FDOT: Plenty of Work Zones Ahead

Already a national leader, FDOT is expanding use of innovative delivery methods

By Debra Wood

Facing challenges to build adequate capacity for its ever-growing infrastructure needs and keep traffic flowing, the Florida Department of Transportation has turned to new strategies to speed construction.

“We have a robust work program, delivering a significant amount of projects,” says Lowell Clary, assistant secretary for finance at FDOT. “When you have a growth state, like Florida, necessity is the mother of invention. We have significant needs, and we’re focusing on innovative ways to meet those needs.”

FDOT’s tentative construction budget as of April 10, 2007, calls for $3.2 billion for Fiscal 2007, before declining to $2.1 billion in 2008. Construction spending then will jump up again to an estimated $2.7 billion in 2009 and $2.6 billion in 2010, before declining again to $2.2 billion in 2011 and $2 billion in 2012. Those future numbers are roughly on par with FDOT’s recent construction budgets: 2004—$2.3 billion; 2005—$3.1 billion; and 2006—$2.1 billion.

Regarding the relative up-and-down nature of those numbers, John D. Cross, manager of production management for FDOT in Tallahassee, says “The department is not seeing diminishing funds, but we do experience different level of construction projects because of when projects are ready to go to construction.”

Despite the significant spending, Robert G. Burleson, president of the Florida Transportation Builders Association, estimates that the state has $30 billion or more in unfunded projects during the next 10 years.

And not keeping up with those needs presents serious challenges to the economy because of the importance of keeping freight moving, says Gene McCormick, senior vice president of Parsons Brinckerhoff in Naples and recent chairman of the American Road & Transportation Builders Association. However, he adds that “Florida recognizes its transportation needs and has done a good job of addressing them.”

“FDOT has had to be even more creative than ever to stretch its dollars and use new ways to build what is badly needed for safety and capacity improvements,” adds Jim Anglin, vice president and director of special projects for HNTB in Lake Mary, Fla.

The agency speeds delivery of road projects through partnerships with local governments and private entities. Clary says sales tax initiatives in Jacksonville and Tallahassee allowed those two communities to accelerate projects they considered priorities.

“We need for the states and local municipal governments to take a more active role to provide for [capacity improvements and access],” says Sia Kusha, Florida district leader for HNTB. “Unfortunately, the limited source of public funds for those investments is the reason behind the significant growth of innovative financing and toll roads and implementation of private equity and different elements to deliver transportation infrastructure.”

Currently, HNTB is completing a widening redesign to accommodate FDOT’s budget on a 2-mi segment of Interstate 275 just west of downtown Tampa in the Westshore Business District. Construction of the first phase of this project will cost $277.5 million, begin in 2007 and wrap up in 2012. Ultimate construction cost will exceed $500 million.

Additionally, construction continues on the $204.5 million I-275 Tampa Airport Interchanges project. A joint venture of Flatiron Constructors of Longmont, Colo., and Tidewater Skanska of Virginia Beach, Va., began the 3-mi job in August 2005, with completion scheduled for spring 2010. The new multilevel interchange will separate local and through traffic with collector/distributor roads.

Also in Tampa, Omaha, Neb.-based Kiewit Corp. is adding four lanes to Interstate 4 from west of 14th Street to east of 50th Street. The $167 million, 3.2-mi project includes reconstruction of bridges to increase height clearances and improvements to interchange ramps. The project was 95% complete in May, with the contractor 10 months ahead of schedule and on track for an early-completion incentive in late July.

Another major project is under way in Jacksonville. Archer Western Contractors of Jacksonville began work in 2005 on the $150 million Interstate 10/Interstate 95 interchange, scheduled for completion in early 2011. The project was 54% complete in May, with a northbound I-95 ramp from the downtown area expected to open in July.

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The federal funding question

A looming crisis with the federal Highway Trust Fund could hurt Florida – and many other state DOTs. The fund spends more than it collects in gas tax revenue, says Burleson, who adds that with more fuel-efficient vehicles and alternative fuels, the country must look at other funding sources, such as a fee for miles driven. Decreases in federal expenditures could result in millions of dollars in lost revenue for the state.

