1. Discussion concerning establishment of a policy for the department to share in the revenue of a toll project when the department provides financial assistance from certain funding categories to pay for the costs of a toll facility of a public or private entity.
A report was provided to the commission at its August 2010 workshop that discussed scenarios under which financial assistance could be provided in the form of a grant, loan, and as equity, and options for revenue sharing. This item will continue the discussion and will explore the possibility of establishing a department policy of sharing in the revenue of toll projects when the department has provided financial assistance from certain funding categories.
James Bass, Chief Financial Officer at TxDOT
As a result of discussions last fall, this policy would not apply if the funding came from Categories 2 or 3. The plan is to bring forth a policy at tomorrow’s meeting that would include those categories that do not apply as it currently stands.
Victor Vandergriff, Chairman of North Texas Toll Authority
Vandergriff is focused on addressing concerns of future road projects that would include revenue sharing. A blanket policy would be difficult to implement because different projects require different amounts of funding. Vandergriff asked for TxDOT to create a project by project policy instead. Ned Holmes expressed his agreement to make it a broad agreement because of the unique difference among each project, and pointed out that there may be a need for a grant instead of adopting a new policy. Vandergriff pointed out that the decisions of the Commission reflect on his agency through the changes in toll prices that will be adjusted for these projects.
William Meadows stated that in the past that there has been a working method that includes a degree of revenue sharing for projects. He followed this point up with a question as to why the Commission needs to create a policy if it the current method is working as it stands. It was made clear by the Committee that the policy would serve to clarify the revenue sharing process. Meadows stressed that the risk in creating such a policy is that higher toll rates will be created in order to accommodate for the adoption of a new policy. Meadows said the Commission should be careful not to become an obstacle for future projects down the road. To summarize his points, Meadows commented that there is not a compelling need to create a policy.
2. Discussion of transportation development credits (TDC) and their potential use toward the non-federal share of eligible projects.
TDC’s (formerly known as toll credits) are a mechanism approved by the FHWA that allows states to use their federal obligation authority without the requirement of non-federal matching dollars. This increases the flexibility of the resources available to the department as well as the department’s local and regional partners. Credits are earned when the state, a toll authority, or a private entity uses toll revenues to build or improve public highway facilities that serve interstate travel.
James Bass, Chief Financial Officer at TxDOT
It is required that the current year’s expenditures be greater than or equal to the previous three year average; the state of Texas did not meet this requirement in 2009 and in 2010. Mr. Bass discussed the different options for funding through the use of an example, which assumes $8 is provided by federal assistance and $2 from state assistance. With the current method that Texas uses, the 10 eligible projects would be completed and the 10 ineligible projects would not be funded. Mr. Bass then proceeded to explain the transportation development credits (TDC) method that is used in Florida. This method is entirely provided for from federal funding and gives flexibility in deciding which projects are to be completed, whether they are eligible or ineligible. The Commission is looking to seek a program call in order to claim the maximum amount credits they can for these projects.
Michael Morris, MPO
Morris suggested freeing up state money and expressed interest in beginning a partnership that would allow TDC sharing. Morris continued by saying that the majority of TDC is generated from the Dallas/Fort Worth area, his suggestion was that it should be considered to create a new policy that would prevent from taking all credits from Dallas in order to complete projects throughout the state.
3. Discuss the development of a rural component to the 2035 Statewide
Long-Range Transportation Plan (SLRTP)
The 2035 SLRTP was adopted by the commission on November 18, 2010. The commission also recently adopted new rules for the planning and development of transportation projects. Those rules include an increased focus on public participation in rural areas of the state, including rural planning organizations when established. Metropolitan planning organizations are required to develop long-range transportation plans; however, no equivalent rural long-range plan exists. The development of a rural transportation component to the SLRPT will assist the department in a thorough identification of transportation needs and the prioritization of transportation improvements in rural Texas. Staff will engage the commission in a discussion on developing a rural component to the SLRTP.
Jim Randall, Director of TPP
Randall began by discussing how each program builds off of one another. Randall said that there is a need for a rural long-range plan. Newly adopted Planning and Programming rules require rural plans. RPO and district recommendations include different projects, such as mobility projects. The department needs to coordinate with RPO on these long-range rural plans. The benefits of a rural plan would provide larger contribution throughout the state and a more clear vision for the state for the transportation development. The process to compose this rural long-range plan would include steering committees, stakeholder meetings, and public involvement. Randall further explained that both existing and future demands would be met for those rural areas, as well as identifying corridors in those areas. After identifying the corridors the list will be prioritized for action. This process is believed to take less than 12 months to complete. William Meadows asked who defines the stakeholder group. Randall answered that the last group TxDOT assembled was first made and then submitted to GPO for review in order to decide if there was “a good mix of representation”. Meadows clarified that the stakeholder group is staff generated and then brought before the commission for approval.
4. Discussion of studies being conducted by Texas State University related to the total costs of performing engineering activities in-house as compared to contracting with the private sector for those services.
Texas State University is conducting studies of the total costs of performing engineering activities in house as compared to doing such work in the private sector. A joint working group composed of the Consultant Engineer Council and TxDOT representatives is coordinating the study.
John Barton
A joint workgroup has been put together for this project. The first task for the group is a cost comparison between internal resource use and outsourcing. After that comparison is complete they will bring details before the Commission.
Dr. Morris
There are six broad based parts to this study. The workgroup is looking to compare internal and external resourced projects in the past, although Dr. Morris cited that there are some parts of the projects that will not be met by outsourcing alone. The group is being careful not to follow other external projects that have had “faulty” ways of doing so.
Closing remarks:
Victor Vandergriff, Chairman of North Texas Toll Authority
Vandergriff asked for a survey to be done 6 months ago to evaluate their business process. Let the Commission know that they will share those results with them once they hear back on them later this week.