APR95TRN.doc
TEXAS TRANSPORTATION COMMISSION
COMMISSION MEETING
Thursday, April 30, 2009
Ric Williamson Hearing Room
Dewitt Greer Building
125 East 11th Street
Austin, Texas 78701-2483
COMMISSION MEMBERS:
Deirdre Delisi, Chair
Ted Houghton, Jr.
Ned S. Holmes
Fred Underwood
William Meadows
STAFF:
Amadeo Saenz, Executive Director
Steve Simmons, Deputy Executive Director
Bob Jackson, General Counsel
Roger Polson, Executive Assistant to the
Deputy Executive Director
Dee Hernandez, Chief Minute Clerk
I N D E X
AGENDA ITEM PAGE
CONVENE MEETING
1. Approval of Minutes of the March 26, 2009
regular meeting of the Texas Transportation
Commission 12
2. Awards/Recognitions/Resolutions
a. Recognition of the service of Robert
"Bob" E. Tesch, outgoing chairman of
the Central Texas Regional Mobility
Authority 12
b. Resolution to recognize Bob Daigh,
Austin District Engineer, upon his
retirement after more than 21 years
with the department 19
3. Regional Reports
a. Report on transportation matters of
regional significance by the North
East Texas Regional Mobility Authority 64
b. Report on transportation matters of
regional significance by the Hidalgo
County Regional Mobility Authority 79
4. Aviation
Various Counties - Award federal grant
funding for airport improvement projects
at various locations (MO) 107
5. Federal Rescission
Discussion of the status of workgroup
activities related to the rescission of
unobligated federal-aid highway funds
apportioned to Texas; approve funding
categories and programs from which funds
will be reduced and returned to the federal
government (MO) 108
6. American Recovery and Reinvestment Act (ARRA)
a. Discussion of ARRA funding the department
could receive from other state and federal
agencies for non-transportation purposes
and the need to develop a list of non-
transportation projects that potentially
qualify for ARRA funding. 113
b. Discussion of the status of ARRA project
delivery and a proposed methodology for
selecting and prioritizing substitute
projects; approve changes to the lists
of mobility and preventative maintenance
and rehabilitation projects previously
approved for funding from Texas' portion
of the ARRA (MO) 119
c. Various Counties - Award Federal (5311,
Nonurbanized Area Program, American
Recovery and Reinvestment Act of 2009,
Funds for Intercity Bus Projects (MO) 140
7. Public Transportation
Various Counties - Award federal (5310 funds,
Elderly Individuals and Individuals with
Disabilities Program, and award transportation
development credits for FY 2009 (MO) DEFERRED
8. Promulgation of Administrative Rules
Under Title 43, Texas Administrative Code,
and the Administrative Procedure Act,
Government Code, Chapter 2001:
a. Final Adoption
Chapter 2 - Environmental Policy and
Chapter 11 - Design (MO)
Amendments to (2.1, General; Emergency
Action Procedures (Environmental Review
and Public Involvement for Transportation
Projects); and Repeal of (11.56, Connection
with Regionally Significant Highway and
New (11.56, Connection with Regionally
Significant Highway (Access Connections
to State Highways) 143
b. Proposed Adoption
(to be published in the Texas Register
for pubic comment)
Chapter 9 - Contract Management (MO)
Amendments to (9.114, Opportunity for
Formal Hearing (Contractor Sanctions) 145
9. Transportation Planning
Various Counties - Approve appointment of one
member to the Grand Parkway Association Board
of Directors (MO) 146
10. Toll Projects
a. Chambers County - Establish toll rates for
Segment I-2 of SH 99 (Grand Parkway) from
I-10 East to Fisher Road in Chambers
County (MO) 148
b. Dallas County - Consider approval of the
designation as a toll project of the I-635
Managed Lanes Project along I-635 from
east of Luna Road to Greenville Avenue and
on I-35E from south of the Loop 12/I-35E
split to south of Valwood Parkway in
Dallas County (MO) 149
c. Travis County - Consider the preliminary
approval of a request for financing from
the Central Texas Regional Mobility
Authority to pay for certain costs relating
to the construction of the 290 East toll
project from east of US 183 to east of
FM 734 in Travis County, including the costs
of right of way acquisition and utility
relocation, and the costs of constructing
direct connectors at the US 183 interchange
(MO) 150
11. Management
a. Update of the development of the Strategic
Policy and Performance Management Program. 151
b. Report on implementation of the spirit of
Sarbanes-Oxley in department policies. 159
c. Rescind prior minute order and direct the
Chief Financial Officer to develop and
implement policies and procedures which
incorporate the spirit of Sarbanes-Oxley
into key financial reports, including an
internal control report, and direct the
finance division to establish a code of
ethics for senior finance personnel (MO) 159
12. Finance
Approval of changes to the Texas Mobility Fund
Revenue Financing Program financial plan,
documents, issuance and remarketing of bonds,
particularly for bonds authorized by the
commission on December 18, 2008 and the Series
2005-B variable rate bonds outstanding (MO) 162
13. State Infrastructure Bank
Final Approval
a. Fort Bend County - City of Rosenberg -
Consider granting final approval of an
application from the City of Rosenberg
to borrow $450,000 from the State
Infrastructure Bank to pay for sewer and
water line relocations costs along SH 36
(MO) 164
b. Jones County - City of Stamford - Consider
granting final approval of an application
from the City of Stamford to borrow
$300,000 from the State Infrastructure Bank
to pay for sewer and water line relocations
costs along FM 1226 (MO) 164
14. Construction and Maintenance Funding Report
Status report on the FY 2009 Obligation Limit
and report on the actual April 2009 and proposed
May 2009 highway maintenance and construction
contract letting. 165
15. Contracts
a. Award or Reject Highway Improvement Contracts
(1) Highway Maintenance and Department
Building Construction 165
(see attached itemized list) (MO)
(2) Highway and Transportation Enhancement
Building Construction 166
(see attached itemized list) (MO)
16. Routine Minute Orders 167
a. Donations to the Department
(1) Bridge Division - Acknowledge a
donation from Precast/Prestressed
Concrete Institute (PCI) for
reimbursement of a department
employee's travel expenses related to attending the joint PCI/AASHTO Technical Committee for Concrete Design (T-10)
Meeting. The meeting was held in
Chicago, Illinois, from April 23-24,
2009 (MO)
(2) Construction Division - Consider a
donation from American Chemical
Society - Rubber Division for a
department employee's travel expenses
related to attending and presenting at
the Rubber Modified Asphalt Conference.
The conference will be held in Akron, OH,
from May 6-8, 2009 (MO)
(3) Houston District - Consider a cash
donation from Methodist West Houston
Hospital to facilitate the review of
various documents required for the
construction of the deceleration lane
located at I-10 West of Barker Cypress
and the Methodist West Houston
Hospital (MO)
(4) Travel Information Division - Consider
a donation from the City of San
Augustine of a leasehold real property
interest in the Camino Real de los
Tejas Tourist Information Center
Facility property (MO)
(5) Various Offices and Austin District -
Acknowledge a donation from Women's
Transportation Seminar (WTS)
International, Heart of Texas Chapter
to allow various department employees
to attend the 2009 Transportation Event
that was held on April 29, 2009 in
Austin, Teas (MO)
b. Eminent Domain Proceedings
Various Counties - noncontrolled and
controlled access highways (see attached
itemized list) (MO)
c. Finance
(1) Accept the quarterly cash report (MO)
(2) Accept the Quarterly Investment
Report (MO)
d. Load Zones & Postings
Various Counties - Revise load restrictions
on the state highway system:
(1) Roadways (MO)
(2) Bridges (MO)
e. Right of Way Dispositions and Donations
(1) Bexar County - FM 471 at FM 1560 in
San Antonio - Consider the exchange
of drainage easements (MO)
(2) Comal County - I-35 at Water Lane in
New Braunfels - Consider the sale of
a surplus maintenance site and
improvements to the city of New
Braunfels (MO)
(3) Fannin County - FM 64 at SH 50 in
Ladonia - Consider the transfer of a
surplus maintenance site and improvement
to Fannin County (MO)
(4) Hockley County - FM 300 at US 385 in
Levelland - Consider the sale of
surplus right of way to the abutting
landowner (MO)
(5) Moore County - US 87 at BNSF Railway
in Dumas - Consider the exchange of
surplus real property for new right
of way (MO)
(6) Tarrant County - SH 180 at SH 360 in
Arlington - Consider the correction
of MO 111283 for the sale of surplus
property to the abutting landowner (MO)
f. Speed Zones
Various Counties - Establish or alter
regulatory and construction speed zones on
various sections of highways in the state
(MO)
17. Executive Session (none required) 167
OPEN COMMENT PERIOD (no commenters) 167
ADJOURN 168
P R O C E E D I N G S
MS. DELISI: Good morning. It is 9:04 a.m., and I would like to call the regular April 2009 meeting of the Texas Transportation Commission to order. Note for the record that public notice of this meeting, containing all items on the agenda, was filed with the Office of the Secretary of State at 2:18 p.m. on April 22, 2009.
Before we begin today's meeting, please take a moment to turn your cell phones on the silent or off mode, please.
As is our custom, we'll open with comments from the members, and first I'd like to call on Commissioner Meadows.
MR. MEADOWS: Thank you very much, Madame Chairman. I just want to observe that my able assistant provided me, in a hopeful way, a bottle of what is called Smart Water this morning, and I certainly hope it has its desired effect. It's wonderful to have an assistant that is thoughtful and supportive.
Madame Chair, I don't have much of a memory left anymore -- as evidenced by the fact that he did give me the Smart Water -- but as I recall, today more or less marks the first anniversary of our service on this commission.
MS. DELISI: Today is exactly the one, yes.
MR. MEADOWS: Today is the exact day. I knew I was close. But in any event, just reflecting back over this past year, just a couple of comments.
One, it truly has been an honor to serve the citizens that we all serve, the citizens of the State of Texas, and it has been an honor to serve with this very professional staff. But it has really truly been a privilege to have had the opportunity to serve with you all, my colleagues -- Ted, you included -- and with any luck, we might all be here a year from now.
MR. UNDERWOOD: I second your comment about with any luck, and I'm sure if you ask the legislature, they'd like for you to share that Smart Water with us.
(General laughter.)
MR. UNDERWOOD: Also, on a more serious note, I want to thank the community of Amarillo for the effort they went to, Mayor McCartt, Judge Ware, the Economic Development. It was very impressive to see all the leadership in Amarillo all on the same page and pushing for a common project, whether it be the congressional, Mack Thornberry's group or whatnot, Senator Seliger, the representative. It makes our job a lot easier when everybody in the community is all on the same page, and I make the same commitment that I made there is that we're going to work toward helping you solve your problems.
MR. HOLMES: Welcome. I add my comments to Commissioner Meadows' and Commissioner Underwood's. And Commissioner Meadows and Chair Delisi, that year went by pretty fast, didn't it?
My observation this morning would be that you folks are really the diehards, because when we were working on stimulus money, the room was full; the back room was full; they were standing in the aisles. We appreciate your dedicated and continued attendance and service. Thank you.
MR. HOUGHTON: I echo my fellow commissioners' remarks on the good mornings and welcome. I think we've got some people from East Texas here. Right, Jeff? Welcome from the eastern part of the state.
I would say one year, it has been a slice of heaven serving with my fellow commissioners for the last 365 days. But I do also want to recognize, Madame Chair, that there is a person amongst the commission that is very distinguished, has been awarded I think the Citizen of the Year Award for the Fort Worth Area, and what is it called the Golden Deeds Club, so do we call you Golden Boy now? In all honesty, I hear it's a high honor that will be bestowed on him --
MR. MEADOWS: Madame Chair, isn't there a time limit on the comments?
MS. DELISI: No, commissioners are wide open as long as he wants to talk.
(General laughter.)
MR. HOUGHTON: But in all sincerity, congratulations, Commissioner Meadows, on the Citizen of the Year Award up in the Fort Worth Area, and I think that will come next month two days prior to the commission meeting. So congratulations to you.
MR. MEADOWS: Thank you.
MR. HOUGHTON: And welcome.
MS. DELISI: Good morning, everybody. Building on what Commissioner Houghton said, I'd also like to welcome the folks from Hidalgo County here today, as well as our friends from East Texas, and we look forward to hearing your reports.
As a reminder, if you wish to address the commission during today's meeting, please complete a speaker's card at the registration table in the lobby. To comment on an agenda item, fill out a yellow card and identify the agenda item. If it's not an agenda item, we will take your comments at the open comment period at the end of the meeting. For those comments, fill out a blue card. Regardless of the color of card, please try and limit your comments to three minutes.
Our first item of business today is item 1 on the agenda, approval of the minutes for the March 26 meeting of the commission. Members, the minutes have been provided in your briefing materials. Is there a motion to approve?
MR. UNDERWOOD: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
Amadeo, with that, I'm going to hand it over to you to continue with the rest of the agenda.
MR. SAENZ: Thank you, Madame Chair. Good morning, everybody.
Before we start today, the next two agenda items are recognitions for two people who have spent a great deal of time and a great bit of time working on transportation issues in and around the Austin area.
First I would like to call Bob Tesch up to the podium. Bob, would you please come up here?
Bob Tesch is the chair of the first regional mobility authority that was created in the State of Texas -- in fact, they've been so successful in that they have their first toll project operating today, and Bob, I think a lot of it has to do with your leadership. And we're sorry to see you go, I know that you still will have an interest and I'm sure we'll see each other, so we look forward to working with you, not on the RMA but on other transportation projects.
I'm going to turn to the program over to our Chair so that she can present some remarks.
MS. DELISI: Thank you, Amadeo.
And thanks, Bob. It's been a pleasure working with you for the past year, and actually beyond your service at the CTRMA. We do have a plaque to present to you upon your departure as chairman of the CTRMA, a position you've held since 2003 since you were appointed by Governor Perry. Your tenure as the chairman of the CTRMA has been marked with a lot of success including your first toll projects being completed in March 2007 on time and on budget.
For those of you who aren't as familiar with Mr. Tesch as we are up here, Bob is president and owner of Tesch & Associates, a real estate investment and development company which concentrates on activities in Central Texas. He's been called upon by the Williamson County Commissioners Court, the City Council of Cedar Park, Southwestern University and Governor Perry to serve in various capacities of leadership in this community.
He also serves on the executive board of the Capital Area Council of Boy Scouts of America, is a veteran of the United States Navy, a graduate of the University of Texas, a member of the Real Estate Council of Austin, the Austin Area Research Organization, the Board of Visitors of Southwestern University, and St. Austin's Catholic Church.
I know you'll probably find a lot of things to keep you busy. You don't need the CTRMA to keep you busy; your resume and your public service are very distinguished and I know you will be very involved going forward.
So I wanted to, on behalf of the commission and on behalf of all the folks at TxDOT who have worked so closely with you over the years and have enjoyed working with you, I want to say thank you for your service and present you with this plaque.
(Pause for presentation and photographs.)
MR. TESCH: Madame Chair and commissioners, thank you so much for this recognition. I'm humbled and I'm proud of the CTRMA team with a very strong board, a staff of key consultants and a very effective team with a culture of performance; my part has been very small. And I have to say that this event is almost as exciting for me as our board meeting yesterday where my board presented me with this pair of boots.
(Applause.)
MR. TESCH: Which I decided to wear today for lots of reasons. They may be a little bit loud for the occasion but I'm certainly enjoying wearing them.
Thank you for the opportunity to express my thoughts here. I'll be very brief; I know you have a busy agenda.
When the CTRMA was formed in 2003, we really didn't have much to work with. As the first regional mobility authority in the state, we had no operations manual, we had to create that. We existed only on paper and what we had was enabling legislation. We had a plan to build a much needed 183A project in western Williamson County. We had no authority to issue bonds, no employees and no money. But we soon got House Bill 3588 -- this was in 2003 -- and we got seed money from two counties, and you here at TxDOT gave us a toll equity grant that gave us the ability to get ourselves to the issuance of our first bond issue which financed our first project.
So with these things, we were ready now to go forth and build toll roads in an environment where people thought all roads ought to be free. Needless to say, we had a few tough spots along the way but we did persevere. There was a bit -- maybe more than a bit of unjust criticism and politics and personal attacks. And as the late Commissioner Ric Williamson once said, it's not a job for sissies, and I know you all know that, Amadeo, you certainly do and your staff does. It was difficult but we didn't have a choice.
And additional comfort was the knowledge that a lot of key people believed in us, Governor Perry, the late Chairman Williamson -- whose mentoring was very helpful to me and who referred to the new fledgling regional mobility authority as family. He was once asked what he thought of it, and he said, Well, TxDOT is the grandfather and they're the grandchild and we'll help them grow. And he did and you did, and that played no small part in the successes we've had to date.
District Engineer Bob Daigh was always there for us, encouraging, supporting. A good working relationship for any regional mobility authority with its district engineer can't be overemphasized. And working with Bob Daigh, I think he, in his district, set the standard for that as we tried to do for other RMAs in our work.
Others that come to mind, former Commissioner and now Senator Robert Nichols was particularly supportive of us in obtaining the financing for our first project. He came out to our office, met with our bond rating agency, and emphasized the belief in the regional mobility authority and the CTRMA that he had, played a big part in obtaining the bond rating that we got which was particularly good, especially for a startup toll agency.
Amadeo, you made us earn your support. I have to say it grew slowly, but I think we did that. Your attitude was show me, and we tried to do that, and hopefully we have done that over this past six years, and we appreciate the support that we have from you.
Commissioner Houghton, we will always be trying to earn your support, Commissioner, we will never stop, but we appreciate the support you've given us and appreciate working with you -- and in good humor, I couldn't not make that comment, Commissioner.
But I'm very pleased with the accomplishments that the state's first regional mobility authority has made: we have improved mobility in Central Texas; we've completed 183A on time and on budget; we have a good reputation that's based on a transparent and accountable method of operation; we've set high standards and a good example for other regional mobility authorities in the state; we have a strong board, an excellent executive director, solid staff and a good team of outside professionals; and we have a well established culture of performance that evolved by no accident; and we're guided by a clear mission of improving mobility and enhancing the quality of life in Central Texas.
And so I'm proud of the small part that I've played in that. One brief closing comment, I'll say that Governor Perry, shortly after he appointed me, said to me, It must feel pretty good being appointed chairman of the state's first regional mobility authority because your success is something you'll take with you the rest of your life. And then he said, Of course if you fail, you'll take that with you the rest of your life too. That thought stuck with me every single day before my feet hit the floor every morning for a number of years.
So I'm very pleased that what I'll take with me the rest of my life is the success of the first six years of the CTRMA made possible not by me but by the entire CTRMA team. And I thank you for this recognition and I assure you that your confidence in the CTRMA is well placed, they will not let you down. Thank you so much.
(Applause.)
MS. DELISI: Amadeo, I'll turn it back over to you.
MR. SAENZ: Bob, thank you again. Can I see those boots one more time, because I think they're University of Texas boots.
MR. TESCH: I'm afraid so, Amadeo.
MR. SAENZ: That's great. I had to make sure Ted got to see them.
(General laughter.)
MR. SAENZ: I would now like to invite Austin District Engineer Bob Daigh to the podium. Bob has announced his retirement, effective today. Bob leaves us with over 21 years of service, dedicated service, and Bob, also a great friend. We're going to miss you. You were instrumental in doing a lot of the projects here in Austin and throughout the state because when I first met you, you were working on consultant contracts. So I thank you for your many years of service and I wish you all the luck in your future endeavors, and I know that we'll be seeing each other as we move through in the future, and I congratulate you.
