BILL ANALYSIS �
SB 151
Page 1
Date of Hearing: August 6, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 151 (DeSaulnier) - As Amended: August 4, 2014
Policy Committee:
TransportationVote:13-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill:
1)Requires the California Transportation Commission (CTC),
beginning February 1, 2016, to allocate funds for capital
outlay and capital outlay support (COS) costs for projects in
the State Highway Operation and Protection Program (SHOPP).
2)Requires Caltrans to submit requests for supplemental
allocations, for projects that exceed approved allocations, to
the CTC for approval, and authorizes the CTC to provide
exceptions to this requirement as it determines necessary to
ensure projects are not needlessly delayed.
FISCAL EFFECT
1)Caltrans estimates a need for up to 22 new positions ($2
million, State Highway Account) annually in its Budget and
Programming Divisions to prepare, track, and monitor COS
budgets on individual SHOPP projects and to prepare and
provide budget information, including requests for
supplemental allocations, to the CTC for approval. Caltrans
indicates, for example, its Budget Division currently does not
track costs for individual SHOPP projects until they reach the
construction phase. The other project phases-project approval
and environmental work, design, and right-of-way are not
tracked individually but by overall program (SHOPP or State
Transportation Improvement Program (STIP).
The Programming Division would incur increased workload to
prepare up to several hundred supplemental allocation requests
SB 151
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for CTC approval involving both construction and COS cost
overruns. The extent to which these additional positions (up
to 10) will be required will depend on the delegation
authority provided to Caltrans by the CTC in terms of
exceptions to the CTC approval requirement, in order to ensure
projects are not delayed. (CTC currently has provided Caltrans
delegated authority to adjust project budgets by up to
$200,000 plus 10% of the original project allocation. Caltrans
believes the bill is unclear as to whether this delegation
could continue.)
Caltrans notes there is no provision in the bill for
immediately starting work on a closed, severely damaged, or
imperiled transportation facility, which could hinder the
departments' flexibility to respond to emergency events.
Caltrans indicates emergency work amounted to over 100
projects last year.
For 2014-15, COS in the SHOPP program involves the equivalent
of 4,250 full-time positions at a cost of around $600 million.
2)Annual special fund costs to the commission would be around
$300,000 for two positions to monitor and track capital and
support costs for SHOPP projects. (State Highway
Account/Public Transportation Account)
COMMENTS
Purpose . This bill is in response to a recent Legislative
Analyst's Office (LAO) report that reviewed Caltrans' COS
program relative to the 2014-15 budget. The LAO recommended that
the Legislature require the CTC to allocate funds for each phase
of a SHOPP project, including COS resources. (COS refers to the
staff support necessary to deliver a project, such as project
design and management, while capital outlay costs are incurred
by construction contractors for materials, labor and equipment
to construct a project.)
The SHOPP, the state's program for repairing and reconstructing
the highway system, is the largest ongoing state transportation
program, currently about $2.3 billion annually. Typical SHOPP
projects include pavement and bridge rehabilitation, major
reconstruction, and safety improvements. Under current law
related to the SHOPP, CTC allocates funds for capital outlay
costs but not for COS.
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Pursuant to the Supplemental Report of the 2013-14 Budget Act,
the Legislature directed the LAO to work with the Administration
to review Caltrans' COS program in order to increase the
accountability and efficiency of the program. The LAO's
recommendation for CTC to allocate funds for each phase of a
SHOPP project is based on what the LAO perceives is a lack of
adequate oversight and control in Caltrans' current COS program.
According to LAO:
1)The Legislature, which is responsible for appropriating COS
funds on a program-wide basis, has limited opportunity to
review COS budget requests, which are typically submitted as
part of the Governor's budget revision in May.
2)While the CTC allocates funds for capital outlay costs of
individual SHOPP projects and is thus able to provide some
oversight regarding project capital expenditures, the lack of
CTC allocation on project COS costs means CTC is unable to
monitor and control allowable COS spending.
3)As Caltrans relies primarily on its own staff to perform most
COS work on SHOPP projects, the COS program lacks checks and
balances to ensure projects are brought in on time and under
budget.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081