‘Shovel ready’ didn’t mean ready to dig
November 10, 2009
By J.B. Wogan
The city of Sammamish was one of the first public agencies to snag stimulus funding from the federal government, but with nearly a year delay before construction, the funding isn’t stimulating anything, yet.
Sammamish’s brush with stimulus funding, through the American Recovery and Reinvestment Act passed by Congress in February, points to one of the ways the stimulus package isn’t working exactly as advertised.
Under the act’s “purposes and principles,” the bill directs the president and heads of federal departments to commence “expenditures and activities as quickly as possible consistent with prudent management.”
The city received $3.5 million in April for a redesign of three-tenths of a mile along the East Lake Sammamish Parkway, but has the project scheduled to begin in the spring of 2010.
The project entails adding a sidewalk on the east side, commuter bike lanes in both directions, and a middle left-turn lane that sometimes becomes a median. This is the northern extension of a construction project from the summer, which involved adding the same features to half a mile from Inglewood Hill Road to Northeast 18th Place.
The city won the stimulus funding because the Public Works Department presented the project as “shovel ready,” which, under the definition provided by the state and the Puget Sound Regional Council, it was.
Public Works Director John Cunningham said the application his department filled out required that a project be “obligated” by July 1. To obligate a project meant that it was already fully designed, met federal requirements under the National Environmental Protection Act, and had received a final approval from the state Department of Transportation. The city also had to meet federal requirements to complete a value engineering study, which was a review of the project’s design by independent engineers. Sammamish could and did meet these requirements.
But obligating a project does not mean starting construction. In the case of Sammamish’s parkway project, the rainy season led to a delay. The city also sought to prevent serious traffic problems by having two contractors working simultaneously on adjacent portions of the parkway. It wanted to finish Phase 1A, from Inglewood Hill Road to Northeast 18th Place, before extending north. The end result is that the effects of a stimulus package designed to combat unemployment by creating or saving new jobs as quickly as possible won’t be realized until six months after the obligation date and at least a year after the American Recovery and Reinvestment Act passed.
“The purpose was to spend this money as rapidly as possible to stabilize the economy,” noted Dick Conway, co-publisher of Puget Sound Economic Forecaster newsletter and a part-time professor of applied regional economics at the University of Washington.
Sammamish’s small slice of the stimulus pie might be part of a larger story of delayed impacts from the stimulus package. An Oct. 31 story from The Seattle Times noted that only about a quarter of the stimulus funds the state received have yet to be spent.
State economists are already predicting that the stimulus’ impacts will lag more than a year behind the passing of the recovery act.
“We said the maximum impact of the stimulus in the state will be in the third quarter of 2010,” said Arun Raha, chief economist of the state and executive director of the Economic and Revenue Forecast Council.
Raha said the council’s forecast model took into account low construction activity during the winter months (among many other factors).
Conway observed that in general, the fiscal policy of distributing stimulus funding was slow going, but it appeared to be working and unemployment was probably not rising as fast as it otherwise would be.
Measuring the impacts of the stimulus funding is complicated and open to some interpretation, which is why Republicans and Democrats can look at the same evidence and draw wildly different conclusions, Conway said.
“The fiscal policy is most likely helping, but it’s not clear how much it’s helping,” he said.
Economists need to consider indirect benefits of creating or saving one job, such as creating other jobs, he said.
Cunningham said the parkway project would create jobs for the contractor and for its subcontractors, in addition to causing new spending for construction-related materials.
Cunningham also pointed out that the stimulus-funded parkway project (phase 1B) did not have funding set aside in the city budget. In 2010, when construction does begin, the stimulus funding will create jobs that would not otherwise exist, he said.
Reporter J.B. Wogan can be reached at 392-6434, ext. 247, or firstname.lastname@example.org.