Texas Department of Transportation Commission Meeting

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

Thursday, August 26, 2004

COMMISSION MEMBERS:

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

STAFF:

MICHAEL W. BEHRENS, P.E., 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. Welcome to the August 2004 meeting of the Texas Transportation Commission. Going to do all of this without a script this time, John. We appreciate the fact that each of you have chosen to attend and participate in what we believe is one of the more important meetings of the year.

For the record, it is 9:25 a.m., and I would like to call the August meeting of the Texas Transportation Commission to order. Also, for the record, public notice of this meeting, containing all of the items on the agenda, was filed with the Office of Secretary of State at 2:08 p.m. on August 18, 2004.

Before we begin our meeting today, if you would indulge me, let's all take out our cell phones, our personal communication devices, our PDAs, and let's take a moment to turn them off or put them on the silent mode so that we won't be disrupted during our meeting. Thank you very much.

As is our custom, we will open with comments from the other commission members, and I would like to begin with Commissioner Houghton. Ted, have at it.

MR. HOUGHTON: Good morning. Thank you, Mr. Chair. Always a pleasure to be here and to see such distinguished guests in the audience, as well as the regular attendees. Look forward to the discussion on the Texas mobility plans from around the state and comments by those in the audience. Thank you, sir.

MR. WILLIAMSON: Hope?

MS. ANDRADE: I also would like to welcome and thank everyone that has joined us in Austin for our August commission meeting. And Mr. Chairman, I couldn't help but remember, as I was driving on I-35 this morning from San Antonio, our last meeting where we were in Childress, Texas, and we rode to our commission meeting in a stress-free rush minute traffic.

MR. WILLIAMSON: Rush minute.

MS. ANDRADE: But I'm glad to be in Austin and I'm looking forward to a very productive day where we make decisions not for today but for tomorrow. Thank you.

MR. WILLIAMSON: Most excellent.

MR. JOHNSON: I guess my interpretation is that you had no stress coming up, and that one minute in Childress was a little bit more than you wanted to handle.

MS. ANDRADE: Commissioner Johnson, I have to tell you that it was stressful but I enjoyed the most beautiful sunrise and I appreciated being in Texas.

MR. JOHNSON: Don't we all.

It's interesting to note how many people are here for the August meeting, and the August meeting is generally one that's pretty vanilla in terms of the agenda items, and I too would like to welcome you, and appreciate very much your willingness to come out and express your views and opinions because the more I'm around what goes on at this agency, the more I become convinced of how important transportation -- and in this case surface transportation -- are to the quality of life in this great state. So I appreciate your being here and look forward to a very productive session.

MR. WILLIAMSON: Robert.

MR. NICHOLS: I'd also like to welcome all of you here and I truly mean that. I know there will be diverse opinions and ideas at issue today. We look forward to everybody's ideas and appreciate the time and consideration for you coming here for what you believe in, and when you leave, I ask you to drive safely back home. Thank you.

MR. WILLIAMSON: Thank you, members, and I associate myself with all those remarks. Again, welcome to the commission meeting.

We do value on the commission frank and open exchanges of opinions and ideas; we think that the most important part of civilized discourse in this great country is our willingness to frankly exchange our viewpoints and to listen to the other person's side, and we think this is a good forum in which to do that.

We are particularly grateful for some special guests who attended today and they'll be all recognized in their order, but to each member of the House and Senate who have taken the time to be here, Senator Barrientos, Senator Lindsay, Mr. Pickett, Ms. Hamric, others. My sight is so bad that if I don't know you personally, I can't recognize you, I apologize. We appreciate your taking your time to be here; I know how difficult that is.

If we have persons who wish to comment on an agenda item, we ask that you fill out this yellow card or a yellow card like this, and you can find that out in the lobby; and if you intend to comment not on an agenda item but on transportation generally in the open comment period, we ask that you complete a blue card -- again, cards can be found in the lobby at the entrance to this room. Regardless of the color of the card, other than statewide elected officials, we ask that you try to limit yourself to three minutes, not because we wish to suppress your speech but because there are so many people that wish to comment that if we didn't try to put some limitations on that, we would be here for several days and that would be difficult, and for those who hadn't spoken yet, it would be rude to those at the end of the line.

I also need to announce that we are going to take some items out of our order today. We always accommodate, if we can, out-of-town guests; we always try to accommodate, where we can, elected state officials who choose to come and participate in our meetings. And frankly, the chair exercises the prerogative to take things out of order if it means a change in the context of the day's events, and I don't hesitate to do that. I'll try to give you as much warning as possible so you won't be caught off guard. I will tell you that we think we have a full-day meeting today and that means we will be taking a lunch break, and that lunch break will occur around one o'clock. Would that be about right, Mike?

MR. BEHRENS: 12:30, one o'clock.

MR. WILLIAMSON: Around one o'clock we'll take a 45-minute to a one-hour lunch break for those of you that need to plan for items later on in the day.

I need to also announce that we have some legal matters which require the convening of an executive session and what I'm going to try to do is coordinate the executive session with our lunch hour so as to not make the meeting, for those of you who are participating, any longer than necessary.

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

MR. NICHOLS: So moved.

MR. WILLIAMSON: Do I have a second?

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: The motion passes and the minutes are adopted.

We need to take a moment to do something that we do here at the commission on a monthly basis which reinforces and more typifies the family approach that the Department of Transportation tries to take in its leadership of its 14,000-plus employees.

Ms. Diane Burkett, are you here? Diane, can you come to the podium, please? Go over there where the microphone is.

MR. NICHOLS: Your speech is next.

(General laughter.)

MR. WILLIAMSON: We take great delight in surprising our great employees, and I think we may have pulled this one off. Have we pulled this one off?

MS. BURKETT: Yes, you did.

MR. WILLIAMSON: This, ladies and gentlemen, is Ms. Diane Burkett. Now, the interesting thing about Ms. Burkett is, as young as she appears to be, she has been with this department for 35 years of her life, and during that time has performed admirably as a contributing employee to this organization's success, and it is the desire of this commission to recognize and thank you for 35 years of service. I would like to read into the record the resolution that we will present to you in a moment. The resolution reads:

"In recognition and appreciation of 35 years of meritorious service with the Texas Department of Transportation, the Texas Department of Transportation Commission recognizes and presents to you this certificate, Diane D. Burkett, and extends to you its congratulations and best wishes for a long and happy continuance of service" -- because we could not operate on the second floor without you up there making sure we were all lined up and doing what we were supposed to do. And it's signed by all five commissioners and the executive director. And I'm going to bring it to you in a minute, but I'm going to first give you the opportunity to say all those things you've wanted to say all these years.

(General laughter.)

MS. BURKETT: I just thank each and every one of you. I've enjoyed being with the department; I've seen it go through a lot of changes and I think we're just on a better road, and I thank you for letting me work here.

MR. WILLIAMSON: Well, we thank you, and in a moment we're all going to walk down and take a picture, but in the meantime, let's all recognize Diane for her work.

(Applause and pause for photos.)

MR. WILLIAMSON: For those of you who take advantage of our continuously updated website and our attempt to publish as far in advance as possible our agenda, you were probably thrown off guard because the printed item was a resolution for Ms. Ralls. We had to omit this from the agenda in order to get the proper level of surprise for Diane.

We have a resolution honoring yet another one of our department's great leaders and I suppose departing leaders, the sad truth, because she's decided that she's given us all that she wishes to give us and she's going on to spend more time with her family and other pursuits.

Mary Lou, are you here? Do you want to change your mind? Don't want to change your mind? I don't blame you. You've done about enough.

This is Mary Lou Ralls. She is the director of the Bridge Division, and I think it's probable that there are certain aspects of the department's business that receive more public attention than others, but the others are as important to the safety and promotion of commerce. The interesting thing about what this department does is not only is it a team, family-oriented, but they're components to building a transportation asset that any one component absent means the entire asset is worthless, and certainly bridges fall into that category.

At this point I'm going to turn it over, if you don't object, to Mike because I think he's got pretty deep feelings about being the one to take credit for honoring you for your years of service.

MR. BEHRENS: Mary Lou, in a minute I'll read this resolution to you, but just for folks to know, Mary Lou has been involved, of course, directing our Bridge Division, she was also involved a lot in research; she's known nationally for the work that she has done in structures; she also served on the AASHTO, the American Association of State Highway and Transportation Officials, the group they put together to look at homeland security in transportation issues. So Mary's done a lot of work here in Texas but has also done a lot of work across the whole country which we appreciate and was glad that she was able to represent Texas in doing that.

Let me now read this resolution:

"Whereas, the Texas Transportation Commission takes great pride in recognizing Mary Lou Ralls, P.E. as an outstanding dedicated engineer who has served the Texas Department of Transportation for two decades, most recently as director of the Bridge Division;

"And whereas, Ms. Ralls earned her master's degree in civil engineering from the University of Texas at Austin in 1984 and her license as a Professional Engineer in 1987, and during her career was recognized with many honors including the Texas Transportation Institute's Dewitt C. Greer Award in 1994;

"And whereas, Ms. Ralls has devoted her professional life to public service with TxDOT by holding various positions including: engineering assistant, bridge design engineer, bridge construction maintenance engineer, and structural research engineer, and during that time served on several professional committees;

"And whereas, Ms. Ralls became director of the Bridge Division in December 1999 and oversaw policy standards, manuals and guidelines for the design, construction, maintenance and inspection of 48,720 bridges in Texas;

"And whereas, Ms. Ralls has devoted her professional life to improving transportation safety and mobility and has worked to improve the quality of life for all Texans;

"Now, therefore, be it resolved that the Texas Transportation Commission on the occasion of her retirement from service with the State of Texas, hereby recognizes and thanks Mary Lou Ralls, P.E. for her professional career achievements and loyal service on behalf of Texas and its citizens.

"Presented by the Texas Transportation Commission on this the 26th day of August 2004." And signed by all five commissioners.

Mary Lou, congratulations.

MS. RALLS: Thank you.

MR. WILLIAMSON: Your last shot at us; go ahead and take it.

(General laughter.)

MS. RALLS: It's been a delight working here. I think TxDOT is just the premier agency in the state of Texas; it's a wonderful place to work, it's given me a very fulfilling and challenging career the entire time, and I appreciate the opportunities I've been given here. Thank you.

MR. WILLIAMSON: That's kind of you. Members, Ted?

