January 31 TranscriptTexas Department of Transportation Commission Meeting

Leo G. Welder Center for the Performing Arts214 N. Main

Victoria, Texas 77901

Thursday, January 31, 2008

COMMISSION MEMBERS:

Hope Andrade, Interim ChairTed Houghton, Jr.Ned S. HolmesFred A. Underwood

STAFF:

Amadeo Saenz, Executive DirectorSteve Simmons, Deputy Executive DirectorBob Jackson, General CounselRoger Polson, Executive Assistant to theDeputy Executive Director

PROCEEDINGS

MS. ANDRADE: Good morning. It is 9:10, and I would like to call the January 2008 meeting of the TexasTransportation Commission to order.

It is a great pleasure for us to be here in Victoria. It is our practice to take the commission meetings on theroad, out of Austin, three or four times a year. This gives us a chance to see firsthand how our localpartners are addressing their transportation challenges. I hope it also provides an insight on how weconduct our business.

Note for the record that public notice of this meeting, containing all items on the agenda, was filed with theOffice of the Secretary of State at 4:17 p.m. on January 23, 2008.

I would like to begin this morning's meeting with one item of unofficial but very important business. Onemonth ago we lost our chairman, Ric Williamson, suddenly and unexpectedly. Ric had so many talents andspecial qualities, and he was a tireless advocate of providing for a 21st century transportation system forthe state of Texas. In his writings, Ralph Waldo Emerson challenged people to not go where the path maylead but to go instead where there is no path and leave a trail. And that is exactly what Ric Williamson did.His legacy in transportation will be longstanding and he is greatly missed.

In recognition of his life and his many contributions to the state of Texas, I would ask that we take amoment of silence in honor of Ric Williamson.

(A moment of silence was observed.)

MS. ANDRADE: Thank you.

We also want to offer a hearty thank you to all of the City of Victoria officials, those from Victoria County,the Port of Victoria, and of course, our own employees here in Victoria and throughout the entire YoakumDistrict, for all of their work in hosting us today. We really appreciate the warm reception that we havereceived.

The Transportation Commission met here in Victoria once before, exactly ten years ago in January of 1998.While it is the first meeting here in the crossroads of Texas for this group of commissioners, on behalf ofthe department, I would like to say that it is certainly great to be back and that we appreciate yourhospitality very much.

As is our custom, we will open with comments from the other commission members, beginning withCommissioner Fred Underwood, followed by Ned Holmes, and Ted Houghton. Commissioner Underwood.

MR. UNDERWOOD: Thank you, Madame Chairman.

I want to thank the men and women of Victoria for the great hospitality we've received. I also want tothank the TxDOT employees for a fantastic dinner last night, and also you should be proud of youreconomic development people -- they did a great job of hosting us yesterday. Thank you, Victoria.

MR. HOLMES: Welcome. We appreciate your interest in transportation. We're delighted to see you here thismorning. I agree with Fred. We had a great tour of the port yesterday. Adrian was helping us and Howard,and we thank you for that.

I'd like to make just one brief comment. I think most of you know Lonnie and would agree that we think hedoes a fantastic job for the Yoakum District and for Victoria, and I think we're all lucky to have him.

Lonnie, we appreciate your organizing and helping with this event, and Randy, we thank you for all thehard work you put in putting this together, but also what you do for this district and the state of Texas.Thank you.

MR. HOUGHTON: Welcome this morning, and good morning to all. This is a whole lot of fun getting outinto the other parts of the state of Texas, getting away from the center of influence -- as some people callit -- Austin, but this is where the action is out here.

Lonnie, thank you again for everything. I've been down here several times and a great part of the stateand I enjoy being here. And to all the folks that have hosted us while we have been here, again, welcome.

MS. ANDRADE: Well, thank you very much, commissioners, and I also echo my fellow commissioners. AndLonnie, we do thank you very much and appreciate the great evening that we had with our staff. That'sone of the many highlights when we come out of Austin is to spend time with our employees and to get topersonally thank them for the great work that they do for the state of Texas and for our department. And Ialso thank all of you for making us feel so special during this visit. Thank you.

Let me remind everyone that if you wish to address the commission during today's meeting, we ask thatyou complete a speaker's card at the registration table in the lobby. To comment on any agenda item or foropen comment, we ask that you fill out a card and identify that agenda item. If it is not an agenda item,we will take your comments during the open comment period at the end of the meeting. We also requestthat each speaker limit their comments to three minutes.

I will now turn this meeting over to our executive director of the Texas Department of Transportation,Amadeo Saenz.

MR. SAENZ: Thank you, Madame Chairman.

I would now like to call up Lonnie Gregorcyk. Lonnie is our district engineer from Yoakum. And Lonnie, Iwant to thank you, just as the commission has said, for the hospitality. It was great being with you and

your folks. And we've been in your district for the last few days doing these town hall meetings. We wantto thank you for all the help and support that you and your folks did on those meetings, as well as thegreat work that you are doing as a whole for the district.

Of course, the Yoakum District stretches over eleven counties, from just north of Corpus Christi up towardsHouston, and Lonnie is going to tell us a little bit about what's going on in his district, as well as introducesome of our other hosts and local leaders that he works with to develop transportation projects in this area.

So Lonnie, I'll turn the program over to you.

MR. GREGORCYK: Thank you, Mr. Saenz.

For the record, I'm Lonnie Gregorcyk, the district engineer in Yoakum.

Madame Chair, commissioners, Mr. Saenz, we are extremely excited to have you here. Hopefully we had afun time last night. We're regular people; we like to be comfortable. And I can't thank the city, the county,the VEDC, and all those that have come together to pull this off. And I appreciate the kind words and thesupport, but it's employees and our community and our partnership throughout this region that reallymakes these kind of things happen.

There's a number of folks that would like to make comments this morning before we do the districtpresentation and actually the city presentation as well. So if you will allow me to introduce our mayor, WillArmstrong, from the City of Victoria to give us some comments and welcome this morning. MayorArmstrong.

MAYOR ARMSTRONG: Thank you very much, Lonnie, commissioners, audience. I came into this room and Isaw this contraption back here in the back, and I checked with the building department and no one hastaken out a permit to build a guillotine. So I think we can hold this meeting on a real high plane.

(General laughter.)

MAYOR ARMSTRONG: Victoria is an old city. It was established in 1824, and there have been a lot ofreasons to come to Victoria. And back before Europeans came, the Native Americans walked up and downthe coast, and the best place to cross the river when you're walking is in our city park. When MartinDeLeon, in 1824, established this town, it was necessary to be able to cross the river and he establishedthe town near our low water crossing of the Guadalupe River. Anyway, so people have been coming toVictoria for an awful long time.

And most old cities have to reinvent themselves, and that's exactly what we're doing right now. And wecan't do this without partners, and you're one of our very dear, most important partners, and you'rehelping us every day reinvent our city.

It's my pleasure to welcome you to Victoria and I hope that none of you had to walk to get here. Thankyou.

(Applause.)

MR. GREGORCYK: Thank you, Mayor, and this is a beautiful facility that they're providing for us today, andwe're very proud of this facility in our community.

Next, I would ask Judge Donald Pozzi, our Victoria county judge, to come and make opening remarks.

JUDGE POZZI: Thank you, Lonnie.

Madame Chair, commission members, Mr. Executive Director, it certainly is my pleasure to welcome youhere to Victoria today. We're honored to have you. We have certainly enjoyed the past couple of days. It'sa pleasure meeting those of you that we have not had the opportunity to meet before.

We hope that it is no accident that you're here in Victoria County. We have had a long-lasting, excellentworking relationship with TxDOT. You may or may not know over approximately the last nine years therehave been approximately 19 projects let or completed in the Yoakum District in our area here in VictoriaCounty. Those project totaled about $146 million. Victoria County, I'm proud to say -- I have been told --Judge Walker was certainly in office at that time -- that we're one of the first to institute the matchingfunds and we were proud to do so. And the city and Victoria County, over that period of time, contributedor matched about a million and a half dollars.

So we appreciate all of your efforts. Certainly those things would not have been possible without theexcellent cooperation that we have, not only with the TxDOT commission in Austin, but certainly with thedistrict engineer, certainly with the area engineer. You have two great people and some great staff workingfor you in this area.

It has been my pleasure over the last two or three months to get to know Commissioner Houghton verywell. We're working on some very significant issues here in this area. We look forward to continuing thatpartnership. We are very proud that you have undertaken your role and your leadership, and decision-making is to a point, corridor advisory and segment committees soon to be formed. We know that you arelooking for local input. I can assure you that from the leadership and citizens of Victoria County you will getthat. We look forward to that continued working relationship.

And again, we're proud to have you here, you do us great honor. Thank you.

MS. ANDRADE: Thank you very much. Members, any comments?

(No response.)

MS. ANDRADE: Thank you very much, Judge.

MR. GREGORCYK: Thank you, Judge.

We have a couple of other judges that come from the rural perspective that would like to make comments,and the next would be Carolyn Bilski. Judge Bilski hails from Austin County. She's a Road Hand recipient acouple of years back. Judge Bilski.

JUDGE BILSKI: Good morning. It is a pleasure to be here, and I want to thank you for the good work youdo. I do recognize that the challenges you face are quite like the challenges we face locally except on amuch larger scale, and we appreciate the town meeting that we did have Monday night. TxDOT staff did anexcellent job of letting our people vent and express their concerns and frustrations.

We have a big project on the road right now that I think has kind of been mainstreamed. Highway 36widening is huge, we've had so many fatalities, and I know the funding issues are quite significant, and aswe look for our letting project for the Highway 36 widening between Sealy and Bellville, I'm sure many ofyou travel that road. We were able to get 35/38 widened and that was because we had a commissioner tellus: I've seen the problems there in Sealy at Interstate 10 and Highway 36. And I'm sure if you've traveledHighway 36, you've seen those problems. And we will do anything we can.

Senator Armbrister told me ten years ago when I was at that commission meeting. I said, Why is VictoriaCounty getting all these projects, what are they doing? And he said, Because the local leadership is workingwith the TxDOT staff and the commission to put money away for right of way. Well, we started doing thatright away so that we could also be partners with TxDOT.

We look forward to a long, good relationship with you, and anything that we can do to assist you in yourwork, we'll be glad to do so. Thank you.

MS. ANDRADE: Thank you very much.

MR. GREGORCYK: And our final county judge who would like to speak is from Jackson County, and he mayhave comments towards you, Mr. Holmes. Commissioner Holmes and Judge Stafford have been friends formany years. I'm proud to introduce Judge Stafford from Jackson County.

JUDGE STAFFORD: Thank you, Lonnie.

I just wanted to welcome you here to our District 13, Yoakum area. It's always good to go out and see. Wecan talk to you in Austin many, many times about the traffic and the flow and everything, but unless youreally come to the area. So I really admire your decision to move these meetings around the state so thatyou can get a feel for it.

The only concern I would have was that you weren't here for a Friday night, Sunday afternoon. If youhappen to come those times, 59 Highway -- Ned, especially if you were driving down from Houston -- youwould see a tremendous change in our traffic patterns. Those particular times are huge.

So we are a true traffic growth part of the state, and we thank you for coming here and acknowledging ourproblems and trying to work with us on those for the future. So thank you very much for coming,appreciate it.

MS. ANDRADE: Thank you, Judge.

MR. GREGORCYK: Thank you, Judge.

Next we have comments from Representative Morrison. Representative Morrison is off at a meeting, but heraide is bringing her comments to the commission this morning.

MS. PETERSON: Madame Chair and commissioners. On behalf of Representative Morrison, I wanted tothank the commission for holding this meeting in Victoria, but more importantly, I want to thank thecommission for coming to hear the thoughts and concerns of the people of District 30.

Unfortunately, Representative Morrison had a previously scheduled higher education commitment in Austinthat prevented her from being here, but she hopes that the commission heard and took to heart thecomments of her constituents Tuesday night.

Representative Morrison believes that we must improve the transportation infrastructure of our state byimplementing reasonable, well-thought-out solutions such as I-69 following the current US 59 footprint andusing the existing right of way. And most importantly, she believes that a productive, honest dialoguebetween the commission and the people of Texas is what will provide the balance between ourtransportation needs and the private property rights that are held near and dear to the hearts of all Texans.

Representative Morrison welcomes the commission to District 30 and ask that you always keep the interestsof rural Texans in mind when you make decisions regarding transportation and the rights of the propertyowners.

MS. ANDRADE: Thank you very much. Give her our best and thank her for everything she does for thestate of Texas.

MR. GREGORCYK: Thank you, Lisa.

And we've had a lot of welcomes here, but I think hopefully you realize these folks all really wanted to lettheir voice be heard to let you know how excited we are for this opportunity. The last welcome is certainlysomebody, as I said, that you know very well, somebody we work closely with, and that's Senator GlennHegar.

SENATOR HEGAR: Thank you, Lonnie.

Thank you, commissioners. I appreciate you being willing to get out in the state of Texas, and I know you

try to make a concentrated effort of that every year to get out through the state, and the state is a bigplace, very big place, as you well are aware.

