Committee Meeting Information

June 8-9, 2009

Lander Inn

Lander, Wyoming

 

Committee Members Present

Senator Michael Von Flatern, Co-Chairman

Representative Roy Cohee, Co-Chairman

Senator Dan Dockstader

Senator Floyd Esquibel

Senator Gerry Geis

Senator Bill Landen

Representative Stan Blake

Representative Seth Carson

Representative Mike Gilmore

Representative Timothy Hallinan

Representative Mike Madden

Representative Robert McKim

Representative Owen Petersen

Representative Dave Zwonitzer

 

Committee Members Not Present

Senator Dan Dockstader was not present on June 9, 2009

 

Legislative Service Office Staff

Ian D. Shaw, Staff Attorney

 

Others Present at Meeting

Please refer to Appendix 1 to review the Committee Sign-in Sheet
for a list of other individuals who attended the meeting.

Executive Summary

The Committee met for one and one-half days for the purpose of receiving reports and information from the Wyoming Department of Transportation ("WyDOT").  The Committee heard testimony and considered reports concerning public transportation, snow fence, protecting against price volatility, commuter rail and bonus/incentive pay to contractors. The Committee will meet again in Casper on August 10^th and 11^th.

 

Call To Order

Co-Chairman Von Flatern called the meeting to order at 9:00 a.m.  The following sections summarize the Committee proceedings by topic.  Please refer to Appendix 2 to review the Committee Meeting Agenda.  The Committee first reviewed the list of topics it will consider during this interim.  The Committee then began considering the topics on the agenda.  The materials accompanying each discussion topic were included in a bound notebook provided by WyDOT to each Committee member. A copy of the notebook, divided into tabs for each subject, is included in Appendix 3.

 

Public Transportation

Pat Collins, WyDOT Assistant Chief Engineer, addressed the Committee with Rich Douglas, John Black and Taylor Rossetti from the WyDOT local government coordination office.  They discussed whether a state-wide public transportation plan is advisable.  The information they presented to the Committee is included in Tab 1 to Appendix 3.  The topics discussed included how public transit is funded, how capital expenses and operating expenses are funded and how budgets are constructed.  WyDOT works with WYTRANS, a non-governmental organization representing each of the independent transportation authorities in Wyoming, to complete annual budgets. 

 

Upon questions by Co-Chairman Cohee and Representative Hallinan, the Committee had a discussion about the Transportation Enterprise Fund.  The interest from that fund is used to replace vehicles used in public transportation programs. 

 

The Committee studied the fold-out cost summaries within Appendix 3, Tab 1.  Various committee members noted the wide variation of costs between individual transit programs.  WyDOT personnel explained the wide variety of budgetary sophistication between various programs and the wide variety of transportation tasks that exist between programs.  WyDOT is currently working to get more uniformity between reported numbers.

 

Representative Hallinan inquired about the types of services being offered and noted that the state's funding is supporting transportation services ranging from hospital appointments to rides to and from work.  Representative Hallinan questioned whether the state should be supporting these activities equally.  WyDOT personnel explained that only eight programs in Wyoming accept federal funds because of the auditing requirements.  Senior centers provide most of the medical transportation but generally are not prepared for federal audits.  As a result, they don't accept federal funds and are funded almost entirely by state dollars.  WyDOT agreed to provide the Committee with a new spreadsheet that includes a column indicating which programs receive federal funding.

 

A large majority of all vehicles used within public transportation programs are 7 passenger mini-vans.  Only 3-5 larger vehicles are purchased each year.  However, WyDOT explained that these larger vehicles are so much more expensive to replace that it creates a funding problem.  Smaller vehicle replacement can be handled within the funding provided by the Transportation Enterprise Fund and the State Lands and Investments Board.  But, such funding is insufficient to replace larger busses and big equipment.

 

The Committee then discussed the Big Horn Basin Transit Authority and the Legislature's grant of funds to the Authority within the budget bill.  The budget bill requires a $62,000 match by local transportation programs.  WyDOT personnel gave an update on the amount of match that likely will be available.  The Committee acknowledged that a proportional amount of the state funds might be available even if the full $62,000 match is not available.

 

Sean Solan, president of WYTRANS and Jeri Bottenfield, vice president of WYTRANS, addressed the committee.    They explained WYTRANS and its membership.  The substance of their presentation is contained within Tab 1 of Appendix 3.

 

Barb Daugherty from the Sheridan Senior Center explained the Sheridan program and the innovative ways in which the Sheridan program obtains contributions from private industry. The Committee also received information regarding the amount of funds generated through various programs' fare boxes and the amount of fare charged by various programs.   Sue Gary from Tensleep explained the Tensleep transportation program to the Committee.

 

Mr. Collins then provided a summary of the conversation and agreed to provide additional information to the Committee. The specific information WyDOT will provide includes:  1) specific state and federal funding levels for each participating program and 2) cost per mile information for the Jackson, Cheyenne and Casper transit programs.   Representative Hallinan requested that WyDOT provide a summary of cash box receipts from each program receiving state funds.  Co-Chairman Cohee requested that the Committee be given a itemized statement of what each program spends and a calculation of the total costs of operation for each program.