We have a resolution that the commission has to present to you today, I would like to be able to read that. It says:
"Whereas, the Texas Transportation Commission takes great pride in recognizing Robert "Bob" Daigh, P.E., who has served with the Department of Transportation for more than 21 years, most recently as the Austin District Engineer;
"And whereas, Bob has served as District Engineer for the eleven-county Austin District since 2003;
"And whereas, in 1977 he graduated from the University of Texas -- we didn't get him any boots; we need to work on that -- "and he began his career in the Austin District in 1988 -- the first eleven years he worked in the outside world but he quickly learned that he wanted to work for us, so thank you for coming --
"And whereas, Bob was instrumental in the development of the Central Texas Turnpike Project and the Texas Turnpike Authority Division;
"And whereas, he is an innovative and ingenious leader who has done great things for the Austin area;
"And whereas, Bob's partnership with the Central Texas Regional Mobility Authority and the community leaders are indicative of his professionalism;
"And whereas, his achievements in moving Austin forward will be long remembered;
"Now, therefore, be it resolved that the Texas Transportation Commission does hereby extend the sincerest best wishes to Robert Daigh, P.E., in recognition for his professional achievements in a career of loyal service on behalf of the State of Texas and its citizens.
"Presented today, April 30, 2009."
Bob, thank you very much for your service, and as I mentioned, good luck and we look forward to seeing you in the future.
With that, I'll open it up to the commission if they would like to say a few words and then we'll let you give us some comments, and then we'll take some pictures.
MS. DELISI: Bob, I just want to start off by saying thank you for your service. I, more than any of the other commissioners on this commission, appreciate the work you've done here in Central Texas because I drive on those roads daily, and you've made a difference, there's no question, in the quality of life and economic opportunity in Texas. So again, thank you for your service and we look forward to working with you again.
MR. UNDERWOOD: Bob, I want to tell you that you're my hero. I cannot imagine being a district engineer and also being in Austin where the head office is and the ivory tower and the legislature all looking over your shoulder, so now I think you're going to get a chance to enjoy life. So congratulations to you, and thank you for your service to our community and to our taxpayers and to all of us on the commission.
MR. HOLMES: Great job, Bob, tremendous projects under your leadership. Congratulations.
MR. HOUGHTON: Well, Bob was always working to get that cost underrun money on State Highway 130 back into the Austin region, and he kept needling, needling, needling for that and other things. The obvious, State Highway 130 is open. Matter of fact, today we open 45 Southeast, the link on the southside.
So because of those sort of things, congratulations, Bob, and others. Thank you very much.
MR. DAIGH: I just would like to say thank you to you all. You get a lot of help from the Austin area across the street also, and we do realize at the district level that it's a whole lot easier to manage when the cupboard is full rather than when the cupboard is bare. And I wanted to make a special thank you and acknowledge the extraordinary effort that the administration is putting forward in these tough times. Amadeo, Steve, James, John, David, Phil, the hours and the dedicated service that they are putting forward on your behalf and on behalf of the rest of the department is just really truly extraordinary. And Amadeo, we sincerely thank you and Steve and the rest of your staff for the effort they're putting forward on all of our behalf in the districts. So thank you very much.
(Pause for presentation and photographs; applause.)
MR. SAENZ: Now, Madame Chair, with your permission, I would like to move agenda item 14 up on the agenda. I'd like the chief financial officer, James Bass, to present this agenda item which is his monthly report dealing with construction/maintenance funding and obligations to Fund 6. James.
MR. HOUGHTON: One more thing. I just wanted a point of clarification. Bob Jackson, it was not me that said the members of the legislature needed Smart Water, nor was it I that said they live in an ivory tower. Just a point of clarification.
(General laughter.)
MR. BASS: Good morning. For the record, I'm James Bass, and as Mr. Saenz said, I'm here to give you the monthly update on our fiscal year 2009 Obligation Limit, the often heard and hopefully you remember, $2.5 billion in obligations towards highway improvement projects that the department will make from our traditional funding sources this year.
The report you have before you shows the total from September through March, and that figure is around $840 million. In addition to that, I believe you're aware of additional commitments and obligations going towards some of the comprehensive development agreements in the Dallas-Fort Worth area. In the April letting, counting against that cap, there was roughly $44 million, and the schedule for May coming up here in the next couple of weeks is an additional $90 million.
As you're aware, and you can see on the report, the good news is a lot of those projects are coming in under the engineer's estimate, and I believe Mr. Bohuslav in his report later has more details on that, as he normally does each month.
I think Roger has and may have just passed out some additional information that we generally talk about during these updates, because, of course, the obligation limitation is simply a plan based upon our forecast that then, in turn, is based upon a number of assumptions. One of the key assumptions in that is the deposits of state fuel tax going into the State Highway Fund that's then available as cash to make all of those payments.
The first page that you have before you should look familiar, and as you will notice, there continues to be red figures on here showing that the deposit in a particular month, the last month here of April, was 8.2 percent lower than it was in April of 2008. When we look down kind of in the lower right of that page, you see the fiscal year to date we're running about 3 percent behind the same point in time for fiscal year 2008, so we're running behind and it is highly unusual for the receipts in a year to be lower than the previous year. In my 17 years, 18 years in the Finance Division, this is the first time that's occurred here in the State of Texas.
The second page gives us some indication or cause of why that's happening. Our Transportation Planning and Programming Division has a number of permanent traffic counters throughout the state, so this second page that you see is not vehicle miles traveled, it is simply the traffic counts at the same consistent locations across the state, 124 locations, and those are broken down between urban and rural counters. And as you can see, just like the earlier page, there are a number of red figures. The traffic volumes continue to be down, and in turn, that obviously is leading to less in motor fuel tax receipts.
It will be interesting here in the next couple of months as these traffic counts come in because we will have reached, in effect, that full twelve-month cycle, so we'll see if traffic volumes have dropped and stabilized or if they're continuing a decline as we go through. As you can see, we're getting close to completing a twelve-month cycle from that initial drop-off.
The third and final sheet of the packet gives kind of a broader level. The first page that we looked at was deposits specifically to the State Highway Fund, and so it was the total motor fuel tax in a month, after refunds, after the 25 percent going to education. We kind of look up higher on that delivery chain and look at the gross receipts to the State of Texas from the Comptroller's Office. It's broken down between diesel, LPG and gasoline. And if you look to the middle far right there, again it goes through that comparison of looking at fiscal year 2009 compared to the same period twelve months ago for fiscal year 2008.
And you can see, just as it was in the previous years where diesel was driving the growth of the state motor fuel tax, diesel is again the leading cause in the decline. Diesel receipts are down roughly 8-1/2 percent from where they were twelve months prior. Gasoline is down only 1-1/4 percent. Once that's all blended together with the weighted average, we get back to that 3 percent decline.
MR. HOUGHTON: Let me ask you a question. Has anybody ever looked at this as an indicator on a national or statewide basis as far as what people are thinking, doing, economic times, are we coming in, going deeper -- I mean, using this as an index?
MR. BASS: It may be the reverse, they're definitely tied. I know the Comptroller's Office, when they do their revenue forecast, they do a separate one for diesel and a separate one for gasoline, and they tie their forecast for gasoline basically to population estimates. On diesel, they look at the GSP, the gross state product, and the activity of the state's economy, and so they definitely see or feel like there's a tie between the diesel activity and the economic activity going on in the State of Texas.
I think we would see that as well -- I'm not as familiar with what's going on with the state sales tax; since we don't directly benefit from any of that at the department, we don't normally track it -- but as you might see with the economy slowing, consumers not buying as much, store shelves don't need to be restocked as often, there's less delivery, equating to less diesel receipts for the State of Texas and ultimately for the operations of the department.
MR. HOUGHTON: Is the population growth offsetting or is that somewhat the gasoline is flat -- I mean, it's not that far down but, so is our population growth part of that hedge, or is there an analysis on that, anybody taken a shot at that?
MR. BASS: Historically, the forecast of population had correlated very well with gasoline receipts and both increasing together. One of the things I think is very interesting on this chart as well, this third page, if you just look at that gasoline line, and up at the top of the page we have fiscal year totals, and if we look at gasoline -- and as we all know, the State of Texas is growing, has been growing and continues and will continue to grow -- well, if we look at the growth in the gross receipts of gasoline in 2005 compared to 2004, gasoline actually went down, in 2006 to 2005, it went up 2/100 of 1 percent, then in '07 it went up 2 percent, in '08 it was roughly half of 1 percent that it went up -- the point being the growth in gasoline has been far slower and far lower than the growth in population. Could be a number of reasons for that, one that would obviously come to mind is increased fuel efficiency in the day-to-day fleet of commuters, perhaps increased use of public transportation in response to increased fuel prices.
I think what we're beginning to see in the last few years is kind of a separation of population growth and gas tax revenue. There may be a number of factors, two that I just mentioned, that are kind of leading to that divergence between those two indices, if you will.
MR. HOUGHTON: What's the age -- or do we know -- of the Texas fleet?
MR. BASS: I don't know that off the top of my head but I can try and find that. I don't know.
MR. HOUGHTON: Does anybody know, do we keep a record of that?
MR. BASS: I don't know. The way we would be able to tell to get close to it, would not be precise, but the vehicle registration fees for the State of Texas, there's three layers and it's based upon the age of the vehicle. So we would know how many vehicles are less than two years old, how many are less than five or six, and then how many are older, but we wouldn't -- in the registration system I don't think we have the specific age of the vehicle, but that would get us close to it.
And so what this means in relation to 2009, because of operational costs that the department has made, reductions in cost, capital equipment, in effect, a hiring freeze or a hiring chill on the department to save operational costs to support the projects going forward, we continue to feel that the $2.53- can be achieved. There are obviously costs along with that. As we've spoken before, the department currently has commercial paper, short-term borrowing, cash management purposes, of $325 million outstanding in debt that needs to be obviously repaid at some point, and the only way to repay that is reduce costs. We don't see revenues increasing so we have to cut back and curtail certain operations or project delivery in order to pay off that debt that's helped us deliver projects sooner.
As we look forward to 2010 and 2011, and at this point just looking at the projected revenues, not looking at anything that may or may not result through the legislative process, the figures we'd looked at around a year ago for the UTP from 2009 to 2019, just based upon this revenue forecast of the state gasoline tax, those figures would be lower today than they were merely twelve months ago because I think we were thinking and hoping that well, maybe this is just an unusual time, a three- or four-month period in decreased fuel tax receipts, and it obviously doesn't look like that. It's changed our baseline and changed our view and our perspective going forward, and so just simply that fact, in and of itself, that UTP, that eleven-year planning document would be lower today than it was twelve months ago.
And those are the items that I wanted to highlight and call to your attention. This is merely a report so there's no action needed by the commission, but I wanted to advise you of the status and then be available to answer any questions that you might have.
MR. HOUGHTON: No one bit on that last statement, I guess -- say it again -- that the UTP twelve months ago, now going forward.
MR. BASS: The UTP twelve months ago, and the figure is $28.2 billion from the traditional funding sources of the department, so that $28.2- did not include the $3 billion that's available in the Dallas area through the 121 and did not include any remainder of any potential Prop 14, it was just the traditional State Highway Fund, kind of bread-and-butter program of $28.2- would be lower today than it was twelve months ago or a year ago. How much lower? Obviously, actions across the street can influence that, but just based upon this, roughly a billion dollars lower than it was twelve months ago, and that's without taking into account anything else that might happen here in the next 35 days or so.
MR. HOLMES: James, this all looks at the fuel tax receipts, and you mentioned the vehicle registration fees. Presumably those fees are going down as well. Do you have any numbers on that?
MR. BASS: We have that and I can get that to your offices. I don't think I brought that downstairs with me. It's staying pretty close to our revenue estimate and maybe slightly higher. The concern may happen, I mentioned there's three strata, and the older a vehicle becomes, the cheaper the registration becomes, and as we've all seen, there's not a whole lot of new vehicles being purchased. So while that average turnover within the state's fleet, whatever the average age may be, there are more older vehicles today than there generally historically had been.
One of the things that's really helping us on the registration fee is -- I'll try and avoid getting into the details of it other than to say in the early '90s there was a diversion that benefited the General Revenue Fund that dealt with vehicle registration fees. A few sessions ago the legislature took action to unwind or reverse that earlier diversion or transfer. They're unwinding it over a ten-year period, and so as that money returns back to the State Highway Fund, it's kind of masking some of the underlying economic activities related to vehicle registration fees. And so we're pretty close to our original estimate on vehicle registration fees and haven't seen a need yet to adjust those, to drastically adjust those going forward.
MR. HOLMES: Do we have accurate enough numbers to tell what the baseline vehicle registration fee has done over the last couple of years versus what the decreasing diversions have done?
MR. BASS: Yes.
MR. HOLMES: I would like to see those.
MR. BASS: The diversion relates to 5 percent of vehicle sales tax, and so we know what that figure is and we can back that out to get to a true trend line analysis of what the underlying figures are.
MS. DELISI: You've been talking a lot about looking backwards, let's look forward for a second. Can you talk a little bit about what the impact would be on these numbers based on what's currently going on with the budget across the street. You know, essentially going through for the rest of the commission the items that were highlighted for Senator Carona in the letter that was delivered to him last week.
MR. BASS: If we look at the obligation limit, one of the things, just the number, since we were talking about that, the letting figures that we would estimate, given the current status -- and as you know, this is an interim step, the Conference Committee on Appropriations will be meeting here in the coming days and coming weeks, so we're just at an interim step at this point -- but the letting figures that we would expect, given the numbers, in 2010 are roughly $2 billion and then $1.7- in 2011. Again, that would be the baseline traditional, sustainable ongoing funding source from the State Highway Fund.
Those figures do not include anything that may or may not happen through Proposition 12, the $5 billion state GO, nor anything that may or may not happen from Proposition 14. In addition to that, the $2 billion and the $1.7-, those figures don't include kind of that continuing obligation on some of the CDAs in the Dallas-Fort Worth area, so just that normal routine monthly letting, we'd have $2 billion to $1.7-.
One of the concerns that we have in addition to that that could affect that number is dealing, as we've talked before, about the Texas Mobility Fund. When we last got a certified revenue estimate for 30 years from the Comptroller's Office, it was December '07, a much different economic time to be forecasting for the next 30 years. Those revenue forecasts supported $6.4 billion in debt. The commission and the department began $6.4 billion worth of work, be that right of way, engineering and actual construction, highway improvement work. We've been issuing the debt as those projects go through their payment cycle such that we've only issued $5.1-.
The concern is that in the biennial revenue estimate issued in January -- which covers 2009, '10 and '11 -- those revenue streams going into the Mobility Fund were lower, between $30- and $40 million a year, such that if you take those first three years and project them out over the next 30, they would not support $6.4 billion in bond proceeds. We've started $6.4 billion of work. The shortfall could be in the neighborhood of $300- to $500 million.
We'll have a better idea once we get an updated full 30-year view, and a request has been made to the Comptroller's Office to give us that update and had the opportunity last night to visit with the revenue estimator and he thinks within the next week we should have that 30-year look. We'll then be able to look at it and have a better picture of what we think that shortfall may be.
The issue where that comes into play is if -- just for discussion purposes today, let's say the figure is $300 million, the revenue streams will not support $6.4-, they'll only support $6.1-. And the department is already looking at this, the department is looking at that $6.4 billion of work and looking at the right of way and the engineering costs and is the right of way that's been obligated, perhaps for a project that's a few years out on the letting such that that acquisition of additional right of way could be suspended so we can lower the $6.4-, and we'll do as much of that as we reasonably can.
But after that's done, let's say we're $300 million short, revenue that had been targeted and planned to support new construction costs would have to be redirected to finish existing projects. We were planning $6.4 billion of proceeds, if we only get $6.1-, we have to backfill -- if you will -- from $300 million of someplace else. If that happens, the $2 billion in 2010 and the $1.7- in 2011 will be obviously lower than that.
One of the things later today, there will be an item before you for your consideration on the Mobility Fund to look at a program out of the stimulus package called Build America Bonds, and we can have a further discussion on that later, but what that would do, we talked about the $6.4- and if we can only $6.1-, we're working internally to review the commitments and see if any of those can be lowered. The Build America Bonds would give us the ability to squeeze a little bit more out of those dedicated revenues to bump up the $6.1-. We could issue taxable debt, get a rebate, and our next cost might be cheaper than just going and issuing tax-exempt -- to attempt to describe it simply.
Another issue that is out there related with debt is dealing with Proposition 14. The commission has directed the department to move forward with the remaining $2.9 billion of statutory obligation or cap out of that program, and the plan was to issue $1.5 billion this year and $1.4- next year. And because of that timing, in the next biennium, 2010 and 2011, the debt service on that was estimated to be in the neighborhood of $365 million.
What's happened at this point in the budget, last biennium, or the current one, as we speak today, the department had $300 million of General Revenue for debt service. $285 million of that General Revenue has been removed from the department's budget, there remains $15 million of General Revenue for debt service in the budget for '10 and '11. Other agencies' appropriations out of the State Highway Fund were reduced by $285 million in the introduced budget, so $285 million of General Revenue went away, other agencies got reduced by $285-, so the department received, in addition to what we had before $300 million of funding for debt service.
As I mentioned, in '10 and '11, that estimated debt service is $365-. In the budget, debt service is fully funded, so what that means is $65 million of that debt service got moved down to the debt service line by reducing other programs of the department which was the initial concern of the commission when the commission was hesitant in moving forward with that $2.9-.
In my mind, the as big if not bigger of an issue would be looking forward and realizing there obviously would be another legislative session between now and then, but as we get to 2012 and 2013, the debt service on that remaining Prop 14 debt in that biennia in the future would be in the neighborhood of $480 million. And so absent any further action -- and again, fully realizing there's another session two years from now -- that would be a total, if we keep the $300- baseline, that would be another $180- that would be redirected from other department programs down to the debt service line.
The federal funding, we've talked about. I believe you are aware of rescissions which really don't impact on the budget side, but this is probably a little overly technical, but as we get our different strategy levels, there's an underlying method of finance for each one of those: there's federal dollars and there's state dollars that are used to match those federal dollars. In some cases, because of adjustments that were needed to be made, we feel in some of those strategies we don't have enough state dollars in there to fully match the federal dollars. So I think we're hopeful that during the Conference Committee process, we'll be able to keep our overall appropriation the same but kind of adjust those state dollars and make sure they're there to be able to fund it and fully draw those federal dollars.
Another issue is looking at the Comptroller's biennial revenue estimate and the amount of appropriations. The Senate version of the bill, I think is pretty close, it maybe appropriates $2 million more than the biennial revenue estimate of the Comptroller's Office, and that's because the Senate stayed pretty close to the introduced version of the bill when looking at the State Highway Fund. The House version appears to be over-appropriated -- if you will -- in the neighborhood of $40 million or so dollars, $40- to $45 million out of the State Highway Fund. So it would appear that obviously that will be something for the Conference Committee to resolve. The Senate appears to be much closer in being balanced against the biennial revenue estimate.
Where that $2 million, or on the House side, the $40 million would get reduced within the overall state budget, TxDOT or others would be a decision for that Conference Committee as they move forward.
Pass-through tolling, there is, as you're aware, an ongoing program call because in state law there's a requirement that the department and the commission enter into an amount in pass-through agreements that the department has averaged since the inception of the program, and that's roughly $260 million. Once we enter into those agreements, that will encumber future funding. More than likely, whatever we enter into as a result of this program call would not have any reimbursements in '10 and '11 because obviously the projects need to be built and then traffic drive on them and get the pass-through tolling, so it would be a future biennium.
