Many states might like to experience one of the biggest challenges in Texas these days: growth by nearly 1,000 people per day.

Despite all the benefits of a strong economy, the steady population growth increases the strain on the state's aging infrastructure. According to Texas A&M's Texas Transportation Institute (TTI), in the past four decades the number of registered vehicles in the state rose 172 percent, but highway capacity increased just 19 percent. With a continued strong economy, TTI's Urban Mobility Scorecard predicted that by 2020 the average delay per Texas commuter could grow to 58 hours annually, while the average total annual cost of congestion per commuter could jump to $1,343. In water infrastructure, even without drought conditions, Texans experience restrictions on use and challenges to water quality.

To address these issues, the state legislature, Texas Department of Transportation (TxDOT), and other agencies have looked at innovative solutions for developing and funding mobility and water projects. This year and beyond, those solutions will lead to increased opportunities for construction contractors.

Growing Funding in New Ways

Art Daniel, President of the Associated General Contractors of America (AGC) and President/COO of AR Daniel Construction in Cedar Hill, Texas, sees good news for infrastructure funding. "Right now, in Texas specifically but more generally across the country, more tax-paying, fee-paying users are beginning to see how our infrastructure is declining. They're beginning to say, "˜We have to fix it.' In many cases, they're also saying, "˜We're willing to pay for it.'"

Because of that attitude, "Twenty-two states across the country have taken measures to increase their funding for highways and transportation," Daniel said. "I think you'll see more and more of that develop."

In addition, "Our elected leaders realize that the new people coming to our state are neither bringing their highways nor their water supply with them," Daniel said. "Our congested areas are going to get even more congested. Our elected leaders know that just to maintain, we've got to have more funding."

This year TxDOT plans to let approximately $6 billion in construction contracts. (See "Top 10 Projects" sidebar for details on significant contracts letting this year.) As Daniel said, "It's one of the largest years we've ever had in Texas, with additional funding coming from a combination of Proposition 1, Proposition 7, and ending diversions of revenue that had been shifted to other priorities."

However, in looking at the report prepared for the Texas Transportation Commission by the 2030 Committee, "There's still a large gap between the funding level they identified we need for our transportation challenges and what's actually there," Daniel added.

Making matters more complicated, "There's a groundswell in Texas against toll roads; we reached a tipping point where people are saying, "˜Enough!'" Daniel said. In fact, in the last legislative session, the Sunset bill that extended TxDOT another 12 years included provisions that will make toll project development more difficult.

"That puts our local and state elected leaders in position to come up with new ways of looking at funding for highways, like Proposition 1 and Proposition 7," Daniel said.

Although the Texas legislature won't hold a regular session this year, some relief may come as Congress considers infrastructure funding. On the campaign trail in 2016, President Donald Trump promised a revamp of roads, bridges, and airports. However, while the Trump administration reportedly will pursue a program based in part on private-sector funding, the Texas legislature in its last session declined to reauthorize the use of public-private partnerships for highway projects.

Focusing on Mobility

With the funding already allocated, TxDOT's goal is to address gridlock for Texas drivers statewide. The 2018 Unified Transportation Program will address 230 lane miles of current congestion and 516 lane miles of future congestion in urban areas, according to TxDOT, with two specific initiatives aimed at solving congestion issues.

Governor Greg Abbott established the Texas Clear Lanes initiative in 2015. According to TxDOT, a total of $2.5 billion is specifically earmarked for the Texas Clear Lanes initiative, but when money is added from different funding categories that are not solely dedicated to congestion, that number for congestion relief increases up to $7.3 billion.

The program focuses on congestion-relief projects in the five metropolitan areas (Dallas, Fort Worth, Houston, San Antonio, and Austin) that represent more than two-thirds of the state's population and contain 97 percent of the state's most-congested roads. TxDOT coordinates with communities to move forward with shovel-ready projects and promote alternative solutions.

"These projects will improve drive times, reduce costs to Texas drivers, and improve our quality of life," said J. Bruce Bugg, Jr., Chairman of the Texas Transportation Commission.

In the Austin area, TxDOT also launched the Mobility35program. Originally built more than 50 years ago, I-35 has not been able to keep up with population and economic growth, resulting in increased traffic congestion. TTI predicts that if nothing is done to address the I-35 corridor through Austin, the 19-mile commute from downtown Austin to Round Rock will take as long as 2.5 hours by 2035.

Since 2011, TxDOT, the Capital Area Metropolitan Planning Organization (Austin), regional partners, and the community have been working on a plan for improvements to the corridor. The region-wide effort will improve mobility and safety along 79 miles of I-35 in Williamson, Travis, and Hays Counties. It will also improve connectivity for all modes of transportation - cars, transit, trucks, emergency vehicles, pedestrians, and bicycles. 

