over half of the transportation agencies are losing funding, it has gone down.

And when I first started, people looked at public transportation, especially in the rural area, as the poor folks, old folks and minority bus. And the calls that we're receiving now and the people that are coming in the office begging for transportation is middle class people who want some public transportation so that they can have relief from the gas costs. We cannot do it.

So as you consider your funding, I'd like for you think about this phase and what happens in the rural area and think about what kind of partnership we can do, if the rural transit systems were to receive additional funds, what can we do together to make a difference in mobility in the state of Texas.

Any questions for me?

MR. HOUGHTON: I just have one. And thank you for coming and your continued service to public transportation. The question I have does your county have any subsidy, either through sales tax or property tax?

MS. OLIER: Absolutely not. Everything that we do is either federal or state, then we get county support which is part of their budget each year, and then the other side of it is foundation grants. If we get buses, then some of it is federal, the other parts will go to the local private sector or foundations to try to match those, and that's it.

MR. HOUGHTON: Let me just talk about that county support, is it a budgetary line item or is it a sales tax support?

MS. OLIER: Line item for the counties, it's not a sales tax. And that is an issue. In your urban areas you do have that, but when you have the rural areas, you have no tax base.

MR. HOUGHTON: The county doesn't have the authority, Amadeo or Eric, to impose an up to the maximum by state statute to support their transportation needs?

MR. GLEASON: Well, I think there's a choice to be made locally about where to spend that authority, and I think in counties where those decisions have been made, in some cases a portion may be going to public transportation but there are other counties who've made decisions with other priorities. So there's not a dedicated capacity for only public transportation.

MR. HOUGHTON: Yes, I understand; it's an election, right.

MR. GLEASON: Yes.

MS. OLIER: Let me just say something about the sales tax part of it. The only thing that we do benefit from is a partnership with economic development corporations that have tried to help with some of the shortfall that we have. That's not a dependable source but it is an option, but it's not like your sales tax going toward public transportation or a certain percent that you can depend on and know that you can grow your systems to adequately address the problems that you face.

Thank you.

MS. DELISI: Thank you very much.

MR. HOUGHTON: Thank you.

MS. DELISI: Our next speaker is Ben Herr with the Texas Transit Association.

MR. HERR: Good morning, commissioners. My name is Ben Herr. I'm the executive director of the Texas Transit Association. It's a non-profit trade association that represents the transit industry in the state which includes the eight metros, the 30 small urbans and the 39 rural transit agencies. Prior to working for the Texas Transit Association, I was a TxDOT employee working for Eric Gleason in the Public Transportation Division.

I'm speaking this morning in favor of this minute order. The transit industry, specifically the small urban and the rural transit agencies, very much appreciate the department's support for public transportation and the $28.7 million that's to be awarded in this minute order. So while we're genuinely grateful, my message to you is that this amount of money is not enough to meet the needs for the transit agencies and their communities in providing adequate public transportation to the citizens of Texas.

As I stated in a letter to you this month, the Texas Transit Association recommends the department raise the amount of state-provided funding to $50 million per year in the next biennium. This is not the usual complaining about not enough money. By every objective measure that we can find, the State of Texas has not kept pace with the need for funding public transportation and we face the very real possibility of losing federal funding because there's not enough state funds to match the federal funds.

In just five years, the gap between federal and state funding has increased from $15 million to over $35 million. Now, not only is the amount of state funding not enough to meet the overall needs of the industry, these funds distributed under the current funding formula mean about 50 percent of the urban and small rural transit agencies will receive less funding than they did last year. In fact, in 2005 and every year since then, more than half the transit agencies in the state received less state funds than they did the year before. The only way to reduce this trend under this current funding formula is to provide an increase in the overall level of state funding.

It's unreasonable to expect that with less state funds and with increased costs like fuel and maintenance that these transit agencies can meet the increased demands of service in their communities. In a recent survey conducted by TTA, transit managers report that they are being forced to implement significant cost-saving measures: they're cutting routes, reducing service areas; they're discontinuing weekend and evening service; they're reducing the number of vehicles on the road each day; they're turning away new customers; they're either laying off employees or not hiring new news; they're postponing planned expansion service; and they're increasing fares.

Now, there is a positive side to all this. As I've said, half of the transit agencies are losing state funds which means the other half of the transit agencies are gaining state funds each year. The benefits of increasing state funding is impressive.

The Alamo Area Council of Governments in San Antonio has been able to add enough routes that they can now cover the entire counties which in the past they could not; they've purchased new buses; they've hired additional drivers and provided a cost of living increase to their drivers; they've made needed improvements to their facilities; and they're now entering into working relationships with local employers to provide rides to employees, something that they did not have the capacity to do before.

The East Texas Council of Governments, increased state funding for them has provided the opportunity to expand service and add new technology and provide not only more efficient service but also more accurate reporting and analysis, something that TxDOT has asked them to do.

And finally, in tiny Corsicana and the two counties of Ellis and Navarro, with increases in state funding, the Community Transit Services has exceeded all expectations. They've increased their fleet from nine vehicles to 19 vehicles, four of which were provided by the local community because of the popularity of the expanding public transportation. Since 2005 they've had a 120 percent increase in ridership and now provide rides for work, medical and personal errands like taking little old ladies to get their hair done. Ridership has increased so much, in fact, that Community Transit Services has just received an FTA award for the highest increase in ridership for a rural public transportation agencies.

Again, I'd like to thank the commission and the department for this minute order and providing these state funds to the transit industry. We appreciate your support but request your assistance in providing more state funding in the next biennium to meet the increasing demand for public transportation in our state.

I'd also like to address a question by Commissioner Houghton. Sir, to my knowledge, only the metros have the legal authority to have state sales tax for transit tax. As I look at the funding for our small urban and rural areas, there currently is no capacity for them to implement any kind of sales tax. The local funding that they get is provided by the cities and the counties, to the best of my knowledge -- and I'm pretty sure I'm right with this -- the only ones that have the authority to have a transit tax as part of the sales tax is your eight metros.

MR. HOUGHTON: Well, Ben, it may be a great opportunity during the next session that your association go back to the legislature and talk about an opportunity there to allow a tax, an election to impose that tax to support public transportation.

MR. HERR: Excellent suggestion, sir, we'll look into it.

MR. HOUGHTON: And I think the timing may be absolutely right from the standpoint of where we are with current gasoline prices, and the gasoline prices have just got to be eating up the operating costs of these transit authorities.

MR. HERR: Absolutely, sir.

MR. HOUGHTON: Not only in the metros, but everywhere.

MR. HERR: Yes, sir, you're absolutely right.

MR. HOUGHTON: This could be a great opportunity to get that done.

MR. HERR: Thank you, sir.

MS. DELISI: I'd like to call up our next speaker, please. Thank you very much. John Hendrickson with Waco Transit.

MR. HENDRICKSON: Chair Delisi, commissioners. My name is John Hendrickson, for the record. I'm the general manager of Waco Transit and also the president of the Texas Transit Association, and I'm here to thank you for your current support.

We have challenges, we have fuel costs that are skyrocketing, we have challenges all throughout the state. Examples in Waco: our fuel budget went from about $450,000 to over $800,000 this last year, and it's continuing to rise this year. Fuel prices are an extreme challenge for us. Some of the challenges that we have in small urban systems, most of the small communities are already taxed out at the maximum amount that's allowed by state law, so they're all at 8.25 percent, so there's no room for any type of sales tax or anything like that that could assist public transportation. Most of the small urban systems receive some type of general revenue from the city to help offset those costs.

Over the last six years of re-authorization, federal funding has increased but yet state funding has stayed pretty much stagnant which has left a big gap for small urban systems and rural systems to be able to come through and match those funds. We rely on the state a lot, and want to thank you for all the things that you've done for us in the past, but we need your support today to help us get a legislative budget request to increase funding for public transportation. It's extremely important.

Ridership, I know that all of you have been reading the newspapers and listening to the news, but ridership is increasing at dramatic rates. Ridership in Waco for the month of April had increased 25 percent, and whenever you look at the capacity of the vehicles, we have major employers there in Waco that are looking for us to transport 200 or 300 people to a shift and we don't have the assets to be able to do that. And so to continue the economic vibrance of this state, we've got to be able to assist these employers and be able to provide the transportation that they need.

So I thank you. Any questions?

MS. DELISI: Thank you. Are there any questions?

MR. HOUGHTON: Unfortunately, yes.

MS. DELISI: Absolutely, Commissioner, go ahead.

MR. HOUGHTON: This may be an opportunity when you talk about private sector looking to public agencies. It may be a great opportunity, whether it's in the session or if statutes allow public-private partnership in transit, and whether it's buying equipment or subsidizing or trying to get people to these factories or shift work, it may be a great opportunity, and I would certainly be your partner in that one. I don't think industry can lay it off all on you, they have to participate.

MR. HENDRICKSON: Well, we do have a project in Waco which is a Job Access Reverse Commute grant which is a public-private partnership and we do have a lot of agencies and businesses that are working together to help support a project -- that actually is one of the poorest counties in our region, Falls County -- to bring those people from Falls County into Waco for education and employment. So we are working on those things and it's something that we're going to have to grow and continue to work on.

MR. HOUGHTON: Yes, and ramp it up a little bit. This may be we've reached that cross point in transportation where it's just not about roads anymore, folks.

MR. HENDRICKSON: I think it's a unique time in this whole country.

MR. HOUGHTON: It's light rail, it's commuter rail. We have to be thinking a little bit differently.

MR. HENDRICKSON: Yes, sir. Thank you.

MS. DELISI: Any other comments or questions? Can I get a motion?

MR. HOLMES: So moved.

MS. DELISI: Second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Any opposed?

(No response.)

MS. DELISI: No opposed. Passes.

MR. SAENZ: Proceed, Eric.

MR. GLEASON: Agenda item 4(b) awards $4.8 million in federal funds under the Federal Transit Administration Nonurbanized Program and $360,820 in transportation development credits for projects that enhance intercity bus service in Texas.

The Section 5311(f) program regulations require that the department set aside 15 percent of the annual apportionment for nonurbanized or rural area public transportation to enhance and improve intercity bus service within the state.

A competitive call for projects was issued on September 7 of 2007. Eight project proposals were received and six are recommended for funding. Two of the proposals did not fit with the program project eligibility requirements. Proposals requested funding for operating assistance, vehicle capital, marketing and planning. The projects listed in Exhibit A are recommended for funding at this time.

Intercity bus is an important component of the overall mix of public transportation options offered throughout the state. The industry is participating in regional service coordination planning efforts around the state. The department historically has supported the development of multimodal centers, including intercity bus carriers, and we expect to see a number of service and customer service innovations integrating rural, urban and intercity bus carriers in the future.

We recommend your approval of this minute order.

MS. DELISI: Members, are there any questions?

MR. HOLMES: So moved.

MS. DELISI: There's a motion. Is there a second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Any opposed?

(No response.)

MS. DELISI: There are no opposed. Passes.

MR. GLEASON: Thank you.

MR. SAENZ: Go ahead, Eric.

MR. GLEASON: Item 48 awards the remaining balance of Federal Transit Administration Section 5311(f) funds originally awarded for fiscal years 2007 and 2008 to Texas, New Mexico and Oklahoma Coaches. It awards these funds to Greyhound Lines, Inc.

On May 19 of 2008, the department was notified that Texas, New Mexico and Oklahoma, TNM&O, was merged into its parent company, Greyhound Lines, and that Greyhound would be assuming all responsibilities previously held by TNM&O. Awarding these funds to Greyhound will allow continued renovation of the bus stations in Amarillo and Wichita Falls, as well as continued operation of routes connecting Lubbock to the cities of El Paso, Odessa and Abilene.

We recommend your approval of this minute order.

MS. DELISI: Any questions?

MR. HOLMES: So moved.

MS. DELISI: Is there a second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Any opposed?

(No response.)

MS. DELISI: No opposed. Passes.

MR. SAENZ: 4(d).

MR. GLEASON: Agenda item 4(d), this minute order approves the award of up to $1.38 million of Federal Section 5304 State Planning and Research Program and state matching funds to support continued regional coordination efforts in 23 of the 24 planning regions across the state. In one additional case, Region 6, the department's Tyler District was selected as co-lead and fiscal agent for the East Texas Region. Those funds will be expensed by the department directly and therefore not included as a grant award in the minute order.

We expect that continued planning efforts will require additional staff time as well as operational and administrative expenses to support it. An equal amount of up to $60,000 is awarded to each area.

We recommend your approval.

MS. DELISI: Can I get a motion?

MR. HOUGHTON: So moved.

MS. DELISI: Second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Passes.

MR. GLEASON: Thank you. Agenda item 4(e) awards $2.2 million in Federal Transit Administration Nonurbanized Program funds to rural transit districts to address increases in rural program expenses, due in large part to circumstances such as the rising price of fuel. In accordance with the formula established in Title 43, Section 31.36 of the Texas Administrative Code, the commission may award discretionary funding under the 5311 program on a pro rata basis, competitively or a combination of both. In this case, funds will be awarded on a pro rata distribution, as described in Exhibit A, using the reported system revenue miles during fiscal year 2007.

