Print 🖨

The House Select Committee on Transportation Planning met on March 30 to hear invited testimony from TxDOT on the status of HB 20 implementation.
 
Victor Vandergriff, Commissioner, TxDOT, Mark Williams, Deputy Exec. Dir., TxDOT, and Ben Asher, TxDOT

  • Update on HB 20
    • TxDOT has been tasked with implementing HB 20, committee was formed and many stakeholder meetings have been held
    • Initial report on congestion and connectivity was submitted in September 2016
    • Preliminary report is due to legislature tomorrow, draft copy should be with committee now and only has minor differences from final
    • Martinez – How does it help us to ask questions today on a report subject to change?
      • Should be only minor differences
    • Pickett – Meeting before reports are due is a common occurrence
    • Martinez – Has never seen a report with “draft” written on it before
    • Report discusses alternative methods of financing, performance metrics and measures, department collaboration with state and local officials, and private organizations, and benefits of zero-based budgeting
  • Alternative Methods of Financing:
    • TxDOT has explored a variety of different financing methods to date including CDAs, various bonds, pass-through financing, transportation reinvestment zones, etc.
    • Examples of each are in the report
  • Simmons – Central Texas Turnpike and similar programs are part of CDAs, correct?
    • Ben Asher, TxDOT – Some are operated by private developers and some are operated by the state
    • Examples of concessions include SH 130 segments 5 and 6, LBJ managed lanes, North Tarrant Expressway, Grand Parkway Authority, I-35 E managed lanes, SH 71 Express Lanes
  • Simmons – And there can be public money in these?
    • Yes
    • Most are a mix of federal grants and state money
  • Pickett – Can you explain the difference in leverages for the Grand Parkway project?
    • Grand Parkway project was funded by a corporation and supplemented by bonds
    • Bond funding includes traditional toll revenue bonds backed solely by toll revenue and state-backed liability agreement bonds
  • Pickett – Can you give a total dollar value for the state liability?
    • Unsure, liability is assessed each year with no carryover
  • Pickett – Can you explain some of the relatively
  • Martinez – Are there any more Prop 14 projects?
    • Asher – Yes, $700 million remaining, all for projects allocated
    • Prop 12 has $1.4 million remaining, again for progress payments
    • No additional capacity exists under these programs for projects without under-runs
  • Walle – Can we find out how the state has leveraged these dollars?
  • Pickett – In other words, did our $16 billion out gain Texas $20 billion in projects?
    • Weighted average cost of borrowing for each program available in report, construction inflation rate has been 4% or higher
  • Pickett – This will even out, sometimes authority is granted to issue bonds that are subsequently not issued, under the original plan no revenue should be left and everything should be allocated
  • Pickett – Do you think you will be able to issue all of the capacity this biennium?
    • Cannot say, vast majority would be out this session
  • Pickett – So anything else would just be crumbs?
    • Prop 12 bond issuance is forthcoming this year, plan is to issue all of it
  • Pickett – Did anything else drive Mobility Fund repayment higher than other funds
    • Contributing factor is the 30 year bond period
  • Martinez – Could timing be an issue as well?
    • Yes, though all things being equal it is likely the term
  • Martinez – What could we leverage right now for the TMF?
    • Numbers haven’t been run
  • Pickett – Likely over $1 billion
  • Martinez – Important for members to understand that state has commitment on the bonds, but how does state pay those TMF bonds back?
    • Series of revenues are available for the TMF, motor vehicle inspection fees, license fees, record fees, and other minor fees
    • A general obligation backstop also exists, but it is self-supporting
  • Martinez – Are any listed in bond covenants? If we scrap the inspection fee, what happens?
    • Language exists in statute that any removed source must be replaced by a like amount
  • Martinez – So even if fees are raised or changed, money still must filter into the TMF as bond covenant exists
    • Similar conversation last session over stopping vehicle inspections
  • Martinez – In all non-attainment areas, drivers must obtain an emissions inspection anyways
  • Pickett – Other things exist that Texas can do to meet attainment aside from emissions, but if inspections go away other factors must be considered like bond involvement
  • Martinez – Something to think about, other methods of financing are available
  • Pickett – This would be a bigger issue if TMF was being leveraged and TxDOT had plans for any bond sales
  • Pickett would personally welcome a fee instead of needing to go to the inspection station
  • Simmons – Why is pass-through financing largely not used anymore
    • Instituted to help local government pay for projects they may not have had the funds for
  • Simmons – Is this asked for very often?
