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80–651 PDF 2002

S. HRG. 107–566

FEDERAL ROLE IN MEETING

INFRASTRUCTURE NEEDS

HEARING

BEFORE THE

SUBCOMMITTEE ON TRANSPORTATION AND

INFRASTRUCTURE

OF THE

COMMITTEE ON

ENVIRONMENT AND PUBLIC WORKS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

ON

A REVIEW OF FEDERAL INVESTMENTS AND PRIORITIES IN NATIONAL

PUBLIC WORKS PROJECTS

JULY 23, 2001

Printed for the use of the Committee on Environment and Public Works

(
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS1

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

BOB SMITH, New Hampshire, Chairman

HARRY REID, Nevada, Ranking Democratic Member

JOHN W. WARNER, Virginia

JAMES M. INHOFE, Oklahoma

CHRISTOPHER S. BOND, Missouri

GEORGE V. VOINOVICH, Ohio

MICHAEL D. CRAPO, Idaho

LINCOLN CHAFEE, Rhode Island

ROBERT F. BENNETT, Utah

BEN NIGHTHORSE CAMPBELL, Colorado

MAX BAUCUS, Montana

BOB GRAHAM, Florida

JOSEPH I. LIEBERMAN, Connecticut

BARBARA BOXER, California

RON WYDEN, Oregon

THOMAS R. CARPER, Delaware

HILLARY RODHAM CLINTON, New York

JON S. CORZINE, New Jersey

DAVE CONOVER, Republican Staff Director

ERIC WASHBURN, Democratic Staff Director

SUBCOMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

JAMES M. INHOFE, Oklahoma, Chairman

JOHN W. WARNER, Wyoming

CHRISTOPHER S. BOND, Missouri

GEORGE V. VOINOVICH Ohio

LINCOLN CHAFEE, Rhode Island

MAX BAUCUS, Montana

BOB GRAHAM, Florida

JOSEPH I. LIEBERMAN, Connecticut

BARBARA BOXER, California

RON WYDEN, Oregon

1Note: The Environment and Public Works Committee had not reorganized

to reflect the change in majority status of the Democratic Party in the

Senate that occurred on July 10, when Senator James M. Jeffords of

Vermont left the Republican Party to become an Independent. For this

hearing, Senator Reid was acting as the Chairman.

(II)
CONTENTS

Page

JULY 23, 2001

OPENING STATEMENTS

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 21

Reid, Hon. Harry, U.S. Senator from the State of Nevada .................................. 1

Voinovich, Hon. George, V., U.S. Senator from the State of Ohio ....................... 3

WITNESSES

Campbell, Hon. Bill, mayor, Atlanta, GA .............................................................. 10

Prepared statement .......................................................................................... 121

Goodman, Hon. Oscar, mayor, Las Vegas, NV ...................................................... 12

Prepared statement .......................................................................................... 123

Reports:

City of Las Vegas Infrastructure Needs............................................... 125–149

Impact of the Maglev Train on the Economy of Clark County and

the State of Nevada............................................................................ 150–173

Southern Nevada Water Authority Capital Improvements Plan....... 174–199

Guerrero, Peter, Director, Physical Infrastructure, General Accounting Office;

accompanied by: Paul Posner, Managing Director, Federal Budget Strategic

Issues; and Kate Siggerud, Assistant Director, Physical Infrastructure

Issues .................................................................................................................... 32

Prepared statement .......................................................................................... 204

Responses to additional questions from Senator Reid ................................... 213

Morial, Hon. Marc, mayor, New Orleans, LA and president, U.S. Conference

of Mayors .............................................................................................................. 7

Prepared statement .......................................................................................... 42

Report, U.S. Metro Economies, U.S. Conference of Mayors ........................ 49–120

Portiss, Robert W., port director, Tulsa, OK ......................................................... 27

Prepared statement .......................................................................................... 202

Williams, Hon. Anthony, mayor, Washington, DC ............................................... 14

Prepared statement .......................................................................................... 200

ADDITIONAL MATERIAL

List, Top 100 U.S. Metro Economies, U.S. Conference of Mayors ....................... 49

Reports:

City of Las Vegas, Department of Public Works, Infrastructure Needs

for Southern Nevada ..................................................................................... 127

Impact of the Maglev Train on the Economy of Clark County and the

State of Nevada ......................................................................................... 150–173

Southern Nevada Water Authority Capital Improvements Plan.............. 174–199

U.S. Metro Economies, U.S. Conference of Mayors...................................... 49–120

Statement of American Society of Civil Engineers ............................................... 214

(III)

(1)

FEDERAL ROLE IN MEETING

INFRASTRUCTURE NEEDS

MONDAY, JULY 23, 2001

U.S. SENATE,

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS,

SUBCOMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,

Washington, DC.

The subcommittee met, pursuant to notice, at 9 a.m. in room 406,

Senate Dirksen Building, Hon. Harry Reid (acting chairman of the

subcommittee) presiding.

Present: Senators Reid, Voinovich, and Inhofe.

OPENING STATEMENT OF HON. HARRY REID, U.S. SENATOR

FROM THE STATE OF NEVADA

Senator REID. The Environment and Public Works Committee is

called to order. This is a meeting of the Subcommittee on Transportation and Infrastructure.

Let me say to my guests here, the witnesses today, we’re going

to have Senators in and out of here during the day. Senator Inhofe

was scheduled to be here. He’s still scheduled to be here, but his

plane is not here, I guess, because of the infrastructure someplace.

Senator Voinovich will be here shortly. The testimony which you

gentlemen are about to give will be taken down by a court reporter

and be shared with the full committee. I am grateful that each of

you are here.

Our physical infrastructure represents the backbone of our Nation and really of our economy. It gets neglected because of cost of

repairs and construction accrue in the short run, while the benefits

are enjoyed in the long run. Too often, short-term cost considerations preclude long-term benefits to productivity, safety, clean

water and the quality of life.

Anyone living in a major metropolitan area can tell you that our

highway and mass transit infrastructures are overwhelmed and

unable to handle our current demand. The resulting congestion impairs productivity, reduces air quality and negatively impacts our

quality of life. This problem is only expected to get worse as vehicle

miles traveled continue to increase.

To improve the condition and performance of our highways and

transit systems, the Department of Transportation estimates that

we need to spend more than $50 billion each year, and this doesn’t

include the billions of dollars in new investments necessary to improve our aviation system and develop high-speed rail corridors.
2

Another key component of our Nation’s infrastructure is built

and sustained and maintained by the Army Corps of Engineers.

The Army Corps’ flood control projects protect lives and property,

and their navigation projects keep our economy moving. Yet they

have a backlog of $40 billion in fully authorized projects that are

waiting for the first dollar funding, not to mention a $38 billion

backlog of projects currently under construction.

The EPA is charged with protecting and expanding our Nation’s

drinking water supply and upgrading our waste water treatment

collection facilities. These critical functions are at risk due to infrastructure funding shortfalls. The EPA has estimated that nearly

$300 billion will be needed over the next 15 to 20 years to upgrade

and expand our existing infrastructure to ensure the safety of our

water supply. In March, the American Society of Civil Engineers

released its 2001 report card for America’s infrastructure, and gave

our Nation’s infrastructure a D+. The American Society of Civil En- gineers estimates that we need to invest $1.3 trillion over the next

5 years to address our infrastructure problems.

More information on infrastructure needs detailed in this study

is included in written testimony provided by the Society which will

be placed in the record.

Just this past week, we saw both the importance and the fragility of our infrastructure when a train carrying hazardous materials derailed in a Baltimore railroad tunnel. This tunnel is 11⁄2

miles long. The impact of this crash is disrupting the lives of those

who live and work in Baltimore, and it should serve as a warning

to all of us about the dangers we face if we don’t adequately confront our Nation’s infrastructure deficiencies.

Clearly, our infrastructure investment needs are substantial, but

I fear our means of funding these is shrinking. The tax bill this

Congress passed in May will cost trillions of dollars in revenues

over the next 20 years if fully implemented. The surpluses are almost gone as we speak, but our infrastructure needs are still there.

I intend to serve as a person who looks at our Nation’s infrastructure continually, and I’m going to look forward to working

with my colleagues on this subcommittee and this committee and

members of the Senate to ensure that our infrastructure gets the

attention it needs. Now, the reason I say the ‘‘attention it needs,’’

I think the only way we’re going to get some of this is to start talking about what we don’t have. I think we tend to ignore municipal

government. We talk about our Federal highway system, but the

people live in cities, urban areas. America is becoming more urban

than it was, and people say, why would a Senator from Nevada

care about urban problems? Nevada is the most urban State in

America. Why, it’s more urban than New Orleans; more urban

than Atlanta—as a State, I should say Georgia, Louisiana, California, New York. It doesn’t matter. We’re more urban because 90

percent of the people in Nevada live in two urban centers. Only 10

percent live in rural Nevada.

So we have to start focusing attention on our cities and what we

don’t have. If a manhole cover blows off, Mayor, you’re the one that

gets the heat. We down here don’t get the heat. If the roads are

jammed in Atlanta, the mayor is the one that gets the problem

there—Mayor Campbell.
3

So I look forward to the testimony from a distinguished panel of

witnesses. We have four very successful mayors. I purposely picked

the mayors that are testifying here today. I was somewhat prejudiced in the one from Las Vegas, but he’s done an outstanding job.

I would put Oscar up against any mayor in the country for being

a passionate believer in what we need in municipal government.

For someone that cares about the city that he represents, there is

no one any stronger. There may be some as good, but no one any

stronger.

So I’m happy to have you each here. I welcome each of you and

the hands-on experience you bring to this topic. In addition, we

have Robert Portiss from Tulsa, OK to speak on port issues, and

Robert Guerrero who is from the General Accounting Office, GAO,

who I’ve worked with in the past, and well represents our Government.

I thank each of you for coming. I look forward to your testimony.

I do say that, Senator Voinovich, if you have an opening statement,

I’m sure happy to have you make it. Around 4 o’clock, I have to

go offer an amendment on the Senate Floor, so we have something

to vote on today. So I’ll ask you, in my absence, to make sure that

if we haven’t finished that you will, if you’re able to be here, if you

would take over. Senator Inhofe is detained, as I indicated earlier,

because of poor infrastructure. He’s stuck at an airport someplace.

If you have an opening statement, I’d be happy to receive it.

OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, U.S.

SENATOR FROM THE STATE OF OHIO

Senator VOINOVICH. I do. Thank you.

I’m really glad you’re holding this hearing today, by the way, and

I’ll try to make sure that I’m here to hold the fort.

Senator REID. Thank you.

Senator VOINOVICH. I want to thank you again for conducting

this hearing, Mr. Chairman.

Infrastructure needs have been the focus of some attention over

the last two decades, ever since the 1981 report, America in Ruins,

initially focused attention on the issue.

Senator REID. What was the date of that?

Senator VOINOVICH. It was 1981.

Senator REID. I would just interrupt you, Senator. You can remember during the 1980’s, major magazines had lead cover stories

about decaying infrastructure. We still have the decaying infrastructure, we just don’t focus much attention on it anymore.

Please go ahead. I’m sorry to interrupt.

Senator VOINOVICH. We started inventorying. I was mayor of

Cleveland at the time. We did an inventory of our own infrastructure to see what we needed to do about that.

Then in February 1988 in a report to the President and the Congress, the National Council on Public Works Improvements concluded that the quality of America’s infrastructure was barely adequate to fulfill current requirements.

While there has been progress in the last decade at the Federal,

State and local levels to better manage our public infrastructure,

these efforts are undertaken sporadically and more on a stopgap
4

fashion, while large-cap investment in operation and maintenance

needs are not being addressed.

I recognize that simply devoting more Federal resources to infrastructure needs is not the solution. The issue of appropriate Federal and State roles, adequate project evaluation, priority setting,

and program efficiency and management must be addressed.

I believe the first step in dealing with the need for a coherent

national infrastructure strategy is an assessment of our Nation’s

unmet infrastructure needs. You’ve got to know what they are before you can deal with them. I realize that even the concept of

unmet needs is difficult to define and that every Federal agency

will define the term differently. That is why as chairman of this

subcommittee last year, I asked the General Accounting Office to

prepare a survey of the unmet needs on information that the agencies have available in the major public infrastructure areas where

Federal assistance is provided.

Specifically, I asked the GAO to report on the needs estimates

of several Federal agencies, and I’m not going to go in and list each

of them because I think you know what they are. In a just-released

report, U.S. infrastructure agencies’ approaches to developing investment estimates vary. The GAO provided a survey of the seven

agencies’ estimates for infrastructure investment, looked at how

agencies compare in terms of how their estimates are developed

and used, and examined the extent to which the agencies’ procedures for developing the estimates embody practices of leading government and private sector organizations.

Of the seven agencies reviewed by GAO in the report, each estimated billions of dollars in investment needs. The figures range

from the General Services Administration estimate of $4.58 billion

over 1 to 5 years to repair public buildings, to the Federal Highway

Administration’s estimate of $83.4 billion per year over 20 years to

improve highways. Independent assessment of our Nation’s infrastructure needs, such as the one conducted by the Water Infrastructure Network (WIN), last year suggest that trillions of dollars

are needed to address this country’s drinking and waste water

needs.

According to the report I requested from GAO, the agencies’ infrastructure needs estimates cannot be easily compared or added

up to produce a national estimate of investment needs because of

the differences in the methods used, time periods covered, spending

sources and purposes for their use. I’d be interested in hearing

GAO’s thoughts on how a national infrastructure needs survey

could be developed. The GAO also looked at procedures each agency has in place for developing infrastructure needs estimates and

whether they reflected some practices used by leading government

and private sector organizations.

The GAO further examined the strengths and limitations of each

agency’s estimate. A number of the limitations identified by GAO

suggest that many of the agencies needs estimates might be understatements of actual needs. I’d also like to hear GAO’s thoughts on

how these agency estimates could be more accurate. We’ve got to

have the right numbers.

Mr. Chairman, congressional authorization of projects are a very

important part of the process of developing and maintaining our
5

Nation’s infrastructure. Equally important is having an adequate

level of funding to construct, as well as operate and maintain these

projects. It’s no secret that this Nation has an aging national infrastructure, which we’re going to be hearing about. There are a number of reasons why we have such great unmet needs. The most significant reason is the decreasing Federal investment in infrastructure since the 1980’s, as you just pointed out. For example, GAO

reported in February 2000, that infrastructure as a percentage of

Federal spending has steadily declined since the late 1980’s. At the

same time, we’re asking agencies to do more and more.

Last year, I conducted a hearing as chairman of this subcommittee to examine the Corps of Engineers’ $38 billion backlog.

At the hearing, I had a number of charts showing the breakdown

by mission. In effect, what happened there is we increased the responsibility of the Army Corps of Engineers, having them take on

environmental restoration projects, and at the same time cut back

their dollars to about half of what they were in previous years.

So I strongly believe that Congress and the Administration need

to develop a strategy to deal with these needs. Again, it gets back

to how do you balance the infrastructure needs of the agencies the

GAO looked at, and then, Mr. Chairman, in all due respect, the

Congress is talking about building schools all over the United

States of America. You know, can you do both of those things? I

have to say that one of the reasons why some of the needs that our

witnesses are going to talk about haven’t been met is because we’re

off on some other agenda items, and quite frankly too many of

them are the result of polling. You know, this is more popular. We

had a Governor of Ohio who once said, never put anything under

the ground. You never see it. You never get any credit for it.

[Laughter.]

Senator VOINOVICH. But the fact is, we all know what’s happening in our cities around this country.

So I’m not going to go on. I’m going to ask that the rest of my

statement be inserted in the record. I’m anxious to hear from the

witnesses.

Senator REID. Senator Voinovich, one of the things that you and

I could agree on is, I would be willing to sponsor legislation with

you to outlaw polling.

[Laughter.]

Senator VOINOVICH. Except for the First Amendment, it’s fine.

[Laughter.]

[The prepared statement of Senator Voinovich follows:]

STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. SENATOR FROM THE

STATE OF OHIO

Thank you, Mr. Chairman, for conducting this hearing today on the Federal role

in meeting our Nation’s infrastructure needs.

Mr. Chairman, infrastructure needs have been the focus of some attention over

the last two decades ever since the 1981 report, America in Ruins, initially focused

attention on the issue. In a February 1988 report to the President and the Congress,

the National Council on Public Works Improvements concluded that the quality of

America’s infrastructure was barely adequate to fulfill current requirements.

While there has been progress in the last decade at the Federal, State, and local

levels to better manage our public infrastructure, these efforts are undertaken sporadically and more in an ‘‘stop gap’’ fashion while large capital investment and operation and maintenance needs are not being addressed. I recognize that simply devoting more Federal resources to infrastructure needs is not the solution. Issues of ap-
6

propriate Federal and State roles, adequate project evaluation, priority setting, and

program efficiency and management must be addressed.

I believe that a first step in dealing with the need for a coherent national infrastructure strategy is an assessment of our Nation’s unmet infrastructure needs. I

realize that even the concept of ‘‘unmet needs’’ is difficult to define and that every

Federal agency will define the term differently. That is why, as chairman of this

subcommittee last year, I asked the General Accounting Office (GAO) to prepare a

survey of unmet needs based on information that the agencies have available in the

major public infrastructure areas where Federal assistance is provided.

Specifically, I asked the GAO to report on the need estimates of seven Federal

agencies: U.S. Army Corps of Engineers, Environmental Protection Agency (EPA),

Federal Aviation Administration (FAA), Federal Highway Administration (FHWA),

Federal Transit Administration (FTA), General Services Administration (GSA), and

Appalachian Regional Commission (ARC). I requested GAO to focus on water resources (inland and deep draft navigation, flood control, and shore protection), hydropower, water supply, wastewater treatment, airports, highways, mass transit,

and public buildings.

In its just-released report, U.S. Infrastructure: Agencies’ Approaches to Developing

Investment Estimates Vary, the GAO provided a survey of the seven agencies’ estimates for infrastructure investment; looked at how the agencies compare in terms

of how their estimates are developed and used; and examined the extent to which

the agencies’ procedures for developing the estimates embody practices of leasing

government and private-sector organizations.

Of the seven agencies reviewed by GAO in the report, each estimated billions of

dollars in investment needs. The figures ranged from the General Services Administration’s (GSA) estimate of $4.58 billion over one to 5 years to repair public buildings, to the Federal Highway Administration’s (FHWA) estimate of $83.4 billion per

year over 20 years to improve highways. Independent assessments of our Nation’s infrastructure needs, such as the one conducted by the Water Infrastructure Network (WIN) last year, suggest that trillions of dollars are needed to address this

country’s drinking and wastewater needs. These are impressive figures.

According to the report I requested from GAO, the agencies’ infrastructure needs

estimates cannot be easily compared or added up to produce a national estimate of

investment needs because of the differences in the methods used, time periods covered, spending sources, and purposes for their use. I would be interested in hearing

GAO’s thoughts on how a national infrastructure needs survey could be developed.

The GAO also looked at the procedures each agency has in place for developing

infrastructure needs estimates and whether they reflected some practices used by

leading government and private sector organizations. The GAO further examined

the strengths and limitations of each agency’s estimate. A number of the limitations

identified by GAO suggest that many of the agencies’ needs estimates might be understatements of actual needs. I would also like to hear GAO’s thoughts on how

these agencies estimates could be made more accurate.

Mr. Chairman, congressional authorizations of projects are a very important first

part of the process of developing and maintaining our Nation’s infrastructure.

Equally important is having an adequate level of funding to construct as well as

operate and maintain these projects.

It’s no secret that this Nation has an aging national infrastructure. If we continue

to ignore the upkeep, and allow the deterioration of our infrastructure, we risk disruptions in commerce and reduced protection for public safety, health, and the environment. In my view, it is up to Congress to ensure that operation and maintenance

funding levels are adequate and efficiently allocated to priority needs.

There are a number of reasons why the we have such great unmet needs. The

most significant reason is the decreasing Federal investment in infrastructure since

the 1980’s. For example, GAO reported in February 2000 that infrastructure as a

percentage of Federal spending has steadily declined since the late 1980’s. At the

same time, we are asking agencies to do more and more.

For example, last year I conducted a hearing as chairman of this subcommittee

to examine the Corps’s $38 billion backlog. At the hearing, I had a number of charts

showing the breakdown by mission area for the Corps’ construction appropriation

by representative year from the decades of the 1960’s, 1970’s, and 1990’s. The charts

clearly showed the mission growth of the Corps into areas such as environmental

restoration, remediation of formerly used nuclear sites (FUSRAP), and environmental infrastructure.

At the hearing, I also had another chart that measured our capital investment

in water resources infrastructure since the 1930’s shown in constant 1999 dollars

as measured by the Corps of Engineers Civil Works construction appropriations.

The chart showed that there has been a sharp decline from the peak in 1966 of a
7

$5 billion appropriation and appropriations though the 1970’s in the $4 billion level

to the 1990’s where annual Corps construction appropriations have averaged only around $1.6 billion.

I strongly believe that Congress and the Administration need to develop a strategy to address the backlog of unmet needs in this country, and I fully intend to

make meeting these unmet needs a priority in the Senate.

For instance, the condition of our Nation’s water infrastructure has been a longstanding concern of mine. I like to use the example of Mayor Reid of the city of

Mansfield, OH, who is facing having to raise sewer rates from $30 a month to $100

a month in order to comply with environmental regulations. I have also heard from

a number of other Ohio municipalities about their water infrastructure problems at

two meetings I held in Ohio on this issue during the last year. Senator Mike Crapo

also conducted a field hearing on Ohio’s wastewater infrastructure needs on April

30 in Columbus.

