Texas Department of Transportation Commission Meeting

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

Thursday, May 27, 2004

COMMISSION MEMBERS:

RIC WILLIAMSON, CHAIRMAN
ROBERT L. NICHOLS
JOHN W. JOHNSON
HOPE ANDRADE
TED HOUGHTON, JR.
 

STAFF:

MICHAEL W. BEHRENS, Executive Director
STEVE SIMMONS, Deputy Executive Director
RICHARD MONROE, General Counsel
ROGER POLSON, Executive Assistant to the Deputy Executive Director
DEE HERNANDEZ, Chief Minute Clerk

PROCEEDINGS

MR. WILLIAMSON: Good morning. It's 9:14 a.m. And I would like to call this meeting of the Texas Transportation Commission to order. Welcome to our May meeting. It's a pleasure to have all of you here this morning in the big room and in the waiting room behind and out into the foyer.

It is our tradition to begin our monthly meetings with opening remarks by the Commissioners. And it's my habit to begin with the Commissioner -- and how did we say we're going to say this?

MALE VOICE: It's your habit.

MR. WILLIAMSON: The most junior member, so I guess that would be Mr. Houghton.

MR. HOUGHTON: Good morning everyone. I believe today is going to be a -- as I said to a couple of the delegation's communities last night -- a high water mark day. I'm anxious to hear the presentations. I know you're holding back what was told to us over the period of the last couple of weeks. But I am looking forward to this meeting today, Mr. Chairman. It's going to be a whole lot of fun.

MR. WILLIAMSON: Good. Ms. Andrade.

MS. ANDRADE: Good morning. And I also would like to echo what Ted said, although I'm sorry that I wasn't at the reception last night. But I'd like to welcome all our delegations that are here. It's good to be back in Austin. And look forward to a great meeting. Thank you.

MR. WILLIAMSON: Mr. Johnson.

MR. JOHNSON: Gosh, you're going to hear much of the same remarks from me. It's a pleasure to have you here this morning. And to the good friends from DFW I appreciate your hospitality -- and Brazoria County the same. I'm sorry I didn't get to the El Paso function, but you just can't be everywhere that you want to be. As Ted mentioned, we're going to have a full and productive day and look forward to it.

MR. WILLIAMSON: Mr. Nichols.

MR. NICHOLS: I'd like to welcome everybody here also. Thank you very much for attending. I know a lot of you have come a long way to talk about the dreams and visions and needs of your community. We welcome them -- hope you feel comfortable. And drive careful when you go home.

MR. WILLIAMSON: Thank you, members. And I echo the remarks of welcome to our meeting. It falls upon me to be the school teacher in some respects. So, first of all, everyone always assumes they've turned off their phone and pager and Dewberry and all that stuff, and inevitably, one of us hasn't. So let's all take a moment, reach into our suit pockets and into our purse, and look at our personal communications devices and realize that -- son of a gun, I haven't changed the ringing style. And let's put them on the silent mode so that we're not -- Blackberry, Dewberry, whatever those damn things are called. I don't have one of them, but I know that they exist.

MALE VOICE: Steve has one.

MR. WILLIAMSON: Steve Simmons has one? Okay. Thank you very much. I'm not one for leaving the elephant unspoken of. This will be at times a contentious day. We have some fairly intense issues that need to be spoken of and discussed. And we have some delegations that will come asking for more than we can provide. And no doubt, one or more members will be suggesting alternative ways to provide for those needs.

But if we will all sort of commit ourselves to conducting ourselves in a civil and appropriate manner, none of us will be guilty of saying things publicly that we'll read about later and regret having said, and none of us will perhaps act in a way that's inappropriate to cause anger from others. That kind of nonsense isn't necessary.

I'll direct my criticism at myself first. I have lots of -- habit from the Legislature. I pick up sayings, and one that you hear me say often is, It's the no road to slow road to the toll road. That irritates some people. It irritates some members of the Legislature.

Let me just say that it is my belief that because of the tremendous population growth of this state, and the fact that our tax base doesn't exactly match our growth until years later -- that's the problem with the consumption tax in a growing economy -- is that it eventually pays the bills, but not until years after the growth and the need for the roads occurred.

Because of that, our state, whether you're in El Paso or Hays County or Brazoria County or Dallas or Houston, or even West Fort Worth, Glen, we face a cash flow challenge. That means you either build no roads or toll roads or you can wait slowly for the road to be built. That's what slow road means. So for those of you for whom that's irritating, let me just say I think that encapsulates the problems we all face. Those are our choices.

Let me also say that we can solve these problems. And this Commission's charge is finding ways to solve those problems as painlessly as we can. While none of us like doing some of the things that we do, we do it in the best interest of one state, Texas -- not one part of the state. We don't do it for the Republic of Mexico. We have great affection for our partners to the south, but we're not building our state for the Republic of Mexico or the province of Oklahoma -- that will get a news clip. We are focused on our state -- the entire state.

For the record, public notice of this meeting containing all the items on the agenda was filed with the Office of the Secretary of State at 1:15 p.m. on May 19, 2004.

Before we begin the business portion of our meeting, let me remind everyone that if you wish to address the Commission we ask that you complete a speaker's card, which can be found at the registration table out in the lobby off to your immediate right as you're facing me.

To comment on an agenda item -- that's something posted on our agenda -- we ask that you fill out a yellow card. If you're not commenting on an agenda item -- if you're wanting to make a comment in the open comment period, we ask that you fill out a blue card. But we've hidden all of them so nobody can fill one out and speak later on in the day. No, no. I don't have a blue card up here, but it's roughly the color of this institutional folder I carry -- and if you would please fill that out.

Regardless of the color of the card, we will limit each speaker to three minutes because we have a very long agenda with a lot of people that have to be heard today. If we didn't limit everyone somewhat we'd never get through, which would make some people happy.

We have three delegations appearing before us today -- the Brazos County delegation, the Dallas/Fort Worth region, and a delegation from El Paso. These delegations are number 6 on the agenda. And for those of you who are long-time participants in our Commission activities, you will have no doubt noticed by now that I have adopted the habit of moving delegations around in the agenda, and that's for the stated and express purpose of exposing the delegations to some of the business portions of our meetings, which I believe they can benefit from watching.

You also no doubt will have noticed that we are I would say, Mike, 95 percent complete on our web site advance posting and taking minutes out to the floor to the public. Probably got a little bit of tweaking left, but we're almost there.

And so increasingly, you may access our internet and see a month, two months, a year ahead of time those things that we intend to take up in our minute orders as fast as we think we can have a draft in front of you. And I want to take a moment to compliment Mike and the staff for how quickly you've accomplished that Commission goal.

The first item on the agenda is the approval of the minutes of the April Commission meeting. Do I have a motion?

MR. JOHNSON: So move.

MR. WILLIAMSON: Do I have a second?

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of approving the Commission meeting minutes from the April meeting will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: Opposed, no?

(No response.)

MR. WILLIAMSON: Motion carries. Now we would like to take a moment to welcome Mac Tristan, who is assistant chief of the Carrollton Police Department, and who is also the chairman of the Automobile Theft Prevention Authority. Mac, welcome to our meeting.

MR. TRISTAN: Thank you very much, Mr. Chairman, members of the Commission, Mr. Behrens.

I appreciate your comments at the beginning. Our Board faces the very same issues. And it seems like whenever there's dollars involved there's certainly emotions involved, and we do the best we can with the funds that we get from the citizens. And those are always challenging decisions. So I empathize with you and I support you 100 percent in your decision making.

Thank you for allowing me the time to come before you to talk about ATPA, to brag on our awards, and present you with some of our awards. I was appointed to the Board of Directors of ATPA in 1997 by then Governor George Bush. In late 2002 Governor Rick Perry appointed me Board chair.

However, this is the first time that I've had the opportunity or come before this Board. In fact, January of last year was the first one I -- first time I met any of the Commissioners, including Mr. Behrens, when I met Mr. Johnson and we waited in the hallways outside the Appropriations Committee many, many days and many hours.

That, in essence, was a failure on our part of miscommunicating -- of non-communicating. And it's something that we started to remedy immediately. Mr. Behrens was nice enough to meet with me on several occasions after that. We've invited Mr. Johnson to some of our functions in the Houston area.

So we're trying to remedy that to make it known that we are ATPA -- we are under the TxDOT umbrella, and therefore, we have a responsibility to communicate with the TxDOT Board and Commissioners.

I'm here today to give you an overview and answer any questions for you that we may -- that you may have about TxDOT -- or ATPA, and, in fact, present you with some awards.

If we could start with our strange noise. We have a very catchy Power Point. We have an executive director that has a show background and a very enthusiastic staff. So you're going to see a lot of entertainment value in our presentation.

ATPA was established in 1991 -- and I'll go through this as fast as I can. And please stop me along the way. This is informal. If you have any questions, please let me know.

Our goal was to reduce auto theft in Texas. Auto theft was skyrocketing. And even though auto theft continues to go up, we are at a much lower auto theft rate since we were even in 1991, which is astounding when you consider the population increase in Texas and the roads and the vehicles that are out there and the number of targets that has increased.

We're funded by a dollar that all of us pay. Every one of us that drives a vehicle and gets liability insurance gets charged $1 that goes to the ATPA.

Since its inception, obviously, we've become a landmark and decreased auto theft by 53 percent. Again, that's not outstanding figure. We'll go over later in the coverage maps of how many grants we fund throughout the state.

Our ATPA program, which there were about 13 throughout the United States -- some of them have folded because of economic issues that they face, not unlike our state. However, several have copied our program. We go to conferences throughout this country, and there is always -- we're always commended by our work.

This past October I was at the International Association of Chiefs of Police in Philadelphia. They allowed me some time to present -- they asked me to present a session -- a workshop on auto theft prevention authorities that was attended by several states, and including Canada. And they're all wanting to copy what we're doing. So we've certainly served as a model for other states and other ATPAs.

We have our own staff -- a very small, but very effective five-member staff -- and we have a Board of Directors. We are seven members. Two are law enforcement, myself and the chief of Brownsville; two are insurance representatives, Mr. Boyce Miles from Houston, Mr. Ernest Garcia here from in Austin -- no, I'm sorry -- Mr. Mike Gerik from Waco; and two are consumer representatives, Ms. Denise Anaya Saenz -- she just changed her name -- I have to keep remembering that every time I say her name -- who is an associate of Mr. Houghton, and Mr. Ernest Garcia. And we have a standing member, who is a colonel of DPS. He appoints Mr. Marshall Gasky to the Board.

