TEXAS TRANSPORTATION COMMISSION COMMISSION MEETING Thursday, January 30, 2003 Rose Garden Center 400 Rose Park Drive Tyler, Texas 75702 (903) 531-1213 SPEAKERS AT THE COMMISSIONERS MEETING: MARY OWEN, Tyler District Engineer (TxDOT) BECKY DEMPSEY, Smith County Judge JOEY SEEBER, Tyler Mayor RANDY BROGOITTI, Green Carpet Memorial Association CHAIRMAN JOHN W. JOHNSON COMMISSIONER ROBERT L. NICHOLS COMMISSIONER RIC WILLIAMSON MICHAEL W. BEHRENS, Executive Director (TxDOT) MARGOT MASSEY, Director of Public Transportation AMADEO SAENZ, Assistant Executive Director for Engineering Operations JERRY DIKE, Director of Vehicle Titles and Registration Division PHILLIP RUSSELL, Director of Texas Turnpike Authority Division GARY TRIETSCH, Houston District Engineer JAMES BASS, Director of Finance Division ZANE WEBB, Director of Maintenance Division THOMAS BOHUSLAV, Director of Construction Division RICHARD MONROE, General Counsel GARY BEESINGER, Councilman for the City of Archer City L.B. BOREN, JR., City Secretary for City of Archer City ALSO PRESENT: CHERYL M. WILLIAMS, Executive Assistant to the Deputy Executive Director DEE HERNANDEZ, Minute Order Clerk EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213

2 1 I N D E X 2 AGENDA ITEM PAGE 3 9:08 A.M. CONVENE MEETING (Chairman John Johnson) 6 4 Receive comments from area public officials, community and civic leaders, and private 5 citizens. Mary Owen - Introductions 10 6 Tyler Mayor Joey Seeber 13 Smith County Judge Becky Dempsey 17 7 Executive Director Randy Brogoitti speaking 19 on behalf of East Texas Gulf Highway 8 Association Report on the Tyler District by Mary Owen 24 9 1. Approval of Minutes of the December 19, 48 10 2002 regular meeting of the Texas Transportation Commission 11 2. Public Transportation (Margot Massey) 48 12 Various Counties - Award Section 5311(f) grant program funding for intercity 13 bus projects (MO) 14 3. Promulgation of Administrative Rules - Under Title 43, Texas Administrative Code, 15 Pursuant to the Administrative Procedure Act, Government Code, Chapter 2001: 16 a. Final Adoption (Amadeo Saenz) 17 (1) Chapter 15 - Transportation 61 18 Planning and Programming (MO) Amendments to Section 15.73, 19 International Bridges (Preliminary Studies) 20 (2) Chapter 17 - Vehicle Titles and 63 21 Registration (Jerry Dike) - (MO) Amendments to Sections 17.20, 17.24, 22 17.28, and 17.50, Motor Vehicle Registration - Disabled, Specialty, 23 and Exempt License Plates 24 25 EAST TEXAS COURT REPORTING SERVICES, INC.

P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 3 1 4. Turnpike Projects 2 a. Travis and Williamson Counties 68 (Phillip Russell) - Accept the General 3 Engineering Consultant Quarterly Progress Report for the Central Texas 4 Turnpike Project (MO) 5 b. Various Counties (Amadeo Saenz) - 71 Authorize the department to expend 6 up to $10 million to perform feasibility studies necessary to 7 identify candidate turnpike projects that may be developed by the department 8 or other entities (MO) 9 c. Harris County (Amadeo Saenz) - 89 Authorize the department to enter a 10 funding agreement with the Federal Highway Administration and Harris 11 County to participate in a toll facility value pricing project to 12 reconstruct IH 10 from the City of Katy to just west of Washington Avenue 13 in the City of Houston (MO) 14 Comments by Gary Trietsch 95 15 5. Finance (James Bass) Accept the Quarterly Investment Report as 97 16 of November 30, 2002 as required by the Public Funds Investment Act, Government 17 Code, Chapter 2256 (MO) 18 6. Maintenance (Zane Webb) Establish funding needs to maintain the 101 19 highway system at or above adopted condition levels as required by the 20 Governmental Accounting Standards Board Statement 34 (MO) 21 7. Contracts (Thomas Bohuslav) 22 a. Award or rejection of highway 105 23 improvement contracts: (see attached lists) 24 (1) Maintenance (MO) 105 25

EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 4 1 (2) Highway and Building 105 Construction (MO) 2 8. Contested Case (Richard Monroe) 107 3 Texas Department of Transportation vs. Roger Chambers dba Roger's - Consider 4 action on Administrative Law Judge proposal for decision concerning revocation of 5 salvage motor vehicle dealer's license and issue final order (MO) 6 9. Routine Minute Orders (Mike Behrens) 7 a. Eminent Domain Proceedings 8 (1) Various Counties - noncontrolled 129 9 and controlled access highways (see attached itemized lists)(MO) 10 (2) Various Counties - controlled 128 11 access turnpike projects (see attached list)(MO) 12 b. Load Zones 129 13 Various Counties - Revise load restrictions on various roadways on 14 the state highway system (MO) 15 c. Right of Way Disposition, Purchase and Lease 16 (Gary Beesinger & L.B. Boren, Jr.) 17 (1) Archer County - SH 79 in 109 Archer City - Consider the sale 18 of a surplus maintenance site (MO) 19 (2) Dallas County - IH 30 at 128 MacArthur Boulevard in Grand 20 Prairie - Consider the sale of access rights (MO) 21 (3) Dallas County - SH 190 at 128 22 Keller Springs Road and St. Louis, San Francisco & Texas 23 Railroad in Carrollton - Consider the sale of a surplus drainage 24 easement (MO) 25

EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 5 1 9. Routine Minutes Orders (continued) 2 c. Right of Way Disposition, Purchase and Lease (continued) 3 (4) Williamson County - US 183A at 128 4 1.5 mile north of Lakeline Boulevard - Consider the 5 exchange of surplus land for needed right of way (MO) 6 d. Speed Zones 128 7 Various Counties - Establish or alter regulatory and construction speed 8 zones on various sections of highways in the state (MO) 9 10. Executive Session - Pursuant to Government 10 Code, Chapter 551 11 a. Section 551.071 - Consultation with 130 and advice from legal counsel 12 b. Section 551.072 - Discussion of real 130 13 property purchase, exchange, lease, donations 14 c. Section 551.074 - Discuss the 130 15 evaluation, designation, reassignment, and duties of department personnel, 16 including district engineers, division directors, and office directors 17 Open Comment Period 131 18 Chris Chandler - Highway signs 131 19 Adjourn 136 20 21 22 23 24 25

EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 6 1 P R O C E E D I N G S 2 MR. JOHNSON: Good morning. It is 3 9:08 a.m., and I would like to call this meeting of 4 the Texas Transportation Commission to order. 5 Welcome to our first meeting of the new 6 year. It is a pleasure to be in Tyler. And as we 7 noticed, the real rose of Texas, and we're also 8 delighted to have you join us today. 9 I would note for the record that public 10 notice of this meeting containing all items of the 11 agenda was filed with the Office of the Secretary of 12 State at 9:09 a.m. on January the 22nd. 13 As some of you may know, it is our 14 practice to hold some of our monthly meetings outside 15 of Austin at different locations around the state, and 16 although the Commission has met three other times in 17 our Tyler District, if our records are correct, I 18 believe that this is the first time we've met in the 19 City of Tyler. 20 We certainly benefit from the meetings 21 outside of Austin. It reacquaints us with the 22 interests, challenges, and people of the various 23 regions of the state. 24 And I'm sure that by the time our visit is

25 over, we will be better informed about the area. And, EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 7 1 hopefully, our meeting will give you the sense of how 2 we conduct business, at least on the transportation 3 end of state government. 4 This meeting also gives us the opportunity 5 to hear from you, and if anyone would like to address 6 the committee -- commission, we would ask that you 7 fill out a card at the registration desk in the lobby. 8 And if you would like to comment on an 9 agenda item, we would ask that you fill out a yellow 10 card, and should it be a nonagenda item, we would ask 11 that you fill out a blue card, and we will take those 12 comments at the end of the meeting at our open comment 13 period. 14 We would also request that in this day of 15 advanced communications that anyone with a cell phone 16 or a pager, that we put those on the mute or the 17 silent or the off mode so that we will not disrupt the 18 proceedings. 19 We will hear from some local officials 20 this morning, but it's a traditional part of our 21 commission meeting that before we get started in the 22 business of the day, that my fellow commissioners be 23 provided an opportunity to make a statement or a 24 comment.

25 And traditionally, I'd ask Robert Nichols EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 8 1 first, but since this is a home game for Robert, I'm 2 going to ask Commissioner Williamson if he has any 3 comments or observations. 4 MR. WILLIAMSON: Thank you, Chairman. 5 Thank you to Tyler and the greater Tyler 6 area for your hospitality, for inviting us into your 7 home and allowing us to learn a little bit more about 8 Tyler. 9 I got up this morning, Mr. Chairman, and 10 went down and checked out the infamous Frankston 11 Highway, and I can tell you that we made the right 12 decision to expand that highway because it is 13 dangerous. 14 (General laughter.) 15 MR. WILLIAMSON: I can also tell you that 16 as one of the few graduates of the University of 17 Texas, before I leave, I fully expect someone to show 18 me where Earl Campbell was born. 19 (General laughter.) 20 MR. JOHNSON: Robert Nichols. 21 MR. NICHOLS: I'd like to thank everybody 22 for being here. We had a great day yesterday, a 23 meeting with the district employees, a nice dinner

24 last night, and a chance to meet a lot of elected 25 officials and stuff. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 9 1 I think it's great to have an opportunity 2 to show East Texas to people from Austin and the rest 3 of the state, and I want to thank Tyler, Cherokee 4 County, and the East Texas area for making everyone 5 feel so welcome here. 6 I did not get the mileage award for this 7 trip since it is in my backyard, and it's good to be 8 here. 9 MR. JOHNSON: Cherokee County. I thought 10 it was Cherokee (pronouncing) County. 11 (General laughter.) 12 MR. WILLIAMSON: Cherokee County. 13 MR. JOHNSON: I would also like to 14 introduce the members of our administration. With us 15 today, of course, is our executive director, Mike 16 Behrens, but also here are our deputy executive 17 director, Steve Simmons, who I'm sure is familiar to 18 y'all, he's in the back of the room to your right; and 19 assistant executive director for engineering 20 operations, Amadeo Saenz, who is back there also. 21 They do a wonderful job representing you 22 at the state level, and it's a terrific group of 23 people that the Commission has the opportunity to work

24 with. 25 We will hear from quite a few people this EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 10 1 morning, but to get us started, it said here that 2 we're going to listen to TxDOT's rose, but she's a 3 real jewel, and we all have a high regard for the 4 district engineer here, Mary Owen. 5 So Mary, if you will come forward. 6 Welcome to Tyler. Welcome to the commission meeting. 7 Thank you for the arrangements that you've made. It's 8 been sensational. 9 MS. OWEN: Thank you very much for the 10 opportunity to be here and taking us up on our 11 invitation, and we do hope, sincerely, that you've 12 enjoyed the hospitality. 13 It is my pleasure to again welcome you to 14 Tyler, Chairman Johnson, Commissioners Nichols, 15 Williamson, and Executive Director Behrens. 16 On behalf of our communities of Northeast 17 Texas, we are honored that you did accept our 18 invitation, and we do hope that you have enjoyed the 19 hospitality. 20 Before I get started, I have been graced 21 with the presence of a lot of support, and I would 22 like to take the opportunity to introduce these folks

23 because we don't get this opportunity very often. 24 I'd like to take the opportunity to first 25 bring to your attention the attendance of our road EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 11 1 hands. The road hands from the district presentation, 2 I would like to officially introduce them and honor 3 them because they are continually involved in our 4 transportation concerns. 5 These are still active members who have 6 been appointed the award of road hand, and they are 7 still actively involved in their communities in 8 supporting our projects. 9 As I say your name -- and I hope that I 10 haven't forgotten anybody -- if you'd please just 11 raise your hand and get some recognition, I'd 12 appreciate it. 13 This is a dubious award that takes many, 14 many years to accomplish. Most of these individuals 15 have worked 20, 30 years for Transportation in the 16 region, and as I said, are continuing to support our 17 endeavors. 18 First I'd like to introduce Mr. Don Wall 19 from Paris. Thank you. Mr. Bob Gould from Athens, 20 Athens Loop advocate. Mr. Landon Alford from 21 Henderson, Alford Loop advocate. Mr. Randy Brogoitti, 22 who will speak to you later, from Kilgore.

23 And last, but not least, the newest 24 member, Judge Mickey Smith. Oh, yes. And, of course, 25 Mayor Abernathy. Now, he is the dean of the road EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 12 1 hands, is he not? 2 (Applause.) 3 MR. WILLIAMSON: Did he bring us some 4 sausage? 5 (General laughter.) 6 MAYOR ABERNATHY: I wanted to bring it 7 especially for you. 8 MR. WILLIAMSON: Oh, okay. 9 MS. OWEN: I'm very pleased to say that I 10 have a few of my peers in the audience who have shown 11 up to grace us at this meeting, and I'd like to just 12 recognize them for the audience. 13 Mr. Jim Freeman, district engineer from 14 Atlanta. Gary Trietsch, district engineer in Houston. 15 Bob Ratcliff, district engineer in Atlanta, and one of 16 our own that was blown over to West Texas, but we like 17 to have him back as much as possible, Randy Hopmann, 18 who's now in Lubbock. 19 (Applause.) 20 MS. OWEN: And certainly last, but not 21 least of all, I'd like to give an opportunity to

22 recognize my predecessor who established the 23 traditions that we so have the pleasure to fulfill, 24 D.E. "James" Evans. 25 (Applause.) EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 13 1 MS. OWEN: It is now my honor and 2 privilege to introduce two of Smith County's most 3 outstanding citizens and leaders for a few opening 4 regards. 5 Smith County Judge Becky Dempsey has 6 recently assumed her new role as county judge just 7 earlier this month. 8 Following Judge Dempsey will be Mayor 9 Seeber. Mayor Seeber is dedicated to working closely 10 with the Department in resolution of all of our mutual 11 transportation concerns. 12 Joey has taken a real interest in the 13 charge that was set upon us last year as we went down 14 to the delegation to look at the feasibility of toll 15 roads for our transportation/mobility issues, as well 16 as organizing our regional mobility authorities. 17 I do believe he'll speak very briefly 18 about his initiatives and those efforts. I'd like to 19 welcome them to the podium at this point. Judge 20 Dempsey, Mayor Seeber. 21 JUDGE DEMPSEY: We'll come together, but

22 I'm going to defer to the Mayor first. 23 MAYOR SEEBER: Good morning. Good 24 morning, Chairman Johnson, Commissioner Nichols and 25 Williamson, Executive Director Behrens. We welcome EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 14 1 you to Tyler. 2 I am Joey Seeber, mayor of the City of 3 Tyler. Welcome to our beautiful city. Thank you for 4 coming. 5 We appreciate having the commissioners and 6 staff from the Texas Department of Transportation in 7 Tyler for one of their two annual out-of-town 8 meetings. 9 We've certainly enjoyed the opportunity to 10 visit with you informally, both yesterday evening and 11 this morning, and we appreciate your willingness to do 12 that. 13 We know you do a tremendous job 14 maintaining and expanding our state's highway system. 15 We're also aware that you are only able to fund about 16 30 percent of all eligible projects that you review. 17 Selecting a project for funding is 18 difficult, and it's a challenging process, and we 19 appreciate your dedication to address the most 20 critical needs and to be sure that every part of Texas

21 benefits. 22 We've been working closely with Tyler 23 District Engineer Mary Owen and her staff on a variety 24 of projects that will improve our region's highway 25 system. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 15 1 Our top priority, as you know, for the 2 past ten years has been the outer loop or Loop 49 3 project. We are very pleased that this project will 4 finally begin construction, or so we're told, this 5 summer. 6 (General laughter.) 7 I'll believe it when I see them turning 8 dirt, but I believe that's going to happen. 9 We are very pleased that this project, 10 again, will begin construction this summer. When it's 11 completed, it will help more traffic through and 12 around our rapidly growing metro area. 13 We thank you for providing funds for the 14 loop project and for all you've done to support our 15 region's highway system for these projects that will 16 improve our ground transportation network. 17 We also heard loud and clear your comments 18 both last spring when we appeared before you in Austin 19 and last evening regarding a regional approach to our 20 transportation needs.

