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EDA Public Works Program: Performance Evaluation

 

Author(s): CUPR ( Burchell ), Rutgers University and NJIT ( Pignataro ), NJIT and NCIS ( Griffis ), Columbia University and NARC ( Epling ), Princeton University and CDCPS ( Haughwout ), NARC and UCSP ( Varady, Looye ), University of Cincinnati

 

SUMMARY OF FINDINGS
PUBLIC WORKS PROGRAM PERFORMANCE EVALUATION
STUDY OVERVIEW

 

• The purpose of the research described here is to evaluate all 205 Economic Development Administration (EDA) Public Works Program projects that received their last payment in FY 1990. This means that, as of that date, the projects were completed and structures associated with them either occupied or soon to be occupied. Thus, at the time of this research-six years later-these projects had been sufficiently established to make their evaluation possible.

 

• Since 1965, EDA's mission has been to promote the long-term recovery of economically depressed areas by assisting local governments via public works project grants in generating and retaining jobs and in stimulating commercial and industrial growth.

 

STUDY PROCEDURES

• The study was undertaken from November 1996 through March 1997 by research teams from five universities and a major professional organization. All principals of the research teams have extensive experience in both economic development and infrastructure studies. Each principal spent significant time in the field researching individual projects and talking to grantees. Each principal and affiliated staff participated in some aspect of research analysis and in writing the final report. All concur with the findings presented below.

 

• The research team contacted by mail and telephone 205 grantees of public works projects. To help the grantees better understand the purpose and types of information necessary to undertake the evaluation, all grantees were invited to attend seminars conducted by the research team at 13
locations nationally. Sixty (60) project sites were visited to conduct in-depth discussions with grantees to learn more about their individual projects' impacts and to validate the information that they were in the process of providing.

• The analysis uses performance measures developed by EDA specifically to evaluate public works projects. Performance measures relate primarily to numbers of various types of jobs created or retained and amounts of private- and public-sector funds leveraged.

 

PROJECT TYPE AND CONTEXT

• From a universe of 205 EDA public works projects receiving a closeout payment in FY 1990, all 205 were successfully contacted.

 

• The composition of the 203 completed' public works projects is as follows:

Buildings
27
13.3
Industrial Parks
59
29.1
Roads
17
8.4
Water/Sewer
87
42.8
Marine/Tourism
13
6.4
Total
203
100.0

 

• In terms of the context of the above projects, EDA public works projects take place in locations where levels of unemployment and percents of the population below the poverty level are 40 percent higher than state and national averages. These are also locations where per capita income is typically 40 percent lower than averages at the state and national levels.

PROJECT COMPLETION

• Of those public works projects contacted by the research team, 99 percent (203) were completed as planned.

• Ninety-one percent (185) of the projects were completed on time.

• Fifty-two percent (105) were completed under budget.

 

PROJECT IMPACTS

• Project-Related Direct Impacts

• Ninety-six percent (195) of the public works projects produced permanent jobs six years after completion.
• Eighty-four percent (171) leveraged private-sector investment over the period.

• On average, each public works project produced 327 direct permanent jobs for every $1 million of EDA funding.

• Based on average EDA funding of $660,557 per project, $3,058 in EDA funds was spent per job created or retained. Total cost (all sources of funding, including EDA) per job created or retained was $4,857.

• Not including public projects, for every $1 million of EDA funding, $10.08 million was leveraged in private-sector investment.

• For all projects, for every $1 million of EDA funding, another $1 million was leveraged in federal, state or local investment.

• 15.0 FTE (full-time-equivalent) construction jobs were created per $1 million of EDA funding, carrying out solely the grant-supported component of capital infrastructure.
Nonproject-Related Direct and Indirect Impacts

• Nonproject-related direct or indirect jobs (those that occur because of the project or the project's jobs) were
found to be present in 30 and 35 percent, respectively, of all public works projects.

Considering all projects' ability to generate nonproject-related direct or indirect effects, for every $1 million of EDA funding, an additional 50 jobs and $1.18 million in private-sector investment were generated in nonproject-related direct effects, and an additional 64 jobs and $126,180 were generated in indirect effects. Except in cases where the project was tax-exempt, public works projects increased the local tax base at a level of $10.13 million per $1 million of EDA funding.

 

PROJECT IMPACTS (GENERAL)

• Public works projects' economic impacts generally increase with time. Jobs resulting six years after completion were, on average, twice the number witnessed at project completion.

• EDA public-sector economic stimuli create private-sector jobs at high levels of success and low levels of cost.

 

CONCLUSIONS

• Most of the public works projects achieved EDA's objective of providing communities with the necessary infrastructure to expand their economic base.

• Jobs and private investment have occuned in many areas that would not have experienced these benefits without EDA assistance.

• EDA offices as an instrument of government, and EDA field representatives who interact with grantees, are well-regarded by their constituencies.

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