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TxDOT Discusses Toll Road By Private Entities


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(from the most recent TxDOT TTC meeting:)

MR. BEHRENS: Agenda item number 5 will be a discussion item where we will be talking about possible rule amendments concerning the approval of connection of another entity's tolled or non-tolled highway to our state highway system. Amadeo will make that presentation.

MR. SAENZ: Good morning, commissioners, Mr. Behrens, Roger. For the record, Amadeo Saenz, assistant executive director for Engineering Operations.

And as Mr. Behrens said, this discussion item is to get some feedback from the commission as we begin to develop the proposed rules dealing with approval of connections to the state highway system from roads that are constructed by other entities.

And of course, a little bit of history is prior to 1980, the department was the only governmental entity with the authority and means to construct, maintain and operate major high-speed regionally significant highway facilities. Of course, over the years more and more entities have been granted such powers. Typically these entities must first receive approval from the department for constructing the facility.

Some of the entities that now have authority to construct, operate and maintain toll facilities include, of course, cities and counties in the international bridges, regional mobility authorities. A limited number of private toll road corporations also have authority to construct toll roads; county toll road authorities have that same authority; regional tollway authorities, and of course, this past session we have a number of special districts.

Most of these entities, by law or by rule, must first seek approval of the Texas Transportation Commission. For example, international bridges, the city or the county must first gain approval from the commission prior to construction of any new international bridge.

Regional mobility authorities, by statute they must receive commission approval prior to any project that will connect to the state highway system or a TxDOT rail.

Private toll road corporations must also receive commission approval before construction; county toll road authorities, by law, unless it is waived by the commission.

A county toll project becomes part of the state highway system when the debt is paid off. So a county toll road authority builds a facility; once the debt is paid off, it then becomes part of the state highway system, unless prior to that project being constructed, by law, the commission would have said that will not become part of the state highway system.

Separate state statutes require the commission also to approve any toll road that will become part of the state highway system. This statute catches all county toll road authorities. Harris County, however, is exempt from this statute and does not need to gain any commission approval for projects.

Regional tollway authorities don't need to gain commission approval for their projects. But our only regional tollway authority in existence today which is NTTA, their past practice has been to recognize the prudence of working together with the department closely and with Federal Highway Administration, and they have voluntarily agreed to design and construct their facilities to TxDOT standards and to follow the environmental review process and public involvement procedures.

Harris County Toll Road Authority has demonstrated a little bit more independence. One of the things that we need to look at is that they could be building a highway that would not be part of -- or any entities could be building a highway that would not be part of a transportation improvement program that could possibly lead into some federal sanctions and basically shut down the federal program for TxDOT.

We do have rules governing the connection to the state highway system, however, these rules do not give the department the ability to deny the connections based on design and construction or compliance with the federal requirements. So we're in the process of putting together rules that would ensure that we have compliance with federal laws, the major highway facilities are properly designed and constructed, and proper statewide planning is included.

And of course, what we'd like to hear from you, I've got a series of questions that I'd kind of like to pose to you to get your feel and your direction so that we can use that to develop the rules.

Once we have this, we will come back at a later month and propose the rules so that they can be there for public comment, and then finalize the rules at a later date.

Yes, sir?

MR. WILLIAMSON: Stop a moment, Amadeo. A couple of things need to be noted here for the record. Not to correct your testimony, but I think what you meant to say was if given direction from the commission, you'll bring proposed rules.

MR. SAENZ: Yes, sir, that's correct.

MR. WILLIAMSON: I do this from time to time, members, and invariably the person I single out isn't happy about it, but I have to do it.

James McCarley is a friend of transportation in this state, and four years ago when I came on the commission, he paid a courtesy call and he made just a passing comment about: My observation about the commission is that you frequently begin making decisions without giving those of us in the regions and the local government fair warning, enough discussion, enough public hearing, or whatever.

I think Wes Heald at that time, and Mike and all the staff, I think, legitimately would say we don't agree with that, we think we do give fair warning. But the fact that someone like James and others after him would have that feeling kind of led this commission towards trying to figure out a way to dialogue with the public such that no one could ever say they didn't have fair warning, and from that came the notion of public discussion, of discussion items.

So James, I give you credit for starting us down the path of doing business this way.

