ATB was working closely with ARTBA regarding a potential “local hire” plan that would have made it more difficult for contractors to find employees. In a major victory for ARTBA and the transportation construction industry, the U. S. Department of Transportation (U.S. DOT) on Oct. 6th withdrew the Obama administration’s proposed rule allowing geographic and other hiring mandates on federal-aid transportation construction projects. The agency determined the regulation “is not practicable for the efficient and cost-effective delivery of [transportation] projects.” U.S. DOT is also terminating a related pilot program under which the Federal Highway Administration had approved such hiring preferences on 14 projects over the past two years. Just before leaving office, the Obama administration extended the pilot program until March 2022. The agency’s withdrawal of the proposed rule change and pilot program vindicates ARTBA’s view, expressed in written comments and in meetings with agency and congressional staff, that such hiring preferences increase project costs, since contractors must calculate in their bids the risk of hiring untrained or unnecessary workers, which also raised safety concerns. Among other materials, ARTBA had provided U.S. DOT with results from a nationwide contractor’s survey confirming these expectations if local hire mandates were approved. Thank you to ARTBA for their work on this subject and for sharing the information.
The Senate is scheduled to take up a FY 2018 budget resolution the week of Oct. 16th that, among other things, assumes constraining Highway Trust Fund (HTF)-supported spending to what existing revenues could support following FY 2020. The 2015 Fixing America’s Surface Transportation (FAST) Act reauthorization law infused the trust fund with $70 billion from other parts of the federal budget and these resources are projected to be exhausted at the end of FY 2020. While the spending plan does not include specific programmatic funding levels, it does include total mandatory transportation funding levels over the next 10 years. HTF spending is considered mandatory because highway and transit contract authority is distributed to state and local governments upon enactment of surface transportation program authorization laws. These programs constitute the vast majority of transportation mandatory spending. Those tables show a $51 billion drop in transportation mandatory spending in FY 2021, to $3.9 billion. Total transportation investment would rebound in FY 2022 and beyond, but to levels of spending roughly $20 billion a year below what is projected in FY 2020. This cliff scenario is the result of virtually all incoming FY 2021 HTF revenue being used to fulfill prior year spending commitments and little remaining resource to support new investment in FY 2021. ARTBA is working to secure an appraisal of the annual programmatic investment levels that would result from scaling back trust fund spending to existing revenues. Although this particular budget’s primary purpose is to set in motion a parliamentary process that will allow Republicans to pass tax reform legislation with a simple majority vote in the Senate, it also cuts $632 billion in non-defense domestic spending and the transportation programs are part of those reductions. It is interesting to note the same procedure was used in January to pass a FY 2017 budget resolution to circumvent an expected Democratic filibuster of efforts to repeal and replace Obamacare and that budget showed no dramatic drop in transportation funding. The Trump administration’s FY 2018 budget proposal recommends constraining HTF spending to the levels existing revenues could support and notes this would result in $95 billion in surface transportation investment cuts through FY 2027. While the administration’s proposal pushes for a $1 trillion infrastructure package with $200 billion in direct federal spending, the same document urges state and local governments to fill the gap that would result from reduced HTF spending. It is important to remember that budget resolutions are not binding and that the primary purpose of the Senate proposal is to advance tax reform legislation. At the same time, this illustration of the trust fund’s fiscal reality is a critical reminder of the need to enact a permanent solution to the HTF’s structural revenue deficit as soon as possible and ideally as part of that same tax bill. ARTBA will continue to use every opportunity, including the budget debate, to make sure members of Congress and the Trump administration don’t lose sight of the need to address this critical national priority. Thanks to ARTBA for sharing this with our members as well.
Thank you to everyone for coming to our regional committee meeting at its new time. We hope that the new time was covenant for you. Thank you to our speakers Karen Wilhelmsen and Kyle Miller from PDEQ to speak to our members. We have uploaded their presentation for everyone to download them for yourself.
ARTBA has developed a user-friendly “plain English” publication to help contractors comply with the new OSHA silica standard. Please note, as the story indicates, that ARTBA remains closely involved in litigation to further defer the implementation of, revise or reverse the rule. In the meantime, however, it is important for contractors to have this information. The Newsline story can be found here.
The Pima County Procurement Department and the Department of Transportation are working together to procure local roadway pavement rebuild, repair and preservation services. This would be helpful to enlist the input of the contracting community concerning the pavement program, schedule, delivery method, contractor capacity, and material availability. By October 20th, Pima County plans to send a Request for Information (RFI) to the contractors asking for responses to specific questions. They would then like to follow up with a meeting with those contractors for an open discussion. The proposed date for the meeting is Wednesday, November 8th in the Pima County Board of Supervisors Hearing Room, 130 W. Congress (time to be determined). We would like to call on contractors in getting the word out to everyone.