Aging water systems and increasing Federal requirements are placing a heavy

burden on our communities. That is why I have introduced in the 106th and 107th

Congresses the Clean Water Infrastructure Financing Act. The bill, S. 252, would

reauthorize the highly successful, but undercapitalized, Clean Water Revolving Loan

Fund (SRF) program at a level of $3 billion per year for 5 years. In comparison,

Congress currently appropriates $1.35 billion for the program.

I am not advocating increased levels of Federal spending as a general matter,

rather, spending our Federal resources on the right things, and among the right

things that are not receiving adequate funding are many of the worthy projects and

programs authorized by this committee. So often the attitude in Washington when

approaching unmet needs is not to address anything that isn’t high profile until

there is a crisis. This is not the way to deal with things.

I would be interested to hear if today’s witness could possibly shed some light on

what they see as the role of the Federal Government in infrastructure funding. To

what extent is investment in our Nation’s infrastructure a Federal responsibility?

How should the Federal Government finance public infrastructure investments?

Who else should be involved? What are other non-capital ways to address our unmet

needs?

Mr. Chairman, thank you for including the findings of the GAO report I requested

on today’s agenda for this hearing. I just got the final report on Friday, and I look

forward to reading it in greater detail. I would also like to thank the GAO for their

hard work on the report, and I look forward to hearing from Mr. Guerrero about

the details of report and what conclusions may be drawn from it.

Finally, I look forward to the testimony of today’s witnesses who I’m sure will testify to their own respective infrastructure needs.

Thank you.

Senator REID. We’re happy, as I’ve indicated, to have each of you

mayors, and you, Mr. Portiss, with us. We’re going to start with

Mayor Morial, Mayor Campbell, Mayor Goodman and Mayor Williams.

STATEMENT OF HON. MARC MORIAL, MAYOR, NEW ORLEANS,

LA AND PRESIDENT, U.S. CONFERENCE OF MAYORS

Mr. MORIAL. Thank you very much, Mr. Chairman.

Senator VOINOVICH. Pardon me, Mr. Chairman.

I’d just like to say that there are a couple of people here. Do you

mind if I do this?

Senator REID. Of course not.

Senator VOINOVICH. Marc, I’d like to welcome you. Your dad and

I were very, very good friends.

Mr. MORIAL. Thank you.

Senator VOINOVICH. Dutch and I, we served as mayors together,

a wonderful man, and I’m sure that he’s proud of the fact that, you

know, he’s happy that you’re sitting in the chair that you are.

Mr. MORIAL. Thank you, Senator.

Senator VOINOVICH. Of course, Mayor Williams and I have spent

a lot of time together, haven’t we, Mayor? We welcome you and the

other mayors that are here today. Thank you.
8

Senator REID. George, when I said to Mary Landrieu, you know,

these people in New Orleans, can’t they come up with first names?

You’ve got Moon and all these others. Anyway, I’m glad that you

have one.

Mr. MORIAL. A nickname sells in a poll.

[Laughter.]

Mr. MORIAL. Mr. Chairman and members of the subcommittee,

let me thank you all for having this hearing. I am Marc Morial,

and for the record, Mayor of New Orleans and also president of the

U.S. Conference of Mayors, a bipartisan organization that represents mayors of 1,200 cities with populations of 30,000 or more.

We’re delighted that you’re having this hearing and we hope that

all four of us can shed some light and some information on where

we are and where we need to go.

I simply want to begin my testimony by thanking you, Mr. Chairman, and the committee for your leadership in crafting the agreement on the brownfields legislation, S. 350. This is a piece of legislation which has been important to the mayors and to the Conference of Mayors for a number of years, and if we’re successful in

getting that legislation passed, it’s going to give us yet another set

of tools to deal with the problem of abandoned commercial and industrial sites in so many of our cities.

I want to talk to you today about a couple of things, and I want

to frame my remarks by saying that local infrastructure needs are

no longer a local issue. Why are they no longer a local issue exclusively? As you observed, Senator Reid, Nevada is a heavily urbanized State. Most people in the United States would be surprised to

hear that. But even more importantly, it tells the story of what has

happened in our Nation, particularly in the past 10 to 20 years.

That is, cities and their suburbs have become the economic units

that are the engine of the American economy. We argue very forcefully that investing in the infrastructure is good not only for the

city and its residents, but is good for the Nation as a whole.

Recently, we released the fourth of our studies on the metropolitan economies of the Nation. This study, put together by DRI and

Wharton Econometrics outlines the significant role that cities play

in the American economy today. Very interestingly, of the 100 largest economies in the world, almost 50 of them, 47 of them are

American metropolitan areas. Very significantly, many of our metropolitan areas have economies larger than nations. New York

City, for example, has an economy larger than that of Australia.

My own city is larger than Syria or even Vietnam in terms of its

economic output.

That is why we hope that there is a fundamental understanding

that we’re going to seek to promote by the Congress and the White

House, business leaders in this Nation, and the American public at

large, that by investing in the infrastructure needs of American cities will do the Nation’s economy some good. If we disinvest in

American cities, if we ignore the needs of American cities, the cost

is going to be paid by everyone. Our cities are transportation centers. Our cities are technology centers. Our cities are centers of

higher education and learning. Our cities are the areas where the

new immigrants are flocking. Our cities produced, if you will, bet-
9

ter than 85 percent of the new jobs created in the decade of the

1990’s. So I wanted to share that with you.

What are our priorities as cities, as metropolitan cities? We surveyed our members, Senator Reid and Senator Voinovich, and they

outlined three very important areas. First, our No. 1 priority is in

the area of surface transportation. That’s, of course, self-evident.

It’s roads. It’s bridges. But it’s also transit and rail. It’s rail transportation. TEA–21 and new start moneys that have been allocated

since then have put maybe 150 to 200 new rail start projects on

the books in American cities. We broke ground in my own city of

New Orleans on a new Canal Street streetcar line. We’re working,

in addition to that, on two additional projects for which we’ve received commitments from this Congress. Importantly, with all of

the issues of congestion, with all of the issues of population density

that many cities are beginning to face, investment in surface transportation systems with a new emphasis on rail, we think is a smart

move for the American economy.

Second, our members identified water system needs. Many of our

cities are old. Our drinking water systems, our wastewater treatment systems and pipes have become old and have begun to crumble. Combine that with the fact that the Congress and the agencies

have had a very aggressive enforcement effort under the Clean

Water Act to force cities big and small to make significant changes,

significant investments in their water infrastructure systems. Indeed, we are operating in New Orleans under a consent decree

through which we’re going to have to spend as much as $400–$500

million overhauling our city’s wastewater system, simply the

wastewater system, not the drinking water system and not what is

very crucial to us, the drainage system to protect us from flooding.

So water system needs are tremendous throughout American cities. You don’t have to be the proverbial rocket scientist to understand that the quality of drinking water affects not only the residents of a city, but also affects visitors to the city. You don’t have

to be a rocket scientist to understand that the quality of the wastewater system affects not only the city directly, but also an entire

region and the American economy at large.

Third, our members identified schools and libraries as a tremendous infrastructure need. I would only add a personal observation

to the schools and libraries infrastructure need. What we’ve done

in my own State, and I would conjecture in many other States, and

even here at the national level, is invest heavily in the infrastructure of the correctional systems. If we did for the schools in the

next 20 years what we’ve done for correctional systems infrastructure in the last 25 years, we could and very much will make a significant dent in the tremendous school infrastructure needs that

many of our urban communities face, and not only urban communities, but our entire metropolitan communities.

I would add one additional point to the infrastructure. The mayors are united in supporting those bills that would allow Amtrak

to access the private markets for its infrastructure needs. Why is

that important? Because Amtrak’s service is something that in

many respects connects smaller- and medium-sized communities to

larger communities. Amtrak service is also something with the advent of high-speed rail that we think could take pressure off both
10

the highway system and the civil aviation system when you’re talking people traveling distances from 300 to 500 miles, which is why

we strongly urge the Congress to act on Amtrak legislation.

To sum up very quickly, the point I hope that we all leave you

with today is that our local infrastructure needs are not simply a

local issue. But to also add, we are not here as mayors who are not

investing our own tax dollars in our infrastructure needs. Every

single one of us has an aggressive capital program where we’re investing in city streets, curbing, gutters, water systems; where we’re

investing in public schools, libraries, parks and recreation facilities.

But the investment that we can command, the investment that we

can muster alone isn’t enough to deal with the tremendous needs

that the Nation has.

So we come today looking for partnership, not with a tin cup, but

looking for a partnership with the Federal Government because as

our cities go, so goes this Nation. I can say to you that a significant

investment in the infrastructure of American cities is going to do

the American economy very well.

You pointed out in your opening testimony the situation in Baltimore. That 11⁄2-mile railroad tunnel is 100 years old. I understand

from reading the papers and from talking to people that it hasn’t

had any significant investment in that period of time. There are

tunnels. There are bridges. There are rail systems all across this

Nation with tremendous needs that we need to address, lest it

begin to affect the economic performance of our major industries.

So I thank you for your time.

Senator REID. Your full statement will be made part of the record

and we’ll have some questions for you.

Mr. MORIAL. Thank you.

Senator REID. Mayor Campbell, if you—and I should have alerted Mayor Morial—try to keep to 5 minutes as well as you can. You

know, we’re not going to very strict, as you saw with Mayor Morial,

but try to keep to that so we have time to come back, because there

are many things in your statements and just basic knowledge you

have that we’d like to get to.

STATEMENT OF HON. BILL CAMPBELL, MAYOR, ATLANTA, GA

Mr. CAMPBELL. Don’t worry, Senator Reid, I’m going to be brief,

no matter how long it takes me.

[Laughter.]

You’re free to use that anytime you like, Senator.

It’s a pleasure to be here. Thank you, and Senator Voinovich, I

appreciate very much——

Senator REID. I will use it.

Mr. CAMPBELL.—That’s where I got it.

I appreciate very much your having us here. In many ways, both

of you understand the problems that we’re speaking about, so it’s

like preaching to the choir. But nevertheless, it’s important for the

American public to hear about these issues.

Not only do I come to testify on behalf of the city of Atlanta, one

of the fastest growing metropolitan areas in the United States, but

also I chair the Transportation and Communications Committee for

the U.S. Conference of Mayors as well.
11

I’ve been here and been a part of the deliberations and discussions. I testified on behalf of TEA–21 and AIR–21, and we appreciate the leadership that was shown on both of those very important issues. As you heard Mayor Morial, we certainly hope that

RAIL–21 will be the next prong that will help us to improve the

Nation’s infrastructure.

Let me give you some sense of overview, Mr. Chairman, to tell

you where we are, and Senator Voinovich.

The issue of infrastructure in this country is the most critical

issue that cities will face. I spoke this morning to a U.S. Congress

issue on competitiveness in cities, and my thought is that other

than the issue of public safety, the issue of infrastructure and who

will pay for the infrastructure for cities will be the most pressing

issue that this country will face over the next 10 years. You heard Mayor Morial talk about the $400 million they’re

spending. Well, I’ve got a better story. We have spent $1 billion

since 1990 to construct and expand wastewater and stormwater

collection, treatment and control facilities to meet Federal and

State environmental regulations. We have spent an additional $2.3

million for watershed protection projects. It’s estimated that we

will spent $3.2 billion over the next 13 years to upgrade our system. That’s an astounding amount, Senators, and I must tell you

that puts a serious burden on the city’s budget. While most people

understand that the metropolitan area is made up of over 4.5 million people, the city of Atlanta proper is about 500,000 people. We

have an approximate income range of about $36,000, with 25 percent of our families making under $15,000 a year. We simply don’t

have the money to pay for that.

But yet it’s mandated, and I must tell you, we have about 1.5

million that come into our city each and every year. Now, if you

magnify that across the country, the estimates are about $300 billion alone just in wastewater infrastructure needs, and about $1

trillion in total water resource demand in cities across this country.

If that’s not looked at very seriously, Senators, there is no doubt

that we will see the same sort of wastewater calamity that we’re

seeing with the Baltimore rail corridor. We have some estimates

that 75 percent of all the bridges in this country are substandard.

So we understand that if we don’t invest in this infrastructure

redevelopment, then we’re going to see America’s cities, and ultimately the Nation, crumble. You heard Senator Voinovich talk

about the Governors saying, don’t put any money in things under

the ground. Tragically, that’s the view by most citizens, and that’s

the view by most elected officials. Because unless it’s a sexy item,

unless we’re seeing something that captures the Nation’s attention

like the rail corridor explosion in Baltimore, people don’t want to

spend the money for it. The moneys that are necessary are enormous and the complexity of the issues are also enormous.

We’ve got surface transportation issues. You see in the headline

on the front page today, the region’s ozone problem lies South.

That’s with regard to Washington vis-a`-vis Atlanta. We have a tremendous ozone problem, a non- attainment problem, a traffic snarl

problem. It’s a suburban nightmare. We have more time spent in

commuting in Atlanta than any other city in the Nation. As a result of that, for 2 years we were not able to spend any of the trans-
12

portation money. It ended up being a plus for the city of Atlanta

because we were able to renovate old roads and repair bridges,

spend it on sidewalks, some of our mass transit money. But ultimately, it’s an ongoing problem for all of us.

We also, as I told you, you may know, as you heard about one

of your colleagues being held up coming in on the flight, we have

the busiest airport in the world. When I took office in 1993, we had

57 million passengers; last year, 81 million passengers. We’re estimated to have 120 million passengers in 2015. We are spending

about $6 billion on one of the few projects that’s been approved for

a fifth runway. We, as you saw by some of the recent news, some

of the delays with regard to air transportation. Luckily, we were

not in the top 10 with regard to delays in airports, but if we don’t

see more money that’s invested, and luckily because of AIR–21 we

will have some availability of those funds, we’re going to see more

delays with the Nation’s infrastructure with regard to air.

So whether it’s water, wastewater, whether it’s surface transportation, whether it’s aviation, whether it’s rail, you understand, Senator and Senator Voinovich, that unless the Federal Government

becomes a more meaningful partner in terms of providing more

funding, then we’re going to see a total collapse of America’s cities.

When the cities collapse, the Nation’s economy will collapse. That’s

a calamity that none of us want to see.

So what I hope that you will look at, Senator Reid, is perhaps

greater assistance with low interest loans, grants and technical assistance to communities to address some of these urgent needs.

Otherwise, I think we’re going to see further erosion in the very

strong economy that we’ve had in the last 10 years, but which

seems to be a bit more fragile today. We certainly hope that we’ll

get the cooperation of the U.S. Congress to help us in that effort.

Senator REID. Your full statement, which I have read, is excellent. It will be made part of the record.

Mayor Goodman.

STATEMENT OF HON. OSCAR GOODMAN, MAYOR,

LAS VEGAS, NV

Mr. GOODMAN. Thank you. Good afternoon, Senator Reid, Senator Voinovich.

It’s an honor to be here today representing the city of Las Vegas.

I’m a lot more provincial than my colleagues. I’m not worried about

the whole world. I’m worried about my city. I love the city of Las

Vegas. I got there in 1964. It had 70,000 people as a population.

It now, as a city, has 555,000. The county when I got there had

about 100,000. We’re now up to 1.4 million. In the year 2020, we’re

going to be at 2.3 million. It’s incredible the kind of growth that

we have, and it affects everything that takes place within southern

Nevada.

We are at a point of bursting, and unless we reach the issues

which affect our quality of life and keep it the same as it is, then

we, too, will suffer dramatically, both economically as well as in the

standard of living that we’re used to here.

When I got to Las Vegas, I had $87 in my pocket. I had a good

education and was able to make a very, very good living there. I

played myself in the movie Casino, and represented all those folks
13

in real life. I thought everything was beautiful. I used to walk

down to the courthouse and look to either side of the street. The

trees seemed nice. The roads seemed good.

Then when I was elected mayor 2 years ago, walking down the

same streets, I saw that the streets were cracking. The trees were

getting old. Everything was withering away. I pledged to myself

that we were going to revitalize the city of Las Vegas, the downtown of Las Vegas, or else we would have serious problems because

we’re being challenged every day in our primary industry, which is

our lifeblood of gaming and tourism, by having challenges throughout the country by other people having gaming—Indian reservations springing up in California. It’s vital that we reach the question and issues of our infrastructure and our transportation, or else

Las Vegas won’t be the kind of place that it is.

The first thing we have to do is we have to widen I–15. That’s

crucial. Our basic clientele comes in from southern California. They

drive in during the weekends. It takes them sometimes 6, 7 hours

to get there. If they go 40 minutes away to an Indian reservation,

the Pala Tribe, they’re able to get basically the same thing and not

have the aggravation of the travel. So we have to open up that

highway.

We need a speed train. We’ve been talking about that. There’s no

reason why we shouldn’t be the partner for that because it goes to

the very economic lifeline of our community. Once we get into

town, we have to have our fixed guideway, the monorail going

down from the Strip all the way into the downtown area, down to

the Fremont Street experience, because without having Fremont

Street healthy, the rest of the valley is going to fail. It’s going to

be like a reverberating effect, and affect all of southern Nevada. So

we need that.

These are issues that really are everyday issues, but they’re

issues of the infrastructure, and unless we have some help from

the Federal Government, we’re not going to be able to do it. We

have a long history of partnerships, as you know, with the Federal

Government. Las Vegas really was made out of the pioneers who

built the Hoover Dam; the folks who were out at the Nevada test

site. These were vital members of our community; Nellis Air Force

Base. There was a very symbiotic relationship between the city of

Las Vegas and southern Nevada and the Federal Government. We

depended upon the Federal Government in order to take care of the

excesses, to build this quality of life that we’ve come to enjoy.

If we’re cutoff, and I get the sense that perhaps with this Administration it’s going to be tougher getting the funds that are necessary in order to take care of ourselves in southern Nevada, and

therefore in that whole Southwest sector of the United States, it

will have this kind of effect, which will be catching to the entire

Southwest and to southern California, and it will be disastrous.

So I ask you to join with us in providing us the necessary funding. The mayors, my colleagues were talking about the wastewater

treatment. We’re going to have to spend $1.2 billion for our wastewater, and we have a model in our Southern Nevada Water Authority as being a local, inter-regional group that’s been able to

solve the most important problem that existed 10 years ago, and

that was water quality. We now have it under control, with the
14

help of the Federal Government, with the help of these inter-local

agreements and interstate agreements. But if we lose our partners,

then the very problems that we were able to solve will not be able

to be solved in the future.

So I implore you to look at us as your partner, to recognize that

we need a new airport there in Ivanpah, and to say that we don’t

just belies the truth. In order to have a new airport, in order to

keep the economy healthy, we need to look to you for some help.

We’re ready to stand up ourselves and to do what we have to do

in order to get the necessary funding that we’re able to get, but

we’re limited, and the Federal Government really is our partner

and has to continue to be our partner in order to sustain the quality of life that we have.

Las Vegas is a great place. It represents all that America is all

about, free enterprise, capitalism. We do very, very well, but we

can’t do it by ourselves.

Senator REID. Thank you very much, Oscar.

We’ll now hear from the Mayor of the District of Columbia, Anthony Williams.

STATEMENT OF HON. ANTHONY WILLIAMS, MAYOR,

WASHINGTON, DC

Mr. WILLIAMS. Senator Reid, thank you for having me here

today. I also want to thank Senator Voinovich for his support over

the years and partnership with the District and working hard with

us in so many, many different ways, recognizing his own role as

a mayor and his understanding, as you do, Senator, of the needs

of our metropolitan areas in our country.

My testimony has been submitted for the record, so I’m just

going to hit some highlights within the allotted time, recognizing

that both you and Senator Voinovich have Thanksgiving plans.

The District has made, I think by everyone’s observation, some

tremendous progress financially, tremendous progress in diversifying our economy from one relying exclusively or predominantly

on the Federal Government, to one now relying on health care,

technology, services and tourism.

Improvements in services, we believe a reverse in migration now,

people moving back to the city. But the question is, how do we sustain that recovery? Clearly, we have to focus on our infrastructure,

and in so doing necessarily have to focus on our unique relationship with the Federal Government. I’ll focus on just a couple of

things. We have one of the highest levels of commuters, after Chicago. We are third in the country, in the number of commuters

coming into our city. We also have in our city one of the highest

utilization rates for our Metro, and we’re proud of that. But therein

lies a problem that we’re facing, and that Atlanta is facing, a problem with air pollution and the impact on our infrastructure. We see

Metro as a way to address this because we are also one of the cities

with the highest usage for Metro.

The problem is, the city pays 40 percent of Metro’s expenses, and

we’re looking at just over a 25-year period in which $3 billion is

needed for an infrastructure renewal program. This is over and

above what we’ve already pledged in Metro improvements. In addition, Metro capital needs are underfunded by $100 million annu-
15

ally, representing another $40 million in unfunded District obligations. The fact is, the District is making serious expenditures supporting Metro, and is also engaging in some unique strategies to

pursue improvements in Metro’s infrastructure. To give you an example, on New York Avenue, there is a unique public-private partnership with the Federal Government, the District and local property owners who have come together essentially on a one-third,

one-third, one-third basis to put in a new Metro station on New

York Avenue. But we need help to continue that.

Highways, as Mayor Morial mentioned, are a key part of our surface infrastructure, and here in the District we really have a tale

of two cities. For our non-transit transportation infrastructure, we

have the Federal City, a city of less than 450 miles of roads, and

a $250,000 annual per-mile fund for maintenance and improvements. Not surprisingly, 70 percent of these roads are in good or

excellent condition. The other city is the local city with nearly 650

miles of roads that have just come out of a 5-year period of almost

no investment whatsoever. While we’re spending now $8,500 per

year per mile for maintenance or improvements, 50 percent of our

local roads are still in fair or poor condition. We have to address

that.

We have to address the need for surface rail in our city. Being

one of the most congested cities in the country, our Metro has only

a limited amount of room for expansion. We believe that surface

rail can provide some of that capacity and bring back the glory

days of light rail in our city, which once led the country in light

rail.

