Monday, October 6, 2008

In Tarrant County, road projects are going nowhere in a hurry

By ANTHONY SPANGLER - Fort Worth Star Telegram - Mon, Oct. 06, 2008

FORT WORTH — The city of Saginaw wanted to widen an east-west thoroughfare from three lanes to six with a divided median.

Even though it combined more than $7 million in federal funds and matching dollars in the 2006 Tarrant County bond program, the city of 19,000, which has a budget of $30 million, is finding it difficult to come up with its share of the money for the project.

Now, Saginaw plans to take the Longhorn Road project back to the county commissioners to request a scaled-back version that would instead widen it to four, undivided lanes.

"The escalating costs, since the concept of the projects were done back in 2005, have made it too expensive right now," said Dolph Johnson, assistant city manager and finance director.

"The city’s share is about $1 million more than what we had expected. It would be difficult for us to come up with the difference."

Rising construction costs, tightening municipal budgets and a national credit crunch are preventing some Tarrant County cities from tapping into $140 million in matching road funds in the bond package that was approved by voters in 2006.

About 90 percent of the transportation projects in the $433 million program have been delayed at least a year. Some have been delayed as long as three years.

And several cities are coming back to the county commissioners, asking to scale back or otherwise alter their project plans to make them affordable.

Commissioner Gary Fickes warns that the problem could get worse as city budgets tighten and construction costs continue to rise.

"Time is killing them," he said during a recent discussion of the project delays. "I think the longer this goes on, the worse it is going to get."

Skyrocketing costs

The 2006 bond program set aside money to match cities’ contribution for road projects that would reduce congestion, ease traffic problems and improve air quality. Under the program, cities must cover the costs of inflation.

Since 2005, the cost of concrete has risen about 20 percent; the cost of steel about 83 percent; and the cost of asphalt paving mixtures about 107 percent, according to Labor Department commodity data.

"They submitted the projected costs in 2005, but those estimates were pre-Katrina, Rita and Ike," said Renee Lamb, Tarrant County transportation director. "The rising cost is the reason for some of the delays, according to what cities have told us. Some of the cities are awaiting bond elections this November to come up with their portion of these projects."

She said the financial crisis may make it difficult for cities to borrow money in the near future.

"I’m sure that the financial side is playing a factor in some of these delays, but it is not in anyone’s best interest to delay because construction costs are not going to go down anytime soon," Lamb said.

Set aside

Tarrant County Administrator G.K. Maenius said some cities have already set aside money for the road projects and others may not issue debt until after the financial crisis passes.

Earlier this year, Tarrant County sold $112 million in bonds as part of the 2006 program, paying 4.36 percent on that debt. The county invested the money in accounts that are earning about 3 percent annually.

Maenius said cities that try to sell bonds, or certificates of obligation, which are typically paid for with property taxes, for capital projects such as road construction may find it difficult.

"It will be a matter of timing, when they go out and try to borrow that money," he said. "A big problem will be that money will only be available to individuals and governments that are credit-worthy. I’m sure the rating agencies are going to be taking a really hard look on any government that they rate."

Read more in the Fort Worth Star Telegram

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