County retains consultants for half-cent oversight

By Matthew French
Staff Writer

When the half-cent sales tax went into effect in Charleston County almost four months ago, voters knew that the additional money collected from the purchase of everything from automobiles to paper towels would go to improving the county’s roadways.

The county has taken its first steps in that direction, announcing recently that it has awarded a five-year, $31 million contract to the LPA Group Inc. of Columbia to provide management and oversight of several major roadway projects.

LPA is an engineering, architecture and planning firm with offices throughout the Southeast, including one in Charleston, and the company has an extensive background in the Lowcountry, having most recently worked on the new Arthur Ravenel Jr. Bridge drainage system.

The half-cent tax, what Charleston County executives now call the Transportation Sales Tax, is part of a plan to raise $1.3 billion for roadway and infrastructure repair, enhancement of the county’s public transportation system and for the construction of greenways and park space. It will remain in effect for 25 years or until the $1.3 billion is raised.

County Public Works Director James Hutto says a determination was made to hire an outside firm to oversee the management and financial analysis of the money raised because doing it in house would have proven even more expensive and cumbersome.

“This is a big pill for us to swallow,” he says. “We’ve never taken on anything quite this large. We determined that if we were to do this in house, we would have to hire 183 additional people as inspectors, right-of-way acquisition agents, utilities experts, engineers, administrators and financial analysts. We would need an additional 20,000 square feet of office space, 50 vehicles, 114 computers. You can see where the expenses were headed.”

So officials decided it would be more efficient and cost-effective for the county to rent those services from a company with a history of managing projects of this scale.

“We were hired as a management consultant and to oversee the financial management of the program, to see where all of the money is spent and how it’s spent, track the costs and schedules for the $847 million,” says Ed Parrish, president and chief operations officer for LPA. “We will hire other companies to design the roadways, etc. and to provide construction services. We are the county’s representative and will oversee quality control and ensure that what has been contracted will be constructed.”

In addition to overseeing the construction, environmental assessments, right-of-way acquisition and community outreach, LPA will be responsible for financial oversight, ensuring the money is being spent as the county council intends.

Of the $1.3 billion the county will receive from the increased tax rate, $847 million will go to area roadways, with the remaining money being split between public transportation and greenways.

“We will advise the county on how it might seek out additional funds from the state, federal highway administration or the state infrastructure bank,” Parrish says. “We are putting together what we now call the Comprehensive Transportation Plan which will over the next nine months analyze the traffic needs and trends of the county. The county will set the priority of projects based on municipal, county and public input.”

Hutto recognizes the speed with which the Charleston County area is growing and that any plans made today could easily change during the next five or 10 years, he says.

“I have a feeling we’re going to see $50 billion worth of want, so we’re going to have to decide very carefully how we spend our $847 million,” he says. “That $847 million is a good start, and it will put a dent in the roadway congestion we’re seeing in Charleston County, but it won’t solve it.”

Rather than offer the $31 million management contract to the lowest bidder, the county issued a request for qualifications, where various companies were invited to submit information about its staff, experience in the job area, how it would approach the project, etc.

A selection committee then determined LPA would best fill the county’s needs and recommended the company to the county council. Only when the council had agreed with the selection committee’s findings did the county enter into negotiations with the company.

The $31 million for the contract with LPA will come from revenue generated by the half-cent sales tax, Hutto says.

The contract is somewhat performance based and has in it a termination clause, if the county determines that LPA isn’t meeting its requirements. However, the contract doesn’t include specific goals and specific timelines largely because of the shifting political winds to which LPA will have to react over the life of the contract, Hutto says.

“There are always schedule changes that come up, new county councilors get elected, new mayors, etc. So we needed to give LPA the flexibility it would need to handle issues as they arise,” he says.

The county has the option of renewing the contract for another five years at the end of the current term and would likely have to renegotiate financial terms.

Matthew French covers governmental policy and legislation for the Business Journal. E-mail him at mfrench@charlestonbusiness.com.

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