November 20 Transcript

Texas Department of Transportation Special Commission Meeting

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

Thursday, November 20, 2008


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


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


MS. DELISI: Good morning. It is 9:05 a.m., and I would like to call the regular November 2008 meeting of the Texas Transportation Commission to order.
Note for the record that public notice of this meeting, containing all items on the agenda, was filed with the Office of the Secretary of State at 4:22 p.m. on November 12, 2008.
Before we begin today's meeting, please take a moment to set your pagers and cell phones and other electronic devices on the silent mode, please.
As is customary, we'll open first with comments from the members, and I'd like to call on Commissioner Meadows to begin.

MR. MEADOWS: Thank you, Madame Chairman. Good morning, everybody. I have very little to say this morning, other than to just pause for a moment and recognize a couple of our employees, and I think it's important that we do that from time to time, and we often overlook the good work that's done by our people. I just wanted to acknowledge David Casteel and Carlos Lopez for bringing creativity and common sense to a challenge that we had on a project in North Texas on US 199. They came onto the scene, brought a fresh look, fresh perspective to a project and came up with creative and common sense solutions that I think is really going to serve the citizens up there well, and I just wanted to acknowledge them and thank them for their help. Thanks.
MR. UNDERWOOD: Good morning. I can see that we lost some of our players, the whole front row is empty.
I want to also give kudos to the Pharr District and also the Odessa District with our town hall meetings. Thanks to their hard work of the DEs and their staff, it was an excellent meeting. We've gotten really good responses back from the leadership and just actually from the general public and whatnot. I've received letters, e-mails, whatnot thanking us for it. The credit goes to those men and women that really did the leg work and the hard work, and I really thank them for that.
And I just want to leave you with one thought. You know, sometimes I feel like economists were put on this earth to make weathermen look good.
(General laughter.)
MR. HOLMES: Stock forecasters too.

Good morning. I'd like to acknowledge a couple of people that have done some good work for the public as well. When we were at the ribbon-cutting at the Galveston Bay Causeway, we discovered that there had been some lapses in debris removal in Galveston by our low bid contractor, and Delvin I think you're back there, Delvin Delvin got on it and you put in 15 crews and 15 trucks and got 28 it's growing by the minute. And the magnitude of that cleanup is really extraordinary. It's kind of as fast as you remove the debris from a roadway, it fills back up because people had accumulated trash and debris that the roadway was so filled that they were unable to put more out, and so it's kind of a continuing process. But when it became apparent that the job wasn't getting done, Delvin got right on it, and I know that residents appreciate that, Delvin.
I'd also like to acknowledge David Gornet, who is going to speak to us here in a few minutes. He's been toiling long and hard on the Grand Parkway, and David, we look forward to hearing your comments. Thanks.
MR. HOUGHTON: Well, I would say I'd echo my fellow commissioners' remarks. We have a tremendous workforce here that are dedicated employees to the department, and more importantly, to the grander picture, to the State of Texas which separates us from the other 49. And I want to thank all those folks over this last year that have rolled up their sleeves, gotten into it and got their thinking caps on. And to the TxDOT family, a very, very happy Thanksgiving to you all and have a safe one.

But again, we have the best and the brightest here and I look forward to another great year and a session coming up. So be thankful today, and again, welcome.
MS. DELISI: Thank you, commissioners.
Please remember if you wish to address the commission during today's meeting, we ask that you complete a speaker's card at the registration card out in the lobby. To comment on an agenda item, we ask that you fill out a yellow card and identify the agenda number. If it's not an agenda item, we'll take your comments at the open comment period at the end of the meeting, and for those comments, please fill out a blue card. Regardless of the color of card, please limit your comments to three minutes.

MS. DELISI: Item 1 on our agenda today is a public hearing regarding our project selection process, and at this time I'd like to call on Brian Ragland, our director of Finance, to conduct this public hearing.
MR. RAGLAND: Thank you. Good morning. For the record, my name is Brian Ragland, director of the Finance Division.
The notice for this public hearing was published in the Texas Register on November 7, as well as with the major newspapers in the state. The presentation and hearing are held annually to fulfill requirements of Texas Transportation Code Section 201.602. And at this time we have about a 13-1/2 minute video to show you, and then I'll come back and answer any questions.
(Whereupon, the video was shown.)
MR. RAGLAND: We want to thank Tim Florer, who is over here running the show, for helping us produce that video. And also, the video is available on DVD out on the foyer, as well as a brochure. We're requesting that written comments regarding the highway project selection process be submitted by the deadline of December 22 at five o'clock. And that concludes our presentation.
MS. DELISI: Thank you, Brian.

MR. RAGLAND: Thank you.
(Whereupon, the public hearing was concluded.)

MS. DELISI: Item 2 on today's agenda is approval of the minutes for the October 30 meeting of the commission. Members, the minutes have been provided in your briefing materials. Is there a motion to approve?
MR. HOLMES: So moved.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
Amadeo, with that, I will hand it over to you to continue through the agenda.
MR. SAENZ: Thank you, Madame Chair. The next item on the agenda is our annual report from the Grand Parkway Association, and David Gornet is here to make that presentation. David, welcome.

MR. GORNET: Thank you, Amadeo. Madame Chair, members of the commission, I appreciate the opportunity to come and give this annual report to you. I would like to take a second to introduce Chris Olavson Chris, if you'd stand. Chris is one of our board members. Those of you that may not be aware, you all appoint our seven-member board of directors. Chris is a past TxDOT employee that spent many years of service to the community of Houston in helping to plan our regional facilities, and he brings a wealth of knowledge and experience in moving the Grand Parkway project forward to the Grand Parkway Association.
The report is going to be very similar to last year's, I'll hit on the various successes of the year and what we have looking forward to for fiscal year 2009. I was criticized by one of my board members that it's boring, that it looks like it was produced by an engineer, and I am an engineer, so what you see is what you get. Plus, I'm also the IT staff of the Grand Parkway Association and the graphic artist of the Grand Parkway Association, so I have more limited resources, and maybe I can get Tim to help me out next year and do a better job for next year.

With that, the overall project status, the Grand Parkway is a 184 or 185-ish mile as we decide on the exact route loop around metropolitan Houston. To date we have about 30 miles that are open to traffic. Those are: Segment D from I-10 to US 59; and then Segment I2 south of I-10. We, this summer, received a record of decision on Segment E which is I-10 to US 290. There's about 146 miles that are currently under study which is: Segment B from I-45 to 288; Segment C from 288 to 59 South; Segment F1, F2, G, H and I1 going all the way around then on the north and east side of town from 290 over to I-10. And Segment A this was in the report from last year Segment had not been started in its study yet but it has been kicked off for this year.
As they mentioned in their video earlier, the Grand Parkway, as part of the state transportation system, is also tasked with meeting the goals that TxDOT has established. The Grand Parkway will help reduce congestion on the metropolitan area roadways by providing alternative transportation routes for our citizens. It will enhance safety for those citizens by giving them a higher class facility to drive on and separate trip types those trips that need to go downtown versus those that can go around town that can use different roadways and provide them a safer way to go around the metropolitan area.
We expand economic opportunity for the citizens of Houston: they can choose to live and work in different areas, it gives opportunity for landowners as they're looking to develop a business in a different area, to expand residential development. It improves the air quality of the area: as we reduce congestion, we improve vehicle operations and improve air quality. And it enhances the asset of all the transportation resources we have in Houston, not just our roadways but our tollways and our public infrastructure for public transit.

This is a long list of the activities that we had in 2008, and I hope that you all have a handout up there, but I'll run through them very quickly. In Segment A, TxDOT selected a consultant that has since started work on doing a feasibility study for the area from I-45 to 146. On Segment B, the draft environmental impact statement continues to be reviewed there. Segment C, the final environmental impact statement is in review. Segment D, TxDOT received an approval for a reevaluation to allow Segment D to be tolled. The original evaluation done in the late 1980s obviously was not considering tolling and they had to go back and reevaluate that. That was approved.
Segment E, I've already mentioned the final environmental impact statement was approved and we've received a record of decision from Federal Highways concerning that segment that, as you all are aware, says we've followed their rules, their regulations, and they've approved that project for further development, that we can go out and do the engineering, buy the right of way and ultimately build the road.

