Texas Department of Transportation Commission Meeting

Dewitt C. Greer Building
125 East 11th Street
Austin, Texas

9:00 a.m. Thursday, December 18, 2003

COMMISSION MEMBERS:

JOHN W. JOHNSON, Chairman
ROBERT L. NICHOLS
RIC WILLIAMSON
 

STAFF:

MIKE W. BEHRENS, Executive Director
RICHARD MONROE, General Counsel
TAMMY STONE, Executive Assistant to the Deputy Executive Director
DEE HERNANDEZ, Chief Minute Clerk

PROCEEDINGS

MR. JOHNSON: Good morning. It's 9:10 a.m. and I would like to call this meeting of the Texas Transportation Commission to order. Welcome; it's indeed a pleasure to have you here this morning.

Please note for the record that public notice of this meeting, containing all items on the agenda, was filed with the Office of the Secretary of State at 4:19 p.m. on December 10 of this year.

If you see a new face up on the dais, I would like to welcome Hope Andrade from Bexar County from San Antonio who is one of our new commissioners. She has yet to be sworn in, so she will observe the meeting. Hope, it's great to have you here and if you'd like to say something.

MS. ANDRADE: Good morning, and thank you Chairman Johnson. This brings back memories: when I was on the Turnpike Authority, I used to sit on the other side of the table, so it's great to be back and thank you for inviting me to sit up here even though I'm not going to be able to vote today, but I'm excited, I'm committed to serving the State of Texas. I thank the governor for this opportunity, and look forward to working with you all. So thank you very much.

MR. JOHNSON: Thank you.

Now I would like my colleagues, Robert Nichols and Ric Williamson, if they have any comments that they would like to make. Robert?

MR. NICHOLS: Yes. I'd also like to welcome Hope. We're real excited about her appointment and being here; she's got a lot to add. I think I sat on the other end with you on the TTA board.

MS. ANDRADE: Yes, you did.

MR. NICHOLS: And her background in transit in the San Antonio area, her experience building a business the hard way, her involvement in a wide variety of different civic things in the area is going to be a great contribution. Looking forward to working with you.

MS. ANDRADE: Thank you.

MR. NICHOLS: I appreciate everyone coming today. It is the holidays, drive careful, be careful out there.

MR. JOHNSON: Ric?

MR. WILLIAMSON: And I, too, congratulate the newest commission member. I have personal knowledge that the governor interviewed many outstanding individuals to at least voice the aspirations of South Central Texas, the Lower Rio Grande Valley, and the southern Border area. I know that his selection of you, amongst an outstanding cast of applicants, says a whole lot about what you will contribute to the commission. I'm just glad you're here.

MS. ANDRADE: Thank you very much.

MR. JOHNSON: Before we begin with the business portion of our meeting, let me remind everyone that if you wish to address the commission, please complete a speaker's card at the registration table in the lobby. To comment on an agenda item, we would ask that you fill out a yellow card and please identify the agenda item; and if it is not an agenda item, we'll take your comments at the open comment period at the end of the meeting, and for that we would ask that you fill out a blue card. Regardless of the color of card, we ask that you limit your discussion or comments to three minutes. And we would also ask that you place your cell phones and pagers in the silent mode.

One item to note about the agenda, we will proceed with the agenda as stated, but we will defer item 6(c), I believe -- 6(b) to the end of the meeting, and to discuss more about that agenda item, we will retire into executive session, so we will, in the interest of your time, have the entire agenda with the exception of that one agenda item before we go into executive session.

PUBLIC HEARING

ENVIRONMENTAL REVIEW RULES

MR. JOHNSON: We will begin this morning with a public hearing regarding the department's rules governing environmental reviews. Dianna Noble, our director of Environmental Affairs, will present this item. Dianna, welcome.

MS. NOBLE: Thank you. Good morning, Chairman, Mr. Behrens and commissioners. For the record, my name is Dianna Noble and I'm the director of Environmental Affairs of the Texas Department of Transportation.

The purpose of this item is for the Texas Transportation Commission to convene a public hearing for the purposes of receiving public comment on TxDOT's environmental review regulations for transportation projects that are not subject to review under the National Environmental Policy Act.

Transportation Code 201.604 indicates that the commission, by rule, shall provide for the commission's environmental review of the department's transportation projects that are not subject to review under the National Environmental Policy Act.

It further provides: that the department will provide public comment on the department's environmental reviews; that the department evaluate direct and indirect effects of its projects; that it provide for analysis of project alternatives; that it provide a written report that briefly explains the department's decision on a project that specifies the mitigation measures; that it provide for the environmental review of a project and that it must be conducted before the location and the alignment of the project has been adopted; and that the commission shall consider the results of its review; and that the department shall coordinate with the Texas Natural Resource Conservation Commission and the Parks and Wildlife Department when preparing that review; and that at least once during each five-year period, that the commission, after a public hearing, shall review the rules relating to the environmental review and make appropriate changes.

In the next six slides, I will outline the current environmental review policy and environmental review procedures. TxDOT environmental policy is codified in Title 43, Part 1, Chapter 2, Subchapter A. Title 43, Part 1, Chapter 2, Subchapter (2) describes the memorandum of understanding that we have with Texas Parks and Wildlife, the Texas Commission on Environmental Quality, the Texas Historical Commission for the review of transportation projects.

Title 43, Part 1, Chapter 2, Subchapter C describes the environmental review and public involvement procedures.

The current policy indicates that the commission and TxDOT will protect, preserve and when practicable, enhance the environment. The policy further indicates that emphasis will be placed on avoidance, minimization and compensation for adverse environmental impacts while balancing social and environmental concerns with economic growth.

Environmental considerations will be fully integrated into department policies, procedures and decision making, and that the department recognizes the need for effective communication and coordination with the public, environmental and transportation groups, environmental and resource agencies, businesses and communities.

This subchapter contains the three memorandums of understanding between TxDOT, the Texas Parks and Wildlife, the Texas Commission on Environmental Quality, and the Texas Historical Commission, and it provides for the review of transportation projects by these agencies.

The sections under this subchapter prescribe the environmental review and public involvement procedures for all transportation modes for which the department has funding, construction or maintenance responsibilities.

These procedures are intended to ensure adequate consideration of environmental impacts related to the transportation system, and to ensure that environmental impacts are mitigated when feasible.

The next slides highlight items the commission considered in giving direction to staff on assessing the need to revisit TxDOT's environmental policies and environmental review rules. As mentioned previously, Transportation Code 201.604 requires that the commission review the rules related to environmental reviews and make appropriate changes. Transportation Code 201.604 further indicates that the commission have a public hearing as part of its review of the environmental review rules. As a result of recent legislation, there is a need for us to assess the need to update and improve the current environmental policy and environmental review procedures.

In a report spearheaded by Commissioner Johnny Johnson to the citizens of Texas, the agency made a commitment to focus on the five items described on this slide. In addition, the commission further directed TxDOT to define and focus its efforts on carrying out the five items described and to ensure that their elements are overseen as part of the system.

As related to TxDOT's environmental policy and environmental review and public involvement procedures, the environmental policy and environmental rules are focused on the PLAN IT strategy, the BUILD IT strategy, and the MAINTAIN IT strategy.

The following slides further describe items which the commission might consider in giving staff direction as related to reviewing TxDOT's environmental policy and environmental review rules. In addition, as mentioned previously, the commission and TxDOT made a commitment to the citizens of Texas to improve project delivery. As part of that, TxDOT sees as its mission to deliver the transportation program with predictability of cost and schedule without compromising the quality of the environment.

Reviewing the recent legislation and clarifying the environmental policy for the environmental review of transportation projects and related approvals and procedures might be necessary. Reviewing the memorandums of understanding with the Texas Historical Commission, the Texas Commission on Environmental Quality and continue to ensure that we continue to make decisions in a manner that builds trust and mutual respect and that results in environmentally sound projects.

MR. WILLIAMSON: May I interrupt, please?

MS. NOBLE: Yes.

MR. WILLIAMSON: Do you have the ability to reverse slides and go back one? Would pass-through tolls fall into the same area as new tools and authorities, RMAs and comprehensive development agreements?

MS. NOBLE: It would fall under the new authorities, Commissioner. What we are proposing to do is not necessarily include the environmental review procedures for those types of projects within 43 TAC Chapter 2, but to look at where it would be best to incorporate those requirements in order to eliminate duplication because what we're looking for is efficient decision making.

MR. WILLIAMSON: I guess the pass-through toll proposal is almost more a financing tool than it is anything else, so we're going to have our standard process for reviewing environmental from now on.

MS. NOBLE: That is correct.

MR. WILLIAMSON: Okay. Thank you for letting me interrupt you.

MS. NOBLE: And as mentioned previously, reviewing the recent legislation to clarify the environmental review and public involvement procedures of transportation projects and related approvals and procedures.

In addition, as mentioned previously, the commission and TxDOT made a commitment to the citizens of Texas to make transportation decisions in a manner that supports economic vitality. As part of that, TxDOT sees as its mission to deliver the transportation program with predictability of cost and schedule without compromising the quality of the environment.

In sum, based on staff's understanding of commission direction, the review will include an examination of the environmental policy and rules and how they guide TxDOT to address its responsibilities to the public and to practice good citizenship, and to re-examine requirements and expectations of its customers, and including an examination of how key production, delivery and support processes are designed and managed in order to improve them.

Copies of the rules may be obtained by contacting me at the above address and e-mail. Comments may be submitted to me at the above address, and with that, I have concluded my presentation.

MR. JOHNSON: Thank you, Dianna. Has anyone signed up to speak during the public hearing phase of the meeting?

(No response.)

MR. JOHNSON: There are none. Robert or Ric, do you have any comments or questions?

MR. WILLIAMSON: It looks pretty comprehensive. I know we're going to have a multitude of pass-through toll proposals probably in the next 30 days, and I want to be sure we're focused on not holding those up to the extent that we can.

