BILL NUMBER: S6319

SPONSOR: LIU
 
TITLE OF BILL:  An act to amend the public authorities law, in
relation to certain contracts of the New York city school construction
authority; and to amend chapter 738 of the laws of 1988, amending the
administrative code of the city of New York, the public authorities law
and other laws relating to establishing the New York city school
construction authority, in relation to extending certain provisions of
such chapter relating to certain contracts of the New York city school
construction authority

 
SUMMARY OF PROVISIONS:

This bill extends the New York City School Construction Authority's
("SCA") exemption from Section 101 of the General Municipal Law (known
as the Wicks Law) for five (5) additional years. The SCA has been grant-
ed this exemption since 1988.

Section one of the bill amends subdivision 1 of section 1735 of the
public authorities law to extend the exemption of the SCA from section
101 of the General Municipal Law to June 30, 2024.
              

Section two of the bill amends section 19 of chapter 738 of the laws of
1988 to extend the exemption of the SCA from section 101 of the General
Municipal Law to June 30, 2024.

Section three of the bill provides that the Act shall take effect imme-
diately and, if it takes effect after July 1, 2019, shall be deemed to
have been in full force and effect on and after July 1, 2019.

 
REASONS FOR SUPPORT:

Section 101 of the General Municipal Law (known as the Wicks Law)
requires separate specifications that allow separate and independent
bidding for certain types of work on public building projects that are
above a certain cost threshold. Separate specifications must be prepared
for: plumbing and gas fitting; heating, ventilating and air condition-
ing; and electrical wiring. In addition, the local government must enter
into a general contract, resulting in four (4) separate prime contracts.
New York is the only state to impose these requirements on building
projects. The SCA has been exempt from the Wicks Law since its inception
in 1988. However, the SCA's Wicks Law exemption is set to expire June
30, 2019. Without this exemption, the SCA will incur substantially
greater costs for the design and construction of schools in New York
City (where costs are already higher than those in the rest of the
state) and longer construction schedules that will delay the delivery of
desperately needed new capacity to the public school system, as well as
the rehabilitation of existing school buildings. The Wicks Law's mandate
of multiple prime contractors complicates construction coordination on
projects, adds layers of expensive construction oversight, fragments the
delivery of construction services, and promotes delays and disruptions
in the construction process which, in turn, drives up costs. The exten-
sion of the Wicks Law exemption is essential because it allows the SCA
to maximize the use of limited capital resources in the construction of
public schools in New York City.

A 1999 analysis of the impact of the Wicks Law on public school
construction in New York City (Wicks Law Economic Analysis by Pricewat-
erhouseCoopers) concluded that projects built under the Wicks Law cost
significantly more and took longer to construct than similar projects
not subject to the Wicks requirements. Other studies and reports (NYSS-
BA, 1991; NYS Division of Budget, 1987; Niagara School District, 1996)
presented similar findings of cost increases ranging from twenty (20%)
to thirty (30%) percent for projects subject to the Wicks Law as
compared to projects not subject to the Wicks Law.  In addition to the
marked increase in the direct costs of construction, the extended
construction durations resulting from compliance with the Wicks Law add
to the final project cost in less apparent ways, such as added interest
payments and the cost of leasing swing space for longer periods of time.

If the Wicks exemption is not extended, the SCA would be required to
award multiple prime contracts, thereby creating a need for additional
personnel or consultants to coordinate effectively the contractors'
activities on site. The SCA would be forced to reorganize its technical
departments, hire or retain consultants to provide the appropriate
construction management resources, modify the plans and specifications
of already designed projects, divide them into multiple trade packages,
and re-bid all pending projects that had not yet commenced. In addition
to the burgeoning construction costs, this would delay the creation of
new public school seats, adversely impacting the children attending New
York City public schools in already overcrowded districts.

Accordingly, the Mayor urges the earliest possible favorable consider-
ation of this proposal by the Legislature.