Texas Department of Transportation Commission Meeting

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

Thursday, December 16, 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. It's 9:00 a.m. and I would like to call the December meeting of the Texas Transportation Commission to order. It's a pleasure to have all of you here this morning at our last meeting in the calendar year of 2004.

Please note for the record that public notice of this meeting was posted, containing all items on the agenda, with the Office of Secretary of State at 1:53 p.m. on December 8, 2004.

Before we begin today's meeting, let's all together, including myself -- as we always do -- take a moment to pull our pagers, BlackBerries, cell phones and other electronic devices out of our pockets and purses and put those devices on the silent, vibrate, or power-off mode. Thank you.

As is our custom, we will begin our meeting with comments from each commissioner. Let's begin with Commissioner Houghton. Ted.

MR. HOUGHTON: Good morning. And it seems like every time that I give a statement or a welcome during these commission meetings, I say it's another historic event today, and again, another historic event -- we had the Texas Mobility Fund -- so each and every meeting seems to be something new in transportation.

It's, again, another historic day. It was, Mr. Chairman, a year ago tomorrow that I was appointed to this august board, and the experience has been quite interesting, quite interesting. The learning curve is straight up, it has been a delight serving with my fellow commissioners and I'm missing my roommate -- not my roommate, my next door neighbor. Wrong use of words.

(General laughter.)

MR. HOUGHTON: Wrong use of words. My next door neighbor. She was appointed three hours prior to my appointment. So again, it's been a tremendous opportunity for me and thanks to the staff for making it one momentous type of event. Thank you.

MR. JOHNSON: I would like to welcome everyone here. Obviously, as Ted has said, this is a very important meeting, as they continue to be as we tread new water in the ways to do things and the accomplishments of this department.

I would like to wish everyone the happiest of holiday seasons and hopefully you'll be with your loved ones and have a safe holiday season.

And I think, finally, I noticed with keen interest, the front page of the Austin paper today had a picture of the gentleman to my left, Mr. Robert Nichols, but I didn't recognize the other two people in the picture. Robert, could you help me?

Anyway, happy holidays and seasons greetings and safe travels.

MR. NICHOLS: I'd also like to welcome everyone here. We do appreciate you taking the time to come to our meetings and participate. It's, to me, an exciting meeting, there are some very historic things that we're going to be voting on today.

Also, this is a wonderful time of the year, the holiday season. It's also a very dangerous time, so please drive carefully during the holidays. Thank you.

MR. WILLIAMSON: And I echo the remarks. We appreciate everyone who takes time out of their life to attend our meetings and either witness the events or comment on the events.

As many of you have heard me say in the past, one of the two things that you're blessed with is time, it's the most valuable thing that you control, and when you give your time to us, it means something to us.

I note for the record, Commission Andrade has been delayed on a personal matter. She will be present at any moment with us, and when she's here, if she cares to offer remarks, we'll certainly stop our proceedings and allow her to do that.

I need to remind everyone that if you wish to address the commission today, there's a speaker's card at the registration table out in the lobby. If you intend to comment on an agenda item, we ask that you fill out a yellow card such as the one I'm holding in my left hand, and please identify the agenda item. If you need to comment on something of a general nature and not on the agenda, please fill out a blue card such as the one in my left hand.

And because of the nature of many of the topics we'll take up today, we're going to try to fairly strictly enforce the three-minute limit except, of course, as always for elected members of the legislature.

And we note also for the record that a great friend of transportation, Chairman Mike Krusee, is with us this morning, and we appreciate you being here, sir.

We're going to rearrange a few items on today's agenda. The chair always like to announce these things so if you have other plans and need to make arrangements, you can go do so now, and we won't be offended if you get up and go outside and make a phone call to do that.

We're going to move items 11 and 12 up on the schedule. I don't know exactly where they will fall, but I know in relation to time and that is I intend to begin those items at ten o'clock this morning. We'll hold the public hearing on the project selection process, item 2, at about 12:30 this afternoon which is when we guess we'll be through with items 11 and 12.

We'll probably take a break somewhere around 9:50, 9:55, we'll take a restroom break, and we'll probably take another at around 11:10 to 11:15. That will be subject to the ebb and flow of the presentation by our staff.

In any event, we will be through by three o'clock this afternoon. That means we will not be taking a lunch break under any conditions. We'll walk straight through, and commissioners, like myself, who have to eat something around noon to avoid a headache, will step to the back room and snack, and you're welcome to step out as well.

I think we begin this historic day at the commission, Mike, by approving the minutes of the November commission meeting. So do I have a motion?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

Mr. Behrens?

MR. BEHRENS: Thanks, Mr. Chairman. We'll go to agenda item number 3 and I'll ask Doris Howdeshell to come forward and acknowledge some awards that the department has received recently, and could you present those, Doris, please?

MR. HOWDESHELL: Good morning, Mr. Chairman and commissioners. For the record, my name is Doris Howdeshell and I'm director of the Travel Division here at TxDOT, and I have a couple of awards to present today.

Keep America Beautiful announced winners of its national awards at their 51st national conference in Washington, D.C., on December 1 through 3 of this year, and the Texas Department of Transportation won two first place awards: a first place award for statewide television advertising, and a first place award for statewide and local radio advertising.

The Rogers Awards, as they're called, recognizes outstanding PSAs. Keep America Beautiful is credited with producing one of the most successful PSA campaigns in history. I'm sure you probably remember the crying Indian; that's a PSA that Keep America Beautiful did. And their awards actually recognize PSAs designed to effect positive change in our environment.

TxDOT won these two first place awards for the latest Don't Mess With Texas PSAs entitled "Excuses." And if you'll turn your attention to the screen, we'll watch two 30-second PSAs.

MR. WILLIAMSON: And just for the members of the audience that aren't familiar, because sometimes some of us don't look to the screen, we look down -- Doris is aware of this but some of you might not be -- we also have screens in front of our desks, so frequently to maintain eye contact with our great employees, some of us will look ahead and pay attention to the screen below.

(Whereupon, a video was shown.)

MS. HOWDESHELL: The radio PSAs are also very similar, offering up those ridiculous reasons to litter.

What I'd like to do this morning is to present the awards to the commission to thank you for your continued support of the program.

MR. HOUGHTON: I have a question, Doris. Who owns the phrase "Don't Mess With Texas"?

MS. HOWDESHELL: I'm sorry?

MR. HOUGHTON: Who owns it? It is registered to the department?

MS. HOWDESHELL: Yes, sir, it is, it's trademarked; it was trademarked in October of 2000.

(Pause for photographs.)

MR. BEHRENS: We'll now go to agenda item -- actually an item that's not posted on the agenda, and Cathy, if you'd come forward, please.

Cathy Williams is our assistant executive director for Support Operations, and just this past week, Cathy announced that she is retiring from the department effective the end of this month, and we're going to really miss Cathy up on the second floor. She's been with us a good while, been here the whole time that I've been in Austin, and really a support person to me as well as all the employees in the department.

And Cathy, I'd like to read this resolution at this time from the commission.

"Whereas, the Texas Transportation Commission takes great pride in recognizing Cathy J. Williams, PHR as an outstanding, dedicated administrator and employee who has served the Texas Department of Transportation for 26 years, most recently as assistant executive director for Support Operations, having been appointed to that position on September 1, 1998;

"And whereas, Ms. Williams has provided insight, experience and leadership in developing policy, procedures and products in all areas of Support Operations, while establishing, promoting and fostering a sprit of customer service throughout the department;

"And whereas, Ms. Williams has devoted her professional life to public service with TxDOT by holding various positions including switchboard operator in the Paris District when she first joined the department in 1973, followed by that of accountant, budget analyst, support operations, executive assistant, and director of the Human Resources Division;

"And whereas, Ms. Williams earned her master's degree in business administration in 1982 from East Texas State University, achieved certification as a professional in human resources in 1994, and in 2002 received the Governor's Commission Award for Outstanding Women in Professional Development;

"And whereas, Ms. Williams has devoted her professional life to improving the quality of life for all Texas;

"Now, therefore, be it resolved that the Texas Transportation Commission on the occasion of her retirement from service to the State of Texas, hereby recognizes and thanks Cathy J. Williams for her career achievements and the loyal service on behalf of Texas and its citizens.

"Presented by the Texas Transportation Commission on this day, the 16th day of December 2004."

Signed by Chairman Ric Williamson, Commissioner Robert Nichols, Commissioner John Johnson, Commissioner Hope Andrade, and Commissioner Ted Houghton.

(Applause.)

MS. WILLIAMS: Thank you. It's been a pleasure to be able to work with TxDOT for the 26 years and to start off on the switchboard and to be where I am now, I would have never ever in my wildest dreams thought that possible.

It's been a pleasure to work with the current chairman and members of the commission and our current administration as well as previous commissioners and administration.

I'm a bit prejudiced, I think TxDOT is the best state agency, we have the best state employees, and I know we will continue to be the best state agency, and for that, I thank you.

MR. WILLIAMSON: Ted?

MR. HOUGHTON: Well, I've only had the opportunity for one year, Cathy, and thank you for guiding me through the minefields when I first walked into this building. And you decide to get married and then you decide to retire, so congratulations and thank you very much personally.

MS. WILLIAMS: Thank you.

MR. JOHNSON: Cathy, one of the things I find to be one of the highest standards at any agency or any business can have the longevity and loyalty of its employees, and I'm struck by so many of your colleagues that have been here a long time and I'm equally as struck by the fact that you started answering the phones in the Paris District 26 years ago, and I marvel one, at your ability to rise through the system to the highest position that a non-engineer holds, and I congratulate you for one, your loyalty, and two, your talent.

And I guess the simplest and probably the most honest thing I could say is I'm going to miss your bright shining face around here.

MS. WILLIAMS: Thank you.