MR. NICHOLS: The only comment I have is I want to compliment Dianna and the Environmental Division. You guys do a great job in a very complicated atmosphere. Federal laws, state laws, the entire changing dynamics of the environmental process and rules is a very difficult process, and somehow or another you were able to go through that, get people involved, do the right things for the right reasons, and anyway, I think it's important to recognize the work that you do.

MS. NOBLE: Thank you, Commissioner. The credit goes to the 25 districts as well as my staff.

MR. JOHNSON: Dianna, I want to echo what Robert said. That's an excellent report and the work that you do in a very complex arena is superb, and I know it's a team effort, but you as the team's leader do a terrific job.

MS. NOBLE: Thank you, Commissioner.

MR. WILLIAMSON: Chairman, before you and Mr. Behrens, through Dianna, I would comment on how nice it is two years later to see that almost everything our staff brings to us now is in the context of the goals, the strategic structure and the tactical structure we laid out two years ago based on your citizens group. Without banging on other state agencies, I think we may be the only state agency that is truly planning and executing according to a strategic plan that's been approved by the department. It's pretty slick to see it.

MS. NOBLE: Staff has heard the direction from Mr. Behrens and the commission; we follow very well.

MR. JOHNSON: Yes, you do. Thank you, Dianna.

MS. NOBLE: Thank you, and I hope you have a very happy holiday.

MR. JOHNSON: And the same to you.

(Whereupon, the public hearing was concluded.)

P R O C E E D I N G S (RESUMED)

MR. JOHNSON: Next we'll move to the approval of the minutes from our November commission meeting. Any additions, corrections or deletions?

(No response.)

MR. JOHNSON: There are none. I'll entertain a motion.

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

Mike, I believe that we'll turn over the rest of the meeting to you. Again, I'll mention that item 6(b) will move to the very end of the meeting, at which time the commission will go into executive session.

MR. BEHRENS: Thank you, Chairman Johnson. We'll go to agenda item number 3 which is our Aviation agenda for the month. Dave Fulton will present our proposed airport projects.

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

This minute order contains a request for funding approval for 16 airport improvement projects. The total estimated cost of all requests, as shown on Exhibit A, is approximately $4.1 million: approximately $3.5 million in federal funds, $200,000 in state funds, and $400,000 in local funding.

A public hearing was held on December 1 of this year. No comments were received. We would recommend approval of this minute order.

MR. JOHNSON: Any questions?

MR. WILLIAMSON: Is Nichols International Airport on here?

MR. NICHOLS: No, nowhere close.

(General laughter.)

MR. JOHNSON: Is there a motion?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

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

MR. BEHRENS: Agenda item number 4 which will be agenda item 4(a), our proposed rules for adoption, the first one being rules concerning management. Richard.

MR. MONROE: Good morning. My name is Richard Monroe; I'm general counsel of the department. I'd particularly like to welcome our new commissioner-to-be soon. A lot of people think of going to the lawyer as going to the dentist when all else fails for a toothache. I hope you won't look upon us that way. We try to practice painless lawyering at my office, but call on us if you ever need us.

If the commission approves this minute order, we will delete a section from our rules which is now unnecessary. It's been there for a long time but it is a potential conflict with statutory provisions and the way the courts have interpreted those provisions about what is necessary for a commission decision. I would urge the commission to adopt the minute order.

MR. JOHNSON: Any questions?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. BEHRENS: Agenda item 4(a)(2) is rules for proposed adoption concerning the selling of bonds for highway improvement projects and also highway safety projects. Carlos.

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

The minute order before you proposes preliminary adoption of Sections 15.170 through 15.174 concerning the issuance of bonds for transportation improvement and safety construction projects on the state highway system. These rules will implement the provision of Article 5 of House Bill 3588 passed during the last session.

Article 5 authorizes the commission to issue up to $3 billion in bonds. At least $600 million of this amount must be used for projects designed to improve safety and none of the proceeds may be used for projects on the Trans-Texas Corridor. The rules also establish the criteria that will be used for project eligibility and selection. We recommend approval of the minute order.

MR. JOHNSON: Any questions?

MR. NICHOLS: I don't know if it's a question or a clarification, and I sent my question really by e-mail -- I think you've already looked at it, or I know some have. It has to do with the $600 million -- or the 20 percent of $3 billion which is $600 million -- for safety projects, and I'd just like to hear some discussion either from you or legal counsel or the executive director on that when you look at the $3 billion as a total, it's understandable what the 20 percent or $600 million is for safety and it's at least that amount. But the question I had was as we work our way into this, we probably would not issue the full $3 billion because it's one a year maximum, so we know it's going to be spread over three years at least, and if we issue $1 billion in one year, are we required to spend 20 percent of that or more on safety projects, or is it only at the completion of the full three, or can you do the safety projects on the front-end?

MR. LOPEZ: Yes, we have options. The way the bill is written, it says $600 million out of $3 billion. The commission can choose to do the $600 million first, can choose to do it at the end, can choose to do it somewhere in the middle, or it could choose to do a percentage of each issuance of bonds. So that is up to the discretion of the commission.

MR. NICHOLS: But the authority is a permissive authority up to $3 billion; we're not even required to do the full $3 billion.

MR. LOPEZ: That is correct.

MR. NICHOLS: So if we only did two of the three, would it be rational to assume that 20 percent of that should be at least on safety projects?

MR. LOPEZ: That would be at the commission's option. The commission could choose to do that at the end.

MR. NICHOLS: If we only did the two and did not do any of that in safety projects, would it be your opinion that we would not have met the intent of the statute?

MR. LOPEZ: We'll have met the letter of the law, whether we've met the intent could probably be a question.

MR. NICHOLS: All right.

MR. BEHRENS: Commissioner, my recommendation would be, because we have a tremendous need for a lot of safety projects, that we would always include -- whether it would be that 20 percent per year if we do a billion dollars per year, we may choose to even do more on the front side because of the need out there.

MR. NICHOLS: I would hope that it would be our intent to work toward the spirit of the intent all the way through as opposed to just the letter, and I think that's what we intend to do, I just wanted to get it out on the record.

MR. NICHOLS: Mr. Chairman, I have no other questions.

MR. JOHNSON: Ric, did you have anything?

MR. WILLIAMSON: Are we going to instruct our bond counsel to label these "Ogden Bonds" when we sell them?

MR. LOPEZ: I'll leave that up to James Bass.

MR. WILLIAMSON: Well, if James isn't here, pass along to him that thought: James, in honor of the senator, let's call these "Ogden Bonds." I think that would be a good idea.

MR. LOPEZ: Okay.

MR. WILLIAMSON: What meets the qualification of safety, Mr. Behrens?

MR. BEHRENS: Well, of course, when we talk about safety overall, we think every project that we do has an element of safety in it, but we do have a safety program and Carlos can explain how the formula is set up on the current program that we have. And if you would do that, Carlos?

MR. WILLIAMSON: Touch on just a few highlights of it, Carlos.

MR. LOPEZ: Yes, Mike is exactly right: safety is inherent in every project that we do. But we also have the ability to let projects that target specific high accident locations and the things that we do can fix those accidents from happening. And Mike is right, we have a program in place that you all know very well, the HES Program that uses a sort of cost-benefit type of formula that looks at the kind of accidents that occur, the cost of the improvement, and what the reduction in those accidents might be, and we basically rank them and draw a line when the money runs out in any given year, but it truly is a cost-benefit formula and we try to get the highest accident locations done first.

MR. WILLIAMSON: No matter what part of the state it occurs in?

MR. LOPEZ: No matter what part of the state. In fact, in the HES Program, many rural parts of the state have benefitted greatly, so it's not just an urban type of issue.

MR. WILLIAMSON: Can you give me one example of a construction project that would follow from a decision that this is an unsafe situation?

MR. LOPEZ: For example, let's say we had an interstate highway in a rural area; it wasn't scheduled any time soon to expand to a six-lane facility. We can do what Richard Skolpik has done in the Waco District is put a concrete traffic barrier up against the inside left shoulder, if that stretch of highway happened to have a high incidence of head-on collisions and by doing that one improvement, we will have eliminated a head-on problem.

MR. WILLIAMSON: As you're aware, we get an awful lot of requests for those dividers.

MR. LOPEZ: That's exactly right.

MR. WILLIAMSON: And that does fall into this category.

MR. LOPEZ: Perfect for that.

MR. WILLIAMSON: So we'll have "Ogden Bonds" and "Ogden Barriers."

(General laughter.)

MR. LOPEZ: And "Ogden Safety Projects."

MR. WILLIAMSON: And "Ogden Safety Projects."

MR. LOPEZ: That's right.

MR. JOHNSON: Carlos, that dialogue triggered one thing in my mind. Besides the question, for an example of a hazard elimination situation that would qualify -- I assume all of them would fall under the "Ogden Bonds" -- but these barrier separated medians, in the Dallas District we have installed where it is not a concrete barrier but instead a wire-type retaining device that seems to have worked in other areas. Are we continuing to look for areas where that particular methodology of preventing head-ons will work and install those as opposed to the concrete barriers?

MR. LOPEZ: Yes. In fact, recently Amadeo asked us to go to the districts and try to locate highways that may have incidents of head-on crashes. We do have a list that we can work down from, and then each individual project we'll engineer separately and see if the wire rope answer is the best answer there, or if a CBP might be the best answer, but we do have those options available to us.

MR. JOHNSON: And then what's an example of an HES project that would be high priority in terms of the "Ogden Bonds"?

MR. LOPEZ: Probably the CBP projects, concrete barrier projects would be a high priority, grade separation projects. We do get some of those in the HES that unfortunately we're not able to fund many of those because they're high dollar and the program is not super large, but those grade out very well, especially if they've had high accident locations.

MR. JOHNSON: Thank you. Any other questions?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. LOPEZ: Thank you, commissioners.

MR. JOHNSON: Thanks, Carlos.

MR. BEHRENS: Agenda item 4(a)(3) which are proposed rules for right of way concerning utility adjustments and their relocation or removal. John.

