States, Municipalities Push Ahead with Innovative P3s

Even in an improving economy, and with Congress’s temporary rescue of the Federal Highway Trust Fund, states are faced with further shortfalls in federal funding for vital transportation infrastructure such as roads and bridges.  But some states are finding a solution in alternative delivery mechanisms such as Design-Build and Public Private Partnerships (P3s). 

Some are moving ahead at a rapid pace.

In Pennsylvania, the state department of transportation is moving forward a plan to use P3 delivery for an ambitious program to replace and repair at least 500 of the state’s bridges.   Four teams have been selected to submit proposals based on their ability to finance the project, their background and experience in managing similar assignments and their understanding of the project.  Selection of a preferred team is expected this fall with construction slated to begin in 2015.

In Florida, the state DoT has just completed its first ever transportation P3 funded by a TIFIA loan from the US DoT, adding three innovative reversible lanes to the six-lane Interstate 595 in Broward County to relieve congestion around Ft. Lauderdale.  So far, the $1.8 billion project has been a major success, shaving years off the state’s project timeline and coming in $275 million under budget.

Further south, the cities of Miami and Miami Beach, working with Miami-Dade County, are considering a P3 to build a passenger rail link between the two communities.  Although the current plan is in its infancy, the project has been talked about for many years and almost got off the ground in 2004 at a cost of $480 million.  It’s now become the county’s top priority transit initiative and studies suggest a P3 delivery could result in a lower cost to build and a faster delivery.   Estimates suggest that the project could cost as little as $532 million, not much over the cost estimates anticipated 10 years ago. 

Alternative deliveries such as P3s, Design-Build and Design-Build-Operate-Maintain are no panacea.  There are times, situations and projects where traditional delivery methods still work best.  All methods of delivering construction projects create valuable jobs needed to keep the economy moving forward.  But for states like California to remain competitive, they must embrace innovation, creativity and global best practices.   Design-build and P3s must be part of the solution.

Time for California to take the road less traveled?

Like the roads and bridges we drive on, our state’s transportation financing policy is in a state of collapse.

In Washington, D.C., legislators went down to the wire to temporarily rescue the Highway Trust Fund, the primary source for financing this country’s highway and mass transit improvements. The rescue is only a stop-gap measure; the Highway Trust Fund will run out of money again by next June.  The Highway Trust Fund supports fifty percent of California’s Highway Capital Program. 

If that weren’t bad enough, in California we face our own funding issues. The successful $20 billion Prop 1B bond program that financed many projects over the last few years has ended and Caltrans has projected a $290 billion shortfall through 2020 for the maintenance and expansion of the state’s roads and highways. Future state and federal revenue for transportation improvements is expected to drop by 40%, compared to the levels of the last five years.

So, here’s the dilemma:  in order to grow our economy in a sustainable way, we need good roads and highways – to carry goods and our growing population.  Roads need constant maintenance and, as our population grows, more cars use those roads, traffic patterns change and require new road solutions.   How do we pay for them?

 “Build California Better,“ a white paper just released by ACEC California, addresses this issue and looks at alternative paths California may take to keep our roads and highways in the condition needed to support further economic growth.

Key to the issue is understanding the state gas tax, which was conceived to help finance road maintenance and improvements.  Gas tax revenue however, hasn’t kept pace with inflation and is actually on the decline as more Californians drive vehicles with greater fuel efficiency or, increasingly, no dependence on gas at all: in 2010 there were just two models of electric car on the market, today there are more than 20.

So, an increase in the gas tax – viewed as political suicide by many – isn’t even a long term guarantee that the state will take in more revenue.  As more Californians adopt hybrid or electric technology, fewer will purchase gas. 

It’s time for some ‘outside-the-box’ thinking on this issue.  The purpose of “Build California Better” is to promote that kind of thinking, enhance discussion and, hopefully, encourage our state’s politicians and visionaries to deliver a long term, sustainable funding plan for our transportation infrastructure.  

Stanford Tour Highlights Engineering Excellence

On June 11th, about two dozen members of ACEC California toured the Bing Concert Hall on the campus of Stanford University.  The $112M project, which opened in January, was given ACEC California's highest award for engineering excellence, the Golden State Award, earlier this year.

Principal and project engineer Ray Pugliesi and President and CEO Stacy Bartoletti of San Francisco-based Degenkolb, the ACEC member firm which designed the Bing project, were on hand to discuss the project's engineering challenges.  According to Pugliesi, the entire project took more than six years from concept and design to completion of construction.

In the words of concert hall's operations manager and tour director Matt Rodriguez, "The Bing is really a unique building  and Stanford had the foresight to put together a great team to design and build it."

Matt added that the team, combined with a BIM process that saw the entire building engineered and design on computer before construction began, kept the project on time and on budget.

The 842-seat symphony hall is visually and structurally impressive and was designed to provide superior acoustics for symphonic music, no audience member is more than 75 feet from the stage.  Benefactors and Stanford alums Dr. Peter Bing and his wife, Helen, insisted on making the viewing experience as comfortable and "organic" as possible.  As a result, the hall has seats that are up to six inches wider than standard theater seating and some have more than a foot of extra leg room.

Congress Moves Ahead on Transportation Reauthorization

Good news out of Washington – not coincidentally, National Infrastructure Week and National Transportation Week --  as the U.S.  Senate’s Environment and Public Works Committee unanimously approved a bill reauthorizing $265 billion in funding for critical infrastructure and transportation-related development.

The bi-partisan bill, S-2322, also known as the Moving Ahead for Progress in the 21^st Century or MAP-21 Reauthorization Act, would provide the states with six years of funding stability, protecting current levels of investment and including an inflationary adjustment.  The bill maintains the core programs and formulas established in MAP-21, creates a new freight mobility program, leverages more private sector investment through the TIFIA program and state infrastructure banks, and authorizes a new pilot study on mileage-based fees to fund the Highway Trust Fund in future years.

The bill is here.  A summary of the bill is here.   

The Key to Good Planning is Balance

As a statewide organization representing more than 800 private engineering and land surveying firms and some 18,000 professionals, ACEC California is often asked to engage in efforts related to new zoning regulations and regional and urban planning.

There are a lot of legislative attempts to bring clarity to planning processes but because of the sheer weight of legislation already on the books, it takes an extremely well-crafted bill to make the grade.  A bill, now before the Assembly, which aims to protect agricultural land, may be well intentioned but doesn’t make the grade.

California should be sympathetic to the desire to guard against and mitigate for the loss of important farmlands.  In fact, some good, tested programs are already on the books.  The Williamson Act provides a property tax reduction incentive to farmers who want to commit land to agricultural use. The California Environmental Quality Act (CEQA) requires a finding of significant impact if a project converts farm or forest land to another use.  And SB 375, establishes a framework for regional planning agencies to integrate transportation, housing and land use plans into performance targets for greenhouse gas emission reductions.   

Any additional legislation needs to be accretive to this body of law, not contradictory or duplicative.  Through this lens, ACEC California works to ensure that present and future legislative efforts to add to this body of law be balanced, focused, and funded.