April 13, 2011

In This Issue:


House Budget Writers Release Recommendations

In Other News

N.C. GOP Lawmakers Say Yes to Rail Money

Engineering Report
 
 
House Budget Writers Release Recommendations

Yesterday, House legislative appropriations committee chairs began rolling out their budget recommendations to the full committees. Overall, the proposals cut hundreds of state jobs, reduced funding for education at all levels with the most dramatic cut to the University system, effectively decimated NCDENR, and made significant funding adjustments in the Department of Transportation.

Although PENC is still reviewing all of the proposals for their potential impact on engineers and the engineering industry, here are some of the highlights thus far:

Environment and Natural Resources
 
-          Reduces the entire NER budget – which includes Ag, Labor, DENR, Clean Water Management Trust Fund, Commerce, Biotech and State Aid – by 25% in the first year and 34% in the second year and eliminates hundreds of vacant and filled positions.
-          Establishes the Clean Water Management Trust fund as a special revenue fund reducing the appropriation from $50 million to $10 million. Three million to be used to administer the fund, one million for providing buffers around military bases and 6 million for wastewater, water and stormwater projects. 
-          Contains significant reductions to the regional offices by closing Mooresville, reducing the Raleigh Office by 42 FTEs, Fayetteville by 37 and Asheville by 66. 
-          Transfers On-Site Water Protection Section and other sections to Division of Public Health in the Department of Health and Human Services
-          Transfers the Public Water Supply Section of DENR to Division of Water Resources
-          Provides required match for Clean Water and Drinking Water Revolving Funds
-          Eliminates the Private Well Program within DENR

 
Commerce 

-          Reduces fund for the Rural Center by $3.3 million – from $22 million to $19 million

-          Eliminates energy grants for NCSU, NCA&T and ASU of $2.5 million and reduces funding for the state energy office.

-          Transfers State Ports Authority from the Commerce Department to the Department of Transportation

-          Transfers the Employment Security Commission to the Department of Commerce

-          Appropriates $10 million to One North Carolina Fund and $6 million to JMAC

 
Transportation
      -   Increases privatization requiring DOT to privatize design and engineering work where practical and economical. Specifically requires 1) contracts of less than $250,000 to be performed by small businesses 2) the use of multiple contract awards for maintenance and repair projects 3) increased outsourcing of preliminary engineering projects to fifty percent of the total funds awarded in each fiscal year.
-  Reduces funds for road construction and shifts them to maintenance and preservation of the state-wide system 
-  Earmarks more money for structurally deficient bridges from funds for maintenance and system preservation
-   Transfers funds for Urban loops and Turnpike projects (Garden Parkway and Mid-Currituck Bridge) to Mobility Fund
-  Removes cap on design-build projects now at 25.

These recommendations will be discussed in committee over the next week where there will likely be a few amendments and changes made before a final committee vote is taken. After approval by the committees, the full House budget will be finalized by the Budget Chairs and then crafted into the final House budget proposal to be voted on by the full House. This is likely to be accomplished by May 1st.
 
      The Senate will then go through the same process for approving their budget and then both sides will negotiate between the two versions to reach a final compromise budget. Legislative leaders still say a June 1st budget adoption by the General Assembly is possible.

It is important to note that the House appropriation committee recommendations are preliminary.  Although there are some items that PENC will readily oppose, such as the significant reduction in Clean Water Management Trust Funds, if there are items on this list that concern you, please let us know as soon as possible as there will only be a short time to work on them before they become part of the House Budget. The farther along in the process they go with the budget, the harder it is to change.
 
PENC will be providing updates on the House budget recommendations as we learn more.




 
In Other News

Thanks to all of you who wrote letters last week opposing HB 422. This bill would have required NC to turn back money for rail improvements between Charlotte and Raleigh. Last Friday, NC Republican legislators announced that they will no longer oppose accepting the high speed rail money. 