MR. HOUGHTON: I meant to mention it when Diane was up here and I see Mary Lou, but we did not have child labor laws back when these people were hired?

(General laughter.)

MR. HOUGHTON: Congratulations.

MS. ANDRADE: Thank you, congratulations, and as I travel throughout Texas, I hear about you, so I'm sorry that you're leaving us but I thank you for everything that you did for us.

MS. RALLS: Thank you very much.

MR. JOHNSON: Are we going down the line here? Mary Lou, to the best of my recollection, you are the only bridge division head that I've had the pleasure of knowing, or at least knowing in that capacity, and as you know by some of my comments, I think bridges are very important because they have a lot to do with the driving experience. We don't have mountains and oceans that we can show off too much of, so bridges is one way we can enhance the driving experience, and I want to laud you for -- there are many examples around the state of your creativity and leadership, and I want to thank you personally for those, and for the people who drive the roads and cross the bridges of this great state. I know they're grateful also.

MS. RALLS: Thank you, sir.

MR. WILLIAMSON: Robert.

MR. NICHOLS: Mary Lou, it has been nice knowing you for a number of years now. I had read about you and the work you had done related to bridges and pre-stress beams and things like that way before I ever met you. You and your team have received statewide and national recognition for many of the innovative ideas and programs on pre-stress beams and bridge designs for a long time, not just one but multiple.

When you had the opportunity to head up the Bridge Division, since you've been in that capacity, I know that the number of bridges statewide, not just on the state system but the county bridges and city bridges as part of that program, have increased dramatically, the work that's been done. And I know that even though you're going to be doing a different type of career now, that you're going to take great pride as you drive around the state and see bridges that you have worked on, and we want you to know that we appreciate the dedication that you have had to this state and our state system is better off because of you. Thank you.

MS. RALLS: Thank you for your leadership in helping us get there.

MR. WILLIAMSON: I haven't been around as long as Robert, and I'm not as old as Robert, but I have known of you all the way back to my legislative days and have certainly gotten to know you better since I've been on the commission, and people in Texas probably don't realize how much national and in fact international leadership the Texas Department of Transportation exercises in engineering and construction services and ideas all the time, and that's not because the organization is different -- an organization is inert, an organization is just a structure -- we're known nationally and internationally because of the individuals who work full-time for this organization and attract attention, and you're certainly one of those individuals.

I really wish you wouldn't go. It hurts every time someone leaves because I know what great things we're going to be doing in the next ten years, but I suspect you'll still be a part of it, you'll volunteer, come in and give us your opinion, or maybe even have an idea to work on in the outside world. I appreciate your years of service and your contribution to this state. Thank you very much.

MS. RALLS: Thank you very much, and thank you for your emphasis on innovations and being more innovative. That's what we need to be doing.

MR. WILLIAMSON: I appreciate that. There are some in the audience today that wish we might not be as innovative as we have been, but they'll get a chance to talk about that.

We're going to officially recognize you and if the audience would join with us.

(Applause and pause for photos.)

MR. WILLIAMSON: We'd like to thank the audience for indulging us and participating with us; these things are very important to the commission and the executive administration and the employees of the department.

We are going to at this point deviate from the posted agenda, and I'm going to try to do the best I can to explain it to my colleagues and the audience.

We asked some of our urban, our metro district engineers to come bring us up to speed on the progress being made in the metro areas, the urban areas, with regard to our request for a mobility plan because we are a creature of the political process. The five of us that sit at the commission level and develop policy for the department are appointees of the governor and confirmees -- or will be, we hope -- of the Senate. Because of that, we are a creature of the political process and we are sensitive to and listen carefully to those who are elected in this state to give us direction and guidance on what our policy should be about transportation.

In the last month, as our wonderful core of urban district engineers have sort of fought through at the local level the development of the mobility plan, some of our House and Senate member transportation leaders have expressed some concern that we're headed down the right path, a few that we're not going fast enough, a few that we're going in the wrong direction, and we always listen when that happens. So we're going to hear from some of those people and I think we might even hear from some locally elected officials on the discussion of the progress of the mobility plan.

Now, in the last month it seems to me that certain business and community and even a few statewide and federal elected officials have assumed it important to make clear their position on certain matters, and as I said earlier, I do believe the mark of a civilized nation is one in which the participants can argue and disagree and listen to each other and get on down the road. But I think that that discussion needs to be in the context of the facts as best we know them and in the context of the truth, and not in the context of what I like to call the soft glove of the empty promise, not backed up by the facts.

So before we hear from these district engineers, Mike, and before we hear from those who wish to comment directly, I think it would probably benefit all of us for us to share with our guests the facts as we see them facing the transportation world. And so I would like to take the Legislative Affairs director out of order and bring him up not to necessarily go over the legislative program as we scheduled so much as to establish for the audience some information that we operate off of that we believe to be accurate that in many ways, maybe most ways, color our policy decisions. And you are?

MR. CHASE: I am Coby Chase, director of Legislative Affairs.

MR. WILLIAMSON: Thank you.

Now, members, I'm going to ask a few questions and I do invite you to ask whatever other questions you feel necessary.

Coby, this morning there was an article in the local newspaper and there was a quote in that article attributed to the senior senator of Texas that Texans are only receiving 90 percent -- that the federal government is only returning 90 percent of what Texans pay in federal gas taxes back to the State of Texas. Now, that 90 percent figure caught me off guard because I have operated on the assumption that the true percentage actually ranges from as low as 81 percent to maybe as high as 84 percent, and I wish you would take just a moment -- because we want to operate on the right set of facts here. We don't want to be guilty of making decisions based on the wrong information -- so what can you share with the commission about when I pay a dollar of federal gas tax and it's sent to Washington, D.C., how much of that dollar is actually returned to the state for transportation purposes?

MR. CHASE: Well, it is kind of a common thing to say we get a 90.5 cent rate of return and that's not true. We get a 90.5 percent rate of return on about 90 to -- I'm going to be off just a little bit but close enough -- to about 90-95 percent of the dollars that are distributed. Some of the money is actually distributed by discretionary means, and so when you factor that in, all the gas tax money that we send to Washington -- and it varies from year to year, it will go low down to about 81-82 percent, one year we got close to 90 percent, and when you average it all out, it's closer to 85 cents to 86 cents on the dollar. So 90.5 cent rate of return simply isn't true; it's just not true, just depends on how you do the math, and we like to count all the dollars that we send up there.

MR. WILLIAMSON: So when this commission is having to make decisions about such things as toll policy, to what degree do we ask our district engineers and the planning organizations and the local leaders of our communities to adopt policies of new constructions for toll roads? We do that because we project out that our cash receipts from the gasoline tax, the motor vehicle registration fee, other sources and what the federal government returns to us of our gasoline tax.

MR. CHASE: Yes, sir.

MR. WILLIAMSON: And when we do that, we have to use the true percentage -- and I think we generally think it averages 85 percent, not 90 percent, and that would be some 5 percent difference would be a billion, about $200 million a year? No?

MR. CHASE: Well, in 2003 it would have been --

MR. WILLIAMSON: $125 million approximately. We paid $2.5 billion in federal taxes in 2003. Is that correct?

MR. CHASE: If we had received 100 percent back in 2003, we would have received $300 million more.

MR. WILLIAMSON: $300 million more in 2003.

MR. CHASE: Right, if it were a dollar-for-dollar rate of return.

MR. WILLIAMSON: And so if the actual percentage is 15 as opposed to 10 -- as was cited this morning --that would be a 33 percent increase in our return, so it would be about $100 million a year more. So when we do our planning, we have to assume 85 percent or $100 million a year less than some apparently are convinced we're getting back.

MR. CHASE: Correct.

MR. WILLIAMSON: Now, I've got the information I wanted to discuss, members, and I'm going to ask Amadeo to come up in just a minute, but I want to stop and allow you.

MR. NICHOLS: I was going to ask a question. It's my understanding that on our federal reimbursement, even though we're averaging 85-86 percent, that's just for the last six or seven years. Prior to that, on the former federal cycle, our return rate was substantially lower.

MR. CHASE: Yes.

MR. NICHOLS: Do you happen to have that number? Wasn't it in the mid '70s?

MR. CHASE: In the 1988 to 1991 legislation -- which I had nothing to do with and it's referred to as STURRA -- I'm not even sure what that means -- that was a 77 percent rate of return. ISTEA from '92 to '97 was a 74.5 percent rate of return; TEA-21 is an 85-1/2 percent rate of return.

MR. NICHOLS: So instead of losing $300 million a year or the equivalent of that, we were really, for the previous decade before that, losing probably more like $600, $700 million a year, or at least proportionately.

MR. WILLIAMSON: I don't know because the '92 gas tax contributions from Texas were $1.2 billion and that year we got about 78 percent.

MR. NICHOLS: So we were losing 21 percent, or 21-22 percent for over a decade.

MR. WILLIAMSON: So it looks like the percentages have gone up and the dollars -- our percent of return, even though it's at 85, not at 90 quoted this morning in the newspaper, it looks like the dollars are going up and the percentages are going down.

MR. CHASE: Right, and we call that watching the rabbit and not the magician. Don't watch the dollars; it's easy to be swayed by the dollars, and people tend to look at the dollars; it is rate of return. There are other things that are equally important that we're pursuing and that's flexibility, but I'm discussing rate of return right at the moment. People get very interested in money for individual projects, they get interested in aggregate dollar amounts, but at the end of the day, it is calculated on a percentage, and it might look like more money and feel like more money at the end of the day, but the truth of the matter is we're building some very nice roads and bridges in the northeast.

MR. NICHOLS: The northeast part of the United States?

MR. CHASE: Yes.

MR. WILLIAMSON: And when was the last time Senator Kennedy indicated that he wished to take money away from Massachusetts and send it to Texas?

MR. CHASE: Not that I recall.

MR. WILLIAMSON: Thank you. Other members?

MR. HOUGHTON: I've got a real basic question.

MR. WILLIAMSON: Sure, go ahead.

MR. HOUGHTON: What is the total tax at the pump state and federal?

MR. CHASE: The state is 20 cents and we don't see all that 20 cents, and then it's 18.3 cents federal.

MR. HOUGHTON: That leads to my next question. What's the net at-the-pump stake? If you take 20 cents and you take available school fund contribution, DPS and start peeling?