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

I'd like to present for your consideration this minute order, item 4(a)(3) which proposes adoption of new Section 21.22 of Chapter 43 of the Texas Administrative Code concerning agreements for utility adjustment, relocation or removal. This new section is necessary to comply with Senate Bill 487 from the 78th Legislature Regular Session which added new Transportation Code Section 203.0935 requiring utility companies which own a facility that is in conflict with proposed improvements to the state highway system to execute an agreement to relocate that facility in a timely manner. If the utility does not sign the agreement, TxDOT may then relocate the facility at the utility's expense.

New Section 21.22 is proposed to implement the provisions of Section 203.0935 and to enumerate the documents to be exchanged between the utility and the Texas Department of Transportation in order to provide both parties with sufficient information to enter into an agreement. Staff recommends your approval.

MR. JOHNSON: Questions?

MR. NICHOLS: I didn't really -- I had a comment, probably a question too, and I had sent that by e-mail. In the exceptions -- in other words, if they don't move it or form a written agreement within a certain period of time, then we trigger this other thing with certain exceptions, and one of those exceptions being unless they are negotiating in good faith?

MR. CAMPBELL: Yes.

MR. NICHOLS: And my question -- and I think it was a legal question -- is that actual wording in the statute?

MR. CAMPBELL: Yes, I believe it is.

MR. NICHOLS: That answers that. I think it will remain to be seen who gets to decide what negotiating in good faith is.

MR. CAMPBELL: Yes.

MR. NICHOLS: That's the way lawsuits come up, and I was hoping we would be able to avoid that, and I think most reasonable people would know what that is. I just had cause for concern, but if it's in the statute, that's it.

MR. WILLIAMSON: I'm going to have a question not specific to this, so I'm standing by.

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. WILLIAMSON: John, what progress are we making on developing ideas to implement the advance purchasing of right of way?

MR. CAMPBELL: We're making quite a bit of headway. In fact, we've put together some informal guidelines in order to give ourselves direction on how we would utilize options to purchase, and we're right now in discussions with a couple of districts on appropriate opportunities to pilot these procedures.

MR. WILLIAMSON: I know all of us have ten times more work than we can get to, and I understand that, but the legislature and the governor gave us unbelievable responsibility this last year, and they gave us that responsibility -- I like to characterize it this way: they decided to take a chance -- and the payoff is that projects move faster, they become more locally controlled, and they become more visionary about where the state's problems are going to be ten years from now and not today, and the option of the advance purchase of right of way is one of those tools.

And I just want to encourage you, and encourage you, Mr. Behrens, for us to develop those rules as quickly as possible. Right of way is never as cheap as it was five minutes ago, and it's going to be more expensive six minutes from now, and to the extent that it's more expensive, it's less asphalt, less concrete and less buses we can put on the ground to move people around.

MR. CAMPBELL: Yes, sir, we totally agree and we're very enthusiastic about the new opportunities we've been given, and are moving quite aggressively forward to try some of those out.

MR. WILLIAMSON: Thank you. Thank you, Mr. Chairman.

MR. JOHNSON: John, are you mad at the commission?

MR. CAMPBELL: No, sir.

MR. JOHNSON: Is it my imagination, but it's been a while since we visited with you.

MR. CAMPBELL: Yes, it has. We have such a good set of rules in place, we haven't had the occasion.

(General laughter.)

MR. CAMPBELL: Incidentally, for your information, the Senate Bill 487 which you just passed action on, was sponsored by Senator Ogden, so we also have "Ogden Utility Agreements" now.

MR. WILLIAMSON: That Ogden boy and that Krusee boy, they did a lot, didn't they.

MR. CAMPBELL: Yes, they did.

MR. WILLIAMSON: We've got to figure out something to call Krusee. Oh, I know, it's the "Krusee Toll Bond."

(General laughter.)

MR. JOHNSON: Thank you, John.

MR. CAMPBELL: Thank you.

MR. WILLIAMSON: I'll get a phone call about that.

MR. BEHRENS: Item 4(a)(4), this is concerning Toll Projects and discussing interoperability involved with the toll projects.

MR. RUSSELL: Thanks, Mike. Good morning.

This minute order proposes adoption of amendments to Section 27.51, Section 27.53 and Section 27.54 concerning financial assistance to toll facilities. Certain governmental entities in the State of Texas that operate toll facilities, including NTTA and the Harris County Toll Authority, have electronic toll collection systems. The department, as you know, is also in the process of implementing such a system on the turnpike projects in Central Texas.

With the impetus of the department financing and development tools provided in House Bill 3588, the department and regional mobility authorities will contribute to the expansion of the network of toll facilities in the state. The anticipated expansion of toll facilities in the state will increase the need for user interoperability between the electronic toll collection systems of the various governmental entities. Interoperability will provide a seamless access across the state network of toll facilities regardless of the facility owner, adding value and convenience to the toll road patrons.

The commission previously has provided guidance that the department's transponder technology should provide interoperability, and as well as for the other entities that they operate their toll roads in the same manner. The proposed amendments are intended to facilitate interoperability and to clarify the intent of these rules.

The amendments to Section 27.51 add definitions for interoperability and transponders; amendments to Section 27.53 require requests for financial assistance to include a description of the extent to which the requester's toll collection system or their plan for their system will provide interoperability; amendments to Section 27.54 provide that prior to granting preliminary approval of an eligible project and a request for financial assistance for that project, the commission will consider the extent to which the requester's toll collection system provides interoperability.

The amendments also clarify that the social, economic and environmental impact studies for the project and the related public involvement activities must be completed in the manner prescribed by the department's environmental rules. This minute proposes these rules for adoption and authorizes their publication in the Register for the purposes of receiving public comments.

I'll be happy to answer any general questions you have. I also have David Powell from my section that is the electronic toll collection guru.

MR. JOHNSON: We have someone who has requested to speak on this agenda item, and we'll do that first and then we'll address questions to you or to David.

Rick Owens from Cedar Creek, Texas, has asked to speak on this.

MR. OWENS: Section 5(a) actually.

MR. JOHNSON: All right. Thank you, Mr. Owens.

MR. WILLIAMSON: Do you want to comment on 4(a)?

MR. OWENS: No.

MR. JOHNSON: Any questions?

MR. WILLIAMSON: You came all the way here from Cedar Creek, you ought to take a shot when you can.

(General laughter.)

MR. NICHOLS: I've got a question or comment. My comment is with regards to what I am anticipating will come -- this is a proposed rule -- from some of the existing toll authorities, and that has to do with we're saying we're not going to lend financial assistance unless these toll authorities are interoperable with our system, and at the same time, we haven't built our system so it's not up and running so there's no way for them to know if it's truly interoperable with ours which would put them in kind of a great difficulty making comments.

The only point I wanted to make sure is on the record is that the criteria that we have relates to those two systems, both Harris County and the North Texas Turnpike Authority. As we understand it, those systems have been interoperable, those two, as of October and that one of the criteria of ours is to be interoperable with those. So even though it may not be up and running, so they won't know, we're not going to pay for it until it does. That's it.

MR. JOHNSON: Ric?

MR. WILLIAMSON: Phil, a couple of questions and perhaps comments laced in between the questions. I guess the first question is our two magnificent partners in Dallas and Houston are now interoperable.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: What physically has to take place in my car in order for me to enjoy the benefits of interoperability between Dallas and Houston, North Texas and Harris County?

MR. RUSSELL: I think the easy answer is probably nothing else. I would anticipate --

MR. WILLIAMSON: So I just drive through and they automatically know my car and they send me a toll?

MR. RUSSELL: You need to make sure you're in the right lane.

MR. JOHNSON: I think you need a toll tag.

MR. WILLIAMSON: So I do need a toll tag.

MR. RUSSELL: I'm sorry. I thought you had a toll tag. Maybe you shouldn't just drive through.

MR. JOHNSON: Ric will just say, Hi, I'm Ric, and just go right on through.

MR. RUSSELL: That would probably work in some areas, perhaps not on the other toll road there.

MR. WILLIAMSON: So how do you get a toll tag?

MR. RUSSELL: If you don't have a toll tag yet, then the first thing you need to do -- and I'm assuming you would approach Dallas since that's closer proximity; they have a website, they have toll tag stores, they have a number of possibilities -- you would enter into an agreement with those folks, put a deposit -- I don't know if Jerry Hebert is here but I believe it's about a $40 deposit -- and they'd give you a toll tag.

MR. WILLIAMSON: What does a toll tag look like? We're going to use the Socratic method this morning. What does a toll tag look like?

MR. RUSSELL: I like that. The toll tag -- and I don't have one with me, David Powell might.

MR. WILLIAMSON: We're going to do that because we have people in the audience that have suddenly decided toll roads might be a good thing and we want to be sure they understand how toll roads in the 21st century operate.

MR. RUSSELL: The toll tag that's currently being utilized in Dallas and Houston, slightly different mechanism, but essentially it's a tag of about 3 by 4 inches wide, a quarter inch thick; you would put it on the windshield of your vehicle.

MR. WILLIAMSON: On the inside of your vehicle?

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: Does it stick like the inspection tag?

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: It doesn't hang on the mirror like the pussycat, it sticks under the mirror on the window. Right?

MR. RUSSELL: I think that's right, yes, sir, it sticks on the windshield. An important point, Commissioner Williamson, obviously, might hear different discussions in the masses on the radio about my experience in Illinois or my experience here or there is these huge backups at barrier toll plazas. Dallas and Houston, I think, are really doing an outstanding job that if you have that toll tag --

MR. WILLIAMSON: And they have those backups because they're running toll systems developed in the 19th century as opposed to the 21st century which is what we're focused on.

MR. RUSSELL: Exactly. In Dallas and Houston --

MR. WILLIAMSON: Is there anything electronic inside these tags right now, or does it just respond to the transponder?

MR. RUSSELL: Dallas -- and again, I'm probably embarrassing David Powell for my rudimentary discussion, but Dallas has a passive tag which it responds essentially to a signal from the overhead gantry. Houston's tag is active, it's battery-operated where it projects a signal and gets a response. So slightly different technologies, but again, they've been able to work out interoperability.

