GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	1 

HOUSE BILL 323

Short Title:  GPAC/DOT Reorganization.	(Public)
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Sponsors: (by request) Representatives G. Miller, Blue, Barnes, Diamont, Hackney, Hensley, H. Hunter, Nesbitt, Robinson; Colton and Stamey.
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Referred to:  Transportation.
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February 25, 1993

A BILL TO BE ENTITLED
AN ACT TO IMPLEMENT THE RECOMMENDATIONS OF THE GOVERNMENT PERFORMANCE AUDIT COMMITTEE REGARDING REORGANIZATION OF THE DEPARTMENT OF TRANSPORTATION.
The General Assembly of North Carolina enacts:
––-ELIMINATE DOT POSITIONS.
Section 1.  (a)	The General Assembly finds that the Department of Transportation has 85 positions involving excess layers of management, excessively narrow spans of control, overlapping functions, and unnecessary positions.  There are 51 positions in the Department of Transportation that involve one-to-one reporting relationships, nearly half of which are in the Division of Motor Vehicles.  Specifically, Department of Transportation sections with one-to-one reporting relationships include:
(1)	General Services;
(2)	Internal Audit;
(3)	Governor's Highway Safety Program;
(4)	Hydraulics;
(5)	Right-of-Way;
(6)	Occupational Safety and Emergency Planning;
(7)	Roadside Environmental;
(8)	Bridge Maintenance;
(9)	Roadway Maintenance;
(10)	Equipment; and
(11)	Materials and Tests.
Most of the one-to-one relationships in the Division of Motor Vehicles are in the 10 district Drivers License offices that have a supervisor and an assistant supervisor, which is considered excessive.  Other sections in the Division of Motor Vehicles with one-to-one relationships are:
(1)	International Registration Plan;
(2)	School Bus & Traffic Safety; and
(3)	Vehicle Registration.
(b) An additional 31 positions are considered excessive because of narrow spans of control.  These are management and supervisory positions where the span of control is frequently two or three, which is very narrow given the duties performed.  In many cases, the affected units have small numbers of staff which represent further opportunity to consolidate staff to achieve broader spans of control.
Department of Transportation sections with narrow spans of control include:
(1)	General Services;
(2)	Fiscal;
(3)	Photogrammetry;
(4)	Design Services;
(5)	Location and Surveys;
(6)	Structure Design;
(7)	Pavement Management;
(8)	Traffic Engineering;
(9)	Equipment Inventory Control; and
(10)	Program, Policy and Budget.
(c) There are 11 positions that have overlapping or similar functions, some of which are in the External Audit Branch and the Internal Audit Section.  If they were combined, certain supervisory and secretarial support positions could be eliminated.
The Civil Rights Office monitors the Disadvantaged Business Enterprise Program.  Certain positions in other units also monitor similar activities; these units include Management Assessment and Compliance, the Construction Branch, and Right-of-Way Branch.  The monitoring of civil rights-related matters in the Department of Transportation should be centralized in the Civil Rights Office, and the overlap of these functions in other offices should be eliminated.
(d) Seven positions in the Secretary's Office and the Fiscal Section, including the Special Assistants for Regional Affairs, are unnecessary and should be eliminated.
(e) The Secretary of Transportation shall report to the General Assembly, by August 1, 1993, with a plan identifying the 85 positions to be eliminated pursuant to Section 1 of this act and providing that all identified positions that can be eliminated during the 1993-94 fiscal year shall be eliminated by July 1, 1994.
(f) The base budget of the Department of Transportation is reduced by two million nine hundred thousand dollars ($2,900,000) for the 1993-94 fiscal year and by two million nine hundred thousand dollars ($2,900,000) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by subsection (b) of this section.
(g) This act is effective upon ratification.
––-REORGANIZE DOT.
Sec. 2. (a)	The General Assembly finds that certain organizational units within the Department of Transportation are organizationally misplaced:
(1)	Internal Audit Section. – The mission of the Internal Audit Section is to promote and ensure that proper operational procedures are fair, accurate financial operations within the Department of Transportation, by conducting internal compliance, fiscal, and operational audits, and by monitoring fiscal records and operational procedures. This Section reports to the Assistant Secretary of Administration which weakens the independence of the function.  Ordinarily, an internal audit function should report to the chief executive officer, audit committee, or the equivalent. The placement of this Section is not effective.
