Columbia Star

County council approves new direction for Penny Program

Richland County Council will receive new details Tuesday, March 19 on its decision to transition management of the Transportation Penny Program from a private contractor to County staff.

Changing the transportation program’s management structure, a move approved by county council earlier this month, will save taxpayers millions of dollars and improve oversight. In addition, bringing the management in-house aligns it with the operational structure of similar transportation programs in other areas, such as Charleston County.

Early last year, Richland County staff presented council a report titled “Return the Penny to Health: A Transition Plan” laying the foundation for council’s decision. At Tuesday’s council meeting, staff will give an update on transitioning management of the program.

“Residents should have every confidence that the staff in place here is professional, forward-thinking and prepared, with Council’s support, to make this transition a success,” said interim county administrator Ed Gomeau, who has discussed the program with transportation staff in Charleston County for more insight into how it handled its transition process about 10 years ago.

“Bringing Richland County’s transportation penny program in-house is a decision that will benefit taxpayers, while still ensuring projects are completed in a timely manner,” Gomeau said. “And managing a local government transportation program is a function that should be undertaken by local government employees.”

For an example of a successful transition plan, Richland County taxpayers can look to Charleston County where employees have overseen management of the program since 2009. During the beginning stages of its Transportation Sales Tax Program, Charleston County contracted with a consultant due to its lack of necessary staff to manage large transportation projects. Voters there in 2004 approved a half-cent sales tax for 25 years or until $1.3 billion is collected to fund highways, roads, streets, bridges, and other projects.

Between 2004 and 2009, Charleston County expanded its registered engineering professionals and inspection staff. With the acquisition of qualified staff and the approval of its county council, Charleston County transitioned the management of its sales tax program to the newly formed Transportation Development Department in 2009.

Richland County currently has a Transportation Department charged with overseeing the work of the Penny Program contractor, a collective of three companies that hire out subcontractors. Moving management of the program inhouse will allow county staff to run all aspects of the program, including some design and engineering.

Richland County’s Transportation Department currently has six staff members: an administrative coordinator, a manager of contracts and budget, a pre-construction project manager, construction project manager, an accountant, and assistant director. The former director of the department recently was promoted to an assistant county administrator and continues to oversee the department. The director position is vacant and the county is currently accepting applications to fill this role.

The organizational structure of the department will change as a result of county council’s decision.

To effectively manage the $1.07 billion Richland County Transportation Penny Program in-house, county administration plans to fill the following eight new positions: four construction project managers and four engineering inspectors. The approximate salaries and fringe benefits for these additional positions is $612,781, which brings the department’s total personnel budget to $1,253,146.

By comparison, the cost of managing the program for the past five years through the Penny Program contractor, the Richland Program Development Team (PDT), was $6,020,000 from November 2014 until February 2018. However, due to the county’s compliance with the South Carolina Department of Revenue’s Guidelines for Use of Transportation Tax Revenue, the county no longer reimburses the PDT for $50,000 each month for public relations services, which brings the annual cost to $5,420,000.

In addition to the administrative and engineering staffs’ salary savings, Richland County government will no longer have to pay additional fees for construction resource management and construction engineering and inspection. For example, the PDT earns 4.5 percent of the latest approved budget project cost for construction resource management and utility relocation coordination. The contractor also earns 6.5 percent of the latest approved budget project cost for construction engineering and inspection. The combined percentages equal 11 percent and for a $30 million to $60 million widening project, the amount can increase to approximately $3.3 million to $6.6 million in additional costs.

The transition plan staff presented to Richland County Council last year on March 6, 2018 includes a timeline, which anticipates the transition from the contractor to county staff to start May 2019 and end in early November 2019 when the agreement with the contractor expires.

The Richland County Transportation Program, approved by voters in November 2012, is designed to fund projects throughout the county during a 22-year period, or until $1.07 billion in sales tax revenue is collected. The program is divided into three major categories: roadways ($656,020,644), The Comet ($300,991,000), and bicycle/pedestrian/ greenways ($80,888,356). It includes such projects as road widenings, intersection improvements, sidewalks, bikeways, and dirt road paving.

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