Segment F1, the final environmental impact statement was approved this summer. I'd love to say that we have a ROD on it, I might be able to say if I was doing this presentation later this afternoon that we do. I had a conversation this morning with the district engineer for Federal Highways and they anticipate that the division administrator will sign that very soon.
Segment F2, the final environmental impact statement for that was approved. Some of you may have seen that there was some controversy in the Spring area on the north side of Houston with Segment F2. We've worked closely with the district, with the local elected officials, the development community, we're trying to make sure we can avoid that. I think we'll be very successful in that in the next month or so here.
On Segment G, from 45 North to 59, the final environmental statement has been submitted to Federal Highways, it's in their review process. We would expect to have that approved in December of this year.
Segment H and I1, the draft environmental impact statement is under review; Segment I2, a success that opened to traffic in March Commissioner Holmes was there to give statements and remarks for the ribbon-cutting and now we can zip along on the east side of Baytown there which is actually in the Beaumont District, not in the Houston District, and they're moving forward with plans to implement tolling on that segment.

Also, quite a bit of time was spent in response to Senate Bill 792 on behalf of the association, working with both TxDOT and Harris County Toll Road Authority, providing them assistance as they went through the terms and conditions negotiation process.
Coming forward, in 2009, I've already hit on some of these because I'm excited that we'll get a lot of things done in 2009. The Segment A feasibility study is already underway. We've held meetings with some of the local elected officials in Galveston County, and this is not starting an environmental process, just a study of do we need to do a new location facility or can upgrades of some of the existing facilities in that immediate area accommodate the travel demand needs for the future.
On Segment B, we're looking forwards to the draft environmental impact statement being signed and to holding a public hearing, getting public comment on that and moving forward with the FEIS.
Segment C, we anticipate that early in 2009 we'll have the FEIS signed. On that particular segment we had made a commitment during the draft environmental impact statement process to hold another public meeting. We'll be holding that public meeting after the FEIS is approved and look forward to getting a ROD then on Segment C in 2009.

Segment F1, I've already talked about the ROD, I hope to have that this week. Segment F2, we'll address the issues that we have on the north side of town. Federal Highways appears to be comfortable with issuing a ROD on that in early 2009 that will allow that segment to move forward.
Segment G, following the approval of the final environmental impact statement and a comment period on that, we expect to have the ROD for Segment G issued. That will give us approval to construct the toll facilities for 59 South to 59 North all around the west and north side of Houston where much of the growth is occurring today.
On Segments H and I1, the draft environmental impact statement will be approved and we'll hold the public hearing on that. Further around on Segment I2, we anticipate the start of a toll collection process there. TxDOT has been working with Harris County Toll Road Authority to make sure that equipment was ordered, is going to be installed, and then it will be activated, and tolls will be collected on Segment I2 starting this spring.
And then we hope to continue to work with TxDOT and Harris County Toll Road Authority in their negotiations so that we can get this project moving forward and figure out who's going to build it, who's going to own it, and who's going to operate it.

And where do we go from here? I've kind of covered most of these points with Harris County and TxDOT, talking about who will operate this. Certainly there's a group among the local toll entities that believe they should have that opportunity, and Senate Bill 792 gives it to them. They just have to come forward with the appropriate resources to do so. We expect to have recommendations from our feasibility on Segment A so we know how to move forward with that one. With the FEISs approved on B and H and I1, and ultimately the RODs issued on those segments, that will give us a clearer picture of when we can advance those projects. Right now I would expect in 2010 we will be able to report that construction has started on segments of the parkway on the east side, particularly Segment E and maybe Segment F1.
With that, I'd like to entertain any questions and take comments from the commission.
MR. HOLMES: Thank you, David. It's a great report, good progress. Let me make sure that I have it kind of straight as to next steps. You have D approved and ready. Is that correct?
MR. GORNET: That is correct.
MR. HOLMES: And E is approved and ready.
MR. GORNET: That's correct.

MR. HOLMES: And so if there were an agreement reached between TxDOT and HCTRA and other local entities, those two segments could literally start as soon as that agreement was effected.
MR. GORNET: As soon as that agreement is moved forward, those two segments could be under construction as quick as they can get the engineering done or the right of way acquired.
MR. HOLMES: And before we talk about how we actually accomplish that, kind of remind us as to exactly what is going to be done on D, because portions of D have been built but you have some grade separations that are not, and talk a little bit about D.
MR. GORNET: Those of you that might not be familiar with it, that is an area where we built the main lanes between cross streets and at the cross streets we have the ramp that goes off, goes through the intersection with the cross street and comes back on, and we're missing the main lane overpasses for the main lanes to continue over that cross street so that you don't have to go through an intersection. It's still controlled access road, you can only get on and off at that cross street, but those overpasses will allow traffic to move more smoothly. Today you have congestion at those cross streets, you may sit through multiple light cycles waiting for that.

On Segment D, most of the projects would be in Fort Bend County and that would be to build those overpasses and to toll each overpass or maybe only toll certain overpasses, depending on how the county or whoever implements it wants to do their toll collection, but you would go in and build those overpasses. The public would still have the opportunity for free travel on the pavement as they do today: they get on, they go down the main lanes that they ride on today, they get off at the next ramp, they go through a traffic light and they get back on; they ride the road for free. If you want to expedite your trip, you're willing to pay the toll, you can take those overpasses, avoid going through the signals. So we're continuing to provide free access for all members of the public that use it today or that want to continue to use it like that, but give the opportunity to expedite the travel for folks that are willing to pay the toll.
MR. HOLMES: And about how many of those intersections are there?
MR. GORNET: There are nine of them.
MR. HOLMES: Nine of them. And does that count the one at Interstate 10?
MR. GORNET: No, sir, not counting I-10. That would be 1093, Bellaire, Peak, Mesa and on south, and not counting US 59 on the far south end.

MR. HOLMES: So it's not 59 or 10 on either end of it.
MR. GORNET: Correct, sir.
MR. HOLMES: Which would be much more significant interchanges ultimately.
MR. GORNET: Yes, they would be more significant because they're third level.
MR. HOLMES: And then if I understood it correctly, literally within the next week, F1 might be in a position to go forward.
MR. GORNET: That's correct.
MR. HOLMES: And then sometime in the first quarter, F2.
MR. GORNET: Correct.
MR. HOLMES: As well as G.
MR. GORNET: G is probably going to be second or third quarter, sometime in next year.
MR. HOLMES: Okay. Let's go just D, E, F1 and F2. Give me a rough estimate of the miles of roadway involved from D to F2.
MR. GORNET: From US 59 South up to I-10 to 290 on around would be 54 miles.
MR. HOLMES: Is there a breakdown of our cost estimate on that?

MR. GORNET: Segment D, the construction cost and the operation cost gosh, I'd be lying if I tried to pull these out. On the new location it's probably going to average somewhere, total project cost, in the $18- to $22- to $23 million in current dollars for the new location per mile. That would be E, F1, F2, each of those segments is a little more than 12 miles, so you're looking at 36-37 miles there. Segment D, the overpasses that get constructed, because you already own the right of way, you've already got all your drainage in place, all you're doing is putting an embankment in there and a bridge over the cross street, and each of those is going to be around 3,000 feet for each of those overpasses. Cost of the overpass is probably $7- to $10 million per overpass.
MR. HOLMES: The next steps, as I understand it, the counties involved how many are there?
MR. GORNET: There are six counties, Harris County plus five plus six there's seven total, plus the six additional counties: Galveston, Brazoria, Fort Bend, Montgomery, Liberty and Chambers.
MR. HOLMES: And each of those have approved the terms and conditions?
MR. GORNET: Each of those have.
MR. HOLMES: And so now it is up to TxDOT to approve those.
MR. GORNET: That's correct.

MR. HOLMES: TxDOT was involved in the development of those.
MR. GORNET: Yes, sir. Yourself, Delvin Dennis, the district engineer for the Houston District, have been sitting in on meetings, I've had the opportunity to sit in on them, as well as members of the public.
MR. HOLMES: And then once those are approved, the next step would be dealing with the market valuation issue?
MR. GORNET: That's correct, sir.
MR. HOLMES: And you think these counties are in favor of waiving that valuation?
MR. GORNET: Certainly. I think they would expect that would expedite the process. My understanding, they're very comfortable with the negotiations that have gone on and they look forward to getting the road built.
MR. HOLMES: We do too. I appreciate all the work that you've done on it.
MR. GORNET: Thank you, sir.
MR. HOUGHTON: Yes. David, how long have you been doing this?
MR. GORNET: As an employee of the Grand Parkway Association, since 1999, but in a past life I was a consultant and have been working on this since late '82, early '83.

