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June 6, 2014
Viewpoints: Outsourcing delays highway projects and increases cost

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(June 6 - by Cathrina Barros, Special to The Bee)

The condition of California's roads - currently fourth worst in the nation - is deteriorating. It takes money to maintain and improve transportation, or any other infrastructure. The main source of revenue, the federal and state gas tax, has not increased in more than 20 years, losing 42 percent of its buying power during a time when vehicle miles traveled on our roads have increased 10 times as fast as the addition of new lane miles.

In California, dependable revenue streams for Caltrans are expected to drop by about 15 percent next year, although loan repayments, "cap-and-trade" revenue and other sources could bolster the highway program. Some local agencies are in better financial shape thanks to voter-approved sales tax measures in individual counties. Two pots of additional revenue - the $20 billion voter-approved Proposition 1B bond funds in 2006 and the 2009 federal economic stimulus money - have mostly been spent.

There may be new federal assistance on the way. The U.S. Senate has proposed tying the gas tax to inflation, and President Barack Obama recommends increasing federal highway funding by 20 percent per year for the next four years.

With some federal money, there is a catch, but a reasonable one: States that get the most money are ones with "shovel ready" projects. Last year, California received an additional $150 million from the feds, over and above the normal allocation, because we had "shelf" projects available - those that were already designed and ready to go to construction - while other states didn't.

At the moment, Caltrans has no "shelf" projects, but thanks to lower competitive bids on many recent projects, there is an additional $700 million available if projects can be quickly designed and advertised for construction.

When voters approved the $20 billion bond measure for transportation, the Legislative Analyst's Office projected that Caltrans would need 4,800 additional positions to get the job done. The projection was ridiculous, so it was ignored by the governor and the Legislature.

Instead, only 500 employees were added, and over the last several years about 3,000 positions have been eliminated as the buying power of the gas tax has been reduced. In 2010, the analyst recommended cutting Caltrans design and inspection staff by 1,500 simply because Caltrans had delivered projects on time in spite of furloughs, which were ending.

Apparently, doing a good job deserves punishment. Now the analyst recommends cutting Caltrans staff by another 3,500 positions at the very time that more projects need to be designed and made "shovel ready."

Once again, the governor and the Legislature are ignoring this irresponsible recommendation, recognizing that transportation is a multiyear program that can be severely damaged by randomly adding or cutting thousands of employees each year. Transportation is an essential function of our society, not a toy for ivory tower number crunchers.

But this may be a good time to take a hard look at whether existing revenue is being spent wisely and effectively.

For example, a Caltrans engineer - salary, benefits and overhead - costs the taxpayer $116,000 per year. Outsourcing the same job costs $237,000, primarily because contracts with private firms are awarded without competitive bidding.

Yet, Caltrans outsources nearly 1,000 jobs per year at an annual waste of more than $100 million. This money could be used to fund construction, create jobs, reduce traffic congestion and improve air quality. Local agencies also outsource most of their highway engineering work using no-bid contracts.

While seeking additional funding to improve our streets and highways, the governor and Legislature would be well advised to stop wasting public dollars by awarding contracts to private firms at twice the cost of having the work performed by public servants.

Cathrina Barros is president of Professional Engineers in California Government.