Our gateways are important, not only to our city as a metropolitan area, but our city as our Nation’s capital. Clearly, Senator Sarbanes has recognized this, our partner Congressman Steny Hoyer

has recognized this, and a bipartisan group in the Congress has

recognized the fact that the entrances to our Nation’s capital are

not befitting the entrance to America’s capital. New York Avenue,

particularly South Capitol Street are in need of tremendous

amount of investment to make them serviceable, let alone make

them the kinds of entrances and gateways to our Nation’s capital

that they should be.

Finally, I would join with my fellow mayors and talk about the

need of our city in infrastructure as it comes to water pollution. We

all know about the progress that’s been made on the Potomac

River, but there is a clear need for improvement in our overall watershed. A big reason for the need for that improvement is the Anacostia River. Once the birthplace of the U.S. Navy and a key historic area of our city, the Anacostia River is now one of the most

polluted rivers in the country. We see a need for $1 billion of investment to provide for a combined sewage overflow strategy that

will get the river up to where it should be in terms of water quality, and will allow us to redevelop this watershed, redevelop this

waterfront in a way that again is not only becoming to our Nation’s

capital, but also uses this river as a way to unite two parts of our

city that are presently divided, unfortunately, in so many, many

ways, including by race and by class.
16

With that, I’d like to thank again the committee for allowing me

to testify today, and of course I’m ready to answer any questions

you may have.

Senator REID. Mr. Portiss, we’re going to ask you to withhold

your testimony. We’re expecting Senator Inhofe and I’d like him to

be here when you testify. So if you just sit where you are, relax,

we’re going to ask some questions to the mayors at this time, and

proceed with you and the GAO at a later time, if you just relax.

I appreciate your patience.

First of all, Mayor Williams, let me say this. I was chairman of

the District of Columbia Subcommittee on Appropriations for a

number of years. I saw then the tremendous need for help, and I

tried to develop a number of pilot projects. But frankly, the mayor

at the time wasn’t interested. I called him into the office, and he

was interested in other things. So it kind of soured me on trying

to do some novel things.

I’ve been very impressed with you since you showed up as part

of the new Control Board, or whatever it was called, and then became Mayor. I really believe that the United States cannot have a

city that is in the deep trouble from an infrastructure standpoint

that Washington, DC is. You’ve been very kind in not describing

some of the real serious problems. I mentioned the manhole covers.

You know, it’s a Federal City. It’s a lack of enough money to take

care. Tell us briefly why we have manhole covers blowing into the

air, which is dangerous for everybody. Why is that happening?

Mr. WILLIAMS. The manhole covers in Georgetown area are really

the tip of the iceberg. What they represent, these manhole covers

blowing up, is the fact that the infrastructure in Georgetown,

whether it’s electrical utilities, gas lines, water and sewer, in essence, all the utilities, and infrastructure hasn’t really been updated. One of the primary reasons is that the Metro never went

into Georgetown, there was never an occasion to redo that infrastructure. Certainly as you’ve pointed out, Mr. Chairman, we

haven’t had the funds over the last 15, 20 years to do that infrastructure improvement ourselves.

So it’s now only with manhole covers exploding and a crisis on

our hands that we’ve begun a comprehensive, systematic effort to

begin rebuilding that infrastructure. But as I mentioned earlier,

while we’ve got an infrastructure effort underway in Georgetown,

while we’re doing an enormous amount of repaving, we can’t sustain this pace for longer than a 3- or 4-year period.

The real tragedy would be to have this comeback of the city grind

to a halt for lack of sustained investment and effort.

Senator REID. Mayor, the reason I mentioned you initially, my

home is in Nevada, but I live here. I spend a lot of time here also.

I spent 18 years or so in the suburbs, and I’ve recently moved into

the District which, you’re right, it’s really being revitalized. But it’s

my understanding that some of the water systems, the pipes that

carry water are 100 years old in the city. Is that true?

Mr. WILLIAMS. There are very old pipe systems, Mr. Chairman.

As a matter of fact, I believe that we still have wooden pipes in

our city. They’re that old.

Senator REID. Even though we had manhole covers blowing way

into the air, and we were very fortunate someone hasn’t gotten
17

hurt. I mean, this is like a mortar going off. I think that you’re

going to see you’re going to get very little help this year. I’m familiar with the appropriations process, and I think that you need to

be more outspoken and demand more help. The way I’ve seen this,

it gave the city such a bad reputation that in effect we had to have

someone come in and start running the city. It’s only now that

you’re taking the city back. So I’m sure you feel somewhat reserved

in going and asking for you really need. But I think you’re going

to have to pass that point and start asking, because unless you ask,

it’s not going to happen here.

So I just say that you’re going to have, and I think all of you

have been very nice here today and talking about generalities,

water systems, sewer systems, streets, light rail and all these

things you need. But I think we’re going to have to start becoming

more specific as to what the problems are.

You know, Atlanta and Las Vegas are a lot alike. Even though

you’re a much older city, the growth in the two areas has just been

phenomenal. New Orleans and Washington, DC are a lot alike—

older cities, moderate growth, but old infrastructure. You know, I

still remember, and I’ve said to John Breaux a number of times,

this thing I watched on public television, Mayor Morial, about the

water situation in New Orleans. Those pumps are ancient.

Mr. MORIAL. We are built on a slough, and actually, Senator, we

are a city that sits underwater. So all of our water—our wastewater and we have a separate, independent, you all call it

stormwater, we call it drainage system—we have a system of in excess of 100 pumping stations throughout the city, which makes our

water system one of the largest users of electricity and natural gas

in the city.

So we not only have the pipe problem, we also have the pumping

station problem.

Senator REID. How old are some of those pumps?

Mr. MORIAL. How old are they?

Senator REID. Yes, I saw that. It’s hard to believe.

Mr. MORIAL. One hundred years old.

Senator REID. Oscar, with Las Vegas growing the way it is,

growth has been phenomenal—the fastest-growing community,

fastest-growing State. We’ve held that for 8 or 10 years. What do

you see as the most demanding need in this vibrant city of Las

Vegas? Is it water? Is it sewer? Is it streets? What is it?

Mr. GOODMAN. The good news, Senator, is none of our pipes are

100 years old, because we’re not 100 years old. Our 100th anniversary, our centennial, comes up in 2005. So that’s the good news.

The bad news——

Senator REID. Most everything is new that you put in. I mean,

we’ve had so much growth there.

Mr. GOODMAN. But the bad news is that unless—everything is

interrelated. When I became Mayor, I wanted to be the hands-on

Mayor as to the regional issues. So I appointed myself on the regional planning coalition, the regional transportation, regional

flood, the Southern Nevada Water Authority—those kinds of agencies—to get a handle on what takes place in the city. I’m convinced

that everything has an interrelating effect.
18

I’ll give you an example. We have air quality problems, and the

EPA is looking at us very carefully. We seem to be getting the carbon monoxide issue under control, but once you take care of that

we have the PM10, which are the dust particulates. Then, we have

to worry about the ozone. Basically all this comes about as a result

of traffic.

So in answer to your question, Senator, I think that we have to

address the issues of traffic. We’re the largest city in the United

States now that doesn’t have a fixed-rail system, and that’s why it’s

so crucial that we have the monorail which will go down the Strip

into the Fremont Street Experience and into the downtown. That

accomplishes an awful lot of things. It helps us economically, of

course. It takes the cars off the highway. It opens up the clogged

up streets so that we can enjoy our quality of life.

So if I had to say that there’s an issue that we really have to

see take place, it’s the monorail in the city of Las Vegas.

Senator REID. Senator Voinovich, let me just ask one more question.

All you mayors should look at Oscar, because the Clark County

School District, which is now the fifth largest in the country, has

to build one school a month to keep up with the growth.

Mr. GOODMAN. With all due respect, Senator, I thought that, too,

but it’s now 14 schools a year. It’s just incredible. We build a home

every 15 minutes. That’s how fast it’s growing.

Senator REID. We dedicated 18 new schools a few years ago. We

hold the record. The Superintendent of Instruction of Clark County, Las Vegas School District is really not a Superintendent of Instruction. He’s Superintendent of Construction. That’s all he does.

Senator Voinovich.

Senator VOINOVICH. I just wanted to ask this one question before

I know you have to go to the floor.

I have had one formal hearing in Ohio that was conducted by

Senator Crapo on the issue of sewage treatment and water infrastructure needs, and then I had a couple of meetings with local

government officials. One of the things that came up—and I’d be

interested in your response to this, particularly from some of the

organizations that you represent, maybe the U.S. Conference of

Mayors and the National League of Cities—that’s been brought up

constantly with me is that many of the new environmental regulations in terms of storm sewer overflow are driving up costs astronomically. They feel that some of those regulations ought to be revisited because they defy common sense. One example was the

Mayor in Mansfield, OH who has a holding tank. When you have

a flood, the water is sent over to the holding tank. They treat it

and then return it to the stream. They return it at a higher quality

than the stream quality. But she’s now been told that she’s got to

put in a whole new setup that’s going to increase her costs to her people from $30 a month to $100 a month just to take care of the

treatment of this water in this holding tank.

I would just like to have your comment in terms of some of these

regulations. I know Atlanta’s got a problem. You’ve got a conformity problem in terms of the new regs. In terms of the new

ozone and particulate, Mayor Goodman, you mentioned that. The

new regs if they come into effect next year, almost every urban
19

area in the United States of America is going to go into noncompliance, and many of them are not in compliance with the current

ozone and particulate standards.

Could you respond to that?

Mr. MORIAL. Let me just say this, what you’re talking about Senator, is unfunded mandates, and those are regulations that force us

to spend money. I think we would certainly be open to looking to

see if there are better ways to achieve the goal, but I don’t think

that we would want to step back from anything that would sacrifice

the quality of water or sacrifice long-term effects on the environment, because we’ve learned in many other areas that sometimes

short-term gain means long-term pain.

But having said that, I certainly think that looking at better

ways to do things, where sometimes the regulations are written by

well-meaning people who have very little practical experience at

the local level. Some of those regulations that you refer to, or some

of those systems that you refer to may have been put together with

the best of intentions, but may be overburdensome with respect to

cities.

Mr. CAMPBELL. Senator, you indicated that we are also under a

Federal consent decree. One of the problems is that we don’t have

the sort of consistency in terms of telling us exactly what will work

and how much it will cost, and then being in partnership to get

there. A perfect example is this consent decree we’re under right

now with this SSO and the CSO Programs, which as I indicated

in our testimony, it will cost us about $3.2 billion over the next 13

years to upgrade the system. That, in and of itself, is an astounding amount, but what we also see is that the approval for the CSO,

as an example, we’re now being told that perhaps the CSOs, which

we were told in agreement that that would solve the problem, now

may not be adequate to solve the problem. We may have to invest

even more than what was originally agreed upon to get the job

done.

So not stepping back from what we all agree are needed environmental regulations to improve the air and the water quality, but

I think it’s a bit disingenuous to say, we in partnership agree this is a solution that will work. We spend almost $1 billion to put the

plants in place with the combined sewer overflows to make it work

in this partnership, and then we’re told, well, that doesn’t work

after all, or at least we’re not certain it works after all.

These costs are going to fall on a very limited number of constituents. When I tell you that virtually 25 percent of the families

in Atlanta make under $15,000 a year, and that our median income

is about $36,000 a year, where will be get the money to pay for it?

When you say $30 to $100, I must tell you, Senator, that’s very

conservative in terms of some of the cost increases that we’re going

to see. It’s not just in Atlanta. It will be in Cleveland. It will be

in Las Vegas. It will be in New Orleans.

What we’re seeing is, if in fact these mandates are necessary to

improve the water quality or to keep the manhole covers from exploding, as you mentioned, Senator Reid, then let’s have a partnership that recognizes that we all have an investment. If we’re going

to pay for this, let’s have a consistent solution. Let’s be in partnership about how we’re going to pay for it, because the cities simply
20

will not be able to fund it without bankrupting many of the people

that we serve. If that happens, then this economic growth that’s

really sort of spurred our economy, although we now see some of

the flatness in our economy now, we’re going to continue to have

problems with sustaining the growth in the future.

Senator REID. You know, I say to my two colleagues here, the

burden for the high cost of infrastructure that we need to spend is

in urban areas, not in the suburbs where we have people that are

better off, but in the urban areas where people traditionally

haven’t the money that they have in the suburbs. But that’s where

we must focus our infrastructure needs is in the cities. I would like

each of you to make sure that you’re very specific—if you don’t

have it now, make sure you send it to us—what really you need

in your cities, specifically. I want to hear, Mayor Williams, about

Washington, DC—why you need to replace your water pipes, because they’re old; and New Orleans, the pumps, I only know a little

about them, 100 years old, I would think they can’t go on forever— and the same with Atlanta.

Mr. CAMPBELL. The lifespan for most of the pumps and the pipes

are about 50 years in terms of an adequate life cycle, Senator. So

we have been living on borrowed time for about 50 years in some

of our cases. We have 100-year-old water pipes and those pipes are

breaking down incrementally. What you end up doing, because you

cannot get any consensus about how to pay for it, is you patch it.

Everybody will tell you that patching simply is only buying time.

What most of us hope for as elected officials, especially those of us

with term limits, is we just hope that it won’t break down massively on our watch, and then we’ll be able to say we did the best

we could, and you’ll pass it on. As it’s passed on and passed on,

eventually it will cost massive amounts of money, as we are now

having to spend in Atlanta and virtually every other city in America.

Mr. MORIAL. I wanted to make one other observation about the

suburbs, because the suburbs’ problems aren’t where our problems

are today because the systems in the suburbs are just frankly

newer.

Senator REID. That’s my whole point.

Mr. MORIAL. But the suburbs are just behind us. In other words,

these suburban communities which grew up in the 1950’s and

1960’s will soon have 60- and 70-year-old water systems, drainage

systems, road systems. So we’re dealing with the fact that all of

this underground technology is basically 100 years old, because it

is in the late 1800’s and the early 1900’s when our engineers and

technology gave us the ability to have clean drinking water, gave

us the ability to have underground wastewater systems and get

away from cisterns and things like that.

So the suburbs are just behind us. I say that to suggest that this

is going to have to be a national priority for the 21st century.

Senator REID. Senator Inhofe, what I have told Senator

Voinovich before you came here, with the transportation bill we

need something to vote on today, so I’m going to go offer an amendment now. Senator Voinovich was kind enough to say he would

take care of the meeting, and that you are the ranking member of

this subcommittee, and Senator Voinovich certainly wouldn’t care,
21

I would ask you to conduct this hearing, and I’ll try to return if

I have that chance. What would be my suggestion is, I think we’re

at a point now where rather than keep these mayors waiting, let’s

finish the questioning to the mayors and then bring on Mr. Portiss

and Mr. Guerrero, and complete it that way. So any further questions to the mayors, you would handle that for me, I’d appreciate

it.

Oscar, could we hear from you before I leave?

Mr. GOODMAN. I was just going to say this, Senator, basically

what we’re talking about as mayors is to preserve the quality of life

for our constituents. I mean, that’s the broad issue. When you talk

about things like patching up—patching up disrupts. You really

have to solve the problems and solve them quickly. This constant

disruption to people’s lives, like in Nevada and Las Vegas in particular, where we’re always working on the roads, trying to make

bigger roads and make roads wider, make roads more safe—it gets

to a point where people just aren’t enjoying themselves in living in

a community. I think that we really have to look at it in that respect.

Senator REID. Let me just say also to my colleagues here, I am

really very interested in infrastructure in our cities and our States,

and this is the first of a series of hearings that I’m going to hold

on infrastructure. I would appreciate it, as your staff’s already been

advised, any ideas you might have on how we can get to the bottom

of this. The first thing I’m going to do is make sure that we,

through testimony given to this subcommittee, we have an idea of

what the needs are around the country. Once we decide that, then

we’ll have to figure out something to do about it.

But this isn’t going to be a one shot deal. We’re not going to hold

this hearing and go on to another subject. I’m going to spend on

this subcommittee as much time as I can on this. Especially we

need to do it this Congress, because next Congress we’re going to

be faced with a highway bill. So I ask you and others to join with

me. Also because of some of my other responsibilities, I’m going to

be holding a number of these hearings on Mondays. So I know it’s

inconvenient for a lot of people, but it’s one of the times that I

have.

So having said that, Senator Inhofe, I turn the hearing over to

you.

OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S.

SENATOR FROM THE STATE OF OKLAHOMA

Senator INHOFE [assuming the chair]. Thank you, Mr. Chairman.

Let me just make a couple of comments. First, before we continue with the questioning of the mayors, first I want to say to

Mayor Morial, both of us, Senator Voinovich and I, were mayors of

major cities and served with your father. In fact, he and I were on

the U.S. Conference of Mayors and we worked very well together

and we became very close friends.

Mr. MORIAL. Thank you. Thank you, Senator.

Senator INHOFE. I know you’re carrying on his tradition.

Mr. MORIAL. Thank you.

Senator INHOFE. As I understand it, we have not heard yet an

opening statement from Mr. Portiss. Is that right? Well Bob, if you
22

don’t mind, we’ll go ahead and finish the way the chairman had

suggested. As most of you know, we went through a majority

change. I was the chairman of this committee, as was Senator

Voinovich right before me. We actually are operating with two

former chairmen and a current one.

Let me just say, as a conservative I’ve always felt we should

have a limited role of what government gets involved in. But I’ve

been very specific to say that there are two areas—national defense

and infrastructure—that specifically these are government roles

that we need to concentrate on and concentrate our resources on.

I feel very strongly about that.

As a former mayor, I know some of the problems that you have— unfunded mandates and all these things that are supposed to be

doing such a great job. Currently, Senator Voinovich is the ranking

member on the Clean Air Subcommittee. I used to chair that committee. We know the necessity of streamlining and I’d like to have

all of you address that a little bit, because in TEA–21, we talked

about streamlining, about doing something where we could quickly

get through some of these environmental demands that are on us.

It might be a good idea to hear if any of you have ideas on how

we could implement this. While we did address it in TEA–21, we

did not actually put down specifically how this is going to be done.

Any thoughts that you have?

Mr. CAMPBELL. Well, Senator, I serve as the chairman of the

Transportation and Telecommunications Committee of the U.S.

Conference of Mayors, and testified a great deal on the TEA–21

passage, as well as some of the particulars.

Quite honestly, Senator, as I’m sure you can imagine, there’s a

huge chasm between good intentions and reality. The streamlining

simply has not occurred. In fact, we in cities have had really to

fight to make certain that our voices are heard in terms of how

these moneys are spent in TEA–21.

There is a concomitant issue which is that in some of the States,

the moneys that were intended in essence to be a part of a partnership between the Federal Government and local communities have

been absorbed by State governments to be utilized for State

projects, and in essence the money is simply being transferred that

comes in from TEA–21 and the States simply take the posture that

they no longer have to find the moneys to fund some of those

projects.

What that means is that there is no real streamlining that’s occurred. We’re having tremendous difficulties in getting some of the

moneys, and we’re also not having our voices heard, even though,

as you may remember, Senators, that there was a good deal of byplay between whether or not the State Departments of Transportation in essence would be the final arbiters on where the moneys

were spent, or whether we would have the kind of local input

which we think is important. Both you and Senator Voinovich

would appreciate, having come out of municipalities, that it’s our

voices that should be heard, because it is local communities that

are really feeling the brunt of these decisions about where transportation moneys are to be spent.

This issue really needs to be resolved, and one of the things that

we were told when TEA–21 was passed was that there would be
23

some further clarifying amendments that would somehow speak to

this issue of more local control, some of the issues with regard to

streamlining, how the moneys were going to be allocated, or whether or not we were going to be able to get these moneys and put

these moneys to use very quickly. In Atlanta, that is one of the

areas where we’ve not seen the kind of partnership that we really

would have hoped for. It doesn’t mean that things aren’t going well.

It simply means that if we are truly to get the money spent quickly, resolving some of these issues with regard to infrastructure

needs, particularly roads and surface transportation as is contemplated under TEA–21, we would look for some further clarifying

amendments, because, to just be very blunt, Senator, it hasn’t happened. In order for us to be responsive, we need your help because

we’re not getting the job done because the moneys aren’t flowing

as quickly as we would like.

Senator INHOFE. That’s the reason I brought it up, because it

isn’t being done. You’re right.

How about you, Mayor Goodman? Do you have any comments

about this?

Mr. GOODMAN. Basically, the only comment I would make is we

have the strongest compliance laws in the world in Nevada as far

as clean air is concerned, but we don’t have the folks to enforce

them. That’s been a big problem in Las Vegas. We’re having a battle right now as to who’s going to be in charge of our air quality,

and we’re going to be meeting with the Governor this coming Monday, a week from today. Hopefully, the city of Las Vegas will have

some say in that.

But basically, it’s a question of money. We went up to our State

legislature and we tried to get money in order to have an independent Air Quality Board. They turned us down. We wanted to increase the smog test fee, and they wouldn’t go for it. The Governor

said he wasn’t going to allow an independent agency to take place

that wasn’t funded. So it all comes down to money, as so much of

our problems do.

Senator INHOFE. Would the new standards for ozone and PM put

Las Vegas out of attainment?

Mr. GOODMAN. Yes. Right now, we believe we’re barely within attainment as far as the carbon monoxide. On the PM10, we’re hoping

that we’re able to get that under control. We have so much construction taking place there, it’s very, very difficult. We put in

some very tough laws as far as construction and contractors’ watering and taking care of the earth around the projects. But we don’t

have anybody to go out there and make sure that they’re complying

with the law. That’s a big problem.

As far as ozone is concerned, we really, in all due respect, haven’t

begun to really address that issue. That’s something that’s out

there.

Senator INHOFE. Are any of the rest of you—would you find yourselves in nonattainment as a result of these standards?

