House Appropriations Committee
Subcommittee on Articles VI, VII, and VIII, 3/6/17
Called to order 7:30 AM. Chair’s opening remarks: Presenting Article VII to the full committee on Wednesday. The goal is to go through the decision document today, ask questions of the agency and staff. A lot of TxDOT will be left pending because it is the largest appropriation this subcommittee handles.
7:34 Legislative Budget Board staff lays out 3/1/17 decision document and starts with Department of Housing and Community Affairs. The subcommittee acts on the proposals.
7:43 AM LBB staff lays out Texas Lottery Commission. The subcommittee acts on the proposals.
7:58 AM. Chair lays out DMV and says the big challenge is to complete the extraction of DMV from TxDOT. Page 7.
Item 1. Includes deferred maintenance on aging buildings (1 d). LBB says it’s $3.99m of the 7.75m in 1d. Chairman Gonzales: The other deferred maintenance items we get are actual project costs. This request is based on “we may need some money for this.” LBB: Their only GR-related item is ATBPA. The subcommittee does not adopt 1a, b, or c. For 1d, the subcommittee lowered to $4million and pended the item.
Item 2. 13 FTEs for a special investigations unit to identify and investigate fraudulent motor vehicle activities. The subcommittee left Item 2 pending.
Item 3. Federal and matching state funds for FMCSA CVISN (motor carrier safety). Subcommittee sees it as IT project and pends it.
Item 4. Customer service related technology initiatives. The subcommittee does not adopt Item 4.
Item 5. Restoration of 4% reduction for ATBPA. The subcommittee does not adopt Item 5.
Item 6. GR funding for additional ATBPA grants. The subcommittee does not adopt item 6.
Item 7. Unexpended balance within the biennium – new rider. The Chair notes they can request it via letter under Article IX. The subcommittee does not adopt Item 7.
Item 8. Unexpended balance authority across the biennium for non-GR funds for move from Bull Creek campus. The subcommittee leaves Item 8 pending.
8:18 AM. TxDOT. The subcommittee pends IT, salaries, cybersecurity.
Cost out adjustments Item 1: adopted.
Cost out adjustments Item 2: adopted.
Item 3, Adjustment – $201.3m in additional state highway funds (not on the 2/24 document). Pended.
Agency requests. Item 1: GR for debt service payments (instead of Prop 7 revenue). $613 million. Pended.
Item 2. Additional salaries and wages for 627 new FTEs. $78m. Pended. Chair: You may see some riders making sure that rural areas are served.
Item 3. $33m for workflow management IT project. Pended.
Item 4. $161m for new headquarters land/complex. Pended.
Item 5. Deferred maintenance. Pended.
Item 6. Enterprise Information Management Information project. IT – pended.
Item 7. Replace area engineering and maintenance facilities (capital request). $128m. Pended.
The Chair notes that “last time, we left the entire agency pending. I think the best case scenario for any of these is they get left pended.”
Item 8 pended. Item 9 (CAPPS/PeopleSoft ERP IT upgrade) moved to Article XI. [NOTE: Article XI is sometimes referred to by legislative staff as the Wish List.]
8:35 AM. General Revenue requests. Item 10 – funding to reimburse veterans’ toll discounts for Central Texas Turnpike System. The Chair observes that the ability to provide a toll discount for veterans exists in statute, the issue is whether there will be an additional appropriation of General Revenue to reimburse TxDOT/CTTS for the lost funds. The subcommittee discusses aspects and implications of the toll discount and reimbursing it from GR, and history of the current rider. Pended.
8:44 AM. Item 11 – South Orient rehabilitation. Pended. Chair: Pended because I don’t want to say not adopt today. At the end of the day, most of this is not adopt, but I just want to pend today.
Item 12, South Orient, rehab for another part of the line. Pended.
Item 13, increase state grant funding for rural public transportation. $7m. Pended.
Item 14. Maritime port infrastructure capital improvements. $133m. Pended.
Item 15. $30m for NETEX rail line rehabilitation. Pended.
Item 16. $48m to reimburse CTTS for truck toll incentives. The subcommittee discusses previous efforts and data gathered. Pended.
Item 17. $5m GR to replace study funds for Amtrak’s Heartland Flyer. Pended.
9:00 AM. Rider authority requests.
Item 18 (Rider 3). Appropriations transfer authority. Not adopted.
Item 19 (Rider 7). Delete minimum wage contracts rider, agency says it is duplicative of existing requirements. Not adopted.
Item 20 (Rider 13). Summer hire program. Keeps the program but eliminates minimum 10 FTE requirement, replacing it with good faith effort. Pended.
Item 21. Rider 14, project status notification timeline. Adopted.
Item 22 (Rider 22). Delete requirement for approval from LBB before spending on a CDA. Not adopted.
Item 23 (Rider 30). Clothing allowance for travel counselors and ferry operators. Current rider allows cleaning allowance, this would add clothing rental. Adopted.
Item 24 (Rider 37). Delete limitation on transfers from IT mainframe modernization. Not adopted.
Item 25 (Rider 45). Appropriation of proceeds from sale of real property. Pended.
Chair: Anything else? A lot of these pends could easily be not adopts.
The subcommittee goes back through pendeds.
Items 11-13 and 15-17 are changed to not adopted.
Chair brings back up Item 21. Changed to not adopted.
End of TxDOT.
9:22 AM Workforce Commission. The subcommittee took action on Workforce Commission items.
9:51 AM The subcommittee adjourned.
House Transportation Committee 3/2/17
Called to order 8:00 AM by Rep. Geanie Morrison, Chair.
Morrison describes committee membership (13 members) and jurisdiction, per House Rules.
8:05 Chair calls Whitney Brewster, Executive Director, Texas Department of Motor Vehicles, joined by Jimmy Archer (Motor Carrier Division Director) Bill Harbison (Director of Enforcement) and Jeremiah Kuntz (Director of Titles and Registration). Brewster provides an overview of the agency along with legislative recommendations as their statute authorizes.