MR. NICHOLS: The first thing I'd like to do is thank you very much for all the time and energy you have put into the state of Texas through this agency. Most people will never know all the things that you have done, but you did do them and there are many in the department that know what those things are and very much appreciate it.

We are all better off because of your contributions, and we will miss you. Thank you very much.

MS. WILLIAMS: Thank you.

MR. WILLIAMSON: I've been with the agency now almost four years; I had a considerable amount of experience in state government prior to this. I think it's safe to say that this state agency comes closest to being run like a private sector of the state agencies I was familiar with in my years as a legislator.

You epitomize the agency's approach. In all of my dealings with you it was as a business by the book with a practical commonsense viewpoint of how to solve problems. I told you this privately, I have to tell you publicly, you will be sorely missed. We understand that it's time to go conquer other mountains, or in your case, dive to deeper depths, but that doesn't hide the fact that we will miss you, and while we all wish you the very best, people like you are never replaced, we only look for someone that we hope may be the same contribution center that you were.

I hope you have fun in your retirement.

MS. WILLIAMS: Thank you.

(Pause for photographs.)

MR. BEHRENS: We'll now go to agenda item number 4 which is a minute order that is being brought to the commission that is recommending the funding of a $600 million safety project that will cover the entire state.

Carlos?

MR. LOPEZ: Thank you, Mike.

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

The minute order before you provides for the approval of the 2005 Safety Bond Program. We used the Safety Improvement Index to rank projects that came in for the districts for this program. That index is one of many indices that TxDOT uses to rank projects for different types of programs. For example, we have indices that rank bridge projects, that rank railroad crossings, safety rest areas and highways that form corridors in rural and urban areas for project selection.

The Safety Improvement Index takes into account accidents and crashes at a particular location and the type and cost of the improvement that's going to try to fix the problem, so therefore, we thought that was the best index to use for this particular program.

After ranking all the projects that came in from the districts, we're ready to recommend to you today a 645 project, $605 million Safety Bond Program that will allow us to widen 1,600 miles of narrow two-lane roadways, install 740 miles of median barrier on divided highways, build 171 left-turn lanes at highway intersections, and build ten new highway overpasses.

The Texas Transportation Institute Safety Center has estimated that these specific projects have the potential to save 1,800 lives and prevent 21,000 injuries over the next 20 years.

We recommend approval of this minute order.

MR. WILLIAMSON: Discussion or questions, members, starting with Mr. Houghton?

MR. HOUGHTON: When would the first projects see dirt or concrete, or whatever it may be, being poured? When would these projects begin?

MR. LOPEZ: We have projects that are scheduled for letting as early as May of 2005, and they'll all be staggered throughout about the next year and three months after that, with a majority of them going to contract by August of 2006.

These are quick turnaround projects, they don't take a whole lot of time to build, so Texans ought to see the improvements on the ground fairly quick.

MR. HOUGHTON: And just looking at the numbers here, it seems to be that east of I-35 has gotten a significant amount of projects.

MR. LOPEZ: That's correct. When we were first laying out this program, we got with the Safety Center and we wanted to see what kind of projects would give us the best safety benefit in return, and they suggested to us that whatever dollar amount that we decide to spend on this program, that half of that ought to go to widening two-lane narrow roads. We have a significant run-off-the-road problem in this state, we have about 30,000 miles of roadways that are less than 24 foot of width, and a lot of those are east of I-35.

Because of that, by looking at the crash history at those locations, projects tended to be concentrated in that area for the widening type of projects especially.

MR. HOUGHTON: So it's a good news, bad news for some districts: good news is you have great safety, bad news is not a lot of projects.

MR. LOPEZ: That's correct, but that is a good positive way to look at it is if your district didn't particularly get a whole lot of money, that means, relatively, your roads are in fairly good shape.

MR. HOUGHTON: Now, what percentage does this take care of the big, big projects out there, the safety projects? I mean, we've got a lot of issues from a safety standpoint. So does it take care of 10, 20, 30?

MR. LOPEZ: Well, that's a good question. We concentrated on our four major categories for this particular program, and there are other types of work that we could have asked for but these are going to give us the best return right away.

The projects we asked for right now, we got about $1.8 billion worth of requests. About $1.4- to $1.5 billion of those projects met the safety test and had a safety improvement index that was over one. So we've got about 40 percent of the projects that were submitted, but a lot of those that we're not funding are grade separations which tend to have just a little less return on safety benefit and tend to be the higher dollar type of projects.

MR. HOUGHTON: Overpasses, underpasses?

MR. LOPEZ: That is correct.

MR. WILLIAMSON: Mr. Johnson?

MR. JOHNSON: Carlos, I think I have a couple of observations. One, the numbers that you mentioned in terms of the reduction in fatalities and injuries, I mean, that's an inspiring number, and I know TTI is very capable in their prognosticating, and I can't help but think we should all be uplifted by that.

And what follows right behind that is safety has been and will continue to be uppermost in this department's thinking, and I think this is an outward and visible sign, but I mean, every day, every member of this staff, and I'm going to say every employee -- most every employee, I think safety is on their minds, and I think this is, as I mentioned, an outward and visible sign of that.

And I guess thirdly, I'd like to thank Senator Ogden and Chairman Krusee for their tenacity in this particular area. Sometimes when we look at congestion and mobility issues and the massive amount of challenges that we have and the expense of those challenges, we sometimes get carried away with those thoughts and we, in a golfer's term, take our eye off the ball, and I think this shows that indeed not only do we have our eye on the ball but so do the leadership in the legislature.

Thank you for what your division has done in this regard also. I mean, I know every day this is in your mind 24-7.

MR. LOPEZ: Thank you, Commissioner.

MR. NICHOLS: A comment and a question. The comment is in the past sessions we were given opportunities to issue bonds to accelerate projects of a lot of different types. I think it is very important for people to recognize that we chose to accelerate on our bond program were the ones that will save lives.

We talk that story and we believe it and we're taking that action. I think that's real important for everyone to know.

Number two, the scoring on these projects was originally created through the Safety Research Center over at A&M?

MR. LOPEZ: Actually, I think that formula originated with TxDOT. Over the years the research agencies and the Safety Center have helped us refine that formula and make sure it stays current and does the job it's supposed to do.

MR. NICHOLS: As I understand it, as you explained it to me the other day, they went through each of the different types of safety projects and those that ranked the very highest, the ones that for the dollars had the greatest opportunity to save the most number of lives or incapacitating accidents, they took those first, regardless of where they were in the state, so it was strictly based on the scoring process.

MR. LOPEZ: That's right.

MR. NICHOLS: And the spread across those, if you were to ask the question for the amount of dollars you spend, what projects could we do the quickest for the amount of money that would save the most number of lives, and these are the projects for that amount of dollars.

MR. LOPEZ: That's correct.

MR. WILLIAMSON: Please.

MR. HOUGHTON: 645 or 644? 644 projects?

MR. LOPEZ: It should be 644.

MR. HOUGHTON: 644 projects, so that's an opportunity for contractors of all sizes. It seems like these projects are smaller in scope, so a greater opportunity for smaller contractors to have an opportunity.

MR. LOPEZ: Yes, especially the widening projects. You'll see that's the kind of work we a lot of times do through our maintenance contracts, so smaller contractors will have the chance to submit bids for these projects, especially on the east side of the state.

MR. HOUGHTON: That's it.

MR. WILLIAMSON: Carlos, first of all, I want to join with the other commissioners in extending my thanks to you for your approach. I know we rushed you, we put a lot of pressure on you to get this done because we felt like it needed to be done this year. It will take six months from now to actually get these projects moving and we want to get these projects moving, and your diligence is noted and appreciated.

I also want to take a moment to thank those who were in the business of disseminating information in the free world. I think that all the news services did a very good job of spreading the message that we're focused on these safety projects.

And it's real important for everyone in the room to know that the process we used, we couldn't have known ahead of time that the money would be distributed the way it was. We're always sensitive when certain parts of the state don't receive as much as other parts of the state, and we always, because we are creatures of political process, ask you the hard question: why isn't there as much money in Brownwood, El Paso, whatever? And the answer is because this was focused on Texans lives, not on geographic areas.

MR. LOPEZ: Right.

MR. WILLIAMSON: You did a real good job. I think we have a couple of people that wish to comment, so if you would step back for a moment.

Bill Shipp, City of Commerce.

MR. SHIPP: Thank you, Mr. Chair. If I may, I am Bill Shipp, city manager of the city of Commerce, and you also have a comment card from the mayor of Commerce, Sheryl Zelhart, and if I might ask your permission to let her speak first and then I could follow with my comments.

MR. WILLIAMSON: Absolutely, yes, sir.

MR. SHIPP: Thank you, sir.

MR. WILLIAMSON: Welcome. Is this your first time with us?

MAYOR ZELHART: No, sir, it's not.

MR. WILLIAMSON: I just don't recall, so thanks for being here.

MAYOR ZELHART: I appreciate it very much.

As Mr. Shipp said, I'm Sheryl Zelhart, I'm the mayor of Commerce, and I want to thank you all for the opportunity to address the commission this morning. And we do appreciate the work that TxDOT does in our community. We have a very good relationship with Bobby Littlefield who is our district engineer and Craig Miser, who is our Greenville area engineer. They've been very good to work with.

Recently TxDOT completed an intersection at Highway 24 just north of Commerce where it intersects Highway 50, and that was completed just a little bit over a year ago, and this intersection is of great concern to us. We've discussed these concerns with both our district engineer and the area engineer. We've had 12 major accidents at this intersection since it opened; we've had 18 people transported to the hospital from those accidents.

As a result of these discussions, TxDOT has implemented a progressive safety measures program and we continue to have very serious accidents at that intersection. We had one on Tuesday and two people were again transported to the hospital, both of the automobiles that were involved were totaled.

