subscribe to ENR magazine subscribe
contact us
advertise
careers careers
events events
FAQ
subscriber login subscriber service
ENR Logo
Subscribe to ENR Magazine for only
$82 a year (includes full web access)

business & labor
PROJECT FINANCING
Bond IssuesTarget Schools, Roads
 
By Sherie Winston, with Tom Ichniowski, Paul B. Rosta, Tony Illia, Mary B.
Powers, Kathleen McFall and Rick Stouffer

Voters will cast ballots Nov. 5 for a wide array of measures that could mean a lot of local work for design and construction firms. Financing for schools and highway projects is at the top of the list of issues for voter approval, but under pressure from dwindling state and municipal budgets.

California has the most money at stake, with billions of dollars of investment in school, transportation, water and building projects at the mercy of voters. The state's public school districts and community colleges collectively are proposing an estimated $10 billion in local bond issues, including $3.3 billion in Los Angeles for new construction.

Statewide, the focus is on Proposition 47. At $13.05 billion, it is the largest bond measure in the state's history, contends Curt Pollock, director of management consulting services for School Services of California Inc., an educational consulting and lobbying firm. The largest share--$11.4 billion--would be used for construction of elementary, middle and high schools. Colleges would receive $1.65 billion. If successful, the ballot measure will be followed by a companion $12.3-billion bond measure on the 2004 primary ballot.

Housing projects in California would get a $2.1-billion boost from Proposition 46, which would provide $1.1 billion for low-cost loans to build rental housing. Together, the school and housing measures "could help to soften the bottom" of the economy and of the construction sector and encourage cautious public and private owners to move ahead with projects, says Thomas T. Holsman, executive director of the Associated General Contractors of California.

(Photo courtesy of CTE Engineers)

Included in a wide-ranging $3.44-billion water quality and wetlands protection initiative is $500 million for water treatment and wetlands restoration, plus $100 million for desalination and other water projects. Passage of San Francisco's Proposition A, a $1.6-billion bond issue, is deemed critical to the planned $3.6-billion upgrade of the region's aging Hetch Hetchy water delivery system.

California's most controversial ballot measure would permanently allocate 30% of motor vehicle sales and user taxes to a patchwork of transportation projects, ranging from buying school buses to modernizing passenger rail infrastructure. But critics charge that some of the measure's financial backers would benefit from funds earmarked for specific projects.

In Washington, state transportation officials and the construction industry are anxiously awaiting the vote on Referendum 51, which would raise $7.8 billion over 10 years through a phased-in 9¢-per-gallon gas-tax increase and other user fees. Supporters are counting on the measure to make a dent in an estimated $100-billion transportation backlog. Priority projects include freeway widening and bridge replacements. The measure faces opposition from some environmental groups who want the state to invest in mass transit.

In Clark County, Nev., voters will consider a tax increase to raise $2.7 billion over 25 years for roadway and transit improvements. Money would come from increased developer fees plus jet aviation fuel and retail tax increases of .25%. An estimated 1,000 new residents move to Clark County every week. Population projections over the next 20 years could see the county, home of Las Vegas, swell to 2.6 million residents.

A statewide initiative seeks exemption from Nevada's debt limit for school construction. "There are so many questions on the ballot, we fear that people will become overwhelmed and stop voting," says John Madole, executive director for AGC of Nevada.

In New Mexico, voters will consider whether to issue $93.4 million in bonds for public education, higher education and other educational institution capital improvements and procurements. Projects include facility renovations, infrastructure improvement and new construction at all six universities, eight two-year post-secondary schools and three state schools. Another bond measure would provide $1.5 million for dam renovation and rehabilitations.

In Boulder County, Colo., voters will determine whether to increase sales and user taxes by .25%, starting in 2004 and ending June 30, 2023, in order to raise $14 million annually to pay for transportation projects. Half of the funds will be used for highway improvements and the other half for transit improvements.

In response to increasing geologic knowledge about the potentially dangerous seismicity underlying Oregon, voters there are considering two separate ballot measures to authorize general obligation bonds for the rehabilitation and seismic upgrading of older public buildings. No limit to the amount of the bonds is specified in either measure. Funds will be issued on an as-needed basis. If approved, the bond measures are expected to produce substantial new work for engineering and construction firms.

"In Salem alone, the state capital, there are estimates that a third of the public buildings would not withstand a moderate earthquake," says Jessica Harris, legislative affairs manager for the Associated General Contractors Oregon-Colum-

bia Chapter. Thousands of buildings could be eligible for upgrades, ranging from large state university buildings to local police stations. The measures prescribe a triage approach, requiring an engineering assessment prior to rehab to ensure that high-risk buildings receive priority attention.

Alaskans will be voting on a bond authorization of $227 million to pay for transportation projects. About $124 million will be allocated to state transportation projects, with the remainder slated for federally supported projects. The largest proposed project is the Abbot Loop Extension and reconstruction in Anchorage, at a cost of $37 million.

Funding for renovation and upgrades of museums and educational buildings also is on the Alaska ballot. The state is looking to raise $237 million with general obligation bonds. The bulk of the funds are slated for 52 projects to upgrade, renovate, remodel and, in some cases, replace local public school buildings. Beyond these projects, roughly $62 million of the total is allocated for maintenance, renovation and technology upgrades at the University of Alaska.

In Michigan, Proposal 2 would authorize the state to borrow up to $1 billion to finance sewage treatment, stormwater and water pollution projects. It also authorizes the state to issue general obligation bonds to pay for the work, with bond repayment coming from the state's general fund.

On the East Coast, there are two bond issues on the Maine ballot. Voters there will decide whether to authorize general bonds to build a new correctional facility and provide maintenance for existing prisons. A second measure would grant general bonds for water pollution control and other environmental issues.

In Rhode Island, voters will consider whether to approve $55 million in bond authority to build the new State Municipal Fire Academy and construction of a new state police headquarters facility. Another referendum seeks approval for $564 million in bonds to match federal funds for transportation programs.



 
----- Advertising -----
  Blogs: ENR Staff   Blogs: Other Voices  
Critical Path: ENR's editors and bloggers deliver their insights, opinions, cool-headed analysis and hot-headed rantings
Other Voices: Highly opinionated industry observers offer commentary from around he world.
Reader Photos
Photos from ENR Jobsite Photo Showcase
Construction Outlook 2009 Spring Update

A 14 page report on industry trends and detailed forecasts affecting the construction industry in 2009.