Mr. WILLIAMS. We clearly have a problem down the road in nonattainment, Senator, in this region. I would agree with Mayor

Campbell and everything he said about unfunded mandates, on the

need to work with the Feds in making streamlining really work.

But I will say that in this area, one strategy we have for address-
24

ing this problem is in our Metro. Our Metro is just about ready to

burst at the seams and really needs some investment. We have the

highest ridership in Metro, I think after New York City, in this region. I think investment in Metro is money well spent for a number

of different reasons, not to mention attaining these standards.

Mr. MORIAL. I would just add that one thing that might be tried

is to deliver more of the resources to the local level. I think what

you find with the whole setup, which is designed to transfer money

from the Feds to State Departments of Transportation, they in turn

are responsible for projects in local levels or they work through

metropolitan planning organizations, is that there are so many

steps along the way—so many rules, so many regulations, so many

meetings, so many hearings—that the money doesn’t get spent.

One of the problems that I’ve seen in Louisiana is that the simple inflation in construction costs takes projects which may have

been envisioned in 1997 dollars, but construction may not begin

until 2001, and no longer the State can afford it because the

matches increase.

So I would urge really a serious look at the system in terms of

the way it works, such that maybe something experimental could

be tried, and that is delivering some resources directly to the local

level for certain types of projects.

Senator INHOFE. What I’d like to do for the record, not to take

up time now, is have each one of you submit your ideas on streamlining, and also this whole idea that you could be losing some real

valuable highway dollars, Mayor Goodman, and that’s very significant. If Senator Voinovich would forgive me, can I tell them my

story you’ve already heard once before?

Senator VOINOVICH. Go right ahead.

Senator INHOFE. I was elected first to the State House of Representatives in 1966, and my first trip to Washington was to testify

before this very committee here, protesting Lady Bird’s Highway

Beautification Act of 1965, saying, ‘‘You can’t withhold our dollars.’’ Here I am ranking member on the very committee I testified before

back in 1967.

Well, only one last question, on the use of Darby bonds, have any

of you been taking advantage of this? That’s allowing your future

revenues—OK, that’s fine.

Do you have any more questions for the mayors?

Senator VOINOVICH. I have. Yes.

As I listened to you today, I’ve been in your position as a member

of the executive committee of the Conference of Mayors and as

president of the National League of Cities. The problems are still

there.

Mr. CAMPBELL. The same problems, same bridges, same roads.

Senator VOINOVICH. I worked very, very hard with the Governors

to get unfunded mandate relief legislation passed. I was very active

in the safe drinking water changes that helped to loosen that regulation a little bit to make some common sense out of it.

I would suggest to you that we have a responsibility in the Federal level to get out hands around the real costs in the various

areas where we have Federal responsibilities. I happen to agree

with Senator Inhofe that we have priorities in national defense and

infrastructure. I think Americans forget that we made the real
25

change in our sewage treatment facilities in this country with the

75/25 program that came in at the end of the 1960’s, and it was

discontinued in 1985. Then we went to the loan fund program.

So we need to get a handle on our numbers, but it seems to me

that you all ought to get together through your respective organizations and work with your Governors in the Big Seven to come back

with some recommendations on how you can tackle some of the

problems that you have. I would suggest one of them is to really

look at, as we did with the safe drinking water, are we asking you

to do some things that don’t make sense? You know, I think that’s

really something that’s important, harmonizing our environmental

needs along with practical needs that you have in your respective

communities.

Then I think that some real consideration should be made concerning partnership. Just what is the proper division of the cost of

these things? I know in my case, my water rates went up 300 percent while I was mayor. We had a thing called ‘‘Build Up Greater

Cleveland,’’ where the Urban Institute told us we had billions of

dollars of infrastructure needs. So we sat down and spent the time

to really get a handle on what those infrastructure needs were.

Then we started to systematically go at them. It wasn’t much fun.

People weren’t happy with it, but at least we knew what we were

doing.

I’d be interested in your thoughts of this WIN proposal. You

know, WIN has come back with $57 billion over a 5-year period.

I don’t know whether that’s going to get the job done or not, but

I want you to know about reality. OK? Reality is that last year, we

tried to increase the amount of money for grants to States and cities for waste treatment infrastructure problems. It was called a

Wet Weather Program. It was only $1.5 billion over a 2-year period. We can’t get in this budget right now in the current Appropriations bill, there’s no money in it at all for the Wet Weather

Program. We’ve increased the money in the revolving loan fund to

about what it was last year.

I’ve got a bill in now, S. 252, which would increase the loan program from about $1.5 billion to $3 billion a year for 5 years. That’s

just a loan program. But that’s not enough in itself. You’ve got to

have a grant program.

So we have an enormous problem. I would suggest to you that

it’s not going to be solved unless you get your respective organizations—the National League of Cities, U.S. Conference of Mayors,

National Governors Association, National Council of State Legislatures—to come back to this Congress with a proposal that you’re

all going to be in lock-step over to see if we can’t make some

progress on this issue.

I just want to make one other point—we’re talking about building schools. I happen to believe that building schools is a State and

local responsibility. Now, I don’t know what’s happening in Nevada, but I know in Ohio, as Governor of our State, I began an infrastructure program. We’re going to spend $23 billion over the

next, I think, 10 years to replace the schools in our State. But it’s

a State responsibility. The Federal Government can’t do it all. The

same taxpayers that you have to go to are the same ones that we
26

have to go to. So there’s a balance that needs to be struck here

about what are our respective responsibilities.

I think if the cities came back to us with some kind of a proposal

on this whole business of waste treatment and water and said,

look, we feel that we can handle this, but we think that’s your job,

and it was a partnership, I honestly believe that we could make

some progress in this area.

So I challenge you to take this on in your respective national organizations. Unless you get your national organizations involved in

this, forget it. It’s not going to happen.

Mr. MORIAL. We will do it. We appreciate the offer.

Mr. CAMPBELL. Thank you very much, Senators, for hearing from

us. It makes a real difference to hear a sympathetic ear. As you

pointed out, there was a 75/25 partnership for a number of years.

We would love to have a 50/50 partnership that would help us to

defray some of the enormous costs that we are absorbing.

Thank you very much, Senators.

Senator INHOFE. Thank you.

All right, we’ll excuse our four mayors and ask Mr. Portiss to

stay, and also ask Mr. Guerrero if he would come to the table.

While our mayors are leaving, I would only say that those of us

who serve in the U.S. Senate, and also served previously as mayors

of major cities, we know what tough jobs the mayors have. I sometimes tell, Bob, when I hear my friends complaining about something here in the Senate, I say you ought to try being mayor of a

major city sometime. If you don’t like the trash system, it ends up

in your front yard.

Let me welcome the second panel. Bob, I hope you will forgive

me. There were some mechanical problems in Chicago, and the

plane was 11⁄2 hours late. I wanted to be here in advance of you.

The way I’d like to do it is to have you go ahead and give an

opening statement. But before you do, I’d like to share with this

panel that back in 1970 when I was in the State Senate, we noticed

that the message wasn’t getting through that we in Oklahoma were

navigable. A guy named Albert Kelly came to me with this great

idea. He was a World War II submarine veteran. He said, Inhofe,

what you’re going to have to do to show people that it’s navigable

is bring a submarine all the way up to Oklahoma. We decided we’d

go ahead and do it. We went down and made a deal with the Navy

to get the retired USS Batfish, about the size of a football field, as

I recall, Bob, and we floated it all the way up the Mississippi into

the Arkansas and across the line. I remember having to use flotation at some times, and having to sink it to get under bridges. But

we got it all the way up there, and all my adversaries were saying,

it’s ‘‘Inhofe’s Folly.’’ You know, we’re going to sink Inhofe with his

submarine. But it didn’t happen because it’s still there right now

as a State Park, completely self-supported. It told a lot of people

in the world that we are indeed—I remember the pictures on the

front of a big industrial magazine showing it crossing the Arkansas

into Oklahoma. So our best-kept secret is hopefully getting heard,

and we’ve made a lot of progress.

So why don’t we start with you, Bob, and you tell us a little bit

about your problems, your victories and your challenges.
27

STATEMENT OF ROBERT W. PORTISS, PORT DIRECTOR, TULSA

PORT OF CATOOSA, TULSA, OK

Mr. PORTISS. Thank you, Mr. Chairman.

I was really pleased that I was able to wait and that you had

me wait until you showed up.

It really is an honor to be here, and it was an honor to sit among

such distinguished mayors as well from our principal cities in this

country.

For the record, my name is Bob Portiss. I have held the position

of port director for the Tulsa Port of Catoosa, a 2,500-acre inland

international seaport located about 10 miles northeast of the city

of Tulsa in Rogers County, OK, since 1984. My employment with

our public port authority actually began in 1973. I have to give you

a little history about the port because needless to say, most of you

would not know anything about it, except for what Senator Inhofe

has shared with you.

Oklahoma began offering barge transportation 3 years earlier, in

December 1970 when the McClellan-Kerr Arkansas River Navigation System was completed. This system begins at the confluence

of the White and the Mississippi Rivers located approximately 500

miles north of New Orleans on the Mississippi River, and extends

445 river miles through Arkansas and Oklahoma. Seventeen locks

and dams permit barge freight to stair-step the 420-foot elevation

change to reach our port at the head of navigation.

Authorized by the Rivers and Harbors Act of 1946, the McClel- lan-Kerr, which cost $1.2 billion to build, has resulted in over $3.2

billion of non-Federal public and private investment in Oklahoma

and Arkansas, creating some 55,000 jobs. Freight handled on the

system currently averages 12 million tons per year, carried in 8,000

barges. That’s the equivalent of 120,000 railroad cars or 500,000

trucks, which if used instead would, of course, add significant congestion to our already constrained railroad and highway systems.

All of this was made possible by a joint venture offered to Arkansas and Oklahoma. The offer was simple. The Federal Government

would build a waterway to Oklahoma if the five principal cities

along the system would each build a public port providing access

to barge transportation. Tulsa was one of those cities. Their commitment delivered what I believe is the largest fully developed inland port complex, believe it or not, in our country today—the

Tulsa Port of Catoosa.

I know of no other inland port that has 2,500 acres of contiguous

land area. This land and the initial infrastructure was paid principally for and through a $21.2 million general obligation bond

issue of the citizens of the city of Tulsa in Rogers County. That

seed money has since grown to over $45 million in public investment, and some $300 million in private investment generated by

the 53 companies now located within the complex who currently

employ 3,000 people. Obviously, the joint venture has worked well

for our States and for the Nation, at least thus far.

The future success of the system will depend in great part on

whether Congress will continue to provide, maintain and operate

our Nation’s waterway infrastructure. The current outlook admittedly is not favorable. Fortunately, the Congress has approved additional funding above the President’s current budget for O&M.
28

But even so, the critical O&M backlog will still increase by more

than $300 million in the next fiscal year.

Locks and dams—this is where the real hurt lies. Locks and

dams along our Nation’s waterways are aging and severely deteriorating, over 44 percent of them being at least 50 years old. Many

are underutilized for modern commercial barge tows, which must

then be broken up and reassembled at each lock. It is estimated

that as a result, river traffic is delayed some 550,000 hours annually, representing an estimated $385 million in increased operating

costs borne by shippers, carriers and ultimately consumers.

Sadly, the current trend is to keep studying the problem, rather

than fixing it. As an example, the current study concerning the

modernization of the Illinois and Upper Mississippi has been underway for 11 years at a cost of $54 million, and yet we are no closer to finalizing the study today than we were in 1990. Favorable

congressional action is also required at our own level for Montgomery Point Lock and Dam, without which our navigable waterway may not exist anymore. Congress has allocated some $23 million for this current fiscal year for the project, way short of the $45

million that we’ve asked for. Delaying this project could literally

shut down our waterway, as I mentioned, simply because of a lack

of water.

Another item affecting our future is the need to increase the authorized depth of the McClellan-Kerr from 9 to 12 feet, enabling us

to operate at peak capacity, being able to load barges more fully— approximately 100 trucks per barge, rather than the current 60

truckloads per barge would lower the cost of products, thereby enhancing our customers’ ability to compete in world trade.

In conclusion, it is time for Congress to take responsibility for

providing the funds necessary to rebuild, rehab, maintain and modernize our Nation’s inland waterway navigation system. Our system has been the envy of the world for decades. Now the rest of

the world is taking up the challenge, with the realization that

water is the only way to remove significant amounts of freight from

the highways.

Our congressional and State leaders must understand that maintaining a viable National inland waterway transportation system

and protecting the environment are not mutually exclusive objectives. They can be accomplished by encouraging local and Federal

agencies to work together as in past years, thereby continuing to

provide jobs and enabling us to effectively compete in the international marketplace. The alternative of abandoning the system

that has helped our Nation to be so strong and which has proven

to be a good Federal investment is clearly not in our best interest.

Thank you.

Senator INHOFE. Thank you, Mr. Portiss.

I think the way we’re going to conduct is go ahead and continue

with you now, before getting to Mr. Guerrero, if that’s all right.

I think it’s really important—you had mentioned on this Montgomery Point Lock and Dam, which we’ve worked on together now

for I guess a decade or longer than that—that it’s not a matter of

shutting it down. One of the big users up in Enid ships a lot of

wheat—Lou Myberg—and was talking about how they make their

contracts some years in advance. If there’s any doubt as to the abil-
29

ity of the waterway to carry them, then they’ll make another contract. In other words, we would contract ourselves out of the business of using the waterway. This is something that’s very hard to

sell here on the Hill.

Now, there’s a lot of competition for dollars. You mentioned $24

million is not an adequate amount. What was the amount? Was it

$50 million or $51 million?

Mr. PORTISS. Forty-five million dollars.

Senator INHOFE. It’s what?

Mr. PORTISS. Forty-five million dollars is the actual amount requested in order to complete it as previously scheduled, and that

was in 2003.

Senator INHOFE. How much can you do now with the $24 million

if we were to be able—now, you know, we did get a little bit extra

through the help of Senator Reid and Senator Domenici just after

this amount had been established. But what is your estimate in

terms of what this would set us back? When is the latest we can

come up with the rest of it necessary to complete the Montgomery

Point Lock and Dam project?

Mr. PORTISS. In talking to the district engineer from Little Rock,

if they do not receive at least I believe $35 million, then their option will be to shut the project down until the next fiscal year. Because apparently the Corps does not have any extra money to

transfer from some other project to Montgomery Point Lock and

Dam in order to continue with construction.

Another option they’ve looked at is the possibility for the contractor to fund the balance of the money that might be needed for

this year—let’s say up to the $35 million that maybe they could

squeeze by with, but that’s not in the cards either.

So the outlook looks very dismal if we’re not able to increase the

amount above $24 million, and again that’s just based on my conversation with——

Senator INHOFE. So you say they might have to shut down until

they wait and see what happens next year, and if that comes up

to the $45 million. What would happen during that shut- down?

What costs would be incurred that would not otherwise be incurred?

Mr. PORTISS. I don’t think there would be any immediate direct

cost. The problem is how soon will the water level in the Mississippi drop that magical 15 feet that the senior hydrologists with

the Corps have been predicting for some time, which was the impetus—the justification, if you will—for building Montgomery Point

Lock and Dam. That could happen starting next year, for example,

and then we would be in trouble because instead of having nine

feet of navigable depth, we may be down to something quite a bit

less. That would be—well, at that point, we just simply cannot economically load barges. You have to have your full 8.5 feet.

Senator INHOFE. Also, there could be a contractual problem, too,

because people have contracted to have that capacity.

Mr. PORTISS. That’s very true.

Senator INHOFE. So I just wonder if we might be incurring any

exposure if that would happen.

You know, you mentioned something I think is very significant,

and the mayors probably maybe they really didn’t get into this. But
30

as to what you relieve—have there been any studies made on, let’s

say, how much did we carry, let’s say, all the way into the port last

year? What kind of figures are you looking at?

Mr. PORTISS. Two million tons by waterway, barges alone.

Senator INHOFE. OK. What would that have translated to if you’d

used trucks?

Mr. PORTISS. Oh, I don’t remember that off the top of my head.

Senator INHOFE. But it does serve to relieve congestion. That’s

my point. You know, I served 8 years on the Transportation Committee in the House, and then when we came over to the Senate

in 1994, until this year I was not active on this committee, and

now just coming back to it. The amount of congestion that’s taken

place in that interval from 1994 to now is just really unbelievable.

That was the most shocking thing that I had learned during the

time that—after coming back to the Transportation Committee.

But I know that it would be something mathematic that can be

worked out, but it’s a message we need to get out—that it’s not just

rail; it’s not just, you know, it affects rail and truck traffic, too.

Mr. PORTISS. Senator, we rely on, as you know, rail, truck and

barge have to work together simply because barges can’t go door

to door. When you figure that there are 60 semi- trailer/trucks to

every single barge full of grain, all of a sudden that illustrates the

magnitude of what we’re talking about in terms of just taking

trucks off the road.

Senator INHOFE. Yes.

You mention in your testimony about the Upper Mississippi and

Illinois Waterway, and you’re very familiar with how inland waterway systems work.

Mr. PORTISS. Yes, sir.

Senator INHOFE. Why do you support the construction of new

locks in the Upper Mississippi River? What effect does this have

on us, down where we are?

Mr. PORTISS. We, as an example, the inland waterway system is

our water transportation highway. We regularly ship cargo to and

from such diverse locations as Minneapolis-St. Paul, Chicago, Pittsburgh. If the highway isn’t there, then we’re no longer in the inland waterway business. As has been—another factor I think to

consider is it’s totally absurd to think about shutting down the Mississippi or restoring it to its original condition as a river, as some

have suggested. Sixty percent of our Nation’s agricultural exports

go down the Mississippi to the Gulf Coast. How are we going to

handle it if we don’t have an inland waterway system, if we don’t

have a viable Mississippi? So I don’t think it’s something that really needs to be studied. We just need to get on with the program.

Senator INHOFE. Bob, what year did you come with the Tulsa

Port of Catoosa?

Mr. PORTISS. Yes, sir, in 1973.

Senator INHOFE. In 1973.

Senator Voinovich, he’s been there a long time. I’ve known him

since that time, too. My father-in-law was very instrumental in the

development of that waterway.

Mr. PORTISS. Yes, sir. You’ve been a 100 percent solid supporter,

Senator.
31

Senator INHOFE. Senator Voinovich, do you have any questions

you’d like to ask Mr. Portiss?

Senator VOINOVICH. No, I do not.

Senator INHOFE. All right, Mr. Portiss, I appreciate very much

your coming. I know the problem with the Montgomery Point Lock

and Dam. I know the necessity of the 12-foot channel. Is there any

other challenge out there you’d like to share with us so that we

would be able to use this?

Mr. PORTISS. I think there’s a couple. One of my colleagues from

the back of the room—thank you, whoever it was, I think I know

who it was—said 80,000 trucks is the equivalent of 2 million tons.

Thank you very much, whoever did that.

I think a couple of other things I’d like to share with you, and

really, my statement is considerably longer than what I read into

the record, as you might well guess. But another area that really

concerns those of us that are in the inland waterway business— probably two areas. One is the Endangered Species Act. If this Act

is to be reauthorized, it simply must be done with needed reforms.

The implementation of its provisions has thus far resulted in actually stopping projects permanently.

Senator INHOFE. Give us an example.

Mr. PORTISS. The Arkansas shiner, just recently Senator, was

designated as having a critical habitat in western Oklahoma.

Senator INHOFE. Yesterday a lawsuit was filed by the Farm Bureau, I believe.

Mr. PORTISS. I saw that. Literally by declaring it a critical habitat, and as I understand it, U.S. Fish and Wildlife Service has complete control over as to what that land is going to be used for, without any compensation to ranchers or farmers in the western part

of our State. I think the reason the lawsuit was filed, based on

some hearings that I’ve attended and where I’ve listened to these

people talk about it, I mean literally, it’s just shutting down their

farms, their ranches. That just can’t be.

Senator INHOFE. Yes, we had testimony on another subcommittee

of this committee that it cost the average farmer with run-off from

one of those areas about $700 a year. So those things add up to

our rapidly endangered—real endangered species, that’s the Oklahoma farmer.

Mr. PORTISS. The only other thing I was going to add is you mentioned earlier about TEA–21 or NEXTEA. Any new bills like that,

we really need to find a way to—the concept makes sense, and that

is for multi-modal transportation links. But so far, at least at our

facility, and my colleagues along the river in Arkansas and Oklahoma have found the same thing to be true, it’s really difficult to

access those funds, and I don’t know why. It’s just very difficult.

Senator INHOFE. All right. Anything else?

Mr. PORTISS. No, sir. I think that’s it.

Senator INHOFE. OK, I appreciate it very much your being here,

coming from Tulsa, and then also tolerating my tardiness.

Mr. PORTISS. Oh, no, no, no.

Senator INHOFE. I look forward to seeing you after the meeting.

Mr. PORTISS. Thank you, sir.

Senator INHOFE. Mr. Guerrero, if you have any opening statement, we’d like to hear it at this time.
32

STATEMENT OF PETER GUERRERO, DIRECTOR, PHYSICAL INFRASTRUCTURE, U.S. GENERAL ACCOUNTING OFFICE; ACCOMPANIED BY: PAUL POSNER, MANAGING DIRECTOR, FEDERAL BUDGET STRATEGIC ISSUES; AND KATE SIGGERUD,

ASSISTANT DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES

Mr. GUERRERO. Thank you, Senator.

I’d like to submit our written statement for the record and just

summarize my remarks.

Senator INHOFE. Without objection, that will be the case.

Mr. GUERRERO. With me is Paul Posner who is our Managing Director at GAO for Federal Budget Issues. We were asked, as you

know, by Senator Voinovich to do this work, and I’ll be talking

about the work today.

As you’ve heard, a sound public infrastructure plays a vital role

in encouraging a more productive and competitive national economy and in meeting public demands for safety, health and improved quality of life. As you heard from the mayors today, when

problems occur with the performance of infrastructure, they can be

very visible and their effects can be widespread.