We were informed in October that a grade separation project had been submitted to TxDOT for funding under this Safety Bond Program, and we learned today that this project had not been funded.

What we would like to do at this time is, of course, continue to work with TxDOT to solve this problem, but we'd also ask that you would carefully consider finding funding for this project.

We believe that the safety of the people that travel that road is utmost in your minds as it is in ours. And again, we would thank you for your time and your consideration. Thank you.

MR. WILLIAMSON: Members, any conversation with the mayor?

(No response.)

MR. WILLIAMSON: Okay, Mr. Shipp.

MR. SHIPP: Thank you, sir. If I may, if I can hand you -- I always find it a little more personal if I can visualize some of these things -- I'd like to hand you some photos here to pass around.

The first of those photos is simply a photo of the intersection itself; the second one is a little bit different picture of the intersection, shows a little bit of the stacking problem at the intersection. And the third and fourth photos are actually the accident the mayor just referred to that happened just this Tuesday.

We haven't been taking photos of accidents but this was one that was fairly typical of the type of accident that's happened, and so I asked the police to take pictures and we got a few pictures to kind of show you what type of things happen.

MR. WILLIAMSON: Let me ask you -- I don't think we have the ability to show it to the audience but you'll know what I'm talking about -- what's the business establishment in the upper left-hand corner of the picture?

MR. SHIPP: In the upper left-hand corner is a propane filling station, gas station, propane station.

MR. WILLIAMSON: Is that a retail operation?

MR. SHIPP: It's primarily retail. And also cater-corner from that, conveniently enough, is Benson Brothers Wrecking Service, so they're always right there handy on the job.

(General laughter.)

MR. SHIPP: To add just a couple of things to what the mayor said. She said in the 17 months since that intersection has been opened which completed the bypass around the north edge of Commerce, in that 17-month period since July of 2003 there have been 12 accidents. Five of those have happened within the last two months, and in those five that happened in the last two months, we had eight transports to hospitals during that period of time.

Another thing I thought was significant as we reviewed the accident reports, that on the 12 accidents, eleven of these occurred on dry roads; all 12 of them occurred during daylight hours. So there weren't those types of mitigating circumstances.

MR. JOHNSON: Is there a common element involved in the accidents?

MR. SHIPP: That's a good question. If you look at that picture up there, you're looking here coming from Paris on Highway 24, headed south into Commerce.

MR. WILLIAMSON: Our guys and gals just love a challenge. When I said we can't put it up, I saw those eyebrows shoot up.

(General laughter.)

MR. SHIPP: And the crossing road to the right is Highway 50 going to Ladonia and to the left is Highway 224 going back into Commerce. It's the old 2450 before the bypass was built; the new part of the highway is that highway above the intersection on the picture.

In fact, this one was taken on Tuesday after the accident. You can see in the intersection where the fuel spill was where they cleaned up the fuel spill.

In answer to your question, sir, of the 12 accidents, nine accidents have been with vehicles coming from Paris, the bottom part of the screen, into this intersection and automobiles either crossing coming from the right at that stop sign or they've been in the median where there is a stop sign and they've crossed. And quite honestly, they've just pulled right in front of traffic is what it boils down to.

And it's one of those things you go stand on the ground and it looks good, it really does, it's hard to say why there should be an accident there but they are happening. I think what happens, as you come in here you're on a two-lane highway about three miles before you get here back in Delta County -- a section of 24 is two lane in Delta County -- and then suddenly you're on this four-lane divided highway, you have kind of a sense that, I'm on a freeway.

And then all of a sudden you hit this intersection that doesn't have high traffic counts, no, but you are starting to get into a city where there is a fair amount of traffic crossing there.

And really, that's all I had to say. Like the mayor said, it's certainly a concern for us, it's been a safety problem. We'll certainly continue to work with TxDOT in whatever fashion we need to, but in working with the area and district engineers, we felt it was appropriate to forward a recommendation for an overpass at this intersection.

This shows the stacking here a little bit at that intersection. And we really would appreciate your consideration and we will continue to work with staff.

MR. WILLIAMSON: Mike, is Bobby Littlefield here with us today?

MR. BEHRENS: No, he's not here, but for the mayor and for Mr. Shipp's information, Senator Deuell had called me about two weeks ago expressing his concerns about this intersection; yesterday I talked to Representative Homer also about this intersection. And we're already looking at it and we're going to be looking at it not only from the district standpoint but we'll be looking at it from our Austin division standpoint. Carlos Lopez, who just made the presentation, will be looking at it also.

MR. SHIPP: We appreciate your help.

MR. BEHRENS: Yes, sir.

MR. WILLIAMSON: We thank you for taking the time to come down here and visit with us.

MR. SHIPP: Thank you, sir.

MR. WILLIAMSON: We appreciate it very much.

Other questions or comments for Carlos?

(No response.)

MR. WILLIAMSON: It's a pretty big deal. The legislature decided and the commission passed rules to, in effect, borrow from construction ten years from now to build safety matters today. I think that says a couple of things: one, safety is important to us; two, we have confidence that the other transportation programs we're working on will yield sufficient cash flow ten years from now to maintain our construction program.

MR. HOUGHTON: Is this the first of the tools available, the Prop 14 Texas Mobility Funds that we'll now issue debt on? These are the first?

MR. LOPEZ: Yes, these are the first ones.

MR. HOUGHTON: This is first out of the chute.

MR. LOPEZ: Yes.

MR. WILLIAMSON: So I think we should all be proud.

MR. NICHOLS: So moved.

MR. WILLIAMSON: Mr. Nichols has moved.

MR. JOHNSON: Second.

MR. WILLIAMSON: Mr. Johnson has seconded. All those in favor of the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Congratulations, Carlos.

MR. LOPEZ: Thank you, commissioners.

MR. BEHRENS: We'll go to agenda item number 5, our Aviation agenda item for the month of December.

Dave Fulton.

MR. WILLIAMSON: Do we need to have Carlos come back and lower the podium for you?

MR. FULTON: I can take care of it.

(General laughter.)

MR. FULTON: For the record, my name is David Fulton, director of the TxDOT Aviation Division.

This minute order contains a request for grant funding approval for 18 airport improvement projects. The total estimate cost of all requests, as shown on the Exhibit A, is approximately $13.7 million: approximately $10.2 million federal, $2.1 million state, and $1.4 million in local funding.

A public hearing was held on November 10 and no comments were received. We would recommend approval of this minute order.

And I would point out that some representatives of the City of Sugar Land would like to address the commission at this time.

MR. WILLIAMSON: Commission members, if there's no objection, we'll go ahead and hear from our two witnesses. I don't want to make the same mistake I made a while ago, so Mr. Abraham and is it Savage?

MR. ABRAHAM: Savico.

MR. WILLIAMSON: Which wants to go first or which should go first? They're going to come together.

MR. ABRAHAM: Members of the Texas Transportation Commission, it is indeed an honor on behalf of the citizens and city council to be here and address you about our airport.

At this time, if you don't mind, I'd like to introduce two other individuals: our assistant city manager, David Ellison, and also our Airport Policy Advisory Board chairman, Ken English. Thank you.

For the record, my name is Thomas Abraham. I am a city council member representing the City of Sugar Land, Texas, and the Sugar Land Regional Airport. I am pleased to be here today in support of the project under consideration for the Sugar Land Regional Airport.

Sugar Land Regional Airport continues to develop into an important part of the Houston metropolitan aviation system providing the additional capacity needed for general aviation and corporate aviation. The Sugar Land Regional Airport continues to see growth as high as 20 percent each year.

The projects that the commission has approved in the past have helped the airport keep up with the continued demands of both transit and based aircraft. The project before you today adds to that capacity that is critical within the Houston metropolitan area. In addition to adding capacity, this project will bring new businesses to the airport and local area economy.

For example, Citgo Petroleum will construct a $2.5 million hangar and office facility housing three to five jets. The revenues that the airport can expect to earn from this in fuel sales, property tax and land lease are anticipated to approximately $300,000 annually, including an estimated 100,000 gallons in fuel sales.

This clearly demonstrates that projects such as this in front of you help to keep the airport self-sufficient as well as provide for the local share of grants.

The City of Sugar Land is also committed to success of the airport. The airport has contributed millions of dollars in improvements, including water lines, fire protection lines, and wastewater services, and is currently spending over $5 million for a new 20,000 square foot terminal to meet the growing needs of the airport.

The Sugar Land City Council has recognized that the airport plays an important part in the economic development of the city by providing access to not only existing businesses but new businesses as well.

In support of these businesses, the airport is currently in the process of having U.S. Customs at the airport 40 hours a week, which became necessary as our customers acquired jets able to access global markets overseas without having to refuel. This shows that airports such as our general aviation reliever airport need to be prepared to meet the new challenges of general aviation and corporate aviation.

The Texas Department of Transportation Aviation Division, under the leadership of Mr. Dave Fulton, has worked closely with our airport staff in planning and development to ensure that we meet the challenges of providing the economic benefits to the community as well as the current and future needs of general aviation and corporate aviation.

Also I want to make one statement further too, that is every grant, every money, our council makes sure that it is done for the betterment of our community and every citizen. On behalf of our citizens, they are very, very appreciative of your decision.

Thank you for the opportunity to speak to you today and for your consideration of the project before you. Thank you.

MR. WILLIAMSON: Members, any questions of Mr. Abraham?

(No response.)

MR. WILLIAMSON: Thank you, sir. Thank you for coming all the way up here. Mr. Savico.

MR. SAVICO: Members of the Texas Transportation Commission, for the record, my name is Philip Savico. I'm the aviation director for the Sugar Land Regional Airport.

We're up here today to show support not only to one of the best aviation divisions that I've dealt with -- and I've dealt with a number throughout the country in my career -- and that is for the support of Dave Fulton and his staff.

