SALT LAKE CITY — An interim legislative committee backed a bill Wednesday, mandating the Utah Department of Transportation get approval for future settlements like the $13 million paid out to a losing bidder on the controversial I-15 contract.
The bill would require the governor to sign off on settlements of more than $100,000. The Transportation Commission also must approve deals of more than $500,000, and the Legislative Management Committee gets involved, too, if the amount totals more than $1 million.
"I think the public, in my opinion, expects transparency and openness," said Rep. Julie Fisher, R- Fruit Heights, the sponsor of the bill and the House chairwoman of the Transportation Interim Committee. "In the case of the settlement, I don't feel we had that."
UDOT quietly settled with the second-place bidder on the $1.7 billion I-15 reconstruction project through Utah County in mid-January. But the settlement did not become public until September.
That's when questions were being raised about the influence of tens of thousands of dollars of campaign contributions from members of the winning bid team to Gov. Gary Herbert.
Fisher's bill — and another being drafted for the 2011 Legislature by Sen. John Valentine, R-Orem — would, in effect, lift UDOT's years-old exemption from a law requiring state agencies to seek approval for hefty settlements.
When the $13 million settlement became public, the governor ordered an audit of UDOT and signed an executive order requiring any settlements of more than $100,000 to come to him for approval.
UDOT Deputy Director Carlos Braceras told the committee the agency's budget already was controlled by the transportation commission. "This is not an open checkbook by any means," Braceras said.
But Braceras said the thresholds proposed in the bill "are levels that the department is comfortable we can work in." He said the money for the settlement came out of the contingency funds set aside on the I-15 project.
The committee voted unanimously to send the bill to the 2011 Legislature with a recommendation for approval.
After the meeting, Senate Majority Leader Scott Jenkins, R-Plain City, a committee member, said he believed the bill would sail through the upcoming session.
"I don't believe this legislation is pointing to the fact that there was anything done wrong. But I do think it shows there was a loophole and we need to change the ways we negotiate these settlements," Jenkins said.
Braceras told reporters this was the first time UDOT had settled a formal bid protest. This was also the largest-ever state roads contract, unusual because it was awarded based not on price, but how much work the bidders pledged to complete.
Asked why the agency did not voluntarily notify state officials, he said, "hindsight's a wonderful thing. We were moving quickly. We're comfortable we made the right decision" because the settlement saved money by preventing the project from being delayed.
UDOT was "not trying to hide anything. We were working with authority," Braceras said, describing the proposed thresholds as not punitive. "We take the use of the public's money very seriously."
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