21 We understand the importance that you now 22 place upon regional cooperation, specifically through 23 the vehicle of the Regional Mobility Authority. For 24 this reason, since returning from Austin last spring, 25 we've been consulting with District Engineer Mary Owen EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 16 1 as to the best and the most efficient way to implement 2 this concept in the Tyler area and in East Texas. 3 Also, beginning last fall, Smith County 4 Judge Elect, at the time, Becky Dempsey -- that would 5 be you, and I left your name out just to test 6 myself -- and Gregg County Judge Elect, at the time, 7 Bill Stoudt, Longview Mayor Earl Roberts and I began 8 informal meetings to discuss ways in which we can work 9 together on a regional basis on a number of issues, 10 probably the biggest of which is our transportation 11 needs. 12 This builds upon the regional approach 13 that our East Texas communities pioneered over the 14 past few years with the leadership of Mickey Smith and 15 folks in Gregg County and Longview, as we participate 16 in the Northeast Texas Air Care Coalitions' efforts to 17 be proactive in the area of air quality. 18 The culmination of these efforts was the 19 signing of an early action compact blessed by both the

20 TCEQ and the EPA, and this compact, only the third of 21 its kind in the State of Texas, requires that certain 22 air quality standards be met by certain dates in our 23 area. In exchange, the EPA has agreed we'll not be 24 designated as a nonattainment area. 25 We believe that this kind of regional EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 17 1 cooperation that you -- is the kind of regional 2 cooperation that you've been seeking, and we want you 3 to know that we've been working hard for a long time 4 to make this happen. 5 We intend to continue these efforts. We 6 believe that as a result, we will have cleaner air in 7 East Texas, we will continue our economic growth and 8 the expansion of our transportation infrastructure, 9 and we also believe that an East Texas RMA will be 10 appearing before you in Austin in the not too distant 11 future. 12 Again, thank you for your work, for your 13 support for projects in East Texas, for coming to 14 Tyler, and just don't wait another 40 years to do it 15 again. 16 Now I would like to introduce Becky 17 Dempsey, Smith County Judge. Thank you. 18 (Applause.) 19 JUDGE DEMPSEY: Thank you very much,

20 Mayor. I'd like to add my welcome again to the 21 commissioners, Chairman Johnson, Commissioner Nichols, 22 Commissioner Williamson, and Mr. Behrens. 23 It's a pleasure to have you here in our 24 city, and I hope you have enjoyed your stay and will 25 continue to enjoy your stay. Hopefully, Commissioner EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 18 1 Williamson, someone will show you where, in fact, Earl 2 Campbell was born. I think there are plenty of folks 3 in the room that know that. 4 Our city and county, as you are probably 5 well aware, have been experiencing tremendous economic 6 growth over the past 15 years. We have a lot of folks 7 in this room to thank for that. 8 Despite a national economic slowdown over 9 the last few years, we continue to show strong growth 10 in population, construction, and retail sales. We are 11 the regional growth center for medical services, 12 education, and retail. 13 We appreciate the efforts of the Texas 14 Department of Transportation to upgrade the Texas 15 Trunk System and to rank Highway 31 and U.S. Highway 16 69, which intersect in downtown Tyler. 17 And I understand, Chairman Johnson, you -- 18 in fact, I believe you made a comment last night at

19 dinner about the merging of all the number of highways 20 in our community, and we find that, ourselves, to be 21 very interesting. They are top priorities for funding 22 in that system upgrade. 23 We also want to thank you for providing 24 funds that will allow us to begin construction, as 25 Mayor Seeber said, on the Loop 49 project. That outer EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 19 1 loop has been a project for a long time. 2 And I'm not a native East Texan; I'm 3 actually from Fort Worth, which is west, of course, 4 the beginning of the west, but I got to East Texas as 5 quickly as I could, and I'm very excited that Loop 49 6 is going to get me to I-20 a lot faster. 7 We will continue to work with Mary Owen 8 and her fine staff to complete these projects, and to 9 that end, we certainly pledge our support. Thank you 10 again for all you do for East Texas, for our region, 11 and again welcome to Smith County. Thank you. 12 (Applause.) 13 MS. OWEN: Thank you for your comments. 14 In an intent not to break with tradition, 15 we've invited Mr. Randy Brogoitti, road hand, to 16 present a few words of welcome and appreciation on 17 behalf of the Commission -- to the Commission on 18 behalf of the East Texas Gulf Highway Association.

19 Randy. 20 MR. BROGOITTI: Thank you, Mary. 21 Y'all have done well in selecting Mary 22 Owen as a district engineer for Tyler, and we 23 certainly appreciate you allowing us to be a part of 24 your presentation. 25 Thank you, Chairman Johnson, Commissioners EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 20 1 Nichols and Williamson, Executive Director Behrens. 2 I'm proud to welcome you to East Texas. I'm 3 especially honored to have the opportunity to 4 represent my own city of Kilgore and its sister 5 members of the East Texas Gulf Highway Association. 6 I want to point out to you that this 7 association is a premiere example of regionalism and 8 regional cooperation that was started long ago. We 9 thank you for the years of support for our mutual 10 goals. 11 On behalf of the Association, I would like 12 to recognize the membership in attendance today to 13 show you the support that we garner from our sister 14 communities. 15 Would those of you from the East Texas 16 Gulf Highway Association please stand and be 17 recognized.

18 (Applause.) 19 MR. BROGOITTI: Thank you very much. 20 Organized in 1965, this association is 21 making its 38th appearance in support of the mutual 22 goals shared by the nine counties and sixteen 23 communities along this memorial route. 24 Charter members, David Abernathy, Mayor of 25 Pittsburg, and Landon Alford of Henderson, Texas, are EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 21 1 in attendance today. Would you two gentlemen please 2 stand? We would be derelict if we didn't recognize 3 them. 4 (Applause.) 5 MR. BROGOITTI: They deserve our public 6 thanks for their dedication not only to this 7 association but to the highways and the driving public 8 of the State of Texas. 9 Now, I want to point out to you that one 10 of Mayor Dave's goals in life is to drive this route 11 from end to end upon its completion. Gentlemen, as 12 you can see, the clock is running. 13 (Laughter.) 14 MAYOR ABERNATHY: 90 and a half. 15 MR. BROGOITTI: And it's running fast, let 16 me tell you. You didn't get to go fishing but 91 17 times this year is what he told me. He's slowing

18 down. 19 During the life of this project, we have 20 met with 19 different legislators, we have worked with 21 more than 10 district engineers from this region 22 alone, we helped train three district engineers for 23 our regions, and we'd appreciate you keeping your 24 clammy hands off the one we've got right now. 25 (Laughter.) EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 22 1 MR. BROGOITTI: We have been acquainted 2 with seven executive directors, one of which we helped 3 train when he was in Paris. Thank you, Alford. We 4 have had -- Mary is a tough lady. She makes me follow 5 a script. That's not what we normally do. 6 We've had to re-educate ourselves as we 7 have endured three department name changes and had to 8 learn numerous funding categories in order to know 9 what to ask for and where to get it. We discovered 10 environmental issues that we didn't even know existed 11 at the time this project started, and now we face -- 12 guess what -- another funding crisis. 13 Gentlemen, we are experienced to the point 14 that this is the longest standing unfinished 15 recognized project in the State of Texas. But we are 16 encouraged. I, like Commissioner Nichols, am viewed

17 as an eternal optimist, and my cup runneth half full. 18 We are encouraged by the progress made 19 during nearly 40 years of organized support for this 20 route and its improvements. I'd like to draw your 21 attention to the map delineating some of our past 22 accomplishments and our remaining concerns. 23 As you can see from this map, this 24 longstanding project is full of accomplishment. The 25 system now lacks only 54 and a half miles of EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 23 1 improvement to accomplish our long recognized goal; a 2 four-lane system from the Houston Gulf Coast region 3 through the Texas/Louisiana border region of East 4 Texas and beyond to the states in the Midwest and 5 Canada. 6 The State Highway 135 portion of our 7 project stretches from Interstate 20 north of Kilgore 8 to U.S. Highway 271 in Gladewater. This roadway 9 currently experiences an accident rate that is 100 10 percent higher than the statewide average. 11 To translate that for us East Texans, that 12 means this road has twice as many wrecks as it 13 shouldn't. The traffic count along this section would 14 be significantly higher except for one major fact; 15 local citizens avoid this roadway when possible due to 16 the hazards.

17 We appreciate the Tyler District for its 18 current commitment of district funds to enhance State 19 Highway 135 and this particular section of this 20 roadway. We appreciate all the support and directions 21 that all the districts have given us as we work to 22 improve the entire route. 23 We appreciate also the magnitude of the 24 decisions that you gentlemen are called to make. It's 25 not an easy job, and you represent the citizens of EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 24 1 Texas well, and we appreciate you. 2 Again, we thank you for the understanding 3 we've received through the years and the dedicated 4 effort to improve East Texas regional transportation, 5 and we trust it will continue. 6 Thank you very much. And thank you, Mary, 7 for letting us be a part of your presentation. 8 (Applause.) 9 MS. OWEN: Thank you, Randy, Mayor Seeber, 10 and Judge Dempsey for your comments this morning. We 11 appreciate your time. 12 Now it's my time to work into our 13 presentation from the district. I would like to take 14 this opportunity to present the Tyler District's 15 contributions towards the shared vision for Texas

16 transportation. 17 Tyler is focused on the vision and is 18 contributing by improving our mobility in East Texas 19 by reducing the fatality rates on both rural and urban 20 roadways. And for your information, unfortunately, 21 Smith County has consistently ranked amongst the top 22 three Texas counties for fatalities on rural roadways. 23 It's a dubious honor and quite a challenge. 24 Number three, we're preserving the system 25 in good or better condition. We do have our EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 25 1 challenges and will continue to meet those, providing 2 design excellence in our service, trying to provide 3 better service to our customers, and lastly, 4 continuing to work with our East Texas partners to 5 work on economic vitality for the region, focusing in 6 on the specific goals, mobility. 7 I'd like to take the first part of the 8 presentation just to introduce you to the district and 9 the counties that we serve, starting with Wood County 10 in the north, one of our smallest counties, but home 11 to Lake Fork and the largest bass on record. 12 Van Zandt County just to the west, 13 bordering our Dallas district friends, known for the 14 shoppers paradise of Canton First Mondays. That 15 special generator, some months, brings in as many as

16 200,000 visitors. Quite a challenge for our 17 transportation. 18 Moving to Smith County, home of the Rose 19 Capital of Texas and Tyler, the first certified 20 retirement center in Texas. Come on. Make your 21 reservations. 22 (General laughter.) 23 MS. OWEN: And Gregg County, home of 24 Longview, Kilgore, and the East Texas Oil Field. I 25 would like to point out that both Smith and Gregg EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 26 1 County do have the dubious honor of being on the near 2 nonattainment air quality list, and we've been working 3 together concertedly as a region to try and identify 4 opportunities to -- like was addressed last night, 5 Commissioner Johnson, what we can do to avoid being 6 put on that attainment list. 7 Moving to Henderson County, home to Cedar 8 Creek Lake, another retirement center, it also serves 9 as a bedroom community to the Dallas area and Athens 10 Black-eyed Pea Festival. 11 Down south to Anderson County, home of 12 U.S. 79, one of our major trunk system routes, and 13 Palestine's Dogwood Festival. 14 And Cherokee, home of our illustrious

15 Commissioner Nichols, the Jacksonville Tomato Bowl and 16 the Fighting Indians. 17 And last, but not least, we have Rusk 18 County, home of Henderson and the Henderson Syrup 19 Festival. 20 As you can tell, most of those counties 21 have reasonably good populations. Together we have 22 about 700,000 in population and a significant amount 23 of vehicle miles travelled throughout the region. We 24 have a challenge, and it's diverse. 25 Moving into the focus of the backbone of EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 27 1 the infrastructure that we're responsible for, just to 2 highlight for you, we currently service 83 miles of 3 Interstate 20. We have 180 miles of Phase I Texas 4 Trunk System, which includes 175 there highlighted for 5 you and 69 highlighted for you. 6 We also service 45 miles of the strategic 7 highway network on 259. And finally, there's about a 8 hundred miles remaining on U.S. 79 and S.H. 31 that 9 are on the Texas Trunk System but have not been 10 identified for funding for widening. 11 I'd like to take this opportunity to thank 12 you for your support for the construction of our most 13 regionally significant strategic mobility project, 14 Loop 49.

15 We are happy to report that after a long 16 18 months of deliberations with the Corps of 17 Engineers, that the $14 million dedicated through the 18 Commission's strategic priority funds and the $1.6 19 million dedicated through local revenues for the first 20 phase construction of Loop 49, and that would be 21 between the roadways of U.S. 69 and S.H. 155 in the 22 south, is "fixin'" to be going to construction in 23 April of this year. We hope to be breaking ground 24 this summer. 25 The second phase, in which you so EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 28 1 generously gave us $6.9 million -- excuse me -- 2 $8.6 million of strategic priority money, and we have 3 500,000 local money matched, will be going to 4 construction in 2004, pending the receipt of the Corps 5 permit. 6 I would also like to take the opportunity 7 to mention 155 in which Commissioner Williamson 8 mentioned earlier. We thank you very much for 9 completing that section of four-lane highway with the 10 15-million-dollar commitment that will connect 11 Palestine to Tyler with a complete four-lane divided 12 freeway. We hope to go into construction on that 13 project in 2005. Thank you.

14 In addition, the folks of Kilgore are 15 celebrating the construction of a long-awaited 16 35-year-plus Kilgore relief route. With the 17 Commission's blessing of $25 million, the district was 18 able to advance this project to construction through a 19 fast-track plan development process that lasted only 20 nine months. We hope to be celebrating the ribbon 21 cutting early next year. 22 Moving on to Athens, the integrity and 23 ingenuity of the City of Athens in Henderson County 24 need to be applauded as we will celebrate the letting 25 of the last section of the Athens loop next year. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 29 1 Their pledge of support for 100 percent right of way 2 has made this long-term mobility project connecting 3 two trunk system projects and routes a reality. 4 As you can see, we're trying to capture 5 some of the identity of the regions and the locals by 6 working with our bridges and making them personalized. 7 Just to balance the scales a bit, I'd like 8 to show you some more -- construction that's more than 9 just loops and that we do more than just loops. 10 We are working actively with our growing 11 communities to identify opportunities for partnerships 12 in the construction and mobility solutions just like 13 the Green Carpet Route.

14 This example is adjacent to the special 15 generator called Canton First Mondays. 16 Moving into the goal of safety, I'd like 17 to highlight just a few examples of our safety 18 challenges. This F.M. 2475 is on the fringe of our 19 urban area here in Tyler. 20 The facility was not designed to carry the 21 traffic, the heavy truckloads, and certainly not the 22 access issues that you see that are becoming more of a 23 critical concern and becoming a problem for 24 management. 25 This roadway has recently been EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 30 1 rehabilitated just to add the two two-foot additional 2 shoulders on each side to maintain it. The core is 3 basically maxed out in its current condition. It 4 carries about 8,000 cars a day. 5 Another example down south in the City of 6 Whitehouse, this project built way back in the '40s 7 has basically seen its life, and because of the 8,000 8 cars a day that we see on this facility, it's 9 currently under development for widening. And, again, 10 you see the consistent driveway access issues, limited 11 rights-of-way, and now we're talking about 12 signalizations.

13 And finally, U.S. 79 south of Palestine, 14 heading towards the Trinity River. We've been graced 15 with the wonderful opportunity to have the Wal-Mart 16 Distribution Center right adjacent to this facility. 17 This rural section of 79 was not prepared 18 to handle the roads that came with that wonderful 19 distribution center, as well as the support facilities 20 that are growing around it. 21 We scrambled to add left turn lanes and 22 shoulders to just protect the pavement. We hope -- 23 this is a priority one project that we hope to get to 24 construction by 2008. 25 Focusing in on a long-term objective to EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 31 1 prioritize the construction of shoulders for all of 2 our U.S. and S.H. highways, we have a significant 3 number of U.S. highways that are still without 4 shoulders of any size. 5 This map gives you an indication of the 6 magnitude of that problem. But there is hope. The 7 construction of the Phase I Trunk System will assist 8 in the elimination of at least two of these red lines. 9 A growing area of concern for our rural 10 suburban areas is the promulgation of rural traffic 11 controlled intersections. This is the intersection on 12 the trunk system of U.S. 69 and F.M. 346.

13 Unfortunately, traffic signal devices do not 14 completely eliminate the conflicts. The addition of 15 advanced warning and caution lights have proven 16 somewhat effective. 17 Of course, the ultimate solution is the 18 construction of a grade separation, particularly along 19 the trunk system routes, and we are working to 20 prioritize the intersections with hazard elimination 21 monies and, hopefully, that will provide us some hope 22 for the elimination of these critical situations in 23 the future. We didn't get down quite close enough so 24 you can see all the skid marks. 25 This is a great opportunity, working with our EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 32 1 local cities, in this case, Tyler. We have been 2 successful at implementing access management 3 techniques like raised medians. 4 These are designed to restore the original 5 capacities of our corridors and reduce the driver 6 conflict zones that have been increasing our overall 7 safety concerns on our urban arterial and primary 8 routes. 9 Though not very popular, these have become 10 very effective. These medians are currently under 11 construction and were funded with our hazard

12 elimination monies. 13 One of our biggest areas of concern, 14 maintenance preservation, that tends to be about 80 15 percent of what our district is responsible for. 16 Using the tools that were given to us through the 17 PMIS, Pavement Management Information System, we are 18 trying to rectify the goal on a 10-year, 90 percent 19 roadways that are better or good. 20 In that evaluation, we've been able to 21 determine that about 7100, 7200 lane miles of our 22 roadways are, in fact, in good and better condition on 23 the conditions we're rating. That leaves about a 24 thousand lane miles that need some work. 25 Over the next ten years, we hope to improve EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 33 1 our condition scores on more than 425 lanes that are 2 currently not rated in the good and better condition. 3 I would like to explain this chart very 4 briefly. This chart represents the percent of the 5 roadway types that have an overall condition score of 6 70, which means they are in good or better condition. 7 For example, in 2002, 83 percent of our F.M. 8 roadways were rated in good or better condition. By 9 2001, first year of 100 percent data collection and 10 F.Y. 2002, first year of the frontage road, the 11 frontage roads were added into our interstate system,

12 which dropped our score significantly. 13 We feel that the interstate pavement scores 14 are the range of the high 80s to 90s. With the 15 addition of the frontage road conditions, which are 16 not maintained at the same levels as on the 17 interstate, that's the reason you've seen the bar go 18 down to about 82 percent on our interstate. 19 What we wanted to bring to your attention with 20 this is we are making some improvements on our U.S. 21 highways, which tend to be our primary concerns. We 22 will continue to have problems trying to maintain and 23 improve our existing system on F.M.'s, and we hope to 24 maintain our I.H.'s pavements in the 80s and 90s once 25 we get all the data stabilized. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 34 1 The biggest challenge we have is to improve 2 the overall condition to that 475 miles that we know 3 are rated in poor condition, without losing or adding 4 any more mileage to that list. 5 How are we going to do it? We have several 6 programs that we've used through the years that we're 7 trying to enhance. The biggest one we use is our 8 district-wide seal coat program through maintenance 9 and through construction. 10 We use a mill and inlay program with