We recommend your approval of this minute order.

MS. DELISI: Motion?

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. SAENZ: Thank you, Eric.

MR. GLEASON: Thank you.

MR. SAENZ: Commission, moving on to agenda item number 5 deals with our administrative rules. Agenda item 5(a)(1) 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.

This minute order provides the final adoption of rules lengthening the term of licenses issued by the Motor Vehicle Division. It gives effect to House Bill 2651 from the last legislative session. Motor Vehicle Division licenses issued to dealers, manufacturers, converters and others have, by statute, expired on a one-year cycle. House Bill 2651 -- which was a commission legislative agenda item -- removed the annual renewal requirement for these licenses and authorizes the department to prescribe the period for which the licenses are valid.

The proposal before you today creates two-year license terms and provides for a transition from one- to two-year licenses. The expected effect is to cut the license renewal workload and we expect that the reduction in renewal workload will improve the backlog, reduce call volume, and allow us to direct resources to processing new applications. The results should be timelier renewal of licenses and better service to the regulated community. Annualized license fees are not increased but dealers and others will pay the fee for two years at the time of application or renewal.

The proposal was published in the April 11 issue of the Texas Register, no comments were received nor did anyone attend the public hearing held on April 29. We recommend approval of this minute order, and I'm happy to try and answer any questions you might have.

MS. DELISI: Any questions?

MR. HOUGHTON: It's a two-year license now?

MR. BRAY: Yes, sir.

MR. HOUGHTON: Same price, you're just paying it at one time.

MR. BRAY: I beg your pardon?

MR. HOUGHTON: Same price?

MR. BRAY: Same price on a per-year basis, correct.

MR. HOUGHTON: Okay. How come we didn't go five years?

MR. BRAY: We looked at other year terms and we didn't find that there was the same benefit for going out that many years as in workload reduction. In addition, it hurts our ability to enforce provisions. The license renewal is one way of getting regulatory compliance. If people can't renew their license until they pay their fines, they tend to renew their license.

MR. HOUGHTON: Good point. And there are a lot of fines out there.

MR. BRAY: Yes, sir.

MR. HOUGHTON: So moved.

MR. BRAY: We really wouldn't be advocating to you two-year licenses if it weren't a direct benefit to the department which ultimately benefits the industry by workload reduction.

MR. HOUGHTON: Just for information purposes, are your personal drivers licenses five years?

MR. BRAY: I think it's five, seven, something like that.

MS. DELISI: It's six years, isn't it?

MR. SAENZ: I think it's six.

MR. HOUGHTON: So is there the same restriction: if you don't pay your fines, you don't get it renewed?

MS. DELISI: That's correct.

MR. BRAY: True, and remember additionally, that you don't pay those fines, there will be a warrant issued and any time you're stopped, you get an even lovelier penalty.

MR. HOUGHTON: Called handcuffs.

MS. DELISI: Pay your tickets.

(General laughter.)

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

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

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. SAENZ: Thank you, Brett.

MR. BRAY: Thank you.

MR. SAENZ: Commission, moving on, agenda item 5(a)(2) deals with final adoption of rules to Chapter 17 dealing with Vehicle Title Registration specialty plates. Rebecca Davio will present this agenda item.

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

We have before you for final adoption today rules that were initially proposed in March of 2008. We held a public hearing on April 28 and we did receive one comment which was addressed in the rules. Primarily these rules are going to implement several pieces of legislation passed last session. And the other change that these rules are implementing is a new fee schedule, proposed fee schedule for the specialty license plate marketing vendor that we were directed by the legislature to hire. It addresses some of the basic working provisions that we are defining for the new vendor.

I'll be happy to answer any questions. We do recommend adoption.

MR. HOUGHTON: Do the amendments in here allow for the opportunity of Ned Holmes to give $100,000 to UT and have his personalized UT plate?

MS. DAVIO: Commissioner, we have conferred with our general counsel and they have recommended that the ability to auction off plates to the highest bidder is --

MR. HOUGHTON: That's a low bid, by the way.

MS. DAVIO: That's right. We have much higher aspirations than that.

(General laughter.)

MS. DAVIO: That is not allowed in statute.

MR. HOUGHTON: It's not allowed what?

MS. DAVIO: It's not allowed by statute, that the commission has to approve the fees for the plate and we couldn't figure out the mechanism to have an auction and have the commission approve the fees. So that's something that we'll need to wait for a statute to be modified.

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. HOUGHTON: Don't leave, Rebecca. Somebody spoke very highly of you yesterday in the presence of Bill Meadows.

MS. DAVIO: Spread that rumor, please.

MR. HOUGHTON: So I have a witness. The county treasurer, right, for the county of Tarrant County?

MR. MEADOWS: Tax assessor-collector.

MR. HOUGHTON: Tax assessor-collector.

MS. DAVIO: Betsy Price?

MR. HOUGHTON: She spoke very highly of you and I thought I'd pass that along.

MS. DAVIO: And I would reciprocate. Betsy had been very, very good to work with.

MR. HOUGHTON: When someone says nice things about our employees, I pass it on.

MS. DAVIO: Thank you, I appreciate that.

MS. DELISI: Thank you.

MR. SAENZ: Thank you, Rebecca.

Agenda item 5(a)(3) deals with final adoption of rules to Chapter 18, Motor Carriers, and Joe Barnard from our Motor Carrier Division will be presenting today. And of course, Joe Barnard will be retiring from the department. How many years, Joe?

MR. BARNARD: Thirty-four.

MR. SAENZ: Thirty-four. So we thank you for your great years of service and wish you all the luck.

MR. BARNARD: Thank you, sir. It's been good.

MR. SAENZ: And we wanted to make sure we brought him up before you all to present something so that you could have a chance to maybe ask him some tough questions about these final rules.

(General laughter.)

MR. SAENZ: Joe, I'll turn it over to you.

MR. BARNARD: Thank you, sir. Good morning. For the record, I'm Joe Barnard and I'm manager with the Motor Carrier Division.

The minute order you have before you is for the adoption of the repeal of sections concerning the vehicle storage facilities and non-consent towing fees schedules to implement House Bill 2094 which was enacted by the 80th Legislature Regular Session 2007.

House Bill 2094 transfers all functions and activities performed by TxDOT relating to tow trucks and towing operations and the vehicle storage facilities to the Department of Licensing and Regulation. TDLR. The transfer of the responsibilities occurred February 1, 2008. TxDOT no longer is involved in the regulation of these entities.

The proposed rules were published in the Texas Register on April 11, no public comment was received. We are recommending for the adoption of the repeal.

MS. DELISI: Any questions?

MR. HOUGHTON: I have one.

MS. DELISI: Okay.

MR. HOUGHTON: Where are you going to work after this?

MR. BARNARD: I'm hoping to have a check from ERS, sir, and I have some volunteer work that I'm going to do too.

MR. HOUGHTON: Fishing, golfing?

MR. BARNARD: Some repairs, I've got some work at the house that has been neglected for years, and I have some volunteer work at my church I'm going to do, and so we're hoping to build a new building, relocate, we've got a pretty big project ahead of us.

MR. HOUGHTON: Well, congratulations to you, and thank you for your service.

MR. BARNARD: Thank you, sir.

MS. DELISI: Congratulations.

MR. BARNARD: Thank you, commissioners.

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes. Good luck.

MR. SAENZ: Thank you, Joe, and again, congratulations.

Commission, moving on to agenda item 5(b), it deals with the proposed adoption of rules. These are rules that will be presented today and published in the Texas Register for public comment. Agenda item 5(b)(1) deals with rules dealing with employment practices for Chapter 4, and Diana Isabel, director of our Human Resources Division, will present.

MS. ISABEL: Good morning. Chair Delisi and commissioners, my name is Diana Isabel, and I am the director of Human Resources Division, and I haven't had a chance to welcome Ms. Delisi and Mr. Meadows, so congratulations and welcome to TxDOT.

The minute order before you today is for the proposed adoption of amendments to Chapter 4, Employment Practices, relating to our sick leave pool program. These rules were last changed in 2004; the proposed changes we are making now are to revise definitions, change eligibility requirements, and clarify existing language. They make the program more consistent with other state agencies and more specifically tailor the program to ensure the leave is available to only those dealing with a catastrophic illness or injury.

The amendments will require employees to use all of their paid leave instead of just their sick leave before being eligible, and this, again, makes us more consistent with other state agencies. We also are clarifying that a severe physical condition refers to the condition of the patient, regardless of whether the patient is the employee or the employee's family member. Other changes require any employee who has been disciplined for abuse of any type of leave in the past 12 months to obtain, at the employee's expense, a second medical opinion.

These amendments will allow the department to better protect its assets but also without making it more difficult for other employees to obtain leave under the program that meet the eligibility requirements.

We will notify the employees of these proposed rule changes, they'll have an opportunity to comment on them until August 11, and our staff recommends approval of this minute order.

MS. DELISI: Any questions or comments?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. SAENZ: Thank you. Thank you, Diana. And of course, Diana has also submitted her letter that she plans to retire -- which I have not accepted -- but I think I found a way to keep her onboard, she's going to have to bring back the rules for final adoption and we can hold that forever.

MS. ISABEL: Oh, I have a replacement already in line.

MR. SAENZ: Diana has worked for us for about 35 years and she's worked her way through the department in various capacities, her latest being our Human Resource Division director, and has done a tremendous job, and Diana, we congratulate you and thank you for the great work that you've done.

MR. HOUGHTON: Congratulations, Diana, but I find it very suspicious that when Delisi and Meadows come onboard, we have retirees.

MS. DELISI: We're scaring them off.

(General laughter.)

MR. HOUGHTON: Now what are you going to do?

MS. ISABEL: What am I going to do? Well, I have five grandkids that I'm sure will keep me very occupied, and then I'll find something else to do.

MR. HOUGHTON: Congratulations.

MS. ISABEL: Well, thank you. And it hasn't actually been 35 years of work; it's been 33-plus, but my sick leave and my vacation time will get me to 35.

MR. HOUGHTON: Because you never took that.

MS. ISABEL: I never took that.

MR. HOUGHTON: Dedicated employee.

MS. DELISI: That's a lot of leave.

MS. ISABEL: I appreciate it, and it's been an honor and a privilege to work for TxDOT.

MS. DELISI: Thank you.

MR. SAENZ: Agenda item 5(b)(2) deals with proposed rules for the development of a CDA Projects Corporation. James Bass, chief financial officer, will present the minute order.

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

This minute order proposes rules to establish a limited purpose transportation corporation for the purpose of issuing private activity bonds associated with TxDOT CDA projects. As many of you know, at the federal level there is a $15 billion private activity bond allocation program that's available for surface transportation projects that's awarded by the U.S. secretary of Transportation. And even though the proceeds of the private activity bonds would be utilized by the private sector in order to finance the surface transportation project, the actual issuance of the private activity bonds must be by a tax-exempt issuer.

The proposed rules would establish such an entity for the limited purpose of issuing PABs, again, for TxDOT CDA projects, subject to commission approval. In order to avoid possible confusion in the marketplace with other bond programs of the commission, what we are proposing here is to establish a separate entity for the limited purpose of issuing the private activity bonds.

If you approve, the proposed amendments would be published in the Texas Register in order to receive public comments, and staff recommends your approval.

MS. DELISI: Any questions?

MR. MEADOWS: I just have one quick question. I'm vaguely familiar with private activity bonds. These instruments, where does the liability fall in default of it?

MR. BASS: It would go back to the developer, but if there ever were to be an issue, what would happen is this proposed corporation would receive the proceeds and loan them out to the developer and they would be responsible for making repayments on that loan which would be security for the bonds. One choice was just to have the commission issue the PABs and serve that role. We did not like that position and potential confusion in the marketplace, we wanted to set up a separate entity to clarify the separation that it is not a commission responsibility for repayment.

MR. MEADOWS: That's what I thought but I just wanted to make sure. Thank you.

MR. HOUGHTON: I'm waiting for the other shoe to drop. Are you retiring?

MR. BASS: I don't know -- you tell me.

(General laughter.)

MS. DELISI: Can I hear a motion?

MR. HOLMES: So moved.

MS. DELISI: Is there a second?

MR. UNDERWOOD: Second.

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. SAENZ: Thank you, James. No, James is not retiring.

Agenda item 5(b)(3) deals with proposed rules dealing with the special license plates, and Rebecca Davio will come back and present these proposed rules.

MS. DAVIO: For the record, I'm Rebecca Davio, director of the Vehicle Titles and Registration Division, and to my knowledge, I am not retiring.

The proposed rules that we have for you to consider this morning are perhaps a little bit confusing because the final rules that you just adopted, we're asking to set those aside -- that's the way it looks because of some technical difficulties with the Texas Register, we are actually only making some minor modifications to that, again, to accommodate the processing of the specialty license plates by a marketing vendor, and we're dealing with various and sundry aspects of the workings of that program.