And I also take this time to sort of educate everyone that at my request we're going to start approaching it a little bit differently.

When staff asks me to put discussion items on the agenda, I'm going to always make them prepare questions for us so that they're going to lay out what they think we ought to talk about and then they're going to submit questions to us. We don't have to answer them today, but they're basically using this forum to tell us and the affected public: These are the questions we think you, the commission members, need to be thinking about answering because we perceive these as the rough spots in this discussion item.

Would that be a fair summary, Amadeo?

MR. SAENZ: Yes, sir, that's correct.

MR. WILLIAMSON: So the questions are not meant to put us on the spot so much as they're meant to inform us that this is staff's view of what Jim McCarley is going to say we need to be prepared to answer in San Antonio, Houston, El Paso, Dallas, and all points in between.

Please continue, Amadeo.

MR. SAENZ: Okay. Like I said, these are some of the ideas that we are looking into and some of the areas that we're looking into. For example, should the commission or the department staff approve major connections to the state highway system?

Like I said, we approve them, we have approval requirements right now for regional mobility authorities, we have approval requirements for private toll road authorities. But do we want to make this a blanket for any toll road that's being developed, should that be a requirement that that be connected.

MR. WILLIAMSON: But what if it weren't a toll road, what if it were a pass-through toll road?

MR. SAENZ: The pass-through toll is on the state highway system so that project is already on the state highway system, so we already have the approval.

MR. WILLIAMSON: I'm sorry. Go ahead.

MR. SAENZ: Another question that we have is, of course, if another entity wishes to connect a regionally significant highway, a major highway in an area that could be subject to the federal air quality requirements, it could be subject to other federal requirements, they want to connect that highway to the state highway system, would we also want to require that that highway be part of a conforming TIP for a metropolitan planning organization.

MR. WILLIAMSON: I have another question about that. Let me give you a for example. The county judge in Grayson County talks Ross Perot, Jr., into going up to Grayson County and making that old Army Air facility a relief feeder for Alliance Airport. He needs a road that goes from Point A to Point B where no road exists now and he's willing to pay for it all.

Does your question address that completely privately-built road as well as any road built by a quasi-public entity?

MR. SAENZ: It could be both. Any regionally significant highway facility.

MR. WILLIAMSON: So your view is we have to figure out do we want to enforce all highway construction having to conform to the TIP.

MR. SAENZ: Yes, sir, that it be included in that area's metropolitan transportation plan and their TIP, especially in the areas of non-attainment where you could get into problems.(note from pineda: like the 8-county region of the Houston area) By adding a facility that is not in the current TIP, you could get them out of conformity, and thus impacting the entire area.

MR. WILLIAMSON: Okay, continue.

MR. SAENZ: The third question is, of course, if another entity wishes to connect a regionally significant highway to the state highway system, do we want to require the connection -- for example, the interchange where we go from their road to our road -- to be designed and constructed to our standards.

We do this for regional mobility authorities. Do we have that requirement and do we allow a potential for them to request an exception that could be granted by the department? We do this for regional mobility authorities also.

And should there be some TxDOT oversight over the design and the construction of that facility that is being constructed that would connect to us? That's another thing that we need to look at and would like to get some feedback from you all.

MR. WILLIAMSON: Amadeo, if we were to require TxDOT standards, would that imply that we had to be responsible for the environmental process?

MR. SAENZ: No, sir. They would still be responsible for the environmental process. The standards I was talking more about is basically the geometric standards and such.

MR. WILLIAMSON: Not the pre-planning or pre-design, pre-engineering.

MR. SAENZ: Right. The pre-planning will come in a little bit. Of course, by the same token, the project connects to our project, and I think in looking at it, that interchange is really a project that is basically owned by both of us.

Do we want to be involved in the approvals and the review for the entire project? And that's another question that we'd like you all to kind of give us some feedback on. Should we have, basically, on the rest of the project approval and oversight for how they're going to develop and approve that project?

MR. WILLIAMSON: That will raise some blood pressure.

MR. SAENZ: It will.

And of course, one of the major questions -- and we've touched base on it a little bit -- is if the entity wishes to construct that regionally significant highway project that connects to the state highway system, should the entity show evidence of compliance with the state statutory requirements to provide public involvement and also to conduct an environmental review.