No questions from the members.
8:15 Chair calls Tryon Lewis (Chairman, Texas Transportation Commission), Marc Williams (Deputy Executive Director), and Brian Ragland (Chief Financial Officer), TxDOT. Chairman Lewis thanks the members for the funding infusion and updates the committee on planning.
Chairman Pickett: About your exceptional item request on FTEs, would you give an overview of what these positions do?
Chairman Phillips: I hope the appropriators add some FTEs, we need more inspectors in the rural areas. This money would not come out of General Revenue. Chairman Lewis: Correct, it would come from dedicated State Highway Funds, and these are jobs that have to be done. We are asking for these employees because it is less expensive to do this in house than to contract it out.
8:27 Rep. Simmons: I’ve heard you say you decentralized management and oversight. Are there Austin employees you could transfer out to other areas? Williams: We have done that, particularly in right of way and special projects areas, some division staff have been moved to report directly to districts. Pickett: if the Legislature does not give you authority for the FTEs, you are still going to hire private sector to do these jobs, and it will come from Fund 6. Williams: Correct.
8:35 Rep. Simmons: Thank you for your work on HB 20. I know it’s a work in progress. Please explain where we are in the process. Williams: [describes].
8:39 Rep. Israel: Texas is growing rapidly but the gas tax doesn’t deliver what it used to. To what extent has the Sunset Process and HB 20 allowed you to think creatively with technology and innovation? Williams: That was also a focus of the Sunset staff, it is the subject of their first chapter. [gives examples of working toward that end].
8:42 Chairman Pickett: HB 20 was supposed to speak more to how much the Commission puts into each funding category. Categories 1 preventive maintenance, 6 bridge, and 8 safety don’t get much public input. Category 12, strategic priority, the Commission has flexibility which I’m for. Don’t you have a subset within Category 12 that should be stated? Williams: The Commission allocated about $5 billion from there to Project Clearlanes to address the congestion focus, congestion needs in our most congested urban areas. [further explains the categories and apportionments].
8:49 Chairman Phillips: Explain the payback of borrowed funds. Ragland [explains][discussion].
9:00 Rep. Burkett: Describe how TxDOT lends funds to other entities. [Ragland describes][discussion].
9:05 Williams concludes presentation. No further questions.
9:06 Chair calls Texas A&M Transportation Institute (TTI) Director Greg Winfree and TTI Transportation Policy Research Center Director Ginger Goodin. Winfree describes TTI’s history and mission. Goodin lays out the PRC’s role as independent researcher for the Legislature and highlights recent research. Goodin cites many studies available online at http://ttipolicy.wpengine.com/ .
9:12 Rep. Israel thanks TTI for being responsive and notes that Winfree was Assistant Secretary of the US Department of Transportation.
No further questions for TTI.
9:15 Chair calls Major Chris Nordloh (Texas Highway Patrol, Commercial Vehicle Enforcement) and Skyler Hearn (Assistant Director, Driver License Division), Texas Department of Transportation. They give an overview.
9:19 Rep. Israel: commercial motor vehicle and driver out of service rates, can you tell me what that means? Nordloh [explains].
Chairman Morrison: Is there any particular area of the state that stands out, like maybe 59? Nordloh: We’ve had a robust border crossing enforcement, so rates there are now lower than other parts of the state. You might have pockets where it is higher, like the Eagle Ford shale or the Anadarko.
Chairman Phillips: Has there been an impact from when we increased fines? Nordloh: Absolutely. The fines are now more punitive and force people to comply. Improving the permits also helped.
9:24 Hearn: [describes driver license division and processes].
Rep. Davis: Can you replace or duplicate Driver IDs at the counter? Hearn: No, that is handled centrally. Getting the card immediately would be better for the customer but the cost to do that is substantial. We are looking at a mobile ID pilot. Davis: How often do you go out and visit the DL locations? Hearn: We have two regional managers that are out there fairly regularly, at least monthly. Davis: How do you determine a location is not effective? You have lines out to the parking lots. Hearn: We do that through supervisory management and constituent calls. Davis: I hear people have to go back multiple times because they aren’t told all the documents they need. How can you prevent that? Hearn: We have an internal resource guide program. Davis: I would ask you to check the level of customer service. They are pretty rude, not as cordial as they need to be, and the locations are overcrowded. Hearn: We will address that.
Rep. Thompson: It is hard to get a CDL because people have to travel so far. Nordloh: It has to do with federal regulations on skills testing. We went from 190 locations to 25 where we can conduct skills testing because of the real estate needed to meet the requirements. We entered into MOUs with other entities.
9:38 AM Committee hearing concluded.
Senate Transportation Committee 2/22/17
This is not a transcript. Items may be summarized or paraphrased.
Posted hearing description: The Senate Transportation Committee will consider and adopt the Committee rules, and conduct any other organizational business deemed necessary by the Chair. The Committee will hear invited testimony from the Texas Department of Transportation, the Texas Department of Motor Vehicles, and the Texas Department of Public Safety.
8:00 AM Called to order by Chairman Robert Nichols and gives introductory remarks and introduces staff: Committee Director Amy Jeter, Policy Director Jonathan Sierra, Heather Dyer, Davis Harrison, Angus Lupton.
Sen. Hall, Vice Chair: Honored to have this privilege. Staff: Jonathan Covey
Sen. Perry: Shannon Harmon staffing.
Sen. Creighton: Chase Fruge staffing.
Sen. Rodriguez: Sushma Smith staffing.
Sen. Garcia: Stella Savage staffing.
Sen. Hancock: Adam Leggett staffing.
Chair lays out proposed committee rules, same as previous session’s. Adopted.