In recent weeks ATB Executive Director and President Steve Melton (Hunter Contracting) held meetings with Pima County Administrator Chuck Huckelberry, Pima County Deputy Administrator Carmine DeBonis, Tucson Water and City of Tucson Department of Transportation. Since many of our members work with Tucson Water we felt it would be good to meet and share information as well as find better ways to work more closely together. Having Tucson Water participate during the Regional meeting would be a great start. We would also like to find out how we can assist them in policy changes. Tucson Water is committed to working with us and other organizations. In the meeting with Mr. Huckelberry and Mr. DeBonis, Bill Mackey (Granite) also attended regarding our recent efforts on the subdivision street standards. We felt it was important to meet with them to confirm some of the changes we wished to see while trying to give them the best solutions for longer lasting roads. We believe that the solutions are here if not very close at this point. Stay tuned for the final language to the topic. The meeting with the City of Tucson was about the continued efforts of a proper schedule for their roadway plan and Pima County’s. Making sure both schedules work together and allowing all contractors to be involved is important to them. We have met twice to discuss what the schedule looks like in the future. Please refer to the article “Pima County Procurement.”.
Effective immediately, ALL ATB meetings that started at 7:00 AM will now start at 7:30 AM. We decided to move the times to assist those coming to the meetings as guest speakers, as well as your support for this after we tried it a few months ago. We appreciate the feedback we received and we hope this helps you more in the mornings.
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Congressional Republicans and Trump administration officials delivered on September 27 long-awaited principles for a tax reform package they will attempt to move through Congress this fall. The “Unified Framework for Fixing Our Broken Tax Code” is short on details and is largely full of broad concepts that were already widely known goals of any GOP tax plan, including:
- Reducing the corporate tax rate to 20 percent;
- Reducing the number of individual tax brackets from seven to three or four;
- Repealing the Alternative Minimum Tax;
- Repealing the estate tax;
- Expensing/writing off of depreciable assets; and
- Reforming the nation’s international tax code, including a one-time tax on profits of U.S. companies holding corporate earnings abroad.
Details on how the changes in the tax code would be paid for were scant, besides broad references to eliminating certain deductions. Also, not included in the GOP framework was any reference to permanently solving the Highway Trust Fund (HTF) revenue shortfall. Given the lack of details and the multiple references both publicly and privately that the House and Senate will now follow “regular order,” which means tax committees in each body will produce legislation and members will be allowed to offer amendments. As such, the opportunity to address the HTF’s fiscal dilemma is still very real. Accordingly, House Highways and Transit Subcommittee Chairman Sam Graves (R-Mo.) and Ranking Member Eleanor Holmes-Norton (D-D.C.) sent a Sept. 28 letter to tax reform leaders both supporting inclusion of a HTF fix as part of tax reform. It also reminded leaders of the June 12 letter (included in link above) 253 bipartisan members of the House signed asking for a HTF solution to be part of any tax reform legislation. The next steps for tax reform to move forward require both the House and Senate to pass FY 2018 budgets that include what’s known as “reconciliation” instructions – a procedural maneuver that allows for only 50 votes in the Senate to pass a tax package and usurp the chamber’s rules that allow a minority to block legislation. The House is slated to take up its version of the budget as soon as the week of Oct. 2. Meanwhile, the Senate budget details came out Sept. 29 and, like the House budget, ignores many of the Trump administration’s requests, including cutting HTF-supported transportation construction programs to available receipts once the next trust fund shortfall is reached, sometime in 2021. Also, like the House budget, the Senate version includes a deficit-neutral reserve fund that allows for spending on infrastructure to be increased beyond the levels laid out in the budget, as long as additional revenues are generated to pay for the increases or corresponding cuts elsewhere in the government. ARTBA and its partner organizations sent an April 7 letter asking for such a reserve fund to be included. As the tax reform process moves forward in the House and Senate, and our partners ARTBA will continue to push for a permanent HTF revenue solution that stabilizes and grows federal highway and transit investment. We will keep you posted as this process continues to move forward. Thanks to ARTBA for sharing this information with us.
Beginning January 1, 2018, the Arizona Department of Transportation will go to solely electronic bidding. Paper documents containing bid information will no longer be available for purchase. Electronic documents will continue to be available for free downloads. Please remind your subcontractors of this upcoming change as well.
NOTICE TO ALL CONTRACTORS
EFFECTIVE JANUARY 1, 2018
BEGINNING JANUARY 1, 2018, CONTRACTOR BIDS MUST BE SUBMITTED ELECTRONICALLY. ADOT CONTRACTS AND SPECIFICATIONS WILL NOT ACCEPT PAPER BIDS FOR ANY PROJECT WITH A BID OPENING AFTER JANUARY 1, 2018.
Contractors that are not already bidding electronically should go to the electronic bidding tab on the Contracts and Specifications website for instructions:
CONTRACTS AND SPECIFICATIONS PROJECT DOCUMENTS WILL CONTINUE TO BE AVAILABLE ON THE WEBSITE IN ELECTRONIC FORM AT NO CHARGE. PROJECT DOCUMENTS WILL NOT BE AVAILABLE FROM CONTRACTS AND SPECIFICATIONS IN PRINT FORM AFTER JANUARY 1, 2018.
Please let me know if you have questions or concerns. You can call me anytime at 602-712-8265.