Construction is expected to be ongoing for the next 15 to 20 years. Planned improvements include adding express lanes; improving safety; incorporating innovative designs such as intersection bypass lanes, ramp modifications, and integrated operations technology; giving users choices in how to travel the corridor, such as express lanes, enhanced transit, or bicycle and pedestrian accommodations; and integrating on-road technology to provide up-to-date information that will facilitate users' decisions about where, when, and how to travel.

The mobility and safety improvements needed in the corridor are estimated to cost at least $4.2 billion. A mix of Proposition 1, the Congestion Relief Initiative, state gas tax, and local investments are funding current projects.

Many Mobility35 projects are not yet funded, but TxDOT said they remain a priority to the region so they will continue to work with transportation partners and the community to design, develop, identify funding, and construct those projects.

Ensuring Enough Water

To keep up with population growth, water infrastructure throughout the state needs attention, too.

"We don't have enough storage in the right places to capture, then transport, then treat and distribute water," Daniel said. "Many people say we need to conserve more. Of the projected needs, conservation can only meet 20 percent. The good news is we're not far from the day when we'll be drinking treated wastewater. The bad news is there won't be enough of that to go around, either. I think we'll see more desalination plants in the coming years, including one under design on the Texas Gulf Coast, but those are very expensive to develop."

To address aging infrastructure, the Texas legislature and voters established the State Water Implementation Fund for Texas (SWIFT) program in 2013. A rolling $2 billion bonding authority overseen by the Texas Water Development Board, SWIFT helps water projects get off the ground. Local entities apply for funding at cost-effective rates for projects included in the state water plan. When funds are repaid, they're turned around for new projects.

"More and more of these projects are being released for construction to begin," Daniel said. "We have a growing demand for our water, so there will be more raw water pipelines built to move water from one basin to another basin, new treatment plants, and new distribution facilities to take the water from treatment plants to the end users. Like the highways, there will be more opportunities for contractors."

Overcoming the Labor Shortage

Those opportunities also come with challenges. According to a nationwide survey released last August by AGC, 70 percent of construction firms report they have a hard time filling hourly craft positions. That trend shows no sign of ending soon, especially as Texas rebuilds from Hurricane Harvey.

However, Daniel predicts the industry will find innovative ways to bring in new workers. "We're seeing states around the country waking up to the fact that not everyone needs a four-year college degree," he said.

Last June, the U.S. House of Representatives unanimously passed a reauthorization of the Perkins Career and Technical Education Act, which delivers funding to career and technical education. However, the Senate has yet to take any action on it.

Daniel sees technology as a way to lessen the impact of a worker shortage. "Technology advances in equipment will continue so more work can be done with fewer man hours, and we can increase the efficiency of the man hours we're currently spending," he said.

Process improvement also helps. "Over the last decade, the vertical building industry used lean construction methods to become more efficient," Daniel said. For instance, "With an RFID (radio-frequency identification) tag, contractors can track a delivery of sheet rock and tell if it has to be moved too many times around the jobsite. Now more horizontal contractors are adapting those same lean principles for greater efficiency."

First "˜Smart State'

As they look to the future, TxDOT is working with transportation researchers to make Texas the first "Smart State" for connected and automated vehicle (CV/AV) testing that will ultimately make roads safer and less congested. Connected vehicles provide networked, wireless communication with the driver, other vehicles, and infrastructure. Automated vehicles are also referred to as self-driving. According to TTI Assistant Agency Director Christopher Poe, "[CV/AV] technologies range from detection of wrong-way drivers to new pavement markings and signs that can be read by automated vehicles."

To promote the development of CV/AV technologies, TxDOT's Texas Technology Task Force hosted a Mobility Summit in 2016. That gathering led to the Texas Automated Vehicle Proving Grounds Partnership, which includes TxDOT, TTI, the University of Texas at Austin's Center for Transportation Research (CTR), Southwest Research Institute, and cities across the state. Members of the partnership contribute their facilities, expertise, and staff as part of a statewide network of proving grounds and test-bed sites to advance CV/AV technologies. Early last year, the U.S. Department of Transportation designated the Texas partnership as one of 10 national Automated Vehicle Proving Grounds.

According to Dr. Chandra Bhat, CTR's Director, "There are many technology, policy, regulatory, privacy, legal, and security challenges that still need to be resolved, and the proving ground is an important and exciting opportunity for us to identify and resolve these challenges before going mainstream with AVs. In the long run, the proving ground will enable us to have a progressive vision to inspire new pathways to addressing safety, mobility, resiliency, and reliability considerations on our transportation systems, and ensure an equitable, inclusive system that enhances the quality of life for all Americans."

