The First Word - July, 2003

American Council of Engineering Companies of Oklahoma
201 N. E. 27th St., Suite 135
Oklahoma City, OK 73105
(405) 525-7696
FAX: (405) 557-1820
Web Site: www.acecok.org
E-Mail: jsullins@acecok.org

The Voice of Oklahoma's Engineering Industry

The First Word

July, 2003

Mike Homan Becomes New
ACEC OKLAHOMA Chairman

Mike Homan was installed by ACEC Vice Chairman Ray Flemons, Dallas, TX, as the first-ever "Chairman of the Board" of ACEC OKLAHOMA (formerly CECO -- See related story on Page 4) on June 7th at the conclusion of the annual convention in Branson, MO.

Homan is a Principal and Regional Manager located in Terracon's Tulsa office. He has been with Terracon since 2000. Prior to that, he was an Assistant Vice President and Office Manger with Law Engineering in Tulsa.

Homan holds a Bachelor of Science degree in civil engineering from the University of Arkansas and a

Master of Science in civil engineering from Oklahoma State University. He is a licensed professional engineer in Oklahoma and Arkansas.

He was recently appointed to the Board of Visitors for the Oklahoma State University School of Civil and Environmental Engineering. He is a Director of the Rotary Club of Tulsa and serves on the Board of the Tulsa Area American Heart Association.

Mike and his wife Ginger have three children, Ryan, 16, Meghan, 13, and Nate, 6.

Also beginning their service on the ACEC OKLAHOMA Board of Directors are:

Chairman-Elect: Don Vick, JGVEngineering, Oklahoma City

Vice Chairman of Membership: Jerry Farrar, EarthTech, Tulsa

Treasurer: Jim Stewart, PSA Consulting Engineers, Oklahoma City

Vice Chairman of Business Practice: Jim Fisher, TranSystems Corportation Consultants, Tulsa

Vice Chairman Education/Public Relations: Steve Ford, Zahl-Ford, Inc., Oklahoma City

ACEC National Director: Mike Arand, Dewberry Design Group, Tulsa

2003-04 ACEC OKLAHOMA BOARD

(Left to Right -- Immediate Past President Chuck Darr; Vice Chairman Education Steve Ford; ACEC National Director Mike Arand; Vice Chairman of Membership Jerry Farrar; Chairman of the Board Mike Homan; and ACEC Vice Chairman Ray Flemons. Chairman-Elect Don Vick, Vice Chairman of Business Practice Jim Fisher, and Treasurer Jim Stewart are not pictured.

Chuck Darr (left), the last President of CECO, receives a plaque recognizing his service to the organization from Executive Vice President Jim Sullins.

Page 2

"Win Some; Lose Some" Legislative Session

Due in no small part to CECO's (ACEC OKLAHOMA's) opposition and member's calls to their Representatives and Senators, the proposal received only limited support in the Legislature, and even the Governor weighed in as being "cool" to a variety of tax proposals.

While we have dodged the bullet this time around, rumors are still circulating that the issue may not be completely dead. Even before the Legislature adjourned, "Special Session" was being openly discussed in several corners.

The last we heard is that the proponents of tax increases were planning to wait until the full impact of the budget reductions come into play that being the time when schools come back into session after teachers have been laid-off and after state employees have been furloughed and/or laid-off. At that time, they believe that there will be such an overwhelming "public outcry" that the Legislature will come back into Special Session with a "mandate" to immediately raise new revenue.

Only time will tell, but it could make for a very interesting late-summer and fall.

One last comment on this issue: You may wonder why a myriad of other business groups were left out. Well, politics and personal safety plays into the issue. One legislator was interviewed on local radio about this issue, and one of his comments was very telling. When asked about why, for example, barber shops weren't included in any of the proposals, he said, (and we're paraphrasing), "Well, you don't think I'm going to vote to impose a tax on barbers, and then go to get my hair cut by someone holding sharp scissors."

On the "disappointing" side of the Session, the proposal to put an increase in the state motor fuel tax to a vote of the people failed to receive legislative approval.

CECO (ACEC OKLAHOMA) was involved in a large coalition of groups working hard to get the Legislature to act this session to add the proposal to the 2004 General Election ballot. We believed that getting the proposal passed this session was critical to the success of the vote in 2004 as it would give proponents over a year to prepare the public for the vote.

Unfortunately, just as it looked as though the Legislature was ready to pass the proposal, the Oklahoma City and Tulsa Chambers pulled their support which was the death-knell for the bill.

What had promised to be a very exciting 2003 Legislative Session for ACEC OKLAHOMA members, turnout to be at the very least "scary" and at the most "disappointing."