You know, in the district that I represent, 19 counties -- it's a wonderful part of the state of Texas, it reallyis -- from Houston all the way just south of Austin, to the edge of San Antonio and Corpus Christi and allthe bays. Here in Victoria and the greater area, it's a lot of wonderful people. And I know that you havebeen traveling throughout the state, had just four little old hearings in my Senate district here in the lastfew weeks on Trans-Texas and I appreciate you doing that. I know sometimes those are painful, but Iappreciate your willingness to listen to my constituents and listen to their concerns.

We've had several discussions over the last few days here, as you've been spending time here in theVictoria area, even though I know, Madame Chair, you were stuck in that little old Houston traffic for just alittle while yesterday, but thank you for coming here.

You know, you've been able to see some of the things that are going on here, and even though in this partof the state it's not grown as rapid as our other metropolitan areas, you understand the traffic is increasingfrom 24- to 40 million people. We have tried to have ideas on how we're going to expand for that capacity,with current roads, new roads, and I appreciate your willingness to work with us in the legislature and thegovernor to try to figure how do we best do that. And I know we've got a lot of challenges ahead, Iunderstand that, you understand that.

Our area here has our needs, as the judges have expressed earlier, and I think we can work through thosewith your willingness, your leadership. And oh, by the way, you have your own businesses to run, you haveyour own lives to run, and you do this out of the kindness that you care about the state of Texas. We sharethat concern with you and my constituents share that concern with you.

And so I have no doubt whatsoever that we can accomplish what we need to make sure that we protectthe people who live in the local areas, we move traffic within the state of Texas and we move trafficthrough the state of Texas, whether it's by rail, whether it's by automobile, or whatever mode. And I lookforward to the course of this year and next year as we get out of the next legislative session so maybe wetry to work for some real solutions.

And I know, Amadeo, you've got some big shoes to fill. My constituent, Mike Behrens, has worked veryhard in his area and I think he's going to continue to, even though he thinks he's going to build some barnsfor a few days.

But anyway, I appreciate your willingness to be here, I look forward to working with you, and I appreciatemore than anything your willingness to listen to our constituents and hear how do we solve local problemsand state problems simultaneously. Thank you.

MS. ANDRADE: Thank you so much for being with us, and we certainly are looking forward to working withyou.

MR. GREGORCYK: And now I'm pleased to introduce Mr. Dale Fowler. Dale will give kind of the outlook onour Victoria area and what's going on in our community. He's with the Victoria Economic Development Corp,and they helped us a lot during the festivities of this week. Dale, would you mind coming forward?

MR. FOWLER: Good morning, Madame Chair, commissioners, director. I want to welcome you to Victoria onbehalf of the VEDC, the city, the county and the chambers of commerce. We all work in sync to makeVictoria a great place to do business, and of course, that means growing the region and ultimately growingTexas. It's my pleasure to take the next few minutes just going over some of the attributes that thiscommunity offers to continue investment in our region, both from existing industry and new industry.

I appreciate the kind words about the tour yesterday. I know Adrian was well prepared for that. I'd like totell you that he spent hours preparing just for your tour, but that wouldn't exactly be true. The fact is thatindustry is rediscovering this region and we get to give those types of presentations on a very regularbasis. And so I hope you enjoyed what you saw.

Now, I don't want you to just take my word for some of these things. After all, I know I am the economicdevelopment guy, so I want to show you some examples of what's been going on around here just the pastyear, some of the announcements and projects that are taking place as evidence of what I tell you.

Just the beginning of this year, beginning of this month, International Power announced the expansion ofColeto Creek Coal-Fired Power Station to double its size with about a $1.2 billion investment. It will bringabout a thousand construction jobs for a three- to four-year construction project, and then about 40permanent jobs plus ancillary spinoff jobs.

In addition, right here in downtown Victoria, last year New Coastal Corporation purchased and then beganrenovations of a moth balled gas-fired power plant. That will be an estimated $60 million investment,should go into operation by mid this year, again, creating new jobs back to the community, and we'reexcited about that.

Also, just ending the renovations at the end of 2007, StarTek, a telecommunications customer servicecompany out of Colorado, leased and spent about $10 million renovating a vacant store -- grocery store, ifyou will -- in our community. It had been vacant for five or six years. By June we expect to have about 400new employees in that facility; it's over 200 so far.

And of course, just as the end of 2007 came, Exelon Nuclear announced that Victoria County is going to bethe name on their licensing application for a new twin unit nuclear power facility to be licensed in the southVictoria County area. Of course, if they go forward with their plans and hopefully build that facility, that willmean an estimated 2,000 construction jobs for a four- to five-year construction project, 700 to 800permanent, good-paying jobs in this community. We're very excited about that opportunity.

In addition, last year Lone Star Ethanol announced their intentions to invest about $170 million near thePort of Victoria -- which you saw yesterday -- as well as many existing industries in Victoria and Calhouncounties, Goliad County have announced expansions coming forward. There's growth in our future.

Now, it's not something that we anticipate doing without an investment. This community is preparing forthe future. You can see by the slide, the past three years the City of Victoria has invested over $300 millionin infrastructure projects, $56 million is currently under construction, and over the next three years, aplanned $70 million, including over $40 million right here in downtown Victoria to renovate water and sewerinfrastructure as well as roadways. And I say those things just so you know the community is putting aninvestment back into the community.

Now, we've had some pretty significant expansions in our retail over the past few years, retail stores,restaurants and hotels and motels. Victoria -- and you may have already figured this out -- is increasinglybecoming a hub for many services for the surrounding counties within our area. Sales tax, for example,over the past ten years has nearly doubled in Victoria from $9.4 million in '96 to almost $19 million in 2006.People are increasingly coming to this region or to Victoria from within the region, choosing from cominghere or going to the major metro areas, and instead coming here -- I'm assuming for convenience and allthe great customer service.

Next year we know that there are some additional retailers coming, three new hotels and motels that arealready announced and nearly completed, so that's continuing to grow.

Another great draw for our region is our regional medical facilities. We have two great operations in VictoriaCounty. One, the county-owned Citizens Medical Center which is a 340-plus bed, acute care hospital, theywere recently named in the nation's 100 top hospitals. They also have an emergency and traumadepartment, three rural health clinics, and a state of the art healthplex for rehabilitation and fitness facility,and that's our county-owned facility.

In addition to that, we have DeTar Health Systems, a privately-owned facility with two campuses, one inthe downtown area of Victoria, and then also in the northern area a women's and children's facility. Over300 beds there, full-service, acute care hospital, emergency and trauma. As a matter of fact, in late 2006,

the VEDC commissioned an economic impact analysis of just the medical industry in our community, and welearned that at that time it was almost a billion dollars a year contribution to the local economy, with over4,000 jobs directly related to that industry in this community, and those are conservative numbers -- but areason for people to come to Victoria.

We are continuing to prepare our young people in order to get them ready for the workforce of tomorrow.The community embraces this project as evidenced by the bond election this past year: $159 million wasapproved by almost a two-to-one vote. That bond election and those monies will go to create two new highschools, two new elementary schools, a new junior high, an events center, as well as some renovations tosome of the existing campuses, getting capacity to not only educate more young people but to do it better.

And of course, after we get them through with high school, we want to make sure they're trained andready and educated in higher education, again for the workforce, and we have two great options in VictoriaCounty. One, the Victoria College. Victoria College's enrollment in 2007 fall was just under 4,000 students.They, too, received approval from the voters for a $15.5 million bond election this past year. They're doingsome building renovations and constructing a 76,000 square foot facility that will house the health andscience center for instructional, laboratory, student support. All of this will go to help expand the alliedhealth courses that they can offer.

They have a great reputation with both the medical community for training nurses and our existing industryin this region for providing workforce development, for retraining existing employees, and partnering withus and our new clients to develop educational programs, training programs specifically for those jobs.

Matter of fact, Victoria College has been successful two years ago in receiving a $1.1 million grant fromTexas Workforce Commission, a skills development grant. That grant trained over a thousand employees.And then just recently, received word that they will receive another $1.7 million grant to work with aconsortia of industries in this region to help train and retrain their existing employees, getting them readyfor the future workforce. Very successful and we're very proud of the role that Victoria College plays.

Now, another asset that employers like to see when we're talking to them and when they come to ourregion is that how do we continue to motivate employees to continue their education and keep themgrowing, if you will. That is one of the things that University of Houston-Victoria offers to this region, andthey do it well, in addition to offering advanced degrees for the local citizenry. University of Houston-Victoria enrollment fall of 2007 was almost 3,000, 2,900 students. They offer degrees in businessadministration, education and human development, arts and sciences and nursing. They teach on campusesin Victoria, Sugar Land and Cinco Ranch.

One thing to note about UH-V, they have been honored in several different instances. Recently they hadbegan a degree, a masters of economic development and entrepreneurship, the only program of its kind inour country, and they were recognized recently by Fortune Small Business Magazine in its list of America'sbest colleges for entrepreneurs. And we look forward to great things and continued growth with UH-V. Andit's a tremendous asset when we bring industry into this part of Texas to know that we have these types ofeducation facilities in our community.

And of course, once we get our industries past those things, we have to provide them a place and we haveto provide them with transportation, and I know that's where you guys spend most of your time. Yesterday,some of you had the opportunity to tour the Port of Victoria which offers a true multimodal operation forpotential industry to come to this region, whether it's water transportation with barge, great highwayaccess, or rail transportation, they can offer it at the Port of Victoria. And we've entertained many industriesand I will tell you that there are people looking at this region because of the assets of that port.

Recently, they expanded their portfolio, if you will, by adding over 1,800 acres of new industrial propertyright there on the barge canal, with about a mile of barge canal access, they have highway frontage onHighway 185, there's rail on that site, they also have gas infrastructure with natural gas pipelines andelectric infrastructure on site, and we look to be able to do great things and create many jobs in ourcommunity with this facility and with the help of the Port of Victoria -- a tremendous asset for us.

A few years ago, the city leaders decided that's great to have a site for large industry but what can we dowith the smaller manufacturers, medium size distribution facilities, and what can we do to bring tax baseinto the city limits. And in a cooperative partnership with the VEDC, with the City of Victoria, with the SalesTax Development Corporation, and with the U.S. Economic Development Administration, we were able toput together this 320-acre business park. We call it the Lone Tree Business Center. It's complete with all ofthe infrastructure, including concrete truck access with water, sewer, natural gas, electricity and rail on theback side, ready to build facilities.

There was an investment by leadership but it's a testament to the visionary leadership that is puttingmoney into this community specifically to attract new industry and new jobs for the citizenry. We're prettyexcited about that.

Well, in closing, as the Texas highway system's grown, I'm sure that we will find there are many peoplewho have had huge influences on how Victoria's highway infrastructure has evolved and has developed.One leading Victoria citizen in particular -- and some of you may have known him -- is a great example ofperseverance and leadership, and that was Zach Lentz, who really fathered some of the partnerships thatyou heard about earlier where we partnered with TxDOT to get things done.

Partnerships like the ones Zach helped form with TxDOT have played a major role, and of course,continuing those relationships will play a major role in how we shape the roads of Victoria and thesurrounding region. So far, those partnerships have been responsible for literally millions of dollars ofinfrastructure that have come to the area, including Loop 463 which you probably drove on yesterday. Wecall it Zach Lentz Parkway.

Victoria takes great pride in these strong partnerships and we want to continue to forge that type ofpartnership with you. We owe a lot to those who have gone on before us; we're going to owe even more toprobably you guys. And we want you to know that we don't think that we've arrived, we've just reallybegun and we want to continue to grow the infrastructure that will keep our citizens on the highway, keepour citizens growing, and keep this community and this region of Texas growing.

We thank you and appreciate the partnership that we've had. Welcome to Victoria.

(Applause.)

MR. GREGORCYK: Thank you, Dale. There's a lot of business going on in the Victoria area, as well as acrossthe state, and at this time it's my pleasure to kind of go over a report, a short report on the YoakumDistrict, kind of how we're organized, how we manage those resources that we have to work with, andwhere we're standing on some of the goals that we have set before us, and talking about some challengesthat we all face at the end of the presentation.

The Yoakum District, as Amadeo said, is an eleven-county district and we're nicely nestled between thecommunities of Houston, Austin, San Antonio and Corpus Christi. We call this our suburbia area, and we doenjoy the relationship we have with those communities, but more importantly, we enjoy the relationship wehave with our district partners that have joined us, as well as all of our South Texas group, and I hope toelaborate on these partnerships and some of the things we do to work together throughout mypresentation.

The district is divided into four area offices and these are our field units, and there's a maintenance officein each county.

The first office area engineer is Mr. James Ivy, he's officed in LaGrange, and he takes care of Fayette andColorado counties, as well as a lot of the work that goes on along Interstate 10.

Next we have Mr. Brian Schoenemann. You can kind of see a pattern here, commissioners. We don't have alot of combs in the western side of our district.

(General laughter.)

MR. GREGORCYK: Brian does a great job. He has to put up being in the district complex, he has a lot ofinspectors watching over his shoulder. He takes care of Gonzales, DeWitt and Lavaca counties.

And then we drop down to Victoria, Mr. Randy Bena, who I can't thank enough. He's put a lot of hours intohelp put this thing on. Randy serves with me on the Victoria MPO, and he takes care of the operations inVictoria, Jackson and Calhoun counties.