MR. WILLIAMSON: Who's that fellow over there on the right?

MR. TRISTAN: We have a young man that is tirelessly at every one of our meetings. And I was going to recognize him later, but --

MR. WILLIAMSON: That's okay. I just --

MR. TRISTAN: -- Mr. Jerry Dike and his big smile. And I think he's wearing one of his Texas ties -- I'm sure he is. And I've never seen him without one. So that's who that young man is.

We fund -- our mission, obviously, is to fund programs to reduce auto theft in Texas. We have a statewide network of law enforcement prosecutors, insurance -- everything from community awareness to actual hiring of law enforcement officials -- law enforcement officers to combat auto theft.

One of our strongest accomplishments that we're very proud of is the partnership that we have developed with Mexican officials. Prior to 1991, and even a few years after that, car goes into Mexico and it's gone. We have come so far in that. We still don't guarantee we'll get your car back, but we are speaking with Mexican officials. We are inviting them to our meetings, and we'll get into more of our Border Solutions Committee that we have established with Mexican officials -- with Mexican attorney generals -- that is quite effective.

Why is ATPA's work important? Well, obviously -- in 2003 you can see the figures of motor vehicles that were stolen in Texas, yielding losses of more than $700 million. In '91 we estimated a theft rate today would be over $1.7 billion. This is all something that we pay, we as citizens, you and I, out of our insurance. So I think we've certainly been effective in reducing that.

Vehicle theft is the costliest property crime in the United States. Most people --other than their homes, their car is the most expensive item that they drive -- that they have. And it affects the quality of life -- it affects the way of life.

I got a call just yesterday from one of the former city councilwomen in my city yelling at me because her husband went out to her driveway and her car was -- his Suburban was gone. Well, I'm sorry he left the keys hidden underneath the floorboard of his car -- the placemat. And they broke out the window and took his car. It's very easy actually.

So people get upset. It's something that people don't think about until you walk out and your car is not where you left it. And that's certainly an impact on all of our lives.

Insurance fraud is an up and coming trend that we've seen in the last three years where -- and we've actually funded some insurance task forces because a lot of people are simply reporting their car stolen and just getting the money out of it. And it's much more complicated than that, but it's costing us quite a bit of money.

ATPA is currently operating with 34 percent reduction of funding. As I said initially, in January of last year we were in the hallways of the Capitol. We met our 12.5 percent that was required, and then the Appropriations Committee ended up cutting us an additional 34 percent. This has caused us to work harder. This has caused us to reduce funding. This has caused us to eliminate grants. This has caused us to try to continue our trend with less money.

However, our citizens are still being collected the $1 for auto theft -- to go to Auto Theft Prevention Authority. And obviously, that $1 is not going to what they're contributing to.

Categories of funding obviously include law enforcement detection and apprehension. We actually fund police departments and sheriff's departments throughout the state that submit grant applications. A lot of those -- they add officers, they add staff, they add equipment -- we fund that. We also fund Attorney General's Office and several prosecution efforts.

We fund equipment, auto theft -- automobile registrations, and a public awareness, which is a huge, huge part of what it is we do. As police officers we have only limited capacity of stopping auto theft. We could do -- we can be much more effective by working with the community, working with our citizenry, and explaining to them what they can do to remove themselves as targets.

We have -- that's what our awards are about today. The Watch Your Car Campaign was started by ATPA. The H.E.A.T. program -- all of these things are an effort to create awareness so that your car is not stolen. You do everything possible to make sure your vehicle does not become a target.

VIN etchings -- agencies throughout the state that are funded by us will buy equipment to do VIN etchings where they'll actually put your VIN number on every window of your vehicle and any other part that you want -- no cost. I was -- I just found out a couple of weeks ago that car dealerships are charging as much as $300 to do that. We do that for our citizenry at no cost -- part of our funding.

This gives you a map of our coverage. As I am getting older it's hard for me to read. But obviously, the green is our coverage map. The red is -- okay. That is where the grant actually is awarded to. The important part is the white, where there is no coverage.

Now, there's no coverage by ATPA grants. There are police departments and sheriff's departments obviously in those areas. And they have -- they do what they can with their staff in fighting auto theft.

Border Solutions Committee is, again, something we're very, very proud of. Several years ago -- and I don't know who the brainchild was of this. I wish I could say I was, but I was not. Whoever it was was a genius because we have established communications with Mexican attorney generals, Mexican officials.

We have meetings yearly along the border. The chair -- we appoint one of our Board members to chair this Committee -- and that is Ms. Denise Anaya Saenz. I'm sorry. It's Mr. Ernest Garcia, isn't it. I'm sorry. Mr. Ernest Garcia.

And we actually meet -- we have a full house when we have the Border Solutions Committee. We have interpreters, we exchange ideas, we exchange -- it's just an open communication to address auto theft, because our cars are going over there and their cars are starting to come over as well. And it's important that, when your car is sitting over there and you can see it from across the border, you're able to get it back. We're able to do that now in many, many instance whereas before, as I said, it was a total loss.

The Border Partners Program is actually an offshoot of the Borders Solutions. It's a three-part project to combat auto theft along the El Paso/Juarez border. It provides computerized exchange of information between both sides of the border. And as you see, there's three essential components -- intelligence, international liaison, and investigation.

These are more of the hard -- the actual investigators in Mexico and Texas that are actually working on auto theft as opposed to the attorneys general and other higher officials from Mexico that try to remove the bureaucracy involved when getting vehicles back and forth.

BATIC is another offshoot of what we're trying to do with the Mexican border. It is administered by DPS. It is a system where any law enforcement official, not just in Texas, but throughout the state, can call in stolen vehicles. And Mexican officials can call in there. It's one place to limit communication, and we can get communication out on stolen vehicles -- get cars back, as you see, and recovered. We recovered 2,028 vehicles in FY '03 with more of a -- with a value of over $26 million. 2,028 vehicles, okay, may not seem like a lot. But when we had zero before it is certainly quite an increase.

The H.E.A.T. program is extremely effective. It continues to grow. It's amazing, as long as we've been doing it, how people still don't know what the H.E.A.T. program -- how it works. It's free. It goes into the computerized system. And if your vehicle is seen being driven between 1:00 a.m. and 5:00 a.m. police officers can stop that vehicle with no probable cause and identify the owner of the vehicle. If it, in fact, is the owner they send them on their way. If it is not, obviously, they've got some explaining to do. But that is the purpose of the H.E.A.T. sticker.

There is also another -- that goes in the back. There's also a small -- a sticker that goes in the front just under the rearview mirror. And that's where customs agents, as they're going across the border and they can see that H.E.A.T. number and they can stop it and check it as well. Very, very effective.

The RATT office is to Reduce Auto Theft in Texas. This is our main crime prevention program for ATPA. It's headquartered out of the COG office in Arlington -- North Central Texas Council of Governments. They disseminate all kinds of public awareness materials. They provide all of the campaign materials -- posters, brochures -- everything for every ATPA throughout the entire state.

And they actually travel throughout the entire state to attend fairs -- any community event that they're needed. And that's where they go. And again, we can't do this alone, so we need the communities' help to be a part of this.

This is some of our communications that we've started -- some of our media campaign with our own grantees. We've taken the newspaper route. It catches people's eye and people's attention. Auto theft's becoming a gateway crime into many, many other things, including some terrorist type activities that -- where we're talking about tractor-trailers and rigs and everything else that we're having to deal with now. And these are actual headlines that have come up throughout the state and that have sometimes resulted in sad outcomes.

We -- actually the Houston Police Department is -- their auto theft division is working huge, huge -- a large operation of stolen vehicles that are going to Central America and have recovered quite a bit. They're doing an outstanding job with the people that they have in that operation.

Now comes the awards section. They are -- the Telly Awards -- and since I've been involved in it -- I've heard of the Telly Awards, I just didn't realize how prestigious it was. It's a nationally respected and international competition. It's not just for public service campaigns. It's for actual commercials of any kind. It honors outstanding commercials and programs and film production, and they receive over 10,000 entries annually.

We have two awards to show you. The first one is a P.S.A. -- and it was a bronze award for this past year -- '04. Is that right? You want to go ahead and play it?

(Whereupon, a videotape was viewed.)

MR. TRISTAN: Obviously, Sheriff Will Catchum -- I didn't come up with that either, but it's catchy and it works. That was the one that we just got this past year. We also -- they did the last -- the best of the last 25 years. And in 1995 we put together this one P.S.A. that has been aired constantly. It seems to be one of the favorites. And we'll play that now.

(Whereupon, a videotape was viewed.)

MR. TRISTAN: That -- we also have similar commercials like that. Some of them are in Spanish -- several of them are in Spanish, in fact. We have several radio spots in English and in Spanish. And it worked very, very well.

I want to thank TxDOT and all of their support and the Commission. Mr. Behrens has been more than grateful -- or more than willing to meet with me at different times. It's been a difficult couple of years, as everyone knows. We still try to do the best we can. We have a mission, and we will do the best we can with our mission.

And when we started in 1991 we were under the Criminal Justice Division. In '96-'97 we were moved under TxDOT. It's been a great marriage, if you will. Mr. Jerry Dike is a great diplomat of TxDOT. He is directly responsible for our staff. He is at every one of our Board meetings. And I call Mr. Dike a servant leader because he's willing to -- and able -- he'll do anything, even if it's to get you a glass of water or run you copy of something. Jerry is right up front, and I appreciate that so much.

I appreciate the support that the Commission has given us, and hopefully, we can communicate better as we move on to these difficult times. And whatever we can do for you, certainly, we're available to you.

I'll answer any questions that you may have before we go on and ask the Chairman and Mr. Behrens and whoever else to come receive these awards.

MR. WILLIAMSON: Okay, members. The floor is yours. Questions for this gentleman?

MR. JOHNSON: I just have an observation. Mac, that's a great presentation, but even more so, those numbers are remarkable for what you've been able to accomplish and with a limited amount of resources.

