Tuesday, September 23, 2008

In the Face of Funding Shortfalls, States Are Adopting MoDOT’s Cost Savings Plan

JEFFERSON CITY - The Missouri Department of Transportation's innovative highway design concept called Practical Design is quickly becoming a national model because of the cost savings it creates. Several states have taken notice of how Missouri's no-frills plan is meeting the state's transportation needs while cutting costs by more than a half-billion dollars over the last three years.

By using Practical Design, MoDOT saves money by customizing its highway construction projects to fit specific needs rather than applying generic standards across the board. Over the past three years, this method has saved more than $500 million that has been reinvested in additional transportation improvements. So far in fiscal year 2009, MoDOT has delivered $118 million of work $2.4 million, or 2 percent, under budget.

Department officials have worked closely with two states that have implemented spin offs of the Practical Design concept conceived by MoDOT in 2004. The state of Idaho adopted Practical Design in 2007 and, just last month, the state of Kentucky unveiled its Practical Solutions initiative. Other states, seeking out ways to meet their own transportation needs in challenging economic times, have also shown interest in Practical Design.

"Many DOTs across the nation are finding it more and more difficult to work within their budgets due to rising fuel and construction materials costs, growing economic concerns and decreasing state and federal funds," said MoDOT Chief Engineer Kevin Keith. "Money is dwindling while the competition for these resources is increasing. That is requiring DOTs to find ways to get the biggest bang for every transportation buck.

"Practical Design has allowed Missouri to make wise investments in our transportation system, building many ‘good' projects rather than just a few ‘perfect' projects. As financial times get even leaner, this concept will ensure we can stretch every dollar we have to meet as many of our transportation needs as we can."

Implementing Practical Design in conjunction with several other MoDOT initiatives has improved road conditions and made the state's transportation system safer. The Show Me State has gone from having the third worst pavement on major roads to an estimated ninth best, with 78 percent of our major roads now in good condition. Missouri also recorded the second-largest percentage decrease in traffic-related fatalities of any state in the nation over the last two years.

Friday, September 19, 2008

Guest Commentary: 802 Better Bridges By Pete Rahn, director, Missouri Department of Transportation

Within five years, 802 of Missouri’s worst bridges will be repaired or replaced. These badly needed improvements will mean crashes avoided, jobs created and the ability to get where you are going easier.

When we launched the Safe & Sound Bridge Improvement Program in September 2006, we sought to fix 802 of the state’s worst bridges using an innovative design-build-finance-maintain approach. We knew it was a bold step - something no other state had ever attempted - but we also knew it would allow us to quickly accomplish what Missourians wanted us to do: fix our ailing state bridges.

We budgeted $50 million a year out of our federal bridge money to pay for the program. In February 2008 we reached an agreement with Missouri Bridge Partners for nearly everything we sought at a cost of $52.7 million annually. Almost immediately the financial crisis our economy has been experiencing began to impact their proposal. Today, payments are estimated at $65 million to $74 million depending upon actual interest rates at the time of financial close. This is just too expensive. It is not the best use of taxpayers’ money and at this cost could threaten highway and bridge improvements in our adopted five-year construction program.

We’re proud to say we’ll still be delivering 802 improved bridges to Missourians in five years – we’ll just be packaging and paying for the work a little differently. When all is said and done, our new approach will likely save taxpayers $300 million to $500 million.

Here’s how it will work: at least 100 bridges will be under construction early next year using accelerated project management techniques; 554 bridges will be included in a single design-build package that will be advertised this fall and awarded in late spring 2009; the remaining 148 bridges will be improved over the following four years also using an accelerated process. We’ll sell bonds and use federal bridge replacement funds we receive each year to make the annual payment.

Safe & Sound has always been about fixing bad bridges quickly and economically, and that’s exactly what we’re going to do. The experience we gained from this innovative approach suggests the project is very feasible. We worked with many excellent contractors and designers who provided competitive proposals. However, their good work could not overcome the extreme volatility in the nation’s credit markets.

MoDOT has purchased from the final two teams their technical plans and design and exploration data. This is a good value and will allow us to work with our private sector partners to jump-start this important work.

In the end, it’s not really about which delivery method gets us there, but that we get there, that matters. We promised to give Missourians a safer transportation system by fixing hundreds of our lowest-rated bridges in a short amount of time, and we’ll deliver on our promise.

We are excited to get to work. The sooner these bridges are under construction, the sooner Missourians will reap the benefits - safer roads, more jobs and increased mobility.

