Texas Department of Transportation Commission Meeting

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

Thursday, March 31, 2005

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 is 9:09 a.m. and I call the March meeting of the Texas Transportation Commission to order.

It's a pleasure to have everyone here with us this morning, and I want to especially welcome all the folks from my home area of the state, the Dallas/Fort Worth area, and their Partners in Mobility. We appreciate you making the long journey down the congested and sometimes dangerous main boulevard of the state of Texas called Interstate 35 to be here with us in Austin.

We're going to be hearing from you later on in the morning and we look forward to the information that you will provide us.

Please note for the record that public notice of this meeting, containing all the items on the agenda, was filed with the Office of the Secretary of State at 10:38 a.m. on March 23, 2005.

We characteristically begin our meetings by taking a moment to reach into our pockets, purses and suit coats to remove our cell phones, Blackberries and personal devices and put them on the silent or vibrate mode before they might disrespectfully disrupt one of our guests while they're testifying before the commission.

So if you will join with me, we will all do that together and thus avoid embarrassment.

They don't have cell service in Jacksonville so he doesn't have a cell phone.

(General laughter.)

MR. WILLIAMSON: Thank you very much.

As is our other custom, we will open the meeting with comments from the commissioners, and we will begin with our youngest member Mr. Houghton.

MR. HOUGHTON: I'm glad you finally recognized that distinction.

Good morning and welcome, and I'm looking forward to the presentation of the Dallas/Fort Worth Metroplex, and I want to thank specifically one group from the Dallas/Fort Worth area -- I don't see any here, I'm not quite sure they're here yet. The people from McKinney who captured me last night on my way to my room and drew this detailed map of their issues on the back of a cocktail napkin on what roads needed to be taken care of, and I'll submit this for evidence when we vote on it, Mr. Chairman.

Thank you.

MS. ANDRADE: Good morning. I'd also like to welcome everyone to our commission meeting. Thank you for your interest in transportation.

I know that I'm looking forward to hearing the presentation from the Dallas/Fort Worth area, and I know that we also have friends from my hometown San Antonio, former Mayor Will Thornton and Tom Griebel.

So thank you all, look forward to hearing from you all. Thank you very much.

MR. JOHNSON: I would like to reiterate the greetings of my colleagues. I would also like to thank the people from the Metroplex for their hospitality last night.

For those of you who weren't there, I mentioned that yesterday I stopped in Round Top on my way to Austin from Houston, and if you're not familiar with Round Top and you are familiar with Canton, it's probably a similar event that's held, I believe, twice a year, once in the spring and once in the fall. But it's unique, I think, in many ways and it's what Texas is all about.

And I encouraged the people there last night to take a moment, especially if you're from a large urban area, to go explore this great and vast and wonderful state.

Anyway, those of you who know me, know that I'm not much of a shopper, and I mentioned when I talked to my wife last night on the telephone that I stopped at Round Top and she dropped the phone. So I don't think that you'll surprise anybody by stopping at a place like that or exploring Texas, but I encourage you to do so.

MR. NICHOLS: I'd also like to welcome everybody here. We do very much appreciate you taking time out of your day to be with us, and share your ideas for transportation as we work.

The chairman had left a letter at the entrance talking about this past month has been a pretty substantial historic month in transportation. I know there was emphasis on the first major contract related to the Trans-Texas Corridor.

Also this past month Governor Perry signed the first in the nation agreements partnering for rail relocation of two major railroads in the state. So it really has been a great month for transportation.

Thank you very much for being here.

MR. WILLIAMSON: Thank you.

Welcome, good morning and thank all of you for being here.

We have a somewhat full and I expect fun-filled agenda. Commissioner Johnson has to leave somewhere around noon to take care of some matters that were previously scheduled, and I have some staff that need to leave no later than three o'clock to participate in the recognition of one of our staff members and an award. So it's my intention to work through lunch.

Normally if we see it's going to be a six-hour meeting, we'll break around 11:30 and grab a quick sandwich, but we won't do that today. We'll continue to work, and members who need to eat may leave the dais for a brief time.

I want to take a moment to remind everyone that if you wish to address the commission, I need for you to complete a speaker's card which you can find out at the registration table.

We use the yellow card if you wish to speak on an agenda item, something that's posted. If you have something that you want to say in the open comment period, we use the blue card.

But in either event, I need for you to fill out a card, and because we do have a relatively full agenda, we would request everyone to try to limit their remarks to three minutes.

One other matter for my neighbors from North Texas. I know we told at least one senator last night that we thought we would begin your presentation at ten o'clock. We're going to try very hard to hit that target but it may be more like 10:15 to 10:30, and if we need to convey that to the senator or any other member of the legislature that we may run a few minutes late, I wish that one of you would do that out of respect for their office.

And I'll reserve my remarks on the rest of the agenda for later on.

We want to take a moment, as we do in this great agency, to stop and honor one of our division directors who is retiring today.

Mr. Behrens, would you please take over.

MR. BEHRENS: Certainly. Thank you, Mr. Chairman.

At this time I'd like to ask Sue Bryant to come forward. She's our director of our Public Transportation Division. And Sue, I'd like to read a resolution in your honor.

The resolution says:

"Whereas, the Texas Transportation Commission takes great pride in recognizing Sue Bryant as an outstanding, dedicated administrator and employee who has served the Texas Department of Transportation for 27 years;

"And whereas, Ms. Bryant has provided insight, experience and leadership in developing policy, procedures and services while establishing, promoting and fostering a spirit of effective and helpful public service wherever her duties have taken her;

"And whereas, Ms. Bryant has devoted her professional life to public service with TxDOT in roles as diverse as director of public information and education in the Traffic Safety Section of the Traffic Operations Division, as aide to a TxDOT deputy director, as director of the Traffic Safety Section, and most recently as the director of the Public Transportation Division, having been appointed on October 1, 2003;

"And whereas, Ms. Bryant, in the course of nearly 14 years as director of the Traffic Safety Section, administered a $42 million program to help save lives on Texas roadways through extensive efforts informing motorists of the perils of drunken driving, of the importance of using safety belts, and of the benefits of driving Texas friendly;

"And whereas, the Public Transportation Division, guided by her leadership, managed the efficient transfer of the Medical Transportation Program from the State's Health Department to TxDOT, and developed new funding formulas for public transportation throughout Texas;

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

Now, therefore, be it resolved that the Texas Transportation Commission, having received notice of her retirement from the service of the State of Texas, hereby recognizes and thanks Sue Bryant for her career achievements and loyal service on behalf of Texas and its citizens.

"Presented by the Texas Transportation Commission on this, the 31st day of March 2005."

Congratulations, Sue.

(Applause.)

MR. WILLIAMSON: Do you wish to speak?

MS. BRYANT: Only to let the commission and my bosses know how much I very, very much appreciate the constant and incredibly gracious support that I've had. The work is far from done.

And I would like to also recognize that everything that's done is a team effort, and it is the TxDOT family that does it, it's never one person.

So thank you.

MR. WILLIAMSON: We'll take a picture, if that's okay.

MS. BRYANT: I combed my hair.

MR. JOHNSON: I did too.

(General laughter; pause for photographs.)

MR. WILLIAMSON: The next item on our agenda is the approval of the minutes from the February meeting.

Members, the minutes are included in your brief materials. Is there 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: Opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries; the minutes are approved.

Mike, in a moment I'm going to turn the agenda back to you, but I want to, for our audience, for those who might be watching via remote and for the record, I want to speak a moment about this business of consulting engineers.

The governor of this state and the legislature of this state, going back six years, have commanded the commission to plan, build and maintain roads as cost-effectively as possible and to expand our system as quickly as possible.

If men and women who believe this state are serious about those two matters -- and I believe they are -- then it is incumbent upon the commission, and by extension its employees, to examine every core and radial term of the transportation world to seek out and implement policies and procedures which result in fast construction at the cheapest price possible, never sacrificing the safety of the driving public.

We have done several important things in the past six years. Internally we have evolved authority to the regions and the local leadership of this state, a marked difference in the TxDOT business culture, in order to permit projects to be identified, designed and constructed faster.

We have demanded of our contractors bids which reflect 24-hour-day operation and rewards for quick work and penalties for slow work, a major departure from this culture.

We have, to Mr. Nichols' great credit, taken on and successfully settled the notion that the fuel taxes of this state were not being collected in the most efficient manner possible.

And we conclude today our discussion of whether or not the manner in which we procure engineering services from the private sector is the most effective and efficient process available to us.

In the process of exploring this aspect of our business, one could infer from a distance that there is hostility at the commission and department level towards the private sector engineering world. Such is not the case.

Most of that world is populated by our former employees; many of our current employees will eventually end up in that world. We could not prosecute the business of this state without a strong and vibrant private sector engineering component.

That should not prevent us from publicly discussing and presenting to the legislature some ideas on how that process could be more cost-effective and more beneficial to the taxpayers of this state.

As the governor said when he assumed office six years ago, monopolies are not good, closed government is not good, it is incumbent upon us to at least discuss these matters.

And then, if the transportation world we share with Mr. Petty and those in the Dallas/Fort Worth area, and Mr. Stevens and those in the Houston area, Senator Shapleigh in the El Paso area, Ted, and Mr. Reed from the San Antonio area, if they wish to also take up this cause, they will do so, and the legislature will act. And if not, they won't, and we will get a life and move on.

