May 6, 2020

CT Construction Digest Wednesday May 6, 2020

CT can delay its transportation financing debate only a few months more
Tolls likely not part of the final fix

With Connecticut’s economy reeling from the coronavirus, legislators insist they won’t hike gasoline taxes or impose tolls this summer — even with new projections the transportation program is headed for collapse in just over one year.
But they also concede their ability to postpone that debate likely is measured in months, not years.
In the meantime, Connecticut may have to rely on its reputation — and its great wealth — to secure the financing it needs to continue maintaining its aging highways, bridges and rail lines.
“I think a commitment to do something about the STF [Special Transportation Fund] and a more detailed look at revenues will be at the head of the agenda” when the regular 2021 General Assembly session begins next January, said Senate President Pro Tem Martin M. Looney, D-New Haven.
“We’ve got to give the economy a little time to recover first, but I see the urgency,” said Senate Minority Leader Len Fasano, R-North Haven.
Gov. Ned Lamont outlined the urgency last week when he and the legislature’s nonpartisan fiscal analysts noted the STF — the portion of the budget that pays off borrowing for infrastructure repairs — runs out of cash in the fiscal year beginning July 2022.
And Office of Policy and Management Secretary Melissa McCaw, Lamont’s budget director, said the crisis could even come 12 months sooner, if Connecticut maintains its current effort to begin reversing decades of deferred maintenance.
That backlog, coupled with 20 years of stagnant fuel tax revenues, created a system headed for collapse. COVID-19 simply sped up the timetable.
Lamont, who spent his first 14 months in office unsuccessfully urging lawmakers to adopt tolls, hinted last week he would consider boosting fuel taxes.
But lawmakers who will return to the Capitol in late June — public health standards permitting — to whittle down a deficit in the overall budget, said any kind of tax hike now is off the table.
“Honesty, I think all of these discussions are premature,” said House Majority Leader Matt Ritter, D-Hartford, who remains hopeful Congress will break its partisan gridlock and approve substantial stimulus for budgetary relief for states and municipalities. “Until I know what the feds are going to do to help states, I really don’t have an answer” to other state budget proposals.
Tolls remain taboo
Even more certain, on- and off-the-record sources say, is that tolls won’t be up for discussion this year or next.
“For now I think we’ve moved past that,” Looney said.
House Minority Leader Themis Klarides, R-Derby, who has consistently opposed tolls, agreed.
“We’re in a place now where we have to re-prioritize everything,” Klarides said, adding that “the answer is not to take money out of people’s pockets continuously.”
But even if Congress orders a major state-municipality relief package — and especially if tolls are off the table — Connecticut may need more revenue from the gas pumps.
New projections last week showed Connecticut’s record-setting $2.5 billion reserve will be gone one year from now.More importantly, revenues for the budget’s General Fund — which covers about 90% of expenses — are expected to be down $4.3 billion in the next, two-year state budget.
Lamont and legislators will have their hands full keeping that in balance and likely won’t be able to spare any General Fund resources to keep transportation afloat.
STF is insolvent by mid-2021
That means Lamont and legislators will have enough trouble keeping the General Fund in balance, and won’t be able to shift resources from that to beef up transportation.
Meanwhile, projected deficits in the $1.7 billion Special Transportation Fund should consume all reserves there by mid-2021 — and continue piling up red ink for three more fiscal years.
Compounding matters, state officials have few options to cut transportation spending. Besides covering debt costs, the STF also funds an under-staffed Department of Transportation and public transit programs that already can’t keep pace with demand for service.
Delaying projects that already have been stalled for years would weaken the construction industry and ultimately break the transportation program, said Donald Shubert, president of the Connecticut Construction Industry Association.
“At the pace we’re going right now, Connecticut is still falling farther behind at maintaining a state of good repair,” Shubert said, adding that construction inflation and highway and bridge deterioration take a heavy toll. “We already know that every $1 of deferred maintenance costs $4 to $5 in future construction expenses.”
The Special Transportation Fund’s chief revenue sources include a share of the sales tax — which has been battered in the current economy — and the retail and wholesale fuel taxes, which haven’t fared much better.
But state officials hope that once residents return to work, gasoline sales — and thereby tax receipts — will increase as well. But those increases already are factored into projections that still show the transportation fund going belly up in the summer or fall of next year.
Connecticut’s two gasoline taxes combined added about 40 cents per gallon to the price of gas when 2020 began, ranking the state 11th-highest in the nation, according to the American Petroleum Institute.
During a televised briefing last Friday, Lamont noted some states are looking at gasoline tax increases “given the low price of gasoline” before he abruptly interrupted himself and dropped the subject. “Let me hear the ideas from the legislature.”
But even though lawmakers aren’t ready to talk about gasoline tax increases now, there’s another reason they can’t wait too long.
Wall Street is watching closely
Connecticut borrows the money for highway, bridge and rail upgrades by selling bonds on Wall Street. And that process traditionally relies heavily on Connecticut demonstrating a healthy revenue-to-debt ratio.
More specifically, investors like to see twice as much revenue flowing into the STF as debt payments going out — for the current year and for four years into the future.
State Treasurer Shawn Wooden has said he intends to issue $850 million in bonds later this month for transportation.
Can Connecticut still secure an attractive interest rate with new projections that show our revenue-to-debt ratios barely meet the traditional standard — and could fail if the economy slips more?Wooden remained cautiously optimistic that investors still want to buy Connecticut’s bonds. That stems both from Connecticut’s constitutional mandate to balance its budget, and its fiscally strong position relative to other states.
“The impact of the COVID-19 pandemic is being felt across the nation in state and local budgets alike, and Connecticut’s Special Transportation Fund is no exception,” Wooden said, adding he is keeping a close watch on state revenues. “We are in close communication with our financial advisors and the senior bond underwriter as we continue to monitor market conditions.”
But Rep. Jason Rojas, D-East Hartford, co-chairman of the tax-writing, Finance, Revenue and Bonding Committee, said Connecticut policymakers face a choice — soon — about how to fund transportation. And neither the bond markets nor potential aid from Washington will change that.
“Anything Congress does would be of great help and assistance,” he said, “but I don’t think they’re going to absolve the states of all of their financial problems.”


