COMMISSION MEMBERS:

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

STAFF:

MICHAEL W. BEHRENS, P.E., Executive Director
STEVE SIMMONS, Deputy Executive Director
BOB JACKSON, General Counsel
ROGER POLSON, Executive Assistant to the Deputy Executive Director
DEE HERNANDEZ, Chief Minute Clerk

PROCEEDINGS

MR. WILLIAMSON: Good morning to everyone. It is 9:01 a.m. And I would like to call the February 2006 meeting of the Texas Transportation Commission to order.

It is a pleasure to have each and every one of you here this morning. And please note for the record, public notice of this meeting, containing all items on the agenda was filed with the Office of Secretary of State at 4:03 p.m. on February 15, 2006.

As we always do, before we begin our meeting, would each of you join with me in pulling out your Blackberry, if Blackberries still work, your telephones, your pagers and all other recording devices that might make a noise, and let's all put them on the silent or vibrate mode, so that we can respect our guests' testimony, and not have them interrupted by irritating sounds. Thank you very much.

As is our custom, we will open with comments from the commission. And we always begin with the commissioner who lives in far West Texas, Mr. Houghton and then work back to Ms. Andrade and Mr. Johnson and myself. So Ted, take it away.

MR. HOUGHTON: I thought the sun rose in the east instead of the west.

MR. WILLIAMSON: Well, this is the transportation commission.

MR. HOUGHTON: I don't know if this thing is working or not. Good morning everyone. Glad to have you here. I see, I hope we have got San Antonio back again. They seem to be a regular here. Congratulations.

And I look forward to all the fun today. I see we have a party on the agenda, Mr. Chairman. That is going to -- I am one never to miss a good party. So welcome, everyone.

MS. ANDRADE: Good morning. Welcome everyone. It is great to have my hometown send their delegation. Welcome to all of you. And also our friends from the Port-to-Plains corridor, and friends from Port Aransas.

It is a great morning in Texas when we have got a room full of people that are interested in improving our transportation system in Texas. So welcome, and have safe travels on your way back home. Thank you.

MR. JOHNSON: Good morning, all. I will echo the remarks of my colleagues. It is a delight to see so many people here. It means that transportation issues are important.

In the seven years that I have served on this commission, I have come to realize -- I was very naive when I started. But I have come to realize that transportation in so many ways is fundamental and critical to our quality of life. And you see so many interested people who want to participate and be heard. It is very enlightening.

Welcome to those of you who have come from San Antonio and of course, the Plains, and other parts of the state, like Padre Island. We are delighted that you are here.

MR. WILLIAMSON: And I associate myself with the remarks of my colleagues. We are delighted to have citizens from across the state who are interested in discussing in a civilized manner the problems and solutions that confront the transportation world in our state.

I note that our good friend, Senator Wentworth is with us this morning. My glasses work only close. So is there another member in the audience that I don't see? Senator Wentworth, it is always good to have you here with us, sir.

Let me remind everyone, that if you wish to address the commission today, we ask that you complete a speaker's card. You can find a card at the registration table, in the lobby, to your right. If you wish to comment on a filed agenda item, we would ask that you fill out the yellow card.

If it is not an agenda item, and you want to comment in the open comment section, we would ask that you fill out the blue card. Irrespective, except for formal delegation and opposition presentation, we would ask that you limit your remarks to three minutes, so that we can hear everyone during a reasonable time period.

The first item on the agenda is approval of the minutes for the January commission meeting. Do I have a motion?

MR. JOHNSON: So moved.

MS. HOUGHTON: Second.

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

(A chorus of ayes.)

MR. WILLIAMSON: All opposed?

(No response.)

MR. WILLIAMSON: The motion carries. Thank you. Mike, we are going to go ahead and start today's agenda.

I think we are still waiting on a few people from San Antonio, and there is some informative matters that I wish to get on the record before we begin our San Antonio discussion. So if you would please, take it over, and let's go to agenda item 2, please.

MR. BEHRENS: Okay, Mr. Chairman. Thank you. We will do that. This is a continuation on discussions that we have started in a previous commission meetings to talk about our legislative agenda, and give the commission a chance to interact with our legislative people on issues that we want to bring before the next session of the Legislature.

And to do that, I will ask Coby Chase, our Director of our Government and Business Enterprises Division to come forward, please. He was here earlier.

MR. WILLIAMSON: Coby is running for cover.

MR. BEHRENS: We are going to start.

MR. WILLIAMSON: He will be here in a second. Coby, it is all yours.

MR. CHASE: Good morning. For the record, my name is Coby Chase. I am the Director of the Government and Business Enterprises Division here at TxDOT. And this is part of my monthly update on our state's legislative recommendation.

As you know, the Legislature asked in law for the commission to make recommendations before each legislative session. And as our Chairman has us do, as we discuss it every single month, out in the open, and in public. And this part of that continuation.

I will be brief today for two reasons. And one, if Mark, I am going to need that overhead. If you could fire that up. Since we last met, and since I last appeared before you in Conroe in January very little has changed. There is not really anything new to add.

I will go through the issues very quickly. Stop me if you have a question. But I don't believe that I have a need to take up much time on this today. However, I do have a new -- there is something else that seems to be driving our state legislative program right now, that I would like to address.

Since we last met, the Lieutenant Governor did issue his interim charges in the Senate. And they looked, to a large degree, a lot like what is going on in the House, with some exceptions. He added Senator Armbrister from Victoria, and Senator Williams to the Senate Transportation Committee.

And what they'll be looking at this interim are making recommendations for updating the state's overweight truck fees; study and make recommendations relating to TxDOT's ability to build, maintain and relocate rail facilities; evaluate and make recommendations relating to the naming of state highways -- which is interesting; study and make recommendations relating to TxDOT's programs designed to increase safety in all safe transportation facilities; monitor ongoing efforts on the Texas-Mexico border; study and make recommendations relating to relocation of utilities; review the process by which the transportation commission allocates funds to the districts through the allocation program.

They will be doing that with the finance committee, and review the process by which the transportation commission determines which federal funding sources should be implemented to comply with funding reductions mandated by Congress, and that will also be done with the Finance Committee. The Lieutenant Governor also made his appointments to the joint study Commission on Transportation and Finance, adding Senator Carona, Lucio, and Michael Stevens of the Houston area.

And so, I would anticipate that that -- and Commissioner Houghton is one of the Governor's appointees. I imagine they will start meeting soon, and we'll be actively engaged in that. Like I said, there was very little -- nothing has changed, since I last appeared before you on the state's legislative agenda.

MR. WILLIAMSON: So you laid out the initial topics that we should either consider, or you are prepared to recommend we should take a position on.

MR. CHASE: Yes, sir.

MR. WILLIAMSON: And we communicated that to whom and to how either formally, or informally?

MR. CHASE: Outside of just the simple fact that I appear at a commission meeting, and it goes to a broad audience. Or say legislative affairs section conveyed it across the street to the people we deal with the most. House, Transportation and Senate --

MR. WILLIAMSON: House and Senate members.

MR. CHASE: Yes. And they are always -- it is always an open invitation to sit and talk to them. But we will actively go and meet with each of them as well, too. To see what their interests are, and to see how it all meshes with the interim hearing process and things of that nature, along with what the Governor's Offices desires are.

MR. WILLIAMSON: Members, I don't know how you reacted to the list that Coby presented us. I thought about it over the last month. And the question that kept popping up in my mind is, the Legislature and the Governor have advanced an aggressive transportation agenda over the last six years, and provided the taxpayers and the commission with a series of tools to address congestion, mobility, safety and economic opportunity.