This basically applies to an RMA, but do we want to require it of the other entities that are constructing toll roads?

We remember when we were in Houston there was a lot of public input concerning the environmental process, and the people there, the constituency there liked the department's environmental process because they knew it was set and we were pretty structured, and you could have different entities that have different processes.

So should we require them to comply with TxDOT environmental and public involvement processes for these projects that are of regional significance that connect to the state highway system.

And of course, any other regulation or any requirement that you all think we need to look at, we'd like to get some feedback so that we can see if we need to make changes to our proposed rules and then propose it neatly.

MR. WILLIAMSON: Members, staff has laid out -- they've identified a problem for public discussion which they believe deserves our attention. They've made some broad recommendations and they've put to us questions that we have to think about in the next month or so.

We do have one member of the public who wishes to comment on this public discussion item, and we're happy to have him. Do you want to question Amadeo now or would you rather hear from Allan Rutter first?

[inaudible response.]

MR. WILLIAMSON: Allan, old friend, Allan -- or longtime friend, maybe I should say.

MR. RUTTER: No, I'm getting old.

Thank you very much for the opportunity to appear this morning.

One of the things we get is we get these legislative clipping services and that keeps us from having to recycle too many newspapers, but we've been reading that there have been some uncharitable adjectives used to describe what happens in this room and in this building from around the state, and that is not our experience with either you or our district folks in both Fort Worth and Dallas.

And I say that not just to suck up -- although there's part of that -- but it also is to acknowledge that I have evidence of that, and that is that we were told that this was going to happen today, before today. Several weeks ago your staff called us to apprise us of this discussion.

And frankly, one of the reasons I wanted to be here is to tell you how much we appreciate the collaboration and sense of partnership that we have with the department, both here and in Dallas and Fort Worth. Saying that we owe our success to your support is not just stating the obvious, it's a gross understatement.

I'm sure that these rules that you're contemplating come from a really good idea in general. TxDOT has a really obvious and central interest in the manner in which other people's roads connect to your system, but we hope, on behalf of my board of directors at the NTTA and our staff, that you not take a one-size-fits-all approach to this issue, particularly in light of the wide array of toll authorities that are or will be operating in the state.

I've got two reasons for our request. One is legal -- isn't everything -- and the other more important one is practical.

First, from a legal standpoint it's important to recognize that the NTTA's enabling legislation addresses the issue of connecting to the state highway system in a very different manner from the way that issue is addressed in the enabling statute for other toll authorities -- particularly RMAs -- and for other entities connecting onto or as part of the state highway system.

Our enabling statute doesn't require as much TxDOT oversight over as many issues when the NTTA wishes to connect our projects to your system. There's probably a reason for that distinction in our legislation. At the time the NTTA was created in 1997, our statutory predecessor, the former Texas Turnpike Authority, had been building and operating turnpikes for over 40 years and had demonstrated its ability to connect to your roadways in a manner that met your admittedly and reasonably high standards and expectations.

So we're urging that your proposed access rules for the NTTA be different from your rules for other toll providers for the simple reason that our law is different. But frankly, the most important reason for why those rules should be different is not legal, it's practical.

As I mentioned before, we're an established toll road authority, now with over 50 years' experience of building turnpikes. Our projects connect to several of those roadways, and in every one of those instances, our staff, working with yours, has been able to structure an agreement to effect that connection tailored to the specific circumstances of each one of those interchanges.

We believe that the flexibility has been enormously beneficial to both our organizations, we sincerely hope that it not be constrained or eliminated by rules that attempt to regulate our 50-year-old authority in the same way as a startup. How ever we accomplish that distinction in the rules is something we can work out.

We prefer to be omitted from those rules and to allow the terms of our statute and the specific tailored features of each individual ILA with you to control. Maybe the rules would, instead, provide exceptions for experienced toll authorities.

But how ever it's accomplished, the NTTA hopes that nothing changes in these rules that in turn compels our organizations to change the way we've successfully addressed this issue up to now at your State Highway 121, State Highway 78, US 75 and twice at both Interstate 35 and Interstate 635.

Maintaining that flexibility will allow for the best use of TxDOT's resources and ensures that our successful approach to this issue will continue.

I really, really appreciate the opportunity for us to be able to express our views on this before you do the rulemaking. Thanks.