MR. WILLIAMSON: James and Amadeo are going to come up and answer that question in a moment.

MR. HOUGHTON: Am I ahead of myself? Okay.

MR. WILLIAMSON: Other questions for Coby -- Hope, John? He'll be back; it's going to be a long day for Coby.

MR. NICHOLS: Let me ask one last question. While we're receiving roughly 85-86 percent, it's my understanding from information we see from other states, that while we're receiving that percentage, there are a lot of states that are actually receiving 150 percent and 200 percent of what they actually contributed to federal.

MR. CHASE: Oh, yes, absolutely. It is an interesting political story about how that's arrived at, and it is interesting -- I mean, some people like to look at Alaska's rate of return at something like $6 or $7 for every dollar they put in, but they're a cheap date, we could hold a bake sale and cover their costs; that's not that much money. But it doesn't look quite so egregious like $1.25 or $1.40 in New York, more or less, and something like that in Massachusetts and things like that, that starts to add up proportionately to very large amounts of money.

MR. WILLIAMSON: James Bass, are you here with us today? Before we begin, James, we're mindful of important members of the legislature present. I'm trying to make this as quick as possible, so I won't characteristically drag it out for you.

In the fiscal year we're soon to close, we know pretty much what our business is going to wind up looking like in a few weeks. Can you share with me how much money we probably received from the federal government in this fiscal year for prior months' expenditures?

MR. BASS: For the record, I'm James Bass, director of Finance at TxDOT. And yes, slightly different from what we talked about just earlier which was dealing with the apportionment and obligation authority from the Federal Highway Administration, the figure I give you will be on a reimbursement basis, and for Fiscal Year 2004 -- that we'll be closing out in just a couple of days -- we will receive as reimbursement about $2.7 billion which equates to about 44 percent of the total revenue to the State Highway Fund.

MR. WILLIAMSON: Do we have the ability to maybe mark that on the screen where the audience can see that amount of money, or are you going to just display it off your piece of paper? As long as my guests can see it.

MR. BASS: I would point out just for the audience and everyone, this is revenues and expenditures of the State Highway Fund which encompasses more than just the operations of the Department of Transportation.

MR. WILLIAMSON: And the amount that you just cited for me, is that the third figure down?

MR. BASS: The two-seven-two-six under the FY 2004, and it's the third figure of the revenues, yes, sir.

MR. WILLIAMSON: What's the first figure?

MR. BASS: The first figure is the State Motor Fuel Tax deposited to the State Highway Fund.

MR. WILLIAMSON: What's the second figure?

MR. BASS: That is Vehicle Registration Fees that are remitted to the state; there's also a portion that's retained by the counties, but the $830 million represents the amounts that are remitted to the state.

MR. WILLIAMSON: And the $2.7-, real quickly, how does that $2.7- get back to us?

MR. BASS: It gets back as we expend money on projects. We the State of Texas, initially pay for that, then we seek reimbursement from our federal partners for those prior expenditures.

MR. WILLIAMSON: So if, for example, Senator Barrientos pays a dollar in gasoline tax today and the comptroller processes it and sends us  -- we don't get a dollar, we get 96 cents?

MR. BASS: On the state gas tax, in response to Commissioner Houghton's question, the State Highway Fund receives in the neighborhood of 73 cents for every dollar of state gas tax.

MR. WILLIAMSON: So you take that 73 cents that we got from Senator Lindsay, and we go out and repair the shoulder of Interstate 10, not build a new shoulder but repair the shoulder of Interstate 10 as it runs through Representative Hamric's district, and we hire a vendor to do that and the vendor gives us a bill and we pay the vendor the 73 cents; we send a copy of that bill to the Federal Highway Administration.

MR. BASS: Correct.

MR. WILLIAMSON: And then they send back to us about how much of that 73 cents?

MR. BASS: Eighty percent over the life of the project.

MR. WILLIAMSON: And that 56 cents they send back to us -- Coby, if I'm wrong, you've got to tell me I'm wrong because I do not want, in front of my great friend Gonzalo Barrientos, want to be wrong -- we send the bill to the feds, they send us back 56 cents, and that 56 cents shows up in that $2.7 billion as reimbursement for the state's expenditure of the money. Okay.

The next figure is Other Federal; that's a significant amount of money. James, what is that?

MR. BASS: That represents the amount from our other federal partners: Federal Transit, Federal Aviation, National Highway Traffic Safety Administration. They also participate in those programs, but it's other than highways and so I separated it out that way.

MR. WILLIAMSON: Local?

MR. BASS: Local. Cities and counties, on a number of our projects, participate financially in that and this year we expect that participation to be in the neighborhood of just under $170 million.

MR. WILLIAMSON: And Other is all other things?

MR. BASS: Correct.

MR. WILLIAMSON: So we anticipate that at the close of this year we would have had responsibility for spending about $6.1 billion.

MR. BASS: The State Highway Fund would have received about $6.1 billion; we have the lion's share of the responsibility for spending that; there are other state agencies who also have access to the revenue of the State Highway Fund.

MR. WILLIAMSON: Is that this figure right here, the four ninety-one?

MR. BASS: Yes, sir. The bottom numbers represent the expenditures on a cash basis, again, out of the State Highway Fund, encompassing more than just TxDOT operations.

MR. WILLIAMSON: Department of Public Safety?

MR. BASS: Correct.

MR. WILLIAMSON: Medical transit, Health and Human Services transit?

MR. BASS: That actually is included under the Other TxDOT in that figure before you.

MR. WILLIAMSON: So is this primarily DPS?

MR. BASS: It's primarily DPS; there's a smaller amount associated with the Attorney General. Their Highway Section that handles a lot of the eminent domain cases for us, they receive some funding from the State Highway Fund as well.

MR. WILLIAMSON: Is this pretty much what we pay you and Mike and Steve and Amadeo and other things?

MR. BASS: We share it with a few other recipients, but, yes.

MR. WILLIAMSON: Primarily our staff overhead.

MR. BASS: Well, included in there is -- again, comparing it to a budget which some people may be more familiar with -- that $915 million includes about $180 million of employee benefits, insurance, retirement costs of employees of the Department of Transportation which in the state's budget are spent by the Employees' Retirement System and the Comptroller, but we reflected that here as part of our overhead or Other TxDOT.

MR. WILLIAMSON: Because the cash actually leaves our hands and goes someplace else.

MR. BASS: It leaves out of the State Highway Fund but it's being expended for the benefit of TxDOT employees.

MR. WILLIAMSON: Okay, starting up here I see $2.2 billion for maintenance. Now, we define maintenance in many different ways, but generally it is preserving our existing roads. Is that correct?

MR. BASS: Correct.

MR. WILLIAMSON: Preserving the asset that's already built. That's an allocation. If, for example, MoPac was complete to Circle C, that would be an allocation of preserving and maintaining that stretch of road, maintaining an existing stretch of road.

MR. BASS: Correct.

MR. WILLIAMSON: Is there also money spent out of this, for example, in maintaining State Highway 249 in Ms. Hamric's area?

MR. BASS: Yes.

MR. WILLIAMSON: Now, this $836 million, tell me a little bit about that without going into much detail.

MR. BASS: That includes the development of the plans, the inspection of the active ongoing construction, and the expenditure for the acquisition of right of way associated with those highway projects.

MR. WILLIAMSON: And is part of this money spent in support of our preservation or is it all spent in support of new construction?

MR. BASS: The majority of it is in support of new construction; there is some, probably a smaller amount, that would also support the maintenance activities.

VOICE: And probably Amadeo can give us some idea about that.

MR. WILLIAMSON: So that leaves us $1.8 billion for what we call construction. Now, is that primarily increasing the capacity of our system, or is it increasing the capacity and reconstructing existing footprint?

MR. BASS: That figure represents increasing the capacity.

If I can break off a little bit and give you an example that we all may be familiar with. Say an existing two-lane roadway that may be 30 years old and the demands placed upon that section of the highway system are such that we need to expand the system. Rather than just merely coming in and adding two lanes on the outside, what we'd likely do, because of the age of the existing system, is come in and take out and replace/upgrade the existing two lanes and add two lanes on the outside. The remove and replace, if you will, of the existing two lanes would be considered preservation or maintenance; the addition of the two lanes on the outside would be considered construction on that chart.

MR. WILLIAMSON: And that's because we like to, as much as possible, report accurately and because the reimbursement rates from the federal government are slightly different for those things.

MR. BASS: Correct, there are different types of projects they will participate at different levels.

MR. WILLIAMSON: I'll be real quick and wrap it up with you, James. So I just want to be sure I understand this. All things being equal, about $6.1 billion would have touched our Highway Fund, we would have spent $2.2- preserving the system, $836- planning for construction of the future, $1.8- constructing the future, $900- running our shop, and almost $500- running DPS's shop. That's a good way to summarize.

MR. BASS: Right, and the Other TxDOT, I would just point out, that obviously is more than just administration; it includes a number of other programs within the department: public transit, aviation.

MR. WILLIAMSON: License plates.

MR. BASS: Exactly.

MR. WILLIAMSON: So $2.2-, we're spending 37 percent of all of our money on maintaining what we've got. Is that percentage up from previous years?

MR. BASS: Yes, and that may be a new percentage to a number of people and to the commission as well. That percentage is off of all of the State Highway Fund. Traditionally in some of our earlier conversations, we focus on the money allocated to the department which would obviously give you a different percentage than the 37 percent there.

MR. WILLIAMSON: Well, for example, if Senator Lindsay wanted to know today how much of our money are we spending on actually constructing the asset, we would go in and say well, we're spending $2.2- maintaining what we've got and we're spending now $3 billion maintaining what we've got in planning, and we're spending $4.2 billion protecting what we have, planning for tomorrow and building for tomorrow, and of that $4.2 billion, Senator, about 56 percent is now for maintenance and that's the figure we normally use to express how much of our budget we spend on maintenance. These two figures aren't going to change; no matter what we're doing up here, we're going to have an agency to run and the DPS to reimburse. So it's 37 percent of total cash and close to 54 percent of cash allocated to the building and maintaining of the transportation asset.

Is that how I would characterize it?

MR. BASS: Correct.

MR. WILLIAMSON: Now, is that percentage up from last year, or up from previous years?

MR. BASS: From previous years, yes; last year there has not been a great deal of change, but over time, yes, that has increased.