In addition to the changes made to 1740, we are also adding a new Section 1741 that deals with the Plate Owner legislation. This legislation was passed last session and allows individual sales, vehicle sales, the person who is selling the vehicle to remove the plates from the vehicle, it requires dealers to remove those plates. This is actually a great security protection for people because when the plates are removed, it requires the new buyer to go and register and title the vehicle in their name, and so it's a great thing. These rules clarify that and spell out some of the detailed working provisions.

In addition, we are also modifying 1751 which relates to the registration reciprocity agreements. This relates to the International Registration Program. These are the motor carriers that do business in multiple states that are based in Texas. Texas is part of the International Registration Program, and we have elected to participate in a federal program called PRISM that is all about trying to ensure the safety of these vehicles, and again, these rules just clarify some of those provisions.

These rules will be posted for comment and we recommend adoption. Are there any questions?

MR. HOUGHTON: So moved.

MS. DELISI: Hold on. We have one person signed up to speak, and I'd like to call James Power with My Plates.

MR. POWER: Madame Chair, I have no comments.

MS. DELISI: Okay, all right. So I have a motion.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MS. DAVIO: Thank you very much.

MS. DELISI: Thank you.

MR. SAENZ: Thank you, Rebecca.

Agenda item 5(b)(4) deals with proposed rules for Chapter 25, Traffic Operations. Carlos Lopez will present this item as well as the next item which is also proposed rules on traffic operations.

So Carlos, if you could present those items.

MR. LOPEZ: Thank you, Amadeo.

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

These proposed amendments incorporate revisions to the Texas Manual on Uniform Traffic Control Devices. State law requires the department to adopt a manual for the installation and maintenance of traffic control devices on public roadways in Texas. This manual is also required to be in substantial compliance with the national manual published by the National Highway Administration.

Recently, the FHWA amended the national manual to further define the term "open for public travel." The FHWA added this clarification on January 16, 2006 and the new text is proposed for addition into our manual.

The FHWA also added new standards for minimum sign reflectivity which became effective on January 22 of this year. Local jurisdictions will have to be in conformance with these standards by the year 2018. TxDOT already adheres to the new requirements.

We recommend approval of this minute order.

MS. DELISI: Any questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Any opposed?

(No response.)

MS. DELISI: Motion passes.

MR. LOPEZ: Thank you.

MS. DELISI: Thank you.

MR. LOPEZ: The next item includes proposed amendments to the department's procedures for establishing speed zones and makes technical corrections and modifications to reflect current practice. The proposed amendments revise Section 25.21 concerning regional tollway authorities, regional mobility authorities and the United States military installations to ensure that the rule fully conforms to state law. The remaining amendments make technical changes to the rules such as: removing references to technical procedures that are contained in the manual; correcting references to sign types that are no longer in use; and correcting existing sign graphics that will show typical signing layouts.

We recommend approval of this minute order.

MS. DELISI: Any questions?

MR. HOUGHTON: So moved.

MS. DELISI: Second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. LOPEZ: Thank you, commissioners.

MR. SAENZ: Thank you, Carlos.

Agenda item 5(b)(6) is also proposing rules for Chapter 25, Traffic Operations, and Carol Rawson will present that. This deals with rules for our Crash Records Information System.

MS. RAWSON: Good morning, commissioners. I'm Carol Rawson, the deputy director of the Traffic Operations Division.

The minute order before you proposes new sections to the department's rules covering crash records. On October 1, 2008, the collection and analysis of crash records transferred from the Texas Department of Public Safety to TxDOT. The Department of Public Safety had existing rules concerning crash investigations. The department is re-adopting these rules, with changes, to define and further standardize the collection of crash information.

These new sections: define the external manuals used to classify motor vehicle crashes; define when a fatality will be considered to be a result of a crash; establish an annual date when crash records database will be officially closed; establish when a driver must self-report a traffic crash; define what form a driver must use to self-report a crash; define when an officer must investigate a traffic crash; define the time period the officer must submit a report on a traffic crash to the department; define the form that must be used by an officer to report a crash and what information will be collected on that form; and note that incomplete and inaccurate crash report forms will be returned to the originating law enforcement agency.

We recommend approval of this minute order.

MS. DELISI: Any questions?

MR. HOUGHTON: So moved.

MS. DELISI: Is there a second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. SAENZ: Thank you, Carol.

Agenda item 5(c) deals with rule review, and Bob Jackson, general counsel with TxDOT, will present this minute order for the commission.

MR. JACKSON: Bob Jackson, general counsel.

State law requires rules to be readopted at least every four years. A notice was published in the Texas Register asking the public for comments on the readoption of rules concerning design and management. No comments were received. Recommend adoption of the minute order which will continue these rules for another four years.

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. SAENZ: Thank you, Bob.

Agenda item 6 deals with toll projects. Mark Tomlinson, our division director for the Turnpike Authority Division, will present agenda item 6(a) that deals with the award of the contract for the I-69 Corridor.

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

Item 6(a) is a recommendation of department staff concerning the selection of the best value proposal for planning, development, acquisition, design and construction and financing, maintenance and operation of the I-69 Corridor. And saying that, I need to re-emphasize for the first time today that while statute authorizes all those activities, what we're recommending to you today is a planning effort only. So we do have a presentation and we'll get into more details.

I think everyone probably knows by now the I-69 Corridor is about 650 miles long from the Mexican border at Laredo up to Arkansas and Louisiana. It serves more than a third of the state's existing and projected population, serves all the state's water ports. This corridor was first named in the 1991 ISTEA legislation as a high priority corridor and it is anticipated ultimately to connect through several states up to Indianapolis.

The proposals, the CDA that we're talking about today, definitely want to try to be as clear as we can. We've been in the process of procuring this CDA for about two years, and as you well know, a lot has changed in the vision of TTC in that time. So I want to tell you about the proposals and the one we recommend to you but also reinforce -- probably several times -- that in this effort we're committed to a new vision of the TTC, prioritizing the use of existing facilities, following the guiding principles that the commission has adopted, being very mindful of all applicable state statutes and federal requirements, in particular Senate Bill 792 which essentially says north of Refugio no CDAs with a private developer to operate and collect tolls. And the third bullet in particular, definitely committed to working with local input, trying to solve problems, shaping the corridors as they help us define them, not necessarily just as we define them.

And in that vein, I'd like to start by talking not really about the proposals but about the corridor and segment committees that you have set up and we've brought online to some degree. The advisory committees, working on a statewide perspective, they are in place and working with us now on both the I-69 and I-35 corridors. We soon hope to bring segment committees together as well, and have them working with us.

The roles of the committees as you defined them, the corridor advisory committees, are there to make recommendations on corridor-wide, bigger picture issues. There's one committee for each corridor, the I-35 and I-69. Members are nominated by local officials and then were selected by you, the commission. Segment committees also will make recommendations but on a more specific, regional and even probably project level, and these committees are multiple committees for each corridor and these committees are selected by local officials.

And how it lays out -- and I want to be clear on this slide, crystal clear, hopefully -- the widening you see there are just county outlines. It's not intended to broaden any corridor or be misinterpreted in that way, but it shows the segments and how they're broken out along the I-69 corridor. At the advisory committee level, we have progressed and those committees have selected their leadership. Judy Hawley is the chair of the committee, James Carlow is vice chair, many great members working with them on that committee.

The segment committees -- again, which will be named -- are broken into the segments as we lay them out there: Texarkana to Lufkin, Lufkin to Houston, Houston to Corpus Christi --

MR. HOUGHTON: Let me stop you, Mark, real quick.

MR. TOMLINSON: Yes, sir.

MR. HOUGHTON: For all the people in the audience, you just explained it, the widening out is just to gather the counties and the representation to advise as to what they'd like to see on the ground in that region.

MR. TOMLINSON: Illustrates that committees will be manned by people within those shaded counties. It's not a broadening of any corridor, and I just mention that because it looks a little bit like some earlier maps we had and we're not regressing in that vein.

MR. HOUGHTON: So in other words, in number one -- if I can read it right -- there are five counties. Is that right? One, two, three, four, five -- I can't see the outline -- but roughly five counties in Segment 1.

MR. TOMLINSON: About that, yes, sir.

MR. HOUGHTON: And in Segment 2, and then the Houston area to Corpus, so you have roughly five or six counties in each segment?

MR. TOMLINSON: I think they tried to kind of split it up in that way, yes, sir.

MR. HOUGHTON: Okay. And the role of the segment committees is to do what?

MR. TOMLINSON: They will also advise, give direction -- if you authorize the CDA today -- they'll work with TxDOT staff and the developer staff to set priorities, to give really whatever input they'd like to on a kind of more regional basis and local basis, and really to give us interaction between this effort and those local communities, to work with other leaders in that area to identify priorities and identify projects, and definitely give us emphasis areas to work on.

MR. HOUGHTON: Okay.

MR. TOMLINSON: And then, of course, the other two segments: Corpus Christi to the Rio Grande Valley, and Corpus Christi to Laredo.

And we are talking about I-69 today, but just to let you know on the I-35 Corridor, it's a very similar structure: four segment committees, the advisory committee is functioning, Tim Brown is our chair, Bill Conley is vice chair. They have worked through several meetings now. Segment committees will be named soon, hopefully, and we'll get them working as well, but that's how those segment committees lay out throughout that corridor.

MR. HOUGHTON: And they have the same role?

MR. TOMLINSON: Exactly, yes, sir.

MR. HOUGHTON: Okay.

MR. TOMLINSON: And this kind of goes more toward that point. Committees will participate at the advisory level in strategic and forward innovative thinking, advising us, but I would say we don't limit that input, whatever they want to tell us, we listen to and then try to adapt into the corridor. Members will prepare reports as Mr. Saenz requests but also give us whatever input they choose, trying to help us develop a master plan that meets the needs of the corridor users, those local users and the corridor-wide users, encompasses the desires of those corridor residents -- which, pledge to you, we're listening to more than ever before -- and enhances the economic benefits of all Texans, hopefully.

MR. HOUGHTON: So in other words, one size doesn't fit all.

MR. TOMLINSON: Absolutely not, sir. We're going to try to custom fit.

MR. HOUGHTON: And if passed today, the developer will be interactive with those segment committees.

MR. TOMLINSON: And TxDOT, yes, sir.

MR. HOUGHTON: Okay.

MR. TOMLINSON: Why use a CDA? There are some things we found that private developer's private perspective can really help us with and the resources and innovation probably are at the top of that list. We have seen that on a number of projects prior to today, and I think you'll see that in the proposal that we recommend to you today. Faster delivery, also; the shared financial risk which really can't be understated; building as needs dictated -- and again goes to your point that one size doesn't fit all, we are trying to custom fit based on needs today and that we can foresee in the future. And the financial solutions is in all caps for a reason. As we've talked through the meeting today, we have tough times and we think the private sector can help with some of that.

We'd like to emphasize -- for not the last time -- that if you authorize the CDA today, the only thing you're guaranteeing is that we'll go into planning for master planning and work with a private developer and that local input we talked about to map out a plan to see what's possible in this corridor. We're not guaranteeing any construction or any design beyond that. The developer will have some rights of first negotiation but that's limited and TxDOT has a lot of discretion there.

The main effects of Senate Bill 792 on this particular CDA, again, we're reading that and working very closely with OGC and have throughout this procurement. We're committed to working not only to the letter of Senate Bill 792 but also the spirit as well, and what it essentially tells us is that highway toll concessions are permitted south of Refugio on ISTEA corridors, not outside them, but north of Refugio County on this corridor we're not allowed to have a private developer collect tolls and operate that facility.

Other delivery methods are possible. We don't know that we're recommending them at this point but they're possible, design-build and lane availability are acceptable. The focus, again, will be working on potential partnerships, and again, I think you'll see in the recommended proposal they rely very, very heavily on close relationships and partnerships with local tolling authorities, RMAs, the MPOs and local county and city organizations. And non-highway modes are allowed in this CDA; I think our emphasis will be on highway, possibly rail, but other modes are allowed, technically.

So where we started back in April 2006 -- again, quite a while ago and we recognize things have changed -- but two teams responded to our request for qualifications in June of 2006: Bluebonnet Infrastructure Investors which is led by Cintra, Zachry American Infrastructure/ACS TTC-69 Team which is led by Zachry, primarily by Zachry American Infrastructure. But again, it's striking to me in looking at the proposals, without the guiding principles in place, they really have followed a lot of those sentiments anyway, and I think you'll see that as we go through.

But as we go through with the procurement and move on into planning, again, we definitely plan to follow all state statutes, rely heavily on those corridor and segment advisory committees, and again, extensive coordination with RMAs, counties, cities and MPOs.

A little bit about the structure -- I won't go into all the folks on that list -- this is the evaluation organization. Down at the lower level, the subcommittees met collectively to score each proposal against standard and predetermined benchmarks. The evaluation, selection and recommendation committee performed independent evaluations, received the results from those subcommittees and made recommendations based on the apparent best value to the state. And then in the next step the project steering committee reviewed those findings and made a recommendation to the executive director, and that's what we'll pass on to you today.