“Any cut has implications for Florida,” says McCormick, explaining that Florida receives a little more than 5% of the nationwide highway funding. “It’s a serious problem. People recognize it, but there hasn’t been a solution put forward yet.”

Even so, the effect may not be as significant for Florida as for other states. That’s because less than 25 percent of the state’s transportation construction funds comes from the federal government, compared to 40 percent 10 years ago. 

Clary says he is not concerned about the current state of the federal trust fund because Congress can deficit spend and traditionally has taken action not to let declining gas tax dollars dictate cutbacks.

“We are hopeful Congress will continue forward with the transportation program at the level it is or higher, but we’re assuming it will not grow beyond 2009 or very minimally,” he adds.

Taking design-build a step further

The state has long used design-build as a delivery method, including high-profile projects such as the $245 million Escambia Bay Bridge replacement. Tidewater/Flatiron completed the first 2.6-mi span in December and expects to open the second one later this year.  

HNTB/Kiewit received a $148 million design-build contract to widen from four to six lanes 10 mi of I-95 in Brevard County. The project began in March and is scheduled for completion in October 2009.

“FDOT has been on the cutting edge of new ways of contracting for the last several years,” Burleson says. “They use a lot more design-build than other state DOTs.”

Last year, FDOT decided to take the concept a step further to also include financing. This spring it awarded a $430 million contract to ACCI/API, a joint venture of Anderson Columbia Co. of Lake City, Fla., and Ajax Paving Industries of Nokomis, Fla., to design, build and finance construction of one lane in each direction along 30 mi of Interstate 75 in Lee and Collier counties. HDR of Omaha will design the expansion.

The project, originally scheduled to take up to nine years, will start later this year and wrap up in 2010. FDOT will pay for the work over five years.

“The hope would be that the inflation savings of doing it today would offset any interest cost of financing,” Clary says.

FDOT is still considering a Southwest Florida Expressway Authority proposal to toll the two new I-75 lanes to finance future construction of four additional lanes. Clary says the state will listen to residents of the area before making a decision.

Clary adds that the department in investigating using design-build-finance to add capacity to other roads, including U.S. 1 in Miami-Dade County and a segment of I-4 in Volusia County.

Adding another component

In Miami, FDOT is taking design-build-finance to yet another level, adding operate and maintain aspects to the Port of Miami Tunnel contract, which is valued at more than $1 billion overall. The state leads the project in partnership with Miami-Dade County and the city of Miami. The local entities still must sign an interlocal agreement before work can begin.

A selection committee, made up of FDOT and Miami-Dade County officials, picked Miami Access Tunnel. It submitted the lowest bid with a plan to complete construction in 47 months.

FDOT has announced plans to award the job to the team, which includes Babcock & Brown of Australia as lead equity partner; Bouygues Travaux Publics of France, the lead contractor; Bouygues Travaux Publics/Jacobs Engineering, headquartered in Pasadena, Calif., as the lead engineering firm; and Transfield Services of Australia as the operations and maintenance firm. The contract signing is scheduled for August.

However, at presstime, some members of the local community were calling into question the winning firm’s past dealings with Cuba—a hot-button issue in Miami.

FDOT is considering another design-build-finance-operate-and-maintain project—the 40-mi-long, $2 billion First Coast Outer Beltway in Duval and Clay counties, now in environmental studies. Clary anticipates proceeding to procurement in late 2007 or early 2008.

“We’re not going to do it as our bread-and-butter, but in the right situation, where it makes sense, it is something we would consider,” he says.

A bill passed during the 2007 legislative session will allow FDOT to lease existing toll facilities to private entities. Clary says the department is investigating the possibilities of doing so but has no current plans to partner on current roadways. 

“It will allow added capacity along existing corridors,” HNTB’s Kusha says.

While public-private partnerships seem hot these days, Burleson says he does not view them as a panacea.

Useful Sources

FDOT Major Project
http://www.dot.state.fl.us/Projects.shtm