And almost all of this agenda, we are considering recommending to Senator Wentworth from this point forward seems to be driven by the lack of cash or cash flow available at the state level, and at the regional and local level. And I am a little bit -- I don't want us to go across the street in January with our hat in hand, after having spent six years with the assistance of Commissioner Nichols, I guess, with us, indicating to the Legislature that the tools alternative to the gas tax that we request should be sufficient over the next 25 years to address the problem, unless we have a real good explanation for that.

So I am a little bit concerned. I am not chiding staff. But I am a little bit concerned that so much of what we may be taking across the street is driven by an absence of cash flow. Can you enlighten me as to why that might be the case?

MR. CHASE: Well, it is. And we have had a series of questions recently. The federal -- and it is often times the state, what happens on the state level is very much driven by what happens to us on the federal level.

And we have had some questions recently about the federal government. And they have a history of this. Promise you X amount of money. We plan against that amount of money, and then they rescind that amount of money. It gets snuck into different appropriation bills and things of that nature.

And it kind of paints us as the bad guy, because we have to turn around and tell our local partners, like the metropolitan planning organizations what the case is. That there isn't as much money available in certain categories as we had originally anticipated.

MR. WILLIAMSON: Yes. But is that because they reduce money, or because the federal government redefined how we could spend that money, or was it both?

MR. CHASE: Both. It is both. What we in SAFETEA-LU, the newest of the highway bills, so to speak, the successor to TEA-21, it had more money go through it.

However, there were more strings attached to it, and they moved around the funding categories. So we anticipated the right amount of money. We did not accurately predict how they would tell us to spend the money.

MR. WILLIAMSON: So for example, in the area that is of concern, for example, to the San Antonio delegation and the opposition delegation, the matter of construction. Would it be safe to say that the amount of federal funds available to us now, for what we define as construction capacity is less because restrictions have been placed on that, or the money has been moved into other areas of the federal reimbursement budget?

MR. CHASE: Yes. Absolutely. It would have been moved into other areas.

MR. WILLIAMSON: And has the federal government actually rescinded or reduced the amount of money they initially indicated we would have?

MR. CHASE: And then after that, and over the last four years, they have rescinded about $300 million. And recently, it was about $159 million. They told states -- it was proportional.

It wasn't that Texas took a bigger hit than another state per se, proportionally, but $2 billion in funding was taken off the table. Because as you know, the federal government operates with very little cushion for emergencies. And in my opinion, and it is just my opinion, but we are going to be looking at more money for the war on terrorism.

We will be looking for more money -- or the federal government will be looking for more money for hurricane relief. And we are probably going to get hit again. But recently, it was $2 billion nationwide, and our share of that was $159 million, which the agency had to figure out the least painful way to remove that amount of money from planned activities.

MR. WILLIAMSON: Well, that being the case, remind or update the commission, how much of our federal gas tax dollar do we actually have, anyway.

MR. CHASE: I will be happy to do that. You had asked a while back for us to prepare some data, and a paper, just to put it into perspective. I mean what are we starting from, before we even make any of these decisions.

And Benard, if you could turn on the overhead. And I hope, I printed this out this morning. And I hope it is visible. But SAFETEA-LU is how our federal money is sent to us, and how we are allowed to spend it.

And I am going to introduce something a little new in a sense, here, but work with me. For every dollar, a Texan goes to the gas pump and pays a dollar. So does a Californian, a New Yorker, Floridian, whatever the case may be. And the very first thing that happens when it lands in Washington, D.C. is a half cent is taken off for LUST, the Leaking Underground Storage Tank fund.

MR. WILLIAMSON: When you mean every dollar, do you mean every dollar of federal tax?

MR. CHASE: Federal gas tax. Exactly. You pay 18.4 cents at the pump, and when it adds up to a dollar, it is in D.C., a half a cent gets subtracted for that. And then 15 2 cents goes to the mass transit account. Which means they take an additional 15 2 cents off and put it into buses. Which is not bad, but I just don't think most people understand that.

It is a lot like on the state gas tax, the first 25 percent is taken off and goes to education. This is similar. What is interesting, our calculations show that 15.5 cents, we only get back about 62 percent of it. So every dollar of that money, we would get back 62 cents.

MR. WILLIAMSON: Does TxDOT get that money, or is that --

MR. CHASE: We get just a little bit of it, for the small and urban-rural. It tends to be the money that goes to DART, VIA, Cap Metro, Houston Metro. The big bus companies.

MR. WILLIAMSON: But if you take all of our metro public transit organizations' distribution from the federal, from that 15 2 cents --

MR. CHASE: Yes, sir.

MR. WILLIAMSON: You are saying the state in total, as best as we can tell, gets back 62 percent of that 15.5 cents?

MR. CHASE: What they do is -- yes. What they do is, the 15.5 cents goes into the transit account. And then they add in some of the general funds, some more of the gas tax dollars. And so, we see 62 percent back.

MR. WILLIAMSON: Okay. Go ahead.

MR. CHASE: And then the remaining 84 cents is credited to the Highway Trust Fund. If I could push that up a little bit. This is where I always ask you all to endure me on the math a little bit.

Out of the 84 cents that Texas contributed to the Highway Account, Texas gets back a guaranteed 70 cents. And a lot of times we hear that it is 90 cents, it is 90.5, it is 92 cents. But over the life of SAFETEA-LU, all we are ever guaranteed, if they don't make any rescissions, is 70 cents back on the dollar, or on the 84 cents. Pardon me.

So that dollar you sent from the gas pump to Washington, D.C., which you think will come back and actually can be used in Texas, is 70 cents. And then I am going to go through a little bit more what happens.

MR. WILLIAMSON: 70 out of the 84.

MR. CHASE: 70 out of the 84. Because it is a 90 to 92 percent rate of return over about 80 some odd percent of the money. They don't guarantee you all of the money out of that 84 cents.

MR. HOUGHTON: Minus emergencies.

MR. CHASE: Yes. Minus rescissions.

MR. HOUGHTON: Minus war on terror, minus the hurricanes, minus all this other stuff.

MR. CHASE: Exactly. I am sorry, Commissioner Houghton. That is before that.

MR. HOUGHTON: Before that.

MR. CHASE: That is before that. No. This is what, if you look at the bill in its pure form, it says you will get back no more 70 cents for every 84 cents in the system, or 70 cents for every dollar you put in the system.

MR. JOHNSON: Coby, one thought. I think I heard you say, that of the 15 2 cents that goes to transit, Texas only gets in the 60 percent range of that bag. So we are getting 60 percent of the 15 2 cents, and we are getting --

MR. CHASE: 70 percent of the 84 cents. And for a little bit of history, and I won't dwell on this very long. Senator Gramm, when he was chair of Banking, when he was in the Senate, proposed a formula that would boost the amount of money that went to -- a guaranteed amount of money. And it was very interesting.

It was even a hard sell back in Texas. Our transit providers didn't quite understand that. They all work on earmarks. Now, if you take that 70 cents, and you wonder how much of it goes into what people generally ask for from the commission, and that is construction money, this is what happens.

You take -- the first thing you do is, of the 70 cents, you subtract 1.6 cents for enhancements. And that leaves 68.4 cents. And over the life of SAFETEA-LU, that is at least $333 million has been taken away from congestion relief and put into tourism projects. The next thing is, you should subtract 11 2 cents for maintenance, which is obviously a very important function of what we do. Federally funded maintenance.

That leaves 56.9 cents, or over the life of the bill, $2.4 billion is taken away for maintenance. Which is important, and no one says it isn't. But no one shows up and asks for maintenance money.

The next is, you subtract 2.6 cents, and that leaves 54.3 cents of that 70 cents, that is $532 million. Safety is important. These tend to be behavioral programs. Don't drink and drive. Those kinds of things. Click it or ticket. Things of that nature.

CMAQ Congestion Mitigation Air Quality. Really, all the money is ever spent on is AQ, air quality projects. Signal timing. Things of that nature. You subtract 2.9 cents, and you get 51.4 cents. And over the life of the bill, that is $603 million.

