Wad of singles

June 11, 2009

Despite the economic downturn, Florida remains one of the fastest-growing states in the union and ranks third behind California and Texas in the amount of infrastructure monies ($1.36 billion) received through the American Recovery and Reinvestment Act of 2009 (ARRA).

And though state officials said they wish they had more, they agree the money will have a significant economic impact throughout the state.

Despite the economic downturn, Florida remains one of the fastest-growing states in the union and ranks third behind California and Texas in the amount of infrastructure monies ($1.36 billion) received through the American Recovery and Reinvestment Act of 2009 (ARRA).

And though state officials said they wish they had more, they agree the money will have a significant economic impact throughout the state.

With many of its major transportation projects on hold because of diminishing revenues derived from the state’s gas taxes, Florida had $6.96 billion in transportation projects eligible for advancement in 2009. Clearly, only a fraction of those could be funded with ARRA’s $902 million controlled by the Florida Department of Transportation (FDOT) through its Statewide Flexible Funding Program and by an additional $404 million directed to counties and cities through the state’s network of metropolitan planning organizations (MPO).

Rick Chesser, former District 4 secretary, whose former aegis included Palm Beach and Fort Lauderdale, and who now serves as the Florida Transportation Leader for the engineering firm RS&H, said that much of the discussion among MPOs is whether to “spread their share around like peanut butter or focus on one major project.” Chesser said that it’s a good bet much of the county and city money will be spent on road resurfacing and bridge rehabilitation projects, especially since each transportation district will be using its flexible funding share for those larger projects needed to ameliorate congestion.  

Not enough to go around

Indeed, FDOT’s seven districts are welcoming the monies to expedite stalled projects, many of which have already been approved but simply could not be financed by transportation funds depleted by diminished fuel-tax revenues. Last fall, FDOT asked its districts to submit a list of projects it wanted funded from the $902 million. Projects had to be “shovel-ready,” meaning all federal requirements had been met, including federally approved environmental documents and completed right-of-way. During the next few months, using a statutory formula based on population and fuel-tax receipts among other considerations, FDOT selected projects from each of its seven districts to allocate the $902 million.

“Under Gov. Crist’s leadership, FDOT wanted a good portion of the funding spread throughout the state to create as many jobs as possible,” said Kevin Thibault, assistant secretary for engineering and operations at FDOT.

When it passed the ARRA, Congress also gave priority to projects that can be completed in three years and those in economically distressed communities. Thirty-nine of Florida’s 67 counties are distressed by federal guidelines, but not all have shovel-ready projects, he said.

Charles Baldwin, FDOT District 2 secretary, whose region covers 18 counties in rapidly growing central and northeast Florida, had 11 major projects ready to go, but FDOT’s allocation to District 2 from the flexible funding of $101 million (11.27%) provided for only three. All of them are in the fast-growing Jacksonville area of northeast Florida and are critical to the region’s infrastructure and growth.

Despite not being able to fund the district’s second-largest project, the extension of 9B (beltway around Jacksonville) to I-95 south of Jacksonville, Baldwin said the money will expedite three important projects, not the least of which is the widening of Beach Boulevard in Jacksonville.

According to Baldwin, much of the widening of the major artery from downtown to the beach was completed, including the rebuilding of a six-lane bridge over the Intracoastal Waterway. However, when the slowdown came, there were no monies to complete the last 3-mile stretch between the bridge and what had already been completed.

“We were going to have a huge bottleneck and it wasn’t going to be pretty,” said Baldwin.

In addition, Baldwin said that the second project funded by the ARRA is a good example of how the stimulus monies will have a direct impact on economic development.

“The overpass at Plantation Oaks on Branan Field-Chaffee Road in Clay County is needed to facilitate the projected increase in annual average daily traffic to and from the Cecil Commerce Center, home to Italian aeronautic firm Alenia North America, which is building the military’s joint cargo aircraft, the C-27j Spartan,” said Baldwin.

Baldwin echoed all of his peers in welcoming the ARRA funds, as state experts said diesel sales are down nearly 12% and gasoline 5% based on consumption over the past two years.

“The last time we’ve seen a fall in consumption was in the early ’70s because of the oil embargo,” he said. “Now it is the high cost of fuel, as well as the trend toward more fuel-efficient vehicles.”

A quick canvassing of FDOT’s district secretaries reveals that a few of them want to distribute monies to projects in every city within their district, while most want to make a significant impact.

Baldwin is in the latter camp and said: “I believe you need to prioritize your needs so that you don’t spread it so thin you don’t get anything done.”

Thibault noted two projects in Miami and Tampa, two of the state’s largest cities, that stand out among the others for making the most out of the stimulus funding.

According to Thibault, the state already had most of the funding it needed to reconstruct the Palmetto and Dolphin Expressways (S.R. 826/S.R. 836) interchange in District 6, which includes Miami. Total costs of the project came to $500 million, but the state was short just over $87 million to get the job done. Likewise in District 7, the state lacked nearly $100 million to build a $400 million connector road from I-4 to the Selmon Crosstown Expressway that would relieve truck traffic through Tampa’s historic Ybor City. Both projects will benefit from the ARRA funding, which will be used to cover the difference.

“FDOT was able to leverage some of the ARRA funding to deliver two of the state’s major projects today,” said Thibault. For the Palmetto-Dolphin Expressways interchange alone, “that’s creating $500 million worth of jobs using a smaller portion ($87 million) of ARRA funds.”

Expanding the payroll

Thibault was optimistic about the economic impact the projects will have on the state, which has traditionally relied on population growth, now stagnant, to fuel its economy. According to Thibault, the state follows the Federal Highway Administration’s (FHWA) rule of thumb that 28,000 jobs are created for every $1 billion spent on transportation. That means by spending all $902 million in its Flexible Funding Program, the state will create over 25,000 jobs, and even more considering FDOT’s ability to leverage this money on projects that already had some funding available.

The projects are expected to spur growth in the state’s hurting construction industry, benefiting everyone from contractors to suppliers and other related groups. Thibault said many of the engineering firms in the state also have construction engineering and inspection components, and thus also will benefit from the stimulus projects. A few of the projects will use design-build delivery, where design and construction happens concurrently, which also will benefit some design firms, he said.

Half of the $902 million must be obligated within 120 days from the apportionment of funds, meaning the projects must have received federal approval and been advertised by the first week of July, with complete expenditure of the funds within three years from the date of apportionment.

FDOT is confident it will reach this milestone and is hoping to obligate even more than the required 50% before that time.

Thibault said some states may not be able to obligate all 50% of their share while others have refused to accept the ARRA funding altogether. In these cases, the states will forfeit the money they don’t use, which will likely get redistributed to other states in the future. Although the states haven’t received guidance on how this money will get redistributed, Thibault is confident that Florida will be ready to receive more money when the time comes.

Each year, the FHWA redistributes funds from states that weren’t able to obligate their transportation funding. Florida has always obligated 100% of its funding and been able to take more in the redistribution, Thibault said.

At the end of April, the Florida Legislative Budget Commission approved FDOT’s recommended list of stimulus projects. Thibault said the districts are ready to move forward immediately once FDOT receives budget authority from the state and FHWA approval.

Baldwin hoped to execute agreements on his three design-build projects in District 2 by June and begin immediately thereafter.

About The Author: Bernos is the director of corporate communications for RS&H. Stutts is a communications specialist in RS&H’s transportation and public infrastructure programs.

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