If the Texas Department of Transportation (TxDOT) is forced to return federal dollars, then it wants the power to void a sale or two in the future.
That is the message sent by TxDOT Executive Director Michael Behrens in early March. His letter to Texas Republicans and Democrats in Washington essentially instructed them to seek clearance from the state agency before pushing through their road and bridge projects. If the lawmakers do not follow the new protocol, then they will not receive the necessary support from TxDOT.
“Most, if not all, projects require matching funds,” Behrens wrote in his March 9 letter. “Earmarks subsidizing only a portion of a project simply do not justify the project’s advancement if funding is not available to provide the remaining balance.”
Behrens’ request stems from an anticipated mandate from the Federal Highway Administration (FHWA) for Texas to return approximately $290 million in federal highway funds to Washington. At press time the FHWA had not issued an official notice, but a recent resolution continuing appropriations for FY 2007 rescinded more than $3.4 billion in previously authorized transportation funds across the nation.
During the last 15 months, Texas has returned $305 million in response to federal funding cuts.
On March 22, the Texas Transportation Commission held a special meeting to receive public comment on how to implement the expected order to return the federal funding.
“We wanted to hear from the public on how we should prepare to absorb these funding cuts,” Behrens said. “We would like to have as little impact as possible on our ability to meet our goals to reduce congestion, enhance safety, expand economic opportunity, improve air quality and increase the value of transportation assets.”
Feedback from Capitol Hill, however, has been heated. Several Congressional members from Texas expressed feelings of betrayal following Behrens’ words on March 9. All want their projects fully funded and say they already do work closely with the state agency. Forty percent of TxDOT’s funding came from Washington last year.
“TxDOT needs to understand the elected representatives make the decisions on what projects we do, not the bureaucrats,” Rep. Ted Poe (R-Humble) told the Houston Chronicle.
“Certainly, we did not mean to offend any member of Congress,” TxDOT spokesperson Randall Dillard told the Houston Chronicle. “We are simply trying to ensure that we are all working together to advance transportation improvements that provide the most benefit to Texans.”
Roads & Bridges’ attempts to reach Dillard were unsuccessful.
Man with a plan
Bill Buechner told a Congressional subcommittee how to save the Highway Trust Fund from a big deficit in a March 27 meeting.
Buechner, vice president of economics and research at the American Road & Transportation Builders Association (ARTBA), said repealing or restructuring four federal motor fuel tax exemptions would generate an additional $1 billion in Highway Trust Fund revenues annually and ensure there is sufficient funding to meet the investment levels called for in 2005’s SAFETEA-LU highway and transit law.
Specifically, Buechner referred to certain vehicles and buses used by state and local governments and nonprofit organizations. These vehicles cause the same wear and tear on highways as automobiles, and they cost the highway account $1 billion a year.
“Eliminating these highway account exemptions, which was previously endorsed by the Bush administration and the U.S. Senate, would ensure the Highway Trust Fund has enough revenue to meet the commitments in SAFETEA-LU,” Buechner said, “and prevent the next surface transportation reauthorization cycle from starting in a deficit situation in 2010.”
Buechner made his comments at a House Highways & Transit Subcommittee hearing called to review the viability of the current fuel tax and highway funding program.
Under current law, the Federal Highway Administration (FHWA) projects a $700 million negative balance in the trust fund’s highway account by the end of fiscal year 2009.
Major Moves may need minor tweaks
Rising prices of fuel, steel, bricks and asphalt may threaten some highway construction projects in Indiana, the Associated Press reported. Gov. Mitch Daniels instituted the Major Moves road construction plan, funded by the $3.8 billion lease of the Indiana Toll Road.
The Major Moves plan assumed an 11% jump in costs during its first year and 3.5% per year in the following years.
Real road construction costs have risen 11-14% in each of the past three years.
The state might have to make changes in the Major Moves program as costs rise, the Indianapolis Star reported.
Daniels said the available money would pay for more than 400 road construction and maintenance projects, including extending I-69, building two new Ohio River bridges and completing the Hoosier Heartland Highway in the north central part of the state.
After a breather costs climb higher
“Construction cost increases slowed markedly in the last half of 2006. But the relief is likely to be short-lived and may have ended already,” said Kenneth Simonson, chief economist for the Associated General Contractors of America (AGC), while speaking at the association’s 88th Annual Convention in San Antonio. “By the end of 2007, materials costs could be rising again at a 6-8% rate, with wages rising at a 5% pace.”
In AGC’s fourth Construction Inflation Alert (CIA), Simonson explained that construction is vulnerable to high price increases because the industry has little ability to avoid using materials that are in strong demand and for which supplies increase irregularly.
Simonson said greater volatility in petroleum, concrete and metals products implied that highway and other heavy construction are more likely to experience large price jumps again than are building construction segments. But, he warned, “even building construction is at risk of much higher materials cost increases than the general rate of inflation.
“Contractors report that fuel surcharges are more common than in the past,” added Simonson. “Because when transportation networks are stretched tight, fuel-cost increases are likely to be passed along to customers.
“The industry also may be entering an era of accelerating wage and salary costs,” Simonson said. From February 1997 to February 2007, the industry created one out of 10 new jobs in the economy, double the industry’s share of overall employment. Construction employment increased by nearly 2 million, or 33%, while total nonfarm payroll employment rose barely one-third as fast, or 13%.
The CIA is available at www.agc .org/March2007CIA.
