Background[1]
The primary operations of the State Department of Highways and Public Transportation (SDHPT) are conducted through 24 highway district offices. The highway districts employed 12,864 employees in fiscal year 1990, which accounted for approximately 81 percent of SDHPT's 15,814 total employees.[2] The total combined district budgets account for approximately 90 percent of SDHPT's total annual budget.[3] Each district is directly responsible for all activities on the state highway system in the district, including the design, acquisition of right-of-way, construction and maintenance of roadways, as well as other related state transportation requirements.
The number of highway districts, originally called field divisions, has grown and fluctuated over the years as responsibilities of SDHPT have changed. The 35th Texas Legislature established the agency as the State Highway Department effective June 4, 1917. Six district offices were in existence by the end of SDHPT's first year of operations. The number of district offices gradually increased to 25 in 1932 and remained at this level until 1982, when the Del Rio district was closed.[4] While only one district has been closed, an SDHPT oversight committee recommended the closure of the Childress district in 1986. However, SDHPT management determined that disadvantages such as the negative impact on the Childress economy and employee morale would be numerous and have a great impact. No changes to district boundaries were made.[5]
According to SDHPT personnel, the number of highway district offices established by the department was primarily influenced by the number of major railroad intersections located throughout the state from 1917 to 1932.[6] During this period, railroads served as the primary means of transporting construction materials to project sites. There were 25 major railroad intersections in the state during this period. SDHPT established a district office headquarters in the area of each of the major intersections to use the transportation benefits provided through the railroads.
The districts vary greatly in their geographic size, number of personnel, demographics and economy. Districts are divided along county lines, with some districts covering as few as six counties while others are responsible for as many as 17 counties. Likewise, staffs range from more than 1,800 in the Houston district to just over 200 in the Childress district.[7] Collectively, the districts are responsible for 181,665 lane miles on the state highway system with a daily travel volume of 284 million vehicle miles.[8] Table 1 presents comparative data for each district.
Districts operate in a decentralized manner, based on broad policies and guidelines established by the State Highway and Public Transportation Commission and SDHPT's headquarters administration. Division offices in Austin provide
assistance where needed in particular functional areas such as design or maintenance.
District Organization and Duties. Each district, directed by a District Engineer, includes a headquarters office that supports the engineering, operations and maintenance activities performed through resident engineer (residency) offices and maintenance sections. These residency offices and maintenance sections are directly responsible for the design, construction and maintenance activity of each district. On occasion, residency and maintenance personnel from one district provide assistance in construction and maintenance activity of other surrounding districts. SDHPT currently operates 151 residency offices and 288 maintenance sections throughout the state's 254 counties.[9]
District design personnel, both in the district headquarters and in the residency offices, direct each highway project through the preliminary engineering phases. Much of the preliminary engineering is performed at computer design stations, which are now available at almost all district and resident engineer offices.[10]
District right-of-way personnel plan and coordinate right-of-way land acquisitions for each district. These right-of-way personnel work with local governments, private property owners, title companies and the Attorney General's Office to acquire needed property for highway construction. Public hearings, as required, are conducted by district office personnel.
District construction inspection personnel observe all construction work performed by contractors to ensure that project specifications and deadlines are met. These construction inspection personnel, who work out of the residencies, work directly with the contractor and are responsible for maintaining the records which support daily construction activity. When plan changes or contract modifications are necessary, district construction personnel work with the design and/or construction division in Austin to ensure that appropriate changes are made. For federally funded projects, district personnel coordinate project progress and contract compliance with Federal Highway Administration field engineers.
