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Lack of Specifics Runs Up Better Jacksonville's Bills City Documents Show How Estimates Were Made on Concepts Rather Than Facts.

Posted on: Wednesday, 20 July 2005, 15:01 CDT

The Better Jacksonville Plan's original estimates for roadwork were built on a shaky foundation because many projects were just concepts in 2000, lacking even preliminary engineering designs, according to documents and interviews.

The Jacksonville Transportation Authority penciled in costs for complicated projects like overpasses in a period of one to two weeks, resulting in what JTA Executive Director Michael Blaylock recently called "cookie-cutter" estimates. The total cost for 12 new overpasses has gone from an estimate of $251 million to a projected price of $548 million.

The city's Public Works Department used formulas to come up with estimates for brand-new projects, but the city didn't allocate at least $28 million recommended by those formulas, setting the stage for shortfalls that have plagued Better Jacksonville Plan roadwork.

The estimates by both the JTA and the city were done at the tail end of the 1990s, a decade in which road-building costs had been fairly stable and predictable.

That didn't last. When global market forces caused a spike in road-building costs and a red-hot real estate market drove up the cost of buying right of way, the escalating prices swamped those old estimates.

The $2.25 billion Better Jacksonville Plan, approved by voters with a half-cent sales tax increase in 2000, contains $1.5 billion for transportation projects. The latest estimates predict it would cost another $690 million to build all the road projects on the list.

This month, Mayor John Peyton plans to ask the City Council to eliminate four overpasses and three road projects while putting $447 million worth of other projects on a list seeking state Department of Transportation funding. He also would beef up spending on some projects -- such as widening most of Kernan Boulevard to six lanes instead of four lanes -- based on updated traffic studies.

LISTS OFTEN A PROBLEM

The experience shows how hard it is for cities to follow through on a specific list of road projects in connection with a tax referendum, said Steve Reich, who specializes in transportation finance at the University of South Florida's Center for Urban Transportation Research. Voters want to know how the money will be spent, but the original estimates are "pretty soft" when projects are still in their early stages, he said.

"The fact of the matter is people are tax-averse, and they want to see a list of what they're going to vote for," he said. "I don't think it's a Machiavellian plot to hoodwink the voters. I think it's just really, really tough to do. If you put too much padding into it, that's not responsible, either. You really want to maximize the the taxpayers' dollars the best you can."

Peyton, who was chairman of the JTA board in 2000, said it "would have been helpful" to base the original estimates on more-detailed engineering studies and have a larger contingency fund. He said the fact the JTA came up with the same prices for overpasses at different intersections shows there "was not thorough study of the actual locations."

But he said it would have been impossible to predict the dramatic upturn in the cost of construction materials and right of way.

"I don't know under any scenario that we could have anticipated the escalation we've seen," he said. "I don't think anyone in their best judgment could have captured that."

The Better Jacksonville Plan's $1.5 billion in transportation spending contains $520 million in lump sum amounts to resurface roads, improve drainage, build sidewalks, buy rapid transit right of way, and miscellaneous road projects. For that portion of the Better Jacksonville Plan, the city will spend the money until it runs out in each category.

The area where soaring costs have hit hard is the $980 million list of specific projects that were put before voters in the 2000 election. The cost of doing all those would be $1.69 billion, a whopping 72 percent increase, according to the latest estimates.

So far, cost overruns have been less than the city's long-term projections. Currently, 13 Better Jacksonville Plan projects are under construction. The original budget for that work totalled $126.8 million. The revised budget is $155.8 million, an increase of 23 percent.

But as time goes on, inflation will continue to take a toll on the Better Jacksonville Plan, Public Works Director Alan Mosley said. The magnitude of the change has been hard to comprehend, said Ron Salem, chairman of the Better Jacksonville Plan's Citizens Oversight Committee.

"It has almost been disbelief as I've seen the prices rise," said Salem, who is general manager of PharMerica. "I'm in a field where there is substantial increase in inflation for health care. But nothing like the road projects."HIGHER CONSTRUCTION PRICES

Jacksonville is not alone in feeling the pain of higher construction prices, said Bob Burleson, president of the Florida Builders Association, which represents businesses in the road construction industry.

He said construction costs were stable throughout the 1990s, but three years ago, the cost spiked nationwide, largely due to global demand. China's roaring economy is consuming steel and cement, driving up the cost for those materials, he said. The jump in oil prices has made petroleum-based products like asphalt more expensive.

Three years ago, state DOT projects were based on a 3 percent a year inflation factor, but now that figure is 8 percent to 10 percent, Burleson said.

"All of sudden, the worm kind of turned," he said.