And then our cleanup batter is Mr. Mark Wooldridge. Mark is housed at our Wharton Area office. Werecently realigned the configuration of how the assignments are to better serve our relationship withHouston because we have several planning initiatives going on with the Houston District, both alongInterstate 10, along US 59, State Highway 36, and some of the TTC-69 issues, so Mark is doing a great jobfor us there.

When you jump to the district office, we have Mr. Paul Frerich, head of our Transportation Planning andDevelopment, and there's Mr. Glen Dvorak who oversees our Construction operations for the district. Nextwe have Rhonda Branecky who takes care of all of our administrative functions, from purchasing to HR --she is our HR person -- and wears many hats for our district, as do many of the employees.

Our director of Maintenance, our veteran, Carl O'Neill, he's our cornerstone during emergency response --he's been through many of them -- and we appreciate his service. Director of Transportation Ops, that's thesigns and signals and safety issues and working with our schools, and Ms. Marla Jasek. And the guy thatmakes sure that we're playing and doing things right is our internal review analyst and our auditor, Mr.Richard Rouse. And last but not least is Public Information, Bryan Ellis, and Ms. Rhonda Moorman whomade sure I was here this morning, she's our secretary, our traffic safety specialist.

And I wanted you to see their faces, but I want to just briefly mention the other 300 employees that arethe face of TxDOT. That's our field units, that's the folks that truly are the heavy lifters. They're out there inour emergencies, they do our emergency response. There's an amazing culture in this department of loyaltyand dedication, not only in this district but I see it everywhere I go. When you go through an example likeJohn had in Beaumont, or when we had Claudette or we've had the fires, that culture is time-honored, andI can't say enough about it.

Going into a little bit more about the area, Dale covered a lot of the Victoria area, but when you look at ourdistrict in general, we're rural in nature. These numbers are based on the USDA national ag statistics. Ithink it's interesting to note that five of the top six cattle-producing counties in the state of Texas lie withinthis region. We also have four of the top five rice-producing counties in this district.

And Commissioner Underwood, this last one is for you. We do have two of the top 25 counties in cotton.And for those of you that don't know, Commissioner Underwood is very active in the cotton industry.

Jumping over to industry, there is a lot of industry and they provide a great tax base as well asemployment base for our area, and you'll see that there's a number of plants and industry in our region.And I think this slide really depicts the tie to transportation: the Intracoastal Canal, the Victoria Barge Canal,our railheads, and our major highways which is US 59. So that industry is an economic engine for our area.

Getting into the basics of transportation, I think it's interesting to note that our district population is about330,000 folks, and we have daily vehicle miles traveled of about 11-1/2 million miles traveled in this districta day. This map depicts the connectivity between our major urban centers and they pass through ourregion: Houston to San Antonio, Austin to Houston, and then to the Valley and Corpus. The growth rate inour district, if you look at just our population, is approximately one percent, maybe a little bit less than that.When you look at the growth rate on these connecting roads, it's ranging in the 5 to 7 percent range onaverage. So our growth rate on our pass-through traffic, yes, we generate freight, but there's a lot offreight and folks moving up and down the roads, and it's about a five-to-one growth rate compared to thepopulation, and I think that's interesting.

And Dale talked a little bit -- and we talk a lot about the Golden Triangle -- we consider ourselves the

Platinum Triangle, so I thought that was something you needed to recognize.

When you get into multimodal, we do enjoy a multimodal system in the district, and especially talking aboutmajor freight and major corridors. We have two active rail lines that are majors: the UP and the BurlingtonNorthern. And you can see they're shown there. Right now there's a lot of work going on, re-establishingthe line between Rosenberg and Victoria, and there's a lot of interest in that throughout the area andthey're moving forward with that.

I want to personally thank Commissioner Houghton. I know we've talked and the city leaders mentioned it.You've put in many hours helping work with that and those issues are really moving forward. Thank you foryour service and help on that.

We are served by four water ports. Two of the primary freight ports would be our Port of Victoria and thePort Lavaca-Point Comfort. We also have ports at Palacios and at Bay City. And you can see the IntracoastalCanal goes along the border of the district, as well as our connecting canal, our Victoria Barge Canal. Thoseare great opportunities for our industry, and you can see from where our industries are located, it moves alot of our product.

In aviation, we have twelve general aviation airports in the district and one commercial airport, and manyof you had the opportunity to use that facility. And I'm going to thank Larry Blackwell. He helped us withputting the facility together last night -- it was a great venue to have our little party -- and he also serveswith us on the MPO.

Public transportation, we have three primary providers:

Golden Crescent, thank Joe and Lisa and all those at Golden Crescent that helped us shuttle folks around inthe buses and hopefully you had a chance to see those, they're really nice, and they're doing a great job.They're serving eight counties, and we take care of the monitoring and oversight for Goliad County for ourCorpus District neighbor.

And when you get up into the northeast, you see there's a four-county area taken care of by Vastina andher folks, and that's Colorado Valley Transit. We also monitor and do the oversight there for the HoustonDistrict and Gary Trietsch.

And then Fayette County, Capital Area Rural Transit, they take care of that for us, so there's just anexample of districts working together.

Sticking on that theme, I want to brag a little bit on the transit, especially here in Victoria. We started afixed route system in 2001, had a rocky start, but it's very interesting to note, for numerous reasons ourridership has been averaging about 21,000 person trips per month, and we've been seeing a steady annualincrease since '04 of about 57,600 person trips per year. And that's really great for a town this size. I thinkit's really starting to take some hold and they're doing a great job.

Getting into some of our core functions, you can see here our letting volume, and this is the generalconstruction lettings that we have had over the years, and the district rocked along typically in the last fewyears of $70- to $100 million. Our peak was in '06 and we had the opportunity to let some very importantprojects, as did much of the state, and we were able to address some great things.

You look at our consultant usage, we typically are running something under $2 million. We do a lot in-house. We have in the past had the opportunity to help some of our neighboring districts, but I think rightnow you can see that we, as many of the districts, are having to consider the funding crisis and fundingsituation that we're facing, and that number of consultants, small as it is in any given year, is droppingpretty rapidly in the Yoakum District as well.

In bridges, our district ranks fifth in the total number of bridges in the state. We have an active program.There are 1,659 on-system bridges and 1,113 off-system bridges. I think there are several things that Ihope you could take back from here. In 2001 we had 16 on-system bridges that were classified structurally

deficient on the state system. Since that time we've been working very diligently to get that number takento zero. At this time we have three remaining. Those three remaining bridges will be replaced within 18months, so we've made headway on the on-system.

On the off-system program, there's several of our county leaders here today, commissioners, we have anactive program working with them. I thank you for the equivalent match program which is essentially theprogram where the federal government pays 80 percent, the State of Texas will pay 10 percent, and if thecounty will take their 10 percent match and reinvest it into other structures and problems out there on theroad, we can get a bigger bang for our buck and improve our bridges faster.

Since 2001 we've replaced 99 off-system bridges, but I think it's interesting to note that 10 percent match,we've done another 188 projects, either completed or programmed, based on those numbers. So thatprogram is really moving forward and you can see that we have made some headway.

In the on-system program, our goal of trying to reach 80 percent good or better by 2011, we've beenpretty steady, staying slight increase -- you can see in the blue there. The red depicts our counties and youcan see that they have really embraced that program. We spend a lot of time trying to communicatetogether, working out our evaluations and inspections, and Jim Pohl, our bridge engineer, does a great jobspending time with the counties, picking those right EMPs to really aggressively address those weakbridges.

So we're sitting about at 78 percent, and we're on track to meet our goal by 2011, but it is that partnershipthat's getting there because you can see we have some room to play and to move forward on our on-system, but there's been greater strides, as we've increased approximately 10 percent over this last sevenyears.

And our construction program, we're like many of the districts that our percent complete of work isshrinking because our letting volumes are shrinking. Right now we have about $176 million under contract,between $176- and $177.

The bridge project shown here in this picture is a project that I think we're all excited about. This replacesone of the two remaining swing bridges on the Gulf Intracoastal Waterway, this one being on FM 2031 inthe community of Matagorda. A swing bridge is essentially a barge that moves out of the way to let bargetraffic move through. This will be a fixed span structure. This bridge is very close to the Colorado Riverlocks which is a navigation concern for our barge partners, people moving freight up and down theIntracoastal. And so we'll be able to move this bridge out, this span, and open that up, and I think that's a300-foot span that will be there, so it will greatly improve the navigability along the Intracoastal.

We use this slide because it shows they move cattle from the mainland out to Matagorda Island forseasonal grazing, and they're moving the cattle across our swing bridge here and then they'll bring themback, and in the future they're going to be moving those cattle across our high fixed bridge, so I thinkthat's an interesting slide.

Going to safety, we have an active employee safety program and we pursue that, and I could carry on forthat for a long time, and many of you probably heard me talk about carrying on about safety on just aboutanything because I think that's what we do and that's what we live as a culture. But this slide is a slide ofan accident on Interstate 10, and if you've been up and down there, this is part of our safety bondprogram that many of you were active in the legislature -- there's so many partners in this thing, but I'mgoing to talk about this a little bit.

This is on a high traffic holiday weekend. This gentleman had a little mishap, lost control, running about60-plus miles an hour, the way we understood it, and he was getting ready to be in the oncoming trafficwhich was fairly heavy at that time. I could tell you numbers of testimonies that we've had, but you cansee that this big old drilling rig, going 60 miles an hour was captured by our cable system.

That cable system, I call it the crown jewel of our safety program -- we have had several of those projects-- but this is about 89 to 90 miles in the district, plus a little bit in Caldwell County that we take care of for

Bob Daigh. But essentially, prior to putting this up, we had eleven fatalities and fourteen serious injuries,and so those are bad wrecks and they were happening frequently and they were happening because trafficvolumes have increased and people were bumping into each other and they were going across the median,and those primarily were head-on, serious injury accidents.

During the project, we immediately saw benefit in injury and possible death; we were catching people aswe were going down the road, if you can envision that. And since that time, we've run the statistics, in thelast two years we've only had one fatality. That was an accident where the vehicle appeared to be rollingbefore it got to the cable and we did lose a person, but we're not aware of any serious injury accidents.And that is just remarkable. I think the jury is still out, but I can't thank you enough and everybody whohad a hand in that.

I know, Commissioner Holmes, you and I talked about some folks that we actually had personal knowledgeof out there that really tears at your heart, but thank you for this project and for that funding.

When you get into maintenance, maintenance is a large portion of what we do and over two-thirds of thedistrict's force in our shops and our field units are involved in maintenance in some form or capacity. Imentioned it up front, it is the face of TxDOT, it's the face of all our emergencies -- not just maintenance,all of us pull together in those really demanding times, such as an evacuation or a reentry -- but they'rethere all the time, they're on the call-outs and I thank them for that.

They're also a key operation in helping us reach our PMIS goals, our pavement condition goals. Theselower volume roads, we go out there, as the slide depicts, and actually reclaim a road and get it back intocondition, put some structural integrity back into it. And we have the expertise and the equipment to dothat and we can see the signs of improvement over time.

And you can see our pavement condition scores going there, and you might remember in '03 I became thedistrict engineer and I really got excited in '05, I thought I was really doing well, and I realized that it's thepeople out there and we do have a greater force, and that's weather and economy. So we met our goal of90 percent in good or better conditions in '05, we had a fairly drastic decrease in '06, and thought we weredoing some things good, but in '07 it kind of held its own. Our tentative numbers this year show a prettygood increase and moving back the right direction.

A lot of that is tied to weather, but I know we've talked a lot about our inflation costs in generalconstruction, I want to just mention our inflation costs in maintenance operations and that's primarily ourmaterials budget and fuel. But in base repair which is what we do a lot of, where we go in and reclaimsome of these roads, in the last five years we've experienced about a 77 percent increase in those costswhich line up pretty well with what we do in our general contracting.

In strip seals, that's where we go out and do the small areas to patch the cracked pavements to keep thewater out, we've also seen about a 69 percent increase in that operation, and that's measured by unit, howbig of an area by square yard or square foot.

And then when you get to our blade-on which is essentially where you have some pavements that arestarted to get out of section, starting to maybe hold some water, have some safety issues, you're not usinga lot of material but you're trying to redevelop that cross slope and the skid, we've seen about a thirdincrease in that.

So those are impacting our budget and they're challenging us on meeting those goals, as the whole state isfaced with.

On our public outreach, we do a lot of the interactions with schools. I mentioned that a while ago, andsomething we're very proud of. We have an outreach to educate our youth in safety and the programs andget them interested in TxDOT and what we do. And I'm going to them right away because we also meetwith the school districts as they're developing new schools and work with them and offer them theexpertise of our traffic engineering folks to sit down with them and work out what is the best way to pickup and drop off our kiddos so that they're not getting off a bus and walking across a lane where maybe the

parents are waiting, and just basic traffic engineering. As well as the ingress and egress, getting in and outof those schools, and trying to work with them and really get them to think about the impacts of buildingsome of those schools on high speed traffic roads, especially where you have teenagers, new drivers. Andthat has been a very successful program. We've got many school districts that we've had the opportunity towork with.