We've worked years in planning the Sugar Land Regional Airport. The Sugar Land Regional Airport is an airport that is becoming something to reckon with, something to see. It's going to be quite an airport that the state itself can be proud of.

We're building a new general aviation center. We've built a new control tower. We have radar there. We've built a corporate taxiway that provides for new business enterprises, major Fortune 500 companies; Customs will be there. Customs will also support major Fortune 500 companies, as well as bringing international travel into the Sugar Land area.

This helps the city in developing our markets within the community itself, it provides access. Although we talk a lot about highways, airports are every bit as important as providing access for corporations like Best Buy, for healthcare companies. These Fortune 500 companies do build and they do provide the community with jobs.

Our airport five years ago went from a small airport to a fairly large airport now that supplies over 150 jobs on the airport itself. We're looking to have over 250 jobs at the airport within the next three years.

These projects continue to provide high-paying jobs, and we look forward to the support of the board for the consideration of these projects before them today. Thank you.

MR. WILLIAMSON: Questions or discussion with Mr. Savico?

(No response.)

MR. WILLIAMSON: Thank you for coming up. We appreciate you taking the time to be with us today.

Discussion with Mr. Fulton?

(No response.)

MR. WILLIAMSON: Do I have a motion?

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. FULTON: Thank you, Mr. Chairman.

MR. WILLIAMSON: Thank you, Dave.

MR. BEHRENS: Commissioners, we're going to now jump to agenda item number 7 under Transportation Planning.

MR. WILLIAMSON: And while Mr. Randall is coming forward, we would want the record to reflect we now are in the August presence of the Honorable Representative Edmund Kuempel from somewhere south of here and somewhere north of San Antonio, and I think he generally is from Seguin if the news about Seguin is good, if it's bad he's from Comal County, it just kind of swings.

MR. KUEMPEL: I can vacillate the Sea of Tranquility with the best of them.

(General laughter.)

MR. BEHRENS: Jim, if you'll go ahead and present those two minute orders.

MR. RANDALL: Okay, sir. Jim Randall with the Transportation Planning and Programming Division.

Item 7(a), this minute order approves projects for the second program call for the Border Colonias Access Program.

In accordance with a request from the Governor's Office, Government Code Section 1403.002 requires the Texas Public Finance Authority to issue general obligation bonds and notes in an aggregate amount not to exceed $175 million to provide financial assistance for border colonia access roadway projects. The TPFA, as directed by TxDOT, distributes the proceeds to the eligible counties.

Pursuant to Government Code Section 1403.002, the Texas Transportation Commission has established a program to administer the use of the proceeds of the bonds and notes. The commission has adopted rules to implement the program codified in Title 43 Texas Administrative Code Sections 15.100 to 15.106.

In accordance with Section 15.103, the first program call of $50 million was issued on January 18, 2002. On July 23, 2004, a second program call for $50 million was issued. Over 300 applications were received for the second program call. The projects were ranked according to the criteria prescribed in 43 TAC Section 15.104.

We are recommending approval of 178 projects in 22 counties. 118 projects are in the allocation portion and 60 projects are in the competitive portion.

Staff recommends approval of the projects described in Exhibit A of this minute order for funding under the Border Colonias Access Program.

MR. WILLIAMSON: Members, we have with us today, having come a long way, county commissioner and most recently one of our financial partners in the RMA business, Commissioner David Garza who wishes to comment.

David, Commissioner, we appreciate so much your coming up.

MR. GARZA: It's a pleasure to be here, Chairman.

Good morning, commissioners, Chairman Williamson. It's a pleasure to be here. I do want to recognize another commissioner here present today, John Wood from Cameron County who is with us joining us.

My name is David A. Garza. I'm Cameron county commissioner from Precinct Number 3.

Before I make any remarks to item 7, I do want to advise you that this last Tuesday, the county commissioners court in Brownsville passed and appointed six members to the RMA board.

MR. WILLIAMSON: Excellent.

MR. GARZA: So we look forward to that coming to fruition as soon as we get a chairman.

MR. WILLIAMSON: You know what, that means we've got an RMA on the Red River, and an RMA, I guess we could say, on the Gulf Coast.

MR. GARZA: Right, we're on the Gulf.

MR. WILLIAMSON: We're there.

MR. GARZA: So we look forward to those challenges and making some projects come through for us.

As I mentioned, I want to address the commission on item number 7(a). First of all, I would like to compliment the TxDOT staff for their hard work and efforts in getting these projects to recommendation point.

I know that we've worked in Cameron County very hard with Mario Jorge and his staff in submitting our projects and our applications to them, and I can assure you that Cameron County will be very fiscally responsible for all the funding we have had. We'll continue working with the local TxDOT office.

But I do want to mention some recommended changes that we would like for you to consider in helping us with. There were some changes made legislatively and we will work with our local legislators to accomplish those changes that need to be made from the first call to the second call.

There were some counties that because of their population received a higher percentage of the allocation the second time over the first call. And I realize that those changes were legislatively made, but I also believe that some of the population figures that were used in the allocation formula are inaccurate.

I know that TxDOT had nothing to do with that, those figures came from the Water Development Board, but they do not appear to be accurate to us, so we wish to bring those to your attention.

MR. WILLIAMSON: We understand exactly what you're saying.

MR. GARZA: What that resulted in is we had one county in particular in South Texas that is 15 percent of the population of Cameron County receiving more of the allocated monies than we did, and that just doesn't seem to be too fair, but I know it's not TxDOT's fault.

Anyway, we would like to thank you in advance and we are very happy that we are receiving the funding that we did. With the funding that we're getting with this call, we're looking at doing approximately 70 roads in Cameron County which will equal 22 miles of roads. And we hope that we can work together with TxDOT and your staff so that in the next call we will have more adequate funding for everyone, especially the allocated portion.

I thank you for your time.

MR. WILLIAMSON: We appreciate the precise and yet gentle way you lay it out.

MR. GARZA: It was the third format, sir.

MR. WILLIAMSON: We all kind of understand the dilemma we're stuck in on this one and I think we're all going to be working together here in a month to try to resolve that.

Members, dialogue with the commissioner?

MR. HOUGHTON: Commissioner, or James can answer this question -- I don't know who is going to answer it -- start to finish, vote today to getting the pavement on the ground, is it working, is it expeditious; are there logjams in this process?

MR. GARZA: Start to finish on the allocated portion of what we've done, Cameron County is about done with all their projects from the first call.

MR. HOUGHTON: From the 2002 first call?

MR. GARZA: Right. On the competitively based ones, we had a situation in which we had a major utility company, PUB in Brownsville, that had a whole lot of relocation of utilities that has delayed that project. We've awarded a contract, we will have a pre-construction bid conference very soon, and that project will be underway.

On the allocated, and which Cameron County is being done through a forced account process, it has been working great and TxDOT has done well for us locally.

MR. HOUGHTON: James, across the border in the colonias, we're seeing the same types of progress or same results?

MR. GARZA: You would probably have to have that answered from one of your TxDOT staff members.

MR. RANDALL: To date we've expended $17 million out of the first $50 million call. What we're seeing, as usually with any new program, it takes a while to start ramping up to get the program going. We're expecting that the counties have more experience with the program, our folks are out overseeing the projects, we're getting better on our billings and stuff like that, so we expect it to accelerate in the future.

MR. HOUGHTON: Are we issuing the contracts or is the county issuing the contracts?

MR. RANDALL: The county is.

MR. HOUGHTON: The county issues the contracts.

MR. RANDALL: Yes, sir. The billings are issued through TxDOT and then we take it to the TPFA, they distribute the funds and then we allocate them back to the counties.

MS. ANDRADE: So out of the first 50- we've expended 17-.

MR. RANDALL: 17-.

MR. JOHNSON: One question, Jim. Briefly describe the difference between the allocation methodology and the competition methodology for the awarding of the colonias grants.

MR. RANDALL: Yes, sir. In our rules, the allocation program is based on the percentage of the colonia population in the county. In the competitive project, we're looking at ranking the projects and it's according to the colonia population, the road mileage, the condition of the road, the presence of a school bus route, and the access the colonia has to the region. So that's four criteria we're looking at.

MR. JOHNSON: And the population figures are submitted by the Water Board. Is that correct?

MR. RANDALL: Yes, sir. The Texas Water Development Board, they're, I guess, the only state agency that really has a read on the colonia population, so early in the program several years ago when we met with the Governor's Office, Secretary of State, other agencies, it was determined that we would use their population figures for the colonias.

MR. JOHNSON: Thank you.

MR. NICHOLS: I didn't have anything.

MR. WILLIAMSON: More for the commissioner?

MR. HOUGHTON: I have something for David.

MR. WILLIAMSON: Okay, Commissioner, can you come back up?

MR. HOUGHTON: You talked about, Mr. Chairman, champions, and Commissioner Wood and Commissioner Garza were significant in the forming of the RMA in Cameron County, and I assume that that project that we're talking about, the rail relocation, will be one of the first rail relocations in the state of Texas. Is that an accurate statement?

MR. GARZA: That is an accurate statement. On our first project we already have the EA done. We've received additional federal funding for the west rail in Brownsville. We've just been told last week from Senator Hutchison that we were also in receipt of $2.8 million so we can continue the EA and design for the project in Harlingen-San Benito area. So those projects will be well underway.

MR. HOUGHTON: Well, I would like to single you and Commissioner Wood out as the champions that made this thing happen.

I went down to Cameron County, I saw the enthusiasm in two people that grabbed this thing and took it, and this is what it takes across the state to make things happen, and I applaud you all for making it happen.

MR. GARZA: Thank you.

MR. HOUGHTON: But I do have one other question. Do you still have that Kerry bumper sticker on the back of your car?

