How Much of a Boost Will Washington Give?

With the economy deteriorating faster than anyone had expected, construction and engineering associations are among the most vocal in calling for Congress to invest in infrastructure. Various agencies busily made lists of projects to do in anticipation of federal aid, checked them twice, and earnestly hoped that Congress would be less naughty than nice.

St. Louisan Tracy Hart, chief executive officer of Tarlton Corp., participated in nationwide press conferences for the Associated General Contractors to drum up support for stimulus spending. Hart took a broad-minded view of what spending was necessary by pointing out that local governmental agencies needed money to operate transportation infrastructure as well as build it. She specifically highlighted Metro’s need for funds to operate its light rail system. At press time, however, it looked like Congress would not embrace her view and would not allocate operating funds to complement construction funds.

Meanwhile, even without knowing how much money would eventually be available, state and local agencies lined up projects to do with whatever money came down from Washington.

The Missouri Department of Transportation (MoDOT) got a jump on other agencies and issued its first list of stimulus projects in November “and we’ve been adding to it ever since,” Highway Commissioner Pete Rahn said in a February 6 interview. The East-West Gateway Council of Governments, the transportation planning agency for metropolitan St. Louis, gave its member local governments until February 13 to submit transportation projects for possible funding with stimulus funds. St. Louis City and St. Louis County compiled their own lists of possible projects in the interim.

How much stimulus money would be available for construction activities was unclear at press time. The Design-Build Institute of America estimated that the House plan contained $114 billion for construction: $19 billion for clean water and flood control; $31 billion to modernize federal and public infrastructure; $30 billion for highway construction; $10 billion for transit and rail; $10 billion for science facilities, research and instrumentation, and $14 billion for educational facilities.

To the dismay of many construction industry associations, the Senate eliminated the $14 billion for schools, a cut that House leaders agreed to when resolving differences between the House and Senate bills. The Associated General Contractors, for example decried the elimination of school funds and $10 million in other construction spending. “Our analysis shows that without these funds the total number of jobs that would be created or saved by this bill will decline by over 340,000,” said Stephen Sandherr, the chief executive officer of the Associated General Contractors of America. The American Institute of Architects and 57 other industry associations said that $14 billion for fixing schools “would create nearly 400,000 private sector jobs in the design and construction industries.”

Roads and Bridges

The slimming down of the stimulus bill meant that federal construction dollars would go more narrowly to traditional infrastructure projects such as roads, bridges, sewers and flood control. Rahn said both House and Senate versions allocated about $30 billion for bridge and highway construction. He estimated that Missouri’s share would come to about $693 million. Although the House and Senate versions distributed the money differently, metropolitan St. Louis would get at least 32 percent of Missouri’s money – about $230 million – because of the highway commission’s own formula for distributing money within the state, he said. East-West Gateway’s estimates are somewhat lower.

However much it winds up being, “if they actually start spending money on infrastructure, that will help our business,” said Jeff Budrovich, president of Budrovich Inc., a crane and excavator rental company.

MoDOT’s initial list of projects consisted of 34 projects that could be built at an estimated cost of $510 million. That includes $137 million of work on Interstates 70, 44, 55, 35 and 29 and approximately $60 million of work on the state's lettered routes in rural Missouri. Four projects already have been put out for bid, none of them in the St. Louis area. Rahn acknowledged a bias towards rural projects, “because those are the easiest to get going quickly,” he said.

Rahn said the increased federal money for road and bridge construction would help cushion the industry from falling state spending. “At our peak of Prop A spending, we were at $1.7 billion a year,” he said. “We’re at $1.2 billion going down to $800 million and down to $467 million the following year. The stimulus money will mean that instead of going off a cliff we’ll be going down a steep hill.”

Rahn said he suspects that many agencies will have trouble spending their stimulus money because of many “use it or lose it” provisions. “The House bill requires us to have 50 percent of monies obligated to projects within 90 days, and it has a clawback provision so that those states that don’t meet that requirement lose money and it is redistributed to other state,” Rahn said. “The overriding factor in the bill is spend money quickly,” he said.

However, MoDOT is ready to spend the money, Rahn said. “We’ve gambled that Congress will pass a stimulus bill,” he said. “We’ve bought up rights of way, completed environmental studies, and spent money to design projects so that when the money becomes available we can get these projects out the door as quickly as we can,” he said.

