IN THIS ISSUE
** MOTOR FUEL TAX INCREASE, REVISIONS TO ARCHITECTS ACT TOP
CECO'S WATCH LIST
** NEXT CECO MEETING SET FOR APRIL 22ND -- "LUNCH &
LEARN" SEMINAR TO BE OFFERED
** LETTER TO THE EDITOR
** OKLAHOMA'S 1-2 (and 3-4-5) PUNCH IN CONGRESS FOR FEDERAL HIGHWAY
FUNDING
** WELCOME NEW MEMBER
** ACEC SURVEY - LIABILITY INSURANCE PREMIUMS RISING
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The 2003 Session of the Oklahoma Legislature is in full swing. The first major deadline passed two weeks ago, that being for bills to clear committee in their house of origin. The next deadline comes up on March 13th, with bills having to receive approval from the full house of origin, i.e., House bills receiving House approval.
1,741 bills were introduced in the House and Senate, but 732 (42%) of those failed to make the first cut, leaving only 1009 still active at this time.
Of the 30 bills originally identified by CECO as being of possible interest to the consulting engineering community, only 11 survived the first deadline. Some of the remaining 11 bills are only on our "watch" list, with a few being of major interest. Here's a recap of those bills:
* HB 1385 MOTOR FUEL TAX INCREASE. If passed, this would put to a vote of the people an increase in the state motor fuel taxes on both gasoline and diesel fuel. A 5-cent increase in the gas tax over 3 years and 7-cent increase in diesel would phase in over 4 years would provide ODOT with critical funding. ODOT estimates it would cost about $7.3 billion to bring the state highway system up to "minimum" standards. While this increase in the state motor fuel tax will not solve all of the problems, it is a critical first-step.
If approved by the Legislature, and eventually by the voters, 60% of the new money from the gasoline tax would go directly to ODOT's construction and maintenance fund. Aeronautics, transit and passenger rail would share 20% of the new funds, with the remaining 20% going to cities, counties and waterways. As for the diesel fuel tax increase, 25% would go exclusively to ODOT's maintenance fund, with the remaining 75% going to the ODOT construction fund.
While aeronautics, transit, rail, cities, counties and waterways would share 40% of the gas tax increase, it is estimated that some 75% of that 40% pie would be used for construction and maintenance. Cities and counties would obviously use their funds for city and county streets, roads, and bridges. Waterway's share of the increase would be used for access roads to the ports. Aeronautics would use the funds for runway and taxiway expansions, while the rail funds would be used for crossings, etc. So, while it looks like the fuel taxes are being "diverted" for non-ODOT uses, much of the increase would be used for maintenance and construction purposes.
Overall, approximately 90% of the new revenue generated by the gas and diesel fuel tax increase would go to new construction and maintenance, of which engineering firms will get their share through the design of these new projects.
CECO members are urged to CALL YOUR REPRESENTATIVE and urge their support of HB 1385 when it comes to the floor in the next few days.
Republican support for HB 1385 is critical. While the chief sponsor of the bill is a Republican, the Democrats will not allow this bill to pass on a straight party-line vote. Many Republicans have taken a "no tax increase pledge", but this bill IS NOT A TAX INCREASE. Remind them that they ARE NOT VOTING ON A TAX INCREASE, but rather, they are simply voting to ALLOW THE PEOPLE to decide if the motor fuel tax increase is warranted.
Your calls are very important, and we ask that you make calls to your Representative as soon as possible. The House Switchboard number is 405-521-2711.
Time is short, so please make your calls today!!!!!
* HB 1451 STATE ARCHITECTS ACT. This bill would make major changes to the State Architects Act, primarily in the area which stipulates when an Architect is required on a project.
Current law has 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.
For example, if a city wants to build a new concession stand at the local ballpark, if the concession stand construction cost is over $40,000 an architect is required for the project. However, if a private developer comes into the same town and wants to build a multi-million square foot shopping center, if the building is only two stories high (not including the basement) an architect is not required.
Architects have been trying for many years to get this changed, but have not come up with a workable solution. In this version, they are striking the "laundry list" and replacing it with combination of building "Code Use Groups" and "occupancy limits". If successful, virtually any building, public or private, with an occupancy limit of more than 30 people would require an architect.
Major opposition is coming 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.