Thursday, September 18, 2008

MoDOT Launches Largest Bridge Project In State History

JEFFERSON CITY – The Missouri Highways and Transportation Commission today approved plans to improve 802 of Missouri’s lowest rated bridges in five years, starting with 100 structures that will be under construction early next year. The Missouri Department of Transportation, though, will manage the Safe & Sound Bridge Improvement Program differently than the Design-Build-Finance-Maintain contract that was envisioned when the program was launched two years ago.

The Commission decided to conclude the procurement process that had previously identified Missouri Bridge Partners (MBP) as the apparent best-value proposer, citing the turmoil in the financial markets that made the proposal unaffordable, and directed MoDOT to move forward with alternative methods to deliver Safe & Sound.

There will be 554 bridge replacements included in a single design-build package to be advertised this fall and awarded in late spring 2009. The remaining 248 bridges to be improved will be contracted using a modified design-bid-build approach, where projects are grouped by type, size or location to accelerate construction schedules.

“Safe & Sound has always been about fixing bad bridges quickly and economically,” MoDOT Director Pete Rahn said. “The experience of this process tells us that the design-build-finance-maintain approach is very feasible, but for this particular project, at a time of extreme volatility in the nation’s credit markets, the requirement for private financing made Missouri Bridge Partner’s proposal just too expensive for our budget.”

Under the Missouri Bridge Partners plan, MoDOT would have been required to make annual payments that would have ranged between $65-74 million, depending on interest rates.

“We had budgeted for a $50 million annual payment, using roughly one-third of the federal bridge replacement funds Missouri receives each year,” Rahn said. “At a time when we are faced with declining revenues and increasing costs, the Commission was concerned we might not be able to honor our commitments in MoDOT’s five-year construction program if we went forward at a price over our budget. Keeping our promises is the Commission’s absolute top priority.

“The turmoil in the credit markets had a tremendous impact on the cost of this project, and extended contract negotiations while we waited to see if a calming of the credit markets would make this project financially viable. Unfortunately, that did not happen.”

MoDOT has spent $15.6 million on development of the Safe & Sound program, an investment that will enable it to have 100 bridge projects under contract by spring, and will also reduce the cost of other contracting options and speed their implementation. Included in the cost to date are stipends paid to MBP and Team United, the other proposing team that was eliminated from consideration by the Commission in December 2007. Those stipends convey ownership of the technical concepts developed by each team to MoDOT for its future use. Additionally, MBP developed bridge plans and conducted surveys and geotechnical investigations in the field under a Limited Notice to Proceed issued by the Commission in June that MoDOT will use to get work under way. MoDOT also located utilities at bridge locations – work that won’t have to be repeated.

Rahn said MoDOT plans to issue bonds to pay for the project with annual payments of approximately $50 million as budgeted previously. With finance charges, it’s estimated that MoDOT’s new plan will be $300-500 million cheaper than the MBP proposal.

A complete list of all the bridges in the Safe & Sound program and other information can be found on the MoDOT Web site at www.modot.mo.gov/safeandsound.

“Ultimately,” Rahn said, “the question became whether MBP or MoDOT could provide financing for the project at the lowest cost. In view of the present turmoil in the financial markets, the answer is that MoDOT could do it for less.

“Better bridges are coming soon.”

Editor’s note: Recorded comments on this subject from MoDOT Director Pete Rahn can be found at www.modot.org/newsroom.

Tuesday, September 16, 2008

Statement from MoDOT Director Pete Rahn on Federal Highway Trust Fund

JEFFERSON CITY – “MoDOT is grateful that Congress and the President have moved quickly to alleviate the financial crisis we all faced as the Highway Trust Fund plunged into insolvency.

The fact is that this is a short-term solution. The action to replace some $8billion previously taken out of the Trust Fund buys us one year’s breathing room to focus on how the nation will meet its future transportation needs. We have to face up to the reality that America must rebuild and renew our aging system if we hope to give our children the same chance at prosperity that we’ve had.

I hope the bipartisan cooperation that brought all parties together in this crisis will continue as we address the challenge that is just around the corner,” said MoDOT Director Pete Rahn.

Monday, September 15, 2008

Missouri High Schools Challenged to Battle to Buckle Up!

Seat Belt Campaign to Save Teen Lives

Calling all Missouri high schools to battle! The 2008 Battle of the Belt Challenge is under way. Sponsored by the Missouri Coalition for Roadway Safety, the statewide competition is in its third year and will run Sept. 15 – Nov. 21 to educate young drivers about seat belt use and hopefully save lives and reduce traffic-crash injuries.