MR. WILLIAMSON: And they've been able to work it out so that poor little me, living in Weatherford, if I want an interoperable toll tag, I don't have to get a box and set it on the dash of my car to go through Harris County Toll Authority. Is that correct?

MR. RUSSELL: Just a toll tag is all you would need.

MR. WILLIAMSON: Now let me ask you something, Phil. Is it possible under our rules for us to suggest to North Texas and Harris County that we want a toll system that would allow, for example -- I'm not suggesting this, I'm just saying for example -- we would allow Bexar County to distribute toll tags once a year to its citizens and give them a certain amount of toll charge automatically as opposed to them having to pay their deposit? Is that possible?

MR. RUSSELL: I think it's possible. It will be in that discussion of those business rules that we’ll be sitting down with Harris County and Dallas and Bexar County will as well, but it is possible.

MR. WILLIAMSON: So it would be possible for Bexar County -- which apparently there are some people in Bexar County that are uncomfortable about tolls, unlike those of us in North Texas who have lived with them forever, and Harris County -- it would be possible to help people of low income with their tolls if they choose the toll road as opposed to the tax road, not the freeway because there isn't anything free, is there, Phil?

MR. RUSSELL: No, sir, there isn't.

MR. WILLIAMSON: Everything costs money; it's either general taxes or it's toll taxes.

MR. RUSSELL: That is correct.

MR. WILLIAMSON: So we can suggest to Dallas and Houston that we might want a system that allows us a lot more flexibility than the toll roads of the 20th century or the toll booths of the 20th century would allow.

MR. RUSSELL: That is correct.

MR. WILLIAMSON: So it's almost like you never knew the toll booth was there.

MR. RUSSELL: You're exactly right; unimpeded flow.

MR. WILLIAMSON: Other than that you have the choice as a consumer to pay more to take a different route or to continue to pay your general taxes and take the tax route.

MR. RUSSELL: You will always have that option.

MR. WILLIAMSON: There's really two options, isn't it, Phillip?

MR. RUSSELL: Exactly.

MR. WILLIAMSON: You can pay general taxes and build highways or you pay user fees and build highways, but one or the other, somebody has got to pay for the highway because as we all know, Phil, there is no?

MR. RUSSELL: Free roads.

MR. WILLIAMSON: Road fairy, right; no free roads. Thank you, Phillip.

MR. RUSSELL: Thank you, Commissioner.

MR. JOHNSON: Phillip you might take the illustration that you've given one step farther and briefly talk about what the Texas Turnpike Authority is doing in terms of the technology and the interoperability between the two systems that are up and running now. And then you might suggest to Ric that he could chum up to Robert Nichols who has one of the first two small transponders, I believe, that will be operable on the Texas Turnpike Authority.

MR. WILLIAMSON: But I can't do that until we swear in Ms. Andrade.

MR. JOHNSON: That's correct.

MR. WILLIAMSON: Or the Austin American Statesman will write an article about us not doing things right.

MR. JOHNSON: You might just talk in general terms on what path we're going down with TTA in this regard.

MR. RUSSELL: We are having, Chairman Johnson, some outstanding discussions between Dallas, Houston and the department. You are correct, Dallas and Houston have really done a great job of working out some of those business rules about how we read other people's toll tags, how we exchange information and that sort of thing. We've been involved very closely in those discussions.

We are putting together an interoperability plan -- we anticipate it will be ready the first part of the spring -- which will be kind of a 30,000-foot view of how we anticipate interoperability to be functioning on the Central Texas project and as how we relate to Houston and Dallas. By the summer we'll get into some of the specifications as far as the electronics and the signals and that sort of thing.

So we've had some great discussions, we're essentially on the same wavelength as the Dallas and Houston technology. We think that's probably the best technology that is functioning right now, so we'll be in good shape. We've had some great discussions with the CTRMA, we've had some preliminary discussions with Bexar County, so all of those are on our first phase of discussions.

The second stage we'll be visiting with some of the international bridges. That will be a little bit more of a challenge; there's a little more of a scatter shot, I believe, of technology, and once we take care of the first phase, the Dallas, Houston, CTRMA and Bexar County RMA, then we'll delve into some of the international bridge crossings and try to get a handle on their technology and see what interoperability opportunities we have there. That obviously will be a critical component on the Trans-Texas Corridor to ensure that seamless transaction.

MR. JOHNSON: Thank you.

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Phillip, thank you very much.

MR. BEHRENS: Moving on to item 4(b), we have our rules for final adoption. 4(b)(1) will be the final adoption of a rule on Management. Richard.

MR. MONROE: Again for the record, my name is Richard Monroe, general counsel for the department.

These rules are before you now for final adoption. If you approve the minute order, these rules will be published as final rules of the department in the Texas Register. They had previously been published in the Register for public comment, no public comment was received.

The reason for these changes, as explained at an earlier commission meeting, is certain statutes changed, adding to the powers of the chair of the commission -- of course, this is in connection with expanding the commission to five members -- and to make explicit what in some cases might have been an implied power of the chair. I would recommend approval of the minute order.

MR. JOHNSON: Any questions, comments?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. MONROE: Thank you.

MR. JOHNSON: Thanks, Richard.

MR. BEHRENS: Agenda item 4(b)(2) is the final adoption of Finance rules concerning financial advisors and service providers. James.

MR. BASS: Good morning. For the record, I'm James Bass, director of the Finance Division.

Item 4(b)(2) adopts new sections of Title 43 of the Texas Administrative Code relating to ethics requirements for financial advisors and service providers doing business with the commission and/or the department. These rules comply with Senate Bill 1059 from the 78th Regular Legislative Session.

In September you approved draft rules for publication in the Texas Register and one comment was received. That one comment dealt with the requirement of the executive director to sign a waiver to allow the department to invest funds in an investment product offered by the financial advisor doing business with the department, and the suggestion was that rather than the executive director signing a waiver, perhaps something easier to manage would simply be to have the financial advisors disclose to the department that they offer these services if they were selected.

We considered that suggestion but we feel that the originally proposed language better serves the department and the public, and the language before you remains unchanged from that which was published in the Texas Register, and staff would recommend these rules for final adoption.

MR. JOHNSON: Questions or comments?

MR. WILLIAMSON: I have a question.

MR. JOHNSON: Ric.

MR. WILLIAMSON: Do we have financial advisors now, Fast Jimmy Bass?

MR. BASS: We currently have a financial advisor which deals only with the bond issuance of toll road bonds. I believe those are "Krusee Toll Road Bonds."

MR. WILLIAMSON: Absolutely, "Krusee Bonds" and "Ogden Bonds." And is that financial advisor an individual or a company?

MR. BASS: It is a company.

MR. WILLIAMSON: What's the name of that company?

MR. BASS: RBC Dain Rauscher.

MR. WILLIAMSON: And so they give us advice on toll deals.

MR. BASS: And in addition to that, they give us advice on how to invest the bond proceeds. As you're aware, when we receive the bond proceeds, those are spent over time, so in the interim we invest those bond proceeds. The financial advisor offers advice on what they think would be appropriate securities or investment products for the department to put those into.

MR. WILLIAMSON: And do we currently have service providers who provide financial services? This is for financial advisors or service providers who provide financial services.

MR. BASS: I do not believe so. The closest thing might be the trustee bank, Bank One, under the indenture associated with the Central Texas Turnpike Project.

MR. WILLIAMSON: And other than RBC, whoever those people are, we don't have any other financial advisors?

MR. BASS: No, but in the near future we will be going out with a request for proposal, I believe, rather than a request for qualification, looking for a financial advisor to deal not only with project revenue bonds, toll roads, but to also look at "Ogden Bonds," Texas mobility bonds, pass-through tolls, short-term borrowing, many of the new authorities that we received.

MR. WILLIAMSON: And so these rules would apply to anyone we hire that falls into the categories you just outlined?

MR. BASS: Correct.

MR. WILLIAMSON: I mean, this is real important.

MR. BASS: Correct.

MR. WILLIAMSON: Mr. Johnson runs a bank and I think Mr. Nichols owns ten, so I'm not telling them anything they don't know, but it's real important for the public to know drop-dead certain that the relationships between our financial advisors and our decisions on when to incur debt and how, everything is clean and straight ahead. We don't want there to be any doubt about that at all.

MR. BASS: That's one of the reasons why, in reviewing the comment, we felt like it was safer and in better interest of the department and the public to keep that waiver in place simply because there are so many investment products out there, the possibility that a single investment product offered only by our financial advisor that it is going to be so much better than anything else out there that we could get, I think is highly unlikely.

MR. WILLIAMSON: Mr. Behrens, you're going to hear this a lot over the next few months. The legislature and the governor decided to take a chance because our transportation needs are so immense, and we just can't blow it even once. We've got to be aggressive with the use of these tools, but we've got to be so clean and straight ahead that there's no hint that we're doing anything improper or even dumb. Know what I'm saying? So let's be wise in who we pick and what kind of barriers we keep between those people and the investment decisions. Thank you, Mr. Chairman.

MR. JOHNSON: James, a question. You brought up the idea that we are in the process of going out for an RFP for a financial advisor. Do you envision that we will have one financial advisor to cover the waterfront, if you will, these many varied products and tools that we have, or that we would have a financial advisor for each category or maybe a couple of categories?

MR. BASS: Right now what we envision is having a single provider so the left hand will always know what the right hand is doing, so to speak. Our programs are so broad and complex, rather than segregating those, we felt the best approach was to have one who would be able to comment on what impact one program might have to another and help us develop all of those programs in the most efficient manner.

MR. JOHNSON: Do you see an instance where a financial advisor and a service provider on one or more of these methods might be one and the same?

MR. BASS: I would doubt that.

MR. WILLIAMSON: You kind of struck to what I'm concerned about.

MR. JOHNSON: Absolutely.

MR. WILLIAMSON: It's real important. We don't ever want for anyone in the business to think or for the newspapers to write a story on we're borrowing money and the same guy that helped us borrow the money is also investing the money.

