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Local Incentives Could Speed Up Highway Construction

Tue December 04, 2007 - Southeast Edition
Eric Fleischauer -THE DECATUR DAILY

DECATUR, Ala. (AP) It’s never been done before in Alabama, but many think an answer to drawn out construction projects could be local contributions to incentives for early completion of Department of Transportation projects.

“We are increasingly seeing the value of local-state partnerships on road projects,” said Tony Harris, ALDOT spokesman. “I don’t think we would ever turn a deaf ear to local suggestions for innovative approaches. Partnerships involving incentives are certainly something we would consider.”

The president of the Alabama Road Builders Association said he thought locally financed incentives for early completion of road projects could be a powerful tool.

“It’s proven that incentives work,” said Billy Norrell. “If you see municipalities going along to help, I think you would see projects completed a lot more rapidly than you would without them. Under the right circumstances, I think they’d be really effective.”

Beltline Road Southwest is a nightmare of orange. Orange barrels, orange cones, orange signs. The route from one side to the other is a perilous expedition complete with hairpin turns, gravel-spinning accelerations and screeching brakes.

Phase 1 has a completion deadline of 260 working days. There are approximately 150 working days — depending on weather — in a calendar year, so completion is unlikely before June 2008. Phases 2 and 3? Decatur could be looking at continuous construction through 2012.

Partnerships between DOT and local governments have evolved as local governments realize the economic and quality-of-life issues tied to road construction. Guntersville and Huntsville are partnering with DOT on projects. The most innovative partnership is the widening of Alabama 113 in Escambia County.

“That’s a project that would not be under way right now if it were not for Florida and local funds,” Harris said. “Four years ago it wasn’t even in our five-year plan and it’s under construction now.”

What changed was a $1 million local contribution — motivated by economic development concerns — and a $4 million contribution from the state of Florida, motivated by a desire for a hurricane evacuation route.

No local government has approached ALDOT with an offer of early completion incentives, Harris said, but such a proposal could work.

“We’ve got plenty of flexibility in terms of negotiating agreements with local governments,” Harris said. “If local governments come to us with ideas on how to advance a project faster and we see validity to it, we’re empowered to make it happen.”

ALDOT’s interest in a rapid construction process is not paramount.

A tight construction deadline creates more risk for contractors, who have to pay penalties under ALDOT contracts if they do not finish in time. That means ALDOT has to pay the contractor more to take the job.

“If the timeframe is too tight, it’s going to take the cost of the project up enormously,” said Mark Petersohn, director of the Decatur Engineering and Public Works Department. “If the duration of the project is squeezed down and you have penalties for late completion, the cost goes way up because the contractor is assuming all the risk.”

So ALDOT tends to benefit from lengthy construction time frames. Through incentives, local governments could encourage early completion without escalating the base cost of the project.

Petersohn said using local money for incentives could provide major benefits.

“Local involvement could work. The negative, of course, is the cost. You have to be very careful about estimating your time of completion. You have to weigh (the cost of incentives) against the value to the community of early completion. But the time for the Beltline construction could have been whittled down. I think it’s reasonable that you could cut the (Beltline) construction time by 20, maybe 25 percent.”

The drought, bad for many, was excellent for construction. The contractor on Phase 1 of Beltline Road was able to get ahead of schedule, but the contractor has no incentive to finish the project early.

“We sign a contract that sets the number of days they have to complete the project,” Harris said. “If he gets started and feels he can complete it in time, and he has another project going on somewhere else, he may leave to work on the other project. They may have a small project somewhere else that they can knock out quickly, and then come back to the bigger project.”

Incentives, Norrell said, would give contractors a reason to complete a project before the DOT-imposed deadline, thus benefiting the residents affected by construction.

“Properly administered, you would see a lot of contractors wanting to take advantage of projects with local incentives,” Norell said. “A contractor’s not going to turn down an opportunity to finish quicker and make a little more money on his end. I see no reason local governments couldn’t play a role in offering those incentives. That would make projects (like Beltline) get completed much faster.”

Alabama has been timid in the use of incentives, but the reluctant mind-set changed dramatically in 2002.

On Jan. 5, 2002, a tanker truck struck and destroyed a bridge in Birmingham, closing the busiest interchange in the state. Traffic on Interstate 65, Interstate 20 and Interstate 59 was paralyzed. Contractors had the bridge replaced in an unheard of 37 days. The reason? Incentives.

The state required that the bridge be complete within 90 days, but offered $25,000 per day for early completion. The incentives cost the state $1.2 million.

“It was important to the whole state that we finish that project as quickly as we could,” Harris said. “If (ALDOT) did that on every project, though, it would quickly put a drain on our available funds and would reduce the number of projects we could initiate in a given year.”

Using state tax dollars for the incentives made sense because the interchange had a statewide impact. The benefits of expediting construction time on future phases of Beltline Road, and of making Alabama 20 in Limestone County controlled access, are primarily local. A local incentive for a local benefit, said Harris, makes sense.

The daily traffic count through portions of Phase 1 on Beltline Road is 31,710. The occupants of every one of those vehicles are experiencing delays from the construction and the traffic jams it causes. The simplest method of calculating these costs is to multiply the delay by the average wage of residents.

If drivers on Beltline Road are experiencing a 10-minute delay from the Phase 1 construction, the daily road-user cost is about $82,000. This estimate is probably on the low side because it assumes only one occupant per vehicle, and it ignores the delays for people trying to cross Beltline but who are not part of the Beltline traffic count.

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