I’m here today to discuss the Federal Government’s role in ensuring a sound public infrastructure. My testimony will focus on the

Federal Government’s role in funding civilian infrastructure, and I

will also discuss estimates for major areas of public infrastructure

developed by seven Federal agencies.

With regard to the Federal Government’s role, it’s safe to say

that it exerts a very important influence on infrastructure investment and development at all levels of government and the private

sector. The Federal Government’s influence can be seen in several

ways—acquiring and maintaining federally-owned assets; providing

funding for infrastructure that’s owned and operated by others; and

influencing the way that infrastructure projects are designed and

built through legislation and regulations. The Federal Government has spent an average of $59 billion a

year since the late 1980’s on the Nation’s civilian infrastructure. As

shown by Figure 1 in my written testimony, this spending showed

a slightly upward trend through the 1990’s. But the Federal Government, as we heard here today, isn’t the only player in meeting

the Nation’s infrastructure needs. As shown in Figure 2 in my written statement, State and local governments also contribute significantly and there’s been an upward trend beginning in the 1980’s

that in certain areas even exceeded Federal spending.

With regard to infrastructure estimates by the seven agencies we

reviewed, each agency estimated billions of dollars will be required

to build or repair the Nation’s roads, wastewater treatment works,

dams, airports, courthouses and the like. The estimates contained

in Table 1 of my testimony range widely and cover various periods

of time. For example, GSA estimated it would need $4.5 billion to

repair public buildings over the next 5 years. At the other extreme,

the Federal Highway Administration estimated up to $83.4 billion

would be required in each of the next 20 years to improve the Nation’s highways.

In between are 20-year estimates by EPA of nearly $300 billion

to construct and upgrade drinking and wastewater systems; $11-

$16 billion estimated by the Federal Transit Administration per
33

year for the next 20 years for mass transit; $38 billion for Army

Corps projects already in progress; $35 billion for airports; and $8.5

billion for highways within the jurisdiction of the Appalachian Regional Commission.

Certain estimates, such as those prepared by the Army Corps

and by GSA are for Federal spending alone. Other estimates, like

those prepared by EPA for drinking water and by the Federal

Transit Administration for mass transit, involve all levels of government and the private sector.

Let me now put these numbers in perspective. First, while these

estimates encompass major areas of public infrastructure, they cannot easily be compared or simply added up to produce a national

estimate of our needs. This is because they are developed using different methods and are for different time periods. A fundamental

reason that estimates were prepared differently and lack comparability is that they are developed and used for different purposes. Some agencies, such as the Army Corps and GSA, for example, use those estimates to manage and repair their own assets,

while other agencies such as EPA and FTA develop estimates to

identify national needs and help you fund those needs.

Second, the seven agencies develop their estimates using some,

but not all of the capital budgeting practices used by leading private sector and government organizations. Those practices include

establishing a baseline inventory of assets, using cost-benefit analysis to identify economically-justified investments, and ranking and

selecting projects for funding based on established criteria. Some

agencies followed more leading practices than others. For example,

the Army Corps had procedures that reflected six of the eight leading practices.

Nonetheless, following these leading practices does not always

ensure a quality estimate, and each estimate has limitations associated with using data of known poor quality.

Third, some investment estimates span several decades and investment needs can change significantly over time with changes in

technology, the efficiency of delivering infrastructure services or

the employment of strategies that alter the demand for infrastructure. For example, energy efficiency standards can affect how many

power plants we build. Year-round scheduling of public schools and

universities can affect how many schools we need to build. User

fees and tolls on roads can influence the congestion on highways.

Finally, these estimates mostly focus on the condition of infrastructure, rather than the desired outcomes—for example, less traffic congestion as a desired outcome. We caution against relying on

estimates of need that are based primarily on the condition of existing infrastructure if desired outcomes are not clearly articulated

and the cost and benefits of alternatives for achieving those outcomes are not fully considered.

This concludes my statement. I’ll be happy to answer any questions you may have.

Senator INHOFE. Thank you, Mr. Guerrero.

I’ll go ahead and turn this over to Senator Voinovich. He is the

one who made the request.

Senator Voinovich.

Senator VOINOVICH. Thank you, Mr. Chairman.
34

I haven’t read the report. I got it on Friday and I am going to

read it, and so I’ll be following up with some specific questions. But

you took the information that each of the agencies had in terms of

their estimates. You just said, I think, that in some instances you

wouldn’t rely on these estimates because they leave something to

be desired.

How do we get to a point where we can get a real handle on what

these costs actually are? Or is it many agencies are afraid to really

confront the costs that they have? Or in the alternative, they figure

even if they do, it doesn’t make any difference because the money

won’t be forthcoming.

Mr. GUERRERO. Let me correct a misimpression if I gave that. I

didn’t intend to suggest these numbers were not reliable. They are

not comparable. In other words, the Congress—if you were to ask

us—if you were to look at these numbers and say, what is the national estimate of need here for infrastructure, you would be hardpressed to come up with a national need because the numbers cannot be easily compared. They’re prepared using different assumptions, different methods, they’re for different time periods, and so

forth. Some of them use cost-benefit analysis to compare different

projects, and only those that are considered economically

justified——

Senator VOINOVICH. But what I’m saying is that could you come

up with a set of criteria that would say to agencies, these are the

criteria that we want you to use over a period of time, and here

are accepted practices in terms of how you go about estimating

costs so that we could get to the numbers—maybe not tomorrow,

but somewhere down the road.

Mr. GUERRERO. Yes, I believe that’s possible. If I could turn that

over to Paul Posner, who could probably elaborate further on that.

Mr. POSNER. Yes, we’ve given that a little thought. OMB—this

does require some more central leadership, I think, to really address what you’re saying. Analytically, the criteria are fairly apparent and we laid it out in the report. We have eight what we call

best practices that have partly been gleaned, by the way, from an

earlier work we did looking at best practices in capital planning in

12 corporations and States.

OMB for several years following up on that has developed a capital programming guide requiring Federal agencies for the first

time to develop capital plans. It’s hard to believe agencies have not

done that before because, unlike State and local governments in

the private sector, they don’t have to go to the market to raise

money or go to the voters. They’ve been able to essentially get by

without it.

One possibility might be to add on, in other words, some kind of

guidance on how to do this, because clearly determining needs is

the first step in that capital programming guide. Every year agencies are required to go through a deliberative process to do that.

Theoretically, OMB could work with the agencies to incorporate

some more consistent criteria in that guide, and then that would

provide probably some more uniformity in how the agencies go

about doing this thing.

Senator VOINOVICH. In terms of when you’re putting it together,

you were just looking at the Federal side. You heard these wit-
35

nesses earlier—we have infrastructure costs. I think the EPA—- what was it?—$300 billion in 20 years to deal with the infrastructure cost for water and sewers during that period. There’s been

more recent from the WIN organization that it’s even more than

that.

Now, the numbers that you came up with—that’s the total number, not just the Federal share.

Mr. GUERRERO. That’s correct. For most of the agencies, it’s the

investment required at all levels of government. There are some exceptions, obviously. The numbers we present in our report for GSA

and the Army Corps would be just for those agencies managing

Federal properties.

Senator INHOFE. What percentage of that would be Federal?

Mr. GUERRERO. What percentage of, for example, the wastewater? I believe historically it’s about 25/75 percent is the rough

approximation. Seventy-five percent would be the investment made

by the State and local governments and 25 percent by the Federal

Government. That has changed historically. Around 1970 when we

put a lot more money into upgrading sewage treatment to a secondary level of treatment, the Federal Government’s role in that

and the amount that the Federal Government provided was probably proportionally higher. But today, it’s about 75/25.

Senator VOINOVICH. You heard me ask the questions of the mayors to come back with, looking at the environmental regulations

and the guidance and so forth that have come out. Has GAO ever

looked at that issue in terms of what additional costs will be incurred as a result of some of these new regulations? The reason I

bring it up is when we did the unfunded mandates legislation—it

started in Ohio. We really went out of the way to identify specifically what these unfunded mandates were. What’s really amazing

to me is that no one had ever done it before. Then we shared it

with others States and they started going through the exercise.

Have you done that at all, do you know, in terms of GAO looking

at, say, environmental costs of the new regs dealing with CSOs or

stormwater overflow?

Mr. GUERRERO. Yes, we’ve done work in different areas. Specifically, very recently we did work on the—not the combined storm

overflows, but the requirement for stormwater permitting, which

has been highlighted also as an unfunded mandate. We can provide

you with information on some of those programs to the extent

we’ve done work on them. We’d be happy to give you specific information. To the extent, we haven’t looked at the additional costs associated with some of those requirements, we could look at that for

you.

Senator VOINOVICH. Because I know with the safe drinking

water, when you got into that here in Congress that the regs in

some instances, most of the water systems were under 10,000, and

they were requiring the most highly sophisticated equipment to do

it, and it would have bankrupted most of the jurisdictions that

were being asked to do the work.

Mr. GUERRERO. Yes, in the drinking water area, for many years

we studied that particular problem. There’s a real difficulty that

smaller systems have complying with the standards. They don’t

have, as you heard from the mayors in the earlier panel, they don’t
36

have always the tax rate base to spread those costs that a larger

jurisdiction can absorb those costs more easily. When Congress reauthorized the Safe Drinking Water Act several years back, it tried

to address that in terms of how those standards were set. The extent to which that’s been successful or not I think is something

worth looking at.

Senator VOINOVICH. You indicated that following a leading practice does not ensure quality investment estimates. What do you

mean by that?

Mr. GUERRERO. Well, for example, if you use cost-benefit analysis

to assess whether a project is economically justified, but the data

are not good or the assumptions are faulty, you might come up

with a result that is not all that useful. So it’s how you apply those

best practices is critical. The key area that all of the agencies suffer from, no matter how good a job they try to do here, is the data

they have to work with have limitations. EPA, for example, in estimating the costs of wastewater treatment and drinking water

treatment only get data that goes basically 5 years out. Congress

is asking it for a 20-year estimate of needs. So the agency has to

take a guess at what that would look like, and to a large extent,

really doesn’t provide a full 20-year estimate because it doesn’t

have that data. That’s why you have the discrepancies between the

WIN report and EPA, where WIN is saying, oh no, it’s much higher, because EPA hasn’t extrapolated these costs into the future.

They’ve only taken the first 5, 6 or 7 years, whatever they were

able to get. EPA acknowledges those limitations, and every agency

suffers from some of those same kinds of data limitations.

Senator VOINOVICH. Do you think that someone objective like

GAO would look at, say, the WIN numbers and the other numbers

and be able to come back and tell us whether you think they’re reasonable?

Mr. GUERRERO. Well, I know that CBO did that analysis. I have

a staff person here. What would we add to the CBO analysis? Do

you have any sense of that?

Ms. SIGGERUD. No, I don’t.

Mr. GUERRERO. CBO did look at the WIN numbers and tried to

reconcile why there were those kinds of differences. My impression

was they encountered some difficulty with that.

Ms. SIGGERUD. Yes, the difficulties that they encountered—well

let me first of all add a few other things to the differences that we

noted between the WIN estimate and the EPA estimate.

Mr. GUERRERO. Let me introduce Kate Siggerud from the General Accounting Office.

Senator VOINOVICH. I didn’t hear your name, Kate.

Ms. SIGGERUD. Kate Siggerud.

In addition to what Peter mentioned about the timeframe differences between these estimates—the 20 years. Usually the communities that reported to EPA in their survey usually only reported about 3 to 5 years worth of plans. The WIN estimate also

includes some maintenance costs that are not generally included in

EPA’s estimates, as well as some financing costs that aren’t included in EPA’s estimates.

Essentially, EPA’s goal in doing its clean water and its safe

drinking water survey is to look at what are the costs of imple-
37

menting the Safe Drinking Water Act and the Clean Water Act.

Another objective is to determine what would be required in terms

of EPA funding to those communities. Of course, the funding under

the statute only covers certain items. For example, it doesn’t cover

maintenance and it doesn’t cover drinking water or wastewater facilities for new communities. Therefore, the EPA estimate is much

different in scope than the WIN estimate. That really goes to explaining the difference in numbers there.

We’d certainly be glad to provide some additional detail comparing the two, and also summarizing what CBO found in terms

of their comparison.

Mr. GUERRERO. I think the bottom line probably is it’s safe to say

that EPA’s estimates of needs are much lower than what’s actually

needed. Now, how much lower is open to question, and I’m not sure

we—I believe the CBO could not, and I’m not sure we could do any

better job of telling you precisely how to bridge that difference between those two estimates. But I think it’s fair to say the EPA’s

estimates are low, and probably in the wastewater area alone, EPA

estimates they’re probably underestimated by some $80 billion, and

that’s no small sum of money.

Senator VOINOVICH. Let me interrupt for just a moment.

Mr. Portiss, we’d be glad to excuse you, and I hope we have a

chance to visit maybe back in my office in a little while, but our

business with you has—— Mr. PORTISS. That would be great. Thank you.

Senator VOINOVICH. All right. Great. Thank you, Mr. Portiss.

Senator INHOFE. Thank you.

Senator VOINOVICH. Well, Mr. Chairman, based on what I’ve just

heard, doesn’t it make it so much more important than when agencies are doing regulations, that they really look at cost-benefit in

terms of those regulations? In other words, they’ve passed the regs.

They’ve come up with estimates of what the costs are, but when

you go back and review them, you find out that they’ve really lowballed it in terms of really capturing the real costs that are incurred by whoever it is that are going to have to comply with them.

We have the unfunded mandates. I think it’s over $100 million that

they have to come back. I think for local communities, it’s $50 million.

But wouldn’t you agree that that ought to be given a higher priority than perhaps it’s being given right now by Congress?

Mr. GUERRERO. I think what happens with—first, cost-benefit

analysis is probably done in almost every case where those requirements are imposed because it’s been a longstanding practice and

requirement under Executive orders going back to I think the

Carter Administration, but it maybe even predates that. Those Executive orders have been refined and refined over time, and every

President has required EPA to do cost-benefit analysis of its regulations. But those analyses are done, as you can appreciate, looking

prospectively before anything is actually implemented. So it’s a

best guess at a point in time.

It is useful to look back. We issued a report a year or so ago

about the importance of looking retrospectively at how well these

estimates are done and whether some of them need to be adjusted,

and if so, what we can learn from making those adjustments and
38

what the implications are in terms of where the rubber hits the

road with the mayors and localities across the country.

I would say that EPA does as good a job as it can do, doing prospective cost-benefit analysis. What it doesn’t do is stop, look back,

and do the retrospective to see, was it right? Was it even in the

ballpark? What did it overestimate? What did it underestimate?

What does that imply in terms of do we need to revisit what we’re

asking people to do?

Mr. POSNER. If I could just interject one other point. I think one

of the most important criteria we have here for judging an agency’s

estimating practices is whether they put a cost-benefit screen on

the proposed Federal project as well. Because as we talked about,

funding is limited at both levels. The State and locals are concerned about mandates without money. We have encroaching entitlements and other things that are gradually shrinking the discretionary spending we have to allocate to this pool where we have

tremendous needs. Obviously, effective cost-benefit analysis—I

think of the ACIR report that was done in 1993 that talked about

high performance public works, which is kind of a nice way to

think about it. We could think of ways to strengthen those claims,

given the greater pressures we have at the Federal level.

I just wanted to bring one thing up to your attention. We at GAO

have suggested—and now this year for budget process reform is an

important year because those discretionary caps are expiring—establishing for purposes of this kind of thing an investment component inside the discretionary caps. In other words, not a traditional

capital budget where you go out and borrow like the States do, but

given our overall unified budget framework and the need to continue to cap spending, that you might have a separate component

devoted to what we call investment kinds of programs—infrastructure, human capital, R&D—which most economists potentially suggest can improve productivity just as well as surpluses can. The

Congress over the year makes two decisions. One is, what’s the

total size of the surplus, and at least another decision is some explicit consideration be given to how much do we invest in promising programs for the future where, again, these estimates of

needs could come back into the process in a more systematic way.

So that’s just saying needs are limited at both levels and there’s

a process that we might think about, to think about our scarce resources as well.

Senator VOINOVICH. That would certainly deal with one of the

questions I asked about school construction. That’s an enormous

undertaking by the Federal Government. Once you get into that,

that could just continue to go. But the fact is that you don’t get into

this issue of weighing that versus something else unless you know

what that something else is. I think that’s the point you’re making,

is there are certain fundamental costs that we have that we should

identify and say these are things that we really need to get at.

They’re really not discretionary. They are fundamental things that

need to be done by the Federal Government if we’re going to have

the infrastructure to have a viable economy and at least clean

water. So I think that’s a terrific suggestion that you make. You’re

just saying is, you’ve got the surplus. You can do this with it. You
39

can do that. But these are costs that you just can’t get away from

if you’re being realistic and practical about things.

Mr. POSNER. Right now, those decisions, as you indicate, are

made in a number of appropriations subcommittees and a number

of other forums, but they’re never brought together for the Congress to consider as a whole and rank against each other.

Senator VOINOVICH. Yes, and the same thing, Mr. Chairman, in

the WRDA bill—$39 billion, and you’ve looked those numbers over.

They seem pretty reasonable that they came up. I think the way

standard is that it’s $39 billion worth of these projects which have

either received some design or some construction money. We continue to pass WRDA bill after WRDA bill after WRDA bill, and

don’t provide the money. I think this year, $1.5 billion or something like that to implement WRDA.

Would you say those numbers were good?

Mr. GUERRERO. The $39 billion? We had reported $38 billion, so

it’s there. It’s in the ballpark certainly. The Army Corps reported

appropriations for those projects last year was $8 billion.

Senator VOINOVICH. Eight billion dollars was appropriated last

year?

Mr. GUERRERO. Eight billion dollars for water resource and

hydro—not just what we heard from Mr. Portiss today, the inland

waterways, but also some of the other areas under the Army Corps

jurisdiction, including dams and hydro and so forth.

Senator VOINOVICH. I’d like to look at that.

Mr. Chairman?

Senator INHOFE. No, I was listening and it occurred to me that

in our MILCON in Defense in the Armed Services Committee, it

seems to me we have a very rigid set of criteria that’s used that

seems to work pretty well. I know you folks are not directly involved in that, but have you, Mr. Posner, have you ever looked to

see if that’s something that could be emulated or maybe it should

not be.

Mr. POSNER. Not specifically. I do know one thing that Defense

does in their budgeting for capital that’s very important is they

have a tradition of budgeting up front for all of the costs of a segment or a total project, which the Corps of Engineers does not do.

They do what’s called incremental funding. We, OMB and a number of other observers, including the President’s Commission on

Capital Budget of several years ago, argued that really when we

go about funding these things, however good your needs assessments are, you ought to be prompted to pay for the costs up front,

because that’s the only time you really get to look at it. That’s

when you lock in the Federal Government’s decisions. By and large,

DOD in the budget process has observed that up front funding

principle, perhaps more than any other agency in government.

Senator INHOFE. That’s interesting. Why is it that the Corps has

followed this incremental approach?

Mr. POSNER. I’m not exactly sure of the history. Typically, when

we look at their budget documents, and we just did a report, we’d

be glad to make available to you, for the Senate Budget Committee

for Senator Domenici several months ago, where you look at their

projects. Typically, you’re funding maybe just a portion of the costs

of completing a facility every year. That way, potentially, you could
40

fund more projects in a given year, but over time you’re subject to

cost overruns and a lot of other problems because of that approach.

DOD has always maintained for their own discipline internally

and to support their planning programming budgeting system, that

up front funding is an important discipline for them.

Mr. GUERRERO. So your point is well taken. Different agencies

employ different best practices. In this particular case, a best practice that DOD as a whole may employ, but not the Army Corps,

is the notion of up front budgeting as opposed to incrementally

funding, which puts the project at risk, of course, to overruns and

so forth. You know, we have a table in here where we identify of

the seven agencies we looked at, how well each of them are adhering to these best practices. It’s a real mixed bag, so there’s room

for improvement by the agencies in terms of how they do their capital planning. That would also improve the estimates of numbers

that are reported to you.

Senator VOINOVICH. We had a capital budget when I was mayor

and we had a capital budget when I was Governor, and some people have proposed that maybe the Federal Government ought to

look at a capital budget. But I think that suggestion you just made

a couple of minutes ago maybe is the beginning of that kind of approach. But does anybody ever sit down at OMB and look at the

big picture, and start to look at priorities for the country and then

kind of go back and start to allocate resources and make those

hard decisions that one has to make in terms of doing a budget?

We have this, in my opinion, ridiculous 13 appropriation bills

that I think is going to end up causing us a train wreck at the end

of this year, like it has the last couple of years. But does anybody

from your observation ever look at the big picture and try to have

national priorities and balance things up and do that? Or is it everybody just focus on their own little area and then hope it all

works out?

Mr. POSNER. Boy, I would guess that their answer would be

that’s the President’s job, and in some sense it does get done. As

you know as a mayor and a Governor, that’s the job that ultimately

falls to the chief executive.

We have looked at this question. I mean, generally OMB has to

put the pieces together somehow. What we have is a new tool that

I think can help in this regard. It’s under the Government Performance and Results Act. Every year, OMB has got to prepare a government-wide performance plan that not only talks about how

much money is going to each agency, but ultimately how much

money is going to each outcome across agencies. So if we’re talking

job training or if we’re talking economic development, the idea is

in one document you want to force tradeoffs across agencies, programs, even tools of government. A tax expenditure for low-income

housing, for example, should be traded off against the HUD Section

8 program and against other kinds of loans and loan guarantees so

that you can have a decisionmaking process that’s truly comprehensive. I think that’s what you’re getting at.

