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County Council September 19

Proposed "on job training" in road work projects not fully understood
Should it be such an issue?
Warwick Jones

If it weren't for the last minute addition of On the Job Training (OJT) to the agenda, there would have been nothing worthy of reporting flowing from last night's meeting. Council member McKeown was troubled at last week's Finance Committee meeting by the talk of $6.5 million being directed to OJT from half-cent sales tax funds spent on road works. He sought to reopen the discussion and Council unanimously agreed to.

Confine OJT to federal funded road works
Council member McKeown wanted to save the $6.5 million and suggested, after some legal investigation, that the OJT program should be applied only to those roads that qualified for matching federal funds. Federal funds could be used for OJT and the sales tax funds could be conserved. Part of the savings could be used for bikeways as suggested by the Transport Advisory Board. Chairman Stavrinakis again said that the $6.5 million was not being "spent" as such or appropriated and attempted to give an explanation.

Back to Finance committee for discussion
After more discussion amongst members, Council member Bostic, who supported Council member McKeown, observed that not everybody on Council fully understood the issue. Rather than discuss it at the Council meeting, it should go back to the Finance Committee for a fuller discussion. This was agreed to.

Here is our take
And for readers who are also confused, here is our take. There is no specific allocation of any amount planned for OJT in a contract awarded for road works that will be paid for out of the sales tax proceeds. However, what Council proposes, or at least those members who seek OJT, is that contracts should stipulate that there should be a number of OJT positions created. This provision is common in Federal roadwork contracts and the County was planning on creating a similar model. We are not sure of the exact figure but we believe that one OJT position must be created for every $1.5 million of value in Federal contracts. e.g. a $15 million road work contract would require 10 OJT positions.

Cost could be negligible
So what would the "cost" be? Obviously, it would be the wages and employment costs of those persons under OJT. Council staff has estimated the costs of these hires as $6.5 million over the life of the sales tax, around about 1% of the total value. But this outlay is not lost nor is it strictly a subsidy. If the persons working under OJT are totally non-productive, then the "cost" to the tax payer will be $6.5 million or thereabouts. But if the persons are productive, it will be much less. As the ultimate positions will require relatively low levels of skill, it can be assumed that full proficiency will be achieved in a relatively short time.

So what will the "cost" be to the tax payer? Of course it is the contractor's call. They will have to judge the productivity of those undergoing OJT and adjust their contract prices accordingly. Our guess is that providing OJT in contracts will add considerably less than $6.5 million to road work costs over the life of the sales tax. Indeed, it is possible that the addition will be negligible.

Maybe Council would have avoided much of the confusion if it had given more details as to what it proposed and the number of OJT positions created. The ratio of positions to contract value will have to be determined to ensure that all contractors can submit bids on an equal basis.

Mayors unhappy but possibly did not understand the proposal
Mayors Summey and Hallman of North Charleston and Mount Pleasant respectively wrote a very snippy letter to the Post and Courtier about this use of sales tax monies and how it was at odds with the sales tax referendum language. They also seemed to think that $6.5 million was being appropriated. We won't get into the argument but it does seem that they too did not fully comprehend the intent of County Council and the mechanism. If there is still an issue, in our opinion it does not seem large.

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