HOUSE BILL REPORT

SHB 1160

BYHouse Committee on Transportation (originally sponsored by Representatives Walk, Schmidt, Patrick, Prince, P. King, Doty and D. Sommers) 

Implementing a pilot program to study road and maintenance project costs.

House Committe on Transportation

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (23)

      Signed by Representatives Walk, Chair; Baugher, Vice Chair; Betrozoff, Cantwell, Cooper, Day, Dellwo, Doty, Fisher, Gallagher, Hankins, Haugen, Heavey, Kremen, Patrick, Schmidt, C. Smith, D. Sommers, Spanel, Sutherland, Todd, S. Wilson and Zellinsky.

Minority Report:  Do not pass.  (1)

      Signed by Representative Meyers.

House Staff:Louise Bray (786-7322)

AS PASSED HOUSE MARCH 20, 1987

BACKGROUND:

There has been continuing discussion and controversy regarding how to most effectively expend public funds used for roadway construction and maintenance projects.  In 1986 the Legislative Transportation Committee authorized a study to identify a reasonable, equitable method for comparing the costs of roadway construction and maintenance projects.

The study examined the accounting methodology and project costing techniques currently used by contractors and public agencies and made recommendations to improve the decision-making process for roadway construction and maintenance activities.

The study recommended a pilot project be conducted involving selected cities, counties and the Department of Transportation utilizing the project cost evaluation methodology (PCEM).  The entities would use PCEM to determine whether a particular project should be done in-house or contracted out, regardless of who had done the work historically.

SUMMARY:

A pilot program utilizing the PCEM is created.  The Legislative Transportation Committee shall select, from those entities wishing to participate, cities and counties representative of the various demographic and geographic components of this state to participate.  The Department of Transportation shall select a portion of a district or districts to participate in the program.

The pilot program shall consist of two parts:  the "preferred approach" and the "shadow approach".  The participating cities and counties will utilize the preferred approach which will involve evaluating the projects and following through with either in-house or contracted out performance of the projects.  The Department of Transportation will utilize the shadow approach and evaluate the projects and make a determination of which projects would have been performed in-house or contracted out had it been operating under the preferred approach.

In order for the local governments to fully participate in the program, the application of bid and day labor limits to them are suspended for the duration of the pilot program.  All reasonable, direct costs to the local governments generated by their participation will be reimbursed through a special studies appropriation that is funded from the city's and counties share of fuel tax revenues.  No public employee shall be displaced or terminated as a result of the pilot program.

The Department and the participating cities and counties shall report to the Legislature on or before February 15, 1989.  This pilot program shall expire on June 30, 1989.

EFFECT OF SENATE AMENDMENT(S):  The pilot program is extended from June 30, 1989 to June 30, 1990.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Dan Pensula, Office of Financial Management and chairman of PCEM Steering Committee; Rob Lemmon, DeLoitte Haskins and Sells; Sam Kinville, Washington State Council of County and City Employees; Duke Schaub, Associated General Contractors; Stan Finkelstein, Association of Washington Cities.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    Bid and day labor limits have been a controversial issue for many years.  The pilot program will evaluate the effectiveness of current practices used in the determination of whether roadway maintenance and construction projects are done by in-house forces or are contracted out.

House Committee - Testimony Against:      None Presented.

VOTE ON FINAL PASSAGE:

      Yeas 94; Nays 2; Excused 2

Voting Nay: Representatives Meyers and Vekich

Excused:    Representatives Chandler and Padden