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Study of Highway Agency Ordered

Panel wants firm to aid in review.
By Michael R. Wickline

ARKANSAS DEMOCRAT-GAZETTE

A legislative panel decided Thursday that it wants legislative staff members to contract with a Virginia-based consultant to help study the state Department of Transportation and recommend improvements.

The Legislative Council's Highway Commission Review and Advisory Subcommittee directed Bureau of Legislative Research officials to negotiate a contract with Guidehouse LLP, which had been known as PricewaterhouseCoopers last year.

The firm has experience studying Arkansas government.

The consultant was hired by the Arkansas Economic Development Commission last year for $900,000 to help Gov. Asa Hutchinson develop his plan to reorganize state government. The reorganization, which took effect July 1, reduced the number of agencies reporting to the governor from 42 to 15.
Also, the conservative nonprofit Arkansas Policy Foundation hired the firm in 2016 to conduct an efficiency review of the Arkansas Department of Finance and Administration.

Guidehouse's experience includes reviewing transportation agencies in Colorado, Massachusetts and Texas, according to the company.
Guidehouse was the only company to submit a proposal to the bureau by the June 14 deadline, said Jill Thayer, legal counsel to bureau Director Marty Garrity.

In June, the legislative subcommittee decided to consider the consultant's proposal rather than see if more firms would submit bids.
Act 298 of 2019 requires the Legislative Council, the body of lawmakers that meets between legislative sessions, to hire a consultant to study the Department of Transportation's processes and functions.

The council assigned the study to the subcommittee.

Guidehouse submitted a maximum price of $647,474.80, including up to $92,400 for travel expenses, to complete a five-month project and cover estimated travel, according to its proposal.

“For additional support beyond the 5 months for drafting legislation and testimony and attending hearings, Guide-house will utilize the rate card … to determine the budget,” the company's proposal states. The rate card's price per hour includes $425 for a partner, $375 for a director, $275 for a manager, $199 for a senior analyst and $160 for an analyst.

Act 298 requires the Legislative Council to recommend legislation based on the study's results. The council is required to file a final report by Dec. 1, 2020, with the governor and House and Senate leaders ahead of the 2021 regular legislative session.

“We don't need an entire year to do the study. We need five and a half months,” said Gaurav Menon, managing director for Guidehouse.

“Instead of giving you a padded number of say $1 million for a whole year, we said that let's do what we know we can do very effectively and quickly in five and a half months, and provide ongoing support as needed by the state,” he said.

The subcommittee chairman, Sen. Jonathan Dismang, R-Searcy, said, “My recommendation is we probably do need [the] maximum [price] in place for that additional work and some greater stipulations on how it is going to play out.”

Earlier in the meeting, Dismang said, “What I really hope we have is purely an independent look” at the Department of Transportation.
Dismang, who has been a critic of the Department of Transportation at times, said, “For me, this whole thing comes down to a very independent look at what is happening.

“I have my biases, other people in this room have their biases and none of us are purely correct on what we think is happening or what can be improved,” he said.

Thayer said she plans to spend the next week or two negotiating a contract with Guidehouse and that proposed contract will be considered by the Legislative Council's Policy-Making Subcommittee on Aug. 21.

Then, the Legislative Council will consider the proposal Aug. 23 and, if the council approves it, Garrity will be authorized to execute the contract, Thayer said.

In this year's session, the Legislature and the governor enacted Act 416 that will raise more money for state and local roads through a wholesale sales tax on fuel, higher license fees for hybrid and electric vehicles and fund transfers. The new tax and fee increases take effect Oct. 1. State officials project that the law will raise about $95 million a year more for the state Department of Transportation and about $13 million more a year each for cities and counties.

The Legislature also referred to voters in the 2020 general election a proposal to permanently extend a 0.5% sales tax for highways. That tax was originally approved by voters in November 2012 for a 10-year period. State officials project the proposal will raise about $205 million a year for the Department of Transportation and about $44 million a year each for the cities and counties.

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