MR. HOUGHTON: Is that right. I remember you making a statement, was it last year? I said, How long would it take to build it out under the current model. And I don't want to put words in your mouth, but I think you said something like 25 years?
MR. GORNET: With the current funding, yes, probably so, and I might well be retired by then.
MR. HOUGHTON: Is there anything that gives you any hope, after the line of questioning that Commissioner Holmes just went through and any significant progress, give you hope that this thing will get put on the ground sooner than later?

MR. GORNET: The current model of trying to use tax funding just doesn't provide the resources that are needed. Going in with toll funding, the counties are looking forward to doing this project, they think it's going to be a benefit to each of them, and they want to get out and have their piece of the road built. I think that would dramatically expedite the process, get it on the ground. And it does more, not just for our local transportation, it provides hurricane evacuation, it's a strong safety function in pulling people off the coast, giving them an alternative to using the existing network, they can get around metropolitan Houston, and that provides direct access to the ports. So all around Houston we all benefit. It brings economic activity up into Liberty County; they're excited about some issues going on down at the port and they see some offsite activities that they can have in their county. The Grand Parkway is the way for them to get people to and from that and goods to and from that.
MR. HOUGHTON: Well, you answered my next question: What are the benefits of the Grand Parkway to the region? And thank you for getting out ahead a little.
MR. GORNET: I led right in there.
MR. HOUGHTON: That just slid right in there. How many employees do you have?
MR. GORNET: Two: myself and my assistant, Donna, that answers the phones and keeps track.
MR. HOUGHTON: Is that right. And how long is this road?
MR. GORNET: A hundred and eighty-five miles.
MR. HOUGHTON: I want to congratulate you, and I'm optimistic, I think things will be coming sooner than later. Thank you for your work.
MR. GORNET: Thank you, sir.

MR. HOLMES: Just to amplify a little bit for people that are not familiar with the transportation system in this part of Texas, the hurricane evacuation routes that are currently in place take quite a lot of people directly through the center of Houston.
MR. GORNET: That's correct.
MR. HOLMES: Which is what creates the very difficult evacuation process.
MR. GORNET: Yes, sir.
MR. HOLMES: And this would take them around that very congested area.
MR. GORNET: Current routes, obviously they have to use the existing road network. Brazoria County feeds out of State Highway 36 up through the Richmond-Rosenberg area toward I-10; they also use State Highway 6, 288, I-45, and then 145 going north on the east side of town; all of those routes traverse congested areas. Obviously, Galveston coming up I-45 goes through the most congested area. And evacuation takes place, as we've seen, a week to four days in advance they need to be getting folks out of there, and during that time frame, a major metropolitan area like Houston, it doesn't slow down, it's not evacuating. The coast needs to evacuate and it's trying to get through that metropolitan area while business as usual is continuing there. And this will give them an opportunity to bypass that area, get to I-10 and get to 290, get to 249, get to their evacuation areas and avoid the issues that happened during Hurricane Rita.

MR. HOUGHTON: This also takes the truck traffic potentially out of the center of Houston, around from the ports, access to your ports.
MR. GORNET: It gives trucks additional opportunities. If a truck is coming in at two o'clock in the morning, they're probably not going to pay a toll to go around Houston, but if they're coming in and they need to bypass Houston to get to New Orleans or go north toward Dallas, it gives them that additional opportunity, keeps them off of 610, off the Beltway.
MR. HOUGHTON: The Port of Houston ought to be able to pay those tolls for those trucks, don't you think.
MR. GORNET: There's probably someone here that knows a whole lot about the Port of Houston that we might ask that question to rather than me.
(General laughter.)
MR. HOUGHTON: David, thank you very much.
MS. DELISI: Thank you very much.
MR. GORNET: Thank you.
MR. SAENZ: Thank you, David.
Agenda item 3(b) is a report to be given by Steve Simmons on our status of implementation of the Sunset Commission staff recommendations. Steve.

MR. SIMMONS: Good morning, Madame Chair, commissioners, Mr. Saenz. For the record, my name is Steve Simmons; I'm the deputy executive director of the department.
As it's been less than a month since I reported to you, there has been very little change in the status of the Sunset report, but let me just get into it. Issue 2 addresses our transportation planning and project development process. Specifically, the Sunset Commission felt that the state's complicated transportation planning and project development process frustrates the public's understanding of how important decisions are made. As I mentioned in Dallas, several of the items are connected and progressed together as a group. Item 2.1 requires TxDOT to establish overarching statewide transportation goals and measure progress made towards those goals.
Since last month, TxDOT administration has decided to use our previously established transportation goals of reduce congestion, enhance safety, expand economic opportunity, improve air quality, and preserve the value of our transportation assets. One of those goals, expand economic opportunity, is difficult to measure, and the Texas Transportation Institute is assisting the agency by studying how best to measure progress on that particular goal.

Items 2.2 and 2.3 deal with project programming and work programs and how they integrate and are driven by specific milestones. Finishing those two items have a direct effect on items 2.1 and 2.4, and thus, we have set a goal of May 30, 2009 for 2.2 and 2.3, and as 2.1 and 2.4 are dependent on their progress, we're aiming for those two to be finished August 31, 2009.
Issue 3 focuses on public involvement and transparency, and I'd like to report that significant progress is being made on item 3.5 which is making our website easier to use. Pieces of the new website have been available for a look internally and we hope to have it ready for public input by the end of the month. We're also looking at item 3.3 which puts into place a formal process for staff with similar responsibilities to share best practices information. An internal internet site has been established containing a chat room for employees to post questions and best practices and share new ideas.
Item 4 addresses our contracting functions, and since the last time I reported to you, item 4.5 which will set time frames for each major step in the development of professional services contracts, has been completed. Item 4.7, strengthening oversight
MR. HOUGHTON: Steve, on 4.1, design-build model, project delivery for traditional highways. How's our chances on getting that through the legislature?

MR. SIMMONS: That has been on our agenda the last two sessions as far as allowing us the opportunity to go forward with it; it has not passed. That is one recommendation that the Sunset did say that we needed to have, and I think that with their recommendation maybe it's got a better chance.
MR. HOUGHTON: Help me with the federal, does federal allow design-build?
MR. HOUGHTON: And local municipalities in the state of Texas, is that an optional deal on design-build, school districts, or this is just indicative to TxDOT that we're restricted to do design-build?
MR. SIMMONS: That's a question I don't know the answer; I'll have to look into that.
MR. HOUGHTON: Where does the opposition come from on design-build?
MR. SIMMONS: I don't know.
MR. HOUGHTON: Does anybody want to take a shot?

MR. SAENZ: I'll take a shot. Originally, design-build, when it was first introduced of course, we do have design-build for CDAs, for toll roads that have to have a tolling element originally, the Association of General Contractors looked at it that the design-build would result in much bigger projects, so therefore, some of their smaller contractor members would not be able to be part of that. Since then, it looks like they've changed their mind and now there is an interest. In fact, they have a CDA committee within AGC that's looking at how they can make the process better.
We're still getting a lot of push-back on the CDA process that we have that uses design-build for toll roads from the consultant industry. They don't like the way that it's structured, that normally the engineer is working for the contractor, and they would like a different mechanism where the engineer is reporting directly to the owner instead of the builder. And so that kind of has been the big push lately.
MR. SIMMONS: One of the areas that we're looking into is the construction manager at risk model which kind of does what Amadeo just described.
MR. HOUGHTON: Where the engineering firm would report to or work for.
MR. SIMMONS: We basically hire the engineering firm and then we select a contractor based on qualifications, and they work with the engineer.
MR. HOUGHTON: Engineers don't like to work for contractors, Steve?
MR. SIMMONS: It's where the money is.
MR. HOUGHTON: I see. I'm sorry, go ahead.

MR. SIMMONS: Item 4.7, strengthen oversight and accountability of professional services contracts in the districts, is underway. The Design Division has held several contract management training sessions to consultant management staff throughout the department to improve competence and professionalism. TxDOT believes that professional services contracts are a strong candidate for regionalization and we hope to have a plan ready for commission consideration in December with final implementation at the end of May.
Item 6 regards billboard regulation. Item 6.1 states that TxDOT should centralize the outdoor advertising regulatory program requiring staff to report to the Right of Way Division instead of district engineers. Rule changes needed to effect the implementation of the business plan will be presented to you today. And the department is also working on item 6.7 requiring the department to develop a complaints process, track and report complaints and provide information to the public about how to file a complaint. A complaint form has been developed that is currently moving through a field test, and full implementation is scheduled in January of '09. Citizens will then have the ability to access a standard complaint form and submit it electronically through our website.