11 specialized crew that works in special areas to help 12 us manage our pavements, seeking innovation in 13 pavement design, getting smarter about the decisions 14 that we're making. 15 We're going to archive the history that we 16 collect through that design program, and we're going 17 to support innovation in our maintenance processes. 18 And most recently, we decided to rededicate source 19 funding to maintaining an overlay program to keep our 20 surface pavements in the best condition possible. 21 Our district seal coat maintenance and 22 contract operations average about 2 million square 23 yards a year, or 425 center line lanes, approximately 24 12 percent of our roadway lane miles per year. 25 Our district mill and inlay operations cover EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 35 1 about 85 miles per year. The productivity from this 2 special crew has increased significantly with the 3 improved equipment designed specifically to handle 4 their milling operations in the urban areas. 5 We are exploring opportunities to turn our 6 waste products into new pavement. We have worked with 7 our equipment vendors, in this case, Wirtgen, to test 8 processes for recycling our wrap into new surface mix. 9 This is an example or a picture of their 10 mobile batch plant where you basically cycle through,

11 stockpile your old wrap, recycled material, inject it 12 with cement and oil to produce a mix that can be laid 13 down in the field. 14 We've had two projects where we've used it as 15 surface mix, and so far the results seem to be very 16 favorable. We'd like to have more experience with 17 this before we make it -- and find out -- get the cost 18 of the equipment down before we make it a full-time 19 issue for us. 20 Getting smarter in our pavement design through 21 forensic investigation. The age of our infrastructure 22 has presented us with challenges of ground water, 23 degradation of grade -- subgrades and bases, as well 24 as premature deterioration of our surfaces. 25 We see it absolutely necessary that we go down EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 36 1 deep whenever we're looking to resurface or 2 reconstruct a facility and then capture that 3 information for the future so that whatever solutions 4 we put in place can be justified to the new 5 generations once they see similar problems starting to 6 erupt. 7 This is a new data archiving system that we 8 have in place to maintain a record of all the coring 9 samples that we do in our roadways. Absolutely

10 essential to remember where you've been so that you 11 won't go back there again. 12 Looking for opportunities in developing new 13 tools to help us address some of our more challenging 14 problems and maintenance. And in this case, you're 15 seeing a couple of tools that we use to take care of 16 our edges and develop shoulders in areas that have 17 critical concerns for wide loads where the 18 deterioration of our edges become a predominant 19 concern for preservation of the pavement. 20 And then we're testing a new product for this 21 district, and that's concrete. Haven't used a 22 significant amount of concrete. Due to its cost, it's 23 pretty much limited us. But we are experimenting with 24 long-term benefits of concrete pavement versus 25 perpetual pavements on a section of rural I.H. 20. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 37 1 The volumes on this section of 20 are 2 exceeding 40,000 cars a day, with an 18 percent truck 3 volume, which, obviously, is giving our dense grade of 4 hot mix a workout. We're hoping to capitalize on a 5 long-term return on this capital investment in 6 concrete. 7 And we're excited. We've got an excellent 8 ride on this project, had a great contractor come in 9 from Oklahoma, and he's moved out very quickly, and

10 hopefully, we'll see good results. 11 Moving into service delivery, we are happy to 12 say we can celebrate success through the commitment of 13 our service delivery and design. It's evident through 14 receipt of four years of design excellence awards. 15 We are continuing to focus on the quality of 16 our plans and development and delivery of time, on 17 time and without errors. Last year we were able to 18 exceed our estimated lettings about $10 million, 19 having projects ready to go at a time when others 20 didn't. And we hope this year we will certify and let 21 118 million, which is an all-time record for the 22 district. 23 Another accomplishment is our work in the 24 bridges. Bridges continue to be a focus for the 25 district with over 1700 bridges on our system. We are EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 38 1 striving to manage and replace these bridges with a 2 program designed to work with our partners, the 3 counties. 4 Last year we received recognition for this 5 effort with the receipt of the On-System Urban Project 6 Development Award. 7 Living in a diverse ecological environment has 8 presented us with environmental challenges we have

9 turned into successes. This effort recognized a 10 cooperative achievement with Texas Parks and Wildlife 11 and the Corps of Engineers in the establishment of a 12 wetland park as a result of the construction of the 13 Athens loop, F.M. 317. 14 We continue to receive awards and recognitions 15 through our partners in the field in the design and 16 laying of Texas hot mix. 17 Working with our partners in the Texas 18 railroad and local cities, we have been successful in 19 enhancing transportation in communities for many 20 generations to enjoy. 21 Building a foundation for the community to 22 rally behind in the re-establishment of a regional 23 resource, we pledged our support through the rest area 24 renovation and enhancement monies to re-establish 25 Love's Lookout rest area. The new facility will EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 39 1 service the community as a visitor center, rest area, 2 and a park. Working with our local historical 3 communities to develop archeological resources dating 4 back to the Civil War era. 5 Economic vitality. Education is a vital tool 6 and compliment to our success as a transportation 7 agency for all of East Texas. We take very seriously 8 our role in that regard, visiting the state fair every

9 year and attending many local festivals to provide 10 information and answer questions to the local public. 11 We take our role very seriously and 12 responsibly as a coordinator of transportation 13 services. We are taking an active role in the 14 consolidation of rural transportation services to 15 support our diversified customer base. 16 We have recently had the pleasure of 17 participating in the startup of new services in the 18 City of Longview. 19 Helping our counties and our cities improve 20 general aviation, a very important economic tool, 21 through the maintenance of their facilities and 22 construction of their facilities. We currently 23 service eight general aviation airports. 24 Quite a unique opportunity has been presented 25 to us in Rusk County. Through the Texas Utility EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 40 1 Mining Operations, we are working to recapitalize and 2 redevelop the community and the facilities that 3 support it. It's quite a massive operation. 4 Focusing in on the area that will potentially 5 be affected by this mining operation, this highlights 6 the roadway infrastructure that has or will be 7 reconstructed, relocated, or eliminated to support the

8 area's redevelopment of the reclaimed lands. 9 We will be working very closely with 10 Henderson, the developments in the county and T.U. 11 Mining, to see what opportunities we would have to not 12 replace some of these facilities, maybe do some 13 rerouting and redevelop this whole area. It's quite a 14 significant parcel of land. 15 And finally, we continue to work with our 16 local industry to provide adequate transportation to 17 support growth and development without deterring away 18 from our existing infrastructure. 19 We identify the fact that our industries are 20 longstanding and are continuing to grow. We support 21 the welfare of our community with safe and comfortable 22 transportation to and from our regional medical 23 facilities. 24 The new challenges that pop up every day with 25 the relocations of regional warehouses, Target on I-20 EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 41 1 and U.S. 69, north of Tyler, and the Wal-Mart 2 Distribution Center at U.S. 79, south of Palestine. 3 They will continue to stretch our resources but help 4 us develop our infrastructure. 5 And in closing, we will continue to work with 6 our local partners to address East Texas' 7 transportation needs in hopes of celebrating all of

8 our future successes. Together we are all making a 9 difference for East Texas. 10 We thank you for your time and your attention. 11 We hope you have enjoyed your visit to Tyler, and we 12 certainly have enjoyed having you. 13 Thank you. 14 (General applause.) 15 MR. JOHNSON: Ric or Robert, do you have 16 any questions or comments relative to the 17 presentation? 18 MR. BEHRENS: Thanks for a great 19 presentation. You did an excellent job. 20 I had one question. On the core 21 samples -- 22 MS. OWEN: Uh-huh. (Affirmative) 23 MR. BEHRENS: -- the -- your method of 24 photographing and, you know, putting that on C.D.'s 25 and storing it for the future, is that something new EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 42 1 and unique? 2 MS. OWEN: That's something we've 3 developed at the district. 4 MR. BEHRENS: Hats off. I think that's a 5 great idea. 6 MS. OWEN: Thank you.

7 MR. BEHRENS: Excellent presentation. 8 MS. OWEN: Appreciate that. 9 MR. WILLIAMSON: That was an excellent 10 presentation, and I don't want to put you on the spot 11 by asking, requesting an answer, but at some point in 12 the next month or so, I would like to explore the 13 decision to test concrete on the interstate, primarily 14 in terms of how it impacts the cash flow -- let me 15 think how to phrase the question. 16 If you're faced with -- you've got this 17 project, and you've got to decide between something 18 other than concrete at lesser cost -- 19 MS. OWEN: Uh-huh. (Affirmative) 20 MR. WILLIAMSON: Or concrete at a greater 21 cost this year, but a life cycle perhaps being maybe 22 less, how does that influence the other projects in 23 your district? 24 Because it occurs to me, if the Commission 25 continues to move towards more and more concrete EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 43 1 across the state, we've got to figure out a way to 2 tell the districts, "It's okay to make that decision, 3 and your other projects in your district won't be 4 penalized because you've made the decision to invest 5 more in concrete now in order to spend less on the 6 road 20 years from now."

7 Am I making sense or not? 8 MS. OWEN: Uh-huh. (Affirmative) 9 MR. WILLIAMSON: I would like your 10 viewpoint at some point in the next month or so about, 11 as a district engineer, how you would suggest the 12 Commission deal with that. 13 MS. OWEN: If I could briefly address that 14 now, we'll get back with more detail for you, but if 15 it hadn't been for the overall -- our facilities on 16 the interstate were in good shape overall, and we have 17 worked very hard to maintain the hot mix in its 18 current condition. 19 And you can see that we had 92 percent in 20 good or better, and we had some of the best ratings on 21 our interstate pavements, on our 83 miles. 22 And because of that confidence and that 23 whole endeavor to get to that point, we felt like it 24 was time on our next projects that instead of 25 investing on an eight-year term, if we're getting EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 44 1 eight years on our hot mix -- and that's a dense grade 2 of mix, versus perpetual, and we haven't really had 3 much experience with the new design, but we -- it will 4 be as good a measure to go ahead and take smaller 5 pieces and pull the concrete knowing that we could

6 maintain that good surface that we had already placed 7 down on the interstate for a little bit longer. 8 We had to buy some time so that we 9 wouldn't be, you know, doing fewer projects further 10 spread out because of the investment of the concrete 11 was our concern, but we're confident that we've got 12 good mix down that will allow us that flexibility to 13 pull those concrete pieces in. 14 MR. WILLIAMSON: Well, I know that -- and 15 I'm not an engineer. In fact, I think I'm the only 16 member of the Commission that's not an engineer, and I 17 know that there's still some disagreement in your 18 profession about, you know, what's best, the hot mix, 19 cheaper up front and maintain it over a period of 20 time, or concrete, far more expensive up front, but 21 less maintenance cost. 22 And I'm intrigued by the ability to inform 23 the public that one of the reasons we can't build new 24 roads as fast as we'd like to is because we have to 25 allocate so much of our cash flow, more and more every EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 45 1 day, to maintaining the good roads we have. 2 But perhaps it's time for us to 3 recognize -- and if we kind of stop and spend a whole 4 lot more over the next ten years replacing the 5 short-cycle product with the long-cycle product, that

6 maybe 20 years from now, we will have enough cash flow 7 to build new roads because we're not having to go back 8 and redo them. 9 So I noticed, when I was driving in, that 10 project, and I stopped and looked at it, and I would 11 like your viewpoint, perhaps privately, in a month or 12 so, about how it impacts the District's decision. 13 MS. OWEN: Another benefit, though most of 14 the public that drives it wouldn't have seen it, we've 15 been able to get in and out quicker in trying to 16 reconstruct that facility with the concrete this time, 17 which was a definite benefit. 18 MR. WILLIAMSON: Just because the guy was 19 from Oklahoma? 20 MS. OWEN: He was so good. 21 (General laughter.) 22 MS. OWEN: We're really getting on with 23 that, and we have let our second, so we're looking 24 forward to that. And I appreciate your comments, and 25 I will get back with you. Thank you. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 46 1 MR. JOHNSON: Mary, one moment. Thank you 2 so much. A very enlightening report. I want to 3 congratulate you on the sequence, the categories that 4 you went over.

5 I noticed -- Mary, if you were not aware, 6 served on a -- as a very vital and important member of 7 a committee that I charged with addressing the goals 8 that TxDOT should have and making them meaningful and 9 measurable to the people who use our system. 10 And the five categories that the committee 11 came up with were mobility, safety, maintenance of the 12 system, project delivery, and economic vitality, and 13 that was the sequence in her report, and I think it 14 was extremely well done, and it's a -- you know, an 15 outline of the way we can do things. 16 We can communicate with the people who use 17 the system, what we are doing to advance to the goals 18 that we believe -- these are not slam-dunk goals. 19 They are challenges. And they are challenges which 20 are going to require a lot of work. They're also 21 going to require a lot of funding. But we can get 22 there, and I believe the people who use our system 23 want us to get there. 24 So thank you so much for utilizing that 25 format. I think that's terrific. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 47 1 MR. WILLIAMSON: I noticed she also used 2 the action words that we've encouraged Mike to use in 3 all of our communications with the public, words like 4 "plan it" and "build it," words that normal people can

5 understand. 6 (General laughter.) 7 MS. OWEN: Thank you very much. 8 MR. JOHNSON: Thanks again. 9 MR. WILLIAMSON: You knew that was coming, 10 didn't you? 11 MR. BEHRENS: I did. 12 MR. JOHNSON: We will take a brief recess, 13 so -- I know many of you -- we're delighted you're 14 here, and it's great to be in a meeting where they 15 have to add chairs. 16 I think that's a tremendous sign of the 17 involvement and interest of this community and the 18 surrounding area and what goes on. 19 But I know a number of you probably have 20 to get back to commerce and industry, so we're going 21 to take a very brief recess to allow you to excuse 22 yourselves, and we will reconvene in just a few short 23 minutes and go about the regular agenda. So we'll 24 stand... 25 (Here followed a short recess from 10:00 EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 48 1 a.m. until 10:19 a.m.) 2 MR. JOHNSON: This meeting of the 3 Transportation Committee is reconvened. We will begin

4 with the approval of our minutes from our December 5 meeting. 6 MR. NICHOLS: I so move. 7 MR. WILLIAMSON: Second. 8 MR. JOHNSON: All in favor, signify by 9 saying aye. 10 (A chorus of ayes.) 11 MR. JOHNSON: Aye. Motion carries. 12 Mike, I'll turn the meeting over to you 13 for the rest of the agenda items. 14 MR. BEHRENS: Thank you, Mr. Chairman. 15 We'll go to Agenda Item No. 2, "Public Transportation" 16 Award Section 5311(f) grant program funding for 17 intercity buses. 18 MS. MASSEY: For the record, my name is 19 Margot Massey. I believe I have the right folder this 20 morning. We have discussed a number of options about 21 this item in the last few days, and I particularly 22 want to thank Commissioner Nichols for his insight and 23 input into this process. 24 What we are proposing to you today is an 25 award of operating assistance to five intercity bus EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 49 1 companies to address their situation in terms of 2 declining revenues and increasing deficits. And the 3 awards that we're proposing are based on a calculation

4 of 35 cents per route mile. 5 One point I do want to clarify is, the 6 methodology for calculating contract awards is one 7 thing, and these numbers that are before you are to 8 assign a contract value and an award. 9 Once we execute the agreement, and we are 10 actually being billed by the companies, receiving 11 reimbursement requests, the methodology that we have 12 to follow on that is based on deficits. 13 We pay 50 percent of the net deficit, and 14 that is from deficits incurred from the time the 15 contract is executed. Any deficits that have been 16 incurred previously are not on the table here. So I 17 wanted to make that point as clear as I could. 18 That's the item. We ask for your 19 approval. 20 MR. JOHNSON: May I ask you a question 21 about what you just said? Are we limited in each case 22 by the amount of funds that is in the minute order? 23 Is that the maximum number that could go to each of 24 the individual route servers? 25 MS. MASSEY: Yes, sir. That's a limiting EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 50 1 amount per contract. 2 MR. JOHNSON: So it's 50 percent of the

3 deficit, equating to -- 4 MS. MASSEY: Not to exceed -- 5 MR. JOHNSON: Not to exceed 35 cents -- 6 MS. MASSEY: No. It's not to exceed -- 7 MR. JOHNSON: Not to exceed the amount -- 8 MS. MASSEY: Of the contract, yes, sir. 9 And ordinarily, we would say that -- you 10 know, the expectation is these are 12-month contracts. 11 It depends on the actual deficit incurred, that some 12 could expend the contract amount if deficits incurred, 13 reach that amount within seven months. 14 Others might -- it might actually wind up 15 being 14 or 15 months, so -- and that's -- this is a 16 cap on the contract amount, the amount they can 17 request reimbursement for. 18 MR. JOHNSON: Since these are federal 19 funds that we are disbursing -- 20 MS. MASSEY: Yes, sir. 21 MR. JOHNSON: -- I am assuming that the 22 methodology that you are saying that we will follow, 23 the procedure that we will follow is one that's 24 prescribed -- is prescribed by -- the way the federal 25 government prescribes it, we conduct these EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 51 1 distributions. Is that a fair assessment? 2 MS. MASSEY: We have flexibility on how we

3 allocate funds for contracts. That's not stipulated, 4 other than it needs to be fair and equitable. 5 And I think this criteria that is before 6 you this morning is -- meets the test of fair and 7 equitable. The reimbursement requirements, how we 8 actually pay them money, on what basis, is stipulated 9 by the federal government, and we have no -- 10 MR. JOHNSON: And that's where the -- 11 we're reimbursing at 50 percent? 12 MS. MASSEY: Yes, sir. Yes, sir. 13 MR. JOHNSON: All right. Any other -- any 14 questions? 15 MR. WILLIAMSON: I think so, Mr. Chairman. 16 MR. JOHNSON: All right. 17 MR. WILLIAMSON: I know Mr. Nichols has 18 been the lead on this, so if you'll allow me to ask 19 mine first, and then Robert can wrap up. 20 I have a couple of questions and some 21 dialogue I wish to have with you and Mike about buses, 22 about public transit. 23 Mike, is it correct that the Department is 24 steadily researching where different types of public 25 transit might overlap with the view of perhaps making EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 52 1 some recommendations to the legislature on where