And so I'm reminded that a long time ago my car was broken into, and I called my good friend Johnny Holmes, who was then the District Attorney of Harris County, trying to evoke a little sympathy and -- which I was unsuccessful in doing. And he turned around and asked me a question. He said, Well, was your car locked. And I said, Well, it was in my garage. And he said, Well, why don't you do something stupid like lock your car. And I mean, ever since then I have locked my car regardless of where it is.

So -- you know, we -- through that experience, and through some of the messages that you're providing, we do learn. And hopefully, everybody will get it. And I salute the work that you're doing.

MR. WILLIAMSON: Are you suggesting that's the copy for the next ad?

MR. TRISTAN: Thank you, Mr. Johnson.

MR. WILLIAMSON: Okay, Mac. I think we're ready to move on then.

MR. TRISTAN: Very good. If -- I'd like to ask Mr. Chair and Mr. Behrens, if you'd come down, and anyone else who would like to, and present these awards to you. I think someone wants to take some pictures, but --

MR. WILLIAMSON: This will be the whole Commission.

(Whereupon, pictures were taken.)

MR. WILLIAMSON: We appreciate the job that Mac and his agency and every state employee and volunteer to state government does in the furtherance of advancing the state's policies.

We have a -- if you will indulge us, we have a resolution. You know, this is an unusual agency of state government. Everyone's proud of their employees, but we are known throughout the land as being particularly family oriented and are cognizant of the contributions of our employees over the years. And so we frequently at these Commission meetings take time to recognize and honor employees who have made the long trip down the road of TxDOT and have decided to retire. And we're going to honor one of those valued employees today.

Could I have Al Rubio come up here please? Al, where are you? (Pause.) Al, where are you? (Pause.) There you are. Al, good morning.

MR. RUBIO: Good morning.

MR. WILLIAMSON: Come out here and let us all kind of eyeball you. You spent your career eyeballing us. You know, one of the things we're all -- we live in mortal fear is Al rotates those cameras when we don't think they're watching us and catch us, you know, doing things we shouldn't be doing.

MR. RUBIO: Yes, sir.

MR. WILLIAMSON: And Mike, I'm going to turn it over to you at this point.

MR. BEHRENS: Thank you, Chairman. Al, you work behind the scenes -- you're always behind us and have been behind the Commission for a good while and have participated in these meetings a good while. And I want to read a resolution that the Commission has for you.

The resolution states, "Whereas the Texas Transportation Commission takes great pride in recognizing Alberto G. Rubio as an outstanding and dedicated employee who has served the Texas Department of Transportation with distinction for almost 19 years as supervisor of video production in the travel division.

And whereas, Mr. Rubio's creative talents and technical expertise have benefitted the Transportation Commission through his assistance with the design and renovation of the Commission hearing room through the state-of-the-art audio/visual support he and his staff deliver during the Commission meetings and through his exceptional assistance during the introduction of the Trans-Texas Corridor Plan at the Governor's Mansion and at the Texas Capitol.

And whereas, Mr. Rubio has contributed 24 years of state service while earning the respect and appreciation of his fellow employees and others who have been privileged to witness his professionalism.

And whereas, Mr. Rubio has produced over 100 programs which have trained employees, promoted travel to Texas destinations, and informed the citizens of Texas about TxDOT.

And whereas, Mr. Rubio's distinguished achievements on behalf of TxDOT earned a Communicator Crystal Award for the video production, The Queen Isabella Causeway. While his extracurricular accomplishments include Academy of Television, Arts, and Sciences Emmys for his work on the Ironman Triathlon broadcast.

And whereas, Mr. Rubio has devoted most of his professional life to promoting Texas and to improving transportation safety and mobility, and thereby bettering the quality of life for all Texans.

Now, therefore, be it resolved that the Texas Transportation Commission on the occasion of his retirement from service with the State of Texas hereby recognizes and thanks Al Rubio for his career achievements and loyal service to Texas and its citizens."

Presented by the Texas Transportation Commission on this, the 27th day of May, 2004, and signed by all five Commissioners.

MR. RUBIO: Thank you very much. Mr. Chairman, Commissioners, Mr. Behrens, it's been fun working here. Without Mr. Taylor, who is the first division head that gave me the once over and hired me on his whim, and the six executive directors that I've served under, it's been with the people that I'm charged with and the people who have helped me, like Debbie Snyder and Bernard Stafford and Bill Blanton here -- without them I couldn't have done anything. And it's been a very good environment for me to be able to work for the state, to watch my kids grow, and be able to stay at home.

I'd like to thank everybody. I'd like to thank Doris Howdeshell, Geoff Appold for giving me the environment of being able to go out there and be innovative and to design the facility here and other facilities. And I'm going to miss it. And I'll be around. And thank you very much.

MR. WILLIAMSON: We thank you for your retirement and everything.

(Pause while pictures were taken.)

MR. WILLIAMSON: I'm trying to think how to structure this. We have the advantage from up here of knowing about how long things are going to take. And the next item on the agenda is probably going to take some time.

I think what I want to do is first -- I know that Senator Shapleigh was here earlier and had to step out on a matter of business. Are there any other members of the Legislature present in the room at this time?

(Pause.)

MR. WILLIAMSON: Commissioner Daugherty, are you present?

MR. BEHRENS: He's now signed up for item number 3.

MR. WILLIAMSON: I understand that, but I just want to know if he's in the room. (Pause.) Commissioner, if you would, bear with us. We need to have -- we're going to take a couple minute break, and then we're going to have this discussion on the Strategic Plan, which is directly related to your comments.

MR. BEHRENS: That's what he signed up for.

MR. WILLIAMSON: Right. And I know that you have pressing business, and I want to provide the Senator and yourself with the opportunity to move on if you need to. But since I kind of know how long all this is going to take, and I need to be respectful of all of our guests, we're going to take a couple of minutes -- and only that -- I mean, you shouldn't leave unless you really need to. And then, Coby, you can get ready because I want to have the discussion on the Strategic Plan at that point.

So everybody that's just got to stop and take a break, of which I'm one, you've got 120 seconds.

(Whereupon, a short recess was taken.)

MR. WILLIAMSON: Mr. Behrens, why don't you take over?

MR. BEHRENS: Thank you, Mr. Chairman. We're going to go to our agenda item number 3, which will be a discussion item that concerns our 2005-2009 Strategic Plan.

Coby Chase will lay out some ideas and some priorities that we have been discussing. And this Strategic Plan will be being put together in the next month and be presented to the Commission in our June meeting. So Coby, I'll turn it over to you.

MR. CHASE: My name is Coby Chase, Director of Legislative Affairs of the Legislative Affairs Office of the Texas Department of Transportation.

MR. WILLIAMSON: Coby, use your microphone --

MR. CHASE: Did Al already retire? Did he just leave after he got his -- can you hear me?

MR. WILLIAMSON: Can you hear me now?

MR. CHASE: Can you hear me now? The purpose of this discussion item is to seek the Commission's direction for the 2005-2009 Strategic Plan. Let me take a few minutes to discuss the background and present some of the challenges.

A formal Strategic Plan has been required of all state agencies since 1992. The instructions, written by the Governor's Office and the Legislative Budget Board, tabulate the areas required to be covered in the plan. These include topics such as assessment of internal and external developments, performance measures, goals, and strategies.

It can be a complex paperwork exercise resulting in a document that sits on a shelf collecting dust, or it can be a defining experience that sets the agency's direction in a meaningful way. We aim, of course, to take the latter approach. We take this plan very seriously here at TxDOT.

Over the past years the Agency came under increasing fire, and justifiably so, if I might add, because it was almost impossible to measure in a meaningful way what it is we were doing.

In 2003 then Chairman Johnson convened a working group that set five objectives for the Agency to reach. These things -- these are things anyone would reasonably measure the Department of Transportation by.

Objective 1, Reliable Mobility. The goal there is to reduce congestion.

Objective 2, Improve Safety. That tends to speak for itself.

Objective 3, Responsible System Preservation -- or, to most people, that means maintenance.

Objective 4, Accelerated Project Delivery -- or how much faster can we deliver projects.

Objective 5, Economic Vitality -- or how do we contribute to the economic health of Texas.

Mr. Johnson's five strategies were added to Commissioner Williamson's simplified set of fundamental strategies -- plan it, build it, maintain it, use it, and manage it. Commissioner Williamson wanted these to serve as the basic framework for discussion of the Department's actions and presentations to the public and the Legislature.

And when you think about it, everything we do falls along these lines. We're either planning something, building something, drivers are using something, we're maintaining something, or we're managing something. Whenever we're confronted with a challenge this is how we respond.

Ron Hagguist, who is with Transportation Planning and Programming, is the Strategic Plan's project manager. Some of you might know him as the intellectual steward of the point of collection issue. He's brought on board the Center for Transportation Research at U.T.  -- and they're here -- Rob Harrison, Jolanda Prozzi, and Khali Persad -- to help us put it all together and to apply some outside critical thought to what we're doing.

Also guiding this effort are Steve Simmons, Amadeo Saenz, James Bass, Jefferson Grimes, and Steven Polunsky.

The next Strategic Plan, the one we're discussing today, builds on the foundation of the previous plan. Like I said, this Agency takes its Strategic Plan very seriously. And it doesn't exist in a vacuum.

I want to take the time to highlight for you seven key challenges as we see them. And these are very important challenges -- and I'm going to spend some time on each one of them.

Significant events, some very recent and some from the very recent past, will shape our Strategic Plan. I believe it is very important that you understand what these are.

Challenge 1 -- escalating costs have just recently been captured. In December 2002 the Commission insisted that the Unified Transportation Program, the master plan for developing and building projects, be adjusted to reflect true costs. Projects tended to get into the pipeline with one cost estimate, and when it came time to build them the price would escalate, seemingly overnight. And not only was it inflation, but unexpected environmental situations and scope creep, as is said around here, meaning the size and breadth of the project would grow.

This leaves us with two results now. One is that projects are more realistically priced and constrained based on accurate cash flows. A clear vision of reality exists. The second, however, is that the ten-year program has now been stretched to 15 years. When this reality seeped into the public's consciousness, the results were the transportation equivalent of shock and awe, I would say, in my opinion.

Chairman Williamson can testify to that firsthand. He had to spend a day in Temple, Texas, explaining this to a rather large group put together by Representative Delisi and Frasier, who were concerned about this.