In summary, we have had a lot of success with quick implementation on several of the recommendations and are now working with issues that take more time, and for that reason, I'd like to recommend that we go to an every other month report to the commission. I'd be happy to answer any questions that you might have.
MS. DELISI: Steve, just so that the other commissioners are aware, can you sort of go through the time line that we're working under with Sunset at this point?
MR. SIMMONS: We have our Sunset hearing before the full committee December 14 and 15, and at that point in time, they'll vote on the various recommendations and see if they move forward. At that point in time, somebody will be coming to sponsor the bill that will move through the session.
MR. HOLMES: I'm sorry, what dates did you say?
MR. SIMMONS: December 14 and 15.
MR. SAENZ: It's the 15th and 16th.
MR. HOUGHTON: Merry Christmas.
MR. HOLMES: Sunday?
MR. SIMMONS: It's the 15th and 16th. I'm sorry. I was going by memory; that should tell you how good my memory is.

MS. DELISI: It's two days of Sunset hearings scheduled, but I think they've signaled their intention to take us up on the 15th with some other agencies.
MR. HOUGHTON: I have one more question on design-build, I just can't get off it, Steve.
MR. SIMMONS: Yes, sir.
MR. HOUGHTON: Can an engineering firm be the lead on a project under design-build?
MR. SIMMONS: Sure, yes, sir.
MR. HOUGHTON: They could. So an engineering firm could bring a project and have a team and be the lead instead of the contractor.
MR. SIMMONS: Yes, sir.
MR. HOUGHTON: Okay, thanks.
MR. SIMMONS: I think it all gets down to who has the most skin in the game.
MR. HOUGHTON: But there's nothing that says they can't.
MR. SIMMONS: Not one thing.
MR. HOUGHTON: So their business model, they could say we want to do this.
MR. SIMMONS: Yes, sir.
MR. SIMMONS: Thank you.
MR. SAENZ: Thank you, Steve.

Agenda item number 4, commissioners, deals with Aviation, and Dave Fulton, director of our Aviation Division, will present two minute orders. Dave, go ahead.
MR. FULTON: Thank you, Amadeo. Commissioners, for the record, my name is Dave Fulton, director of the TxDOT Aviation Division.
This minute order is in response to a request by the City of Arlington to limit seaplane operations on Lake Arlington. Transportation Code Chapter 26 provides that a governmental entity that owns, controls or has jurisdiction over a navigable body of water may not prohibit the operation of aquatic aircraft in an area in which motorized boats are permitted. The governmental entity may apply to TxDOT to prohibit or limit the operation of aquatic aircraft. The department shall approve the prohibition or limitation if the department determines that safety concerns justify the prohibition or limitation.
The Aviation Division has investigated the request by the City of Arlington and proposes the following limitations for seaplane operation: no nighttime operations and no touch-and-go landings. In addition to the aforementioned limitations, the City also requested limiting seaplane operations to days of the week Tuesday, Wednesday and Thursday only. We did not find that request justifiable in accordance with the statute.

The City of Arlington has been informed as to our preliminary findings. We would recommend approval of this minute order.
MR. HOUGHTON: Is there a plethora of seaplanes in that area?
MR. UNDERWOOD: Dave, a quick question. Have we had any other public comments on this as we're going forward with it, any conversations with the seaplane operators, so to speak?
MR. FULTON: We have not. We have had no inquiries about this at all from the seaplane operators.
MR. UNDERWOOD: And they're alerted to the fact that this is coming down the pike?
MR. FULTON: They're aware of it, yes. I think the intent, it was initiated by the City of Arlington to try to limit the operation at this location.
MR. UNDERWOOD: I understand for the safety reasons. Thank you.
MR. HOUGHTON: Where are they flying to and from, or from to get to Arlington?

MR. FULTON: I don't know. This statute was put into effect several years ago to try to give seaplane operators equal footing with other motorized vehicles operating on public bodies of water, and most states have something of this nature. But Lake Texoma has a very active seaplane operations school, and so that very likely might be one of the places that operate to Lake Arlington.
MR. HOUGHTON: We may want to look at El Paso restriction on seaplanes.
(General laughter.)
MR. MEADOWS: Move approval.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. FULTON: Thank you. Item 4(b) is a minute order that contains a request for grant funding approval for ten airport improvement projects. The total estimated cost of all requests, as shown in Exhibit A, is approximately $17 million: approximately $15.4 million federal and $1.7 million local. A public hearing was held on October 23 of this year. No comments were received. We would recommend approval of this minute order.
MS. DELISI: Any questions? Is there a motion?
MR. UNDERWOOD: So moved.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: Motion passes.
MR. FULTON: Thank you.

MR. SAENZ: Thank you, Dave.
Agenda item number 5 deals with Public Transportation, and Eric Gleason will present a minute order dealing with the Public Transportation item.
MR. GLEASON: Good morning. For the record, my name is Eric Gleason, TxDOT director of Public Transportation.
Agenda item 5 adjusts the San Antonio District's allocation of FTA Section 5310, Elderly Individuals and Individuals with Disabilities Grant Program funding and transportation development credits included in the fiscal year 2008 program of projects. On May 29, 2008, the commission approved the fiscal year 2008 Section 5310 Grant Program for all districts. The San Antonio allocation provided funds and transportation development credits for both Presa Community Center and Warm Springs Rehabilitation for eligible program expenditures. Recently, Warm Springs Rehabilitation elected to suspend transportation services as of December 31, 2008.

This minute order transfers the remaining portion of funds and development credits allocated to Warm Springs Rehabilitation to Presa Community Center to ensure that no service interruptions will occur and adjusts the San Antonio program of projects to reflect the change. Staff recommends your approval of this minute order.
MS. DELISI: Any questions?
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. GLEASON: Thank you.
MR. SAENZ: Thank you, Eric.
Agenda item number 6 deals with the Promulgation of Administrative Rules. 6(a)(1) deals with final adoption of some rules for Chapter 1, Management, dealing with digital certificates, and Bob Jackson will present this minute order.
MR. JACKSON: Bob Jackson, General Counsel.
This minute order adopts rules concerning digital certificates. The Department of Information Resources has adopted rules for state agencies concerning digital signatures. To facilitate the digital signing of electronic documents, the department will approve the issuance of digital certificates to individuals by a contract of certification authority. These rules will enable the impending electronic bidding system for highway improvement contracts that Thomas Bohuslav will be talking about later today.

This minute order adopts the rules. There were no public comments received. Recommend adoption of the minute order.
MR. HOUGHTON: So moved.
MS. DELISI: Is there a second?
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes. Thanks, Bob.
MR. SAENZ: Thank you, Bob.
Agenda item 6(a)(2) deals with Chapter 4, Employment Practices. Debbie Moore, interim HRD director, will present.
MS. MOORE: Good morning. For the record, my name is Debbie Moore and I am the interim director for the Human Resources Division, and I'm here today to request the approval for the final adoption of the Substance Abuse Program rules.

You approved these amendments at your August 28 meeting. We asked for comments, and that comment period ended on October 13. We received 21 comments during this period and you've received a summary of these in your briefing books and in response to these comments, no changes to the rules are necessary. So at this time we would ask you to adopt the proposed rules as written.
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MS. MOORE: Thank you.
MR. SAENZ: Thank you, Debbie.
Agenda item 6(a)(3) deals with Chapter 9. Ken Barnett is going to present dealing with Contract Management dealing with electronic bidding.
MR. BARNETT: Good morning. For the record, my name is Ken Barnett. I'm the director of the Construction Section of the Construction Division.
These rules for adoption will allow the implementation of our electronic bidding system. They also address some issues we've had with bidding by affiliated businesses, they address both of those. We received no comments on these proposed rules, and we recommend your approval.
MR. HOUGHTON: So moved.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes. Thank you.