MR. WILLIAMSON: And will that percentage increase?

MR. BASS: I would expect it to as the age of the system continues to increase and the 80,000-mile system that exists today is getting older and older and having more and more demands placed upon it.

MR. WILLIAMSON: That's all my questions, members. Mr. Bass is available to you.

MR. NICHOLS: Isn't there one other item related to the motor fuel tax that's not really on the list? I believe there's a 3 percent of gross motor fuel tax that's deducted prior -- I call it off books -- that's deducted for collection and enforcement before we ever see a dollar?

MR. BASS: Correct, and that gets back to traditionally --

MR. WILLIAMSON: Three percent of this?

MR. NICHOLS: Top number, yes.

MR. WILLIAMSON: Three percent of $2 billion?

MR. JOHNSON: That's a net number.

MR. NICHOLS: It's 3 percent of about $2-1/2 billion.

MR. BASS: It's about $2.8.

MR. NICHOLS: It's about $75 million a year.

MR. WILLIAMSON: For what?

MR. BASS: Just generally what happens --

MR. WILLIAMSON: What's this for?

MR. NICHOLS: It's deducted before it ever hits the state coffers.

MR. WILLIAMSON: Deducted by who? What are you talking about? I don't know about this.

MR. NICHOLS: For the enforcement and collection of those.

MR. WILLIAMSON: Who deducts it?

MR. BASS: The comptroller. Part of that is directed by statute and other is directed by estimates calculated by the comptroller's office.

MR. WILLIAMSON: Wait, I want to go back to the senator's dollar. Are you saying that when the senator paid that dollar in gas tax today, before we got our 74 cents or whatever it is, are you saying the comptroller gets 3 percent of that?

MR. BASS: Not all 3 percent of that goes to the comptroller, and it gets back to really my response to Commissioner Houghton's question of when we buy five gallons of gasoline and we pay a dollar of state gas tax, what happens to that dollar. Most people generally think a quarter of it goes to education and three-quarters goes to transportation. Generally that's true, but if you recall, I didn't say that we receive 75 cents, I said that we receive 73 cents.

What happens when that dollar comes in, a penny comes off the top to fund and support the collection and enforcement activities of the Comptroller's Office. There's obviously costs associated with collecting that gas tax on a statewide basis, but one penny is pulled off the top, if you will, to fund those activities.

In addition, the way the constitution reads is the state gas tax is dedicated for transportation only when it is used to propel a motor vehicle across the state highway system. So if you buy gasoline for your motor boat, your bass boat, whatever, you can seek a refund from the Comptroller's Office for the payment of that tax. What the Comptroller's Office does is they estimate each year how much of the gross collections of state gas tax went for activities other than propelling a motorized vehicle across the state highway system. They then pull that money aside and make it available for those who ask for a refund. If those people do not ask for a refund, the money then goes to general revenue fund and I believe the Parks and Wildlife Department; it does not return to the State Highway Fund.

If I can jump back to the 1 percent collection and enforcement, if that one cent in aggregate is not all used for the enforcement and collection, they then distribute the remainder, and here in the past couple of years to the State Highway Fund or to the Education Fund.

And sorry, that long-winded response is why out of the one dollar that's paid, we receive 73 cents, not 75.

MR. NICHOLS: One percent is deducted by the Comptroller's Office for administration of the fuel tax.

MR. BASS: Correct.

MR. NICHOLS: But there's an additional 2 percent that's deducted prior to the comptroller ever getting it for the state, I assume to reimburse the motor fuel people for administration of that, but most comparable -- if there is such a thing -- retailers around the state get a half percent. I just wanted to make sure that it was pointed out that 3 percent of the fuel tax is not even stuck up there in the first place.

MR. WILLIAMSON: Well, I didn't know that; I appreciate you pointing that out to me.

Other questions for James, members?

MR. JOHNSON: I've got one observation. Many people have heard the statement that we are now spending more on the maintenance and preservation of the system than we are collecting in the motor fuel tax, and those numbers show that to be the case. At the very top line we estimate collecting $2,144,000 from the motor fuel tax, and the top line in the expenditure column, the maintenance or preservation is $2,249,000, so there's $105 million more that we are spending on preservation of the system today than we're collecting in the motor fuel tax. Now, we also have other sources of revenue, but that statement is very factual.

The other thing that jumps out at me is I apologize that the numbers are not fresh in my mind, but the Governor's Business Council commissioned a study by the Texas Transportation Institute to look at congestion and mobility in our urban areas, and my recollection is that the number that that study showed would be necessary to get mobility -- or congestion back in our urban areas to be at a manageable level was $75 billion. Now, I apologize if that's not right on, but it's a huge number.

So I think if you look at what we're talking about here, we have a huge mountain -- and I'm sorry to interject another thought into this discussion, Mr. Chairman -- but I mean, there's a huge challenge out there and we're dealing with hundreds of millions of dollars and yet the challenge is a multi, multi billion dollar challenge. Thank you.

MR. NICHOLS: I hope I'm not jumping too far ahead. The figure that Commissioner Johnson just mentioned, the $75 billion, that's a shortfall, that's in addition to what is projected using traditional revenues for the department throughout time, I believe 25 years out; that's either to 2030 or 2025. And we're going back region by region and recalculating that again and we're still coming out in the ballpark, so it's almost like two independent means arriving at that number, so the number is fairly close.

If you take the $75 billion divided by the 25 years, that's $3 billion per year shortfall over and beyond what we traditionally get for funding in today's dollars. At 4 percent inflation -- because every year that you delay doing those projects, the cost of those projects goes up about 4 percent, that's the average -- actually means that unless you've got the $75 billion today which nobody does, you actually have to book up and come up with about $6 billion extra every year beginning this year, every single year for the next 25 years not to solve the congestion problem but to not make it dramatically worse. That's my understanding.

To come up with $6 billion a year in revenues using fuel taxes, about how much per gallon would that be?

MR. BASS: One penny brings in about $100 million so I'm thinking that would be 60 cents.

MR. NICHOLS: So you're in 50-60 cents a gallon.

MR. BASS: In addition to the existing 20 cents. And the actual problem is -- I'm sorry, I need to calculate my math -- it would be 60 cents if we were to receive 100 percent back, but since we only receive in the neighborhood of three-quarters, then we'd be higher than that. It would be in the neighborhood of 80 cents so we could get the 60 cents for transportation.

MR. NICHOLS: My point by stating that -- which is a carryover from what Commissioner Johnson was talking about -- is that people that are talking about maybe we ought to do a nickel a gallon really wouldn't even begin to touch the inflation on the shortfall of what is truly needed in our great cities of this state.

MR. WILLIAMSON: In fact -- because it's appropriate to why we're doing all this in the first place -- Bob, are you back there someplace, just off the top of your head, what's the cost to build the flyover of MoPac over William Cannon Boulevard?

MR. DAIGH: $8 million.

MR. WILLIAMSON: $8 million. Thank you.

MR. BASS: If I may, since the figure you mentioned of $6 billion per year I've received earlier questions, if I can kind of elaborate a little bit. A lot of people said we just received bonding authority for $6 billion in the last legislative session. There seems to be a lot of confusion over that. Of course, part of that $6 billion really is in two pieces: part of it is from Proposition 14 which is a pledging of the future revenues that you see on the chart above you.

MR. WILLIAMSON: Those are Ogden-Pickett Safety Bonds?

MR. BASS: Correct. My point is that that is not new money, it is an acceleration of existing money, so it allows us to spend that money quicker -- huge benefits, I'm not arguing with that; over the next two or three years we can accelerate and do a number more projects -- but if you expand it into the 25-year period that you're looking at, it's the same dollars; we've just spent them over time differently.

MR. WILLIAMSON: Ted? Hope?

MR. HOUGHTON: I have a question. Commissioner Nichols talked about the $6 billion fix but I don't know if we focused in on the maintenance out into the future. $6 billion is for new mobility. Correct? What does the crystal ball say about maintenance into the future? That's another how many billion that now we have a shortfall in the state gas tax?

MR. BASS: I would hate to speculate, and I would be speculating if I were to give you a number right now. As I mentioned earlier in just general terms --

MR. WILLIAMSON: Amadeo might know. What's the average age of our system, Amadeo?

MR. SAENZ: About 45 years.

MR. WILLIAMSON: So if we add up all the road miles in the state and say how old are these on the average, 45 years is the average age? What's the useful life of a road? Forget the fact that Gary Trietsch has learned how to make a 20-year road last 100 years, what's the estimated useful life?

MS. SAENZ: For the record, Amadeo Saenz. We design on a 20-year life, but of course, through the use of good preventive maintenance techniques where we go back and patch our potholes, seal our cracks, put overlays to restrengthen, we can stretch the life of those highways for many, many years. The only problem is it's still an old highway and eventually it's going to have to be rebuilt.

When we looked at the average life of our highways, about 45 years is the average life of our system. So we've done a good job at stretching our dollars; that's why you see more and more dollars going into the maintenance, into keeping it going because otherwise it would have to be reconstructed and it would take a lot more to reconstruct than it does to put a maintenance overlay or to put a seal coat.

MR. WILLIAMSON: So one way of looking at it is we could take any funds we receive, whatever they are, we could put more into maintenance and less into construction and extend the useful life of our roads but not have to have that whole maybe $6 billion and become more congested, as Mr. Nichols pointed out.

MS. SAENZ: We can put more money into maintenance, and eventually every year we see that we're having to put more to maintain our system because it's getting older, but it's less money that's available so that $6 billion really would be getting bigger and bigger and bigger because we're not adding any additional lanes to what we're spending the maintenance money for.

MR. WILLIAMSON: Well, that's in effect what we've been doing the last 20 years.

MS. SAENZ: Correct.

MR. WILLIAMSON: We've been building less and less and maintaining more and more.

MR. HOUGHTON: So the delta widens.

MR. WILLIAMSON: Gets bigger.

MR. NICHOLS: The average age, as I understand it, of a typical road is 30 to 40 years, depending on where it's built in the state?

MS. SAENZ: Average design life or average age?

MR. NICHOLS: Average design life.

MS. SAENZ: Design life, we use 20 as a parameter but between 30 and 40 years is what they actually last. We have some roads out there --

MR. NICHOLS: I've heard that they typically last 30 to 40 years; that's after you've coated them and patched them and you finally get to the point that you just have to totally overhaul it.