MR. WILLIAMSON: Hang on a second, Coby.

MR. CHASE: Uh-huh.

MR. WILLIAMSON: Now, you're laying this stuff out fast, and we appreciate brevity. But I want to be sure the Commission members and our partners in the transportation world have a moment to focus on this. So challenge 1 -- you're making us painfully aware that when we decided after many years of doing things one way that we preferred a plan that accurately reflected the cost of Loop 375 in El Paso, State Highway 121 in Weatherford, Dallas, and Fort Worth, State Highway 59 in the west Houston area. The actual cost ten years from now for those projects would be calculated into the plan and not the original cost from two, five, ten, or fifteen years from now.

MR. CHASE: Right. You were -- the Commission's action was -- it was a very monumental exercise, as I recall my observation of it. And it closed the gap. I mean, it was reality now. It's what projects cost by the time they reach your desk.

MR. WILLIAMSON: So the situation prior to this decision by this Commission was we might have $5 billion worth of projects on our books covering 600 -- $5 billion worth of cost covering 600 projects on our books, everyone in the state expecting their piece of the 600 projects to get started because it was in our plan.

But the reality was we didn't have near enough money to pay for all of those. And rather than admit that and confront ourselves and the public with that we just kind of let it keep rolling.

MR. CHASE: Yes.

MR. WILLIAMSON: It wasn't really a ten-year plan. It was a 12-year, 15-year, 16-year plan.

MR. CHASE: Right. Well, remember, how many times a project would percolate up to the system, and for some reason, you had to find extra money to keep it moving -- to get it going. And that seemed to be an exercise every Commission meeting -- or not every, but many Commission meetings. And this newly adjusted cost figures seem to put that in better check.

MR. WILLIAMSON: Amadeo, why don't you come up and just touch a little bit on the project selection process prior to this change and after the change is fully implemented here in the next year or so.

MR. SAENZ: Okay. Thank you. For the record, I'm Amadeo Saenz, assistant executive director for engineering. Our project selection process, prior to the change in 2002, is that most of our projects -- and I'll talk about mostly the mobility projects, the projects that were selected at the Commission level.

They were all based on a cost effectiveness index. And they were all measured against each other based on this cost effectiveness index.

MR. WILLIAMSON: Okay. Cost effectiveness index.

MR. SAENZ: Right. But we would look at --

MR. WILLIAMSON: Well, what is a cost effectiveness index?

MR. SAENZ: We would look at the cost of the project, and then we would divide that by the -- say, the number of vehicle miles traveled, the average daily traffic. And that ratio is how cost effective that project would be. The lower the number that means that -- the cost divided by benefits -- the lower the number the project was a better project to build. It would address more traffic. And the whole goal was to reduce congestion. So we would be able to select those projects based on cost effectiveness.

MR. WILLIAMSON: So for example, if you had a loop around Stephenville costing $10 million that, when completed, would serve 5,000 cars, you would divide the money by the cars?

MR. SAENZ: We would divide the cost -- say, the cost of the project -- and there were several factors, but real simply, we would divide the cost of the project by the number of cars times the length of the project, which we would equate to vehicle miles traveling on that particular piece of highway.

MR. WILLIAMSON: And you would -- and accepting for a moment that Stephenville is in a different category than Dallas, but you would then take LBJ Freeway in Dallas and do the same basic analysis. And then you would ask yourself, if you had $1 to spend either in Stephenville or in Dallas --

MR. SAENZ: Right.

MR. WILLIAMSON: -- which project would you spend the dollar on that would result in the highest benefit to the State of Texas.

MR. SAENZ: That's correct, sir.

MR. WILLIAMSON: Not to Stephenville or not to Dallas, but to the State of Texas.

MR. SAENZ: The State of Texas.

MR. WILLIAMSON: And that's because we're a statewide system -- we're not a regional system or a county system, we're a statewide system.

MR. SAENZ: We were looking at statewide mobility, and we wanted to address statewide congestion and mobility problems.

MR. WILLIAMSON: Okay. Continue.

MR. SAENZ: Okay. What that would do is, of course, being a -- the state divided into 25 districts and having 25 district engineers that were competing to get some of the mobility money, we would look at ways to make that project as, what I would call, lean, mean, or as streamlined as possible to keep your cost as low as possible. And then you would break up your project to find out what piece of that project gave you the highest benefits.

MR. WILLIAMSON: When you say cost you mean --

MR. SAENZ: The cost of the --

MR. WILLIAMSON: -- projected cost.

MR. SAENZ: The -- well, the cost of the project at that time.

MR. WILLIAMSON: At that time.

MR. SAENZ: We were using the cost of the project at the time that we were submitting it for it to compete with other projects across the state.

MR. WILLIAMSON: So when the loop around Wichita Falls was initially costed and the cost effectiveness index calculated, that would kind of become written in stone and stay with the plan.

MR. SAENZ: Right. That project -- let's say, for example, we were talking about 1998 and we were looking at a loop in Wichita Falls. We would determine the cost of that project in 1998 dollars, divide it by the 1998 traffic, and then we would calculate a cost effectiveness index for that project.

That project would compete with other projects that were of similar size. We had that broken up between metropolitan areas, urban areas, and in rural areas. And we were able to compete. And then the projects that had the lowest cost effectiveness index would be the ones that would be selected.

MR. WILLIAMSON: So that was -- or that model applied -- or where that process applied fairly and uniformly and rigidly across the state it could be said that that was a hard way of distributing dollars -- a harsh way.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: A competitive market-oriented results based method of distributing limited dollars.

MR. SAENZ: That's correct.

MR. WILLIAMSON: And that -- help me with my memory -- but I was in the Legislature I think at the time. That was implemented in the late seventies, early eighties and being fully followed by the early to the mid-eighties.

MR. SAENZ: That is -- that's correct. That was -- I think it was initiated during the time of Chairman Lanier, I believe, when he was on the Commission. And he came up with a mechanism that we could evaluate all projects based on a cost effectiveness instead of just selecting projects by whichever method was being selected prior to that.

MR. WILLIAMSON: Where -- well, a fair and rigid application of that process would have resulted then probably in no project, other than those in Dallas and Houston, that were being approved.

MR. SAENZ: It pretty much did that. And, of course, I could -- in speaking through -- a little bit through history and my time that I was in Pharr, Pharr being an urban district and then also characterized as a metro district in some areas, we were having a hard time in getting our projects to compete with projects in Dallas and Houston.

So what we would look at is we would then wind up building just very small segments of projects. We would have to break them up and find those nodes that had the highest traffic counts to make those projects compete. But it was still pretty hard in getting our projects to move forward and get them into the plan.

The problem then, once they got into the plan -- because we went out there and we tried to cut the cost down at the very beginning, once the project got into the plan and we started designing it that we went in to come up with final design, and because of the changes in environmental and also the additions that needed to be done, that project estimate would then increase for two reasons -- one, because the scope increased, and also it was calculated and came into the plan based on, say, 1998 dollars. And now I may not be able to build this project till 2003. So I've got five years of inflation that were not included in the original estimate.

MR. WILLIAMSON: And not only inflation in the sense of the price of oil going up or the price of labor going up --

MR. SAENZ: That's correct.

MR. WILLIAMSON: -- but inflation in the sense of more people building on the right of way --

MR. SAENZ: And we had additional right of way cost --

MR. WILLIAMSON: -- or utilities being laid.

MR. SAENZ: -- we had additional utilities that needed to be located. So all of those were costs that you added to the project that would, if you calculate it all now and you put time value of money, it would have decreased the cost effectiveness.

MR. WILLIAMSON: So how does -- what -- how does the direction the Commission has taken in recent years changed that project selection process that got us to the point -- and let me be sure I understand the dollars because I have forgotten since Mr. Nichols started us down this path two years ago. We had about 6 billion in projects that were actually 10, or was it 10 billion that was actually 15? I can't remember.

MR. SAENZ: We had about -- we had in --

MR. WILLIAMSON: Or do you remember?

MR. NICHOLS: Yes. I'd like to comment on that. Basically, as I understood it, we let out to construction about ten -- about a thousand contracts a year. So we do a ten-year fiscally constrained plan, so we have roughly 10,000 projects in that plan at any one particular point in time. Each year we let those out, and then we bring in another group. The ones that are brought in on the ten-year plan were brought in with the best estimated dollars at that time.

And I think the reality set in a few years ago that we had not -- we want a ten-year fiscally constrained plan -- that's what the Legislature expects, that's what the federal government expects, that's what we told everybody. But we had not allowed -- or the basic inflation costs on projects. And when you go and you add that in for 10,000 projects scattered over a ten-year period of time it added so much extra cost that, instead of a ten-year plan, all of a sudden we had a 13-, 14-year plan.

So we realistically realized a few years ago that we had booked a lot more projects than could be built in that ten-year period.

MR. WILLIAMSON: What was the dollars, Amadeo?

MR. SAENZ: I think -- in fact, the numbers that I recall, just looking at the mobility categories -- or categories that do -- add more lanes, we had available revenue of about $10 billion over this ten-year period. And we were only -- and we had about 13 to $14 billion worth of projects in our ten-year plan. So we, in essence, had four extra years in our plan -- in our ten-year plan back in 2002.

MR. WILLIAMSON: And so I want to reduce it to words that normal people can comprehend. We had $14 billion worth of approved projects and only $10 billion to pay for it.

MR. SAENZ: Yes.

MR. WILLIAMSON: So increasingly, projects were being slowed down and not started, but until this Commission decided to take this position --

MR. SAENZ: Right.

MR. WILLIAMSON: -- no one really wanted to talk about the elephant being in the room.

MR. SAENZ: That's correct.

MR. NICHOLS: There was a false --

MR. WILLIAMSON: We just kept telling everybody there was a road fairy, and we kept rolling.

MR. SAENZ: That's correct.

MR. NICHOLS: There was a false hope out there that the project that was brought in to the ten-year plan would begin construction within a ten-year period or possibly sooner. And what we realized at that time was that really was a false hope.