(2)	Beautification Program. – The purpose of the Beautification Program is to serve the citizens by improving the appearance of North Carolina highways.  Its goals are to establish and maintain effective litter cleanup and litter prevention programs, and to increase public support for the Wildflower Program.  This unit reports to both the Deputy Secretary of Operations and the Deputy Secretary of Programs.  The dual reporting responsibility and placement of the Beautification  Program is not effective.
(3)	Charlotte International Registration Plan (IRP) Office. – The International Registration Plan Section administers a registration reciprocity compact covering member states and one Canadian province.  All IRP activities, except the Charlotte IRP Office, are included in the IRP Section.  The Charlotte Office is under the Vehicle Registration Section.  The placement of the Office is not effective.
(b)	The Internal and External Audit units are to be consolidated into one Audit Section and that Section is transferred to the Office of the Secretary of Transportation.
(c)	The Beautification Program is transferred to the Division of Highways, Maintenance Branch.
(d)	The Charlotte International Registration Plan Office is transferred to the International Registration Plan Section.
(e)  This section becomes effective July 1, 1993.
––-PRECONSTRUCTION PERSONNEL LIMIT.
Sec. 3.  (a) The General Assembly finds that the Department of Transportation is currently seeking funding for 298 more staff positions in its preconstruction units during the next 15 years to handle the work load from the Highway Trust Fund.  The majority of these positions are to be filled during the next four years in the Highway Design and Planning Branch and the Environmental Branches.  
The use of private engineering firms to handle peak work load requirements is a well-founded strategy for avoiding the public-sector problems of staffing up and down for varying work loads.  
The Department of Transportation is currently contracting out twenty percent (20%) to twenty-five percent (25%) of preconstruction work to private engineering firms.  If outside contract forces were used to address the preconstruction work load associated with the additional 298 positions, then the level of preconstruction work contracted out would rise to about thirty-two percent (32%) to thirty-six percent (36%).
This increase in contracting out work load, from twenty percent (20%) to twenty-five percent (25%), to thirty-two percent (32%) to thirty-six percent (36%) would be a reasonable level of increase because the Highway Trust Fund represents a 78 percent increase in the pre-1989 preconstruction work load of the Department.
(b)	The Secretary of Transportation shall submit a plan to the General Assembly, by September 1, 1993, to implement the recommendation in subsection (a) of this section to freeze preconstruction positions and contract out the balance of its preconstruction work to private engineering firms.
(c)	This section is effective upon ratification. 
––-CONSTRUCTION PERSONNEL LIMIT.
Sec. 4.  (a)	The General Assembly finds that the Department of Transportation's on-going strategy to increasingly rely on the use of private engineering firms to perform surveys, process control, and construction engineering and inspection functions should be continued.
With the Highway Trust Fund program entering a phase of expanded construction activity, having completed a number of project plans, the Department will need to further leverage its in-house construction staff to meet the requirements of the program.
(b)	The increased use of outside contract forces to perform quality control and quality assurance functions will require continued Department of Transportation construction staff involvement in project oversight and verification, careful selection of vendors, and rigorous contract administration of these projects.  The level of this outside contracting should be based on the following considerations:
(1)	Focus outside contract activity on the peak load requirements of the Highway Trust Fund construction program;
(2)	Retain sufficient in-house capability to address the base load requirements of the Highway Trust Fund construction program and properly administer the outside construction engineering and inspection-related contracts; and
(3)	Select contractors with significant experience in performing construction engineering and inspection for major road and bridge projects and familiarity with Department of Transportation engineering standards and construction specifications.
(c)	By using private engineering firms to handle more of the Highway Trust Fund program construction work load, the Department of Transportation can reduce the number of new in-house staff required to support the construction portion of the program.
(d)	The Secretary of Transportation shall report to the General Assembly, no later than September 1, 1993, a plan meeting the construction needs of the Highway Trust Fund program with a minimum of new construction staff in the Department of Transportation and increasing the use of outside contract forces while meeting the criteria in subsections (a) through (c) of this section.
(e)  This section is effective upon ratification.
––-DIST. EQPT. SUPS. ELIMINATED.