Demonstration projects. Remember that Congress picked the projects. 2.7 cents or at least 48 cents or $556 million.

MR. HOUGHTON: Give me an example of a demonstration project.

MR. CHASE: An example of a real demonstration project?

MR. WILLIAMSON: No, an unreal one. Give me an example of an unreal demonstration project. Don't be afraid.

MR. CHASE: There is one in Alaska. Why don't we do that.

MR. WILLIAMSON: Pick one in Texas.

MR. CHASE: They have got a number. Someone's state is bigger than us, so that is fair. You know, some ungodly amount of money that really wasn't planned for. The bridge to nowhere. Multi-hundred million dollar bridge to service 60 people and a polar bear.

And that is the kind of thing that we are talking about. Things that generally go outside of the traditional planning process.

VOICE: [inaudible].

MR. CHASE: There you go. I am going to try my best. The next amount of money is for border infrastructure. And a little bit of that actually can go towards construction, or it could go to construction. But it is also used for things like inspection facilities, I believe, and things of that nature. But it is not just pure construction dollars.

The next amount of money, recreational trails. And over the life of the bill, that is worth $13 million. Next is bridge replacement or rehab, very important, of course. 4.43 cents, leaving you 43 cents. $917 million over the life of the bill. Metropolitan planning, the amount of money that goes to our MPOs for planning purposes. Very important money, .4 cents or $89 million. Environmental and planning, now these last two, I am going to say, environmental and planning and right of way are both necessary to build projects. No two ways about it. And over time, right of ways become increasingly an insanely expensive part of our business, so we do have to spend money to do that.

But people don't come and ask us for right-of-way money. They come and ask for hard construction dollars. They don't come and ask for environmental planning money.

They come and ask for hard construction dollars to build roads. So that further reduces the amount of money by 5.6 cents and 7 cents. So at the end of the day, remaining for construction of that 70 cents, is 30.37 cents. And over the life of the bill, that is $6.25 billion for the next five years, for construction, in federal money.

MR. HOUGHTON: To the State of Texas.

MR. CHASE: To the State of Texas. Before any rescissions and before, if we were able to receive any discretionary money, which is very rare for us.

MR. WILLIAMSON: But we can only get that money if we spend state receipts first, correct?

MR. CHASE: Yes, sir. It is a reimbursement program. And in general, we pay a dollar, we get back 80 cents.

MR. WILLIAMSON: So it is not a grant. It is not an allocation, like Social Security. It is there are two levels of tax, gasoline tax.

MR. CHASE: Yes, sir.

MR. WILLIAMSON: That our citizens pay.

MR. CHASE: Yes, sir.

MR. WILLIAMSON: They pay this federal tax, it goes to D.C., it gets back to the state only if the state collects a state gas tax and spends that first, in order to get reimbursed.

MR. CHASE: Yes, sir.

MR. WILLIAMSON: So if we are getting 30.37 on the gallon of our federal gas tax, how much of the state gas tax are we getting to work with for that same construction project? Because, the elephant in the closet is 281, 1604 and the Bexar County discussion we will have today.

MR. CHASE: Okay.

MR. WILLIAMSON: Let's use 1604 and 281 as an example. How much of the federal gas tax and the state gas tax we collect from the citizens of our state are we actually able to use to build 281, or expand 281 and 1604?

MR. CHASE: When the state collects the dollar in state gas tax, a penny is taken off for collections enforcement. How you collect the gas tax.

MR. WILLIAMSON: Who gets that?

MR. CHASE: The Comptroller.

MR. WILLIAMSON: The Comptroller?

MR. CHASE: The Comptroller. And then three cents go back in refund, it is people who apply for a fuel tax refund. I guess, like boating and I believe ag, and things of that nature. So there is a way to get people who are tax-exempt their money back. So three cents goes back.

MR. WILLIAMSON: That's 96 cents

MR. CHASE: So we are at 96 cents. After that, 24 cents is taken off for education. We have done that forever, and that is where it goes.

MR. WILLIAMSON: So, we are down to 72 cents.

MR. CHASE: And 17 cents for the Department of Public Safety.

MR. WILLIAMSON: So we are down to 62, 56 cents. Did you say 17 or 16?

MR. CHASE: 17.

MR. WILLIAMSON: We are down to 55 cents.

MR. CHASE: Right. And if we are talking in terms of things that affect the roadway system, we need to subtract out other expenditures, other transfers, like to the Gulf Intracoastal Waterway, public transportation and aviation, all very important programs, but they are not asphalt, so to speak. And that is ten cents.

MR. WILLIAMSON: 45 cents.

MR. CHASE: 45 cents. Now that is what is left over from the state gas tax for the state's use in the roadway system. There is also registration fees.

MR. WILLIAMSON: Add that back in.

MR. CHASE: If you add that back in, for every dollar in registration fees, about 65 cents accrues to the department for its use. And if you were using the same amount that got us to 45 cents, that would be, I believe, an additional 29 cents. That would be available to the department.

So the state gas tax actually goes into -- a lot of department programs are not just hard construction, Chairman. I am not implying that. But it is 45 cents, plus 29 cents in registration fees.

MR. WILLIAMSON: I know we are going to take a break in a moment and let our San Antonio discussion begin. And I don't want to belabor this. But I am curious.

And maybe Amadeo is more appropriate to answer this question. How are we progressing on our research project, to try to nail down in a way that the entire state can accept and agree the apportionment of state and federal taxes of all kinds to the actual use of a road.

MR. SAENZ: We have been able to -- and we have had several -- for the record, Amadeo Saenz, Assistant Executive Director for Engineering Operations. And part of the request that the commission -- the direction that the commission gave was to come up with some indexes.

And one of the indexes is that the asset value of the system. And what we were coming up with is basically, being able to determine on any particular road, how much revenue the users of that road would be generating. And of course, the revenue is being generated through the gasoline tax.

MR. WILLIAMSON: Tax revenue.

MR. SAENZ: Tax revenue. Yes, sir.

MR. WILLIAMSON: We are not talking about toll roads here.

MR. SAENZ: No. This is just on any road that anyone drives on, depending on the number of vehicles that use that road, and the length of the road, you can come up with vehicle miles traveled.

And then you can apply some formulas and come up with how much revenue and gasoline tax, what percentage of the vehicle registration can be attributed to that road. And you come up with the total revenue that this particular road generates, based on its use.

MR. WILLIAMSON: The reason we have asked for this, is because across the state, there are those who believe that the current tax scenario the state uses to pay for transportation is sufficient to pay for their roads. I hear, whether it is San Antonio or Dallas or Houston, I hear in those communities, we are already paying for our roads.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And so, what are your initial findings? Or are you at a point in time where you can share anything with us?

MR. SAENZ: We have had some examples. There may be some roads out there that generate enough revenue through the use that would pay for the construction and maintenance over the life of that facility.

And of course, what you have on a project is, you have a capital cost and initial construction, which includes design, right-of-way acquisition and the actual construction of that first part of the asset. And then from then on, you start maintaining it through routine maintenance. You have scheduled preventative maintenance programs that go there.

And as the traffic increases, you have to have capacity improvements. So over the 40 year life of the project, you can calculate what the projected cost would be to construct and maintain that asset to keep a level of service that is adequate. So we can come up with those costs.

We can also take that same traffic projection that we used, and generate the amount of revenues that it would have -- that road would have generated. And we are finding that a majority of our roads generate much less than the cost to construct and maintain.

MR. WILLIAMSON: Is it 20 percent less? 13 percent less? 40 percent less?

MR. SAENZ: Every road would vary. You know, if you all recall, I had done the example of 151 in San Antonio. And 151 in San Antonio that looked at the expansion that had just been completed, just looking at from that day forward, not taking into account and before, from that construction for 40 years into the future, that road would only generate about 45 to 47 percent of the revenue needed to construct and maintain that asset.