    • No recent cities have come and asked for it
  • Pickett – Could be kind of a hybrid on 130, could reach agreement with the local areas
  • Larson – Some projects would still be looking for funding without availability of pass-through funding, very helpful for rural road development projects
  • Martinez – Agrees, lots of high growth areas with unsafe roads, but pass through financing needs to be reformed and would like suggestions from TxDOT
  • Performance Metrics:
    • 4 year maintenance and fleet forward programs analyze use of state resources
    • TxDOT also publishes list of 100 most congested roads and other similar metrics
  • Simmons – Appreciates this, but the bill’s purpose was to development new performance measurement systems where needed
    • TxDOT understood the bill to require a report on current practices
    • TxDOT has committees in the process of re-evaluating project selection criteria
  • Simmons – Bill was very specific on project selection criteria and revamps of performance measures would go hand-in-hand
    • TxDOT is going through process of implementing HB 20, trying not to get ahead of themselves and bring all of the different interested parties and ideas together
  • Walle – What is the definition of performance-based planning and programming?
    • First component is understanding performance metrics of current systems and how they will change in the future (funding, congestion, maintenance, safety, etc.), and 2)
  • Walle – If congestion doesn’t ease in some areas, is there a threat that funding would be pulled?
    • Rather a method of informed decision-making, working close with authorities to make decision on allocating funds
    • Second component is project selection revamps, revamping the system of prioritizing projects
    • Ultimately, TxDOT will evaluate how well they achieved the metrics and selections goals
  • Larson – 12 perfectly good categories in the UTP, have to decide how funds are deployed across state and ensure that it is done fairly, this needs to be connected to project selection, prioritization, and business/system performance measures
  • Safety, maintenance, and bridges is the “holy trinity” of TxDOT, within these TxDOT must decide how to prioritize funds
  • Pickett – This process should have started a lot earlier, subcommittees seem to be trying to find “winners” in all arenas, however, a third constitutional amendment will likely not be successful – have to do the best with the funding the state has
  • Pickett – State hides behind some of the criteria currently, wants to have a good system of selection to help with filtering projects
  • Martinez – Shouldn’t the commission post selected projects for public comment? Is there any oversight beyond the discretion of the commission?
    • TxDOT’s goal is to give you a very clear picture of the guidelines for the selection commission
  • Martinez – That is not in the report though
    • This is internal that will translate into project selection
  • Martinez – Are TxDOT and the selection commission the same thing?
    • This would be something the commission would adopt and submit to the legislature
    • No one inside TxDOT has attempted to change funding formulas yet, for example and agreement exists to address congestion in urban areas and this has not changed
  • Martinez – Are there roads in Houston that were not built because money was prioritized for other areas
    • Would like to be able to re-do some of the specific Houston roads, will take metrics from these projects and move them forward
  • Walle – Toll roads leave a bad taste in my mouth
  • Pickett – Is there something different you have brought today? When can we ask you what your plan is and which of your projects met or did not meet expectations?
    • Federal and LBB measures track funding and not necessarily performance
    • TxDOT is very focused on filling this gap
    • HB 20 focuses on developing these areas
  • Pickett – It seems like safety projects have been taken out of the loop, is there any inclusion of outside opinions on the selection of projects? Should be simple to turn around and say a project is successful or not
    • TxDOT could go back and make determinations of success of safety projects, Prop 14 included an allocation to safety projects and studies upon completion showed a significant improvement
    • TTI has done a report on the actual impact of the significant improvements
  • Pickett – Can TxDOT be tougher on itself than the legislature can mandate? TxDOT being tougher on itself in project selection would bolster confidence in TxDOT
  • Martinez – Concerned about lack of maintenance on median trimming, state should not be getting calls about limited visibility, what exactly is happening with Fleet Forward programs? It does not seem to be saving enough money and it seems to be negatively impacting maintenance
    • Part of the post program analysis would be to evaluate unintended consequences
  • Martinez – Received a call that a constituent’s mailbox was the incorrect distance from the curb, mailbox had been there for 12 years. How much money are we spending on this?