MR. GARZA: Not any longer, sir. Cameron County delivered in red, so we have funding for our rail.

(General laughter.)

MR. GARZA: The one thing that I would like to say is that the allocation formula that was in the first call, as far as the numbers were concerned, is not the same that was used for the second call. I want to make sure we clarify that. But we're okay, sir.

Any other questions? If not, I wish to thank you for allowing us an opportunity to come before you and we look forward to working with you with the RMA.

MR. WILLIAMSON: And I think we all echo Mr. Houghton's comments about your partnership has been wonderful, and actually it's a great example. We chuckle about the Kerry bumper sticker, but it's a great example of how the department, we work with members of each political party and members of all the geographic parts of the state. My favorite saying is there are no Democrat highways or no Republican bridges, there are no Liberal pull-offs and there's no Conservative fast lanes, it's all one Texas highway system.

You've been a great partner and we look forward to doing some great things down there.

MR. GARZA: Thank you, and thank you for bringing us forward on the agenda.

MR. HOUGHTON: Thanks, Commissioner.

MR. WILLIAMSON: Jim, to wrap up 7(a), do we have witnesses on 7(b)?

MR. BEHRENS: No.

MR. WILLIAMSON: Let's go ahead and wrap up 7(a). Anything on that?

MR. RANDALL: Yes, sir. On the legislative change, the last session they added a 10 percent set-aside for the rural border counties, and that's ten of them, so when we have a $50 million program call, that means $5 million is set aside for those counties, and that goes into the allocation portion. So that's the change.

MR. WILLIAMSON: I think the commissioner made it clear that he understood. We all understand what the challenge is, we'll just have to figure out how to work through it during the next session.

Do I have a motion?

MR. HOUGHTON: So moved.

MR. NICHOLS: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. RANDALL: Item 7(b), we bring you the first quarter program for the economically disadvantaged counties to adjust matching fund requirements.

In your books is Exhibit A that lists the projects and staff's recommended adjustments for each of them. The adjustments are based on the equation approved in earlier proposals. There are 59 projects in nine counties; the total reduction in participation for these projects is $1,276,159.

We recommend approval of this minute order.

MR. WILLIAMSON: Discussion or questions or comments for Jim in regards to item 7(b)?

MR. NICHOLS: So moved.

MR. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Thank you, Jim.

MR. RANDALL: Thank you.

MR. WILLIAMSON: As previously announced at the beginning of the meeting 59 minutes and 56 seconds ago, we're now going to take a ten-minute break. At that time after ten minutes, we will come back from recess and we will take up discussion item 11 which is a discussion matter that affects discussion item 12.

And everybody has got plenty of time to get up. If you don't want to lose your seat, that's fine, but you've got plenty of time to get up and stretch because it will be another hour after that before we take a break.

We're in recess for ten minutes.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: We will return from our recess.

For those of you in the audience today who are curious, we've put discussion item 11 ahead of discussion item 12, as I would like to think we always do, for a reason.

Two years ago, actually beginning with Senator Shapiro and Representative Alexander four years ago, state policy in regard to how to pay for expanding our transportation system began to change. And it's safe to say that over the four years there's been some rough spots and will continue to be some rough spots, and not everyone in our state agrees with the policy and the direction the commission has taken to address capacity problems, and we acknowledge that, we understand that.

What we've tried to do is carefully listen to the criticism and the opposition in an effort to first ask ourselves do we need to correct course, are we wrong about something, and if we feel like we're right, then try to understand how to distribute information to a free people and let citizens themselves make the decision about the correctness or the rightness or wrongness of the policy.

I believe I speak for all of the commission when I say we have an abundance of confidence in the citizens of the state, in the legislature, and certainly in the governor to take information from two perspectives and balance it and make a rational decision about the wisdom, the rightness or the wrongness of the policy.

One of the most persistently repeated criticisms of the policy is that the legislature and the commission by extension is instituting a system of double taxation for the use of the roads of the state.

You know, Mr. Johnson, in my years in the legislature, I had the privilege of serving many great chairmen, but one of the most intelligent chair that I had the privilege of serving was Paul Sadler. Remember from East Texas? And he had a great saying: I can lead you to the truth, I cannot make you understand it.

And something that's perplexed us all is how anyone can say, I've already paid for this road, you're making me pay for it twice. Because we know instinctively, in the use of our cash flow, that we can't possibly be paying for our roads or we wouldn't be allowing our road conditions to deteriorate and congestion to build anywhere in the state.

If we were paying for our roads, if the user fee system called taxes was exactly balanced with the use of the roads, then we would never be congested and we would always have our roads at a pavement score of 95 percent or higher. So how do we understand that argument and at least offer the information for a rational public to weigh and balance?

And so we put our staff on gathering information and building the research models to help our citizens understand the dilemma we see clearly. We don't do that with the expectation people will agree with us necessarily, but just so that the information is there.

One of the things that we've instructed staff to work on over the last six months is a defensible analysis of just how much revenue is generated by the tax system and consumed on the road built with those taxes.

And discussion item 11 is the, I think, third report on this research project, because, as I understand, by the time the legislature convenes, we're going to be prepared to lay that model before the House and Senate members and say just so you know, this is what a road costs and these are the taxes of all kind from all sources, including federal reimbursement, that are generated by the use of that road, and here is the difference between the revenue and the cost.

And that's very important in our deliberations about discussion item 12, I think. So Mike.

MR. BEHRENS: I'll turn it over to Amadeo. He has put together this discussion item where he'll talk about the cash flow analysis when we talk about the cost of building that road and maintaining that road and how it compares to the money it takes to do that.

Amadeo?

MR. SAENZ: Thank you. Good morning, Commissioners, Mr. Behrens, Roger. My name is Amadeo Saenz, I'm assistant executive director for Engineering Operations. I'd like to visit with you today on a discussion item and kind of give you a status report of some of the things that we've been looking at with respect to determining where our money comes from and how much of it is attributed to a particular road and such and so forth.

Of course, as you know, the majority of our revenues to construct and maintain our highway facilities comes from our state gasoline tax and our federal gasoline tax. There's also vehicle registration fees that add on to it and some other taxes and fees on lubricants. But the majority of it comes from the state and federal gasoline tax.

You know, of course, there's a 20-cent state gasoline tax and then there's an 18.4-cent federal gasoline tax. Not all that revenue that is generated when people buy gasoline comes to our Transportation Fund 6. About 72 percent of the state gasoline tax, 72 percent of 20 cents is almost 14-1/2 cents, and then of course our federal tax is 18.4 cents of which part of that goes to mass transit, about 3 cents' worth of that, and then the real return that we have realized over the years is about 85 percent, or about 13 cents.

So in total for every gallon of gasoline that people purchase, the department realizes about 27-1/2 cents per gallon. That money then comes into Fund 6.

What we've tried to do is, of course, as we develop projects, those projects have an initial capital cost to construct. And then as that project is built and it's open to traffic, from then on we have routine maintenance and every so many years on the schedule we have some preventive maintenance that needs to be done.

And as traffic builds up on a particular facility, then we have to add additional capacity so we can keep the congestion levels at a level that are bearable. And then, of course, the project continues to be rehabbed and continues to be maintained and eventually rehabilitated, and the road stays on forever, the road never just goes away. So there is always an expense on that road.

But as we were looking at this, we wanted to maybe look at a 40-year period, and during that 40-year period we would build a facility and then, of course, we would maintain the facility, add on to the facility when it needed to be added on. And then what we wanted to do is we wanted to determine, okay, based on this facility and the traffic that is utilizing this facility, how much tax revenue is this facility generating?

So we said maybe one of the things that we need to look at, we'll take small steps and we look at a project that was recently built that did not exist, and so we took an example of State Highway 151 in San Antonio.

State Highway 151 in San Antonio is about a ten-mile corridor, it's a four-lane divided freeway, was built in phases. Traffic on that corridor ranges from about 5,400 vehicles to 25,000 vehicles in 1986 when it was opened. In 2004 today, that traffic ranges somewhere between 14,000 vehicles and 43,000 vehicles; different segments of that facility have different traffic.

At the end of our 40-year study period, because I looked at it from the point that we started, traffic would be somewhere from 39,000 on the low end and maybe 96,000 at the high end on the different elements.

That traffic that uses that facility, then we attributed how much gasoline tax that traffic would generate for that facility.

MR. WILLIAMSON: Based on how many average miles per gallon per vehicle?

MR. SAENZ: Based on some research, average amounts per gallon is about 22.1.

MR. WILLIAMSON: So we took into account the more fuel-efficient vehicles.

MR. SAENZ: Yes. And this came about through some research, and our staff found out that about 22.1 miles per gallon was that. And as I mentioned, we were able to realize about 27-1/2 cents per gallon.

Of course, we did not take into account any fuel tax increase in the future, we're saying this is what it is today, and based on when the project opened, based on the traffic for each individual segment, the lanes of the segment, we were able to determine the vehicle miles traveled, then attributed that and based on the 22 miles per gallon, how many gallons of gasoline would have been expended on that facility.

And then, of course, we were able to determine how much gasoline tax revenue would come into Fund 6 by the people that were utilizing this facility.

MR. WILLIAMSON: What about vehicle motor registration fees? That's a large expenditure for a lot of citizens.

MR. SAENZ: We took that, and what we tried to do on that is we have that data based on a county basis, so we were able to take the vehicle registration fees by county, divided by the total vehicles miles traveled in the entire county, and then prorated down to this road. So we were able to incorporate that.

MR. WILLIAMSON: So you accounted for gasoline tax at the state and federal level.

MR. SAENZ: And vehicle registration.

MR. WILLIAMSON: And for vehicle registration fee annually.

MR. SAENZ: Yes, sir. So all those factors go in to determine how much revenue can be attributed to the people that are using this facility, or how much money this is bringing in.