Coronavirus cuts transportation funding, puts major road and bridge projects on hold
, USA TODAY
WASHINGTON – One of the many side effects of stay-at-home orders during the coronavirus pandemic is a catastrophic decline in state and local transportation funding, which officials said threatens to bring road and bridge construction to a screeching halt for the next year and a half.
“It’s a very large concern,” Patrick McKenna, director of the Missouri Department of Transportation and president of the American Association of State Highway and Transportation Officials (AASHTO), said of a projected 30% decline in transportation revenue nationwide. “This is a pressing, immediate issue.”
The financial crisis that resulted from shuttering much of the economy forced governments big and small to postpone construction, even as roads, bridges and tunnels crumble. Collections of gas taxes and tolls that fuel construction have plummeted as motorists stay home. Despite historically low interest rates, voters and their governments are leery of borrowing because of uncertainty about repaying the debt.

In Ohio, an interstate project in downtown Columbus was punted for a year because of reduced fuel taxes. Missouri delayed a handful of projects valued at $40 million slated for May. North Carolina postponed more than 100 transportation projects valued at $2.2 billion during the next year because of concerns that reductions in traffic volume would translate into steep reductions in fuel and motor-vehicle taxes.
Tolls plunged 50% to 90% at facilities nationwide because of fewer vehicles on the road, according to the International Bridge, Tunnel and Turnpike Association (IBTTA), a trade group for 342 toll facilities in 34 states. The facilities generate $20 billion in tolls per year to maintain and upgrade 6,300 miles of highways, bridges and tunnels.
Matt Chase, executive director of the National Association of Counties, said officials have been told to cut their budgets because the federal government wouldn’t bail them out.
“We are very disappointed that Congress left us behind,” Chase said April 22. “Our gas taxes have essentially stopped in the last six weeks. How are we going to repair our roads and bridges?”
Transportation advocates hope to hitch a ride on the next federal aid package. AASHTO asked Congress for nearly $50 billion for operations and construction during the next 18 months. IBTTA asked congressional leaders for $9.2 billion to offset lost revenue projected over the next year.
“I think everyone is thinking about infrastructure as part of the next phase," said Patrick Jones, CEO of IBTTA. "We are hopeful that there will be some type of assistance.”
States lose fuel for construction