MR. WILLIAMSON: Now, I had come on the Commission -- or I had been on the Commission about six months when we decided to redo things. One of the impressions I recollect having is that, in the delegation appearances during that first six months, I would continually see projects in this plan that couldn't be paid for move quickly to actual construction when delegations would come in and say, we found $20 million in our community. Here, you take the 20 million and put it with your $100 million estimate, the 100 million, by the way, being from six years ago when it's now going to be a $180 million project but we're still carrying it as 100 million.

Wealthy communities would come in, give us 20 million to buy down the cost to the state of that project, allowing it to move up on the cost effectiveness index --

MR. SAENZ: That's correct.

MR. WILLIAMSON: -- thereby preempting lower income communities such as the ones that appear quite a bit in the Pharr district, moving their projects even further down the list.

MR. SAENZ: Right. That --

MR. WILLIAMSON: So is that the case?

MR. SAENZ: That was happening to some extent. We were getting projects -- communities would come in and they would leverage their own dollars. That would lower the cost to the Department for that project, making the cost effectiveness index better. And so projects that were competing on their own merit -- or on their own dollar -- now fell further down because the other projects got ahead of us.

MR. WILLIAMSON: And I know, because I've looked at Coby's layout, that we're going to be talking about the impact of NAFTA and having to get ready for that. But is it fair for me to assume that communities primarily along the border, who at that time did not have the cash flow to pool their cash and bring in and buy down projects, were actually put at a disadvantage to communities in the interior of the state or on the northern or the eastern border --

MR. SAENZ: That's correct.

MR. WILLIAMSON: -- because of that.

MR. SAENZ: That's correct, sir.

MR. WILLIAMSON: So how did what we -- how did the changes we make change that?

MR. SAENZ: Well, the changes that we're making now is -- of course, the first thing we're doing as we -- as we work our ten-year plan, we're putting the plan based on the dollar estimate of when the project -- we expect the project to go to construction. So if I have a project today that I expect to go to construction in 2010, I am calculating the construction cost estimate for that project based on 2010 dollars.

The other thing that we're doing is that we've moved away from cost effectiveness index. And we have working groups that look at first restructuring our UTP to make it a lot more simpler. We went from 34 categories down to 12 categories.

MR. WILLIAMSON: Who were these working groups? You know, traditionally, we're criticized for forming committees of ourselves and telling ourselves what we're going to do. Who were these working groups?

MR. SAENZ: The working groups -- first of all, of course, the original looking at or restructuring our UTP was as a result of -- I think -- I believe something -- it was a result of some input and also some books. So we hired TTI. TTI went out there and interviewed all our MPOs and interviewed --

MR. WILLIAMSON: MPO leaders or the MPO groups?

MR. SAENZ: The MPO groups, the policy board people that were -- which are elected officials. Also the technical people, which are more of the worker, what I call --

MR. WILLIAMSON: Elected locally or statewide?

MR. SAENZ: Statewide. And got some --

MR. WILLIAMSON: So members of the Legislature were in some of these interviews?

MR. SAENZ: Yes, sir. And then we had members of the Legislature -- because some of the MPOs have members of the Legislature in their MPO policy board. And based on that feedback, we reduced the number of categories from 34 to 12.

The categories were not 34 when ISTEA first came about. They grew through the years. For example, because of the -- of some of the areas and because of some of the things that were influencing the Department like NAFTA we came in there during 1999 and added a new category into the UTP -- this is before we started restructuring -- and added a NAFTA category.

And that was because we saw that NAFTA -- the treaty had been signed -- there was some impact to the border. We were not being able to address the border through cost effectiveness back then, and --

MR. WILLIAMSON: Okay. Wait, wait, wait. You're losing some of us, I think.

MR. SAENZ: Okay.

MR. WILLIAMSON: You're saying that the cost effectiveness index, when it started and got rolling was a hard, even harsh, method of allocating the state's resources.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: That had the, perhaps, intended consequence of routing most of the state's cash to Dallas and Houston --

MR. SAENZ: That's correct.

MR. WILLIAMSON: -- because that's where the population is.

MR. SAENZ: Right.

MR. WILLIAMSON: And that harshness over time became uncomfortable for legislative leaders, governors, and Commissioners.

MR. SAENZ: That's correct.

MR. WILLIAMSON: And so then the softening -- the rounding of the edges began. The willingness to see beyond traffic congestion in Dallas and Houston and share of the state's resources began -- that rounding of the edges occurred.

MR. SAENZ: It started occurring --

MR. WILLIAMSON: One of the ways that occurred was by adopting larger numbers of categories into which El Paso, Laredo, Pharr could compete.

MR. SAENZ: The three districts -- so that we could compete. And that was, for example, our NAFTA category. When that was put in place -- because the three border districts could not compete well with the other metropolitan district for the mobility money and because the Commission identified that we needed to address some needs that would be coming. Because of the NAFTA treaty we set up a separate NAFTA category.

And now the Pharr district, the Laredo district, and the El Paso district would compete, but only among themselves. We were still using cost effectiveness, but we were only competing among ourselves.

MR. WILLIAMSON: It's a rational decision.

MR. SAENZ: Right. And this allowed us -- and the Commission put together a working group, and that working group identified $1.8 billion worth of projects to address congestion issues on the border that could result -- as a result of NAFTA.

And, of course, the Commission -- we have been working on that. Those projects have been identified. They're in our UTP. We have built -- constructed a large percentage of them, and the rest are still in the UTP and on schedule to be developed.

MR. WILLIAMSON: Well, we may touch on that again in a moment. But again --

MR. SAENZ: I wanted to go back and I guess --

MR. WILLIAMSON: -- tell the Commission have the process now today as we envision --

MR. SAENZ: Okay.

MR. WILLIAMSON: -- it is going to be different --

MR. SAENZ: Right.

MR. WILLIAMSON: -- from two years ago.

MR. SAENZ: Okay. The process now -- because we have to -- the working groups that restructured the UTP that made it much more simpler -- it allows more flexibility and may -- instead of 34 buckets of money we now have 12. So some have been combined. So the buckets are now bigger. They have most dollars and they have more flexibility as to what projects can be built from that particular bucket -- with monies from that particular bucket.

The other thing that we did is we also wanted some assistance, because what we were hearing is that, you know, we're not getting our fair share -- the money is not being distributed like it should be across the state. So we put together some working groups. And these working groups consisted of people from the Department, some of our district engineers, people from the MPOs, the people that are on the policy boards, some local elected officials, we had some county judges, we had some city council members, we even had some state Representatives that were part of MPOs.

And we had these five working groups put together -- you all recall the formulas that we would use to distribute money in the different categories. One was in the metropolitan mobility, another group was working on urban mobility -- and metropolitan are areas greater than 250,000 population. Urban is areas between 50B and 200B  -- is over 200-. And then the statewide connectivity, or the rural areas, are the rest of the state. Also --

MR. WILLIAMSON: Were those elected officials that participate, and primarily the members of the Legislature, did we like select our favorites, or did our district engineers use their own judgment, or did we send a letter to all 181? How did that work?

MR. SAENZ: We worked with the district engineers. We also had just -- the other thing that happened, for example, I think Representative Pickett was on the -- what I call the category to the metropolitan mobility working group. And that he was -- he was I guess chair of the MPO. And because of his position in the MPO he came on as the representative for that category to the working groups.

So all these working groups worked together, and they put together a report. And if you all recall, last July we had a -- presented the recommendations on how to distribute the money in mobility categories, in district discretionary categories, as well as the preventive maintenance and the rehab categories. And we had --

MR. WILLIAMSON: When you say distribute the money, that means money, the source of which is our gasoline tax --

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: -- allocation from the Comptroller --

MR. SAENZ: This would --

MR. WILLIAMSON: -- and our motor vehicle registration fee allocation from the Comptroller?

MR. SAENZ: This would be all the money that was coming in to Fund six through our gasoline tax and our vehicle registration and motor fuel tax.

MR. WILLIAMSON: Which the Comptroller permits us to spend --

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: -- allocates to us.

MR. SAENZ: And so these groups came up with what I call the funding formulas and the distribution of those formulas across the state. And that is now what we are using as we move forward in developing the next Unified Transportation Program -- our next ten-year program -- so that the -- for example, in the mobility categories the metropolitan areas said that they wanted to get the money distributed by an allocation --

MR. WILLIAMSON: Of money.

MR. SAENZ: -- of money, not --

MR. WILLIAMSON: Not projects.

MR. SAENZ: -- not by projects. Because, one, we know what projects are higher priority in our area -- what projects will get us better improvements to our transportation mobility than you do. And that's rightly so.

MR. WILLIAMSON: So the difference between then and now -- then was we approve projects. Now, or soon to be in the future, we will allocate cash.

MR. SAENZ: Yes, sir. We'll allocate --

MR. WILLIAMSON: And the Houston district and the Dallas district and the Fort Worth district and the Waco district will take their allocation of cash and make their own decision about which projects move forward and which don't.

MR. SAENZ: That's correct.

MR. WILLIAMSON: I think that answers the question that I wanted answered. Members, do you need to talk to Amadeo while he's here? He's going to be here for the morning. (Pause.) Okay. Thank you, Amadeo. Coby, if you'll continue, please.

So challenge 1 is your Strategic Plan is going --

MR. CHASE: You know how much everything costs now.

MR. WILLIAMSON: -- to have -- I'm sorry.

MR. CHASE: The first challenge is you know how much everything is going to cost now.

MR. WILLIAMSON: So the Strategic Plan that you're going to present to us next month will take into consideration that, for the first time in modern time, we're actually dealing with how much it's going to cost us to do the things we say we're going to do.

MR. CHASE: Yes, sir.

MR. WILLIAMSON: Okay. Proceed, please.

MR. CHASE: Now, I'm going to cover some of the same territory that was covered in some of the questions, so bear with me. The second thing -- the second challenge to finding the landscape of our Strategic Plan is, as was just discussed, the simplification of the Unified Transportation Plan.

The UTP, as it's called, grew over time, not just in the number of financially vague projects, but also in the number of funding categories. Thanks to old Commission funding initiatives, changes in federal law, and actions at the Legislature 34 funding categories existed. Our planning professionals at the MPOs and in the districts spent more time moving money around than they did moving drivers around.

The Commission insisted that this be collapsed and let Austin figure out -- Austin meaning the Department of Transportation -- figure out where the money comes from and let the districts and MPOs figure out which projects were the best.

