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Business Observer Thursday, Aug. 6, 2009 13 years ago

Candid Cann

FDOT District One Secretary Stan Cann explains how the federal stimulus plan is affecting $1 billion worth of transportation projects in the region, and to be ready for more toll roads in the future.


FDOT District One Secretary Stan Cann explains how the federal stimulus plan is affecting $1 billion worth of transportation projects in the region, and to be ready for more toll roads in the future.

The good news is that the Gulf Coast's eight counties, from Pasco to Collier, can expect to see nearly $1 billion of stimulus-related transportation projects underway soon as the federal gravy train makes its way to local contractors.

The bad news is that few projects add new capacity — much of it is sidewalks, bike paths and pavement resurfacing — and Florida is last in per capita federal stimulus funds received thus far, having only received $505 per person compared to $634 nationally. That's less than 80% of the national average. To catch up, Florida would need another $2.4 billion to match the U.S. per capita average.

Alas, Florida should be getting used to its second-class citizen status in road-funding. Florida has been receiving only about 86 cents on the dollar it sends to Washington, D.C. in gas taxes.

Back to the “good” news category — as long as we leave out having to pay all of the stimulus spending back some day -- federal stimulus dollars will pay for about 37% of total project costs for projects receiving some stimulus money for the eight Gulf Coast counties. That's $361 million out of $968 million.

Percentage-wise, it's a bit better for Florida Department of Transportation District One Secretary Stan Cann. His 12-county, mostly rural district includes the five urbanized coastal counties from Manatee south to Collier, and has $244 million of part stimulus projects that are 85% paid for with stimulus money. About another $60 million of projects in his work program are not tied to stimulus funds.

District Seven, which includes Pasco, Pinellas, and Hillsborough is getting slightly more transportation stimulus money, $223 million compared to $208 million for District 1, but will be using the federal largesse to leverage $815 million in total stimulus-related project costs. That's barely 27% of the total costs for their stimulus project list.

The state's getting $1.73 billion in transportation funding which includes $1.35 billion for highways and bridges. The rest goes to airport and transit projects.

The state can apply for another $1.5 billion in discretionary grants for transportation and has already signaled plans to apply for some of the $8 billion for high-speed rail connecting Tampa, Orlando and Miami. Even if Florida gets a quarter of that, it could be a Trojan horse to pay for the inevitable operations and maintenance expenses.

A few Gulf Coast counties may feel like they have more to gripe about. In Hillsborough County, they're getting less than 22% of stimulus project costs paid for with stimulus funds — the balance coming from state and local sources. Compare that to Lee County, where more than 95% of their project costs are funded with stimulus bucks.

Cann, who has been district secretary since July 2004, explains what's going on here, and shines his headlights on the future of transportation in the state and particularly Southwest Florida.

Cann is a civil engineer graduate of the University of Florida and a registered professional engineer. He started out with FDOT in 1973 and worked in the private sector in Colorado and California from 1994 to 2004. Cann also served as District 6 secretary in 1994.

The following is an edited version of a Review conversation with Cann.

Q: In District 1, 85% of stimulus project costs are being funded by stimulus funds, but in District 7 it's only about 27% and seems to vary pretty widely across the counties. (See table.) What accounts for that?

A: District 7 has a couple of really large projects, the Selmon Crosstown and U.S. 19 in Pinellas. Those are projects that had funding already programmed, and not enough to get it done. Stimulus comes along and provides the additional funds. So, you combine and leverage all that money with what you got and you get the project done. Now, they can achieve projects, which is really going to generate more jobs.

Q: I heard that capacity-adding road projects, such as Cattlemen Road in Sarasota, were pulled from consideration for economic stimulus funds because it would have delayed projects due to the federal requirements. Can you confirm that?

A: What we wanted to do in that period of time was projects that were, quote, “shovel ready” projects. The federal government has requirements for analysis of alternatives and also right-of-way acquisition. Right-of-way acquisition takes about two years to complete. The purpose of the stimulus, of course, is to create jobs now, not three years down the line.

Cattlemen Road is a brand new alignment. Sarasota County has made some good progress in their project development. But they weren't quite there yet. The right-of-way — that's all going to be donated by local property owners.
No one is going to have to go in and take the property.

With what Sarasota has been able to accomplish we have funded U.S. 301 in downtown Sarasota, that second phase of the project there (Myrtle Street to DeSoto Road) with stimulus dollars. That project was already in the five-year program in year 2012. By us taking money out of U.S. 301, it made it so money was available for another project.

The MPO (Sarasota-Manatee Metropolitan Planning Organization) has said that they're OK with us funding Cattlemen with the money that's then made available. They're going to get 301 and Cattlemen.

You get some brand new funds, which is stimulus funds, you put them to use so that makes money available. You got two projects now, which helps the economy and the transportation corridor.

Q: With projects coming in with fairly low bids, does that create surplus funds that could be recycled within Florida, or will those funds now go to other states because the Legislature took $120 million out of the state transportation trust fund?

A: No, the opportunity remains for the state to use the quote “surplus money” from good bids. Yeah I'm getting good bids. Metro (Parkway) down in Lee County was great — great bids. So, I get some extra money.