Sec. 5.  (a) The General Assembly finds that the Division Equipment Operations Supervisors positions represent a redundant layer of management.  Each of the 14 Highway Divisions has a Division Equipment Operations Supervisor who has a one-to-one reporting relationship to the Division Equipment Superintendent and manages the Auto Parts Supervisor and Mechanic Supervisors.  This one-to-one reporting relationship creates uncertainty regarding the management responsibilities of the Division Equipment Superintendent, inhibits the efficient delegation of responsibilities within the Division Equipment units, and complicates management reporting within the unit.
(b)	The Division Equipment Operations Supervisor positions in the Department of Transportation are eliminated.
(c)	The base budget of the Department of Transportation is reduced by four hundred thirty-four thousand dollars ($434,000) for the 1993-94 fiscal year and by four hundred thirty-four thousand dollars ($434,000) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by subsection (b) of this section.
(d)	This section becomes effective July 1, 1993.
––-CONSOL. EQUIPMENT SECTIONS.
Sec. 6.  (a)	The General Assembly finds that the Equipment Sections of the 14 highway divisions perform maintenance and repair functions for all Department of Transportation equipment, except for sedans which are maintained through the Department of Administration.  Each division has between five and 10 garages, including one major division garage.  In some cases, two-person garages continue to operate in certain rural areas of the State, where the distance between garages is fairly large (40 to 50 miles).  In addition, there are local county garages colocated near the division garages.  These latter garages represent a potential opportunity for consolidation, to reduce the overall number of garage facilities maintained by the Department of Transportation.
(b)	The Department of Transportation shall develop a plan to consolidate the equipment section resources associated with the 14 division garages and those 14 Department county garages located nearby for submission to the General Assembly by July 1, 1993.  This plan shall provide for the completion of the consolidation on or before January 1, 1994.
(c)	This section is effective upon ratification.
––-DIVISION-BASED STAFF REDUCED.
Sec. 7.  (a)	The General Assembly finds that eliminating the district layer of management will increase the span of control of the Division Maintenance Engineer in each Division.  Each Division should have a Division Operations Engineer, with the Traffic Services unit, the Roadside Environment unit, the Equipment unit, and the Bituminous Operations unit reporting to that Division Operations Engineer.
(b)	The Secretary of Transportation shall report to the General Assembly, no later than September 1, 1993, on the elimination of all positions within the "district" layer of management.  
(c)	The Secretary of Transportation shall report to the General Assembly, no later than September 1, 1993, on the creation of the position of "Division Operations Engineer" in Divisions 1 and 12 and the realignment of responsibilities so that the Traffic Services unit, the Roadside Environment unit, the Equipment unit, and the Bituminous Operations unit shall report to the Division Operations Engineer in each Division.
(d)	The base budget of the Department of Transportation is reduced by three million four hundred thousand dollars ($3,400,000) for the 1993-94 fiscal year and by four million five hundred seventy-five thousand dollars ($4,575,000) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by subsection (b) of this section.
(e)  This section is effective upon ratification.
––-DIVISION TRAFFIC SERVICES.
Sec. 8.  (a)	The General Assembly finds that Division Traffic Services units are variously organized, with some units having all field forces reporting to the Division Traffic Services Supervisor and others having signal-related forces assigned to the Assistant Division Traffic Engineer in a Traffic Control Technical Services unit.  The latter arrangement provides a better balance of technical and nontechnical traffic services personnel among the middle management positions within this unit, resulting in a more equitable span of control among these supervisory personnel.  This alignment recognizes the increasingly technical aspects of traffic signal planning and implementation, while also providing for a more balanced distribution of Traffic Services staff among the Traffic Services supervisors.
(b)	The Secretary of Transportation shall realign the Traffic Services sections of the 14 Traffic Divisions so that the signal/traffic control personnel report to the Assistant Traffic Engineer and pavement markings/signs personnel report to the Traffic Services Supervisor.
(c)	This section becomes effective July 1, 1993.
––-CONTRACTED ROAD MAINTENANCE.
Sec. 9.  (a)	The General Assembly finds that the overall level of staffing for the Department of Transportation should be based on:
(1)	The determination of resources needed to provide an acceptable level of service, accomplish the annual maintenance program efficiently, and erase the existing maintenance backlog; and
(2)	The determination of the most appropriate mix of contract and in-house resources.