After a great deal of agony, 34 categories -- the 34 funding categories were collapsed into 12, making the process much easier to understand both from the inside and the outside.

Once the Commission simplified the funding categories, the Agency asked local elected officials, MPOs, TxDOT staff, and state elected officials to help us develop the best methods of distributing mobility funds, preventative maintenance funds, rehabilitation funds, and discretionary funds.

MR. WILLIAMSON: And when you speak of mobility funds here you don't speak of funds from the mobility --

MR. CHASE: No, no. Things --

MR. WILLIAMSON: -- Prop 14.

MR. CHASE: -- that get you home faster every night -- adding capacity -- getting you where you need to go.

MR. WILLIAMSON: Gasoline tax?

MR. CHASE: Gasoline tax money. Yes, sir.

MR. WILLIAMSON: Motor vehicle registration fees.

MR. CHASE: Yes, sir. Absolutely. But that's, of course, when the real fun started. They had to decide how to equitably distribute the funds, just like you've done in the past.

In December 2003 the Commission adopted the work group recommendations. These are now being used as a base for the financially realistic 2005 UTP. Two important things happened when you did that. You started distributing funds based on the needs of a region, not the needs of a project, and removed yourself from the project selection process.

Challenge 3 -- the next logical step was the Texas Metropolitan Mobility Plan. It is an undeniable fact that Texas' metropolitan areas are the economic engines of this state. All reasonable transportation planning models suggest that money should be spent where the congestion is. It isn't exactly a secret, but sometimes it can be a politically -- it can be politically thorny to say something like that.

MR. WILLIAMSON: Are you -- and so in warning us about the challenge, are you suggesting that the money has not been spent where the congestion is over the last 20 years or so?

MR. CHASE: Yes. I hope I'm not just suggesting it.

MR. WILLIAMSON: So when you say it's not a secret -- it's politically thorny -- what you mean is it hasn't been spent where the congestion is. How do we know that?

MR. CHASE: It has to a degree, but if you were -- if -- we have to spend money in places that aren't congested.

MR. WILLIAMSON: Do we keep data on that, Amadeo?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Do we keep data on where the money's spent and by district --

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: -- and by -- if I understood your previous testimony, the single barometer an engineer tries to use in the allocation of resources and the decision making process is the vehicle miles traveled, the basis of that cost, the effectiveness index. Is that correct?

MR. SAENZ: That's correct.

MR. WILLIAMSON: You have that data handy?

MR. SAENZ: I've got a table up here with our expenditures over the last 30 years.

MR. WILLIAMSON: By district?

MR. SAENZ: By district. Yes, sir.

MR. WILLIAMSON: Put that up, will you?

MR. SAENZ: And it's got a lot of data because it's 25 districts.

MR. WILLIAMSON: I can't even read it. Can you focus it? That looks like the old highway department. We need --

MR. SAENZ: But what we have there, just -- kind of just to walk you all through -- of course, the first column is the district -- we have 25 districts. The second column is our construction and maintenance expenditures that we have had from 1970 to 1998.

MR. WILLIAMSON: So this is the list of our districts?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: What's this?

MR. SAENZ: That is the construction maintenance expenditures that have been spent in each of those districts between 1970 and 1998.

MR. WILLIAMSON: Hang on a second. Between 19 when?

MR. SAENZ: 1970 -- just -- can you just go up so we just can see -- right there. See, our construction maintenance expenditures between 1970 and 1998. And the reason that I have it broken out like this because --

MR. WILLIAMSON: So over 28 years one -- we spent $3.2 billion.

MR. SAENZ: That's correct.

MR. WILLIAMSON: Actual dollars or adjusted for inflation?

MR. SAENZ: These are adjusted and calculated based on the year 2004. I brought everything forward to today's dollars.

MR. WILLIAMSON: So we spent $10 billion two in Dallas -- 10 billion two --

MR. SAENZ: In Dallas we spent $10.2 billion in 2004 dollars over that almost 30-year -- 28-year period.

MR. WILLIAMSON: We spent 2.5 billion in Bryan?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: 2.3 billion in El Paso?

MR. SAENZ: That's correct.

MR. WILLIAMSON: 6.7 billion in Fort Worth.

MR. SAENZ: That's correct.

MR. WILLIAMSON: Okay. What's this percentage right here?

MR. SAENZ: That's just the percentage of the dollars spent in a particular district as a percentage of the amount spent in the entire state.

MR. WILLIAMSON: Okay. So I want to be sure I understand this. I don't want to operate --

MR. SAENZ: Yes.

MR. WILLIAMSON: -- on emotion. I want to operate on facts. You're saying that in the Pharr district, your old home town, the 2.4 billion spent over that 28-year period --

MR. SAENZ: Yes.

MR. WILLIAMSON: -- was 2.65 percent of the total.

MR. SAENZ: It's 2. -- yes.

MR. WILLIAMSON: Correct?

MR. SAENZ: It's 2.5 -- yes, you're pointing -- it's the same -- it happens to be the same number, but you went to Waco. It's --

MR. WILLIAMSON: 2.65.

MR. SAENZ: -- 2.65 of the total.

MR. WILLIAMSON: Okay. What's this column?

MR. SAENZ: Okay. What I did there -- I was using this thing when we were looking at expenditures, so I broke it up. And between 1999 and 2003 -- and I'm using this chart because I was using it to compare our NAFTA funding -- this is what was spent -- the same -- the amount of money spent in those districts between 1999 and 2003.

MR. WILLIAMSON: Okay. So again, with Pharr --

MR. SAENZ: In Pharr --

MR. WILLIAMSON: -- whereas from '70 to '98 2.4 billion was spent -- 2.65 percent of the total.

MR. SAENZ: Yes.

MR. WILLIAMSON: From '99 through 2003 --

MR. SAENZ: We spent --

MR. WILLIAMSON: -- 1.06 billion was spent --

MR. SAENZ: Right.

MR. WILLIAMSON: -- for 4.4 percent of the total --

MR. SAENZ: Yes, that's correct.

MR. WILLIAMSON: -- of state expenditures.

MR. SAENZ: Of state expenditures.

MR. WILLIAMSON: So a simplistic way of looking at it, when you were district engineer --

MR. SAENZ: We spent more money in Pharr.

MR. WILLIAMSON: -- we almost doubled the percentage of the state's resources in Pharr.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And you thought we moved you up here because we wanted your help up here. You didn't realize we moved you up here so you'd quit spending all that money in Pharr. But is that how I read that?

MR. SAENZ: Yes, sir, that's correct.

MR. WILLIAMSON: Okay. What's that last column over there?

MR. SAENZ: The column is -- of course, this is what we have programmed in our current UTP between 2004 and 2007. Again, these are the program projects that are in the UTP, you know, for that time period. And, of course, the column after that is just the percentage of those dollars compared to the total.

MR. WILLIAMSON: So again, in Pharr, the 4.47 projected is going to follow the 3.37 --

MR. SAENZ: 3.37.

MR. WILLIAMSON: -- still above the 2.65 historically.

MR. SAENZ: Yes, sir. Right.

MR. WILLIAMSON: But falling.

MR. SAENZ: It is falling.

MR. WILLIAMSON: Are any of these programs winding down?

MR. SAENZ: The program is winding down. And as a result -- because, as I mentioned, I was looking at the NAFTA program here and to see what impact the NAFTA program had had. We had put together the NAFTA program in 1998 -- the end of '98. We started spending money in the latter part of '99, and it was going to go really from about 2000 to 2010.

MR. WILLIAMSON: So what -- this is the vehicle miles traveled?

MR. SAENZ: That is the vehicle miles traveled in the district. And what it does, it takes the average daily traffic for a particular highway and multiplies it by the number of the miles that -- of that highway. So this is a barometer of how many vehicle miles are traveled in that --

MR. WILLIAMSON: And that was the basis of the cost effectiveness index of the old way of allocating money.

MR. SAENZ: That was part of it. We had another couple of factors, but this was the main part of it.

MR. WILLIAMSON: On a percentage basis.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: You say main part. How much? 50? 60? 80?

MR. SAENZ: I'll look here at the --

About 60 percent.

MR. WILLIAMSON: Okay. The 4.47, 3.37 -- so the Pharr district had 3.58 percent of the -- or whatever, if I'm on the right --

MR. SAENZ: Yes, Pharr district has 3.58 percent of the vehicle miles traveled in the state.

MR. WILLIAMSON: And in the next four years they'll get 3.52 percent of the money.

MR. SAENZ: That's right.

MR. WILLIAMSON: For the previous five they got 4.47 of the money.

MR. SAENZ: And then in the early years they were getting 2.65.

MR. WILLIAMSON: 2.65.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: What happened to Dallas?

MR. SAENZ: Dallas --

MR. WILLIAMSON: 11 percent of the money going to 12 percent of the money. Right?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Falling to 11 percent of the money?

MR. SAENZ: Right. In Dallas the vehicle miles traveled is 15.84.

MR. WILLIAMSON: What happened to Houston?

MR. SAENZ: Houston had 19 percent of the money in the -- between -- in the first 28 years. Then they dropped to 14-and-a-half percent of the dollars in '99 and 2003. And they're at 16.44 with that program over the next few years. Their vehicle miles traveled is 20.06.

MR. WILLIAMSON: So is it fair to say that over about a ten-year period the percentage of the funds were transferred from Dallas and Houston to the rest of the state?

MR. SAENZ: It is. And if you look at it -- and if you just look at the NAFTA program, when the NAFTA program was put in place, because a chunk of money was carved out -- the total money did not change, so the chunk of money was carved out to address the border. Then the money from the other parts of the state had to come -- the money had to come from somewhere so it came from projects in the other parts of the state. And most of it came from the -- if you look at that most of it came from the metropolitan area.

MR. WILLIAMSON: So -- okay. Thank you. So how will that change under our third challenge, Coby, the Texas Metropolitan Mobility Plan?

MR. CHASE: Last year Governor Perry asked the Commission to do a few things to make the project selection system better. The Commission honored the Governor's wishes in its August 2003 Texas Metropolitan Mobility Plan. Here's the practical effect of what happened.

Governor Perry wanted to make certain that the state's metropolitan areas had a guaranteed source of funding. This is similar to the way the federal government sends highway funding to the states, in predictable streams.