Of course, as I mentioned, the facility was constructed and then it needs to be maintained, and since the road is already in place, we utilized actual data from 1986 till today, and then, of course, we then took some factors and projected the life of the expenditures from then on till the design year of 2046, or the lookout year of 2026.

If you look at this basically on Highway 151, and we took this as an example, and of course this can be attributed to any other facility in the department, but we wanted to try out our mechanism on this and from then we can move forward and try to incorporate it into basically the different highway systems that we have and eventually our whole system.

If you look at that, of course, that project originally cost about $40 million to build and it was built around 1986, from 1986 on to about 2000, and of course the project, being brand new, has very small maintenance costs in the early years but as you see, as we're getting into 2000 and 2001, those maintenance costs begin to increase.

The big increase that you see just after 2000 is that, as I mentioned, the project was built in phases and some additional capacity was added and some additional main lanes were constructed on 151, and that's a project that was just completed in the last couple of months to complete 151 to a full freeway.

That brings us to 2004, so we continue to have some maintenance that will continue. In time we will have to go in there around 2008 to do some preventive maintenance. We've got to do a little bit higher than the regular routine maintenance than the mowing and the patching, we've got to go out there and maybe put additional surface on this project, and you see that little hump.

And then based on the projected traffic -- as I mentioned, traffic is going to go anywhere from 25,000 to 96,000 -- around 2012 this facility, based on congestion, would have to be expanded. We would have to add an additional lane in each direction, and that's that other hump you see up there. Then from then on we project just routine maintenance as well as preventive maintenance for the rest of the life of the facility.

But if you look at it over a 40-year life period, this facility, the blue line is basically the line that depicts the revenues that would be collected from gasoline tax, federal and state, as well as vehicle registration fees. So if you look at it, the lines never cross.

Even if you were to drop down and say I will not incorporate the cost of the initial construction and bring your initial construction line and fund it from somewhere else -- which is normally what we do -- your revenues over this particular facility, the traffic volumes for this particular facility, even though they require the facility to be expanded during its life, are never enough to be able to pay for the maintenance that would be needed to keep this facility in a condition that's good or better, which is one of our maintenance goals.

So the blue line depicts the traffic, and you can see the difference is basically the shortfall that we have on this facility. That's not to say that every single facility in the state of Texas falls under this same scenario, because if they all fell under this same scenario, we wouldn't have any money to build any capacity.

But what we do is we then reduce our maintenance monies that we have that we apply to these facilities and we bank some of our tax dollars that we're receiving, and we use it to go out there and address. So we would have banked money from all over the state to go out there and take care of that expansion that would be needed in 2012.

MR. WILLIAMSON: So in effect, we would have avoided maintenance on other facilities in order to invest maintenance dollars on this facility.

MR. SAENZ: Yes, sir. We would have reduced the level of service of our maintenance on other facilities so that we could have saved some dollars to come and put them on this facility.

MR. WILLIAMSON: Or in the alternative, Amadeo, we could have not added that lane capacity. Correct?

MR. SAENZ: That's correct.

MR. WILLIAMSON: The gap wouldn't have grown quite as much by simply doing exactly what we're doing now which is not adding capacity, just let congestion grow.

MR. SAENZ: Yes, sir. But in that case, congestion on that particular facility would have grown which, in essence, would have probably caused additional damage and additional maintenance costs. So it's going to always be a balance.

MR. WILLIAMSON: But we don't maintain that every road in the state will show this deficit. We suspect there are roads that generate a surplus, we just don't know for sure which roads those are yet?

MR. SAENZ: We are working on trying to collect that data, we're trying to collect that based on the district. And I think we're going to see that certain roads across the state in various districts, particularly in the metropolitan areas that have the large traffic volumes, are going to be what I would say in the black, where the blue line will cross above the red line. And that's what we would call money that's available to help us address some of the other things.

What's very important is that we need to make sure that we keep our level of maintenance at such a point that we preserve our existing system at a level that is bearable and usable.

MR. WILLIAMSON: So what we can say, sort of in summary up to this point, is we know instinctively of the deficit. The deficit is expressed in increasing pavement scores which means deteriorating roads and an increasing congestion which means roads more heavily used. That's how that deficit is absorbed.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Are there other examples you brought?

MR. SAENZ: Well, another example we started looking at -- and I apologize, we started working on it late into the evening yesterday and our data was not correct -- but we did basically the same scenario.

Before I leave that, let me go ahead and turn this slide over. Kind in summary, over the 40-year period our revenues for 151 are estimated to be about $74 million based on the traffic that is using 151 from the beginning till the end of the 40-year period. Our cost of maintenance and rehabilitation are about $159 million. So if you look at our revenue over cost ratio is only about 47 percent. So we could basically cover only half of the cost with the revenue that is being generated by the users on that facility.

We've done the same thing, and I guess I wanted to pick another example, and I was looking at 130, segments 1 through 4. I don't have all the data collected but I was able to get to the point where I calculated this R-over-C ratio. The R-over-C ratio for 130 is somewhere about .20 to .25. I say it in a range because I had to make a little bit more assumptions because I didn't have all the data, but it was somewhere between 20 and 25 percent.

MR. WILLIAMSON: That is to say, it would be that had 130 been built as a tax road and not a toll road.

MR. SAENZ: Yes, right. And what I did is I calculated the cost of the project as a road that did not include the toll elements, and I used the traffic numbers for that facility as a non-toll facility. And then, of course, I applied our maintenance factors to that facility as a regular four-lane divided facility.

So a lot of my data is more based on assumptions because the facility doesn't exist at this time, but based on our early looking at that facility, we're somewhere between 20 and 25 percent.

MR. WILLIAMSON: So by the time the legislature convenes, we need to have this refined and broken out to rural two-lane, trunk system, urban four-lane, urban multiple-lane. Any member that says I want to know for example, what's the tax rate of return on Interstate 10 from downtown Houston to Katy, we'll be able to generate that with some surety and say this road is paying for itself or not paying for itself.

MR. SAENZ: We should be able to categorize our facilities based on rural interstate, urban interstate, metropolitan interstate, our farm to market road system, and come up with what we would call a rate of return for each individual type of facility.

MR. WILLIAMSON: Of course, you know if we pursue this for the first time in the long argument of private vehicles versus public transit, we're in effect giving the proponents of public transit the information they've long sought which is what is the true subsidy of the automobile on Texas highways.

MR. SAENZ: True.

MR. WILLIAMSON: But we're prepared to do that.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Because we think truthful information is more important than untruthful information.

MR. SAENZ: Yes, sir. I'd be happy to answer any questions.

MR. HOUGHTON: I have a question. When is the last time the gas tax was increased?

MR. SAENZ: I believe it was 1991.

MR. HOUGHTON: Have we done in real dollars what the gas tax is today in real dollars? I mean, we talked about 13 years ago we were getting 27.5 cents.

MR. SAENZ: Let me see if James Bass is here.

MR. WILLIAMSON: Not if he's smart. If he's smart, he's avoiding it.

MR. HOUGHTON: Bass is not here.

MR. SAENZ: We could very easily calculate that and come back and determine what in real dollars it is based on that because of inflation.

MR. HOUGHTON: That's important. I mean, a loaf of bread 13 years ago is a lot different than it is today.

MR. WILLIAMSON: John?

MR. JOHNSON: Two things that strike me, particularly the graph that you showed on State Highway 151 in Bexar County. I think if you use that as a template, you could make the case that over time we're going to be spending all of our gasoline tax on maintenance and upkeep because clearly as surfaces age, they require more in terms of dollars. And in that case, there was an uptick in the graph when we added capacity because the more lanes to maintain, the more cost. But also, that's magnified by the number of years and especially as the surface ages.

The other thing that you mentioned was that in the major metropolitan areas where there are congested freeways and roadways that the possibility exists that we are actually running in the black, or there's a profit between the gasoline tax collected and the amount of money spent on upkeep and maintenance.

I find that to be a distressing commentary that in order for us to have more income from a particular corridor than we have in expenses that we either need more traffic, which leads to congestion. I mean, it's in essence the congested roadways which are creating positive cash flow in terms of the cost of maintenance and upkeep versus the income derived through the gasoline tax.

MR. WILLIAMSON: Well, not just gasoline tax, John, but tax receipts from all sources.

MR. JOHNSON: That's a depressing conclusion, because clearly one of our goals and objectives, certainly the group of transportation leaders and users that we convened several years ago to outline the goals that this department ought to have, and mobility, congestion and safety were on everybody's list right at the top, and to think that the only way we're going to have a positive cash flow in these situations is more congestion and less mobility. I think that's a depressing conclusion.

So maybe that's the purpose of this drill is to get depressed.

MR. SAENZ: Right before Christmas. Sorry about that.

MR. JOHNSON: I would hope not. I think it's to illuminate the facts that we're having to deal with and the judgments that we make to find the appropriate funding sources.

Anyway, those are the observations that I have.

MR. SAENZ: And I think we need to look for additional funding sources to help supplement so that we can bring those curves a lot closer together across the state.

MR. HOUGHTON: I'm going to get shot for saying this, but this begs the question that you can no longer go down this rocky road without additional revenue sources or user fees, and we have said we're not going to convert existing roads, but there's going to come a point in time where you can't avoid that subject, non-conversion.

MR. WILLIAMSON: Well, unless other sources of revenue are generated.

MR. HOUGHTON: That's the first criteria: you've got to identify can you, will you, and can you get the authorization, and then what are the other sources of user fees.

MR. WILLIAMSON: Robert?

MR. NICHOLS: On this particular example, the useful life of preservation costs was about double the original construction cost?

MR. SAENZ: It's a little bit less. We're looking into the numbers.

MR. NICHOLS: It's almost two times.