But please don't confuse our focus as one of anger. We're a civil commission, we see the distinction, we discuss and fully air it out and all things will be considered in order to build our roads and design our rail and move as quickly as possible.

Having said that, Mike, I turn the meeting over to you.

MR. BEHRENS: We'll then turn to item number 3 which is a discussion item concerning our consultant selection process. This is a continuation of the discussion that we had last month, and it will be presented by Amadeo Saenz, our assistant executive director for Engineering Operations. Amadeo.

MR. SAENZ: Good morning, commissioners. For the record, Amadeo Saenz, Jr., the assistant executive director for Engineering Operations for the Department of Transportation.

First of all, this is a follow-up to our meeting last month. At last month's meeting the Transportation commission directed staff and asked them to provide some additional information related to the department's use of consultant firms, their reasons for providing professional engineering services and architectural services and surveying.

This information was presented to the commission representing our ongoing effort. And then there were also some questions that came out of this meeting that you asked us to research and bring back to you.

In December, you the Texas Transportation Commission adopted your 2005 legislative agenda, pursuant to the requirements of Transportation Code 201.0545.

One of the positions advanced in the agenda concerns the process you, the members of the commission, believe that the department should follow in obtaining the services of private consultant firms to assist the department in project planning and design.

During the February commission meeting, the process was presented which TxDOT currently uses or undertakes in the selection of a firm, or in most cases a team, to do consultant work for us.

As you may recall, the process begins with the department issuing a notice of intent; the interested firms reply with a letter of interest, LOI; the department consultant selection team then selects a short list or develops a short list out of the people that submitted the LOIs; and a proposal or an interview is then conducted and the firms are evaluated; and then, of course, one is selected; and then once we have one selected, we negotiate with that top-ranked firm. If the negotiations are successful, then a contract is executed.

MR. WILLIAMSON: I'll try not to interrupt too much today, Amadeo, but I want to be sure the slides you laid out would give one the impression that when you went from short-list determination to proposal/interview that you interview and review the proposals of all the short list.

Do you look at all of them and then select a firm to negotiate with?

MR. SAENZ: Yes, sir. What we do is we receive letters of interest and then we review those letters of interest, and from those letters of interest we short-list. And at that point we then go back to the short-list approved and ask them to either submit an additional proposal or we bring them in for interviews. And based on the interview evaluation, then we select a firm.

MR. WILLIAMSON: And so, for example, if your short-list is three firms?

MR. SAENZ: We interview the three firms.

MR. WILLIAMSON: You interview all three firms and then make a decision.

MR. SAENZ: Yes, sir. We interview the three firms and then we select the top firm, and then that is the firm that we move forward with in negotiating a contract.

MR. WILLIAMSON: Thank you.

MR. JOHNSON: Mr. Chairman, may I ask a question?

Amadeo, during the interview, what are the subjects covered or the questions asked typically when you're interviewing a short-list?

MR. SAENZ: Some of the topics are: the consultant's understanding of the project; the experience of the team; the experience of the project manager; the ability to meet the schedule; some of the other items that the district consultant selection team decides that are important to that project.

And then based on those evaluations, then a firm is selected.

MR. JOHNSON: Thank you.

MS. ANDRADE: Mr. Chairman, I have a question.

MR. WILLIAMSON: Please.

MS. ANDRADE: Walk me through the negotiation briefly. Do we negotiate face to face, number one; and number two is do we have a deadline as to whether we must negotiate within 24 hours, 48 hours?

MR. SAENZ: Yes, ma'am. Once a firm is selected, then the district normally meets with the firm -- and it could be a division, but I'll use the district -- the district consultant team will meet with the firm and they will review the scope of services for the contract. Then the district has already probably come up with their estimate of what the fees should be; they did that because they were already requested to use a consultant.

And then, of course, once they meet and discuss the scope, then the consultant goes back and will prepare a cost estimate based on that scope. Or if during the going back the consultant decides that there may be some other issues that maybe were not included in the scope, he will bring in those issues up to the next negotiation time.

MS. ANDRADE: And do we give ourselves a time line for negotiations?

MR. SAENZ: We have 30 days to negotiate the contract from the point that one is selected.

MS. ANDRADE: Do we need 30 days?

MR. SAENZ: Thirty days is what has been put in place by rules, and in all of our contracts, we do have a process where we can extend the 30-day period, and there have been some contracts that we have extended the 30-day period to allow an additional 30 days, and then there's also a second extension.

That first extension requires my approval and then there is a second extension that would require Mr. Behrens' approval. But normally, for the most part, all our contracts are negotiated within that 30-day period.

MS. ANDRADE: Thank you.

MR. HOUGHTON: I have a question regarding the fees. Is that a dartboard or is that just history, experience? I mean, if you say this project is to build overpasses and the project is $20 million in construction, and how do we know what the estimated engineering costs are on that overpass? Is that a history thing?

MR. SAENZ: Well, our people, because of history, we've been in the business for quite a long time, know how much effort it would take to design that particular project.

MR. HOUGHTON: Do we have to throw out a fee? It seems to me that when a fee is established by the department, everyone runs to that fee. There's nothing underneath that fee. If it's a $3 million engineering fee, I'm going to run to that fee and there's no negotiation after that.

MR. SAENZ: The fee is an internal document that the districts submit to the division and to administration to approve the use of consultants. The fee is not available to the consultant so they don't know what the fee is.

No one knows what our estimate of the fee is up until after we start negotiations.

MR. HOUGHTON: I've heard that differently. I've heard that the estimated engineering cost is about 3 million bucks on a project and --

MR. SAENZ: Let me ask -- this is Camille Thomason, our director of our consultant services.

MS. THOMASON: This is Camille Thomason.

We have quarterly projections that we do make available, our quarterly projection of contracts on our website, and at that time sometimes we do identify a rough number that indicates the size of the contract, but that is not typically our detailed number that we develop prior to initiating negotiations. But it gives the consultants an idea of the magnitude of the work that would be involved.

MR. WILLIAMSON: Based on historical costs?

MS. THOMASON: Yes.

MR. HOUGHTON: Do we have to do that?

MS. THOMASON: We don't have to, but that's typically the way the information has been provided.

MR. HOUGHTON: That leaves no room for -- we can't negotiate the fee anyway, but they run to that number and that's the established number.

MR. SAENZ: I guess one of the other things that you may be hearing is some of our contracts are indefinite deliverable, or evergreen contracts, and those evergreen contracts are --

MR. WILLIAMSON: Let the record reflect that for those of us who didn't go to Texas A&M, we find the term "indefinite deliverable" strange.

(General laughter.)

MR. SAENZ: The evergreen type contracts have a maximum cost, and that is readily known at all times. We know that when we advertise, we're going to go out for an indefinite deliverable contract of this amount. But that just basically says the actual negotiations are made up of a series of work orders or work authorizations, and each one of those is negotiated independently and has its own limit that's done throughout the life of the contract.

MR. NICHOLS: I had a question on that.

We short-list with two or three firms or a small number of firms that we have determined are very qualified, capable, have a history of doing these kind of jobs successfully, have a team we feel comfortable with, all that kind of stuff. So we have several -- in most cases, I would assume, several firms that have expressed an interest and that meet that qualification.

We also, on that specific project, as I understand it, have internally -- supposed to have done a detailed estimate of what we think the cost is.

MR. SAENZ: Yes, sir.

MR. NICHOLS: Which I'm kind of a little bit confused where Ted was, whether or not we have shared that with the short-listed firms or not.

But at some point when we select the first firm, then we sit down with them, lay out a detailed scope of work, and then they go and try to calculate how many hours and how many dollars for how much it would cost.

MR. SAENZ: That's correct.

MR. NICHOLS: Okay. Why do we not share that same scoping with two or three of them and let them each independently develop a cost and an approach?

MR. SAENZ: We cannot do that right now under the present requirements.

MR. NICHOLS: Because it's against the law?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Against the law or against the rules?

MR. SAENZ: Against the law.

MR. WILLIAMSON: And you're going to tell us when that law was established?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Please proceed.

MR. SAENZ: Okay.

The commission's legislative agenda included a proposed alternative process for consultant selection. Representative Sylvester Turner has filed House Bill 2673 that outlines this proposed process.

It is important to note that the revised selection process is still a qualifications-based process. The alternative process would only be applicable to projects that would have very defined scopes, and the process would bring in elements of both design and project innovation.

The alternative selection process, as I mentioned, is a two-phase process, it's a two-phase approach: the firms submit a letter of interest; a short list is selected based on qualifications; the short-listed firms then submit proposals. The selection is based on the understanding of the project scope, the experience and the ability to meet the schedule, as was done currently.

The two new parts in the selection would be based on design innovation and also the cost of the design. The current selection process, as it exists today, can still be used on other contracts where basically a very defined scope of services is not actually known at the time that we're procuring the services of the consultant.

For example, if we want to go out there and do a planning contract or a route study contract, there's some preliminary engineering where we don't know exactly how many public meetings we're going to have to have, or how much effort it's going to take, then that would follow the existing process.

MR. WILLIAMSON: Time out, Amadeo.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: You're a civil engineer, are you not?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And you have what's called a PE ticket?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: I want to establish for the record the process that you're presenting to us is a process that commission members who are not engineers have told you they want designed.

MR. SAENZ: That's correct.

MR. WILLIAMSON: You have not designed this yourself.

MR. SAENZ: No, sir.