State transportation officials are trying to get their arms around the prospect that one-third of their budgets is evaporating through the lack of driving that provides state fuel tax, vehicle registration fees and highway user fees.
The state-level losses are compounded by the lack of matching funds from the federal government, which typically quintuples how much states can build.
In Missouri, McKenna projected about $1 billion in lower transportation revenue during the next 18 months. He said it was worse than that because half that amount – about $530 million – would have been matched by $2.1 billion in federal revenue that would also be lost.
“So our construction program could take a $2.6 billion haircut” during the next 18 months, McKenna said. “If that were to play out, in our current program, you’re looking at 400 bridge projects and 20,000 lanes of roadwork. It’s significant.”
In North Carolina, Transportation Secretary Eric Boyette warned that traffic volume was down 30% to 50%, depending on the road, leading to a projected loss of $300 million in the fiscal year ending June 30.
Four projects valued at a combined $648 million to widen Interstate 95 to eight lanes were deleted from the state’s 12-month spending plan, which had anticipated start dates for sections in July and December. Two projects worth a combined $280 million to upgrade two sections of U.S. 70 were dropped from planned starts in November and January.
“This loss of revenue will require significant reductions in expenditures,” Boyette told state legislative leaders April 7. “Modeling indicates it will take months to bring suspended projects back.”
Bridging support for transportation
Transportation funding typically enjoys broad, bipartisan support in Congress, but emergency requests for funding come at an awkward time because they overlap with the routine highway bill that lawmakers must debate.
The five-year highway bill expires Sept. 30. Congress needs to negotiate an extension  to provide hundreds of billions of dollars to state and local governments for as long as the next six years.
President Donald Trump said he would like to provide money for infrastructure in the next spending package to combat coronavirus because roads, tunnels, highways and bridges need help.
“They have to be fixed,” Trump said. “So hopefully, we’ll get an infrastructure bill.”
House Speaker Nancy Pelosi, D-Calif., has repeatedly called infrastructure a priority.
“As we fight the virus day to day, we must work on an infrastructure package for recovery that addresses some of the critical impacts and vulnerabilities in America that have been laid bare by the coronavirus," Pelosi said.
After Congress approved several coronavirus relief packages worth trillions of dollars, conservative lawmakers may balk at sending federal funding to state and local governments.
"We're not interested in revenue replacement for state governments," Senate Majority Leader Mitch McConnell, R-Ky., told Fox News last month. "We're interested in trying to help them with anything related to coronarivus."
Tolls curbed by fewer cars on road
Bridge, tunnel and turnpike traffic has suffered nationwide as fewer vehicles are on the road.
Massachusetts projected a $38 million loss in tolls this year along the Massachusetts Turnpike and other facilities.
Some toll bridges, including Maryland's Chesapeake Bay Bridge and those operated by the Delaware River Joint Toll Bridge Commission in Pennsylvania and New Jersey, stopped collecting cash tolls in March to avoid spreading the virus between motorists and collectors. About three-quarters of Delaware River motorists have automated E-ZPass, and those without it are mailed bills. Maryland suspended sending notices for Bay Bridge tolls due until 30 days after the emergency ends.
Jones, of the International Bridge, Tunnel and Turnpike Association, said some agencies tap reserves to pay for operating costs such as paying toll collectors, even though they  no longer staff booths, or maintenance workers on reduced schedules. Even if no federal assistance is provided, tolling facilities will operate while perhaps reducing staff at service plazas or postponing major projects such as adding traffic lanes, he said.
“The day-to-day operation is going to happen,” Jones said.
The Ogdensburg-Prescott International Bridge in upstate New York saw a significant drop in traffic after Trump and Canadian Prime Minister Justin Trudeau decided March 18 to close the northern border to nonessential traffic to hinder the spread of the virus.
The bridge carried 24,000 cars and 4,800 trucks in March 2019, according to Steve Lawrence, the Ogdensburg Bridge and Port Authority’s interim executive director. Car traffic was down 95%, and truck traffic was down 24% from those rates last week, he said.
Lawrence estimated April revenue could be down $150,000. The authority hasn’t had layoffs, but routine maintenance will be postponed until finances improve.
“We’ve really taken a hit,” Lawrence said. “What you’re trying to do is reduce your costs and hold on the best you can.”
Spurning debt despite low interest
Despite historically low interest rates during the economic crisis, transportation officials have been cautious about borrowing for construction projects. Agencies might have trouble justifying their creditworthiness without knowing when traffic will rebound, and taxpayers worried about losing their jobs might oppose raising taxes to pay the debt.
In the San Francisco Bay Area, officials in nine counties have worked for years on a referendum to better coordinate rail, bus and ferry transit systems that are spread across 27 agencies. The goal of making transit more reliable and affordable is to relieve commuting where motorists average two hours a day in traffic.
A proposal intended for the November ballot sought to raise the sales tax 1 cent to generate $100 billion over 40 years. Similar measures have been approved in Los Angeles and Seattle.
“I think there was a lot of consensus around elected officials and residents because nobody wanted to sit in traffic,” said Gwendolyn Litvak, senior vice president of the Bay Area Council, an advocacy group that works on regional economic development.
A public referendum in November needed to clear several hurdles first, including approvals from the state Legislature and local governments. Sheltering for the coronavirus hindered the sort of meetings needed to win approval of the measure, Litvak said. Instead, the advocates decided to postpone the vote and aim for the 2022 ballot.
“We are continuing to work on this as a coalition,” Litvak said. “We’re still focused on making a seamless and integrated transit system here in the Bay Area.”
In Bend, Oregon, the City Council scheduled a referendum for this month on a $190 million bond issue for improvements to roads, sidewalks and transit. But the council voted unanimously March 18 to postpone the effort because of economic uncertainty in a community dependent on tourism.
Councilors said residents relayed fears about layoffs when the new debt would have added an average of $170 to each household’s tax bill. Hotels and restaurants were already hurting. Councilor Barb Campbell said she temporarily closed her own retail shop and laid off workers the day before the council vote.
“This is a really difficult decision,” Mayor Sally Russell said. “We don't know how long this COVID-19 pandemic is going to last."