MR. SAENZ: Yes, sir.

MR. NICHOLS: And I know you ran an example like six, nine months ago of another one, had a little lower volume, and the preservation costs were about three times the construction cost.

MR. SAENZ: Right.

MR. NICHOLS: And I know that over the years, at least the last eight years, most of the focus I know from the legislature -- I'm not talking about recent but historically in the communities that have real congestion problems, the focus was to come up with resources to add capacity, which is very logical to help reduce congestion, but there was no emphasis on coming up with resources to pay for the preservation. Because obviously every time we add capacity, we had better come up with a new resource to preserve it; otherwise, we're going to have to rob from our ability to add capacity, and that's the trap we got into and that has evolved over the 20 years.

So I think that's one thing is to show a little clearly: you add capacity, you better come up with a resource when you do that to preserve that thing.

MR. HOUGHTON: Do you have that number, James?

MR. WILLIAMSON: What number?

MR. BEHRENS: Fast Jimmy Bass.

MR. BASS: It's very small. For the record, I'm James Bass, director of Finance at TxDOT.

And as Mr. Saenz mentioned earlier, the last time the state gas tax was increased was October of 1991 which, as that falls in the state's fiscal year, it was actually fiscal year 1992. So fiscal year 1992 actually had some state gas collections under 15 cents a gallon and some under 20 cents, so the first full state year of the new gas tax was in 1993.

What that shows is in 1993 dollars, the deposits to the State Highway Fund were just over $1.5 billion. In fiscal year 2003 in 2003 dollars, it was almost $2.1 billion, almost 33 percent increase, it would appear.

The next column over says "Motor Fuel Tax Adjusted for HCI." HCI is the Highway Cost Index, very similar to a consumer price index but looks at the materials that we purchase for construction. If you discount that revenue stream back to 1993 dollars to show the true purchasing power of the state gas tax between '93 to 2003, the purchasing power actually went down, it's relatively stayed the same over that entire period in the neighborhood of $1-1/2 billion.

And the rest of this chart goes on to show that unfortunately vehicle miles traveled and other items, there is no discounting factor to bring those back. Inflation does not affect the increase in vehicle miles traveled. So the revenue generated per 100 miles of VMT has gone down considerably and the purchasing power of that revenue has gone down even more so.

MR. NICHOLS: So you basically dropped from it looks like a penny, 1.3 cents per mile traveled?

MR. BASS: Correct.

MR. NICHOLS: To under a cent. If you were to back up a couple more decades using that same process, to like the '70s, I would almost speculate it was probably many times higher than this.

MR. BASS: Correct.

MR. NICHOLS: Because the volumes were lower.

MR. BASS: And it's actually per 100 and doing it per mile it would be less than a penny. This particular chart shows that it's less than a dollar because it's per hundred miles.

MR. NICHOLS: So that's about a penny.

And at the point in time in Texas' history when the vast amounts of our roads were built, the '50s and the '60s and the early '70s, these numbers would have been dramatically higher actually, on cents per mile traveled actually going into construction for new roadways?

MR. BASS: Correct. And the intent of this chart was just to show the impact of inflation since the last motor fuels tax increase on the state side, that yes, the true gross collections have continued to increase as population, registered vehicles and vehicle miles traveled increase, but that purchasing power of that revenue has stayed relatively the same.

MR. WILLIAMSON: Thank you, James.

Okay, Amadeo, I appreciate the report and the update. Same instruction from the commission five months ago when we started this, this department is famous for collecting data and ratios and computations and graphs, we want to be sure we focus as much on the information the legislature needs for the future as we focused on the information it needed for the past.

So let's get this routine down cold where we can defend it from every angle and be prepared to deliver it to the legislature in January, along with some of the other analyses that you'll present us in January.

Thank you very much for your hard work on this. It's important.

MR. SAENZ: Thank you, sir.

MR. WILLIAMSON: I think we're ready.

MR. BEHRENS: We'll go to agenda item number 12(a). This will be a recommendation by department staff which the minute order concerns the selection of the best value proposal for the planning, development, acquisition, design, construction, financing, maintenance and operation of the Oklahoma-Mexico priority element of the Trans-Texas Corridor system, and this one generally paralleling Interstate 35. We refer to it as TTC-35.

The second part of this minute order will be concerning and the recommendation of looking at the execution of a comprehensive development agreement for TTC-35.

Phil, I'll turn it over to you.

MR. RUSSELL: Thanks, Mike. Good morning, commissioners, Mike and Roger. For the record, I'm Phillip Russell and I'm the director of the Turnpike Division.

As Mike mentioned, you have a minute order before you this morning. What I thought I might do to help illustrate the process, we put together a little PowerPoint presentation, and I guess pardon the pun, but I'd like to provide kind of a roadway map to lead you through the process of how we've gotten to this point.

MR. WILLIAMSON: Phil, if we're going to do it this way, the commissioners need time to absorb what they're looking at, so if you would, kind of give us the opportunity to look as you go.

MR. RUSSELL: Will do.

Really I think you have to ask yourself the question, first off, of what is the problem, why are we going down this path, what would be the purpose of it. And I think from our perspective we define that in two general areas. There are probably many more, but for today's discussion, I've focused those into two general areas: population and traffic growth.

And I got the guys to go back and look at the census data in Texas back at the turn of the century, and I think it's kind of interesting -- as most of us know that are kind of amateur historians, I guess -- Texas at the turn of the century was very rural, very bucolic, pretty much what you see in the films in Hollywood.

I think it is interesting to note that the growth that is occurring is in the central and the eastern part of the state, not surprisingly -- that probably has much to do with water -- but I think it's also interesting to note where some of those population centers are growing. Of course, Harris County -- and I apologize, I think that screen eats my lasers -- maybe I can still show it -- Harris County, right here on the southeastern portion, but apart from that you have Bexar County, you've got Waco, McLennan County, Dallas-Fort Worth area.

And so even though I-35 has not yet been built and probably hasn't even been contemplated, you can already begin to see population that is accumulating and developing along this central artery of Texas.

Let me zoom forward a half century, right after World War II, and you can begin to see some changes. The population, off the top of my head, at the turn of the century was about 3 million people. Now we're popping up to 8 million people, the best I remember. But you can begin to see some centers popping up of more population, but you see further development along that corridor.

And of course, this is about the time that the precursors of I-35 were being developed, but again, you can see that development coming up from Laredo and the Lower Rio Grande Valley, up through San Antonio, Travis County, Waco, on up through Dallas-Fort Worth.

We zoom forward to the last population date, year 2000, and you can see the landscape of Texas is vastly different. For the sake of today's discussion, I've popped to those 50-year snapshots, but the reality is you can begin to see certainly in 1950, but even more so about 1970 you see some increase in population in the state.

And again, you can see some heavy growth areas up and down the corridor. Dallas County, Harris County, in the red, are showing some vast and quick explosive development.

We zoom forward to 2030, and not surprisingly, increased development along this artery, the spinal cord for Texas, and probably for the central U.S. as well, continues to see this growth. Again, you see Bexar County, Harris County, Tarrant, and Dallas all now achieving that explosive growth.

MR. WILLIAMSON: So the top urban centers of the state, there's really four mega-urban centers: Dallas-Fort Worth, San Antonio-Austin, Harlingen-Brownsville, and Harris-Ball, I guess Galveston County.

MR. RUSSELL: Galveston.

MR. WILLIAMSON: Okay.

MR. RUSSELL: And if we zoom one more snapshot up to 2050, again it's furtherance of that same growth pattern. It's not to say that there's not some growth out in these areas, but much of that is still rural, still more agricultural. This area very, very quickly is becoming urbanized within that central corridor.

And then to quantify that, and we tried to analyze just the I-35 corridor, just that spinal cord of Texas, and we looked in close proximity and we selected counties within a certain 50- or 100-mile radius of that study area, and what it showed, really, commissioners, were staggering.

I think we all sensed this but essentially what it's saying is over half of the state's population is located within very close proximity and relies upon I-35 on a day-to-day basis. The total population for the state, of course, is approximately 21 million as of the 2000 census, but over 50 percent now rely upon and live within close proximity.

And again, if we use those same figures and straight-line it out, it would suggest that almost 60 percent, 57 percent will be in 45 years living in close proximity. So I think that begins to give you the sense of the population, where we've come, and where those that have that demographic knowledge think we're going to be heading to the future.

MR. WILLIAMSON: So at this point in your analysis, we're not considering who lives in Oklahoma and uses 35, we're not considering who commutes from Chicago with a big truck and gets to Mexico and hauls goods back and forth, we're just focused on Texans.

MR. RUSSELL: That is correct, just the population.

MR. WILLIAMSON: The citizens of this state that are within 50 to 100 miles of this corridor and use it every day to transport themselves or to receive the goods and services they purchase as of this moment in time, over 50 percent of the population of the state relies on Interstate 35 as its principal lifeblood.

Forget NAFTA, forget that, forget the migration from south to north and north to south, forget all of that. Just thinking about Texas and Texans, over half the population uses the 35 corridor as its principal artery for its daily business. Is that what I derive from that?

MR. RUSSELL: Yes, sir, exactly.

MR. WILLIAMSON: Carry on.

MR. RUSSELL: It absolutely is the spinal cord.

Let's talk about the other half of that. With that population, what logically comes with it, of course, is the traffic. I pulled out some quick figures from some of the metropolitan areas, San Antonio, Austin, Temple, Waco, Dallas. As you can see, we have some very, very large numbers.

Again, for the folks here in Austin, that's probably not surprising at all. When you look at Dallas and San Antonio, you can see that same sort of explosive traffic and congestion.

MR. WILLIAMSON: Now, is Dallas Interstate 35 East or is that a number combined with 35 West?

MR. RUSSELL: That's just East.