The "scary" side was a late-in-session proposal to impose the state sales tax on professional services, including engineering, architectural and land surveying services.

With the state facing a major shortfall in revenues, the Legislature was looking for anything to make up the difference. Naturally, the Legislature looked to businesses, and specifically businesses that "sell" services but don't collect the state sales tax.

Two groups who are beneficiaries of tax collections, the Oklahoma Education Association and the Oklahoma Public Employees Association, pressured the Legislature to impose the sales tax on a select group of businesses. Some 18 business groups were singled out over the more than 250 exempt business groups and became the "targets" for removal of their sales tax exemptions.

These eighteen groups (which included A/E/LS, Accountants, Attorneys, Auto Repair, Payroll Services, Employment Agencies, and more) were identified because they have "perceived" large ticket items.

For example, according to the figures used for A/E/LS services, removal of the exemption would have generated $49 million in sales tax collections from A/E/LS firms. That means there is over $1 billion in "sales" of A/E/LS services in Oklahoma annually.

Obviously, $49 million from one business group looks very inviting, but the numbers are very flawed. In reality, according to research provided CECO (ACEC OKLAHOMA) by Bill Fanning of PSMJ, just over $18 million would actually be generated.

This is based on PSMJ's research which shows that 43% of the "sales" would be for federal, state, and local government project services which would be exempt from the new tax. Additionally, another 16% of the sales would be to and from sub-consultants, which would be considered "purchases for resale" and not be taxed directly but would be included in the final "sale" price only. All in all, only 38% of the total $1 billion-plus in sales would be taxable transactions.

(Cont. on Page 3)

Page 3

Legislative Wrap-Up Continued

Since the two Chambers had been actively involved in the Coalition, their sudden opposition was quite surprising. Granted, the Chambers and many others had expressed concerns with different portions of the bill throughout the entire process. But, with politics being the "art of compromise", many of their concerns along with the concerns of others had been addressed. So, it seemed that everyone was on-board, right up to the last minutes when the Chambers bolted.

So, where does that leave highway funding? While the bill could be brought back up next session, attention now seems to be turning to an initiative petition drive. The two Chambers seem to be headed towards a "MAPS for Roads" petition drive, but since the end of the session, very little has been said or done.

Whether it's the Chambers' proposal, the bill from this session, or, some yet-to-be-named proposal, something has got to happenand happen very soon. Oklahoma's road are already in very bad shape, and without new funding for maintenance and construction, they will only get worse.

Only time will tell, but one thing is certain2004 will be a "make or break" year for Oklahoma's highway system.

STATE ARCHITECTS ACT -- Last but not least, there was a strong move to make major changes to the State Architects Act primarily in the area which stipulates when an Architect is required on a project.

Under current law there is a "laundry list" of building types (school, auditorium, public owned buildings, etc.) on which an architect is required if the cost of the project is over $40,000. However, for some other types of commercial buildings, there is an "exception" for buildings that are two stories or less in height. Architects have been trying for many years to get this changed, but have not come up with a workable solution.

Major opposition came from two groups, the homebuilders association and the building designer's association. These two organizations are closely related, and their membership are those who design and build "strip" shopping centers. "Strip" malls do not fall into the current definition of a building, but would if the new "code use group" and "occupancy" limits are adopted.

The bill passed the Legislature and was signed by the Governor but in a form far from the original bill. Major amendments were made on the House floor which basically "gutted" the bill. In lieu of the substantiative language, amendments proposed by the opponents provided for a legislative task force to be convened to study the issue and make recommendations for legislative language.

In the final bill, seats on the legislative task force have been assigned to various interested organizations including CECO. A member of CECO (now ACEC OKLAHOMA) will be appointed to the task force by Senate President Pro Tem Cal Hobson.

That's the wrap on the 2003 Legislature. As always, ACEC OKLAHOMA will keep a watchful eye on 23rd and Lincoln, and look for any signs of a possible "Special Session." And, Interim Studies will be announced soon, and we will watch those to see if anything of interest appears on those agendas.

Welcome New Members

ACEC OKLAHOMA is excited to welcome four new members to ACEC OKLAHOMA and to ACEC.

GLEN R. BOYD ENGINEERING, P.C., of Oklahoma City is a 2-person mechanical engineering firm offering design services including HVAC, plumbing and fire protection sprinkler systems. Glen Boyd is the principal of the firm.

B & R ENGINEERING of Oklahoma City is headed by Dr. Bob Watson, who offers residential and commercial structural inspections.

RICHARDSON ENGINEERING of Tulsa is a 2-person MEP firm providing services for commercial, residential, and institutional projects. Fred Richardson is the principal of the firm.