In the long run, this boils down to a "turf war" between the architects and the "strip" mall designers. The architects argue that this is a public safety issue, while the strip mall designers contend that it's just a ploy by the architects to put the designers out of business. The designers refute the architects' public safety argument by saying that they use qualified professional engineers to design the structural, electrical, mechanical, and fire safety systems, and that their buildings meet all of the applicable building codes.
While the bill made it out of the House Judiciary Committee, it was not a unanimous vote even though the Chairman of the Committee is the sponsor. The fate of this bill is quite uncertain in the House as there is little room for compromise between the architects and the homebuilders/designers. Both have drawn a "line in the sand" and neither seems to be willing to move the line.
One other thing we are closely watching is the budget issue, and how the Legislature is going to handle the $700 million deficit over last year's budget. Rumors and whispering of "sales tax on professional services" are still floating around the Capitol, including the "temporary" removal of all exemptions for one or two years.
Otherwise, again, there are a few other bills we are "watching", but at the present time there is nothing to report.
We will keep you informed of any late breaking developments, and, of course, if you have questions about any legislation, please do not hesitate to contact CECO.
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NEXT CECO MEETING SET FOR APRIL 22ND -- "LUNCH & LEARN" SEMINAR TO BE OFFERED
The next CECO General Membership Meeting will be held Tuesday, April 22nd at the CECO Office in Oklahoma City.
The meeting will start PROMPTLY at 11:30am with a new and different offering. The program for the meeting will be a "Desktop Seminar" offered via the internet entitled, "FINANCIAL RISK MANAGEMENT - HOW TO GET PAID."
This "internet-based" seminar is like the seminar CECO hosts in January in both Oklahoma City and Tulsa. We received tremendous feedback from that seminar, and are going to incorporate the next in the series into the scheduled CECO General Membership meeting.
The seminar will be followed by our regular business meeting, and lunch will be included.
Registration information will be sent in late March, but mark you calendar today for the April 22nd CECO General Membership Meeting and "Lunch and Learn" seminar.
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LETTER TO THE EDITOR
In last months CECO REPORT we ran an article authored by John P. Kreiss, AEC WorkForce. In response to that article, we received the following "Letter to the Editor" and are offering the response with the author's permission. CECO welcomes responses to any of our articles from members. Please feel free to comment at any time.
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Jim:
I don't always agree with every article published in newsletters, but that is to be expected. It is not very often, however, that I am truly appalled by the opinions being expressed in an article in our CECO newsletter. The specific article to which I am referring is the one entitled, "2003: DON'T GET CAUGHT OFF-GUARD BY A DROP IN BUSINESS," By John P. Kreiss, AECWorkForce. It starts off talking about the slow economy and the "uncertainty" that 2003 brings to every business in the country. I don't necessarily disagree with that, and I think that people do need to be prepared to tighten their belts, if the need arises. My only objection is with one of the ways that he is suggesting that this be done.
In the last sentence of the second paragraph of the article, in which he has been discussing that cash flow is essential to a business, Mr. Kreiss states, "The firms that can remain profitable during recessionary periods are the ones that will be a lot stronger when the economy eventually recovers." That statement is true, but you shouldn't have to sacrifice your "principles" or your "principals" to get there. As far as I'm concerned, that is what he is advocating in the paragraph where he is recommending trimming payroll from the top down.
I'm not sure how it is in the companies in which Mr. Kreiss has worked, but in many companies, especially companies in our business, the people that are making the higher salaries are usually making those salaries for a very good reason. They are usually the people who have worked their butts off to get that firm to where it is today. I am, by no means, saying that some of those upper level people may not be "dead wood," but I certainly do not agree that they are always the ones which should go first, just because they make the largest salaries, which seems to be Mr. Kreiss's opinion. In referring to these upper level people, his comment is that these senior people have "... been burning payroll for the last 10 years and not pulling their weight like some of the others." That is a pretty broad generalization to make about the upper level workers of many companies, and I find it an incredibly ignorant statement to make. He goes on to say, "Ignoring the top-level people and cutting the junior people also can leave a firm lacking enough junior people who actually do the work." How does he think enabled the company to achieve success in the first place?
