Senate Finance Opens Hearings on Construction Reform Proposals
Two members of the Strickland administration found themselves in the awkward position Monday of strongly advocating for passage of construction reform recommendations developed by a panel called for by the governor and put together by his Department of Administrative Services (DAS) – only not in the vehicle Senate Republicans want to insert it into, and counter to the desires of both the Senate and House Democratic caucuses.
DAS Director Hugh Quill led off the afternoon’s testimony before the Senate Finance and Financial Institutions Committee by saying, “From the outset, the work of the Ohio Construction Reform Panel (see The Hannah Report, 12/3/09) was meant to bring subject matter experts together in dialogue which would lead to recommended changes to bring greater efficiency and value for taxpayers’ capital spending dollars. Those of us in the administration never meant for the panel’s report to supplant a traditional legislative process. We did hope that our recommendations could be used by Gov. Strickland to start this legislative process in both chambers of the General Assembly with the confidence that constructive dialogue was already under way among the competing interests inOhio’s construction reform debate.”
He went on to say, “While the administration fully supports construction reform, we also believe that injecting this issue into the current debate over how to fix the state’s immediate general revenue shortfall is counterproductive to both the budget effort and ultimately to the construction reform effort.”
Board of Regents Chancellor Eric Fingerhut was almost giddy later when he told the committee that he was glad to be able to address the issue in a public forum and answer members’ questions from both sides of the aisle.
“Since the day the report was adopted in April of this year, my team and I, together with representatives from across the University System, have stood ready to explain the report’s provisions, answer questions and to analyze any additional suggestions that may come from the General Assembly,” Fingerhut told the committee.
“We have provided answers and explanations when asked to do so in private, and have met with many members to advocate for the adoption of the report. But we have also consistently and repeatedly urged the General Assembly to begin the public consideration of this report so we can confront the issues of concern in an open forum.”
Pressed by Sen. Gary Cates (R-West Chester) about whether he supports inclusion of the provisions in HB318, Fingerhut answered, “Frankly, it is enormously frustrating to see an issue that is so important to higher education get caught up in the legislative debate that it is. Obviously, I am not unaware of the governor’s opposition to including it in HB318 and that the speaker has announced the same. I am here today to get construction reform passed. I implore you to get it passed, and hopefully we find a vehicle to do that.”
Senate Republicans on the committee continued to ply questions supporting their quest to add the provisions to HB318 that expand “the construction delivery menu,” as Quill described it, to, as panel facilitator Jeffrey Appelbaum of the law firm Thompson Hine LLP said, move beyond Ohio’s current multiple prime system to also include alternate project delivery methods “such as construction manager at risk, design-build and general contracting….”
Doing so, said all who testified Monday, would save the state – and particularly its universities – tens of millions of dollars on capital projects.
Ohio State University President Gordon Gee attempted to put it into perspective for the panel by telling them OSU is seeking to build a $1 billion medical center that has no state funds. However, he said, the state’s “construction regulations written more than 130 years ago – before the development and production of electric lighting, even,” and intended to be used to build canals, mean that when he seeks private contributions he has to admit that at least 10 percent – “and possibly as much as 20 to 30 percent” – of the donations “go to administrative costs” because of the process the university must follow in constructing a new facility.
He said that in his earlier tenure at Ohio State in the 1990s, “hardly any of the projects I worked on then were completed.” Gee said the renovation of the library that was just completed was begun back in his first administration. In contrast, during his much briefer tenures at Brown and Vanderbilt universities, he oversaw the construction of a number of buildings, with those at Vanderbilt costing $1.5 billion.
Challenged by Sen. Shirley Smith (D-Cleveland) about OSU’s failure to meet its goals under both the Minority Business Enterprises (MBE) and Encouraging Diversity, Growth and Equity (EDGE) programs, Gee pledged to exceed the EDGE goal, explaining that he believes the reforms contained in the construction rewrite will make it easier for minority firms to participate.
Smith, Finance Ranking Minority Member Sen. Dale Miller (D-Cleveland) and the other Democrats on the panel continued to press their contention that not all stakeholders – particularly African Americans – participated in the DAS deliberations, and that the issue is complex enough to warrant extensive hearings and should not be rushed into enactment.
Also testifying Monday was former Lt. Gov. Bruce Johnson, now the president of the Inter-University Council of Ohio. He told committee members the issue is a tough one for both parties – that both have constituents on all sides of the issue.