However, this is entirely new in Texas. The benefit is that the Commission moved away from picking projects on a case-by-case basis to looking at the needs of an entire area.

This bears repeating because I really don't think the magnitude of this has completely sunk in with most people. It seems like every time I explain it to somebody it's outside of the Greer Building, or outside of the Department. It's a bit of a surprise.

The Commission now has guaranteed the metropolitan areas of the state steady and predictable funding with available revenue. The Commission gets out of the process of deciding each project and leaves that to the local MPOs to decide.

The Commission will measure the plan by two simple yardsticks -- will congestion be reduced and has the area's baseline funding been leveraged. And by baseline funding, I mean gas tax dollars, just to put it simply, things --

MR. WILLIAMSON: Okay. Stop. I don't mean to be rude, but normal people might have not understood what you just said. Let's go back and make sure I understand since I consider myself a member of the normal people.

You said the Governor asked us to do a plan that would provide reliable funding. We responded with the Texas Metropolitan Mobility Plan. What are the -- Amadeo, where you'd go? Steve?

MR. SAENZ: I'm right here.

MR. WILLIAMSON: What are the metros?

MR. SAENZ: The metros --

MR. WILLIAMSON: Who are the metro districts?

MR. SAENZ: The metros are the eight largest metropolitan areas of the state.

MR. WILLIAMSON: And they are?

MR. SAENZ: They're the ones that have their population greater than 200,000 population or more.

MR. WILLIAMSON: So that's Dallas --

MR. SAENZ: Dallas --

MR. WILLIAMSON: -- Houston --

MR. SAENZ: Dallas/Fort Worth, Houston --

MR. WILLIAMSON: Wait, wait. Dallas, comma, Fort Worth.

MR. SAENZ: Dallas slash Fort Worth. They're together because they're one metropolitan area.

MR. WILLIAMSON: Okay. They're one metropolitan -- okay.

MR. SAENZ: Houston, Pharr, Corpus Christi, El Paso, Lubbock is our newest one, Austin, and San Antonio.

MR. WILLIAMSON: Okay. And what you said, Coby, was we've made an allocation of resources to those metropolitan areas. And we, the Commission, will measure the projects they choose to fund out of that allocation by two simple yardsticks. You said, will congestion be reduced -- doesn't that get us back to the CEI, Amadeo, the harsh allocation?

MR. SAENZ: It gets to measuring the impact on congestion -- determining a congestion index -- a measure of congestion. How are you improving congestion?

MR. WILLIAMSON: Ah.

MR. SAENZ: It's not on a --

MR. WILLIAMSON: So it doesn't have anything to do with cost effectiveness.

MR. SAENZ: No.

MR. WILLIAMSON: It has everything to do with congestion relief.

MR. SAENZ: How do you relieve congestion in an area.

MR. WILLIAMSON: And then we also -- and this is a plan we've already adopted.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And this is a plan that was developed from the ground floor up with participation by community transportation leaders, including some legislators --

MR. SAENZ: It started as part of the restructuring, and that's where we had the input. The Texas Metropolitan Mobility Plan started with a group of our district engineers and some of our staff here in Austin. But then we incorporated and got a lot of feedback and comment from our large metropolitan area stakeholders and partners in putting the plan together. And now we have asked people like Michael Morris --

MR. WILLIAMSON: And Michael, you understand the Texas Metropolitan Mobility Plan to include a component that says how much of the gas tax funding has been leveraged in the tolls.

(Michael Morris nods yes from the audience.)

MR. WILLIAMSON: Thank you. So Coby, you say challenge 3 is our Strategic Plan that we've got to approve in June will, by necessity, be influenced by the Texas Metropolitan Mobility Plan.

MR. CHASE: Yes.

MR. WILLIAMSON: Which has not got anything to do directly with the mobility fund.

MR. CHASE: Nothing -- no.

MR. WILLIAMSON: And that plan, approved from the grassroots up, is built upon the notion that your projects will reduce congestion and your allocation of gasoline tax and motor vehicle registration fees will be leveraged in order to build the maximum amount of assets in your community possible as quickly as possible.

MR. CHASE: Exactly. Precisely.

MR. WILLIAMSON: Please continue. And members, please interrupt at any time. This is not a two-person show. Any time you have questions just go.

MR. CHASE: The big eight regions, as they were just described, face acute problems. It is important that they go to the next level and identify not just projects by the magnitude of their funding shortfall.

Their plans also need to contemplate other modes of transportation and new sources of funding to create a plan to reduce congestion. And if I may editorialize for a moment, a perception still lingers that projects are awarded by the Commission because someone made the right phone call to the right person. It certainly isn't accurate, but the suspicion exists. If it were true, I would try to make those phone calls for Mo-Pac. This isn't -- I've been trying from the inside.

This isn't to say that the rigid selection criteria put in place during the Lanier years hasn't become somewhat malleable over time -- the congestion index. Any system that exists this long can't completely withstand alteration or control by outside forces.

For instance, the cost effectiveness index -- the measure of a project's worth is scored by its cost and ability to provide mobility -- has been skewed in two directions. And we had a fairly healthy discussion about this. Let me just say, rich communities can buy down the cost of a project by making it easier to get. Disadvantaged communities, thanks to a change in law, can waive some of or the entire local share. The result is that it became so weak that it could easily be manipulated by --

MR. WILLIAMSON: That relates to the question I asked Amadeo a while ago --

MR. CHASE: Yes.

MR. WILLIAMSON: -- about communities bringing cash in to buy projects --

MR. CHASE: Right. But it wasn't just weakened by rich communities -- not the best choice of words. But it can also be used by economically disadvantaged communities as well. So it starts to become nothing at some point.

MR. WILLIAMSON: So it started out harsh and square cornered and sharp, it became rounded and blunt, and then it became kind of dented, and at the end indistinguishable as a rigorous method of distributing cash.

MR. CHASE: Right. Precisely.

MR. WILLIAMSON: But we don't have that luxury anymore. I'm sorry. Go ahead.

MR. HOUGHTON: Let me ask a question. Do the communities -- or, Amadeo, do they have now the MPOs or the DEs [phonetic] their history of index from TTI? I mean, I have it right here of various communities the index --

MR. SAENZ: Yes, sir.

MR. HOUGHTON: -- and what the pattern has been --

MR. SAENZ: Yes, sir.

MR. HOUGHTON: -- and index and what the future now holds for them?

MR. SAENZ: Absolutely.

MR. HOUGHTON: They do have that now and they're working off of that index? That congestion index?

MR. SAENZ: The eight large MPO -- the eight metros are working on their Metropolitan Mobility Plan. And part of it is they need to see what congestion index is going to be, so that data has been provided. We've been working with TTI to provide them that data for each of the eight metropolitan areas.

MR. HOUGHTON: And they are getting that information.

MR. SAENZ: Yes, sir.

MR. HOUGHTON: Okay.

MR. NICHOLS: Mr. Chairman?

MR. WILLIAMSON: Please.

MR. NICHOLS: I -- the comments I'm going to say I've said publicly at a few other places. But much of what we're going over -- a different way to look at the same thing is that, I know from over a period of years the legislative members, as well as communities, have asked us to do with our planning document three basic things -- make it simple so people can understand it, make it fair -- everybody agrees with fair --  and give us some local input -- an opportunity for input rather than projects popping up by some formula out of Austin.

In tackling those three things, the simplification -- make it simple -- our project was -- our selection categories of funding was very complicated. And when things are complicated, people don't understand them and they don't -- not to trust them. The taking of 32 categories and bringing them down to 12 was a method of simplifying it, to answer the first.

We further simplified that by breaking it into preservation, that which it takes to maintain the system, and the expansion or new stuff, which is what most people are asking for.

In the fair category, the Department has always, I felt, tried to very objectively have a criteria for project selection. It was more a needs basis. That's why there was formulas -- and a wide variety of those complicated formulas -- to take the random picking out.

But fairness -- by going to a allocation basis, I think the Commission recognized that the needs were so great in all these areas and that a community's plans and dreams in their development process is much more than just a cost effective index on one particular project segment over another.

And by going to an allocation basis on the fairness we -- then communities are able to plan out. The allocation basis, very simply, since two-thirds of the people lived in the metropolitan area, I think we -- the Commission picked in that process roughly two-thirds of all the expansion money, allocated that for the metropolitan areas.

Further breaking it down, we got all the metros together and they actually agreed on a formula of how to distribute those funds amongst themselves based on population, vehicle miles traveled, number of cars registered. So beginning this past year, all the expansion money -- basically all the expansion money was allocated to those communities.

The third piece of the formula let us have local input. The Commission turned over, in effect, to those metropolitan planning organizations, who have very professional staff working with our districts, to lay out and help decide amongst themselves, with all these dollars they now have allocated to them, which projects are going to be the most critical for the development of our community.

And how it develops in Houston might be a different method than how it develops in Dallas/Fort Worth or El Paso or San Antonio. Some may choose a different mix of transit or rail or highway expansion or whatever, but that's a local choice. So those bodies recommend to us which of those projects. So that's the local input.

And that's the part that also was implemented this past year. And what most communities have not realized -- it just hasn't really sunk in yet, but I think it will as time moves on -- is that they are empowered to take the money allocated to them, rearrange in their project mix that which is already on the books.

We then took another step, so they could plan further out, all the way out to 2030 and gave them the authority to -- development authority, with the districts working with the MPO, to try to plan projects even further out.

So they can see in each of these communities which projects they can do, which projects they can't do. Our districts can now go in and anticipate in the future with traffic volume growths, based on forecasts of population growths, what the congestion index will be, what the shortfall in transportation will be.

And I think what we're discovering is, in those areas of the state that we have done that, it is dramatically short, even though it's allocated. We had estimated three times off for the last several years, and what we're discovering as we pull these numbers, which should be complete early in the fall, is that the shortfall is about five times off -- five times off -- because we continue adding volume at a very high rate in those areas and not nearly the capacity.

But the only way to expand that, using our traditional funds, is by pulling money away from some other community, which is not what we said we were going to do.

MR. CHASE: Exactly. And you never said it was enough. You just said it was guaranteed and it's flexible, which is -- which actually does a whole lot.

MR. HOUGHTON: I have another question --

MR. CHASE: Yes, sir.