Another point to raise, there's a rider in the appropriations process -- at least the House version -- that would continue that pass-through tolling requirement in '10 and '11, that the department must enter into an average amount, again, somewhere in the neighborhood of $260- and $280-. What that would do is, again, encumber those funds, additional funds going forward such that when we start looking at the UTP, we would have to say well, this money is already obligated for debt service, this money is already obligated for existing projects, this money is committed for pass-throughs and we'll just continue to lower that overall dollar amount.
MR. HOUGHTON: Before we lower the overall dollar amount, on an obligation basis, James, let's go back to what you said on the front-end on the revenue side with your lowering that number by a billion dollars. So where do these lines start crossing?
MR. BASS: Well, one thing -- and I want to make sure on the pass-through part -- it would still be delivering projects, obviously, it would just be delivering it out of a different program rather than through the formula funding of the UTP, it would be going through a different process, it would still deliver projects.
MR. HOUGHTON: But regardless of revenue, though, we are obligated to pay those pass-throughs by contract.
MR. BASS: Correct.
MR. HOUGHTON: So if revenue slides or if reauthorization goes haywire, or whatever it may be, we are still contractually obligated to make those pass-through payments.
MR. BASS: Correct, and we haven't taken in or done an updated forecast based upon the different versions of the proposed budget. As we said, they're in an interim step right now. Once the Conference Committee begins to meet and go through that process, we'll have a better idea. I know, as you all know, the 2030 Committee and the trends analysis that was done as part of that -- and this may at least hopefully be partially responsive to your question -- looked at it and said at some point in the 2012 time frame the amount available for new mobility projects would go away and all of that available money would be dedicated and used merely for maintenance. That was a result of the 2030 Committee so I'm not intimately familiar with the details of that analysis. That was, as you know, the group that has come before you in the past few months and delivered that report.
I think that's covered the highlights that are in there. There is one additional bill that's outside of the budget process, but still impacts revenue to the State Highway Fund, and it's Senate Bill 16 that is the Texas Emissions Reduction Plan, the TERP program, and it would extend that program another four years through 2019. The way that that is of interest to the department from a financial perspective is one of the provisions that's in there and in law is money that's received by the Texas Mobility Fund from a portion of the certificate of title fee, whatever the Mobility Fund receives, that same amount gets transferred from the Highway Fund over to TERP. And when that revenue was initially dedicated to the Mobility Fund back in 2003, TERP was scheduled to end in 2008, so it was unencumbered money and in 2009 and beyond it got dedicated to the Mobility Fund.
During the 2005 session, the decision was made to extend TERP to 2010, wanted to bring those revenues back to TERP. Well, the Mobility Fund, how it operates, money was dedicated to it, we had bonds outstanding, that money cannot be pulled out unless it's replaced by something of equal or greater value. So the answer, the solution to that problem for 2009 and '10, the legislature decided to make a transfer from the State Highway Fund over to TERP in an equal amount to hold TERP harmless. Last session, TERP got extended to 2015, so the transfer from the Highway Fund got extended to 2015.
In the proposed legislation the legislature is currently considering, TERP would be extended to 2019 and the transfer from the Highway Fund would continue for another four years, and from 2016 to 2019, our estimate would be somewhere in the neighborhood of $100- to $105 million per year. So if that were to pass and we come in and look and update the UTP, there would be roughly another $400- to $420 million less available for that program because it would have been redirected to other state purposes, state programs.
And I think those are the highlights, Madame Chair. I'm not sure if I missed anything, may have covered more than you wanted me to, but I think those are the highlights of the letter that had been requested by the Senate Transportation Committee.
MR. SAENZ: Thank you, James.
Commissioner Houghton, to your question, if we move forward with the Pass-Through Toll Program and it continues for the next two years and let's say it's $250 million per year, it will cost us probably, starting in 2011, $25 million that we would have to take out from the future construction to pay for that -- it's like debt service. But then in '12, it would probably go up to $50-, and in '13 and in the future it would go up to about $75-. Our Pass-Through Toll Program is basically debt service for that project being built by the local entity, so it's just an encumbrance.
The other thing that I did and I prepared for you and presented to you all yesterday in a memo was the several options that are available with respect to the Prop 14 based on the direction that we were given last October. If you would like, I would like John Barton to kind of go over what those options were so that we could see kind of what impact we have on the future budget.
MR. HOUGHTON: Well, what I would like to have, James, -- we've got so many things moving out here -- have you tied your thing up in a nice little package, you said highlights, have you tied it up and said I've got a billion dollar revenue estimate, going down less, I've got $400 million to TERP. Can you tie that up?
MR. BASS: Not to avoid your question.
MR. HOUGHTON: Well, I didn't let you avoid it during Senate Transportation.
MR. BASS: Right. Thank you for that.
MR. HOUGHTON: And I think a good point is when I asked you that you have $2.5-, out of the $2.5- is to maintenance -- I think Amadeo answered that question -- about what, $1.7-?
MR. SAENZ: $1.4- to $1.5-.
MR. HOUGHTON: So the rest is for new construction. That's absent Prop 14, that's absent pass-through, that's absent debt service. Correct?
MR. BASS: Right. It's absent Prop 12, it's absent the 121 money which is only available in Dallas, it's kind of looking at the traditional available statewide funding, the traditional sustainable revenue sources going forward.
MR. SAENZ: James, but I think the $2.5 billion for '10 and the $1.7- for '11 did include the Prop 14.
MR. SAENZ: The $2 billion and $1.7-, well, in 2011 it wouldn't have any in there because we would already have committed and obligated all of it by that point. I think there may have been some amount in there. The original plan, when we were developing the LAR, was for most of that $2.9 billion of Prop 14 that was remaining in the statutory cap, for that to have been committed by this August. Some of that has been committed -- and I think John may give you an update on that -- some of that has already been committed. Additional amounts are scheduled to possibly be committed in upcoming months of letting, and I guess that may be one of the things just to make sure that everybody is on the same page to continue on that path of continuing to commit those bond proceeds going forward.
MR. HOUGHTON: Still didn't answer my question.
MR. BASS: I was hoping you forgot.
MR. SAENZ: We will get for you all, kind of just in what James presented today, looking at projected cash flows we see about a billion dollars less between '09 and '19. Looking at the Texas Mobility Fund, based on the revenue estimates we're seeing that we've got somewhere between $300 million and $500 million less than what was previously approved in prior revenue estimates. The Prop 14, as James said -- and John will give us some details -- but if we move forward and issue all the Prop 14 as you've directed, it will cost us, provided that the amount of money stays the same from this biennium forward, about $180 million more a biennium from Fund 6. And then the pass-through toll, what that would do, as I mentioned, probably cost us about $75 million more a year, starting in about 2013.
MR. HOUGHTON: I think it needs to be summarized.
MR. SAENZ: We need to come up with a summary of the total impact, and we will get that to you.
MR. HOUGHTON: I think the looming issue, James, is if we don't get the certification from the Comptroller on Texas Mobility Fund, you've already committed those projects, you need the money for cash flow, and let's say -- I'll split the pie -- we have $350 million that we don't get to issue, what do we do?
MR. BASS: That would come from future projects, and so if we look at the -- I think to summarize, and one of the reasons I'm hesitant is the same reason I was in Senate Transportation is because the budget process is still in process, as is the legislative process, so what those final results will or will not are hard to say. But if we just look at the reduced motor fuel forecast, roughly it was a billion dollars, if we commit another $250 million in pass-through in 2010 and another $250- in 2011, there's $500 million that would have gone through the formula process that will now go through a different process. It's still delivering projects but just through a different mechanism.
And then $400 million, rounded off, for Senate Bill 16 which is the continued transfer of the TERP, so now we're up to $1.9 billion less. If the Mobility Fund -- just for discussion purposes -- say it comes $300 million less, we're going to have to redirect revenues that we thought were going to start new projects to finish old ones. Just those four items, we're $2.2 billion less than where we were twelve months ago.
Now, not to not be accused of being Donald or David Downer, there are other items going on in the legislature. Proposition 12 that you're all very familiar with, the Senate in their version of the bill, has $2 billion in there in 2011, the House has it in the base bill but at a much smaller level. I think their intent was to ensure that it becomes an issue for the Conference Committee to deal with.
There are other proposals, too, that quickly come to mind: Senator Carona and the Senate Transportation revolver that you're, I believe, all familiar with; and Senator Ogden has a proposal of establishing transportation zones around state highway projects where the state sales tax would be captured to then repay for that initial improvement that, as the infrastructure goes in, it increases and enhances development, and that increased and enhanced development should help to go and repay that.
So there are other things going on, but just as we saw with the Mobility Fund and just as we see with Prop 14, if the Prop 12 comes through, it will be a one-time infusion, a big one-time infusion of $5 billion, but still a one-time infusion over the next number of years while we commit that and go forward.
So most of the comments that I was making are focused on kind of when we peel away the different layers of the onion, if you will, we peel away Prop 12, we peel away Mobility Fund, peel away Prop 14, the different infusions to different tools in the toolbox that we're fully utilizing, we're left with the core program, the underlying baseline program that we think when we're doing our planning -- whether it's for the next five years, the next eleven years, the next 25 years -- we can say okay, this is the program, the baseline program that we have certainty is going to be there as we attempt to develop these plans to address the transportation needs of the state, this is what we know is going to be there as part of that baseline program.
That's what most of the comments have been on. There are other things going, and I just wanted to bring your attention to that. But just quickly right here, I think hopefully to address your question, $2.2 billion less than what we were thinking roughly twelve months ago.
MR. UNDERWOOD: James, they're talking about there's a possibility of the diversions and that they're going to slowly phase some of those out. How much would that affect us if they were to speed that up?
MR. BASS: Thank you. That's another one that's out there, I believe, an additional one by Senator Carona, a constitutional amendment to, in effect, end those diversions, but over the next eight years to phase it in so the state overall budget doesn't take a big hit in the next twelve months. I believe it's over an eight-year period. And so the diversions now are roughly -- and I should say appropriations to others out of the State Highway Fund -- are $1.5 billion a biennium. That would phase down over time so you'd roughly be pulling out $200 million a year over the next eight years to get to that reduced diversion. That would, if passed through the legislature and approved by voters, obviously go a long way to address the $2.2- figure I just said, if not fully cover it and go some and go above and beyond that.
But that points out one of the reasons I'm hesitant to say this is the number and this is the definite number: the process is still ongoing. And that one, as an example, even if the legislature approves, it would still be subject to voter approval. So if we were building a plan today, we would certainly be aware of all those possibilities, but we couldn't really build our plan upon that as a foundation because it's uncertain still.
MR. UNDERWOOD: But my point is that even if you stopped the diversions and whatnot, it still doesn't solve our problems.
MR. BASS: Correct.
MR. UNDERWOOD: It just addresses the interest on the note, almost.
MR. BASS: It would address this additional erosion or reduction, but it would help us get closer to addressing the full needs of the state, but no, we would still not fully address all of the transportation needs of the state.
Thank you.
MR. BARTON: For the record, my name is John Barton, assistant executive director for Engineering Operations here at the department.
And to divert just for a minute to the question that I believe Commissioner Houghton asked, we're going to show the average age of vehicles here in Texas. You asked, I think, what was the average age of the fleet. And the 50 percentile or average should be coming up there, but it's six years. I think it's important that staff looked at this. This is personal vehicles only, it's up here on the screen now, and I think you can see that trend line that's pretty sharp on an increasing incline for the first six years of life, so there's a rapid increase in the number of vehicles that are aging.
The 50 percent rate is six years at this time, and then it kind of tails out as vehicles get over ten years in age. So that's the average fleet of personal vehicles here in Texas. You can draw your own conclusions from that, but I think you'll see that there will be, even with the state of the economy that we have today, there would be an expected turnover in the near future of quite a few of these vehicles. And we're getting the truck fleet information to be able to provide to you as well.
As Mr. Saenz just pointed out, he asked me to come up, I think, and kind of put some context to the information that was provided to you in the memo that he prepared for you and distributed to you yesterday. And on pages 2 and 3 of Mr. Saenz's memo to the commission, he kind of laid out the status of the Proposition 14 Bond Program, the additional $2.9 billion that we were directed to move forward in developing a plan on in October of 2008, on how to expend those bond proceeds, and an analysis of where we are today, and what considerations the commission has before you in terms of moving forward in light of the information that Donald Downer just got through sharing with you related to the current budgets being considered by the Senate and the House during this legislative session.
On page 2 of that memo, Mr. Saenz laid out for you some different options, four of several that you could consider, but the lowest risk option, quite frankly, is to stop where we are today with the Proposition 14 Bond Program, honor those things that are already out the door, so to speak, projects and commitments that are underway that in reality we do not have the ability to stop anymore. We have about $1.15 billion worth of work that is underway and would need to be paid for as those projects and activities are completed, and those things are to perform engineering work for projects that are in our current letting schedules to pay for construction of projects that have already been bid and awarded to contractors and to acquire right of way for those projects, not only those but others that will be funded through our normal revenue streams.
And there was one, I guess, interesting note that is in there that's been talked about a lot. We had, in effect, arranged a bargaining deal with the North Central Texas Council of Governments on two projects that they had in their area that they needed to move forward when we didn't have the cash flow to sustain it. They used their State Highway 121 revenues to pay for that, knowing that we would reimburse them with Proposition 14, so those commitments are the ones that are underway.
So you could stop, if you wanted to, today and say that is all we can do and we won't be able to move forward with any of the other planned activities under the Proposition 14 Bond Program. The net effect of that would mean that we would have $1.15 billion of debt to issue, you would be able to cover that with either of the budgets that are currently being considered by the House and Senate and the debt service that we would be able to cover with those particular budgets. The downside is that you would be foregoing or postponing $1.75 billion worth of right of way, engineering and construction activities, primarily $1.2 billion of construction activities that would now have to be moved forward under the normal pay-as-you-go program. And so that would be the option that is of the lowest risk.
I guess another option that was laid out is a low risk option which would be to continue to move forward with issuing the full $1.5 billion of debt that was available to us in this particular fiscal year. What that would mean is that we would be able to do some additional construction projects that you selected in October of 2008. I'll remind you those were the projects that had been delayed in previous actions, November of 2007 when our cash flow issue first became a reality for us, and so you would be able to move forward with some of those additional projects.
You also recently took action to identify $600 million worth of Safety Program projects. You could choose between either those postponed or delayed mobility projects from November of 2007 or some of the safety bond projects that you recently selected to move forward with. But at the end of the day, you would still be foregoing $1.4 billion worth of additional Prop 14 Bond proceeds. Again, we could do that within the budgets that both the House and Senate are considering without having a negative effect on our future cash flow in terms of increased withdrawals on our funds that aren't going to be covered in terms of debt service with the budgets that the House and Senate are considering. But the net effect is that you would be postponing or delaying to cover under the pay-as-you-go program about $1.4 billion worth of activities.
MR. HOUGHTON: John, what is to be let in May and June?
MR. BARTON: There are no Proposition 14 Bond Program projects scheduled in the May letting, there are several -- and I think it's approximately $250 million, I believe -- that would be available to let in June if the commission chose to do so.
MR. HOUGHTON: Are those both safety and Prop 14, new and safety?
MR. BARTON: I believe the majority of those, if not all, are mobility projects. The Safety Bond Program projects, if we moved forward as planned, would be moving forward in the July-August-September time frame.
MR. HOUGHTON: So we have time before we are pushed to that decision process.
MR. BARTON: That's correct.
MR. HOUGHTON: We don't have to take action now; we can wait and see what happens.
MR. BARTON: I believe that's correct. And I think that Mr. Jackson would say that you aren't capable of taking any action today because it's not before you as an action item. But a decision on this matter should be made probably during the month of May in order for us to determine what we would do in June.
MR. HOUGHTON: But one of the things, Madame Chair, that I would think that we would want to do in advance is let our partners know that there is a distinct -- the MPOs -- possibility this may occur, not to surprise anyone.
MS. DELISI: Well, absolutely they need to know.
MR. HOUGHTON: They need to know.
MS. DELISI: I think the whole point of this discussion is no surprises. We're talking about projects that were already delayed, and then we tried to get them back on track, and we're talking about potentially delaying them again, and the recipients of these projects need to understand that's the situation that they're faced with.
MR. UNDERWOOD: I think we've already talked to some of them, haven't we, John?
MR. HOUGHTON: Yes, but we haven't formally said anything.
MR. UNDERWOOD: I realize that. Isn't that correct?
MR. BARTON: Yes, sir.
MR. UNDERWOOD: We try to stay in contact with the MPOs daily, weekly, whatnot, we don't try to surprise them all of a sudden once a month.
MR. BARTON: Yes, Commissioner Underwood, you're correct. And several of them, quite frankly, are very astute and after the letter that Chair Delisi sent over to Senator Carona, several of them called asking what does this really mean in terms of the future of the Proposition 14 Bond Program. And my response to those individuals that asked is that the commission has a lot of issues to consider and that's a matter that the commission would take up at the proper time.
MR. HOUGHTON: I don't think it's an action item but I would sure like, in my opinion, to see a letter go out that does in fact say that we are looking, specifically we're looking, and just to forewarn those and let you know that there's -- we'll see what happens, in other words, but I think formally say that.
MR. UNDERWOOD: Not by choice, just because of the facts.
MR. HOUGHTON: Yes, the facts.
MS. DELISI: What's the drop-dead date in the month of May for the June letting?
MR. BARTON: We actually advertise for the June letting relatively early during the month, 21 days prior to the normal letting, so in that case it would be about mid May when we would advertise. We can remove projects from the letting if we choose to do so at a later date.
MR. HOUGHTON: That doesn't take formal action from here to do that, does it?
MS. DELISI: No.
MR. BARTON: No.
MR. MEADOWS: In this information we talk about sharing with MPOs, it's interesting -- pardon me, but this is a statement of the obvious, and that is that the ramifications of all of these funding challenges that we're discussing today directly impact funds flowing to and out of MPOs. It's not just Proposition 14, every single one of these has that potential impact, and as they begin to go through their processes of planning as they do on a regular basis, that's what they do.
I do think that these issues need to be explained to them in a more global way because really the answer to these questions lies across the street, there's no question about that, and it's our obligation to communicate not only to the MPOs and our prior MPO partners, but also to our elected representatives -- which I know is happening and I appreciate that.
But again, I think the communication needs to be maybe not in a specific letter -- maybe the letter, Ted, you're talking about is very specific to Proposition 14 and immediate ramifications -- but the fact is that this is a global issue, a much broader issue than that, and this is a much broader policy issue than that with different component parts and needs to be explained carefully.
MR. HOUGHTON: Well, I had forgotten to take into consideration, Mr. Meadows, the advance on letting notification.
MR. MEADOWS: Sure.
MR. HOUGHTON: I think that you need to push the letting for May into June or July, not to get those false expectations and hopes up that it's going to happen. That's not an action item but I think that needs to be looked at very carefully.
MR. MEADOWS: I think we're all unclear, and that is the way to say it at this point because the legislators are making policy at this very moment that impacts this agency and impacts our ability to fund, and until such time as we know specifically what actions are taken, a lot of this information is difficult. It's difficult to ascertain exactly what the impacts are going to be, I think we have a sense of it, some of you all may have a better sense of it than I do -- I suspect that's the case -- but nevertheless, there are some points that are still moving and moving very rapidly.
MR. HOLMES: I tend to support Commissioner Houghton's notion that we might be better off delaying at least some of those lettings that would otherwise occur. The middle of May, that's two weeks, right?
MR. BARTON: That's when the advertising would occur.
