The engineering and construction (E&C) industries have a common attribute, you’re always working yourself out of a job! Once you’ve designed the bridge, you need another bridge to design!
Over the last few decades, transportation and communications have been greatly enhanced to the point that every E&C firm is faced with huge and very competitive competition for work. Over those decades, E&C firms have eliminated one word from their dictionary – overhead! If you’re working on a project and billable, they love you, but if not, there’s no overhead budget dollars to keep you.
Thus, over the last several decades E&C firms have gotten very lean with their core staffs. Some in those industries joke that they’re so lean, that they’re afraid to bid for work, for fear that they may win the project! After a project award, its wow, where do we get the folks to augment our core staff to complete the design and/or construction of the awarded project?
When they win work, they augment their core staff with the gig economy of outstanding talent from technical staffing services that specialize in E&C talent, or subcontract out portions of the work that may be done more cost effectively by others.
Those days of having large permanent engineering staff, many of which are not assigned to a funded project, have come and gone. Today, firms are augmenting their core staff and/or subcontracting portions out to be able to complete the project ahead of schedule and under budget.
CALTRANS is in a unique position, in that they have a monopoly, by never bidding for work, and deciding in-house how much preliminary engineering they wish to perform which may be totally non usable by the firms they award the work to, and being funded by the State for whatever costs they incur. Thus, with no accountability for having a huge permanent staff onboard which may include those that are not assigned to projects, it’s all funded with State taxes.
Overstaffing is nothing new to CALTRANS, as the Legislative Analysis Office pointed that out in their 2014-15 Budget. In addition, those inflated staffing levels adds fuel to the unfunded pension liabilities for retiring workers that the State must also absorb.
Those unfunded pension liabilities are SUPPOSED to continually increase due to the cause of those unfunded liabilities, DEFINED BENEFITS. We’re constantly trying to put band aids over the wound, but the only way to heal the wound is to change Defined Benefits to DEFINED CONTRIBUTIONS, like the rest of the business world. With Defined Contributions ONLY, there would be no need for CALPERS that already pays more than 640,000 retirees their DEFINED BENEFITS.
The international business community is intelligent enough to know that DEFINED BENEFITS, neither capped nor precisely quantifiable in advance, financial disasters to any business, thus all businesses focus on the known, i.e., DEFINED CONTRIBUTIONS alone.
Since the public pension system is severely underfunded, city governments need to fund the retirements of former employees by taking money from government services as the increasing pension costs will likely continue to crowd out resources that otherwise would go to public assistance, recreation, libraries, health, public works, and public safety.
The young generations who are unable to vote today, will bear the costs of many enacted “Defined retirement benefit” pension programs requiring the younger generations to pay higher taxes and work later into their lives to pay for those promises, to subsidize older Americans.
CALTRANS can join the real world of E&C firms that contracts out much of the work to eliminate ever having idle workers being paid for not working on funded projects, or augments their core staff just for the project durations, without having an overly inflated number of permanent staff. In addition, CALTRANS can lower their unfunded pension liabilities by relying on attrition of retirements and voluntary departures to systematically reduce staff headcount.
There are ways to create true affordable housing. However, based on their behaviors and actions, our elected officials do not appear to have any interest in solving the problem.
In this Los Angeles Times article from April, market rate developers can build $140-160 per square foot. Yet “affordable” housing costs $450-$650 per square foot??!!??
Under Mayor Garcetti, development “soft costs” (permits, fees, required expediting services, interest paid by developers due to delays and much more) because of the poor management of LA Dept of Building and Safety and other required LA Departments with required clearances have ballooned in many cases to upwards of $80,0000 to $100,000 or more.
In other words, under Garcetti’s watch, we have added $600-$1,200 per month to rent just because Garcetti and other elected officials can’t get their act together. And as LA goes, so goes the region.
This is one of the ultimate causes of displacement due to gentrification. Yet they blame it on the market rate developers who, if not for the soft costs can build for $140-160 per square foot.
On the other hand the “affordable” housing developers who suck up the $450-650 sq. ft., such as those that are re-developing the Jordan Downs Housing Developments are the heros???
In my opinion, this is the ultimate way to promote displacement from gentrification.
The politicians and “affordable” housing developers put on a dog and pony show to celebrate the few that are provided housing and jobs.
Yet, the masses are left behind. As is obvious in Los Angeles, more are being left behind and in much worse shape then when the redevelopment started.
There are responsible ways to create more affordable housing.
However, our elected officials, including local, state and federal, have shown no sincere interest in solving the problem.
There are some very specific and explainable reasons why developers are overbuilding only the “luxury” units in the higher income communities, yet the market developers significantly underbuilding the density in South LA? While they would prefer to build the higher density to help with the housing shortage, they are only building the hodge-podge of low density duplexes and four unit buildings.
And they wonder why those of us trying to improve communities are taking our money and no longer willing to build in Los Angeles or even in California.