MR. WILLIAMSON: Nor has any other civil engineer who works for the department participated in the design of this proposed alternative.

MR. SAENZ: That's correct.

MR. WILLIAMSON: Only non-engineer commission members have designed that.

MR. SAENZ: That's correct.

MR. WILLIAMSON: And would you care to know why I asked you that question, or do you already know?

MR. SAENZ: I think I know.

MR. WILLIAMSON: Why would I ask you that question on the record?

MR. SAENZ: As a professional engineer, you want to make sure that I, as a professional engineer, or any other professional engineer within the department is not basically -- I'm trying to figure out -- that we're protected so that the board cannot come back and basically say that we're trying to do something that is against the law.

MR. WILLIAMSON: And remove your license.

MR. SAENZ: And remove my license.

MR. WILLIAMSON: So a civil engineer in this state, because of the statutes and the rules and regulations in the state, can't advocate for a cost-based decision without running the risk of losing his professional license.

MR. SAENZ: That's my understanding.

MR. WILLIAMSON: That's also my understanding.

Would you venture a guess as to how many people in the state know that that's the law?

MR. SAENZ: I would venture to say that all professional engineers should know what the law is, that's what they work on.

MR. WILLIAMSON: Thank you.

MR. NICHOLS: For the record, Mr. Chairman, to the commission members, when you said non-engineer commissioners, two of us are engineers, but we're not registered professional engineers, we have engineering degrees.

MR. WILLIAMSON: I thought you were a lawyer.

MR. NICHOLS: No, just been sued by a bunch.

(General laughter.)

MR. SAENZ: Thank you.

Based on the previous discussion that we had last month, the members of the commission asked staff several questions and directed that these items be further researched.

First, staff was directed to review the history of professional service procurement by governmental entities, and that's what I will cover next.

And what we did is I looked at the Government Code, as well as the Transportation Code, to kind of provide a history of the Professional Service Procurement Act.

In 1972 the Professional Service Procurement Act was created in the Government Code. This Act specified that the selection was to be based on qualifications rather than on competitive bid.

In 1989 the Government Code was amended to put in place a two-phase process: the initial phase is a qualifications-based selection, and the second phase is the negotiation process.

I'm going to jump a little bit over to the Transportation Code because I wanted to keep my time line moving forward. In 1991 the Transportation Code stated that it was the department's policy to achieve a balance between private sector and in-house engineering design. However, no minimum amounts for outsourcing were established in the Transportation Code.

Continuing, in 1993 the Government Code was amended to add that professional fees must be consistent with and not higher than recommended fees published by professional associations.

Our Transportation Code was amended in 1997 to create a minimum level of expenditures for engineering-related private sector services. The minimum level of expenditures was to be based on a rider in our Appropriations Act, and we also had Rider 44 was codified that a minimum level of expenditures for private sector engineering for TxDOT for 1998-99 biennium was set at $207 million.

MR. WILLIAMSON: Stop a moment.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: There was a statute passed that said --

MR. SAENZ: The statute was passed that created a minimum level of expenditures that would be determined by rider.

MR. WILLIAMSON: So there was a rider in the Appropriations Act --

MR. SAENZ: The Transportation Code was codified that created the minimum levels of engineering-related private sector services.

MR. WILLIAMSON: Yes, but I want to understand, there were actually two documents

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: The Appropriations Act said of the money appropriated to the Texas Department of Transportation, no less than $207 million will be contracted out through private sector contracts.

MR. SAENZ: Right.

MR. WILLIAMSON: For a two-year budget cycle.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And at the same time there was a statute passed that said using that $207 million as your minimum basis, you will --

MR. SAENZ: There was a statute passed that said that the minimum level of expenditures for engineering-related private sector service would be set by rider.

MR. WILLIAMSON: I see what you're saying.

MR. SAENZ: And then there was a rider in the Appropriations Act that set the amount.

MR. WILLIAMSON: What was the department's FTE count in 1997? Do you know?

MR. SAENZ: I'm sorry?

MR. WILLIAMSON: The department's FTE count. How many employees did we have in '97?

MR. SAENZ: Just over 15,000.

MR. WILLIAMSON: What was it in 1993? About the same?

MR. SAENZ: Yes.

MR. WILLIAMSON: And we've just let it attrit down to 14,000 or about where it is now?

MR. SAENZ: And really we've been capped at 14,800 the last few years.

MR. WILLIAMSON: Okay, thank you. Continue.

MR. SAENZ: Finally, in fiscal year 2000, TxDOT was directed by statute in 220.3041 of the Transportation Code, to increase the expenditures in Strategy A1.1 -- which is our Plan-Design-Manage Strategy -- to use private sector providers at least one percentage point per year, increasing one percentage point per year until we reached a maximum of 35 percent.

MR. WILLIAMSON: Maximum or minimum?

MR. SAENZ: A minimum. I'm sorry. A minimum of 35 percent.

MR. WILLIAMSON: Of that strategy?

MR. SAENZ: Of that strategy.

Just as a side note, TxDOT exceeded the minimum percentage of 35 percent the first year because we were already using consultants quite heavily during that time.

What I'd like to do now is I'm going to turn the program over a little bit to Mark Marek to make the presentation on the next part which you asked us to look into some of the studies that have been done in the past concerning the use of consultants and the comparisons of consultants and in-house engineering services.

Mark?

MR. MAREK: For the record, my name is Mark Marek. I'm the director of the Design Division for TxDOT.

Mr. Saenz said the staff was directed to provide a summary of studies done with respect to the cost of preliminary engineering done by in-house staff versus the cost of outsourced preliminary engineering.

Before discussing these studies, it may be beneficial to review the makeup of overhead costs since that was an integral discussion topic of each study.

Business costs have two components known as direct costs and indirect costs. Direct costs are any costs identified specifically with a particular final cost objective or project-related cost. These may include labor as contributes to the direct labor base, materials, and project-related travel. These costs are typically recovered by direct reimbursement through project invoicing.

Indirect costs or overhead expenses are those not identified specifically with a project such as rent, utilities, supplies, and non-billable salaries or indirect labor.

Overhead expenses, indirect costs, include two basic categories: general and administrative expenses such as rent and utilities, and fringe benefit costs such as insurance and payroll taxes.

Not all overhead expenses are considered allowable in terms of calculating a firm's overhead rate for billing purposes. The Federal Acquisition Regulations, or FAR, define what are allowed expenses.

Firms hire independent auditors to calculate their overhead after completion of a fiscal year. This annual report is what firms submit to TxDOT as record of their allowable overhead expenses.

For the fiscal year, the report also includes a firm's direct labor base which are their total billable wages for that fiscal year. Overhead rate is then calculated by dividing allowable overhead expenses by the direct labor base, or their billable wages.

A firm typically strives to maintain a reasonable overhead rate because most of the firm's client base includes more than just TxDOT or other governmental entities. To achieve this, a firm must maximize the direct labor part of the equation and minimize overhead costs.

Although we do receive an audited overhead report, TxDOT does reserve the right to negotiate the overhead rate.

There were three independent outsourced versus in-house engineering costs done in 1987. These studies are sometimes referred to as the Tri Consultant Studies.

The first of these was titled "The Utilization of Consultations by the State Department of Highways and Public Transportation." This study was done by the Center for Transportation Research at the University of Texas at Austin in January of 1987.

This study used 23 paired projects of similar work done by in-house staff and consultant staff. The study concludes that the estimated costs of preconstruction engineering, a ratio of indirect costs and supportable costs to personnel salary and wage costs may be delivered for less with in-house services than with consultant services.

The study concludes that a global cost analysis suggested that the consultant total preconstruction engineering costs were 30 percent greater than similar in-house costs.

The study concludes that there were many individual projects which can be more efficiently done by in-house staff and there are projects which can be done more efficiently by consultant staff.

The study states that it was not feasible to determine a value or quantity by which the effectiveness of a unit of time or a unit of cost expended for preconstruction engineering could be completely measured.

The study also provided responses from the consultant sector on the methodology of the study itself. These responses indicate that the consultant industry believed that if all department cost factors such as large overhead and support costs are considered and that costs incurred by the private sector as a result of public policy such as taxes and insurance are factored in, then the consultant-delivered engineering services could be at the same cost level or lower when compared to those of the department.

The second of the Tri Consultant Studies was entitled "The Utilization of Consulting Engineers for Highway Project Development" done by the consultant and management firm of Ernst & Whinney in May of 1987.

This study used 19 paired projects of similar work done by in-house staff and consultant staff. The study concluded that comparison of costs of plan work done by consultants and in-house personnel showed that in most cases it costs less to do the work in-house.

On average, the cost per in-house project was about 40 percent less than the cost per consultant project. The study stated that this appeared to be the case regardless of project design complexity, location, or the degree of in-house participation.

Sensitivity tests showed that the finding was fairly strong with respect to large increases in estimated overhead rates.

The third of the Tri Consultant Studies was entitled "Utilization of Consultants by the State Department of Highways and Public Transportation." This study was done by the Texas Transportation Institute at Texas A&M University in May of 1987.

This study used 18 paired projects of similar work done by in-house staff and consultant staff. The study concluded that the comparative costs of conducting preliminary engineering in-house are less than the costs of similar work done by consultants.

Further, the overhead rates for consultants are larger than the overhead rates assignable for in-house preliminary engineering.

The study found that preliminary engineering for in-house projects was lower than for consultant projects in all project categories.

