Austin pressured to go fast on ‘go big’ transportation bond program


Highlights

The recent history of big infrastructure in Austin is rife with projects finishing late and over their budget.

The projects have had a variety of problems, but haste and unrealistic expectations were often involved.

The city of Austin’s staff is under political pressure to complete $720 million of work in just eight years.

On time and on budget. The bureaucrat’s mantra.

And lately in Austin, an elusive goal. The MoPac toll project, the new downtown Austin library, the Waller Creek tunnel, the Barton Creek bicycle bridge, the Texas 71 tollway and the Lady Bird Lake boardwalk have all finished late or cost more than first estimated, or both. Reach back just a few years and that list includes Capital Metro’s MetroRail.

Bill Nelson, a retired engineer whom I had never met until last week, had been reading my stuff and thinking about the local struggles to meet schedules and budgets on large infrastructure projects. Risk management, the discipline of how to anticipate trouble and control costs and schedule, was his area of expertise during much of a long career working on oil and gas processing plants, Nelson told me. He is worried, in particular, about the city of Austin plunging into the complex business of spending the $720 million in transportation bonds that voters approved in November.

So we met for coffee.

We talked about how staffing levels, political pressure and sometimes unrealistic expectations figure in. About “technical limits.” And how when something seems too good to be true — for instance, a shockingly low bid — it usually is.

Take MoPac (please).

I’ve covered all this in detail before, so here’s the short version: The Central Texas Regional Mobility Authority, when it sought bids on the project in 2013, got three finalists’ submissions to do detailed design and then construction. CH2M’s bid came in more than $60 million below its competitors, and about 20 percent below the agency’s estimate of what the job would cost. Though they later said the figure gave them pause, mobility authority officials picked CH2M. And the two sides agreed contractually that the 11-mile-long addition of a toll lane on each side of North MoPac would be done by Sept. 17, 2015.

The authority, then and now, operates on a skeletal basis, functioning as more of a contract manager than an engineering entity, with just a couple of dozen employees. A general engineering consultant, with a huge international staff to draw from, is under contract to be its eyes and ears.

We all know how this has worked out. A portion of the toll project opened in October, 13 months late, and the rest will be done (MoPac commuters hope) by June. So, it’s almost two years late on what was to be a two-year project on a highly congested, key Austin highway. The authority might (or might not) end up having to spend more than the project’s $200 million budget, because it negotiated a stern contract with CH2M. The courts likely will determine the final figure, plus attorneys’ fees.

But, no matter the ultimate cost, the public has already paid a heavy price in delay and frustration.

Mobility authority officials, no dummies they, took the painful lesson to heart. When the U.S. 183 toll road project in East Austin came up for bid in 2015, and one company’s bid was $116 million lower than the next highest cost, the agency board (pointing to the low bidder’s poor ratings on technical expertise by a mobility authority evaluation team) went with the second-lowest bid. The agency contends that work, scheduled to be done by 2020, is on schedule. We’ll see.

Capital Metro, likewise operating with a thin administrative staff and taking on rail for the first time, was two years late on MetroRail and spent $140 million, about 55 percent over what it had told voters the project would cost.

The city of Austin’s 2014 opening of the boardwalk, meanwhile, came after construction was delayed about 18 months. The final cost was at least $5 million above the $23 million or so estimate when voters approved it in 2010.

But even the Texas Department of Transportation, with all of its resources and staff, isn’t immune. The Texas 71 toll project is going to finish close to a year late. The Barton Creek bike bridge, beset with redesigns of column supports and lighting, will be many months late and has ballooned in cost since the idea first surfaced in about 2005. And a recent report from the Texas Sunset Commission knocked TxDOT for having far too many projects coming in late and over budget statewide.

As Nelson said, much of this trouble can be prevented, or at least diminished, by careful planning on the front end. But that’s where politics and the pressures of operating in the hard light of government can be a hindrance.

Some readers may remember that I was a petroleum engineer for about a decade, long ago. My colleagues and I had the advantage of working in obscurity (no Deepwater Horizon incidents in my past) and under relatively little time pressure. In fact, in an era in which oil and gas prices generally were on the rise, getting the goods out of the ground and into a pipeline a little slower than expected was sometimes a good thing economically.

Transportation departments don’t have that luxury. Particularly the Austin Transportation Department and the Public Works Department, which will work in partnership to build the projects in Austin’s $720 million “go big” bond program.

I sat in meetings last year in which city officials told the City Council that building all those projects — overhauls of several major city thoroughfares and intersections, sidewalks and bike lanes, signal system upgrades and off-street trails — would be very difficult to pull off in the eight-year time frame that somehow became the expectation. The bond is five times larger than any transportation program previously approved by Austin voters, and those have typically taken five or six years to get on the ground.

Well, OK, came back the message from the mayor and council. Hire extra staff and whatever consultants you need, but plan it, design it and build it in eight years. On budget.

I’m told that a very detailed plan will be brought before the council as early as late February, and work on some of the smaller projects (sidewalks, primarily) should begin later this year.

This is all complicated by a conspicuous problem in the bond program itself, one I wrote about extensively before the November election in which it was approved. The plan’s centerpiece is that makeover of nine major Austin streets. The bond set aside $482 million for that purpose, but the staff’s cost estimate for just seven of them was $1.5 billion.

Legally, the city can’t issue bonds above $720 million for these projects. So, to the extent more money is spent, the overage would have to come from other parts of the city treasury. And there’s only so much of that finagling that could occur.

So this coming plan will have to prioritize those corridor projects, and the city would build them in order until the money runs out. It’s complicated.

The old saw about carpentry (pun intended) is that you need to measure twice, cut once. The city is being asked to measure quickly on this bond, then make thousands of cuts by the end of 2024. Recent history, along with my new friend Mr. Nelson, suggests that could be risky management.



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