MR. WILLIAMSON: Well, you're always articulate in expressing a logical viewpoint of the department.

Members, any questions of Allan, discussion with Allan?

MR. JOHNSON: It's good to see you.

MR. WILLIAMSON: Always good to see you, Allan.

MS. ANDRADE: It's good to see you. I have a question, and thank you for working so closely with us. Has that impaired or has that delayed any of your projects?

MR. RUTTER: No. Part of that is due to the attentiveness that we've received from both district offices, and I think that's always been good.

The extent to which the department is now getting into the toll business now provides them with the same kind of impetus that we've always experienced which is we've got to get these roads built and start collecting money because that's what our bondholders expect of us.

But our past has been distinguished by a real cooperation that our being able to build a facility enables people who are using the state highway facility to use that. The better we make that interchange, the better we construct it, the more we make sure it meets your expectations and standards, the longer it's going to stand up there and the longer it's going to serve the user of the state highway system whose gas taxes have been used to build it.

MS. ANDRADE: Thank you.

MR. HOUGHTON: Wouldn't you think, though, Allan, that the standard that you've all agreed to with TxDOT should be a benchmark for the state and then you can start from that point?

MR. RUTTER: Well, I appreciate Amadeo saying that we've chosen to use your standards. We design to the AASHTO guidelines; we want to do so because we want to make sure that our customers have a safe road to drive on.

We construct our roads to TxDOT's specifications in large part because contractors know what that is. That helps us get a road built faster and cheaper instead of coming up with our set of specifications.

I guess my only question would be that it be specific to the interchange or the project that you're building, that there be enough flexibility that you give to your district engineers to deal with whatever they have on the ground there.

A number of the things that you talked about, making sure that something is in the TIP, we require that of any of our projects. Before a local government wants us to build something, it has to be in the TIP, both from a regional priority standpoint and from the air quality standpoint.

And making sure that some of those standards and specifications are met, that may not be a high hurdle for us. We just want to caution as those rules are being developed that they build in enough flexibility for your DEs to deal with changing circumstances down on the ground.

MR. HOUGHTON: And I can ask Amadeo, do we build in enough with our DEs to have that kind of latitude?

MR. SAENZ: Again, for the record, Amadeo Saenz. And we have, to some extent, because most of our rules require that you meet TxDOT or AASHTO standards or you can request for a design exception, and that would be kind of like the special circumstance: you want to do something different that's not exactly tied to that standard. So that flexibility can be incorporated.

MR. HOUGHTON: And the DE has that authority?

MR. SAENZ: Yes, sir, or it would be done at a higher level, even up to Mr. Behrens, if it needs to be.

MR. WILLIAMSON: Questions, members, comments?

MR. JOHNSON: I have an observation, I guess. Allan, a lot of what you brought, I concur with.

I'm going to put this in two perspectives. First of all, whatever we do, we cannot run the risk of losing federal funding. I think that's a given that all parties would agree with. On the other end of that, I want to put what I'll refer to as our partners -- and that's collectively -- all the entities, both public and private, that can do facilities that they would want to have access to the state highway system.

My thought is that we cannot run the risk of making the requirements so onerous that it discourages the development of transportation assets, nor should they be so onerous that they delay project delivery. And there is a wide area in between those two requirements, the loss of federal funds and the discouragement of so many or so onerous requirements that we impede the development of transportation assets and throw in requirements that delay project delivery.

I think there's ground in there. I think in golf parlance it's the rough on one side and the rough on the other side of the fairway, and there's the fairway in between.

MR. WILLIAMSON: Well, I think you, and to a certain extent Ted, make the case for the limited regulation or no regulation approach, which philosophically I share. But I think the difficulty, when staff asked to bring this forward as a public discussion item, we see a lot on the inside that isn't yet in the public's eye -- will be but isn't yet -- and what we see, particularly what staff sees, is an explosion of transportation authorities of different types soon to be approved and in operation.

And while we will strive to be, as Jerry Dike said earlier, 100 percent perfect, we know that ultimately some of these authorities, private sector initiatives are not going to succeed, and that we intentionally plan for the day that we'll have to take one back or take one over.

