Ohio Senate might reverse House-made changes in transportation budget bill
A pair of significant policy initiatives deleted from the Kasich Administration's proposed two-year transportation budget bill passed by the Ohio House of Representatives just might find their way back into the version of the bill being considered in the Ohio Senate.
Sen. Tom Patton (R-Strongsville), chairman of the Senate Highways & Transportation Committee, said Monday he looks more favorably on the administration’s proposal to build selected highway projects through public-private partnerships than did the House.
Kicking off Senate testimony on HB 114 in the Senate, Ohio Department of Transportation Director Jerry Wray urged senators to restore both the PPP proposal and the provision that would allow ODOT to pay stipends to teams that submit unsuccessful proposals on design/build projects.
Other states, such as Virginia, have successfully used PPPs to reduce the overall cost of renovation, maintenance, and expansion of facilities and networks, Wray told the committee.
The House stripped the provision out of the bill after several witnesses expressed concern that allowing such PPPs could run counter to local government infrastructure planning and enable private interests to wield eminent domain.
Wray said any PPP project not already approved by the Transportation Review Advisory Council would have to fulfill a public need and be included in a state, regional, or local plan, he said.
“I would like to be clear: these projects must still adhere to follow all existing local, state and federal regulations,” he said.
In response to a question from Patton, Wray said ODOT would not pursue a PPP project unless it was part of a metropolitan planning organization’s improvement plan.
Patton said he was reassured by Wray’s testimony. “I think the questions that were answered by the director today is eminent domain will clearly not be abused in projects such as these public-private partnerships, and that the locals – all the zoning and all the ordinances – will be respected.”
Wray also asked senators to restore the provision that would allow ODOT to compensate losing teams that submit proposals on major design-build projects.
Ironically, ODOT paid stipends recently on two major projects (the I-90 bridge replacement in Cuyahoga County and the first phase of the I-70/71 split in Columbus) after persuading the state Controlling Board that it already has the authority to do so. The provision in HB 114 was intended to further clarify the department's authority to make the payments.
“Allowing ODOT to purchase qualified secondary design concepts will attract competent and responsive firms from within the state to bid and compete on these larger projects,” he said. Moreover, it will allow the agency to use losing design concepts in the future and help smaller firms compete.
Patton suggested the House’s decision to remove the provision “might be a little shortsighted” when considering how much firms have to spend just to bid on a project. “What we’re actually doing is purchasing their ideas.”
Wray said the “allowance” for losing bidders would be 0.2% to 1% of the total estimated cost of the project and would have to be approved by the Controlling Board.
During testimony Tuesday, George Palko, president of the Great Lakes Construction Co., whose company was part of a team that submitted one of two unsuccessful proposals on the I-90 bridge project, encouraged the committee to restore the stipend provision.
Palko said his company spent an estimated $600,000 out of its own pocket to generate the proposal, above and beyond the $1 million stipend it turned over to Parsons Transportation Group for engineering work that firm produced.
“What ODOT received for their $1 million plan preparation payment was a project that was $100 million under their estimated cost, 30% of the drawings from three teams, which they now own, the design drawings and ideas of how and what to build from some of the most experienced and smartest engineers in the world,” he said.
The Senate seems less likely to modify the third major change that the House made in the Kasich Administration's proposed budget relating to the funding of the Ohio Highway Patrol.
The administration had proposed to help stabilize funding the Patrol with a $10 increase in motor vehicle title fees, but that idea was killed in the House.
Instead, the House voted to divert $49 million in International Registration Plan funding away from ODOT construction programs to fund the Patrol. That diversion, along with the decision to redirect $32.4 million in gas tax revenue to the Patrol, will seriously hamper the department's construction program in the years ahead, Wray said.
Chris Runyan, president of the Ohio Contractors’ Association, told the committee Tuesday that the gas tax and IRP diversions could make it difficult for ODOT to come up with the matching funds it needs to secure the state's share of federal highway funding.
Currently states are required to put up a dollar for every four dollars in federal funds, but Runyan noted that some members of Congress have expressed interest in raising the required state match to 25 or 30 percent.
In asking members to reinstate the proposed title fee hike, Runyan noted the Ohio Patrol Funding Task Force previously recommended the increase to avoid cutting infrastructure spending.
Patton said the state might not be able to produce the required 20 percent state match within two years, noting that state gas tax revenue is declining due to high unemployment, rising fuel prices and increasing vehicle fuel efficiency.
Runyan said the state must begin looking for ways to replace declining gas tax revenue to maintain infrastructure funding. “We will come to a day when we can’t maintain our highways because of revenue shortfalls.”
Patton said proposed amendments to the $7 billion, two-year budget bill measure would be due by 4 p.m., Friday and his committee will likely introduce a comprehensive amendment on Tuesday.
The amended bill could come to the Senate floor as early as next Wednesday and would then have to go back to the House for concurrence on Senate amendments.