STANDARD TESTING AND ENGINEERING CO., of Oklahoma City offers geotechnical, construction materials testing, and environmental engineering services. Tom Kelly is the principal of the 60-person firm.

We welcome these firms and look forward to having them as active members of ACEC OKLAHOMA and ACEC.

Page 4

CECO is Now
ACEC OKLAHOMA

Tomlinson Named
OTA Director

It's Official CECO is now the AMERICAN COUNCIL OF ENGINEERING COMPANIES OF OKLAHOMA, or ACEC OKLAHOMA!

While it may take a few weeks to get everything converted to the new name, CECO is rapidly being phased out and ACEC OKLAHOMA will become more and more visible.

You first saw the ACEC OKLAHOMA name on the recently mailed dues statements.

With this newsletter you will see that the former "CECO REPORT" is now "THE FIRST WORD". For almost 50 years CECO has been the only place for news and information critical to the success of Oklahoma's engineering firms, so we thought our new newsletter should reflect the fact that ACEC OKLAHOMA is "THE FIRST WORD" for Oklahoma's engineering business.

And now, we are also ready to announce our new website: www.acecok.org. The new site is up and running and we encourage you to visit the site and change your bookmark to the new address.

Also, we have a new e-mail address jsullins@acecok.org. As with the website, the new e-mail is active and we ask that you change your address book to the new e-mail.

The old web and e-mail address will be kept active for a period of time to give everyone the chance to get changed over. But, we ask that you start using the new web and e-mail addresses as soon as possible.

We want to assure everyone that, other than the name, nothing else has changed. We've received several phone calls in recent days concerning the name change. For example, there has been concern that our relationship with ACEC had changed, and that members would still be eligible for the ACEC insurance programs and other ACEC programs.

Be assured that other than the cosmetic name change, nothing has changed in our relationships with any of the programs offered when we were CECO. We are still the same; all of our programs and services are the sameonly the name has changed.

Thanks for your understanding and cooperation during this transition, and be watching for more information from ACEC OKLAHOMA!

Governor Brad Henry's Secretary of Transportation Phil Tomlinson has been named director of the Oklahoma Transportation Authority, which operates the state's turnpike system.

Tomlinson, 64, will receive an annual salary of $109,200 as authority director. He succeeds Holly Lowe, who has served as acting director and chief financial officer for two years.

Lowe, who submitted her resignation on June 1, has taken a position with Spirit Bank. Tomlinson told authority members that he "encouraged" Lowe to remain at the authority. She declined a position as deputy director.

Lowe was named acting director when then Gov. Frank Keating's Secretary of Transportation Neil McCaleb resigned.

Also at the June 19th monthly meeting, Doug Riebel, Enid contractor, was chosen authority chair for the coming fiscal year; Mike Leonard, a retired Muskogee banker and chief financial officer of Bacone College, was elected vice-chair; and Greg Massey, president of First United Bank in Durant, was chosen secretary, treasurer.

ACEC Seeking To Kill
Anti-Outsourcing Amendment

The House Appropriations Subcommittee on Interior has introduced an anti-outsourcing provision for the F.Y. '04 Interior Appropriations bill. The provision prohibits all agencies within the Department of Interior from moving forward with the Administration's competitive sourcing plan.

The Administration plan compels agencies to compete work that is available in private industry.

The provision is particularly harmful to the engineering industry as the Bush plan would help to stop unfair competition ACEC members face from agencies within the Department of Interior, including the Bureau of Reclamation and the U.S. Geological Survey.

The full Appropriations Committee is marking up the bill next week. ACEC is working with the Bush Administration and industry allies to have the language removed.