Chairman Nichols: When we start hearing bills, we will lay them out one week and not vote until the next week, typically. We will give at least 48 hours if a substantial substitute is being offered.
8:06 AM Chair calls TxDOT: Tryon Lewis (Chair), Marc Williams (Deputy Executive Director), Brian Ragland (Chief Financial Officer).
Lewis: Also with me today is Rich McMonagle, TxDOT’s Chief Administrative Officer. [Lewis gives remarks about finance and Sunset]
Lewis: TxDOT will host a legislative briefing on the Unified Transportation Program on Friday. Legislators and staff invited.
Marc Williams: [distributes handout and covers highlights.]
Kolkhorst: In Senate Finance we talked about management of the projects and finance, technology and IT. My constituents think TxDOT wastes money and certain projects are mismanaged. Let’s talk about technology and how this much money will be managed.
Lewis: Our Commission’s biggest effort is to make sure that TxDOT is ready to deliver. There’s no question we are ready. Our Executive Director has over 30 years with the department. He reorganized the department so the right people report to the right people, took out some empires. Moved right of way back out to the districts to increase efficiency. Planning under Lauren Garduno and Marc Williams is being done in a modern, state of the art manner. The Commission has confidence in that. This department has had big money to spend in the past and has done so efficiently (Kolkhorst: Not always) but is capable of doing so today. We’ve built Interstate Highways through Texas; the projects are different now, more concise but still billions of dollars.
Kolkhorst: Talk about the technology gap we may have.
Ragland: The past few years we have made significant strides in the area of technology. We’ve implemented a large system that replaces our accounting, human resources, backoffice systems, to enable us to accurately pay bills and bill the feds for reimbursement. Also our MPPM project replaces 40 different systems to handle project management, from concept to design to delivery to construction and maintenance. It should be complete by August of 2019, the end of the biennium. That and two other IT projects were not funded in our baseline capital budget rider.
Sen. Kolkhorst: I was around when TxDOT “lost” a billion dollars. The taxpayers have dedicated a lot of money that creates a pretty big hole in our budget. I hope we don’t have problems, and will be working closely with you. We can vote to rescind some of that money if necessary. Your new district engineers are great.
Sen. Perry: Do the CAPS program and the PERT/charts program interface, so our labor costs interact with our projections?
Sen. Perry: My district is interested in Loop 88 and I-27. If someone is on your construction plan and they aren’t ready, how can other projects come in?
Chairman Lewis: It is a fluid and dynamic process. We set how much money is in each category, we let districts, MPOs, and other entities know how to access them, then it is primarily staff driven, they work together to come up with a proposal on where the money flows. We have a four-year, immediate plan — that will be laid out at tomorrow’s Commission meeting and voted on in March. Then there is a ten year plan. If additional money comes in, it will be plugged in. If funding is limited, it will be taken out. We have made one major change from the past in the UTP: we used to consider only dedicated funding, so the planning document was also a spending document. Now we do not constrain to available funding, we use reasonably expected money for planning purposes, this should reduce the scramble for projects when additional funds come in.
Perry: So the MPOs should be extremely engaged with district engineers. Lewis: We will have more projects ready to go as they come up. The projects that rate highest and have the most benefit will already be slotted. Perry: Is the $70 billion already allocated for projects? Lewis: We have a list of projects that will be rated and placed forward, coming from MPOs and Districts, and staff will present the actual plan for the next four years. In August we will be plugging in additonal projects. Williams: the $70b is spread out. Many of the funds go out by formulas to the districts or MPOs. We can provide maps of where projects are in the four-year plan.
Sen. Hall: I would be interested in reviewing what technology you are using for major projects. Problems happen in the planning phases of large projects, generally. I appreciate the efforts of Chairman Nichols and others to put the focus back on our transportation needs. Where do we stand on being able to handle the funds coming in? Lewis: It is astonishing how hard the staff is working to make it happen. This is what these professionals do and are very good at. We have engineering companies that are absolutely capable of doing this work. I agree that planning is key. We have made the necessary adjustments. Engineering companies from all over America are coming here to work on these projects. Williams: We are ready. Back in February of last year we allocated the money and have projects under construction. At the end of FY 18 the Prop 7 funding should become available, the Commission is now taking steps having worked with MPOs to designate those priorities. We have projects waiting on that funding to move forward. Hall: How confident are you in the resources available to implement those plans? I have passed equipment sitting on I-35 and other places that didn’t move, projects start and don’t move, and it ends up costing a lot of money. Do we have the ability to follow through, not just start projects but get them finished efficiently? Williams: Yes, that has been an area of focus over the past several months with our Commission and the contracting industry. There are some projects that are bad examples, the Commission has taken steps to address what caused those delays and the contractors behind on their work and limit their ability to start new work. We also are working on ensuring that when the projects go to construction we have right of way cleared, we have reduced the number of projects started that still have ROW issues. Lewis: I have seen two sources of serious delay: projects awarded but not started, many times due to not having the ROW in hand, and we have changed how we handle that. We have a great contractor community, every now and then we get one with management problems, and there are other delays — availability of steel, weather delays, but sometimes management problems result in nothing happening on the project. Hall: It appears the evaluation of a contractor doesn’t take into account they are already working at capacity, and they abandon one project to work on a more profitable one. Lewis: It is a low bid process to a great extent, but we are using a number of tools: penalties in contracts, awards in contracts. We can bid some projects not only on price but on time (A+B). Williams: Last fall our Commission adopted rules that gave us more flexibility in looking at a contractor’s capacity. Lane rental, pricing the time it takes a contractor to close and reopen a lane. Penalties, liquidated damages, we have to work with FHWA because they have some standards we have to follow. Nichols: Schedule a time with Senator Hall in his office to go through this and hear his ideas as well.
