Coronavirus Ended Traffic, But It Could Also Delay These CDOT Construction Projects

Nathaniel Minor/CPR News
Interstate 70 west of Denver approaching Floyd Hill is backed up with ski traffic on Jan. 18, 2020.

The state Department of Transportation warns that Colorado’s coronavirus-ravaged economy and state budget are threatening to upend the agency’s plans to spend hundreds of millions of dollars on construction projects this year.

The Colorado Department of the Treasury has not yet issued $500 million in debt that is supposed to pay for the first installment of a multi-year, $1.6 billion set of road projects approved last fall. That was supposed to happen in March, CDOT says. In addition, CDOT now expects to lose about $250 million in gas tax and general fund revenue over the next four years.

Even if the state ultimately issues the debt, as CDOT expects it will, the agency isn’t convinced it will receive all of that money. So it’s preparing to put some major projects on hold.

"It's a scenario we don't want to be in,” CDOT executive director Shoshana Lew told the Transportation Commission on Thursday. “There's really nothing we can do that's a great outcome.”

Contracts for some projects — like part of the Interstate 25 expansion between Denver and Colorado Springs, and a new rush-hour toll lane on Interstate 70 near Empire — have already been awarded and are under construction. Those will likely move forward.

Hart Van Denburg/CPR News
Construction and traffic on Interstate 25 between Monument Hill and Palmer Divide.

But other projects that are earlier in the bidding and awarding process are now in limbo. Those include part of the toll lane expansion on I-25 north of Denver, U.S. 50 repairs near Grand Junction and more than 20 others. They are listed on pages 12 and 13 of this presentation.

"Unfortunately, it's hard to envision a pathway, with the current funding scenario ... that at least some of these projects don't have to get purged,” Lew said.

If funding issues push farther into the future, big-impact projects — like a rebuild of I-270, the expansion of I-70 at Floyd Hill and the rebuild of I-25 in Pueblo — could be jeopardized as well.

"We're getting gut-punched every day, and this certainly one," commissioner Irv Halter said.

Democratic state treasurer Dave Young said his office originally planned to issue the certificates of participation in March, but there was no market at the time as the COVID-19 pandemic continued to spread. Young said he’s hopeful this delay won’t mean a significant setback in funding for CDOT.

"The development of this has been going on for months and months. By statute we are required to issue this $500 million by the end of June. We have flexibility there, and we’re doing everything we can to make sure we can meet the statutory deadline,” Young said.

He did say it’s possible the deadline will have to be pushed back even further because of market volatility. The state is expected to receive an updated economic forecast from non-partisan legislative staff on May 12. 

“We’re balancing a lot of things at the same time to make sure this thing is done in a proper way,” said Young on issuing the debt. “We’re trying to make sure we’re pushing the issuance forward in a timely way so we can make use of the funds now and get these projects going.”

The $500 million and the work it represents is key to contractors across the state, said Tony Milo, executive director of the Colorado Contractors Association. Small operations could close if projects are postponed or abandoned, he said.

“We need this money to be issued today,” he told the commission.

It’s also possible that Colorado could see a windfall from the federal government if Congress passes another stimulus bill. But CDOT is not counting on it until President Trump signs such a bill, Lew said.