Home



Page 2


"Win Some; Lose Some" Legislative Session
	Due in no small part to CECO's (ACEC OKLAHOMA's) opposition and member's calls to their Representatives and Senators, the proposal received only limited support in the Legislature, and even the Governor weighed in as being "cool" to a variety of tax proposals. While we have dodged the bullet this time around, rumors are still circulating that the issue may not be completely dead. Even before the Legislature adjourned, "Special Session" was being openly discussed in several corners. The last we heard is that the proponents of tax increases were planning to wait until the full impact of the budget reductions come into play that being the time when schools come back into session after teachers have been laid-off and after state employees have been furloughed and/or laid-off. At that time, they believe that there will be such an overwhelming "public outcry" that the Legislature will come back into Special Session with a "mandate" to immediately raise new revenue. Only time will tell, but it could make for a very interesting late-summer and fall. One last comment on this issue: You may wonder why a myriad of other business groups were left out. Well, politics and personal safety plays into the issue. One legislator was interviewed on local radio about this issue, and one of his comments was very telling. When asked about why, for example, barber shops weren't included in any of the proposals, he said, (and we're paraphrasing), "Well, you don't think I'm going to vote to impose a tax on barbers, and then go to get my hair cut by someone holding sharp scissors." On the "disappointing" side of the Session, the proposal to put an increase in the state motor fuel tax to a vote of the people failed to receive legislative approval. CECO (ACEC OKLAHOMA) was involved in a large coalition of groups working hard to get the Legislature to act this session to add the proposal to the 2004 General Election ballot. We believed that getting the proposal passed this session was critical to the success of the vote in 2004 as it would give proponents over a year to prepare the public for the vote. Unfortunately, just as it looked as though the Legislature was ready to pass the proposal, the Oklahoma City and Tulsa Chambers pulled their support which was the death-knell for the bill.
What had promised to be a very exciting 2003 Legislative Session for ACEC OKLAHOMA members, turnout to be at the very least "scary" and at the most "disappointing." The "scary" side was a late-in-session proposal to impose the state sales tax on professional services, including engineering, architectural and land surveying services. With the state facing a major shortfall in revenues, the Legislature was looking for anything to make up the difference. Naturally, the Legislature looked to businesses, and specifically businesses that "sell" services but don't collect the state sales tax. Two groups who are beneficiaries of tax collections, the Oklahoma Education Association and the Oklahoma Public Employees Association, pressured the Legislature to impose the sales tax on a select group of businesses. Some 18 business groups were singled out over the more than 250 exempt business groups and became the "targets" for removal of their sales tax exemptions. These eighteen groups (which included A/E/LS, Accountants, Attorneys, Auto Repair, Payroll Services, Employment Agencies, and more) were identified because they have "perceived" large ticket items. For example, according to the figures used for A/E/LS services, removal of the exemption would have generated $49 million in sales tax collections from A/E/LS firms. That means there is over $1 billion in "sales" of A/E/LS services in Oklahoma annually. Obviously, $49 million from one business group looks very inviting, but the numbers are very flawed. In reality, according to research provided CECO (ACEC OKLAHOMA) by Bill Fanning of PSMJ, just over $18 million would actually be generated. This is based on PSMJ's research which shows that 43% of the "sales" would be for federal, state, and local government project services which would be exempt from the new tax. Additionally, another 16% of the sales would be to and from sub-consultants, which would be considered "purchases for resale" and not be taxed directly but would be included in the final "sale" price only. All in all, only 38% of the total $1 billion-plus in sales would be taxable transactions.

		(Cont. on Page 3)



	Page 3


	Legislative Wrap-Up Continued
	Since the two Chambers had been actively involved in the Coalition, their sudden opposition was quite surprising. Granted, the Chambers and many others had expressed concerns with different portions of the bill throughout the entire process. But, with politics being the "art of compromise", many of their concerns along with the concerns of others had been addressed. So, it seemed that everyone was on-board, right up to the last minutes when the Chambers bolted. So, where does that leave highway funding? While the bill could be brought back up next session, attention now seems to be turning to an initiative petition drive. The two Chambers seem to be headed towards a "MAPS for Roads" petition drive, but since the end of the session, very little has been said or done. Whether it's the Chambers' proposal, the bill from this session, or, some yet-to-be-named proposal, something has got to happenand happen very soon. Oklahoma's road are already in very bad shape, and without new funding for maintenance and construction, they will only get worse. Only time will tell, but one thing is certain2004 will be a "make or break" year for Oklahoma's highway system. STATE ARCHITECTS ACT -- Last but not least, there was a strong move to make major changes to the State Architects Act primarily in the area which stipulates when an Architect is required on a project. Under current law there is a "laundry list" of building types (school, auditorium, public owned buildings, etc.) on which an architect is required if the cost of the project is over $40,000. However, for some other types of commercial buildings, there is an "exception" for buildings that are two stories or less in height. Architects have been trying for many years to get this changed, but have not come up with a workable solution. Major opposition came from two groups, the homebuilders association and the building designer's association. These two organizations are closely related, and their membership are those who design and build "strip" shopping centers. "Strip" malls do not fall into the current definition of a building, but would if the new "code use group" and "occupancy" limits are adopted.		The bill passed the Legislature and was signed by the Governor but in a form far from the original bill. Major amendments were made on the House floor which basically "gutted" the bill. In lieu of the substantiative language, amendments proposed by the opponents provided for a legislative task force to be convened to study the issue and make recommendations for legislative language. In the final bill, seats on the legislative task force have been assigned to various interested organizations including CECO. A member of CECO (now ACEC OKLAHOMA) will be appointed to the task force by Senate President Pro Tem Cal Hobson. That's the wrap on the 2003 Legislature. As always, ACEC OKLAHOMA will keep a watchful eye on 23rd and Lincoln, and look for any signs of a possible "Special Session." And, Interim Studies will be announced soon, and we will watch those to see if anything of interest appears on those agendas.



