June 9, 2009
GCAA analysis of the May 22 letting awards indicated that the total project awards were significantly lower than what GDOT engineers had estimated. The AJC covered this on Saturday, June 6. Story below.
Stimulus projects pull in low bids
Roads plans may cost 43% less than expected.State transportation officials consider how to spend remaining funds.
By Ariel Hart
The Atlanta Journal-Constitution
Saturday, June 06, 2009
When Georgia awarded its first road projects from the federal stimulus over the past week, some transportation officials couldn’t believe their eyes: The bids had come in lower than estimates. A lot lower.
For the 40 bids on stimulus projects taken from across the state so far, the winning lots totaled almost $56 million. In a likely windfall for more projects, that’s nearly $42 million less than predicted, an AJC analysis shows: 43 percent less.
In the Atlanta region, bids were even more aggressive than the state average, coming in at half of the estimate amounts.
“We thought they were going to be low,” said David Haynes, who works on transportation planning at the Atlanta Regional Commission. “But when we saw how low, it was like, holy cow.”
Federal transportation officials said Friday that the nation on average is seeing low stimulus bids, but not that low. U.S. Secretary of Transportation Ray LaHood wrote to U.S. governors in April that across the country, bids were coming in 10 percent to 20 percent under estimates.
LaHood added that the leftover money should be spent on other transportation projects in the same state.
Several factors are probably at play, but one seems clear: The recession and Georgia’s transportation funding crisis have a silver lining.
“We were very aggressive” with low pricing on stimulus bids, said Bill Hammack, president of C.W. Matthews Contracting Co., which won most of the projects in metro Atlanta. “Everyone’s out of work or low on their work —- the old supply and demand.”
In fat times DOT was getting one or two bids per project, officials said, but for the stimulus it’s been getting four or five.
Still, the estimates seemed high to Hammack. When told that a project in Banks County that his company won for $759,446 was estimated at $1,712,500, he replied, “Holy mackerel.”
Hammack said that the projects Matthews won in this round would probably put hundreds of people to work, from road crews to subcontractors, quarry workers and asphalt plant workers.
No one’s crowing about the potential windfall. Agencies addressed it with the press only when an AJC reporter noticed, too. They caution that there are more possible explanations, and that the state is far from closing the checkbook on those projects.
DOT spokesman David Spear said the agency is methodical about its estimates. But DOT recently started building larger contingency funds into project estimates, after years of getting sucker punched with surprise costs.
In addition, asphalt and construction prices have been on a roller-coaster, rising steeply in recent years, then falling during the recession.
Indeed, the good news is a turnabout from recent years, when low, outdated cost estimates helped cause a budget catastrophe with Georgia’s roadbuilding program.
“Now it’s like the tables have turned,” said Jane Hayse, transportation planning chief at the ARC. “It’s just a real conundrum that we’re trying to figure out.”
DOT spokeswoman Karlene Barron said DOT would decide what leftover money was usable and slate it for other projects some time between July 1 and Feb. 29.
June 9, 2009
More money for more enforcement? Despite the economy, the President has proposed increased funding on enforcement in the metal/non-metal sector. The following from Pit & Quarry Magazine.
President Barack Obama has proposed to increase funding for the Mine Safety & Health Administration from $347 million this year to $354 million for the budget year that starts Oct. 1 – an increase of about 2 percent. Metal/non-metal enforcement funding would increase by nearly 5 percent, budget documents show.
June 9, 2009
US Highway fund to go broke in August
Jun, 03 2009
(WASHINGTON, D.C.) – The Obama administration is warning lawmakers that the trust fund that pays for highway construction will go broke in August unless Congress approves an infusion of as much as $7 billion.
Sen. Barbara Boxer, chairman of the Senate Environment and Public Works Committee, said at a hearing Tuesday that the administration has told senators the Federal Highway Trust Fund will need an estimated $5 billion to $7 billion to keep current construction projects going.
The California Democrat said another $8 billion to $10 billion will be needed to keep the fund solvent through the year ending Sept. 30, 2010.
Transportation Department spokeswoman Jill Zuckman confirmed those figures.
“The administration is working closely with Congress to solve this difficult problem and ensure that states have the resources they need to maintain our roads and highways,” Zuckman said.
A decline in driving that began in late 2007 has reduced federal gas tax revenue, the primary source of trust fund dollars.
The trust fund is separate from the $48 billion in transportation projects included in the economic recovery law enacted by Congress and signed by President Barack Obama earlier this year.
Congress approved an emergency transfer of $8 billion in general treasury dollars last fall to make up a projected shortfall — the first time in the program’s history that had happened. The fund dates back to creation of the federal interstate highway program in 1956.
Sen. George Voinovich, R-Ohio, said it’s clear that Congress must raise the federal gas tax, which is now 18.4 cents per gallon.
“I know that doesn’t go down so well with some folks,” but it’s “the reality of the situation,” Voinovich said at the hearing, which was on Obama’s nomination of former Arizona highways director Victor Mendez to head the Federal Highway Administration.
“That will be one of my highest priorities, to get on that very quickly,” Mendez said of the trust fund.
The law that authorizes federal highway programs is due to expire at the end of September, but the issue hasn’t been on Congress’ front burner. There is a consensus among transportation experts and lawmakers that there will have to be some form of a tax increase — always unpopular, but especially so in a recession — to make up for the lower gas tax revenues and to address a backlog of crumbling and congested highways, bridges and public transit systems.