Hall: Props 1 and 7 money. The public spoke loudly about moving away from toll roads but it seems like the lawyers are trying to work around the Legislature’s intent. We find that in the question of mixing money on toll roads. Do you consider managed lanes to be toll roads? Lewis: Yes. The Commission fully accepts and supports the will of the Legislature, the Governor, and the Public with regard to these funds not being used for toll projects are partially used for toll projects or for a facility designed to support a toll lane. If the purpose of the money spent is for a toll project, then the money from Props 1 and 7 do not go there. We look at the purpose. Hall: If you have a project from point A to point B, and you take the first five miles and make it a toll road and make the rest a free road, would that be considered mixing the money? Lewis: I have not had that situation come up, but my main thought is, there are toll roads all around the Metroplex and Houston, I don’t want to get in a situation where I don’t build free lanes because they might connect to a toll lane. We want to use that money to build as much free lanes as we can, but we won’t bar that money from being used to connect two toll roads, for example, that would mandate that the new lanes be tolled and we don’t want to do that. Nichols: They go to great effort to keep those moneys separate. They’re not even trying to fudge on the edge.
Sen. Hinojosa: You have made a lot of progress since the last Sunset legislation six years ago.
Sen. Garcia: I was struck by some remarks James Bass gave at a transportation forum in College Station, and that was about safety. We have not gone a day without a fatality in years, but you have not talked about safety this morning. We have given you a lot of dollars, and I don’t think we have any more dollars to give, now it’s about accountability. What are we doing to inspect our 53,000 bridges? Will your new management software help manage that? Williams: We have made some tremendous progress in addressing our bridges. We have the most bridges of any state but the second lowest percentage of structurally deficient/functionally obsolete bridges, second only to Nevada. We are working to get the Harbor Bridge in Corpus Christi off the list. We are following the guidance in HB 20 from last session on prioritization. Garcia: How is the list maintained? Do we have the kind of list that Art Storey gave me when I was a County Commissioner? Williams: We have a comprehensive bridge information and management system, we are required by federal law to maintain a schedule, we expect every bridge every two years, some annually. We use that information to prioritize bridges.
Garcia: You may be aware that there was a bus crash in my district, and the guard rails contributed to that. How many guardrails do we have and how are they inspected? Williams: We will get that to you. Garcia: Do we know how many aren’t compliant, and how often they are inspected? Williams: We will get that to you.
Garcia: The target you have for deaths per 100,000 miles traveled is 1.3, and we are at 1.38. Why isn’t the goal zero? Williams: We would hope to be able to get to a zero fatality day, a zero fatality year. We set the goals on what appears to be reasonably obtainable within the timeframe the Commission is allocating funding. A lot of the causes of fatalities are beyond what we do with our roads. Well over 90% are driver error – speeding, distracted driving, DUI. We are doing what we can from an engineering standpoint to bring those down, it will require changes in driver behavior. We think automated and connected vehicles will bring that down. Garcia: You are saying that zero is not a realistic, obtainable goal? Lewis: The majority of deaths and serious injuries are motorist related, not infrastructure related. The Commission needs to have goals that can be realized, not altruistic, that wouldn’t be a measurable goal. If we set zero, we will never reach that. Garcia: Goals are set because you work like hell to reach them. Lewis: We don’t have control of DWI laws or alcohol sales or decision making over texting while driving or human nature. There are some things we can do and are moving on. We beefed up Category 8, safety programs. The one category that is infrastructure related to some degree is leaving the pavement, it’s largely rural, where narrow roads can lead to disaster. The answer is more shoulders and rumble strips. Nichols: You should share with the committee your chart that shows fatalities.
Sen. Rodriguez: You have an exceptional item request for $7 million for the South Orient Railroad. Why is it not in the regular funding pattern? Ragland: TxDOT’s funding sources do not allow for investment in freight rail, so by default it has to be an exceptional item.
Sen. Rodriguez: Highway 67 from Presidio to Marfa, we have had a lot of accidents over the years as you know, is there any effort to try to widen that road, add shoulders and safety features? Williams: We have been concentrating our Super 2 efforts there and on similar West Texas roads, many are currently programmed in the UTP or being considered for the new one. A Super 2 is an enhanced 2 lane highway where we added wider shoulders and passing lanes. Rodriguez: That road is heavily traveled by oil and gas industry workers, so anything we can do would be appreciated. Lewis: There will also be an additional bridge at Presidio to handle increased traffic.
Sen. Hall: We can only do so many things physically to improve safety and reduce congestion. There are management techniques that might work in certain highway situations, the general term is ramp metering. A number of studies show where properly implemented with modern technology and traffic monitoring and realtime adjustments show significant improvement in safety and reduction in emissions. Has TxDOT given any serious consideration to look at management techniques like ramp metering? Williams: We are continuing to work in our urban areas, we have some ramp metering in place in Houston and looking at additional opportunities in Dallas and Fort Worth, and working with the Texas A&M Transportation Institute on how to move forward. Hall: I would like to at least see a pilot project.
Nichols: Since last session you have had two big things, House Bill 20 to make the planning process more precise is one. Williams: [describes HB 20 implementation]. Nichols: You have an exceptional item related to that, a pretty significant piece that was covered quite a bit in the Sunset report.
Sen. Kolkhorst: What is the price tag on building consolidation? Ragland: $160 million was put in the LAR, calculated in the summer, we think we can do that for less. It could be one or several building, to house about 2000 employees. It would come out of Fund 6. Kolkhorst: I know you have to have buildings but be careful here, the UT System has been criticized on how much they are spending on their building, you have some ground leases coming due, how long have we have those? Ragland: Since the 80s. Kolkhorst: Did we build those buildings? Ragland: I believe those buildings were there, we entered into a lease to own, and now we own the buildings. Kolkhorst: Those are the discussions going on with Senators, the amount of money and how we look at things. We paid for the buildings but not the land and now we have to look at more buildings, it’s a lot of money that needs to go to highways. Ragland: We would not do a similar deal today.
