By Dale Kasler and Phillip Reeser
Published Monday, Mar. 15, 2010
This is the seventh installment in the ongoing "Road to Recovery" series.
After six months of fear and frustration for Thomas Avalos, it was no coincidence that his job search landed him at Sacramento International Airport, where he installs air conditioning ducts at the terminal under construction.
The "Big Build," as the $1 billion terminal project is known, is one of a slew of public works projects providing some economic lift to the Sacramento area during the recession.
"This is one of the very few jobs going," said Avalos, 47, who added that he couldn't even get work mowing people's lawns during his job hunt. "To have a job in this field is very fortunate." He's one of 400 construction workers building the new terminal.
With the residential and commercial construction industry still largely in hibernation, government is picking up much of the slack. Public works projects are pumping about $4 billion into the Sacramento economy while altering the area's landscape for years to come.
Construction on publicly funded projects rolls on despite dire budget problems for all branches of government. Some of the money is coming from the federal stimulus package, aimed at shoring up the economy. State, local and school district bonds approved in better times represent another major source of funding.
Taxpayer money is moving dirt and building bridges at Sacramento's downtown railyard, future site of a massive urban village. It's upgrading Folsom Dam and retooling sections of Highway 50 and Interstate 80.
School districts are building and remodeling classrooms even as they lay off teachers. The University of California, Davis, alone is spending nearly $800 million on construction, about half of it on a new surgery center at the Medical Center in Sacramento.
"It's all that's out there," said Terry Street of Roebbelen Contracting Inc. of El Dorado Hills, which specializes in school construction.
Because of dwindling tax receipts, public works construction spending has actually shrunk by 26 percent in Sacramento over the past three years, according to the Construction Industry Research Board. But the downturn in private construction housing, commercial and industrial has been far more severe.
As a result, government commands a bigger share of the construction pie: some 40 percent of the market in Sacramento vs. 29 percent before the downturn.
"It does seem like a lot of the larger jobs that are keeping a lot of men employed are government jobs," said Dustin Pacheco, an electrical apprentice at the airport terminal.
To measure the economic impact of public works projects, The Bee compiled a list of jobs recently completed, under way or soon to begin. The list includes projects entirely funded by taxpayers, via the federal economic stimulus package, voter-approved infrastructure bonds and other public sources. It also includes hybrid projects such as the airport, where Sacramento County is paying the bill but is being gradually reimbursed through fees paid by passengers and airlines.
The bottom line: a $4 billion contribution to the local economy.
"It's coming at the right time," said economist Jeff Michael of the University of the Pacific.
Some conservative economists remain skeptical about the impact of government spending. Although some public works projects are essential, tax breaks are a more effective method of boosting the economy, said UCLA economist Richard Roll.
"Give the money back to the people; let them invest the money as they like," said Roll, one of scores of academics who signed an open letter to President Barack Obama last year opposing the stimulus plan. "It's more efficient to do that."
While national unemployment is stuck at 9.7 percent, the White House says the economy would be in worse shape without the stimulus; it argues that the package has saved or created 2 million jobs. Several prominent private economists have pegged the job figure at 1.5 million, though most Republican leaders say the stimulus has done little or no good.
In Sacramento, unemployment in January reached 13.1 percent despite massive government spending. The region's share of the stimulus comes to $918 million, including $350 million for construction and other public works projects. Yet the construction industry remains deeply troubled, with employment half what it was in 2005.
Part of the problem is that much of the stimulus money hasn't been spent yet. Washington has yet to disburse all of it, and the state has taken months figuring out how to allocate much of its share. That's caused frustration among contractors and workers.
"There's been stimulus money allotted, but where is it?" said Dennis Canevari, president of Avalos' union, Sheet Metal Workers Local 162. About 400 members of Local 162 are unemployed, or 17 percent of the total.
The stimulus dollars are now starting to flow. Caltrans officials said they expect to commit stimulus funds to 900 projects statewide, creating a highway construction boomlet. Sacramento County, for instance, will use around $10 million to rehabilitate major stretches of Power Inn Road, Rosemont Drive and other thoroughfares.
"We expect the majority of projects to be completed this year," said Caltrans spokeswoman Tamie McGowen.
Since December, Rancho Cordova has been using federal stimulus money to build a bridge extending International Drive between Zinfandel Drive and Sunrise Boulevard.
The $17 million project provides work for people like Don Kirkorian. Until recently he's been bouncing from one job to the next in the Fresno area, where he lives. Now he expects to be working on the bridge for a year or longer.
Although he goes home only on weekends, Kirkorian calls himself "one of the lucky ones." At his union, a Laborers local in Fresno, the waiting list of unemployed members is as long as he's ever seen it.
Government red tape has actually been a blessing of sorts for contractors. Because it can take so long to get a public project approved, governments are reluctant to cancel them even if the economy turns bad, said Matt Kelly of the Sacramento Sierra Building Trades Council.
That can be confusing to voters. The Folsom Cordova Unified School District is starting a $27 million administration building this summer despite budget problems that have forced it to consider furloughs, increase class sizes and eliminate some sports programs.
The $27 million comes from a bond approved by voters three years ago. The money can be used only for construction, and district officials said it makes sense to start the project when costs are low.
Still, some public works projects have been altered or scrubbed in response to economic reality. Sacramento County scrapped a six-story, $77 million Westin hotel that was supposed to sit atop the new terminal. The county also postponed a $160 million parking garage, plus a $23 million baggage system for the other terminal.
The state's budget problems have hurt some projects funded by voter-approved infrastructure bonds. Officials couldn't issue $7 billion worth of bonds until last April.
Thousands of projects were put on hold for months, the downtown Sacramento railyard among them.
Road and bridge work at the railyard came to a halt last summer for lack of $47 million in bond money. Stan Thomas, the head of developer Thomas Enterprises, later told The Bee that the entire project had been threatened by the delay.
It wasn't until last September that the funds became available. Work resumed. More government money is expected to arrive soon, and the developer says several hundred construction workers will be on the job by summer.
"The funds are starting to come through," said Suheil Totah, Thomas' point man in Sacramento. "It really is these government funds that are keeping contractors busy."