MR. WILLIAMSON: Tax receipts.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: So on a gasoline tax, on a federal gasoline tax, state gasoline tax, and motor vehicle registration fee apportionment --

MR. SAENZ: Right. Yes, sir.

MR. WILLIAMSON: The users of that road would only contribute between 45 and 50 percent of the actual cost of that road?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: So how would we make up the difference in the current scheme, if that weren't a toll road. How would we make that up?

MR. SAENZ: Well, the way we make up the difference is, you have a common pool. So we would still need to maintain, and still need to operate. So what you do is, you take money that is in the common pool to address your costs that are associated with additional capacity in the future, and the maintenance of that facility.

MR. WILLIAMSON: Well, who contributes to the common pool?

MR. SAENZ: All the taxpayers that drive on our highways.

MR. WILLIAMSON: Every taxpayer in the state, or every taxpayer in Bexar County?

MR. SAENZ: Every taxpayer in the state.

MR. WILLIAMSON: So taxpayers in Dallas contribute to the common pool. And in the case of 151, part of their tax money is used to make up that difference.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And is that the case on, for example, 121 in Dallas?

MR. SAENZ: We haven't run the numbers on it. We are running them now. We now are able to almost take every segment of road in the state, and calculate the revenue and cost ratio, or the revenue. You take the cost and subtract the revenue, and you find out whether you have a gap or not. So we have not run 121, but I would imagine that would be the case also.

MR. WILLIAMSON: But okay, let's assume for a moment, 121 is probably not going to be any more or any less used than 151.

MR. SAENZ: That is probably --

MR. WILLIAMSON: If we can assume for a moment that it would be the same 45 percent tax recovery, so citizens in San Antonio would be paying gas tax, that would go into the common pool. And the common pool would be used to make up the difference.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: And what happens when the common pool is $86 billion short over a 50 year period. Who makes up that difference?

MR. SAENZ: We don't. The needs are $86 billion over a ten-year period of time. And if the pool, the money is not there, then in essence, we don't get to maintain our roads to that high level, or we don't get to construct additional assets.

MR. WILLIAMSON: So if we are $86 billion short, the way the shortage is made up through increased congestion.

MR. SAENZ: Increased congestion.

MR. WILLIAMSON: Degrading air quality.

MR. SAENZ: Degrading air quality.

MR. WILLIAMSON: Increased accident rates, deaths and damage on the highways.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Less economic opportunity and deterioration of our road beds.

MR. SAENZ: That is correct.

MR. WILLIAMSON: So in essence, leave it for our children to figure out how to solve the problem.

MR. SAENZ: That is correct.

MR. WILLIAMSON: Members, do you have -- I want to go to the San Antonio delegation at this point. But do you have any questions or any dialogue you wish to have with Mr. Chase or Mr. Saenz?

MR. HOUGHTON: I have got one. It is just a simple matter. Out of the full gas tax receipts in the State of Texas, what goes to new construction?

MR. SAENZ: I guess, in looking at the big picture, when we look at how much we are spending for maintenance and rehabilitation, which is not new construction, our numbers are somewhere between $2.1 and $2.3 billion a year. If you look at how much revenue the 20 cent state gasoline tax brings in, it brings in about 2.1, 2.2. So really, all our money, the equivalent amount of our state gasoline tax is being used just to maintain the 79,000 miles that we have.

MR. WILLIAMSON: Is that amount going up or going down?

MR. SAENZ: It is going up. Our system is getting older. I think last I checked, our average life of our system was about 45 years. So the older the system, the higher the maintenance cost.

MR. HOUGHTON: Where does the difference come from?

MR. SAENZ: What is the difference? Some of the federal money can be used for maintenance. You saw that Coby talked about interstate maintenance. So we used, and we commingled monies where we can use federal money to cover some of the maintenance. We do that now.

It all is basically a balance of cash management. And as we said earlier, the federal money is a reimbursed amount. So we have to spend state dollars, and then we get federal dollars to come back. And then we use those federal dollars on other projects. So it is just managing cash flow and managing accounts.

MR. WILLIAMSON: Do we contract in -- we contract in multi-year cycles, right?

MR. SAENZ: Yes. We put together a ten-year unified transportation program, that is basically a financially-constrained program. These are the projects that we foresee that, based on the revenue that will come into the state, both in federal and state gasoline tax, federal reimbursements, the projects that can be let, of course, then the project development process is a long process.

You have got the preliminary engineering. You have got to do design. So we have consultant contracts on board to do some of that work. We do some work in-house. And of course, we then let the construction projects. And of course --

MR. WILLIAMSON: So we let the estimated dollar cost of our projects, according to the estimated cash flow from all sources of cash.

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: So there are some in the state that believe we have billions of dollars in the bank. Is that the case?

MR. SAENZ: We don't. I think James could probably tell you what our balance in our account is at any time. But if I remember correctly, the last thing to report that I saw, we had about $160 million in the cash balance, but we had an outstanding loan of $300 million, because we had to cover some federal reimbursements that were delayed.

So we try to, now that we have the tools, we try to utilize all the revenues or all the sources of money that we had, and keep as close to as possible to zero, so that we can put those on the ground faster. It is balancing the money is, versus what our best projections of how the money is going to roll out.

MS. ANDRADE: Amadeo, we may have a cash balance, but it is all committed.

MR. SAENZ: It is all committed. Yes, ma'am.

MR. WILLIAMSON: Contractually committed.

MR. SAENZ: It is contractually committed. We have contracts for design. We have contracts for construction. Construction projects average for the state about three years to complete.

So contracts that we let three years ago are being finished this year. Contracts we let two years ago will probably go into -- some will go into this year. Some that we are letting this year, over the next three years.

But we know that we have a revenue source coming in, in the gasoline tax. We know that we are able to go back and ask the Federal Highway Administration for the reimbursement of the federal dollars. And that is how we manage the cash flow. But everything is committed.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Anything else? Anything of Coby?

MR. HOUGHTON: I just have one question, Coby. When you look at the gross numbers on the gasoline receipts at the federal level under SAFETEA-LU, and then you read reports like the U.S. Chamber of Commerce report that the Highway Trust Fund will be insolvent by 2008, can you describe that to --

MR. CHASE: Very briefly, yes. The Congressional Budget Office in particular is projecting that by 2010 or so, there won't be enough money to pay for -- the Highway Trust Fund will go negative. That is just a simple point of fact.

MR. HOUGHTON: And then it is based on appropriations from Congress to make up the difference.

MR. CHASE: Well, you would have to scale back the next generation of highway bills to something smaller than it is now.

MR. HOUGHTON: And then we would be a loser in that effect.

MR. CHASE: Historically, yes. That is an accurate bet.

MR. WILLIAMSON: Okay. Well, Coby and Amadeo, thank you for sort of establishing for the rest of the day some statistics that we want to deal from. Mike, at this point, I want to leave the discussion items, and move to the San Antonio delegation and the opposition presentation.

For those in the audience who are accustomed to our regular behavior, it will be irregular today. We will not take a break at this point, or following the San Antonio delegation, we will go straight through, and then we will take about a ten minute break and let everybody kind of catch their breath.

Joe? A friend of transportation. How in the world are you?

MR. KRIER: Yes, sir. I am fine, Mr. Chairman. Thank you. Chairman Williamson, Chairman Johnson, Commissioner Houghton. Before I go further, I want to say how proud we in San Antonio are of Hope Andrade, our Commissioner. I want you all to know that we not only seek her advice and counsel, we follow her advice and counsel on all matters affecting transportation in San Antonio and on a lot of other matters. But certainly on those in transportation.