MR. SAENZ: Ken will also present the next item. Agenda item 6(a)(4) deals also with Contract Management, dealing with our internal compliance program and some requirements of our contractors.
MR. BARNETT: These rules repeal and adopt new sections of Chapter 9 concerning the department's policies and procedures for contractor sanctions. They set forth circumstances under which contractors may be sanctioned and the procedures that must be followed. They also take into consideration a contractor's internal compliance program for applying a sanction. It also establishes an opportunity for an informal hearing concerning the sanction, and addresses sanctions to businesses associated as affiliates due to family relationships only.
We published in the Texas Register, no comments were received. We would recommend your approval.
MR. HOUGHTON: So moved.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you, Ken.
Agenda item 6(a)(5) deals with final adoption of rules for Chapter 21, Right of Way, dealing with utilities. John Campbell will present.

MR. CAMPBELL: Good morning, Madame Chair, commissioners, Mr. Saenz. My name is John Campbell, for the record; I'm the director of the Right of Way Division.
I'd like to present for your consideration today item 6(a)(5) which provides for the final adoption of amendments to Sections 21.31, 21.35, 21.37, 21.38, 21.39, 21.40, 21.52, 21.53, 21.54 and 21.55, and 21.902 and 21.905. These are with regard to utility accommodation on highway rights of way and rail facilities. The proposed rule revisions clarify several existing definitions, add new definitions, they require additional information from utilities for the change of ownership, change of use, and they also are necessary to clarify existing language and maintain consistency with the federal and state regulations.
We posted these rules for preliminary adoption in September, we received a few public comments and they've been incorporated into the preamble of these rules. Staff recommends approval.
MS. DELISI: Is there a motion?
MR. HOLMES: So moved.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.

MR. SAENZ: Thank you, John.
Agenda item 6(b)(1) deals with proposed adoption of rules, and Bob Jackson will present some rules dealing with Chapter 1, Management, and Chapter 15, Transportation Planning and Programming, and Chapter 27, Toll Projects.
MR. JACKSON: Bob Jackson, General Counsel.
These rules propose the adoption of amendments and new sections concerning the adoption of internal ethics and compliance programs by certain entities that receive financial assistance from the department. As we discussed yesterday, we're expanding our internal compliance program. The U.S. Sentencing Guidelines asked us to look at our partners. We're taking it a step at a time; eventually we're going to look at developing rules for all entities that receive assistance from the department and some that are regulated by the department. At this point we want to start with transportation corporations which we have one, the Grand Parkway Association, which by law is an extension of the commission, and entities that receive financial assistance for toll roads. These rules will give them one year, till January of 2010, to develop a compliance program. The requirements of the compliance program very closely track the requirements of the U.S. Sentencing Guidelines.

These are proposed rules that will go out for public comment. Recommend adoption of the minute order.
MS. DELISI: Are there any questions?
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you, Bob.
Agenda item 6(b)(2) deals with our Chapter 2 Environmental Policy and deals with some proposed rule changes for off-system projects. John Barton will make this presentation.
MR. BARTON: Good morning. For the record, my name is John Barton, assistant executive director for Engineering Operations.

This particular proposed rule is an amendment to the provisions regarding environmental review and public involvement activities for a certain subset of projects. The proposed rules relate to those projects that are being funded by the department solely through the use of the State Highway 121 funds that are set aside into a sub-account for those projects in the North Central Texas area. These proposed rules will redefine the environmental review requirements for certain projects that are funded from the sub-account, as discussed at the last commission meeting in Dallas.
The proposed amendments require that a project agreement be entered into by the department and the entity responsible for implementing the project, that they be solely funded by the State Highway 121 sub-account for those projects and that they comply with all environmental review and public involvement requirements applicable to that entity under state and federal law in connection with the project rather than following the environmental review and public involvement process that the department generally follows for our projects.
The concept is that the department has created a sub-account for these State Highway 121 funded projects. The responsibility for allocating those monies from those funds was assigned to the Regional Transportation Council of the North Central Texas Council of Governments and that all the projects proposed to be funded through this sub-account were selected by the Regional Transportation Council using a competitive evaluation process that resulted in the selection of their highest priority projects that need to be built quickly. The RTC also has determined that these projects will mitigate or prevent air pollution caused by the construction, maintenance or use of those proposed facilities.

And the projects that will be funded by the department solely from this sub-account are not a part of the state highway system, therefore, the local governments implementing those projects have been complying with environmental reviews and planning processes under their own rules. Some of those requirements for some of those projects are limited to the environmental permitting processes and certainly aren't as cumbersome as the state process, and the environmental review and public involvement for some of those projects may necessarily cause other activities to be recommenced if certain environmental thresholds trigger other environmental review and public involvement processes.
So these rules are being posted to receive public comment on them, and I would recommend that you adopt this minute order.
MR. HOUGHTON: John, I remember from the Dallas meeting there was representation from the RTC or the Council of Governments that our department hadn't responded to some of the things that you're talking about here today regarding rules, regarding environmental, design, those sorts of things. Do you remember that?

MR. HOUGHTON: And it was not challenged at that meeting, that assertion as to whether we were or weren't, but after the meeting I found out we, in fact, did go back and forth with concepts, ideas on how to get these things accomplished, and I want to make sure for the record that our department, in fact, was proactive, and you, especially, and others in the department were proactive.
MR. BARTON: I believe that's correct, Commissioner. There was a lot of effort on a lot of people's parts, both at the Council of Governments, the MPO and the department's level, both locally there in Dallas and Fort Worth as well as here in Austin, to consider several different scenarios. I think one of the things that was said was that the MPO and the communities had submitted design standards and processes for our consideration and we had not responded to those, and that was an inaccurate statement. We did work very hard with them, late into the hours, on weekends, and felt like we had been very cooperative and certainly gone above and beyond the call of normal duty to respond to their proposals and to offer ours for consideration. So I appreciate the opportunity to correct that statement.
MR. HOUGHTON: Thank you.
MS. DELISI: Any other questions? Is there a motion?
MR. MEADOWS: So moved.

MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. BARTON: Thank you.
MR. SAENZ: Thank you, John.
Agenda item 6(b)(3) deals with Chapter 5, Finance. Brian Ragland will present these proposed rules.
MR. RAGLAND: Thank you. For the record, my name is Brian Ragland, director of the Finance Division.
This minute order proposes amendments regarding the department's collection of debt procedures in Section 5.1. The primary effect of the amendments is to add a step to the process which requires us to send out notification of obligation to the debtor before we start sending out demand letters. And the other changes are technical in nature just to bring it in line with the rules that the Attorney General's Office has. We recommend adoption.
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. RAGLAND: Thanks.

MR. SAENZ: Thank you, Brian.
Agenda item 6(b)(4) deals with Right of Way, deals with our billboards and some administrative changes that are being proposed. John Campbell will present.
MR. CAMPBELL: Again for the record, I'm John Campbell, director of the Right of Way Division.
Item 6(b)(4) is the one referred to by Mr. Simmons this morning with regard to the Sunset Advisory Committee's implementation plan and item 6 specifically. These rules were developed from the much larger, more comprehensive rule set that we were considering previous presentation of. These are very, very specific to only create the flexibility within our own organization to be able to consider alternatives for reorganizing the program.
There are no impacts or effects on industry or anything outside the operations of TxDOT's control program. We have proposed a December 16 public hearing in order to reassure industry of those concerns.
Staff recommends your approval.
MS. DELISI: Does anyone have any questions?
(No response.)
MS. DELISI: Then at this time I'd like to call up Mark Chancellor who would like to speak against.

MR. CHANCELLOR: Good morning. My name is Mark Chancellor.
I respectfully come before you today to ask that you maintain and strengthen our property rights. I'm a sixth generation landowner as well as a small business owner. I'm concerned that placing more restrictions and any of these restrictions on these lands is going to have an adverse effect and erode our property rights, but also have a negative effect on small businesses. More restrictions inevitably take more property rights away from landowners. And this is something we really need to keep with us.
A lot of the people that are trying to take these property rights away, these groups, they want to control the land but they don't want to pay the taxes. And we've got to keep that control with the landowner, we can't let people that don't own land control it, that's not right, that's property rights. I've yet to hear any of these groups offer to buy the land or pay the property taxes or lease land. We need to keep the land control with the owner. They just want to control the land, they feel free to control it but that's wrong, they just can't control other people's land without paying the taxes or something. You can't just go and tell people what they can do with their land.