Table 1
Statistical Comparison of Texas Highway Districts, 1991*
District Daily Percent Total PercentTotal
No. District No. of Employees Vehicle Miles Vehicle Miles Lane Miles Lane Miles
1 Paris 398 7,001,814 2.46% 6,976 3.84%
2 Fort Worth 774 24,997,325 8.78 7,893 4.34
3 Wichita Falls 344 5,092,276 1.79 6,234 3.43
4 Amarillo 443 6,681,803 2.35 9,162 5.04
5 Lubbock 497 7,303,700 2.56 11,819 6.51
6 Odessa 365 5,413,694 1.90 7,780 4.28
7 San Angelo 402 4,022,717 1.41 8,131 4.48
8 Abilene 395 5,584,350 1.96 8,241 4.54
9 Waco 436 10,276,592 3.61 7,454 4.10
10 Tyler 440 11,257,184 3.95 8,345 4.59
11 Lufkin 352 6,042,480 2.12 6,225 3.43
12 Houston 1,853 48,287,559 16.96 8,382 4.61
13 Yoakum 462 8,208,629 2.88 7,784 4.28
14 Austin 661 16,119,543 5.66 8,178 4.50
15 San Antonio 1,041 22,727,145 7.98 12,296 6.77
16 Corpus Christi 495 8,572,178 3.01 6,568 3.62
17 Bryan 364 8,007,001 2.81 6,770 3.73
18 Dallas 1,013 38,616,429 13.56 9,466 5.21
19 Atlanta 403 7,145,634 2.51 6,215 3.42
20 Beaumont 470 10,689,814 3.75 5,317 2.93
21 Pharr 444 10,632,764 3.73 6,825 3.76
23 Brownwood 260 3,163,032 1.11 5,694 3.13
24 El Paso 334 6,950,244 2.44 4,519 2.49
25 Childress 217 2,013,819 0.71 5,391 2.97
Total 12,864 283,807,726 100.00% 181,665 100.00%
* District Number 22, Del Rio, was closed in 1982.
Source: State Department of Highways and Public Transportation.
Maintenance activity in each district is the responsibility of the maintenance sections. Maintenance section personnel are directly responsible for the preservation and repair of state roadways within their respective district. Each district includes an average of 12 maintenance sections.[11] Each section is directed by a maintenance supervisor, who reports directly to a resident engineer within the district. District maintenance personnel are responsible for a wide variety of functions, including pothole repair, landscaping right-of-way, maintaining rest areas, sign installation, striping roadways, traffic signal installation and herbicide spraying. In addition, district maintenance personnel are responsible for the oversight of maintenance services, such as mowing, pavement marking and litter pick-up, that are contracted out to private contractors. District maintenance personnel also provide emergency functions such as protecting or clearing roadways in severe weather and repairing damaged roads and structures.
The district headquarters staff is also responsible for lending support to many of SDHPT's operations not directly related to designing, constructing, and maintaining the state's highways. These operations include providing technical assistance to public transportation programs, assisting metropolitan planning organizations, conducting anti-litter campaigns, and performing highway beautification activities at the district level.
Impact of Residencies and Maintenance Sections. SDHPT maintains a significant presence in the local communities through the district residency offices and maintenance sections. The department currently operates 151 construction residency offices and 288 maintenance sections throughout the state's 254 counties.[12] The personnel at these construction and maintenance sections provide direct services on highways within each district. The residencies currently employ approximately 3,000 construction personnel while the maintenance sections employ approximately 5,400 personnel.[13] As noted previously, construction personnel, who work out of the residencies, are responsible for observing and inspecting all construction work performed by contractors to ensure that project specifications and deadlines are met. Maintenance section personnel are responsible for a variety of functions, including pothole patching, landscaping and removing litter from right-of-way and maintaining rest areas within the district.
Impact of Technology. Technology has changed the need for close oversight by district headquarters. District residency offices are almost entirely self-sufficient. Each district residency office is managed by a resident engineer. In some of the larger residencies, an assistant is available to help manage operations. Support staff, including accounting and payroll clerks are stationed in most residencies.
