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III. Conclusion The department appreciates the challenge to improve operations that the
Legislature posed by mandating this report. As issues were examined and
considered for possible conclusion, it became clear that the scope of issues
could not be addressed without brief discussion of two significant matters that
the body of this report does not address, funding and federal environmental
issues. One of the most significant issues that the department faces in completing
projects in a timely manner is the inability of highway funding to match
inflation and increased demand for transportation. For instance, over the past
five years, highway construction costs have increased an average of five percent
per year. During the four-year span of the department’s Unified Transportation
Program (UTP) planning document, a five percent loss of spending power per year
equates to twenty percent erosion. With a recent letting schedule of $2 billion
per year, there is a $400,000,000 loss of purchasing power by the end of the
four-year period. With an expected surge in transportation spending nationwide,
the department expects the issue of inflation to impact even more heavily in the
next several years. A good example of the long term erosion of the department’s financial ability
due to inflation is a project in Houston. In 1967, a five-mile, ten-lane stretch
of Interstate Highway 10 inside the 610 Loop was constructed at a cost of $3.5
million. TxDOT is now in the process of rehabilitating the original ten lanes.
The low bid was $44.6 million--an
increase of 12.7 times the original cost of construction. In that same thirty
year time period, TxDOT’s budget increased six times. The Commission requests that diversion of funds from Fund 6 be eliminated. The
traveling public has shown tremendous support for using fuel taxes on
transportation infrastructure. In 1988, an overwhelming 86.9 percent of voters
supported a constitutional amendment to dedicate federal highway reimbursements
for that purpose. In 1991, the Legislature increased the motor fuels tax.
However, a significant amount of those funds have since been diverted for
non-highway purposes. No single issue effects the speed of maintenance and
construction projects more than funding. TxDOT strives to be environmentally sensitive, but a brief mention of the impact
of environmental protection laws should help bring perspective to a report on
construction cost and timeliness. Environmental protection laws have added
complexity to highway planning and construction. In 1963, planning to build a
new highway required surveying the land,
acquiring it and then construction. There are now 41 federal and state statutes
that must be followed before construction begins. On major projects likely to
cause significant impacts, the federally required Environmental Impact Statement
(EIS) typically takes three to five years to prepare and process, adding to a
project’s development period and increasing cost. An EIS is only required in a
very limited number of projects, but these tend to have a high public profile. An environmental assessment, also a federal requirement, is required on
approximately 30 percent of TxDOT construction projects. Projects for which
environmental assessments are required are among the most complex construction
projects. The assessment typically takes from six to twelve months. With both
the EIS and environmental assessments, additional time is required when
remediation is necessary. The legislative recommendations contained in this report are in response to the
statutory requirement that the department review rules and statutes to determine
appropriate changes that would enhance the department’s ability to construct
projects less expensively or in a shorter time period. While not always mutually
exclusive goals, some of the recommendations above could accomplish either
increased speed or reduced cost at the expense of the other. For example, A+B
bidding and design-build projects tend to increase the speed at which projects
are completed, but can also tend to increase project cost. Recommendations such
as right of entry, requiring performance bonds for maintenance contractors, and
enhanced electronic funds transfer for electronic bidding would greatly assist
the department’s efforts toward both increased speed and reduced cost. |