To advance the process of bringing the technologies into everyday use, TxDOT and TTI recently co-signed a Memorandum of Understanding outlining the guidelines that would allow TTI to test lab-proven technologies in a real-world environment. Under the new framework, the two agencies will work together to develop plans for the safe testing of TTI's own technology applications or technologies from industry and other universities on Texas highways.

"This is a very important step for testing and proving out new CV/AV technologies," said TTI Agency Director Greg Winfree. "TxDOT is a vital partner in all of the work we do, so it's great news that this testing framework is in place so that Texas is well-positioned to take advantage of the safety and mobility benefits that connected and automated vehicles will offer."

Statewide Approval of $9.9B in Bonds Means Abundance of Contracting Opportunities in Texas

By Mary Scott Nabers, President and CEO of Strategic Partnerships Inc.

Private-sector firms interested in beginning 2018 with a pipeline full of upcoming projects should be elated. Hundreds of new projects will be announced soon and almost all will have outsourced contracting opportunities. Timing is everything and now is the time for contractors to begin the process of getting positioned to capture this new business.

Passage of $9.9 billion in local bond elections in Texas on November 7 guarantees an abundance of new business opportunities for private-sector firms. More than 80 local government entities held elections to decide the fate of bond referendums that totaled $11 billion.

The $9.9 billion that was approved includes statewide opportunities for engineering, architectural, construction, security, technology firms and many others. Contracts will also be awarded for numerous types of water projects, sports facilities, parks, libraries, sidewalks, landscaping and public safety facilities.

Below is a sampling of some of the numerous projects that have been approved.

Austin

·      The Austin ISD passed the largest bond issue in Central Texas history as voters approved a $1.05 billion referendum. The bond proceeds will be used to build or modernize 16 new schools. District-wide technology upgrades, furniture purchases and safety and security projects are all part of the bond as well. 

·      Voters in Travis County said "yes" to a $185 million bond election that will net $93.4 million in transportation and road safety projects, and $91.5 million parks and open spaces projects, including construction of a new $21.2 million Bee Creek Sports Complex. 

·      A $253 million successful bond issue in the Lake Travis ISD will provide for a new $12.7 million middle school and a new $31.5 million elementary school.

·      A new middle school will be paid for by bond sale proceeds from the successful $454 million Leander ISD bond vote. Three additional elementary schools will be built.

Dallas

·      The largest successful bond vote in the area was passed in the city of Dallas. Voters approved a $1.025 billion referendum that will result in projects related to streets, parks, traffic synchronization, and many more varied projects.

·      In Fort Worth, residents of the Fort Worth ISD passed a $750 million bond package for construction of a new elementary school at a cost of $28 million, along with $514 million in school upgrades at 13 high schools.

·      North of Dallas, the Sherman ISD passed a $176 million bond referendum, the proceeds of which will be used for district-wide technology upgrades, including improved Internet access and surveillance, a new $157 million high school and various campus improvements.

·      The Little Elm ISD passed a $239.5 million bond package that included the replacement of an existing middle school. Additionally, the district will construct new baseball and softball facilities, renovate athletic areas and provide improvements to the athletic complex.

Houston

·      Voters in the city of Houston passed a $495 million bond referendum that will result in $159 million in public safety projects, including upgrades to police and fire stations and outdated equipment replacement. Libraries within the city will see $123 million of the bond proceeds for replacement or renovations, and parks and community centers will undergo renovations and expansion.

·      The Crosby ISD will benefit from a successful $109.5 million bond election. Construction projects include new middle school and elementary school campuses and addition of two academic wings at a high school.

·      In the Katy ISD, voters approved a bond election totaling $609.2 million. Included is $448 million for six new schools.

·      The Lamar Consolidated ISD will soon have a new high school, three new elementary schools and a new alternative learning center after passage of its $445.5 million bond election.

·      Nearby Fort Bend and Galveston counties also passed bond elections. Fort Bend County's $218.5 million bond vote will pay for a variety of mobility projects and Galveston County approve an $80 million referendum that will address road construction, county buildings and flood control issues.

These are only a few examples of opportunities that will result from bond elections. In addition to all these opportunities, it is likely that in early 2018, Congress will address infrastructure reform and incentivize private-sector investment for large infrastructure projects. Texas has many critical infrastructure needs and government leaders throughout the state are hoping to capitalize on alternative funding that will allow them to launch the long overdue projects immediately.

Prime contractors and subcontractors should carefully monitor the public entities that will soon announce their plans to proceed on projects that will be funded by the bond elections.