Every other year, the state legislature grapples with ODOT’s two-year budget. From mid-February to late-March is budget time, so OCA closely watches and comments on issues that arise during this process. This year was no exception, as we took advantage of the comment opportunity, just as we do every budget cycle, to publically address those topics contained in the draft language that we agree or disagree with, or just want to express an opinion on. Following is the testimony that was presented to the House and Senate. While this does not address every matter contained in the bill – and we are not given time to touch on every topic – it does highlight several issues that OCA wished to emphasize.
The proposed ODOT 2014-2015 transportation budget was submitted to the Ohio House of Representatives in early February. The following post is abridged from Mr. Runyan’s commentary in the January/February issue of Ohio Contractor magazine.
In what seems like no time at all, we have arrived at the point in time where the Kasich Administration will be submitting a proposed transportation budget for ODOT. In addition to the overall funding direction for the next two state fiscal years, there are a number of policy items that the Ohio Contractors Association already anticipates will be included in the bill that will be of interest to the heavy/highway community.
OCA has worked with ODOT for the inclusion of modifications in defining the amounts of performance and payment bonds. Presently, the amounts of these bonds are based on the state’s estimate amount. We have secured the concurrence of ODOT in supporting a change to set the bond amount equal to the contract price amount.
In an earlier edition of OC magazine, I wrote on the evolving contractual concept of Construction Manager/General Contractor (CM/GC). ODOT intends to include language in the budget bill to allow one pilot project to be administered, designed and constructed using this new project management and construction philosophy. This pilot project will be monitored closely to determine if there are, in fact, financial and operational benefits over the traditional design/bid/build methods.
Recommendations on the Ohio Turnpike operations study were recently announced. To the surprise of many, it was decided by the Kasich Administration to retain the current Turnpike Commission structure and permit turnpike toll revenue to secure bonding for projects that are not located on the turnpike. In their pre-announcement briefing, ODOT stated as much as $1.7 billion worth of projects can be directly financed with the use of these bonds. OCA will be supporting the administration’s effort to change current law so that turnpike-generated revenue may be expended for highway and bridge purposes off the current turnpike alignment.
OCA and ODOT have arrived at an agreement to fundamentally change how force account limits are measured on many projects that are performed by the ODOT workforce. In lieu of dollar limits, size limits will determine if the work can be performed by ODOT forces or must be contracted out for: bridge replacement, widening or deck replacement, culvert replacement or asphalt paving.
Recently, the Ohio Supreme Court ruled that revenues generated via the Commercial Activity Tax (CAT) on motor fuel must be spent for highway and bridge construction and maintenance purposes along with several other uses as stated in the Ohio Constitution. This ruling will require a change to the sections of Ohio law that define how CAT-generated revenue must be spent. Our hope – and efforts – will be to urge the legislature to direct those funds to road and bridge construction as prescribed by the constitution and affirmed by the Supreme Court.
These represent five major issues we plan on addressing in the upcoming legislation. No doubt other topics, offered by other sources, will arise. We will be evaluating each of these closely for their impact to the heavy/highway construction industry and responding accordingly.
U.S. Representative Pat Tiberi is the only Ohioan serving on the Conference Committee that is currently reviewing the House and Senate versions of the federal highway reauthorization bill. As member of the conference, he has the unique opportunity to shape legislation that will potentially deliver jobs to Ohio and facilitate transportation infrastructure improvements that will provide a long-term boost to the U.S. economy.
Despite the ongoing struggle to help stabilize the nation’s economic and employment outlook, Congress cut federal highway investment by $2 billion in the FY 2012 appropriations process. At time when Congress should be preserving and creating jobs in the transportation construction industry through highway investment, this major cut is having the exact opposite effect.
Fortunately, the reauthorization bill approved by the Senate would, among other things, restore this $2 billion cut and make purchasing power adjustments for the FY 2012 and FY 2013 federal highway investment levels. Under the Senate-approved bill, Ohio would regain more than $95 million in lost federal highway funds for this year, at a time we need them most.
Policy reforms such as increasing state flexibility and streamlining the environmental review process for transportation improvements are important. However, the highway investment levels will be the key deliverable in this bill. It is a simple fact that locking in a $2 billion cut in federal highway investment will endanger jobs in our state and further shrink the number of projects made available for construction. In fact, the Columbus Dispatch Biz Blogs notes that, ODOT’s Transportation Review Advisory Council will soon vote on a plan to push back Ohio’s major highway projects for up to 19 years.
The Conference Committee is striving to reach compromise before the current transportation authorization extension expires on June 30. Now is a very good time for each of us to contact Congressman Tiberi and encourage him to work to ensure the final conference report includes – at the very least -the highway investment levels called for in the Senate-passed bill.