Proposal scoring -- again, these were predetermined but not published -- scoring criteria, and I'll just touch on these quickly because they are important. The US 77 conceptual financial plan you see had the most points, the US 77 conceptual development and the conceptual development plan for the entire corridor. The corridor, partially because of Senate Bill 792, was kind of split into two major parts from Refugio County south, and that's US 77, the question really is asked can you come up with a financial and development plan to make an I-69 a reality there, and then north of Refugio County for the rest of the corridor, can you come up with a conceptual development and financial plan for the entire corridor. As well, we also asked for a project management plan, management plan for quality, and then price, price being we capped the sum we would pay for this planning effort at up to $5 million -- don't have to spend $5 million but that is the cap in this CDA and really the limitation of the work, and proposals were scored but given very low, low points based on that.

So the two teams a little more in detail. Bluebonnet Infrastructure team is led by Cintra and Lehman Brothers, a whole host of other organizations, all outstanding, working with them. Then the Zachry American Infrastructure/ACS Dragados team as the equity leaders, again, an outstanding team below them. And so our recommendation to you -- which we'll talk more about the proposals -- our recommendation to you, based on the scoring and evaluation structure that we have, is the Zachry American Infrastructure/ACS Infrastructure team. We feel it is the best value to the state.

And again, to highlight what they really looked at and what we'll continue to look at are following guiding principles, all proposed facility locations, description, financing and schedules are conceptual that we'll talk about here. You're going to see a lot of ideas. We asked for innovative ideas and this team, believe me, over-achieved, and again, because the way we split out the CDA -- I think we'll talk first about the southern segment -- the northern part, probably goes a little further afield in looking at innovative ideas, but I want to be clear, again, if you approve this today what you're committing to are not all those ideas, it's simply planning to try to make a plan take shape that we can bring to you, hopefully, later to see if you would like to move to a further step of potential design and construction well down the road.

So kind of highlights of the recommended proposal: 50-year partnership for planning near, mid and long term projects -- that, again, would be the overreaching vision, specifically what we're bringing to you today is a 12- to 18-month planning process in which we would spend no more than $5 million, but the plan, the proposal anticipates almost $2-1/2 billion in near term transportation construction projects, and notably, anticipates no gas tax dollars for construction on those US 77 upgrades which we made a priority in this RFP. And again, the minute order that we're presenting to you states that we will come back after that planning process is, hopefully, successfully finished, but before we can begin any further steps of design or construction or really further detailed planning.

So in general terms, we're going to talk mainly about the Zachry proposal, but the Bluebonnet proposal as well was very thorough, very well studied. Essentially, in very simple terms, they identified on the 77 end of things that what they conceived was bringing US 77 up to full interstate standards would cost about a billion dollars, and if we could come up with that, they could build that for us. That's kind of the normal way we've done business throughout the years and we've had good results, we just don't have those resources anymore, so in large part, it's the innovative portion of what we'll talk about now on the Zachry side that we feel helped them win the day.

So the conceptual plan there, I'll go through in a little detail. The primary feature of the plan is that they feel they can bring US 77 up to full interstate standards, potentially an I-69 Corridor there, with no tolling on those elements at all except for two exceptions that you see in red there: the number 4 and 5 projects. Number 4 is a relief route around Driscoll and 5 is a future relief route around Riviera, and of course, drivers will have an opportunity to either choose those bypasses and pay a toll or go through town, as they do today, and have it be a non-tolled option.

But it's pretty striking, probably need to pause here to consider the fact that the proposal, at least, says that an interstate level facility can be built and not tolled along about a 120-mile corridor. Now, how do they do that? It's a system financing concept. All the projects in red, 1 through 7, are proposed to be toll projects, they're in MPO plans, long range plans now without funding, they're not able to be funded. We understand from the districts that they're priority projects, local communities feel they're needed, would like to have them today but have no way to fund them.

So in very simple terms, the plan is to allow the developer to build and collect tolls on those seven projects, and in return, provide to TxDOT a full functioning freeway system on US 77 that we maintain -- we would take the maintenance and operation of that once they're constructed -- but they would be non-tolled main lanes. So a key part to be noted is very heavily relying on an innovative collaboration with RMAs, MPOs, cities and counties, and we'll talk more about that.

Outside of the southern portion of this corridor, we asked for other ideas, how could you possibly make an I-69 happen all the way, and so you see a very large number -- a large area and large number of potential projects, they are near, mid and long range projects, and then just other significant projects that the proposal identified. They claim no ownership of those, necessarily, and I think I accept them and I would suggest to you that we look at those as ideas only at this point. Many of them, I think staff feels, are probably not possible to do under the purview of either TxDOT or the CDA, many are not really highway or even transportation related projects, so probably not feasible to consider. So if we go to negotiation, many of those will go off the table immediately, but there are some other very significant projects that in large part are being planned by districts or MPOs, RMAs or the regions anyway.

So there's a lot on there and we show it because it's in the proposal and we can talk about any of them, but I wouldn't be too concerned about any of them because at this point they're really just ideas.

So again, the kind of highlights of the proposal, the developer really understood the need to use existing alignments and focus on them primarily. The plan does have some risk. We can't guarantee you today that it's completely feasible but I think it does give great hope and offer some very innovative thinking. It requires a coordination and structured agreement with Cameron County RMA, the counties involved down there, Nueces County and the MPO in Corpus Christi, also those cities and counties in a very close coordination because one of the more innovative, I think, ideas in the plan is the bottom bullet there, the use of tax -- and I probably will get the term wrong -- essentially a tax increment reinvestment zone, essentially saying for those tolled projects we talked about, the five projects that are outside the US 77 corridor, they would ask local governments to set up those taxing districts such that if the projects were built and property values increase, the increment above the base level that those governments set would come into being used in this project.

We also would keep the risk for the maintenance of US 77, again, that freeway standard project there, and that's significant but it's just part of the proposal.

So the next steps in the process, if you approve our recommendation today, would be to negotiate final terms of the master comprehensive development agreement, again, for planning only, could not go to any further steps of design and construction or really even any further planning without coming back to you -- that's a condition of the minute order. We would also need Federal Highway Administration concurrence with the award, attorney general concurrence, legal sufficiency, LBB concurrence, submission to the State Auditor's Office, and then planning of final US 77 facility terms and conditions.

Again, I hate to belabor it but don't want any misunderstanding that no construction can be done without additional action by you. What this really is is 12 to 18 months of master planning, working very closely with local governments and our advisory committees to try to come back to you with a plan that could be pretty exciting.

So just to emphasize again, we plan to work very closely with the segment committees. They're going to be put to work and their input will be valued and accepted and we'll try to use that as much as we can, and the developer will as well. The advisory committees' concepts will go right into the master plan as well, and again, one other innovative level of this, I think, is having those local representatives so intimately and closely working with a private sector engineering and financial group, so they're all talking and hearing the same things at the same time.

So in summary, that CDA that we have in front of you requires our developer to collaborate with us on the creation of that master plan we talked about. The CDA doesn't guarantee any design or construction. The conceptual development plan combines those near term projects into kind of a system we think -- but we'll find out -- we think meets our goals and the local agency goals, but again, the agreements are going to be crucial there. And we'll continue the environmental process independently of this master planning process, although feather it in wherever is appropriate.

So in summary, in thinking about this this morning, I haven't really worked extensively in the Valley, but I think for most of my career I've heard or read of the desire to have an interstate standard facility down to the Valley of Texas, and reading and knowing about the growth down there, we think it's an exciting possibility and exciting suggestion we'd like to flesh out further.

So also to let you know, in the interest of transparency and full disclosure, we probably have already published the CDA, or if we haven't, we will this morning on KeepTexasMoving.com. Also, the proposal will be there, if it's not already, at the same web address. I do need to note most of the proposal is there, one part of it is not. Volume 2 is financial records of the privately held companies involved in the CDA; those have been excluded, they're not going to be on the website. Everything else, every page will be posted on the website.

So would certainly entertain any questions, but staff definitely makes this recommendation to you.

MS. DELISI: If you don't mind, Mark, I just want to emphasize something very, very strongly that while no doubt this proposal has a lot of innovation in it, I don't want this agency to lose sight of the fact of what we need to focus on which is building I-69 and getting 77 upgraded to interstate standards because that's necessary for South Texas, it's a priority for that region of the state, and it's a priority for this commission, so I don't want anyone to lose focus on that main priority of the agency.

There are some interesting projects that were included in this proposal that may be important to the state and are important priorities for the state, but I'm concerned fall outside the purview of this agency. A good example is a desalinization plant. It's an important priority of the state, it's been made a priority by the legislature, but that more appropriately falls under the purview of our good friends at the Water Development Board. There are other examples of that in this proposal. I don't want this agency or anybody in the public to lose sight of the fact that the main priority should be the construction of US 77 and then ultimately I-69.

Does anybody else on the commission have any comments or questions?

MR. HOUGHTON: I have. Mark, you talked about the segment committees and we've been working on these for a long time. We've embodied the advisory committees, both on 35 and on 69, and we touched on the segment committees earlier on. I'd like to direct a question, Joe Maley, are you here? Joe, can you come up? You didn't know I was going to do this to you, did you? You get invited for a reason. You need to state your name and who you're associated with.

MR. MALEY: Yes, sir. I'm Joe Maley, with Texas Farm Bureau.

MR. HOUGHTON: Joe, you and I had a conversation I think a week ago regarding the segment committees and you and representatives of the Farm Bureau made some direct comments to me about these corridors, these assets, and we can have this dialogue, and I don't want to lead you with questions, but I'd sure like to hear what your thoughts are on what we're doing here today.

MR. MALEY: Well, in the first place, I'm a little over my head because some of this is pretty technical, and of course, I'm not a transportation expert, but let me tell you just real quickly what our major objectives as a farm and ranch organization, representing the property owners that will be directly impacted by the construction.

In the first place, we strongly support following existing rights of way where at all possible. We understand there's some areas that will have to be looped or dealt with, as your map showed. Then again, when those people are impacted by the process of eminent domain that it be as fair as everything laid right on top of the table, good faith offers, et cetera, because when you start losing your property, all of you know what that means, there's emotional, there's financial, there's all kinds of logistical considerations that must be given.

And we, as an organization, support improving our infrastructure and I know that you told me this is a non-starter, but just to show you how serious our folks are about improving the infrastructure, with following existing rights of way where possible, our delegates approved a position where we support a tax increase, and for a very conservative rural organization to support an increase in the gasoline tax with indexing shows that we're not opposed to building highways in this state.

Most of the population of Texas depend on city streets for their day-to-day movement because our population is urban. That's just the opposite for rural people. We depend on the farm to markets, the ranch to markets, the state and federal highways to move us and our product. So we support looking at bonded indebtedness, we support using tolls where they're appropriate, we do not oppose tolls -- we oppose tolling existing roads.

I don't know, Commissioner. Is that kind of what you wanted?

MR. HOUGHTON: Yes. We had this discussion and we talked about opportunities and I discussed with you the segment committees, and I would hope that your membership -- and I think you have three members here with you today representing various parts of the state.

MR. MALEY: Yes, sir, board members of our state organization.

MR. HOUGHTON: Right, that they would look at getting involved in these segment committees because the segment committees is where the action, in my opinion, is going to be. And it means segments, what each segment needs and wants for economic opportunity, moving freight, getting traffic out of congestion, out of cities, out of center cities, all of those different things.

And you also talked about one thing -- and I know, Madame Chair, we talked about water, about water transmission -- you brought that up the last time.

MR. MALEY: Well, we had the discussion and you informed me of something where a private water purveyor can come to the state and actually move water down an existing state highway -- I think we talked about Highway 21, if I remember correctly -- and if, in fact, TxDOT decides to improve that highway, then the cost of moving that waterline is a state responsibility, not the water purveyor, except within the concepts of Trans-Texas Corridor. And so that was some education on my part. I think we all know that water is going to move in this state and we can get into a long discussion on water-related issues.

But going back to the segment committees, we would like very much to have the opportunity for impacted landowners to be involved in those segment committees. You know, it's real easy in most of your urban areas, your metropolitan areas, your economic development councils, they're going to support improving transportation, that's their lifeblood, we understand that, but it's those landowners, whether they're city where the highway has to be expanded into their backyard or they're farms and ranches, those are the folks that are going to bear the brunt and they need to be involved in that segment committee. And we will be glad to work with you in helping to make sure that there are people.

MR. HOUGHTON: I think that would be outstanding.

MR. MALEY: We look forward to that.

MR. HOUGHTON: Do you have questions of Joe?

MR. MEADOWS: You go ahead, I might learn something.

MR. HOLMES: I have questions for Mark.

MS. DELISI: Does anyone else have a question for Joe? And we'll bring Mark back up here. No. Thank you, Joe.

MR. HOUGHTON: Joe, hang around, though, we may ask to talk to you in a minute.

MR. MALEY: Thank you.

MR. HOLMES: Thank you, Joe.

MR. HOLMES: Mark, just a couple of questions. You've emphasized that this is planning approval only. I think it's important to make that distinction because kind of the lead-in paragraphs tend to talk about a broader array of activities, construction, design, operation, et cetera, but it is clear that this is only for planning.