A majority of the residency offices have a design section responsible for performing the design work of each area within the responsibility of the residency. Automated design capabilities allow the residency personnel to design project plans and specifications and communicate with the district headquarters office for review and approval of designs without having to meet directly with district supervisors. According to SDHPT estimates, approximately 65 percent of all design work is done by residency personnel, as opposed to district headquarters personnel or private contractors.[14]
The existence of computerized design stations within each district enables personnel from one district to design highway plans and specifications for other districts, regardless of the distance between each district. Currently, six districts are preparing plans, specifications and estimates for other districts. Design personnel in the Wichita Falls, Amarillo, Odessa, Abilene, Yoakum and Childress districts are performing design work for projects in the Fort Worth, Tyler, Houston, Austin and Dallas districts.[15]
Focus of District Activities. Highway districts are responsible for constructing and maintaining the state highway system, including state highways, farm-to-market roads and interstate highways. Districts were established primarily to construct the state's highway system. A significant portion of all new highway construction has been completed. SDHPT estimates that the interstate system is 99 percent complete or under construction as of January 1, 1991.[16] As a result, activity in a majority of the districts, with the exception of the larger urban districts, is maintenance oriented. Activity within the larger urban districts continues to be primarily construction oriented, although a significant portion of the construction activity consists of increasing the capacity on existing roadways instead of building new highways.
Construction costs incurred in the larger urban districts, including Houston, Dallas, Fort Worth, Austin and San Antonio, represented 66 percent of total statewide construction costs in fiscal year 1990. Construction expenditures in the remaining 19 districts represented only 34 percent of total construction costs.[17] The number of construction personnel per district was relatively proportional to the levels of construction activity per district in fiscal year 1990. The number of construction personnel in the five larger urban districts represented 54 percent of the total number of statewide district construction personnel in fiscal year 1990. Personnel in the other 19 districts represented 46 percent of the total statewide district construction personnel.[18]
The majority of statewide maintenance activity is concentrated in the small urban and rural districts. The 19 districts which represented 34 percent of the construction activity represented 66 percent of total statewide maintenance costs in fiscal year 1990.[19] Maintenance costs incurred in the five larger urban districts, conversely, represented only 34 percent of the total statewide maintenance costs during this period. The number of maintenance personnel per district was also proportional to levels of maintenance activity per district in fiscal year 1990. Maintenance personnel in the 19 smaller urban and rural districts represented 66 percent of the total statewide district maintenance personnel. Personnel in the five larger urban districts represented 34 percent of the total statewide district maintenance personnel for this period.[20] Table 2 presents district construction and maintenance activity, for fiscal year 1990, as a percent of the statewide total. Many of the districts are now primarily maintenance oriented (Table 2). Highway maintenance, however, does not require the same level of district oversight as highway design and construction.
Table 2
District Construction and Maintenance Costs as a Percent of Statewide Total, 1990
District Percent Percent
No. District 1990 Construction of Total 1990 Maintenance of Total
1 Paris $28,766,394 1.53% $23,863,162 4.04%
2 Fort Worth 139,968,720 7.45 34,438,496 5.84
3 Wichita Falls 24,068,113 1.28 16,384,226 2.78
4 Amarillo 17,702,470 0.94 22,045,373 3.74
5 Lubbock 67,903,260 3.61 26,107,540 4.43
6 Odessa 16,943,268 0.90 15,539,616 2.63
7 San Angelo 22,764,333 1.21 18,770,065 3.18
8 Abilene 22,702,666 1.21 18,691,637 3.17
9 Waco 29,503,606 1.57 20,102,966 3.41
10 Tyler 40,184,319 2.14 29,596,675 5.02
11 Lufkin 27,478,401 1.46 19,056,110 3.23
12 Houston 603,986,362 32.13 55,720,139 9.45
13 Yoakum 36,900,678 1.96 26,489,640 4.49
14 Austin 141,743,584 7.54 29,870,535 5.06
15 San Antonio 149,096,457 7.93 40,770,572 6.91
16 Corpus Christi 68,554,644 3.65 20,817,609 3.53
17 Bryan 31,932,995 1.70 20,853,721 3.53
18 Dallas 207,589,272 11.05 44,528,565 7.55
19 Atlanta 34,983,879 1.86 20,054,957 3.40
20 Beaumont 76,344,640 4.06 20,227,957 3.43
21 Pharr 38,532,705 2.05 24,936,847 4.23
23 Brownwood 13,518,819 0.72 13,587,924 2.30
24 El Paso 27,605,843 1.47 12,913,638 2.19
25 Childress 10,928,046 0.58 14,512,289 2.46
Total $1,879,703,474 100.00% $589,880,259 100.00%
* District Number 22, Del Rio, was closed in 1982.