MR. HOLMES: And we're not going to know the result, possibly we won't know the result of actions taken by the legislature until maybe the end of June, we may even need to go through a veto period. And so I think we need to be prudent, and clearly the elected officials need to be aware, I don't want them to be surprised by delaying contracting, delaying lettings, and they need to be aware before we take that step.
MR. BARTON: I think we clearly understand the direction you're asking us to take. We'll prepare some correspondence to go out under the Chair's signature to the elected officials, MPOs. And then we can take the action that you suggested, it's just a prudent option that gives you time.
MS. DELISI: I think the best case scenario, if they get the budget done mid May, best case scenario, that's the target laid out by the two chairmen yesterday or the day before, let's assume that slips a few days, I just don't know if we're going to have the ability to go forward the way we'd want to. I don't think we have much of a choice, to tell you the truth.
MR. HOUGHTON: There's one other, we have a program call right now for pass-through.
MR. BARTON: That's true.
MR. HOUGHTON: We have a statutory requirement before the end of the year for how much, Amadeo?
MR. SAENZ: I think it's about $260 million.
MR. HOUGHTON: And we have all $260- still to award?
MR. SAENZ: Yes, sir.
MR. HOUGHTON: So we have a program call plus a $260- statutory requirement. I think we need to look at the program call and not give those people the same false expectation that hey, we don't know. I know what you're going to say, but come on up.
MR. BASS: I'm sorry. The $260- will be met by the program call.
MR. HOUGHTON: It will be.
MR. BASS: They're not separate. The intent of the program call is to meet the $260- requirement.
MR. BARTON: And not to belabor it any longer but just to be specific, we have about $681 million worth of additional mobility projects that are in play here, about $547 million of safety projects -- in play means will be postponed if we choose to stop the program where we are today.
MR. HOUGHTON: Stop is not the accurate word, it is delay.
MR. BARTON: Delay.
MR. HOUGHTON: Hold on, take a breath.
MR. BARTON: And there's about $322 million worth of additional bond proceeds that have yet to be committed to projects, so in total that's what we're looking at, and I just wanted to make sure we were clear on that.
Any other questions?
(No response.)
MR. BARTON: Mr. Saenz, thank you for inviting me to participate in James's good news.
MR. SAENZ: I guess James was Donald and you were David?
MR. BARTON: I guess so.
(General laughter.)
MR. SAENZ: I think commissioners, just from the conversation on this discussion item and report, I think we have clear direction about our lettings for the next few months and then taking into account as to what happens after the legislative session.
MR. HOUGHTON: How would you see that letter, Madame Chair, going out and from whom? My opinion is the MPOs and members of the legislature.
MS. DELISI: Yes. And you know, from the debate from the stimulus package and during the budget, it was clear that the legislature doesn't feel like the MPOs communicate with them, so I think whatever we communicate to the MPOs, we need to communicate directly to all members of the legislature as well.
MR. SAENZ: What we can do, commissioners, is I'll get a letter drafted to the MPOs, elected officials for my signature that basically outlines the situation and the things that we're doing in the interim.
MR. MEADOWS: Just one note of caution, at least from my perspective, and that is we need to be very careful with the way this letter is worded, making sure that it is clear that we consider this to be a prudent business practice and a prudent business decision. This is not about highlighting an issue, it's not a statement in and of itself, it is a prudent business practice, and I think we need to be very careful with the way that we word that so it is not perceived as something other than in fact it is.
MR. HOUGHTON: Commissioner Meadows, it was pretty well, I think, clearly illustrated at the Senate Transportation Committee last week, and I applaud them, they all got it, they understood we're running out of money. We were implored by the chair to get out there on our stump and start talking about these sort of things, and I kind of blanched a little bit as to should we be doing that, but they understood.
MR. MEADOWS: You being ever shy, I know.
MR. HOUGHTON: Yes, I'm ever shy. My calm and cool demeanor.
(General laughter.)
MR. SAENZ: Thank you, commissioners. Thank you, John; thank you, James.
Now I'd like to proceed back to the agenda. On agenda item number 3, we have two reports from a couple of our regions. The first report is from the North East Texas Regional Mobility Authority, and Jeff Austin will lead that presentation. So Jeff, welcome, good morning.
MR. AUSTIN: Good morning, Madame Chair, commissioners.
MS. DELISI: We hope you have better news.
MR. AUSTIN: How do you follow that? I was going to lead starting off by saying in East Texas we've heard there's a recession and we're not going to participate, and I'm going to modify that to we've heard there's a recession and we're going to do our best not to participate.
But all that to be said, we're happy to be here this morning. We have several of our board members, staff and team with us, and we want to be brief to be respectful of your time, but we want to give you an overview to talk about where we are and what we're doing right now and what direction we're going. Most of all, we want to say thank you because we would not be here where we are working on the projects without your support and without your help.
I don't know if Bob Tesch is still here, but I want to say thank you to Bob and to the Central Texas RMA. Early on in our infancy we contracted with the Central Texas RMA to help work on joint issues, policies, and we took their lead and we really want to say thank you to them for what they're doing. I guess when we grow up we want to be like them.
It is a team effort and some of the projects that we're working on do come back and involve funding, and I'd like to just make a couple of comments. I appreciate James really laying it out. This only echoes the need for us at the local level to come back and look for other ways of funding than relying on the traditional sources. I know much like the projections that were just shared -- I'm a banker, in the banking business we do stress tests and scenario planning such as interest rate shocks -- we are not unlike anybody else in any other business or people that we see come in that are delaying projects. It's not what we want to hear but it is the prudent thing that sometimes we have to do.
We are one of the potential recipients of the Prop 14 bonds of a $20 million project, we've already planned from accepting bids in June, going to July, and if that's what has to be done, we'd rather know sooner than later. So I appreciate the effort, and don't forget about communicating to the RMAs and the toll authorities as well, because I think that's something we all need to hear to be able to communicate back to our folks.
This morning there's a few things -- one thing that has changed since last time, I now need binoculars so I can read -- we want to talk about four or five of our projects briefly. Texarkana Outer Loop is a project that we've been working up in Bowie County, our Toll 49 in the East Texas Hourglass, our project in Rusk County with an inter-local agreement, a potential involvement with Lake Columbia, an also with our rail projects.
First of all, I want to say thank you for the stimulus package that we were down here before and in receiving funding from the stimulus package, our plans are to take the $37 million plus the $5 million that came from the MPO and be able to leverage that into approximately $150 million to be able to issue bonds for the completion of our project up to Interstate 20. I do want to say one thing, in being able to move forward with the bonding on this is to be able to receive that revenue right now that's currently being collected, and we've had discussions with Amadeo and Phil Russell to look at receiving those funds so we can move forward to issue those bonds, and we look forward to continuing those and trying to wrap that up as soon as we can.
The East Texas projects, we continue to receive great support, without a lot of controversy, and we are doing our very best to move forward with this in a non-controversial manner and that's something you don't see throughout the rest of the state.
The Texarkana Outer Loop, you'll hear from Bowie County and then our FAA, financial assistance agreement, on the East Texas Hourglass is something that had been submitted previously, we'll talk a little bit about that. That is to continue this project as a toll project, requesting that for potential corridor studies.
Next I'd like to ask Gary Halbrooks, who is our Smith County representative and also our finance director, to talk about our funding. Gary.
MR. HALBROOKS: Thank you, Chairman Austin.
Again, my name is Gary Halbrooks, I'm the finance chair of the North East Texas Regional Mobility Authority. Thank you for having us here today.
Just a quick update. We are, obviously from the discussions here this morning and what's been going on the last year or so, we're out creatively looking for funding for all of our projects. We've got a great team to help us do that.
On the bullet point on Toll 49 3B, I'll come back to that in just a second. Everybody is familiar with the mileage used to fee study, so I will not cover that in depth at today's meeting.
One thing that Jeff had alluded to that we have been very successful on is creating strong partnerships in the North East Texas regional area. From the RMA to the MPOs to everybody that we've dealt with, we've been very successful in putting those partnerships together. One of those has been in discussions on the Lake Columbia project. We've had multiple discussions with them on how we join together on potential projects that are out there, and as that project moves forward, we will continue to have those discussions.
Rail activities, Celia Boswell will cover that in just a minute, and the inter-local with Rusk County, John Cloutier will cover that in just a minute.
My primary purpose today is to bring you up to date on Toll 49. There's six sections on Toll 49. Section 1 and 2 are up and operating. When Section 2 became operable, the usage jumped substantially and we were very excited to see that. Section 3A will be funded through the stimulus package. I'm going to skip Section 3B just for a minute. Section 4, currently we're waiting on approval for the environmental study, and Section 5, notwithstanding the previous discussions, we're hopeful that it will be funded through Proposition 14 funds.
That brings us back primarily to what we're here today to talk about is Section 3B. We feel like with Section 3A and 5 being handled financially how they are, we feel like that we can go to the bond markets -- even though it's still a little bit tricky these days, we feel like we can go to the bond market and get Section 3B funded through traditional bond funding. In May we anticipate releasing the names for financial underwriters for the RMA and that will be a big day for us. We've waited a long time and it's taken a long time to get to the point to be able to do that. But we are hopeful and feel very confident that we can take 3B under a traditional bond package, and without your help we wouldn't have been able to get there, and we thank you so much for that.
MR. TORRENCE: Good morning, commissioners. My name is Bob Torrence, I'm here to represent Bowie County and Texarkana. We appreciate the opportunity to be here.
At least in part, one of the things that we're here to seek funding for is the Texarkana Outer Loop. As you can see on the diagram, the Texarkana Outer Loop extends northward on Highway 59 from Houston -- which is what we hope to be the I-69 Corridor -- westward around Texarkana to I-30, and ultimately to Highway 71 north.
What you'll see between State Highway 82 and Highway 67 represent the eastern border of the Lone Star Army Ammunition Plant and the Red River Army Depot. As a result of the most recent Base Realignment and Closure Commission report, the 35,000 acres that are represented by the Lone Star Army Ammunition Plant and Red River Army Depot now fall under the purview of the Red River Redevelopment Authority and will soon represent the single largest industrial park in the State of Texas.
I'm pleased to report with regard to the outer loop that the public outreach and education initiatives in East Texas have been well received by both the media and the citizens of North East Texas, and we look forward to moving forward on this project. The financial assistance agreement was submitted in January of '09.
Thank you very much for the opportunity to be here.
MR. AUSTIN: As you can see, we do have multiple toll projects that we're working on within our region. The map that you have up here is the extension of Toll 49 from the existing segments that we already have environmental clearance. This is our vision for what we deem as the Hourglass. This includes 63 miles that would include Segments 6, 6A, 7, 8 and 8A that would go from south of Tyler, across the county line up into Upshur County, north of Longview, and over to Marshall. Our Hourglass committee is beginning to work again on this to begin receiving public input absent funding. The financial assistance that I referred to a while ago that we applied for and submitted is to do the preliminary corridor study so we can try to keep this project going and get up to where we could secure potential bonding for this project. I would highlight this was proposed in 2003, was one of our initial projects when we became an RMA.
We are seeing some rapid growth over here. The first two segments that we would probably do next over we're already working on would be north of Marshall coming back to the west over to north of Longview, so those would be the next two that would seem the most viable. I do want to add that the preliminary toll viability analysis did show that the Texarkana project actually had a little bit more viability than the Tyler project, so that's something that we're working on to try to move forward.
Next I'd like to ask John Cloutier from Rusk County to share about our inter-local agreement we're working on.
MR. CLOUTIER: Thank you, Madame Chairman and commissioners.
The significance of Loop 571 -- it's a fairly simple project -- is this project was originally shelved in 1996 after the first leg of it was built, and so the goal, if you will, for the RMA was to find a way to revive a rural project that wasn't so much toll viable and provide a rural template, if you will, to try to revive some of these projects. 571, with the safety need that it has, was an apparent choice for that, and with the support of the RMA chair and TxDOT officials, we've been able to really advance that project and bring it back to life. The local commissioners are excited and the community again feels like there's an opportunity to improve its quality of life and provide some safety for the school system and the people that need that road. It has been a tremendous, tremendous effort.
Also, if you'll look at the Lake Columbia project coming up on the next page, you'll see that we're exploring our partnerships with the Angelina-Neches River Authority. They have come to us as they get closer to the public comment portion of their environmentals to see if we might be of assistance to them to move the transportation infrastructure part of the project along. As you see, that project will be a huge economic development and water resource for the eastern side of the state, and so we look forward to being part of that solution through the RMA. Thank you.
MS. BOSWELL: Thank you for letting us come today. I'm Celia Boswell from East Texas. I'm the rail chairman for the RMA. We have a rail committee that's composed of members from all of our member counties and we have prioritized rail projects. We want to be an inclusive RMA and we know that rail is a big part of where the future is.
We've identified 34 potential rail projects with a series of very fruitful meetings, and we're working our way through this. Of those 34, one of the upcoming projects, as you can see on our printout, is the abandoned rail line between Whitehouse and Troup. That is an important component of economic development for that area, and we are beginning to get that one moving. So that is on the front burner for the RMA. It's not a large area but we're negotiating with Union Pacific to acquire that.
The next highest priority for us is the design and construction of parallel line -- listen carefully because this is important when you start thinking about moving people around the state by rail -- parallel line on Union Pacific's existing US 80 rail corridor for higher speed commuter rail between Dallas and Shreveport. You'll continue to hear about that. It is a major artery for us to connect us with Shreveport, and eventually, hopefully, all the way over to Mississippi and up and down the East Coast. So we're doing our part here; we have a plan; we are moving it forward. We hope to be part of the future in moving passenger rail, higher speed passenger rail along that US 80 corridor.
This is exciting news for me because this is my passion. I love highways; rails don't cost as much as highways and we can move a bunch of people. And so I'm hoping that we can think in terms of a complete RMA with all the components of moving people around the State of Texas. Thanks for letting us come.
MR. AUSTIN: Thank you, Celia.
As you can see, some of the projects that we're involved in is not just road and not just toll roads, we're trying to listen to our constituents which are our counties, our cities, our chambers, our economic development corporations, in identifying these projects, and more importantly, planning for them bottom up. We know the next real critical piece is going to be the funding, but we've got to be ready to go and begin to look at other sources.
One thing I wanted to follow up on, why the involvement with the Lake Columbia. This is one where we're looking at a potential inter-local agreement with the River Authority to improve the roadway there, and this lake is a non-controversial lake, they're about to receive their 404 permit very soon, probably this year, and over 60 percent of the water is committed. This is the lake between Jacksonville and Henderson. Depending on what happens with the remaining water -- hopefully it will stay within the basin -- we could potentially be involved with a pipeline. We've had some expression of interest there for revenue generation.
With that, Celia said the best thing, we want to be inclusive, and we want to wrap up our comments to say thank you, and hopefully we can answer any questions.
MR. HOUGHTON: Where is the water committed to?
MR. AUSTIN: The roughly 64 percent is all in the basin.
MR. HOUGHTON: In the basin. No inter-basin transfer?
MR. AUSTIN: That is correct, at this point.
MR. HOUGHTON: You mean Houston is not going to come take your water?
MR. AUSTIN: Depends who is the highest bidder.
(General laughter.)
MR. HOUGHTON: Water runs to money.
MR. AUSTIN: Well, in looking back at the legislation that created regional mobility authorities, this gave us multiple things, and we're looking for other revenue sources that can stay within our region and solve transportation issues within our region. So we are trying to expand what we're doing, and many of these things run parallel tracks, and some are longer term and some are very short term.
MR. HOUGHTON: Jeff, I want to congratulate you all. I watched you give birth to the NET RMA up there, and this is phenomenal what you have on your plate. Can I ask you just a question?
MR. AUSTIN: Sure.
MR. HOUGHTON: On your existing tolling, you're hoping that we can issue Prop 14 to take care of a segment, you've got stimulus money to take care of Segment 3B or 3A.
MR. AUSTIN: Segment 1 is open, Segment 2 down below is open. And Segment 5 which is almost three miles is the Prop 14 section.
MR. HOUGHTON: And the stimulus money?
MR. AUSTIN: The stimulus money would come to 3A.
MR. HOUGHTON: 3A, and 3B is what you're looking at financing.
MR. AUSTIN: Yes. The stimulus money helped us complete a construction gap, and now the preliminary studies show we have bonding capacity.
MR. HOUGHTON: To do 3B.
MR. AUSTIN: For 3B to get it up to Interstate 20. Then we really have a road that goes somewhere.
MR. HOUGHTON: So you have the capacity to build 3B without grants, et al?
MR. AUSTIN: Correct. There is a $12 million financial assistance agreement that we have currently with you and we'll get that repaid, but at the same time, we're also looking north which will add to the toll viability of the Lindale Relief Route. We had a meeting in Lindale two weeks ago, they're excited we're beginning to look at their congestion problems, and they're looking at some local match to solve some other issue there as well. But to be able to get up to Interstate 20, we have some local match from the city, from the county, some congressional demonstration funds that were done four years ago, and we're ready to move forward.
MR. HOUGHTON: So 3A is the stimulus. You've got a time constraint on those.
MR. AUSTIN: We're going to accept bids in July.
MR. HOUGHTON: Outstanding. Design-build?
MR. AUSTIN: Absolutely. And we've heard for the rest on 3B, we're finalizing the plans and specs, said it could take up to nine months, and I said four would be fine.
MR. HOUGHTON: That's great. Congratulations, Jeff, and to your group, congratulations.
MR. HOLMES: Terrific job, Jeff. Do you have cost estimates on 3B yet?
MR. AUSTIN: Yes, we do. The construction is about $80 million, and to actually bond, by the time we go through the insurance and everything, the bonding would probably be about $125- to $127 million.
MR. HOLMES: And does that $80- include right of way or is that only construction?
MR. AUSTIN: The right of way is pretty much all acquired, that's all construction.
MR. HOLMES: You already have it.
MR. AUSTIN: Yes, sir.
MR. HOLMES: That's great.
MR. AUSTIN: And we're awaiting the record of decision from FHWA on the Segment 4 at the top which is what we call the Lindale Relief Route. That should come within the year, definitely by the end of the summer. We're not sure if we're going to include that yet in the bonding capacity, but we may be able to follow up shortly thereafter. Because the right of way has not been acquired there, we don't want to delay getting up to Interstate 20.
MR. HOUGHTON: What is the RMA project for 3B rated? You haven't gone to the market yet?
MR. AUSTIN: We have not. We're waiting on the final cost estimate and then we're updating the T&R study. We feel very optimistic about this.
In looking at these sections, Segment 1 there between 155 and 69, when that opened up about three years ago, we were generating probably 1,500 cars a day. The next section which dead ends on a farm to market road in south Tyler, we went from 1,500 to roughly 5,500 counts per day, and that's still increasing. And when we open up the next segment going over to 110, what's interesting there, southern Smith County, Whitehouse, we're seeing a lot of growth, Trane Manufacturing is one of the largest employers in the region, that's their national research center as well. So that will help get up to Interstate 20 but we see the traffic counts for each section that we open substantially increasing. That's what's going to help us on our T&R study.
MR. HOUGHTON: Congratulations.
MR. AUSTIN: Thank you.
MR. SAENZ: Thank you. Our next item deals with a report from the Hidalgo County Regional Mobility Authority.
MR. BURLESON: Good morning, Chairperson Delisi and the members of the commission. We are very happy to be before you this morning. My name is Dennis Burleson and I'm the chairman of the board of directors of the Hidalgo County Regional Mobility Authority.
We're very happy to be here this morning and to be able to tell you about Hidalgo County and its loop. The loop is important to our community and we need to tell you what we're doing to make it a reality. This is the first presentation we've made before the commission. We've heard the TxDOT staff and their concerns about the state resources that are going to be available to construct highways, and Hidalgo County has realized that it needs to step up and take a large local responsibility for part of that funding.