MR. TOMLINSON: Yes, sir. I did go ahead and read those, again, up front because they are on our agenda, it is, we understand, part of statute that they need to be there on your agenda, but what we're talking about here, there minute order, the recommendation to you is for planning only and we've lettered in or noted in the minute order we can't go beyond that bound without coming back to you.

MR. HOLMES: And just in case people only read the first page, it's in the top paragraph on the second page: The department shall not move forward under the conditions set out in the CDA with actual design, construction, financing, et cetera without coming back to the commission.

MR. TOMLINSON: Absolutely, yes, sir.

MR. HOLMES: Also, as our chair pointed out there, are some projects listed on the I-69 map, Figure E-2, which are very far afield from 77 and 69, desalinization plant, as pointed out, but also container facilities in three different ports and the Bolivar bridge over the Houston Ship Channel and high speed rail and all kinds of things. Those, I think, should be completely taken off the map. I mean, to the extent that Zachry wants to talk to the Port of Brownsville about building a container port, that's entirely between Brownsville and Zachry, it really doesn't have anything to do with improving 77 to interstate standards and 69. Is that correct?

MR. TOMLINSON: Yes, sir, and I think I would also say within the framework of this proposal it is a competition, and I can tell that Zachry are competitors and knew that we would -- or maybe they anticipated we would reward innovative thinking, so again, I believe they over-achieved that.

MR. HOLMES: Well, they didn't get DFW Airport or Intercontinental in Houston, and I'm not sure what else they left out.

(General laughter.)

MR. TOMLINSON: Well, I would agree completely. There are a number of projects listed in the Houston area which are clearly in the Houston region, the toll road authority there has primacy there, they're probably important and needed projects, but I think you could probably take those off the list immediately as well, unless HCTRA chose to talk to us about them.

MR. HOUGHTON: Well, you can, in fact, do that during the negotiations on the development plan, you can take those off. Right?

MR. TOMLINSON: Absolutely, sure.

MR. HOUGHTON: Okay. My point, Commissioner Holmes and fellow commissioners, is when you look at the total points of 200, 111 is the 77 conceptual financial plan and the development plan, so more than half has to do with from Corpus Christi down.

MR. TOMLINSON: Yes, and a very notable point because the emphasis, the priority was placed on trying to give us a realistic idea of how to make I-69 possible down there because it's been needed and wanted for so long.

MR. HOUGHTON: Well, let me remind the audience -- and I'm not sure who was on the commission, I think you were, Ned and Fred, when the governor told us, instructed us that go find a way to build I-69. How long ago was that?

MS. DELISI: I'm want to say that was 2006.

MR. HOUGHTON: Was that 2006?

MR. HOLMES: It's been going on a long time.

MR. HOUGHTON: 2005 -- they're all holding up fives. So 2005 instructed us, we're a little late. Sorry, guys, gals.

MR. TOMLINSON: Well, we started in '06.

MR. HOUGHTON: Yes, so he instructed us to do that, so in fact, 110 of a total of 200 points is the 77 conceptual design and finance plan.

MR. TOMLINSON: Yes, sir.

MR. HOUGHTON: So if we approve this, we'll move on with that today.

MR. HOLMES: Mark, I think it's really important for the public to understand this is about 77 and 69 and not other projects because we could develop misunderstanding very easily  with this.

MR. TOMLINSON: And usually do, yes, sir.

MR. HOLMES:  And usually do, and quite frankly, it would be hard not to misunderstand it when you look at this map and all the projects that are designated. I think it's important that the staff be focused on, restricted to the improvements on 77 and 69 and not on these ancillary, unrelated projects.

MR. TOMLINSON: Again, I think in the context these were received, the chart could be titled all the ideas we could think of.

MR. HOLMES: Yes.

MR. TOMLINSON: And it doesn't mean they lay claim to those.

MR. HOLMES: I just don't want there to be a misperception in the public that we are endorsing the planning of any of these, because we are not.

MR. TOMLINSON: You are correct, sir.

MR. HOLMES: Now, the other point -- and I'd like to ask Bob Jackson a question at some stage, if that's acceptable.

MS. DELISI: Sure. Bob, can you come up?

MR. JACKSON: Bob, some circles have suggested that maybe this minute order is in contravention of existing statute, specifically 792. Do you believe you have crafted it in a manner that it is consistent with the 792 letter and spirit of the law?

MR. JACKSON: Yes, sir, absolutely.

MR. HOLMES: And 792 gave specific authority to go forward with the lower portion, Refugio County and south.

MR. JACKSON: Yes, 792 specifically exempted this type of contract from the moratorium.

MR. HOLMES: In that section or in the totality of it?

MR. JACKSON: In that section. The moratorium listed a number of exceptions and it excepted three corridors south of Refugio County.

MS. DELISI: Can I be clear about something? Did the moratorium exempt the whole planning document and then include another moratorium for construction in the South Texas area?

MR. JACKSON: That's a good point. Something to stress is the moratorium was not on planning, it was not on toll projects, it was not on CDAs, the moratorium is on certain types of concessions where a private developer is collecting tolls and operating a toll project.

MR. HOLMES: And this minute order does not do that. Is that correct?

MR. JACKSON: It does not do that, and this minute order mentions the moratorium and how that applies to this project.

MR. HOLMES: And your legal opinion is that it's consistent with existing law?

MR. JACKSON: Yes, sir.

MS. DELISI: Does anyone else on the commission have any questions for Bob or for Mark?

MR. UNDERWOOD: Mark, a quick question. We're talking about spending $5 million, is that right, on this project, a million and a half more than we normally do?

MR. TOMLINSON: A maximum of $5 million, yes, sir.

MR. UNDERWOOD: But the value to us will be $2.5 billion. Is that correct?

MR. TOMLINSON: Could potentially be, yes, sir.

MR. UNDERWOOD: Without any cost to TxDOT on building these roads. Is that correct?

MR. TOMLINSON: Yes, but I want to be very precise in saying that's true for the construction and design of these facilities. We will continue the environmental process that is a cost to that.

MR. UNDERWOOD: That was going to be my next question. So we will have that, but we would have that no matter what.

MR. TOMLINSON: In fact, that is ongoing in the districts today.

MR. UNDERWOOD: All right. Thank you.

MR. HOLMES: One last comment, the public has long supported the development of I-69, really from the Valley all the way up into Northeast Texas, and I appreciate the proposal by Zachry as it relates to that project and look forward to it being planned accordingly.

MR. TOMLINSON: Yes, sir.

MS. DELISI: Any other questions for staff?

(No response.)

MS. DELISI: Okay. We've got four people who have signed up to speak, so I would like to start by calling up David Garza, who is a county commissioner down in Cameron County. And I know you have another commissioner here. Why don't you have him come on up. Commissioner Wood, you want to come on up?

MR. GARZA: Commissioner Wood and Commissioner Benavides, we have two commissioners.

MR. HOUGHTON: Wait a minute.

MR. GARZA: We have a quorum.

MR. HOUGHTON: You have a quorum?

MR. GARZA: Yes, sir, but we're on different sides of the room. And I will step out before you vote so we won't have a quorum during your vote.

(General laughter.)

MR. HOUGHTON: I don't want you to say anything just yet. I'm going to just say something to you, Commissioner, I don't know you as well. John and David, how long have you been involved in the 69 project?

MR. GARZA: Eight years for me.

MR. WOOD: About 15 for me.

MR. HOUGHTON: Fifteen? When I first got on the commission -- Bill Summers will attest to this -- I was sent down to Brownsville to spread cheer in my way, and when I did spread that cheer -- Bill Meadows, when I spread that cheer, I told them the Road Fairy was dead, there was no money. And at that time Chairman Williamson was somewhere, I don't know where, and he got a call that said, Did you know Houghton just killed the Road Fairy down in Cameron County?

(General laughter.)

MR. HOUGHTON: And what I alluded to earlier, folks, was that the governor instructed us to get this thing done, and if it weren't for the steadfastness and the tenacity of the two of you that I have worked with for now 4-1/2 years, this thing has now become a reality. Now, I have been instructed, the chair has been instructed to give you something to tack up in your commissioners court room. And I will give that to the chair to give to you now. Is that okay?

MR. GARZA: That is fine, sir, you're the boss.

MR. HOLMES: We have surprises all the time.

MR. HOUGHTON: Madame Chair, would you do the honors of handing this to them.

MS. DELISI: All right.

(Ms. Delisi presented Mr. Garza a sign for I-69.)

MR. HOUGHTON: Has somebody got a camera? We've got cameras all over the place.

(Pause for photos; applause.)

MR. HOUGHTON: And Commissioner Benavides, it's incumbent upon you to be in that rowboat to get this thing across the goal line with the department and hopefully the developer -- we haven't voted yet.

MS. DELISI: Right. Commissioner, why don't you go ahead and give your prepared remarks.

MR. GARZA: That didn't take up any time of my three minutes. Right?

MS. DELISI: No, sir, it did not.

MR. GARZA: First of all, thank you for the opportunity to be before you all, commission, Mr. Saenz. It's a pleasure, again, to stand here, and it's a pleasure to have the delegation that we have here today representing Cameron County and South Texas.

I am one of those members of the I-69 Advisory Committee. I appreciate the opportunity for the input that we've been able to provide to TxDOT in that regard, especially on the guiding principles minute order that was passed last month. We look forward to providing more input. We have a really good group that is very active in wanting to give opinions and solutions in solving the needs that will be occurring in the corridor.

But I want to reference my comments today to South Texas because it is the largest metropolitan area in the state, or maybe in the entire country, that is not served by an interstate highway. For many years the area has had that distinction. It has impeded economic development and it has hampered the full potential for all the surrounding communities. We are excited and very encouraged with what we've heard today here and we're looking forward to seeing this come to fruition and going through the planning process and becoming full members with our CCRMA who will speak to you briefly in just a few minutes.

I will reference December 8 of 2005 in Houston, Texas when Governor Perry stated the following: "We should not wait any longer on the important trade corridor. We should not be afraid of private equity, of tolls, of building new and letting future pay for part of those roadways. Tomorrow I will instruct my commission to immediately begin developing proposals to build an interstate quality highway to connect the Lower Rio Grande Valley to I-37 south of San Antonio, including the consideration of new and separate lanes for commercial truck traffic." And followed with more, but it was December 8.

We commend the governor for that vision that he had and for the importance of connecting us to the rest of the state of Texas and to the rest of the nation.

We are here today to lend the support to continue this project. The sooner this is completed, the sooner South Texas will experience better mobility and much more economic opportunity.

And with all due respect, Commissioner Holmes, referencing the Port of Brownsville project, we felt very strongly that some of these other things that are very important -- I know to Commissioner Benavides because that's in her precinct, the port project -- sometimes we felt that including some of that discussion in this process would bring to the forefront the opportunities that exist there which can only be exercised when and if we have an interstate system in place. So it wasn't meant to give TxDOT more work or more problems in going through this process, but to hopefully at least bring those projects to a discussion level with the different individuals that were interested in being partners with TxDOT for the development of the interstate.

So I know that we probably instigated some of that, you know, when we spoke with some of these individuals when they would visit our areas, and we are innovative thinkers, we feel, down there also, and sometimes we think of things we can't afford but we at least try to plan for them.

MR. HOLMES: Well, I would like to give you encouragement for your discussions and development of a container facility at the Port of Brownsville. It's just that I think that if it gets involved in this project itself, then it baits the question of what other of these that are listed would be involved. But to me, that could be a great benefit to the region and to the state, and it would obviously utilize a new I-69 Corridor, and I think that's important. So I give you encouragement on behalf of the Port of Brownsville to continue discussions with Zachry or whoever else you feel is appropriate.

MR. GARZA: We appreciate you bringing it to the table for us.

We also recognize the need for evacuation routes during hurricane preparedness. Our judge could not be here today because he's in such an exercise, and he sends his greetings to this commission also.

But we look forward to being part of the solution, being part of the group that solves and serves the needs of the area in South Texas that have not yet been served. We have had good relations with TxDOT on the projects that we're doing, we have a number of ongoing projects right now. The interstate in the Valley already exists between north of Mission to Brownsville, almost totally completed to interstate standards, north to Raymondville also. So we have the system in place.

We are very interested in the ports of entry, the land ports of entry since the county owns and operates three bridges in Cameron County and are looking forward to another major addition at one of our bridges and a new rail bridge to move rail out from downtown Brownsville and downtown Matamoros.

So we've got all these projects in place, TxDOT has been a wonderful partner. We look forward to hearing from you as to what else we can do to help in utilizing the tools that the legislators have provided us to do the work, so we look forward to that. And I'll try to answer any questions, if there are any; if not, I thank you so much for your attention, I thank you for the opportunity to be here, and I look forward to continued relations.

MS. DELISI: Any questions?

(No response.)

MS. DELISI: All right, we're going to move on the next person, David Allex, the chair of the Cameron County RMA. And to my knowledge, we do not have a gift for you. I'm sorry.

MR. ALLEX: Oh, that's fine. I haven't got a gift yet so I'm not going to worry about it. Thank you, Ted. Just sit down, will you, please.

(General laughter.)