Still, he said higher construction prices wouldn't be enough to account for the entire increase in Better Jacksonville Plan estimates. The other factor is what it costs to buy right of way for widening roads and building overpasses.

For instance, the JTA's latest estimate for overpasses show buying right of way at heavily developed intersections is a huge factor in the higher costs for those projects. But at the time the JTA put together the original estimates, the agency didn't have any engineering designs for the overpasses so there was no basis for identifying specific businesses that would need to be bought.

Steve Arrington, director of strategic initiatives for the JTA, said that in 1999, the JTA spent one to two weeks estimating the cost of Better Jacksonville Plan projects such as the overpasses. To get a bead on construction costs, the JTA looked up state DOT information on what it was costing at that time to build overpasses.

JTA staff also went to eyeball the intersections for a rough idea of which ones would have the most expensive right of way because of existing buildings, he said. Along with adding money for design to the estimate, Arrington said that was "pretty much all you had time to do when the numbers were turned in."

Along with money for engineering design, Arrington said the JTA added a 10 percent contingency for unforeseen costs and a 3 percent annual inflation factor. "We've had some periods where he had a 7, 8 or 9 percent inflation factor," Arrington said, "but in the 1990s, inflation was fairly flat."

The city Public Works' estimates did not put in an annual inflation factor for the projects. Instead, the city calculated that from 1995 to 1998, its average cost for road construction was $385 per foot. The city used a figure of $466 to $644 per foot, depending on the width of the road, for the Better Jacksonville Plan estimates. After adding in estimated costs for design and rights of way, the city put in a 20 percent contingency amount.

However, the city didn't always follow that formula. For instance, the city crunched numbers for 29 projects and determined the Better Jacksonville Plan needed $237 million to do that work. The actual amount put into the plan for each project varied from the formula's recommendation -- some got more, some got less -- but the total for all 29 projects was just $209 million.PRIORITIZING COULD HAVE HELPED

John Delaney, who was mayor in 2000 and spearheaded passage of the Better Jacksonville Plan, said the city "tweaked" the formulas to come up with estimates for individual projects. He said overall, the Better Jacksonville Plan built in a financial cushion that was far larger than any contingency the city would have needed for the kind of cost increases the city had historically experienced.

He said Peyton's proposed solution "has achieved a minor miracle to preserve a big hunk of the Better Jacksonville Plan" in the face of rising costs for construction and land.

Looking back, Delaney said it might have been better to rank the list of road projects and tell voters the Better Jacksonville Plan would pay for them in order of priority until the money ran out. That would be the same approach the Better Jacksonville Plan took in other areas such as parks and preservation land.

He said it wouldn't have made sense, however, to do full-blown engineering studies on all the projects before coming up with the original estimates. There was no guarantee voters would approve the half-cent sales tax to fund the projects, engineering studies would have cost tens of millions of dollars, and those studies still wouldn't have foreseen the spike in roadwork costs that occurred after 2000, he said.

"It would have cost money to lock down that number -- a lot of money -- and you might have had to throw all that money away," he said. "That's just hard to justify."david.bauerlein@jacksonville.com, (904) 359-4581

UNDER CONSTRUCTION, OVER BUDGET

Thirteen Better Jacksonville Plan projects are currently under construction. Some are below the original budget, others are above, but overall, the bottom line is a 23 percent increase for the total cost.

ROJECT______________________________________________________ORIGINAL BUDGET_CURRENT BUDGET

13th Street from Division Street to Myrtle Avenue____________$5.4 million_____$6.9 million

State and Unions streets_____________________________________$4 million_______$6 million

Wesconnett Boulevard_________________________________________$9.1 million_____$10 million

Lenox Avenue from Highway Avenue to Day Avenue_______________$9 million_______$10.2 million

Lone Star Road from Arlington Road to Mill Creek Road________$8.9 million_____$8.7 million

Hendricks Avenue from Prudential Drive to Mitchell Avenue____$3 million_______$6.8 million

Pulaski Road from New Berlin Road to Eastport Road___________$5.8 million_____$6.3 million

Spring Park Road from Emerson Street to University Boulevard_$5.3 million_____$12.3 million

Barnes Road from Kennerly Road to University Boulevard_______$4.6 million_____$6 million

Argyle Forest Boulevard from Blanding Boulevard to Westport Road $6 million___$22.6 million

Butler Boulevard from Belfort Road to Gate Parkway___________$22.7 million____$20.5 million

Southside Connector overpass at Merrill Road_________________$25 million______$17.9 million

Southside Connector overpass at Trednick Parkway_____________$18 million______$21.6 million

Total________________________________________________________$126.8 million___$155.8 million

Source: Jacksonville City Hall

Source: Florida Times Union

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