You've got the state flexible funds, you've got local funds and enhancement. The local funds for the most part are done by formula. For instance, Lee County gets so much money. The fed designated certain dollar figures for Lee County in local stimulus funds.

That money can't be used anywhere else, so Lee County projects that come in really good, any surplus would stay and be used for another project — same thing with Collier, same thing with Polk County and Sarasota and
Manatee and rural areas, also. The money's going to stay in the rural areas.

Now, state flexible funds are the majority of funds in my district - about $122 million. Those are split up amongst those five projects which include U.S. 301 in Sarasota and Metro Parkway. If I get really good bids on those, they don't necessarily get it back in that district. What we're going to do is take a look at the state as a whole, and we're going to do what is best for the state.

Q: Do you have specific concerns about the proposed $20 billion, 18-month extension of the federal transportation bill, or that the federal highway trust fund won't have anything in it after Sept. 30? Right?

A: Right. Federal money is really reimbursement money to us. We have to go out and spend our money first on a project before reimbursement with federal funds.

What we see is that typically there will be a lag time for reimbursement to us for projects that we proceed with. That may affect us some way.

Q: U.S. DOT Secretary Ray LaHood says the gas tax is inadequate for paying for roads and others have said the gas tax should be replaced with mileage charges. What is the solution for road funding going forward, and are we going to see more state and local toll roads?

Number one, something's got to be done with the method for revenue generation for transportation. The gas tax based on per gallon of gas — it just doesn't work anymore. People are buying more fuel efficient vehicles, so we're down in the volume of gas people have to purchase. And over the past couple of years, for the first time, I think in history, you see the consumption of fuel go down.

So, right there you're going to get a decline in revenue where the demand for transportation continues to go up. So, something's got to be done about the method. I don't see any new highway mileage being constructed by any other method other than toll roads.

I've got a couple projects in my district that we're doing studies on. One is a port connector road which connects Port Manatee with I-75. We're doing a project environmental study right now. I don't intend to do anything else with that project until that study is done. I'm going to determine, if it was built, what is the best alignment for that road going to be, what's the cost, how much right-of-way is needed and just lay it on the table.

And, if others want to step forward and set up, for instance, a toll authority in Manatee County, and pay for it through that type of mechanism or private industry, and they see a value to that, and build the road using some kind of private delivery method, that's fine too. But I can tell you for sure that under traditional public avenues or funding mechanisms, the money is not there, nor do I perceive that it will be there.

There will be some kind of a financing method other than traditional funding mechanisms — public-private partnerships — absolutely. The very first design/build/finance job in FDOT's history is that I-75 job in Lee and Collier. Would it have been in our program, it would have taken at least eight years to build. By putting it all together and letting one construction job — which also at the time was the largest construction job in FDOT history — it allowed it to be constructed in nearly two years instead of eight. And the contractor financed it and we're paying them over a five-year period.

Q: I asked Lee and Collier's transportation chiefs if they had thought about county toll roads, given the revenue declines, and they said they don't have big plans for toll roads, but there may be little choice given gas tax revenue declines.

A: You're right. These kinds of things kind of evolve. They've got to get to that point where something else has to be proposed before things like this move forward. Toll roads are not a popular thing. It takes a lot of effort to educate the public and also to get the public to feel like “you know, you're right,” we've got to do something else like tolls.

You saw the same thing with tolling on I-75. We had a lot of problems with the public in putting tolls on there, particularly on a lane we're building right now. People asked, “Why are we thinking about tolling on lanes you already financed?” Good point. I can come up with a good idea, but you've got to sell it to the public.

Q: Anything new about tolling Alligator Alley. Are they going to rebid that?

A: We've kind of stepped back a little bit. We're considering what all the options may be. It's just that now is not a good time in the economy.

Q: Were there credit market issues?

A: Yes, I would say so. There was a lot of interest at the very beginning. Then, things got worse and worse and everyone realized that money's going to be a lot harder to get. We got no bids, and obviously this wasn't the right time.

Q: FDOT Secretary Stephanie Kopelousos commented recently that the feds think “capacity is a cuss word,” which is her phrase for it being very difficult to get stimulus dollars for capacity projects. She felt like she was getting nowhere with the feds in trying to get stimulus dollars for capacity projects.

A: There are a couple reasons for that. We're such a fast-growing state, so we have needs for additional capacity more so than other states. The other thing is that our first priorities are, number one, safety, of course. Number two is preservation. We haven't made any cuts whatsoever in our safety or preservation funds. So, therefore, we continue to resurface our highways, we continue to repair our bridges, so that they're in excellent shape, and so we're way ahead of other states when it comes to our system being in good condition.

Q: Secretary Kopelousos says that many projects are having right-of-way and utility work done, but have not yet reached the construction phase. Is this because of federal requirements, or is it just early phases?

A: We're just in the early phases. Those early things such as utility relocations are creating jobs or saving jobs.

Q: Could the federal government be doing anything better to help expedite projects?

A: They're doing a good job of cooperating with us. We'll be the first to say, “Thanks for the money, now get out of the way.” They've been pretty proactive, and done a pretty good job of being responsive to us in turning things around.

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