August 2009 Cover Story

TxDOT Executive Director, Amadeo Saenz, Jr. Talks About the Future of Construction in Texas

HCA welcomed for the first time as speaker, Mr. Amadeo Saenz, Jr., Executive Director for the Texas Department of Transportation.  Mr. Saenz thanked HCA for the opportunity to address the group and recognized his local district director, Delvin Dennis for the outstanding job that he has done in taking over the Houston district.

Mr. Saenz began his presentation with a discussion on the Grand Parkway stating that TxDOT has been working very closely with the Harris County Toll Road Authority (HCTRA) on the development of the Grand Parkway.  One of the things that TxDOT wants to accomplish is to see the Grand Parkway constructed as one project.  This is important to TxDOT because, in theory with it passing through seven different counties, you could see seven different construction projects and seven different types of development.  Two years TxDOT ago worked through the legislature to create SB792.  This bill set up a mechanism to develop the Grand Parkway as one project where each completed section would help to develop the remaining sections.  HCTRA has the right of first refusal and they have been working with the other six counties on this project, however come September, if the County Judges decide not to do it, then TxDOT will already has a plan in place.  According to Mr. Saenz, if TxDOT builds the Grand Parkway it would be constructed in a similar format to that proposed by HCTRA.  Mr. Saenz stressed to the contractors in the audience that there will be an open procurement on this project and that they want as many contractors as possible to come forward to bid.

Mr. Saenz next asked how many contractors in the audience were certified as a DBE, SBE, WBE or certified to bid on TxDOT contracts?  The response from the audience was light to which Mr. Saenz stated that if you wish to work for TxDOT, and fall under one of those categories, TxDOT has a mechanism for you to get certified.  Being certified is the only way that you can work on TxDOT projects either as a prime or a sub.    To bid on any TxDOT project you must be certified and TxDOT is actively looking to increase its number of certified contractors at all levels.

Mr. Saenz moved on to cover a few things that came out of the last legislative session.  Amadeo stated that the legislature was considering a couple of things that were important to his department.  One was the setting of the state budget and of course TxDOT’s portion of that money and also the conclusion of the sunset legislation for TxDOT.  Mr. Saenz said that he felt certain that the Department of Transportation performed an important task and would be continued.  Unfortunately, according to Mr. Saenz, any bill that was behind the voter I.D. bill didn’t go anywhere.  Mr. Saenz stated that they had worked with both houses and come out with a good bill that addressed issues concerning transportation, department operations and the structure of the department as a whole.  However the voter I.D. bill was never resolved and the session ended without the TxDOT sunset bill being approved, therefore the department went into the wind down process to close the department.  Luckily the governor called a special session in which the legislature passed two bills; one gave TxDOT an extension of two years, basically keeping TxDOT under the sunset review for an additional two years. The second bill authorized TxDOT to issue $2 billion worth of general obligation bonds that had been previously approved by the voters.  This will allow TxDOT to have one billion dollars in infrastructure bank and $2 billion for infrastructure projects.  This money will not solve Texas’ transportation problems, according to Mr. Saenz, when you look at the transportation needs of the state, that money is about one year’s worth of work that you can advance.  The Chairman of the Department of Transportation put together a committee called the 2030 Committee whose purpose was to study the future transportation needs for the State of Texas.  To do this they needed to find out what it would take to maintain the roads and bridges that we currently have and also what is the investment that is needed to keep the State competitive with other states in the nation.  The committee determined that between now and the year 2030 the state needed approximately $313 billion to address the needs of the state.  Broken out, that comes out to $14 billion a year.  Texas spends between $3 and $4 billion per year on the highway program currently for construction and maintenance.  What that means is that right now TxDOT does not have the resources to cover the needs of the state.  Mr. Saenz stated that we need to start working together to determine where new funding sources can be found that can help us solve this problem.  Mr. Saenz stated that he has begun working on the legislators, trying to educate them on exactly what it takes to keep Texas moving and how much that will cost.  You don’t get everything you want in one session said Saenz, so we have started laying the groundwork for the future. 

Another issue that TxDOT was interested in addressing during the last legislative session was how much money was being taken from the state highway fund and used for other agencies like DPS, Health and Human Services and Medical Transportation.  Mr. Saenz stated that he was able to reduce that amount this year by $365 million.  There was a lot of movement in this last session to keep the transportation money for transportation.  Mr. Saenz says he thinks that push will continue into the next legislative session because the hole for meeting the transportation goal is getting deeper by the year.  Mr. Saenz stated that he is about $2 billion down this biennium as compared to the last session.  TxDOT is also working to get stimulus money to do a feasibility study for two high speed rail corridors in Texas.  One corridor runs along interstate 35 and the other runs from Houston toward Baton Rouge.  They are currently looking into ways to connect the two lines.

Federal issues.  Congress is working on a new re-authorization bill for the disbursement of the gas tax.  Congress has a draft bill out now that would increase the funding from the current $225 billion over six years to $500 billion over six years.  Unfortunately a closer examination of the bill shows that there is less money in that bill for highways than there is in the current bill.  Mr. Saenz stated that he does not think that this is the bill that will make it out of congress, however the current bill is ending soon and a replacement needs to be found.  President Obama is on record for extending the current bill an additional 18 months to give his administration time to get up to speed on the issue.

Mr. Saenz closed by noting that when gas prices rose last year to $4.00 per gallon we started seeing big changes in peoples habits.  Gas guzzlers were being replaces with fuel efficient vehicles, car pools increased and people who had never used public transportation before began using it.  The interesting thing according to Saenz is now that the gas prices have dropped we are not seeing a return of people to their private vehicles.  According to Mr. Saenz people have identified ways to save money and therefore there has been a corresponding drop in the motor fuels tax revenue brought in by the state.  According to Mr. Saenz, revenue is down about 2.5 % compared to historical data.  That equates out to about $50 to $60 million a year less.  According to Mr. Saenz, we need to find a replacement for the motor fuel tax as the revenue source for TxDOT and find something more reliable.  Across the country there are several new approaches to funding our highways.  One is a motor vehicle miles per gallon tax that is being looked at in Seattle.  This proposal would tax drivers based on the number of miles that they drive.  Mr. Saenz says that he believes we will see a change to something like a vehicle miles per gallon tax in the near future.

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