MS. SAENZ: Right.

MR. NICHOLS: But it's not just a factor of life -- in other words, age -- it's also a factor of volumes and weights. The heavier the volumes and the heavier the weights, the quicker it's going to deteriorate, and our volumes have increased in the past three decades since interstates were completed over 300 percent, and the weights have continued to go up, and we're anticipating a dramatically higher increase in volumes, and therefore, heavy truckloads and things like that over the next 20 to 30 years.

MS. SAENZ: Right.

MR. NICHOLS: When we ran some numbers on the typical cost of a roadway -- you may recall some of the charts I was looking at -- we looked at first the cost of construction of a certain number of miles, but then I wanted the Maintenance Department to go in and over the lifetime of that road -- I think we used 40 years -- how much it cost to preserve or maintain that road over a 40-year period. And what we saw and what came out of that was that the cost to preserve it over that 40 years was more than twice as much as the original cost.

MS. SAENZ: It was between two and three times.

MR. NICHOLS: Two and three times.

MS. SAENZ: Yes, sir.

MR. NICHOLS: And the number that Commissioner Johnson was referring to from the Task Force, the $75 billion shortfall -- and we're seeing through our studies similar numbers -- that's new construction.

MS. SAENZ: That's correct, that's additional capacity.

MR. NICHOLS: So if somehow magically we came up with an additional $60- to $75 billion, we would have to, in a 40-year period of time not only come up with that and the inflation as we get there, but almost twice that much more just to preserve it.

MS. SAENZ: That's correct.

MR. NICHOLS: And I know these numbers sound fantastic and unbelievable but they're real, and that's what most people don't understand.

MR. WILLIAMSON: Judge Lindsay has got to catch a plane, so what I want to do at this point is ask -- is it David that's going to lay out our mobility plan?

MR. BEHRENS: Yes.

MR. WILLIAMSON: David Casteel, where are you? What we're going to do is you're going to lay it out and you're going to talk about San Antonio right quick and then we're going to ask Gary to talk about Houston, and then Judge -- I'm sorry, Senator -- I can't get Judge out of my head -- then we're going to let Senator Lindsay offer his remarks.

MR. CASTEEL: Okay, sir, I'll be pretty brief. My name is David Casteel and I work for you in the San Antonio District, and the purpose of my being here today is to update you on progress towards meeting the Texas Metropolitan Mobility Plan goals and to provide a briefing on implementation in San Antonio, and this presentation should take eight to ten minutes.

Last year the commission approved the framework for the Texas Metropolitan Mobility Plan which was developed under Mr. Simmons' leadership by a group of district engineers who worked with the Federal Highway Administration, community leaders, MPOs and elected officials.

The plan asked that very specific milestones be met on a very specific time frame. These included: the regional allocation, allocation of the Metropolitan Mobility Funds, or Category 2 funds, for the upcoming 2005 UTP. TP&P accomplished this goal in about January of this year.

Also asked for was the development of a Texas Congestion Index to help measure congestion relief efforts. TTI developed this under the guidance of Jack Foster and TP&P and we're using those in our plans at this time.

Development of goals for congestion relief in each of the metropolitan areas. The MPOs have performed this task and those are included in their draft plans.

Development of unconstrained needs analysis based on the congestion relief goals, and the MPOs have done this and this is in their draft plans.

And the development of plans to fill the funding gap between needs, traditional funding and goals, the "fill the gap plan," and this is under development by each of the metro areas at this time. Some are further along than others.

MR. WILLIAMSON: When you say metro areas, do you mean Texas Department of Transportation employees, or do you mean community volunteers?

MR. CASTEEL: This effort was led by the MPOs in each of the areas.

MR. WILLIAMSON: And the MPOs are made up of Texas Department of Transportation employees?

MR. CASTEEL: No, sir. The MPOs are the umbrella planning organization for the metropolitan areas, generally governed by a policy board combined of elected officials and technical personnel from the different agencies.

MR. WILLIAMSON: Local elected officials or state elected officials, or a combination of both?

MR. CASTEEL: Sometimes a combination of both. In San Antonio we have two state elected officials, four city councilmen, I believe three county commissioners, some technical people from the city and technical people from the state in our metropolitan planning organization.

MR. WILLIAMSON: So whenever one of those MPOs conclude and recommend and vote on and approve, for example, a toll plan for their area, was that a local decision?

MR. CASTEEL: It was discussed locally, yes, sir.

MR. WILLIAMSON: Did they vote?

MR. CASTEEL: Yes, sir. Not always unanimously.

MR. WILLIAMSON: This is America; I don't think things are ever unanimous anymore.

Somebody told me that we were cramming it down people's noses. Are you telling me local leaders are making these decisions?

MR. CASTEEL: Local leaders are making the decisions, of course with staff input from us and from the MPO.

MR. WILLIAMSON: I guess I was misinformed.

MR. CASTEEL: Okay, sir.

The status of where we're at right now, the eight large MPOs in the state representing the big metropolitan areas of Texas, the leaders of those MPOs, the staff of those MPOs have been meeting regularly over the past year to facilitate the development of the individual plans. The MPOs have met in several cities around the state; they're traveling together and have been working closely together. I would say Michael Morris of the North Texas COG has been a great leader on this effort, as well as Alan Clarke and Ashby Johnson of the Houston-Galveston COG; Joanne Walsh and Jeanie Geiger of San Antonio have been involved very heavily; as has Michael Aulick of CAMPO. And they've been working well with district staff like Julie Brown here with me from San Antonio, and other staff have also been working very hard in developing these plans.

Each of the MPOs submitted their draft plans to Mr. Simmons this month. Mr. Simmons had all the metro DEs and our planning and development directors in Austin on August 18. We went through the plans and are now in the process of correlating the various plans and combining the results for presentation to you. There are some minor differences in how the individual MPOs calculated and interpreted some of the data, so each district is now working with the MPOs to normalize the data to common definitions and interpretations.

Since Mr. Simmons' August 18 meeting, the DEs, staff and MPOs have begun formulating their individual data into an executive summary for you. I believe the DEs and MPOs to be able to have this available to Mr. Simmons for your consideration on the planned October time frame as shown in the Metropolitan Mobility Plan.

The San Antonio Metropolitan Mobility Plan developed by our MPO consists of the application of the Texas Congestion Index -- we call it the TCI -- to assess our status, the development of non-financially constrained needs plan, the study of goals for congestion relief as measured by our Texas Congestion Index, the application of the House Bill 3588 tools to start on a plan to fill the funding gap between the goals and needs.

This chart shows the relationship between the congestion index needs and funding investment levels in San Antonio and the impacts of our first "fill the gap plan." In this presentation I hope to show how the data in this chart was developed and how it was used in the San Antonio MPO in our project and financial planning for our metropolitan area and our local portion of the Unified Transportation Plan.

The Texas Congestion Index, as a reminder, is a measure of travel time during peak periods across the metro area compared to travel times with free flow. The larger the value, the more congested the metropolitan area is.

Looking at traditional funding, our Category 2 funding which you regionally allocate to us, as well as the already committed Categories 7, 11 and 12 and various other funds that we can project --

MR. WILLIAMSON: A normal person won't know what that is. Give me a normal-person description of Category 2.

MR. CASTEEL: Category 2 is the Metropolitan Mobility Funds which you regionally distributed to us.

MR. WILLIAMSON: Is that construction money?

MR. CASTEEL: That's construction money for mobility only.

MR. WILLIAMSON: What's Categories 7, 11 and 12?

MR. CASTEEL: Category 7 is some preventative maintenance funds -- excuse me -- some Metropolitan Mobility Funds that are allocated to the MPOs; Category 11 is the district discretionary money that you give me to work with; and Category 12 is Commission Strategic Priority funds.

MR. WILLIAMSON: Thank you. Go ahead.

MR. CASTEEL: Yes, sir.

What we can anticipate in San Antonio over the next 25-year period is about $1.7 billion available for congestion relief efforts. In San Antonio the state highway system is pretty extensive; we account for about 20 percent of all the roads and we carry about 65 percent of all the vehicle miles traveled in our area. Our MPO tells us that the system carries about 35 million vehicle miles per day and is projected to increase significantly as our population increases over the years.

When you look at the Texas Congestion Index, our MPO modeling efforts show that congestion has increased over the past years from a 1.14 index to a 1.21 index, and with the expected traditional $1.7 billion that we can apply to transportation, we'll continue to increase to a 1.47 index by 2030.

To reduce congestion to near 1995 levels -- which would be a good goal for us -- would take an estimated additional $8 billion infrastructure investment. That $8 billion figure was arrived at by calculating the equivalent lane miles needed to accommodate the increased population and traffic. In San Antonio we would need an additional 2,300-odd equivalent lane miles beyond what traditional funds would allow.

An equivalent lane mile for our calculation purposes is either an actual mile of travel lane or a light rail system or a bus rapid transit system or an ITS expansion or a freight rail or a demand reduction strategy or something else that equates to moving the demand carried by a lane mile of highway. We are not saying that we think we'll ever build an additional 2,300 lane miles of highway in San Antonio with the funding that we'll receive, but this is the way that we can use the urban models that we do have to estimate total mobility needs.

So once we have established our goal, looked at our congestion and established what we can expect through traditional funding, we need to start working on filling the gap. In San Antonio we are looking at our mobility plan with how we can use the new tools available to us to add some more equivalent lane miles. The Regional Mobility Authority of Bexar County petitioned for a 50-mile system of toll lane projects -- shown in green -- and may add some other logical segments in the future.

TxDOT, the MPO and the Regional Mobility Authority are working together to get started on this system with a 22-mile, $450 million initiative in a congested and fast-growing area of the city as shown here. Our approach is to add four new tolled express lanes within the congested Loop 1604 corridor and improve interchanges at I-10 and US 281, and add a new six-lane tolled expressway on the US 281 corridor. This is accomplished by moving the existing lanes out to function as they do today like frontage roads and then adding six new tolled express lanes between.

Using the tolls, Proposition 14 authority, some of the Texas Mobility Fund and some toll equity, we were able to move this initiative from a 20-year-plus phase in into construction starting in less than two years, saving over 24 years for some segments. If we had phased in the segments over the 20-plus year period, the projects would have cost us closer to $750 million rather than the $450 million we are planning.