Two congressionally mandated commissions have called for an immediate increase in the gas tax. The first commission, which issued its report in early 2008, recommended a 40-cent per gallon hike. The second panel, which issued its report earlier this year, recommended the tax be increased 10 cents per gallon for gas and 15 cents per gallon for diesel, and that both be indexed to inflation.
The two panels also said fuel taxes are not a sustainable source of revenue over the long term as drivers shift to more fuel efficient vehicles. Both panels recommended Congress find a new revenue source to pay for highway and transit programs.
Their top recommendation was to tax motorists based on how many miles they drive. That would require equipping cars and trucks with devices that use GPS technology to record not only how many miles the vehicle was driven, but whether the driving occurred on interstate highways or secondary roads and whether it was during peak travel periods. The device would calculate the amount of tax owed and the bill could be downloaded.
A mileage-based tax system would take about 10 years to implement.
By JOAN LOWY
June 9, 2009
Jim Galloway of the AJC speculates that Vance Smith has the “inside track” on being named the next GDOT Commissioner. His article is below.
Homing in on a new DOT commissioner
5:56 pm June 2, 2009, by Jim Galloway
Bill Kuhlke, chairman of the board that (sort of) governs the state Department of Transportation, said eight formal applications have been received for the job of DOT commissioner. A search committee will interview candidates next week, and a decision is expected by June 18.
But Dick Anderson, director of the Georgia Regional Transportation Authority, has told my AJC colleague Ariel Hart that he has taken his name out of contention for the post.
That means means state Rep. Vance Smith, chairman of the House Transportation Committee, has the inside track. Smith sought the commissioner’s job in 2007, but lost to Gov. Sonny Perdue’s choice, Gena Abraham.
Also, the following was from Dick Pettys with InsiderAdvantage:
Vance Smith Rated Likely To Be Next DOT Commissioner
By Dick Pettys
InsiderAdvantage Georgia
(5/27/09) When you dig around a bit in the business of the DOT board, you emerge mostly with rumors, guess work and off-the-record, background information. That said, however, the conventional wisdom at this point puts state Rep. Vance Smith in a strong position to get the vacant DOT commissioner’s job when it is filled by the board, probably next month.
Following the governor’s signing of SB 200 <http://www.legis.ga.gov/legis/2009_10/versions/sb200_AP_14.htm> , the next commissioner won’t have as much power as his predecessors. Some of the clout will go to a new director of planning – an official the governor gets to appoint with the approval of the House Transportation Committee, currently chaired by the same Vance Smith under consideration as DOT commissioner. And some of the clout – particularly over money – will go to the Legislature.
But weaker than in the past or not, the post still is one that Smith wants. At last count, it appeared three others also wanted the job, but it is now less certain that all of them will remain in the running.
There’s no good speculation yet on who Perdue will appoint as planning director and, in fact, that decision doesn’t seem to have been made yet.
At any rate, we’re clearly nearing some kind of turning point for DOT, but exactly what that produces remains to be seen. The agency has been under fire for months from legislators and the public for what critics contends is a failure to get the job done.
In February, the board fired Commissioner Gena Evans after a tumultuous
16 months on the job. Her election in October 2007 had been a major point of division between Gov. Sonny Perdue, who supported her, and House Speaker Glenn Richardson, who even then was pushing for Vance Smith’s election as commissioner.
In early April, the Legislature went home without passing a transportation tax increase that road advocates and consumer groups had been pushing for two years straight. But at least in part because of a crisis in confidence in DOT operations, particularly as expressed by the governor and the lieutenant governor, the Legislature passed – and Perdue later signed – the bill that separates DOT’s planning functions from its operational functions.
The bill does, however, keep the DOT board – elected by caucuses of legislators – intact, and gives it the power to name the commissioner.
But to some extent it may be a sullen board that makes the decision about a new commissioner next month; its members fought the transportation makeover bill as hard as they could.
Old grudges aren’t easily put aside, and we’ve even picked up on some chatter about the board possibly selecting Smith as commissioner and then encouraging his old House committee to dilly-dally about confirming whoever Perdue selects as planning director, perhaps postponing it indefinitely But that’s not being taken too seriously among some we talked with for this article. “When you start down that road, it’s genocide,” one observer told us.
Still, this is a board that Perdue does not control, as is obvious by its decision to fire Gena Evans. And, as a result, we hear he has not expressed a preference for commissioner.
Whether he has or not, some board members are said to feel that he would prefer to see Dick Anderson, currently head of the Georgia Regional Transportation Authority, as commissioner. And that, naturally, is a strike against Anderson in their minds. Anderson is said to be – or to have been – one of the four under consideration.
Another under consideration is said to be Gerald Ross, the interim commissioner. He’s won favorable marks from many board members for his performance so far. But he’s also within a few years of earning one of those lucrative DOT pensions. Taking the commissioner’s slot – a job whose tenure in recent years hasn’t been all that secure or long – could be financially disadvantageous to him.
One long-time board observer said the board is split 5-5 between Smith and Ross with 3 undecided. Another said he believes Smith has at least 9 votes right now. A third said he believes it is close with Smith the likely winner if the vote were held now.
