Leo Journagan Construction Co. Vice President John View says the highway contractor is running at half speed in terms of its employment level at this time of year.
Roads picture sours after busy summer
By Chris Roberts and Chris Wrinkle
Cuts in federal funding are hitting the transportation industry hard, causing members of the Missouri Department of Transportation and subcontractors in the area to cast a wary eye to the future.
A combination of Amendment 3 bonds and federal stimulus money has allowed MoDOT to tackle projects at an average rate of $1.25 billion per year during the past five years. But lagging state revenues, lack of federal funding and an end to the Amendment 3 bonds mean MoDOT will have to cut its budget by $750 million a year during the next five years. The $5.7 billion 2011–15 Statewide Transportation Improvement Program draft completed its public review June 4, and will be considered for approval by the Missouri Highways and Transportation Commission by July 1.
Amendment 3, approved by Missouri voters in 2004, redirects highway user fees such as fuel and vehicle taxes to state road and bridge projects. The amendment required MoDOT to sell bonds to leverage the additional funding the agency received, rather than using the proceeds on a pay-as-you-go basis, and now Amendment 3 funds are being used to make the bond payments.
“We’ve been preparing for scaling back for some time knowing that this was going to happen,” said Frank Miller, MoDOT’s planning manager for District 8 in Springfield. “You’re going to see a shift in projects from the huge capacity improvements like the 60-65 interchange – which is itself a $60 million project – down to just resurfacing and repairing bridges and replacing bridges and maybe even smaller-scale projects.”
According to Scott Bachman, planning manager for MoDOT’s Southwest District in Joplin, a drop to $500 million per year means holding or eliminating many projects across the state. He said MoDOT also is planning to eliminate more than 400 jobs through attrition by the end of June 2013.
Miller said the Springfield office plans to make job cuts through attrition, though no number has been set.
“As retirements occur, we’re going to move people where they need to be to meet our critical services,” Miller said.
Work on 57 summer projects in MoDOT District 8, which covers 13 counties including Greene, will continue despite the budget shortfall, but the outlook for projects beyond summer is grim, according to District 8 spokesman Bob Edwards.
“We’re having less money – it’s going downhill over the next five years – but there are no projects on the books that we’re not going to do because of what happened this year,” said Edwards.
“There are things that we won’t be able to put on the five-year plan, but we didn’t have anything planned that we’ll have to take off,” Edwards said. “We just won’t be able to do quite as much. Everything that’s going now we have the money for and … we’re going to finish it.”
Contractors in crunch Among the ongoing area projects are two by Columbia-based Emery Sapp and Sons. The company is performing the $27 million widening of Highway 65 to six lanes between James River Freeway and Interstate 44 and the $16 million widening of Highway 5 north of Lebanon.
Another major project this summer is the $57 million Amendment 3-funded Route 60/Route 65 interchange project to replace bridges and build two flyover ramps. MoDOT has set an October 2012 completion date for Illinois-based Archer Western Contractors. John View, vice president of Leo Journagan Construction Co. Inc. in Springfield, said MoDOT’s maintain-only approach could present an opportunity.
“The pendulum swings both ways,” View said. “When you get down to just doing maintenance only, maintaining your highways and your roads, that’s generally asphalt work and that’s what we’re best at. It means if they’re going to spend money on asphalt … we’re going to have an opportunity to do it.”
One major project in southwest Missouri that will be shelved for now is the proposed route from Republic to Monett and into northwest Arkansas.
Both Miller and Bachman said a plan for U.S. Route 60 and Missouri Highway 37 would be impossible to complete without additional funding. However, MoDOT still plans to study the proposed roadway.
“We’re still looking at it – just enough to understand it for planning,” Miller said. “It’s not proceeding as far as buying rights of way or even with detailed planning at this point.” Journagan’s View said one of the crunches is on contractors’ employees.
“Let’s face it, if there are no large projects, that means employment opportunities for our employees are very limited,” said View, noting that Journagan is operating with about 160 workers, about half of the company’s usual crew.
“Our employees are laid off and haven’t worked since October,” he added. “It’s not good. This is the middle of the construction season when everybody should be working.”
Beverly Oakes, owner of Joplin-based Beverly’s Traffic Control and Safety Inc., said the hit to the transportation industry mirrors the recent struggles of the construction industry.
“When major contractors don’t have major projects, that parallels us, and we don’t get those jobs either,” said Oakes, who manages traffic plans for construction work zones. Oakes, who also offers Occupational Safety and Health Administration training for workers looking to be certified for job sites, said one ray of light is a push to enforce work-site and public safety. She expects demand for training to rise, even though she said the loss of projects translates to a loss of jobs and therefore fewer workers seeking certification.
“Our business has been decent, but there are a lot of contractors and subcontractors that went out of business last year,” Oakes said. “Good business practices will prevail, but we’re certainly keeping a wary eye on the future.”[[In-content Ad]]