N.C. GOP lawmakers say yes to rail money
Charlotte Business Journal - by Erik Spanberg
Date: Friday, April 8, 2011, 11:56am EDT
 
Republicans in the N.C. General Assembly will drop their opposition to accepting $545 million in federal money for high-speed rail projects, state Sen. Bob Rucho told Charlotte business leaders Friday.
Rucho, a Matthews Republican, said he discussed the issue Thursday with Phil Berger, the state Senate president, and both agreed the money should be accepted.
State Rep. Ric Killian (D-Mecklenburg) introduced a bill last month to reject the money. Rucho, during his appearance Friday at the Charlotte Chamber Transportation Summit, said he didn’t know whether Killian planned to rescind the bill. Instead, he said Republicans would support moving ahead with the projects, including adding tracks between Charlotte and Greensboro and increasing passenger service between Charlotte and Raleigh.
He remained resolute that the General Assembly was surprised at news of the grants. In the near future, Republicans will introduce a bill requiring the legislature to approve accepting such money, allowing for greater due diligence on the related costs.
“What we don’t like to do is be surprised by announcements,” Rucho said. “We don’t like the $300 million tag that came with it over 27 years. It’s like getting a new home as a gift. They’re going to pay the down payment and then you take the $2,500-a-month bill forever.
“The bottom line is our budget doesn’t allow those kinds of changes. We’re going to go ahead and make sure that doesn’t happen again.”
Killian could not be immediately reached for comment.
The money for rail maintenance and operations will come from the state’s $4 billion annual transportation budget. Freight upgrades included in the rail construction are as important as the passenger service, backers say.
“We’ve come to the conclusion that this project needs to go forward,” Rucho said. “It’s well down the track, and the bottom line is we will support this effort.”
He cautioned that other federal rail money may not be feasible. An additional $2.3 billion in potential projects to be awarded by Washington could require as much as 25% in matching money, Rucho said. That specter could make it untenable for North Carolina if it is awarded a portion of those grants.
Over nearly 30 years, an additional $300 million equates to $10 million or so per year. The figure comes from the state transportation department.
In those terms, Rucho said, it doesn't sound like a lot of money, but the state budget is too strained to make unexpected concessions.
“If you look at the value you get for $545 million and it cost you $300 million over 27 years and if it delivers the freight-transportation efficiencies, the passenger-transportation efficiencies, my recommendation was that we would accept that,” Rucho said. “Because it’s like taking a loan for about 2.5%. You’ve got to be practical about things.”
 
Regulatory Reform Hearings Come to Raleigh
  • The final Regulatory Reform Committee hearing will be held at 1:00 on Thursday, April 21st in the, Legislative Building Auditorium (3rd Floor), 16 W. Jones St., Raleigh to collects public comment on the burden of state rules and regulations. Contact: Jordan Shaw, 733-3451 for more information.
  • PENC also continues to collect information to be submitted to the Committee on behalf of Professional Engineers.  If you would still like to submit comments, please e-mail or call with a description of your issue and the burden it has on your engineering practice. 
Engineering Report

A professional engineers licensing board says Kevin Lacy, the state's chief traffic engineer, was right to blow the whistle on a North Raleigh neighborhood activist -- but it has dismissed Lacy's charge that the man illegally practiced engineering without a license. Lacy took heat for sparking an investigation after David N. Cox filed a traffic analysis on behalf of his neighbors in a homeowners group. They were fighting the state Department of Transportation's refusal to approve new traffic signals at two intersections as part of a Raleigh city project. Critics across the country, from local residents to Rush Limbaugh, accused Lacy of trampling a citizen's right to petition the government. In a split ruling last week, the N.C. Board of Examiners for Engineers and Surveyors concluded that, as Lacy suspected, the eight-page report Cox submitted was indeed a work of engineering as defined by state law. But the board dismissed the charge against Cox. It was unable to discover who -- Cox or someone else -- actually wrote the report. Cox knows the answer, but he isn't talking. He did not reply to the licensing board's letters or speak to its investigators. "Which is his right," said Andrew L. Ritter, the board's executive director.
Cox works as a computer scientist. He and his neighbors did plenty of talking over the past couple of years as they fought city and state officials on the Falls of Neuse project. After a consultant hired by the city concluded that the traffic signals were not warranted, the North Raleigh residents responded with their own sophisticated analysis. The board enforces standards intended to protect the public from people who falsely present themselves as licensed engineers, and from engineers who break the rules, Ritter said. Engineers are required to put their names and their professional seals on all their work. And they are required to report possible violations -- as Lacy did, Ritter said in a letter last week to Cox. The consequences are minor, Ritter said. If the board had concluded that Cox was the author of the report, it would simply have written him a letter asking him not to do it again. Repeat offenders could, in theory, be referred to a district attorney for prosecution of a misdemeanor. Professional standards aren't just about protecting professionals' jobs, he said. Public safety is at stake when engineers design buildings, roads and airplanes. "This board isn't in the turf-protection business," Ritter said.(Bruce Siceloff, THE NEWS & OBSERVER, 4/05/11).