MR. BASS: And it hasn't been published yet, but I can tell you in the draft RFP for the financial advisor firm it puts them on notice that they would not -- there are some firms who provide financial advisory services and also serve as an investment banker or underwriter, as you're aware.

MR. JOHNSON: Represent the underwriting group.

MR. BASS: In our RFP for financial advisor services, we put them on notice that if you are a financial advisor, you will not be able to be involved in the selling of our debt to the market because that could, obviously, be a conflict of interest and we want our financial advisor looking out only for the best interests of the department.

MR. JOHNSON: Good. Thank you. Is there a motion?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

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

MR. BEHRENS: We have agenda item 4(b)(3) which is Contract Management and this deals with awarding highway improvement projects and purchase of services. Joe.

MR. WILLIAMSON: A new target.

MR. GRAFF: Good morning, commissioners. I'm Joe Graff, the deputy director of the Maintenance Division.

The minute order before you concerns final adoption of rules for two statutes that were passed in the last legislative session. Amendments to Section 9.18 revises the performance bonding requirements on certain asset management-type contracts to an annual two-year bond instead of bonding the total amount of the contract. New Section 9.21 allows the department to use the purchase of service process for activities on the right of way up to $15,000.

The proposed rules were approved by the commission on September 25 of this year, no comments have been received, and the Maintenance Division recommends approval.

MR. JOHNSON: Any questions?

MR. WILLIAMSON: Oh, yes.

MR. JOHNSON: I figured you might have something for Joe.

MR. WILLIAMSON: New face, we've got to ask him something. I'm just trying to figure out what the question is.

(General laughter.)

MR. WILLIAMSON: Well, tell me, are we going to save money under this deal?

MR. GRAFF: Absolutely.

MR. WILLIAMSON: Are we going to be able to do things faster and cheaper?

MR. GRAFF: Absolutely. Especially the purchase of service process will allow us to very quickly acquire the services of a provider to perform a small contract on a right of way where now we have the use the highway improvement statutes, go through the advertising requirements, quite frequently about a three-month process. With the purchase of service process, we'll be able to call a provider to get out there to do a $2,000 job or something like that, where it might have taken $2,000 worth of work to prepare the proposal to let the $2,000 contract.

MR. WILLIAMSON: To your knowledge, is this much different from the authority the legislature gives cities and counties?

MR. GRAFF: No. It should be about the same.

MR. JOHNSON: Joe, do we do more contracts less than $15,000 or do we do more contracts that are greater than $15,000?

MR. GRAFF: Most of our contracts now, routine maintenance contracts probably average around $100,000. And this would really provide an opportunity for small businesses and probably save us a lot of money in the long run.

MR. NICHOLS: That's pretty close to the comment I was going to make in that what this really does is before, because the process was more burdensome, we almost had to lump these things into much larger contracts for efficiency purposes which kept a lot of small contractors out of the loop. Big contractors begin as small contractors, and to help the industry, this gives small businesses an opportunity to get a start, get going. Is that correct?

MR. GRAFF: Absolutely.

MR. WILLIAMSON: So not only will it benefit small businesses generically, but in specific this could be a major step for benefitting minority-owned businesses.

MR. GRAFF: Minority-owned businesses, any of the small businesses it will certainly help develop that industry and help them evolve into larger contractors.

MR. WILLIAMSON: That's wonderful.

MR. NICHOLS: Since you brought up small contractors and minority businesses, Mike, our executive director, I think you were showing me some percentages. Do you want to share with the group some of our most recent percentages?

MR. BEHRENS: When we look at our DBE performance for Fiscal Year 2003, our goal was about 11 percent; we awarded 15.4 percent to DBEs in '03, the largest ever for the department.

MR. JOHNSON: Is that dollar volume?

MR. BEHRENS: Yes.

MR. JOHNSON: Excellent.

MR. WILLIAMSON: That's wonderful.

MR. BEHRENS: We now have I think it's about -- I'm trying to remember the number -- we have a large amount of DBE prime contracts, in other words, where they were the prime bidder, the general contractor and not being subs, so we're moving in the right direction. The last quarter of '03 we had 17 percent of our contract went to DBE work.

MR. NICHOLS: And this is a step that not only encourages and helps that, but it does it more efficiently for the department and the state.

Are you ready for a motion?

MR. JOHNSON: Yes, sir.

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Joe, thank you.

MR. GRAFF: Thank you.

MR. BEHRENS: Agenda item 4(b)(4), we have two rules under Traffic Operations for final adoption: one concerning the Logo Sign Program, and the other one the restrictions on use of highway lanes.

MR. LOPEZ: Good morning, again, commissioners. For the record, my name is Carlos Lopez and I'm director of the Traffic Operations Division.

The minute order before you proposes final adoption of revisions to Section 25.406 concerning the Logo Sign Program. This change modifies the criteria for restaurants to participate in the program as laid out in House Bill 1831. A restaurant would now only have to be open ten hours a day, six days a week, and serve two meals a day in order to participate in the program. A restaurant would no longer need to seek a variance to operate for this number of hours. We believe this should streamline the application process for program participants and decrease the number of variances the department has to process.

This revision was published in the October 10 edition of the Texas Register and no comments were received. We recommend approval of the minute order.

MR. JOHNSON: Any questions, comments?

MR. NICHOLS: So moved. Oh, did he have a question?

MR. BEHRENS: Just let it lay.

MR. WILLIAMSON: No. I'm following Mr. Behrens' advice, I'm letting it lay.

(General laughter.)

MR. JOHNSON: Talking about radio stations? I'll second the motion.

MR. WILLIAMSON: Did he move?

MR. JOHNSON: Yes, he did.

MR. WILLIAMSON: I'll second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

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

MR. LOPEZ: The next minute order proposes final adoption to revisions of Section 25.601 through 25.603 and new Section 25.604 concerning lane restrictions on the state highway system. These sections implement House Bill 1208 and Senate Bill 514 of the last session.

The revisions to the existing sections allow counties to propose lane restrictions by class of vehicle on the state system as authorized under Senate Bill 514. Municipalities have had this authority since 1997; TxDOT must approve these types of restrictions before they become effective.

New Section 25.604 allows TxDOT to initiate a lane restriction as allowed under House Bill 1208. The new section establishes the criteria the department will follow when creating a new restriction and the coordination that will occur with local governments.

The department conducted a public hearing on these rules on October 21. We didn't get any comments at the hearing but we did get two written comments, one supporting the rules and one opposed to the rules. We provided a response to these comments in the adoption preamble. We recommend approval of the minute order.

MR. JOHNSON: Any questions?

MR. WILLIAMSON: Who opposed?

MR. LOPEZ: We had one independent trucker write in a letter saying that he thought that keeping trucks to only one lane would be bad for business. Well, he misunderstood and what we're saying is they typically will not be able to use only one lane of a freeway and can use the rest of them. So he thought trucks were going to be single file in one lane on any given freeway, so it was kind of a misunderstanding on his part.

MR. WILLIAMSON: And who was the one party that wrote in support of it?

MR. LOPEZ: Actually we had a letter signed by six different individuals from the Metroplex area saying this is a neat thing to do.

MR. WILLIAMSON: So generally speaking, urban leadership appears to support this?

MR. LOPEZ: We're having a great response on this on lane restrictions. We've done it in Houston, San Antonio is looking at it, Austin is looking at it from Georgetown to Buda. With the accident reductions we saw in Houston, we think this could improve safety and mobility at the same time.

MR. WILLIAMSON: Would capital expense to implement some of this stuff fall under the "Ogden Bond" category?

MR. LOPEZ: No. This is typically something we would do within our regular funding.

MR. WILLIAMSON: Thank you, Chairman.

MR. JOHNSON: Is there a motion?

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries.

MR. LOPEZ: Thank you, commissioners.

MR. JOHNSON: Thanks, Carlos.

MR. BEHRENS: We'll go on to agenda item 5(a) where we're looking at establishing guidelines for evaluating mobility projects on our state system for development to turnpike projects. Amadeo.

MR. SAENZ: Thank you, Mr. Behrens. Good morning, commissioners. For the record, I'm Amadeo Saenz, assistant executive director for Engineering Operations.

Item 5(a), commissioners, before you is a minute order that describes the necessity for toll roads and the implementation as part of the state highway system. Transportation is essential to the state's economy, it is what keeps Texans moving, but right now a serious transportation threat that is facing many parts of the state is the continuing travel delay due to congested highways.

From 1990 to 2000, traffic congestion has cost Texans $45.6 billion in terms of wasted time and fuel. In the same decade, the number of registered vehicles increased by 23 percent and the vehicle miles traveled increased by 41 percent, while only 3 percent more lane miles were added to the state highway system. The increased traffic demand requires TxDOT to spend approximately half of its total budget on preserving the existing highway system, leaving less for the needed expansion projects.

Texas is the second most populous state in the nation and the population projections indicate a continuing increase. In 2000 the state's population was 20.9 million and it is projected to be 29.6 million in 2025. What this proves is that the transportation system is under strain. The State of Texas is nearing a crisis because we can no longer keep pace with the demand. Instead of doing business in the same old way, relying on the pay-as-you-go basis, we recommend implementing new financial options approved by the legislature.

Tolling can help us turn the corner on congestion by delivering much needed highway improvement projects sooner and stretching limited state highway dollars further so that transportation needs can be met. Tolls can help bridge the gap between transportation needs and resources. In exchange for the cost, toll roads offer motorists a time savings, predictable arrival time, and an alternative to sitting idle in traffic-clogged highways.

Tolling is not for every road. However, projects that expand the system should be thoroughly evaluated as toll projects. In other words, all controlled access mobility projects should be considered as potential toll projects that will undergo a toll feasibility study and public input before the decisions are made.

The minute order before you directs the department to establish and implement guidelines for evaluating mobility projects on the state highway system for development as toll roads. These guidelines are as follows:

One, controlled access mobility projects in any phase of development or construction must be evaluated for tolling; this includes new location facilities and increased capacity projects such as adding additional lanes or constructing new main lanes on existing facilities.

