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Transport Industry Waits for Infrastructure Bill Funding

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Congress Continues 2020 Funding Levels through March 11

By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

Heavy highway firms are preparing to mobilize their people, eye potential projects and await project lettings as DOTs await funding appropriations for the new federal infrastructure bill.

It has been three months since Congress passed the $1.2 trillion Infrastructure Investment and Jobs Act (H.R. 3684), yet transportation agencies aren’t able to let contracts without the necessary appropriations. Although the most ambitious infrastructure bill in recent history was enacted into law last November, Congress is still operating on 2020 funding, woefully less than the levels promised under the new law.

The February 18 government appropriations deadline came and went, with the U.S. Senate agreeing upon another continuing resolution to continue the same funding levels through March 11 rather than authorize new spending to include the $1.2 trillion influx.

Contractors and engineering firms say it’s a triple witching effect in the making: a shortage of skilled project team members, a still-clogged supply chain and continued volatility in materials prices. Those who design, engineer and build highway, bridge, rail and mass transit infrastructure would normally be bidding on these projects during this season to enable crews to begin during peak work season.

“The lack of appropriation is putting pressure on agencies such as Missouri Dept. of Transportation in terms of the timeframes and estimated costs of their upcoming projects,” said St. Louis-based KCI Construction Inc. President Tom Huster. “Until Congress appropriates this infrastructure bill and MoDOT receives the funding, the timeline remains in question. We’re excited about the infrastructure bill because it’s the type of work we perform. This funding, coupled with the Missouri gas tax increase that passed in 2021, means good things for the state and the region from an infrastructural standpoint. Yet as an industry, we don’t have nearly enough people…from top to bottom, project managers to laborers in the field, we’re short.”

Criteria that KCI and other heavy highway contractors will be weighing to decide whether to bid or pass on an infrastructure bill-funded project includes: the number of people the company has available or will have available once the project start timeframe becomes clear; the job schedule itself; the scope of work; how much of the work is self-performed versus subcontracted; and lastly, whether the owner/agency’s budgeted project amount is realistic given current labor and materials constraints.

“We have bid projects recently that were over the initial owner budget, and it forced the owner to either cut scope or find more money, and then issue for re-bid,” said Huster. “It’s a challenge to be low on a bid one time, much less twice.”

Cliff Mashuda, Jr. is president of Mashuda Contractors Inc. The earthwork contractor performs much of its work in Wisconsin and Iowa. Mashuda says the firm’s projects range from moving 10,000 cubic yards of dirt to three million cubic yards of dirt.

“There’s definitely quite a lot of uncertainty surrounding the infrastructure bill,” Mashuda said. “If transportation agencies don’t know for sure when the funding is coming, they can’t plan in a realistic fashion. The season typically runs from April 1 until Thanksgiving. It’s already time for DOTs to be appropriating the money at the state level and getting project bids out the door. Once Congress does appropriate the funding, many of us may find that our more experienced project managers are already immersed in managing other jobs. The timing could prove to be poor regarding the four to six weeks it’s going to take to do the paperwork, engineering, preconstruction and mobilization of workers.”

Persisting supply chain issues could also prove detrimental to the start of these projects,” added Mashuda. “We’re already seeing huge delays for certain pieces of heavy equipment and components. If the project demands two or three more (bull)dozers, we may not be able to get them.”

Charlie Quandel is chief executive officer of Chicago-based Quandel Consultants Inc. The niche firm’s specialty is engineering intercity high-speed rail projects. Quandel draws a distinction between the “shovel-ready” projects of the Obama administration’s 2009 federal stimulus package with the “shovel-worthy” projects waiting to be funded via the current infrastructure package.

“There are Midwest-based high-speed rail projects that are indeed ‘shovel-worthy’ and ready to move forward once the necessary federal appropriations are made,” Quandel said. “These are projects which have environmental clearance with the records of decision already in place, and they can move quickly toward construction with concurrence from the freight railroads.”

The Consolidated Rail Infrastructure and Rail Improvements (CRISI) program is working to get its 2022 budget passed so that the federal infrastructure dollars can be appropriated into the various (rail) programs, Quandel added. “Once that is done, the NOFOs (Notices of Funding Opportunity) will come out and then states will be able to submit their applications,” he said. “We’re realistically looking at the latter part of 2022 or early 2023 before funds appropriated by this infrastructure bill could flow to the states. We’ve already seen one high-speed rail project estimating significant increases in costs just over the past six to 12 months.”