The following quote is from the paragraph in which he is giving an example of a company having "...three good estimators, but your backlog is indicating that you can get by with one or two, then make the cut." He goes on to say, "If Estimator B is just as productive as Estimator A, but costs $10,000 a year less in payroll, then Estimator A should go regardless of how long that person has been with you..."(underline added). That was the statement that put me over the edge with this guy. Mr. Kreiss may be correct in trying to sell this kind of attitude to some employers, but he's going to have to come up with something very different for those of us that still value loyalty in and to employees.
As far as I'm concerned, loyalty works both ways. Give me
a handful of loyal, hardworking employees, and I'll match them
against anyone for getting the job done over the long haul. Sometimes,
you will find that some of
those employees are, in fact, some of the younger ones in the
firm, but that is only because they have recognized, early in
their careers, the value of hard work and loyalty. They have
also recognized the benefits that they can receive from the loyalty
of their employer to them. It's a two-way street. As an employer,
you will find that you end up with the kind of employees that
you cultivate. Imagine that!
This is, of course, just my opinion, but I would like to include one last quote from Mr. Kreiss's article. I have modified it with the underlined portion. The modified quote is, "The firms that have solid business plans and loyal employees in place will have a tremendous advantage over their competitors." I totally agree with this statement, as modified.
Bob Zahl
Zahl-Ford, Inc.
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OKLAHOMA'S 1-2 (and 3-4-5) PUNCH IN CONGRESS FOR FEDERAL HIGHWAY FUNDING
When it comes to Transportation Funding in the new Congress, Oklahoma's packing a 1-2 (and 3-4-5) punch that could mean millions of new federal dollars to the state.
Senator Jim Inhofe is the new chairman of the Senate Environment and Public Works Committee that will be responsible for writing the bill reauthorizing TEA-21. Inhofe has been responsible during the past five years for dramatically increasing the amount of funding Oklahoma receives.
Additionally, Senator Don Nickles is the new Chairman of the Senate Budget Committee. While Inhofe's Committee writes the reauthorization legislation, Nickles' Committee will be allocating the actual dollars from the Senate's perspective.
On the House side Congressman Ernest Istook, due to a restructuring of the appropriations sub-committee's, now chair's the Appropriations Subcommittee on Transportation and Treasury. The sub-committee has oversight of the U.S. Department of Transportation and all federal transportation funding for roads, highways, bridges, airports and rail.
Also on the House side, Congressmen John Sullivan and Brad Carson serve on the House Transportation and Infrastructure Committee. That Committee will be responsible for writing the House version of the TEA-21 reauthorization, and Sullivan and Carson will play major roles in the rewrite.
With the chairmanships and key committee memberships, Oklahoma is now represented with top positions in both houses of Congress. Inhofe's, Sullivan's and Carson's committees will approve transportation projects over the long term, while Nickles' and Istook's committee will decide which projects are funded during a given year.
Various Oklahoma officials are thrilled with this newfound power in Congress.
"To have Congressman Istook elevated to such a high post will greatly impact not only our transportation needs, but he economic development that comes with good transportation funding", said ODOT Director Gary Ridley.
Oklahoma City Mayor Kirk Humphreys said, "We're about as well-placed as we can be" regarding Istook and Inhofe's chairmanships and the I-40 Crosstown Bridge project along with projects at Will Rogers World Airport and Tinker Air Force Base.
And, Victor Bird, Director of the Oklahoma Aeronautics Commission said that Istook's new position, coupled with Inhofe's chairmanship, couldn't be better for Oklahoma.
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WELCOME NEW MEMBER
CECO is pleased to welcome our newest member, Grooms Consulting Company.
The firm principal is Greg Grooms, with the firm specializing in oil and gas engineering, field supervision, project management and financial analysis.
The firm is located at 1337 N. Willow Ave., Broken Arrow, 74012, (918) 252-3300.
We welcome Greg and Grooms Consulting Company to CECO/ACEC, and look forward to having the firm as an active member.
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ACEC SURVEY - LIABILITY INSURANCE PREMIUMS RISING
Professional liability insurance premiums for engineering firms rose sharply last year, according to the results of the 2002 ACEC Professional Liability Insurance Survey.
About one-third of the survey respondents reported paying at least 30 percent more for their premiums in 2002 than in 2001. Larger firms (101 employees or more) experienced an average increase of 17 percent, while smaller firms saw an average increase of 12 percent in liability premiums.
A detailed analysis of the 2002 survey results will appear in the March/April issue of Engineering Inc. The results will also be posted on www.acec.org on the "Risk Management, Business & Tax" page.
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