It is a sweltering June morning, but inside a windowless conference room at the Sheraton Westport, the air is as cool and dark as Meramec Caverns while 30 highway engineers, clad in khakis and golf shirts, nibble on the remaining crumbs from the hotel breakfast bar.
The group has come from as far away as Wyoming to attend the annual leadership conference presented by the American Association of State Highway and Transportation Officials (AASHTO). And this morning they'll be treated to a presentation by one of the biggest names in the business: Pete Rahn.
A dozen years after first tackling roadway issues, Rahn today draws repeated accolades within the tight-knit world of state highway czars. "Pete's a new kind of highway director," notes Florida's former transportation secretary Thomas Barry Jr. "He didn't come up through the conventional ranks, and he's not afraid to innovate."
Rahn led the transportation department in his home state of New Mexico from 1995 to 2002. Two years later in 2004, a nationwide talent search landed Rahn the top spot with the Missouri Department of Transportation (MoDOT) — a job he wields today with ever greater power. In September Rahn will add another notch to his belt when he takes on AASHTO's revolving presidency.
Despite his gravitas, the 52-year-old Rahn remains eminently approachable. He accents his business suits with garish, transportation-themed neckties (cars, stoplights, school buses) that lend him the folksy affability of an elementary school principal. After driving his state-owned Chevy Impala in from Jefferson City, Rahn bursts into the quiet conference room with the unflappable vim of a campaigning politician.
"How are you?" roars Rahn, extending a hand to a few startled conference-goers. Offered the same enthusiastic salutation, Rahn shouts back: "Me? Oh, I'm fantastic! Great! Awesome!"
He's even more spirited when addressing the entire crowd, and he peppers the start of his hour-long Q&A with a few jokes. Rahn deadpans that he took the MoDOT job because he liked the acronym. "My old agency was the New Mexico State Highway and Transportation Department, or the NMSHTD," he says. "Invariably, everyone pronounced it 'Nim-shitted.' You can imagine what that does to an agency's morale!"
As to his insights on effective management, Rahn relays a story from New Mexico. The governor had just appointed him to head the state's transportation department, and the first thing the inexperienced Rahn did was gather his employees together for a meeting.
"I encouraged them that it was their job to challenge their managers," recalls Rahn.
"And right after I said that, a guy stood up and said: 'Well, I think you're going to really screw things up, and after four years we'll be left cleaning up your mess.'"
The man would challenge Rahn several more times during the speech before he realized the employee was just doing what he asked him. "He was challenging the leadership!" exclaims Rahn. The next time the employee interrupted him, Rahn rewarded the man for his candor by extending him a day off work with pay. "No sooner did I say that that another employee stood up from his chair and shouted: 'Yeah, well, I don't like you either!'"
These days a number of critics in Missouri are also shouting out their displeasure for Pete Rahn. This winter Rahn infuriated leaders on both sides of the Mississippi River by pushing for a private toll bridge to address the region's burgeoning interstate traffic concerns. After months of political squabbling, Rahn backed off the toll bridge plan this past May. Now $239 million in federal earmarks are in jeopardy of expiring as Missouri and Illinois officials continue to wrangle over plans for the bridge.
More pressing for residents of St. Louis is MoDOT's controversial plan to rebuild twelve miles of Interstate 64 (Highway 40). Last November the transportation department rejected the wishes of regional leaders and residents when it approved a $530 million plan that will close down parts of St. Louis' main east-west artery for two years.
"To call that situation a 'quagmire' in the making is a gross understatement," says Democratic state representative Tom Villa of St. Louis, who, in a speech before the General Assembly, compared Rahn to the engaging con artist Harold Hill in The Music Man.
"The analogy was that he's selling us the band uniforms, instruments and everything else, while turning a deaf ear to our real needs and concerns," comments Villa, who remembers that Rahn showed up unannounced the next day at his Jefferson City legislative office.
"I don't know if his minions told him to see me or what," recalls Villa. "But I will say this about him: He's a heck of a salesman — and charismatic, too!"