Source: State Department of Highways and Public Transportation.
District Administrative Costs. Districts that have lower levels of construction activity incur the higher administrative costs. Administrative costs per district, as a percent of total construction per district, exceeded the statewide average for such costs in 16 of the 24 districts. Administrative costs are defined by SDHPT as those costs which have no direct relationship to individual construction projects or maintenance work accounts. Such costs are primarily incurred at the district headquarters level.
District administrative costs typically relate to district accounting, personnel management, public affairs office, warehouse personnel, safety coordinator, design management, contract section management, construction management, maintenance management, switchboard and mailroom operations, permit operations and the district internal review function. Administrative costs as a percent of construction ranged from a high of 27.03 percent in the Childress district to a low of 2.70 percent in the Corpus Christi district.[21] The average administrative costs per construction for the 24 districts was 6.4 percent. Table 3 presents the percent of administrative costs to construction for each of the 24 districts, ranked in descending order. As can be seen in Table 3, the costs of overhead and supervision of some districts, when applied to relatively low levels of construction activity, are quite high.
Even if expenditures of both construction and maintenance are considered, the administrative costs of districts with lower levels of construction and maintenance activity are also high. Administrative costs per district, as a percent of total construction and maintenance per district, exceeded the statewide average of 4.86 percent for such costs in 16 of the 24 districts. Administrative costs as a percent of construction and maintenance ranged from a high of 13.59 percent in the Odessa district to a low of 2.07 percent in the Corpus Christi district. Although construction and maintenance activities are not the districts only responsibilities, such activity does represent a significant majority of district operations. Figure 1 presents the percent of administrative costs to construction and maintenance for each of the 24 districts, ranked in descending order.
Table 3
District Administrative Costs as a Percentage of Construction
Activity--Ranked from Highest to Lowest, 1990
District 1990 District 1990 Administration
No. District Administrative Costs Construction as Percent of Construction
25 Childress $2,953,740 $10,928,046 27.03%
06 Odessa 4,414,285 16,943,268 26.05
04 Amarillo 4,100,482 17,702,470 23.16
23 Brownwood 2,625,879 13,518,819 19.42
07 San Angelo 4,087,154 22,764,333 17.95
08 Abilene 3,695,534 22,702,666 16.28
09 Waco 4,539,041 29,503,606 15.38
24 El Paso 3,917,619 27,605,843 14.19
17 Bryan 4,277,366 31,932,995 13.39
01 Paris 3,752,644 28,766,394 13.05
03 Wichita Falls 3,113,449 24,068,113 12.94
11 Lufkin 3,138,551 27,478,401 11.42
19 Atlanta 3,764,990 34,983,879 10.76
10 Tyler 3,887,728 40,184,319 9.67
13 Yoakum 3,488,487 36,900,678 9.45
21 Pharr 3,414,730 38,532,705 8.86
05 Lubbock 3,714,892 67,903,260 5.47
02 Fort Worth 7,616,370 139,968,720 5.44
14 Austin 6,061,210 141,743,584 4.28
15 San Antonio 6,152,480 149,096,457 4.13
12 Houston 24,719,221 603,986,362 4.09
18 Dallas 8,208,749 207,589,272 3.95
20 Beaumont 2,873,692 76,344,640 3.76
16 Corpus Christi 1,851,739 68,554,644 2.70
Total $120,370,032 $1,879,703,474 6.40%
Average $5,015,418 $78,320,978 6.40%
Source: State Department of Highways and Public Transportation and Texas Performance Review.
