Stimulus spending? Next year will be big

More than a year after the passage of the $787 billion federal stimulus package, state officials credit it with creating or saving thousands of jobs in Washington.

Yet a look at the largest local projects in the South Sound shows that much of the biggest stimulus spending here still lies ahead.

In Pierce, Thurston and South King counties, the top 20 stimulus awards not related to education received a total of $176 million in funding, a News Tribune analysis found. About 20 percent of that money had been spent as of February, the one-year anniversary of when the stimulus package became law.

The picture was similar statewide, said Jill Satran, Gov. Chris Gregoire’s economic recovery coordinator. Of the more than $7 billion in stimulus awards received throughout Washington, Satran estimated that about $1.6 billion had been spent as of February. That’s about 23 percent of the total.

In the South Sound, many of the biggest-ticket items – eight of the top 20 – had yet to break ground.

Four of the other largest stimulus efforts had barely begun, including two military contracts receiving a combined $22 million and rental housing at Tacoma’s Salishan housing development that received $11.8 million.

Among the 20 biggest local awards, the only grant that was entirely spent by last month was $4.6 million to help Sound Transit continue extending commuter rail from Tacoma to Lakewood.

The only other big awards that were mostly spent were those for work force training.

The largest two investments in the South Sound – new car-pool lanes on Interstate 5 in Fife and a Port of Tacoma railroad overpass – started construction last year but won’t be completed until 2011.

Satran said the package is working as designed: Some funds went out quickly, while others will be spent steadily over two years or more.

“There was an initial wave of money that got out and had a big impact,” Satran said. “Then, there’s been a constant stream of jobs that have kind of kept things stable over time.”

Republican critics, however, say high unemployment numbers and a slow rate of spending show that the stimulus package has failed. According to the state Employment Security Department, Washington’s unemployment rate rose from 7.5 percent in January 2009 to 9.3 percent in January 2010.

“It was more about politics than about getting the economy moving again,” said Luke Esser, chairman of the Washington State Republican Party. “It’s clear the bill did nothing to help the economy and put people back to work.”

JUST GETTING STARTED

Local award recipients say stimulus money has helped them retain employees and begin work they couldn’t have afforded otherwise.

But many said they’re just getting started.

That’s partly because some awards weren’t announced until late last year or early this year, Satran said. A few big grants are to be awarded in the coming weeks.

In other cases, its taken time for recipients to sort through unfamiliar federal rules and reporting requirements.

“In general, the Recovery Act wants to show transparency, and it wants to show that the projects we’re doing are making things better,” said Ryan Dicks, who was hired as Pierce County’s sustainability manager. He oversees spending of the county’s $4.4 million stimulus grant for energy-efficiency projects.

“Everything we’re doing has to have a decrease in greenhouse gases, for instance,” Dicks said. “We just have to do some documentation of the various activities to show that we’re making things better and not worse.”

Dicks said work on the county’s energy improvements – such as replacing the heating system in the Pierce County Jail and installing energy-efficient LED traffic lights – are beginning this month.

City of Tacoma officials received a similar grant for $1.9 million that they started spending earlier this year.

Other major work that was just getting started in February included rental housing at Salishan, which will help the Tacoma Housing Authority complete the redevelopment. Stimulus-funded work to build 91 rental apartments at Salishan began in February and is expected to wrap up next February.

The Housing authority estimates the Salishan work will ultimately create 272 part-time construction jobs, but only 25 were in place as of late February, said Tina Hansen, the authority’s real estate development manager.

Those estimates include all workers who will be employed at various times, not all full-time jobs, she said.

Elsewhere, a $12.6 million stimulus project to replace an aging U.S. Army Reserve training pier on Tacoma’s waterfront was approximately 1 percent complete in February, said Ken Beyer, spokesman for the U.S. Army Corps of Engineers in Louisville, Ky.

Meanwhile, stimulus work to renovate the military museum at Joint Base Lewis-McChord was 1.5 percent complete, said Mickey Traugutt, a project manager with Gig Harbor’s Wade Perrow Construction.

The museum renovation received $9.5 million in stimulus money and is scheduled for completion this fall. Traugutt said only two jobs had resulted from the project as of February.

Regardless, Traugutt said his company would be in much worse shape than it is now without its two big stimulus contracts. Wade Perrow is also the contractor for a $2.9 million upgrade of visiting quarters at McChord Field, a project that is mostly complete and had created an estimated 13.05 full-time jobs, he said.

“These contracts are absolutely keeping our guys and our subcontractors on the job,” Traugutt said. “We’re doing less and less private work, so this is what’s keeping us busy.”

FEDERAL RULES CREATED DELAY

Most grant recipients say recovery money sped up projects that were on hold. But the opposite happened in the case of the stimulus loan Tacoma Water received for its McMillin Reservoir project.

The $6 million low-interest loan helped the utility save $2.5 million over alternate financing options, but it delayed construction for about three months, said Tacoma Water spokeswoman Sonja Hall.

That’s because the stimulus loan program for water projects was still under development last spring when the reservoir work was ready to go out to bid, Hall said.