The study makes an additional point in the discussion of the difficulty of assigning accurate overhead rates. If all other factors remain unaltered, any increase in department overhead rates also yields an increase in the cost of department support provided to consultants.

MR. WILLIAMSON: Do you know who put up the money for the study done at UT in '87?

MR. MAREK: Yes, sir. All three of these studies were paid for by the department.

MR. WILLIAMSON: By direction of the legislature or by choice?

MR. MAREK: By choice.

MR. WILLIAMSON: So while the conclusions of these three tend to favor the department, the fact that we paid for it could tend to taint its conclusions?

MR. MAREK: It could cast a shadow there, yes, sir.

MR. WILLIAMSON: Okay. Continue, please.

MR. MAREK: A fourth study was done in 1997 entitled "A Review of TxDOT Cost Allocation Methodologies." This study was done by MGT of America for the Consulting Engineers Council of Texas.

This study differed from the previous studies in that no attempt was made to directly conduct a cost comparison of work performed by consulting engineers and by TxDOT engineers.

This study focused on the way TxDOT collects and accounts for both direct and indirect engineering cost information used in comparing the cost of in-house engineering services to the cost of contracting out for these services.

The study concluded that TxDOT's current allocation method understates the resources used to perform the engineering function of the agency.

The study states that there are a variety of cost allocation methods, none of which can be considered correct or incorrect. However, some methods, the study states, produce more realistic results than others.

Some factors to consider in choosing the allocation method include size and complexity of the project, the behavior of the costs and the correlation to the activities they support and the resources available to devote to using a more sophisticated costing methodology.

MR. WILLIAMSON: Who paid for that?

MR. MAREK: That was sponsored by the Consulting Engineers Council of Texas.

MR. WILLIAMSON: I wouldn't want to publicly state what one might infer from that.

Please go to the next one.

MR. MAREK: The fifth study was entitled "Highway Design Cost Comparison." This study was performed by PricewaterhouseCoopers in February of 1999.

This study was a comparison cost study of in-house and contracted preliminary engineering and design work related to 13 types of highway design projects.

The analysis applied established cost comparison guidelines and methodologies including those prescribed in OMB Circular A76, Performance of Commercial Activities.

The database consisted of almost 6,000 historical projects. The study's statistical analysis of adjusted cost established with a high level of confidence -- that being 95 percent or greater probability -- that outsourced costs are higher than in-house costs for eight of the 13 design project categories.

On average, outsourced work for these eight design categories was 62 percent more expensive. Cost comparison results for the remaining five categories were indeterminate.

The staff also contacted the Texas Society of Professional Surveyors and the Texas Society of Architects, but no cost comparison studies related specifically to surveying or architectural services were discovered.

MR. WILLIAMSON: You know, obviously my question is going to be who paid for the 1999 study. Do we know?

MR. MAREK: That study was also paid for by the department

MR. WILLIAMSON: So one could infer, because we paid for it, the conclusion that department costs were lower than private sector costs might be shadowed somewhat.

MR. MAREK: That question could be raised, yes.

MR. WILLIAMSON: Michael, there are way too many people here and way too many very important elected officials participating in your presentation. I didn't mean to indicate that we would make them wait.

At the moment that the folks from across the street that you want present are here, please let me know and we'll stop this and we'll go immediately to the partners.

Please continue, Mark.

MR. MAREK: With that, I will turn it back over to Amadeo Saenz.

MR. SAENZ: Thank you, Mark.

MR. WILLIAMSON: I'm sorry. Does anybody want to ask Mark any questions?

(No response.)

MR. WILLIAMSON: Thank you, Mark.

MR. SAENZ: If I let Mark make the whole presentation, there won't be any questions.

MR. WILLIAMSON: Or let Camille make the whole presentation and there wouldn't be any questions at all.

MR. SAENZ: Well, we can do that.

MR. WILLIAMSON: Be nice to her.

(General laughter.)

MR. SAENZ: Staff was also asked to give a breakdown of the type of payments, both in number and in dollar amounts.

The department's standard contracts include a series of four payment types. The payment types include: cost plus fixed fee; lump sum; specific rate; and unit cost.

For contracts with multiple work authorizations -- again, our evergreen contracts -- it is possible for more than one payment type to be used on one contract.

MR. WILLIAMSON: So you're telling me we have a multiple work authorization with an indefinite deliverable?

MR. SAENZ: Yes, sir. We have an indefinite deliverable contract with multiple work authorizations.

MR. WILLIAMSON: Only an engineer could come up with that.

(General laughter.)

MR. SAENZ: In other words, one work authorization may have different payment types than another.

For the five-year period between 2000 and 2004, 17 percent of our contracts were cost plus fixed fee or work authorizations, 24 percent of them were lump sum, 28 percent were specific rate, and 13 percent were unit cost.

Eighteen percent that were identified basically included more than one work authorization, more than one type. And those are the dollar figures right there.

MR. WILLIAMSON: Now, Amadeo, I want to understand something about this lump sum. This is the first time I've seen this.

To an oil and gas guy like me and John, lump sum means turnkey fixed price, but it means turnkey for the outcome, not turnkey for the number of hours.

Does lump sum in this context mean turnkey or lump sum for the outcome or for a number of hours?

MR. SAENZ: Turnkey for the outcome.

MR. WILLIAMSON: So we have some contracts where we say to whomever -- I don't want to use a company name --

MR. SAENZ: ABC Consulting.

MR. WILLIAMSON:  -- ABC Consulting, Design this bridge according to the scope and you will do it for $50 million.

MR. SAENZ: Yes, sir. Under a lump sum contract, what we do as we negotiate, we identify the different elements of the design, the hydraulics, the structure, the foundation, and we negotiate hours and we negotiate a rate, but eventually we come down to a set amount that we want to pay for it.

MR. WILLIAMSON: But I heard you say two different things.

MR. SAENZ: Well, we use hours in our negotiation to come up with the lump sum amount that we then agree upon.

MR. WILLIAMSON: Okay. Well, what happens if they design the bridge in less hours than you agreed upon?

MR. SAENZ: We agree to pay that amount of money for the design of that bridge.

MR. WILLIAMSON: What happens if it takes twice as many hours?

MR. SAENZ: We pay the same amount.

MR. WILLIAMSON: Never go over it?

MR. SAENZ: No, sir.

MR. WILLIAMSON: No overage at all.

MR. SAENZ: Under lump sum, we do not go over.

MR. WILLIAMSON: Well, one of the things that I hear directly from the private sector community, and I have heard from my boss, is are you sure it's not the department's behavior that's driving this lack of competitiveness.

So I guess I have to ask you why don't we have a lump sum contract on every contract.

MR. SAENZ: Some contracts do not lend themselves for lump sum.

MR. WILLIAMSON: Because of them or because of us?

MR. SAENZ: Because of the type of work that it's going to be, the type of work that you're asking for.

For a contract where you do have a very specific or known scope of work, I want to design this bridge, it's here, we know exactly how long that bridge is, we know how wide it's going to be, we have what type of bridge, we can basically design a lump sum contract for that.

For a project that we are going out there to do a route analysis or route study, environmental documents, is going to involve a lot of maybe public involvement and public outreach in a series of meetings where we do not know exactly what the scope is, we don't have a good defined scope, then we move to the cost plus fixed fee type.

MR. WILLIAMSON: It still looks to me like we could go to lump sum, but we'll talk. I'm sure we're going to be changing our rules, whether the legislature changes the law or not, so we'll talk about that a little bit later.

MR. SAENZ: We have evolved. In the years in the past, we used to do everything cost plus fixed fee, and then of course, the lump sum, specific rate and unit cost have evolved as part of our process.

And if you notice, 24 percent of our contracts are now lump sum.

MR. WILLIAMSON: Amadeo and members of the commission, if you do not object, we're going to take a two-minute break to allow our guests to prepare themselves and to allow us to exit the podium, and we're going to take up and listen to a great transportation story from North Texas.

So two minutes for everybody to switch out seats and we'll get started again.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: In a moment we'll turn the meeting back to Mr. Behrens to introduce our guests. Let me just take a moment to invite our guests to stay after the presentation to hear the rest of what the department has to go through, but if you can't, we will understand. We'll take a break after this presentation to permit people to leave.

And let me also take a moment to say, as I always do, how proud I am of the transportation leadership of North Texas, whether it's Senator Shapiro, Senator Brimer, Representative Phillips, and did I say Representative Eddie Bernice Johnson who led a valiant effort with Kenny Marchant and Michael Burgess to change the federal bill just a month ago to potentially route -- and I want everybody to think about this -- as much as $8 billion of toll credits to this state if we proceed along the path of building toll roads.

It's important to convey that, I think, to our two senators, $8 billion of state money can be replaced by toll credits, permitting us to invest that state money in commuter rail, mobility projects, and clean air projects.

People have no idea how important it is unless you talk about it and the free press writes about it, and that effort -- and of course aided by the majority leader -- could be singularly the most important financial decision that the federal government has made about our transportation for our state in 20 years.

And right on down to Michael Morris and Mike Moncrief and Laura Miller and the hundreds of county and city officials that come together to plan for our region, I am proud of what we do in transportation. Even Glen Whitley.

(General laughter.)

MR. WILLIAMSON: Oh, Margaret, you're here. And Margaret.

Michael.

MR. BEHRENS: Thank you, Chairman. We'll go to item number 4 which is a delegation presentation from the Dallas/Fort Worth Area Partners in Mobility.