2 efficiencies might be gained? 3 MR. BEHRENS: Yes. We're asking Margot's 4 staff to take a look at existing routes and overlay 5 them and look at duplications, look at maybe even 6 other types of transportation, such as -- I think, 7 Margot, you might help me on this. 8 But I think there was one provider that 9 told me last week they're using like church vans 10 during the week when they don't -- when the church 11 doesn't use them, that will supplement their program. 12 I think they have -- I don't know all the 13 details on that, but I know when we were at the 14 transit luncheon the other day, one of them said they 15 are looking at that to supplement their program. 16 So just looking at a lot of things to get 17 the biggest bang for the buck and provide the services 18 that are needed. 19 MR. WILLIAMSON: And that would include 20 not only transit operators with whom we directly 21 interact, such as what we're describing today, but it 22 would also include instances where we know there are 23 transit operations that are not directly communicating 24 with us; for example, Mental Health/Mental Retardation 25 transit, perhaps Department of Human Services transit EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 53 1 operations. In other words, we're taking a more

2 global view. 3 MS. MASSEY: Yes, sir. And I would point 4 out -- you know, Mary Owen, in her presentation, 5 touched on this briefly, but the Tyler District is an 6 excellent example. 7 When we award the -- or we're planning the 8 program of projects for the 5310 elderly and disabled 9 program that we administer, that the District offices 10 reach out to all of those stakeholders, whether they 11 do business with TxDOT or not. 12 And the way they make decisions on 13 programming the 5310 funds takes into consideration 14 all the other resources that are available in the 15 community and what the full gamut of needs are as 16 well. 17 And it touches on things that Mike was 18 describing as well, that if you have other vehicles 19 that can be available during certain parts of the 20 week, that you incorporate those into your regional 21 transit planning. 22 And, again, I would salute the Tyler 23 District. I think they're one who's really embraced 24 this concept that we had in mind and that you passed 25 in the administrative rules last year. They've really EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 54

1 taken it, as have other districts, and run with it, to 2 look at the big picture. 3 MR. WILLIAMSON: Well, what I'm trying to 4 focus on, Margot, the state's cash flow crisis, not 5 just in transportation, but in the general revenue 6 account as well has now been well publicized and is, 7 we would hope, the topic of discussion among the 8 citizens of the state on a regular basis. 9 And it appears to me that if there were 10 ever a time for an agency to direct the legislature 11 and the Governor's attention towards the opportunity 12 to save money and improve services, it would be in the 13 area of public transit, not only as it relates to the 14 types of transit we deal with, but as it relates to 15 other transit opportunities or activities in other 16 state agencies, including and not limited to our 17 school districts, our, you know, metro operations that 18 are supposedly self-sustaining with some kind of 19 capture tax. 20 I mean, if there was ever an opportunity 21 to direct attention to the need to take a more team 22 approach to transiting the state, this is it, and I 23 think the legislature looks to us to direct their 24 attention that way, whether they choose a path or not. 25 MS. MASSEY: Yes, sir. And we have, in EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 55

1 that regard, been working and should have ready to 2 pass up the line a package of recommendations that 3 deal exactly with those kinds of issues within the 4 next week. 5 MR. WILLIAMSON: And is it my 6 understanding, Robert, that you have some particular 7 interest in giving some direction to the staff on how 8 we're going to handle this in the future? 9 In that case, I thank you for allowing me 10 to ask the questions and pass the baton. 11 MR. NICHOLS: Okay. Baton call. First of 12 all, I want to ask, are there any representatives from 13 the intercity -- 14 MS. MASSEY: Yes, sir. 15 MR. NICHOLS: -- buses here today? 16 MS. MASSEY: Yes, sir. There are a number 17 of them. 18 MR. NICHOLS: Would they hold up their 19 hands? Did y'all sign up to talk? Would you like to 20 sign up to talk? 21 Well, I mean, I don't mean that in a 22 negative way. I mean, we're voting on something 23 that's very important to you and to the state, and 24 y'all are representatives to the people we're going to 25 be voting on, and I mean, I would certainly like to EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213

56 1 offer you the opportunity. 2 UNIDENTIFIED MAN: We'll be happy to 3 respond to any questions. We're comfortable with the 4 proposal. 5 MR. NICHOLS: Okay. Several comments. 6 One, the -- in the past, in this 7 particular category of intercity bus funding, we 8 normally have spent the money, I believe, on capitol 9 improvements -- 10 MS. MASSEY: Yes, sir. 11 MR. NICHOLS: -- stations, things like 12 that. And we recognize, since 9-11 and the economy 13 dropping down, that this element of our transit is -- 14 which is extremely important to the state, has been 15 hurt also, and we do not want to see any of y'all quit 16 operating because we think you're a very valuable 17 asset to the state. 18 We've also been asked and encouraged by 19 the federal government to help y'all out with your 20 operating costs in this category, which they provide, 21 and that's what we've been working real hard on. 22 One of the things that I have talked 23 about, and I think some of the other commissioners 24 have talked about in the past, is that -- and this 25 would relate to all the other categories of transit -- EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213

57 1 is that we would like to see formulas -- if that's 2 what we're going to be using in the future -- that 3 somehow or another address strategic needs, reward 4 efficiencies, you know, maybe a factor in there for 5 providing service in some economically disadvantaged 6 areas where they may not -- you know, may have a dip 7 in their local economy for some reason and things of 8 that, whereas the original proposal was to just fund 9 based on 50 percent of whatever the loss was. 10 That's not an incentive. That's almost a 11 disincentive. The greater the loss, the greater the 12 money you get. I know that some people can operate a 13 little more efficiently than others, but the 14 originally proposed system, in effect, rewarded those 15 who lost the most. It's almost like an incentive for 16 inefficiency, which is contrary to the way I always 17 ran my business. 18 We're restrained at the federal level, 19 here locally in our distribution, not to exceed 50 20 percent of the net operating expenses, which is 21 operating expenses after you subtract the revenue, but 22 I want to make sure that the way we are defining it, 23 as I understand it, is net operating expenses after 24 the passenger revenue is subtracted. Is that -- not 25 including freight revenue, just passenger revenue. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213

58 1 MS. MASSEY: That is generally the way we 2 approach that, yes. I mean, we do have some 3 flexibility in the area of intercity because they have 4 a -- they have different revenue streams from the 5 other carriers that we deal with. 6 MR. NICHOLS: Okay. But as far as the 7 federal government, that is an acceptable method -- 8 MS. MASSEY: Yes, sir. 9 MR. NICHOLS: -- to take the passenger 10 revenue, strike the operating expenses to come up to 11 this? 12 MS. MASSEY: Yes, sir. 13 MR. NICHOLS: We do not have to add these 14 other categories of revenue? 15 MS. MASSEY: That's correct. 16 MR. NICHOLS: Okay. And the latest 17 proposal I'm looking at -- I think we're all looking 18 at up here, in effect, is more money to be distributed 19 to the intercity carriers than what was originally 20 proposed -- 21 MS. MASSEY: That's correct. 22 MR. NICHOLS: -- which I think is great, 23 to try to kind of flatten out the curve a little bit 24 between those that have different operating costs but 25 directly reward more toward those who are putting in EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213

59 1 more miles in a consistent manner. 2 As I understand it, we're talking about 35 3 cents a mile, not to exceed 50 percent of the deficit, 4 only including passenger revenues. 5 MS. MASSEY: Yes, sir. 6 MR. NICHOLS: Which means that if they can 7 do better and get more profitable by picking up some 8 of these other revenues, we're not going to penalize 9 them for that. 10 MS. MASSEY: That's correct. 11 MR. NICHOLS: We're actually, in effect, 12 going to reward them for coming up with the other -- 13 is that correct? 14 MS. MASSEY: Yes, sir. 15 MR. NICHOLS: Okay. I would encourage us 16 to work toward -- and working with y'all and us 17 together to try to come up with something that meets 18 some of these other definitions, strategies, strategic 19 areas, strategic routes, things of that nature, and 20 some type of incentive program, which we would like to 21 work with y'all on. 22 With those comments, I'll -- somebody 23 else? 24 MS. MASSEY: If I might, Mr. Chairman, I 25 hear what you're saying, and we are certainly EAST TEXAS COURT REPORTING SERVICES, INC.

P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 60 1 intending to put this into administrative rules. 2 My best guess today is that we will have 3 proposed rules for you about April or thereabouts 4 where we talk about -- I know my acronym is not going 5 to fly -- the Strategic Intercity Network. I like -- 6 we can talk about SIN for a change, huh? 7 (General laughter.) 8 MS. MASSEY: But we want to establish what 9 that critical network is, and that will guide us in 10 terms of both operating assistance, as well as capital 11 improvements. 12 We still have a need for intermodal 13 facilities, and we want to establish the criteria to 14 declare that network and also to address the points 15 that Commissioner Nichols just raised, is to find a 16 method of making contract awards that hit on the 17 points that he's identified. 18 So we fully expect to have something 19 before you around April. 20 MR. NICHOLS: I so move. 21 MR. WILLIAMSON: Second. 22 MR. JOHNSON: All in favor, signify by 23 saying aye. 24 (A chorus of ayes.) 25 MR. JOHNSON: The motion carries.

EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 61 1 Margot, thank you very much. 2 MR. BEHRENS: Agenda Item 3 is our 3 administrative rules for final adoption. We have two 4 before you. The first 3(a) for final adoption is the 5 rules on international bridges. 6 MR. SAENZ: Good morning, Mr. Chairman, 7 Commissioner Williamson, Commissioner Nichols, 8 Mr. Behrens. For the record, I'm Amadeo Saenz, Jr., 9 Assistant Executive Director for Engineering 10 Operations. 11 The minute order before you adopts 12 amendments to Section 15.73 to be codified under Title 13 43, Texas Administrative Code, Part 1, relating to 14 international bridges. 15 Transportation Code 201.612 provides that 16 the Texas Transportation Commission may adopt rules 17 providing for the approval of proposed bridges over 18 the Rio Grande. 19 The Commission previously adopted 15.70 20 through 15.76 to specify the process for approval of 21 the proposed international bridges. 22 Experience with the administration of the 23 rule has shown in practice the existing provisions can 24 impose duplicative requirements that are not necessary 25 for Commission review.

EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 62 1 Section 15.73, Subsection (3)(A) is 2 amended to eliminate the requirement that the 3 applicants follow the exact procedures applicable to 4 the Department in conducting environmental reviews and 5 ensuring public involvement. Rather, the applicants 6 will be required to comply with federal law. 7 This section is also amended to eliminate 8 the requirement that the Department approve any 9 decision that an environmental impact statement is 10 unnecessary. This change eliminates a duplicate 11 approval that would be required from the federal 12 government. 13 Under Section 15.73(3)(B), it is amended 14 to eliminate the requirement that applicants follow 15 the exact procedures applicable to the department in 16 ensuring public involvement. 17 Formal public hearings will not be 18 required, but the applicant must hold public meetings 19 which may take place at any point during the 20 application process. 21 These amendments will provide a more 22 flexible system that will significantly reduce the 23 burdens placed on the applicants. 24 The amendments were proposed by Minute 25 Order 109056 on October 31st, 2002, and were published

EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 63 1 in the November 15, 2002 issue of the Texas Register 2 for purpose of receiving comments. Four written 3 comments were received and are addressed in Exhibit A 4 to this minute order. 5 Staff recommends approval of this minute 6 order. 7 MR. JOHNSON: Any questions? Comments? 8 MR. NICHOLS: I so move. 9 MR. JOHNSON: Second? All in favor? 10 MR. WILLIAMSON: Second. 11 MR. JOHNSON: All in favor, signify by 12 saying aye. 13 (A chorus of ayes.) 14 MR. JOHNSON: Motion carries. Thank you. 15 MR. SAENZ: Thank you. 16 MR. BEHRENS: Agenda Item 3(a)(2) is 17 another rule for final adoption, and it concerns 18 amendments to our disabled specialty, and exempt 19 license plates, and Jerry will present those. 20 MR. DIKE: Commissioner, members, my name 21 is Jerry Dike, Division Director of Vehicle Titles and 22 Registration Division. 23 And this minute order concerns the final 24 adoption of amendments to Administrative Rules 17.20,

25 -.24, -.28, and -.50 concerning motor vehicle EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 64 1 registration. 2 The Texas Department of Transportation, as 3 well as the counties, issue disabled license plates 4 and placards, specialty license plates, and exempt 5 plates. These rules permit all motorists to obtain as 6 many services as is possible from one location, their 7 local county tax assessor-collector. 8 This will allow applications for 9 personalized license plates, most specialty plates, 10 and exempt license plates to move to the county tax 11 office and allow special plates customers to pay one 12 consolidated bill rather than two different bills, as 13 well as other efficiencies. 14 We did receive two comments from county 15 tax assessor-collectors. They're addressed in 16 Exhibit A, and staff recommends approval of this 17 minute order. 18 MR. JOHNSON: Any questions? 19 Jerry, the two comments that you 20 received -- 21 MR. DIKE: Yes, sir. 22 MR. JOHNSON: -- basically, did you 23 respond to those comments? 24 MR. DIKE: Yes, sir, we did respond to the

25 comments. One of them was that they wanted us to EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 65 1 notify their county commissioners of the fact that 2 they would be receiving some additional work. And the 3 compensation, they're compensated $1.90 for each 4 registration receipt that they will be issuing. And a 5 couple other comments, like verification of military 6 evidence before they issue military plates. But 7 they're responded to in the exhibits. 8 MR. JOHNSON: Did they seem to be 9 satisfied with your responses? 10 MR. DIKE: Yes, sir. Yes, sir. They're 11 reasonably satisfied. And really, we expected many 12 more than two comments. These are from small 13 counties. 14 MR. JOHNSON: Any other questions? 15 MR. NICHOLS: I have one question that 16 wasn't quite related to this, but it has to do with 17 plates. 18 MR. JOHNSON: Yes, sir. 19 MR. NICHOLS: Do you sell -- on the 20 specialty plates, my question is, do you sell more 21 U.T. plates or more A&M plates? 22 (General laughter.) 23 MR. WILLIAMSON: Tell the truth, Jerry.

24 MR. DIKE: Commissioner Williamson, I'm 25 sorry to tell you this, but the largest plate seller EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 66 1 in the State of Texas is your counterpart to your 2 left, Texas A&M University. 3 (General laughter.) 4 MR. DIKE: Texas is third place behind 5 Texas Tech, and that's our university. 6 MR. NICHOLS: Okay. 7 MR. WILLIAMSON: We can't win everyone. 8 (General laughter.) 9 MR. DIKE: That's right. That's right. 10 MR. WILLIAMSON: How many do they sell of 11 Lamar? 12 MR. DIKE: Sir? 13 MR. WILLIAMSON: How many do they sell of 14 Lamar? 15 MR. NICHOLS: They don't have one for 16 Lamar. 17 MR. WILLIAMSON: Do we have one for 18 Vanderbilt? 19 MR. DIKE: We do have one for Lamar. 20 MR. NICHOLS: We do have one for Lamar? 21 MR. DIKE: Yes, sir. 22 MR. WILLIAMSON: We do? And Nichols 23 hasn't bought one?

24 MR. DIKE: I'll take your check this 25 morning. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 67 1 (General laughter.) 2 MR. JOHNSON: Looks to me like there's a 3 lot of market out there that is going untapped. 4 MR. DIKE: Yes, sir, sitting on the board. 5 MR. JOHNSON: Especially that sort of has 6 an orange tinge to it. 7 MR. DIKE: We tried to sell one this 8 morning to Arnold Oliver. After he retired, he had 9 TxDOT-X as a personalized license plate for several 10 years, and for some reason, the last couple of years, 11 he had stopped having that one. 12 MR. WILLIAMSON: Anyway, somebody -- 13 MR. NICHOLS: I so move. 14 MR. WILLIAMSON: Second. 15 MR. JOHNSON: All in favor, signify by 16 saying aye. 17 (A chorus of ayes.) 18 MR. JOHNSON: Motion carries. 19 Jerry, thank you. 20 MR. DIKE: Thank you, Commissioners. 21 MR. JOHNSON: Thank you for being so 22 honest.

23 (General laughter.) 24 MR. BEHRENS: Under Item Number 4, we have 25 three minute orders. These pertain to what we call EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 68 1 turnpike projects or toll projects, and Phil will 2 present the first one, Item 4(a). 3 MR. RUSSELL: Good morning, Commissioners, 4 Mr. Behrens. For the record, my name is Phillip 5 Russell, Director of the Texas Turnpike Authority 6 Division. 7 Under Agenda Item 4(a), we bring to you 8 this morning our first quarterly construction report 9 for the Central Texas Turnpike Project. As you know, 10 the Commission entered into an indenture of trust for 11 the August 2002 bond financing for the Central Texas 12 Turnpike Project. 13 The indenture requires the Commission to 14 disclose certain information on a quarterly basis. 15 This progress report is prepared by the project 16 general engineering consulting firm of Post, Botley, 17 Shue & Jernigan for distribution to the trustee, the 18 bondholders, and the public in general. The report 19 will be prepared on a quarterly basis until 20 construction is complete. 21 I might also note that this report covers 22 up to November 30th. We were dealing with a little

23 bit of a short month in December, and so we went ahead 24 and deferred it to this month. Our second quarterly 25 report will be completed at the end of February, and EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 69 1 we anticipate bringing it up to the Commission in 2 March. 3 This report, of course, provides project 4 specific information detailing the progress on right 5 of way acquisition, utility relocation, environmental 6 issues, design, construction startups, construction 7 completion dates, and, of course, these numbers will 8 be changing and will be updated on that quarterly 9 basis. 10 It does include our first traditional 11 project that was let and approved in October, and I'm 12 pleased to say that the trend the Department has been 13 experiencing over the last year or so, and that being 14 the construction process coming in significantly under 15 our engineer's estimate, follows through with these 16 turnpike projects. 17 That project, of course, came in almost 18 $30 million under the engineer's estimate, so that is 19 a good thing. 20 I'd be happy to address any comments or 21 questions you might have, and we would suggest

22 acceptance of this report. 23 MR. JOHNSON: Any questions, Robert? 24 MR. NICHOLS: No. This is a formal report 25 to the -- that goes to our trustee? EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 70 1 MR. RUSSELL: Yes, sir. 2 MR. NICHOLS: Other than that, that's all 3 my questions. 4 MR. JOHNSON: Ric, did you have anything? 5 My question was, we're a little bit askew 6 of the calendar quarters. The idea is to get on the 7 calendar quarters as soon as you make up for the short 8 month of December that -- 9 MR. RUSSELL: Yes, sir. 10 MR. JOHNSON: So we'll have a report 11 through December. 12 MR. RUSSELL: That's right. 13 MR. JOHNSON: Then the next one will be 14 through March. 15 MR. RUSSELL: Well, no, sir. This one, of 16 course, September, October, November. The next one 17 will be picking up in December, then January, 18 February. 19 MR. JOHNSON: So it will be every three 20 months? 21 MR. RUSSELL: Yes, sir.