The review and evaluation of projects for tolling shall be performed in accordance with the applicable statutes and rules, including evaluating the conversion of a non-tolled highway in accordance to the toll conversion rules.

Three, the revenue generated by toll projects that is not needed for debt service, operation or maintenance of the toll road should remain in the local area in which the project is located so that other transportation facilities may be constructed.

Staff recommends approval of this minute order.

MR. JOHNSON: Rick Owens of Cedar Creek has asked to speak on this item. Mr. Owens, welcome.

MR. OWENS: Glad to be here. Thanks for the opportunity to address this issue.

My interest is speaking out in favor of funding our roads with increasing the gas tax as opposed to converting additional tax-built roads to toll roads. The toll road conversion would amount to double taxation and could lead to additional expenses for having to establish toll booths and slow down traffic to stop and pay tolls -- though the automated system would take care of that. But the overhead of collecting tolls as opposed to using the existing system, I would just speak in favor of increasing gasoline taxes as opposed to converting existing roads to toll roads.

MR. JOHNSON: Thank you. One thing that I hope you're alert to is that the gasoline tax is a pretty inefficient way of funding our roads, and the reason is for every dollar that we collect, about 60 cents gets back into transportation, both at the federal level and also at the state level. By Constitution, 25 percent goes to education -- which is a wonderful way to support education -- but there are other diversions after the gasoline tax is collected, and at the federal level we lose a portion, 20 percent to transit projects, and then we in Texas are a donor state and we send a dollar to Washington and we get somewhere between 86 and 88 cents back. So if you go through the mathematics of that, it becomes a pretty inefficient way of generating the money that we need.

Tolling, on the other hand, if you take out administration and collection fees -- and one of the parts of our preamble here is that the money that is positively cash-flowed after debt service and maintenance stays in the area -- it means about 98 percent of the money gets back into the system. So just from a pure efficiency standpoint, that's one of the reasons that we are headed down the path. The other one, I believe, is that to do projects more quickly -- and oftentimes it will be the difference of a decade -- by going the leverage way through bonding.

And then I'll also throw this open to Robert or Ric if they have any observations on your comments. But I just wanted you to be aware that there are a lot of moving parts, if you will, to this equation and we're trying to consider them all.

MR. OWENS: I had one other question. If a tax-built road was converted to a tollway, would there be at some point in the future, or in the case of any new road built as a toll road, is there some point in the future when that toll road will have funded its construction and then be converted to a non-toll road, or is this a perpetual tax authority as we've seen in the East Coast where they may have a bridge or a turnpike and so on that's been built with tolls but they've long since paid off that road and I believe in many instances exceed the maintenance expenses and use that just as a continuing source of revenue? So they're charging the users of that facility in excess of the cost of building and maintaining that facility.

MR. JOHNSON: That's an excellent question. I think as Amadeo Saenz pointed out in his presentation, there's considerable strain, financially, on our system. We're spending more than half of our budget just trying to keep our system up to date and maintained in the condition that the users of the system want a smooth ride, so our maintenance costs, as a percentage of our total budget, continue to rise. And for that reason, this is one person and I don't speak on behalf of all the commission -- I think that you will see that we will continue to operate these as toll facilities, and please be reminded that we view these as an investment of an area of the state, and by the guidelines we're obligated to keep the positive money that's generated, even after the bonds might mature and be completely paid off, that they will be reinvested in that area. So there is a return to those users that have paid the toll in that there will be other mobility projects in their area which should facilitate their travel and aid in commerce.

And I've done all the talking here so I would throw it open to Robert and Ric. Ric, I know you have something.

MR. WILLIAMSON: I'll yield to Robert.

MR. NICHOLS: Let me just address that specific question, the question of when the bond is paid off, do the toll booths come down. I remember during the legislative session where this entire issue was debated quite extensively by the committees both in the House and in the Senate. Many of them asked me the very same question, so it's on record, my response, and my response was that regardless of whatever decision we make -- I mean, half the committee may say I think when the bond is paid off, it ought to come down, and the other half of the committee might say -- we're talking about elected officials -- I think we need the option of keeping them open, and my response was that regardless of what decision this commission might make or the legislature across the street might make this year or next year, 30 or 40 years from now when those bonds are paid off, it will be a totally different elected body and appointed body, it may even be different agencies, that whatever decision they make will be the final decision, it won't be up to us.

Our responsibility at this point in time is to take what is greatly and desperately needed, building this system the best way we can to provide economic opportunity, safety for the public and get these people home, get them to work, get them to school, with the only resources that we have available to us. That's our responsibility, and then the elected officials will make that decision at some point.

The nice thing about establishing regional mobility authorities -- which you have in this area -- is that the projects that they develop inside their regional mobility authority will be decisions that are made locally. If it is a toll project by the regional mobility authority, then it will be their decision; it won't be ours, it will be theirs. If it is a state project like 130, then it will be whoever is sitting here or whatever the elected body across the street says. But without that tool, I do know that these projects could not be built, many of these projects.

And I drove out that way last night and took off on 35 at five o'clock just to go out 183 where the new construction was and then out on 620, and I will tell you it took me one hour. It's not just 183, all those roads are plugged up. We have got to do something. And what has occurred in the past is that the general public does not support general tax increases, neither does the governor nor the legislature, but at the same time the need is so great that something has to be done, and the most reasonable thing is a user fee on new capacity if we can build them quicker. The existing roads that are out there that people are driving on, the action that we're talking about today will affect new capacity, new locations primarily.

MR. OWENS: I had one additional concern. When considering what existing roads to convert to toll roads, that the commission consider whether there are in place alternatives or whether you'd be holding a gun to people's heads saying if you want to get from Point A to Point B, you have to use the toll road. So consider that, please, when you make rules establishing what roads could be converted into toll roads.

MR. JOHNSON: Ric, did you have anything?

MR. WILLIAMSON: Yes. First of all, I want to thank you. Your testimony, the words you used -- words mean something, and the words you used are accurate and rational. You never said freeway because there are no free roads; there are either tax roads or toll roads, there are no free roads. There weren't any free roads 50 years ago, there won't be any 50 years from now.

I hope you'll stay through the balance of the commission's questioning of its own staff because you're going to hear some information that I think is important to helping you and the other citizens of the state make a decision about the wisdom of this approach, but let me just leave you with a couple of comments. We don't disagree with you about forcing you to pay a toll. Nothing in our rules suggest, no one in the legislature has suggested, and I can assure you Governor Perry has not suggested that we make people use toll roads. The governor's specific instruction in the statute and to the commission is where tax road or open road alternatives exist, we will not force anyone to use a toll road as their only means of moving from Point A to Point B. That's the first point I want to make.

The second point I want to leave you with is we are all creatures of the political process. We're appointed by a governor elected by the people, and a Senate confirms us, also elected by the people. We are always going to be responsive to the political process. If enough mayors and county judges, large enough number of mayors and county judges, if a large enough number of senators and House members, and an activist governor -- as Governor Perry is -- feel we're going in the wrong direction, they're going to tell us that and we're going to respond. We do not take lightly comments from Senator Barrientos, from Senator Ogden, from Mr. Krusee, and certainly from Mr. Perry. We are creatures of the political process

So I don't want you to leave this room thinking that what you had to say didn't matter and that we don't listen to those folks, because we do. But you're going to hear some pretty interesting information in the next few minutes that might, might give you an opportunity to rethink your position.

MR. OWENS: I am in favor of accelerated development of the needed road structures to improve our infrastructure and economy, so whatever is the most efficient way to do that would be acceptable, would be good. Thank you.

MR. JOHNSON: Thank you, Mr. Owens.

MR. WILLIAMSON: Well, well, speak of one of the greatest guys I've ever met.

MR. JOHNSON: Also wanting to speak on this agenda item is Senator Barrientos. Senator, welcome. We're delighted that you've come a great distance to be with us.

SENATOR BARRIENTOS: May it please the commission. Commissioner Williamson, you have great eyesight.

MR. WILLIAMSON: I didn't know you were back there, I swear.

SENATOR BARRIENTOS: I don't know if we've been hunting together, but you have great eyesight and insight.

Let me say you have so many people that want to speak, I want to keep mine to a minimum, two minutes, hopefully.

As has been mentioned, I am sure, House Bill 3588 was for the acceleration of the infrastructure, the speeding up of construction financing, et cetera, et cetera, et cetera. The bill was about yea thick, complicated and legalese beyond my dreams.

Just two quick questions here to consider. Could the department elect to toll any of the projects, for example, mentioned in the American Statesman, that would be to increase capacity on, for example, parts of 183 without any more local input than one public meeting held by TxDOT? What is the answer to that?

MR. NICHOLS: Are you talking about putting tolls on existing lanes?

SENATOR BARRIENTOS: Correct, without any more local input than one public meeting held by TxDOT.

MR. NICHOLS: Do you want to get our legal counsel up here? My understanding is we do have to have approval by the county commissioners court. Is that correct? Yes, before we would do that, we would not convert an existing lane unless we have a supporting resolution from the county in which that project exists, and that's in the statute.

SENATOR BARRIENTOS: All right. Would a local RMA have to agree with the department's decision? You just said that the commissioners court would have to.

MR. NICHOLS: Okay, there's four different categories: you have a regional mobility authority like you have in Central Texas; you have a turnpike authority like you have in Houston or North Texas; you have a toll project by the Texas Turnpike Authority, that's us; and then the fourth one is a county toll authority. It's my understanding that obviously on the county authority, if they want to do it, they're going to have their own support to do it. On the other two, the TTA or the regional, before we would ever even get into converting any existing lane, the county on those three would obviously have to support it before it takes that step. And on like the Central Texas or any regional mobility authority, the governor himself or herself at the time would have to approve it.

You cannot do any project -- obviously it would have to connect with our system which we would have to approve, and it would also have to go through an environmental process which includes a public hearing. So you've got checks and balances in the statutes and in the rules.

