Below is the HillCo client report from the August 27 House Government Efficiency & Reform Committee hearing

The committee met to consider the following interim charges:
 
Examine current restrictions on state and local governmental entities relating to the construction of critical infrastructure, including transportation and water projects, and make recommendations for expediting and creating more cost-effective and efficient methods for the construction of such projects.
 
Review the application of the Public Information Act to requests for large amounts of electronic data. Examine whether the procedures and deadlines imposed by the Act give governmental bodies enough time to identify and protect confidential information in such requests.
 
Study the benefits of utilizing a Chief Innovation Officer for Texas and its agencies.
 
 
Infrastructure Construction
 
Ed Pensock, Director of Strategic Projects, Texas Department of Transportation (TxDOT)

  • Responsible for oversight of comprehensive development agreements (CDAs) and design-build (DB) project delivery systems
  • Projects range from $50 million to $3 billion
  • These type of projects use a best value selection process rather than a low bid process
  • DB allows for right of way acquisition, design, construction and maintenance in a single contract
  • CDA makes the developer responsible for performing many of the tasks and responsibilities within a project
  • Both models can be used on tolled or non-tolled roadways
  • A third-party review process helps protect the tax payer interest in these projects; also subject to OAG (Office of the Attorney General) and Legislative Budget Board review
  • TxDOT has realized significant cost savings through these programs as well as time savings
  • TxDOT has a mature program that has been instrumental in accelerating and delivering varying transportation projects while saving residents time and money
  • As additional tools such as construction manager at-risk (CMAR) are made available, continued savings will be realized
  • Rep. Phil Stephenson asked what limits should be in place on these projects
    • If the restriction were removed there would not be a huge increase in projects using these delivery methods but a small increase would be seen as TxDOT could see savings on additional projects
  • Rep. Hubert Vo asked about the purpose of the public hearing for CDA projects
    • That is required for all CDAs; the project description and financing must be vetted through a public hearing; public needs to be made well aware of private financing agreements
  • Vo asked how much public input is brought back to the agency
    • Quite a bit; if the region doesn’t want a project or is not ready it will not move forward
  • Vo noted he brought up legislation that would require economic impacts to be studied before a project is taken on; the proposal was shot down
  • Chair Linda Harper-Brown asked if any other restrictions should be changed; didn’t agree with the limit on number of DB projects from the beginning
    • Would view any potential tool available as a benefit to the state; if availability payment contract structures and CMAR were deemed allowable they may not be used a lot but the best tool would be used in every situation
  • Harper-Brown noted availability payments are subject to appropriations; if they don’t meet criteria set for a project they can be penalized
    • To a certain degree; if they make the project available to the public for use they are required to be paid according to the contract
  • Harper-Brown asked how availability payments are different from any other model regarding how payment is made
    • Those projects are all similar to buying a house with a mortgage; the caveat is that if projects have problems those are deducted from what could be considered the mortgage payment
  • Harper-Brown asked how processes are being studied to find cost savings
    • Since 2011 with DB statute in place have been looking at how to make the DB process better through streamlining; in discussions with the Association of General Contractors to try to reduce the number of steps in the process
  • Harper-Brown asked about other models besides DB
    • The very fact of taking right of way acquisition, design, construction and maintenance in one contract significantly decrease the number of steps and time that goes into contracting and delivery; also decreases procurement timeframe
  • Harper-Brown asked how procurement is defined as it relates to TxDOT
    • It is a very defined two-step RFQ and RFP process; proposals are developed and evaluated under the best value process; contracts are awarded based on evaluations; alternative technical concepts from losing proposals are studied and brought to the winning contract team to try and incorporate additional savings
  • Harper-Brown asked why committed financing is not asked for at the same time proposals are submitted
    • If there is a financial close deadline separate from the execution of the contract the team can time the market to find the best financing options; feels that the state gets better value this way
  • Harper-Brown noted the delay of time is the issue; the TX-183 project was awarded in June or July and they have until December to find financing
  • Harper-Brown noted it seems unfair that when project details are changed after proposals are submitted and the contract is awarded other proposals are not reconsidered or allowed to resubmit
  • Harper-Brown asked about the restrictions on DB projects
    • There can be three projects per year that must have a value over $50 million each
  • Harper-Brown asked if questions during the public hearings are ever answered
    • Carlos Swonke with TxDOT noted the agency does not engage in dialogue with the public in those hearings; in public meetings that is different and less formal; comments from the public hearing process are responded to in the public hearing summary document which is made public
  • Harper-Brown asked about part of the environmental process including the economic background evaluation of the population in the area
    • The impact on social and economic environment of an area is studied which includes a demographic analysis; it does fall under the environmental process; mainly a federal highways initiative
  • Vo asked how much consideration is taken from the economic study
    • It is a big issue when it comes to affecting access to businesses and potential relocations of those businesses; the context at which impact occurs is a consideration as well
  • Vo asked who makes those decisions
    • Mainly TxDOT as well as the federal highway administration if it is a federal project
    • Everything depends on how the negative impact weighs against the positive impact and the level of public protest
  • Harper-Brown asked about two types of contracts with NTTA (North Texas Tollway Authority) and how projects can get delayed
    • Pensock returned and responded that NTTA being a local tolling agency has primacy on any toll project proposed in that region; that goes for any local tolling authority; if they choose not to develop a project TxDOT can come in and develop out a region; that usually happens very early in the process
    • For development of toll services agreements, NTTA has the right to be the back office tolling authority; early on, this process had a lot of different perspectives that had to be taken into account; these have been ironed out for the most part
  • Harper-Brown believes there may need to be some legislation to streamline those processes; asked about delays in the TX-183 project
    • Primacy was released on the TX-183 project then it was determined that two other connecting highways should be included in the project to make it more efficient; it was unclear whether NTTA released primacy for the other two highways so there was a delay in trying to find that understanding