DOT: 3-year Merritt Parkway project coming to an end
Jim Shay
After three years of work, the state Department of Transportation has announced the final stage of construction for the ongoing Merritt Parkway improvement project in Fairfield and Westport
During this stage, northbound and southbound traffic lanes will be placed into final alignment in preparation for paving.
The five-mile stretch of the Merritt Parkway included in the $56.7 million project will transition to full final alignment progressing east to west (Fairfield to Westport) as median reconstruction work is completed and temporary barriers are removed.
The first 1 1/4 mile section of parkway to be placed into final alignment will include the southbound and northbound roadway from the Congress Street overpass to where the parkway crosses over Cross Highway in Fairfield.
Check out the project’s traffic cams here.
Construction activities will also include raising drainage basin tops to match final pavement, final paving over the entire width of the reconstructed roadway, installing final pavement markings (12-foot travel lanes), installation of median plantings, and establishment of the grass shoulder.
Stretching almost five miles from the Newtown Turnpike Bridge in Westport to just past the Congress Street Bridge in Fairfield, the project — the seventh in a series of eight covering all 37.5 miles of the Merritt — is creating 4-foot reinforced grass shoulders on both sides of the parkway, replacing existing guiderail with steel-backed timber railing, and installing a slip-lined concrete curb and gutter system along the median for improved drainage.
The project also includes work on 11 bridges uniquely designed for the Merritt in the 1930s by architect George L. Dunkelberger. While most of the bridges required minor cosmetic enhancements — such as parapet work, graffiti removal, surface and crack repairs, and fencing — others, like the Saugatuck River Bridge needed more work.
During the final stage, motorists can expect lane closures in the right and left lanes in both directions as construction continues.
Lane closures will typically occur during the evening and nighttime hours from 7 p.m. to 6 a.m. northbound and southbound.
Due to a reduction in traffic volume on the Parkway daytime lane closures from 6 a.m. to 3 p.m.can also be expected.
All motorists traveling on the Merritt Parkway are required to obey posted vehicle restrictions and are reminded that no vehicles over 8 feet tall are allowed on the Parkway.
The existing vertical clearance under the Newtown Turnpike Bridge is lower than the existing bridge height during construction.
The project consists of the rehabilitation of 5 miles (each direction) of Route 15 and 11 structures (over and underpasses) in the towns of Fairfield and Westport. Upgrades to pavement, guiderail, drainage and historic concrete are included.
The project awarded to Manafort Brothers, Inc. is scheduled to be completed Aug. 8.