Duplication of Functions. Certain functions are duplicated among districts regardless of the level of construction and maintenance activity within each district. For the most part, each district has a public affairs office, right-of-way section, sign shop, radio shop, equipment shop, design section, district laboratory, accounting section, personnel office and an internal review analyst. These functions are conducted regardless of the level of construction and maintenance activity within each district. The existence of such functional areas within each district can result in high administrative costs for those districts with low levels of construction and maintenance activity.
Source: Texas Performance Review.
As an example, 319 personnel among the 24 districts were involved in the acquisition of right-of-way parcels during fiscal year 1990.[22] While each district maintained a right-of-way section, a majority of all statewide acquisitions occurred within a few districts. A total of 1,609 parcel acquisitions were made during fiscal year 1990.[23] Ten districts acquired a total of 1,337 parcels, or 83 percent of total statewide acquisitions. The remaining 14 districts acquired only 272 parcels, or 17 percent of total right-of-way acquisitions, compared to 29 percent for the Houston district alone. One of the 14 districts, Wichita Falls, had no right-of-way acquisitions during fiscal year 1990, while continuing to employ four right-of-way personnel.
District Staffing Requirements. In 1990, the SDHPT Planning and Policy Division recommended decreasing the number of personnel in 18 district offices to balance staffing levels with expected work loads.[24] The Planning and Policy Division, through the use of staffing guide models, identified staffing levels for each district which represent the best estimate of future staffing requirements based on forecasted work loads. As noted previously, a majority of statewide construction activity is concentrated in the larger urban districts while a majority of statewide maintenance activity is concentrated in the primarily rural districts. Through the use of the staffing guide models, the Planning and Policy Division recommended a reduction of 672 employees in 18 of the primarily rural districts, including El Paso, Pharr, Beaumont, Atlanta, San Angelo, and Wichita Falls. In addition, the division recommended increasing the number of personnel by 413 in six of the primarily urban districts, including Fort Worth, Austin and Dallas. The net effect of such changes would be a decrease of 259 district employees.
While the Planning and Policy Division recommended changes to current staffing guide levels in order to reach optimum staffing levels, SDHPT management did not require the changes to be made immediately. Districts are allowed to rely on routine attrition or transfers to decrease staffing levels. The report did not address achieving the identified staff reductions through district consolidations.
Interstate Comparisons. Texas has more districts than seven other states which have relatively large geographical areas with one or more large urban centers. California, which is comparable to Texas in both geographic area and number of urban centers is divided into 12 highway districts. Ohio, Pennsylvania, New York and Florida are divided into 12, 11, 11 and 7 highway districts, respectively. Michigan and Illinois, which are comparable to these other states with regard to geographic area and number of urban centers, are each divided into nine districts.[25]
State Agency Comparisons. Other state agencies, which are responsible for providing direct services throughout the state, operate with fewer district or regional offices. The Texas Department of Human Services operates with 10 regional offices and two sub-regional offices. The Texas Employment Commission and the Texas Department of Health provide direct services through ten and eight regional offices, respectively. In addition, the Texas Rehabilitation Commission carries out its activities through six regional offices.[26] Each of these agencies oversees a considerable number of smaller local offices which provide most of the direct services to citizens. This approach is similar to SDHPT, except for the fact that the other agencies oversee local operations with less district or regional offices.
Recommended Policy
The State Department of Highways and Public Transportation should be required in statute to have no more than 12 district or regional offices to reduce its administrative costs and carry out its responsibilities in a more cost effective manner. SDHPT would retain full authority to determine the boundaries and organization of district offices within the limitation of having no more than 12 regions or districts. This would require SDHPT to analyze the cost effectiveness of each district, the amount of highway activity in each county and other factors. Based on this information, SDHPT should identify those districts to be eliminated and establish the new boundaries for the remaining districts. The statute would not require any change in the number or location of residencies and/or maintenance sections which provide the direct services to the traveling public.