MR. JOHNSON: David, I hate to interrupt. Would you go back and repeat the last three or four sentences?

MR. CASTEEL: Certainly.

MR. JOHNSON: I think that's so important.

MR. CASTEEL: Our plan with that segment we showed, that $450 million project on 1604, 281 and our interchanges, using tolls to help us fund the debt, using Proposition 14 authority to advance our existing dollars to today's dollars, using some of the Texas Mobility Fund that you're allocating to us, we were able to move the initiative of this $450 million project from a 20-plus-year phase in, as shown here, into construction in less than two years beginning, saving over 24 years for some of those segments. If we had phased these segments in over that 20-year period, the project would have cost closer to $750 million to construct due to inflation, rather than the $450 million we're projecting.

MR. NICHOLS: I hate to interrupt but I want to ask a quick question. It's an existing highway but you're not talking about tolling the existing capacity, you're talking about tolling the new capacity.

MR. CASTEEL: Yes, sir, we're only tolling -- the Bexar County Regional Mobility Authority petition did not allow us to toll any existing lanes under their petition.

MR. NICHOLS: Okay. So somebody who's not well informed on the issue might think that you're converting that highway into a toll road because it's still going to have the same highway number, but in effect, the existing capacity they're driving on without paying a toll, they'll still be able to drive on and they'll only be tolling on the new capacity and the rider gets the choice.

MR. CASTEEL: The rider gets the choice, as well as I would think those people on the non-tolled lanes would realize some benefit because some people would move over to the tolled lanes allowing them some more room to move.

MR. NICHOLS: Okay. Thank you.

MR. CASTEEL: The traditional funding plan for the San Antonio area would allow us to address less mobility needs in San Antonio than we can do with what we're showing. We could do less on fewer roads.

Shown here is what we could have done with the traditional funds; this is actually our 25-year plan from a year ago. That same section of Loop 1604 I talked about is shown on here; however, with the traditional funding plan we could only add two lanes rather than the needed four lanes, and that's true for many cases. Some of the very needed interchanges in our city that need to be worked on could not even be addressed with the traditional funding plan.

Our new 25-year plan, using the new tools and the new partners we have, we were able to add about $900 million more in investment in our area and add an additional 260-plus lane miles more than the traditional funding allowed, and we can take a more comprehensive approach addressing congestion sooner. With our first "fill the gap plan," we can move the congestion index from about 1.47 that we got with the $1.7 billion down to about a 1.39.

MR. HOUGHTON: So David, what bite did you take out of that $8 billion apple out into the future?

MR. CASTEEL: About $900 million.

MR. HOUGHTON: Almost a billion dollars.

MR. CASTEEL: Yes, about a billion, and that includes what I talked about with the TMF, the toll and the passage -- hopefully -- of an ATD, Advanced Transportation District, sales tax in our area.

We can start connecting to State Highway 130 and the Trans Texas Corridor by developing 1604 and helping relieve some of the traffic that has to go through town now and take them on around to 10 and out to the east quicker with this plan.

This is good to move from a 1.47 to a 1.39, but it also means we need to keep looking at ways to reduce congestion, most likely with some more highway projects and definitely with additional transit and probably some rail projects in the future as well. When you look at the infrastructure, with the new tools we are able to add more infrastructure sooner allowing infrastructure investments to more than double in the next few years over what traditional methods would have allowed.

To get to this point in our mobility plan, we have formed some great partnerships with the MPO and the RMA, and to keep reducing congestion to our goal, we will need to expand our circle of innovative partners to the transit and rail community as well.

Thank you.

MR. NICHOLS: I'd like to ask.

MR. WILLIAMSON: I need to do one thing, Robert. Senator Lindsay, I know you've got a plane. We would do this for Senator Barrientos, for Ms. Hamric -- if you wish to address or if you wish to wait until Gary lays out, it is your decision. I'm sorry it's taken this long. If you want to speak your piece, you can and catch your plane, or if you want to wait for Mr. Trietsch to lay out the Houston dilemma.

SENATOR LINDSAY: Let's let Gary go.

MR. WILLIAMSON: And if you don't mind, Mike, let's let Gary go ahead and kind of lay out the Houston situation.

MR. TRIETSCH: Thank you. For the record, I'm Gary Trietsch, district engineer.

MR. WILLIAMSON: Do you want to borrow my hard hat?

MR. TRIETSCH: No. I've got a hard head. But also for the record, I can't talk as fast as David talks.

One thing kind of concerned me. Commissioner Andrade, worried about your one-minute rush commute in Childress, I want to assure you that you will not have that when you come to Houston because all you have to do is ride down the elevator to the meeting room so we won't even get you out on the freeway that morning; that afternoon is a different story.

MS. ANDRADE: I was there yesterday and I saw that.

MR. TRIETSCH: Okay, good. But we're a pretty laid back group of people in Houston.

In one sense in the Houston area we've been working on the Metropolitan Mobility Plan for a number of years, and I'm not as high tech, but the handout you got earlier of the little newsletter kind of illustrates we're now 14 months into the reconstruction and widening of the Katy Freeway, and the reason I bring that up, primarily before we had House Bill 3588 and other things, we figured, we squirmed our way around the only way available to us at that point in time and we were able to bring Harris County Toll Road Authority in as a partner and what started out as managed lanes have become tolled lanes, HOT lanes, any number, but basically the four lanes that are in the middle of the Katy Freeway expansion, Harris County Toll Road Authority is putting $250 million into that effort.

So we're basically just past the one-year construction anniversary and we've let half of the work on this 23-mile segment and we'll have all of it under contract by March, and basically other than a few weekends that are kind of rough when we have some major beam hanging or something like that, most of the traffic works generally as well as before we went to work.

What House Bill 3588 and the additional tools has done for us in the Houston area has really made us focus and caused us to concentrate our efforts on funding in all the different scenarios, and I will tell you it has not been easy, primarily because there are so many options. We have been fortunate in that we have the Harris County Toll Road Authority to work with, but also now we have two other toll road authorities in the area: the Fort Bend County and Brazoria County. And it should be noted that Fort Bend County Toll Road Authority opens its first toll road come Monday; matter of fact, we'll have the ribbon-cutting tomorrow evening at 6:30 and if you want to come out, you can even drive golf balls down the freeway, so I've asked Steve, he might want to come back, it might be your only opportunity.

During this past year, though, we have been working with the MPO, the Houston-Galveston Area Council to develop an overall plan using the tools provided in House Bill 3588. Last month you approved a minute order that allows us to negotiate with Montgomery County on a series of projects using Pass Through Tolls. That's kind of exciting to us because I don't know anything about it, but we're going to learn.

As you may have seen in the paper, we've proposed both a toll conversion project on State 249 for the eight-mile freeway section already open to traffic -- and I might mention, we talked about acceleration; that eight miles took us 12 miles to do and we've got 42 more miles to build; you can do the math and figure out how long it will take us if we do it the old way -- and we are proposing that State Highway 99, Grand Parkway be tolled, and US 290 expansion has a major toll component within it. And we are working on the detailed schematics and environmental and working with Harris County Toll Road Authority to figure out who's going to do what on that one. But we also have many other roadways to investigate.

It is also not just roads that are a part of this plan. Harris County began a freight rail and commuter rail study last year. TxDOT will expand that study; Harris County only has jurisdiction within Harris County; it became very evident quite soon on that study is that the study needed to be expanded for a regional basis and TxDOT will take on that role to look at multiple counties, looking at all rail elements and how they will tie in with Metro's rail plan to see if we can get agreement by all parties on where we ought to be with rail in the next 100 years. And we're talking about moving freight rail lines, developing commuter rail and other elements, but it all has to fit together.

What it has taught us, in the last few years we looked at these corridors on a project basis and we look at a rail element and it doesn't exist -- and the Katy Freeway is a classic example. Metro didn't have anything planned, we didn't have anything, there was no plan, so obviously rail kind of went away. So there needs to be a grand rail plan, and as I tell everybody, it's a 100-year plan. It's going to be curious to see if we can get folks to agree to it, but we haven't been afraid to take on these things and with our partners, with HGAC we will begin that study shortly.

Obviously what it has taught us -- we already knew this but it's even more evident today -- when we really start looking at this -- and you've mentioned a number of these facts on financing; I won't repeat those -- but we have to look at every mode, every method of financing that we can find available, gather every partner that we can -- and I'm going to tell you, partnerships are great but sometimes they're a little bit of a burden also. When you're the only one responsible, you can make decisions faster; I think that's why small business is so efficient. Whether it's government or large business, the more people you get in, it does tend to take longer, but we cannot do this, TxDOT cannot do it, City of Houston cannot do it, Harris County, Metro, none of the individual agencies can do it without working together.

And finally, if congestion and air quality were not enough to worry about, we also need to do this work and develop this plan for our region to have a viable functioning evacuation system. One of the things you haven't heard today that's true, especially in the coastal areas, we have to have some of these routes if for no other reason than evacuation. I hope my tenure lasts long enough before the next big hurricane comes because it just blows my mind every time I go down to the coast and see all the development going on.

And I'd like to leave one thought with you, maybe a picture, but by 2025 -- we currently have about 5 million people in the region -- in 2025 which is only 20 years from now, we're going to have another 3 million people. You don't have to be a rocket scientist to figure out with what we're doing at the rate we're going, we're going to be in a heck of a shape if we don't figure out how to do something better. Thank you.

MR. JOHNSON: Can I ask Gary one question?

MR. WILLIAMSON: Sure.

MR. JOHNSON: Gary, David Casteel mentioned the time savings on just one project in Bexar County using a toll element to finance it. You and I have had a discussion about State Highway 99, and I'm going to put you on the spot here -- and I'm hesitant to do that but I think I need to hear what you have to say -- what in your estimation is the time savings by developing the Grand Parkway as a toll facility versus waiting on traditional funding to build the Grand Parkway?

MR. TRIETSCH: This is my guess, as I told Judge Willy, a couple of months ago Brazoria County was developing a bond program -- you know, I used to could tell you just by my experience how long these would take, and now with the new tools, I don't have a real good handle on that because I'm relearning again -- but based on the way we've done things, Grand Parkway, it's 152 miles, it would probably take 20 to 40 years to do. Obviously, we have some sections under construction, some already built, and we'd start others probably within the next couple of years, but to get the whole thing done, if something happened greatly, federal funds became much more abundant, if we did get 95 percent or something, we might be able to do it in 20 years, but I think it would be closer to 40 years to complete.