 

Co-Chairman Von Flatern concluded by noting that rules and regulations promulgated by WyDOT likely will be able to promote good accounting and budgeting practices by public transit participants.  No legislation is contemplated at this time.

 

 

Snow Fence

Delbert McOmie, WyDOT Chief Engineer, with the help of Cliff Spoonemore and Ken Shultz, addressed the Committee concerning snow fences.  The information presented is contained in Tab 2 within Appendix 3.   Consistent with the information within Tab 2, Mr. McOmie discussed the various benefits of snow fences, the design of snow fences and the accident statistics reflecting the safety provided by snow fences.  The Committee learned that certain critical sections of roadway in Wyoming are not protected by snow fence and that the lack of snow fence in these areas is causing large economic and safety-related damages.  The reason snow fence is not present in these areas is because of a lack of land-owner consent.   WyDOT believes there are 3 or 4 places in the state where this is a problem.  The Committee considered W.S. 24-2-102, which provides WyDOT with the power of eminent domain for the performance of certain tasks.  The maintenance or placement of snow fences is not included within the list of covered tasks.  The Committee asked that LSO draft a bill which would provide WyDOT with the power to exercise eminent domain for the purpose of placing and maintaining snow fence.  Specifically, the Committee suggested that the authority be incorporated into the definition of maintenance.  The Committee also suggested that the power of eminent domain be allowed only upon the exhaustion of all reasonable negotiation efforts. A draft bill will be considered at the next Committee meeting. 

 

John Pope, president of Centennial Woods, LLC, addressed the Committee.  The substance of his presentation was included in a handout to the Committee, included here as Appendix 4.  Centennial Woods, LLC pays WyDOT to obtain maintenance contracts for the replacement of wood on portions of Wyoming's snow fences.  Mr. Pope's company keeps the wood that is taken from the snow fences and sells it to the public for use as siding and for other applications.  Presently, WyDOT only signs one year contracts with Centennial Woods, LLC.  Mr. Pope explained that 3 to 5 year contracts, let at intervals and requiring the replacement of all fence within a small region, would promote competition for the contracts, would improve over-all maintenance and would allow businesses that do obtain the contracts to better manage their businesses.  Mr. Pope explained the benefit Wyoming receives from his company's services and believes that longer-term contracts are essential to preserving and expanding those benefits.   WyDOT personnel explained that the Attorney General's Office has recommended the one year contracts.  There are no rules or statutes that specially require the one year term.  The Committee discussed the idea that longer term contracts might be permissible, especially if the contracts required no payment by the state.  By not requiring payment by the state, the contracts would not be obligating funds that have not yet been obtained or appropriated.  The Committee concluded that the Legislature may not want to dictate the exact ways in which WyDOT structures its contracts with its contractors.  But, the Committee recognized that there may be some benefit to restructuring the contracts for snow fence maintenance.  The Committee will leave it to WyDOT to modify its rules and regulations as appropriate.

 

Price Volatility / Hedging

Tim Hibbard and Pat Collins from WyDOT addressed the Committee.  The world economic down-turn has made price volatility and the need for hedging less important.  Several years ago, there were significant problems with the skyrocketing price of concrete, steel and asphalt.  When the world economy recovers, price volatility may again become a problem.  WyDOT is currently doing studies on these issues.  These studies are not yet final.  Among other things, these studies consider the wisdom of purchasing options for quantities of asphalt or pre-purchasing stocks of concrete or steel necessary for yearly highway construction projects.  For example, if WyDOT knows it will let contracts for the construction of a certain mileage of roadway or certain types of bridges, it could purchase some of the construction materials, or options for the purchase of such materials, at a set price prior to the contract being signed.  Although outrageous inflationary pressures do not exist now, WyDOT wants to prevent another situation like that which occurred in 2008 and which made it impossible for many contractors to comply with their own bids.  In 2008, WyDOT inserted acceleration clauses into their contracts to help contractors.  But, those clauses placed the entire burden of rising costs on the state.  WyDOT is looking for other ways to spread the risk and/or bring more price regularity to the process.  WyDOT will provide a copy of the studies they are performing on asphalt prices and supplies at the Committee's August meeting.  Mr. Hibbard indicated that WyDOT does not foresee needing legislative action to deal with this issue.  WyDOT will report back to the Committee in August.

 

Jonathan Downing, Wyoming Contractor's Association, stated that the Association generally does not support the state being the supplier of asphalt for roadway projects.  However, the Association would support pilot projects which explore the options and see how each option might work.

 

Meeting Recess

The Committee recessed at 3:40 p.m. and then continued on June 9^th at 9:00 a.m.  Co-chairman Cohee called the meeting to order on June 9, 2009.