Pete Rahn quickly made a name for himself at MoDOT by bringing a portable air horn with him to the departments quarterly performance evaluations. Whenever someone offers an excuse for not meeting their performance goals, I blast the horn, he says. Its my version of The Gong Show. Other gimmicks include arriving at press conferences dressed in the type of Day-Glo safety vest worn by highway workers. To further promote driver safety, Rahn has gone so far as to set up his office on the shoulder of Highway 63 between Columbia and Jefferson City. A plastic flowerpot glued to his desk completed the scene.
"Trucks were driving by and blowing stuff all over," says Rahn, whose dearth of hobbies, he concedes, provide him ample time to dream up work-related ideas. "I think a CEO's job is to show leadership in a demonstrable way that the public and members of your organization can understand. Sure, some things may seem corny, but they convey a message: In this case, the public needs to know that the roads are our maintenance workers' office and people need to slow down."
Sadly, those words came only a few weeks before a drunken driver from St. Peters struck and killed Gavin Donohue, a 22-year-old student at the University of Missouri-Rolla, while he was working on a Highway 40 road construction project just east of the Boone's Crossing overpass in Chesterfield.
Charged with running one of the state's largest bureaucracies, with more than 6,000 employees and a budget north of $2.3 billion, Pete Rahn acknowledges he was an unlikely candidate for the state's top highway job.
"I'm the first to admit that there's nothing on my résumé that would have anyone saying, 'Oh, this guy would make a great transportation secretary,'" says the MoDOT director, whose office at the state capital is adorned with a bumper sticker on the wall that reads: "Dreams Minus Action = Squat."
"I'm sure there are plenty of people who thought I'd be terrible," adds Rahn, "but I don't believe that's the case."
In the early 1990s Rahn was employed as an insurance agent in the northwestern New Mexico town of Farmington. Out of nowhere he leapfrogged to become that state's transportation secretary. As he explains it, a friend of his in the state legislature was running for governor on the Republican ticket and asked Rahn to help raise funds. The friend lost the primary to soon-to-be governor Gary Johnson, who recruited Rahn to join him on his campaign. After Johnson won the governorship, Rahn was rewarded with a choice of two cabinet positions: transportation or tourism.
"At first I wasn't really interested. I already had a job, but the governor was a big believer in the efficiencies of the private sector and was making a cabinet of businesspeople," he recalls. "A colleague suggested that if I really wanted to make a difference, I'd take the transportation job."
While seemingly unqualified for the position, Rahn, who fancies himself more a CEO than government bureaucrat, maintains he wasn't completely ill-suited for the job. He'd earned a degree in city and regional planning during his days at New Mexico State University in the 1970s. At the age of 24 he was elected county treasurer for rural San Juan County, located along the Arizona/Colorado/Utah border. Later he served as president of the New Mexico Association of Counties.
As New Mexico's transportation secretary, Rahn rolled up his sleeves and instituted business techniques not previously associated with state government, such as department-wide performance trackers and the use of so-called design-build projects.
The I-64 renovation in St. Louis follows the design-build model, with the contractor responsible for all aspects of the project, including the engineering, architecture and construction. (Traditionally the state has awarded road contracts on the design-bid-build model, in which projects are designed, put out for bid and built by the lowest-priced contractor.)
After six years on the job, Rahn boasts that his department became the first state agency to win New Mexico's Zia Award — an honor based on the prickly requirements of the National Institute of Standards and Technology. Rahn resigned the post in 2002, just prior to the end of Johnson's second term in office, when the new governor-elect Bill Richardson would select his own cabinet.
He was working as a government liaison for bridge manufacturer Contech Construction Projects when a corporate headhunter recruited Rahn for the MoDOT position. Until moving to Jefferson City, Rahn had spent his entire life in New Mexico and says he never anticipated leaving home. His two adult children still live in New Mexico. "My wife and I like Missouri," says Rahn, "except for the humidity. It's murder."
Bill McKenna, a member of the six-person Missouri Highway Commission, recalls that the transportation department was in desperate straits when it hired Rahn. "Seventy-five percent of the voters recently had disapproved of additional funding for MoDOT," says McKenna. "The then-governor Bob Holden chastised the commission to get its act together, and the previous MoDOT director subsequently resigned."
The highway commission, says McKenna, sought a leader with a passion to shake things up and the personality to charm both the media and MoDOT's many detractors. From dozens of candidates, Rahn emerged as the unanimous choice. In September 2004 he accepted the $140,000-per-year post and became the first non-engineer ever to lead MoDOT.