OMB has produced that report every year. It’s published in the

President’s budget. But it’s not a driving document. It’s an afterthe-fact compilation of decisions they make in the more traditional

route. We have suggested, in fact, that more of a government per-
41

formance results perspective, using outcomes as your decision

units, could make for a more comprehensive decision process. But

so far, they haven’t taken us up on our challenge with regard to

that.

Senator INHOFE. You know, Senator Voinovich, when I was elected in 1986 to the House, I came up here and I realized having gone

through the same thing that Senator Voinovich mentioned when he

was mayor and Governor, that we had very rigid and separate operating and capital budgets. We knew exactly where we were at all

times. We depreciated our stock. We followed the guidelines that

the Federal Government imposes on everyone in America except for

themselves.

A guy who was at that time serving from New York in the House

of Representatives, who was a CPA by the name of Joe DioGuardi

and I put together a task force. We were going to come up with an

accounting system for the Federal Government. We worked on it

for 4 years, Senator Voinovich, and nothing happened. So maybe

this discussion here today can be the start of something.

I had the Secretary of the Air Force into Tinker Air Force Base

this past Friday, and just looking at the way we do business—no

depreciation schedules. You don’t really know where you are at any

given point, except it’s money in and money out. Does this bother

you?

Mr. POSNER. Yes, I think it’s fair to say that your work may have

ultimately to fruition because we now have Federal accounting

standards. All agencies are required, theoretically, to put together

depreciation schedules, have them audited every year. DOD has

not in fact been able to be audited still. They’re one of the agencies

that has not been able to pass a clean audit, and there are longstanding problems with financial management that, as you well

know, go back years. One of them is they can’t get a good inventory

of their property, plant and equipment, which as you rightly say,

we expect everyone else in the country to do.

There’s a lot of reform going on. We feel there is progress being

made. But at least we have accounting standards now. So that’s

the CFO Act and the following amendments have gotten us on the

right track at least.

Mr. GUERRERO. You know, one of the things we point out in our

report is that over the last few years, there have been various reforms like the one that Paul mentioned. I’ll just rattle off maybe

six. There’s a Chief Financial Officers Act. There’s a Government

Performance Results Act that we talked about. There is a Federal

Acquisition Streamlining Act, OMB Circular A–11, OMB’s Capital

Programming Guide, and our own Leading Practices Guide.

When you take the sum total of all this over the last, I would

say, 6 years or so, there has been a concerted effort to improve how

the Federal Government budgets, reports and thinks about these

kinds of issues. It’s really a very daunting task. All of these are different pieces of a puzzle that can help us answer this question. I

think to some extent, we’re doing a good job in some areas, and

maybe not as good in other areas. We just need to continue to monitor how these different reform initiatives are working and are they

producing the intended result, which is really to get the Congress,

in the end, better information to make better decisions.
42

How do you feel? Are these things helping you? Or is this turning

out to be largely a paperwork exercise for the agencies involved,

and you’re still not getting the information you need.

So that’s something we’d be happy to continue to monitor and

work with you in the future on, in terms of where can we continue

to go in terms of improving how report these things and how useful

that information is to you in terms of decisionmaking.

Senator INHOFE. Well, I don’t want to steer this into the Senate

Armed Services Committee or into Defense, but there is a real serious problem there. You buy a submarine and then one day it’s

gone, but nobody knows what happens in between.

Mr. POSNER. I think just to followup quickly on what Peter said,

I think we’ve made substantial progress in developing an infrastructure of information. Now we’re trying to figure out how do we

integrate it in decisions. For example, we have performance information now in these annual performance plans. We have a budget

accounting system that’s still often oriented toward old-style kind

of reporting and decision units, where you’re talking about salaries

and expenses on one side, but the performance information is outcome-oriented on the other. So how we bring those perspectives together in a way that prompts Congress to think about it as they

make decisions—that’s the challenge going forward.

Senator VOINOVICH. Start off with finding the time to do it, because we spend all our time on the budget and appropriation bills,

and we have very little time for oversight. Many of the agencies

that we’re charging with responsibility to do the things that you

just talked about are so busy with directing their attention to it

that they haven’t got time to follow through on the management

things that they’ve got to do. You’ve got to wonder at the way we’re

organized whether we’re going to be able to deal with this next century in terms of our challenges.

I have no other questions.

Senator INHOFE. I don’t either. I appreciate very much your taking the time. Sorry for the long wait, and you’re dismissed.

[Whereupon at 5:13 p.m. the subcommittee was adjourned to reconvene at the call of the chair.]

[Additional statements submitted for the record follow:]

STATEMENT OF HON. MARC H. MORIAL, MAYOR, NEW ORLEANS, LA, ON BEHALF OF

THE U.S. CONFERENCE OF MAYORS

Mr. Chairman and members of the subcommittee, I am Marc H. Morial, Mayor

of New Orleans.

I appear today on behalf of the U.S. Conference of Mayors where I serve as the

organization’s president. The Conference is a bipartisan organization that represents mayors of the more than 1,200 cities with a population of 30,000 or more.

Mr. Chairman, I want to thank you and other members of this subcommittee for

holding this hearing today to examine the ‘‘Federal Role in Meeting Infrastructure

Needs.’’

OVERVIEW

Let me begin by emphasizing that the Nation’s mayors believe that the Federal

Government needs to be a strong leader in partnering with cities on local and regional infrastructure projects. We also believe that the Federal Government is

uniquely situated to ensure sufficient flows of public capital in meeting the Nation’s

growing infrastructure needs, including the preservation of existing critical assets,

to support an expanding economy.
43

In my testimony today, I offer some of the mayors’ perspectives on the necessity

for increasing Federal commitments to infrastructure investment. In providing these

views, I include findings of a recent survey of the mayors on these issues. I also

offer up a new context or benchmark—investing in our Nation’s most potent economic engines, cities and their metropolitan economies—to guide future Federal policy decisions on infrastructure investment. Finally, I describe several infrastructure

projects in the city of New Orleans to illustrate some of our needs in this area.

Mr. Chairman, I would begin my remarks by thanking you and the other members of this committee for your leadership in crafting the bipartisan agreement on

brownfields and in moving this legislation, S. 350, forward so successfully in the

Senate. This legislation will make a real difference in cities, counties and regions

throughout the Nation.

There is a clear nexus between recycling America’s land through brownfield redevelopment and the infrastructure issues before us today. For too long, we have let

these properties—thousands and thousands of acres of land in existing communities

and places with substantial infrastructure in place—lay idle, as development races

relentlessly to undeveloped and pristine land, ever further away from our built-up

areas. We know that this pattern of development has been highly consumptive of

our public infrastructure dollars, as we chase ever spreading and lower density development and its associated needs. This form of land use requires infusions of capital for new facilities and systems that is disproportionate to the number of people

and economic activity that we are attempting to serve. This is occurring all the

while incumbent system needs, both modernization and rehabilitation, are overlooked or ignored, facilities that serve a substantial majority of our citizens.

When past conference president and then Fort Wayne Mayor Paul Helmke testified before this committee at your March 1999 hearings on livability and open space,

he helped develop your record on the many linkages among brownfields, infrastructure and urban development.

By embracing S. 350 and other brownfield-related policies, we will, for the first

time, take significant action to help decelerate the several decades-old pattern of

outward development, while renewing our attention to the substantial public and

private investment we have made in existing communities and places. In the very

fast growing and relatively new cities and regions, broader brownfield reuse efforts

will not be as potent as it will be in most other areas. However, it is a crucial first

step in redirecting our public resources inward to places where most Americans now

live and work and where the Nation’s most crucial economic assets are located.

The mayors applaud this committee’s leadership on S. 350 and we are anxious

to see final congressional action on brownfields legislation over the next several

weeks. We strongly share Committee Chairman Jeffords’ goal to have this legislation enacted this summer.

FEDERAL ROLE IN MEETING LOCAL INFRASTRUCTURE NEEDS

Mr. Chairman, let me provide some of our key perspectives on the challenges before this committee, the Congress and the Nation in addressing our Nation’s growing infrastructure needs.

Local Infrastructure’ Needs Are No Longer a Local Issue

Mr. Chairman, if there is one perspective that I believe is most important to this

hearing today, it is that ‘local’ infrastructure needs are no longer simply a local concern. These needs are of national significance, of national economic importance and

of substantial cost, exceeding local capital resources.

It is a given that one of the fundamental functions of government is to ensure

that the Nation has a modern and efficient infrastructure to support our societal

and economic endeavors. Among the challenges we face locally, like all leaders in

government, is to find ways to reinforce in the public’s mind the importance of investing in these infrastructures. Sometimes, we can’t immediately see the benefits,

or in other cases, the benefits are longer term. We know that investment in the Nation’s infrastructure is more than an exercise in shifting responsibility among levels

of government.

An overriding theme of the Conference’s recent efforts has been to call attention

to the role of cities and their metropolitan economies in fueling U.S. economic

growth. At some point in Nation’s economic development, many of the infrastructure

needs in cities and regions ceased to function as ‘local’ infrastructures. Increasingly,

these systems are National infrastructures in their scope and importance. Later in

my statement, I share some of the Conference’s work on metropolitan economics to

bolster this claim.

Whether it is Mayor Williams’ efforts that anchor a metropolitan economy that

influences three States and the District of Columbia, an economic engine that last
44

year outpaced the economy of Austria or Hong Kong. Or, it is Mayor Campbell’s city

that anchors a metropolitan economy that generated more output than Norway or

Denmark. Consider the New Orleans region, an economic engine that now accounts

for nearly one-third of my State’s total output and easily surpasses the economies

of Kuwait or Syria.

As we look at the broader issue of infrastructure investment, we see the Federal

Government as an investor, a partner in building national prosperity. It is an undeniable reality that the U.S. economy will grow or stall, based on the economic performance of our Nation’s metro economic engines. Our metro economy reports show

this convincingly. They underscore how infrastructure assets fuel the output of

these metropolitan engines.

As mayors, we see infrastructure investment, particularly larger scale projects

that often surpass locally available resources, as one of the pathways to improved

productivity and economic performance of our metropolitan engines. These are investments that influence and shape the rate of U.S. economic growth.

Look at Mayor Campbell’s capital plan for Hartsfield, a city-owned facility that

serves more people than any airport in the world. This one asset has helped define

the economic prosperity of the Southeastern United States. There are numerous examples everywhere of how these infrastructure assets, while perhaps none so dramatic as Hartsfield, now fuel metropolitan output and, in turn, underpin our States

and U.S. economic growth.

In recent remarks to the National Press Club, I made the point that the improved

health of our Nation’s cities and their influence on their metropolitan economies

helped drive one the most significant economic expansions in this Nation’s history.

This did not happen by accident.

Mr. Chairman, when Fort Worth Mayor Ken Barr testified before this subcommittee in last Congress, he first introduced this panel to some of our work on

metro economies as well as our perspectives on the implementation of TEA–21. The

report that we just released now provides data over the 10-year period, 1990–2000,

covering all of the Nation’s most recent economic expansion.

We believe that our metro economies data is a powerful tool in helping this committee fashion policies to partner with States and local governments on infrastructure. It can be a new standard upon which to gauge the effectiveness of financing

strategies and other efforts and can help policymakers make more strategic investments for the future.

With this context of metropolitan economies as a roadmap for making more strategic infrastructure investments, I want to offer some further observations on where

we are in meeting our infrastructure needs.

Sequencing of Major Federal Commitments to Infrastructure

With the enactment of TEA–21, the mayors saw this as a milestone in the national debate on rebuilding the Federal partnership on infrastructure investment.

With this legislation in 1998—where the Federal partnership commitment to surface transportation nearly doubled—mayors and others viewed this as the first installment in a broader effort to increase our public commitments to the Nation’s infrastructure.

Building upon this legislation, Congress substantially increased funding commitments to the Nation’s aviation system with the enactment of AIR–21 in the last

Congress. Again, capital commitments to airport capital needs and our national

aviation system more broadly were raised to the next level.

Both initiatives—AIR–21 and TEA–21—were badly needed and enacted just in

time, as our world-class highway and aviation systems labor under rising demands.

But these are not the only systems that are overburdened.

Mayors anxiously awaited this Congress, looking to engage you and others on the

need to further enhance our Federal partnership commitments to other infrastructure needs. As you know, mayors have been seeking action on new initiatives to increase capital commitments to intercity rail, rail transit, water and wastewater,

parks and school modernization, areas of need that are now on the congressional

agenda and in the queue for legislative action.

We see the need for a longer-term Federal infrastructure strategy that builds

upon the gains that we made under TEA–21 and AIR–21, while extending this investment thrust into other areas, through initiatives such as WATER–21 and RAIL–

21.

You have already built a record on the rapidly escalating needs in the water and

wastewater area, with need analyses by the Water Infrastructure Network (WIN),

American Water Works Association, U.S. EPA and others.

One of your committee members, Senator Voinovich, has already stepped forward

with a legislative plan to begin closing the gap in this area of need. The funding
45

gap here is driven by what is needed to maintain the integrity of existing systems,

while investing in new facilities to meet Federal standards.

One of the areas that the mayors believe warrants particular attention, along

with an expanded Federal commitment, is rail transportation. In January, I led a

National Mayors’ Summit on A National Rail Policy for the 21st Century to begin

to begin pressing for increased investment in the Nation’s rail infrastructure, both

for passenger and freight.

The mayors are seeking enactment of the ‘‘High-Speed Rail Investment Act of

2001’’ (S. 250) as the first installment in this broader national commitment to the

Nation’s rail infrastructure. Mr. Chairman, I want to underscore the strong support

of the mayors for S. 250, legislation that will help us further modernize our Nation’s intercity passenger rail capabilities.

Rail transit is another key element of this national policy. Today, these systems

are taking root in every part of this country, with more than 200 projects—be it

light rail, heavy rail, commuter rail, trolleys and other fixed guideway projects—now being studied, planned or constructed. Later, I provide examples of rail projects now

underway in the New Orleans area.

It is now estimated that the pipeline demand for capital for these rail projects al- ready exceeds $35 billion, against an expected Federal commitment in the next fiscal year of about $1.1-$1.2 billion. In our survey, the number and geographic distribution of mayors who cited light rail or other rail transit projects as their city’s

number surface transportation priority represents a sea change in surface transportation investment priorities.

In the wake of the 1991 ISTEA law, when local areas were given the opportunity

to help shape transportation priorities for their local areas and regions, rail investment moved to the forefront of the transportation agenda. We can no longer afford

to view this need as an issue for cities and regions of the Northeast or Midwest,

it is now national in scope. To amplify this point, consider the pending fiscal year

2002 Transportation appropriations bill, which was recently approved by the Senate

Appropriations Committee, where 38 States are represented in the ‘new starts’ program.

We believe there is much to be done on the rail transportation, both intercity and

local projects, that the mayors would urge this committee to consider and work with

us on strategies to accelerate investment in these projects.

Mr. Chairman, we recognize revenue expectations have changed dramatically

since the first of the year, when mayors and others began pressing to allocate portions of the surplus to these priority infrastructure needs. Nonetheless, we believe

we must still find ways to finance these infrastructure needs. Mayors are certainly

open to creative mechanisms, like the bond/tax credit approach set forth in S. 250,

legislation we strongly support, to further our progress in addressing our Nation’s

infrastructure needs.

It is not just about more money or doing things in the same old way. In the water

and wastewater area, we are seeking reforms that will promote more competition

among private companies in delivering more cost-effective solutions to our needs.

This effort includes seeking changes in procurement practices and laws to move us

away from the more traditional design, bid and build processes to design/build models. We are also advocating approaches that emphasize standards-based compliance,

not facility-based compliance. We have called for the adoption of tax and other incentives to attract more private capital in support of our efforts. While we are seeking ways to reduce the costs and promoting new partnerships with the private sector, we don’t want to understate the reality of the needs in this area. We know that

there is also an urgent need for an expanded Federal partnership on water investment, one that includes additional financial commitments to local areas, to address

the surging needs in this area.

As the revenue outlook improves, we would certainly urge you and others to work

to dedicate some portion of any future surplus revenues and be open to new revenue

sources to finance the many infrastructure needs that we are discussing here today.

City Infrastructure Priorities

To prepare for this hearing, the Conference surveyed 160 mayors to solicit their

priority concerns on infrastructure. First, we learned that surface transportation

was the No. 1 priority, with more than 50 percent of the mayors choosing this area

(defined as highways/streets and transit/rail). One quarter of the mayors indicated

that water and wastewater was their city top infrastructure priority, followed by 13

percent of the mayors selecting schools/libraries as their top priority. The remaining

respondents chose aviation, telecommunications, parks and other areas of need.

I would point out that these responses generally follow the functional areas where

cities play a dominant role. Cities with counties, for example, own and operate
46

about 80 percent of the Nation’s streets and highways, explaining their strong interest here. Many cities do own, but most largely participate in the governance or policy direction of the Nation’s transit systems, which are generally regional providers.

With regionalization of many water and wastewater services since the 1970’s, cities

are less dominant in these services, particularly treatment functions, but most own

or are responsible for the collection and delivery systems. While schools are most

often a function of independent schools districts, libraries are generally a city function as are urban parks. The relative priority of aviation can be explained by the

fact that in most metropolitan areas there are only one or two owner/operators who

are directly responsible for this infrastructure.

Anticipating the importance of surface transportation issues to the cities, we

asked each of the respondents to rank their top three priorities in surface transportation, choosing from a menu of ten items. Nearly 50 percent of the respondents indicated that highway/street maintenance and rehabilitation was their top priority,

emphasizing the interest of cities in system preservation. Highway/street capacity

was the top priority for 22 percent of the cities, followed by transit capacity as the

top choice for 14 percent.

In addition to strong support for streets and transit, I would note that 28 percent

selected bridge replacement/rehabilitation, 26 percent selected pedestrian/bicycle/

school crossing and 25 percent selected intermodal facilities/system integration as

among their top three concerns. These survey results do follow to some degree the

basic structure and principles embedded in the TEA–21 legislation.

When mayors were asked to describe what Federal actions would be most helpful

in meeting city transportation needs, the self-selected responses (i.e. specify concern)

were very consistent. Additional funding was cited most often, followed by requests

that more funding flow directly to cities and local areas, rather than stopping at the

States. Mayors were also asked to list the single most important project in their

city. While there was a broad cross-section of responses, it was notable how many

cities indicated that light rail, commuter rail, high-speed rail, continued Amtrak

service or other transit projects among their selections.

Mr. Chairman, I would like to offer a couple of observations on the survey that

we conducted. It follows some of what we found in our previous survey that Mayor

Barr presented to this committee in the last Congress. First, we know that TEA–

21 substantially increased the funding commitments to surface transportation. What

we don’t know yet is how the bulk of these funds move around in the system, given

the absence of transparency in the flow of dollars within the States. This was the

central theme of Mayor Barr’s testimony to this subcommittee during the last Congress.

But we do know that there are some rapidly rising needs in the surface transportation area, particularly in the growing demand for rail projects. Despite dramatically increased funding and the flexibility that is provided under TEA–21, many

States are not taking full advantage of what the law allows, particularly in aiding

local and regional transportation priorities.

The point to be made about our infrastructure needs is that isn’t just about more

money, it is also about understanding how current funding is being allocated. TEA–

21 was about more than sparing Governors or the States the political inconvenience

associated with raising State transportation dollars, it is also about addressing

transportation needs in cities and in our metropolitan areas. That is what our efforts on metropolitan economies is all about—to make the point that we need to be

using these dollars strategically to make the investments that keep their metropolitan engines running. And, sometimes, these investments may not be the highest priority for State agencies, but are most important to the cities or the metropolitan

areas.

Mr. Chairman, I know that we will have an opportunity to discuss these issues

with you during renewal of TEA–21, but I thought it was important to indicate how

the mayors are thinking about these issues.

Comeback of America’s Cities and U.S. Metro Economies

As I previously noted, I recently had the opportunity to address the National

Press Club on the Comeback of America’s Cities. My message was simply that we

have a new reality before us—American cities, the new American City, can no

longer be defined by mere political borders or by the jurisdiction that a mayor may

serve over. I also made the point that infrastructure investment is one of the ‘‘keys’’

to furthering this Comeback of America’s Cities and the continued prosperity of this

Nation’s economy.

Of particular importance to Federal policymakers is the reality that the growing

health and strength of America’s cities and their metropolitan economies is now the

very reason why America’s economy came back.
47

Mr. Chairman, we have the data that backs this up. Several years ago, we retained one of the Nation’s foremost economic firms, DRI–WEFA, to compile annual

reports on the economic output of our Nation’s metropolitan economies. At the Press

Club, I released our new report on the Gross Metropolitan Product (GMP) for the

Nation’s 319 urbanized areas. It also documented the output of our metro economic

engines over the last decade.

Our Metropolitan Economy Report, U.S. Metro Economies: The Engines of America’s Growth, A Decade of Progress, tells a story that is as significant as any story

that’s been told in the last 25 years. If you look at American cities—cities as the

integral parts of the economic units we call metropolitan economies—and then rank

them in terms of the strength of these economies with the Nations of the world, it

changes the way you think about the policy choices before the Nation. Ranking

these metro economies, not with States, not with regions but with the Nations of

the world, these areas represent 47 of the 100 largest economies in this world.

These numbers are so compelling that the economy of New York—yes, the economy of metropolitan New York—is larger than the economy of Australia. Looking

at the economies of other cities in their broader metro context, you will find that

the economy of Chicago is greater than Taiwan, Argentina, Russia, or Switzerland.

Philadelphia and Houston are larger in output than Hong Kong.

But even more significant is looking back on the 1990’s, a decade of great economic growth, a decade of new jobs and a decade of expansion in new sectors of the

economy, like technology. When we look at where those jobs were created, where

that new economy flourished, it was in American cities and in their metropolitan

economies. Almost 90 percent of the new jobs and in excess of 90 percent of the technology jobs were created in these areas.

