BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 969
                                                                  Page  1

          Date of Hearing:   July 2, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                  SB 969 (DeSaulnier) - As Amended:  June 11, 2014 

          Policy Committee:                              
          AccountabilityVote:11-1

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              Yes

           SUMMARY  

          This bill requires an agency administering a transportation  
          megaproject (one with costs exceeding $2.5 billion) to:

          1)Establish a comprehensive risk management plan and peer review  
            group, as specified.

          2)Make available on its website a list of all engineers in  
            charge of the work, and their qualifications.

           FISCAL EFFECT  

          1)Potential reimbursable General Fund costs exceeding $150,000  
            per megaproject for local transportation entities to establish  
            and administer peer review groups and risk management plans.  
            Caltrans indicates that there is about one new local  
            megaproject each year.

            To the extent the peer review groups and risk management plans  
            lead to better project outcomes, agencies could realize  
            significant unknown cost savings. (Each one percent saved on a  
            $2.5 billion project would be $25 million.)

          2)Any costs to Caltrans would be minor and absorbable. The  
            department, which rarely has jurisdiction over projects of  
            this magnitude, already applies the proscribed activities on  
            large projects.
           
           COMMENTS  

           1)Purpose  . According to the author, this bill is intended to  








                                                                  SB 969
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            improve the state's delivery of large projects by applying  
            best practice principles of oversight and risk management to  
            all future transportation megaprojects.

           2)Opposition  . The Department of Finance opposes the creation of  
            a new state reimbursable mandate.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081