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HomeMy WebLinkAbout1998-01-13 - AGENDA REPORTS - STATE ELECTIONS COST SAVINGS (2)WDJtM_:libyQMV DATE: SUBJECT: DEPARTMENT: AGENDA REPORT City Manager Approval Item to be presente by: Michael P. Murphy January 13, 1998 STATE ELECTIONS: GOVERNMENT COST SAVINGS AND TAXPAYER PROTECTION AMENDMENT INITIATIVE City Manager RECOMMENDED ACTION Oppose the "Government Cost Savings and Taxpayer Protection Amendment" initiative. On the June 2, 1998 ballot, the Professional Engineers in California Government Union is sponsoring an initiative entitled "Government Cost Savings and Taxpayer Protection Amendment." This initiative, if passed by a majority of California voters, will transfer the bidding process of local projects (such as engineering, architectural, surveying, environmental, or engineering geology) over $50,000 which use any amount of state and federal funding or requires review from any state agency over to the State Controller's Office. At the state level, the bidding process will be between the state engineers and private contractors in which the Controller determines who will be awarded the project. The League of California Cities and California Contract Cities Association are among the co- sponsors of the fight against the initiative under a broad based umbrella organization entitled "Taxpayers Fed Up With More State Bureaucracy." The initiative, if enacted, will produce drastic changes in the way the City will contract for future capital projects. Instead of being able to award contracts directly, bids for specified projects will be subject to review by the State Controller's Office to determine if state civil service employees can perform the work at less cost. Out of this process, City infrastructure projects would be delayed significantly as there is no time constraint for the state review process to be completed. Furthermore, the City could lose the local authority to choose which firm does work on projects. Proponents of the initiative state that there is a problem with the current privatization of local projects including the alleged wasting of 540 million dollars since 1990. They claim the current bidding process is not competitive, is corrupt and time consuming. Proponents claim that no - bid contracts, currently used by some jurisdictions, contain no cost analyses as to whether contracting those services is truly cost effective. FROVEN - , Agenda Item._ 'r Opponents of the initiative believe there will be a storm of requests hitting the Controller's office in which thousands of projects could be bottle -necked resulting in significant delays of completion of local public works projects. Secondly, the bidding process would spawn a heavy tilt on the side of the state engineers, unfairly. For instance, the state engineers would not have to claim employee costs, utilities, office cost, insurance, and professional cost during the bidding process, always making the state cheaper than the private contractor. However, when final payment for the overhead cost from the State is due, the above cost (which were left out in the bidding process) will be included in the invoice. It is further argued that the state will be taking away local authority by reviewing local contract awards. Since July 1, 1993, the City of Santa Clarita has awarded close to $90,000,000 in capital projects. A few examples of local projects awarded by the City Council include infrastructure earthquake repairs, widening of San Fernando Road, Metrolink station improvements, Creekview Park, Santa Clara River Trails and curb, gutter and associated infrastructure improvements in Newhall. The City has successfully completed a number of significant community projects in response to local resident concerns and in cooperation with other public entities, including the State of California. Enactment of this initiative will only serve to add a needless layer of state bureaucracy, erode local control and significantly delay construction of locally desired projects. ALTERNATE ACTIONS Other direction as determined by City Council FISCAL IMPACT Unknown at this time