Moving On

North Carolina DOT is Facing Up to Its Funding Gap

Trying to overcome past funding problems, the state transportation agency has several large projects under way and more in the works.

By Debra Wood

Struggling to keep highway projects in the pipeline, the North Carolina Department of Transportation will borrow against future federal funding to accelerate needed improvements in its highway system and to keep work moving forward.

“Fifteen to 16 percent inflation cost per year during the last three years really cuts your buying power,” says Berry Jenkins, director of the Highway-Heavy Division of the Carolinas Associated General Contractors in Raleigh, N.C.

“We’ve been in a bit of a slump the last couple of years because of the funding levels available,” he adds. “That is starting to turn around to some degree. [The NCDOT’s] program should be significantly larger this year than it has been in 2006 and 2005. There is an effort in the General Assembly to try to get additional funding for transportation needs in North Carolina.”

Steve Varnedoe, chief engineer for NCDOT, agrees rising construction costs have forced the department to cut back on projects during the last three years. In 2005, Southeast Construction reported that the department may have been spending its cash reserves more quickly than expected. As a result of that faster spending, NCDOT has switched, at the request of the Legislature, from a pay-as-you-go system that retained close to $1 billion in a special account to be dispersed as projects were let to a cash management system. He says the new system has allowed the agency to more accurately project and track its expenditures.

That move helped slow down funding, which had been at about $1.4 billion in 2003 and $1.3 billion in 2004 but then decreased to around $519.7 million in 2005. NCDOT awarded approximately $791.6 million of contracts in 2006.

To bump up its funding again, NCDOT will now turn to Grant Anticipation Revenue Vehicles or “GARVEE” bonds to finance jobs. Essentially the state can borrow up to about $900 million against future federal funding.

“Long-term, it will reduce your federal dollars coming in, but it lets you take advantage of getting much needed work done now at a potentially lower cost than having to defer the work,” says Varnedoe.

Varnedoe anticipates letting $700 million in traditionally funded bridge and road contracts this year, plus $200 million in GARVEE-funded jobs. One of the biggest to be awarded will be a $100 million project on U.S. 311 in High Point. Other projects will be bridges at Sunset Beach and Oak Island.

NCDOT also will complete about $200 million to $275 million in rehabilitation projects this year. These range from $2 million to $20 million each. The agency also plans to award in the near future a $28 million performance-based maintenance contract for the Charlotte area.

Jenkins expects the North Carolina Turnpike Authority will let its first projects, in the Raleigh-Durham Research Triangle area, later this year. The state Legislature created the authority in 2001 and placed it for administrative purposes within the NCDOT. The law specifically empowers it to act independently.

NCDOT has employed the design-build method on more than 20 projects so far, and Varnedoe anticipates continuing to do so. Jenkins says the agency is using design-build more effectively now, on projects with more room for innovation and efficiencies.

Jenkins also anticipates local governments may be granted authority to develop local infrastructure, which could result in faster completion of projects. “These will be the first toll-road projects we have had in North Carolina, although they still need funding out of the General Assembly. But we are pretty confident that will occur,” Jenkins says. “Their goal is to try to advertise through the design-build process in June, with the idea of going through the process and making the award in December of this year.”

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Projects Under Way 

Despite the funding issues, NCDOT is moving forward on numerous major projects. The agency awarded a joint venture of Flatiron Constructors of Longmont, Colo., and United Contractors of Irmo, S.C., a $192 million design-build project in February 2006 for the 8-mi U.S. 17 Washington Bypass in Beaufort County. Earth Tech of Long Beach, Calif., provided the design work. Construction began about one year later on the coastal route, and is scheduled to wrap up by 2010.

“It’s the largest design-build contract the DOT has awarded to date,” says Paul Newman, project manager for Flatiron.

“We wanted to take advantage of accelerated construction on that project,” Neil Lassiter, division engineer for NCDOT, says about why the agency opted for the design-build method. “With costs skyrocketing, we thought we would have some benefits.”

The project includes two interchanges and a 3-mi-long Asta bridge that spans the Tar River and wetlands. Flatiron/United chose a top-down construction method using a gantry, rather than constructing a temporary work bridge. Crews will start at either side of the river and work their way across. They will drive piles, cast pile caps, place girders and pave the deck from the gantry.

 “We won’t have to get down to the water edge or wetlands with any real equipment, except to do clearing operations,” Newman says.

Bridge work will start in May or June, pending approval from the U.S. Coast Guard. Flatiron/United has subcontracted the road construction on either side of the bridge to S.T. Wooten of Wilson, N.C.

NCDOT expects Tidewater Skanska of Virginia Beach, Va., to finish a $94 million section of Interstate 485 in Charlotte in December. The project, which began in December 2003, includes 21 bridges and an interchange at Interstate 77.

“For the configuration of the interchange at I-77, we had to relocate a section of a U.S. route so the ramps and distribution lanes could all fit in,” says Tawana Brooks, division construction engineer for NCDOT. “We have a bridge that the one end splits into a ‘Y.’ Typically, we have bridges that carry one corridor of traffic. But the end of this bridge has a loop and a ramp where they come together.”

Blythe Construction of Charlotte was scheduled to complete another $48.6 million section of I-485 in May.

Projects nearing completion

Also by May, Lane Construction of Meriden, Conn., anticipates finishing two sections of the new Interstate 540 outer loop around Raleigh. It began construction in February 2004.

“As the city sprawled, there was a major need for another loop around the city,” says Wally Bowman, division engineer for NCDOT. “This is a high-growth area.”

The work includes a $68.4 million, 3.3-mi section and a $44.3 million, 1.7-mi segment. Some portions are four lanes while others are six. Crews did not have to build under traffic, except at the interchanges.

“There is 6 million yds of grading, a lot of drainage work and 130,000 cu yds of concrete paving,” says Don Cross, executive vice president for Lane.

The NCDOT is still working on plans to complete the southern portion of the outer loop.

Additionally, Granite Construction of Watsonville, Calif., has substantially finished a $188 million widening of an 8-mi stretch of Interstate 85 in Durham. The contract included seven interchanges and 18 new bridges.

Due to elevation changes, crews installed both temporary and permanent retaining walls, Bowman says.

BMCO Construction of Lumberton, N.C., was scheduled to complete a $65 million, 16.2-mi section of Interstate 73/Interstate 74 in Richmond County later this summer.

Two sections of the Greensboro Western Loop are expected to open this fall. Archer Western Contractors of Atlanta holds a $116.5 million contract for the first 7.6-mi section. Thompson-Arthur Division of APAC Atlantic of Greensboro, N.C., began work on the second $101.6 million, 4-mi section in August 2003..