Spokane Journal of Business

Road builders face rough path

With DOT jobs declining, contractors look elsewhere for more highway work

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Spokane-area highway construction companies face a rough road ahead due to an expected precipitous drop in Washington state Department of Transportation-funded roadwork.

Also, some planned projects within the new city of Spokane Valley could be delayed a year, which would add further to contractors woes.

Hoping to make up for less work near home, highway builders here already are looking farther afield for jobs on which to bid, and at least one company plans to diversify the types of construction projects it takes on. Across the board, highway contractors say they expect to use fewer Spokane-area laborers this year than in previous years.

The decline in state-funded work is expected because of the failure last fall of Referendum 51, which would have provided funding for highway projects statewide, and the projected $2.6 billion state budget deficit, which likely will force the state to shelve many planned projects during the next two years.

Both Referendum 51s failure and the budget crisis likely will cause many contractors to struggle, says Jason West, owner of Westway Construction Inc., a West Plains contractor that does site-development work for road projects.

The contractors cant fluctuate as fast as the budget does, West says. Its really difficult for a company to meet its obligations with such a decrease in work here.

How bad is it?

The Washington state Transportation Commission has earmarked $11 million for capital improvements in the Spokane-based eastern region for the 2003-2005 biennium, which starts July 1. Thats one-seventh of the $77 million budget for improvements for the current biennium. The commission has budgeted an additional $47 million for maintenance and repaving work in the upcoming biennium, which is about 80 percent of the current maintenance and repaving budget, says Jerry Lenzi, eastern region administrator for the DOT.

Lenzi says the Legislature could tweak those numbers, but historically, the commissions recommended budget numbers dont change much. Because of the failure of R-51, however, the Legislature might make special efforts to find additional funds for highway work, he says.

The DOT projects that currently are shelved include the planned $35 million widening of Interstate 90 between Argonne and Sullivan roads in the Valley and site work on the envisioned north-south freeway.

Meanwhile, before Spokane Valley residents voted last May to incorporate the new city of Spokane Valley, Spokane County had planned to complete this year between $13 million and $15 million in roadwork and up to $10 million in sewer work in the Valley. County engineer Ross Kelley says the county now must work with the new city of Spokane Valley while it establishes its own public works department.

During that process, Kelley says, There is a possibility that some of that work will be pushed back.

Not counting on much work from the state or in the Valley, many highway contractors are looking elsewhere for business.

Unfortunately, a lot of other states are having similar problems, says Robert Seghetti, vice president of Spokane-based Acme Concrete Paving Inc.

Still, Acme Concrete has stepped up its efforts to land out-of-state work and is aggressively bidding for jobs in Arizona, Nevada, Montana, and Southern Idaho in an effort to keep its construction volumes up, Seghetti says. The company is forecasting that it will be able to improve upon its 2002 revenues, which were $9.8 million, by pursuing out-of-state work.

Bidding work in other states is nothing new for Acme Concreteit has completed projects in 12 Western statesbut in the past, 50 percent or more of the companys construction volume has involved Washington state DOT projects.

With its new focus on work farther afield, Acme Concrete will be using far fewer Spokane laborers, Seghetti says.

Ill have 50 employees, but they wont be from here, he says.

Bruce Cyr, president of Spokane-based CPM Development Co.s paving division, says that division is expecting a flat year for its road-surfacing operation and is looking at reducing its work force here by 25 percent to 40 percent.

Westway Construction also is looking for work elsewhere. It has completed jobs in Idaho and Montana in the past and plans also to seek work this year in Oregon and the Dakotas, West says.

In addition, he says, Westway is diversifying in the types of jobs it takes on. Along with its usual site-work contracting, the company plans to begin taking on utility work and some specialized concrete work, such as for bridges and culverts.

West says he expects revenues in 2003 to be on par with 2002. He declines to disclose the companys annual revenues.

Planned state work

As recommended, the $11 million slated for capital improvements in the DOTs eastern region would go toward only a handful of projects, Lenzi says. Of those, one of the larger projects doesnt involve road construction.

The non-road project is a $3 million expansion of the DOTs information-technology system, which includes cameras along I-90 with which the agency monitors traffic flow and watches for accidents, breakdowns, and other events that cause congestion. The system currently has capabilities to monitor I-90 from Sunset Hill to the Broadway Avenue interchange. The expansion would add cameras to monitor the interstate as far east as Sullivan Road and also to monitor heavily traveled stretches of Trent Avenue, which also is state Route 290.

Lenzi says the DOT can justify such an expense in lean times, because the system helps it identify traffic-slowing incidents and allows it to resolve those problems more quickly. He says a car parked on the shoulder of an interstate causes other drivers to slow down and reduces the highways carrying capacity by 15 percent to 20 percent, and deterring such slowdowns to keep traffic flowing is a priority for the agency.

Of the construction jobs planned here in the coming biennium, the largest is a $4.7 million project to build an eastbound on-ramp to I-90 from Division Street. That project could be put out to bid as soon as next spring.

The remaining $3.3 million in work involves smaller jobsmostly bridge improvementsthroughout the seven northeastern Washington counties that make up the eastern region, Lenzi says.

With about 80 percent of the scheduled repaving work expected to be funded, Lenzi says maintenance on heavily traveled roadways will be addressed, but work on some rural highways might be delayed.

He says putting off such maintenance work is a concern, because once a road starts to deteriorate, the wear and tear takes on momentum. Consequently, roads on which work is delayed likely will be more expensive to repair in later years.

Linn  Parish
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Editor Linn Parish has worked for newspapers and magazines since 1996, with the bulk of that time being at the Journal. A Montana boy who has called Spokane home for some time now, Linn likes Northwest trails, Deep South foods, and lead changes in the ninth inning.

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