"So he doesn't have a degree in engineering," posits McKenna. "We needed someone to do things differently, and so far that's been the case."
Rahn began by initiating the "Smooth Road Initiative" that repaved 2,200 miles of Missouri's busiest highways. McKenna notes that the project has not gone unnoticed, with a national survey announcing last month that the quality of Missouri roads jumped from 28th best in the nation in 2004 to 17th in 2005.
Not long into his tenure, Rahn and his staff spent two days parsing out a corporate strategy for MoDOT that critics contend reads like fortune-cookie prophecy: "Our mission is to provide a world-class transportation experience that delights our customers and promotes a prosperous Missouri."
"I sent the new mission statement out to all 6,300 MoDOT employees and I got 370 e-mails back," Rahn recounts. "A lot of people had problems with the words 'world-class' and 'delights.' They asked me, 'Isn't it enough just to make people happy? Do we have to delight them, too?' My position is we should set the bar as high as possible."
Thirty-five thousand. Thats the number of vehicles MoDOT says it needs to disappear from the roads in order to make the I-64 renovation work.
The formula goes something like this: Each day some 175,000 cars and trucks travel the twelve-mile stretch of I-64 between Kingshighway Boulevard in the city and Spoede Road in St. Louis County. According to transportation department figures, the highway's alternative routes — Interstate 44, I-70, Manchester Road, Page Avenue, Clayton Road — can handle a maximum of 140,000 additional vehicles per day, leaving no room for some 35,000 autos.
"Those drivers are going to have to flex their work hours, telecommute, carpool or use mass transit," explains Rahn during a stop by MoDOT's Chesterfield office earlier this summer. "We're not trying to kid anybody. This is going to be difficult and inconvenient, but we're confident St. Louis is going to survive."
In the months before the project's plans were made clear, much public clamoring was made as to whether the contractor would close all twelve miles of interstate during construction. St. Louis Mayor Francis Slay referred to the notion as the "nuclear option" that could have a catastrophic impact on downtown's nascent resurgence. St. Louis County Executive Charlie Dooley also implored the agency to keep the highway open.
In May 2006 the civic booster group Downtown St. Louis Partnership released a study that indicated shutting down just one lane of I-64 would cost the region $38 million in lost productivity. Shutting down two lanes raised the losses to $89 million. The study never took into account the possibility that that the entire highway would close. "It's just not something we contemplated," says partnership president Jim Cloar.
A few months earlier, the East-West Gateway Council of Governments, a regional committee charged with distributing federal transportation funds, passed a resolution urging MoDOT to restrict its contractor from closing I-64. MoDOT's own telephone survey — conducted in December 2005 — found that of the 1,300 area residents polled, 66 percent opposed shutting down the interstate, even if it meant an earlier completion date. Publicly, Rahn downplayed concern that the entire stretch of I-64 would close but left open the possibility that parts of the highway would shut down. Still, more than a few public officials were taken aback last November when MoDOT announced its winning bidder — Gateway Constructors — would complete the project in just three years by closing down the highway in two different sections.
Beginning next January both east- and west-bound lanes will close between I-170 and west of Spoede Road. In 2009 the eastern half of the project between 170 and Kingshighway will close for construction.
"By leaving one side of the highway open Rahn argues that he's not totally shutting down the highway," posits East-West Gateway executive director Les Sterman. "But it's like a pipe. If you shut off one side, the water is not going to flow. It's the same thing with a highway. It doesn't alleviate a thing."
The losing I-64 bidder — a consortium of contractors known as FAM-64 and led by the Texas-based Fluor Enterprises Inc. — proposed rebuilding the highway while leaving two lanes open in each direction. Rahn says that while the FAM-64 proposal may have appeased certain critics, it would have provided fewer structural improvements and stretched construction over four years. By contrast, he refers to the Gateway Constructors plan as a "very bold" approach that will speed construction and make the work zone safer by eliminating through traffic.
The design-build model of the project will also save MoDOT a considerable amount of money. "If we did this the conventional way, we'd need another $200 million and the construction would take ten years," notes Rahn. "Design-build provides greater efficiencies. The contractors mobilize their equipment just one time and purchase in quantities that provide real savings."