Construction officially began in September. Had it started earlier, the reservoir would have been ineligible for the loan, she said.

“Although participation in the loan program did result in some delay for the project, the economic benefits of participation far outweighed the costs of delay,” Hall wrote in an e-mail.

Likewise, confusion about conflicting federal and state wage rules delayed much of the state’s stimulus-funded housing weatherization work last year.

Local agencies that help make buildings more energy-efficient waited months for federal and state guidance, causing little work to take place until December. Gov. Gregoire sharply criticized the slow progress last fall.

Things are now moving forward as planned, said John Walsh, CEO of the Community Action Council of Lewis, Mason and Thurston Counties, which administers low-income housing weatherization money.

By February, Walsh’s agency had weatherized 128 units in its region and had another 44 units in progress using stimulus dollars, he said.

Meanwhile, Pierce County’s program had weatherized 36 homes and had an additional 156 units in progress, program coordinator Sherry Martin said.

“I think there’s a wrong impression that we haven’t been doing anything,” Walsh said. “We’re actually right on schedule production-wise.”

LOW BIDS, MORE PROJECTS

In the South Sound, $10.5 million in roadwork on Interstate 5 between Lacey and Tacoma has yet to begin.

Crews will replace more than 200 aging concrete panels that make up the 20-mile stretch of freeway. Up to three lanes at a time will be closed in some areas.

Work is expected to begin about April 1 and is bound to tie up traffic this spring and summer.

The project has taken longer to start than other major highway projects funded with stimulus dollars because it wasn’t on the state’s top priority list to receive funds last year, said Kelly Stowe, spokeswoman for the state Department of Transportation.

Work is getting done now partly because low bids on the state’s higher-priority transportation projects left millions in federal money for some second-tier projects, she said.

Additionally, officials couldn’t secure permits for some work higher up the list.

DOT officials didn’t find out they’d have enough money for the I-5 panel replacement until July, about three or four months after the first transportation stimulus projects had been selected, Stowe said.

By then, it was too late for last year’s summer construction season, Stowe said.

“All of our work is weather-dependent,” Stowe said.

The Lacey-to-Tacoma road work should wrap up this August, said Lisa Copeland, spokeswoman for the DOT’s Olympic Region.

Other local highway projects funded with stimulus dollars will continue into 2011, such as the Fife car-pool lanes. Others, including the construction of the eastbound Nalley Valley interchange at state Route 16 and I-5, won’t begin until late next year.

“Work hasn’t started yet on some of these projects, so there’s still a lot of jobs that are to come,” said Satran, the governor’s stimulus coordinator. “What I’m expecting to see over the next year or so is the peak of the Recovery Act impact on jobs, but it will play out over the next few years.”

BEYOND THE STIMULUS

Some local grant recipients who spent their stimulus money quickly now wonder what will happen when it’s gone.

Local workforce development councils, which received money for job training and unemployment assistance programs, had mostly exhausted it by February.

State officials gave the councils a June deadline to spend all their stimulus money – a much earlier timeline than for most recovery awards.

But demand for unemployment assistance and training will still be high after that, said John Loyle, deputy director of the Pacific Mountain Workforce Development Council, which serves Thurston, Mason, Lewis, Pacific and Grays Harbor counties.

“Personally, I’m pretty concerned what will happen July 1 when the Recovery Act money is all gone,” Loyle said. “There are still more people coming through our doors, and still so many people that we need to help.”

Loyle said he hopes Congress passes a new jobs bill to provide aid to training programs. His work force council will also seek support from the private sector and from the state, he said.

Other stimulus award recipients are also planning ahead so they don’t run into a shortfall down the road.

The Law Enforcement Support Agency, which handles police dispatching for Tacoma, Pierce County, Lakewood and several other regional communities, is trying to figure out how to sustain a new crime analysis unit funded with stimulus money.

The unit, called LESA Accelerated Response using Integrated Analysis and Technology (LARIAT), will help police in real time as they respond to crimes. It will collect data such as crime-scene video feeds, suspect photos and satellite views of pursuit routes – anything that could help officers and deputies respond without delay.

For instance, the LARIAT unit could tap into security videos while a bank robbery is under way to inform officers whether the robber is armed.

The stimulus grant is $3.3 million, which is just enough to start the program and keep it running for two years, said LESA interim director Mike Carson.

After that, LESA leaders will have to come up with another plan to fund LARIAT, which they estimate will cost about $950,000 per year, Carson said.

“We’ve had the question from the very day we submitted the grant: How are we going to sustain this thing? Carson said. “We’ve received a tremendous amount of support from our partnering agencies, but they made it very clear that they’re having their own issues funding basic services. There’s not going to be extra money out there to fund this.”

LESA expects to have LARIAT running in May.

Then, the program coordinator will be tasked primarily with finding a private partner or other ways to sustain it after stimulus funds dry up, Carson said.

Alternatively, LESA may have to scale back the program or adjust it somehow.

“I’m confident we can come up with something – I really am,” Carson said. “I think this is going to be something looked at as extremely valuable.”

Melissa Santos: 253-552-7058

melissa.santos@thenewstribune.com