Arkansas combines best practices for an innovative Interstate Rehabilitation Program - Arkansas State Highway and Transportation Department

Public Roads, March, 2002 by Dan Flowers, Sandra L. Otto

So, you think you might complete the rehabilitation of 380 miles (612 kilometers) or 60 percent of your state's interstate highways in five years? No way! You also think you can come up with some creative financing to do this. Probably not. On top of that, you think you can do this with the approval of the voters in your state. Really no way/And finally, you think you might receive honors for this innovative program -- five awards in the first seven months of the program. Highly unlikely.

Actually, the big news is that the Arkansas State Highway and Transportation Department (AHTD) is making this all happen through its Interstate Rehabilitation Program (IRP) and the accompanying "Pave The Way" information and safety campaign. The department has put together numerous best practices -- in financing, project management, construction, and communications that together create a compelling model for tackling a project of this scope.

What isn't news is aging interstate highways with surfaces in need of repair, bridges in need of improvement to withstand today's load requirements, and limited resources to begin those repairs. As many of our country's interstate highways get on in years, state departments of transportation are searching for answers to a host of interstate rehabilitation issues.

Because Arkansas was the first state to complete its original allotment of interstate highway miles, the Arkansas Highway Commission and AHTD faced the problem of needing to rehabilitate some of the oldest interstate highways in the United States. Designed to accommodate the country's revived commerce in the post-World War II era, Arkansas interstate construction began in the early 1950s and was completed in the mid-1970s. More than 30 years of wear and tear resulted in one of the roughest interstate systems in the country.

Arkansas' Creative Financing

Finding a solution to the funding problem presented the first and most challenging obstacle. The cost for the state's original 542-mile (872-kilometer) interstate system was $837 million, with much of the funding supplied by the federal government. The estimate for repairing about 60 percent of those miles in today's market was $950 million.

As in most states, Arkansas had used the "pay-as-you-go" method of regular road maintenance and rehabilitation, and the state repaired only what they could afford in each annual budget. But with a program of this size, this method just wasn't an option.

By conducting research into past and present methods, the department identified several previously successful concepts, developed a few new ones, and built an innovative program for Arkansas. Critical issues involved overcoming financial constraints, determining what rehabilitative methods would be used, addressing work schedules, and communicating with the public.

For the Arkansas program, the innovation is in the mix or combination of previously established processes and procedures. By combining these "best practices" into a single program, Arkansas IRP has become a model program.

AHTD's problem-solving strategies for funding began with a review of preferred financial practices; however, the agency also developed a few new and innovative ones along the way. Officials soon realized that participation and cooperation from several groups, including federal and state governments as well as the public, were needed for a project of this magnitude.

The department recognized that this issue needed to go to a higher level and involve the governor, state legislature, and most likely the Arkansas voters. This was a monumental commitment of money as well as a major inconvenience issue, and AHTD believed the support of the public was a high priority.

In early 1998, the Arkansas Highway Commission began exploring the use of Grant Anticipation Revenue Vehicle (GARVEE) bonds for the rehabilitation project. These bonds may be retired with future anticipated federal funds in a "buy now, pay later" payment arrangement.

In that same year and at the request of the Arkansas Highway Commission, Gloria Jeff, the deputy administrator of the Federal Highway Administration (FHWA); Jack Basso, the chief financial officer for the U.S. Department of Transportation; and David Seltzer, an FHWA innovative financing specialist, came to Arkansas to brief the commission on innovative financing opportunities. In early 1999, another FHWA innovative financing specialist, Max Inman, was invited to speak to the legislature on financing issues.

With the support of the governor, the 1999 legislature expressed a desire to provide funding for all roads -- not just interstate highways. The legislature passed phased-in increases for a three-cents-per-gallon gas tax over three years and a diesel tax of four-cents-per-gallon over two years. Legislators also authorized the Highway Commission to sell GARVEE bonds subject to a vote by the public. Gov. Mike Huckabee campaigned for the program and made interstate rehabilitation a major part of his state infrastructure and roadway agenda.