Nichols: [FTE discussion]
Nichols: Rail oversight and federal government requirements, there are financial penalties if we don’t take action, and it has nothing to do with bullet trains, right? Williams: We have to be able to administer funds to inspect passenger rail systems in the state, in areas that would include DART and Metro, we are required by the federal government to have an inspection oversight responsibility, so our budget includes a line item for that. We don’t need additional statutory authority, we need the appropriation.
Nichols: Something happened in the Third Court about billboards, the Court ruled you can limit the size and height and location of billboards but the content? Williams: Yes, we are required under federal law to have a highway beautification provision in state law that aligns with the federal law, or lose federal highway funds. We have a provision now that governs height, size, and content and location. The case in question was brought by AusPro who placed a political sign, which is exempt from highway beautification act provisions for 90 days before and after an election. The sign was placed outside that period so we were required by state law to enforce the Act. There was also a Supreme Court ruling that political speech on billboards could not be regulated. The Court of Appeals threw out the entire section of the Transportation Code that deals with the Highway Beautification Act, not just the content part. We have appealed that and the process proceeds but we may need to have legislative action. [for more info: http://www.chron.com/news/houston-texas/article/Core-of-Texas-highway-sign-ban-tossed-by-appeals-9191352.php]
Nichols: We are paying $2.3 billion in debt service. That’s a lot. [discussion of debt]
End of TxDOT
The Chair calls Whitney Brewster, Executive Director; Jeremiah Kuntz, Vehicle Titles and Registration Division Director; and Jimmy Archer, Motor Carrier Division Director, Texas Department of Motor Vehicles.
Brewster: [formal remarks describing desired legislation]
Nichols: Companies can register trailer in any states, so they register in Maine or Oklahoma, so the other states get the revenue. I support your efforts here.
Nichols: If the Camp Hubbard facility is a transfer from TxDOT to you, why do you need legislative action? Brewster: We need the legislative authority. We are working with House Transportation Committee and would love to work with you as well.
Nichols: Have we had any threat from the feds regarding upgrading to their requirements? Brewster: No.
The Chair call Joe Peters, Assistant Director for Drivers License; Captain Omar Villarreal and Oscar Ybarra, Texas Department of Public Safety.
Nichols: Where are we on Commercial Drivers License? Peters: Federal regulations required additional space to conduct skills testing for commercial drivers, we would have had to close public streets, space we did not have, so in the interest of efficiency and compliance we consolidated commercial driver testing sites from 190 to 25 sites. 95% of commercial drivers live within 50 miles of one of the 25 sites. That increased lag times in getting commercial driver skills testing. We have an exceptional item pending for $33 million to add additional testing lanes and FTEs to reduce the wait times. There is also interest in establishing third party skills testing, that program is about to kick off. Nichols: Does the third party skills testing require legislation? Peters: No, we are doing it administratively. Nichols: Why do you need more FTEs if you have fewer locations? Peters: We took 160 FTE slots from customer operations and assigned them exclusively to CDL testing. 20 of the 160 are vacant. We are asking to increase the number of positions to 188. Sen. Hancock: When you went from 190 to 25 there was no reduction in FTEs. Peters: True, but the new skills test requires 2 hours whereas the old one was 50 minutes to 1 hour. Nichols: If you are trying to schedule to take the test, you have to really plan ahead. It bothers me that school bus drivers have to take the same test that 18 wheeler drivers do. But we can’t make an exception for school bus drivers because they drive on the federal highway system. If that change is to happen it has to be at the federal level. Peters: We hope that community will come in on the third party testing program.
Nichols: Any legislative issues? Peters: There are several bills filed of interest that we would encourage, to authorize DSHS to include a social security number on death records to help detect fraud in the driver license process and make the jury wheel process more accurate; enabling electronic notification of enforcement actions; statute of limitations on convictions.
The committee recessed subject to call of the chair at 10:16 AM.
House Appropriations Committee 2/20/17
Subcommittee on Articles VI, VII, and VIII
Texas Department of Transportation
This is not a transcript. Items may be summarized or paraphrased.
Archived broadcast: http://tlchouse.granicus.com/MediaPlayer.php?view_id=40&clip_id=12635 (morning) and http://tlchouse.granicus.com/MediaPlayer.php?view_id=40&clip_id=12647 (afternoon).
Live and Recorded Public meetings of Appropriations – S/C on Articles VI, VII, & VIII for Texas Legislative Council – House
The House Appropriations Committee Subcommittee on Articles VI, VII, and VIII (Natural Resources, Business and Economic Development, and Regulatory) met on Monday, February 20, 2017, at 7:30 AM.
Rep. Larry Gonzales, chair; Rep. Armando Walle, vice chair; Reps. Jay Dean, Mary Ann Perez, Dade Phelan, Justin Rodriguez, Ron Simmons.
Also present were Rep. Ed Thompson and House Appropriations Chair John Zerwas.
The Chair announced that the subcommittee would take testimony from the LBB and agencies, then at the end take public testimony, and will begin markups (votes on budget provisions) next week. He noted that the only returning member on this subcommittee beside himself is Rep. Rodriguez.
Chairman Zerwas thanked Chairman Gonzales for his work on Sunset. Chairman Gonzales noted that the Sunset Commission reviewed 24 agencies, and 17 of those fall within Articles VI, VII, and VIII. He said appropriations and Sunset must work together.
The Chair called Thomas Galvan of the Legislative Budget Board to lay out the TxDOT budget in HB 1. Galvan spoke from this briefing document: http://www.lbb.state.tx.us/Documents/HAC_Summary_Recs/85R/Agency_601.pdf
Rep. Simmons: On Prop 1, the estimate of $573m for 2018 and 2019, how did we determine that? Galvan: based on Comptroller’s estimate from September 2016.