We do hold biannual information-sharing meetings. I call it Highway 101. That's essentially where we meetwith every elected official in city, county, state, federal government, we offer the opportunity. Typicalattendance at those meetings is about 150. We go over every program, it's where partnerships are forgedwith our areas. It was started by Mike Behrens back in '94 and it has really helped both sides because wehave forged some of those partnerships and really explained some of these programs that we do as anagency, whether it be off-system bridges, public transportation, or any other program that's out there to tryto let them know what we can do and what we can do to work together.

I mentioned working with others and my neighbors; I'll give you a few examples. Before I get off, this is aconvoy going to help John in the Beaumont District. I think there's four districts involved in this convoy.They stayed in Yoakum, we assembled the equipment and manpower there. And I've always been reallyproud that I had the opportunity to be part of that because that was a great team effort. Great highwayfolks from the Valley, Chano Falcon and his guys were in Beaumont as the winds were subsiding, and wecleared the road and made the way in. And that's a tribute, that's a culture -- I mentioned it early on -- butit is how we respond.

And that's what we all already know, but things that we are doing other than working as a team torepairing pavements or sharing equipment is in 2001 we started making small signs as a pilot for theCorpus Christi District. That went well, we worked the bugs out and the logistics, and in '04 we startedmaking the small signs in the Yoakum District for Laredo, Corpus and San Antonio, and as of this month,we've picked up the Austin District. We did that by really working with Scott Burford and his folks on thelogistics and building a business model, didn't add FTEs but really improved our operation and it's beenvery successful. And we are using that around the state, I know, but we had an opportunity to start that in'01.

In '04 also, Mr. David Casteel and I got together and we visited on purchasing and how we warehouse, andfrom some things we learned in our business model on how do delivering -- and I'm going to call it just-in-time delivering for TxDOT, but it was some streamlining -- and we were able to consolidate our purchasingefforts and some warehousing efforts, and that has really been a successful administrative sharing ofduties. And I think we have worked the bugs out and have good savings in that area, plus the sharing ofknowledge and innovation in some of our purchasing procedures has helped us all.

We are doing some environmental support for Gary Trietsch. Gary and I got together and we have a lot ofsimilarities on the western side of his district, and we're doing projects for them from the environmentalsupport. We're doing the documents and working it through public process for him on some of the projectson the west side of the Houston District and that really is working well.

There are other opportunities, I think we'll all face some of those in the very near future, and we lookforward to those opportunities to streamline and maximize our efficiencies.

There's a lot of projects, and I could speak to specific projects, but I think in our region and looking atmaybe a more global perspective of the economic benefits for our area -- like Dale alluded to -- expansionof the Interstate 10 corridor as it comes out of Houston. Our traffic has almost doubled since 1998, so inten years we're getting close to doubling the traffic there in Austin County. Judge Bilski, we've met a fewtimes, we've had a community meeting to talk about the potential of tolling the inside capacity managedlanes, very receptive. It does take buying some right of way but people see the need and we can easilyproject a very short distance in the future that problem is going to compound.

Of course I-69 TTC, we're on the heels of very active public involvement and discussions, and I think in ourdistrict alone we had probably close to 2,400 people at two different meetings, so a total of about 1,100and 1,300 is kind of what we're coming up with because some of them didn't sign in. But forging those

partnerships with our locals, with our elected officials and, of course, the leadership that the commissiongives us is something that we all understand the need and trying to communicate that need in workingtoward actually how do we develop that project.

Achieving our goals, working toward those bridge goals, the pavement goals, the safety goals. In thepavement area, a lot of it will be focused on with our maintenance forces, and we're in that part of theworld where, whereas in Houston you may have to have a whole lot of people just to set up a traffic closureon one lane, here we do have some ability to get that work done in-house, good economical numbers. Ourissue would be in materials and having available materials for that. And funding, you hear it, we talk aboutit a lot, but right now it's paramount, how do we address some of these needs.

I think that's a quick and dirty shot at it, commissioners and Madame Chair. I guess I had one othercomment and I need to thank some employees for all the work that they did in helping facilitate and putthis together, a lot of people. I had a very small part in it; it really is the men and women of this districtand our team that puts it together. Again, just welcome. I welcome the opportunity to present in front ofyou and have the chance to share some time with you.

MS. ANDRADE: Lonnie, that was a great presentation.

Members, do you have any comments or questions for Lonnie?

MR. HOLMES: Lonnie, it's a great presentation. Of particular note is that cable barrier system, and I wouldencourage you to continue to extend that where it's applicable, and other districts around the state need totake a pretty hard look at it. It's a very significant improvement in safety.

MR. GREGORCYK: Yes, sir, Commissioner. I know David and I have talked about trying to capture astatewide statistic on it after we have enough data, science. It's showing really great returns, I guess, inthe savings of lives and serious injury. I know David and I visited on it, we captured it here. It's hard tocapture behind us, we didn't count that time, but you and I talked about the young lady, while the cablesweren't even tight, they just had them strung up, and she lost control, a young girl hit that thing and thetruck was waiting for the impact, so we didn't capture any of that, but I could go on and on on testimoniesthat we've gotten from some of those accidents.

So I appreciate your comments, and yes, sir, we've talked about just gathering the statistics because I thinkit's a message that needs to be out.

MS. ANDRADE: Any other comments?

MR. HOUGHTON: Thank you for your hospitality, Lonnie, and you've got a great district and a lot of positivethings working for you down here. Keep up the good work.

MR. GREGORCYK: Thank you. Thank you for your support.

MR. HOLMES: One last comment. It's really directed more towards Judge Stafford. Your comment about theincreased traffic on 59 on Fridays and Sundays, it's going to be Monday, Tuesday, Wednesday, and that'sjust simply the growth of the state, and so those conditions Friday and Sunday are going to repeatthemselves throughout the week in the future.

MS. ANDRADE: Lonnie, that was a great presentation. You're absolutely right, you've got a great team, soplease make sure that you thank each and every one of them for all the great work that they do for thisregion and for making us feel so special.

To the City of Victoria, congratulations on all your successes. You seem to have a clear vision of where youwant to be and we're happy to provide you with the support and the infrastructure needs for you to keepgrowing.

And to all the judges that are here, thank you so much for being here with us, and thank you for the great

partnership . It's great to be working with you and please help us spread that word throughout the state ofTexas. Thank you very much.

MR. GREGORCYK: Thank you.

MS. ANDRADE: It is normal that we take a break after a presentation, but I think we're going to moveforward, so Amadeo.

MR. SAENZ: Thank you, Madame Chairman. Your first item is the approval of the minutes of the December13, 2007, regular meeting of the Highway Commission.

MS. ANDRADE: All right. Members?

MR. HOLMES: Move it.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries, the minutes are approved.

MR. SAENZ: Thank you. Moving on, Madame Chairman, the next item is the continuing discussion itemsthat we have, and Coby Chase, our Government and Public Affairs Division director, will be presenting ourfederal legislative priorities. Coby.

MR. CHASE: Good morning. For the record, my name is Coby Chase and I am the director of TxDOT'sGovernment and Public Affairs Division. Today I'd like to provide an update on federal activities that I wasasked to do at the last commission meeting.

I'd also like to just take one second to thank the Victoria Economic Development Corporation and Mr.Kennedy for the great tour yesterday of the area and of the port. That was very eye-opening. We used tobe part of the economic picture here in Victoria; my mother-in-law used to run Hancock Fabrics but she hassince retired.

On December 27, President Bush signed the Consolidated Appropriations Act 2008 which includedappropriations for the department of transportation. The bill contained $3.1 billion in rescissions of budgetauthority. We estimate Texas's share of that to be roughly $260 million. The bill also included 64transportation-related earmarks aimed at Texas.

The president signed an executive order on Tuesday that directs agencies to ignore any future earmarks inreport language but not in the legislation that actually comes to his desk. The executive order, however, isnot retroactive so it's from this point forward.

As I mentioned to you previously, the Texas congressional delegation has formed a bipartisan workinggroup to assess the funding problem and to recommend and implement possible solutions. They have beenholding meetings with transportation officials and policy experts and plan to meet with key state legislatorshere in Texas in the spring. We should look forward in the coming months to a document that lays out thedelegation's thoughts on making progress toward solving our transportation funding crisis.

Congress, within SAFETEA-LU -- and I'm going to move a little bit to recent headlines -- created theNational Surface Transportation Policy and Revenue Study Commission, more popularly known as the 1909

Commission. Their charge was to conduct a comprehensive study of the current transportation system. OnJanuary 15, they issued their report. In the end, the group was split: the report was supported by nine ofthe twelve commissioners, however, the three White House appointees -- including Secretary Peters -- didnot sign the final report and instead filed dissenting views.

The commission estimates that the nation will need to invest at least $225 billion annually over the next 50years for new construction and repairs of the existing surface transportation system. That would representalmost a tripling of the current annual investment of $85 billion per year. They also recommend that thefederal government continue to contribute 40 percent of the total funding requirements.

One of the most significant recommendations in the report was an increase in the federal fuel tax from thecurrent 18.4 cents to nearly 60 cents per gallon through a series of five tax increases over five years.That's what received all the headlines and all the attention. It drowned out some of the other moreconstructive things that they actually suggested in the report. The report also recommends that states raisetheir own gas taxes at even higher rates. Also in the realm of taxes, the report suggests implementing afederal ticket tax on transit trips and inner city rail passenger trips. So the cost of everything, in their eyes,needs to go up.

The 1909 Commission did show some support for tolling and pricing as a way to help solve the fundingcrisis. It recommended that tolls should be allowed to be used as a mechanism to fund new capacity on theinterstate system and congestion pricing should be allowed on both new and existing facilities in theinterstate system, but only in metropolitan areas over one million in population. The commission placescertain conditions on tolling and pricing on the interstate system, specifically a requirement that toll revenueshould be used only for transportation improvements within the corridor in which the tolls are collected.

The issue of public-private partnerships, or PPPs, did make its way into the commission's report. Thecommissioners encouraged the use of PPPs where state and local governments are willing to use them.However, to ensure that the public interest is protected, in their eyes, the commission believes the PPPsand concession arrangements involving interstate facilities, in particular, be the subject of certainconditions. These include a prohibition against non-compete provisions, a cap on toll increases limited toinflation adjustments, revenue-sharing provisions, and limits on the length of concession agreements.

The report emphasizes that the fuel tax will only be the primary source of revenue for the next 15 to 20years. Beyond that time, it urges the federal government and states to plan on moving to an alternativerevenue source. The commission recommends that the next surface re-authorization require a majornational study -- again -- to develop specific mechanisms and strategies for transitioning to an alternativerevenue source, most likely a vehicle-miles-traveled fee, meaning moving from taxing the consumption ofgasoline to charging for use of the entire roadway system or transportation system, much like theexperiment that has been conducted in Oregon.

Another solution proposed by the 1909 Commission is to eliminate all existing programs of the FederalHighway Administration, Federal Transit Administration, Federal Motor Carrier Safety Administration,National Highway Traffic Safety Administration, and the Federal Railroad Administration, and instead replacethem with 10 new programs that cross agency and modal lines. Each of the new programs will beperformance-driven, outcome-based, generally mode-neutral and refocused to pursue activities of genuinenational interest.

Let me translate just a little bit. We still need to get more into the details, and the report isn't heavy ondetails -- which, for me, is praise -- but it shows kind of a repositioning of thinking that we -- and you canrepeat this story on the local levels and state levels and certainly on the national level -- that agencies arebuilt up to focus on one type of transportation and has one identified stream of money and it has a veryhard time turning to its counterpart in another type of transportation, mixing their money or coordinatingtogether

And whether the 1909 Commission fully acknowledges this or not, this is a somewhat slight movementtowards the concept of a mobility corporation in the sense that we've been very focused on state DOTs andpeople who can build and construct and deliver things versus people who can plan, manage and move

resources around to a region or a state to build things, regardless of where they come from or regardless ofmode of travel, so this is kind of an acknowledgment of that. And in my time here at TxDOT, we and otherstate DOTs have spoken at length to members of Congress and anyone who will hear that so much of ourmoney comes tied up in so many different ways and so many different categories that it's very hard toapply them where the money needs to be used the most, such as congestion relief.

So that is a long way of saying that was actually a very good sign in the report that they were thinkingabout how blend money, because at the end of the day, it's a congestion problem, it's a safety problem, it'san economic opportunity problem, it's not necessarily just a highway problem, a port problem, a busproblem or a rail problem.

The House Transportation and Infrastructure Committee held hearings to discuss the report on January 17 -- took no action, of course -- and the Senate Environment and Public Works Committee will be holding theirhearing today to discuss the commission's report as well.

Another source of ideas and thought is the congressionally chartered National Surface TransportationInfrastructure Financing Commission -- no shortage of long names. The commission's final report is due inearly 2009 -- it worked in parallel and now it's working on its own with the other commission -- thecommission's final report is due in early 2009 and timed to influence the congressional re-authorizationprocess.

This commission plans to release a preliminary report in early February, possibly as early as tomorrow.While the interim report will not offer any specific recommendations as to the future funding options, it willstate the commissioners' assessment of the fiscal problem confronting Congress and describe a proposedmethodology for evaluating potential funding sources and financing mechanisms. The commission views theinterim report as a means of stimulating the debate and soliciting feedback from stakeholders -- and they'vedone a very good job of that, I will say.