    • Perhaps this should have been better funded if it had been there for 12 years
  • Pickett – Projects like clearing debris from roads should be prioritized, very clear problems exist with project selection
  • Workman – If the state ended diversions last session and freed up $1.2 billion, where is this number in the report’s budget chart
    • Money has already been used, shows up in UTP
    • Diversion merely diverted gas tax funds, diversion ending did not increase the actual tax revenue
  • Department Collaboration:
    • Report discuss work done with metropolitan planning organizations
  • Rules, Policies, Programs, and Plans:
    • Speaks on how TxDOT will look at adopting new rules to govern implementation of performance-based metrics
  • Zero-Based Budgeting:
    • TxDOT anticipates putting more thought into this section of the report
    • Staff has worked to identify non-discretionary spending not subject to zer-based budgeting
    • HB 20’s performance-based project selection can tie into a zero-based budgeting approach
    • Other factors can be aligned including Fleet Forward, travel budgets, roadside maintenance, etc.
    • However, there is always more that the public would want done, zero-based budgeting would allow TxDOT to demonstrate where project funding comes from
  • Simmons – Zero-based budgeting is never really zero, main focus is to evaluate budget as brand new periodically to explore new budgeting ideas even if the ideas are not practical
    • TxDOT is trying to do this, will be in the revised report tomorrow
    • Non-discretionary funding analysis is the first step in this process
  • Moving forward TxDOT will look at performance measures and metrics, evaluate funding categories, work with MPOs on funding plans and structure, and continue development of portfolio management
  • Ultimately, TxDOT will promulgate rules as called for by HB 20
  • Martinez – How have the MPOs reacted to TxDOT’s operations?
    • Surprised and appreciative, MPOs have never been approached before for collaboration
    • MPOs share similar concerns with the legislature
  • Martinez – Has transit come up in any discussion with the MPOs
    • No, general feeling is that this topic needs to wait for a few years
  • Martinez – What about railroad relocation?
    • Would need legislative guidance on this, currently focusing on road infrastructure
  • White – When a certain area has a natural disaster event, how does that impact the entire process?
    • Have heard some worries concerning HB 2- hampering ability of TxDOT to respond
    • However, nothing in HB 20 would prevent TxDOT from acting quickly and effectively
  • White – So do other projects get pushed back to address disasters or is funding drawn from other areas of the state?
    • Commission has the discretion to move funding to areas of need, theoretically projects might not get funded
  • Simmons – Would like a rundown of the HB 20 areas and whether they are finished
  • 1) Performance based metrics and measures system
    • No, likely one of the last things
  • 2) Performance metric and measures to review strategic planning and project selections, etc.
    • Around halfway through the process
  • 3) Periodically review performance metrics and measures, make this information available to the public, and assess efficacy
    • A couple significant steps have been made in this direction, USDOT identified measures have been identified and posted
    • Likewise, commission has adopted goals and objectives TxDOT should develop
    • Measuring and reporting will take additional time
  • 4) Periodic reporting schedules for the performance metrics and measures, understands this will come after other goals
  • 5) Work with MPOs and their 10-year plans
    • Around 25% done, MPOs are very receptive
  • 6) Project recommendation criteria
    • 10%-20% done, significant work to be done
  • Simmons – Key component, no use measuring performance without this
  • 7) Commission shall by rule prioritize and approve projects on the statewide plan
    • Commission is on board with this
  • 8) Set performance-based projects for funding categories in the UTP
    • 50%, money is the first thing people want to talk about
  • 9) Discretionary funding no more than 10% of the biennial funding, understands that this is 10% of funding put out to projects and not the total paperclip fund
    • Understands the legislature’s position
  • 10) Design build limitations, understands that this is tacked to the $250,000 rider
    • TxDOT has a different interpretation of $150,000 and $250,000 collectively
  • Simmons – Riders are not appropriations
  • Martinez – There is a way to conduct business correctly, but the state cannot compromise on safety