MR. ALLEX: I will say this, my name is David Allex and I have the honor of serving as chairman of the Cameron County RMA at the pleasure of the governor. It's kind of interesting -- Ted, I'm not going to retire -- I have been at this job for 46 years trying to build a great urban society in the Rio Grande Valley of Texas, and today, Amadeo, after a long, long time, it's a great day for the state of Texas, it's a great day for the Rio Grande Valley, and it's a great day for Mexico because they want the interstate highway as much as we want it.

So I have prepared text but I think we've covered most of that, but I think we ought to be talking about what we're going to do tomorrow and how we're going to expedite what we're trying to do.

I have with me three members of my board, and I'd like to introduce them. One of them is David Garza -- if you'd stand up -- Yolanda Villalobos and Michael Scaief. Now, we have a quorum here too, also, and since you already met the county commissioners and their quorum, one of the little minor technicalities, we could take some action today to expedite service to the Texas Department of Transportation. So we'll try to figure that out; if you need some help, let us know.

We're here to support just what we hope that you'll do. We've talked about the governor and his mandate to each one on this commission to bring an interstate highway to the Valley. And I'd be remiss if I didn't compliment one individual in this room here that has worked hard to get an interstate to the Valley, as hard as anybody else, and that's Bill Summers and the Valley Partnership. He's a dedicated individual to I-69, as we all know.

I'll just say one thing, in 46 years in developing a great urban society in the Rio Grande Valley, I have had that dedication to transportation. I think it's indicative of my Road Hand Award; one of my greatest achievements in life was having the Texas Department of Transportation give me something back, and I'm honored with that and I'm pleased that it was recommended by former state highway engineer Raymond Stotzer back in '95, I believe it was -- maybe it was earlier than that.

I also have in this audience with us the former vice chairman of the Texas Turnpike Association, Allen Johnson, and back in the spring of '94 -- I'm deviating just a minute -- in the spring of '94 in the third basement of the nation's capitol, we met with Senator Graham's administrative aides, and we drafted for the Federal Highway Administration language in that bill that year to bring I-69 starting from the Rio Grande Valley of Texas north, not from Canada south. So I think that's indicative of all the support we've had over all these years for what you're trying to do and what we're trying to do with you.

I'd be remiss also if I didn't extend my congratulations to your Chair Delisi. We look forward to working with her, we look forward to working with each one of you in support. We've got a legislative session coming up and you'll see more of me. I'll be up here and I'm going to be supporting everything you want to do. We are committed to this group, we are committed solely to what we have to do. And Ted, you know, if you need us, you holler, and Chair Delisi, if you need us, you holler, and we'll be there and we'll be here to support you.

The Cameron County RMA has accepted a challenge unlike any other RMA in the state of Texas. We know what the challenge is and that is to do something on our own. We believe in the public-private partnership, we believe in it really heavily. We have vision but we have vision with facts, and we're going to do the job that needs to be done to create a great urban society in the Rio Grande Valley and give all of our citizens the equal opportunity to be gainfully employed.

And with that, I will say God bless you and thank you so much for your support.

MS. DELISI: Thank you. The next speaker I'd like to bring up is Bill Summers.

MR. SUMMERS: It's a great honor to be here. I'm Bill Summers, president and CEO of the Rio Grande Valley Partnership. Ma'am, it's an honor to see you and I'm so proud to see a good looking chairperson. I thought it might be somebody else and I've been up here staring at them. But anyway, I wanted to come up here and say thank you on behalf of the I-69 Alliance of Texas. I'm the vice chair, I have been since 1992, and our chairman -- can you believe this -- Judge Thompson from Polk County decided to go to the Mediterranean instead of come here.

I told Armadillo yesterday I was on my way to Falfurrias, Texas and I gave that up to come up here because I wanted to see that man right there, Commissioner Ted Houghton. I'll never forget that day when I was standing about four feet away from him and he said, The Road Fairy is dead. Man, I about died and so did all these other people here, David Allex and Allen Johnson.

By the way, David Allex and Allen Johnson were with us when we asked the Greater Houston Partnership at Cotton's Bar-B-Q in Robstown, Texas, if they would let us join in on Corridor 18 or I-69, and David had a full head of hair then and we have been working together for many years. One of the gentlemen who has helped us for many years wanted me to give you his regards, and that's former mayor of Harlingen, Bill Carr. But these two gentlemen I just mentioned have worked real hard on this project.

On behalf of I-69 Texas, this is a great, great day. There are some other projects on 281 that are very, very small projects, Armadillo, that I know you will look into. But we do want to say thank you also because the 77 takes care of all the ports, the Port of Brownsville, Harlingen, Port Isabel, Corpus and Houston. Those are very, very important to the trade route that you're creating in the Rio Grande Valley and Texas.

And Amadeo, I know his name but Armadillo sounds more better. Don't you think?

MR. SAENZ: One of these days he's going to learn.

MR. SUMMERS: And you know, I like to call nicknames but I don't want to call Ted Fairy, you know, so I'm going to leave that alone.

(General laughter.)

MR. SUMMERS: But anyway, I, along with these other people for the I-69 corridor, we've said many, many -- and I mean this from the bottom of my heart -- many, many prayers to come to this day, and we appreciate you. And Amadeo, I am so proud, here you were, a little bitty engineer in the Rio Grande Valley and now you're sitting up here, and I'm honoring you through my little talk right here that you're such a great guy and we appreciate you. And you guys keep him here a couple more years, at least, will you.

Thank you so much. This is a great day, and I would come up there and hug your neck but I'm going to wait till later. And we're so glad that you picked a Texas company, H.B. Zachry, to do the job. Thank you.

MS. DELISI: Thank you. And we have one final speaker. I would like to call Hank Gilbert with Texas Turf and Pineywoods Subregional Planning Commission.

MR. GILBERT: Thank you, Chair and commissioners, and Amadeo, all I can say is they grow armadillos a lot bigger in the Valley than we do.

(General laughter.)

MR. GILBERT: First, I would like to congratulate the people of South Texas and the Valley for achieving a milestone that they've been trying to achieve since, I know, 1970 or '71. All we've heard since the early '70s is the need for an interstate in the Valley, and this will give them that. In my neck of the woods up in Northeast Texas, since that same period of time, all we have heard is how we need a north-south interstate through East Texas, and the I-69 proposal will grant that. We do have problems, however, in the TTC model of I-69.

It was welcome relief a couple of weeks ago to attend the press conference in Lufkin where the revelation was made -- which we had suspected would come -- that you're going to follow the existing 59 footprint. However, there still remain some questions with that proposal, and the reason I'm here today, to see how the CDA is going to work.

We have several issues concerning CDAs. As most of you know, we worked real hard in the last session to pass a true reform bill on the Trans-Texas Corridor which the governor vetoed and we worked vehemently to stop the passage of 792 for the CDA reasons as well as the market valuation.

MS. DELISI: A bill that was vetoed?

MR. GILBERT: A bill that was passed but was vetoed by the governor.

MS. DELISI: That bill was actually never sent to the governor's desk.

MR. GILBERT: Okay, I'm sorry.

What our concerns are -- and it's been mentioned several times throughout the course of this -- about trade corridors where the perception given to the public leading up to the TTC version of 69 by the governor, as well as others, was minimizing congestion in the urban areas, evacuation routes and so forth, when the true purpose is more about moving trade instead of moving people. And this is manifested by the model of the TTC version of I-69 as it relates to the current interstate highway system in the country as far as access.

The proposed 69 model, unless it's changed with the changing of the route of the model, is still going to be a limited or controlled access model as opposed to the current interstates in the state of Texas and across the country which is not conducive to -- like Mr. Maley said with the Farm Bureau, it's not conducive to the people in the rural areas. We conclude that what the Texas Farm Bureau has stated in their remarks earlier to be very indicative of what people along the corridor in these rural counties concur with, that we want the landowners to be protected. We realize that there are going to be areas, loops around towns that are going to take property and we want them to be fairly compensated.

At the same time we urge the commission, rather than promoting CDAs, whether it's in-state investors or construction companies or out-of-country investors and construction companies to look at innovative ways that we can do these projects on our own. Now, I've heard all throughout this meeting the shortfalls that we have in funding, most of which are out of your control. We know we have a legislature that robs from the gas tax, that robs from the transportation fund through diversions, and I think it would be imperative among this group to try to remedy that situation which could bring millions, if not billions of dollars back into the transportation fund and make the legislature accountable as TxDOT is trying to create an air of accountability and transparency, make our legislature do the same, and I would ask this commission to work really hard at that.

We have excellent institutions within the universities which TxDOT has traditionally used, TTI and CTR, that I think could be very innovative in helping TxDOT and the commission in developing plans for infrastructure growth without having to take money from other companies or entities in order to help subsidize and basically risk our sovereignty as a sovereign state. Unfortunately, we see that in Washington our Congress and Senate is looking at doing the same thing to our country, and it's a sad day for America, in our opinion.

We know that most of the gas tax dollars as well as most of the wear and tear on our highways is in our major metro areas because that's where the majority of the population lies, however, we cannot forget about the people in the rural areas because that's where infrastructure improvement and growth is deemed to go to facilitate the trade traffic or transportation traffic. So our focus is not only in looking out for rural Texas but urban people as well.

I would like to make a recommendation to the commission. I know in this agenda item, and it's been noted by Commissioner Holmes, that the agenda item is very broad and that it includes planning, construction, every aspect of a CDA, and I urge the commission before passage -- if you pass this CDA -- that you make a note for the record that this CDA is for planning only. That way there is no room for anything but transparency in the event that this CDA progresses to the next step.

We realize that it is from I-37 south which is greatly going to benefit the people in the Rio Grande Valley as far as their need for an interstate system, but I would like to close by saying I've grown up my entire life traveling Highway 59 from Northeast Texas to Houston. My dad worked on the ship channel for 35 years and we owned a home in Houston and we owned a home on the farm, and when I was a little kid up until age 10, we commuted every Friday from Houston and every Sunday back, and I remember when Highway 59 was two lanes from our farm to Houston. Now it's 15 lanes coming out of Houston which narrows down eventually to four lanes before you get into Cleveland, and people have spent their entire careers with TxDOT working on that improvement.

But it's worked and it's worked within the right of way, and in very few places on Highway 59 from Houston north to Texarkana or south to Victoria are we very far away from having interstate status, just a stone's throw away, a loop here, a loop there, maybe a few additional lanes. We recommend that TxDOT progress with that mode of thinking rather than the non-accessible 1,200-foot wide model of the TTC, and we would support that particular model over the TTC model.

Thank you.

MR. HOUGHTON: Hank, I'm going to go backwards on this. Your 1,200-foot TTC model -- and I've been at some meetings with you, and ad nauseam, have tried to explain the TTC model is a procurement model, it is a financial model, it has nothing to do with 1,200 feet, it's a way to finance these roads which we are now going to use on 77, and that is the TTC model but we call it I-69. And if someday somebody wants to put a waterline in there, they certainly can if it fits.

I've driven 59 many, many times, I've driven the entire 59 from top to bottom, and as I've said to the local leaders in every county, that footprint will be 69 where our people can't really say that until they go through the environmental process, but I'll say it -- it's 69; that will be Interstate Highway 69 someday.

As to the conspiracy theory of what we're trying to do in trade or not trying to do, we're meeting the needs of the state of Texas, the traffic needs, the transportation needs, the trade needs, hurricane evacuation. That is something we talk about all the time and 69 will meet that need.

I'm glad to see you instructing us that we need to work hard in the legislature, but Hank, we need you in the rowboat to instruct the legislature that the diversions need to stop. It's not just us, it's ideas from you and your folks.

As far as the North American Union conspiracy stuff, I'm not going there.

MR. GILBERT: No, sir, I'm not either.

MR. HOUGHTON: But as far as the Farm Bureau and the landowners, they're here today to represent themselves, I've heard from them, we have heard from them, and I do believe they'll be a great part of what gets built and how it gets built because they have blood in the game, they're going to be affected. Somebody will be disadvantaged here because either whether it's widening 59 to put the overpasses in or whether it's widening 35, the current footprint of 35, that's what ultimate gets built, somebody is going to have to push back the fences, it's going to impact someone. So these people that are landowners, those folks I have the greatest empathy for.

But I guess my point to you and your organization, instead of instructing us on how to do business, I do believe it's incumbent upon you and your people to help us persuade the legislature we do need new transportation modes, we're short on cash -- you heard it here today -- and I'd like to hear your ideas sometime on how we're going to get new dollars for this system and to not only improve but maintain it.

MR. GILBERT: Well, we look forward to working with the commission, if possible, with the Farm Bureau and other organizations in this next session, convincing the legislature that TxDOT needs dollar for dollar of money collected in gas taxes. As well as that, we agree with the Farm Bureau's perspective and the Governor's Business Council in that the gas tax needs to be indexed for inflation.

MR. HOUGHTON: Just logically thinking --

MR. GILBERT: Sir?

MR. HOUGHTON: Apply logic. Do you believe, in your heart of hearts -- again, this heart of hearts deal -- where gasoline price is today, do you think it has a snowball's chance in hell of happening?