22 MR. JOHNSON: And it's not the calendar 23 form. 24 MR. RUSSELL: Yes, sir. Every three 25 months. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 71 1 MR. JOHNSON: Okay. Thank you. 2 MR. RUSSELL: But we will try to bring it 3 up on that next commission date. 4 MR. JOHNSON: Certainly. 5 MR. BEHRENS: Fiscal year quarters? 6 MR. RUSSELL: Yes, sir. Fiscal year 7 quarters. I'm sorry. 8 MR. JOHNSON: Very good. 9 MR. NICHOLS: I so move. 10 MR. WILLIAMSON: Second. 11 All in favor, signify by saying aye. 12 (A chorus of ayes.) 13 MR. JOHNSON: Motion carries. 14 MR. RUSSELL: Thank you. 15 MR. JOHNSON: Thank you. 16 MR. BEHRENS: Okay. Amadeo will present 17 Item 4(b) and (c) under this agenda item. 18 MR. SAENZ: Yes. This is a -- I usually 19 have to follow Thomas, and I have to lower the podium. 20 This is the first time I get to follow -- I was going

21 to have to raise it but didn't have to raise it but 22 can't win for losing. 23 (General laughter.) 24 MR. SAENZ: Item 4(b) -- Commissioners, 25 I'm Amadeo Saenz, Assistant Executive Director for EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 72 1 Engineering Operations. Good morning again. 2 Item 4(b) is that transportation funding 3 limitations have affected the ability of the 4 Department of Transportation to develop needed highway 5 projects in a timely manner. 6 Proposition 15, approved by the voters in 7 November of 2001, along with previously adopted 8 legislation provides the Commission with innovative 9 methods of developing these needed projects, including 10 the use of tolls, toll equity, and Regional Mobility 11 Authorities. 12 Minute Order No. 109122, dated December 13 19, 2002, authorized the Department to expand up to 14 $10 million to perform feasibility studies on selected 15 projects for the purpose of evaluating the viability 16 of developing these projects as toll -- as turnpikes, 17 as well as assessing where these projects would be 18 most efficiently developed by the Department or a 19 Regional Mobility Authority. 20 This minute order we bring before you

21 accomplishes three objectives. It cancels the minute 22 order that was passed on December 19th, Minute Order 23 No. 109122. 24 It reauthorizes the Department to expend 25 up to $10 million to perform the feasibility studies EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 73 1 on projects selected by our executive director for the 2 purpose of evaluating the viability of developing 3 these projects as turnpikes. 4 But it also authorizes feasibility studies 5 that can be used by toll authorities to develop needed 6 highway projects as turnpike projects also. 7 Having the option to use these various 8 methods will provide a more efficient, effective way 9 of maximizing the use of our limited resources. 10 Staff recommends approval of this minute 11 order. 12 MR. JOHNSON: Amadeo, this is a little bit 13 off the subject, but I'm going to bring it up anyway. 14 There is always great anticipation about the U.T.P., 15 and we're in a transformational period where we're 16 changing methodology, we're changing categories, 17 reducing the number of categories, et cetera. 18 I wanted to ask the question as to how we 19 stand on the development of the 2004 U.T.P. and the

20 methodology of project selection. 21 MR. SAENZ: Yes, sir. The 2004 U.T.P., if 22 you recall, in December, we had the public hearing on 23 the allocation of funds for the 2004 U.T.P., and we're 24 receiving comments now. 25 In addition, we have the five working EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 74 1 groups that were put in place that -- as part of the 2 restructuring of the U.T.P. that were supposed to give 3 us reports on recommending funding allocations or 4 funding criteria to be developed for the 5 rehabilitation of the maintenance program, the 6 discretionary program. 7 Those two groups have submitted the 8 recommended reports, and we're reviewing them at this 9 time. We also have three other groups that are 10 looking at our mobility category -- our corridor 11 mobility categories, one in the metropolitan areas, 12 one in the urbanized areas and, of course, the 13 statewide productivity group. 14 That group that's doing the 15 metropolitan -- the metropolitan area group has almost 16 completed their work. They're scheduled to meet the 17 first part of February to take final action on their 18 recommendation and submit their report to the 19 Department.

20 The other two groups are still working. 21 They're a little bit behind. We met with them. They 22 met twice in the month of January since our last 23 meeting, and we offered them some direction that y'all 24 had given us as part of that meeting, and they're 25 moving forward to accomplishing the goal of giving us EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 75 1 this recommendation. 2 They're a little bit further behind, but 3 we will be moving them as quickly as possible to get 4 them to complete that so that the goal is to them, 5 after that, is to have a public hearing on their 6 recommendations that will allow us to set the stage of 7 how projects are going to be selected in the future 8 based on the streamlining of the U.T.P. processes. 9 MR. JOHNSON: Robert, do you have anything 10 to ask? 11 MR. NICHOLS: Yeah. 12 MR. WILLIAMSON: Oh, go ahead, Robert. 13 MR. NICHOLS: No, sir. 14 MR. WILLIAMSON: I yield. 15 MR. NICHOLS: With regards to what 16 Chairman Johnson was talking about, you know, we did, 17 last month -- I believe it was December -- 18 MR. SAENZ: Yes, sir.

19 MR. NICHOLS: -- encourage those task 20 groups to work more often or, you know, to try to come 21 up with a consensus because we don't want the entire 22 state process to sit and wait for lack of a decision 23 or for something we haven't done. And I'd just like 24 to, first of all, thank those people who are working 25 on that. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 76 1 I know most communities, regardless of 2 whether they're a metropolitan area or an urbanized 3 area, like Tyler and Longview or communities that are 4 interested in corridors of connectivity, the 5 methodology we use to pick projects is extremely 6 important. 7 And we told everyone -- and I think we 8 still feel that this two-year transition is adequate 9 time to address those things, and that time period, at 10 the end of the two-year cycle for which we need all 11 that, is rapidly approaching and that I would 12 encourage the remaining groups to try to shoot at 13 least a target for about April, early April to have 14 that process completed. 15 I understand some of them work with our 16 staff, but a lot of them are volunteer individuals 17 around the state that have a -- it's a pretty big 18 burden on their plate, but it's also -- they have a

19 great opportunity to make a contribution that will be 20 long lasting. 21 So I would encourage them, if they need 22 to, let's -- I think we're certainly willing to let 23 them meet for days at a time like a jury, lock them in 24 and let them come back out or whatever, but encourage 25 them really in the next couple of months to have that EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 77 1 thing wrapped up. 2 MR. SAENZ: Well, we passed on the words 3 of encouragement that we received in December. In 4 fact, we showed them the video portion of our 5 commission meeting, and they started working a little 6 bit -- at a little faster rate. We will pass this 7 word on and -- 8 MR. WILLIAMSON: I'm shocked. 9 MR. SAENZ: -- and establish this deadline 10 so that we can meet the deadline and move forward, 11 having the needed public hearings for the selection of 12 the future projects that will become the projects in 13 the 2005 U.T.P. if we get to add these new projects on 14 to the existing program. 15 MR. JOHNSON: Ric, did you have any 16 observations? 17 MR. WILLIAMSON: I -- most of what I

18 wanted to ask or -- I would direct my comments to what 19 Robert covered. I just -- for the benefit of our 20 Tyler area attendees and for the repeat benefit of our 21 friends who are helping us do this, I just want to 22 clarify in my mind what we've done and where we're 23 going with regard to this discussion. 24 We recognize at the Commission level that 25 probably far too many proposed projects have been EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 78 1 allowed to work their way into our planning document 2 as if we had the money to build those projects or pay 3 for those projects. And the truth is we don't. 4 And what we have asked the various public 5 citizens to do is, in their area -- their geographic 6 area or in their area of expertise, look at all of the 7 alternatives and rank in order of importance which 8 ones that we should plan and know we're going to fund, 9 which is essentially what this department has done for 10 all these years and then had to listen to people 11 complain about it being a 46-year project. 12 And so now we've asked these folks to 13 exercise local control and accept local responsibility 14 and tell us what's most important to Dallas/Fort 15 Worth, to Houston/Beaumont, to San Antonio, to Austin, 16 to Brownsville, and I suppose to Tyler, and we've been 17 doing this how long?

18 MR. SAENZ: We've been working on this for 19 about six months. 20 MR. WILLIAMSON: And we're not to 21 resolution yet? 22 MR. SAENZ: Some groups are working faster 23 than others, yes. 24 MR. WILLIAMSON: So it must be difficult 25 to make choices about these things. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 79 1 MR. SAENZ: From experience, it is. From 2 our experience, it is, yes. 3 MR. WILLIAMSON: So I guess -- I suppose, 4 Mr. Chairman, the question that ought to be asked is, 5 if our friends in the vast expanse of Texas, whom 6 we've asked to advise us about these things, just 7 simply can't bring themselves to making a decision, 8 there's got to be a point in time when we have to make 9 that decision for them. 10 And I suppose there will be less 11 complaining this time around since they've all had a 12 personal experience with the challenge of making these 13 difficult decisions. Probably not. 14 At what point will we pull the string and 15 say, we can't wait for you to exercise local control 16 any longer, or the real question is, we can't wait for

17 you to exercise local responsibility any longer; we 18 have to move on? When do we do that? 19 MR. SAENZ: What I would say is let's look 20 at our schedule. We need to make sure that we have a 21 document that keeps on and carries us forward so that 22 we do not have any delays to the projects that are 23 being developed now and that will be developed in the 24 future, and then with that, we can set a time line and 25 say this is the drop-dead date. If it's not here, EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 80 1 then we have to move in a different direction so that 2 we can make sure that the program continues. 3 MR. WILLIAMSON: So pretty soon? 4 MR. SAENZ: So I think we can use -- April 5 would be a good date to use. 6 MR. WILLIAMSON: I would think April would 7 be real good. 8 MR. JOHNSON: What part of April? 9 April -- early in the year? 10 MR. SAENZ: I would say the beginning of 11 April so that we can bring something to you-all at the 12 Commission meeting in April. 13 MR. JOHNSON: You know, I dare say that 14 the U.T.P. is probably the most anticipated document 15 that we produce, and due to this transition, the 16 people who are so interested in it have been very

17 patient with us because we, in essence, have been 18 operating under the same U.T.P., the 2002 U.T.P. 19 So I think it becomes incumbent upon us to 20 be -- deliver a 2004 U.T.P. in a timely fashion, and I 21 hope that the work group members will recognize that 22 and not require others to make the decisions which we 23 think they should make, and, hopefully, they can do 24 that in -- so we will not miss a beat. 25 MR. SAENZ: We will pass that word on to EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 81 1 them and set a schedule and time line and then -- 2 MR. WILLIAMSON: Is this the -- is the 3 time delay on this matter partially responsible for 4 the recent discomfort along Interstate 35? 5 MR. SAENZ: Part of it is. Part of it is 6 the amount of money that we're projecting that we have 7 between the time period of 2014 -- between 2004 and 8 2014 and that the amount of projects that we currently 9 have in the U.T.P. and the available monies are almost 10 equal. 11 So for the 2004 U.T.P., we have no 12 mechanism to add any additional projects from the 13 outside. But it would be very important for people to 14 know that in the future, how are projects going to 15 be -- how is money going to be allocated to the area

16 so they can start planning for those out years after 17 2014. 18 We can develop the 2004 U.T.P. because the 19 projects are already in there, but we need to develop 20 and identify the priorities that are in the future 21 because that entails -- may also allow some change in 22 the projects that are in the current U.T.P. in the off 23 years and add new projects and costs and changes. 24 So we need to have both of them so that 25 the general public, they know what direction we're EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 82 1 going to be going. 2 MR. WILLIAMSON: But when you say "plan," 3 what you mean is really plan. 4 MR. SAENZ: Yes. 5 MR. WILLIAMSON: I mean, we know this 6 money will be available at this moment in time to 7 proceed, and so -- 8 MR. SAENZ: Our goal is to have a 9 financially constrained 2004 U.T.P., and in 2005, with 10 the available monies and the allocation formulas that 11 are going to be recommended and approved by the 12 Commission, we will continue to add projects based on 13 that money, but it will always be financially 14 constrained. 15 MR. WILLIAMSON: So, in theory, a few

16 years from now, no one will ever honestly come to us 17 and say, "This project has been -- this has been a 18 project for 46 years. We've been waiting for 46 19 years. We've been told for 46 years that this road 20 was going to be built." 21 MR. SAENZ: And a lot of those priorities 22 are going to be set by the locals, and if that project 23 is that important for that area, that project can -- 24 then they can move that project within their funding 25 allocation to whatever level they need to put it in to EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 83 1 be able to expedite it if they want to expedite it. 2 (Discussion had off the record.) 3 MR. JOHNSON: Well, I just have another 4 observation. Ric referred to the heartburn that has 5 been felt in the I-35 corridor, and I think it's very 6 important that we communicate to the elected 7 representatives and senators along that corridor of 8 expressed interest and the local officials that -- you 9 know, precisely where we are and what we're doing 10 because, hopefully, the interpretation they've made is 11 a lot more adverse than the situation is, at least the 12 way I interpret it. 13 But, you know, sometimes people have a way 14 of interpreting the same words in different fashions,

15 so I think we need to do a job of getting with 16 Representative Delisi and Senator Fraser and Senator 17 Avery and others along that corridor and explain to 18 them the reasons what has happened, but the bottom 19 line of how it's going to affect them and, hopefully, 20 put their minds at rest, that the priority one 21 projects that are in priority one, they're going to be 22 done in a timely fashion as they previously were 23 scheduled -- 24 MR. WILLIAMSON: That's funny. 25 MR. JOHNSON: -- and where we're EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 84 1 constrained due to the funding issues, that we're not 2 able to move priority two projects into priority one; 3 is that fair? 4 MR. SAENZ: Right. The priority one 5 projects that are currently in the plan are proceeding 6 as they were planned and will be constructed as per 7 schedule. The projects that are -- that are priority 8 two that did not have construct authority, we're 9 looking and working with the district to identify the 10 key projects that need to be moved forward and 11 expedited, that will get priority one authority as we 12 look at the overall picture. 13 So we have been meeting with Senator 14 Delisi and Senator Fraser, and we will go back and

15 make sure that our message is presented and that it 16 was understood. 17 MR. WILLIAMSON: Well, with regard to the 18 minute order -- and this conversation is impacted by 19 R.M.A.s, but with regard to the minute order itself, I 20 have just a couple of questions, Mr. Chairman. 21 I notice we have included principally 22 North Texas Toll Authority and Harris County Toll 23 Authority as potential recipients of these study 24 grants. 25 MR. SAENZ: Yes. We now can do -- really, EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 85 1 the minute order gives us the flexibility to do 2 feasibility studies to determine toll projects 3 anywhere in the state, whether they're a potential 4 R.M.A., a project that will be developed by the 5 Department or within one of the toll turnpike 6 authorities. 7 MR. WILLIAMSON: And I'm assuming we've 8 added those because those groups asked us to at least 9 put them -- make it possible for them to come apply. 10 MR. SAENZ: Yes, sir. 11 MR. WILLIAMSON: So by inference, then, 12 N.T.T.A. and Hector must feel like they're on the same 13 footing as any R.M.A. that we created or we're going

14 to create, shouldn't be treated any differently or 15 specially in any way. 16 MR. SAENZ: Yes, sir. 17 MR. WILLIAMSON: Because if they want the 18 same grants, they must be wanting to be treated 19 exactly the same, right? 20 MR. SAENZ: That's correct. 21 MR. WILLIAMSON: Or that's at least what 22 you'll convey to them -- 23 MR. SAENZ: Yes. 24 MR. WILLIAMSON: -- for us. 25 And the 10 million is not for EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 86 1 construction; it's to use -- 2 MR. SAENZ: The 10 million is to study. 3 MR. WILLIAMSON: -- to study whether or 4 not a project makes sense. 5 MR. SAENZ: That is correct. 6 MR. WILLIAMSON: And it can't all be used 7 at once. It's not 10 million in a whack; it's a total 8 of $10 million to be allocated to El Paso -- 9 MR. SAENZ: Right. We have 10 million -- 10 MR. WILLIAMSON: -- Austin -- 11 MR. SAENZ: -- and we are currently doing 12 several studies. 13 MR. WILLIAMSON: -- and Tyler if they get