My guess is by going to toll, we could conceivably have those parts that are most needed on the northwest quadrant and the southwest quadrant probably open to traffic within four to five years from now. To have the total Grand Parkway constructed, I think we could be done in 15 years. Obviously on the east side the need is not quite as great and it would take a little longer. But basically, simple short answer, 40 years to change it to 15 years.

MR. JOHNSON: Thank you.

MR. HOUGHTON: Gary, David talked about the gap in the funding reaching a certain index. His was about $8 billion rounded. What's Houston's gap?

MR. TRIETSCH: Seventeen.

MR. HOUGHTON: 17 billion?

MR. TRIETSCH: Billion.

MR. WILLIAMSON: Gary, we have Senator Lindsay, Ms. Hamric and I think others and I think their focus might be on 249. Just so I understand completely where we are on not only 249 but many of the other pending plans across the state, right now we're trying to figure our what's supportable and what's planable; we're not making final decisions about what we're going to do. Is that the case?

MR. TRIETSCH: Absolutely, just a proposal, we've got a lot to look at. I don't even know if some things could be done physically, you know, whether there would be enough room.

MR. WILLIAMSON: We have, as I'm sure they have, received a lot of input from that part of the world, and a lot of it actually -- I want to cite a guy named Whitworth, whoever's district he's in over there, Steven Whitworth. He's a remarkably intelligent and articulate guy, writes a really good letter, and he gave us some reasons for why we need to think about doing it a different way.

But the point is, State Highway 249, the way we approach things is we say here's what we think we should do, now we let the public tell us what they think they can support or what they think is supportable. Correct?

MR. TRIETSCH: Correct.

MR. WILLIAMSON: Senator Lindsay, I apologize, it has taken a long time.

SENATOR LINDSAY: Does that mean I'm up?

MR. WILLIAMSON: Yes, sir. These are difficult times for the transportation world and sometimes it takes some time.

SENATOR LINDSAY: Well, and listen, I'm ready to stay as long as you'd like for me to stay, and I'm learning as we go, by the way, and listening to Gary and others talk, it's valuable to me to stay and listen -- which I will do.

But first of all, before I get into the subject on toll roads, I want to thank you for one thing in particular and comment about another. I want to thank you, first of all, about the money that you all saw to it that we got to do the enhancement program going into the airport on the Hardy Toll Road connector, a little less than $2 million you gave us a couple of years ago. We're going to dedicate that on September 3; we've planted 30,000 plants, crepe myrtles, you name it, we've got them out there. You need to drive that; it's going to be a colorful entry into the airport, it's going to be beautiful.

The other thing I'd like to comment on, Tuesday I attended a luncheon with the I-69 Coalition where Tom DeLay was making a luncheon talk, and of course, he's the majority leader of the House, he controls the agenda, he's on the Conference Committee for the Transportation Bill, but he emphatically said in front of this crowd and admitted in the newspaper that that bill won't come out without a 95 percent guarantee in it. Now, I didn't ask him because I didn't think about it until the presentation was made just a little bit ago, does that include the discretionary funds. So maybe we need to follow up here a little bit and find out more about what he's talking about there. But I did want to make that comment, and say that if we've got to follow up on those discretionary funds, we need to do it.

But on toll roads, needless to say, I've had a little bit of experience with them. I'm a strong believer in building toll roads and you've talked about it a little bit here today. I'm probably the strongest advocate that you can imagine for building toll roads in some form or fashion, but I think it needs to be left, in large part, to the local entity on how they do it, and I think House Bill 3588 made it so that that would be the case so that the local guys with the MPOs would develop some kind of program on what needs to be done locally and your job was to kind of give us the impetus to move forward -- which you've done.

And I think putting things on the table, Mr. Chairman, like you've done, and you commented earlier in your statements today, putting things on the table, even if they're controversial, is good and we need to discuss them. You know, just because they're on the table doesn't necessarily mean they're going to be done but we're going to get the public input, and certainly we've got the public input on 249, and I know also here in the Austin area with Senator Barrientos you've had a little input there as well. But I think that is great, it needs to be done. And we're going to listen to them and respond and I'm sure the first thing that's put on the table is not going to be the final thing that comes out at the end of the chute at the end of the day.

But let me give you a little history on how we started our Harris County Toll Road because I think there's a point here that I want to make by telling you how we got started. Back in 1982 we decided to do the toll roads. We took the project, with the legislation approved -- you were here at the time -- got the legislation approved, let Harris County indeed do their own toll road project because Texas Turnpike Authority was kind of dragging their feet and not doing what needed to be done on the two major projects we were talking about: the Beltway and Hardy Road.

So we decided what we needed to do was develop, after we talked to the rating agencies -- they weren't going to authorize any bonds or encourage any bonds to be sold there just on the come, you had to put up a credit enhancement, is what it amounted to, in order to be able to sell those bonds. Well, a credit enhancement in Harris County was a $900 million bond program that we the voters and the property taxpayers in Harris County were going to be asked to say: Yes, we will put up the credit of the county in that amount in order to guarantee the first sale of bonds.

It was a very controversial election in 1982, and September 19 -- I remember the date very well -- I remember all the things we went through, we had a lot of opposition, but we passed it, and then we sold those $900 million worth of bonds, built the project. We sold another $900 million worth of bonds to continue the project, and those bonds were not ad valorem tax backed bonds, those were first call on the revenue bonds, so the rating agencies would give us a good rating on those bonds as well.

Now, the point I'm driving to here is I think there's ways to enhance other local entities -- now, Harris County is in great shape now, as we all know; those projects are making money, Harris County is making a lot of money and they're able to do the 99, the Grand Parkway, and other things pretty much on their own without a lot of outside help. But the most important thing for a local entity to do is to get a reasonably good rating on their bonds, so we need to be innovative in how we help the San Antonios, the El Pasos, the Austins -- all of these other areas, Dallas-Fort Worth, how we enhance their ability to actually sell the bonds, and if there's ways to do that, we need to be innovative and work that. And I think that's really the program we need to be and should work on, and I'm sure during the legislative session we'll be working on that as time goes on in any way and every way we can.

Anyhow, that's kind of my story and I'm sticking to it.

(General laughter.)

SENATOR LINDSAY: But 99 was talked about by Gary; I've talked to a couple of you about that already. I've talked to more of you on that about how I think we can get this done, and I truly believe we can have the segment between Interstate 10 and US 59, 58 miles, done in no more than five years if we get with it, I really do.

MR. NICHOLS: I have a question.

MR. WILLIAMSON: The members are aware that Senator Lindsay is among the -- like Senator Barrientos -- one of the warriors for transportation, and we appreciate all your leadership over the years, Senator/Judge.

The floor is yours, members. Please.

MR. HOUGHTON: Senator, you said they're making a lot of money. How much money is the Harris County Toll Authority making?

SENATOR LINDSAY: Well, I believe last year's net profit was around $50 million after all expenses. They have a large amount of money in the bank; a lot of it is debt reserve funds and has to be in the bank, but they've got a sizable amount of money. They contributed, as mentioned earlier, $250 million towards the construction of the Katy Highway expansion. Of course, they'll get that money back with tolls that they'll place on those interior lanes. I'm very confident that will be very successful.

MR. HOUGHTON: Tremendous.

MR. NICHOLS: Just for clarification for people in the audience, when you were referring to credit enhancement for bonds and bond issuance and stuff like that, you were referring to bonds for toll roads.

SENATOR LINDSAY: Yes, I am.

MR. NICHOLS: The bonds for the actual construction of toll roads.

SENATOR LINDSAY: Yes.

MR. NICHOLS: I don't know that that was clear to everybody; I think we understood it.

SENATOR LINDSAY: That's all I'm talking about is toll roads right now.

MR. NICHOLS: So there really was a lot of controversy in Houston when that first came up.

SENATOR LINDSAY: There was, very contested. I spent four months speaking at least four or five times a day at different organizations around town.

MR. NICHOLS: I was at a number of different functions in Houston over the last number of years, obviously since construction of the major toll roads, and the attitude of the people that I've talked with and in pretty large audiences was what in the world would you have done for transportation if that system had not been built. So it was very visionary and I don't know what you would have done, but you've got a major amount of traffic flowing on those lanes now.

SENATOR LINDSAY: They had to raise the tolls to try to get a few people off of it.

(General laughter.)

MR. HOUGHTON: Senator, I was in Houston yesterday visiting with your Harris County Toll Authority and I heard the success that they've had over the years, but I also went into your tag stores and I saw the many people that were in line to buy the tags, I stood by a toll booth and saw all the cars that were in line to pay and the cars that speeded through when they had a toll tag, and saw that on the access roads that were available that you still had more people on the toll roads than you did on the access lanes. But I think that what you've done with Houston, that's a normal way of life.

SENATOR LINDSAY: That's true and I think that's the case. People get used to it after a while and they say, Okay, a few dollars a month is worth it to get on that thing and speed through -- especially if you have an EZ Tag where you can go through speedily.

MR. HOUGHTON: And I asked about had there been any controversy when West Park was built, and they said no, to Houston another toll road is just another toll road.

SENATOR LINDSAY: Right.

MR. HOUGHTON: And so I got the privilege to drive on it and it was great.

SENATOR LINDSAY: Once people get used to it, I think it's easy to sell, but that first sale is a hard sell.

MR. HOUGHTON: Thank you very much for your vision.

SENATOR LINDSAY: Thank you.

MR. WILLIAMSON: Go ahead, John.

MR. JOHNSON: Senator/Judge, I'm going to go on the record, clearly you're the father of the toll road system in Harris County, and as has been mentioned by my colleagues, it's very successful. Without it, who knows how bad the congestion would be, and they're invested back in the community. West Park is a splendid example that will continue to build that to the west and join up with the Fort Bend Toll Road, and they have other projects coming forward, and they're utilizing the cash flow after debt service, after maintenance to reinvest in the community, and without them we would really be in dire straits in terms of congestion.

SENATOR LINDSAY: I might have left with some people -- the wrong impression on one item, as I think back on what I said, and let me clarify one thing just to make sure I didn't leave that bad impression. When I said tax backed bonds, it's true we sold those bonds and used that money to build the roads but we never assessed a tax, an ad valorem tax for the payment of those bonds. The money that paid those bonds back was always revenue generated from the project itself. So although we had the authorization to impose an ad valorem tax for those bonds, we never did it. I just want to make sure I didn't leave a bad impression there somewhere.