I'm a rural landowner and any restrictions that you put on people that are trying to make a living out in small towns, it's hard on us. It's hard on the small businesses in our area if you make it harder to put up advertising. At this time right now with all the businesses that are having trouble surviving, any kind of restrictions that we put to make it harder is going to hurt our state in the long run.
We should make it more accessible for the landowner to be able to do what he wants with his land, whether that be leasing it for a sign, or let these other people lease it for their non-use of it, if they want. That's fair. I'm not saying that we have to have billboards, I'm just saying that the control of the land should stay with the landowner, and I respectfully ask you to strengthen, not weaken any of our property rights. Thank you for your time.
MS. DELISI: Thank you, sir.
With that, does anyone have any questions?
MR. HOLMES: Just for clarification, John, does this change the rules on outdoor advertising signage?
MR. HOLMES: Or does it just simply move the process from the districts to Austin?

MR. CAMPBELL: What it does, it doesn't do that specifically but it eliminates specific designations within the current rules. For instance, right now some authorities rest with the district engineer. This removes those explicit authorities in favor of the more general authority of the executive director or his designee, and that's the only thing that these rules are proposing to do.
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes. Thank you.
MR. CAMPBELL: Thank you.
MR. SAENZ: Thank you, John.
Agenda item number 7 deals with Transportation Planning. Jim Randall, director of the Transportation Planning and Programming Division, will present a minute order dealing with a report from the Border Trade Advisory Committee.
MR. RANDALL: Good morning, commissioners. My name is Jim Randall with the Planning and Programming Division. Item 7, this minute order accepts the Border Trade Advisory Committee report for 2008.

The Border Trade Advisory Committee was established by the 77th Texas Legislature in 2001. The purpose of the committee is to develop a strategy and make recommendations to the commission and governor for addressing the highest priority border trade transportation challenges. Their first report was accepted by the commission on November 16, 2006. The report established four high priority principles for the committee: trade transportation corridors, coordination with Mexico, safety and security measures, and economic benefits of international trade. The committee met in 2007 and 2008 to address the strategies and recommendations contained in the report. The 2008 report details progress made in implementing actions.
In addition, Transportation Code Section 201.6011 requires the department to develop an integrated international trade corridor plan. The department is required to update the plan biannually and report to the presiding officer of each house of the legislature no later than December 1 of each even-numbered year. The plan must address the implementation of the recommendations of the Border Trade Advisory Committee.
With your approval, the Border Trade Advisory Committee report, as shown in Exhibit A, will be incorporated into the International Trade Corridor Plan as required by Transportation Code. Staff recommends your acceptance of the report and approval of the minute order.
MS. DELISI: Are there any questions?

MR. HOUGHTON: So moved.
MS. DELISI: Is there a second?
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes. Thank you.
MR. SAENZ: Thank you, Jim.
Agenda item number 8 deals with Pass-Through Toll Program. Phil Russell, assistant executive director for Innovative Project Development, will present two minute orders: one in Bexar County and one in El Paso County.
MR. RUSSELL: Good morning, commissioners, Mr. Saenz and Roger. For the record, I'm Phillip Russell, assistant executive director for Innovative Project Development.

Commissioners, agenda item 8(a) is a bit of a rehash. If you recall, last month you all approved a minute order related to a pass-through toll agreement from Bexar County. Again, the project was to improve a highway intersection and length of roadway on the west side of San Antonio, it's a high growth area, and of course, in addition, this site was one of four or five sites across the United States that's being selected for a possible Department of Homeland Security research park. So the project went forward, the commission approved that minute order.
Subsequent to that, we started looking through it and I think there was some conflicting information on the limits of the project, and so we all thought it would be better to go ahead and bring this minute order back to you all. Again, substantively it's the same minute order. The slight changes are that on the limits of 1957 it runs from 1604 all the way to the Medina County line, and on 211, the north-south facility, it runs from 471 to just slightly south of that intersection with 1957, about a mile or a mile and a third south of that.
Everything else is essentially the same or substantively is the same. It has not inhibited our ability at all. We've already begun meeting with Bexar County and are moving forward. So staff would recommend approval of this minute order and I'd be happy to address any questions you might have.
MS. DELISI: Any questions?
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes. Thank you. Oh, we have another one.

MR. RUSSELL: One more, Chair.
Agenda item 8(b), as Mr. Saenz mentioned, relates to an unsolicited proposal we received from a private entity. It relates to an intersection there in El Paso, the Schuster/I-10 intersection. It's, again, a high growth area, it's right next to the UTEP campus. It's an intriguing proposal in that it does a couple of things. First off, the major issue and we hear from the local community, from the university, and our own district verifies that there's an exit ramp there that, because of traffic, is beginning to back traffic up on the interstate, obviously not a desirable situation on any of our facilities.
UTEP is going through a process where they are building more infrastructure, a new college, a parking garage that's probably only going to exacerbate this situation, and so this proposal has a potential solution of how they could alleviate that congestion and move forward. Obviously, since this is an unsolicited proposal, I don't want to go into too much detail, but we think it's a reasonable solution to alleviate congestion in this area.

This proposal also differs a bit from our traditional pass-through in that in a traditional pass-through the source of funds they would be utilizing is your money, Category 12 Commission Discretionary. What I think this proposal envisioned is perhaps using locally controlled funds, those Category 2 dollars that the MPOs control, that would be the repayment mechanism, so again, it's really the epitome of local control.
So if you approve this minute order, you would be doing a couple of things. You'd be requesting for staff to go out with a request for competing proposals. We would open it up for a minimum of 45 days to assess what sort of competing proposals, we would review those as well as this original proposal, make a determination if there's value to the State of Texas, and if there is, we would move forward with attempting to negotiate a contract with that best value proposer. Just like on all pass-throughs, we would bring it back to you at the end of that for commission approval on that second step of that pass-through agreement.
Commissioners, I'd be happy to address any questions you might have.
MR. UNDERWOOD: Yes, a question, Phil or I would aim it more towards Ted. With the increase in the military and whatnot, the college is going to grow just from that, won't they? This intersection is critical to the college. Is that correct?
MR. RUSSELL: Yes, sir.

MR. UNDERWOOD: And with the influx of almost 30,000 troops, a lot of them will be going to continuing education type programs, so this is going to exacerbate the problem.
MR. RUSSELL: Yes, sir.
MR. HOUGHTON: The cars are queuing up on the interstate right now, backing up; students trying to get off onto the campus now are backing up onto the interstate.
MR. UNDERWOOD: Exactly. And now you're going to enlarge your campus even more so and whatnot. And we're going to basically say thank you for the bid, we're now going to go out and take other bids?
MR. RUSSELL: And assess those. And again, Commissioner Houghton will probably know the exact numbers, but I think the number I remember is the system UTEP is injecting about $230-, $240 million for improvements in that part of the campus. So as the commissioner mentioned, it's only going to exacerbate the current queue on that exit ramp.
MR. UNDERWOOD: Exactly. Thank you, Phil.
MR. RUSSELL: Yes, sir.

MR. SAENZ: Commissioner, under the Pass-Through Toll Program, when we get an unsolicited proposal from the private sector, the rules require that we open it up for competition, so this is what we're asking for.
MR. UNDERWOOD: Right. It's the normal course of business.
MR. SAENZ: Yes, sir.
MR. HOUGHTON: Is this a design-build?
MR. RUSSELL: Potentially, yes, sir.
MR. HOUGHTON: It could be.
MR. RUSSELL: Yes, sir.
MR. HOUGHTON: Can you tell us under this proposal we got, is the proposer an engineering firm or a general contractor?
MR. RUSSELL: It's probably a little bit of both. There are a couple or three members on this team, and I'm trying to recall, Commissioner, I think generally they're probably engineering.
MR. HOUGHTON: Engineering firm that is proposing to us a design-build.
MR. RUSSELL: And to go back to your earlier question, I think clearly either party could lead that team.
MR. HOUGHTON: Move to approve.
MR. HOLMES: Second.
MS. DELISI: All in favor? Thank you.
MR. RUSSELL: Thank you, commissioners.
MR. SAENZ: Thank you, Phil.

Agenda item number 9 deals with Finance and the approval for the issuance of bonds and other obligations. James Bass, Chief Financial Officer, will present.
MR. BASS: Good morning. For the record, I'm James Bass, chief financial officer at TxDOT.
MR. HOUGHTON: I haven't seen you up here much, Bass. You've been sending the A team in.
MR. BASS: That's right.
MR. HOUGHTON: He's a good guy, Brian is a good guy.
MR. BASS: I know, that's why we hired him.
Item 9 would authorize the refunding of the $150 million of variable rate bonds issued as part of the initial financing for the Central Texas Turnpike System. And this may sound very familiar to all of you because we came in August with a similar minute order looking to replace the current structure with a letter of credit but with the tightening of the credit markets, we weren't able to get an offer to cover the full $150 million. We then came to you last month in October looking for a private placement. One week after the commission meeting, the insurer on the current bonds suffered an additional downgrade which made the private placement option less feasible.

