Senate to consider asphalt accord

Law prohibiting county-operated plants, quarries could be repealed

By TOM HUMPHREY, for KnoxNews
May 9, 2005


NASHVILLE - An agreement between county officials and the state's road-building industry has paved the way for repeal of a state law that blocks local governments from making their own asphalt.

The agreement is incorporated into legislation approved unanimously last week by the House and Senate Transportation Committees, apparently resolving a private-public sector dispute that dates back to 1976.

In that year, the Legislature - at the urging of the road-builders' lobby - prohibited local governments from owning asphalt plants, except for four already in operation. The late former Gov. Ray Blanton was in the middle of a scandal-ridden term of office at the time. His family was involved in the road construction industry.

More recently, a state comptroller's report found that county governments often get only one bid on their asphalt contracts and suggested some local governments could save taxpayer dollars by operating their own plants.

The survey of 50 counties found there was no competitive bidding on 35 percent of the $30.4 million worth of asphalt contracts the counties awarded in 2003. That was up from 22 percent in 1999.

Meanwhile, the Tennessee County Highway Officials Association last year found that at least 16 county governments were interested in starting their own plants, according to Rodney Carmical, executive director of the statewide organization.

At the urging of the association, House Transportation Committee Chairman Phillip Pinion, D-Union City, and Senate Transportation Committee Chairman Mark Norris, R-Collierville, introduced legislation to repeal the old law.

Other local government lobbies backed the bill, contending it is unfair to block governmental operation of asphalt plants if they will save taxpayer money, but the Tennessee Roadbuilders Association opposed it.

The two sides were at a standoff until last week, when Carmical and Kent Starwalt, executive director of the road-builders group, negotiated what they both called a compromise.

The agreement, which generally follows recommendations in the comptroller's study, covers both asphalt plants and stone quarries.

Under the proposal, a county that wants to operate an asphalt plant or stone quarry must first conduct a "financial feasibility study," including a detailed analysis of capital and operational costs, then submit it to a three-member "oversight committee."

The committee will be composed of one representative of the highway officials association, one representative of the road-builders association and one person designated by state Comptroller John Morgan.

If the committee agrees that the operation is financially viable, the county commission would then have to approve by a two-thirds majority vote. If passed, the plant could be built. When in operation, it would be subject to an annual audit by the comptroller's office.

Starwalt acknowledged that the deal runs counter to the road-builders' "long-held position that government shouldn't be in competition with the private sector." But he said the agreement is "better than just repealing the law."

"We have been able to craft legislation that does provide governments the choice they desired, but still assures the taxpayers that, before they get into the business, the risk and the feasibility is studied," he said.

Starwalt said feasibility studies likely will show plant operations will not save taxpayer money, especially when the loss of tax revenues that would be paid by private companies is calculated.

But Carmical predicted that "at least a half-dozen" counties will successfully move next year to start their own operations. He said as a practical matter it is too late for counties to get into the business this year.

The bill is scheduled for a vote tonight in the Senate. It still needs approval of the Finance Committee in the House this week, but with the two sides in agreement, the legislation is expected to move quickly to the House floor for a vote next week.

Tom Humphrey may be reached at 615-242-7782.

Copyright 2005, Knoxville News-Sentinel Co.