14 a -- 15 MR. SAENZ: In Tyler. We're doing a study 16 in Tyler. We've met with San Antonio last week with 17 the -- Judge Wolfe and some of their folks to identify 18 some potential projects in the San Antonio area 19 that -- or have a good chance of being toll projects, 20 and Phil and his staff will start working on those 21 projects. We've been working -- we have a request 22 from the Rio Grande Valley. We have some requests 23 from El Paso. 24 So -- but all of these -- this money that 25 is set aside is money that is used to determine if a EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 87 1 project is feasible to be developed as a toll project, 2 and then we can go back to the potential R.M.A. or go 3 to Harris County or go to N.T.T.A. and say, look, we 4 have this project that is a potential toll project, 5 and you can form an R.M.A., or you can develop it as a 6 turnpike authority project, or we can have the -- also 7 have the flexibility of developing it as a Texas 8 T.T.A. turnpike. 9 MR. WILLIAMSON: And so, as I always ask 10 each month and will ask from now on until we have 11 something more flexible, does this mean that the 12 Department is full bore towards encouraging a second

13 look at Highway 114 in North Texas, Grand Parkway in 14 Southeast Texas -- 15 MR. SAENZ: We -- 16 MR. WILLIAMSON: -- 1640 in San Antonio? 17 We are aggressively identifying toll projects in this 18 state? 19 MR. SAENZ: Yes. We are looking at 114 -- 20 we are looking at -- for example, in the Dallas 21 District, we were looking at Interstate 635, L.B.J.; 22 we are looking -- in the Fort Worth District, we're 23 looking at State Highway 114. 24 We're looking at two projects. At 114, an 25 alternate that's kind of a new location, and then EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 88 1 we're also looking at 114 -- we should be able to have 2 some reports on 114 for the February meeting. 3 MR. WILLIAMSON: Because if we're going to 4 be honest with people in our planning -- and I think 5 we should. I think this is a great move the 6 Department's made. I commend you -- and tell people 7 that, you know, "It's 37 years before we get to your 8 project unless you're interested in an R.M.A. and a 9 partnership with the state and build a toll road, in 10 which case it's six years." 11 I think we need to be saying that to 12 people because my perception, moving around the state

13 and listening to legislative leaders, is that people 14 are willing to pay for solutions to transportation 15 problems now as opposed to waiting in line for 37 16 years and hope that the money's there when their time 17 comes. 18 So let's be aggressive, Phillip. Let's 19 mark it. Let's go find toll roads. 20 MR. SAENZ: In fact, in the Tyler 21 District, Loop 49 that was talked about early this 22 morning, we are probably within 30 days of having the 23 initial feasibility study to look at the potential 24 toll project for that. 25 MR. WILLIAMSON: Thank you for your EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 89 1 patience and letting me ask those questions. 2 MR. JOHNSON: There is a motion to this, 3 or is there? 4 MR. NICHOLS: I made some comments, yeah. 5 MR. JOHNSON: There is a motion made? 6 MR. WILLIAMSON: Second. 7 MR. JOHNSON: There is a motion and 8 second. All in favor, signify by saying aye. 9 (A chorus of ayes.) 10 MR. JOHNSON: The motion carries. 11 Thank you, Amadeo.

12 MR. SAENZ: Thank you. 13 Continuing with Item 4(c), the minute 14 order before you for Item 4(c) authorizes the 15 Department to enter into a funding agreement with the 16 Federal Highway Administration in Harris County to 17 participate in a toll facility value pricing project 18 to reconstruct Interstate Highway 10 from the City of 19 Katy to just west of Washington Avenue in the City of 20 Houston. 21 The Department has approved the project -- 22 has approved a project to reconstruct the I.H. 10 from 23 the City of Katy to just west of Washington Avenue in 24 the City of Houston. 25 On April 26, 2001, the Commission EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 90 1 authorized the executive director to develop an 2 agreement with the county and Federal Highway 3 Administration for innovative financing of the project 4 in a future -- and to present this at a future 5 meeting -- present this funding proposal at a future 6 meeting. 7 Working with Harris County and the Federal 8 Highway Administration, we have a proposal on an 9 innovative funding plan for the expeditious funding 10 and construction of the project. The plan would 11 include county funding for a county-owned four-lane

12 toll facility to be designed, constructed, operated, 13 and maintained and monitored as a value pricing lanes 14 within the limits of Interstate 10 from west of State 15 Highway 6 to Interstate 610, a distance of about 12 16 miles. 17 The value pricing lanes will be considered 18 a county toll road, subject to all federal regulations 19 for interstate highways. As part of the cooperative 20 agreement, the Commission would license Interstate 10 21 right of way to the county for the county 22 toll facility. 23 The county has agreed to expend 24 $250 million of county -- for the county-owned 25 facility to be repaid with the toll revenues and to EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 91 1 provide up to $250 million for providing services for 2 the nontoll section of the project. 3 The Department would reimburse the county 4 up to $250 million for providing the services on the 5 nontoll. It's just to give us the flexibility that 6 the county can help us as we develop the project 7 should we need their assistance, and then we would 8 reimburse them for that work, but they are responsible 9 for the actual building of the toll facility. 10 The county toll facility would become part

11 of a segment of Interstate 10 under the jurisdiction 12 of the Department after the county's $250 million for 13 the toll facility is repaid from the revenues that are 14 generated. 15 At that point, a Commission in the future 16 can determine whether that project can continue as a 17 toll project or should they want to change it to 18 something else. 19 MR. WILLIAMSON: Okay. I want to ask a 20 question, Mr. Chairman, about that. 21 The way I read the minute order on there 22 is the county toll facility will become toll-free, 23 part of I.H. 10, under the jurisdiction of the 24 Department after the county's 250 million repaid. 25 I don't want there to be any confusion EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 92 1 because I can't imagine that the Commission will ever 2 allow that to become a toll-free facility. 3 MR. SAENZ: The minute order that I've 4 got, it says the county toll facility would become a 5 segment of Interstate 10 under the jurisdiction of the 6 Department after the county's $250 million for a toll 7 facility is repaid. 8 MR. WILLIAMSON: Okay. Am I missing an 9 insert? Perhaps I am. 10 MR. SAENZ: It says we're leaving it open,

11 and then a future commission would determine whether 12 the project continues as -- 13 MR. WILLIAMSON: I think Robert Nichols is 14 playing a joke on me. 15 MR. NICHOLS: Yeah. What we first saw -- 16 MR. SAENZ: The first -- one of the early 17 drafts talked about that, and that was one of the 18 amendments that we made. 19 MR. NICHOLS: Yeah. The early draft I 20 saw, I know in one place in the book, it said it would 21 be turned over toll-free. In another part of the 22 book, it said, you know, we would have that option. 23 MR. SAENZ: Yes. The agreement -- 24 MR. NICHOLS: And I think we all want to 25 make absolutely sure that there's nothing that EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 93 1 dismantles automatically in this agreement the tolling 2 but leaves the option open for future commissions or 3 the state, that if we want to keep continue tolling 4 it, we have that option and so on; is that correct? 5 MR. WILLIAMSON: My -- my -- 6 MR. SAENZ: The way we have the minute 7 order -- 8 MR. WILLIAMSON: Well, my crack 9 administrative assistant has just hand-signed me that

10 I have an insert elsewhere in my book that clarifies 11 this, so... 12 MR. SAENZ: Okay. The minute order we 13 have gives us that flexibility. 14 MR. WILLIAMSON: But it's a good -- I 15 betcha ol' Amadeo is down there saying, "Well, that 16 guy does read all this stuff." 17 (General laughter.) 18 MR. WILLIAMSON: Chairman? 19 MR. JOHNSON: Yes, sir. 20 MR. WILLIAMSON: There's probably not very 21 many people from Houston here. 22 MR. JOHNSON: Well, their district 23 engineer is. 24 MR. WILLIAMSON: Perhaps we ought to tell 25 Gary to carry the word back that -- to John Culberson EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 94 1 and Tom Delay and to our staff in Houston and Robert 2 Nichols -- Robert Eckels and to this Commission, hats 3 off to all of us for being so focused on this and 4 knocking heads and working hard and hammering 5 something out that's in the best interest. 6 This is a true partnership. And we do owe 7 Culberson and Delay a big hats off for their work, and 8 they owe us big hats off for our cooperation. 9 Good job, Gary.

10 MR. JOHNSON: Gary, correct me. My 11 understanding, this is a first of its kind. 12 MR. TRIETSCH: Yes. 13 MR. JOHNSON: And it's a unique -- as Ric 14 mentioned, it's a partnership amongst many parties. 15 In fact, the document that we're going to execute will 16 be executed by Federal Highway, Harris County, and 17 ourselves. 18 So it shows that there are many parts that 19 are playing a significant role in this success, and I 20 want to salute you and your district for what you have 21 done. I think the county and Robert Eckels have led 22 the way. 23 And, of course, John Culberson started 24 working on this project when he was in the State House 25 of Representatives and now he's a United States EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 95 1 Congressman. He continues to be keenly interested 2 and, of course, Majority Leader Delay has carried the 3 water and been very interested in this project. 4 And I just -- it exemplifies to me that, 5 you know, if we work together, we can move mountains, 6 and if we work individually, we probably will get a 7 few little mole hill moves. 8 And so congratulations to you and

9 everybody involved, and I'm going to reinforce and 10 echo and shout what Ric has observed in terms of who 11 should be congratulated. 12 Robert, did you have any questions? 13 MR. NICHOLS: Great job, Gary. 14 MR. TRIETSCH: My only comment is that 15 this is a simple version that you've got, that this is 16 also an H.O.V. lane that in the operating agreement 17 with Metro, they had 65 buses per hour, 24 hours a day 18 that won't be charged, metro lift vans, possibility of 19 even putting rail down there some day. 20 Well, they're going to pay $5 million for 21 add-ons to make that provision. So whether all this 22 will ever happen -- but, you know, it's -- I say 23 "we" -- kind of -- the engineers all agreed about a 24 year ago what this was going to be. It's taken a year 25 to get all of the legal and everybody to review and EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 96 1 sign off on this thing. 2 And, you know, I have had very little to 3 do with it other than stand over people and look down 4 and where is it and -- but Gabe Johnson and Delvin 5 Dennis and the consultants that have been involved -- 6 you know, we have approximately -- I know we have 11 7 contracts, but with all the subs and everything, 8 virtually, the plans -- well, as a matter of fact,

9 Tuesday the first plans will arrive in Austin on this 10 project for letting, and within the next 12 months, 11 we'll have all of the plans wrapped up. 12 I appreciate your kind comments, but 13 Amadeo and Mike and the Federal Highway Administration 14 has been -- done an outstanding job of working us 15 through the federal part of this to get this. 16 This wasn't really going to be a value 17 price project, but that's the only way we could get 18 through this federal maze. And they, here locally in 19 Texas, have done an outstanding job. 20 MR. WILLIAMSON: Well, I think for our 21 district engineers across the state, Mike, and for our 22 14,000 plus hard-working employees and for local 23 officials who might read these remarks, this, in our 24 view -- this is a perfect example of entrepreneurial 25 thinking, of risk-taking, of not being afraid to take EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 97 1 a risk, to negotiate hard but to try to think outside 2 the box and find a solution that will work for a 3 peculiar part of the state that has a peculiar problem 4 that isn't duplicated anywhere else, considering all 5 the political subdivisions. 6 And I'm just real happy about it. I can't 7 tell you. I would like to see much more of this kind

8 of aggressive kind of problem-solving occur. I know 9 we're aggressive, but from other partners that we 10 have. It's real important if we're going to solve 11 some of our transportation dilemmas. 12 MR. JOHNSON: Is there a motion? 13 MR. NICHOLS: I so move. 14 MR. WILLIAMSON: Second. 15 MR. JOHNSON: All in favor, signify by 16 saying aye. 17 (A chorus of ayes.) 18 MR. JOHNSON: Motion carries. 19 MR. SAENZ: Thank you. 20 MR. JOHNSON: Thank you, Amadeo. 21 MR. BEHRENS: Okay. We'll go to Agenda 22 Item 5 under "Finance," which James will present the 23 Quarterly Investment Report. 24 MR. WILLIAMSON: Fast Bass. 25 MR. BASS: Good morning. For the record, EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 98 1 I'm James Bass, Director of the Finance Division of 2 TxDOT. And Item 5 presents the investment report in 3 accordance with the Public Funds Investment Act and 4 the Commission's investment policy. 5 This report is for the first fiscal 6 quarter of F.Y. 2003, and it covers the period of 7 September 1 through November 30th, 2002, reports on

8 the investment status of bond proceeds and local 9 contributions associated with the Central Texas 10 Turnpike Project. 11 Unfortunately, Phil mentioned that -- and 12 I think he's going to be able to accelerate the 13 general engineering quarterly construction report. 14 I'm uncertain that we'll be able to accelerate 15 delivery of the quarterly reports in the future. 16 We're dependent upon some information that we receive 17 from some security providers, so we may always be in a 18 situation that this quarterly report is a couple of 19 months behind the end of the quarter. 20 A few brief highlights in the Quarterly 21 Investment Report; the book value of our investments 22 actually increased this first quarter of F.Y. 2003 23 roughly $16 million and ended up with a value of 24 around $2.331 billion. 25 This is a little unusual that the EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 99 1 investments increased. It's the beginning of the 2 project, and we would expect, in the future, that, 3 obviously, as the proceeds are spent on the project, 4 they will decrease. 5 But in this first quarter, in addition to 6 the expenditures being made, we received an additional

7 28 million from the local governments, and those were 8 invested in money market funds, and we received 9 accrued interest of over 13 and a half million that 10 led to that increase in the book value. 11 At the end of the quarter, we had an 12 unrealized gain of $1.664 million, and I would be 13 happy to answer any questions that you may have, and 14 staff would recommend your acceptance of the report. 15 MR. JOHNSON: Questions? 16 MR. NICHOLS: This is a required report 17 also for the bonding thing? 18 MR. BASS: Correct. 19 MR. NICHOLS: Okay. And it's done as it's 20 required and I -- any questions I have, I'll just get 21 with you individually. I don't want to muddy up the 22 water for the trustee of this. 23 So I would just -- anybody have any 24 questions? 25 MR. JOHNSON: I have one. Ric, did you EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 100 1 have one? 2 MR. WILLIAMSON: Isn't this the one that 3 Mr. Monroe told us not to say much about? 4 (General laughter.) 5 MR. JOHNSON: He has not jumped up, so... 6 MR. WILLIAMSON: I have no questions.

7 MR. JOHNSON: James, what is the weighted 8 average yield, earning on our assets? 9 MR. BASS: On all the investments, I 10 believe it is around 3 percent. I can get you an 11 actual number on that. We have, of course, a variety 12 of investments with different maturities and 13 different -- 14 MR. JOHNSON: But the weighted average 15 yield is 3 percent -- 16 MR. BASS: I believe so. 17 MR. JOHNSON: -- roughly? 18 And the cost of our liabilities, weighted 19 average price? 20 MR. BASS: It's slightly in excess of 5. 21 I'm not sure of that exact number. 22 MR. JOHNSON: That's my question. 23 MR. NICHOLS: I so move. 24 MR. WILLIAMSON: Second. 25 MR. JOHNSON: All in favor, signify by EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 101 1 saying aye. 2 (A chorus of ayes.) 3 MR. JOHNSON: Motion carries. 4 MR. BASS: Thank you. 5 MR. BEHRENS: Zane Webb will present Item

6 No. 6, referring to GASB 34. 7 MR. WEBB: Good morning, Commissioners, 8 Mr. Behrens. For the record, my name is Zane Webb, 9 Director of the Maintenance Division. 10 In June 1999, the Governmental Accounting 11 Standards Board established new financial reporting 12 standards that will fundamentally change the way state 13 and local governments report their financial results. 14 The Governmental Accounting Standards 15 Board Statement 34 requires that assets have to be 16 depreciated or the Department can use a modified 17 approach that allows for the measurement of the level 18 of services of the asset. 19 TxDOT is using the Texas Maintenance 20 Assessment Program to measure that level of service. 21 Tx-MAP is a system where the Maintenance Division 22 rates the interstate and noninterstate highways across 23 the state. 24 The minimum Tx-MAP score of 80 percent on 25 the interstate system and 75 percent on the EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 102 1 noninterstate system has an acceptable roadway 2 condition standard and were previously adopted by the 3 Commission in September of '01. 4 This minute order establishes the funding 5 needs to maintain and preserve the

6 interstate/noninterstate system for F.Y.O. 3 at or 7 above the condition levels required by GASB 34. 8 Recommend approval. 9 MR. JOHNSON: Any questions? 10 MR. NICHOLS: I had questions back and 11 forth, but I think I did get most of mine answered, 12 but one kind of popped up after Mary made hers. I was 13 kind of surprised that when the -- where did Mary go? 14 Anyway, the -- at one time, some of the 15 frontage roads were not included on the inventory, and 16 then they were included. 17 MR. WEBB: That's correct. 18 MR. NICHOLS: And we had a rating in the 19 Tyler District at one level, and when they included 20 the frontage roads, that level dropped down 21 immediately. 22 MR. WEBB: That's correct. 23 MR. NICHOLS: Because the primary focus 24 was on the interstate -- I guess you call them main 25 lanes. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 103 1 MR. WEBB: Right. 2 MR. NICHOLS: The requirement on that 3 level in here, is that main lanes, or does that 4 include frontage roads?

5 MR. WEBB: These include the entire 6 system. 7 MR. NICHOLS: Okay. 8 MR. WEBB: The ones that Mary was showing 9 on the presentation earlier, Commissioner, were 10 actually P.M.I.S. scores, not Tx-MAP scores. 11 MR. NICHOLS: Okay. 12 MR. WILLIAMSON: Educate me a little bit. 13 I'm sure James has told me this, but I've forgotten. 14 Why do we select Tx-MAP over depreciating our assets? 15 MR. WEBB: Primarily because it's easier 16 for us to do, Commissioner. If we have to go out and 17 inventory our assets, which we'd have to do if we 18 depreciate them, we put a substantial amount of 19 resources out there in the field, counting every sign 20 and every piece of guard rail, and it's actually 21 easier to go out and do an assessment of our system 22 rather than to keep up an inventory of our system. 23 MR. WILLIAMSON: Well, certainly, 24 according to that film we watched last week, it's more 25 fun for you. You got to see the state. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 104 1 MR. WEBB: Well, yes, sir, that's true. 2 MR. WILLIAMSON: Did we lose any -- it 3 looked to me like you were having fun. Did we lose 4 anything by choosing Tx-MAP over depreciation?