At this time I'd like to call on the mayor of Fort Worth, Mike Moncrief, to lead off this report and to introduce subsequent speakers.

And mayor, if you would, as members possibly from the legislature come, feel free to interject them into your presentation at any time.

MAYOR MONCRIEF: Thank you very much.

Well, good morning, Mr. Chairman and members of the commission. I'm Mike Moncrief, mayor of the city of Fort Worth, and I'm proud to be joined today by two members of our council, Ms. Wendy Davis and Ms. Becky Haskin, and also with former mayor of this city, Kenneth Barr, who is part of our delegation.

On behalf of the Dallas/Fort Worth Area Partners in Mobility, I'd certainly like to thank all of you for our opportunity to join you today.

As you well know, each year we come to discuss with you the mobility changes and challenges facing North Texas with one theme in mind: continued investment in our region's surface transportation system is critical to our economy and to our quality of life.

We strive to bring to you innovative solutions to these challenges, solutions that are based on the continuation of our long-standing and successful partnership with this commission and with TxDOT staff.

Our coalition includes mayors, city council members, county judges and commissioners, city managers, chamber presidents, business and civic leaders, and transportation professionals from throughout North Texas.

I would like at this time for our delegation to please stand and be recognized, and I want to thank every one of them for being here. Could you all please stand?

Thank you, Mr. Chairman.

Through the combined efforts of our state leadership and this commission, we have new opportunities to address the transportation infrastructure and financing needs of our region, as well as the entire state.

Our presentation today will focus on several of these key initiatives and how the North Texas area is promising to make the most of these opportunities.

We recognize your leadership and vision associated with the development of the Trans-Texas Corridor and we would like to share with you our concepts on integrating the Trans-Texas Corridor/35 proposal with our region's needs.

Our legislature is currently debating ways to address major fiscal challenges that we are facing at the state and local levels, and I don't envy them.

We will highlight several of our ongoing legislative initiatives. Last year our presentation focused on our efforts to aggressively move out on the financing and implementation of transportation improvements with the tolls provided by House Bill 3588.

We want to provide you with a brief update on the progress of those efforts because we're excited about that progress.

And finally, it's easy for you to see that a region of our size will not be sustainable without a seamless passenger rail system which we are now concentrating on with other regional partners.

Against today's major fiscal and environmental constraints, it is the partnerships of elected officials, the private sector and the Transportation Commission working together that will lead to our ultimate success.

We look forward to this continuing strong partnership with you to address the mobility needs of North Texas.

Mr. Chairman, I think I can truthfully say, on behalf of our entire region, we are excited about the momentum we feel, we are excited about the synergy that's taking place, we are excited about not having to deal with large city versus small city controversy that so often become turf wars that lead to failure of being to work together. We've gotten past that.

We are working to try and make a difference, a difference in not only the mobility needs of our region, but also the quality of life of the people who live in our region and who we represent.

And with that, I'd like to thank you, Mr. Chairman and commissioners, and I'd like to introduce Bob Estrada to continue our presentation.

MR. WILLIAMSON: Thank you, Mike.

MAYOR MONCRIEF: Thank you, Mr. Chairman.

MR. WILLIAMSON: You're always welcome here, buddy.

MR. ESTRADA: Thank you very much, Mayor. And good morning, Mr. Chairman, commissioners, Mr. Behrens. It's a great pleasure to be here.

As most of you know, I'm Bob Estrada with Estrada Hinojosa & Company, but I'm particularly proud to be here today wearing my civic hat representing the Greater Dallas Chamber and the DFW Partners in Mobility.

We've seen and we concur with the growth forecast on the Interstate Highway 35 corridor between Laredo and Dallas/Fort Worth, and we applaud this commission's vision and your leadership in promoting the Trans-Texas Corridor as the key to moving people and goods, not only in the Interstate 35 corridor but also throughout Texas.

Over the last several months, in response to your request for public input regarding the TTC-35 proposal, elected officials in our area, other transportation interest groups throughout North Texas have taken part in a dialogue regarding this concept of TTC-35.

The outcome of these deliberations has been the development of a regional policy position on the TTC, Trans-Texas Corridor 35 that was recently transmitted to you through our Regional Transportation Council. Overall, we support the TTC-35 proposal to help address our mobility, reliability, safety and air quality needs.

Within the Dallas/Fort Worth metropolitan area, we're promoting that you consider and proposing that you consider the Trans-Texas Corridor on a mode-by-mode basis which will provide the opportunity to expedite important auto, truck and freight rail corridor improvements needed in our region, all of which feed the multimodal corridor to the south from the center of our region.

We are suggesting that you consider a phased implementation approach that allows for addressing sustainable development concerns while also preserving future right of way.

Our proposal features urban connector alignments for automobiles, trucks and passenger rail, providing access to the existing economic infrastructure of Dallas and Fort Worth.

This includes an east-west connection on the south side of the DFW area, an element that was missing from the original TTC-35 proposal, that we think is key to unlocking congestion on the interior of the region and to cost-effectively complete the original economic development goals of the Trans-Texas Corridor.

We believe that the evaluation of alternative routes and staging of investments should include an analysis of economic impacts to the existing and the expected future population and employment of the region.

For example, outside of our region, the intercity portions of the TTC-35 between Hillsboro and Laredo should perhaps be spaced as closely to Interstate 35 as feasible in order to provide the maximum amount of access and economic benefit to the communities that are already there and well established.

With that, let me turn the presentation over to my friend David Russell to discuss some of the specific recommendations for the development of modal corridors within our region.

Thank you very much.

MR. RUSSELL: Thank you very much, Bob, and good morning, commissioners and Director Behrens.

I am David Russell, vice president of external affairs for Verizon, but I'm here in my capacity this morning as the chairman of the North Texas Commission.

My office is in Dallas County and my home is in Tarrant County, and so for almost 20 years I've been a regular daily commuter on the Texas highway infrastructure, so I'm especially excited to be here today to talk about something I think could make a real impact in the traffic that we face in that daily commute, and hopefully before I retire from my career with Verizon.

As Bob mentioned, an important distinction of our proposal is the delineation of separate routes for individual modes, including urban connectors to facilitate movement within the region.

The staged auto mode calls for the use of the TTC-35 consortium investments and concession fees to evaluate and, as feasible, construct additional capacity improvements to the toll road automobile urban connector along existing and planned sections of the Dallas North Tollway, State Highway 161, the President George Bush Turnpike, and State Highway 360, as shown in red on the map on the screen.

Ultimately, as demand warrants, the next stage of investment is construction of an auto loop around the DFW region.

On the next map, shown in green are the TTC-35 truck urban connectors and improvements. The near-term improvements could include dedicated truck lanes, intelligent transportation systems, geometric improvements, interchange and frontage road improvements, and truck safety enhancements, leading to the eventual construction of an east-west truck bypass.

To address the shipment of rail freight, the TTC-35 consortium investments and concession fees should be utilized to construct both an east-west freight rail bypass to the south of the region and a north-south freight rail bypass to the west of the region.

These bypasses would alleviate congestion at Tower 55 and relocate hazardous material shipments out of downtown Dallas and downtown Fort Worth.

Finally, the high speed rail portion of the TTC-35 should access the Dallas/Fort Worth International Airport from the south, as recommended by the recent Dallas/Fort Worth Airport Rail Access Study, and should also connect to the regional light and commuter rail systems to facilitate movement to other destinations in the region.

These recommendations represent our region's initial response to your TTC-35 proposal for your consideration. Once we have concurrency between TxDOT and the MPO for the TTC-35 routes within the metropolitan planning area, the final element of our regional policy position calls for the TTC-35 proposal to be placed in our region's metropolitan transportation plan.

We look forward to a continuing dialogue with the Texas Transportation Commission and TxDOT staff on making the TTC-35 project a reality.

Now Dallas County Judge Keliher will continue our presentation.

JUDGE KELIHER: Good morning. Good morning, I'm Margaret Keliher, the Dallas County judge and the co-chair for the Dallas Regional Mobility Coalition.

The partners in mobility are committed to working alongside with the commission to continue to address transportation funding. These issues, as they come up during this next legislative session, we will be also working hard on.

And I want you to note that they gave me my favorite topic to talk to you about, and that's money and what are we going to do for more money.

(General laughter.)

JUDGE KELIHER: We recognize that, first and foremost the transportation resources, the revenues, the authority and the flexibility that was achieved by House Bill 3588 have got to be protected during this legislative session.

This includes the use of the Texas Mobility funds in those areas that are willing to leverage the funds, the construction of highways as toll roads, and the use of the comprehensive development agreements. These are all necessary tools to improve mobility throughout our metropolitan regions.

There are two ways that we actually believe that we can increase funding for transportation.

First, we can eliminate or reduce the diversion of highway user fees and taxes that are deposited into the General Revenue Fund rather than into the State Highway Fund.

Second of all, we could take the dollars that are deposited into the State Highway Fund and use those dollars for transportation projects rather than for non-transportation uses.

SPEAKER FROM AUDIENCE: All right!

(Applause.)

JUDGE KELIHER: I told you they gave me my favorite topic to talk about.

Both of these circumstances which represent lost opportunities for improving mobility across Texas need to be corrected. The Partners in Mobility strongly encourages the Texas Legislature to not allow the continued escalation of diverting these needed transportation funds.