Rep. Rodriguez: There is an increase in funding but roughly the same number of FTEs. Are we doing more external hiring for project management and such? Galvan: That is my understanding but they are asking for an increase in FTEs. Gonzales: That was also a subject of the Sunset report.
Rep. Simmons: It looks like they spent less than appropriated last biennium. They spent $8.8 billion and were under budget by $1.2 billion. I want to make sure we aren’t double counting the budget. Gonzales: That money has to be reappropriated. Galvan: They would need new appropriation authority for it.
Rep. Dean: Are those projects they couldn’t complete in that time frame? Will we see the same projects? Galvan: Some of that money is for design, and the payout for construction is over several years and may span several biennia. Dean: So we aren’t saving that money, we will see it again. Galvan: Correct. The policy with Prop 1 funds was to appropriate all the money that was expected to come in. The department may have obligated those funds in the 2016-2017 biennium but it is likely they will pay out over the following 5 years or so.
Rep. Gonzales: Prop 7 set aside some money for debt service. Galvan: Correct. Prop 12 also.
Rep. Simmons: We are in a deficit on our federal gas tax money. Does the federal funding estimate anticipate an increase? Galvan: It stays the same but it reflects no the apportionment but what the agency expects to draw down.
Galvan: describes debt. Gonzales: $2.4 billion off the top goes to paying principal and interest.
30 minute mark
Galvan: The agency request includes $161 million for construction of a new Austin headquarters. The recommendations do not include any funding for a new building. The LBB has approved the agency’s use of $21 million for site acquisition.
Rep. Rodriguez: There’s a 180% change order? Galvan: Enterprise resource planning software, I don’t have the details but I think it’s the centralized accounting and personalized payroll project. I would defer to the agency. It could be an amendment.
Rep. Simmons: When are Prop 7 funds scheduled to be allocated? Galvan: After the revenue hits $28 billion.
Rep. Gonzales: We paid for a veterans’ toll discount with the sale of real property. That’s gone so there’ s no more appropriation for that. Galvan: Yes sir, and the truck discount.
Rep. Perez: Why is port capital improvements rider improved? I represent the Port of Houston, and we need a lot of work. Gonzales: There was a huge effort this interim to look at ports. I’m curious about that as well. Galvan: Part of the discussion last time was the eligibility to use highway funds for ports, outside the gates vs inside the gates. The $20 million that was allocated here is for projects that provide access to and from outside the gates. Gonzales: we appropriate for outside the gates, what connects the port to roads. Inside the gates, these ports are their own entities. Perez: The Port of Houston needs infrastructure leading to the port. Is that somewhere else in this bill? Galvan: I defer to the department. Rep. Walle: I echo Rep. Perez on the need for funding. Maybe we should move the gate closer to the channel. Gonzales: This is a priority for me too.
Rep. Walle: Did the agency give you any information on the deleted item about minimum wage? Galvan: The rider was considered redundant so the agency requested deleting it.
Rep. Dean: I had a business on Clinton Drive outside the port. The road was bad in 1976. Will we put a list of projects in this rider? Galvan: There is a new rider proposed to include General Revenue that would also be eligible for inside the port projects.
Rep. Rodriguez: TxDOT’s highest priority request is for GR for debt service? Galvan: HB 1 as introduced used the new money from Prop 7 and the agency is requesting to replace that with GR for debt service. Gonzales: We sold Prop 7 on using it to pay down debt, so we will have to have a discussion on this.
Rep. Simmons: There are good reasons to use debt for projects. It’s financially more prudent, even with debt as it is now. We should continue to look at accelerating debt service payoff, but because our bond ratings are so good and we have refinanced at good rates, it’s a tough call. Every dollar we spend to pay off debt early is a project we can’t build down the road.
One hour mark
The Chair called up Lann Bolding, Legislative Budget Board, to talk about the LBB Staff Report pertaining to state funding for seaport capital improvements. Bolding talked from this document: http://www.lbb.state.tx.us/Documents/Publications/Staff_Report/3729_LBB_Staff_Reports.pdf#seaport_capital and reported that seaports are falling short of funding needs for capital improvements.
Rep. Simmons: You said that the seaports are pretty much self sustaining. Have they considered raising their fees to cover a capital improvement sinking fund? Bolding: Most of the ones we talked to have raised fees but have to stay competitive with other ports. Simmons: Are other seaports getting state aid? Bolding: I don’t know. Simmons: Do ports have bonding authority? Bolding: The bigger ones do, GO and revenue bonds backed by their political entity, not the State. The state does not limit the amount that can be bonded. Gonzales: We are going to spend some time on this.
one hour 12 minute mark
The chair called:
Amy Tripp, Sunset Advisory Commission
Verma Elliott, State Auditor’s Office
Justin Griffin, State Auditor’s Office
Amy Tripp gave an overview of Sunset Commission recommendations (see http://ttipolicy.wpengine.com/wp-content/uploads/2017/02/Sunset-Report-to-the-85th-Legislature.pdf ).
Rep. Simmons: One of the big challenges is the department’s performance based planning and budgeting process. If you had to grade them on their completion of HB 20 requirements, where would you say they were? Tripp: We didn’t look specifically at their level of completion, it was more focused on the long term effectiveness and meaningful change. Simmons: Should we hold the money back until we see improvement? Tripp: The Sunset Commission doesn’t weigh in on funding issues. Gonzales: The Commission focused on keeping them on the right path. Simmons: I would respectfully disagree with the characterization that there’s “rough edges here and there.” Gonzales: There has been turnover at TxDOT and this time they were very cooperative and collaborative, which they should be, but it is different from how it has been. A systemic change. Tripp: Performance measures are in the Sunset bill. We found five different sets of goals and one move will be to harmonize those.
Gonzales: You are encouraged to file your own bills, all the changes don’t have to be in the Sunset bill. There are a lot of moving pieces to this thing. The Sunset staff is your staff.