We're going to have a few additional speakers: Mayor Beto Salinas, representing the elected officials of the county; Sofia Hernandez, the economic developer on behalf of the county judge; and Pat Townsend, who represents the other economic development professionals in the community.
We also have a great team, we have a team of the local MPO staff which we cost share on, and the local council of governments is kind of our fiscal agent that keeps all our rules straight, and we have another great partner, we have a great partner in the Pharr District. Mario Jorge is actually in Fort Worth working on some project at the direction of Austin staff and he's not able to be here, but we really want to thank him for all of his being there when we needed him to be there.
Hidalgo County's RMA was formed in 2005 by this commission and identified the Hidalgo County Loop as our primary first project. There is an additional project in the La Joya Bypass which is also a needed project that would connect on to TxDOT plans which Amadeo worked on when he was district engineer in the Pharr District of a bypass around Rio Grande City and Roma. But the loop is our initial project and our project that we think can get us going and get us up and running.
When San Antonio began planning its loop, the population of Bexar County was 450,000 people. Hidalgo County has 22 cities in it, several of a major size. McAllen is the largest city in the county, but really has less than 20 percent of the population. So whereas Jeff Austin has a bunch of counties, we have one county but we have a bunch of cities. Getting a consensus when you have 22 players and everybody has their own local needs is difficult, but the Hidalgo County Loop has been a project that not only has tied us together for our transportation needs but also tied us together for our economic development needs.
Again, San Antonio and Bexar County are now working on outer loops and I don't know how many outer loops are in their plans, but the population of Hidalgo County is now pushing 800,000 and we're just now starting to plan our loop, and so we've got a lot of work and a lot of time to catch up on.
We're extremely grateful for the investments that TxDOT has made in our transportation system. About ten years ago TxDOT made the commitment to finish out US 83 and substantial improvements on 281 to get us our initial starting structure. Congestion is building at a rapid clip on 83 and 281. With the population of Hidalgo County doubling over the next 20 years, it will soon be where parts of that freeway is unusable. So the loop has to be pushed along to continue to provide the transportation assets that continue our economic development
That's why the communities backed the formation of the RMA: they realized that that transportation asset, the loop, is very important to us. More than a transportation project, the loop really is jobs. I come from really an economic development volunteer perspective, and the loop and economic development are really two sides of the same coin, they really go hand in hand.
NAFTA has driven a lot of changes in the economy starting in the late '90s. In the past, Hidalgo County was largely agricultural and with low-paying jobs and very little economic growth. We had manufacturing jobs -- everybody can remember Levi Strauss and Fruit of the Loom, those jobs are gone, those jobs just have left -- but they were low-paying, they provided very little stimulus to the rest of the economy. But NAFTA has brought a change for us and that change is a new economy. The new economy is based on international trade and it's heavily dependent on transportation, and the loop will allow us to continue that benefit that TxDOT investment over the last ten years has brought to our transportation net.
The new economy means that the economy now in South Texas is actually growing faster than the population is, and for the fourth largest or third largest or second largest -- depending on how they count it -- fastest growing county in the state, actually in the nation, that's a pretty good thing to say. Job opportunities have grown faster than the population: 3.9 percent job growth over the last few years as opposed to 3.1 on the population. Personal wealth is increasing. Per capita income in Hidalgo County is now approaching that of the rest of the state.
County ad valorem tax base has increased, 8.1 percent a year over the last decade, allowing us to provide other government services and desperately needed drainage improvements and things like that that we needed to make. And so there has been additional tax revenues available for the cities and the county to be able to provide essential services. But the main thing, the main benefit of this is that unemployment has gone down. Unemployment is about half of what it was ten to twelve years ago, and the Valley is on the move and Hidalgo County is on the move.
The jobs that were lost as the economy transitioned are at the bottom of this chart. They were low-paying manufacturing jobs and agricultural jobs. The jobs that replaced those jobs is the international trade jobs that are tied to NAFTA and Mexico's emerging from the Third World to the at least Second World. And the rest of it is as Hidalgo County has gotten higher GDP per person, the normal service industry jobs in medical, real estate, finance and information technologies have come along with it. So there's been more jobs created than lost and the jobs that were created were higher paying, so everybody is better off in the county.
The forecast for South Texas, the border, and particularly for Hidalgo County is more of the same if we are continuing to be able to provide the transportation assets that can keep us from becoming gridlocked, and that's why we're here today. We've heard the call that TxDOT can't provide a lot of the transportation assets that we need for our future growth, and more and more that's going to have to be a local responsibility. But we're here today to say that if you can get us some money through the Pass-Through Program to get us started, we can largely handle a lot of our transportation needs on our own from local resources.
And so we think the loop is important and -- I'm trying to learn how to operate this power point projection and talk at the same time, it's kind of like chewing gum -- so we're really happy to be stepping up. What we think we need is to have a publicly owned transportation system that will generate the revenue. How are we going to get that revenue? We're stepping up in Hidalgo County. Tolls won't pay substantially for our loop improvements for several years, but local leaders have acknowledged that that's a necessary step and we're going to toll the loop.
We have created a transportation reinvestment zone, the first in the state, that's 175,000 acres and we will probably add an eastern portion to that at a later time, 175,000 acres that will be affected by the loop. The county is willing to share the future tax revenues that come out of the ad valorem taxes of that to help us build our loop. We know that the development will come from the growing economy and the growing economy comes from the transportation assets, so everybody thinks it's a win-win for the transportation assets to be paid for by some of the local activity.
One of the key steps that we did is we took advantage of legislation by Senator Chuy Hinojosa and Representative Kino Flores in the last session that allowed a couple of the counties, us and Cameron County, to add $10 to our vehicle registration fees. We've done that and actually all of the funding for our planning to this point has come out of local resources. We formed up late enough, just about the time that TxDOT had to drop planning support for the RMAs, so all of our planning to this point has been done on our nickel, and we're proud of that. We wish that you had lots of money and that didn't have to be the case, but we want to move ahead.
What the planning that we've done so far indicates is that the loop is a needed project, it's a project that can be financed, it's a project that can be built, but we're going to need some help in getting that, and the Pass-Through Program call is an opportunity for us to ask for that assistance and hopefully you'll give it favorable consideration.
A little more technical stuff, I'd like Gary Pate with Pate Transportation Partners, who has been the provider of that planning and some of the finance and construction feasibility plans, to come forward and give you a short additional report on some of the more technical items of our plan.
MR. PATE: My name is Gary Pate, I'm the managing partner of Pate Transportation Partners. We are under contract with the RMA there to develop the Hidalgo Loop project, and I just want to take a minute or two to describe what it is.
One of the things that I want to point out before I look at the loop slide again is the finance plan which is very important. We think that the first phase of the loop -- and I'll show you that in a minute -- we can fund about two-thirds of it with locally generated revenues, either the combination of the vehicle surcharge, transportation reinvestment zone, and tolls.
Now, we're tolling this project probably several years ahead of the time when you would ordinarily toll a project like this, and so there's a gap there. It's going to take a while to build up before the tolls build up to a self-sufficient level. But if we can get some help on this project, get over the hump now, we think we can build a revenue-producing project that would generate probably somewhere between a billion and two billion over a 20- or 30-year period to generate and pay for other projects.
So let me just give you a quick overview of this. This was the slide you saw a minute ago. The base of that slide shows the two freeways that TxDOT built over the past decade or so, 83 and 281. Of course, 281 connects the county north, and most of the long-distance, long-haul truckers use 281 to go north to markets in the rest of the U.S. and Canada.
We have four international bridges in Hidalgo County, and another bridge, the Donna International Bridge which is proposed, and that's the source of lots of traffic that crosses, particularly the NAFTA-driven truck traffic which a lot of that is cartage traffic which crosses back and forth across the border, but ultimately translates into long-haulers going in and out of the county. These little arrows indicate the primary entrance and exit points for that traffic, that truck traffic.
So we have a truck traffic problem that's increasing there, and in addition, if you think about the funding crisis -- you talked about this morning, we're all well aware of -- it's not likely that 83 and 281 are going to be improved much over time, and this doubling of the population Dennis talked about is going to create lots of congestion on those freeways, and then what are those long-haul trucks going to do trying to move north and south and east and west. So that's going to be a significant drain on the economy in the future.
So the idea is to move ahead with the Hidalgo County Loop. The proposed first phase that we think we can finance right now is Segment A on your map, Segment B, Segment C, and we would propose to go ahead and clear and get the right of way, protect that corridor for Segment D. Segment E and F would be longer term projects as the eastern part of the county, which is not as developed as the central and western parts, develops.
So that's the project that we are proposing. It would be initially a toll project, and as I said earlier, we would enhance the tolls with the vehicle registration fee and with the TRZ revenue and so forth, and hopefully with some state assistance to get us over the hump so we can continue to do this.
Just a brief progress report on what's happened the last year since we've been involved with this. The RMA, as I said, retained a project developer -- that's us. The idea is that we would guarantee the price and the delivery of the project, guarantee construction and the startup phase of this project. We're into environmental work, they've retained an independent environmental consultant. We've performed some advance planning and schematic design of selected loop segments. We've conducted extensive open houses; over 1,400 citizens have come to those open houses throughout Hidalgo County. We've performed traffic and revenue studies; that's why we think we can finance the project. We've created the TRZ, a big TRZ, the first TRZ in Texas -- right behind El Paso which I think was second, or maybe you were the day after, I don't know, Ted, if you want to be first, be first -- but we created a TRZ.
(General laughter.)
MR. PATE: And we've actually laid a draft price and finance plan on the table, and so we're moving along with this project, but as the chairman said, we need your help. So this little slide just shows where we are, the star down there, and shows why it's important, where is this NAFTA traffic coming from and so forth.
Again, I appreciate the opportunity to be here with you and to make this brief technical report.
MR. HOLMES: Gary, before you leave, give me a sense of where the 175,000 acres is.
MR. PATE: Sure. I did not bring that slide. We'll be glad to send you a slide that shows or a map that shows it.
If you look back on the map here -- do I have a laser beam?
MR. BURLESON: The zone is largely around Section C which is pretty much open land. The law is constructed that the transportation asset has to affect the zone that's set aside. The zone is narrower in A because that's largely already developed; B, C and D are largely undeveloped, and so the zone is wider there than it is along A, but C is where a good part of the property, there are large landowners that are waiting for transportation assets that may be willing to develop large coordinate land developments. And those kinds of developments is what we hope that the loop can encourage, high quality development, industrial development and commercial development.
MR. HOLMES: Does the zone include property that is contiguous to E and F?
MR. BURLESON: There will be a new zone -- we're a little further behind on the environmental clearance on E and F, so the zone has not been created. You can't create the zone until you have a route delineated, so we're a little behind on E and F.
MR. HOLMES: And so the zone now is only on A, B and C?
MR. BURLESON: A, B and C and D.
MR. HOLMES: And D. And 175,000 acres is a very significant amount of acreage. How far out does it tend to go from the roadway?
MR. BURLESON: In the A segment, because it's already developed, you're half a mile out on each side. Some of that is limited because we're right up next to a major flood way improvement. Out in the C area, it's over a mile wide on each side. So we're being aggressive. The county is willing to step up with half of its ad valorem increase in that zone, and we think we not only can use that as a starter backup for the loop itself, but all of the MPO projects -- and Andrew Canon is here, is here and I don't know how many miles there are that either need to be built or upgraded in our MPO plan. We don't foresee there being a lot of TxDOT money to be able to widen from two lanes to six lanes.
And that transportation zone will actually provide a vehicle that we can build non-tolled roads that every citizen can use, and once the loop is up and on its own and fully built out and tolled, we think we have transportation assets that we can largely handle what Hidalgo County needs. We still very much need your help on I-69 for 281 improvements, for additional improvements on 83, but we think we can handle a lot of our own needs by the reinvestment zone and the loop once it's up and running.
MR. HOLMES: Earlier we heard about a bill that Senator Ogden was working on that would dedicate the state portion of the sales tax to projects. I'm assuming you have not included in your numbers any benefit from that were it to pass.
MR. PATE: No. The TRZ is in law now, of course, and that's all we projected. I certainly support Senator Ogden's bill. A lot of the development that would probably occur in this TRZ would be sales tax type business, probably, and we would certainly take advantage of that were it to pass. No projections, however.
MR. HOLMES: And of the two-thirds of the cost that is covered by these various elements, how do you break that down between tolls and ad valorem tax and the $10 vehicle registration?
MR. BURLESON: The toll feasibility along Segment A is fairly good because of a lot of the cartage traffic that Gary referred to. So Segment A, probably toll viability completely on its own, somewhere in the neighborhood of 40 percent, and Segments C, B and D, you're talking about a lower percentage. And we may have to handle that through phasing to get to build it as the toll viability increases. It's a long-haul project, but we think tolls will substantially -- where we really look for tolls to really kick in is not to necessarily pay for a lot of the starter structure which would be smaller two-lane and four-lane facilities, but the build-out to 300-foot wide expressway sections, that's where the tolls are going to be critically important.
Before we conclude real quickly, Mayor Salinas from Mission -- he's my mayor -- is here, he'd like to say something, and we have a resolution.
MR. HOUGHTON: Before he comes up, let me ask are you environmentally cleared on the project?
MR. BURLESON: We're going through that process, we are going to have to have a little longer term process with an EIS, possibly we're going to be getting with Federal Highways. We may have to trim our project down to only the A route and see if we can get that cleared faster. We may have to clear it all. There's new rules at Federal Highways that we want to explore if we can speed things up. But that's probably over the next year going to be our major hurdle and our major activity is getting environmental clearance. We've done a lot of the EIS-type input sessions that really weren't required if we had assumed an EA, but we're moving forward with that. And we may have to slow down and not build a $750 million first phase, we may have to do something smaller to be able to get started.
MR. HOUGHTON: Do you have an investment grade on the zone yet?
MR. BURLESON: No, not really, the zone was just formed. The next step is an inter-local with the county and we've got some economic projections. And Hidalgo County, even with the slowing of the economy, is still growing fairly rapidly. As I said, there are large landowners who want to build developments of several thousand acres along that loop structure, and if that happens, the transportation reinvestment zone will be a big key to transportation assets for us.
Mayor Salinas, and Sofia Hernandez, who is the county judge's economic developer, also has a resolution and also has a short presentation.
MAYOR SALINAS: Thank you and good morning, and I want to, first of all, tell you that I represent the elected officials of Hidalgo County It's hard to get those people, those friends of mine to come to Austin, I think that all of them in the county commissioners court had something to do today.
But first of all, I want to thank all of you for the projects that we've done in Hidalgo County. First of all, Amadeo, thank you for everything that you supported us in Hidalgo County, especially 281 and Highway 83 expressway, especially on our Anzalduas Bridge and on the uncommitted monies that we never had before, you gave us $25 million for the Anzalduas Overpass, and that made us very happy. And I remember we had a meeting up here somewhere on the east side of the state, and at that time Ric Williamson was chairman and he told us not to worry about anything, that we were going to get everything done, and thank God that we have everything in place.
We finally got the county judge and the county commissioners to be able to come on board and get this RMA going and were able to convince them to charge the $10 fee on the license plates because one of the things we know is that we needed to put some of our money into this project, a project that is very, very much needed in Hidalgo County. As you go down to Hidalgo County, all those new roads like Highway 281 and Expressway 83, are overwhelming getting congested, and the only thing that we are going to have to do is to get some of our money, more than two-thirds of this project built by the taxpayers of Hidalgo County.
We're also looking at the rail and that's going to be another additional cost for us, but we have a commitment to do what we have to do for our taxpayers, and we're only asking that the State help us on the pass-through toll. We're willing to toll the trucks and we're willing to toll the cars, but we also need you all to consider the application that we'll probably be bringing to you in May on the pass-through toll, that hopefully we can get it funded.
I talked to the governor yesterday, talked to him about it; he looked very supportive. And we had another meeting on an auto plant that we're trying to get to McAllen and Mission and it's very promising, and we're going to need to have something in place. If we get this auto plant going, we're going to have to have rail and we're going to have to have this loop. It's no other way. I mean, things are getting pretty crowded in Hidalgo County and I know that we will be opening the bridge in October and we're going to be getting a lot of new traffic into our area which we need to get the trucks into the loop.
And hopefully, the county will continue to support us on the license plates. That is helping us to pay for some of our engineering and we have a lot of support, we probably get about $50 million a year on the license plates and we will continue to do that. Believe it or not, we did not have anybody in the county objecting to it, I think everybody sees the needs that we have.
But we want you all to be our partners in this loop. I think it's very important that we all get together and get this project going. This project is going to cost about $800- to $900 million and we're committed, the County of Hidalgo is committed to do this, we just need your help. I was a county commissioner from 1980 to 1992 and I would have never, never supported the $10 license fees and the TRZ that is 175,000 acres on the taxes, and I was very conservative when I was in the county, and of course, it was a smaller county. Now it's a growing county and I congratulate the county judge and the county commissioners for supporting the TRZ around the county and also the $10 that would help us create our own responsibility in our loop.
But we will be coming in May with the proposal so you can support us on the pass-through toll road. I think it's time that you all see that Hidalgo County and the small cities and our big cities, like McAllen and Mission and Pharr and Edinburg, are saying yes to this project, and I think we need you to be our partner in trying to get this pass-through toll road. You all have done a lot for us, especially in the Mission area. I've gotten a lot of support from you in the Mission area. It's been transformed with the new roads and the bridge and things that you all have done for us, and for a city that did not have very much money, we were able to get a lot of funding from you guys, and I really appreciate that.
But now the county asked me here and I was chosen by them to come and talk to you about this and I hope that, Amadeo, we get your blessing on it. I know you're going to say anything today, but hopefully you can work with us and get this thing done. I think it's a beautiful project. I would have not done it 20 years ago but I think now we're ready and the City of Mission, City of McAllen and the bigger cities that we have are supporting it.
And I think you all should be proud of the county commissioners court and the county judge for spending some of our own local money on this loop because nobody else would have done it. We are doing the $10 and we're doing the taxes on the TRZ, that is going to generate a lot of money for this loop, and I would suggest that now that the county is there willing to do this that you all join us and help us with at least one-third of the cost because it's going to be a big, big project, and you are going to see the difference between the traffic that we're going to get in from Mexico through Mission and through McAllen.
So thank you all very much for everything you've done for us, and I hope that we can work as a partner on this loop.
MR. HOUGHTON: Mayor, thank you for coming.
MAYOR SALINAS: Thank you for all the support.
MR. HOUGHTON: Mayor, let me ask you a question. When did all this road-building take place down in that part of the world in Hidalgo County?
MAYOR SALINAS: Well, it's been in the last ten years.
MR. HOUGHTON: Ten years. Who was the district engineer down there when all that took place?
MAYOR SALINAS: Right here, he was our district engineer.
MR. HOUGHTON: That guy right there?
MAYOR SALINAS: He was our district engineer. The first meeting I had with him on the MPO was we can't get it done, so I said, Well, you watch and we'll get it done. So I want to remind you, Amadeo.
(General laughter.)
MAYOR SALINAS: But Amadeo has been the guy in front of the whole thing in Hidalgo County, and he prepared it well for us and taught us the way to come to Austin back then, and it's been a lot of success. And I thank Amadeo for all the work he's done. And of course, Mario, our district engineer, is very, very good to us, but he trained him well. And I am very, very happy with all the projects that you've done for us, and here we come asking for more, but what else can we do when we are growing so fast.