The 200-plus-page environmental impact study that MoDOT drafted for the "New I-64" cites several more economic benefits. The report concludes St. Louis drivers will shave 9,000 hours off their commute time, for a cost savings of $850 million over twenty years. The study further suggests that commuters will save an additional $460 million in vehicle operating costs thanks to the roadway's smooth pavement. Drivers will retain some $155 million in crash-cost savings over twenty years.
Curiously, the MoDOT study provides no such numbers for the financial impact the construction will have on commuters and businesses. Republican state representative Scott Muschany of Frontenac estimates that figure will exceed $100 million.
"They say they're doing it this way because it saves MoDOT money," says Muschany. "But what about the businesses along that corridor? They're exacting a tremendous toll on them. Employees are coming in late, companies are setting up satellite offices to deal with traffic, deliveries are taking longer — you name it. It's a tremendous burden."
This past spring Muschany crafted a House resolution demanding that MoDOT leave the highway open during renovation. The non-binding legislation garnered 40 co-sponsors but never reached the floor for a vote. Either way, Muschany says it wouldn't have mattered. Missouri is one of only seven states whose transportation department is ruled by a citizen committee of highway commissioners — and not the governor or legislature.
"In Missouri we really don't even have budgetary control, because MoDOT has dedicated income from the vehicle sales tax," laments Muschany. "They're ironclad. I can scream and shout as much as I want and they disregard public outcry and say, 'OK, now we're going to go ahead and do it our way.'"
Yet Muschany isn't giving up. He believes MoDOT failed to properly study the economic consequences of the project before agreeing to shut down parts of the highway. Now he's searching for a person or business whose property lies adjacent to the construction zone and can claim financial damage.
"The next phase is legal action," promises Muschany, who says he's secured attorneys willing to work pro bono on the case and an unnamed — but wealthy — individual who's agreed to bankroll the legal battle for as long as it takes. "It's not that I don't think Highway 40 needs to be improved, I'm just saying whose bright idea was it to close the road for two years?"
Ultimately, the state representative pins that blame on Rahn. "He's the one in charge, and he's accountable," says Muschany. "I don't think it's from ill intent, but then, there are a lot of people who do stupid, goofy things and don't know they're causing a major problem."
Rahn's tenure in New Mexico was not free of controversy. In 1999 the Albuquerque Journal ran an investigative series on the manner in which Rahns transportation department bid the $314 million widening of N.M. 44 (now U.S. 550).
The series began: "Pete Rahn had a problem. It was April 1997 and Gov. Gary Johnson had let his Highway and Transportation Department chief know in no uncertain terms that he wanted N.M. 44 from San Ysidro to the Farmington area widened to four lanes. But Rahn didn't have any way to do it."
Two weeks after the governor's order, Rahn announced he'd received an "unsolicited" proposal from Kansas-based Koch Industries. The offer outlined a way in which the cash-strapped state of New Mexico could build, design, finance and warranty the highway through a public-private partnership.
The Journal later reported that specifications from the Koch proposal were used to draft the RFP (request for proposals) to bid the highway. Koch won the contract when no one else bothered to submit a bid. The Journal also quoted Koch executive Bob Heitmann, who confirmed that the "unsolicited" offer from his company had in fact been solicited earlier by employees within Rahn's office.
In response to the Journal series, Rahn drafted a handout critical of the newspaper's reporting and denied knowing of anyone in his office who contacted Koch about the N.M. 44 bid.
Like the current plans to rebuild I-64, the N.M. 44 proposal followed the basic tenets of the design-build model. Koch controlled the entire scope of project and completed construction within three years. The roadwork recently has come under additional attack as parts of the highway have begun to crack and buckle just a few years following construction.
"That road is 118 miles and crosses over mountains, basins and deserts with extremely unstable soils," defends Rahn. "The problem area is maybe three miles long. Given those difficulties, I'd say it was an extremely successful project."
As was the case in New Mexico, Rahn's critics in Missouri are now asking pointed questions about several MoDOT bids, including I-64. Last November Rahn raised eyebrows when he offered a handful of area leaders the opportunity to review the two competing bids for the project — but only on the condition that they sign a confidentiality agreement not to discuss the proposals outside the meeting. Mayor Slay and Les Sterman, of East-West Gateway, declined the invite.