MR. GILBERT: Commissioner, to answer that question, I think it's going to be more difficult to do but this is not something that just needed to happen yesterday when gas got to $4 a gallon, this needed to happen before gas was $2 a gallon.

MR. HOUGHTON: But the focus just can't be on the gas tax. For every one penny we raise in gas tax, it gives you $100 million. Now let me give you kind of an equation to $100 million. What does it cost to build the major overpass, grade separation on Interstate Highway 35 at Cabela's, what did we pay for that, Amadeo?

MR. SAENZ: Cabela's, that's just a simple interchange, a simple diamond interchange. But let me kind of give you an example for projects that I know. The Katy Freeway project, the 610/I-10 interchange was $250 million, the I-10/Beltway 8 interchange was about $260 million. That's a direct connector interchange.

MR. HOUGHTON: So you see the equivalent of one penny is $100 million, I need two to do one interchange. Not that we don't need the money but we're still getting further behind, we need to look at the complete comprehensive plan, Hank, and it has got to be a CDA.

MR. GILBERT: But, Commissioner, if you follow the Governor's Business Council's recommendation, the study done through TTI -- and I don't know that that study was based on 100 percent dollar for dollar funding into the transportation fund, I think they took into accord the 35 percent or so diversions that are already taken out of that fund -- but 35 percent of a dollar that you never see, along with that gas tax, is a considerable amount of money.

MR. HOUGHTON: It is but it gets you part of the way home. I think with that, without debating the issue, my point is we need your organization in the rowboat with us.

MR. GILBERT: And we will.

MR. HOUGHTON: As well as we're inviting Farm Bureau in that rowboat to find the solutions to meet our transportation needs.

MR. GILBERT: We're in favor of doing whatever it takes to improve our infrastructure to make it better for all Texans but to do it to where Texans actually do the work, Texans benefit from the work, and Texas has no risk of sovereignty lost in the process, where we have total control of our own roadways rather than other entities outside the state and outside the country.

Any other questions? Thank you.

MS. DELISI: All right. We don't have anyone else signed up to speak, do we?

MR. SAENZ: No, ma'am.

MS. DELISI: Anything else, Mark?

MR. TOMLINSON: Not on this agenda item.

MS. DELISI: We have a motion in front of us.

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All those in favor, say aye.

(A chorus of ayes.)

MS. DELISI: Any opposed?

(No response.)

MS. DELISI: It passes unanimously.

MR. HOUGHTON: Would it be appropriate at this time, Madame Chair -- or where is Bob Jackson when you need him -- David Zachry, are you in the room, did I see you come in? David, can you come up? I guess congratulations.

MR. ZACHRY: Thank you very much.

MR. HOUGHTON: Or condolences, depending upon where you stand.

MR. ZACHRY: I think right now we just appreciate very much the opportunity and the selection process and the criteria, and I have to be very complimentary of Amadeo and the staff and the process that they ran. We've seen a number of proposals, not just transportation proposals but in a lot of different markets and a lot of different geographies, and this was as fine a group to work with, clean, straightforward, honest, open, and I really have to be very complimentary of the staff that we got to work with, and we look forward to working with all of them and the segment committees and the commission and the people along the alignment as we go forward with this planning.

MR. HOUGHTON: That was my question, David, the openness and willingness to work with the segment committees along the corridor, and secondarily, the ability and willingness to work with the RMA, our partner down in Cameron County.

MR. ZACHRY: Absolutely, Commissioner. We had people from our team attending most, if not all, of the public hearings. In fact, we came under some criticism for actually showing up at those meetings. We went there to listen, and tried to orient our proposal and our approach to meet the needs of the communities, we talked with a number of people in the Valley, through the Pineywoods, all across the state to try to determine what the needs are.

I appreciate the comments from Commissioner Holmes about the port facilities and staying focused on the roadway and that is the primary focus, however, in a planning document you have to look broadly at what the needs of the communities are and we listened to those communities and tried to include them as much as possible so that they can be planned for, and all of that was done within the framework and the support, and I think was, frankly, the intent that TxDOT had to create an overall planning agreement.

But we very much, as part of our proposal, intend to work with the RMAs in the Valley in particular and focus on 77, 69 from Corpus south, working with the RMAs and the segment committees, and frankly, any other organization that wants to participate in the discussion to move everything forward.

MR. HOUGHTON: David, thank you.

MR. ZACHRY: Thank you very much.

MR. SAENZ: Thank you, commissioners.

MR. HOUGHTON: Let's take a break.

MS. DELISI: I'd like to take about a five-minute break. Thanks.

(Whereupon, a brief recess was taken.)

MS. DELISI: If everyone can please sit down, we're going to go ahead and finish with the commission agenda.

MR. SAENZ: Moving on, agenda item 6(b) deals with the adoption of policies relating to the implementation of the market valuation process that are required by Senate Bill 792, and Mark will make this presentation also.

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

Our general counsel believes that the commission, even though Senate Bill 792 doesn't refer to the commission, should be minute order establish an approval process for the various steps in the market valuation process and prescribe those criteria for approval, particularly criteria for waiving the development of market valuation.

As stated in the minute order, the market valuation working group, headed by Commissioners Houghton and Meadows, that's re-evaluating TxDOT's approach to the market valuation process may come up with changes to these policies, but this action designates those department employees authorized to carry out the market valuation responsibilities of the department and prescribes criteria for entering into these agreements, including an agreement to waive the development of market valuation.

The provisions of the minute order are to allow the executive director or his designee -- and those designees are defined as not below the level of assistant executive director or chief financial officer -- but those people may agree on the terms and conditions for the development, construction and operation of a toll project and should only include those that are required by law and should be included in the project agreement.

Also can agree on the entity to develop the market valuation of a toll project -- to the extent possible, that entity shall not be a consultant to either the department or that local toll project entity; agreement on the market valuation of a toll project or the negotiated value of a toll project in the event the development of a market valuation is waived, and in agreeing to that valuation, should consider whether the valuation reasonably represents the value that could be achieved in a competitive procurement, and any issues affecting the ability of the local toll project entity to finance the project and any payment of the amount of the valuation to be made to the local toll project entity; and also waive the development of a market valuation and in determining whether to agree to this wavier, should consider the department's preliminary financial analysis indicating that the toll project is revenue-negative; and any issues that make it more likely that a greater value can be achieved through an agreement on a negotiated value instead of market valuation.

The commission must approve any determination to exercise an option to develop, finance and construct a toll project.

Staff recommends approval of this minute order. Any questions?

MS. DELISI: Any questions from the commission?

MR. HOUGHTON: So moved.

MS. DELISI: I've got someone, Hank Gilbert -- Mr. Gilbert, would you like to come up? -- would like to speak on the agenda item.

MR. GILBERT: Thank you, Madame Chair. Hank Gilbert, Texas Turf. I don't really want to comment as much as I want to ask a question. Is the minute order available also on the website?

MR. SAENZ: Yes, it should be.

MS. DELISI: Thank you.

MR. GILBERT: That's all I need. Thank you.

MR. SAENZ: It's been there since Monday.

MS. DELISI: I had a motion. Is there a second?

MR. UNDERWOOD: Second.

MS. DELISI: All in favor, say aye.

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. SAENZ: We're keeping Mark busy today, this agenda item is also Mark's. Agenda item 6(c) is to present a report to the commission on the traffic revenue report for the Central Texas Turnpike System for the period that ended through May 31, 2008.

MR. TOMLINSON: Yes, sir, and it's required by our CTTS indenture of trust. The report compares current traffic and revenue data with data from the prior fiscal year of 2007, as well as traffic and revenue projections from the 2002 traffic and revenue study. The traffic and revenue projections in this report are displayed as averages and have not been seasonally adjusted.

Just some highlights. The 65-mile system we now have complete and fully opened to traffic. The last stretch of State Highway 130, Segment 4 from State Highway 71 to US 183, opened on April 30. Incentive periods will continue on that stretch, though, through the summer to encourage customers to test drive that roadway, so the effect of that opening on revenue won't be realized until this fall. Full tolling on Segment 4 of State Highway 130 will not begin until September 1, due to those incentive periods, and allow drivers and TxTag customers to try out the new segments free of charge.

Also, the system is primarily a commuter roadway system. Average weekly transactions have increased to approximately 219,000 per day. Some fluctuations in this we see are primarily due to the number of working days in a month, again, because it's heavily commuter traffic.

The CTTS continues to exceed revenue forecasts. For this quarter, revenue exceeded projections by approximately 48 percent and exceeded revenue in the same months of last year by 78 percent. During this quarter, average monthly revenue was approximately $4.3 million. On average, 70 percent of our transactions are posted to TxTag accounts which in the industry is really outstanding.

So with that, staff would like to recommend approval of the minute order, and I would also just like to commend to you David Powell, our director of Turnpike Systems, and Catherine Sanchez -- I think they may be here. They've done a fantastic job getting this -- there's David; Catherine had to go -- have done a fantastic job getting this system up and running and continue to do a great job operating it.

So I'd be happy to answer any questions, but we do recommend approval of the minute order.

MR. MEADOWS: I just have one quick question. Obviously, congratulations for something that's going so well, but I'm just curious, exceeding traffic and revenue projections by these sort of percentages, were those internally generated estimates or were they external?

MR. TOMLINSON: External.

MR. MEADOWS: And who did those?

MR. TOMLINSON: The company would be -- do you recall, David?

MR. MEADOWS: You can tell me later, and I'd like to know who did them and what year they were done, how far out are we from when those projections were done today to be exceeding that by 78 percent.

MR. TOMLINSON: We'll get more precise information. I believe they were done in 2002, though.

MR. MEADOWS: Thank you.

MS. DELISI: If there are no other questions?

MR. HOLMES: Madame Chair, just one.

MS. DELISI: Yes.

MR. HOLMES: In looking at the revenue and traffic numbers, they are very positive, one other question comes to mind in addition to Commissioner Meadows's questions that relate to timing and who did them, is there a variance in the toll rate per mile between the tolls on Loop 1, 45 North and 130? Because you've got a pretty good variation between the traffic increases over estimate. Are they all basically the same per mile toll rates?

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

A couple of questions, the first one is the toll rate. Typically, the best I remember, it vacillates between about 12 to 14 cents a mile, essentially it's the same. I think what you're seeing there is fluctuations. The toll rate, primarily on 45 and Loop 1, is exactly 75 cents per toll plaza, and we have pretty high traffic, if you look on those reports. On 130 it's $1.50 per plaza, and we've got four plazas that are now open, so it's a function both of the toll rate per mile, but primarily it's that traffic count itself, and that's what you're seeing the difference. 45 and Loop 1 have been and continue to be heavily utilized and when you look on those charts, they greatly exceed those traffic amounts, 130 slightly so, 45 and Loop 1 by a large amount.

MR. HOLMES: Phil, do we have any congestion developing on 45?

MR. RUSSELL: It's getting a little closer to it; it still flows pretty well.

MR. HOLMES: Is it still flowing at 45 or 50 miles an hour?

MR. RUSSELL: Typically, Commissioner, where we have congestion problems are where direct connectors are entering other roadways. For instance, if you're traveling eastbound on 45 to northbound I-35 at five o'clock in the evening, yes, there is congestion. That's not so much a function of the toll road on 45, that's a function of the congestion on I-35.

So to answer your question, we don't have a problem yet but with the traffic mounting as quickly as it is, at some point in the future, we may.

MR. HOLMES: The last time, or maybe the time before last that we talked about the performance of the CTTS, numbers were running ahead of schedule but so were some of our costs.

MR. RUSSELL: Yes, sir.

MR. HOLMES: And how are these balancing out?

MR. RUSSELL: You're exactly right. Revenues are up but operation costs are as well; more transactions, more traffic numbers, so those are up as well. I think one of the things that we're beginning to look at is the specter of perhaps going cashless. Mike Heiligenstein, of the CTRMA, announced yesterday on the radio that they're going to be going cashless on 183A in December. We will have to do a new traffic and revenue analysis but it's something that we might want to look at as well. It will save a considerable amount of operations dollars.

MR. HOLMES: I think it was in this morning's paper that it was costing a million one to collect a million seven in tolls on the cash basis.

MR. RUSSELL: That sounds about right.

MR. HOLMES: That sounds like a terrible ratio to me. I mean, it's better than if it cost a million seven to collect a million one.

MR. RUSSELL: Yes, sir.

MR. HOLMES: But going cashless would make a lot of sense.

MR. RUSSELL: Yes, sir, I agree.

MR. HOUGHTON: Does our indenture allow for that?

MR. RUSSELL: We'll have to have a new traffic and revenue analysis to show that it won't have a negative effect on the revenue stream, but we've begun talking about initiating a new traffic and revenue analysis.

MR. HOUGHTON: What the article also say, that it was 25 percent of transactions are cash -- no, 10 percent?

MR. RUSSELL: I think that's about right. That report shows that the cash is vacillating somewhere around 10-12 percent.

MR. HOUGHTON: Around 10-12 percent.

MR. RUSSELL: Yes, sir.