So now we are before you kind of like the dog chasing the tail at some point with the current market conditions looking at a put bond transaction, moving these bonds into a fixed mode for a period of two to three years and then having continued optionality at the end of that term. In addition, the minute order would authorize all of the necessary actions and documents to be carried out by staff, and staff recommends your approval and would be happy to answer any questions you may have.
MS. DELISI: Any questions?
MR. HOLMES: When would this actually take place, do you think?
MR. BASS: Hopefully quickly in the next couple of months that we would actually do that. And the rates would be, obviously, whatever the market rates are at that time, and when we looked a couple of weeks ago, the best estimate would be in the neighborhood of 5-1/2 percent, obviously plus or minus, for that two- to three-year period.
MR. HOLMES: And the rate that we're currently paying?

MR. BASS: We're currently paying 9 percent on the bonds, and out of the $150 million, only $17 million have been able to be placed in the marketplace, and that $17 million is carrying a 9 percent interest rate. $133 million have been brought in by the liquidity bank, the standby bond purchase agreement, and as of a couple of weeks ago, we were paying 2.75 on those. Sounds like a great deal, let's just let the bank hold them for a period of time at 2.75. Well, there's triggers in there in that they only do that for so long, and if it continues for so long, we would then be required to start paying off that $150- in a much shorter period than originally planned for.
With the further downgrade of the insurer, that liquidity bank could send us a notice and terminate their agreement within 90 days and so we are hoping not to receive that letter, but even if we do, we need to be ready to go within that 90-day window to change the structure. And it looks like right now this put bond structure is feasible and doable; similar transactions have occurred in the last few weeks. What also has happened, the letter of credit option may be coming back a little bit. The original group who was considering that back in August but had not been able to get together the full $150-, has contacted us again and wants to visit with us again.
This minute order does not supercede the earlier one, it's just giving us more options. We'll look at those options and pick whichever is the best for the debt of the system.

MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. BASS: Thank you.
MR. SAENZ: Thank you, James.
Agenda item number 10 deals with a loan request from the City of El Paso and the Camino Real Regional Mobility Authority. Brian Ragland will present.
MR. RAGLAND: Thank you. For the record, my name is Brian Ragland, director of the Finance Division.
This minute order gives preliminary approval to a joint application submitted by the City of El Paso and the Camino Real Regional Mobility Authority, CRRMA. The amount of the loan is for $3,075,000 and it's to pay for various costs for preliminary studies and implementation of the CRRMA proposed I-10 at Loop 375 project. The minute order also directs the executive director to begin negotiations. Staff recommends your approval.
MS. DELISI: Any questions?
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)

MS. DELISI: The motion passes.
MR. SAENZ: Madame Chair, just for clarification, this is a loan from our State Infrastructure Bank.
Thank you, Brian.
Agenda item number 11, James Bass will come back and provide our monthly report on our construction lettings and the obligations that they're putting on the funding for 2009.
MR. BASS: Thank you. For the record, I'm James Bass, CFO at TxDOT.
Last month we shared with you the schedule for the November letting and the report provides updated information on the November statewide letting as well as updated information on the October local letting projects which occurred after last month's commission meeting. The details of those lettings and the schedule for December is included in the report. I'd be happy to answer any questions you may have on that.

Last month when we spoke in Dallas, the focus was more so on the obligation limit of $2.53 billion and we were focused and anxious to get the deposit of motor fuel tax in November. We received that, and unfortunately, it was 4 percent lower than last November of '07. So for the first quarter of fiscal '09, the motor fuel tax deposits to the State Highway Fund compared to quarter one of '08 are down 4 percent. If you'll recall, when we did our long range plan and the UTP, we were projecting a 1-1/2 percent growth. We are experiencing a 4 percent decline currently.
Between now and next commission meeting, we'll receive the December deposit, but if this trend continues which yes, gas is now below $2 a gallon so one would think that driving would come up and we haven't seen that yet from either our traffic counts or from the deposits of motor fuel tax. I think in December we will likely be bringing an adjustment to that $2.53- obligation limit and/or other reductions in the operations of the department to account for this reduced revenue.
MR. HOLMES: James, if you project out, and let's just assume that that 4 percent negative variance carries forward, between 1-1/2 above and 4 down.
MR. BASS: $140 million off.
MR. HOLMES: $140 million?

MR. BASS: Would be the variance. We had projected around $2.34 billion for 2009; we are currently on pace for around $2.2-. And it appeared, looking at it, of course, 10 or 15 different ways, 2009 seems to be very much on pace with 2006 deposits for the first quarter. That's how far we have to go back to get a quarter one to be an equivalent amount; that year was $2.2 billion. If we look at the first three months, the first quarter of these various years and say well, that first quarter has represented X percent of the ultimate deposits in a year and the just interpolate 2009 to that total, that gets us $2.2 billion. If we replace the last nine months of 2008 and say maybe we're going to get back to where we were last year, that only gets us to about $2.2-fifty. So the $2.34- which we thought six months ago, nine months ago when we did it was conservative and I think we checked with both weather forecasters and economists when we did that now with the current conditions, it looks like that may have been overly optimistic.
MR. HOLMES: The time frame that we're looking at, the first quarter of FY '09 really is a couple of months back anyway.
MR. BASS: Yes, sir.
MR. HOLMES: And so while gas prices have come down, the economy has clearly gotten significantly scarier.

MR. BASS: Right. The true taxing point, even though all of us, when we buy gas, the price includes the tax, the true taxing point remitted to the state is higher up the supply chain, and when it's taxed at that point in the supply chain and to when it's deposited in the State Highway Fund, there's a two-month delay. And so one thing would be well, that two-month delay, that's why we haven't seen a jump back, but the Transportation Planning and Programming Division has permanent counters around the state, 124 of them or so, and they provide monthly counts to us of just the pure number of vehicles crossing those points, and we have the information through September here in the next week or so we'll get October updates but all of those months compared to 12 months prior are coming in lower than they had been. So because of the two-month delay, that traffic count kind of gives us maybe an early indication of trends, traffic up or down, so far that traffic trend has remained down, and that information we have is through September. So here in the next ten days or so we'll get the updates for October and see if that trend is continuing or not.
MR. HOLMES: Are we able to do a running count on those traffic counts?

MR. BASS: Yes, and that's what we have. I didn't bring it with me but I have a sheet that shows similar to the way we do motor fuel tax, we compare September '07 to September '08, see if it's higher, and then September '08 to September '09, when we get there I'm thinking in fiscal years now. We have that showing the variance, the growth, the percentage growth, and off the top of my head, I'm thinking it's either six or seven of the last nine months on just the traffic counts not vehicle miles traveled, it's just pure counts have been lower than the prior 12-month period. So it's fairly consistent, it's not every other month it's up or down or that some event may have caused it to go up or down, it's either six out of the nine or seven out of the nine last months have been down.
MR. HOLMES: The negative 4 may be best case scenario?

MR. BASS: Right. When we had had a conversation last month and I don't think we've had a conversation with the Comptroller's estimating office since the November deposits came in but last month when we had talked to them, they didn't have a number they could share with us but their thinking at that time was that they thought '09 would still be a little bit bigger than '08 but the growth would not be as big as it had been in '08 compared to '07. We're having conversations with them again to see if they're still holding that belief, because in my opinion, at this point flat would appear to be optimistic for the year. And so again, we'll have more data but absent a Christmas surprise in December, more than likely we'll be bringing an adjustment to that obligation limit to the commission in December. And as this is a report, I don't think there's any action required by the commission, I just wanted to provide the data and see if you had any questions. So thank you.
MR. SAENZ: Thank you, James.
Agenda item number 12 deals with the Contracts that were let this month, and Ken Barnett will make the presentation of two minute orders.
MR. BARNETT: Good morning again. For the record, my name is Ken Barnett; I'm the director of the Construction Section in the Construction Division.
Item 12(a)(1) is consideration of award or rejection of Highway Maintenance and Department Building Construction contracts let on November 4 and 5. We had nine projects; average number of bids was 5.4 projects.
Regarding the maintenance contracts this month, we have two bid errors for the commission's consideration in accordance with Rule 9.16. Two contractors have alleged they made an error, per the criteria of this rule. One project in Brown County for a guardrail repair, we determined that the contractor has met all the criteria for the acceptance of a bid error. We recommend that we accept this error, reject all bids an re-let the project.