MR. JOHNSON: Well, I guess the end of my points are I'm deeply appreciative as a citizen of Harris County for what you've fathered in our toll road system, and as a member of this commission, I'm as appreciative of your leadership on transportation issues here that I know will continue well into the future.

SENATOR LINDSAY: Thank you.

MR. WILLIAMSON: Thank you, Judge/Senator, and if you do hang around, maybe if something comes up, we'll ask you to come back and comment again.

Ms. Hamric, another warrior for transportation, and we appreciate it.

MS. HAMRIC: Good morning, Commissioners and Mr. Chairman. My senator failed to tell you that he was county judge in Harris County for 20 years and when he came up with the toll road idea, I'm sure he probably remembers it was referred to as Lindsay's Folly for a long time until everyone in Harris County decided that it was a good idea, and certainly the Beltway 8 and the Hardy Toll Road have been responsible for a lot of the economic development up in the north part of the county because literally before the toll road opened, it was like taking a pig trail to get down to the west side of town from up where I live in the 1960 area, and as a lot of you know, I've always been very grateful for that beltway.

For the record, my name is Peggy Hamric and I'm the state representative in District 126 which is in northwest Harris County, and today I'm really here -- obviously as a member of the Transportation Committee, I care about all transportation projects throughout the state of Texas, but today I will limit my comments to testimony concerning the proposed toll conversion of State Highway 249 between Beltway 8 and Spring-Cypress which is in my legislative district.

As a member of the Appropriations Subcommittee on General Government, on June 16, Commissioner Nichols and Mr. Behrens will remember, that I commented that I had some concerns that I'd heard about this conversion in that particular area. Now, that was prior to the two public meetings. Had I known then what I know now, I would have been probably a little more hearty in my comments that day about what I expected to happen.

At the public hearing in my district on August 5, I did oppose the conversion of State Highway 249, that conversion portion between the Beltway and Spring-Cypress, due in large part to the years of construction the citizens and businesses in the area have already endured: first, several widenings of FM 1960; second, construction of State Highway 249; and third, the construction of the underpass at the intersection of 1960 and 249.

People unfamiliar with the area that I represent often laugh when I tell them that I'm served by a seven-lane farm to market road through my district, but FM 1960 dissects the legislative district that I represent and 249 certainly is a big part of that area.

Traffic on FM 1960 has become so congested that 249 has now become the major artery to the businesses and the residences in my area. The FM 1960/State Highway 249/Willowbrook area is the economic driver for a several mile radius throughout the area. The Willowbrook Mall area that is at that intersection a few years ago was considered the second busiest mall after the Galleria in the Harris County area, so that tells you that business has been brisk and good. And I believe that tolling or construction on 249 would likely dissuade patronage, thus equating to dollars and jobs and business that might be lost in that area.

After years of construction and congestion and headaches, this area, I believe, simply cannot afford another hindrance to our economic stability. Some of you may recall that that was also the home of Compaq Computer which was probably one of the reasons that we wanted 249 improved years ago, and when Compaq moved, certainly Hewlett Packard bought them, but we did lose several thousand employees with that.

So as a small business owner myself, forced to endure years of construction on Highway 59 with my business in Deerbrook Mall, I can empathize with businesses feeling the economic strain resulting from limited access or economic deterrence. I believe toll conversions do have merit in the state of Texas but I don't believe that this particular conversion is probably one that I would recommend. In addition, I question the need to convert the completed portion of State Highway 249 to a toll facility in order to subsidize new construction of a tollway that is adamantly opposed by the people that we would be hoping to pay for it.

In filing House Bill 3545, amending House Bill 3588 and ultimately voting in favor of House Bill 3588, it was always my intention that all toll conversion proposals would be deliberated with the context of public good, public support, with some pragmatism thrown in there also. I have advocated to some of my constituents and some of my locally elected officials that designated toll lanes or HOT lanes may be a compromise sufficient enough to lessen economic impact concerns while at the same time giving TxDOT the flexibility and funding that it needs to fulfill its mission.

A number of community leaders in the area stand ready to discuss the conversion and the tolling with the commission, or with certainly you, Mr. Chairman -- you've offered to come into the district. I believe once the commission understands the community's history of exasperating congestion and construction, you will agree that conversion of State Highway 249 from Beltway 8 to Spring-Cypress to a toll-only facility is not a long-term answer to completing the entire State Highway 249 corridor.

And that does complete my remarks, and certainly I have always been an advocate of tolling and certainly relieving congestion, but no one was more surprised than I when this proposal was made, particularly in that area because it is the economic driver in my area; it is the retail destination. So I do have some concerns that anything that would prevent people from getting there to do business -- like I said, I have had personal experience with that when 59 was built and my business certainly suffered, as well as all the businesses in that mall, because you couldn't get there.

MR. WILLIAMSON: Well, we certainly, as I said at the outset of the meeting, we take very seriously all comments and all pragmatic suggestions from House and Senate members.

MS. HAMRIC: I know you do, Mr. Chairman, and having served with you in the Texas House, I know you're a very thoughtful person about proposals and I know that all of the commission will listen to what we have to say. And your having served in the House, you know we do have to respond to the wishes of our constituents.

MR. WILLIAMSON: You've got about 160,000 people out there.

MS. HAMRIC: That's who we represent.

MR. WILLIAMSON: In the Senator's case, I guess about 500,000.

MS. HAMRIC: He's got about probably 700,000.

MR. WILLIAMSON: Well, we've tried to approach this -- and we have individual opinions and commission opinions -- we've tried to approach this, as we have to tell our district engineers, we have to be as aggressive as we can because of the facts and figures we've laid out for everybody.

MS. HAMRIC: Absolutely.

MR. WILLIAMSON: I mean, the state, without leadership -- and my roommate Cliff Johnson, former colleague, and known to all here said something to me the other night -- that he reminded me of something. He said, You know, some things are worth fighting for, some things are worth defending, some things are worth advocating. We spent a lot of time and energy on things that don't matter, but some things matter, and if the leadership of the state doesn't do something about the transportation infrastructure now and for tomorrow and for next week, it will fall upon our heads as it has in every other industrial state and we'll spend decades digging back out from underneath the problems.

I think that's all we're trying to do is advocate for today, tomorrow and next week, and figure out what works.

MS. HAMRIC: Absolutely, and I certainly understand that, and on Monday the House Transportation Committee had the Florida Department of Transportation as well as their tolling authority give a presentation, and they have all the same problems that we do, and so this is not just a Texas problem, this is something that's going on all across the country because Florida, like Texas, is a donor state as far as the federal taxes are concerned.

Thank you very much for that presentation for those questions because I think you brought out a very good point. Our congressional leadership has been using that 90-cent number in a lot of articles recently which has made it very difficult for all of us who understood it was somewhere between 84-88 cents to understand exactly where this was coming from, and we thought perhaps there was a surprise we didn't know about that we were getting all this money. So I'm glad you did clarify that.

MR. WILLIAMSON: Members, questions for Ms. Hamric?

MR. NICHOLS: I just wanted to thank you very much for all the work that you have done on transportation. I think as you came up, Johnny said that -- or maybe it was the Chair that said you have been a warhorse for transportation, and we do appreciate it.

MS. HAMRIC: Well, you know, my few years in the legislature. I want to say there's two wonderful young women that you honored earlier this morning spent 20 and 30 years with the department. Obviously it doesn't do the wear and tear the legislature does on life, and so I had to think about that, but I was so happy that you did honor them because they are a fine example of the kind of people that we have working throughout the department for the people in this state, and so I'm happy that we did have guests here today to see the kind of -- it's not just the commission, it's not just the elected officials, but we have fine staff backing us up on all of this, and so I was glad you honored those two young women. But like I say, I think you did abuse the child labor laws a few times.

(General laughter.)

MR. WILLIAMSON: We appreciate your taking the time to offer your comments.

MS. HAMRIC: Thank you very much and I appreciate you allowing me to be here this morning. As always, always happy to work with you on projects and hopefully we can work these things out where everyone wins.

MR. WILLIAMSON: We shall pay very close attention to what you've had to say.

MS. HAMRIC: Thank you, Mr. Chairman and members.

MR. WILLIAMSON: Mr. Van Arsdale? I need to announce that as soon as we've got through -- I understand that Mr. Van Arsdale is going to compliment us roundly for our approach in this matter, and as soon as we get done with that, we are going to take up matter 8(a), the Strategic Priority Funds for Bell County, and we're going to hear from Congressman Carter, and that won't take but a few minutes and then we'll return to the Metropolitan Mobility Plan.

Corbin Van Arsdale. I didn't serve with you.

MR. VAN ARSDALE: No, you did not.

MR. WILLIAMSON: You sent a remarkable letter and I want to thank you. The urge to lash out, the urge to jump off the cliff to prove yourself to your constituents is sometimes overpowering and you resisted that. You sent a very thoughtful, but to the point, letter: I don't want this; I understand the problems you guys face; I want to help you get there. And we appreciate it; it was a very thoughtful way to approach it.

MR. VAN ARSDALE: Thank you, Mr. Chairman.

For the record, I'm Corbin Van Arsdale, state representative for District 130 which is northwest Harris County; Highway 249 and Highway 290 both cut through my district. And I want to echo a lot of the comments made by Senator Lindsay and Representative Hamric without repeating any of them and wasting time. I'm here to talk about toll conversion.

I'm a big proponent of tollways, just like Senator Lindsay and Representative Hamric. The conversion nature is kind of what I want to talk about today and I think it's kind of a dual nature problem: one of them is strictly public perception and the disconnect there that's taking place; second, there are some policy problems, but these are all fixable, and I want to emphasize that.

There's three things I'm kind of getting from my constituents. One is that people don't want to pay for roads twice. Now, we all know in this room that that's not what the toll conversion is doing, it's not repaying for a road that's already paid for, but that is one of the things I get from my constituents. I don't have as many e-mails as are on this dolly back here, but I've gotten over a thousand letters, e-mails, et cetera. Even though I'm a freshman -- and it's hard for me to think that I still have four months left as a freshman because it seems like I've been a freshman for six years -- but I am a f