And we have a great governor who has given us support. I think Rick Perry has been the jewel for us in Hidalgo County and South Texas because he's really, really worked for us in South Texas, especially the Hidalgo County area, he has really worked for us, not only on transportation but he's worked with us on sewer plants, he's worked with us on water plants and he's worked with us on any other project, baseball fields. He's done such a good job for us in our area that we would not have gotten from anybody else.
Before we used to get about $77 million a year, just on the expressway I think it was $1.5 billion. We keep telling the people in our area that that is the biggest project we've ever had in South Texas, and we're going to be coming back and asking you to help us because we are showing TxDOT that we are putting our talk on the table and saying we are going to tax ourselves so we can be able to pay at least 70 percent of the cost, but we're still going to need some help because all this is going to be done by the people of Hidalgo County and we need your help.
Thank you all very much.
MR. BURLESON: As you can tell, Beto is my mayor, I'm a citizen of Mission, and it's probably in some ways hard for Mayor Salinas to come and ask you on behalf of the county because I think Mission could find a way to use a good chunk of that money for its own projects, but the loop is something that has bound our community together in a way that we didn't think a transportation project could.
And we have a representative from County Judge J.D. Salinas and we have a resolution of support that we'd like to deliver, and then I'll sum up real quickly and we'll answer any questions. And we very much appreciate your time this morning.
MS. HERNANDEZ: Good morning, Madame Chair, commissioners, Mr. Saenz. My name is Sofia Hernandez, I'm the economic development director for Hidalgo County, and I'm here representing Judge J.D. Salinas and our members from the commissioners court, and I think Mayor Salinas did a great job representing the county so I'll make my remarks brief, but they did ask that I deliver a resolution of support to you for the record.
Basically, they want you to know that they fully support the loop project and the pass-through application. They also wanted me to not leave without making sure to thank, Madame Chair Delisi and you commissioners for the significant investment that you've made to upgrade US Highway 281. So I'll kind of make a couple of key points of some of the things that they wanted to make sure that I communicate to you.
Clearly, as it was stated before, we're one of the fastest growing counties in the state and the nation, we have close to 800,000 residents, like Mr. Burleson said. We have five ports of entry that this year will be feeding truck traffic into 281; there's about 1,500 trucks daily that go through that corridor and that traffic is expected to double by 2030. So it's important that we have the loop in place to move some of that commercial traffic away from our major corridors and away from our neighborhoods onto the loop and into 281.
The other key thing is that, like was said before, we have stepped up to the plate -- like Mayor Salinas said, the county is there -- we're committed to this project and we've done several things to show our commitment: the $10 registration fee, the creation of the transportation reinvestment zone. One of the other things that we're doing with the zone is creating TIFs, and we're looking at Chapter 3 development agreements to try to spur development around the zone. That's why we've committed half of our MNL rate but the other half is committed to developers who are interested in developing around the corridor. Last, obviously we're committed to tolling some of the segments of the loop.
So the last thing that they wanted me to mention to you is our region, just like so many other communities in Texas and the nation, could use the infusion of this investment so that we can create jobs. And somebody back here will correct me if I'm wrong, but this is an $800 million project and we understand that for every $100 million in transportation investment, 1,500 jobs are created, so quickly you look at the math and you're talking about maybe 10,000 jobs.
So again, we appreciate your time, your consideration, and again, thank you for all that you have done for South Texas.
MR. HOUGHTON: Would you mind passing on to the judge we thank him for his support of transportation? He has been an avid supporter of this department and transportation initiatives.
MS. HERNANDEZ: I will. Thank you, Commissioner.
MR. HOUGHTON: And I'll remind Amadeo, he did go to the chosen school in the State of Texas.
(General laughter.)
MS. HERNANDEZ: The judge reminds me that I didn't; every day he reminds me. But thank you again for everything, and I can leave this behind, if you'd like. And again, he's really busy dealing with some pressing issues, but otherwise, he would have been here today. Thank you.
MR. BURLESON: And I can reiterate, Commissioner Houghton, the same thing, the county judge has been a great partner and we appreciate the local leadership stepping up.
We've taken over our time and I appreciate your indulgence. I just want to finish up with the things that Hidalgo County is doing, we looked at everything the legislature allowed us to do, we did it. We're the first RMA that we can fully identify that once we get up and running, we intend to provide local needs, both tolled and non-tolled, as much out of local resources as we can because we know that your maintenance needs and your building of the spine of the rest of the state, the big transportation net for the rest of the state is important to us also.
It's hard to get out of that mode where you just come to TxDOT and if you ask three or four times, you get it. That's the old way. But we're here and we're happy to be partners with TxDOT to provide the transportation that all of us need in the State of Texas. Thanks.
And we'll answer any questions if anybody has any more.
MR. HOLMES: Just as a note, I want to echo Commissioner Houghton's comments. It's been very impressive, the steps that you have taken to help yourself and it sure makes it easier for this commission and this agency to help out people that are willing to step forward with their own money.
MR. BURLESON: Thank you, Commissioner. Any other questions?
MR. HOUGHTON: No. There's just an observation.
MR. BURLESON: Sure.
MR. HOUGHTON: I just couldn't help myself on this observation, but you have another good friend in transportation, the guy sitting behind you, Gary Pate, and he has been very helpful in getting some things done across the street and helping the Transportation Department. Good partner.
MR. BURLESON: Well, we look forward to all the work. As a volunteer chairman, it's been more than I signed on for, but it's been exciting. So anyway, thanks again, Chairman Delisi and commissioners.
MR. SAENZ: Thank you, Dennis, Mayor Salinas. You did a great job.
MR. BURLESON: Thank you.
MR. SAENZ: All right. Commission, moving on, agenda item number 4, David Fulton, our Aviation Division director, will present a minute order on award of some federal funding for airport improvement projects.
MR. FULTON: Thank you, Amadeo. For the record, my name is Dave Fulton, director of the TxDOT Aviation Division.
This minute order contains a request for grant funding approval for two airport improvement projects. The total estimated cost of both requests, as shown in Exhibit A, is approximately $2.1 million: approximately $2 million in federal funds and $100,000 in local funding.
A public hearing was held on March 19, no comments were received. We would recommend approval of this minute order.
MR. HOLMES: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. FULTON: Thank you.
MR. SAENZ: Moving on, commissioners, agenda item number 5, James Bass and John Barton are going to present a discussion on the status of the federal rescissions. I guess they're here; I don't see them.
(No response.)
MR. SAENZ: Okay, I'm going to move on. Agenda item number 6(a) deals with the American Recovery and Reinvestment Act, and Ed Serna will lead us in a discussion -- where is Ed?
(No response)
MR. SAENZ: Okay, let's move on to agenda item number 6(c), Eric Gleason, are you here?
Going back to agenda item number 5 on the rescissions, could you cover that discussion item for us?
MR. BARTON: Yes, sir.
Good morning again, Madame Chair, commissioners. For the record, my name is John Barton, assistant executive director for Engineering Operations.
This item is to discuss a federal rescission notice that we received on April 16 of this month from the Federal Highway Administration for yet another federal rescission to previous federal apportionments to the State of Texas. As you know, a rescission is a reduction in the apportionment of federal funds to the state, and the notice that we received include a response date of no later than May 13 of 2009. By state law, the department is required to notify the Legislative Budget Board of the rescission notice within ten days of its receipt, and Mr. Saenz did so on April 21 of 2009.
Additionally, we also have to notify the LBB of our planned response to the rescission no less than ten days prior to responding to the Federal Highway Administration, and therefore, we issued a letter to the LBB on April 29, 2009 -- which was yesterday -- describing the content of staff's recommendation that we're going to lay out for you this morning.
For this rescission, Congress decided that certain categories of funding would be preserved or protected from the rescission. These included safety funding, rail grade crossing funding, enhancements and sub-allocated STP funds to the MPOs of the state. But the rest of the programs were made available to the state to use at our discretion in determining how to move forward with the rescission.
The information that's shown on the screen here is an application of the total rescissions that the State of Texas has been subject to over the past several years and I just wanted to show you a summary of that. The rescission in play today is the one highlighted there in orange. I don't know that this information is your packet but the rescission we're facing for the State of Texas is $272,403,085.
I wanted to also highlight for you that there is an anticipated future rescission that is expected later this year of approximately $720 million yet to come, so this will not be the last time we probably address this issue before the commission in calendar year 2009.
In response to previous rescissions, at the behest of Senator Watson, the department created a work group of representatives made up of Texas's metropolitan planning organization representatives. We refer to that group as the Stakeholder Committee on Rescissions, and they are to provide the department with input on how to respond to rescissions when they come about. This group met several times over the past year to be briefed on information regarding rescissions, how they work, the funding categories that are available to us, what our obligation balances were, and to get insight on how to help us move forward with rescissions once one was provided to us.
In anticipation of this particular rescission at this time, Deputy Director Steve Simmons asked me to convene the Stakeholder Committee on Rescissions. We held a meeting on March 31 of 2009 to discuss the anticipated rescission, and then held a followup meeting through a conference call once the rescission notice was made available to us to finalize a recommendation. We distributed what we believed was in compliance with the consensus reached by that group to them for their comments and they agreed that it was an appropriate recommendation to make with you.
This particular plate shows you the contents of the rescission. It is the information that's contained as an attachment to your minute order. If you will notice, the majority of the money is taken from the last two funding appropriations shown on this particular plate. The top ones, quite frankly, are cleanups of existing obligations that are no longer available for us to move forward with projects on, and so there is no harm, if you will, to the state in rescinding these unobligated balances. Unfortunately, they are very few in terms of dollar amounts, they add up to very few dollars. The last two are a rescission of approximately $150 million from the interstate maintenance funds, appropriations made available to the State of Texas, and the second is $113.5 million from the national Highway System appropriations for the State of Texas.
This is the recommendation provided by the Stakeholder Committee on Rescissions, staff agrees with this recommendation, and therefore, would recommend the commission's consideration and approval of the minute order before you today. And I will now try to answer any questions that you might have about this issue.
MS. DELISI: Any questions?
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: It's a minute order.
MR. BARTON: It is a minute order, and based on your action, we will be submitting it to FHWA as the State's response.
MS. DELISI: Right. So there's a motion and I heard a second. All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. BARTON: And Madame Chair, I don't know if you would like, but I believe that perhaps one or more members of the Stakeholder Committee on Rescissions is here, and I don't know if they would like to make a comment just about their involvement in this process. I know Andrew Cannon from Hidalgo County MPO is here and he has been a very active participant in that. So Andrew, do you have anything you want to share?
MR. CANNON: Good morning. For the record, Andrew Cannon, director of the Hidalgo County MPO.
First of all, I'd just like to say that it's with great gratitude that we thank you for the cooperation of being able to work with John Barton and his staff. Mr. Barton and them have been phenomenal and great partners to us in being able to go through this rescission and try to hold everybody as harmless as possible with this amount of money.
Of course, with the next round, it may not be as easy as this one was, but we certainly appreciate the leadership that Mr. Barton provides to all of us and the continued success that we'll have together with working with him and providing this information to the commission for your approval. It wasn't an easy task but good leadership prevailed and I think we came up with the best idea that we could. I appreciate you approving that today and I certainly know that will put the best foot forward with the next rescission as it comes down the pipe, a little over $700 million. That's going to hurt a little more but we can only do what we can do and we all live to serve, so we'll make the best of it
MS. DELISI: Thank you.
MR. SAENZ: Thank you, John.
Agenda item number 6(a) deals with the American Recovery and Reinvestment Act or the economic stimulus act, and Ed Serna will make a presentation on some funding availability that we have been discussing with other agencies.
MR. SERNA: Good morning, Madame Chair, commissioners, Amadeo. For the record, my name is Ed Serna, I'm the assistant executive director for Support Operations at TxDOT. Normally you hear John Barton talking about ARRA funds and they're transportation related. There are, however, some potential opportunities for TxDOT to take advantage of where we would be able to receive non-transportation related stimulus funding.
Before I get started, one of the things that I want to make sure that you understand is we have not sought any of these additional funds -- they would be in the form of a grant, mostly, through the Department of Energy or EPA -- we haven't sought any of them yet. Those that we are working on, we're working on from the perspective of being included in someone else's grant submission, primarily research organizations at TTI or University of Houston or University of Texas, and I'll talk a little bit about that in a second.
There are basically two types of opportunities, one from the Department of Energy and one from the Environmental Protection Agency. From the Environmental Protection Agency there are four programs: the National Clean Diesel Program, the State Clean Diesel Program, the Emerging Technology Program, and the Clean Diesel Financing Program. Of those four programs, the only two that TxDOT would probably be able to take advantage of would be the State Clean Diesel Program or the Emerging Technology Program.
Department of Energy has two programs: State Clean Cities Program and the Energy Efficiency and Renewable Energy Program. With regard to the latter, originally we had thought that at our rest areas we would be able to get involved with regard to using renewable energy, wind power energy for our rest areas, but we understand that that's no longer available. With regard to the State Clean Cities Program, that's going to be managed by the Comptroller's Office, State Energy Conservation Office. They've asked us or basically told us that they did not expect us to administer or directly apply for any of the Clean Cities Program grants, however, they are asking for our input concerning how cities and counties can take advantage of that grant with regard to signal timing, LED lights, metering ramps and access to arterial transportation routes, so we are working with them on that.
In addition, the Railroad Commission is working with SECO, the State Energy Conservation Office, to submit an aggregate grant that TxDOT may be included in with regard to acquiring light duty hybrid vehicles or acquiring after-market LPG conversion for our existing fleet. And again, we would be a sub-recipient under the Railroad Commission for that grant. We really haven't moved forward with any of that.
The EPA grant that I talked about earlier, there are two of interest to us, and as we gain more information, we'll certainly pursue those. The two in particular are the Clean Cities Program and in that case we may able to take advantage of receiving grant funding there to replace the locomotive style engines that we use in the Galveston ferries for more efficient, cleaner fuel-burning engines. The one issue that we have there potentially is the EPA would only fund 75 percent of the effort, leaving 25 percent for the department to fund. We'll evaluate the impact on our budget and our ability to do that. Our initial estimates are that the cost to us would be somewhere in the neighborhood of $600- to $700,000 to replace those locomotive style engines that are in the ferries right now with more efficient engines.
The other opportunity that we have is to purchase hybrid medium duty vehicles, primarily our bucket trucks that we use for sign and light work. In that case we'll consider again how much TxDOT would have to invest in the grant and whether there would be a benefit and whether we could, in fact, sustain that in our budget.
Primarily what we have been doing and we historically do anyway, aside from Recovery Act money, is partner with research entities at TTI, University of Texas, University of Houston, for example, with regard to emerging technologies. In that case, what we normally do is our contribution is primarily the use of our fleet, both on-road and off-road. The research entities, what they get out of it is, of course, the research and the opportunity to further advance their knowledge and in general move those technologies from research into production. The advantage that we get out of it is we get to actually to see if that's something we want to do in the future, and if it is something that works for us, then we pursue it. Plus, during the research period most of the time we'll continue to have that equipment installed on our vehicles and continue to use it afterward at no cost to us or at normal maintenance cost to us.
There's not as much money from a dollar perspective, naturally, as there is with regard to the transportation dollars. In this case we're talking about tens of millions or hundreds of millions as a whole nationwide that we would have access to directly or indirectly, but again, we're just at the preliminary stages. The intent of this agenda item was to brief you on what's available and to let you know that TxDOT staff will continue to research those opportunities.
But the commitment that I've made to Amadeo and the instruction that he's given to me is: one, we're not going to advance any type of a grant unless, in fact, there's no residual cost to TxDOT down the road -- in other words, yes, we got a grant for half a million dollars to do something, and the next thing you know, it's costing us several hundred million dollars over the course of ten years or tens of millions of dollars over the course of ten years, so we're not going to do that; and second, we're not going to do anything that really doesn't benefit our operations, so for example, when we look at the medium duty bucket trucks, if there's not an advantage to us with regard to their performance or their usability, then we won't pursue the grant, so we're doing that evaluation.
I'll answer any questions that you might have about this effort. I don't have any specifics on the amounts of money that are involved. Since these are all grants and TxDOT would have to apply either directly or indirectly for them, I don't know how much we would get if we got anything, but we would certainly evaluate that.
MR. SAENZ: Commissioners, there's a lot of programs under this economic stimulus package. Just this morning we received an e-mail from AASHTO about another Department of Energy program where they're just developing guidelines where we could submit or request money for going out there and improving the carbon footprint, improving travel time. We just got the information this morning, I passed it on to staff, we'll be working with the MPOs, especially in the non-attainment areas, because this could be a way that they could supplement their congestion management and their air quality management programs. So something new comes in every day on this economic stimulus program.
Thank you, Ed.
MR. SERNA: Thank you.
MR. SAENZ: Agenda item 6(b) is a minute order where John will present some changes to some of the work that we've approved under the economic stimulus program for highways. John.
MR. BARTON: Thank you, Mr. Saenz. Again for the record, my name is John Barton, assistant executive director for Engineering Operations, and after having to talk to you about two unpleasant issues today, it's a pleasure, quite frankly, for me to be able to talk to you about something that is of a much more enjoyable nature.
I would like to discuss three items with you today and receive feedback from you, if I might, on how you would like us to proceed on a couple of these matters. First, I would like to update you on the current status of our efforts to implement the Recovery Act as it relates to transportation infrastructure here in Texas. Following that, I would like to share with you a project selection methodology that we have developed in response to guidance received from you during your last meeting to select substitute projects should we have the unpleasant experience of one of the preferred projects you've already selected reaching trouble and not being able to proceed forward. And then lastly, I would like to present a minute order that contains some technical amendments we need to make to the previously selected list of projects that you approved for us to fund under the Recovery Act.
As you will recall, the Texas Transportation Commission, this group, previously approved highway and bridge preservation projects valued at approximately $500 million in February of this year, and an approximately $1.2 billion worth of stimulus funding for mobility projects in March, as well as $73 million for enhancement projects, and over the past month TxDOT staff, as well as our transportation partners, have been working diligently to implement these projects for you.
I would be remiss if I did not mention that we do continue, as Mr. Saenz pointed out just a moment ago, to receive additional implementation guidance and clarification on issues from the Federal Highway Administration and US DOT on almost a daily basis, and I would like to express our continued appreciation to our federal partners here in Texas for being extremely cooperative in working with us as we implement this program and assisting us a great deal in maintaining our project delivery schedules.
I also must applaud the excellent work of our districts and our division staffs in developing these projects and getting them ready to go to contract. They have taken the responsibility that we placed on them very seriously, and in my opinion, are doing an outstanding job of delivering these projects to help Texans get back to work.
In order to monitor our progress on implementation of these projects, our district staffs are updating our database -- we refer to it as Project Tracker -- on a weekly basis, and then we pull information from that database into a roll-up report, if you will, that I, along with other key staff members use to meet with FHWA on a weekly basis to monitor the progress of these projects, to marshal additional resources if need be, to make sure that we're performing well, to get bottlenecks and rocks in the roads out of the way, so to speak, and resolve any issues that we have on these projects.
Because of the success of those efforts, last week on April 21 and 22, we took bids on our first stimulus-funded projects here in Texas. There were 129 contracts up for bids that were obligated for approximately $401 million. These projects, we estimate, will create about 2,655 job opportunities here in Texas, so that's great news that I think we should all be very proud of. This was a special letting that we had there in the month of April to allow these Recovery Act funded projects to move forward quickly, and April is going to be the only month that we anticipate having to have this special or second letting. All of our other Recovery Act funded projects should be included during our normal lettings over the next several months.
We currently have approximately $135 million of additional Recovery Act funded projects scheduled for bids in May, and a similar or larger amount of bids will be taken each month throughout this summer for Recovery Act funded projects as we continue the Recovery Act here in Texas.