As the maintenance has increased, the Department of Transportation has been able to handle a portion of the increased work through contracting.  The Department of Transportation can make additional use of private contractors.
(b)	The Department of Transportation shall report to the General Assembly, on or before November 1, 1993, a plan to maintain its current maintenance staffing and accomplish the increased maintenance program work load through expanded use of outside contract forces.  The plan may include:
(1)	The continued contracting out of construction activities, as well as those maintenance functions, such as mowing, roadside rest area maintenance, building maintenance, signal installation, and signal maintenance, that it currently contracts;
(2)	The contracting out of all of the Secondary Road Construction program and free up the in-house maintenance staff now performing this function to concentrate on backlogged and expanding maintenance needs; and
(3)	Expanding the Department's efforts to contract out maintenance functions, by increasing the proportion of contracted work in such areas as: ditch cleaning, landscaping, and bituminous surface treatment resurfacing.
(c)	This section is effective upon ratification.
––-CLOSE SOME DMV OFFICES.
Sec. 10.  (a)	The General Assembly finds that the actual work load performed by the Division of Motor Vehicles field offices varies substantially from location to location.  An analysis of Division of Motor Vehicles activity reports indicates that the average number of drivers license applications processed per person per day is 24, but that forty-six percent (46%) of the offices process significantly fewer applications than the average, and many of the field offices are located within close proximity of each other and serve common communities.  These closures would result in a Division of Motor Vehicles field office being within 15 miles of every driver, except those who now drive longer distances to reach a field office.
(b)	The Commissioner of Motor Vehicles shall submit to the General Assembly, on or before September 1, 1993, a plan to close the Division of Motor Vehicles field offices that process fewer than the State average of drivers licenses per day, on or before June 30, 1995, and to increase the overall productivity of the remaining field offices by ten percent (10%).
(c)	The base budget of the Division of Motor Vehicles, Department of Transportation, is reduced by one million three hundred ninety-eight thousand eight hundred sixty dollars ($1,398,860) for the 1993-94 fiscal year and by one million eight hundred fifty-five thousand ten dollars ($1,855,010) for the 1994-95 fiscal year due to the closing of the Division of Motor Vehicles field offices and attendant reduction in personnel positions mandated by subsection (b) of this section.
(d)	This section is effective upon ratification.
––-PRIVATIZE REGISTRATION OFFICES.
Sec. 11.  (a)	The General Assembly finds that it costs approximately two dollars and twenty-six cents ($2.26) more to process a transaction in a State-run motor vehicle registration office than in a contract office.  When the "variable costs" of the operations, including salaries, benefits, rent, and utilities for State-operated offices and branch agency fees, field supervisors' salaries, and travel for contract offices, were compared, the two dollars and twenty-six cents ($2.26) difference was determined.
(b)	The Commissioner of Motor Vehicles shall submit a plan to the General Assembly, on or before August 1, 1993, for the privatization of the State-operated vehicle registration offices in Raleigh and Charlotte to reduce costs and improve productivity.
(c)	The base budget of the Division of Motor Vehicles, Department of Transportation is reduced by six hundred thousand dollars ($600,000) for the 1993-94 fiscal year and by one million two hundred thousand dollars ($1,200,000) for the 1994-95 fiscal year due to the decrease in personnel and costs attributable to the privatization of the State-operated vehicle registration offices in Raleigh and Charlotte mandated by subsection (b) of this section.
(d)	This section is effective upon ratification.
––-DMV PRODUCTIVITY ENHANCEMENT.
Sec. 12.  (a)	The Commissioner of Motor Vehicles shall submit a report to the General Assembly, not later than November 1, 1993, containing proposals for enhancing the efficiency of the motor vehicle registration process.  The report shall contain consideration of:
(1)	Encouraging vehicle owners to mail in their vehicle registration materials, thereby reducing the need for 126 registration offices.
(2)	Purchasing a computer system that will accommodate direct transmission of registration information by contractors and branch offices to a central system at least on a daily basis.
(3)	Accommodating possible future applications such as direct customer telephone input through automated teller machines and using credit cards.
(b)	This section is effective upon ratification.