I am Joe Krier. And I am here in two capacities; as president and CEO of the Greater San Antonio Chamber of Commerce, and I am pleased to serve this year as the Chairman of our San Antonio Mobility Coalition, our public-private partnership, dedicated to addressing transportation funding challenges in our region.

We have a number of SAMCO members in the audience this morning. And I would like all of them to stand at this time to be recognized. Would all you SAMCO folks stand and take a wave at the commissioners?

(Applause.)

MR. KRIER: Now I know you are going to hear later from opponents of some the strategies that we will be discussing with you. And I wanted to stress that SAMCO is a broad-based coalition that enjoys the support, not only of Bexar County and the City of San Antonio, and our VIA metropolitan transit, the Greater Chamber, the San Antonio Hispanic Chamber, the North San Antonio Chamber, the South San Antonio Chamber, the San Antonio Real Estate Council, and numerous private sector firms.

On behalf of all of those public and private and non-profit organizations, we are presenting to you our annual update on what is going on in our neck of the woods, and thanking you for your help in the past, and we will be talking about some future opportunities. I want to start with a thank you.

You will see from the chart we have shown, thrown up for you that TxDOT has made impressively higher investment levels in our district, in recent years. Since 2003, annual construction volume in San Antonio has almost tripled, rising from $178 million in 2003, $280 million in '04, $400 million in '05, and projected to reach $470 million in 2006. Several key sections of I-10, IH-410, U.S. 281 and other high priority quarters are currently under construction. Thank you for your support for that.

Other projects are being accelerated and expedited with aggressive use of a number of the new funding tools that you encouraged us to look at and that we have taken advantage of. Those tools were provided us not only with your help, but that of the Legislature.

I would like to also say a big thank you to David Casteel to our district engineer who is with us. You have an outstanding nationally recognized staff, but we are very proud of our San Antonio district staff. And David, would you stand up, and could we give David a round of applause. Where are you, David. I know you are here somewhere. There he is.

(Applause.)

MR. WILLIAMSON: Joe, did he go to UT?

MR. KRIER: I think the appropriate response to that, Chairman, is whoop. Is that all right, David? We have a number of San Antonio leaders that will be sharing some comments with you this morning. And then we have a closing video we want to share with you.

But I would like to start with a man who has received national recognition for his efforts with regard to hurricane relief, a truly outstanding -- and I think a guy who will be remembered as one of the great mayors of San Antonio, our Mayor, Phil Hardberger. Mayor?

MR. HARDBERGER: Thank you very much. It is great to see you. It is great to be before you, Commissioners.

MR. WILLIAMSON: Welcome, Mayor.

MR. HARDBERGER: We really appreciate all of the help that you have been giving us. And on behalf of the City of San Antonio and our public and private sector transportation partners, I want to thank you for the efforts that you have all made to accelerate the priority highway and improvement projects for San Antonio. And I am going to tell you a little bit about our needs, which are great. In fact, and I want to get two points across. Thank you for what you are doing, and two, we need more. We have several of our City Council members here, and I am going to ask them to just quickly stand.

I will get them all in here, as well as our City Manager here today. And if you all would just stand and remain standing. Richard Perez, Sheila McNeil, Patty Radle, Roger Flores, Art Hall, is Chip Haas still here? Chip Haas was here last night. And our City Manager, Cheryl Skelly. Thank you very much.

(Applause.)

MR. HARDBERGER: Despite the increased levels of investment, and the application of new tools, our region continues to face significant transportation funding challenges. Primarily, that is due to rapid population and economic growth. That is a good problem to have.

And we are fortunate to have that strong economic growth. But it does present transportation problems for sure. And we know that the demand for transportation services is going to continue to grow, dramatically grow in the years and the decades ahead for San Antonio.

Population, let's talk about population. And there will be some slides that we go along here, should you wish to look at them. But I am going to give you the information anyway. I am of the old school. I can just listen. I don't have to listen and look. So whatever you want to do.

But recent projections indicate that our regional population, which was 1.42 million in the year 2000, is going to increase to 2.39 million in the year 2030. That is a 68 percent increase, or to put it in common figures, 1 million new people.

If we turn now to our economic growth, during the same time period that we are talking about, the employment in the San Antonio region is going to grow by more than 75 percent. The addition of Toyota's North American assembly plant accompanied with 21 onsite suppliers, as well as a lot of rapid expansion in the biotechnology, health services, financial, higher education sectors, indicate with great certainty that the local economic growth is going to be a significant factor in generating transportation demand.

In the area of international trade, with more than 50 percent of our export-import traffic with Mexico passing through the San Antonio region, international trade expansion is going to place additional pressures on the local and regional transportation network. NAFTA truck traffic through the IH-35 corridor -- and all you have to do is be out there by the way, and you will know what I am talking about -- but that is going to continue to grow at an exponential rate, adding thousands of trucks to the region's already congested highway system.

And the truck traffic is growing by 15 percent every year along IH-35. That is compared with a 2 percent growth nationally. NAFTA related rail traffic is also growing 6 percent a year. And the overall growth in the movement of freight by rail is forecast to almost double by 2025.

The military. Recent base alignment and closure decisions have resulted in our case, not in a loss of people, but in a gain of people. A net increase of more than 4,000 military employees in San Antonio, and the addition of new and expanded missions at Fort Sam Houston, Randolph Air Force Base and Lackland Air Force Base.

The most dramatic of these changes will be at Fort Sam Houston, which is transitioning to become America's hub for joint enlisted medical training. That is everything down from doctors. It does not include the doctors, but all other kinds of medical training.

It will be the largest in the United States, resulting in 13,000 or 14,000 new workers and students, 5,000 families and $2 billion in new construction. Clearly, these military missions are going to benefit the Texas economy. But they will also require us to make additional investments in our transportation infrastructure that is going to serve those facilities.

The regional trade corridors hurricane evacuation routes which we had a recent example of. During that last hurricane season that we just got through, San Antonio served as a center for mass evacuations of citizens from Houston, New Orleans, Corpus Christi and other points along the Texas Gulf Coast. At least 30,000 people came through there around San Antonio; very likely more.

During such emergencies, the regional corridors between these Gulf Coast communities and San Antonio which would be IH-10, IH-37, and U.S. 281 were really inadequate for the purposes. These routes also served as regional trade and statewide connectivity corridors, which is of course then ongoing. We do applaud, and we thank the ongoing efforts of TxDOT to take a fresh look at these regional connectivity corridors in light of the lessons that we have learned from the hurricane experience this past year.

It is also important that our transportation planning move forward in a manner which allows the region to remain in compliance with federal air quality standards. We enjoy the growth, but we don't want the growth to degrade the quality of our air, which has occurred in many other cities in the United States. The San Antonio region has been proactive in air quality work through implementation of an early action compact that emphasizes proactive voluntary approaches and outreach to business and industry to meet a 2007 goal of full attainment.

So I hit five areas here, five trends that are going on which summarize and emphasize our transportation challenges that San Antonio and Bexar County is going to be facing over the next 25 years. And I believe that is all I really have to say, except thank you for how much you are doing for us.

We really do appreciate it. We really do need it. And we are going to need it more and more in the days, weeks and years ahead, almost certainly.

MR. WILLIAMSON: Members, dialogue with the Mayor?

MR. JOHNSON: Mr. Mayor, and I see Judge Wolff there, my observation is clearly you are doing things right.

MR. HARDBERGER: Thank you.

MR. JOHNSON: I salute you and I mentioned last night at the SAMCO reception what your area is accomplishing is, you are trying to stay on the curve, or ahead of the curve and anticipate a lot of the challenges before they actually get there in a direct and painful way. And I salute that. And I salute you for it.

MR. HARDBERGER: Thank you, Commissioner Johnson. I really appreciate your saying it. And we do have a very close relationship between the city and the county in San Antonio and Bexar County. Judge Wolff and I consult virtually every day about one thing or another. And so that is a good harmonious working relationship.