Money leads AASHTO’s top 8 policy goals
Perhaps not surprisingly, the American Association of State Highway & Transportation Officials’ (AASHTO) No. 1 policy goal is to see federal funding increased for highways and transit.
The association laid out its goals in a report for the National Surface Transportation Policy and Revenue Study Commission, which will make transportation recommendations to Congress.
The report, titled Transportation/Invest in Our Future: Surface Transportation Policy Recommendations, is the second of six being provided by AASHTO to the commission.
“The last time America had a national vision for transportation was when the Interstate System was launched in 1956,” said AASHTO Executive Director John Horsley. “Since 1950, our population has increased by 130 million, highway travel has increased five-fold . . . what it will take to meet America’s surface transportation needs for the future will require a different approach than was taken in the past.
“It will require a multimodal and an intermodal approach . . . it will also require solutions which go beyond transportation improvements alone and include policies addressing land use, energy, global climate change, the environment and community quality of life.”
The report sets eight major goals:
- To increase federal highway funding from $43 billion a year to $73 billion a year, and to increase funding for transit from $10.3 billion a year to $17.3 billion a year, by the year 2015;
- To supplement state and local revenues through alternative financing options;
- To double transit ridership over the next 20 years;
- To preserve the 47,000-mile Interstate Highway System so it lasts for another 50 years;
- To add nearly as much capacity to the Interstate Highway System as it already has over the next 50 years;
- To reduce annual fatalities on U.S. highways by 10,000 per decade;
- To reduce congestion and energy consumption and improve air quality; and
- To establish a National Rail Transportation Policy to address the needs of passenger travel and freight users.
The first book in the series, titled Transportation/Invest in Our Future: Future Needs of the U.S. Surface Transportation System, proposed an increase in the federal gasoline tax (or equivalent) of 3 cents by 2009 and another 7 cents or equivalent by 2015.
Lawmaker meet
The Transportation Construction Coalition (TCC) will once again host an industry fly-in to Washington, D.C., to lobby for Congressional support of federal highway and airport construction programs. The fly-in, which offers contractors, material suppliers, engineers and manufacturers a chance to communicate directly with their representatives, will take place May 8-9.
“The new Congress presents challenges and opportunities,” said Steve Sandherr, CEO of the AGC, “and it is more important than ever to aggressively educate new members and leadership on issues important to the transportation industry.”
A key issue this year is the low level of revenues in the Highway Trust Fund, ARTBA said.
The TCC comprises 28 national construction and labor unions, including co-chairs AGC and ARTBA and the Association of Equipment Manufacturers, which will host a Congressional reception on May 8.
Feds sponsor trials by grant
The FHWA has finished giving out the last of its 2006 grant awards to states to find innovative driver-fee approaches to relieving congestion. The grants totaled close to $8 million for 12 different projects in six states.
As part of the projects, the Santa Clara Valley Transit Authority will look at ways to combine highway and transit pricing strategies.
Illinois will study the effect of pricing on how drivers choose their routes in the Chicago area.
Florida will examine car-share use when prices fluctuate.
The Port Authority of New York and New Jersey will upgrade E-ZPass electronic tolling technology to allow toll rates to vary in both directions.
King County, Wash., will conduct a field test to determine if driving patterns change when insurance fees are based on usage.
The successful Value Pricing Pilot Program, which provides these grants, is continued at $59 million through 2009 under the surface transportation law signed by President Bush in August 2005. The administration’s recently released budget request for fiscal year 2008 calls for an additional $100 million for the program.
FHWA also has invited states to apply for $329 million in grant awards to fund projects that might significantly increase highway safety and relieve congestion. For more information, contact Nancy Singer at 202/366-4650.
Braking for trees
The Fourth Court of Appeals in Texas has heard oral arguments in the “Arbor War,” a grassroots movement to stop removal of five native trees along a narrow 8-mile stretch of Highway 16 toward Medina, Texas, the Bandero (Texas) Bulletin reported.
The Texas Department of Transportation (TxDOT) planned to remove the trees in 2006 to allow improvements, such as adding shoulders and guardrails, to the narrow road, but the project quickly bogged down in injunctions, appeals and environmental studies.
Opponents of the roadwork said removing the trees, which are thought to be 60-200 years old, would ruin the aesthetic value of the area and destroy the only native pecan grove in the county.
TxDOT said the trees are within the state-owned right-of-way and pose a safety hazard.
Numerous settlement attempts have failed to yield a resolution.
Good deeds unpunished
Kiewit Western Co. has been awarded the first-ever Aon Build America Grand Award for its work on the Transportation Expansion (T-REX) Project in Denver.
AGC has been giving Aon awards for years, but 2007 is the first year for the Grand Award. In all, 15 projects were selected as winners and five were selected for merit awards at AGC’s 88th Annual Convention in San Antonio.
“The Aon Build America Awards recognize the nation’s premiere projects, large and small, from across the country,” said Stephen E. Sandherr, AGC’s CEO.
Entries are chosen by a group of the contractor’s peers and judged on meeting the challenge of a difficult job; excellence in project management; innovation in construction techniques; advancement of the state of the art; sensitivity to the environment and surroundings; excellence in client service; and contribution to the community.
Other winners in highway-related categories were:
- Highway New: Granite Construction Co., ReTRAC, Reno, Nev.; Tarlton Corp., MetroLink Facilities 1—Forest Park—DeBaliviere Station to Kingsland Avenue, St. Louis; and
- Highway Renovation: James Construction Group LLC, Picardy Avenue Interchange and I-10 Widening and Rehabilitation, Baton Rouge, La.
