Caltrans Swift At Putting Federal Stimulus Dollars to Work

Caltrans, the state’s Department of Transportation, has been swift in using nearly $1 billion in federal economic stimulus money, already putting out to bid projects using 92 percent of the funds, a recent report by the Legislative Analyst shows.

Transportation agencies for the state’s cities and counties have been slower in spending their $1.6 billion, with less than one-third of their funds out to bid.

The pace of the local agencies could hurt them.

A 2008 bill, ABX3 20, requires that whatever federal stimulus money a local agency hasn’t obligated by February 1, revert to Caltrans for redistribution to other projects. The Legislative Analyst finds only $900 million of the money received by cities and counties to be obligated as of November.

Caltrans has asked local agencies to turn in their documents relating to the American Recovery and Reinvestment Act by December 15.

As the report indicates, a key reason for Caltrans’ speed in putting the federal money out to bid is the number of highway repair and reconstruction projects ready to begin construction but for which there is no state money. By using this “shelf of “shovel-ready” projects, Caltrans was able to go to bid sooner.

As of mid-November, the agency had already awarded $400 million contracts out of more than $870 million put out to bid.

The report also notes that Caltrans – and taxpayers – are benefiting from the state’s economic downturn because there is more competition to win a contract.

“Caltrans currently receives, on average, seven to eight bids per project that it advertises. This increased competition results in lower prices for awarded contracts,” the Legislative Analyst said.

“In July 2009, Caltrans reported that it received bids an average of 33 percent below the department’s project cost estimates. As a result, the department will be able to construct more transportation projects than first estimated.”

Caltrans has already created a list of additional projects.

Among the 52 contracts already awarded, nine projects totaling $93 million are in the Sacramento/Tahoe area, 11projects totaling $47 million are in the Central Valley and seven totaling $50 million are in the Bay Area.

By contrast, cities and counties have awarded $444 million in contracts but only put $530 million of the total $1.6 billion out to bid.

The Legislative Analyst cites several factors for the local agency slowness including lack of experience dealing with the requirements of using federal funds and selecting projects that weren’t actually “shovel-ready.”

While data on the extent of economic stimulus provided by the federal funds is incomplete, the federal government estimates that for every $1 billion spent on highways directly supports 15,000 jobs.

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