And we are really blessed to have a great city council that also I think has a team approach, rather than an approach of trying to fight each other. And we have got a great city manager. So we have got a lot going for us. But we still have a lot to do, too.

MR. HOUGHTON: I think this is a model that the cities around the state should emulate, and I congratulate you on it.

MR. HARDBERGER: Thank you.

MR. HOUGHTON: There are great opportunities in San Antonio and it is obvious by what the economic development opportunities are being brought forth. I have one question. Is this your leadership of the city, sitting right here with you?

MR. HARDBERGER: It is a lot of it. We have a lot of leadership, but it is certainly that you have got a lot of it, right here in the room.

MR. HOUGHTON: I was going to say, who is in charge back home?

MR. HARDBERGER: The truth is, this is our city council day, and so we are all going to go running home after lunch to start our city council meeting, which usually begins at 9:00.

MR. HOUGHTON: Well, congratulations.

MR. HARDBERGER: Thank you so much, Commissioner.

MS. ANDRADE: Mayor, I want to thank you for your leadership. It is great when I have meetings with you and the Judge, because we are a great community that works together.

But I would like to offer a special thank you, because I know that this is your city council meeting day, and you moved the meeting around so that you could be here. And to all the city council members that are here, thank you so much for driving to Austin.

I know that some of you got stuck on I-35. And it just proves that we do have a congestion problem. I try telling you that. I am on that road often.

But it is just great to live in a city that understands that we do have to put transportation as a priority in our community. And so I thank you for your leadership.

MR. HARDBERGER: You are welcome. And we are proud of you, Hope. It is great to work with you.

MR. WILLIAMSON: Thank you, Mayor.

MR. HARDBERGER: Thank you so much, Mr. Chairman.

MR. KRIER: Mr. Chairman, it was my high school English teacher who first taught me that if you goof up big time, confession and abject apology are the first steps on the road to forgiveness. We had intended for Senator Wentworth and Representative Ruth Jones McClendon to speak before any of us spoke.

And I goofed up and got the Mayor up here first. So we would love to have Senator Wentworth and Representative Ruth Jones McClendon visit with you, and then Judge Wolff will follow them, if that is all right with you, Mr. Chairman.

MR. WILLIAMSON: Absolutely.

MR. KRIER: Thank you.

MR. WILLIAMSON: A sitting member of the Legislature takes priority around here any day.

MR. WENTWORTH: We just did it on the basis of seniority, even though I am not that much younger than the Mayor. Chairman Williams, Mr. Houghton, Andrade, Johnson and Director Behrens, I notice you have had your colleague leave, because he still doesn't have a name plate, so I can't address him by name even. You need to get him a name plate.

Let me tell you, I am grateful for what the Texas Department of Transportation has done for San Antonio for a number of years. We are in the process now of completing the interchange at I-10 and 410, which is fabulous. We are making good progress on the interchange at 281 and Loop 410 near my house, that is going to be fabulous.

San Antonio and the State of Texas, because of our business climate is attracting more and more businesses. We have got Toyota coming. We have got Washington Mutual coming. We have got a lot of folks coming.

And I want to add my accolades to those that Joe Krier has already made of David Casteel. I have worked in my 18 years in the Legislature with a number of district engineers in San Antonio and they have all been good.

But none of them have been any better than David Casteel. He is responsive. He is professional. He is timely. And he is a real credit to the Texas Department of Transportation. And I want to add my congratulations to him.

MR. WILLIAMSON: Thank you for that, Senator.

MR. WENTWORTH: Let me bring a little practical political reality to our discussion. I send out every year a report.

And every other year, before we go into a regular session, I add a questionnaire to it. And I ask the 700,000 people in my six counties different topical questions. And I just did one last month.

I have gotten approximately 16,000 voter responses to the questions. I had 20 questions, and two of them had to do with transportation, because transportation has become a very hot topic in Bexar County.

And these are the two questions. In order to reduce congestion on our public highways, do you favor an increase in gasoline taxes of up to 50 cents per gallon, to fund new highway construction, yes or no. 77.4 percent of my constituents say no. They do not want an up to 50 cents per gallon gasoline tax increase.

Now I heard Chairman Williamson say it would take up to a dollar a gallon. I think that was an exaggeration. So I just put up to 50 cents a gallon.

MR. WILLIAMSON: I do want to -- thank you for giving me the opportunity to clarify that. There are three answers to the question how much does it take?

If we want to make up what has been removed from the state's transportation budget since 1986, to this moment, and then maintain that to 2030, the answer is it takes 75 cents a gallon right now, declining to 35 cents a gallon in 2030. And no provision is made for the population increase that we all know is coming.

If we want to make up for what has been removed in the last 20 years, and provide for the population increase that is coming by 2030, then we start a buck and a quarter a gallon, slide to 75 cents, and then to 35 cents by 2030. And you gave me the opportunity to clarify that. Because a lot of people say, you say a dollar, a dollar and a quarter, 75.

Well, it depends on what your goal is. If your goal is to make up what has been taken away, it is 75 cents today. If your goal is to make up what was taken away and build out for the future congestion, then it is a buck and a quarter, then you can slide it back down.

But you can never get it below 55 cents a gallon if you want to maintain that system. Anyway, that is where I get that.

MR. WENTWORTH: Okay. Well, my constituents at 77.4 percent do not want a gasoline tax increase. So the second question was -- because everybody in my district does want to reduce congestion -- the second question was, if you want to reduce congestion on our public highways do you favor the construction of new highways to be paid for by tolls.

And 54.2 percent of my constituents don't want to pay for them with tolls either. Essentially, they want the highway fairy to pay for new construction.

MR. WILLIAMSON: But he killed the highway fairy.

MR. WENTWORTH: Now let me say as a practical matter, and Chairman Williamson and anybody else in the room, including currently serving elected officials I think will identify with this. I have been in office for a long time.

I was first elected in 1976. I haven't served continuously since then. There was a little six year hiatus. But I have actually served in office for 25 years. As a county commissioner, as a State Representative and now as a State Senator.

The message that my Texas constituents have given me over that period of three decades now really hasn't changed that much. And I hope the Mayor and the councilmen and others will see whether or not this resonates with them, because -- and I understand it, because it is the same message I give my congressman and my county commissioner and my school board members and the rest. And it is this.

I am a Texan, I live in Texas. I am damn proud of it. I wouldn't live in any other state. And by god, we are entitled to the best roads and the best health care and the best schools and the best parks, and the safest streets, which means the finest prison system known to man. And oh by the way, while I have got you on the phone, don't raise my taxes.

That is the tightrope that all elected officials in this state try to walk. Between either the requests, or in some instances, the demands of our constituents for certain services, but the lack of enthusiasm about giving us the money to pay for it.

So I appreciate what you all are attempting to do. As you may recall, six or eight years ago, when Kip Averitt was still in the House, and Clyde Alexander from Athens was Chairman of the House Transportation Committee, they came up with the idea.

As you all know the Constitution does not allow the Senate to initiate tax bills. They have to initiate in the House of Representatives. They came up with the idea of increasing the gasoline tax by a dime a gallon. I couldn't introduce that bill in the Senate.

But when I heard about it, I said, it is a good idea. We need to do something to address congestion. It takes money to build these highways. So I told both Clyde and Kip that I would be the Senate sponsor of that bill, in the Senate, if they got it out of the House.

That news got made public, and Governor Perry announced that it doesn't make any difference what the Legislature did on raising that gasoline tax, he would veto the bill if we passed it. So that is taken off the table.

So it looks to me like the question at this point is, we do either nothing, which is what you all don't need to be reminded, which was the policy that the City of Austin adopted years ago. Don't build them, and they won't come doesn't work. They didn't build them. People came anyway. And Austin is trying to catch up.