5 MR. WEBB: We did a lot of discussing when 6 we -- before we made that decision to go that 7 direction, we discussed it a lot, and quite frankly, 8 we didn't see the benefit of putting the kind of 9 resources we're talking about into doing a 10 depreciation type of model. 11 And, no, sir, to answer the question, we 12 think we're getting just as good a result out of using 13 an asset assessment rather than doing depreciation. 14 MR. WILLIAMSON: Thank you. 15 MR. JOHNSON: Any questions? Any other 16 comments? Is there a motion? 17 MR. NICHOLS: I so move. 18 MR. WILLIAMSON: Second. 19 MR. JOHNSON: All in favor, signify by 20 saying aye. 21 (A chorus of ayes.) 22 MR. JOHNSON: Motion carries. 23 Thank you, Zane. 24 MR. WEBB: Thank you. 25 MR. BEHRENS: Item No. 7 on the agenda EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 105 1 will be presented by Thomas Bohuslav. 2 MR. BOHUSLAV: Good morning, 3 Commissioners, Mr. Behrens. My name is Thomas

4 Bohuslav. I'm Director of the Construction Division. 5 Item 7(a)(1) is for consideration of the 6 award or rejection of highway maintenance contracts 7 let on January 7th and 8th, 2003, whose engineers 8 estimate the cost at $300,000 or more. We had nine 9 projects at about 5.4 bidders per project, and staff 10 recommends award of all projects. 11 MR. JOHNSON: Questions? 12 MR. WILLIAMSON: Magnificent. 13 MR. NICHOLS: What did he say? 14 MR. WILLIAMSON: Magnificent. It's far 15 below our estimates. 16 MR. NICHOLS: I don't have any questions, 17 so I'll move. 18 MR. WILLIAMSON: I'll second. 19 MR. JOHNSON: All in favor, signify by 20 saying aye. 21 (A chorus of ayes.) 22 MR. JOHNSON: Motion carries. 23 MR. BOHUSLAV: Item 7(a)(2) is for 24 consideration of award or rejection of highway 25 construction and building contracts let on January 7th EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 106 1 and 8th, 2003. We had eight projects. We have 5.5 2 bidders per project. 3 We have one bidder we would recommend for

4 rejection, and that's in Jefferson County, and that's 5 Project No. 3230. That bidder submitted -- the 6 apparent low bidder submitted a bid with an error in 7 it, about a $200,000 error in their bid and met the 8 five rule requirements that we have in our rules now, 9 and we recommend rejection of all bids and then go 10 back and rebid the project. 11 Staff recommends award with the exception 12 noted. 13 MR. NICHOLS: Does that -- you know, we 14 did some modification of our rules on bidder errors. 15 Does this fit in that category? 16 MR. BOHUSLAV: This is the meeting that 17 the rules that we changed to address contractor bid 18 errors, yes. 19 MR. JOHNSON: Any other questions? 20 MR. WILLIAMSON: Is this another example, 21 Thomas, of how a more enlightened approach to contract 22 management kept a good taxpayer in Texas from having 23 to lose money on a mistake that he couldn't have 24 anticipated? 25 MR. BOHUSLAV: We look at it -- on these EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 107 1 projects from the standpoint of is there any loss to 2 the Department if we go back and rebid this project?

3 Was there any harm to the public? And there was not 4 in this case. We would have just -- it had undue harm 5 on a contractor in this case, and therefore, we 6 recommend the rejection. 7 MR. WILLIAMSON: So once again, the 8 enlightened approach of the Commission has produced 9 some results intended. 10 MR. BOHUSLAV: That's right. 11 MR. JOHNSON: Is there a motion? 12 MR. NICHOLS: I so move. 13 MR. WILLIAMSON: Second. 14 MR. JOHNSON: All in favor, signify by 15 saying aye. 16 (A chorus of ayes.) 17 MR. JOHNSON: Motion carries. 18 Thomas, thank you. 19 MR. BOHUSLAV: Thank you. 20 MR. BEHRENS: Agenda Item No. 8 is a 21 contested case that has come before the Department 22 concerning a salvage motor vehicle's license, and 23 Richard will present that. 24 MR. MONROE: Thank you, Mr. Behrens. 25 For the record, my name is Richard Monroe. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 108 1 I'm general counsel for the Texas Department of 2 Transportation.

3 Among some of the lesser known duties of 4 the Department, imposed on it by statute, is a certain 5 amount of regulation as to salvage yards. This 6 dovetails into the Department's duties as far as 7 registration and licensing of cars and also the 8 regulation of automobile dealers. 9 In the interest of that, salvage dealers 10 are required to keep certain records. These are 11 primarily of use to law enforcement officers when 12 they're trying to trace things like stolen cars, 13 investigate chop shops, that sort of thing. 14 This particular individual, Roger 15 Chambers, dba Roger's, did not keep any of the records 16 he was required to keep. Twice in the year 2002, the 17 Beaumont Police Department paid him a visit, even 18 sitting down with him and instructing him how to keep 19 these records. 20 He still refused; therefore, the case went 21 before SOAH. The SOAH judge agreed with the position 22 taken by the state, that his license should indeed be 23 yanked. That was the finding of the SOAH judge. 24 I would urge you, by order of the 25 Commission, to affirm that judgment on the part of the EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 109 1 SOAH A.L.J.

2 MR. JOHNSON: Question? Ric, did you have 3 anything? 4 MR. NICHOLS: I so move. 5 MR. WILLIAMSON: Second. 6 MR. JOHNSON: All in favor, signify by 7 saying aye. 8 (A chorus of ayes.) 9 MR. JOHNSON: Motion carries. 10 MR. MONROE: Thank you, gentlemen. 11 MR. BEHRENS: I'd like to go to Agenda 12 Item 9, our routine minute orders and would like to 13 take one of those first, which would be Item 9(c)(1), 14 which would be the sale of a surplus maintenance site 15 that we had in Archer City adjacent to State Highway 16 79 and pass this part on to you, Mr. Chairman, to 17 recognize a speaker. 18 MR. WILLIAMSON: This is the guy that owns 19 "The Last Picture Show." 20 MR. JOHNSON: Signed up to speak, Gary 21 Beesinger -- 22 MR. BEESINGER: Yes, sir. 23 MR. JOHNSON: -- councilman for the City 24 of Archer City. Now, I also have a name of L.B. 25 Boren? EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 110 1 MR. BEESINGER: Junior, city secretary.

2 MR. JOHNSON: Would both of you like to 3 speak? 4 MR. BEESINGER: He'll answer any 5 questions. I'm going to speak for the City. 6 MR. JOHNSON: All right. Councilman, 7 thank you for being here and good morning to you. 8 MR. BEESINGER: Good morning, 9 Mr. Chairman. Commission, a good morning to you. 10 We'd like to take this opportunity to thank you for 11 allowing us to comment today. I'll be as brief as 12 possible. 13 As you're aware, we are considering 14 Item 9, Section (c)(1) of the agenda, which concerns 15 the sale of the state's surplus maintenance site north 16 of the city to a private business who won the property 17 in a public sealed bid on December 3rd, 2002. 18 Hope and believe that you do have in your 19 possession a copy of the certified letter from our 20 city and our mayor which was addressed to you, 21 Mr. Johnson, in which we were notifying you that we 22 were filing a protest with the Commission asking that 23 the sale of this site be -- excuse me -- that the sale 24 of this site to the private business be overturned. 25 I do have a U.S. Postal Service certified EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 111

1 mail receipt dated 1-10-02 showing that the letter was 2 received by the Commission. 3 Our reason for filing this protest goes 4 back to mid 2000 when Mr. Robert Fenoglio, engineer 5 with the Wichita Falls TxDOT office, first contacted 6 the City of Archer City, as well as the two other 7 political subdivisions in Archer City, the County of 8 Archer and the Archer City I.S.D., to notify us of the 9 state's intent to make this property available to one 10 of the subdivisions if an agreement could be reached. 11 It was at this meeting that we were asked 12 to submit a letter stating our interest in the 13 property. I do have in my possession today a copy of 14 that letter dated June 14th, 2000, which was submitted 15 to Mr. Fenoglio as requested. 16 At the time of the open house held for the 17 state's new maintenance site facility in Archer City, 18 sometime around late 2001, early 2002, 18 months or 19 more later, we again advised both Mr. Fenoglio and 20 Mr. Joe H. Nelson, district engineer for the Wichita 21 Falls office, of our interest in the property, and we 22 were not made aware at that time of any interest 23 expressed by the other two entities nor that they had 24 responded as was asked to do so. 25 We again stated that both of those EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 112

1 entities had made known to us that they were not 2 interested in that property. We were confident at 3 that time that the City of Archer City would be 4 awarded the property for the appraised price of 5 $65,000. 6 We continued to wait out this process 7 until the fall of 2002, waiting for the state to act 8 when we were suddenly notified by Wichita Falls 9 engineer, Jeff Warren, in October of 2002 that the 10 property would now be available only through public 11 sealed bid due to the sudden and unexpected interest 12 of the property by the Archer City I.S.D. 13 This was indeed quite puzzling and 14 perplexing. As we pointed out in the certified 15 letter, we believe that this was the result of a 16 dispute that subsequently arose between the city and 17 the I.S.D. over a water leak on school property, which 18 the city failed to rule in favor of the I.S.D., 19 causing them a significant amount of money. 20 It is our city's belief it was then that 21 the I.S.D. took steps to advise the state of their 22 interest in the property. We obviously believe that 23 this was done to interfere with the city's legitimate 24 interest in the property since the superintendent of 25 the I.S.D., Mr. Randall Beaver, had previously told EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213

113 1 the city that they were not interested and would not 2 pursue the property and had not notified the state 3 until this event had occurred. 4 Again, I would point out that neither the 5 TxDOT office in Wichita Falls, Mr. Fenoglio, nor 6 Mr. Nelson nor Mr. Warren had not received a letter 7 from them until October 2002, when all entities were 8 asked to do so in mid 2000, if they were interested. 9 This substantiates our belief that the 10 City of Archer City was the only public entity to 11 truly and legitimately express the interest in the 12 property as requested to do so. 13 What further complicates this matter is 14 that one of the owners of the business, which was 15 awarded the property in the sealed bid, was previously 16 a board member of the I.S.D., in fact, president of 17 the board. He is no longer a member of that board. 18 This was done at the time that the three 19 entities were originally contacted by the state. It's 20 a well-known fact in our community that this business 21 was interested in the property and knew that their 22 only chance to obtain it would be if there was public 23 bid. 24 Our investigation into this matter has led 25 us to believe that there was collusion, possible EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213

114 1 manipulation by several parties to make this possible. 2 MR. WILLIAMSON: Be real careful what you 3 say on the record. 4 MR. BEESINGER: Yes, sir. 5 Since the I.S.D. has previously expressed 6 no interest, was not upset with the city over the 7 matter previously alluded to, we believe that they 8 decided to get involved and that they could not win -- 9 that they knew that the city could not win in this bid 10 process due to our lack of limited funds. 11 I believe that the winning bid placed by 12 the private business was in the vicinity of 125,000, 13 which was the more than 55 -- which was more -- excuse 14 me -- which the city's bid was 55,000. 15 I will leave this to you to draw to your 16 own conclusions but would ask you to consider the 17 information presented here. 18 With the recent news of our state's 19 financial woes and budget cutbacks, we hope the 20 Commission can understand why this course of action 21 would be in the best interest of a whole community and 22 its city officials who are elected and appointed to 23 serve the municipality the most effective way with 24 limited funds and resources, not a single business 25 which does not serve the city. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213

115 1 Awarding the property to anyone other than 2 the City of Archer City would only hurt the city and 3 its citizens in the long run. 4 An additional $60,000 off the sale of the 5 property is a lot of money. I do agree with that. 6 But, ultimately, does it justify hurting the entire 7 citizenship of the municipality who are also citizens 8 of the state which you serve. 9 I might add, Mr. Chairman, that I also 10 have recently been elected as president of the Chamber 11 of Commerce in Archer City, so I do wear a dual hat 12 here. I represent a conglomerate of business owners 13 who have an interest in how this turns out. 14 As one of the gentlemen referred to, we 15 are beginning to see a fair amount of visitors and 16 tourists to our fair city due to Mr. Larry McMurtry, 17 who is a world-renowned, Pulitzer Prize winning 18 author, who owns and operates Booked Up, which is one 19 of the world's largest book stores in Archer City. 20 It's also home to the Royal Theater, which 21 is a national icon, made famous by the movie, "The 22 Last Picture Show," Oscar-winning movie. 23 And the courthouse there in Archer City, 24 which is, again, the county seat, has recently been 25 awarded -- I believe it was with last year's budget -- EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213

116 1 one of the courthouse renovation grants, which are 2 rare and hard to come by in these days. 3 We believe that with all of these facts 4 considered, Archer City, has an attractive draw to it. 5 We feel that the city being able to own this property 6 would only add to the beauty of the city and allow the 7 city to be represented in a fair and decent way, with 8 our current facilities not doing so. 9 In closing, gentlemen, I'd like to read 10 the next to last paragraph of our certified letter to 11 reiterate our basis and request for this protest. 12 (Reading) "The city does not wish to 13 deprive any rightful owner to the property but 14 believes that they should be the rightful and 15 legitimate owner based on statements made to them by 16 state officials, that having the property will allow 17 the city to serve its citizens more effectively, allow 18 the city to operate sufficiently through the coming 19 years without having to utilize city funds and tax 20 dollars to offset not having the property. 21 "Thus, the city is requesting that the 22 sale of the property to the high bidder be overturned, 23 the property be awarded to the city for the opening 24 bid price of 65,000, which is the appraised value that 25 was set by TxDOT on the property, as a sign of good EAST TEXAS COURT REPORTING SERVICES, INC.

P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 117 1 faith and cooperation between the city and TxDOT." 2 Gentlemen, I want to thank you for your 3 time. Mr. Boren and myself will be glad to answer any 4 questions. If not, thank you for your consideration 5 in this matter. 6 MR. JOHNSON: Mr. Boren, did you have 7 anything that you wanted to add? 8 MR. BOREN, JR.: No. I'm just here to 9 answer questions. 10 MR. JOHNSON: Clarification? 11 MR. BOREN, JR.: Not necessarily. He 12 pretty well covered it. 13 MR. JOHNSON: Robert, did you have any 14 questions or -- 15 MR. NICHOLS: I actually have several 16 related to this. Before I ask the councilman a 17 question, I think I'd like to ask my counselor a 18 question. 19 As I recall, statutorily, when we have a 20 property that becomes available -- I'm asking our 21 attorney -- we are required first to go to other state 22 agencies on surplus property, state agencies, such as 23 D.P.S. Is that a statutory? 24 MR. MONROE: No, sir. 25 MR. NICHOLS: Not other state agencies?

EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 118 1 MR. MONROE: Right. 2 MR. NICHOLS: I thought it was, but I 3 knew -- I always -- it was my understanding that when 4 we get into surplus property, it has been a policy, as 5 a courtesy from the Department, to then go to the 6 community and work with the school or the city or the 7 county, because many times, the communities can put 8 these things to work. 9 MR. MONROE: Yes, sir, that is true. 10 MR. NICHOLS: But in our policy, that if 11 the community can agree which entity or -- in other 12 words, we have one entity that comes to us, then we 13 would sell it at the appraised value. But if we have 14 an expressed interest from several entities, then 15 we'll go to public bid. 16 MR. MONROE: Yes, sir, that's a fair 17 statement. 18 MR. NICHOLS: That's all my questions to 19 you. 20 In my folder, I've got a copy of a letter 21 dated October from the Independent School District 22 with a declaration of interest in purchasing this. 23 And then in the bid opening December 3rd, just a 24 little over 30 days ago, the Independent School 25 District actually bid on it.

EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 119 1 So as late as 30 days -- a little over 30 2 days ago, they had enough interest that they actually 3 bid on this item. 4 MR. BEESINGER: I would like to address 5 that, Mr. Nichols. 6 MR. NICHOLS: Okay. And -- so at the time 7 the bid went out, obviously, it is apparent to me that 8 they had enough interest that we had two different 9 entities in the community that were interested in 10 this, so we went to public bid, and the actual private 11 entity that bid on it was almost twice as much as the 12 appraised value. 13 Okay. What's the population of Archer? 14 MR. BEESINGER: Approximately 2,000, sir. 15 MR. NICHOLS: Okay. How long have you 16 been on the city council? 17 MR. BEESINGER: Almost eight years. 18 MR. NICHOLS: Okay. I spent, I think, 19 about nine years doing city council work in a small 20 community. It was about 12,000. It's a lot bigger 21 than Archer, but in our community, most of the city 22 council people knew most of the board members of the 23 school. 24 MR. BEESINGER: That's right. 25 MR. NICHOLS: And we also knew all the

EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 120 1 county commissioners. 2 So usually, we -- I know that I've heard 3 our commissioners preach around the state that when 4 communities can pull together and be in support of 5 things and work as a unit, it is so much easier to get 6 things accomplished. 7 But in a community, when you have entities 8 pulling in opposite directions, it's really tough to 9 get something done. And in a town of 2,000, as late 10 as a little over 30 days ago, you had the school going 11 one way, and you had the -- it appears to me, the city 12 council going the other way. 13 MR. BEESINGER: That's correct, 14 Mr. Nichols. 15 And what I would address to that matter is 16 that, again, I state that I have a letter in my 17 possession dated June of 2000, after we were notified 18 by TxDOT to write a letter of our interest to that 19 property. 20 Neither one of those other entities ever 21 did so until October of 2002, and it was only the 22 I.S.D. that did so, only after the dispute between the 23 city and the I.S.D. 24 MR. NICHOLS: But we are not -- I mean,

25 there are so many different disputes and -- I know in EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 121 1 our small town, we have disputes on the rare occasion, 2 but we have a stated policy of, if you have different 3 entities in a community that are interested in a 4 surplus property, then we do go out for public bid. 5 So, in other words, if at that point in 6 time up to the point of the sale, as long as you have 7 different entities, we're going to go to public bid. 8 So we did pretty much what our stated 9 policy was. And we do have bids, and neither one of 10 those entities that had expressed an interest, school 11 or city, was the high bidder. 12 MR. BEESINGER: My question that I'd like 13 for you to consider is, if TxDOT did notify us in June 14 of 2002 to express our interest, and, again, the city 15 was the only one that did so at that time, why, in 16 October of 2002, did that request again suddenly go 17 out? 18 And I've made a point, which, again, the 19 Chairman was kind enough to ask me to be very careful 20 about making any accusations, but I believe the facts, 21 as we believe them, are that there are some other 22 circumstances at work here. 23 MR. NICHOLS: All right. 24 MR. JOHNSON: Ric, did you have any

25 questions or observations? EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 122 1 MR. WILLIAMSON: Yes. A pretty confusing 2 situation to me, but I have really just one. This 3 property is inside the city limits of Archer City? 4 MR. BEESINGER: Yes, sir. 5 MR. WILLIAMSON: And what's the tax rate, 6 Archer City tax rate? 7 MR. BOREN, JR.: .5233 per 100. 8 MR. WILLIAMSON: So what will this -- what 9 will this add to the city's tax collections? 10 MR. BOREN, JR.: It's on the tax roll at 11 66,500. 12 MR. WILLIAMSON: It's on the tax roll? 13 MR. BEESINGER: I believe that's what he 14 means, its appraised value. 15 MR. BOREN, JR.: Appraised value. 16 MR. BEESINGER: He's asking what would it 17 add to us in taxes. 18 MR. NICHOLS: Don't we still own it, 19 Amadeo? 20 MR. SAENZ: Yes, sir. 21 MR. NICHOLS: So it's not on the tax roll. 22 MR. BOREN, JR.: But it's been appraised 23 by our chief -- county chief appraiser at sixty-six

24 five. 25 MR. NICHOLS: And if U.S.A. Rock Bit -- EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 123 1 whoever they are -- 2 MR. BEESINGER: Yes, sir. 3 MR. NICHOLS: -- buys it, it will then go 4 on the tax roll at a hundred and -- 5 MR. BOREN, JR.: 125,000. 6 MR. WILLIAMSON: So what will that be in 7 tax collections to the city? 8 MR. BOREN, JR.: Be somewhat over -- 9 100,000 would be $500 per year. 10 MR. WILLIAMSON: But if the city bought 11 it, it wouldn't go on the tax rolls, obviously, or if 12 the school district bought it, it wouldn't go on the 13 tax rolls. 14 MR. BOREN, JR.: Right. 15 MR. BEESINGER: One of the things that 16 we're considering, Mr. Chairman, is that -- 17 MR. WILLIAMSON: No. The Chairman is 18 here. 19 MR. BEESINGER: Excuse me. One of the 20 things that we're considering there is that, in the 21 long run, the city will be out much more money to 22 update needed facilities, which we don't really have 23 at this time, more than that tax value will benefit

24 us. That was why we were interested in the property 25 in the first place. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 124 1 MR. WILLIAMSON: Thank you. 2 MR. BEESINGER: Yes, sir. 3 MR. JOHNSON: You know, my observations 4 are, one, I appreciate your coming; two, it's 5 difficult for me, and I would suggest also my 6 colleagues on the Commission, to know the intentions 7 of the parties involved in any dispute or any 8 competition, be it a bid or a negotiation. 9 And so to try to interject or infuse 10 ourselves in that is something we just can't do. I 11 mean, people do things because they think that's in 12 their best interest to do. 13 So the intention of the Independent School 14 District to involve themselves in this tract might be, 15 as you contend, that it was a matter of spite, 16 disagreement with a decision that the city council 17 made in Archer City. 18 And my second point is, is that in spite 19 of everything that's happened, the city still had an 20 opportunity to purchase along with everyone else who 21 elected to bid on the property. 22 And just as we bid almost all of our work,

23 both maintenance and construction, we have an 24 obligation to have as transparent and as sanitized and 25 secure a bid process. When you go back and you start EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 125 1 overturning, you know, the legitimacy of your bid 2 process, it sends out a red flag. 3 And so, you know, I'm very cognizant of 4 our obligation to protect the bid process, and not 5 knowing the intentions of any of the parties here, and 6 we went through a process, we've come to a conclusion, 7 and my sense is or my vote will be to ratify the 8 conclusion. 9 I understand perfectly where you're coming 10 from, and it's just an unfortunate situation in my 11 mind that these things happen. I think Robert's 12 alluded to things, when we work together, we 13 accomplish a great more than if we -- when we have 14 differing minds and differing agendas. 15 MR. BEESINGER: Thank you, Mr. Chairman. 16 I do believe that we came down here with the 17 understanding that that would be the action of the 18 Commission, but as Oral Roberts says, you must believe 19 in miracles. 20 MR. JOHNSON: Well, you're -- you might be 21 omniscient or something. 22 Any other questions or comments?

23 MR. NICHOLS: No more questions. I so 24 move. 25 MR. WILLIAMSON: Second. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 126 1 MR. JOHNSON: All in favor, signify by 2 saying aye. 3 (A chorus of ayes.) 4 MR. JOHNSON: Motion carries. 5 MR. WILLIAMSON: Chairman, now that we've 6 acted on that, might I also direct comments to the 7 gentleman? 8 Is that okay, Mr. Monroe? 9 MR. MONROE: Certainly. 10 MR. WILLIAMSON: The chairman said 11 something that was very important, and I just hope you 12 consider it later on. 13 I suspect all three of us are confused 14 about this, but the single most important thing to the 15 way this department handles the god-awful amount of 16 money it handles is to have procedures in place that 17 are transparent, that are unimpeachable, that 18 everybody understands and believes in, and I went out 19 of my way to compliment ourselves on a previous 20 contract matter in anticipation of your presentation. 21 It is terribly important to us that we

22 have a system and we follow it in order that no one 23 can accuse us of manipulating the system to the 24 benefit of one or the other. 25 And in every case, there's -- almost every EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 127 1 case, there's a happy person and an unhappy person, or 2 in the case of highway contracts these days, there's 3 one happy person and fifteen unhappy persons. 4 But everybody walks away knowing that it 5 is unimpeachable. And we hope that you'll take that 6 into consideration as you ponder the decision. 7 MR. BEESINGER: Thank you, sir. 8 MR. JOHNSON: Anything else? 9 MR. NICHOLS: Since he made a comment -- 10 are you through? 11 MR. WILLIAMSON: Sure. 12 MR. NICHOLS: Can I go ahead and make one? 13 MR. JOHNSON: Yes, sir. 14 MR. NICHOLS: I'm going to repeat 15 something somebody else said, and that is, we do thank 16 you for coming here. 17 And I will assure you that I have seen 18 situations where additional information brought by 19 someone at a podium just like that in front of this 20 group has changed the action we were going to take 21 from what was recommended based on input.

22 So don't think that just because you make 23 a presentation on something that's in a 24 recommendation, that we don't change, because I have 25 seen it quite a bit. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 128 1 It's unfortunate that in your community, 2 that something that probably would have been 3 beneficial either for the school or for the city is 4 going to end up not beneficial for either because of 5 apparent bickering or disagreements among yourself and 6 your community. 7 MR. BEESINGER: That's true. 8 MR. NICHOLS: And it's a perfect example 9 of when you work together, you can do so much more. 10 MR. BEESINGER: That's very true, and 11 we'll push forward to do so. 12 MR. NICHOLS: All right. Thank you. 13 MR. BEESINGER: Thank you, gentlemen. 14 MR. JOHNSON: Thank you. 15 MR. BEHRENS: Commissioners, you have the 16 remaining routine minute order listed, and they were 17 all posted, of course, on our agenda as required. If 18 you'd like any of those discussed individually, we'd 19 be glad to do that; otherwise, I'd recommend we 20 approve the remainder of the routine minute orders.

21 MR. WILLIAMSON: Mike, has someone checked 22 to be sure that nothing affected in here is anywhere 23 close to what -- where any of the three commissioners 24 might have any assets? 25 MR. BEHRENS: Yes, sir. And we have seen EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 129 1 no conflict. 2 MR. WILLIAMSON: I didn't see any when I 3 read through it. 4 What's this about the Robert Nichols 5 Freeway I see here? 6 (General laughter.) 7 MR. NICHOLS: My only question was on the 8 speed limits that we're changing. 9 MR. WILLIAMSON: Wait. Wait. Wait. 10 Wait. 11 MR. NICHOLS: I wanted to know if we have 12 any particular spots where we're raising them to 75 so 13 I can mark them on my map. 14 (Laughter.) 15 MR. BEHRENS: We have none this month that 16 we're raising to 75. 17 MR. JOHNSON: I think we're going to 85 in 18 Carter County. 19 MR. WILLIAMSON: Oh, you boys. Y'all are 20 just not as old as me. When you get a few more years

21 on you, you'll want to slow down. 22 MR. JOHNSON: Any questions about the 23 routine minute orders? Is there a motion to accept 24 and approve? 25 MR. NICHOLS: I so move. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 130 1 MR. WILLIAMSON: Second. 2 MR. JOHNSON: All in favor, signify by 3 saying aye. 4 (A chorus of ayes.) 5 MR. JOHNSON: Motion carries. 6 I believe we'll have the open comment part 7 of the meeting now, and then as per our agenda that's 8 posted, we will recess for an executive session. 9 Signed up to speak at the open comment -- 10 (Discussion had off the record.) 11 MR. JOHNSON: Well, for the record, 12 Carolyn Hyman, I believe, has -- did sign up to speak 13 on traffic repairs on South Broadway and the speed 14 limit, and we're sorry that she was unable to stay. 15 Chris Chandler from Tyler signed up to 16 speak on the placement of state signs on highways. 17 Chris, are you here? 18 Please note for the record that that 19 person also has left.

20 We will, at this time, recess the meeting 21 for the Commission to meet in executive session 22 pursuant to notice as given in the meeting agenda 23 filed with the Office of the Secretary of State. 24 (Time 11:50 a.m.) 25 (Executive session held in chambers.) EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 131 1 (Time 12:36 p.m.) 2 MR. JOHNSON: This meeting of the Texas 3 Transportation Commission is reconvened. 4 We have one of our speakers here from the 5 open comment session. The name of Chris Chandler, at 6 least to me, is a famous one. It's the name of a 7 quarterback who played professional football. But 8 even more so, as a TV star newscaster from the Houston 9 area for many, many years, and we have that 10 Mr. Chandler here. 11 Mr. Chandler, we're glad that you're here. 12 It says you're going to speak on the placement of 13 state signs on highways. The podium is yours. 14 MR. CHANDLER: Thank you, sir. 15 My name is Chris Chandler. I'm a lifelong 16 Texan. I was born and raised in Dallas, but I moved 17 to Houston in 1960. 18 I spent 18 years there in television and 19 radio, and in that time, through a personal interest

20 in highway systems and transportation systems and 21 general subjects, I have thought of a lot of ideas 22 that might be helpful. 23 But one has always stuck with me in recent 24 years, and I'd like to give it to you gentlemen to see 25 if it goes into the right place. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 132 1 Essentially, I have found through my 2 experience and experience with talking to groups and 3 other individuals that one of the major problems of 4 Texas highways is the distance of directive signs 5 before, say, exits. There's a lot of arguments pro 6 and con on where they should be placed. 7 But my feeling has generally been that 8 since the speed limits have changed from 55 and 60 up 9 to 70 miles an hour, at the same time the traffic is 10 increasing in numbers, more lanes, more cars, more 11 trucks, it makes it more and more difficult for people 12 to move from the inside lanes to the outside lanes for 13 exits. 14 And I think that if you gentlemen could 15 perhaps pass that thought on to the state chief 16 engineer or someone who's actually in charge of 17 placement, that my recommendation would be that all 18 signs of this type be moved to double the distance

19 from those places. 20 For instance, an exit sign 500 feet from 21 the exit should go to a thousand feet because we find 22 and you, I'm sure, have seen many cases, many near 23 accidents, where people in the middle lanes will 24 suddenly say, "Hey, there's the exit" and dart over to 25 get into the exit, and a huge number of near misses EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 133 1 and I'm sure a few accidents caused by it. 2 I'd like to see all the signs, when 3 possible -- I wouldn't think it would be practical to 4 spend the money to go around and move every sign, but 5 whenever highways are changed or any are built, I 6 would recommend to the chief engineer that he put all 7 exit signs or direction changes double the distance 8 they now have on their book. 9 They're operating on a book that's nearly 10 25 years old, as far as where the -- judging the 11 footage back from those places where the signs are. 12 The other comment that I had was on a 13 similar thing and that was the fact that I feel, from 14 talking to so many thousands of people over a period 15 of years, that the term "exit only" is confusing. 16 It means to an engineer "get in this lane 17 if you only want to exit," but I think that people are 18 confused by it, and I think it would be helpful to

19 change the designation from "exit only" to "lane ends" 20 or "lane ends at exit," whichever is practical. 21 I realize that space and things of that 22 sort play a part, but I think it would be hugely 23 helpful to say "lane ends," and everybody will pretty 24 well get on to that. But "lane exit" is confusing. 25 That's all I have at this time, and I EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 134 1 appreciate you gentlemen coming to Tyler to listen to 2 the comments. 3 MR. JOHNSON: Well, thank you so much for 4 staying around and your patience to make those 5 comments. 6 One thing that I want to emphasize to you, 7 and for the record, I think, to this Commission and to 8 our departments, safety is one of our watch words. 9 It's a beacon in what we try to accomplish. And so I 10 think your observations are ones that we ought to take 11 into serious context. 12 Mike, I would just ask you, if you could 13 enlighten us and perhaps Mr. Chandler on what we do in 14 terms of distances and where signs are located on 15 existing facilities, and I think that one of his 16 observations or requests are that on new facilities, 17 we consider lengthening the distance.

18 But if you could briefly touch on that, 19 and then we'll probably adjourn, unless my colleagues 20 have a comment or question. 21 MR. BEHRENS: And I think there are two 22 distinctions. There is the existing, what we have in 23 place now, and then what we are building new in the 24 future. 25 And also, you know, you speak of the EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 135 1 manual and our guidances is old. You know, that is 2 being updated, and I know particularly on some of our 3 intersections, we have new guidance on how we place 4 our signs. 5 But normally, on the existing ones, you 6 know, we try to give guidance, you know, several miles 7 back. The example being if a person is in the inside 8 lane of a freeway, letting him know that maybe two 9 miles down the road is where the exit -- you know, try 10 to give him that name and progressively try to move 11 him over to that exit. 12 But I appreciate your comments. I think 13 that, you know, especially when you said "exit only," 14 it sort of makes you think, you know, if that is the 15 proper term, and we will definitely take your comments 16 into consideration. 17 MR. CHANDLER: Thank you.

18 MR. WILLIAMSON: Would you accomplish the 19 same thing if you said "exit, dead end"? 20 Would you accomplish the same thing if you 21 said "exit" and then underneath that "dead end"? 22 MR. CHANDLER: I'm still not getting you, 23 sir. 24 MR. WILLIAMSON: You probably wouldn't. 25 MR. CHANDLER: My hearing is not good. EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 136 1 MR. WILLIAMSON: That's okay. My speaking 2 sometimes isn't very good. "Dead end" is not a good 3 term? 4 MR. BEHRENS: I don't think so. 5 Robert, did you have any -- 6 MR. WILLIAMSON: How about "exiting this 7 road is not big enough for all the traffic"? 8 (General laughter.) 9 MR. JOHNSON: One thing I omitted to say 10 is that during the executive session, there was no 11 business that was transacted, and the executive 12 session was concluded with no action being taken on 13 any matter. 14 Is there any other business that needs to 15 come before the Commission this day? 16 MR. NICHOLS: Move to adjourn.

17 MR. JOHNSON: There is a motion. 18 MR. WILLIAMSON: I second. 19 MR. JOHNSON: Second to adjourn the 20 meeting. 21 For the record, please note that it is 22 12:43 p.m. Meeting stands adjourned, if we'll vote on 23 the motion. So all those in favor, signify by saying 24 aye. 25 (A chorus of ayes.) EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 137 1 MR. JOHNSON: Motion carries. 2 Thank you. Good afternoon. Great to be 3 in Tyler. 4 Mary, thank you for all you've done. 5 (Whereupon, at 12:43 p.m., the meeting was 6 concluded.) 7 8 9 10 11 12 13 14 15 16

17 18 19 20 21 22 23 24 25 EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213 138 1 C E R T I F I C A T E 2 3 MEETING OF: Texas Transportation Commission 4 LOCATION: Tyler, Texas 5 DATE: January 30, 2003 6 7 I, JANET JASPER SIMMONS, CSR, court reporter 8 in and for the State of Texas, do hereby certify that 9 the foregoing pages, numbers 1 through 138 inclusive, 10 are the true, accurate, and complete transcription 11 prepared by computerized stenotype machine and 12 Reporter's Record produced by computer-aided 13 transcription before the Texas Transportation 14 Commission of Texas. 15

16 _________________________ JANET JASPER SIMMONS 17 CSR, RPR STATE OF TEXAS Certificate No. 5279 18 Expires: 12-31-04 RPR No. 816183 19 Expires: 12-31-03 20 EAST TEXAS COURT REPORTING SERVICE, INC. 21 P.O. Box 6214 Tyler, Texas 75711 22 1-800-593-3213 23 24 25 EAST TEXAS COURT REPORTING SERVICES, INC. P.O. BOX 6214, TYLER, TX 75711, 1-800-593-3213