Consider other findings. With 20 percent of the land area and 80 percent of the

Nation’s population, these 319 areas last year accounted for about 85 percent of all

U.S. economic output, a share that is projected to rise over the next couple of decades.

What is particularly striking in its policy implications is the finding that in 2000

the output of the top 10 metropolitan areas exceeded that of 31 States.

Mr. Chairman, when you look at Nevada, we can readily detect what you know

about the challenges before your State, and why infrastructure investment is so crucial to the continued economic success of your State and the Nation. The single fastest growing metropolitan economy in the United States over the last 10 years was

the Las Vegas metropolitan area, an economic unit strongly influencing your State’s growth, with spillover into Arizona. From 1990–2000, this metropolitan economy in- creased its output from $20.5 billion to $54.6 billion, an astounding increase of more

than 166 percent. This represents an annual average growth rate of more than 10

percent.

When you combine the output of the Las Vegas and Reno metro economies, you

see that these two areas account for about 90 percent of the entire State’s economic

output. In Oklahoma, as another example, the metro economies of its two largest

urbanized areas, Tulsa and Oklahoma City, account for about 62 percent of the

State’s output.

Mr. Chairman, we would strongly urge you and other members of this committee

to examine this data and consider its implications as you go forward in setting infrastructure investment policies for the Nation. We think this is new information

and offers further support to a broader congressional infrastructure agenda.

NEW ORLEANS PRIORITIES

To provide local context for my remarks, I have described some of the major infrastructure projects where the city of New Orleans is seeking Federal assistance.

These projects in rail transportation and sewerage infrastructure simply illustrate

the scale of the challenges before us.

Canal Streetcar Project

The New Orleans Regional Transit Authority (RTA) is developing a 5.5-mile

streetcar project in the downtown area, along the median of Canal Street.

The Canal Streetcar spine will extend from the Canal Ferry at the Mississippi

River in the central business district, through the Mid-City neighborhood to

Carrolton Avenue, where one branch will continue on Canal Street to the Cemeteries and another will follow Carrollton Avenue to City Park/Beauregard Circle.

The corridor is located in an existing, built-up area that was originally developed

in the streetcar era. Much of the corridor lies within the central business district

and historic areas, where employment and housing densities, mix of uses, and pedestrian-oriented development are generally good. The central business district includes a high-density mix of office, retail, hotels and leisure attractions.
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The total capital cost of this project is estimated at $156,600,000, of which our

RTA is expected to seek $125,300,000 in ‘new starts’ funding.

New Orleans Central Business District to Armstrong Airport Light Rail Project

The CBD to NOIA light rail project is a new start project authorized under TEA–

21. The project is intended to provide commuter rail transportation via light rail vehicles between the Central Business District and the Louis Armstrong International

Airport. In TEA–21, funds were provided for preliminary work associated with the

project.

Although we don’t have final estimates of the total project costs, it will be a substantial project and we will need the Federal Government as a partner.

Desire Streetcar Project

The Regional Transit Authority (RTA) is restoring a 2.9-mile traditional streetcar

line in downtown New Orleans, as part of the locally preferred alternative for the

Desire Corridor. The Desire Corridor streetcar project will operate along North

Rampart Street and St. Claude Avenue between Canal Street and Poland Avenue.

The proposed streetcar alignment will loop at Canal Street and use exclusive rightof-way in the median of city streets, as much as possible. The project will serve the

communities of Iberville, Treme, Faubourg, Marigny, St. Roch, and Bywater. Six

major bus transfer points with construction of center platforms, canopies, passenger

benches, and landscaping will be provided: 16 intermediate stops with less elaborate

center platforms are also planned. The project also includes the purchase of 13 new

vehicles.

The capital cost estimate of the streetcar project is $93,500,000, of which RTA will

be seeking $65,500,000 in FTA funding.

Sewerage and Water Board Inflow & Infiltration Project

The City has embarked on a very ambitious plan to correct the inflow and infiltration of its sewerage lines beneath the streets of the City, as required by a consent

decree entered against the City by the U.S. EPA.

Because most of the New Orleans area is below sea level, over time the New Orleans Sewerage and Water Board developed an elaborate drainage system to remove

the rainwater that falls every year in tropical amounts on the city. Partially because

the system was built in the early part of this century, and also because of the great

amount of subsidence and settlement of the soils in the area, the New Orleans Sewerage and Water Board normally spends approximately $5 million per year on line

repair and replacement alone.

Although the repair and upgrade of the system is a continuous process, we have

not been able to keep up with the highest environmental standards set by the Federal Government. The Board is under a consent order from the Justice Department

to undertake this project, with the total costs of the project expected to exceed $400

million.

CLOSING REMARKS

Mr. Chairman, I want to thank you for this opportunity to appear before you

today to offer the perspectives of the Nation’s mayors on the Federal role in meeting

our infrastructure needs.

This is a very high priority concern for the mayors and other local elected officials

and we will stand with you and this committee as you examine ways to sustain and

expand the Federal partnership commitment to infrastructure investment.

On behalf of the Nation’s mayors, I thank you for this opportunity to present the

views of the Conference and its members on these important issues.
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STATEMENT OF HON. BILL CAMPBELL, MAYOR, ATLANTA, GA

Good afternoon Mr. Chairman and members of the Transportation and Infrastructure Subcommittee. I am Bill Campbell, Mayor of the city of Atlanta. It is a pleasure

to come before you to discuss Atlanta’s infrastructure needs and the Federal role

in investing in local communities.

I am testifying today principally on behalf of the city of Atlanta. At the U.S. Conference of Mayors, I chair the Transportation and Communications Committee, a position that I have held throughout congressional deliberations of TEA–21 and AIR–

21. In this capacity, I can offer some additional perspectives on the challenges before

the Nation in addressing our infrastructure needs.

I am also pleased to join my colleagues, Mayors Morial, Goodman, Streeter and

Williams, to address the demands placed on city infrastructure systems and the solutions that the Federal Government can pursue in collaboration with cities and

other municipalities.

My point of reference in my remarks is Atlanta, and the broader Atlanta metropolitan region, but the problems that I express are fairly typical of urban areas

around the country. Many other areas share some the same challenges in dealing

with growing demands for infrastructure investment.

At the same time, we are somewhat of an indicator of what lies ahead for others.

Among the largest metropolitan areas in the country, we had the highest rate of

growth over the last decade. We grew much faster than the national economy, growing at an average annual rate of 8.4 percent, increasing our gross metropolitan

product (GMP) from $73.4 billion in 1990 to $164.2 billion in 2000. Mayor Morial

will talk about metropolitan economies in more detail and the importance of these

regions to U.S. economic growth.

OVERVIEW

Mr. Chairman, I am proud to say that Atlanta is thriving. Over the course of 10

years, the population of the metropolitan area, which consists of 10 counties, has

grown from 2.5 million to 3.4 million. These individuals represent a wide range of

income, racial and ethnic diversity. They are the foundation of our vibrant community.

Growth in the region has brought greater economic development, housing and job

opportunities to the city of Atlanta. We are a leader in global productivity, serving

as the anchor of economic activity in the South. To maintain this level of balanced

growth requires not only strong business investments, but also sufficient and modernized infrastructure. As we experience this unprecedented expansion, we are challenged to provide solutions through our surface transportation, aviation and water

infrastructure systems. Recognizing the interdependency and interconnectivity of

our success on the local level with national policy priorities, I offer ways to strengthen the Federal investment in local infrastructure needs.

SURFACE TRANSPORTATION

Our region, like Los Angeles and a number of other cities, is facing the challenge

of reducing severe traffic congestion on the highways and roads. In Atlanta, we have

moved aggressively and decisively toward building transportation alternatives to

protect the environment and increase the quality of life of residents.

One such alternative is rail. In Atlanta we are using MARTA—our transit system,

buses, and eventually, commuter and high-speed rail to move people to and from

their jobs and recreation while simultaneously reducing pollution and congestion.

This involves coordination on a local, regional, and State level. Plans are in place

for an intermodal facility that will serve as the hub of transportation, residential

and commercial activity for the downtown.

Our success is strengthened by the cooperation of the citizens of Atlanta who are

making lifestyle adjustments to embrace alternative modes of travel. It is because

of this changing culture that the vision for rail development must expand beyond

the boundaries of the City. High-speed rail provides the mechanism for linking communities and addressing the impediments to effective growth.

The State of Georgia, Federal Railroad Administration, Norfolk Southern and Amtrak are working together to roll out high-speed rail throughout the State. They are

planning to build a line that will connect Atlanta to Macon and, ultimately, Savannah. We are pleased that Congress has provided the initial funds to study the development of this line.

High-speed rail would significantly reduce travel times. It is estimated that Amtrak’s connection between Atlanta and Birmingham currently takes 3 hours. With

high speed rail the trip time can be reduced to 2 hours by 2010. Atlanta to Charlotte
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is currently 5.5 hours, and is expected to be reduced to 3.5 hours. This is a major

difference and will provide further incentive for people to ride rail versus driving.

I strongly support the High Speed Rail Act and urge Congress to pass the legislation to improve the efficiency of our overall transportation system and reduce congestion on our roads and in our skies.

AVIATION

We must not only address congestion on the ground but deal with gridlock in the

air.

The fact that the Nation’s flying public is facing gridlock in the skies is obvious

to everyone. Federal Aviation Administration forecasts indicate that airline passenger traffic will increase 59 percent to a billion passengers annually by 2010.

Those forecasts suggest further that some 70 percent of that traffic growth will

occur at the Nation’s 28 largest airports. Ironically, these are the very airports for

which the primary cause of delays is lack of capacity, especially runway capacity.

Atlanta Hartsfield International is now the busiest airport in the world, surpassing even Chicago O’Hare. Hartsfield handles 6 percent of the Nation’s pas- sengers annually and generates $15 billion in the Atlanta metro region. Hartsfield

is also the most delay-impacted airport in the country with 9 minutes of delay per

flight and will increase to 15 to 20 minutes per flight in 2005 without the construction of our new fifth runway, which we have broke ground on this past April. The

fifth runway is part of a $5.4 billion Capitol Improvement Plan. These delay times

cost the airlines operating at Hartsfield over $250 million in the year 2000 alone.

Let’s not stop there.

Congress helped by passing AIR–21 last year, increasing the Airport Improvement

Fund to $3 billion annually, and by allowing airports the option of increasing the

local Passenger Facility Charge for infrastructure and noise abatement projects. I

was pleased to see the House and Senate Appropriations Committees in the Fiscal

Year 2002 FAA Appropriations fully fund the AIP program by honoring the so-called

‘‘firewalls’’ erected around the Aviation Trust Fund in AIR–21. Let’s not stop there.

I would urge the Congress to address the impediments to reducing airway gridlock by passing environmental streamlining legislation as proposed by the Airport

Council and American Association of Airport Executives that will expedite review

of runway expansion proposals. We must not circumvent our environmental approval process. However, the problem of taking 10 years to build a new runway

must be addressed, and these streamlining proposals have great merit in my judgment.

WATER RESOURCES

Along with the growth on the roads and in the air, we are also facing challenges

to our water infrastructure system.

Four years ago, I developed the Regional Atlanta Watershed Program, a comprehensive regional approach to resolve our water infrastructure needs by addressing the environmental quality and supply of the urban watershed, rivers and

streams. This cooperation has expanded, through the efforts of Governor Barnes,

into the North Metro Atlanta Regional Waste District. Through the district, water

resource needs will further be coordinated and addressed on a regional basis.

In addition, the U.S. Army Corps of Engineers is completing a study to carry out

water-related environmental infrastructure and resource protection development

projects. We are very pleased with our partnership and look forward to working

with this subcommittee in the next year to move toward the construction phase.

The efforts of the Regional Atlanta Watershed Program involve protecting the

quality of the Chattahoochee River, one of the most heavily used water resources

in the State of Georgia. It has a finite supply of water. Therefore, the health of this

resource, lakes and riparian streambanks is vital not only to Georgia, but also to

our downstream neighbors in Alabama and Florida.

Rapid growth has significantly increased water withdrawals from surface and

groundwater resources, resulting in greater demands on the supply. This trend is

expected to continue. In addition, increased pollution from stormwater runoff from

roofs, roads, driveways and parking lots has transformed the watershed. This degradation is exacerbated by wet weather overflows from old, combined sewers that

drain into community tributaries.

Since 1990, we have spent $1 billion to construct and expand wastewater and

stormwater collection, treatment and control facilities to meet Federal and State environmental regulations. We have implemented innovative re-engineering and strategic outsourcing programs to reduce operating costs. Our innovative approach to

wastewater treatment has helped reduce costs for capital facilities such as phos-
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phorus control programs. We spent an additional $2.3 million for watershed protection projects. However, in order to comply with EPA Federal consent decree for our

SSO and CSO programs, we estimate that we will need over $3.2 billion over the

next 13 years to upgrade our system. This is an astounding amount.

This will put a serious burden on the City’s budget. The median family income

for Atlanta is approximately $36,950, with 24 percent of our residents making less

than $15,000 per year. While there are approximately 500,000 people who reside in

the city of Atlanta, over 1.5 million come into the City each day to work or for recreation. I am sure you can see the challenge we face. And we are not alone. There

is estimated to be more than $300 billion in wastewater infrastructure needs and

$ 1 trillion in total water resource demands in cities across the country.

Mr. Chairman, I am asking Congress to provide greater assistance provide greater

assistance with both low interest loans, grants and technical resources to communities to address these urgent and demanding water resource needs. I would hope

that Congress could give greater authority and resources to the Army Corps of Engineers, who are experts in dealing with water issues, to reduce costs, prevent flooding and habitat degradation and address the needs of our aging sewer infrastructure. The direct intervention and assistance from your committee and your colleagues in the Senate and House will help maintain both the sustainable development of the metro-Atlanta region and strong quality of life for citizens and visitors.

Importantly, this will ensure that the economic engine of the Southeast can continue to provide good jobs and services for our people.

SUMMARY

As my colleagues from the other cities have expressed, we share many common

problems. Mr. Chairman, I wanted to underscore one of the points that Mayor

Morial emphasized in his statement dealing with the importance of local infrastructure to the Nation’s economic prosperity. As a leader of a region that has helped

drive our Nation’s economic growth, I would urge you to recognize the importance

of an expanded Federal partnership on infrastructure investment to your own interests. These projects are not only crucial to our local and regional areas but they are

to the investment that will help sustain the Nation’s future economic prosperity.

Again, let me thank you, Mr. Chairman and the members of the subcommittee,

for your leadership and recognition of the importance of this issue.

Thank you for this opportunity to appear before you today.

STATEMENT OF HON. OSCAR GOODMAN, MAYOR, LAS VEGAS, NV

Good afternoon Mr. Chairman and members of the committee. I am Oscar Goodman, Mayor of Las Vegas, NV. It is a pleasure to come before you today to testify

on the infrastructure and transportation needs of southern Nevada and the city of

Las Vegas.

Over the last decade, the City and the metropolitan area of southern Nevada grew

the fastest of all the cities our size. Yet, we are simultaneously ranked as the 14th

densest major metropolitan area in the country. In southern Nevada, we are doing

a good job at balancing growth and economic strength and vitality with sound infrastructure and community development. In the next two decades, I expect we will

continue to grow at a phenomenal pace and we will successfully meet the new challenges of growth head on.

We need only to look back at the last decade to see how ingenuity, hard work

and strong partnerships can work to make our future in Las Vegas bright. We just

recently celebrated the 10th anniversary of the creation of the Southern Nevada

Water Authority (SNWA). The SNWA is a regional leader, and I assert a national

leader, in water quality, conservation and resource planning. Ten years ago water

resources and quality was the most pressing issue for our valley. Today, providing

safe and reliable water resources is still a significant on-going public concern, yet

we have made significant progress in banking water resources, constructing a sound

water delivery system, and achieving higher levels of conservation. This success is

in part due to significant community leadership, intergovernmental coordination at

the local level, and support from neighboring States and the Federal Government.

It is this kind of partnership between local communities and the Federal Government that I would like to focus my comments on today. I truly believe many of our

accomplishments and future accomplishments in southern Nevada hinge on a successful partnership between our local communities and the Federal Government.

Similarly, the National League of Cities is pursuing its ‘‘Investing in Communities’’

agenda. Cities around the country struggle to build and maintain infrastructure and
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to find the resources to perform this public service adequately. So, southern Nevada

is not alone in the infrastructure race.

I mentioned our major issue of the last decade was water—for the next decade

and possibly longer, the issue for southern Nevada is air quality. Air quality will

change the way we approach the issue of transportation in southern Nevada. We

have focused significant Federal, State and local dollars to improve roadways, and

we certainly need to. In comparison to other metropolitan areas, we do not have sufficient roadways. In fact our freeway density is half that of Los Angeles and Orange

County. Just recently, we identified approximately $7.6 billion in roadway and transit needs for our valley in the next 20 years. However, we will need to shift toward

alternative modes of transportation to best preserve our air quality. There is no way

we can build enough roadways to accommodate our population. Therefore, we are

pursuing monorail lines, trails systems, bus only lanes on major roadways, and a

high-speed train to southern California.

The monorail alone is a significant investment. The project’s total investment will

be approximately $575 million for a 5-mile system connecting the Las Vegas strip

to downtown. The unique nature of this project is that a majority of the funding

comes from the private sector.

Transportation is not the only infrastructure area in need of great attention. We

still face significant investments in our water and wastewater systems. The public

is becoming more and more acutely aware of the condition of our water and sewer

lines. This infrastructure is often taken for granted, ‘‘out of sight, out of mind.’’

Many of the water and sewer systems around the country were built in the early

1900’s. As a result, over the next 10 to 20 years many of these investments will be

reaching the limit of their capacity and working condition. In addition to replacement of these older systems, Las Vegas will continue to invest in extending our current system to accommodate new growth. Within the next 20 years, the Las Vegas

valley will face a treatment capacity deficit of approximately 144 million gallons of

wastewater per day. The cost to fill that gap is estimated at approximately $1.2 billion.

Obviously, these are not little ticket items. They are significant investments. Congress invested significant Federal dollars in measures such as TEA–21, Air—21 and

hopefully will invest in a water and wastewater infrastructure bill this session or

in a future Congress. I cannot stress enough how having those Federal dollars available to supplement local investments can make or break many significant public

projects. Whether it’s the innovative public-private monorail system in Las Vegas,

or the I–15 widening project between Barstow and Las Vegas, those Federal dollars

are key to the success of such projects.

In addition to being Mayor, I serve or have served on numerous regional governing boards that manage many of the regional projects I mentioned here today.

I feel I am in a unique position to share with the committee a well-rounded perspective on the needs of southern Nevada. I encourage you, if at all possible, to keep

the level of investment of Federal dollars in State and local projects from dwindling.

As a country, we can be most successful working together and leveraging the public

tax dollar to the benefit of all its citizens through these kinds of public investments.

All of us want clean air to breathe, safe water to drink and efficient transportations

systems. We have and can continue to address these significant public issues with

a strong partnership between the Federal and local governments if we all keep those

goals in mind.
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STATEMENT OF HON. ANTHONY WILLIAMS, MAYOR, WASHINGTON, DC

Good afternoon Chairman Reid, Senator Inhofe, and members of the committee.

Thank you for this opportunity to testify before the Committee on Environment and

Public Works’ Subcommittee on Transportation and Infrastructure.

Before I begin, I wish to also acknowledge Mayor Marc Morial of New Orleans,

the new president of the U.S. Conference of Mayors and a strong voice for transportation improvements, especially rail transportation. The Council of Mayors has been

focusing on the transportation and infrastructure issues that are facing are major

cities.

Transportation is a critical issue to the general public. In fact, in Washington, DC,

transportation was picked as the second most important issue in our Neighborhood

Action planning sessions—second only to public safety. Neighborhoods are concerned

about traffic, pedestrian safety, parking, development, and mobility. All issues that

become increasingly significant as we attempt to increase the District’s population

by an additional 100,000 residents over the next 10 years.

THE DISTRICT AND THE REGION

I am sure you are all aware that nationally, the Washington Metropolitan area

is classified as the third most congested area in the country. The District, though,

can be part of the solution to this problem. Already, the District is the core of the

metropolitan region and of the regional transportation network. It plays a vital role

in the economic health of the region and in the region’s transportation. One-third

of the region’s office space and nearly 500,000 jobs are located here. And these jobs

are concentrated. We have the second largest concentration of jobs in the country,

after New York City and tied with downtown Chicago.

Job concentration is part of the solution to gridlock because it reduces travel distances and the number of trips. Also, concentrated job centers can be more efficiently served by mass transportation. Washington, DC is second only to New York

City in the number of commuters who use mass transit every day. More than 50

percent of District residents use mass transit for their home to work trip each day.

This saves energy and saves money that would have to go into building many more

highway lanes to serve those riders if they drove.

However, many people do drive to the District each day. The District is already

second only to New York City’s Manhattan in the number of cars that enter downtown every weekday. These users of the District’s road infrastructure are largely

from outside the city. In fact, approximately 70 percent of the cars on our roads each

day are registered outside the District—and because of the District’s unique financial structure, these vehicles do not contribute significantly to the maintenance and

capital costs they impose directly on our transportation infrastructure.

The District is also the largest contributor to the operations and capital costs of

the Washington Metropolitan Area Transit Authority (WMATA)—known to most as

METRO. The District pays nearly 40 percent of both operating and capital costs of

the METRO system. And while the recent growth in METRO ridership, the highest

in the country in some categories, ensures traffic does not come to a complete standstill, it has a substantial impact on the District’s finances. Its like that old joke:

‘‘We’re losing money on every unit, but we are making up in volume.’’ Metro ridership increases cost the District more each year in operating subsidy payments, increasing roughly 10 percent between fiscal years 2001 and 2002—one of the largest

jumps in any District program.