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IDOT Rolls Out 6-Year, $20.7 Billion Plan to Rebuild Illinois

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Gas Tax Revenues, Pandemic Relief Dollars to Fund Revenue Stream

By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

Despite fewer miles traveled during the COVID-19 pandemic resulting in reduced motor fuel tax revenues, Illinois will see more than $20 billion allocated during FY 2022-2027 toward constructing and rehabbing the state’s roads, bridges, passenger rail and pedestrian walkways.

Of the total $353 million received by The Illinois Dept. of Transportation from the federal Coronavirus Response and Relief Supplemental Appropriations Act, $227 million will fund the state’s highway program. The remainder will be added to the FY 2022 annual highway program and a future multi-year program. Additional funding for Rebuild Illinois is coming from a 19-cent, per-gallon increase in gas taxes, a 5-cent, per-gallon increase in diesel fuel taxes, $50 to $100 increases in annual vehicle registrations and – starting in July – a five-year phase-in of state sales tax on motor fuels.

Civil engineering design firm EFK Moen, LLC Co-Owner Linda Moen says legislators’ work to supply a more stable funding stream for transportation construction, rather than relying on bonded indebtedness as is often a reality, is a welcome solution.

“A lot of times, with capital programs the (transportation) funding comes from general revenue or the work is bonded, meaning it takes away from other priorities,” Moen said. “Legislators worked in a truly bipartisan manner to make this happen. They’re to be commended.”

Illinois’ new multi-year plan is expected to rebuild more than 2,700 miles of roads and nearly 8 million square feet of bridges. Additional investments under the FY 2022-2027 plan include: $5.79 billion for highway reconstruction and preservation, $4.82 billion for bridge improvements, $2.59 billion for strategic expansion, $1.43 billion for system support such as engineering and land acquisition and $1.21 billion for safety and system modernizations.

For more details on the IDOT multi-year plan, see https://idot.illinois.gov/transportation-system/transportation-management/transportation-improvement-programs-/multi-modal-transportation-improvement-program/index.

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ASCE 2021 Report Card Underscores Essential Nature of Infrastructure Construction

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By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

Although the American Society of Civil Engineers’ latest national report card upgrades U.S. public infrastructure from a D+ to a C-, engineers say there is much to be done to ensure the safety and reliability of roads, bridges and more for years to come.

The report card analyzes 18 infrastructure categories: aviation, broadband (new category), drinking water, hazardous waste, levees, public parks, roads, solid waste, transit, bridges, dams, energy, inland waterways, ports, rail, schools, stormwater and wastewater.

Long-time engineer and ASCE public policy committee member Maria Lehman says the nation’s infrastructure report card – released every 5 years – was well along when COVID-19 hit.

“From my public sector lens, too many public entities were in a death spiral in terms of how the pandemic was going to affect them,” Lehman said. “In June 2020, the ASCE published a report card as a roll-up without any grades because the data wasn’t going to be live at that stage, with our analysis and predictions about how transportation infrastructure was going to be affected. At that point in time, it was difficult to understand what the mid-March (2020) funding relief bill would mean at a granular level. How is the relief money going to match up with the losses in sectors such as aviation? Those are the questions we asked last year.”

In March 2021, the ASCE released its official national infrastructure report card, citing that the U.S.’s grade of C- is reflective of an “old age crisis,” according to Lehman.

“There is a water main break in this country every 2 minutes,” she said, “creating an estimated 6 billion gallons of treated water lost each day, enough to fill more than 9,000 swimming pools. We have collectively left 43 percent of our public roadways in poor or mediocre condition, a number that has remained stagnant over the past several years. There are 30,000 miles of inventoried levees across the U.S. plus an additional 10,000 miles of levees whose location and condition are unknown.”

More than 178 million trips per day are taken over 617,000 U.S. bridges daily by school buses, cars and trucks, according to the ASCE. Lehman says the American Association of State Highway and Transportation Officials estimates a 30 percent decline in revenue over the past 18 months. “This (national) report card reflects the first time that there are more fair and poor bridges in the U.S. than good ones,” she added.

And while there are far fewer transit users since COVID-19 struck, large cities’ transit systems were required to continue operating to provide essential employees with public transportation.

“The federal government has allowed states to flex the (federal) relief money to use it for transportation infrastructure,” said Lehman, “but at the same time more than a dozen states are challenging the provision that you can’t use relief money to lower taxes. I think there’s a disconnect between reinvesting that money in badly needed infrastructure work and putting people back to work in the process.”

The most recent report card about Missouri’s infrastructure, released in 2018, also cited a grade of C-.

For more information and analysis, see https://infrastructurereportcard.org/.

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