These funds need to be deposited either into the Texas Mobility Fund or into the State Highway Fund during this 79th Texas Legislature.

We encourage the Texas Transportation Commission to join us in informing our Texas legislators about the damaging consequences of diverting these highway funds into uses other than transportation uses.

The Partners in Mobility are in support also of the proposed plan to index the Motor Fuels Tax to the Consumer Price Index. This will stabilize the purchasing power of the Motor Fuels Tax relative to the cost of maintaining and constructing roadways which has gone up each year while the Motor Fuels Tax has remained constant for the past 14 years.

We have been working with our statewide partners through the Texas Urban Transportation Alliance -- better known as TUTA -- to encourage the legislative support of this proposal. However, while we do support the indexing, we also support using those dollars only for transportation purposes, and again, not allow those dollars to be diverted for other uses.

The Dallas/Fort Worth region is moving forward with the construction of toll roads which allows us to build projects more quickly and to provide future revenues to build additional transportation projects within our region.

The revenue generated from the toll roads needs to be constitutionally dedicated to transportation funding only within the TxDOT district in which the toll revenue is generated. Without this protection, it will be difficult to maintain public support for toll roads.

We recently concluded an 18-month process focused on finding ways to bring a seamless regional rail system to North Central Texas. We had a lot of local leaders and business community involved who participated in the Regional Transit Initiative to identify financial institutional structure and legislative implementation strategies in order to make this regional rail system a reality.

This effort is crucial given that in 2025 only 47 percent of the Dallas/Fort Worth population is projected to reside within the boundaries of our current transportation authority service areas.

We are continuing to look at solutions and proposals and legislative needs that we will have available to us to be able to make this a reality.

We want to thank the commission for your decision to allow flexibility in the use of Texas Mobility funds to construct public transportation with your recent commitment of $100 million in the 2005 UTP for intermodal connections in our region.

These funds will go a long way to help jump-start our regional rail initiative. We, as elected officials, stand ready to assist the state in getting these bond funds sold as quickly as possible.

And yes, I did read today's newspaper and saw what was on the front of the paper. But we do believe strongly that we have got to continue to work hard on this issue.

I am now going to turn the podium over to Jack Hatchell who will continue with our presentation.

Thank you very much.

MR. WILLIAMSON: Thank you, Judge.

MR. HATCHELL: All I have to say is amen to her comments.

Good morning, commissioners and Director Behrens. I am Jack Hatchell, Collin County commissioner, and this year's chairman of the Regional Transportation Council. I am joined today by two fellow commissioners, Phyllis Cole and Joe James.

On behalf of the entire Regional Transportation Council, I want to thank you for the opportunity to appear before you to address our concerns on regional mobility and transportation.

Last year our Partners in Mobility presentation focused on our efforts to move out aggressively, with you as partners, in the financing of transportation improvements through tools provided in House Bill 3588.

I am proud to say that we're continuing to make great strides in this direction, and more importantly, to report that we have not lost any ground on our commitment to you to take advantage of the opportunity to expedite financing and construction of as many projects as feasible.

You may recall this map which we presented last year in our presentation to you which reflects our region's highest priority projects.

We also shared with you our proposal for funding for each of these corridors that includes a combination of: TxDOT Category 2 funds, Texas Mobility funds, RTC Surface Transportation Program Metropolitan Mobility funds, Commission Strategic Priority funds, toll funding, and local funds.

This is nearly a $7 billion partnership program to construct these high priority projects over the next ten years.

Over this last year we have been working diligently with the TxDOT Dallas and Fort Worth District office and staff and our transportation partners on the details of this partnership funding program.

Several of these corridors are fully funded, however, funding needs still remain on some of the key projects. Securing your Strategic Priority funding commitments is critical in order for us to continue to move forward.

The partners in the Dallas/Fort Worth area region are focused on ways to get the most out of our transportation dollars.

One of the strategies that we're pursuing is to leverage state and federal funds by partnering with local agencies in the construction and operation of transportation infrastructure and services. This type of innovative leveraging will expedite the delivery of needed transportation projects.

For example, since we are proposing that your Strategic Priority funds are primarily used to construct revenue-producing facilities, excess revenues will be generated for other transportation projects.

An ongoing example of the leveraging strategy is to use commission Strategic Priority funds to complete the financing package for the President George Bush Tollway extension.

This new tollway -- which has now received environmental clearance -- will provide congestion relief to Interstate 635 and provide access to growing population and employment centers in the north and eastern portions of Dallas County. The project will aid in the reconstruction of Interstate 35 which is vital to our region.

The estimated project cost is $442 million. All but $150 million of this funding is in place and the Partners in Mobility are asking the commission to complete the funding package with Strategic Priority funds.

The Strategic Priority funding leveraging strategy will expedite the construction of this needed tollway facility and provide a funding stream that can be used to fund future transportation projects in the Dallas District.

We also believe that there's an opportunity to use your Statewide Transportation Enhancement Program as a leveraging opportunity with the private sector to increase funding that we would like to explore with you in the future.

The partners in the Dallas mobility region are supporting the construction of additional toll roads in the North Central Texas area. Several agencies have been identified as potential issuers of toll bonds, those including the North Texas Toll Road Authority, TxDOT Turnpike Authority Division, and private investors for the use of comprehensive development agreements.

We're actively engaged in policy discussions that will allow our region to take advantage of the flexibility provided by House Bill 3588 for all these groups to build toll roads in the region and continue to work together to identify specific funding packages and lead agencies for each potential toll project.

The Regional Transportation Council has committed over $385 million of Surface Transportation Program Metropolitan Mobility funds to the projects in our partnership program with the Transportation Commission.

This commitment of funds is provided as part of the funding strategy for the high priority toll and TxDOT projects needed in the region.

In order to preserve this commitment on these important projects, the RTC is requesting that the commission complete the funding packages with the programming of Strategic Priority funds.

We are here today to secure from you your commitment of Strategic Priority funding of $75 million per year for the next ten years.

Commissioners, we thank you for the opportunity to present this information to you and we thank you for your attention.

Commissioner Glen Whitley from Tarrant County will conclude our presentation.

Before he does this, I would like to recognize our staff at the RTC and the North Central Texas Council of Governments.

Mr. Chairman, you've already mentioned Michael Morris, so Michael is here, his assistant Dan Kessler, and several of the staff. And as you well know, we couldn't do our job without them. They're the ones that do all the work and we take all the credit, so we sincerely appreciate what they do.

And likewise Vic Suhm, executive director of the Tarrant County group, and also James McCarley, the head of the Dallas Regional Mobility Coalition.

So with that, I would like to turn the podium over to Commissioner Whitley. Thank you.

MR. WILLIAMSON: Good to see you.

MR. WHITLEY: Thank you, Jack. I'm Glen Whitley, Tarrant County commissioner and chairman of the Tarrant Regional Mobility Coalition -- we're new -- Tarrant Regional Transportation Coalition.

We appreciate the opportunity to come to you today and the time that you've given us, and we extend our thanks for all the support you've given us in the past years.

We look forward to the continued partnership that we've enjoyed, and what I hope to do today is to summarize what our specific suggestions and requests are.

In response to your request for input on the TTC-35 proposal, we have transmitted to your staff a regional policy position from the Dallas/Fort Worth area.

We hope that you will evaluate and consider the multimodal urban corridor recommendations submitted as a part of this policy position as the means for integrating the state TTC-35 project with the Dallas/Fort Worth area.

As you've heard from us again today, we believe that the future of transportation funding lies in our collective ability to allocate funds to projects that generate additional revenues that we can reinvest back into the transportation system.

The commission is urged to allocate TTC-35 concession fees to those regions that can use the funds to leverage additional transportation revenue.

You know, we were very excited about the reception that we had last night and we really have looked forward to the presentation today. I will have to say it was a little frustrating to get up and read in the paper that we are now looking for another $300 million to possibly divert from transportation funding.

Diversion of state transportation revenues to non-transportation uses continues to undermine your ability and ours to address the state's transportation needs. The Dallas/Fort Worth Partners in Mobility and our colleagues at the Texas Urban Transportation Alliance -- it would just be easier to say TUTA.

MR. WILLIAMSON: As in toot a horn?

(General laughter.)

MR. WHITLEY: As in toot a horn -- remain committed to the importance of communicating the issues to our state legislators.

We urge your active participation -- as I know you are already doing -- in this dialogue to explain the need for increased transportation funding and limiting diversions from our transportation resources.

We've worked hard over the past two years on the refinement of plans for a regional rail system in North Texas, including the institutional and financial requirements needed for implementation.

We want to thank you for your support of the effort with your approval of Texas Mobility funds to be used for rail projects in our region, and we look forward to the issuance as soon as possible.

The recently completed Texas Metropolitan Mobility Plan documented the need for an additional $130 billion of metropolitan transportation system funding across the state over the next 20 years. Funding strategies that maximize transportation revenue are critical for addressing this shortfall.

The commission is urged to allocate Texas Mobility funds and Category 12 Commission Strategic Priority funds to those regions demonstrating the ability to use these funds to construct projects that generate additional transportation revenue.

Finally, the Regional Transportation Council has committed $386 million of Category 7 Surface Transportation Program Metropolitan Mobility funds to TxDOT Dallas and Fort Worth districts to construct freeway/tollway system improvements.

We are requesting that you allocate $75 million per year for the next ten years of the Category 12 Commission Strategic Priority funding to the Dallas/Fort Worth area to fulfill its partnership program.