And I think staff's concern is how do you pick the one that's going to succeed or not succeed, or how do you prepare for the day that one of them is not going to, and we don't want to have handed back to us an asset collapsing around our heads that people have been injured on that we have to take gasoline tax money from the motorists in Cameron County to go repair. I think that's where they're trying to go with it. So that's kind of the slice and the hook rough of that problem.

And we hear what you're saying now and we appreciate what you're saying, and I'm not sure how far we're going to ask staff to move forward with this initiative, and if we do, we will answer these questions for them, and we'll have lots of public hearings.

I appreciate your comments about public hearings. I don't mind being criticized for my decisions, but it really caught me off guard when somebody said we don't listen to the public. That's pretty silly.

MR. RUTTER: Well, that's not been our experience, and we look forward to working with your staff on this and other issues. Thanks.

MR. WILLIAMSON: Thanks, Allan.

Amadeo, do you want to sum up?

MR. SAENZ: Yes, sir. I think from what I heard -- and of course, we will be visiting with you all a little bit more during the next couple of weeks -- basically we need to have some flexibility, that we also need to make sure that we don't jeopardize any of the federal funding. So we're kind of working between the two roughs and hopefully we can hit a straight drive.

MR. HOUGHTON: We don't compromise quality and safety.

MR. WILLIAMSON: We're trying to develop an entrepreneurial transportation world. We don't want to sit on entrepreneurs, we don't want to sacrifice integrity or quality at the same time.

I suggest you make sure commission administrative assistants have the questions so that they'll ask us to confront what I think our answers are, and let's dialogue with the commission one-on-one through the next couple of weeks before we go to the next step.

MR. SAENZ: We will do that. And we understand the different entities have the different levels of expertise and experience, and I think we could probably learn from our past experience in developing projects and putting in place something that will work for all of us. Thank you.

MR. WILLIAMSON: Thank you.

Chronicle story today about private entities and toll roads

Edited by pineda
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Guest Plastic

I wonder why private companie slike Coca-Cola,Exxon ,and RCA don't buy land and build tollways. They've got plentyy of money and there's revenue in it. Hell they're buying and building all the sporting venues.

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from the Chronicle story:

Other toll roads have leased operational rights.

Chicago last year leased the rights to run the Chicago Skyway for 99 years for $1.8 billion. The deal spells out that Cintra-Macquarie Consortium can double the toll to $4 in the next decade on the Skyway, about 8 miles of elevated highway.

The Civic Federation, a government watchdog group in Chicago that often supports Mayor Richard Daley's decisions, has complained that he has frittered away the windfall gained by privatizing the Skyway, according to the Chicago Tribune.

Cintra is the same company Gov. Perry signed on with for his Trans-Texas Corridor recently...

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I wonder why private companie slike Coca-Cola,Exxon ,and RCA don't buy land and build tollways. They've got plentyy of money and there's revenue in it. Hell they're buying and building all the sporting venues.

How many private toll roads are there in America?

I saw a piece on TV about one in California that seemed to be doing well.

Chicago just leased the Chicago Skyway to a Spanish/Australian company for 99 years for $2 billion, but that's very recent. Are there any private toll roads that have a track record of making money over years or decades?

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How many private toll roads are there in America?

I saw a piece on TV about one in California that seemed to be doing well.

Chicago just leased the Chicago Skyway to a Spanish/Australian company for 99 years for $2 billion, but that's very recent. Are there any private toll roads that have a track record of making money over years or decades?

As far as I know, there are no private toll roads in the United States in addition to the Chicago Skyway.

The Camino-Columbia toll road in Laredo was private and was a financial disaster. It was recently taken over by TxDOT.

The California 125 project is under construction and is mostly privately financed.


There is some discussion of private projects, mainly in Virginia and possibly the ICC in Maryland. TxDOT's fanaticism for tolling is way out of line with the rest of the DOTs in the country.

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I think there must be at least one completed in California because the I remember the film crew following this woman on her entire commute to work.

Though, maybe it was something like a congestion-charge lane where people pay a separate toll on a public road to use special less-clogged lanes. Like if the Hardy Toll Road was merged into I-45 as one freeway.

One of the (many) details of the civil war that are often overlooked is the transportation factor. In addition to slavery and state's rights and the other big issues that divided north and south was how the nation's road system should be built. The northern states thought it should be a network of publically-funded roads much like what we have now. The southern states felt that roads should be private enterprises much as they were in parts of Europe at the time.