So it is either, we do nothing, which is not an acceptable alternative in my view, or we do tolls. That is the point we are at. And I am grateful for the work that you all perform; the service you provide.

And I am grateful too for the multimodal approach you all are taking. I would encourage you to continue working on getting Union Pacific to move their lines.

And I appreciate the help you have been to the Austin-San Antonio commuter rail district. That is a bill that Senator Barrientos and I got passed nearly a decade ago. And it is more needed now than ever.

And with that, I thank you. And Chairman Williamson, we have got another House member who has sneaked in since you introduced me.

MR. WILLIAMSON: Members, any dialogue with the Senator?

MR. HOUGHTON: I just thank the Senator for his support on transportation issues. A champion, really appreciated. And moving those railroad lines, there is no railroad fairy, either.

MR. WENTWORTH: Oh, I understand.

MR. WILLIAMSON: Anything else?

MS. ANDRADE: Senator, it is always a pleasure to be with you. And thank you so much for coming here. You are right. Thank you for the history that you have given us.

But you are absolutely right. You know, what we are dealing with is extremely difficult because it is different from the way that we have done things before.

And so sometimes, we need to be reminded that we don't have any choices. And those are tough choices that we have to make, that we do have to prepare our community and our state for the growth that we are experiencing. So thank you.

MR. WENTWORTH: Thank you.

MR. JOHNSON: Senator, I just want to echo what my colleagues have said. It has been a pleasure noting the consistency that you deal with, all the issues that you deal with, and especially from the transportation side.

You have just been a true champion of finding solutions to the challenges that we face. And I have certainly enjoyed my association with you, and I thank you for what you do for this great state.

MR. WENTWORTH: Thank you, Commissioner. I am glad that I am still on the Senate Transportation Committee to, and will continue to be actively engaged.

MR. WILLIAMSON: You have always spoken directly, since your days when you and I were colleagues in the House, and I appreciate the direct communication.

MR. WENTWORTH: You bet. Thank you, sir.

MR. WILLIAMSON: Thank you, sir.

MS. MCCLENDON: Good morning.

MR. WILLIAMSON: Good morning.

MS. MCCLENDON: Mr. Chairman, Commissioners, Director. On behalf of the San Antonio area, and particularly my House District 120, I want to express my appreciation to each of you, for your magnificent staff, and especially our San Antonio area staff for the increasing level of investment you are making in San Antonio, and for the assistance in developing transportation solutions for our region.

Since early 2000, we have really gotten our act together. And I really appreciate the fact that you have recognized our efforts. In particular, I want to sincerely thank you for your efforts in working with me, and the rest of Bexar County, the Union Pacific Railroad and other key stakeholders, to identify and implement a plan to relocate freight rail carrying dangerous toxic chemicals away from our densely populated neighborhoods.

And Mr. Chairman, I just want to thank you especially for your sage advice and counsel as I work to steer the relocation effort through the Legislature and get them to understand that rail relocation is a safety issue, and it is very important to the State. I measured this gigantic project in four steps.

The first step was to get it past the Legislature and to get the government decided. And that has happened. Then the next step was, of course, the amendment that we passed in November to get the voters' approval, and that has happened.

The third step is to secure the funding. And then the fourth step of course, and the final step is construction. With the passage of Proposition One in November, the Texas Rail Relocation Fund was approved by the voters of Texas.

We now begin step three. And I will be working with colleagues in the Legislature on the Appropriations Committee to find sources of funding for this huge project, and we'll start making plans to implement the actual moving of the rails.

I look forward to working with you and all of your staff, and all other interested parties of these next two phases of this monumental production. In closing I want to join the others in appreciation for your newest member, my friend, Hope Andrade, I will tell you, she truly gets it.

But don't go to California with her, because she will get you in trouble and will make you have to take shots and stuff. So don't do that. But again, I sincerely appreciate all that you have done for San Antonio. That is a long story.

MR. HOUGHTON: I think you may want to clarify that.

MS. MCCLENDON: I am going to let Hope handle that. Thank you for all you have done. And we really appreciate your efforts.

MR. WILLIAMSON: Well, you were a tremendous asset to the State. Not just San Antonio and Bexar County, but the State, in advancing the rail relocation bill. And we do believe it is as much a safety issue as it is an economic development issue.

We think ultimately, it is also a congestion relief issue. Because we believe that if we can figure out how to get, primarily the UP, the BNSF and the Kansas City Southern, on routes away from our urban areas, we will off load truck containers onto railcars, which will reduce the congestion on all of our highways. So we think it is a three-for, long term.

But it wouldn't have worked, if you hadn't been so articulate in advocating the safety side of it in the House. And we owe you a great deal of gratitude for that.

MS. MCCLENDON: Thank you.

MR. WILLIAMSON: Members?

MR. JOHNSON: I just wanted to say it is great to have you here. And thank you for championing so many very strategic issues, and especially the railroad relocation. I know it is vital, not only to your district, but you know, the community and the state, in ways that the Chairman has mentioned. And I certainly have enjoyed working with you on some of the enhancement projects.

MR. WILLIAMSON: What was the name of that bridge?

MS. MCCLENDON: It is the A Street Bridge.

MR. WILLIAMSON: The A Street Bridge.

MR. HOUGHTON: I look forward to working with you on the rail relocation. We had some meetings on that internally, on the funding sources, and some ideas and concepts.

And I am glad you got to go to California. That is a prime example of private sector and the public sector coming together, and making something happen.

MS. MCCLENDON: Absolutely.

MR. HOUGHTON: But thank you for your efforts.

MS. MCCLENDON: Thank you.

MS. ANDRADE: Representative McClendon, thank you so much for everything you have done for this State, and for our community. And I promise you that if you go on another trip where we are trying to find opportunities to fund our rail fund, that you will not get sick. And so it really was not my fault.

MR. WILLIAMSON: Everyone told us that you were the one that chose the restaurant.

MS. ANDRADE: The food was good, right?

MS. MCCLENDON: The food was delicious.

MS. ANDRADE: And the company was wonderful.

MS. MCCLENDON: Absolutely.

MS. ANDRADE: So thank you, and I am so proud of you and I am so proud to call you my friend.

MS. MCCLENDON: Thank you.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Thank you, ma'am.

MS. MCCLENDON: Thank you.

MR. WILLIAMSON: Oh man, my favorite County Judge.

MR. WOLFF: Wonderful, the quality of Ric Williamson, who is able to convey to anybody exactly how he feels. We have enjoyed that. I really want to thank Hope again for the tremendous work she has done -- we have come a long way, almost five years now, I guess, with pulling the community together. And trying to be a partner with the department.

We still have a long ways to go. The landmark in Texas metropolitan transportation plan released by TxDOT in October of 2004 identified $8.4 billion transportation funding gap for San Antonio, over the next 25 years. This number doubles to $16 billion when unfunded rehabilitation needs are considered. And still more will be needed to adequately address local street construction needs.

I suspect just about everyone in this room is familiar with that gap, and similar gaps in other Texas metropolitan areas. We all share a common challenge to reduce or eliminate these gaps. To this end, officials from various local and regional transportation entities, the Alamo RMA, Bexar County, the City of San Antonio, VIA, MPO, ACOG and SAMCO are partnering with TxDOT to apply the new funding tools made possible in recent years by actions of the Texas Legislature and Texas Transportation Commission.

By aggressively applying these new funding tools, and by undertaking related efforts to focus on multimodal and regional solutions, significant transportation projects are being accelerated in Bexar County, and in some cases, for decades ahead, earlier than what had been the case with traditional funding approaches. Taking together the application of new funding tools, we'll begin to take a significant bite out of the projected $8.4 billion funding gap.

Here are just a few examples of how we are applying the range of new funding tools in Bexar County and San Antonio. $34 million in new annual funding is being generated through our advanced transportation district, which was approved by the voters of San Antonio in November 2004, to leverage additional street, transit and highway improvements.