MR. HOUGHTON: -- Coby and Amadeo. Where is the check and balance? You mentioned earlier in the discussion that roads that were built shouldn't have been built just because -- whatever the reasons were.

Now we have a congestion index. Where is the check and the balance? And it sure looks good -- nice, you know, pavement on the ground or concrete -- but it doesn't meet a standard of busting congestion.

MR. CHASE: Well, all --

MR. HOUGHTON: I mean, we can put the interchanges in the air and the concrete on the ground, and you know, feels good, looks good, look at what we've done. Now, where is the check and balance from this Commission?

MR. CHASE: I'll let Amadeo fill in if I miss something. But the Commission will be approving plans. Each plan will -- and the project in the plans will be able to identify the amount of congestion expected to be reduced. Is that -- did that answer the question? You, the Commission, will be approving the plans.

MR. HOUGHTON: All right.

MR. CHASE: And each project will say it will reduce the congestion -- it's scored by the Texas Congestion Index, which we all see once a year on the Today Show, thanks to Tim Lomax at TTI.

MR. HOUGHTON: All right.

MR. WILLIAMSON: So challenge 3 was understanding the impact of the Texas Metropolitan Mobility Plan on our Strategic Plan.

MR. CHASE: Yes, sir. And -- but I do need to end this by reminding you that the -- you are committed to this, and that the funding is now promised to communities like Houston, Fort Worth, Dallas, El Paso, and it does come with a cost. Then this will weigh heavily on our Strategic Plan.

Challenge 4 -- NAFTA. And spring boarding a little bit off the -- NAFTA is something that was unexpected. I mean, you couldn't factor that into a formula. NAFTA was a good idea, but it wasn't our idea. Regardless, it now resides squarely on our border with Mexico. Our border communities rightfully pointed out that this would a disproportionate impact on their trade transportation infrastructure, and it did.

Then Lieutenant Governor Perry and former Commission chairman David Laney announced in October 1999 a plan to accelerate border trade transportation infrastructure. Commissioner Nichols, Johnson, and Laney fanned out across the border to make the announcement. Lieutenant Governor Perry joined Commissioner Nichols to reveal the news in El Paso. The result was a $1.8 billion acceleration of projects along the border.

We're now in the fourth year of that ten-year program. And if you recall my discussion earlier about springing project costs you won't be surprised to learn that the price has jumped to $2.4 billion.

MR. WILLIAMSON: That's 2.4 billion from 1.8 billion for the same projects envisioned in October of 1999?

MR. CHASE: Exactly. And you are committed to funding that. That's a 34 percent increase. We've gone to contract with $865 million. But my point here is that this is a commitment made by the leadership in this state to fund the projects in the border area.

The money, however, did not magically materialize. The metropolitan areas of the state subsidized this expansion in border infrastructure. Now, they also realize -- they also rely on a healthy border infrastructure to move goods and services to their parts of the state and through the state. But --

MR. WILLIAMSON: So those are the percentages that Amadeo put up earlier that I asked about.

MR. CHASE: Exactly. That was precisely what you were talking about at that point.

Challenge 5 -- new funding methods. The Legislature has recently granted us three powerful new methods of financing --

MR. WILLIAMSON: Stop.

MR. CHASE: Yes, sir.

MR. WILLIAMSON: What happens -- you're telling me about challenges in your plan.

MR. CHASE: Yes.

MR. WILLIAMSON: So Amadeo, what happens when -- is this going to be a ten-year plan or is it going to take longer than ten years? Did you say something about that earlier?

MR. SAENZ: Based on the dollars that we have available to us -- the Fund 6, gasoline tax, motor fuel tax -- we get only so much money. So if the project cost has escalated, then the projects have to be delayed or kicked back. So it takes longer to build.

MR. WILLIAMSON: So the projects will be built, albeit at a higher cost in a longer time line.

MR. SAENZ: Yes, sir. Because the longer the project takes, inflation also increases, so it just -- this is going to continue to escalate and get bigger.

MR. WILLIAMSON: Okay. So going back to challenge 2 and 3, how does our new method of planning, and in particular, the Texas Metropolitan Mobility Plan, impact the resources that are going to be available to El Paso, Laredo, and Pharr? In other words, we're going to this allocation system.

MR. SAENZ: Okay. For El Paso and Pharr, that are two of the metropolitan areas, they're putting together this Metropolitan Mobility Plan. We asked the metropolitan areas to put together a plan that was not financially constrained.

We've given you your dollars numbers, but set them aside for a little while. Go out there and identify your needs and determine if you build that what will be the resulting impact on congestion. Okay?

You start -- really, you start by -- if I don't do anything, my congestion is going to grow to say, three. If I go out there and I build all of these -- and we want them to look at across the border -- we just don't want them to look at highways, we want them to multi-modally -- look at rail, look at public transportation, look at what can help you decrease congestion in your area.

Once you identify your needs and your plan then you will come back and say, Okay, if I build this I will now be able to reduce congestion through my cost -- through my congestion index to this amount.

MR. WILLIAMSON: Uh-huh.

MR. SAENZ: Now I come back to the other side and I pick up my ledger and I find out how much -- what resources do I have available to me. Well, you have the money available through the Commission from the gasoline tax. And if you're including some public transportation, you might have some public transportation dollars available to FTA and local tax bases that are available.

And you look at now what can I build and how far can I go down and build with the dollars that I have available to me. Then what's left over to get to that desired congestion index will be what we call your gap, or much more money do I need to get to that point.

If I can only build half of it, then my congestion will not be what I planned to be -- it's going to be something higher. And that's what the metropolitan areas are going to put together to identify how they can best leverage their resources to come up with a way to make up that gap and get their congestion to a point that they are willing to live with.

MR. WILLIAMSON: Okay. That explains that for me. Thank you.

MR. CHASE: Challenge 4 -- NAFTA.

MR. WILLIAMSON: Well, I think --

MR. CHASE: Challenge 5. I'm sorry.

MR. WILLIAMSON: -- I understand, Coby. I -- you made that clear, and I --

MR. CHASE: Okay.

MR. WILLIAMSON: I feel comfortable with the answer Amadeo gave.

MR. CHASE: Okay.

MR. WILLIAMSON: You're just making us -- you're just saying we've got that commitment. Commitment's got to be maintained. Amadeo said we're going -- that commitment's going to be reflected in our Strategic Plan.

MR. CHASE: Correct.

MR. WILLIAMSON: Okay.

MR. CHASE: I apologize. I went backwards for a second.

Chapter 5 -- new funding methods. The Legislature has recently granted us three powerful new methods of financing projects. Let me speak to each one individually.

The Texas Mobility Fund was capitalized this last session with revenues derived from certain traffic fines. Next biennium it will be funded with fees associated with driver's licenses and automobile inspections. This is truly new money.

The Commission is currently considering a Strategic Plan just for the Mobility Fund. And let me emphasize this is separate from what I'm discussing about the Agency's Strategic Plan.

The Commission is currently considering a Strategic Plan just for the Mobility Fund. Should two-thirds go to the metropolitan areas of the state and one-third be used in rural areas? Should preference be given to creating assets like toll roads or liabilities like pay-as-you-go roads? Or will non-highway innovative revenue-generating projects be considered? Is it about cement or is it truly about mobility? You'll be wrestling with that question, and we have to wrestle with it in the Agency's Strategic Plan.

The Legislature and Texas voters created what we call Ogden Bonds last year.

MR. WILLIAMSON: So why do we need a Strategic Plan for the Mobility Fund? Why do we need a separate one?

MR. CHASE: Well, it is -- well, first of all, it's required separately in law. And second --

MR. WILLIAMSON: Wait, wait, wait. It's what?

MR. CHASE: Required separately in law. House Bill 3588 required that the Agency adopt a Strategic Plan for the guiding principles and how these Metropolitan Texas Mobility Fund will be distributed.

MR. WILLIAMSON: So the law requires us to adopt a Strategic Plan for the use of the Mobility Fund. Correct?

MR. CHASE: Yes.

MR. WILLIAMSON: Is that what you just said?

MR. CHASE: Yes, sir.

MR. WILLIAMSON: Steve, I know you're familiar -- and James -- with the Mobility Fund. Does the law Coby's talking about give us guidance about, for example, allocated equally by population or equally by income -- average personal income, or geographically?

MR. BASS: No, sir, it does not.

MR. WILLIAMSON: Doesn't give us any guidance about, take the Mobility Fund and be sure that you return it to the communities in the exact same proportions as those citizens might have paid the fines?

MR. BASS: No, sir, it does not.

MR. WILLIAMSON: Does it tell us to use it for toll projects or not use it for toll projects?

MR. BASS: No.

MR. WILLIAMSON: Does the law give us any guidance at all?

MR. BASS: No, sir. It just merely states that prior to issuing debt backed by the Texas Mobility Fund the Commission must adopt a Strategic Plan for the use of those proceeds.

MR. WILLIAMSON: So the law is clear. It's the responsibility of the Commission to determine how the funds are to be used -- how the debt is to be used. And it must incorporate that now into a Strategic Plan.

MR. BASS: Correct.

MR. WILLIAMSON: Unequivocal. Is Richard Monroe here? (Pause.) Is that how you see it from the OGC from the legal perspective, Mr. Monroe?

MR. MONROE: That's not just the OGC's perspective. That's the only perspective.

MR. WILLIAMSON: Thank you, sir. When do we -- if you've got to incorporate that into your Strategic Plan, when do we have to adopt -- what's the path, Steve, for adopting this?

MR. SIMMONS: For the record, my name is Steve Simmons. I'm deputy executive director of TxDOT. I believe that at your June Commission meeting we'll be presenting you with the Strategic Plan for the Texas Mobility Fund. There was a discussion item at the last Commission meeting on how to develop it.

MR. WILLIAMSON: Okay. Thank you. Do we have to spend it on roads?

MR. BASS: No. The law states that it can be for roads or other public transportation projects.

MR. WILLIAMSON: So for example -- and I'm not trying to suggest anything to the mayors of our cities that are appearing today -- but we could take this money and use it to move the BNSF and the Union Pacific out of downtown El Paso, Fort Worth, Dallas, Brazoria County?

MR. BASS: I think you would have to be able to do that if, in the place you are going to p