Plans for New London schools central office take step forward
Greg Smith
New London — The City Council has given a preliminary nod of approval for the school district to move forward with planning for construction of a new administrative office building.
A 6-1 vote on Monday came after the council received reassurances that the costs for the new building, up to $5.5 million, would not interfere with the $49.5 million reconstruction of Bennie Dover Jackson Middle School, not cost taxpayers additional money or impact school programming.
Still, the council stopped short of authorizing construction costs or the estimated $557,000 needed for an architect to design the new building. Instead, the council amended language in a 2014 ordinance for the middle school project to include demolition and construction of an admin building, sometimes referred to as Central Office.
Voters at a referendum in 2014 approved a total of $55 million for the reconstruction of the middle school as part of the district’s conversion into an all-magnet school district. The cost for construction of the school, as approved by the state, was subsequently set at $49.5 million, with the remaining money left for contingencies.
With design of the school now set and nearly ready to go to bid, the district wants to use the contingency money to demolish and rebuild Central Office, which is home to various administrative offices and the information technology department.
The project manager, Colliers, is looking to complete the projects together.
The move makes sense to many, since the building is outdated and physically connected to the middle school. Councilor Alma Nartatez on Monday said professionals have evaluated the building and “say demolishing it is the right way to go. Those are facts. It’s the right thing to do.”
Councilor James Burke said further debate on the issue will only serve to delay the entire project.
“I think it would be detrimental, especially six years in the making, to enter into this construction project with what could be seen as a liability for building maintenance costs that would then eat up resources which could be spent taking care of our new school facilities once they are built," he said.
Burke said Monday’s vote allows the designers the ability to figure out whether the project can be done within the approved $55 million budget.
Councilor John Satti, chairman of the School Building and Maintenance Committee, which oversees planning for the two new schools, took a hard stance against the move. He warned of “serious legal ramifications if in fact we co-mingle these projects.”
Satti also argued that alteration of the ordinance, which he voted against, could lead to a legal challenge and require another referendum. “If in fact that happens, I believe that this will delay the Bennie Dover Jackson Middle School project,” he said.
The state is reimbursing the city 80% of the majority of costs for the middle school and high school construction projects. The reimbursement rate for a new Central Office remains an unknown, though they are typically funded at 40%.
Voters in 2014 approved bonding a total of $165 million for two school construction projects: $55 million at the middle school campus and $110 million at the high school. Both included contingency money. The high school project, once estimated to be $98 million, has risen to $108 million because of complications that arose from the loss of a planned downtown campus for the arts magnet program.

West Hartford eyes second $20M transit-oriented development on New Park Ave.
Joe Cooper
he nonprofit development arm of the West Hartford Housing Authority says it’s secured federal tax credits to build its second, $20-million transit-oriented development on New Park Avenue.
Trout Brook Realty Advisors on Monday said the tax credits awarded by the Connecticut Finance Housing Authority (CHFA) and additional financing from the Connecticut Department of Housing (DOH) will spur its redevelopment of the former Acme Auto Part site into a 52-unit apartment building with ground-level retail space.
Trout Brook, which is developing the 2-acre property in partnership with National Housing Trust Communities, plans to break ground on the project later this year with a completion date set for early 2022.
The so-called 540 New Park community will complement a neighboring transit-oriented development Trout Brook completed two years ago known as 616 New Park. That $19-million development has 54 fully occupied living units on its three upper floors and ground-level retail space with a bicycle repair and retail store, coffee shop and fitness studio, officials say.
Forty-one units will be available to occupants with incomes 60% or less of area median income, or $43,140 for an individual and $61,560 for a family of four, according to 2020 figures. Projected rents are expected to range from approximately $1,165 and below a month for a one-bedroom apartment and $1,386 and below monthly for a two-bedroom unit.
The other 11 units will be market-rate with projected rents at about $1,425 a month for a one-bedroom.
Most of the first floor will feature exterior glass meant to showcase activity in retail spaces, a lobby, and fitness and community rooms. Apartments will include high ceilings, large windows and open living-dining-kitchen areas.
An existing vacant 22,000-square-foot warehouse on-site will be razed at 540 New Park Ave. to make room for the apartment building a quarter-mile south of the CTfastrak station at the corner of Flatbush and New Park avenues.
“With our material choices and design, we looked both to capture the former industrial essence of the area and to make a statement that this is the new look for West Hartford,” said Amenta Emma Principal Anthony Amenta.
West Hartford Mayor Shari Cantor in a statement said the town is “committed to providing a variety of housing options” and added that 540 New Park is “exciting news, especially during these challenging times.”
In addition to its New Park Avenue developments, Trout Brook, which builds, owns and manages multi-family housing developments in West Hartford, has other properties at Elm Grove at 11 Grove St., Alfred E. Plant at 759 Farmington Ave., The Goodwin at 189 Newington Road and The Faxon at 1078 New Britain Ave.