"I was very uncomfortable about meeting and making a decision behind closed doors," Slay told the Post-Dispatch the next day. "I also don't think two hours was enough time to read all of the documents, fully understand, and make an informed decision." (Slay's office did not respond to numerous interview requests for this article.)
Sterman calls the confidential meeting one of the stranger requests he's seen in his 30 years of working on public transportation issues. "When you're spending $500 million in public money it should be as open a process as possible," says Sterman. "There was no reason for it to be a private meeting. The public didn't know anything about the project until after it was already signed and a done deal."
The East-West Gateway director raises additional concerns over the lack of competition involving design-build projects. "The problem with that model is that you're only going to have one or two bidders," states Sterman. "The projects are so large and cost so much to develop a proposal that any logical contractor wants at least a 50-50 chance of winning the bid."
The I-64 renovation brought just two bidders, with MoDOT awarding the losing contractor a stipend of $1 million for its work drafting a bid. Last week Missouri's only other design-build project — a plan to rebuild some 800 state bridges — was delayed after the two bidders for the work expressed concern over the performance bonds for the $600 million to $800 million project.
For his part, Rahn continues to champion the design-build formula and private-public partnerships. "My fingerprints are all over the I-64 project," says Rahn. "When I came into office the plan was to do this over thirteen years and in multiple pieces that would cost the state a lot of money. The simple fact is that design-build is the most economical way to take on a large, complex project like this."
In February Rahn raised suspicion among Missouri and Illinois officials when he produced an "unsolicited" offer from Texas-based Zachry American Infrastructure. The proposal detailed plans in which Zachry would construct a privately financed, $1 billion toll bridge to connect I-70 across the Mississippi River. Named in the plans was Zachry executive Bob Heitmann — the same man who worked for Koch Industries in the 1990s, when Rahn received the "unsolicited" offer to rebuild New Mexico's Highway 44.
"'Unsolicited' doesn't mean that it drops out of the clear blue sky," explains Rahn. "It simply means that we haven't made a formal request for proposals. But anyone who follows these issues knows were looking at alternatives. It's not uncommon at all then to receive unsolicited proposals."
The Zachry offer quickly set off a fight between Rahn and regional officials, who, prior to the unsolicited offer, were prepared to approve construction of a smaller coupler bridge adjacent to the Martin Luther King span. So heated was the debate that MoDOT reportedly refused Illinois Department of Transportation (IDOT) workers access to survey the Missouri side of the river.
By March the squabbling had reached Washington D.C., with U.S. Representative William Lacy Clay penning a letter to Governor Matt Blunt. "I urge you to work with the Missouri Highway Commission to direct MoDOT director Pete Rahn to work in a similar cooperative fashion with IDOT," Clay wrote the governor.
U.S. Senator Claire McCaskill also joined the fray, telling the Belleville News-Democrat that she'd been working behind the scenes to end the bickering. "There has been some stubbornness," said McCaskill. "And in fairness to Illinois, the stubbornness has been on the Missouri side of the line."
Rahn abruptly dropped the plans for the toll bridge in April when he presented a proposal that would have Illinois shouldering $500 million of a $569 million bridge to connect Interstate 70. "Our analysis was that the MLK coupler bridge would have paralyzed downtown traffic," defends Rahn. "Hopefully this new proposal will be a good compromise. No one has thrown any big stones at it yet."
As for the strife he's caused with the toll bridge proposal and I-64, Rahn remains unapologetic. "A lot of what we do can be controversial, but that doesn't mean we're wrong."
Back at the Sheraton hotel last month, Rahn tells tomorrow's transportation leaders to follow a similar path. "The problem — and allure — of this job is that there is never enough money to do every project you want," says Rahn. "Innovation can damage your career. But if you're not making mistakes, then you're not pushing boundaries."
At the conclusion of the morning Q&A Rahn will climb back in his Impala for the two-and-a-half-hour drive to Jefferson City. The trip jumps to three hours if Rahn stops along the highway — as he's apt to do — to thank MoDOT construction workers for the jobs they do.
"The secret to success," Rahn imparts, "is to get at least 30 percent of the people behind you. They'll turn the opinion of another 50 percent. The 20 percent left over will have to decide to either get on the bus or get out of the way."