One hour 29 minutes
Verma Elliott, Assistant State Auditor, and Justin Griffin, Audit Manager on Selected Design-Build Contracts.
Griffin spoke from this report: http://www.sao.texas.gov/Reports/Main/16-037.pdf which examined five projects.
Rep. Rodriguez: Do changes in the contract have to be approved by the Transportation Commission? Is it based on the dollar value? Griffin: We did not see any requirement for Commission approval, so it is administrative.
Rep. Perez: What percentage of TxDOT contracts are design-build? Griffin: I defer to the agency.
1 hour 38 minute mark
The Chair calls Brian Ragland, TxDOT CFO, and Mark Williams, TxDOT Deputy Executive Director.
Williams and Ragland give introductory remarks. Ragland: In response to Rep. Simmons questions about the large unexpended balance from Prop 1, those deposits come in annually in large chunks and are appropriated that way. We are able to commit the funds and slot the programs but the actual cash payouts will span 3-4 years for Props 1 and 7 so there are always going to be very large unexpended balances going forward that need to align with the cash expenditures.
Rep. Simmons: Can you provide a breakdown of the positions you are requesting FTEs for? Ragland: see the handout. Simmons: Why do we need 220 engineer inspectors in rural districts? Ragland: Because of the costs involved in oversight in rural districts. Simmons: Is this part of the decentralization of the department? We can talk about that later. Rep. Rodriguez: Are any of the FTEs requested a direct result of Sunset’s oversight recommendations? Ragland: Not necessarily. Our analysis was done independently of Sunset, but there is some overlap. Rodriguez: We heard the Auditor’s office make recommendations about project oversight. Williams: We are improving transparency in how we choose design-build for a project. Working with the Center for Transportation Research at UT, we have a tool that we use to take recommendations to the Commission. Rodriguez: One of the high risk areas was altering the nature and scope of DB projects. Williams: We take a bit of exception with the finding because we have to follow federal acquisition regulations in all of our projects, in making any decision that changes the scope of a project that uses federal funds. But we recognize the need to be more transparent in how the decisions are made so we have made adjustments. Rep. Walle: There are certain issues in the report that you don’t need statutory guidelines, they are common sense. Document policies and procedures to redact personal information. You need to back up and document what’s been going on throughout the whole process in design-build, amendments, alterations to projects. Williams: Yes, that was the fundamental theme of the report, documenting decisions and how they are made. It is on us to make those changes. Our teams involved in that have received additional training and we’re doing more distribution of information. Perez: What percentage of contracts are design-build? Williams: A very small percentage. We are statutorily limited to 3 DB projects a year. However, they are typically high value contracts, above half a million dollars to sometimes above a billion dollars. So it may be closer to 25 to 30% of our overall contract value that we use DB for.
Rep. Simmons: For money not going directly to paving roads, it’s a question of whether you need it this biennium or not.
Dean: What’s the total acreage you are looking at for $22 million? Ragland: 80 acres. Dean: Do you have a cost-benefit analysis for owning and building instead of leasing? Ragland: We’ve done a business case, the break even point is about 15 years. Gonzales: We have plentiful and cheap land on Williamson County, and you’d be going against traffic, it would solve many problems. Ragland: We understand it’s part of our role to reduce congestion so we do not plan on staying in the Austin urban area. Phelan: $22 million is an obnoxious amount of money.
Ragland: We have detail on the ports’ projects list if you like.
Rep. Walle: Please give the committee a list of those projects.
Two hour mark
Rep. Walle: Pertaining to rail and rail safety, a rail safety rider was eliminated? Williams: I will need to get with the LBB for that. We worked with the Texas A&M Transportation Institute to see what our peer states are doing. We are doing well compared to our peer states, even those with more inspectors per mile than what we have. Walle: Does that include grade separations? Williams: Those are safety related projects funded as traditional highway projects in our Unified Transportation Program. There were also some funded under the ports program. Walle: There is talk in Harris County of rerouting rail traffic out of east Houston. Is that part of our plan? Williams: It is my understanding that that is in the planning stage at the Houston-Galveston Area Council, and they are looking at some innovative approaches, it’s in a feasibility study stage.
Rep. Walle: Why did we eliminate the minimum wage rider? Williams: Redundant. The vast majority of our contracts are prevailing wage required under Davis-Bacon. Walle: I kind of like the redundancy. Ragland: It doesn’t hurt to leave it, we are fully compliant, it was just a cleanup request.
Rep. Phelan: Walk me through your aviation strategy. I see $68.6 million requested. Ragland: It’s a pass-through strategy for federal funds to support general aviation facilities around the state and also contains the money for our state aviation facility. Some of it does go to local GA airports. Phelan: Would you consider that inside the gates? Ragland: Yes, and that’s why we use non-state highway funds. Phelan: So we do use money for inside the gates at airports, just not at seaports. Ragland: Correct. Phelan: Port projects are just like other projects, if you don’t pay for them now you will pay much more later. It’s best for our road system to get as much freight as possible off of roads and onto the water and the rails. I fully support the ports. I believe the Senate ports committee has a bill they will be sending our way.
Rep. Simmons: The LBB talked about information resource technology changes. I need an understanding of these major projects we are involved in. How long has that been going on, how much have we spent? Ragland: I will get that for you. Going on for probably 6-8 years, there will always be upgrades, but we anticipate being done with what we are working on now by the end of the next biennium. This should be the last big appropriation for this.
Rep. Simmons: Veterans toll waiver: is it just disabled veterans? Ragland: Disabled veterans, Purple Heart, Legion of Valor, and primarily on the TxDOT -operated Central Texas Turnpike Project. Other toll entities choose, the statute is permissive. We are seeing tremendous growth because the veterans can purchase plates for their family members as well, and the toll is completely waived.