Just as a brief reminder, the Recovery Act requires that we obligate 50 percent of the funding that was available at your discretion prior to June 30, and we refer to that as the 120-day requirement that is a use-it or lose-it clause. Thus far, we have obligated about $534 million worth of Recovery Act funded projects here in Texas and approximately $374 million of that counts towards that 120-day requirement. The total 120-day requirement is $787.5 million, so if you do the math, we're about 47 percent of the way home which is good news this early in the game.
We still need to obligate about an additional $413 million before June 30 of this year, and our current implementation schedule indicates that we should able to obligate about $1 billion of the funding that you had available at your discretion within that 120-day period. This obviously gives us some cushion above the $787.5 million requirement, and so we have some small amount of insurance to make sure we do meet that requirement without any problems. The remainder of the projects funded under the Recovery Act would have to be obligated by March 3 of 2010.
A couple of items that are still unknown to us, as Mr. Saenz pointed out, there was a call for ferryboat applications. We have prepared two, one for Port Aransas ferry system, the other for the Galveston-Bolivar ferry system, and we are currently reviewing that with our federal partners and the Governor's Office before we submit those. Those are due to be submitted prior to May 15 of this year.
All of the required certifications that are a part of the Act have been submitted and are currently posted on the website, so we're fully compliant with the certification process due to the efforts of our staff and Governor Perry. We are currently amending our maintenance of effort certification. There was a little technical glitch that almost every state was I guess prone to, and so we've been asked to review and amend that and we are currently doing that.
In addition to these ongoing efforts to deliver the Recovery Act funded projects, our staff has met with the Government Accountability Office who has been asked by the US DOT and President Obama to monitor and audit all activities associated with the Recovery Act program. We met with them and are currently working through their auditing process to make sure all information they need is made available to them to ensure they have what they need. And so far, their process reviews of our practices and process indicate that we're doing a good job in developing and implementing the program.
We have also invited our inspector general, who will be looking at this program for us here in Texas, to speak to all of our district engineers and division staff at our quarterly meeting this month, and he briefed us on the things that they would be doing and the fraud prevention and awareness things that we should be doing in order to make sure that we can implement this program in a pristine and honorable manner.
Also, Director Saenz asked us to hold a workshop with our contracting partners -- and we did that earlier this month -- to discuss the reporting requirements that would be associated with these projects, as well as our on-the-job training program, and then to discuss fraud awareness and prevention to ensure that we're all on the same page as we implement this program. We are going to be having webinars for all other contractors as well as our own employees on the reporting requirements. Quite frankly, that's a huge part of this program to make sure that we adequately and accurately report the number of people that are put to work and how that money is flowing out into the communities it is intended to serve.
In order to maximize the opportunity for our small and minority and women owned businesses, we have also implemented a statewide program through our Business Opportunity Program office and the leadership that to hold special workshops with our DBE, or disadvantaged business enterprises and historically underutilized businesses around the state to give them information that would allow them to maximize their opportunity to participate in these projects.
And of special note, I think it was very important that I point out to you that Director Saenz felt so strongly that we should take advantage of this unique and once in a lifetime opportunity to not only create jobs here in Texas but to equip those who work on these projects with the ability to be better prepared to compete for future transportation construction related project jobs that he directed us to implement an on-the-job training program as part of our Recovery Act funded projects. This isn't required by the Recovery Act itself. It's not a federal requirement; it's simply a measure that we're taking here in Texas to ensure that our employees that work on these projects are well trained and well prepared for the future. And I'm very, very proud of this initiative and I think that Director Saenz deserves a lot of recognition and should be commended for his leadership in having us implement this program.
And finally on this issue, I'd like to just share with you that in order to disseminate this information to the public and our stakeholders, we have created a special web page on the Recovery Act and our activities associated with it on our internet site. This particular web page contains much of the information that we have shared with you in the past and that others have shared with you about this, as well as all the certifications and implementation guidelines that we have received that not only we but our staff and contractor personnel, as well as the public and our elected officials can turn to in order to see what we're doing, how we're supposed to be doing it, and the progress that we're making.
So at this time I'd kind of like to pause and see if you have any questions about where we stand in the implementation of the Recovery Act before I talk about this project substitution process, and if not, then I can move forward.
MR. HOUGHTON: The ferries, are these two new ferries, additional or replacement?
MR. BARTON: They would be additional.
MR. HOUGHTON: Do we have naming rights for those ferries?
MR. BARTON: Someone does, and they're typically named after former executive directors and commissioners, so you may want to think about that.
MR. HOUGHTON: Really. That's your area, Ned.
MR. HOLMES: The Ted Houghton Ferry.
MR. HOUGHTON: No.
MR. BARTON: I think there was a Road Fairy associated with something.
(General laughter.)
MR. HOLMES: I think many of us saw media reports of the damage that was done on Bolivar where there was basically one house left on the entire Bolivar island. What's happened to the traffic on the ferry over to Bolivar? It might have increased if they have a lot of construction work, but I don't think they actually have much over there. Do you know what's happened on that?
MR. BARTON: We originally monitored it, and of course, shortly after Hurricane Ike it fell off dramatically because, as you pointed out, much of Bolivar Peninsula was damaged so severely that residents of Bolivar Peninsula could not live there any longer. Our experience right now is that the ferry system has picked up on traffic. Much of it may be people from southeast Texas traveling over to the medical center in Galveston and vice versa. We do experience a lot of traffic of those property owners and construction workers going back and forth during the day, early in the morning and then late at night to work on their homes because many of them do have full intentions of coming back, and the General Land Office has kind of given an indication of where they're going to draw the line in the sand -- no pun intended -- on where it's now state property versus private property. So we have seen an increase in traffic.
Under the leadership of Mr. Casteel and our district engineer, Delvin Dennis, Bryan Wood, our district engineer from Bryan District put together a work group to look at that ferry operation, what its long term load and demand would be so that we can take advantage of this opportunity when traffic was a little lower and the system was damaged to fully develop a plan for how to build it out and be ready for when traffic returns to normal levels. But we have seen a significant increase in traffic. In fact, I got a complaint from a gentleman that's in my Sunday School class last weekend about having to sit in line for 2-1/2 hours.
Perhaps it would be best if I moved on before we have any more comments about naming ferries that would embarrass me.
Last month I did share with the commission a proposed methodology for selecting substitute projects for our mobility projects that you previously selected if, in the unlikely event, something happens and one of those is not able to move forward. So I'd like to just briefly share with you how we have responded to the comments and input we received from you last month, and based on that direction, we are proposing a revised methodology that I'll just try to walk through quickly and briefly to, again, replace one of those projects that you've already selected that, should the unexpected event occur, would not be able to move forward, how we would go about choosing a project to replace it.
First, we would look at projects within that district from which the project was not going to be able to move forward and try to identify a project of similar size dollar amount that's, first, within an economically distressed area, if there are any, and then outside of economically distressed areas to replace that project in equal dollar amount and within the time frame that it needs to move forward. As I mentioned, there are two milestones, this June 30 date and then the March 3, 2010 date.
If we are not able to find a project or projects of similar magnitude within the district, then we would look within that same region, again looking at economically distressed areas first and then in non-economically distressed areas to find projects, again, of equal dollar amounts and within the time frames needed to match the project that is being replaced.
And then finally, if we haven't been able to do that successfully by first looking in the district and then within the region, we would look statewide to ensure that we fully utilized every dollar available to us under the Recovery Act and met the milestone requirements for those obligation dates.
If we found more than sufficient enough projects either at any of those levels and had to then try to determine which ones of those were the best, we would, of course, place precedence on those within the district first, then within the region and then, of course, statewide. But we'd look at safety issues, the value that the project brings in terms of safety, congestion relief, whether it's a project on a roadway that's considered of statewide or regional significance, and then what kind of economic opportunity that that project would create for the long haul or into the future for the communities they serve.
I think this approach seems to be quite simple, it does provide what I believe is a sound methodology of identifying potential replacement projects, and it would not be something that could be considered biased or under undue influence.
So with that, I'd just like to pause and see if in response to the information I shared last month and the direction that you gave us, if this is the kind of tool that you believe would be appropriate for us to be using, and if so, then we can kind of formalize that as we move forward into the future. Again, hopefully never to be used, but it's always best to be prepared in case of an event where a project is not able to move forward.
MR. HOLMES: John, just so that I understand, assuming you had a project fall out, you would go back to the district, and to what weight would you give a project in an economically depressed area that had no positive impact on safety, air quality or congestion versus a project within the same district that was not in an economically disadvantaged area that had a positive impact on congestion reduction, improvement of air quality, improvement of safety?
MR. BARTON: I think to answer the question most specifically is for the most part I don't think projects that don't address congestion issues, improve air quality and provide for economic development would be on the list of projects we would be selecting from, although we don't have a list of substitute projects to select from today, I would anticipate that that list would be developed based on input from the MPOs, our districts and our elected officials for their highest priority projects, so whether they're in an economically distressed or not, they would be projects, because of their nature to be mobility projects, ones that would reduce congestion, improve air quality, bring economic opportunities.
But I think what we would do in this process is we would look at those and if there are projects that are of significant value in economically distressed areas, that would be the tilting favor because they are in an economically distressed area over an equal valued project in a non-economically distressed area.
MR. HOLMES: Well, the way you'd expressed it was that you put that as the first criteria that you listed and then if it met that, then it was over, and if it didn't meet that, then you went on. And so my sense about that is we need to be careful, everything on the list needs to have some positive impact on air quality and safety and congestion, economic opportunity, et cetera.
MR. BARTON: And in the absence of the list, it would be impossible for me to say that that's exactly what would happen, but what I envision is the process that we will go through in the next several months to come up with a list of substitute projects would ensure all those projects are the types that do things that we just mentioned. I don't imagine that any MPO, district, region or elected official would want us to have a project for mobility purposes that doesn't reduce congestion, doesn't improve air quality or provide for long term economic benefits. So I think we're going to have some high value projects.
MR. HOLMES: Probably some of us too.
MR. BARTON: I think so.
MR. UNDERWOOD: What you're really saying is you're really looking at guidance from the MPOs. Isn't that correct?
MR. BARTON: At the time we move forward with the development of a substitute list of projects, we would be looking toward the MPOs, our district staff, the commission, elected officials so that we, again, as we did in the selection of the preferred projects, have that complete vetting of the projects by the public, the transportation professionals that are hired to serve them, and by our professional transportation engineers and by the elected officials and appointed bodies.
Any other questions on that before I move on to the minute order? And it appears that with the conditions of the questions that were asked that this might be a tool that you're comfortable with, and so we'll move forward with the development of a structure on that, if it's all right with the commission.
The final issue that I wanted to bring before you is an action item; it would require your consideration of a minute order. As I mentioned already, in March of 2009, Minute Order 111734 was approved by the commission that developed and implemented the projects that we are funding under the Recovery Act. The department has continued to monitor the progress, as I've mentioned, of these projects to ensure that they're in full compliance with the Act itself, as all the federal and state government requirements and rules associated with them.
As a result of our analysis of these projects and our efforts to implement them, it's important that we bring before you today an action to revise some of the information associated with the list of mobility projects as well as the preservation projects, and these revisions are shown and set forth as an attachment to this minute order through Exhibits A and B. These are technical corrections to a number of the projects that are associated with project numbers, project limits and descriptions to make sure that they're fully compliant with the environmental documentation that these projects had in place, as well as state and federal regulations.
Just real briefly some points that I wanted to make sure I highlighted for you. The funds that were previously identified for two of the mobility projects in the Houston District have been modified to allow us to maximize our assurance to meet this 120-day requirement that I talked about earlier. The funds for the Interstate 10 project have been increased from the $11 million that the commission placed on that to $27 million, and then in return, the funding that the commission placed on the State Highway 99 projects has been decreased from $181 million to $165 million. There was a $17 million change between those two projects.
The Houston-Galveston Area Council of Government chose to put $17 million of their stimulus money on the Interstate 10 project originally. By moving their money to the State Highway 99 project and putting more commission money on the I-10 project, we are able to commit $27 million instead of $11 million within that first 120 days. So it's not a funding change; it doesn't increase or decrease the amount of money going to Houston from the Recovery Act. It's simply a matter of using that money most efficiently to meet the 120-day requirement.
Similarly, the two projects the commission chose to fund through their discretion funding for the mobility projects in the Lubbock District are being recommended to modify the funding for them as well. I won't go through the details but it's similar to the Houston project; we would be moving some of the local MPOs money from one project to the other and replacing it with an equal amount of the stimulus money from the second project back to the first so that we can move forward with obligating more of your money within the first 120 days to maximize our opportunity to meet that 120-day requirement.
The third point I wanted to point out was that the department had planned and you had decided to put $500,000, a relatively small amount compared to the total package, on a project in the Texarkana area. It was the project that was being developed by the Arkansas portion of Texarkana; they had several million dollars committed to that, and unfortunately, at the end of the day they chose not to move forward with that project under the Recovery Act. So there's, therefore, no need or value for us having Recovery Act funding on that particular project, so we are recommending deleting that project from this list of projects.
And then the last revision that I wanted to point out to you is that on the preservation side of the program we had, again, some technical revisions to make but several things that I needed to point out to you, quite honestly. One is that there was a project on FM 1681 that was in the San Antonio District, the tail-end of the project actually spills over into the Yoakum District. We did not have that identified on the original list and we need to add it in order to complete that project to a logical termination point.
One of the projects in the Beaumont District is being added. This is something of importance and value, I think, although it's a relatively small amount of money, just over $300,000. It's on Forest Highway 335, it doesn't come from the $2.25 billion given to Texas; it's an additional value or added money to Texas for the Forest Highway Program that was a decision made by the Federal Lands Bureau, so they've funded that project and it needs to be added to this list so we can move forward with it.
There are also two projects in the Pharr District. Mr. Saenz was applauded by his colleagues from the Valley for his work that he did there. He also worked on two projects -- and I guess his mentoree, Mr. Jorge, worked on these projects, and unfortunately, they cleared them as state environmental document projects so they're not eligible for federal funds. We didn't know that at the time that we brought them to you and you funded them through the Recovery Act, they're not eligible for Recovery Act funds, so we need to delete those two projects, and the Pharr District has asked to add three projects to replace them of equal dollar amounts, and so those changes are shown on this.
And then lastly, there are 22 other projects that were on the original list that will be funded from normal Fund 6 funds, we had included that as a note on the previous minute order, but for transparency's sake, we felt like it would probably be best to remove them, so we're removing those. They were never really intended to be funded under the Recovery Act and so we'd like to remove those as a technical correction.
So those are the projects that we are specifically wanting to note in these minute orders. For your information, there's an Exhibit C and D as an attachment to the minute order that show those projects that are actually being suggested to be removed because they do not appear in Exhibits A and B.
So with the revisions that I've laid out there for you, I believe that it's appropriate for you to consider this minute order, I do recommend your approval, and with that, I will stop and see if you have any questions I may answer for you.
MS. DELISI: Any questions?
MR. HOLMES: John, on the Houston and Lubbock money that you're moving around in order to meet the 120-day obligation requirement, do you actually have commitments from the respective MPOs?
MR. BARTON: Yes, sir. Both MPOs -- and thank you for that question -- have implemented what are referred to as administrative amendments to their local plans to show this funding change, and that's already been done.
MR. HOLMES: So our action today would complete it.
MR. BARTON: It would finalize it and we can get the obligation from the Federal Highway Administration at that point.
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. BARTON: Thank you.
MR. SAENZ: Thank you, John. And commissioners, I guess a lot of people have been working on this economic stimulus program but the champion of the program is the person that was up before you a few minutes ago. John has been doing a tremendous job and I don't think we have anyone else that could have probably carried this program to where we're at today, without all the effort. So thank you, John.
Agenda item 6(c) also deals with economic stimulus, and Eric Gleason will present an award of some of the Federal Transit monies.
MR. GLEASON: Thank you, Amadeo. Good afternoon. For the record, my name is Eric Gleason, TxDOT director of Public Transportation.
Agenda item 6(c) awards approximately $7,588,000 of Federal Section 5311(f) Program funds made available under the American Recovery and Reinvestment Act of 2009 to enhance and improve intercity bus service in Texas. Section 5311 Program regulations require the department to set aside 15 percent of the approximately $50.5 million it received in Recovery Act funding for these purposes. The amount recommended for award today satisfies that requirement.
Exhibit A includes projects to enhance and upgrade intercity bus facilities in 15 locations around the state and allows two carriers to purchase additional rolling stock. These projects were the result of a call for projects by the department on March 11, 2009. They are consistent with the objectives of the American Recovery and Reinvestment Act. Intercity bus services provide critical links in our rural mobility network, providing rural residents of this state with access to urban area destinations throughout Texas and the nation.
We have worked closely with the industry on these proposals and recommend approval of this minute order.
MS. DELISI: Any questions for Eric?
(No response.)
MS. DELISI: I'd like to call up Randy Isaacs, please.
MR. ISAACS: Thank you, Madame Chairwoman, commissioners. My name is Randy Isaacs, I have the pleasure of being here today representing, as president, the Texas Bus Association, and secondarily the state government affairs manager for Greyhound's nationwide state government affairs function, a proud Texas-based company.
I had the pleasure last month of attending a White House ceremony in Miami, Florida -- I bring that up, obviously Texas trumps Miami -- but it was one of the first announcements of stimulus projects in the nation and it was for a Greyhound terminal at Miami Intermodal Center adjacent to the Miami International Airport. The industry in Texas is working very closely with the Texas Public Transportation Division of TxDOT, all other state DOTs nationwide.
We're pleased to be here, we're in support of the minute order that you have before you, and we look forward to putting some more Texans back to work with these projects.
Thank you very much.
MS. DELISI: Thank you, Mr. Isaacs.
All right, can I get that motion?
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. GLEASON: Thank you.
MS. DELISI: Thank you, Eric.
MR. SAENZ: Thank you, Eric.
Agenda item number 7 is deferred at this time. Agenda item number 8 deals with our adoption of rules. Mark Marek will present agenda item 8(a) for final adoption dealing with Environmental Policy.
MR. MAREK: Thank you, Mr. Saenz. For the record, my name is Mark Marek, I'm the director of the Design Division for TxDOT.
This minute order proposes for final adoption amendments to Section 2.1 concerning procedures for environmental review and public involvement requirements for transportation projects and proposed repeal of 11.56 and new 11.56 relating to connections with regionally significant highways.
Transportation Code Chapter 203 provides that the Texas Transportation Commission may lay out, construct, maintain and operate a modern state highway system. Transportation Code 201.604 requires the commission by rule to provide for the review of department transportation projects that are not subject to review under the National Environmental Policy Act.
Senate Bill 792 of the 80th Texas Legislature granted local authorities the first option of building projects within their jurisdictions and provided these authorities with the powers to construct and complete these projects in a manner consistent with the practices and procedures by which the local authority finances, constructs and operates their projects. Senate Bill 792 also authorizes the department to assist those authorities in the completion of projects by providing the use of right of way owned by the department and access to the state highway system without requiring payment for these resources.
The amendments to 2.1 allow the local governments to follow their own environmental review for those projects; however, the amendments to 2.1 provide that the department must ensure that the entity responsible for the project complies with all state and federal environmental review and public involvement laws applicable to the entity.
Current 11.56 -- which this minute order proposes to repeal -- assigns broad environmental review and approval authority to the department. This rule change places the focus of the environmental requirement on the project's connection point to the state highway system. New 11.56 provides a uniform means by which public and private entities may obtain to connect facilities to the state highway system. This new rule will ensure that: one, proper statewide planning is employed in the construction of major highway facilities that connect to the state highway system; two, that the facilities are properly designed and constructed in compliance with federal laws; and three, that the environmental impacts are appropriately considered.