To accomplish district restructuring, SDHPT should determine the number of personnel and the number of counties to be served by each district in the new district office structure. The analysis should begin immediately and the statute should require that the reduction in number of districts be in place as of September 1, 1992. Since this recommendation would require a statewide analysis of the district office structure, the change should occur at one time. This will also facilitate any transfers of personnel that will need to take place.
This recommendation would also apply to the regional structure of a consolidated Texas Department of Transportation (TDOT). The overall regional organization of TDOT should follow the SDHPT regional structure.
Implications
As changes in technology, population, construction activity and other changes have occurred across the state, SDHPT has remained virtually static in its approach to delivery of services. The failure to change this approach has led to excessive administrative costs in several areas of the state. Therefore, the primary advantage of this recommendation would be a reduction in the administrative costs incurred by SDHPT as a whole.
This recommended change is intended to allow SDHPT to be able to maintain its level of direct services with less costs. The change would primarily result in a reduction of duplicative administrative and support positions from the 12 eliminated districts. These changes would not affect the number or location of construction residency offices or maintenance sections, which are responsible for providing direct highway construction and maintenance services for each district. Additionally, this recommendation does not require a reduction in the number of personnel at each residency office and maintenance section. The districts employed almost 8,400 "front-line" employees within the district residencies and maintenance sections during fiscal year 1990.[27] These personnel represented approximately 70 percent of the 12,864 total district employees.
One of the primary disadvantages associated with this recommendation is the loss of employees with experience in district operations. Among the positions potentially affected would be supervisory engineers, accountants and other managerial support positions. These positions would be among those that would be redundant under an organizational structure with fewer district offices. The majority of employees in these positions typically have been with SDHPT for a number of years and represent an experienced pool of personnel.
The span of control under an organizational structure with fewer highway districts would be increased significantly. Under an organizational structure with 12 fewer districts, senior district managers operating out of the district headquarters, such as the district construction engineer, would be responsible for a greater number of employees as well as a greater number of construction projects. However, improvements in technology, such as SDHPT's new Executive Information System are expected to improve access to information to provide greater management oversight and analysis.
Fiscal Implications
By implementing this change, it is estimated that the State Highway Fund would save over $21 million per year from fiscal years 1993 to 1996. The primary source of savings would result from reductions in the number of personnel needed to operate a smaller number of district offices. It is estimated that on a statewide basis, 535 positions would no longer be required to carry out the functions of SDHPT. This reduction in personnel represents almost 3.4 percent of SDHPT's total current work force of 15,841 personnel.
In addition to the projected savings in payroll costs, revenue gains would also be realized from the sale of property from those districts to be closed. However, revenues realized from the sale of such property may be offset by the costs of expanding the remaining district's facilities to accommodate any added levels of activity. Estimating the value of specific highway properties to be sold, identifying additional property or office space needs and projecting the relative costs of each is dependent on the number and locations of district offices that will be retained by SDHPT as of September 1, 1992. Therefore, the fiscal impact of disposing and acquiring property or office space for district headquarters purposes cannot be estimated at this time. However, it is estimated that $1.25 million in moving costs will be incurred by SDHPT. This figure was determined by assuming that all remaining district personnel from dissolved districts will choose to relocate to a new district headquarters at an average moving cost of $1,126 per employee.[28]
Because of the operation of the state fund structure, the implementation of this change would not increase the amount of revenue available for certification by the State Comptroller of Public Accounts for General Revenue Fund spending. There would be a positive effect on the state's cash flow and similar fiscal implications would continue after fiscal year 1996.
Fiscal Impact 1992-1996
Fiscal Savings to the
Year State Highway Fund Change in FTEs
1992 $ 0 0
1993 20,099,000 -535
1994 21,353,000 -535
1995 21,353,000 -535
1996 21,353,000 -535
Endnotes