			Welcome New Members

			ACEC OKLAHOMA is excited to welcome four new members to ACEC OKLAHOMA and to ACEC. GLEN R. BOYD ENGINEERING, P.C., of Oklahoma City is a 2-person mechanical engineering firm offering design services including HVAC, plumbing and fire protection sprinkler systems. Glen Boyd is the principal of the firm. B & R ENGINEERING of Oklahoma City is headed by Dr. Bob Watson, who offers residential and commercial structural inspections. RICHARDSON ENGINEERING of Tulsa is a 2-person MEP firm providing services for commercial, residential, and institutional projects. Fred Richardson is the principal of the firm. STANDARD TESTING AND ENGINEERING CO., of Oklahoma City offers geotechnical, construction materials testing, and environmental engineering services. Tom Kelly is the principal of the 60-person firm. We welcome these firms and look forward to having them as active members of ACEC OKLAHOMA and ACEC.



	Page 4


	CECO is Now ACEC OKLAHOMA		Tomlinson Named OTA Director

	It's Official CECO is now the AMERICAN COUNCIL OF ENGINEERING COMPANIES OF OKLAHOMA, or ACEC OKLAHOMA! While it may take a few weeks to get everything converted to the new name, CECO is rapidly being phased out and ACEC OKLAHOMA will become more and more visible. You first saw the ACEC OKLAHOMA name on the recently mailed dues statements. With this newsletter you will see that the former "CECO REPORT" is now "THE FIRST WORD". For almost 50 years CECO has been the only place for news and information critical to the success of Oklahoma's engineering firms, so we thought our new newsletter should reflect the fact that ACEC OKLAHOMA is "THE FIRST WORD" for Oklahoma's engineering business. And now, we are also ready to announce our new website: www.acecok.org. The new site is up and running and we encourage you to visit the site and change your bookmark to the new address. Also, we have a new e-mail address jsullins@acecok.org. As with the website, the new e-mail is active and we ask that you change your address book to the new e-mail. The old web and e-mail address will be kept active for a period of time to give everyone the chance to get changed over. But, we ask that you start using the new web and e-mail addresses as soon as possible. We want to assure everyone that, other than the name, nothing else has changed. We've received several phone calls in recent days concerning the name change. For example, there has been concern that our relationship with ACEC had changed, and that members would still be eligible for the ACEC insurance programs and other ACEC programs. Be assured that other than the cosmetic name change, nothing has changed in our relationships with any of the programs offered when we were CECO. We are still the same; all of our programs and services are the sameonly the name has changed. Thanks for your understanding and cooperation during this transition, and be watching for more information from ACEC OKLAHOMA!		Governor Brad Henry's Secretary of Transportation Phil Tomlinson has been named director of the Oklahoma Transportation Authority, which operates the state's turnpike system. Tomlinson, 64, will receive an annual salary of $109,200 as authority director. He succeeds Holly Lowe, who has served as acting director and chief financial officer for two years. Lowe, who submitted her resignation on June 1, has taken a position with Spirit Bank. Tomlinson told authority members that he "encouraged" Lowe to remain at the authority. She declined a position as deputy director. Lowe was named acting director when then Gov. Frank Keating's Secretary of Transportation Neil McCaleb resigned. Also at the June 19th monthly meeting, Doug Riebel, Enid contractor, was chosen authority chair for the coming fiscal year; Mike Leonard, a retired Muskogee banker and chief financial officer of Bacone College, was elected vice-chair; and Greg Massey, president of First United Bank in Durant, was chosen secretary, treasurer.


			ACEC Seeking To Kill Anti-Outsourcing Amendment
			ACEC Seeking To Kill Anti-Outsourcing Amendment
			The House Appropriations Subcommittee on Interior has introduced an anti-outsourcing provision for the F.Y. '04 Interior Appropriations bill. The provision prohibits all agencies within the Department of Interior from moving forward with the Administration's competitive sourcing plan. The Administration plan compels agencies to compete work that is available in private industry. The provision is particularly harmful to the engineering industry as the Bush plan would help to stop unfair competition ACEC members face from agencies within the Department of Interior, including the Bureau of Reclamation and the U.S. Geological Survey. The full Appropriations Committee is marking up the bill next week. ACEC is working with the Bush Administration and industry allies to have the language removed.