The requirement of compliance and the new rule ensures public involvement in the process and that the social environmental and economic impacts of the connection are considered. Focusing the environmental review and public involvement on the connection portion of the project addresses the State's requirements concerning consideration of environmental and safety and mobility concerns. The requester is still required to perform and document all environmental studies, environmental compliance and public involvement activities.
No comments were received on these proposed rules changes. Staff recommends approval of this minute order.
MS. DELISI: Any questions?
MR. HOUGHTON: So moved.
MR. MEADOWS: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you, Mark.
Agenda item 8(b), Thomas Bohuslav will present some proposed rules dealing with Contract Management.
MR. BOHUSLAV: Good afternoon, commissioners. My name is Thomas Bohuslav, director of the Construction Division.
Item 8(b) is for the amendments to Section 9.114, Opportunity for Formal Hearing on the Contract Sanction Rules. This rule corrects an inadvertent omission by adding that Level 1 sanctions may be appealed through the administrative hearing or to SOAH. A Level 1 sanction is for a 50 percent reduction in bidding capacity.
Staff recommends approval.
MS. DELISI: Any questions?
MR. HOUGHTON: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you, Thomas.
Agenda item number 9, commissioners, Jim Randall will present a minute order requesting approval of appointment of a member to the Grand Parkway Association Board.
MR. RANDALL: Good afternoon, commissioners. Jim Randall of the Planning and Programming Division.
Item 9, this minute order appoints a member to the Grand Parkway Association's Board of Directors. Section 15.85 of the Texas Administrative Code states in part that the commission review an individual's application, financial statement and letters of reference and may appoint members of the corporation's board of directors.
William F. Burge III of Houston was originally appointed by the commission on December 18, 1997, and was reappointed on April 24, 2003. Mr. Burge has been nominated for a third six-year term to the board. He has submitted the required information to the department. Based on the review and consideration of the information as documented and filed with the commission, and based upon the board's recommendation, it appears the nominee is fully eligible and qualified to serve as a member of the board.
We recommend your approval of Mr. Burge to the Grand Parkway Association Board of Directors with a term expiring on April 30, 2015.
MS. DELISI: Is there a motion?
MR. HOUGHTON: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. RANDALL: Thank you.
MR. SAENZ: Thank you.
Commission, agenda item number 10 deals with Toll Projects. Agenda item 10(a), Mark Tomlinson will present a minute order that will establish toll rates on Segment I-2 of the Grand Parkway, State Highway 99.
MR. TOMLINSON: Good afternoon, Mr. Saenz, commissioners. My name is Mark Tomlinson, director of the Texas Turnpike Authority Division of TxDOT.
Item 10(a) establishes toll rates for the State Highway 99 Grand Parkway Segment I-2 toll project from Interstate 10 to Fisher Road in Chambers County. This roadway is a four-lane, divided, controlled access toll road extending 6.6 miles and having a $48 million construction cost. It was designated by the commission as a toll road in December of 2007. It's an electronic open toll facility, it will accept toll tag only, no cash, no pay by mail. The request comes now to allow HCTRA to program and design their toll equipment which we anticipate taking about six weeks.
We would recommend your approval of the minute order.
MS. DELISI: Is there a motion?
MR. HOUGHTON: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Mark will continue presenting 10(b) dealing with the approval of the designation of the LBJ project as a toll project.
MR. TOMLINSON: As you'll recall, you conditionally awarded the LBJ comprehensive development agreement in February. Item 10(b) authorizes the designation of the toll managed lane portion of Interstate 635 from east of Luna Road to Greenville Avenue, and on Interstate 35E from Loop 12 to Valwood as a toll project on the state highway system.
We received environmental approval for this facility to be a toll project in June of 2008; we now need to come to you to seek toll designation which, of course, applies on I-635 to the three managed lanes in each direction, and on the Interstate 35E, the two elevated managed lanes and direct connectors.
Just for your information, the next steps in this process are to hold a public hearing, and we anticipate that happening May 7 and we anticipate commercial close of the CDA on May 28 of 2009. So we request your favorable approval of the minute order.
MR. HOUGHTON: So moved.
MS. DELISI: Is there a second?
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. TOMLINSON: Thank you.
MR. SAENZ: Thank you, Mark.
Agenda item 10(c), Brian Ragland will come and present a minute order for your consideration dealing with preliminary approval of a request for financing for the Central Texas Regional Mobility Authority.
MR. RAGLAND: Thank you. For the record, my name is Brian Ragland, director of the Finance Division.
The CTRMA submitted a request for financial assistance for up to $281 million for certain costs related to construction of US 290 East toll project from US 183 to FM 734. This proposed minute order grants preliminary approval of $90 million related to the direct connectors only, and this is the portion of the request that is funded with federal economic stimulus dollars.
The remaining $191 million is still under consideration, and I would also point out that they have submitted a SIB request in the amount of $50 million, of which a portion is related to this project.
So staff recommends your preliminary approval of the $90 million funded with stimulus funds.
MR. HOUGHTON: So moved.
MS. DELISI: Can I get a second?
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. RAGLAND: Thank you.
MR. SAENZ: Thank you, Brian.
Agenda item number 11, commissioners, deals with an update on our Strategic Policy and Performance Measurement Program, and Mary Meyland will make this presentation.
MS. MEYLAND: Good afternoon, Chair Delisi, commission, and Executive Director Saenz. I am Mary Meyland, currently serving as special assistant to the executive director for Strategic Policy and Performance Management.
On behalf of the interim Performance Management staff -- which Tonia is here with me this afternoon -- I present a brief update of the progress made toward the implementation of the TxDOT Performance Management Program.
First of all, to date we have focused our efforts in four areas: first, we identified the existing performance reporting activities that this agency is currently engaged in; secondly, we have provided an evaluation of the DOT performance management programs that are already in practice throughout the United States; and thirdly, we've provided an evaluation of pending state and federal legislation that may have an impact on our going forward in our performance management and our reporting requirements; and finally, we've kind of identified some phases we'd like to entertain as we move forward to implement our Performance Management Program.
Currently, TxDOT submits quarterly performance reports to the LBB through an automated budgeting process. The LBB performance management report is tied to the budget authorization process only. Ideally, it is hoped that our new Performance Management Program will be tied to the agency strategic goals and will replace the current LBB reporting process. We hope to be able to influence that process in the future.
I'm providing you some examples of the best tools we've got available to us. In March, Tonia Norman and myself and Frank Bushong completed a scan tour of four states known for their accomplishments in performance management. We brought back products and processes from Virginia, Washington, Maryland, Missouri and incorporating those into our project design.
In front of you we've got some examples that were just passed out of the number two bullet on this next slide which is the Maryland Transportation Plan and its attainment report. Maryland has consolidated their long term plan program into their strategic project plan and it is now one document, and this is the blue one in front of you. We want to engage in trying to produce a similar type document, again tied to goals so that we will be able to provide for a five-year goal assessment and performance management process.
Virginia, we were able to engage through them. They were really facing the same similar issues that we have with our concern for trust and they developed the first performance dashboard which is being used across the state in order to develop a monthly performance accountability process.
Missouri, instead of goals they're using tangible results, and are using agency values to make their decisions. The Washington DOT external website -- which you may have heard some comments about -- has been used as examples across the street, used as performance journalism rather than just a statement of measures to tell their story.
And so we are hoping to integrate these four different items from these different states to come up with something that will be even better as a Performance Management Program.
We have been paying attention to what has been happening across the street regarding performance management, and it's been getting a lot of press lately. We realize there are some recurrent themes in both the House bills and the Senate bills. One is the consolidation and simplification of our strategic plan and the Texas transportation plan which would be symbolic of that plan that you're seeing from Maryland. The second is a collaboration and agreement of all planning entities that we all work together and come up with similar goals and we strive toward those goals. And the third, development of a project plan that would have a ten- or eleven-year horizon, and that needs to be tied to performance measures and it needs to be updated annually and constrained fiscally.
Recognizing the comprehensive and collaborative requirements of the best performance management programs, we suggest a phased implementation process. First, we would like to utilize the ongoing and recently approved organizational assessment contract which we hope to engage in June to bring our stakeholders and our public that are interested in our development into the process of developing our goals and encouraging them to come up with ways to measure our progress towards those goals. These will be basically become what we're defining as the strategic direction statements.
You've seen this graph before that has been used in previous presentations under the Phase 1 reorganization called Regionalization that you approved last month and the month before. We believe this circular graphic depicts the most reasonable relationship between the ongoing organizational restructuring project, Phase 1 and Phase 2, and the importance of the Performance Management Program. The agency's organization should be formulated to address the expectations of the agency as defined by our performance objectives and reported through our management measurement.
The statements that we need to be focused on, again, the big picture is the mission, the vision, the values, goals, and what do we do and how much do we use to get it done. The most important thing here is being able to tie our measurable goals to the assets that we have, the resources that are available to us, and then report back to how well we've used those resources.
Phase 2 from Phase 1 will basically use strategic cross-functional teams that are selected to help develop our performance measures and integrate specific goals to those performance measures. We believe this would be members from both our internal staff and external stakeholders to help us develop these. We've seen the examples from other states where they've used outside entities, particularly stakeholders, to help them drive these performance measures, and therefore, they take responsibility and ownership of them as well.
This would be the beginning of a goal-focused and performance-accountable strategic performance plan which we really haven't had to this date. We've had some large goals and some large measures.
Just to help you focus, this is what we're trying to drive for is what is a measurable goal. Giving you an example here of a management goal of congestion, this is just a draft, and the most important thing you have a focus area and then a target, and that target would be one that you would have to pay attention to from administration and an executive leadership position, and that is how much we're going to utilize to develop and accomplish that focus area which would be to expand the system by 1 percent during the next five years and that would mean and imply that you would have a resource committed to that.
This is a pyramid for planning. It provides a graphic illustration of the interrelationship of policy level, long range planning to a system level project plan and ultimate work program. We've heard these same words across the street being used quite regularly that TxDOT needed a work program that was updated annually based on its progress. This is the interrelationship that we see being developed and being formulated and then being used. This is actually adopted from a document we saw in Florida.
A big part of those processes are the project financial plans, so something that we would like to integrate and move toward so that each project that's listed in the 20-year plan would have a responsible level back to preliminary design, final design, environmental processing, right of way acquisition, utility relocation and construction. At this point we really haven't driven hard enough down to the total project cost. I showed this yesterday to our working group at the UTP who is trying to redevelop our Uniform Transportation Plan and there's quite a few members of the MPOs and their executive directors on that committee, and they embraced this thought of a financial plan very well and thought that was the direction that they needed to lean to in the development of their plans as well.
Finally, in Phase 3 we measure performance against goal targets, we report those in a document we're going to be calling TxDOT Tracker, and then we want to publish our annual results in TxDOT Results which we'd go back and check and make sure that we're doing all of our goal assessments and that we're making progress.
Finally, what we've done to date, we mentioned it earlier that we have a Project Tracker that has been online since December of last year and it's been updated consistently to make sure that our terminology is understood and that the public is being serviced well through that medium. The second part of our product is trying to get the additional project information as well as our program information out to the public so that they can watch what our programs are doing and we can become more accountable.
Just very briefly, I give you a little internal beta site of what we have available to you or to limited members of the administration at this point. This will be the TxDOT Tracker, this is done by a Share Point site, it's been developed in-house, and as you look down on the left side, you'll see all the different reports that are available. It is organized currently by our goals as we have adopted them now, and each one of those is hot and there's a project, and if you'll just push the time and budget to see we're working towards a red-yellow-green analogy of our performance based on how well we are tracking our budgets as projects are let to construction and how well we are performing on an annual basis and the completion of our projects.
So some of these efforts have already been some thought put together, we're in the infancy stage of trying to make this understandable to the public, and I appreciate the efforts of Mr. Casteel and his group with the Regionalization effort, trying to put this information together from the district engineers.
Thank you for this time, and we look forward to coming back to you with more results in the future.
MR. SAENZ: Thank you, Mary.
As you can see, commissioners, what we're trying to do is start beginning from our strategic plan and our goals and then come up with measurable standards that then we can report and check our progress.
Moving on to agenda item number 11(b), James Bass will present a report on the implementation of the spirit of Sarbanes-Oxley, and he'll follow up with 11(c) with a minute order on the same topic.
MR. BASS: Good afternoon. I'm James Bass, chief financial officer at TxDOT. And as Mr. Saenz said, 11(b) is a report that was required by an earlier minute order the commission adopted back in January on the implementation of the Sarbanes-Oxley Act, or at least the spirit thereof. The minute order in 11(c), the next item, will actually make a technical correction to that earlier one. But as you will recall, the commission has ordered the department to implement the spirit of the Sarbanes-Oxley Act or SOX, by developing and implementing policies and procedures to ensure the continued integrity of financial reports and ethical behavior of financial personnel.
The applicable sections of SOX to be implemented by the department include: providing certifications by the executive director and chief financial officer for key financial reports, assessing the effectiveness of and maintaining an adequate system of internal controls, and developing and adhering to a code of ethics for senior financial personnel.
To give you an update on those three items, the first one, providing certifications by the executive director and CFO, a certification form has been developed and has been implemented for use with key financial reports. There's actually a sample of that certification basically saying that the attached reports have no material misrepresentations, there is an effective system of internal controls established to ensure the accuracy of the financial information in the report, and that the report in all material respects fairly and accurately represents the information it's conveying from a financial position.
The second item is to develop and implement policies and procedures for establishing and maintaining an adequate system of internal controls. On that item, the Finance Division has drafted a request for proposals for a consultant to come in and review the current internal control structure and make recommendations on that. We're hoping to have that out in the near future but that request for proposals has been drafted.
The third item, develop a code of ethics for senior financial personnel within the department, that has been drafted as well and that's the last page of the material you have before you. I won't read all of the eight items but it is what you would expect, and I will just point out that this code of ethics does not replace that of all department personnel; it merely supplements or adds on top of it for the senior financial officers within the department.
I'd be happy to answer any questions you have on that. Again, this is a status report as required by the earlier minute order back in January.
If no questions, moving on to 11(c), references back that earlier minute order in January. When it listed the different financial reports that would require the certification, it erroneously included the cash forecast report when it should have included the quarterly cash report that is on the agenda later today. What this minute order 11(c) would do is rescind that earlier minute order from January and replace it with a corrected one that appropriately lists the appropriate reports to have that certification. And staff would recommend your approval
MS. DELISI: Do I hear a motion?
MR. HOUGHTON: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. BASS: Thank you.
MR. SAENZ: Thank you, James.
Agenda item number 12, Brian Ragland will come up and present an item dealing with the Texas Mobility Fund Revenue Financing Program.
MR. RAGLAND: Thank you. Again, Brian Ragland, director of the Finance Division.
What this proposed minute order does is make changes to the Mobility Fund Revenue Financing Program in primarily two different ways. First of all, the finance plan for the Series 2005-B bonds did not contemplate or anticipate the possibility of the current condition of the credit markets and the almost complete absence of qualified liquidity providers. So what this does is it allows those bonds to be remarketed into an interest rate mode that will not require a liquidity provider which, in effect, lowers our cost.
The second thing it does is restates the eighth supplemental resolution that you adopted in December, and allows us to include Build America Bonds, or BABs, as authorized in the recent federal economic stimulus plan. And James touched on what BABs were earlier, but basically it allows a muni issuer to sell taxable bonds and then benefit by a direct subsidy from the federal government in the amount of 35 percent of the interest. So the prior finance plan approvals, of course, did not contemplate the BABs program, and these amendments are necessary to allow us to avail that option if we think the math works.
And then there was one change, one very recent change to your minute order in your book which adds options for the methods of sale so that we can attempt to achieve lower costs of borrowing.
Staff recommends your approval.
MS. DELISI: Is there a motion?
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you. Continuing on to item 13, 13(a) deals with a final approval of a State Infrastructure Bank loan to the City of Rosenberg, and Brian will present this also.
MR. RAGLAND: Yes. This proposed minute order provides for the final approval of a SIB application to the City of Rosenberg for $450,000 for sewer and water line relocation along State Highway 36 from US 90A to Avenue M in Rosenberg, Texas. Staff recommends your approval.
MS. DELISI: Is there a motion?
MR. HOUGHTON: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Agenda item 13(b) is also a final approval of a State Infrastructure Bank loan for the City of Stamford.
MR. RAGLAND: This proposed minute order provides for final approval of a SIB application for the City of Stamford requesting $300,000 to pay for sewer and water line relocation along FM 1226 in Stamford, Texas. Staff recommends approval.
MR. HOUGHTON: So moved.
MR. MEADOWS: I just have one question. Is this a typical use of SIB funds?
MR. SAENZ: Brian, can you give us just a quick overview as to kind of how we us the SIB?
MR. MEADOWS: It's all right, I'll get it later.
MR. SAENZ: It is.
MR. RAGLAND: Yes.
MR. MEADOWS: Thank you.
MS. DELISI: I heard a motion. Is there a second?
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you, Brian.
MR. RAGLAND: Thank you.
MR. SAENZ: Moving on to agenda item number 15, 15(a) deals with award of our contracts, and Thomas Bohuslav will present a couple of minute orders.
MR. BOHUSLAV: Good afternoon again, commissioners. My name is Thomas Bohuslav, director of the Construction Division.
Item 15(a) is for the consideration of award or rejection of Highway Maintenance and Department Improvement Building Construction Contracts let on April 7 and 8, 2009. We had 29 projects; average number of bidders is 6.4; we had a 25 percent underrun on those maintenance projects for a total award of about $18 million. Staff recommends approval of all the projects. Any questions?
MS. DELISI: Is there a motion?
MR. HOUGHTON: So moved.
MR. HOLMES: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. BOHUSLAV: Item 15(a) is for the consideration of award or rejection of Highway and Transportation Enhancement Building Construction Contracts let on April 7 and 8 and 22 and 23 of 2009. John has already talked about this a little bit about our projects that were let on the 22nd and 23rd. You see the numbers in your spreadsheet there. The total numbers for the letting were 157 projects; an average number of bidders of 5.7 bidders per project; an award amount of about $347 million if the recommendation follows that we award all of these projects; and it was under about 27 percent or $133 million. Do you have any questions? We recommend award of all projects, by the way.
MR. HOLMES: So moved.
MR. HOUGHTON: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
MR. SAENZ: Thank you, Thomas.
Commission, agenda item number 16 deals with our Routine Minute Orders that we adopt. Staff would be happy to explain any of the individual minute orders if you would like. We recommend approval of all minute orders under agenda item 16.
MS. DELISI: Can I get a motion?
MR. HOLMES: So moved.
MR. HOUGHTON: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes.
This completes all of the items on the posted agenda. There is no need for an executive session.
Now we'll enter into the open comment period. Are there any cards?
MR. SAENZ: No cards.
MS. DELISI: Okay. Is there any other business to come before the commission? There being none, I will entertain a motion to adjourn.
MR. HOLMES: So moved.
MR. UNDERWOOD: Second.
MS. DELISI: All in favor?
(A chorus of ayes.)
MS. DELISI: The motion passes. Please note for the record that it is 12:53 p.m., and this meeting stands adjourned.
(Whereupon, at 12:53 p.m., the meeting was concluded.)
C E R T I F I C A T E
MEETING OF: Texas Transportation Commission
LOCATION: Austin, Texas
DATE: April 30, 2009
I do hereby certify that the foregoing pages, numbers 1 through 169169, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Nancy King before the Texas Department of Transportation.
5/05/09
(Transcriber) (Date)
On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731
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