 
Zhanmin Zhang, Center for Transportation Research, University of Texas

  • Infrastructure systems are the backbone of the economy
  • In Texas there is a traffic fatality every 2.5 hours and a traffic accident every 75 minutes
  • Discussed the Texas 2030 Committee; they determined that in order to maintain current maintenance and traffic levels the state would have to spend around $220 billion over the next 25 years
  • Limited resources must be allocated across different types of infrastructure according to need
  • Systems must be managed proactively not reactively; this would result in lower cost and lower risk; reliable prediction techniques must be used so that the impact of maintenance spending can be projected
  • Harper-Brown asked if funding is a contributing factor to the state being reactive instead of proactive
    • The state has not used the right predictive technologies in the past; new methods will help in that regard
  • Harper-Brown noted at the recent NCSL conference a lot of technology was discussed that is available that the state is not using; these could save manpower, time and money; very interested in the self-healing asphalt that has a bacteria in it so that when it cracks the bacteria can seal the pavement

 
Pensock returned to answer questions

  • Harper-Brown asked about TxDOT adding another layer of personnel at the district level; already added a regional layer; why adding personnel when funding is so desperately needed
    • Will take that question back to the department
  • Rep. Van Taylor asked if $10 billion per year is enough for the department
    • That would certainly solve a lot of problems
  • Harper-Brown asked about prediction technology; does TxDOT have the best
    • The department is rapidly trying to get up to speed with the new technologies; have to make the decision where dollars are spent, widening lanes or investing in technology; as the department grows it is becoming more efficient while implementing new strategies and technologies

 
Ken Stringer, Texas Water Infrastructure Network

  • Membership is largely composed of family owned and privately owned companies
  • Over the last seven years there have been many alternatives in project delivery; there are very few procurement and delivery methods that aren’t available for water projects in Texas
  • All types of delivery methods have a place in the system and all provide value in their own way
  • Many have only been available since 2007 and there is limited experience with these methodologies at both the government and contractor level
  • For the most part innovative delivery methods have better served larger integrated firms outside of the state; artificial barriers to market entry for Texas companies have been created
  • The competitive process has seen some slight improvements but there is still a tremendous learning curve regarding how to use these systems in the best ways
  • Because Texas firms have only had a few years to gain experience with these methods, outside firms are able to show better experience when developing proposals; many times the procurement process is manipulated to exclude or include individual firms; showing project references or experience with that delivery method excludes Texas firms; HB 1977 (83R) would have helped with that problem
  • There has been very little DB used in water infrastructure projects; reasons range from the cost of the selection process, stipends to firms with losing bids, loss of control over design and various legal issues
  • Have seen a fair amount of competitive sealed proposal projects around the state; there have been a wide range of requirements and it is unclear sometimes how the selection process is being done; it could be a little more clear as far as how the subjective aspect of the evaluation is done
  • Harper-Brown asked if there are any suggestions to improve processes
    • The process should take into account a company’s background and references particularly for the type of project the procurement is for, not just whether or not a firm has done a CMAR or DB project multiple times in the past

 
Chris Canonico, Vice President, CDM Smith

  • Need the legislature to give local governments access to the full suite of tools for procuring and delivering projects to their residents
  • Many bills last session would have done a lot to advance the use of alternative delivery methods but there were also bills that would have limited use and flexibility of these methods
  • For many small to medium sized cities and water districts, DB and CMAR are not available for project delivery
  • Would like to have the rules opened up to everyone
  • Harper-Brown asked about the population criteria for using alternative delivery methods; testimony suggested that cities with smaller populations would not have the necessary experience to utilize those methods; those decisions should probably be made at the local level
    • Agreed

 
Maxie Gallardo, Workers’ Defense Project

  • The committee should continue to review ways to make projects more efficient and cost effective while also studying ways to improve construction workers’ safety
  • Wage theft and employee misclassification should continue to be studied to ensure workers are receiving their full benefits and wages
  • Vo asked what remedies are recommended; OSHA does company inspections
    • Both OSHA and TWC (Texas Workforce Commission) only perform reviews when someone has filed a complaint; many wage claims are going unrecognized because employees are paid through cash or personal check
  • Stephenson noted a way to attack the misclassification problem would be to have employers claim how they classify their employees during the bidding process