We, TxDOT, have continued to prepare for the next authorization by working with a diverse group ofseveral other DOTs and other concerned parties who are interested in meaningful reforms. Our group metat the beginning of December and we adopted a name for ourselves; we are now called the TransportationTransformation Group, or T-2 -- which might say something about groups coming up with their own names.

(General laughter.)

MR. CHASE: T-2 has a goal that revolves around seven basic principles:

An American transportation policy in 2009 is required not just re-authorization of current policies;

There needs to be a national transportation plan that sets and reaches goals, not simply mandates thatprocesses be followed;

The nation requires a transportation system that enhances quality of life and maintains globalcompetitiveness by reducing congestion and increasing mobility;

It's absolutely critical to redefine the roles of the federal, state and local governments and the privatesector in the delivery of transportation solutions;

Transportation policies should provide maximum flexibility in transportation finance, procurement andoperation of existing and new facilities;

New transportation policies should allow states to develop and implement seamless multimodal solutionsthat best achieve transportation goals;

As states graduate to other forms of financing, continuation of the existing federal motor fuels tax isnecessary, provided significant program reforms and innovative financing methods are made fully available.

We'll meet again soon as a group to review and approve action plans, and that will drive the group's nextsteps.

On January 20, the International Bridge, Tunnel and Turnpike Association board of directors adopted its re-authorization policy. It lays out what it believes should be the nation's surface transportation systemrequirements. Those requirements should center on: customer focus, decreased congestion, increasedsafety, system preservation, economic growth.

And I've talked about a number of groups and I'll talk about one more, and I do that deliberately to pointthe listener in the direction that you're hearing groups say very similar things that they haven't said in thepast. Changes like this don't happen in one place and at one time, they happen over time and in differentplaces. What I'm pointing out is that it is happening in different places. The people who are speakingdirectly to Congress and the federal government are starting to say very similar things.

Several groups have started making announcements about the re-authorization efforts. One recent one thatgot a day's worth of headlines was made by Mayor Bloomberg of New York, Governor Rendell ofPennsylvania, and Governor Schwarzenegger on the creation of a group called Building America's Future.Their charge is to work with presidential candidates -- which seems to be getting easier by the passing day-- and elected officials to ensure that transportation becomes a national priority. The Rockefeller Foundationwill be providing staff and funding for the effort.

They desire to provide analysis on emerging infrastructure issues and encourage an increased investment intransportation at all levels of government. They are getting off the ground but they have expressed asignificant interest in talking to us in Texas, and so we're trying to bridge that and get that started, and weshould have some very healthy discussions in the near term. But we're excited about it and we hope theinitial momentum keeps it moving through at least the entire congressional re-authorization phase.

As we all enter an election year, transportation is not likely to be as significant of an issue, interestinglyenough, no matter how much I wish it were, or at least treated with as much depth as we would hope. Theeconomic stimulus package, taxes and defense funding will likely be at the forefront. The House passed itsversion, the Senate Finance Committee kicked out its version and it's completely free of any sort oftransportation stimulus.

Our umbrella organization in Washington, AASHTO, asked each state for a list of projects that shouldCongress decided it wanted to use roadways for economic stimulus and they happened to find extramoney, what could go to contract immediately -- meaning how soon could we start turning dirt -- and Mr.Barton submitted a list of $2 billion worth of projects that met those criteria. So to be a little pessimistic,we've been down this path a number of times in my time with TxDOT, and the economic stimulus androads never seem to jell towards the end, but we'll see, keep hope alive.

Leaders on both sides of the aisle and in both chambers have indicated that there is a potential for aninfrastructure stimulus package in the coming months, but those have come and gone in the past, like I justsaid. Beyond any immediate boost in highway infrastructure spending, House Speaker Nancy Pelosi haspromised to make a long term effort to overhaul the nation's infrastructure. Like I said, people are startingto repeat similar themes. House Transportation Infrastructure Committee Chairman James Oberstar alsopushed for final approval of a Highway Technical Corrections Bill to kind of clean up some of the loose endsof SAFETEA-LU, but the Senate hasn't taken action on it, and it's very small things, nothing of significance.

It is a positive sign, like I said, that so many interest groups are beginning to take steps to address re-authorization. Texas plans to be at every table they possibly can and we will continue efforts to be part ofthose discussions. I'm happy to take any questions you might have.

MS. ANDRADE: Members, you've heard Coby's presentation. We also have a citizen that has signed up tospeak. Would you like to wait on your question?

MR. HOUGHTON: Let's hear the speaker.

MS. ANDRADE: Okay. Coby, if you'll step aside. John Shackett, please.

MR. SHACKETT: Good morning, Commission and Executive Director. I've got my notes here. My kids gothold of them last night so they've got some drawings on the back, so don't pay attention to those.

I addressed the commission last month and I mentioned to Commissioner Williamson I was a littleconcerned to speak in front of him because I knew that he asked tough questions, and the fact is that I feltprivileged to talk to somebody that was so passionate about transportation, and I think we need to honorhim by continuing to ask tough questions.

I think the toughest question that this agency is faced with is how to sustain, if not increase, the long termrevenue stream. And so you would say, well, what does that mean in plain terms. And basically, if you havea cigar box, you have money coming into the cigar box and then you have a lot of money that goes out.What I'm focusing on today is the money that's coming into the cigar box.

So if you look at that, everything is expensive right now. We talk about the inflation for the past five years,you know, exceeding 67 percent; oil, gas, materials, everything is expensive. The only thing that's cheapout there right now is money, and so the question is how do we gain access to that money, and the best Ican tell, you can gain access to that money via bonds or private equity. And so if our goal is to retain alarge portion of that long term revenue stream, if you go the bond route, you retain it, if you go the privateequity route, then you have to share it, and that's okay. The fact is that there's a lot of that cheap moneyout there right now.

So if we want to consider that, if you look at the transportation spectrum, you kind of have maintenance onthis side and then you have the Trans-Texas Corridor over here and both are extremely important to thestate. Maintenance, we've got to preserve the assets, we've got huge assets out there. Trans-TexasCorridor is a long term vision, it's important to have a long term plan for mobility. So when you look at that,those items are so important that I think that we ought to significantly reduce expenses this year in thoseareas, take that money, leverage it, go get access to that cheap money, get a couple of your most toll-feasible projects that you have out there, quickly get them underway, establish a long term revenue streamoff of those projects to supplement the gas tax revenue.

We all know the gas tax revenue is not the only answer. Even if they were to index it -- and the legislaturedoesn't have the backbone to index it -- but even if they were to do that or increase it, we still need tocome up with a way to supplement that gas tax long term.

So I was reading Texas Monthly the other day and I saw the "Don't Hold Back, Be There, Be Heard." Ithought that was a great message on that TTC-69, so I kind of came up with my own slogan, and it's notas catch as that but I think there's some meaning behind it, and that is "Long term maintenance and longterm visions are here to stay, cheap money will go away."

So I do appreciate your time, and let's honor Commissioner Williamson by continuing to ask the toughquestions. Thank you.

MS. ANDRADE: Thank you very much. Any questions?

I remember you coming to the meeting last month and you gave us something to think about and youcontinue to do that. Thank you very much for your interest and your commitment to transportation.

Members, any questions for Coby, any comments?

MR. HOUGHTON: Coby, what has gotten the headlines has been the amount of increase in the gas taxrecommended by the commission that just filed their report. You glossed over that. Can you get specific asto the increase when you fully load it both at the federal and the state level?

MR. CHASE: I think if I remember the last math we did, so to speak, a couple of days ago, if you were tofollow that plan, we would easily have topped $1.20 a gallon that we had suggested in the absence of any

innovative finance, anything else, a construction program for Texas to tackle our $86 billion problem wouldhave been a $1.20 a year additional per gallon. So what is both disappointing and reaffirming is that itconfirmed we weren't out in the woods when we were thinking about that.

MR. HOUGHTON: The other things didn't get as much ink. Unfortunately, they focused in on the revenuesource.

MR. CHASE: The gas tax.

MR. HOUGHTON: Right, the gas tax. So nine out of the 12 commissioners took the route let's just go raisethe gas tax and get over it.

MR. CHASE: And they took some rudimentary steps in public-private partnerships and some innovativeprograms, and a lot of that was not discussed in light of just the huge gas tax headline, kind of thefinancial sand that was being poured in everybody's tank, but they took more steps than I think mostpeople thought that they would. Now, there are some details that need to be worked out, but they did talkabout things that are very unpopular to talk about, like tolling existing assets, how you would do that, howyou would create new assets with public-private partnerships and how you keep revenue in an area.

They looked at what happened in Indiana with the lease of that facility and the Chicago Skyway, and kindof thought they were taking some of people's fears and concerns off the table. But we were very happythat they acknowledged that those things actually are important and are ways to look at certain pieces ofinfrastructure, and a more user-financed system that actually pays for itself.

MR. HOUGHTON: Obviously, our former chair honed in on those increases as a choice, and the choice iseither you raise the gas tax in this case and/or you need to do these certain things on the interstatehighway system. They focused more on the interstate highway system.

MR. CHASE: The federal aid system, yes, sir.

MR. HOUGHTON: The federal aid. And to our previous speaker about the cheap money, Amadeo, we'reconstrained by the amount of debt that we can issue as to Prop 14, as to the Texas Mobility Fund, so wedon't have unfettered authority to go issue that kind of debt.

MR. SAENZ: That's correct, sir. As far as the Proposition 14, we're capped at $1.5 billion a year and ofcourse, we have a maximum amount of $6 billion that we could do.

MR. HOUGHTON: And the Mobility Fund is constrained equally.

MR. SAENZ: The Mobility Fund is constrained based on the amount of fees that come into the MobilityFund.

MR. HOUGHTON: So it would be nice to have you show up in front of committees next January and talkabout -- which this commissioner thinks is a valid point -- that we look at the opportunities of increasing thecap on the Mobility Fund that would allow us to issue some debt. I think some of the recommendationsembedded in the commission out of D.C. is the three Ps, CDAs, those are the things that we're going tohave to look at.

MS. ANDRADE: Ned?

MR. HOLMES: Coby, I'm very pleased to see that the 1909 Commission has recognized that there are someissues that you and Chairman Williamson and Commissioner Houghton and Madame Chair have beentalking about long before Fred and I got here. It took them a pretty long time to get there, but at leastthere does seem to be some recognition at the federal level of some innovative ways to address theproblem.

I agree with Commissioner Houghton that it needs to be a very broadly based examination and sourcing of

additional revenues. It isn't all going to come from one area, it's going to have to be very broadly based;otherwise, we're not going to be able to fix this funding problem.

I have been working with Coby and others on the T-2 effort, and we will continue to try to move thefederal government forward on that line of thinking. Pretty challenging proposition.

MR. CHASE: Yes, it is.

MR. HOLMES: But the fact that there is some recognition of it now is encouraging.

MR. CHASE: You're exactly right, Commissioner. And it proves that people are starting to think it's not justany one answer, it's a series of answers which is very healthy for everybody. But you're right, we almostfeel we can stop banging our head against the wall a little so much in D.C., and that feels good. But yes,you're right, people are starting to acknowledge what they wouldn't acknowledge three years ago.

MR. HOLMES: And one last point to the comments from the previous speaker relative to the cheap money.That $1-1/2 billion a year cap on new bonding on Prop 14, about a billion 250-, 300- of that has alreadybeen issued this year, and so there's only a couple hundred million -- which sounds like a lot of money butin the context of this program and the state's needs, it's not, so there's very little capacity left for thebalance of this year.

And there's been a lot of conversation about moving a billion dollars from new capacity to maintenance andwhether that is a political move or just a reality, if you look at the numbers that Lonnie presented of a 77percent increase in cost of maintenance over the last four or five years, TxDOT had been spending about abillion one in '02-03 and you apply that 77 percent increase to that, you would need to spend about abillion nine in order to accomplish the exact same amount of maintenance that a billion one bought fiveyears ago. So that extra billion shift doesn't buy us any more maintenance, it just simply provides themaintenance that we have been providing over time.

MR. HOUGHTON: Coby, in your wildest dreams, if the legislature agreed, both at the state level and thefederal level, to increase the gas tax by that amount, how do you think the electorate would react?

MR. CHASE: I think I've spent enough time at the microphone. No one reacts very well when they're askedto spend more money, but I think there's a higher level of comfort when they know that it's actually beingused for the reason you asked for it. So if it were actually being used to build and construct and make theirroads safer, buy more barrier cables so people don't have so many accidents or pay for the maintenance ofthe roads and they can get home sooner to take their kids to soccer games, they might be morecomfortable.

MR. HOUGHTON: Somebody said if they did pass that, that would be tantamount to term limitsimmediately.

MR. CHASE: Not for me to decide.

(General laughter.)

MS. ANDRADE: Coby, have we had an update on the pilot program in Portland, how they're doing? I knowyou and I and a couple of others went to visit with them.

MR. HOUGHTON: There has been an update.

MS. ANDRADE: Is it working?

