Submitted by Site Improvement Association
Just how much has the outbreak of the coronavirus impacted the construction industry in St. Louis city and county? Well, if public works projects were used as a measuring stick, more than 42 percent of planned public improvement projects have either been eliminated or placed on hold for an indefinite period of time.
That is the findings of a survey conducted by the Municipal League of Metropolitan St. Louis and one of its members. SITE Improvement Association. SITE is a construction contractor association composed of 215 construction companies and businesses associated with the construction industry.
About a quarter of the Municipal League’s 88 members, or 21 cities, responded to the survey. Those municipalities reported they planned to construct more than 130 projects with an estimated value of $38.2 million in improvements this year before the coronavirus hit. Now, due to uncertainty of revenues, these cities have dropped or indefinitely delayed 77 projects or $16 million.
“Cities, just like many private businesses, are facing the harsh reality of a loss in revenues created by the coronavirus impact on the economy,” said Pat Kelly, Executive Director of the municipal league. “Not only have these and other cities had to scale back their public improvement programs, but many also had to close some of their facilities and furlough or layout employees because of the bleak revenue picture.”
Many municipalities finance their capital improvement programs through sales tax revenue. When stores, restaurants and other businesses had to close, those revenues were lost.
Most survey respondents said they would hope to add the projects and purchases back into their budgets either this year, if money became available, or next fiscal year.
Among some of the responding cities cuts were: Chesterfield which started their fiscal year with a capital improvement budget of $5.3 million and cut five projects valued at $2-million; Ladue which had 13 projects at a cost of $6.5 million and has now deferred all the work; and Overland which budgeted $1.2 million for 18 street projects and now is planning only six projects and dropped $1.1 million.
Construction work was not the only budget items to be scaled back, according to the survey. The survey revealed that 67-percent of planned capital purchases by municipalities such as new equipment, vehicles for police and fire departments also have been dropped or suspended.
“This is a real blow to the gut for the local construction industry,” said SITE Executive Director, Terry Briggs. “There are many construction firms who depend upon municipal work to make or break their fiscal year. Their only hope now is for the cities to receive some financial assistance from the federal government and thus be able to add some of these projects back into this year’s construction schedule.” Several proposals are now being discussed in Congress to aid municipalities across the country whose budgets have been decimated because of the coronavirus outbreak and its impact on revenues.
Briggs did note that some public bodies are continuing their capital improvement programs undeterred by the virus. “MSD is a good example of that,” said Briggs. “The sewer district’s revenue comes from user fees billed monthly. “Many contractors are thankful the sewer district work is continuing.”