BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 374 Hearing Date: 9/11/2015
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|Author: |Hueso |
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|Version: |9/4/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Eric Thronson |
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SUBJECT: Local agency design-build projects: transit districts
DIGEST: This bill specifies that the San Diego Association of
Governments (SANDAG) is authorized to utilize design-build for
transit capital projects and development projects adjacent or
related to transit facilities.
ANALYSIS:
Existing law:
1)Enables certain local agencies to utilize an alternative
procurement method called design-build (DB) for public works
projects.
2)Limits the local agencies authorized to use DB to the
following:
a) A city, county, or city and county.
b) A special district that operates wastewater or related
facilities.
c) Any transit district, operator, or local or regional
agency responsible for the construction of transit
projects.
1)Limits the types of projects each type of local agency can use
DB to construct. Specifically, limits transit districts to
SB 374 (Hueso) Page 2 of ?
transit capital projects that do not include state highway
construction or local street and road projects.
2)Creates SANDAG as a consolidated agency and makes it, among
other things, responsible for all public transit and other
transportation planning and programming responsibilities in
San Diego County.
This bill:
1)Specifies that SANDAG is authorized to utilize DB for both of
the following:
a) A transit capital project that does not include state
highway construction or local street and road projects.
b) Development projects adjacent, or physically or
functionally related, to transit facilities developed or
jointly developed by SANDAG.
COMMENTS:
1)Background. SANDAG is in the planning process for a project
to develop a bus stopover facility in downtown San Diego, with
multiuse options. At present, buses park at temporary
curbside locations around downtown. The stopover is needed to
maintain bus schedules and to provide a location where transit
operators can rest at the start and end of routes. The
stopover will not be a transit station. The stopover also
would provide restroom facilities for transit drivers,
allowing for the removal of existing portable restrooms from
city sidewalks. SANDAG will oversee the entitlement, design,
and construction of the stopover, which will be operated by
the San Diego Metropolitan Transit System. Roughly $16
million has been allocated to the project from TransNet, the
voter-approved half-cent sales tax for transportation projects
administered by SANDAG.
According to SANDAG, "The potential multiuse aspect of the
facility is based on the goals of SANDAG owning the facility
that houses its office space at a lower cost than leasing as
well as providing an opportunity for multiuse development on a
block of land in a vibrant area of downtown. In conjunction
SB 374 (Hueso) Page 3 of ?
with the stopover, the facility also could provide future
office space for SANDAG and other tenants as part of a
mixed-use development project. This approach would enhance
integration into the character of the neighboring community
and aligns with the City of San Diego Downtown Community Plan
Ordinance."
2)Design-build contracting. State law generally requires public
agencies to invite bids for construction projects and then
award contracts to the lowest responsible bidder. This
design-bid-build method is the traditional approach to public
works construction.
Under DB, a single contract covers the design and construction
of a project with a single company or consortium that acts as
both the project designer and builder. The DB entity arranges
all architectural, engineering, and construction services, and
is responsible for delivering the project at a guaranteed
price and schedule based upon performance criteria set by the
public agency. The DB procurement method can be faster and,
therefore, cheaper than the design-bid-build method, but it
requires a higher level of management sophistication since
design and construction may occur simultaneously.
Advocates for DB contend that project schedule savings can be
realized because only a single request for proposals is needed
to select the project's designer and builder. The more
traditional design-bid-build project approach requires the
separate selection of the design consultant or contractor,
completion of design, and then advertising for bids and
selection of the construction contractor. Proponents add that
DB allows the overlap of design and construction activities,
resulting in additional time savings and lower project costs.
By avoiding the delays and change orders that result from the
traditional design-bid-build method of contracting, proponents
argue that DB can deliver public works faster and cheaper.
Detractors of DB contend that it eliminates competitive
bidding, allows the private contractor or consortium to
inspect and sign off on their own work, and increases project
delivery costs.
SB 785 (Wolk, Chapter 931, Statutes of 2014) repealed existing
law authorizing the Department of General Services (DGS), the
California Department of Corrections and Rehabilitation
SB 374 (Hueso) Page 4 of ?
(CDCR), and specified local agencies to use the DB procurement
process, and enacted more uniform provisions authorizing DGS,
CDCR, and most local agencies to utilize DB for specified
public works projects. SANDAG has the authority under these
statutes to use DB for transit capital projects, but not for
the type of mixed-use development envisioned for its bus
stopover facility.
3)What is a "development project?" According to the sponsor,
this bill is intended to authorize SANDAG to build a specific
project. It authorizes, however, SANDAG to build any
"development projects" adjacent or related to a transit
facility without any more specificity as to what type of
project that might include. There is no clear definition of a
development project, and therefore it could mean any project
undertaken for the purposes of development. For example, this
bill, as written, authorizes SANDAG to enter into a DB
contract to construct a housing project, an arena, or even an
airport as long as it is located adjacent to a transit
facility. Existing law does not permit SANDAG to build an
arena, but the ambiguity of this language raises questions
about what might become available to SANDAG or other entities
seeking DB authority through this section of law.
4)Concurrence hearing. When this bill passed off the Senate
Floor in May, it related to the Indian Gaming Special
Distribution Fund. The bill was amended on the Assembly Floor
to its current form. Because of these amendments, the Senate
Rules Committee referred this bill back to this committee for
a hearing under Senate Rule 29.10(d). At today's hearing,
the committee may not amend the bill further and may only,
with a majority vote, (1) hold the bill or (2) return the bill
as approved by the committee to the Senate Floor.
Assembly Votes:
Floor: 80-0
L Gov: 9-0
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: Yes
POSITIONS: (Communicated to the committee before noon on
Thursday,
SB 374 (Hueso) Page 5 of ?
September 10, 2015.)
SUPPORT:
San Diego Association of Governments
OPPOSITION:
None received
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