We again want to thank you for the opportunity to come before you today, and we'll be glad to answer any questions that you may have.

MR. WILLIAMSON: Who would you suggest would be the proper person for us to collectively address our questions to: would it be you; would you prefer Michael to come up?

MR. WHITLEY: Probably Michael.

(General laughter.)

MR. WILLIAMSON: We are always happy for Michael to be here with us.

MR. MORRIS: Michael Morris, director of Transportation, Dallas/Fort Worth Region.

MR. WILLIAMSON: Thank you, and welcome.

I'll touch on a couple and then stop for a moment and let the other commission members speak.

There are three points I need to make. Well, first of all, I need to say thank you for a great presentation. And I think the elephant is in the room so we'll just say it from a personal perspective.

I thank the region for stepping back and looking at TTC and saying: Now, wait a minute, what does this mean to us and are they really serious about influencing how it affects us; it's big, it means something to us, and we need to influence it. And I appreciate that attitude more than you can imagine.

You know, after having several websites created in my name and having taken more than my share of shots, it's good finally for people to say, you know, maybe this isn't bad.

And to lead into that, I think we all have to be very aggressive in saying to our constituencies: Concessions are new to this state, but it may well be the only way we can build some of our bigger projects. It may be no longer a choice between raising taxes high enough to rebuild something or concessions.

And certainly concessions don't apply to every project, but it may well be the case that we need to turn to businesses and say we are willing to give up your revenues for a number of years if you're willing to come construct assets we've got to have. And if we're frank and forthright and willing to say that to our constituencies, I think they'll understand it.

I happen to personally believe it's the only way we can get some of our larger problems solved quickly.

The second point I need to make is I believe the commission and CINTRA is going to always be focused on working with regions to make this work. You're our partners, you are who we work for, it wouldn't make any sense for us to have a divergent plan.

We're going to need your help this session on getting some land use authority because some of the corridors suggested in your layout, we probably can't reserve unless we start moving real fast, and in order to move real fast, the legislature is going to have to give us the authority to do that in some way.

We've asked the legislature for a couple of bills, we don't have the corner on the marketplace of good ideas, there may be some other ideas. But I think Carter Casteel has one of our proposals. Is that not correct?

MR. BEHRENS: Yes.

MR. WILLIAMSON: That basically permits counties to go out to citizens and say: Look, you need to reserve this and TxDOT is prepared to pay you for it, but we need to not do any more building here because we think someday we're going to be asking the federal government to give us a footprint.

The third point I would make is that none of us want to walk through the state and try to tell the happy story of tolls. We all recognize that it's one more way to pay for roads. You can raise taxes or you can borrow money and buy tolls.

And I am deeply appreciative of the recognition by the region that we really don't have much choice if we want to build things. If we don't want to build things, then we do have a lot of choices, but if we do want to address these things, that nasty word has got to become part of our daily life, whether we want it or not. I appreciate it.

Members, questions for the Dallas/Fort Worth area? Please go ahead, Robert.

MR. NICHOLS: Okay. Comments and questions. The first comment is outstanding presentation. It is such a pleasure to have a group who has come up not just with their hand out asking for a project or for money, but with an overall plan.

I mean, you have a vision, you have a plan not only of how to do it but how to implement it, you've worked it out together. You support us in statewide efforts that we are going to help your region plus the rest of the state in transportation. Extremely important for everybody to work on those things together.

You've identified a couple of key elements in what needs to be done. We certainly would appreciate because it would be very helpful.

In your planning, one of the early things that caught my attention in the layout was the elements that are in the Trans-Texas Corridor, your recognition of how that fits. Freight rail, not just cars and trucks, but how the freight rail can interact and how it can benefit by having freight rail relocations, for instance, on new corridors, how that can benefit your new commuter rail, how all that ties together.

The one element I did not see, or maybe I missed it, the last element is utility transmissions, something we're trying to plan more with because there is a real recognition that these utility companies, whether it be a large electrical transmission line, they've got to come through and put it somewhere. And so we're trying to incorporate that.

MR. MORRIS: It's not included in this presentation, Commissioner, but it is included in the vision.

Our elected officials in our region very much understand under deregulation that the issue in electric generation is no longer the power plant capacity, it's the transmission capacity.

MR. NICHOLS: Right.

MR. MORRIS: And just like we have congestion on the roadway side, there is congestion on the transmission of that electric power, especially within metropolitan areas and especially within the Dallas/Fort Worth region.

Bill Hill is here today and I talked to him about it, I think, probably about eight days ago. Not only is the Trans-Texas Corridor a potential corridor for transmission capacity to hold down or lower electric utility rates within the region, we think the hidden revenue source within the Dallas/Fort Worth region are the transportation corridors that could be potential electric utility corridors within the transmission constrained areas of metropolitan areas.

And there's going to be issues that we have to bring back to staff about how do we protect, by putting up transmission lines, buffers around those poles so we don't create safety problems. And I think there's a whole new generation of professional -- of integrating transmission lines in some architectural urban design sense in a safe way that protects it from the traveling public as a way to reduce the electric power transmission loss.

It's in the Trans-Texas Corridor vision, you have it very much in there. And we think as these elected officials continue to get briefed on this huge expense, out-of-pocket cost to the citizens of the region, to actually bring back to you maybe within the Dallas/Fort Worth region or El Paso or Houston, a within-region mini Trans-Texas Corridor vision with regard to those transmission losses.

MR. WILLIAMSON: Absolutely.

MR. NICHOLS: Second question was in the layout of how all that connects, at least visionary, I was counting the number of counties that your plan touches, and in some of the layouts I'd hit nine counties, in some of the layouts I'd hit 12 counties.

In your metropolitan planning organization, how many counties do you currently have?

MR. MORRIS: That boundary there, Commissioner, is portions of nine counties; it's almost nine full counties. The state of Maryland in land area and in population can fit inside the Dallas/Fort Worth planning region.

(General laughter.)

MR. NICHOLS: Probably more economic development going on back here too.

MR. HOUGHTON: They love to hear that back east.

MR. MORRIS: Commissioner Whitley flies back there once a month to the state of Maryland to remind them of that.

Just to let you know, the region will be going through a re-evaluation of that. We now have a full nine-county non-attainment area, so there's some small slivers of that that are not included, and the regional transportation will be looking to see if this nine-county area should be expanded.

MR. WILLIAMSON: What's the size of the COG?

MR. MORRIS: The COG is 16 counties.

MR. NICHOLS: In incorporating uniform planning for commuter rail, the transit, the tolling systems, all that kind of stuff, do all of these entities have the authority to work with that many counties? Because that's where your people are going to be and it's a system that needs to fit.

MR. MORRIS: As the elected officials have digested -- and I want to touch on this notion of a financial RMA just for a second. You have the North Texas Tollway Authority that can build toll roads in four and in all perimeter counties.

MR. NICHOLS: And perimeter.

MR. MORRIS: They can opt in to that particular initiative. So we can get up to this urban boundary.

Obviously your TxDOT division can build toll roads in any of that area, and obviously comprehensive development agreements can. So we think all three mechanisms are available to us anywhere within that jurisdiction.

Obviously we have two very able highway department districts to build transportation. We're flattered and we thank you for inviting us to the signing of the MOUs between the governor and the rail freight operators, because that institutional structure needs to be created to develop for this century what the interstate highway was for the last century: new partnerships to build the rail freight system.

And as you heard from our elected officials and Judge Keliher, the big problem we have is on the passenger rail side. Within 2025, a majority of our citizens will reside outside our three existing transportation authorities.

Not too many cities have opted into those authorities in the dozen years. So that is why over the last year and a half we have talked about the creation of a fourth, and hopefully final, rail authority that can go six-seven counties and pick up the regional rail components that are outside of those other existing authorities.

Those transit needs in that other area -- and it's important for you as commissioners to understand -- are basically regional rail non-bus-oriented users. And we've had elections by cities who see buses moving into markets where they're really looking at regional rail as their solution and not a bus system.

So a regional rail authority or some institutional structure that is seamless. We already have a compact between all transit agencies where they seamlessly go between the systems. The vehicles cross boundaries, the fare systems cross, the transfers are free. That's all worked out internally among the transportation authorities.

There's a lot of focus, and I know both here and across the street, on somehow consolidating these initiatives into a new institutional structure.

The elected officials in our region do not think -- in fact, we think we're building more transportation than any city in North America. We're very proud of the surgical capability of the DFW Airport Board, of these rail authorities, and of these toll road initiatives. It's very precise, it's very particular, it's at a very high standard. Aggregating those functions into an institution will water down that more surgical capability.

What needs to be coordinated now with two, three, five, seven, nine CDAs potentially, comprehensive development agreements built in our region is the coordination of the resources.

As Judge Keliher said and as Mayor Kirk stood before you several times: Follow the money. And the money and the revenue stream is generated by the institution of all these toll roads that are going to be built.

So we're suggesting there's a financial RMA or a capture or an audit or an account of all these funds that are then pooled within each of the districts that are then leveraged, including your own Strategic Priority funds.

Our suggestion is you put your money on toll road projects, that toll project creates revenue that pays you back your Strategic Priority funds that we hope you keep in our district for you to then assign to more transportation projects within our region. That's the theme of this.