Although comprising only 7 percent of Missouri’s licensed drivers, young drivers were involved in 19 percent of the fatal and disabling injury crashes. Since 1995 in Missouri, more than 1,900 teen occupants ages 15-19 years old have been killed and more than 20,000 have experienced disabling injuries in nearly 18,000 severe crashes.

To battle these statistics, more than 80 schools took the challenge in 2007, with students performing surprise seat belt checks at their high school, coupled with an educational campaign on the importance of seat belt use. In addition to the peer seat belt checks and educational campaign, students had the opportunity to submit a video of a 30-second television spot. Each winning entry received cash prizes, and the video winner was aired statewide. The top video entry last year was a creative spot featuring a car, a banana peel and a lesson on buckling up. It can be viewed at saveMOyouth.com.

“More than 80 percent of the teens killed in Missouri vehicle crashes each year aren’t buckled up,” said Leanna Depue, chair of the Missouri Coalition for Roadway Safety’s executive committee. “That’s why we’re so excited to have schools participate in the Battle of the Belt challenge. Through education, competition and fun, we can make a difference with Missouri teens and save lives.”

Missouri high schools may choose to participate in one or both components of the program. Prizes will be awarded for each component.

Prizes include:
· $1,000 to the Missouri school with the highest overall safety belt use rate
· $1,000 to the Missouri school with the most improved safety belt use rate
· $1,000 to the student or group producing a winning 30-second video PSA for safety belt use, and professional production of the video and possible use in local and statewide media
· Regional monetary awards for the highest overall safety belt use rate and most improved safety belt use rate

The 2008 Battle of the Belt challenge is sponsored by the Missouri Coalition for Roadway Safety and American Family Insurance.

For more information on Battle of the Belt and last year’s winners, or to sign up your local high school for the 2008 challenge, visit www.saveMOyouth.com.

Buckle Up to Arrive Alive!

Friday, September 5, 2008

Highway Trust Fund Shortfall Could Cause State Highway Projects to be Canceled

JEFFERSON CITY - Today's announcement by the U.S. Department of Transportation that it would curtail federal highway payments to the states could cause Missouri road and bridge projects to be delayed or even canceled. If Congress fails to provide $8 billion to the Federal Highway Trust Fund as requested by U.S. Secretary of Transportation Mary Peters, it could mean Missouri would lose $252 million, which translates to 8,770 jobs lost.

"If Congress doesn't act to shore up the funding in the Federal Highway Trust Fund, we will have to take a hard look at the projects we have planned in our five-year construction program to determine if we'll be able to move ahead with them," said Missouri Department of Transportation Director Pete Rahn. "This will have a devastating ripple effect, because it could mean lost jobs and less business for suppliers and contractors. Our communities will feel the blow, as will the driving public."

The trust fund is primarily funded by federal fuel taxes - 18.4 cents a gallon on gas and 24.4 cents on diesel. Rising fuel costs have sped the depletion of the trust fund. Fewer miles driven and more fuel-efficient vehicles mean fewer gallons of gas bought and lower than expected revenues. In Missouri, fuel tax revenues for July and August were down 8.7 percent compared to last year. About 70 percent of MoDOT's highway construction budget is federally funded.

"This problem has been building for three years, but little to nothing has been done to correct it," Rahn said. "It's time for Congress to use general revenue to reimburse the highway trust fund. Even if that happens, it will just be a short-term fix. In the long run, we need to find better ways and new funding mechanisms to support our nation's vital transportation system."

Editor's note: Taped comments by MoDOT Director Pete Rahn are available on MoDOT's newsroom, www.modot.org/newsroom.

Thursday, September 4, 2008

MoDOT Readies Roads for Tour of Missouri

JEFFERSON CITY – When 120 of the world’s greatest bicyclists spin their way through Missouri Sept. 8-14 for the Tour of Missouri bicycle race, the Missouri Department of Transportation will be working behind the scenes to make sure the way is safe for cyclists, motorists and spectators.

MoDOT has been working with event organizers to map the race routes and develop traffic management plans to minimize the impact on the traveling public. Now that the route is set, MoDOT’s focus is to share information with the public about road closings during the race.

“We’ve worked hard to contribute to making this a successful event for the state of Missouri,” said MoDOT Director Pete Rahn. “As the race goes along, safety for the traveling public and for the cyclists is our major concern.”

MoDOT will also work closely with the Missouri State Highway Patrol throughout the race to secure the routes, Rahn said. Most of the affected roads will be closed a few minutes ahead of the racers and will be opened back up as soon as they pass through, keeping road closings to about 20-30 minutes.

More information about the race, including maps of the race routes, can be found on MoDOT’s Web site, www.modot.org/tourofmissouri, and at www.tourofmissouri.com.