MR. SAENZ: Madame Chairman, the Oregon DOT has just put out a report and we are getting at least theexecutive summary sent out to all of you. They've completed it, they've made some recommendations as tosome additional things that they'd like to continue to study. They showed that the system that they put inplace worked, they were able to make it work, but they've got some additional items that they want to look

at. And I'll make sure that the whole report, if you'd like, but at least the executive summary will be sent toyou.

We're also sending that executive summary to all our legislators so that they have an idea this is anadditional tool that could be used, and I think this is some very good information.

MS. ANDRADE: Good.

MR. CHASE: If I might add, it took me a second to understand which pilot program you were talking about,but it's the one where you pay for consumption of the system, how much you drive on the system insubstitute of a gas tax, and Oregon did a very interesting experiment that all of us have been watching andthey just issued a report, and so we just got it the other day and we're going to get the executive part of itand send it around.

MS. ANDRADE: Good. Anything else? Coby, thank you very much.

MR. CHASE: Thank you.

MR. SAENZ: Thank you, Coby.

Moving on to item number 3, Eric Gleason, our division director for Public Transportation Division, willpresent two minute orders dealing with our rural transportation program. Eric, good morning.

MR. GLEASON: Good morning. For the record, my name is Eric Gleason, TxDOT division director of PublicTransportation.

Agenda item 3(a), this minute order awards $23,104,352 in federal funds under the Federal TransitAdministration Nonurbanized Program for rural transit districts for rural public transportation. The formulafor allocating these funds is established in Title 43, Texas Administrative Code, Section 31.36. The totalfiscal year 2008 Nonurbanized Program apportionment to Texas is $32,047,150.

Rural transit districts use these funds for administrative, operating and capital expenses. They use statefunds for public transportation or other locally derived funds as match for these federal program funds. In2007, rural transit districts across the state operated 25 million miles of service, carrying over 4.8 millionriders with a fleet of 1,250 vehicles.

In addition to funding critically needed basic mobility services for transit-dependent individuals in rural areasof the state, this award provides funds for investments in public transportation contributing directly to thefive goals of the department. The balance of the fiscal year 2008 apportionment will be allocated to stateadministrative expenses, inner city bus enhancements, and commission discretionary funds. Subsequentminute orders will award funds for inner city bus enhancements and for projects using commissiondiscretionary funds.

We recommend your approval of this minute order.

MS. ANDRADE: Members, we have a citizen that has signed up to speak on (a) and (b). Now, are we goingto take separate votes, or are we going to vote on (a) and (b) together?

MR. SAENZ: Separate.

MS. ANDRADE: Separate votes, okay.

Would you like to hear our citizen?

MR. HOUGHTON: Yes.

MS. ANDRADE: Why don't you continue to (b) and then we'll hear Mr. Herr.

MR. GLEASON: So go ahead and do the next item then?

MS. ANDRADE: And then we'll vote on it.

MR. GLEASON: The next agenda item, this minute order awards $10,000 in federal funds under the FederalTransit Administration Rural Transportation Assistance Program, otherwise known as ARTAP, to the TexasTransit Association to support a leadership training event in association with their annual conference thiscoming April.

ARTAP provides a source of funding to assist in the design and implementation of training and technicalassistance projects and other support services tailored to meet the specific needs of rural transit operators.Allowable activities include training, technical assistance, research and related support services.

The Texas Transit Association is a non-profit organization whose members are Texas transit providersincluding metropolitan, small urban and rural transit agencies. Their mission includes providing training fortheir member organizations.

We recommend approval of this minute order.

MS. ANDRADE: Thank you. We're going to now ask Ben Herr. Thank you, Eric.

MR. HERR: Good morning. For the record, my name is Ben Herr. I'm the executive director of the TexasTransit Association. Madame Chairman and members of the commission, thank you for the opportunity toaddress you this morning.

I want to speak in favor of both of these two minute orders, but first I'd like to thank the commission foryour leadership in helping prevent a funding crisis with the state 2008 funds. The situation we had last falllooked like it could have been a meltdown of funding for our transit agencies, both small urban and rural,and thanks to your leadership and the actions of Eric and his staff, plus the letter-writing campaigns withthe transit agencies in the state, we helped prevent this financial meltdown, and I want to thank you foryour efforts in preventing that from happening.

In relation to the minute orders, the first minute order with the 5311 funding, this federal fundingrepresents about a third of the available funding that our rural agencies use throughout the year, and we'dlike to recognize that this type of funding allows these rural agencies to provide needed mobility to theircommunities.

I'd like to commend Eric Gleason and his staff for the expedient manner in which they've been able to bringthis minute order to you. Just on Monday, the Federal Register was published with the FTA allocations, fourdays later we sit here with this minute order before you, and that is indicative of Eric's forward thinkingand planning for him and his staff. I've never seen it happen that fast, and the association is extremelypleased with the actions that Eric and his staff have taken to get these funds to the transit agencies as fastas he has. So thank you for that.

I'd also like to comment in favor of the second minute order, the leadership training that the Texas TransitAssociation wants to present at its conference in April. These ARTAP funds that Eric has in the minuteorder, this will allow us to provide this type training. This was a priority project for our past TTA president,John Wilson, and our current TTA president, John Hendrickson. Without these funds, we would not be ableto provide this type of leadership training to our conference attendees and to the managers.

I'd also like to comment just in general, the ARTAP training program that Eric and his staff has put togetheris, in my opinion, second to none. I've talked to other state associations, I've talked to other state DOTs,the training programs, the opportunities and the funding that Eric and his staff provides to the transitagencies within the state is just phenomenal. And we look forward to continuing to work with Eric and hisstaff. TTA would like to help support and expand other opportunities to use these funds to train not onlythe drivers, the maintenance folks, the supervisors, but the transit managers throughout the state.

So we would thank the commission for your consideration of these two minute orders. Thank you.

MS. ANDRADE: Thank you very much.

All right, members, you've heard agenda item 3(a). What is your pleasure?

MR. HOLMES: Move it.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

MS. ANDRADE: Agenda item 3(b), what is your pleasure?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: Against, nay.

(No response.)

MS. ANDRADE: Eric, thank you very much.

MR. SAENZ: Thank you, Eric.

Moving on, commissioners, agenda item number 4 deals with the Promulgation of Administrative Rules.Agenda item 4(a) deals with proposing the rules for adoption for Chapter 25, Traffic Operations, and JimRandall, our Transportation Planning and Programming Division director, will make this presentation.

MR. RANDALL: Good morning, commissioners. Jim Randall with the Transportation Planning andProgramming Division.

Item 4(a)(1), this minute order proposes the adoption of amendments to Section 25.50, 25.51, and 25.53to be codified under Title 43, Texas Administrative Code, Part 1, concerning statewide bicycle road use.

In the course of reviewing the administrative rules pertaining to bicycle road use, the department identifiedthree sections that require revisions. Amendments to Section 25.50 and 25.51 correct an outdated statutoryreference and an outdated reference to a division of the chapter. Amendments to Section 25.53 deleted aparagraph related to the preparation of a statewide comprehensive bicycle plan. When this section wasoriginally adopted, it was considered the best practice for the department to prepare the plan, however,this work is currently accomplished by local governmental entities. Department staff participates andprovides assistance to the local entities with regard to these planning efforts.

The minute order presented for your consideration authorizes that the amendments to Sections 25.50,25.51 and 25.53 are proposed for adoption and are authorized for publication in the Texas Register for thepurpose of receiving public comments.

Staff recommends approval of this minute order.

MS. ANDRADE: Members, you've heard the staff's presentation.

MR. HOUGHTON: So moved.

MS. ANDRADE: Any comments? Let me finish. Do I need to remind you who is in charge?

MR. HOUGHTON: No, ma'am.

MR. UNDERWOOD: No, ma'am.

MR. HOLMES: No, ma'am. Anything you say, ma'am. Second.

(General laughter.)

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: Opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you very much.

MR. RANDALL: Thank you.

MR. SAENZ: Thank you, Jim.

Agenda item 4(a)(2) deals with proposed rules for Chapter 28, Oversize and Overweight Vehicles, and CarolDavis, division director for our Motor Carrier Division will make this presentation.

MS. DAVIS: Good morning. Carol Davis, Motor Carrier Division director.

The minute order that you have before you is for proposed amendments to Chapter 28, rules concerningoversize/overweight permits. These amendments implement provisions of House Bill 2093 from the 80thTexas Legislature regarding fees for oversize/overweight permits and administrative enforcement ofoversize/overweight permit requirements. They also add guidelines regarding the issuance of annualenvelope vehicle permits, streamline the permit issuance process used by the Port of Brownsville andChambers County, clarify existing information and update statutory references.

Rules for the proposal include a small business impact statement and a regulatory flexibility analysis thatassess the potential impact of the fee increase for the annual envelope vehicle permits on small businessesand also considers alternatives of achieving the rule's purpose.

Staff is recommending approval of the proposal.

MS. ANDRADE: Thank you. Members, you've heard the staff's recommendation. We do have two citizensthat have signed up. Would you like to hear them?

MR. HOUGHTON: Sure.

MS. ANDRADE: Ted Long. Mr. Long, are you here?

(No response.)

MS. ANDRADE: All right. Jim Krenek.

(No response.)

MR. HOUGHTON: Let me ask Carol a question.

MS. ANDRADE: Sure.

MS. DAVIS: Yes, sir.

MR. HOUGHTON: Carol, you said you had a couple of people responding or counties, Port of Brownsvilleand Chambers County. What was their response to the oversize/overweight issue?

MS. DAVIS: Actually, the Port of Brownsville already has a pretty significant permit issuance operation andhave for about ten years. This just kind of clarifies their rules, and we've been working with them veryclosely over the past year.

MR. HOUGHTON: And they're in support of?

MS. DAVIS: Yes.

MR. HOUGHTON: Okay.

MS. DAVIS: Chambers County, we have rules in place, they have a process in place, they haven't actuallyissued any permits, they don't have a customer in that business park yet that needs those permits.

MR. HOUGHTON: Okay.

MS. ANDRADE: Anything else? Members, you've heard the staff's presentation, our citizens apparently haveleft. What is your pleasure?

MR. SAENZ: I think they're going to come back.

MS. ANDRADE: Oh, do we wait?

SPEAKER FROM AUDIENCE: They're going to decline.

MS. ANDRADE: They're going to decline. Okay. What is your pleasure, members?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. DAVIS: Thank you.

MS. ANDRADE: Thank you very much, Carol.

MR. SAENZ: Thank you, Carol.

Commissioners, agenda item 4(b) deals with Final Adoption of rules, and Eric will come back to the podiumand present some final adoption of Public Transportation rules.

MR. GLEASON: Thank you. Again for the record, my name is Eric Gleason, TxDOT director of PublicTransportation.

This minute order provides for the final adoption of amendments to Title 43, Texas Administrative Code,Part 1, Chapter 31 relating to Public Transportation. The amendments address numerous sections inChapter 31.

In recent months, the Federal Transit Administration undertook an analysis and review of its regulations toeliminate the duplication and unnecessary requirements, to update and clarify its rules, and to bring theminto conformity with SAFETEA-LU. The amendments to Chapter 31 align text with updates made by FTAand SAFETEA-LU. Changes in language are also made to enhance readability and clarity, to improvegrammar, to update citations, to address technical corrections, and to be more consistent with the codeconstruction at Government Code Chapter 311. None of the amendments resulted in substantivemodifications to existing policies except as may be required by SAFETEA-LU.

A public notice for comment was published in the November 30 edition of the Texas Register for a 30-daycomment period, and a public hearing was held on December 17. No comments were received. The PublicTransportation Advisory Committee met on January 11 and recommended the adoption of the amendments.

Staff recommends approval of this minute order.

MS. ANDRADE: Members, you've heard staff's recommendation. Any questions or comments?

(No response.)

MS. ANDRADE: What is your pleasure?

MR. UNDERWOOD: So moved.

MR.HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Eric, once again, thank you so much.

MR. GLEASON: Thank you.

MR. SAENZ: Thank you, Eric.

Moving on to item 5, commissioners, Phil Russell will present two minute orders dealing with our tollprojects, one in Bexar County and then the second one in Travis and Williamson counties. Phil.

MR. RUSSELL: Good morning, commissioners, and good morning, Mr. Saenz and Roger. For the record, I'mPhillip Russell, director of the Turnpike Division.

Commissioners, as you know, for several years now we've been working on a procurement for an importantproject in the north part of San Antonio, the 281-1604 project. Throughout that process, we've gonethrough a CDA procurement, we've short-listed two firms, the Zachry-Cintra firm and the MacQuarie firm.

Of course, during that time there were some important events that have occurred. Passage of Senate Bill792 has occurred which affects our CDA process, specifically on the 281 portion of that project. It's alsochanged the relationship that we have with RMAs and MPOs. Subsequent to 792, the Bexar County RMAhas requested that they be able to develop both of these projects, the 281-1604 project. The MPO has alsoapproved that through several MPO resolution votes, and of course, last month we received a letter fromBexar County Judge Nelson Wolff that also requested us to cancel this procurement and move towardsultimately transferring this project back to the locals, back to the RMA.

So the minute order before you would take the first step. If you approve this minute order, it would directthe executive director to cancel our CDA procurement, and of course, as you all probably remember, that'swell within our abilities to cancel these procurements.