The second bid error is for a job in Tom Green County. This contractor does not appear to have met the criteria of Rule 9.16, and we recommend that we do not accept the bid error and proceed with award of the contract to the apparent low bidder.
Staff recommends award of all projects with the one exception noted, and I'll take any questions if you have any.
MS. DELISI: Thank you. At this time I'd like to call up Clayton Kalisch.
MR. KALISCH: Hello. I'm with CKORP. We had the low bid on Tom Green.
MS. DELISI: I'm sorry, sir, can you state your name for the record?
MR. KALISCH: Clayton Kalisch. I don't really understand how they didn't accept my request for a bid error. They did it under (c) the alleged bid error occurred despite the contractor's exercise of ordinary care in preparing its bid. That's easily probably the most ambiguous criteria. We looked over it many times; it was a simple mistake.

Even if it didn't satisfy that, under Rule 9.15 of the Texas Administrative Code, the department examines unit bid prices, the department will evaluate a bid with extreme variations from the department's estimate. Any contractor would decide if their bid was, say, 50 percent less than the engineer's estimate that it was unbalanced. Mine was 6 times under. When you check over it, things just get under the radar. I have a contract in Beaumont and it's being re-let prematurely because the department made a huge error just with the amounts, several bridge rail and beams, and they put basically $150,000 on the contract that shouldn't have been on there. The Galveston contract that was let out a few months ago, they put 1,000 feet, it was supposed to be 10,000, they simply just re-let it the next month. A simple mistake. That's it.
MS. DELISI: Does anyone have any questions?
(No response.)
MS. DELISI: Thank you, sir. Is there a motion?
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes. Thank you.
MR. SAENZ: Agenda item 12(b) deals with the establishment
MR. BARNETT: Amadeo, do you want to do the construction contracts?
MR. SAENZ: Go ahead.

MR. BARNETT: Agenda item 12(a)(2) is award or rejection of Highway and Transportation Enhancement Building Construction contracts let on November 4 and 5 of this year. We had 35 projects with an average number of bids of 6.3 bids per project. Staff recommends award of all projects.
MR. HOUGHTON: So moved.
MR. MEADOWS: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you, Ken. Sorry about that.
12(b) deals with the establishment of the annual participation goals for the Small Business Enterprise Program. Elizabeth Boswell will present this minute order.
MS. BOSWELL: For the record, my name is Elizabeth Boswell and I currently serve as the section director for the DBE Program Compliance Section for the Office of Civil Rights.

Subsequent to the September 2008 commission meeting, I was asked to perform a study on TxDOT's Small Business Enterprise Program, specifically the methodology used to calculate the annual goal. By definition, a small business enterprise is a firm, including its affiliates, whose annual gross receipts do not exceed the U.S. Small Business Administration size standards for four consecutive years. The Small Business Administration size standards are categorized by Standard Industrial Classification Codes for the principal business of the firm. The department considers those firms that meet these size standards disadvantaged. Small businesses that meet these requirements are eligible for certification as an SBE.
The annual SBE goal is based upon the total number of ready, willing and able SBEs in relationship to the total number of ready, willing and able prime contractors and subcontractors. Previously, an assumption was made that all DBEs and HUBs were also SBEs. This assumption resulted in our past annual goals to be inflated by a factor approximately equal to the number of ready, willing and able DBEs and HUBs who also participated in TxDOT work during the previous fiscal year.

As this assumption is no longer valid, a pure number for ready, willing and able SBEs had to be determined. To determine this number, we looked at three options. The first option was considered a theoretical number, and it was derived based upon the number of currently certified SBEs that we have in our system. A second number was derived based upon the total number of SBEs that were approved as subcontractors on active projects during fiscal year 2008; that number is 70. A third number was derived based upon an average of SBEs that were approved as a subcontractor for active projects during fiscal years 2003 through 2007, inclusive; the average of those numbers is 62. So to obtain a percentage, we divided these three numbers individually by 2,400. That number is the approximate number of ready, willing and able prime contractors and subcontractors.
So subsequent to these calculations, you have three options to pick for from an annual 2008 SBE goal. The theoretical annual goal calculated out to be 6.4 percent; the annual goal based upon last fiscal year's data was approximately 3 percent; the annual goal based upon the average data for fiscal years 2003 through 2007 was approximately 2.6 percent. Staff did a close evaluation of this data and the numbers, and after evaluating these three options, a decision was made that with an increased effort to market TxDOT's SBE Program, a 5 percent SBE goal for fiscal year 2009 is attainable.
Therefore, in accordance with Title 43, Texas Administrative Code, Subsection 9.55, the minute order before you establishes a Small Business Enterprise, or SBE, goal of 5 percent for fiscal year 2009. Staff recommends approval of this minute order as presented, and I would be happy to answer any questions that you may have.

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: The motion passes.
MR. SAENZ: Thank you, Elizabeth.
Agenda item number 13 deals with a Development and Exchange Agreement. Zane Webb, director of our Maintenance Division, will present this minute order.
MR. WEBB: Good morning. For the record, I'm Zane Webb, director of the Maintenance Division.
The minute order that you have before you is to allow staff to complete negotiations and to sign a Development and Exchange Agreement with FAI Killeen Partners, Ltd. We have a surplus maintenance site, the maintenance office was closed at Killeen, Texas. There is a developer that wishes to take over that site. In exchange for that, we've asked them to build us a couple of buildings at the Belton and Waco offices. When we built those two buildings at Belton and Waco, because of limited capital funds, we weren't able to put in as many vehicle bays as we would like. What this is going to allow us to do is exchange the surplus property and get these vehicle bays built at Belton and Waco.

We feel like it's an advantage for us to be able to leverage the limited amount of capital we have with surplus property. Staff would recommend approval.
MR. HOUGHTON: So moved.
MS. DELISI: Is there a second?
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you, Zane.
MR. WEBB: Thank you.
MR. SAENZ: Agenda item number 14, Mark Tomlinson will present a minute order in Bexar County for consideration of preliminary approval of a toll equity request for the Alamo RMA.
MR. TOMLINSON: Good morning, commissioners, Mr. Saenz. My name is Mark Tomlinson, director of the Texas Turnpike Authority Division.

As mentioned, this minute order addresses a toll equity request by the Alamo RMA. In May 2008, the commission approved financial assistance in the amount of $19.8 million to be used to fund the cost of preliminary engineering and right of way acquisition on the 281 North project. This minute order today grants preliminary approval to use that financial assistance for environmental and feasibility studies on the 281 North project.
I'd be happy to answer any questions you might have, but staff would recommend approval of the minute order.
MS. DELISI: Are there any questions? Can I get a motion?
MR. UNDERWOOD: So moved.
MR. MEADOWS: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you, Mark.
Agenda item number 15 deals with the Routine Minute Orders dealing with donations to the department, eminent domain proceedings, load zones and postings. I will note, commissioners, that agenda item c(2) that deals with bridge load postings, there are none this month so there will be no action on that one. Agenda item (d) deals with right of way dispositions and donations, (e) deals with speed zoning. And staff would recommend approval of all minute orders in the Routine.
MS. DELISI: Can I get a motion?
MR. HOLMES: So moved.

MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
At this time we will recess the open meeting so that the commission can meet in executive session which is posted as item 16(b), Section 551.074, Evaluate the performance of the executive director.
(Whereupon, at 10:53 a.m., the meeting was recessed, to reconvene following conclusion of the executive session.)
MS. DELISI: The meeting of the Texas Transportation Commission is reconvened. For the record, the time is 12:06 p.m. The commission has concluded its executive session during which no action was taken on any matter.
We will now enter into the open comment period of the meeting. Are there any speakers signed up?
MR. SAENZ: No, ma'am.
MS. DELISI: There are no speakers signed up. 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. UNDERWOOD: So moved.
MR. HOLMES: Second.

MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: Please note for the record that it is 12:06 p.m. and this meeting stands adjourned.
(Whereupon, at 12:06 p.m., the meeting was concluded.)


MEETING OF: Texas Transportation Commission
Special Meeting
LOCATION: Austin, Texas
DATE: November 20, 2008
I do hereby certify that the foregoing pages, numbers 1 through 85, 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.

(Transcriber) (Date)

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


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