So it's about keeping track of the money. It's about telling the 121 constituents -- which you received so many e-mails about -- that if you, instead of taking the gas tax-supported roadway, take the toll road, you will have a seat at the table to decide what that money will be used for.

And those MOUs were signed two weeks ago. We need a mechanism to keep track of the revenue that's generated by what might be that CDA, one suggestion by the Regional Transportation Council, so all those agreements can be honored on what that money is going to. And that's why they want constitutional protection that those revenues stay within the district that is there.

So Commissioner, we think it's the transit component that needs an institutional addition and that's why we're concerned about this notion of aggregating transportation providers when we really should be looking at the boundary of the RTC's responsibility and they're able to capture the revenue stream to make sure all those agreements are honored.

MR. NICHOLS: Ever since the issue of toll equity a number of years came up, the commission has always been supportive of keeping those revenues inside the region. And I think as time has moved on, we realize that those revenues can be used or possibly used, there's a potential to use those not just for roads but for expanding the system which could include all those other elements, whether it be rail relocation, commuter rail, transit or whatever.

And it's going to be real interesting to see how well we can protect those funds and the uses of those funds. Because whenever there's funds, there's always a temptation of what everybody's ideas are, as we know.

MR. WILLIAMSON: The more I've thought about this idea of a financial RMA, the more intrigued I am by it, and I think it's an idea that's worth watering and see if it will grow a little bit.

I think I can speak here, never for the governor but I think I can speak what's in the back of his head.

As you know Michael, he's been focused on regionalism from the day he took office. His view has always been that regions plan better and individual governments execute better -- the current disagreement we're all having about caps on appraisal values, notwithstanding.

(General laughter.)

MR. MORRIS: I'm glad you brought that up.

MR. WILLIAMSON: Don't throw anything at me, but I agree with him.

But seriously, he views regionalism as the mechanism for modern society to most quickly solve its problems. The difficulty is in figuring out what's really a region versus what is the current power centers of a particular area, and then compromising the regional boundary lines based on those power centers. And I say that without being negative to anyone.

I think his view of North Texas is that it's 16 or 18 or 19 counties, not four or six or seven, just like his view of Southeast Texas is is not just Harris County, it's probably eight or ten counties.

It's the counties that have right now and the counties that have not, who will someday be the counties that have and the counties leaving the counties of have-nots.

And I know many times you and I have visited, and Mayor Miller and I have visited on this notion of what happens if we abandon urban Texas.

I think the governor's focus is on making sure that urban Texas isn't abandoned by creating a regional concept that says it's as important to plan for Decatur as it is to plan for Dallas, it's as important to have Hillsboro committed to the region as it is to have Haslet committed to the region.

So I'm thinking that if we talk about a financial RMA in terms of a larger physical area, you're certainly getting a lot of support from the second floor middle room.

MR. MORRIS: Well, I think certainly the nine-county/16-county, the footprint that again has been laid out from a standpoint of just looking at the TTC-35 Corridor, allows us to really begin moving more and more in that direction because it gives us something to look toward protecting for the future.

MR. WILLIAMSON: I'm sorry. I didn't mean to interrupt. Members, who's next?

MR. JOHNSON: I had an observation or two.

One thing, it's an extraordinarily comprehensive report. I think Robert did point out one component of the TTC that you've well thought out but have not included in the report.

I continue to marvel year after year that this group continues to grow, but also that what you bring to us in terms of ideas and organization really serves as a template for groups like you, and I salute the organizational ability, the leadership and the whole community that you serve for what you do.

I wanted to mention one thing I think that the chair was emphasizing, and that's the idea and the issue of where the decisions should be made.

One of the great strides, I believe, that this department has made in our planning and in delivery is that we have pushed to local decision-makers, local leaders who really know their needs and their priorities, more and more of that decision-making authority as to which projects are done and in sequential order through our planning, through the MPO process and actually through the funding.

One of the fears, I believe, of people that have lined up against the concept of the Trans-Texas Corridor is this great new transportation system is going to be shoved down our throat and there's not going to be any local input received nor listened to.

And I think that what you've illustrated today confirms my belief that by working together we're going to arrive at the best solutions, and those are going to be locally driven because you know your constituents, you know your needs, you know your priorities. I mean, you've demonstrated that time after time.

I know there's a lot of talk, especially in rural areas about the landscape and what this is going to do to the ag centers, agricultural interests and ranching interests.

And those considerations are going to be deep and thoughtful and well thought out, as are they as we go through and around our urban areas. And I think what you have done here exemplifies that, and in my mind reaffirms the fact that these decisions are going to be driven locally.

Now, as Mayor Kirk pointed out, you've got to follow the money and ultimately economics, in terms of the proportionate share of the decision-making, are going to be one of the prime factors.

But I'm comforted by that or certainly lifted by what you bring in total concept on all these issues, and I'm grateful.

MR. HOUGHTON: Well, I just want to make a comment or two regarding what has been said previously here. I think this group is a marquee group as to the way you've coalesced, and as Commissioner Johnson just talked about, the template that could be used across the state, I hope people take note of that.

One of the things I think communities are going to have to start looking at that I have discovered is that we need to look outside our regions, especially look outside the state on what's getting ready to happen to us from the Pacific Rim.

Fifty-three percent of goods produced now are produced in northern Asia -- that means China, Hong Kong, Japan -- and they're coming this way. The Port of Los Angeles and the Port of Long Beach are almost at capacity.

Those ports are now being challenged by ports in Mexico which will come up through Laredo, El Paso, Brownsville, and the two distribution points in Dallas/Fort Worth.

And we need to look outside what's coming to us and plan for it and tag some of the revenue opportunities of 3 million trucks crossing the border between El Paso and Brownsville, northbound, an additional 3 million trucks headed out of our ports from Brownsville to Port Arthur, along the Gulf Coast.

So Mike, when I talked about the rail and some of the things we were looking at here yesterday, it's profound what's going to happen to this state in a positive way, but if we're not ready for it and don't plan for it on a more global instead of regional, we're going to be our own worst enemies. And that's some of the things we're going to be bringing to you.

But again on a positive note, I think this is an outstanding group and I appreciate the amount of work that's gone into it.

MS. ANDRADE: Mr. Chairman.

Mayor, commissioners, Bob, it's great to see you here this morning, and thank you. I'm always so impressed with your presentation. You truly are the leaders and being visionary in understanding how we all need to work together. So I salute you for that also.

And Judge, I have to tell you that I loved your presentation on money and you're right on target on the issues. We just need to make sure we keep communicating that and talking about it. So I certainly enjoyed your presentation.

And I have to tell you all how appreciative and how fortunate you are to have Michael and how fortunate this state is.

(Applause.)

MS. ANDRADE: You know, Michael, I'm just always so grateful for all your expertise and support. You're always so willing to help.

For those of you that do not know, Michael has also agreed to lead a study group for us for the commission on public transportation, and he gives so much of his time.

And I watched him yesterday for three hours, and I thought, you know, if it wasn't for Michael leading this group, we wouldn't be where we're headed. And so thank you, Michael, for that.

Thank you all very much. Congratulations. How can we not work with you? So I'm looking forward to working with you.

MR. WILLIAMSON: As you know, Michael, we don't make decisions about SP money at these meetings, but the information and the arguments presented by groups have great impact on the decisions the commission makes.

Ted touched on something that I just can't pass up. When were putting together the initial maps and the thought processes that the governor wished to lay out four years ago, one of the key drivers was our very firm belief that few people were really concentrating on what was going on on the West Coast -- as Ted said -- and that almost no one was paying attention to what was happening to the energy world and what was likely to happen to the dollar value of crude oil, and the implication of that for the opportunity to wind farm electricity in West Texas.

And folks can say, well, you know, that just happened, you can't plan on that stuff, but really if you're kind of thoughtful, it's not very hard to kind of figure out the way your world is going to be in a few years if you just look at the information available to you.

And it was apparent to us, it's been apparent to my department for years that West Coast ports were filling up and eventually one of two things were going to happen: either the United States of America was no longer going to be an economic powerhouse, or different ports were going to develop in different ways to transport the nation's goods were going to happen and that was going to involve the state of Texas.

And there was only one logical conclusion: the ports of Mexico were going to grow, and that traffic, that freight was going to be put on trucks and trains and it was going to go straight through the state of Texas.

And as it turns out, the Dallas/Fort Worth area is the key distribution center for the central United States. So if you take the population growth of the country, it is all east of kind of a line running from Memphis to Buffalo down to Mobile, Alabama. That's where population is growing and that's where all this trade is going to go, and they're all going to be using our highways and our railroads.

And I had a friend of mine representing that area out west of Weatherford who said, Well, yes, but there will never be a reason to take the corridor out Interstate 20, there will never be a reason to take it out Interstate 10. I'm looking at him and I'm thinking, you know, you're just not really seeing the future.

The day will come when we will want an 85-mile-an-hour 100,000-pound truck corridor from El Paso to Dallas/Fort Worth, that day will come. And oh, by the way, the day will come when we're going to have to erect 7.65 kilowatt, whatever it is, megawatt transmission towers to bring wind energy out of West Texas to Dallas/Fort Worth to lower our cost of operations so we can be competitive with Monterrey and Hong Kong, that day will come. So yes, the corridor will be out 20 sooner than you think.

The growing recognition of that is just short of heartwarming.

Thank you very much, we appreciate it. We're going to recess for five minutes.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: We will return from recess and pick back up with our discussion about engineering consultants.