Staff would recommend approval of this minute order, and I'd be happy to attempt to address any questionyou might have.

MS. ANDRADE: Phil, thank you.

Members, you've heard staff's recommendation. We do have our Alamo RMA chair in the audience and theexecutive director. If you have any questions, I'm sure they'd be more than happy to come up and answerthem.

MR. HOLMES: Would you comment on it?

MS. ANDRADE: I'll hold off my comments until the end.

MR. HOUGHTON: No comments.

MS. ANDRADE: Bill, why don't you come up.

MR. THORNTON: I don't want to take any time, but it's appropriate. We too miss Ric Williamson. This is thefirst meeting you've had without him. A lot of our relationship with the commission was through thechairman. Personally and professionally, I liked him a lot because you knew where he stood and he toldyou what he was going to do and then he'd do it, and that goes a long, long way.

Second thing is we want to meet Commissioner Underwood and Commissioner Holmes, we've not donethat, and appropriately under Hope's guidance, we will come to Austin and meet with you or we wouldwelcome you in San Antonio to build that relationship. Commissioner Houghton is well aware of what we'redoing and involved in our process.

This is also the first time I've appeared that Amadeo Saenz has been the leadership of your staff, and thatis a decision you made that we're very pleased with. We really like Amadeo in San Antonio, we trust him,he's bright, he's quick, he's decisive, and those are the types of things you need when you're doingbusiness.

David Casteel you've stolen from us, but we're okay with that. David remains a friend.

I think today is remarkable also for our community, San Antonio. To have a very bright woman, Hispanic,Republican chairing the Texas Highway Commission is remarkable. This is a good day for Texas. It'snoteworthy and it should not go by quickly without notice of that. I assure you those of us who live inSouth Texas/San Antonio are well aware of what I see in my vision today, and we're very proud of that.

Terry Brechtel, for Commissioner Holmes and Commissioner Underwood, is here with us. She is the

executive director who runs our regional mobility authority, and quite capably so. She's a former citymanager of the City of San Antonio and is well equipped in professional skills to do the job before her.

Richard Perez is here today. He is the president of our Greater Chamber and is here today showing theinterest that our entire community has in this project. And Lisa Gonzales used to work in the governor'soffice, and she is also here. This is very, very important to us.

What you ladies and gentlemen talked about, the challenge before us is in San Antonio too. We're preparedto step forward, to do our part locally to make these projects a reality and that means moving themthrough the engineering, the financing, the political component, the neighborhoods, all of those challengesbefore us, because growth is explosive. As former mayor of San Antonio and former chairman of ourChamber, we worked really hard for the last 15, 20, 30 years trying to build our economy. We wantedcompanies to come to San Antonio, we wanted people to put businesses there, create jobs. Well, whenthey come, you need to be prepared for success, and they're arriving and we think it's our obligation tohelp in those areas of quality of life and transportation.

We do ask you to support this order. Actually, our formation was at the request of county government,petitioned for there to be an RMA, and they appoint six of our members. So this gives you an idea of thepolitical, civic leadership that we have.

We're working hard, I will tell Commissioner Houghton. we have three prongs moving forward, this is oneof those three, to get this project moving this summer. The transfer of the property -- which I think will benext meeting; our financial folks are doing their preparation to make this a bond-worthy project in thefinancial realm; and we have two teams that are competing in design-build. And all three of those prongsshould come together around April or May.

We in San Antonio will be so much better off once we get this started, we'll be miles down the road oncewe get it opened and showing our citizens how helpful this can be. We are well aware of the financialconstraints and we recognize tolling is a way to fund projects. At our last meeting that Richard Perezhosted at the Chamber where we met with Ric Williamson, we also stated very clearly to him, face to face,eye to eye, we're open to all areas of funding. But we'd like to get this project up, going, let our citizens inBexar County see the advantages, and then we'll work, as we have, with Amadeo and Phil and others ofyour staff to build other projects and improve the quality of life in our community.

We'll be glad to answer any questions you have.

MS. ANDRADE: Thank you. Any comments, questions?

(No response.)

MS. ANDRADE: Well, Chairman Thornton, thank you so much for being here and thank you to my fellowSan Antonians. Richard, thank you for being here, and Terry and Lisa. I appreciate very much the workingrelationship that we have, and thank you for being open. Thank you for understanding the fundingchallenges that we have, and this is a decision that has been made by the local community and we respectthat and we wish you the best of luck and we'll continue to support you. Thank you very much.

Members, you've heard staff's recommendation. What is your pleasure?

MR. HOLMES: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you very much. Get it built.

MR. SAENZ: The next item, commissioners, 5(b) is the general engineering report on the Central TexasTurnpike project, and Phil will present that.

MR. RUSSELL: Thank you, Amadeo.

Commissioners, as Amadeo mentioned, this is our quarterly update through November of last year. Thenews continues to be good. I think I reported at the last quarterly update that our Segment 4 -- that's thepiece from State Highway 71 just south of the airport there on State Highway 130 -- was projected to becompleted in April. I visited the project and got a project tour here a couple of weeks ago and they'remaking great progress. Tim Weight, the district's construction manager, is doing a spectacular job. And sothe news is good all the way across the board. The 45-Loop 1 projects again are operating at highefficiency, and then that last segment from 71 to just south of the airport there on 130 still is scheduled tobe completed in April.

The other element that I've always brought to your attention is the fact that this project continues to bewell under budget. It's vacillated somewhere around about $400 million under budget. Again, in the age ofgovernment problems, that's always a good message, I think, to tell. Actually, that amount has gone upincrementally over the last year or so. It was about $350-, $360- under budget, and over the last year it'sslowly crept up. Right now the general engineering consultant is showing that we're about $388 millionunder budget on that project.

So commissioners, I'd be happy to address any question you might have.

MS. ANDRADE: Members, you've heard Phil's presentation. Any questions, any comments?

(No response.)

MR. HOUGHTON: So moved.

MR. HOLMES: Phil, who all shares in the savings?

MR. RUSSELL: It's over about three or four areas. Some of that money, a large percentage of that is onright of way acquisition costs. That was in partnership with both counties, Williamson and Travis, two cities,City of Austin and City of Round Rock, as well as TxDOT. There were also some savings in construction anda couple of other areas, but the largest percentage is probably in the right of way acquisition costs.

MS. ANDRADE: Amadeo, did you have anything to add to it?

MR. SAENZ: Yes. In the area of the right of way acquisition costs, some of the cities that participated inwhat we call like a lump sum agreement, we just want to participate this much. Some of the other citieswere participating based on a percentage of the right of way costs, so we would have to go back and lookat all of the agreements that we had for the project to see if the savings were realized in that portion oftheir contract and we have to address the requirements that were part of the contract that we havebetween them.

MR. RUSSELL: Absolutely.

MS. ANDRADE: We have a motion.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you very much, Phil.

MR. RUSSELL: Thank you, commissioners.

MR. SAENZ: Thank you, Phil.

Item number 6 deals with Finance, and James Bass will present three minute orders dealing with youracceptance of some reports. James.

MR. BASS: Good morning. For the record, I'm James Bass, chief financial officer at TxDOT.

Item 6(a) presents the Quarterly Investment Report for the first quarter of fiscal year 2008 which ended onNovember 30, 2007. The investments covered in the report are associated with the 2002 project of theCentral Texas Turnpike System and the lease with an option to purchase for the Houston Districtheadquarters facility. The detail of these investments have been provided to you in the quarterly report.

I would be happy to answer any questions you may have, and staff recommends your acceptance of thereport.

MS. ANDRADE: Members, you've heard James's report. Any questions, comments? What is your pleasure?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

MR. BASS: Item 6(b) is due in part to the master resolution for the Texas Mobility Fund in which thecommission agreed to present audited financial statements and an annual update of financial and operatingdata to the bond market. This agenda item asks that you accept these items so that we may distributethem to the market.

Staff recommends your approval.

MS. ANDRADE: Members, what is your pleasure on (b)? Any questions, any comments? Motion?

MR. UNDERWOOD: So moved.

MR. HOUGHTON: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you.

MR. BASS: Item 6(c) is the same thing as 6(b) except it's for the State Highway Fund Revenue BondProgram, and in that program in the master resolution, the commission again agreed to present auditedfinancial statements and an annual update of financial and operating data to the bond market. We're askingthat you accept these items so we may distribute them to the market.

Staff recommends your approval.

MS. ANDRADE: Members?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

MR. SAENZ: Thank you, James. James will continue presenting item number 7 dealing with two minuteorders requesting approval of loans from the State Infrastructure Bank.

MR. BASS: Item 7(a) seeks preliminary approval of a loan to the Olmito Water Supply Corporation in theamount of $600,000, with a 20 percent contingency, to pay for utility relocation due to the expansion ofFarm to Market 511 from a two-lane to a four-lane divided highway.

Staff recommends your approval so that we may begin negotiations.

MS. ANDRADE: Members?

MR. HOUGHTON: So moved.

MS. ANDRADE: We have a motion, we need a second.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

MR. BASS: And lastly, item 7(b) seeks preliminary approval of a loan to the Liberty City Water SupplyCorporation in the amount of $1.16 million, with a 20 percent contingency, to pay for utility relocation alongState Highway 135 in Liberty City.

Staff recommends your approval so that we may begin negotiations.

MS. ANDRADE: Members, you've heard the recommendation. What is your pleasure? Any questions, anycomments?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

James, what's the balance on our State Infrastructure Bank?

MR. BASS: The cash balance is roughly $85 million but some of that has already been approved for futureloans from the commission, such that the available balance is around $31 million for additional futureapplications.

MS. ANDRADE: Thank you very much.

MR. SAENZ: Thank you, James.

Commissioners, item number 8 deals with two Transportation Enhancement projects, and Steve Simmons,deputy executive director, will present these two minute orders.

MR. SIMMONS: Good morning, Madame Chair, commissioners, Amadeo. For the record, my name is SteveSimmons, the deputy executive director of the Texas Department of Transportation.

Item 8(a) is a minute order needed to address legislation passed during last session. In January 2000, thecommission authorized $7 million in Federal Transportation Enhancement funds for the Texas State RailroadHistorical Park renovation project under a federal aid project to the Texas Parks and Wildlife Department.The railroad was deemed a truly unique and significant piece of Texas transportation history. The fundingwas intended to rehabilitate the line, locomotives, bridges and facilities to improve conditions for the usersof the system, as well as educate the public about historic railroad operations. Of the original $7 million,$1.75 million in funds remain unspent.

Senate Bill 1659 of the 80th Legislature transferred ownership of the Texas State Railroad from the TexasParks and Wildlife Department to the Texas State Railroad Authority. This proposed minute order authorizesthe executive director to execute an agreement with the Texas State Railroad Authority to administer the$1.7 million in unexpended funds for the continued improvements of the Texas State Railroad HistoricalPark.

Staff recommends approval of this minute order.

MS. ANDRADE: Members, you've heard staff's recommendation. Any questions or comments?

(No response.)

MS. ANDRADE: What is your pleasure?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

Steve, how are you feeling?

MR. SIMMONS: I'm wonderful.

MS. ANDRADE: I know you've been to all of our town hall meetings and we want to thank you for that, butI know you've been up quite a bit.

MR. SIMMONS: Yes. That's not counting the number of hours I get a night of sleep, it's how many hours inthe week I've gotten. I think I'm up to twelve.

(General laughter.)

MS. ANDRADE: Well, thank you.

MR. SIMMONS: Item 8(b) is a minute order to amend the 2007 Statewide Mobility Program to provideenhancement funds for the Heritage Trail Programs. Rider 50 to TxDOT's fiscal year '08-09 appropriationsbill directed the department to make available $8.9 million in Federal Transportation Enhancement Fundsfor the Heritage Trails Program, provided that the program met the federal funding requirements.

Since 1998, the Texas Historical Commission has been developing a statewide Heritage Tourism Program.Utilizing the ten Texas travel trails designated by the department in 1968 as a marketing tool, the programhas developed heritage regions around these driving trails, encompassing all 254 counties in the state. Theproject has been approved by the Texas Historical Commission, TxDOT and the Federal HighwayAdministration.

The commission approved the 2007 State Mobility Program in November 2006. This minute order willamend the 2007 SMP approved in November to provide $8.9 million in Category 9 TransportationEnhancements, and direct the executive director to proceed with the execution of any necessaryagreements.

Staff recommends approval.

MS. ANDRADE: Members, you've heard Steve's presentation on agenda item 8(b). Any comments orquestions? What is your pleasure?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

Thank you very much. Get some sleep.

MR. SAENZ: Thank you, Steve. Commissioners, I think we've had a lot of people attending these town hallmeetings and they've helped us but in particular I want to thank Steve because Steve has made everysingle one of those meetings and has been there listening to what the constituents across the state have onthis project. So Steve, thank you.

Agenda item number 9 dealing with Transportation Planning, we have four minute orders that will bepresented by Jim Randall. The first two minute orders deal with increasing the size of metropolitan planningarea boundaries, and then the third minute order deals with the appointment of a member for the Austin-San Antonio Intermunicipal Rail District, and then we have a minute order approving a work program. Jim.

MR. RANDALL: Thank you, sir.