 

Commuter Rail

Pat Collins updated the Committee on the status of the commuter rail studies being conducted by WyDOT's consultants.  The first phase of commuter rail studies was finished last fall and presented to the Committee during the prior interim.  Since that time, Colorado has finished its first phase of commuter rail studies and reached conclusions which indicate that it may be difficult to extend commuter rail from Colorado into Wyoming.  Specifically, Colorado has set as a top priority bringing high-speed rail up the I-70 corridor to the ski resorts west of Denver.  This route will require a specialized type of train, called electro-motive, which requires very special technology and expensive railway.  Colorado has preliminarily decided that this technology also would be used for the rest of the front range.  As a result, in order to extend commuter rail service from Fort Collins into Wyoming, Wyoming would have to use the electro-motive technology. This technology is much more expensive than that technology originally contemplated by Wyoming's consultants.  The cost of this type of rail system would far exceed the $1 million to $1.5 million per mile calculation originally used by Wyoming's consultants.  Although Colorado has, or is about to, issue its initial report making these recommendations, there is some indication that their recommendations may not be final.  For this reason, WyDOT will wait until Colorado's recommendations are finalized before proceeding.  The Committee voted in favor of a motion asking that WyDOT take no further action on the commuter rail study until the Committee's August meeting.  At the August meeting, the Committee would like to receive a report concerning whether WyDOT should any longer consider studying the extension of commuter rail north, past Cheyenne.  Wyoming's prior study showed that extending the rail north likely would be economically unfeasible even at $1 – 1.5 million per mile.  In preparation for the August meeting, the Committee asked LSO to review the legislation which required the commuter rail study to determine if the study can be limited to only studying the extension of rail from Fort Collins to Cheyenne.  Information consistent with the commuter rail presentation is included within Tab 4 to Appendix 3.

 

Contracting Bonuses / Incentives

Mr. McOmie, Mark Eisenhart and Rick Harvey presented information concerning WyDOT's contract bonus and incentive programs.  The substance of their presentation is contained in Tab 5 within Appendix 3.  Bonuses are payments made to contractors whose work meets certain quality standards.  Approximately 41 states have bonus programs within their transportation contracts.  WyDOT has found that the quality of work on Wyoming's highways has measurably increased since WyDOT started incentivizing capable contractors to do more than meet minimum contract standards.  Not only has the bonus program raised quality, but some contractors who know they have the equipment and expertise necessary to meet the higher standards have wrapped a portion of the bonus they expect to receive back into their bids by lowering those bids.  As a result, the bonus program is providing better quality at a lower cost.  This process also assures that higher quality contractors obtain WyDOT contracts.

 

WyDOT personnel answered various questions regarding the specific incentives created by the bonus system and why it does not work to simply raise the quality requirements of each contract to the level that would receive a bonus.  Representative Gilmore spoke about his experience with WyDOT road projects and questioned whether the bonus system really does improve the long-term quality of roads.   The Committee suggested that WyDOT consider renaming "bonuses" to something with a less stigmatic name. 

 

Incentives are payments made when projects reach defined completion dates on time.  They are rarely used, but are effective on high-profile projects where the disruption caused by construction must be held to a minimum.  There have been only four incentive-paying jobs since 2003.  Unlike bonus payments which are generally small, incentive payments can be large, in excess of $1 million.  The Committee did discuss that such incentives may encourage contractors to hurry their work.  Representative Gilmore stated that he has witnessed contractors hurrying their work, knowing that they will be able to fix their mistakes after the project is deemed complete.

 

From 2003 to 2008, WyDOT let $520 million of work.  $13 million was paid in incentives and bonuses over this time. So, these programs consume only a very small percentage of WyDOT's funds.  Mr. McOmie believes that without the incentive and bonus programs, WyDOT would have spent more than $520 million between 2003 and 2008 and that the work completed would have been of a lesser quality.

 

Representative McOmie, present in the audience, provided public comment on this subject.  He stated his belief that WyDOT's over-all efforts toward quality assurance / quality control, including the bonus/incentive programs, have been very effective for WyDOT.

 

Other comments

Upon Representative Blake's request, WyDOT agreed to provide the Committee with an update on the variable speed limit program that was instituted last winter on Interstate 80. 

 

The Committee discussed the dates for its October meeting and found that the originally scheduled dates will not work.  LSO will poll the Committee to determine whether October 15-16 or October 22-23 will work best for a meeting in Cheyenne.

 

Meeting Adjournment

There being no further business, Co-Chairman Cohee adjourned the meeting at 11:50 p.m.

 

Respectfully submitted,

 

 

 

 

 

 

                                                                                                                                               

Senator Michael Von Flatern, Co-Chairman                    Representative Roy Cohee, Co-Chairman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix		Appendix Topic		Appendix Description		Appendix Provider
1		Committee Sign-In Sheet		Lists meeting attendees		Legislative Service Office
2		Committee Meeting Agenda		Provides an outline of the topics the Committee planned to address at meeting		Legislative Service Office
3		All WyDOT Topics		Notebook with tabs containing all information discussed by WyDOT		WyDOT
4		Snow Fence Maintenance Contracts		Centennial Woods, LLC Presentation Handout		Centennial Woods, LLC