MR. WILLIAMSON: That's just East. So you left out the more important part of the Metroplex?

(General laughter.)

MR. RUSSELL: It was unintentional, I assure you.

MR. HOUGHTON: Does that include, Phil, truck traffic?

MR. RUSSELL: Yes, sir, it does.

MR. HOUGHTON: So that does include commerce.

MR. RUSSELL: Yes, sir.

And Commissioner, I'll be happy to share that data with you as well -- I don't have it in front of me. Best I remember, the traffic, for instance, between the Austin area north of Austin, I think it's approaching in excess of 20, 25 percent truck traffic.

Amadeo, does that sound reasonable?

I reviewed those numbers here a month or two ago, but I'll be happy to provide those at a later date.

MR. WILLIAMSON: That's fine.

MR. RUSSELL: And once again, you can look at 2030 and 2050 and the reality is all of these facilities, the reason they're not growing even faster is, frankly, there's just no more capacity, there's no more lanes to put them. They're going somewhere and they will go somewhere, but it really begins to give you a sense for what's going on.

US DOT puts out some various studies. This represents some of the truck flows, Commissioner Houghton, that you talked about a minute ago, that are coming up through Texas and how those are distributed throughout the United States. And you can see, you know, predominantly it's going to the Eastern Seaboard, East Coast, but also some in the Midwest and California as well.

MR. WILLIAMSON: Hang on a second.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: Does the traffic appear out of the Lower Rio Grande Valley appear to be, in the aggregate, heavier than that of, say, the Laredo corridor or the Del Rio corridor?

MR. RUSSELL: That's what that graph is suggesting.

MR. WILLIAMSON: The large artery here would then suggest that about 50 percent splits to Houston -- no, maybe 60 percent to Houston and maybe 40 percent to San Antonio and then further north?

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: So that almost suggests that the I-69 corridor, from a truck perspective, from about Corpus Christi northeast is more heavily traveled than the 35 corridor.

MR. RUSSELL: There's a great deal of traffic in that corridor as well, yes, sir.

MR. WILLIAMSON: Okay, thank you.

MR. RUSSELL: And again, if you lend that back to some of that population growth, I obviously focused on the I-35 corridor, but you can begin to see that same growth potential through Harris County and throughout East Texas.

MR. HOUGHTON: Do we know the volumes that go with truck traffic?

MR. RUSSELL: Yes, sir. This is in trade value in billions of dollars. I think we probably have some data -- and again, I'd be happy to provide that to you -- of the actual cargo, but this is in value in billions. And you can see the general progression of truck traffic from 1995 all the way through 2000.

Obviously there was a little significant aberration in 2001 that was attributed to 9-11. It's been leveling out. They have not computed the data, I understand, for 2003 or -4, but I think the preliminary numbers that I've been given would suggest that 2003 and -4 will again begin to see that growth building up over 120 once again. I would anticipate, my expectations are that '03 as well as '04 will once again show that escalation.

MR. WILLIAMSON: Could that drop partially be attributable to economic slowdown as well as border slowdown, or a combination of the two?

MR. RUSSELL: That's an economist question, obviously, but I would think obviously that would be a key contributing factor, yes, sir.

MR. HOUGHTON: Part of that is China too.

MR. WILLIAMSON: And this is truck growth, this isn't a match for Texas population. Part of this is Texans and part of this are non-Texans moving through the state.

MR. RUSSELL: Yes, sir. It's kind of the second half of your rhetorical question, I guess, earlier where we were talking about purely population, purely Texans, now we're beginning to talk about other folks that use our corridor besides all of us that live up and down that corridor.

So I think by most viewpoints, we really have some issues that are up and down 35 and we have to begin to look at what our choices are, what our opportunities are to improve that corridor, that need.

We've looked at three or four areas: do nothing, doing nothing more than what we're doing right now; there have been some suggestions that perhaps we need to improve the existing footprint, widen in place, double-deck; construct a series of loops perhaps around the cities; or maybe construct a parallel corridor such as the Trans-Texas Corridor 35. And I thought I might briefly talk about each one of those bullet points.

The cost of doing nothing more than we're doing right now, I guess really that's kind of the copout title. It would be pretty easy for human nature, I guess, just to sit back and wrench our hands and say, Dadgummit, we're doing just as much as we can and that's about it. But the reality is congestion does get worse every day that we delay.

And from a personal point of view, Chairman, I'm the guy that lives in Georgetown, I'm the one that gets to drive up and down 35, along with all those other members of the driving, traveling public, and I find myself increasingly having to leave Georgetown earlier and earlier to get here on time, if not to get around the congestion but from the dependability standpoint.

If I have an early meeting and I absolutely have to be there, it might be a meeting with Mr. Behrens at eight o'clock and I absolutely don't want to be late, so now I'm at the point that I leave my house at six o'clock in the morning. And looking at these numbers, I anticipate I'll probably have to start leaving earlier than that in the next few years.

So I think that congestion gets worse, driver frustration grows, economic activity will slow down. I think here locally, Dell Computer is one of those stories that came out two or three years ago, and certainly not within the department, but there were others that perhaps didn't believe some of those concerns that Round Rock area that suggested we're moving out of town or at the very least we're not going to grow our business anymore unless some sort of congestion relief is provided.

Of course, the reality is Dell did move some of those jobs or at least moved their business elsewhere in Tennessee and other places. So I think that model is there, it made everyone take notice, and I think that Dell example is and will continue to occur up and down that corridor unless we aggressively fight that congestion.

Of course, quality of life suffers. I am a morning person, but I would love to leave the house a little bit later in the morning.

MR. WILLIAMSON: Wait a second. Go back, I want to ask you a question.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: When you say the cost of doing nothing more than we're doing now, I want to quantify what we're doing now. We are investing every day tax dollars in capacity on Interstate 35 between San Antonio and Dallas, are we not?

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: I mean, I drive it twice a week and I see the construction, have to live through some of the nighttime stops. You know, I used to always leave at night where I wouldn't get stopped, and now we do nighttime contracts, so we're stopped every night.

But we are investing now in 35 based upon the amount of money we have available to allocate.

MR. RUSSELL: I think, Chairman, you're exactly right. We are expanding it. I think Mr. Behrens is pushing those districts, the Austin District, Richard Skopik, and the Waco District is working very hard, all the way up to Dallas-Fort Worth.

And to the extent they can, they're widening on the inside area. Some of the folks here in the Austin area can see some of those improvements that have occurred through Williamson County. And so for various reasons, we had some right of way and we had some flexibility within that median in the middle of that roadway to add some additional lanes, and we're doing that.

I think part of it is, just as you expressed, that work as done is always complex, it's under traffic, and it's always a bit of a challenge. And it takes us a while to accumulate enough dollars to actively pursue it. We're doing it, it's never built as fast as I think any of us would like to have it built.

Let me talk a little bit more about that exact subject: widening in the existing urban footprint. To the extent we can widen inside that median and the transportation engineers 50 years had the foresight to provide a little extra right of way, then that is advantageous. We can squeeze those lanes in, and those sections were completed up through Williamson County here just within the last few years.

But if we don't have that flexibility, then our only opportunity is to begin to widen outside of those main lanes, and you really have a cascading effect. We have to widen those lanes where there are sections of frontage roads that typically requires that those ramps and those frontage roads also be reconstructed and widened.

The right of way along that 35 corridor is very expensive, even in the rural areas, whether it's the rural or the urban areas. You know, in the rural areas, we buy it per acre; as we get very close to I-35, we buy it per foot. So that's reflected in that cost of construction.

All those issues that you talked about a moment ago of building it under traffic, one of the things that we try to do to accelerate construction is to do some nighttime work, 24-7, and it doesn't come without a price tag, it is costly. We think it's in the best interest of the traveling public but it is costly building under traffic.

Without a doubt, you not only disrupt existing businesses, you simply destroy those businesses that are very close to that right of way. As we have to expand it to buy a slightly larger footprint, we will get into those businesses and destroy them.

Increased congestion, we've talked a little bit about that. Limited state dollars. Once again, on a pay-as-you-go format, it takes a bit of time. And Amadeo, in the previous presentation, discussed that a bit, but it takes us a bit of time to accumulate enough state dollars to build these projects. And to date, my experience is the private sector has not been overly interested in contributing dollars to that sort of project.

MR. WILLIAMSON: I don't want us to fall into the trap of picking and choosing numbers that we want to use. When you say $60 million a mile, you're talking about an urban mile?

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: You're not talking about north of Temple to south of Waco. So in theory, when we're analyzing our choices, we wouldn't multiply $60 million times 320 miles, we would multiply that times perhaps 84 miles inside the urban footprint.

MR. RUSSELL: Right.

MR. WILLIAMSON: And we would use a lesser figure, probably a near-urban figure that we might investigate, but certainly not $60 million a mile.

MR. RUSSELL: That's right, Chairman. I think perhaps on the Katy -- if Gary Trietsch was here -- it might be higher than that actually, with the right of way costs in some of those construction efforts. But I think you're exactly right, when you get to some of the more rural areas, then that number would go down. Right of way is slightly cheaper and some of the construction problems are a little cheaper as well. So there's a range.

MR. NICHOLS: Let me ask a question.

MR. RUSSELL: Yes, sir.

MR. NICHOLS: Most of the expansions that we have undergoing and are planning on 35 along these stretches is typically to add an additional lane on each side. Is that right?

MR. RUSSELL: Some reconstruction activities, but also adding lanes where possible, yes, sir.

MR. NICHOLS: And that's going to take a number of years to complete that, but that corridor is already congested today, so if that expansion was completed today, we would basically be at capacity right now.

MR. RUSSELL: Yes, sir.

MR. NICHOLS: Without allowing for the growth that you showed a while ago.

MR. RUSSELL: That's right, without getting in with really comprehensive widening and