AASHTO Journal, 8 May 2015
The state of Utah is delaying 25 highway paving projects worth $65 million from this year’s bidding schedule for its weather-shortened construction calendar, a state senator told Congress (see related AJ story), because of uncertainty over when the federal share of project costs might be reimbursed from the Highway Trust Fund.
Utah State Sen. Curt Bramble, who is president-elect of the National Conference of State Legislatures, made the disclosure May 5 in testimony at a U.S. Senate Commerce subcommittee hearing on the importance of a long-term reauthorization of the trust fund.
His testimony comes at a time a number of congressional leaders are indicating Congress will probably enact a short-term extension before the trust fund’s authority expires May 31, and put off trying to pass a long-term bill until later this year.
Bramble told lawmakers: “The uncertainty that pervades short-term extensions makes it extremely challenging for states to adequately plan and achieve their performance targets, especially because many transportation infrastructure projects require a multi-year commitment. It is difficult for me to overstate the negative state impacts this uncertainty creates.”
He explained that Utah, like many other cold-weather states, has a limited road project season every year. It schedules bid lettings “to maximize competitive bids and take into account the capacity of contractors to prepare bids for multiple projects at any one time,” Bramble said, and aims to have its entire construction program bid out by May each year.
However, he said, “due to the uncertainty of federal funding and short-term extensions … Utah withheld one-third of our bid letting for the current year.”
Now, even if Congress extends that authorization beyond May, he said, “a portion of the 2015 construction program will be lost. While we could resume bidding activities later, it will be too late for larger paving projects. We anticipate 25 projects with a total value of $65 million will be deferred to next year. These delays have a harmful impact on the state’s broader economy.”
As AASHTO Journal has reported, at least four other states – Tennessee, Georgia, Arkansas and Wyoming – have already publicly identified more than $1.3 billion in highway construction and paving projects that they have delayed from this year’s schedule, out of concern the federal funds might not be readily available when the states would need to pay bills from their contractors.
The Utah Department of Transportation provided Bramble with information for his testimony about the project delays. UDOT Executive Director Carlos Braceras also told AASHTO Journal that once Congress acts to extend the trust fund, his department will see how many of the delayed projects can still be bid out this year.
But Braceras said contractors will not be able to get to all the delayed paving projects in Utah’s short construction period, so some of them will have to wait until 2016. And “I anticipate that the costs will rise” for those put off to next year, he said, even in a period of low inflation for construction costs.
All of this, Braceras emphasized, “is a direct result of us not having a long-term federal transportation program,” and the uncertainty that brings as to when federal dollars will arrive for projects.
These project interruptions are in the home state of Sen. Orrin Hatch, who chairs the Senate Finance Committee that, along with its House counterpart, would need to find revenue to cover a short-term extension of the trust fund or a long-term bill.
“Sen. Hatch is well aware of the issues we are dealing with” in project delays and a short season to work on road improvements, Braceras said.
Hatch has said he wants to extend the trust fund through December to give lawmakers more time to try to negotiate a broad tax reform that could include money for a long-term surface transportation bill. Such an extension would get states through the rest of the 2015 work season.