Simmons: On the incentives for trucks to move to SH 130, there’s no value unless you prohibit through trucks on I-35, and what type of measurable improvement would that give, for that $48 million? Gonzales: There was a study done preceding the 2015 session and there was a 40% increase on truck traffic using the toll road. We told TxDOT they could use the cash from property they sold. If you have not been on SH 130 during rush hour, you would be shocked on how you sit in traffic on the toll road. They are heavily utilized. But we knew that the $19 million was a one-time deal and in the future we would be discussing GR. Simmons: I am not in favor of it unless we know what kind of difference we are making. Ragland: We are studying that. Simmons: Do we anticipate requiring through trucks to use 130? Ragland: No.
Rep. Rodriguez: How are you bringing in new contractors? Williams: Contractors are limited by the number of contracts they can do, which opens up competition for others.
Rep. Rodriguez: What is the status of the Accenture contract? Williams: We will get that to you.
Rep. Gonzales: Are there assurances for this committee that if we approve 220 FTEs for CEI in the rural districts, the jobs would actually go there, and we would see projects speed up? Williams: Those are the areas where have difficulty getting good pricing on our construction engineering inspection when we outsource them, and they aren’t unusual projects, we just need people on site who are readily available to make decisions. I can’t speculate on what a metric would be to characterize and measure the performance but we will work on it.
Rep. Dean: From a rural perspective we need the right kind of TxDOT representation from a construction engineering standpoint, it is typical for contractors to miss deadlines. On pavement management, is it declining? Williams: The performance of our pavement statewide has dropped a little bit over the past year or two in response to energy sector impacts. It is a performance measure we are focusing on in response to HB 20 requirements. Ragland: our funding strategies that address routine maintenance are fairly stable. We are seeing increases in our contracting strategies. Dean: Maintaining roads is important, I’d like to see a proactive position from TxDOT to keep up with that.
Rep. Simmons: How many government affairs people do you have? Williams: Probably a dozen state and a little less federal. Simmons: Does this include your public information office? Williams: That is separate. I would speculate there are between 30 and 40 there. Simmons: Those are the people that come up with the cute slogans? Williams: That is a small part. Many of them are located in our district offices and interact with questions from news and print media, and also push information out to media and the public about lane closures, emergency events, hazardous weather conditions, we rely on them to communicate effectively. Simmons: We have to look at all overhead in this process. If somebody is not putting down pavement, it may be necessary but it’s still overhead. I’d ask you to look at making those offices as efficient as possible, They may already be there.
2 hour 30 minute mark
Rep. Gonzales: Amy Tripp, please walk through the Sunset Commission’s aviation recommendation, and if the budget requests do what the recommendations suggest they do. Tripp: [describes]. [Discussion on state fleet]
Rep. Gonzales: If we do toll discount again by selling property, how much would be available? Ragland: The opportunities since that authority has diminished. I will get you the list of possible. We don’t want to be incentivized to sell real estate for the wrong reasons, we want to be thoughtful about it and sell property for the right reasons.
Rep. Walle: I’ve had my staff try to explain the Rube Goldberg machine of Props 1 and 7 to the public and other members, and it’s very difficult. Can you explain how Prop 1 and Prop 7 work? Ragland: [explains and discussion ensues].
End of TxDOT testimony at 2 hours 49 minute mark.
House Appropriations Committee 2/15/17
Background: the Texas House Appropriations Committee is getting briefings on state agency legislative appropriations requests (LARs). Subcommittees for each article of the General Appropriations Act (GAA) will begin meeting on Monday for detailed hearings. Transportation is in Article VII (Business and Economic Development) of the GAA, which includes the Texas Department of Transportation (TxDOT), the Department of Motor Vehicles (DMV), the Department of Housing and Community Affairs, the Lottery Commission, and the Workforce Commission.
- Budget 101
- State Budget by Program (interactive, multi-session)
- General Appropriations Act Development Process
- House Bill 1 as introduced
- TxDOT Legislative Appropriations Requests
- DMV LAR
Note: This is not a transcript. Statements are summarized and paraphrased.
1:30 PM The committee reconvenes and takes up border security. Transportation will come after that. The Chair will call up staff from the Legislative Budget Board first, then transportation agency representatives. Committee members may ask questions.
2:50 The Chair calls up Thomas Galvan of the Legislative Budget Board to brief the committee. Galvan gives an overview of transportation finance in HB 1 — see LBB Briefing Document (PDF format).
2:57 Questions. Rep. Simmons: What is TxDOT’s FTE increase request? Galvan – 11,900. An increase of 670 to handle increased workload. The cost is $78.2 million for the biennium.
Rep. Howard: I see $8.5 billion, TxDOT told us they needed 10 to keep up with congestion at current levels. Galvan: Yes, that was their LAR request last session, $5 billion extra per year. Howard: Some revenue would have gone into the Economic Stabilization Fund but instead is going to the State Highway Fund. Galvan: Yes.
Rep. Dukes: Do you have any monitoring information on TxDOT’s DBE program? Galvan: I do not. We don’t review agency DBE programs. Agencies submit HUB information in their LARs but that’s not the same thing. Dukes: I would encourage you to get some information on the DBE program. We have received complaints it does not meet federal requirements. Galvan: We will look into it. It was addressed in the Sunset report. [Note: For more on the Sunset Advisory Commission’s review of TxDOT, see http://ttipolicy.wpengine.com/sunset-advisory-commission-action-on-txdot-january-11-2017/]
3:08 PM Chairman Zerwas dismisses the LBB and does not call any agencies. He appoints the subcommittees. The subcommittee for Article VII is Larry Gonzales (Chair), Armando Walle (Vice Chair), members Dean, Perez, Phelan, Rodriguez, Simmons.
The Chair adjourned the meeting at 3:10 PM.
Here’s a list of transportation bills filed so far, with blog and other links at the bottom.