As a result, ADT leveraged six major highway projects along portions of IH-35, 410 and IH-10 have been authorized for construction this year, rather than waiting up to ten more years to bring these projects online. We thank the commission for working with us to expedite these projects, which were first presented to you in June 2005.

ADT money is being also used to upgrade city streets, and to make significant operational improvements in our mass transit system, as Tim Tuggey, VIA Chairman will shortly address. We are also accelerating delivery of projects through the Alamo RMA, and a proposed 70 mile system of new toll lanes along U.S. 281, 1604, and IH-35 and other high traffic corridors. The new lanes will provide additional needed capacity, faster congestion relief, and a choice for motorists in the existing non-toll lanes will remain available to motorists.

A third tool we are applying is pass-through financing. Specifically along portions of FM 3487, Culebra Road, and FM 2696, Blanco Road. Bexar County and TxDOT staffs continue to negotiate specific terms and we anticipate the first of these agreements would be brought before the commission for your approval in April of this year. Again, the primary goal is to accelerate project delivery by several years.

Other funding tools and approaches we are applying in the region include the Texas Mobility Fund, bonds for future toll lane projects. Project 14 bonding to accelerate non-toll capacity. Expansions along IH-35, and 410 and U.S. 281 interchange. Potential private sector dollars from the CDA proposals. And some $30 million in federal earmark for eight priority projects.

To illustrate how the new tools are being applied in Bexar County, the MPO has prepared the following two slides showing our 25 year transportation plan before and after the addition of the new funding tools. Through application of these new funding approaches, 264 additional lane miles have been added to the MPO plans, or a $964 million in new or accelerated investment and transportation infrastructure.

With regard to freight rail, a San Antonio rail master plan is being developed through three ongoing studies that will examine options for one, the relocation of rail through freight out of the Austin-San Antonio corridor to the east of IH-35. Relocation of rail freight to bypass the metropolitan area of San Antonio, swing it around southeast and missing, and taking that freight out of the middle of San Antonio.

And potential improvements to existing infrastructure, related to the first two goals, and most important as Senator Wentworth has stated, with the moving of freight out of the IH-35 corridor, then our commuter rail system will begin to function in that area. A specific list of projects and their costs and benefits will be prepared as phase two of the rail study, expected to be completed in the fall of 2006.

Improvements to the regional rail infrastructure is also a critical piece of a state's infrastructure in this region serves as a crossroads for both north, south, and east-west lines. Given the proximity of San Antonio to several border crossing and expected increases in freight coming from San Antonio. And improvements to rail infrastructure will alleviate some of the strain that the expected increase in freight will place on the roadway system.

We support the commission's continued efforts to address congestion and safety issues along key rail corridors in the state, and to incorporate specific rail elements in the design of the Trans-Texas Corridor project. We are also supportive of the Legislature to capitalize the Texas Rail Relocation Fund, and fund it, which was approved by the voters in November.

Clearly, significant funding will be needed to address rail relocation needs of all major areas in our state, and I am very thankful that the commission understands the significance of increasing our capacity in rail to be able to not have as many trucks on our highways, and it is a major safety issue. I would now like to introduce Bill Thornton, Chairman of the Alamo RMA who will provide a brief update of the development of our toll lane system.

MR. WILLIAMSON: Members, any dialogue with Judge Wolff?

MR. HOUGHTON: Just it is very refreshing, Judge, to see the city and the county going down the same path together. And that is something again, I would hope other communities around the state would emulate.

MR. WOLFF: Mayor Hardberger is providing great leadership on the City Council, and the City Council that is here today, I think is one of the best city councils that I have seen in the last ten or 20 years. And they are really providing good leadership and we are delighted to be working with them.

MR. HOUGHTON: Congratulations.

MR. JOHNSON: Judge, I wanted to repeat what I told the Mayor. Clearly, San Antonio and Bexar County are doing a lot of things right. And it is really great to see.

MR. WOLFF: Well, it took a major effort, I think, in the last five years, pulling together city, county, VIA and the private sector, which has played a key role in helping us develop these plans, and the voters of San Antonio, voting by some 58.15 percent to assess a sales tax to help.

MR. HOUGHTON: 58.15.

MR. WOLFF: I remember that number. We had a good campaign.

MS. ANDRADE: Judge, I want to add to thanking you for being visionary and so committed to our community. And you know, at times, I am saddened when you are criticized, because I know where your heart is. And I know that you would never do anything to harm our community.

You are just trying to help prepare it. But thank you. Thank you for being strong and hanging in there.

MR. WOLFF: Well, if we will continue to get over the facts as you have laid out today, and explain to the citizens of Bexar County what we are faced with, I think they will understand we need to take all these steps. There is a lot of distortion in the community today about what we are doing. And we have got to do a better job of communicating what the challenge is, and what we are planning to do.

MS. ANDRADE: And I will help you on that. Thank you.

MR. WILLIAMSON: You really are one of my favorites. I think you are a very good county judge. My daughter is well represented.

MR. WOLFF: Thank you very much. We like working with you, even though you can be tough sometimes.

MR. WILLIAMSON: That is about the kindest thing that has been said.

MS. ANDRADE: Judge, but we seem to work it out at the end. Right.

MR. THORNTON: Nelson has kind of set this nest of warmness for me to land in now. The problem we have got is there are too many straight shooters in this room. And that is not bad in Texas though.

Texans where I grew up in West Texas, they kind of like that. In fact, the only worse thing you could be called in West Texas was a liar. And that is one thing we're talking about here, is getting the facts out so people using the correct information as we face these issues.

And speaking of straight, you have always been a straight communicator. But you have been a steadfast commitment to what you said you were going to do. And I had banked on that. I have bet on that, and I will do it in the future.

The commission has followed through with every thing you have asked us to do. You have given us the resources. We came to Corpus. We said help us with a little financial assistance, and you came through in spades. You were wonderful.

We are using that money now to do those studies, to address these issues that you have identified. I think we are doing it in a proper way. We have Terry Brechtel that we have hired. I think that you all have met, is our new -- replacing Tom Griebel as our new president of our organization.

Jim Reed is here from our board, who is spending a great deal of time over here. And let me say in that partnership with 281 where we had our conversation, where do we fit in. The process has been spectacular in your kindness, in your inclusion of San Antonio's people coming over here, and that needs to be noted. Thank you very much.

We are using these additional funds to look at three other projects. Bandera Road, Highway 16, 281 and actually it is Wurzbach Parkway and 281, that area. And also I-35 -- the NAFTA highway, as it comes through San Antonio.

We are doing the work on those today. We may need more toll equity to make those feasible. And we will work with you to develop what that ought to be.

What you see today -- and Ruth is still here. Ruth leaned over and said, we have our act together. Bexar County, San Antonio, the RMA and partnership with the MPO Division, business organizations, we are coming here today as a united front. These elected officials on city council take decisive votes to support what we do. And we are saying thank you to them.

It is not easy to ask people to pay more. But they have done that or are supporting us, rather. And we say thank you to all of you that have done that.

Interestingly, the opposition we have, even what you will hear today is not from Bexar County. From Comal County, New Braunfels, not San Antonio. So I think that is an important note that we need to make on this.

I want to say the Governor's name. We are developing or living that vision that was developed several years ago, through you and the Legislature, the commission in adopting this. But it is the most creative way, I believe, the most fair way to address this shortfall that you have identified here today.

It is not a tax, which everyone pays. It is an option. If you don't want to ride in our toll lanes, don't do it. But don't be upset if I choose to do it, and I speed on past you to get to wherever I need to go.

I will be one less car in front of you at that next traffic light while you are still waiting. I think these toll lanes are going to be adopted by our citizens, and they will be ap