Urban areas have to spend money even more quickly under the bill. Jim Wild, development manager, planning and programs, for East-West Gateway, said the House bill requires urban planning agencies to commit 50 percent of their stimulus funds within 75 days, although they have a year to spend the rest. “And we can’t use the money on projects that are already in the Transportation Improvement Plan,” he said. “They have to be new projects that aren’t budgeted, and that is just not realistic,” he said. Wild added that planners at East-West Gateway hope that the 75-day deadline gets stripped out of the final bill.

St. Louis City’s $2.4 billion stimulus list included $178.5 million for 18 street projects. The largest is $35 million to replace the Tucker Avenue bridge from Cass to Washington. St. Louis County’s $1.8 billion stimulus wish list includes 17 road projects costing an estimated $463 million. Almost half of the county’s road money, $200 million, would go to finish Route 141. Neither area is likely to get as much money as it hoped for.

Rahn said that one area where quick “use it or lose it” deadlines definitely don’t work is in transit. The House approved $12 billion for transit – “a huge amount,” said Rahn – but it is for capital purposes only. St. Louis Rep. Lacy Clay was a leader in pushing for a large bundle for transit and St. Louis City wants $900 million to build a north-south extension of Metrolink through the city.

“You don’t get these projects designed and out the door in 90 days,” Rahn said. Diane Williams, Metro’s director of communications, said the north-south city extension project “is not shovel ready.” East-West Gateway would be responsible for the project’s design. That project has not been designed yet, and Les Sterman, executive director of East-West Gateway, said he hopes Congress leaves room for “legacy projects” in the stimulus package. “There is a trade-off between fast and good,” he said. “Anytime you start shoveling money out the door you will waste a lot of it. I hope there will be provisions in the package that allow for longer lead time projects,” he said.

“If you have to obligate transit money fast, you put it into buses, and I fear that what we will see [from that money] is a five-year backlog of bus orders,” Rahn said.  He added that what Metro really needs is not capital funds, but operating funds.

Rahn also estimated that Missouri would get $30 million of the $3 billion that the House allocated for airports. St. Louis City’s stimulus wish list includes 12 projects at Lambert-St. Louis International Airport with estimated costs totaling over $80 million.

Water and Wastewater

MSD and the St. Louis City Water Department also are prepared to use whatever money they can get from the $19 billion allocated for water and flood control projects in the stimulus package. The city’s stimulus list includes 12 water projects they can do for $100 million, including $35 million for a Harlem-Baden relief detention system, $20 million for repairs and enhancements to the St. Louis floodwall, and $30 million for “green” alleys. MSD has a list of 59 projects to do at a cost of $163.7 million.

MSD spokesman Lance Lecomb said only $6 billion in the House bill was specifically allocated for wastewater projects, although $17 billion in projects were identified across the country. “We still don’t know how the money will be distributed. The devil will be in the details of the formula,” he said.

United Rentals’ Trench Safety Division is one business pinning hopes for a good year on the stimulus package. “We rent underground safety equipment, so a lot of the impact of the legislation for us will depend on how much is allocated for water work,” said Branch Manager Joe Wise.

Bi-State Utilities is another company that could benefit if more sewer and water work flows from the stimulus legislation. Bi-State Utilities recent added equipment for “pipe bursting,” a method for replacing or enlarging underground pipes where open trench methods are practical. The company recently used pipe bursting to enlarge sewers for MSD in a neighborhood near Lambert Airport, replacing an 8-inch diameter pipe with a 12-inch diameter. The pipe bursting equipment acts by pulling larger pipe through the smaller pipe, forcing the smaller pipe to split apart and pushing it aside into the soil. The machine that pulls the pipe can exert a force of 125,000 psi, said Bi-State Utilities’ President Mike Jerome.

Among St. Louis area Congressmen, Reps. Lacy Clay and Russ Carnahan voted for the House’s stimulus bill. Rep. Todd Akin voted against it. Missouri’s Senators also split on the bill.

Steve Taylor, a spokesman for Akin, said that Akin strongly supports allocating money for rebuilding infrastructure, but felt that the overall bill was weighted down with so many unrelated items and so much pork that it could cause the national debt to balloon to levels that “could crash our economy permanently.”

Regardless of how much money Congress ultimately approves for construction, many people believe that quick deadlines for spending will almost require agencies to turn to the design-build project delivery method to get things done. According to the Design-Build Institute of America (DBIA), the stimulus legislation will “present the design and construction community with a once-in-a-lifetime opportunity to shape the future of our nation, particularly in the water and transportation arenas.” DBIA will present a Design-Build for Water/Wastewater Conference this March in Denver and include a panel on how the stimulus legislation affects the industry. It will present similar information at its Design-Build in Transportation Conference this April in Baltimore

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