SENATOR BARRIENTOS: That's the main question that I'm after, checks and balances. To clarify even a little bit more, what about work that has not yet been completed, almost completed, like for example, US 183 in southwestern Williamson County?

MR. NICHOLS: The action today is the establishment of guidelines for evaluating this very thing, at what stage should we or shouldn't we, what financials are involved and all those kind of things. So the minute order today -- which was posted on the agenda that way -- is to authorize the establishment of guidelines for evaluating mobility projects for development as turnpikes. That is the action today. So that is the question: at what point in the process is it too late?

MR. WILLIAMSON: In other words, we're not making that decision today, Senator. We're putting it to the public and now we want -- and as you know, I live with our former colleague Cliff Johnson to this day, and we got up this morning to have coffee, and he said, are you guys fixing to pass some kind of rule to let you put up toll roads everywhere? And I said, no, we are starting the public process that will incite senators and House members and public citizens -- like the fellow from Cedar Creek -- and the newspapers and the transportation community and the constructors all across this state to have a dialogue that might last 30 days, it might last 60 days, it might last 90 days, about the best way for us to collectively as a team, one Texas, figure out how to solve this problem. This is just the beginning point today.

Senator, you know you've been a great friend of transportation and one of the requirements you and, as I recollect, Senator Lindsey from Harris County made of us when the legislation was being passed is that any excess revenue from these new toll lanes or new toll roads remain in your districts where your taxpayers paid the tolls to expand their transportation facilities, including -- and in fact, I think this was your wording -- including public transit and rail. And one of the things that hasn't gotten a lot of attention from our buddies to my right and your left, is the fact that we're laying the groundwork for cash flow to provide for Clean Air initiatives and for the expansion of public transit systems across the state. That's part of what we're doing here. It may take us a few years but we're certainly further along than we were a year ago.

SENATOR BARRIENTOS: To conclude then, what you said I think is the bottom line: checks and balances.

MR. NICHOLS: Yes, sir, they're there.

SENATOR BARRIENTOS: I'm already getting phone calls, as you can imagine, as other senators are. We're talking about rules being developed, a dialogue, as you said, Commissioner Williamson, and as the public expects of us -- as you well remember -- we are supposed to stay ahead of the game. So I thought I'd come in here and wish you a very Merry Christmas and ask you to be cautious and listen to the public and always have input and have those checks and balances: commissioners court, elected body, sounds good. So we will be back with some other input. Thank you, and I will depart now.

MR. NICHOLS: Senator, I think the reason you're getting those phone calls is if you read the news media, what was on the radio, what was in the newspaper, obviously there were some statements made -- and I listened to the radio this morning myself and heard them making statements that are just totally incorrect and pretty exaggerated.

SENATOR BARRIENTOS: Talk shows tend to do that.

MR. NICHOLS: They get pretty exaggerated, and everybody who listened to the radio this morning got the impression that we were fixing to take an action that turns these things into toll roads, or we're going to give Mike Behrens the authority to just turn them into toll roads and never vote on it and have no public hearings and all that -- which would get people pretty excited, and obviously that's what they did, and I think that was the intent is to create excitement. I can assure you --

MR. JOHNSON: Not by us.

MR. NICHOLS: Not by us. We like excitement but not that type. The process you established is just as you said, there are checks and balances in the statutes and I can assure you that we're going to ensure that this is a public process and we are not going to try to -- regardless of the technicalities, we're not going to try to violate the spirit of that either. We will take steps all the way through this thing, and that's one of the things that we're doing today so this can become an easier process for people to understand is at what point would we consider one, under what point would the financials be, all this. So we're going to be directing -- assuming we approve this which I think -- to do that.

MR. WILLIAMSON: This is not going to work unless everybody has a sense of ownership. We've got two choices: we can raise taxes or we can build things with user fees, and those are the two great philosophical divides of our country. Unless everybody feels good about this process, it's not going to work, and it's got to get started.

SENATOR BARRIENTOS: Three things: Godspeed; my good friend the mayor of Laredo is here, treat her nice; and happy holidays. Thank you.

MR. WILLIAMSON: Happy holidays, Senator.

MR. JOHNSON: One thing I wanted to point out in response to what the senator brought forth, and Amadeo Saenz mentioned it in his preamble, and that is public input, and this commission and this agency takes that responsibility very highly, and so there will always be public input, especially in these issues that affect each and every one of us. I cannot say that in strong enough terms: we take that responsibility very, very highly.

Any other questions or comments?

MR. WILLIAMSON: Oh, yes. Let me go for a while. I need you, Amadeo, and I need Jimmy Bass. This is for the man from Cedar Creek. If the legislature were to raise the gasoline tax a nickel, how much money in the first year after full implementation would be made available to us for transportation construction? It's real important, Rick. One nickel.

MR. BASS: Good morning. Again for the record, I'm James Bass, the director of the Finance Division of TxDOT. In our latest projections, if the gas tax were to increase by a nickel, it would generate for the state roughly $700 million. As was mentioned earlier, one quarter of that would go to fund education. That would then leave around $520 million for deposit to the State Highway Fund. All of that $520- does not go solely to TxDOT, there are other purposes throughout the state, the Department of Public Safety being one of the primary users of that fund.

But out of that $520-, if we take a positive approach and say we were to get all of that, currently 50 percent of what's in our budget and what TxDOT does each year, roughly 10 percent, goes to just maintaining and preserving the existing system. There's administration, there's design, right of way, everything else, and if you look at --

MR. WILLIAMSON: Okay, stop. So being very aggressive, $520 million would be available to us; historical averages are $260 million has to go to maintaining the existing system; $260 million would be available for construction. But let's just say we're doing real good on our maintenance program, and let's just assume for the purpose of the discussion I want to have for Rick from Cedar Creek and our friends to my right and your left, $520 million becomes available to us. Now, what's the gasoline tax in Texas now, the state tax?

MR. BASS: Twenty cents a gallon for gasoline and diesel.

MR. WILLIAMSON: So we're speaking of a 25 percent increase in a general tax to get us $520 million in the first full year of implementation. Correct?

MR. BASS: Correct.

MR. WILLIAMSON: Now, don't leave, kind of hang tight.

Amadeo, we're in the process of building State Highway 130 or a portion of State Highway 130, I believe from just south of Georgetown to just north of Lockhart or just east of Lockhart?

MR. SAENZ: Right about there, right around the airport.

MR. WILLIAMSON: And about how many miles is that, not lane miles, geographic, normal-person miles? Do you need to lower the thing after Carlos was here?

MR. SAENZ: No, sir. I think I need to raise it.

(General laughter.)

MR. SAENZ: I think we're looking at about 40 miles.

MR. WILLIAMSON: Forty miles. Are you familiar with the interchange on basically the northeast corner of the city of Dallas called the High Five?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: How much is that interchange going to cost?

MR. SAENZ: That interchange cost about $250 million.

MR. WILLIAMSON: $250 million for the interchange.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Now back to State Highway 130, when we're finished building State Highway 130, about how much would it have cost?

MR. SAENZ: That whole system of State Highway 130 and 45 and 1 is going to cost about $3 billion.

MR. WILLIAMSON: $3 billion?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Now, pay attention. How many years is it going to take us to build and open 130?

MR. SAENZ: 130 will be open by 2007, the end of 2007.

MR. WILLIAMSON: So that was a six-year project?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: So about $500 million a year.

MR. SAENZ: That's correct.

MR. WILLIAMSON: Stay real close please. James, I've got a bad memory; I'm getting old, just coming off the flu. Now, what did you tell me that a nickel would give us a year?

MR. BASS: For the State Highway Fund, roughly $520 million a year.

MR. WILLIAMSON: So we could raise taxes a nickel and we would have enough money to build State Highway 130 over the next six years, and we wouldn't have any of that additional nickel to be used anywhere.

MR. BASS: And one other point. In the traditional method over the six-year period, you would be assuming that there was no inflation cost for construction.

MR. WILLIAMSON: So we'd have to raise the gasoline tax on a citizen in Texarkana, and a citizen in Amarillo, and a citizen in Plano, and a citizen in east Houston, and a citizen in Brownsville, and a citizen in Laredo in order to provide funding for the next six years to build State Highway 130. Well, I guess if we're going to build 183, then we've got to raise taxes a little bit more, so I guess we could raise taxes a dime and that would get us a billion. Right?

MR. BASS: Correct.

MR. WILLIAMSON: Now, are there studies to indicate that at what point the general taxation diminishes in terms of people crossing the state to buy gasoline or using less gasoline?

MR. BASS: There are studies on that and more rather than just looking at the tax, it's the overall cost, and it's actually fairly elastic -- I believe I'm using that correctly -- as we saw during this last summer when gasoline prices were $1.50 or $1.55, none of that increase was due to a federal or state increase, but we did see, for a while, revenue come in at the same point. Here recently, we've actually seen our gas tax receipts level off in the state even though population, vehicle miles traveled and everything else continue to go up, primarily due, I'm assuming, to the fuel efficiency of the fleet that's out there.

MR. WILLIAMSON: So at 10 cents we'd generate in the first full year a billion, so now we can build five exchanges a year and we can build State Highway 130, and the citizens in Richardson will get to pay another dime, and the citizens in Weatherford get to pay another dime, and eventually we'll get around to them.

But let me ask you something. How much capacity did we lose from 1989, the height of our last economic weakness, through 2003 by not increasing our gasoline tax? How much construction capacity did we not build during that time period?

MR. SAENZ: Right now we're only able, as far as we look at the capacity projects, we're able to do about 35 to 36 percent of the projects that are identified as needs, so we can do one-third of our projects.

MR. WILLIAMSON: So if I take that two-thirds and apply it to our annual budget, could I infer that we lost about $3 billion times 13, about $39 billion in construction capacity?

MR. SAENZ: That's correct.

MR. WILLIAMSON: Do you have an opinion of how much the legislature would have to be persuaded to raise the gas tax in order to make up that $39 billion?