There's actually a relic from this old school of thought still operating in the U.S. A man by the name of Dingman set up a ferry hundreds of years ago in the area between New Jersey and Pennsylvania known as the Delaware Water Gap. Today it's part of a national Park, except for Dingman's Road which is still the main route connecting U.S. 206 in New Jersey to U.S. 209 in Pennsylvania. Dingman's ferry was very profitable as it was the only way across the Delaware River for a hundred miles and the enterprise was handed down from generation to generation. Today the ferry is gone and replaced by a bridge, but the area is still known as "Dingman's Ferry" as is the small town just outside the park. I remember as a kid going to visit relatives in the Poconos we would cross the bridge and there was always a Dingman descendant seated on a stool in the middle of the bridge on the Pennsylvania side who would collect a quarter from each car as it passed in either direction. This was in the 1970's and 80's. I don't know if the toll has gone up since then. I think the last time I crossed that bridge would have been around 1992.

Anyway, it's a cool piece of history that survives today. I don't know exactly when the enterprise was started, but I wouldn't be surprised if it predates the founding of the United States.

Sorry to reply to my own reply, but I just found some information.

Andrew Dingman established his ferry in 1730, so it does pre-date the United States. The ferry was replaced by a bridge in 1830. The current bridge dates to 1898, and is considered one of the last private bridges in America.

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I live in Northern Virginia. We have a road called the "Dulles Greenway" or Rt. 267 that was built in 1995 and is operated by a private company. As far as I know the state money was not involved in building this road from the start. (http://www.dullesgreenway.com/cgi-bin/dginfo.cfm)

The company that built it bankrupted because of the massive debt. The road later got purchase by another company which is now breaking even or making a profit. the road is approximately 13 miles long and runs between Leesburg, VA and Dulles Airport. After the airport it becomes a state toll road and connects all the way to the capital beltway (I-495).

I have an EZ Tag to I don't usually pay attention to how much the price of the toll is to drive it but I think it was recently raised to $2.50 or maybe $3 for the 13 mile private stretch.

Now, back to Houston. I think that HCTRA should not sell or lease the toll roads. They are doing just fine financially and they need to focus their energy on building more toll roads to relieve state highways and provide redundancies. Introducing a private firm will hurt residents by increasing tolls and possible miss-management. I would like to see HCTRA build a toll road that parallels 290 and build the Grand Parkway in the next year or two.


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MR. WILLIAMSON: Well, I think you, and to a certain extent Ted, make the case for the limited regulation or no regulation approach, which philosophically I share. But I think the difficulty, when staff asked to bring this forward as a public discussion item, we see a lot on the inside that isn't yet in the public's eye -- will be but isn't yet -- and what we see, particularly what staff sees, is an explosion of transportation authorities of different types soon to be approved and in operation.

And while we will strive to be, as Jerry Dike said earlier, 100 percent perfect, we know that ultimately some of these authorities, private sector initiatives are not going to succeed, and that we intentionally plan for the day that we'll have to take one back or take one over.

I think this may be the bone of contention for Art Storey, the fact that Williamson is saying here that TxDOT needs to prepare now to be able to take over projects that may not suceed, (perhaps in terms of revenue), like the Grand Parkway project. Remember, Art Storey's quote: "We're in the mobility business, not the revenue business." Which means that though HCTRA did all the grunt work, TxDOT could take over the project when it's completed on the grounds that the project did not generate the revenue that was projected, and HCTRA would have put all that money out there for nothing.

Edited by pineda
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Draft minutes from Sept. 29th TxDOT TTC meeting

One section that caught my eye was the rather lengthy set of minute orders dealing with toll road projects and proposed changes that TxDOT would like to see enacted, specifically one dealing with "Surplus Toll Revenue".

Could it be that TxDOT wants to allow HCTRA to build the Grand Parkway project with HCTRA funds, and maintain it with just enough HCTRA funds, but send all surplus revenue from the Grand Parkway project back to Austin to be used for other transportation projects in other parts of the state where they don't have the financial capital that the Houston area has?

We'll have to wait to read the full minutes when they're published and read the proposed changes in the Texas Register, but this may be the real reason why Art Storey put the brakes on the Grand Parkway! :)

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