One other comment, I guess to Commissioner Meadows, who did our traffic and revenue studies, actually when we did it we had all three of the big traffic and revenue guys involved: Vollmer, which is now Stantech, and URS did all the traffic analysis for our projects, and then as part of the TIFIA loan, the Federal Highway Administration required that we also get the third group, Wilbur Smith, to kind of have a second layer of analysis. So really, we employed all three traffic and revenue analysis and that was all part of that 2002 bond indenture, so it's about six-year-old traffic.

MS. DELISI: No other questions? We have a motion before us.

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All those in favor?

(A chorus of ayes.)

MS. DELISI: All opposed?

(No response.)

MS. DELISI: Motion passes.

MR. SAENZ: Thank you, Mark.

Agenda item number 7 deals with the Strategic Plan and the minute order will be presented by Jefferson Grimes.

MR. HOUGHTON: Do you have another narrative?

MR. GRIMES: No, I'm just going off the cuff on this one.

Good afternoon, commissioners, Mr. Saenz. For the record, my name is Jefferson Grimes. I am the deputy director of TxDOT's Government and Public Affairs Division.

Agenda item number 7 is a minute order that we recommend you adopt regarding the formal adoption of the official 2009 through '13 Strategic Plan, as required under state law, and as required under law, the Strategic Plan is to be submitted to both the Legislative Budget Board and to the Governor's Office of Budget and Planning. The goal of agency strategic planning and the intent of the process is well documented in both state law and in the voluminous guidance that we received from the LBB on putting the document together.

The Strategic Plan, as you see it now, was put together with the assistance of several divisions within the agency, and I'd like to go ahead and recognize them: the Finance Division, the Technology Services Division, Human Resources Division and the General Services Division. All four assisted us in putting together significant components of the Strategic Plan.

This version of the Strategic Plan is a formal document that communicates TxDOT's goals, vision, missions, directions and outcomes to the governor, the legislature and the public. The plan provides data about the department's projected performance in terms of the adopted budget structure prescribed by the LBB for the present biennium. And before I go on on this, I want to say a little bit about what this document is and what it is not.

The commission, you all, over the last three years have put together what we have termed strategic plans that are public versions of the Strategic Plan. We are working on refining that and will be presenting that to you next month. This is the one that is statutorily required by law to be submitted to the LBB and to the Governor's Office. So you will see the public consumption version of this document in the ensuing months.

The Strategic Plan, as presented to you today, is developed within numerous constraints as provided to us. One of them has to do with timing of submittals, the other has to do with the actual input of the information into the state system. Both of those limit to a certain extent the flexibility that we have to present a true agency strategic plan.

The primary purpose of this document is to allow the LBB to measure an agency's performance, mainly related to the budget, from year to year, using the measures that have been established. It is not a very user-friendly, reader-friendly document, it is all input into the ABEST system -- and I'm not sure even what that acronym stands for, but that is the system that all this information is placed into.

The other issue, as far as timing goes, there are portions of this plan, for instance, some of the workforce related components of it, under different requirements have already been submitted. The performance measures associated with this plan are the present ones because the time line for the revisions to the performance measures works alongside the LAR which is still, I think, two months away from being finalized.

So what you do have in front of you is a document that has several sections. It includes the statewide vision mission as presented to us by the governor, relevant statewide goals as they apply to the agency, then our specific mission and goals which you all have seen and commented on. There is an internal-external assessment of factors that the agency works within, and then there is a listing of the specific components that are required that are the performance measures, the workforce plan, the technology plan are all in the document as well.

And with that, I will be glad to answer any questions and would recommend your approval of the minute order.

MS. DELISI: Are there any questions for Jefferson?

(No response.)

MS. DELISI: There is a motion before us.

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Any opposed?

(No response.)

MS. DELISI: Motion passes.

MR. GRIMES: Great. Thank you very much.

MR. SAENZ: Thank you, Jefferson.

Agenda item number 8, James Bass will present a minute order concerning the re-marketing of the Texas Mobility Fund.

MR. BASS: Good afternoon. Again for the record, I'm James Bass, chief financial officer at TxDOT. This one minute order covers three items that are all related to the Texas Mobility Fund bonding program, and I'd like to walk through those one by one.

The first one, I would point out that UBS is the remarketing agent for $100 million of Mobility Fund variable rate bonds, and UBS has announced that they are exiting the U.S. municipal bond market. Therefore, this minute order would authorize the department representative to carry out all necessary actions to replace UBS as the remarketing agent and recommends that Bank of America serve as the replacement in that function.

Secondly, we have an existing $400 million swap associated with the Mobility Fund with three different counter parties. This minute order would authorize the CFO within the next 12 months to suspend up to $200 million of that current swap for no more than a two-year period if the value offered through the suspension or reversal of that is at least 20 percent greater than the original projection for that two-year period. One of the things I would highlight on this one and the subsequent one, there was a change this morning to the minute order. Previously the delegation in this section was to the department representative; it is now delegated only to the chief financial officer, to a more limited group.

Third, we continue to receive additional proposed swap transactions that could benefit the Mobility Fund programs but they are subject to market volatility. Therefore, this minute order would authorize the chief financial officer, again, just for the next 12-month period to enter into a swap for a term of not more than 20 years, not more than $500 million if the benefit was at least 10 percent better than what the average has been for such transactions over the last seven years.

I'd be happy to answer any questions you might have on any one or all three of those pieces, but staff would recommend your approval.

MS. DELISI: Questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: Any opposed?

(No response.)

MS. DELISI: Motion passes.

MR. SAENZ: Thank you, James. James will continue with agenda item number 9 dealing with final approval for two State Infrastructure Bank loans.

MR. BASS: Thanks, Amadeo.

Item 9(a) seeks final approval of a loan to Hopkins County in the amount of just over $868,000 to pay for utility relocation costs along State Highway 11 and to acquire right of way along State Highway 154. Interest would accrue from the date funds are transferred from the SIB at a rate of 3.78 percent per year, with payments being made over a period of no more than ten years.

Staff recommends your approval.

MS. DELISI: Is there a motion?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: None opposed. Motion passes.

MR. BASS: Item 9(b) seeks your final approval of a loan to Montgomery County in the amount of $550,000 to pay for a toll feasibility study for the Montgomery County Parkway project. Interest would accrue from the date funds are transferred from the SIB at a rate of 3.75 percent, with payments being made over a period of no more than five years.

Staff recommends your approval.

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: None opposed. Motion passes.

MR. HOUGHTON: James, what's the unencumbered fund balance?

MR. BASS: It is $53 million.

MR. HOUGHTON: And who is the largest borrower from the SIB right now or largest loan?

MR. BASS: That would be to the North Texas Tollway Authority.

MR. HOUGHTON: How much?

MR. BASS: $135 million was the initial amount. That was for the original George Bush Turnpike and it was actually transferred over a period of four or five installments to them.

MR. HOUGHTON: What's the balance of that loan?

MR. BASS: I'm not sure; we can certainly get that for you. It was structured such that it was transferred over a five-year period, there was no interest charged for a following period during ramp-up, and then for an even shorter period, interest was assessed but no payment was made, but we've been receiving payments for, I think, at least the last two years, maybe three, on that. They come in, I believe, on January 1 of each calendar year.

MR. HOUGHTON: Did you say P&I or just interest?

MR. BASS: P&I now for the last few years.

MR. HOUGHTON: Okay.

MR. HOLMES: What are the receipts back in annually total in the SIB?

MR. BASS: Well, life-to-date, what I have here, is $119 million, but that's life-to-date repayments. What we have projected to receive or scheduled to receive for the next six months is $7.2 million. Now, that's not necessarily just because the next six months is $7.2-, it doesn't mean for the next year it's going to be $14.4- because the large repayment from NTTA per year, I don't think it's currently within the next six months, it would be just outside of that. But we have a cash flow model, if you will, looking at when payments are scheduled to come in from the loan recipients, and then also we have incoming applications all the time.

MR. HOUGHTON: What did we capitalize the SIB?

MR. BASS: I believe it was in the neighborhood of $220 million. We have loaned out to date, because it earns interest and gets money paid back, we've loaned out to date around $330 million, and that's a total of 79 different loans that have been approved and executed to date.

MR. HOLMES: Do you have a sense of what the average maturity is in the loan portfolio?

MR. BASS: No. We have that detail; off the top of my head, I apologize, I do not know. It varies greatly. The longest one, of course, is with NTTA.

MR. HOUGHTON: When is the maturity on that?

MR. BASS: It was a 35-year done back in --

MR. HOUGHTON: That's a bond.

MR. BASS: Well, that was the maximum that we could do back then. So probably in the early 2030s would be the final maturity on that one. We have others that are probably as short as three to five years.

MR. HOUGHTON: That's the longest maturity, but the average is what: three, five, six, seven?

MR. BASS: I'm not sure. And then, of course, you know me, I'd ask do you want that a weighted average maturity based upon the value of the loan?

MR. HOUGHTON: Well, I understand.

MR. HOLMES: The weighted average is going to be pretty long.

MR. BASS: It's going to be pushed because of that one large loan, yes.

MR. HOUGHTON: Are we constrained by our capacity as to the applications?

MR. BASS: No. One of the things we look at in a monthly report -- and a summary of that report is provided to your offices each month -- is we look at that uncommitted fund balance which, as I mentioned, is $53 million, we expect in the next six months to get another $7.2 million in loan repayments, and then we look at the pending loan applications that we have already in hand that are being processed and try and just look, okay, are we going to have enough money for the applications we already have in hand if the commission elects to approve those to be able to hand out the proceeds to them when they need. We have not ever been in a position where we didn't have it. It's a revolving loan fund and it's made that complete circle once such that we're now getting the loan repayments and loaning those out to second generation recipients.

MS. DELISI: Good.

MR. BASS: One thing I'd mention, the commission has the authority to issue debt backed by loan repayments to the State Infrastructure Bank. We have not, to date, ever exercised that authority because we've always been in the position that the cash available in the SIB was sufficient to cover pending applications. But that is an authority that is available but has not yet been exercised.

MR. HOUGHTON: To what amount?

MR. BASS: Whatever it would support in the marketplace. There is no statutory cap. The security for it would be the loan repayments that we get from the SIB recipient. The market conditions, credit quality of those recipients would be the limitation and we have not gone through an analysis of what that cap would be.

MR. HOUGHTON: Okay. Have you reconsidered your retirement?

MR. BASS: Not yet.

(General laughter.)

MR. SAENZ: Thank you, James.

Agenda item number 10 deals with the award or rejection of our highway improvement contracts. Thomas Bohuslav will present two minute orders.

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

Item 10(a) is for the consideration of the award or rejection of Highway Maintenance and Department Building Construction contracts let on June 10 and 11, 2008. We had 20 projects; we had an average number of bidders of about 3.7, 3.8; an overall underrun of about 1.8 percent. Staff recommends award of all the maintenance projects. Any questions?

MS. DELISI: Any questions? Is there a motion?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. The motion passes.

MR. BOHUSLAV: Item 10(a)(2) is for consideration of award or rejection of Highway and Transportation Enhancement Building Construction contracts let on June 10 and 11. We had 50 projects; the average number of bidders is five, and we're still high on the number of bidders -- that's a good thing.

We have one project we'd recommend for rejection. It's in the El Paso District in El Paso County, it's project number 3217. We just had one bidder for this project, it was 63 percent over or 64 percent over. This is for some urban pavement and ADA work. Of course, these are high prices and we didn't have a lot of competition. We'd like to go back and see if we can solicit some more bidders and hopefully get better prices in doing so.

We recommend award of all the other projects with that one exception. Any questions?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. Motion passes.

MR. SAENZ: Commissioners, agenda item number 11 deals with the Routine Minute Orders that we present to you each month. Staff has reviewed the minute orders and sees that there is no conflict on any of the minute orders with any of the commissioners. Staff recommends approval of all the minute orders as posted. We'll be happy to answer any questions on any particular minute order that you may have.

MS. DELISI: No questions. Is there a motion?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: No opposed. The motion passes.

MR. SAENZ: Thank you.

Agenda item number 12 deals with an executive session. We have an executive session today scheduled to discuss the creation of a performance plan for the executive director.

MS. DELISI: At this time we will recess the open meeting so that the commission can meet in executive session. We will be meeting under agenda item 12(b), Section 551.074 of the Government Code, to discuss the preparation of a performance plan for the executive director.

(Whereupon, at 12:49 p.m., the meeting was recessed, to reconvene following conclusion of the executive session.)

MS. DELISI: The meeting will reconvene. Is there any other business to come before the commission?

MR. SAENZ: No, ma'am.

MS. DELISI: There being none, I will entertain a motion to adjourn.

MR. HOLMES: So moved.

MR. MEADOWS: Second.

MS. DELISI: All in favor?

(A chorus of ayes.)

MS. DELISI: None opposed. Please note for the record that it is 1:18 and this meeting stands adjourned.

(Whereupon, at 1:18 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: June 26, 2008
I do hereby certify that the foregoing pages, numbers 1 through 168, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Nancy King before the Texas Department of Transportation.

6/30/2008
(Transcriber) (Date)

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

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