MR. SAENZ: I think looking at the numbers that you mentioned, we would have to raise the gasoline tax about 30 cents to 40 cents.

MR. WILLIAMSON: So we'd get to go from 20 cents to about 50 cents, and would that put us pretty close to the highest gasoline tax in the nation?

MR. SAENZ: I believe so.

MR. WILLIAMSON: Maybe by a factor of two. Okay, I think I've had enough of that. Thanks.

So the point, Rick, is maybe we should have been raising the gasoline tax the last 15 years but we didn't, and now we've doubled our population and we're increasing faster, and you almost can't raise the gasoline tax fast enough to do any good before you're having to build the next project. The only rational way that, it appears to me, the legislature and the governor can approach is to say that existing open lanes, tax roads, tax lanes, will be maintained for those of us who pay taxes, and new capacity will be built quickly with debt incurred by the commitment of toll collections.

And so those of us who choose to pay the tolls will travel a different lane than those of us who choose to pay -- let me just rephrase -- those of us who choose to pay the taxes and the tolls will travel a different lane than those of us who choose to pay the taxes. But the truth is -- and the governor realized this long ago -- for whatever reason there is not enough tax capacity left right now to do what we need to do in this state to remain competitive and open and welcoming to the estimated 6 million new Texans that will arrive in the next 15 years.

The fact of the matter is there is no road fairy, money doesn't fall from the sky, these things cost something, it's a matter of figuring out how you're going to pay for them. Thank you.

MR. JOHNSON: Robert.

MR. NICHOLS: I kind of tried to take this and break it in two pieces and go a little bit different direction, and it's beyond really what's in this minute order but it relates to what the general concern is by a number of people in the audience, and that is when you're talking about toll roads in Texas, I think of it in two totally different groups. One is if you're going to have tolls on new locations or new expanded capacity only, only tolling that new capacity. And the second piece has to do with converting existing lanes.

As you heard Senator Barrientos talking a while ago, if you're talking about converting existing lanes, we're talking about a whole different level of scrutiny and processes which it must go through. The legislature not only put those checks and balances in there, but they also said that you can only do that if you're going to expand capacity or extend that road. So it takes a totally different level of scrutiny.

The primary thing we're dealing with -- although that will be considered at some point -- has to do with new capacity and new locations which are desperately needed not only in this area of the state but in many other areas of the state, and the legislature not only gave that authority but it went out to the general population two years ago in a constitutional amendment to give us the authority to take state money and help build these toll roads using state money, and then the legislature obviously continued to expand that, so that's certainly nothing that's new.

This particular minute order, this minute order we're voting on, all it does -- because I know there's concern out there that we're going to take an action that's going to turn everything into a toll road and give our executive director -- this is what I heard on the radio -- the authority just to make them a toll road at his will. All this minute order does is it directs the executive director to establish and implement guidelines for evaluating mobility projects as toll roads, and then it breaks down into several different categories.

So we're asking him, we want to evaluate these things and we're asking him to establish guidelines of how we're going to evaluate that. The actual vote would come from us after public hearings and an environmental process. So I think that was one of the main things to point out.

I also feel that I've got to make another comment, and I always have a general rule of never arguing with people who buy ink by the barrel, but when our agency is accused, in effect, of illegal acts -- and I'm directing this really more to the Austin Statesman -- when you make a claim that we're doing things in secret, in effect that's saying we're doing something illegal, and we're not, I take great concern for responsible reporting. This department takes great pride in going out to the public, involving the public, having public hearings, doing everything in the open -- that's part of what we're doing today and it's what we will continue doing in the future.

It did, in the headlines even, say that we had secret stuff, and I know personally, I had conversations with some of the reporters with the Statesman concerning the very issue of whether or not a working document -- which is recommendations which are constantly changing -- from the staff coming to us should be turned over to the newspaper for them to review before our staff has even completed their recommendation. In my explanation, not only do we have the legal background of it truly is a document in progress, a work in progress which we're not required to because it's not final until we vote on it, but it is constantly changing also. And I had explained that if they turned it in a week ago, for instance, and it changes -- which these things are in constant motion; you have to be on your toes to keep up with them -- then, in effect, then they would say if it changed that you deceived us because what you said was the recommendation didn't turn out to be the recommendation, and so on.

MR. WILLIAMSON: No, not those guys.

MR. NICHOLS: Well, anyway. I do take offense when we're accused of doing something illegal.

MR. WILLIAMSON: They're all fair in Dallas, Robert.

MR. NICHOLS: And anyway, I am greatly offended by that. I don't expect an apology in the paper or a retraction, but if there was one in there, it would be welcome. That's it.

MR. JOHNSON: Thank you, Robert.

MR. WILLIAMSON: Thank you, Robert.

MR. JOHNSON: Any other questions or comments? If none, we'll entertain a motion for approval.

MR. NICHOLS: So moved.

MR. WILLIAMSON: Second.

MR. JOHNSON: All in favor, signify by saying aye.

(A chorus of ayes.)

MR. JOHNSON: Motion carries. Amadeo and James, thank you very much.

MR. WILLIAMSON: Wait a minute. Where did Rick go? Now, I might not have changed your mind, but do you see the dilemma we have to face? It's not just a matter of raising taxes, and it's not at our pay grade to recommend that to the governor or legislature anyway. But the point is the problem has gotten too far for it to be a simple "let's raise the gas tax." It's a little bit more complicated than that. We could raise the gas tax a lot and in ten years we'd be caught up and we'd have a lot of cash and we'd have all these projects built, I suppose.

But you asked the question -- I meant to work this into my dialogue -- will you take those tolls off when the road is paid for? Let me turn the question around to you. How long have you been in our state?

MR. OWENS: Six years.

MR. WILLIAMSON: I can tell you in this room there are people who have been in this state 60-70 years. If anyone knows when a gasoline tax has been lowered, raise your hand. You mean the taxes never go away? I'm shocked. Thank you.

MR. JOHNSON: Thank you.

MR. BEHRENS: We'll go to agenda item 5(b) and 5(c), they'll be presented together.

MR. RANDALL: Good morning, commissioners. My name is Jim Randall, director of the Transportation Planning and Programming Division. As Mr. Behrens said, I'd like to present items 5(b) and 5(c) together for your consideration.

Transportation Code Section 201.612 requires commission approval of an international bridge over the Rio Grande. The department received Webb County's international bridge application on September 17, 2003, and in accordance with Title 43 TAC, Section 15.74, conducted a public hearing on October 20, 2003, to receive public comments on the project. The department also received the City of Laredo's international bridge application on September 22, 2003, and conducted a public hearing on October 29, 2003.

The department submitted both applications to all entities required under the international bridge rules and requested their review and comments on each application. Title 43 TAC, Section 15.76 provides that the commission consider commitments from the appropriate jurisdictions of the United Mexican States to provide adequate roadway connections to the proposed bridge and the consistency of the construction of the bridge with the regional transportation plan developed by the metropolitan planning organization having jurisdiction over the project. This section also provides that the commission consider the views and comments of the entities to which the applications are required to be sent, including any entity which may significantly be affected by the project.

Staff has analyzed the information provided in the applications and information subsequently received during the public comment period, as outlined in Section 15.76, and has considered commitments by the Mexican authorities and the views and comments of other entities, including Webb County and the City of Laredo, each having submitted a competing international bridge application.

After reviewing both international bridge applications and all comments provided, staff recommends that commission approval of either application is not in the interest of the public and the state's transportation system for the following reasons:

Number one, there is no written commitment from the appropriate jurisdictions of the United Mexican States to provide adequate roadway connections to either of the proposed bridges. Neither the City of Laredo nor Webb County provided any documentation demonstrating Mexico's commitment to construct a connection to Mexico 85 which is a primary approach roadway to either bridge. Webb County indicated they could not secure a written commitment from Mexico for construction of the bridge segment on the Mexican side of the Rio Grande. The City of Nuevo Laredo indicated their willingness to work with either the county or the city but does not provide a firm commitment to either.

Number two, while a fifth international bridge is contained in the metropolitan transportation plan, indicating a need for a bridge, the plan does not indicate whether the county or the city, which have submitted competing applications, would construct and own the bridge. Accordingly, there's not sufficient information to indicate either bridge is consistent with the regional transportation plan developed by the metropolitan planning organizations having jurisdiction over the project.

Number three, there's a lack of public support for constructing either of the proposed bridges. With respect to state highway projects, the commission and the department will not pursue projects without adequate local support, whether because of lack of required financial participation by local government entities, or because there's no local support of an alternate facility, such as two competing applications. When the involved local entities are not supportive of a single project, this indicates a greater probability that a proposed project will be challenged and that construction of the project and the resulting positive effect on the economy and the free flow of trade is speculative. The probability of a legal challenge is particularly great in the case of the county's application. This is due to the city's indication that the county has no legal authority to construct a bridge located within jurisdictional limits of the city.

Based on the findings and conclusions presented, staff recommends disapproval of both applications as outlined in minute orders presented to you under items 5(b) and 5(c) of the agenda.

MR. JOHNSON: We have two people who have requested to speak on this particular agenda item. Judith Gutierrez, commissioner from Webb County. Commissioner, thank you for making the long trip up here.

MS. GUTIERREZ: Well, thank you. I'm very, very happy to be here. For the record, my name is Judith Gutierrez and I am a Webb County commissioner, and on behalf of Louis Bruni, Webb County judge, and the Webb County Commissioners Court, I appreciate the opportunity to offer some brief comments as you consider both the city's and the county's applications to construct a new international bridge.

In November of 2000, the Webb County Commissioners Court voted to pursue a presidential permit for the construction of a new bridge. We awarded the contract to Dannenbaum Engineering and assembled a team of engineers and consultants on both sides of the border to work with our county administrator Carlos Villarreal, and county engineer Tomas Rodriguez, whose combined 50 years of experience with the City of Laredo included leadership roles in past bridge projects. The result is a thorough and professionally prepared application by Webb County which is before you today.

While I am sure you are familiar with every detail of the voluminous application, I do want to take a moment to highlight some key advantages with our p