 
Chief Innovation Officer
 
Tony Parham, Government Innovation Officer, Commonwealth of Massachusetts

  • Harper-Brown asked if the majority of innovation officers are looking at IT
    • Not just in technology but also looking at processes in every aspect of government
  • Vo asked what the office budget is
    • Started at $2.5 million mostly for staffing; agencies who implement projects from the office generally fund the projects themselves
  • Vo asked how large the staff is
    • Currently there are eight innovation fellows who are assigned by the federal government and around 5 other staff members
  • Harper-Brown asked about the Mass. Challenge
    • It is a program that facilitates competition among startup companies; they can suggest innovation projects for the commonwealth; many projects focus on IT procurement reform; another project going on is focused on open data, agencies publishing open data information allows third-party companies to develop that into accessible formats for customers to use
  • Harper-Brown asked about the innovation agenda
    • It is set by the Governor to lay out his objectives and projects he wants to pursue surrounding innovation
  • Harper-Brown asked if crowdsourcing in Mass. uses specific suggestions or if it is open
    • The topic must not be too broad or too narrow; there needs to be a targeted challenge for responders to address
    • Crowd sourcing itself is only 30% of the solution; the management and processes surrounding crowdsourcing are the majority of what makes it successful
  • Harper-Brown noted Texas has a system in place for innovation but there is no incentive system for them to be proactive in developing solutions

 
Steven Goldsmith, Harvard Professor

  • Government systems are quite archaic and do not facilitate innovation that helps public officials do the job they want to do
  • Employees within an entity should be incentivized to produce innovation; they know the best ways to improve their processes
  • Middle managers often trap innovation; they are too interested in controlling their employees to allow innovation to make its way upward

 
Public Information Act
 
Laurie Payne, City Secretary, City of Southlake

  • In the last 3-4 years the act is being used more and more by private business to generate information on leads
  • About 64% of requests come from private businesses
  • They are requesting building permits, fire reports, building plans, code violations and newly connected utility water customers
  • When a request is submitted, responsive documents are compiled then redacted; it is a very time consuming process
  • Suggestions to expedite the process and make it more efficient and effective:
    • Public entities should be able to satisfy requirements of the act by directing requestors to a website where the information may be housed
    • If copyrighted materials could be part of the list of information that cannot be released it would prevent entities from having to seek an AG opinion because copyrights are never released anyway
    • Would like for utility water customer information to be on the list as well
  • Rep. Giovanni Capriglione agrees that there is a problem especially when information that is on a website is requested and the work must be done multiple times to fulfill the requests
  • Capriglione asked how much work is done in situations where a price estimate is required
    • If a voluminous request is made, the office will work for about an hour and see how many documents that request would require; there is a maximum amount that can be charged for hourly work but it doesn’t come anywhere close to full reimbursement; sometimes the information is put together to determine how much it would cost and when the price is quoted the requestor cancels their request after the work is done

 
Amanda Crawford, Open Records Division Chief, Office of the Attorney General

  • There definitely has been an increase in requests from private businesses but statute requires that all requestors must be treated uniformly; there is also a prohibition on asking why information is being requested
  • Under the act as written, there is the possibility, if directing a requestor to information online, that a requestor can agree to receive the information that way
  • There are provisions in the act to allow governmental bodies to attempt to clarify a request; if that is done the clock stops and the 10 day period will not continue to run
  • If a voluminous request is made, it is not considered a received request until it is paid
  • There is a waiver that can be applied for if the cost to fulfill a request is higher than is allowable by law
  • Copyrighted information is not confidential; copyrights just mean that a copy cannot be made; OAG rulings will say that the information must be released in accordance with federal copyright laws; entities do not have to make an AG opinion request for every copyright situation
  • Capriglione asked about the process for getting utility water customer information
    • For any information that is subject to a confidentiality option; they do have to be sent in for a ruling from OAG; the office will generally say that for people who have opted out of having their information available it may be redacted
  • Rep. Scott Turner noted he agrees that type of  information should be off limits without having to have an AG opinion or a customer check off a box to remain confidential

 
Joy Streeter, County and District Clerks Association

  • Some people send requests asking for “everything you have” those requests are hard to fulfill
  • The deadlines do not give adequate timelines to allow for protection of confidential information
  • A big part of the problem is that requestors do not just want information to be accessible, they want the work done for them and they want to the information in a certain format
  • The PIA was intended to allow for transparency in government; do not believe it should be used to turn government employees into secretaries for businesses
  • Believes that clerks’ records should be exempt from the PIA
  • Capriglione asked what commercial use there is for clerks’ documents
    • Some people take the information just to turn around and put it on a paid website so they can sell the information
  • Had 10 requests in 2013 that caused 100 hours of work to be done; only 4 of those actually paid and came in to pick up the information
  • Harper-Brown noted it is hard to strike a balance between making information available to people who are just curious or with the media and those who are trying to commercialize the data or abuse the system
  • There was a situation where a person made a request for quite a bit of information; the office realized the same person had made another voluminous request earlier that year and had never come in to pay for and pick up the information; there is nothing in statute to address that type of situation