When Gary Hudder began his job as the transportation director for the city of Round Rock in 2011, a new traffic signal typically cost about $250,000 to install. In 2016, that cost has ballooned to $400,000, he said.


“We all know what’s going on with growth,” Hudder said. “We know about the [low] unemployment rate in Central Texas, and all those things drive up the costs, obviously, so new road construction right now is really, really expensive, and it’s changing almost day to day.”


According to the Texas Department of Transportation’s Highway Cost Index, or HCI, which tracks the cost of transportation projects, road construction prices—including the price of labor and materials—have increased 153.84 percent since 1997. Between December 2010 and December 2015, Texas’ HCI increased more than 50 percent. Nationally the average HCI increased about 3 percent during that period, according to the Federal Highway Administration.


“That is fairly stunning inflation, but that is what we are seeing,” Williamson County Infrastructure Director Bob Daigh said. “When people read the paper and see nationwide numbers, that is not what we’re experiencing here in Texas. Austin is as hot as any market in Texas.”


Round Rock, Pflugerville, Hutto and other Central Texas cities are attempting to alleviate congestion—a top concern among residents in each city, officials said—while also combating rising costs of new road construction.


Officials are turning to better maintenance strategies as well as alternative funding and transit planning to address the issue, and state and regional leaders are considering long-term solutions to the problem of the mounting taxpayer expense of building and maintaining roads.



Strategies


The city of Pflugerville is focusing on keeping costs down by better maintaining its existing road network, Assistant City Manager Tom Word said.


According to the city of Pflugerville’s fiscal year 2015-16 budget, which covers the one-year period ending Sept. 30, the cost of maintaining 1 mile of road in the city increased 59.93 percent from $9,900 to $15,833 within the fiscal year.


City residents paid on average $36.63 in taxes for street maintenance in FY 2013-14, according to the budget. By FY 2015-16, that number had risen to $57.39.


“I think everyone—Pflugerville in particular—is really interested in the maintenance aspect,” Word said. “We realize that if you take care of something all along you can avoid some larger costs in the future.”


To that end, the city completed in 2015 a study of the pavement throughout the city, with the intention of addressing potentially problematic stretches of asphalt by applying sealants and other “spot fixes,” Word said.


Hutto Development Services Director Helen Ramirez said the city is considering creation of a mobility plan that will examine ways to grow a transportation network that provides options for those traveling in motorized vehicles as well as those traveling by bicycle, walking or other nonmotorized means.


To defray the city’s share in the cost of new roads, officials could also consider implementation of a road impact fee, which developers would pay to the city when they are building a project that requires expanded public roadways or other transportation infrastructure.


That may be a conversation the city has in the future, Ramirez said, but such a fee could have unintended consequences, she said. [totalpoll id="168021"]


“We want to be a very developer-friendly community,” Ramirez said. “We are and we strive to be, so we also have to take that into consideration. Would [creating a road impact fee] negatively impact us getting new development because it’s another impact fee? That’s something that needs to be analyzed.”


Will Conley, policy board chairman of the Capital Area Metropolitan Planning Organization, which is responsible for coordinating transportation projects in Central Texas, said state and national leaders took a step to address the issue in the mid-2000s.


At that time cities throughout the state and nation were waiting seven-10 years for environmental clearance on transportation projects, Conley said. A project that would have cost $10 million in 2001 might have cost more than $16 million by 2008, according to TxDOT’s HCI. 


“We worked to reform with others across the nation the environmental process in our federal government to the point that today, most of the time, those processes are taking a year and a half or two years, which is giving us the ability to save money and to get assets on the ground sooner rather than later,” Conley said.Area cities aim to manage rising road construction costs



Funding options


The city of Round Rock uses a mechanism known as Type B funding to help combat congestion in the city. The fund dedicates a half-cent of sales tax to economic development and transportation projects in the city.


The extension of Creek Bend Boulevard from Creek Bend Circle to Hairy Man Road is being paid for partly through Type B funding. The $9 million project is expected to be complete in the winter.


“We see the day in the not-too-distant future where the only way we’ll be able to build [capital improvements] from scratch, new roads for example, we’re going to have to borrow money to do that, and our Type B fund will be used entirely for maintenance,” Hudder said.


Hudder said the city has not had to defer any projects because of a lack of funding yet, but it is instead moving money that had been intended for future construction projects to fund the most pressing needs.


“If I have $10 set aside for a project five years down the road, but a project I’m working on now is short by $2, I’ll just take $2 from that $10,” Hudder said. “But eventually that will catch up with us. We can’t do that forever.”


The Type B funding can also be volatile because it is directly dependent on sales tax, Hudder said. During the worst period of the economic crisis in the late ’00s, the city’s Type B fund collections fell from about $17 million annually to about $11 million. The money has recovered, and Hudder said he expects the FY 2016-17 collections will be the city’s highest ever.


“The challenge right now is trying to figure out how you pay for the new stuff we need to deal with the growth as well as maintain the current stuff, which in itself is growing, obviously,” Hudder said.



Area cities aim to manage rising road construction costsFuture outlook


In 2014, a report from the Texas A&M Transportation Institute, which researches transportation issues, concluded that a fundamental change is needed in the way Texas cities plan and build transportation projects.


“Significant change must occur,” the report states. “We will never have all the funding required to build our way out of our current situation, and even if we did, we do not have the space to build that capacity. And if we had the space, we could never obtain all of the required environmental clearances.”


Among the suggestions included in the TTI report were accommodating telecommuting to keep more workers off roads and thereby slowing down the roads’ deterioration and facilitating alternative forms of transportation, such as cycling, walking and transit.


“There is no silver bullet to solve all of our transportation problems,” the report states. “We must use our infrastructure funding to add capacity where we can get the most ‘bang for the buck’—in critical corridors and to enhance safety statewide.”


In the short term, Daigh said he sees no reason to expect the “stunning
inflation” to slow down.


“Four percent [inflation] is traditionally what we would see, but now it’s closer to 6 percent,” Daigh said. “I don’t see that slowing down.”