Item 9(a), this minute order approves revisions to the Sherman-Denison MPO metropolitan area. Pursuantto Title 43, Texas Administrative Code, Section 15.3, revisions to metropolitan planning area boundariesmust be approved by the governor or the governor's designee. On October 4, 2005, Governor Perrydelegated authority to the commission to approve metropolitan area boundary changes.

In accordance with federal regulations, a metropolitan area boundary shall, as a minimum, cover theurbanized area and the contiguous geographic area likely to become urbanized within the 20-year forecastperiod covered by the metropolitan transportation plan.

On June 5, 2007, the Sherman-Denison Transportation Policy Committee approved the expansion of theSherman-Denison metropolitan planning area. Current growth patterns show that the Dallas-Fort WorthMetroplex continues its northern growth. With the extension of State Highway 289, the possible expansionof the North Texas Tollway, and Dallas Area Rapid Transit light rail into Grayson County, the Sherman-Denison MPO expects this area to become urbanized within the next 20 years.

The staff has reviewed and concurs with the proposed boundary changes which were provided by theSherman-Denison MPO. Staff recommends your approval of this minute order.

MS. ANDRADE: Members, you've heard staff's recommendation. Any comments or questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

MR. RANDALL: Item 9(b), this minute order approves revisions to the Lubbock MPO metropolitan areaboundary. As indicated earlier, Governor Perry has delegated authority to the commission to approvemetropolitan area boundary changes.

On October 16, 2007, the Lubbock Transportation Policy Committee approved the expansion of the Lubbockmetropolitan planning area. Lubbock has been experiencing growth in the south and southwest portion ofLubbock County and the MPO expects this area to become urbanized within the next 20 years.

Staff has reviewed and concurs with the proposed boundary changes which were provided by the LubbockMPO. Staff recommends your approval of this minute order.

MS. ANDRADE: Members, you've heard staff's recommendation on item 9(b). Any comments or questions?

MR. UNDERWOOD: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

MR. RANDALL: Item 9(c), this minute order reappoints J. Tullos-Wells as a public member to the Austin-San Antonio Intermunicipal Commuter Rail District. Article 650(c)-1 of Vernon's Texas Civil Statutes allowsthe establishment of an intermunicipal commuter rail district and grants the powers necessary to providecommuter rail service between the Austin and San Antonio areas.

This statute requires the Texas Transportation Commission to appoint two public members to the districtboard of directors. The other board members are appointed by the member cities, counties, transitorganizations and metropolitan planning organizations. Currently the board has 20 members. Due to hisexemplary service, staff recommends Mr. Wells be appointed for a fourth term which will expire in January2010.

Staff recommends approval of this minute order.

MS. ANDRADE: Members, if I may add, we're fortunate that Tullos-Wells keeps wanting to serve. He bringsgreat expertise and the consistency of his knowledge throughout the years is very beneficial to this. So Ithank him for wanting to do that.

What is your pleasure?

MR. HOLMES: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

MR. RANDALL: Item 9(d), this minute order approves the work program authorizing projects utilizingpayments received from the North Texas Tollway Authority for the right to develop, finance, design,construct, operate and maintain the State Highway 121 toll project. A subaccount has been created in theState Highway Fund to hold payments received.

A memorandum of understanding between the department and the Regional Transportation Council of theNorth Central Texas Council of Governments outlined that projects would be selected by the RTC with theconcurrence of the commission. The RTC, through the public involvement process, has identified projects tobe funded with the State Highway 121 payments. The department has established a work program toaccount for and track the projects. With approval of this minute order, projects listed in Exhibit A will beauthorized for CONSTRUCT authority in the work program.

Staff recommends approval of this minute order.

MS. ANDRADE: Members, you've heard staff's recommendation. What is your pleasure? Any comments,questions?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

MR. RANDALL: Thank you.

MS. ANDRADE: Jim, thank you very much.

MR. SAENZ: Thank you, Jim.

Commissioners, agenda item number 10. Steve Simmons, deputy executive director, will come back andpresent a minute order requesting approval to move forward with the purchase of options for a project inWebb County.

MR. SIMMONS: Thank you, Amadeo. Before I get into that, since you thanked me for being at these townhall meetings, I wanted to get on the record that we've had a lot of employees at our districts attend thesemeetings and have been a great help in putting these things on. But I do want to commend one particularemployee, and that is Mr. Doug Booher from our TTA Division. He has been at all these meetings, he is theenvironmental coordinator for these which most of the questions are revolving around that document, andhe has been right on the spot with the answers and people have been very much appreciative of havinghim here, and I want to recognize Doug for those actions.

Now to item 10, once again for the record, I'm Steve Simmons, deputy executive director.

Item 10 proposes to authorize the negotiations of options to purchase for the advanced acquisition of land

and right of way for a Border Safety Inspection Station at the World Trade Port of Entry in Laredo. Thisminute order authorizes the Laredo District engineer to negotiate the execution of option contracts and toexpend funds for option fees payments as well as other expenses necessary to purchase options for thenew location Border Safety Inspection facility at the World Trade Port of Entry.

Mario Medina is here to answer any questions that you might have regarding this minute order, but staffdoes recommend approval.

MS. ANDRADE: Members, you've heard staff's recommendation. Any questions or comments? What is yourpleasure?

MR. HOLMES: So moved.

MR. HOUGHTON: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you very much.

MR. SAENZ: Thank you, Steve.

Agenda item 11 deals with the award or rejection of construction contracts in Maintenance and HighwayConstruction. Thomas Bohuslav, director of our Construction Division, will present.

MR. BOHUSLAV: Good morning, commissioners. My name is Thomas Bohuslav, director of the ConstructionDivision.

Item 11(a)(1) is for consideration of the award or rejection of Highway Maintenance and DepartmentBuilding Contracts let on January 8 and 9, 2008. We had 41 projects; the average number of bidders at 4.3bidders per project; we were about 17 percent, 18 percent underrun.

We recommend award of all the projects for maintenance projects. Any questions?

MS. ANDRADE: Members, you've heard staff's recommendations. Any comments or questions? What is yourpleasure?

MR. HOLMES: Move it.

MR. HOUGHTON: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

MR. BOHUSLAV: Item 11(a)(2) is for consideration of the award or rejection of Highway and Transportation

Enhancement Building Construction contracts let on January 8 and 9, 2008. We had 83 projects; averagenumber of bidders at 4.5 per project.

We have one project we recommend for rejection. It's in Harris County, project number 3042. We had twobids on this project; it's actually 64 percent under; the bid was $45,000. Actually, it's a painting project inthe district. The contractor submitted a bid of $165 instead of their intended bid of $165,000, and they can'tdo it for that. We have rules that allow contractors to withdraw their bid and we reject all bids if they dohave a mathematical error in their bid. They met the criteria for that and we recommend rejection due tothat. The contractor will not be allowed to bid the job when it's re-let again.

We recommend award of all the projects with the exception noted. Any questions?

MS. ANDRADE: Members?

MR. HOUGHTON: So moved.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries. Thank you.

MR. BOHUSLAV: Thank you.

MR. SAENZ: Thank you, Thomas.

Commissioners, agenda item 12 deals with our Routine Minute Orders dealing with donations to thedepartment, eminent domain proceedings, finance -- we have a report, highway designations, load zonepostings, right of way donations and dispositions, as well as speed zones.

We have reviewed all of the items, and based on what we see, we see that there are no projects where anyof the commissioners would have any kind of a conflict.

MS. ANDRADE: Members, do you have any questions on the Routine Minute Orders? If not, what is yourpleasure?

MR. HOUGHTON: So moved.

MR. UNDERWOOD: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: All opposed, nay.

(No response.)

MS. ANDRADE: Motion carries.

MR. SAENZ: Commissioners, there is no need for an Executive Session for this meeting. We now will move

on to the Open Comment period. We do have some people that have signed up to speak.

MS. ANDRADE: All right, good. Lee Vela.

MR. VELA: Good morning, Madame Chair and commissioners. My name is Lee Vela. I'm president of theOutdoor Advertising Association of Texas, and we just wanted to take a couple of minutes here to offer ourpublic condolences for the loss of Chairman Williamson. He was truly a great leader for this commission andfor Texas, and I know he will be sorely missed in the months and years to come.

And we wanted to offer our congratulations to you, Madame Chair, for stepping in and doing such awonderful job today, as a matter of fact, and we look forward to working with you on key issues that facethe traveling public in Texas in the future.

Thank you.

MS. ANDRADE: Thank you very much, Mr. Vela.

MR. HOUGHTON: Thanks, Lee.

MS. ANDRADE: Coolidge Gerdes.

MR. GERDES: Let me first start out by removing my cap. I'm trying to get as much mileage out of that as Ican.

MS. ANDRADE: Good morning, sir.

MR. GERDES: Thank you for allowing me this privilege. A few nights ago I was at this meeting and I'mgoing to be hitting a whole bunch of places because three minutes don't give me much time.

I was really surprised when they said we could not vote on this super highway, and I've been thinking thatour government is supposed to be a government of the people, by the people and for the people, but whenwe're denied vote for things that's going to be so involved, it's what it's going to be.

They talk about taxes. There is now, I've counted, 56 different taxes we pay, 56, and I think it's one morethat's a surcharge which would be 57 taxes we already pay. Our life has really become complex.

I'm a World War II veteran, saw combat in the Philippines, spent a year in Korea, like to got killed at boththose places, but the Lord provided a way for me to get back, and I've thanked Him every day for that,even though I'm still suffering from the effects of that experience.

Life, as I said a second ago, has really changed in my generation of people, I'm 82. I was brought up on afarm. I'm the last person to get up and harness up the mules and go to the fields. The next generation goton a tractor and went to the fields. And when I was a boy, I'd come to town on a dirt road, we had nohighway. Cuero Highway didn't exist. So I remember coming in, and we had these dirt roads that at timesyou'd get stuck right in the middle of the road. So I remember coming to town in wagons, in a buggy, inModel T Fords and Model A Fords, and I think I'm richer for that experience.

I would like you to consider one thing. As we go through these difficult days that we're living in right now --they are truly difficult -- I guess it's why it's time that people my age move on because our ideas of wherewe were and where we are now is so different, we're living in a different world. But one message that I'dlike to leave with you, for all of you to remember this because after Judge Moore had the TenCommandments removed from his courtroom, I thought there's got to be a way to continue this thing, somy car has got a paint job on it and it says this: Remember this, you can't live wrong and die right, honorthe Ten Commandments of Creator God.

It is now estimated that we have between 17- and 18 million laws on the books today. It's absolutelyunconscionable that we can even fathom anything such as that, and today we're passing more laws. They'll

never quit, they'll never cease. But our world is not that much longer from here. I'll never see thecompletion of this and none of you people will ever see the completion of this highway that they propose,and this highway is being built so they can bring products built in foreign lands, produced in a nation that'sknown for its strength by the products that it produces. We've got no products; everything has been movedaway from here, and so we're going to fix a road so foreign countries can deliver their products up fromhere to Canada. I don't think that should be our job.

Another thing, too, if we remove all the illegal aliens from here immediately, our medical society would becured and so would our school system be cured. I don't suspect this will ever happen but I know it shouldhappen.

I know I went to war to liberate the people in the Philippines so they'd have their country and the Japanesepeople annihilated or captured and removed from there. In Korea the same thing. I went there and spentalmost exactly one year there. Like to got myself killed there and all we did was remove the Japanesepeople and send them back to Japan. That was a horrible thing seeing them shipped out of there in littleboats, but that's what we did.

But just keep this in mind, I'll say one more time, if this is a government of the people, by the people andfor the people, I wish I could see it today. I don't see it anymore. And I'll just say one more time -- and I'mgoing to thank you for your time -- to remember this: You can't live wrong and die right, honor the TenCommandments of Creator God. Thank you.

MS. ANDRADE: Thank you, sir. Thank you very much for coming to address us and thank you foreverything that you've done for our state and our country.

MR. GERDES: Thank you so much. I appreciate that. And thank you people that have to do this difficultwork. It's got to be difficult, and it takes special people like you to do it. Other people can't do this, and Iappreciate you so much.

MS. ANDRADE: Thank you, sir.

MR. GERDES: May God continue to bless our nation. Thank you.

MS. ANDRADE: Be safe. Thank you.

Is there any other business to come before the commission?

MR. SAENZ: No.

MS. ANDRADE: There being none, I will entertain.

MR. HOUGHTON: Move to adjourn.

MR. HOLMES: Second.

MS. ANDRADE: We have a motion and a second. All in favor, say aye.

(A chorus of ayes.)

MS. ANDRADE: Fellow commissioners, thank you very much for making our meeting so successful.

Please note for the record that it is 11:30 and this meeting stands adjourned.

(Whereupon, at 11:30 a.m., the meeting was concluded.)

C E R T I F I C A T E

MEETING OF: Texas Transportation CommissionLOCATION: Austin, TexasDATE: January 31, 2008I do hereby certify that the foregoing pages, numbers 1 through 123, inclusive, are the true, accurate, andcomplete transcript prepared from the verbal recording made by electronic recording by Stacey Harrisbefore the Texas Transportation Commission.

02/04/2008(Transcriber) (Date)

On the Record Reporting, Inc.3307 Northland, Suite 315Austin, Texas 78731

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