THE FEDERAL PRESENCE

The Federal presence has a major impact on the District’s unique transportation

role. Federal workers account for one-third of METRO riders and as the District’s

largest employer, the Federal presence adds to the heavy burden on our roads.

This special relationship to Washington and the region has not gone unrecognized

by the Federal Government over time. There have been significant Federal contributions to two of the most important regional transportation projects ever undertaken.

These are the long-term investment in METRO and the new Wilson Bridge. Both

of these attest to the role the District can play as a model for transportation improvements. METRO and the new Wilson Bridge show that the Federal Government

has recognized the unique role the District plays in the region and as the Nation’s

Capital.

Thus, as we examine how to maintain and improve the District’s transportation

infrastructure, we look for the Federal Government to assume a special role in recognition of this special relationship.
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Maintaining this transportation infrastructure, much less improving or expanding

it is very costly. While Federal Transportation Equity Act for the 21st Century

(TEA–21), has provided almost $100 million per year in much needed assistance for

transportation capital, operations and maintenance, this is not enough.

This inequity can be summed up as a ‘‘tale of two cities’’ for our non-transit transportation infrastructure. One is the Federal City. This is a city with less than 450

miles of roads and a $250,000 annual per mile fund for maintenance and improvements. Not surprisingly, more than 70 percent of these roads are in good or excellent condition.

The other is the local city with nearly 650 miles of roads that have just come out of a 5-year period of almost no investment. Although we are now spending $8,500

per year per mile for maintenance or improvements, 50 percent of local roads remain in fair or poor condition.

TRANSPORTATION FUNDING FOR TODAY

As you can see, shortfalls in transportation funding represent one of the biggest

challenges to improving mobility in the District and the region and keeping it economically viable. The District, as part of the region’s long term transportation plan- ning process, identified anticipated funding sources over the next 25 years at $11

billion. This includes both $100 million per year in Federal aid and local taxes dedicated to the transportation system.

A 1998 lifecycle analysis by the Federal Highway Administration found an anticipated $1 billion needed in the next 6 years for transportation improvements. Since

the study, our needs have increased as have our costs, further exacerbating the

funding dilemma.

Unfortunately, this level of funding will not keep pace with the continuing need

to rehabilitate, maintain and expand transit services, resurface streets, fill potholes,

fix curbs and sidewalks, provide bikeways and implement other traffic calming and

roadway safety improvement projects.

Perhaps the single largest long-term transportation-related financial constraint

facing the District and the region is the investment needed in METRO in the forthcoming 10 to 25 years. METRO estimates a $3 billion preservation funding gap over

25 years for the its Infrastructure Renewal Program, with the District’s share being

$1.2 billion. This is over-and-above what the District has already pledged to METRO

improvements. In addition, METRO capital needs are underfunded by $100 million

annually, representing another $40 million in unfunded District obligations. These

investments are needed to simply maintain the METRO’s ability to deliver its core

services given the current rate of ridership growth.

The District, like other cities, also face a brewing problem under its streets. Aging

utility infrastructure, including power and gas lines, as well as new technologies

(such as fiber optic lines) are putting strains on cities’ ability to manage and control

their rights-of-way. Perhaps most challenging is the problem of combined sewers. In

the District alone, this largest source of water pollution will cost upwards of $1 billion to address.

One of the most creative proposals to meet this need has been put forward by our

Congresswoman, Eleanor Holmes Norton. Her D.C. Non-resident Tax Credit Act

proposal would transfer to the District an amount equivalent to 2 percent of the income earned by non-District residents working in the city. This would produce some

$400 million for the District and earmarking a part or all of this for transportation

improvements would make a significant dent in the District’s, and the region’s

transportation needs.

Clearly, funding shortfalls represent one of the biggest challenges to improved mobility in Washington, DC. and in the regions. Working on long-term—25-year—regional funding needs, we have discovered that both Maryland and Virginia are experiencing similar challenges and we look forward to working with Congress and our

neighboring jurisdictions on solving our shared transportation problems.

TRANSPORTATION INFRASTRUCTURE FOR TOMORROW

While funding our existing infrastructure is a major concern to the District, we

need to look beyond what we are doing today. For the last 15 or 20 years the District has been largely replacing or rehabilitating its existing transportation system—

major pieces of which are nearing their useful life. Therefore, we are now presented

with a once-in-a-lifetime opportunity to plan, design and build the transportation

system for the new millenium, serving our city, its citizens and visitors as they now

live, work and play.

We need to look at our major transportation gateways and devise ways to make

them more attractive and functional. For example, the New York Avenue and South
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Capitol Street corridors do not present the appropriate grand entrance into our city

that they should. Major bridge projects such as the Theodore Roosevelt and South

Capitol Street bridges represent opportunities to redesign these connections in a

way that suits our monumental city and better serves commuters, citizens and

guests.

Pennsylvania Avenue should be reopened in a way that both serves the needs of

the 26,000 citizens who used to pass by the White House each day and those who

live and work within that historic structure. The access to the Kennedy Center

needs to be improved, reuniting that world-class facility for the arts with the rest

of the District and the monumental core.

Access to and around our hidden jewel, our Anacostia waterfront needs to be enhanced by building the Anacostia Riverwalk and improving access across the Anacostia freeway. Our other freeways, the Southeast/Southwest and the Whitehurst

have to be studied for ways to alleviate the barrier they represent between communities and the Georgetown Waterfront, respectively.

We also need to look at our transit infrastructure and how we can grow that to

support the District’s own rebirth and internal mobility needs. Two new transit

routes that need to be explored include building—finally—the long needed subway

connection to Georgetown. In addition, the District should revisit the mistake made

almost exactly 40 years ago when Congress mandated the removal of our world-class

light rail system. Possible routes for a new trolley include the then-most popular

trolley route—and currently most popular bus route—of Georgia Avenue to Seventh

Street. This route could connect with the new Convention Center, our reawakening

retail district and the reborn Anacostia waterfront, and Southeast Federal Center.

The District is also looking at the longer term future of transportation by joining

with Maryland to compete for a federally-sponsored Magnetic Levitation Rail

(MAGLEV) demonstration project. If funded, this project would whisk riders between Washington and Baltimore in roughly 20 minutes—essentially rendering each

city a neighborhood of the other. This sort of aggressive, visionary thinking is what

Washington and Baltimore will need in order to successfully compete for the 2012

Olympic Games.

WASHINGTON, DC REBORN

Our Olympic bid signifies the culmination of the process we have begun in rebuilding Washington, DC in terms of its financial stability, its attractiveness as a

home, its perception and reputation and its importance in the region. As part of this

symbolic rebirth we must commit to rebuilding, refreshing and improving the arteries and passageways that serve our Nation’s Capital.

I believe that one can tell a lot about how a city is doing by looking at its infrastructure—its roads and trees and sidewalks and signs. A city that is doing well and

is well managed has a well-maintained infrastructure. It sends a signal to its citizens and visitors through its transportation infrastructure—its largest, most valuable and visible asset—that it cares and is a good steward of resources entrusted

to it. We have made great strides during my administration to send that message

and I look forward to working with each of you, the committee and Congress to keep

moving forward.

Thank you.

STATEMENT OF ROBERT W. PORTISS, PORT DIRECTOR, TULSA PORT OF CATOOSA

Thank you Mr. Chairman. My name is Robert W. Portiss. I am the port director

for the Tulsa Port of Catoosa, a 2,500-acre inland, international seaport located

about 10 miles northeast of the City of Tulsa in Rogers County, OK. I am employed

by the City of Tulsa, Rogers County Port Authority, a public agency.

My employment with the Port began in 1973 as manager of traffic and sales, a

position I held until the end of 1974 when I opted for land development experience

in the private sector. I returned to the Port 3 years later and, following a series

of promotions, was appointed port director, a position I have held since 1984.

Oklahoma began offering barge transportation in December 1970 when the

McClellan-Kerr Arkansas River Navigation System was completed. This System begins at the confluence of the White and Mississippi Rivers located approximately

500 miles north of New Orleans on the Mississippi River, and extends 445 river

miles through Arkansas and Oklahoma. Seventeen locks and dams permit barge

freight to stair-step the 420-foot elevation change to reach our Port at the head of

navigation.

Authorized by the River and Harbors Act of 1946, the McClellan-Kerr Arkansas

River Navigation System cost $1.2 billion to build. This, in turn, has resulted in
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over $3.2 billion of non-Federal public and private investment in Oklahoma and Arkansas, creating over 55,000 jobs. Freight handled on the system currently averages

12-million tons per year carried in 8,000 barges. This is the equivalent capacity of

120,000 rail cars or 500,000 trucks to carry the same amount of freight adding significant congestion to the already constrained rail and highway systems. Less trucks

on our Nation’s highways is welcomed by all of us because of less congestion, wear

and tear on our roadways, and energy savings.

All of this was made possible by a joint venture offered to Arkansas and Oklahoma. The offer was simple—the Federal Government would build a waterway to

Oklahoma if the five principal cities located along the system would each build a

public port providing access to barge navigation. Tulsa was one of those cities.

Their commitment delivered what I believe is the largest fully-developed inland

port complex in our country today. I know of no other port that has 2,500 acres of

contiguous land area. This land and the initial infrastructure was paid for through

a $21.2 general obligation bond issue by the citizens of the city of Tulsa and Rogers

County. That seed money has since grown to over $45 million in public investment

through reinvestment of income earned off the land, which incidentally is only

leased to preserve access to low-cost water transportation, as promised, for future

generations. That money, in turn, has already precipitated some $300 million in private investment generated by the 53 companies now located within the complex who

currently employ 3,000 people. Obviously, the joint venture has worked well for our

States and for the Nation—at least thus far.

The future success of the System will depend, in great part, on whether Congress

will continue to provide, maintain and operate our Nation’s waterway infrastructure. The current outlook is not favorable. If the President’s budget recommendations are adopted, the critical maintenance backlog will more than double—from

$415 million to $835 million. Locks and dams and other capital stock along our Nation’s waterways are aging and severely deteriorating. As an example, over 44 percent of the inland waterway’s locks and dams are at least 50 years old. Many are

undersized for modern commercial barge tows, which must then be broken up and

reassembled at each lock. This results in delays, increasing operating costs, decreasing efficiency and causes safety and environmental concerns. It is estimated that nationwide, river traffic is delayed 550,000 hours annually, representing an estimated

$385 million in increased operating costs borne by shippers, carriers, and ultimately, consumers. These delays, which are in the range of $250 to $350 per hour

for a 15 barge tow, will become more severe as system traffic grows and as aging

infrastructure increases maintenance and repair time.

Sadly, the current trend is to keep studying the problem rather than fixing it. As

an example, the current study concerning the modernization of the Illinois and

upper Miss has been underway for about 11 years at a cost of $54 million and yet,

we are not closer to finalizing the study today then we were in 1990. All of this

and more is set forth in the Marine Transportation System Survey and Analysis

completed by the U.S. DOT several years ago.

Favorable congressional action is also required at the local level. Montgomery

Point Lock and Dam, which is currently being constructed in the entrance channel

to the McClellan-Kerr Arkansas River Navigation System, is destined for shut down

this year due to a probable severe shortfall in Federal funding. The project needs

$45 million for fiscal year 2002, and to date the President and Congress have only

allocated $25 million. This funding deficiency will reportedly force the Corps of Engineers to curtail construction pending funding in fiscal year 2003. We, therefore,

would not realize the benefits derived from the $152 million already spent on it and

will increase the overall construction costs. Delaying this project could also shut

down our waterway due to inadequate water depths for barges. We, of course, would

then be out of the waterway business altogether.

Another item affecting our future is increasing the authorized depth of the

McClellan-Kerr from 9 to 12 feet enabling us to operate at peak capacity. We believe

this would significantly improve our Nation’s competitive advantage in world markets. Being able to load barges more fully—approximately 100 truck loads rather

than the current 60 truck loads—would lower the cost of products thereby enhancing our customer’s ability to compete in world trade. Rivers flowing to the Gulf

Coast already have 12-foot channels.

The U.S. Army Corps of Engineers has begun installing tow haulage equipment

on our locks—all but five have been completed. This equipment locks through nine

barges leaving the towboat and up to an additional eight barges to subsequently

lock through thereby efficiently doubling the capacity of our locks without having

to construct new structures. Federal funding for this important infrastructure

project, like our lock and dam project, will reportedly be significantly reduced or curtailed for fiscal year 2002.
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1This testimony is based on our recent work in the area of infrastructure investment trends

and investment estimates. See U.S. Infrastructure: Agencies’ Approaches to Developing Investment Estimates Vary (GAO–01–835, July 20, 2001) and U.S. Infrastructure: Funding Trends and

Opportunities to Improve Investment Decisions (GAO/RCED/AIMD–00–35, Feb. 7, 2000). 2The seven agencies develop infrastructure estimates for highways (ARC and FHWA), water

supply and wastewater treatment (EPA), airports (FAA), mass transit (FTA), public buildings

(GSA), and water resources and hydropower (Army Corps).

Recent versions of TEA–21 or NEXTEA can help meet local infrastructure needs

through funding of multi-modal connecting links to enable barge, rail, truck, and air

transportation to work together in an optimal manner. To date, our efforts to obtain

any of this funding have not been successful. The concept makes good sense, but

for some reason it is not happening. Connecting rail lines and roads could be significantly improved through this program.

Before closing, I would be remiss in my duties if I did not mention the Endangered Species Act. If this Act is to be reauthorized, it simply must be done through

needed reforms. The implementation of its provisions has resulted in projects being

stopped permanently without regard to the social and economic good of our Nation.

In conclusion, it is past time for Congress to take responsibility for providing the

funds necessary to rebuild, rehab, maintain and modernize our Nation’s inland waterway navigation system. Our system has been the envy of the world for decades.

Now the rest of the world is taking up the challenge with the realization that water

is the only way to remove significant amounts of freight from the highways. U.S.

inland waterway ports and terminals—about 1,800 of them—are less concentrated

geographically than our deep-water ports thereby being able to provide almost limitless access points to barge transportation. The result is greater flexibility to the

users in determining the location of industrial facilities requiring water access.

Our congressional and State leaders MUST understand that maintaining a viable

national inland waterway transportation system and protecting the environment are

not mutually exclusive objectives. They can be accomplished by encouraging local

and Federal agencies to work together as in past years, thereby providing jobs and

enabling us to effectively compete in the international market place. The alternative

of abandoning the system that has permitted our Nation to be strong, and which

has proven to be a good Federal investment, is clearly not in our best interest.

Thank you.

STATEMENT OF PETER F. GUERRERO, DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES,

U.S. GENERAL ACCOUNTING OFFICE

Mr. Chairman and members of the subcommittee. A sound public infrastructure

plays a vital role in encouraging a more productive and competitive national economy and meeting public demands for safety, health, and improved quality of life.

In addition, public office buildings, courthouses, and other facilities support noneconomic goals and allow Federal agencies to carry out their missions. When problems occur with the performance of infrastructure, they can be very visible, and

their effects can be widespread. For example, traffic congestion in the Nation’s 50

most populous urban areas is estimated to cost over $39 billion a year in time and

wasted fuel.

I am here today to discuss the Federal Government’s role in ensuring a sound

public infrastructure and the estimates of future investment requirements developed by seven Federal agencies: the Appalachian Regional Commission (ARC), Environmental Protection Agency (EPA), Federal Aviation Administration (FAA), Federal Highway Administration (FHWA), Federal Transit Administration (FTA), General Services Administration (GSA), and U.S. Army Corps of Engineers.1 My testimony will focus on the major areas of public infrastructure covered by these seven

agencies2 and the Federal Government’s role and funding trends regarding civilian

infrastructure.

In summary, we found:

• The Federal Government exerts an important influence on infrastructure investment and development. The Federal Government’s influence can be seen in several ways, including acquiring and maintaining various federally-owned assets, providing funding for infrastructure that is owned and operated by others, and influencing the way infrastructure projects are designed and built through legislation

and regulations.

The Federal Government has spent an average of about $59 billion annually since

the late 1980’s on the Nation’s civilian infrastructure. This spending showed a

slightly upward trend through the 1990’s. Similarly, spending by State and local
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3 ‘‘Current dollar’’ is the dollar value of a good or service expressed in terms of prices current

at the time the good or service is sold. 4 ‘‘Constant dollar’’ is a dollar value adjusted for changes in the average price level (i.e., adjusted for inflation) for a base year. 5 Executive Guide: Leading Practices in Capital Decisionmaking (GAO/AIMD–99–32, Dec.

1998).

governments continued an upward trend that began in the 1980’s and exceeded Federal spending in certain areas. • The seven agencies we reviewed each estimated billions of dollars for future investment in infrastructure. The estimates focused on investment in the areas of

water resources, hydropower, water supply, wastewater treatment, airports, highways, mass transit, and public buildings. The estimates ranged from GSA’s calculation of $4.58 billion (in current dollars)3 to repair public buildings over the next 5

years to FHWA’s estimate of $83.4 billion (in constant 1997 dollars)4 per year over

20 years to improve highways. Certain estimates, such as those prepared by the

Army Corps (for water resources and hydropower) and GSA, are for Federal spending; other estimates involve all levels of government and the private sector. • Some perspective is called for in reviewing the investment estimates developed

by the seven agencies. While these estimates encompass major areas of public infrastructure, they cannot be easily compared or simply ‘‘added up’’ to produce a national estimate of infrastructure investment needs because, for example, they were

developed using different methods and were for different time periods. In addition,

the seven agencies all had procedures for developing investment estimates that reflect some practices used by leading private sector and government organizations,

although some agencies followed more practices than other agencies. Nonetheless,

following the leading practices does not ensure a quality investment estimate and

each estimate had limitations associated with the quality of the data used in developing it. Furthermore, some of these investment estimates span several decades and

investment needs can change significantly over time due to changes in the efficiency

of delivering infrastructure services or pricing strategies that alter the demand for

services. Finally, these estimates mostly focus on the condition of infrastructure

rather than the desired outcomes (e.g., less traffic congestion) that can be expected

from additional infrastructure investments. We caution against relying on estimates

of need that are based primarily on the condition of existing infrastructure if desired

outcomes are not clearly articulated and the costs and benefits of alternative approaches (such as using strategies to manage demand rather than building new infrastructure) for achieving those outcomes are not fully considered.

We did not independently verify the seven agencies’ investment estimates, but we

did rely on past reviews of these data by us and others that examined the soundness

and completeness of the methodology and/or data used to develop the estimates. We

reviewed agencies’ documentation of their procedures to develop the estimates, but

we did not verify whether these procedures were followed. In addition, we compared

agencies’ procedures with some of the capital decisionmaking practices used by leading government and private sector organizations that we identified and reported on

in 1998.5 Those leading practices are identified in appendix I.

THE FEDERAL ROLE IN CIVILIAN INFRASTRUCTURE INVESTMENT AND DEVELOPMENT AND

TRENDS OF GOVERNMENT SPENDING

While most spending on civilian infrastructure takes place at the State, local, or

private-sector level, the Federal Government exerts an important influence on infrastructure investment and development in several ways. First, the Federal Government is directly responsible for acquiring and maintaining various federally-owned

assets. These include, for example, Federal office buildings, dams and flood control

structures, and the Nation’s air traffic control system. The Congress directly appropriates the funding for such infrastructure. Second, the Federal Government provides funding—such as grants, loans, or loan guarantees—for infrastructure that is

owned and operated by others such as mass transit systems and municipal water

supply systems. In these cases, Federal funds cover a portion of the capital development and improvements required. For example, the Department of Transportation

provides States, localities, and others with grants that partially fund the construction and improvement of urban and rural highways and bridges, including major

maintenance of interstate highways; the States generally provide a 20-percent

match for these funds and determine how to spend the money within broad Federal

guidelines. Third, the Federal Government influences infrastructure investment

through tax incentives. For example, the interest on municipal bonds, which are primarily used for infrastructure purposes, is exempt from Federal taxes. Finally, Federal legislation and regulation influence both the need for and the way infrastruc-
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6We used information from OMB’s budget data base to analyze actual Federal infrastructure

outlays (spending) for fiscal years 1981 through 1998, using a broad definition for infrastructure

spending that included the physical structure and facilities that are intended to enhance the

private sector’s long-term productivity, as well as spending for physical capital designed to

achieve Federal agencies’ goals or improve the Government’s efficiency. OMB’s budget data base

does not contain State and local spending for infrastructure. See U.S. Infrastructure: Funding

Trends and Opportunities to Improve Investment Decisions (GAO/RCED/AIMD–00–35, Feb. 7,

2000). 7See Trends in Public Infrastructure Spending, Congressional Budget Office (May 1999). CBO

defined infrastructure to include spending for highway, mass transit, rail, aviation, water transportation, water resources, water supply, and wastewater treatment. State and local spending

excludes Federal grants and loans.

ture projects are designed and built. For example, meeting safe drinking water

standards may often require the construction or modification of local water systems.

The Federal Government has spent an average of $150 billion (in constant 2000

dollars) annually since the early 1980’s for civilian and defense infrastructure. Of

this amount, about $59 billion was spent annually for spending on civilian infrastructure.6 As figure 1 shows, Federal spending for civilian infrastructure showed

a slightly upward trend through the 1990’s.

FIGURE 1: FEDERAL SPENDING ON INFRASTRUCUTRE IN 2000 DOLLARS, FISCAL YEARS

1981 THROUGH 1998

Similarly, as figure 2 shows, spending by State and local governments continued

an upward trend after netting out inflation that began in the 1980’s and exceeded

Federal spending in certain infrastructure areas. A 1999 Congressional Budget Office (CBO) study reported that State and local spending for transportation and

water resources, supply, and treatment rose from over $88 billion (in 2000 dollars)

in fiscal year 1981 to $152 billion in fiscal year 1994.7
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FIGURE 2: STATE AND LOCAL SPENDING FOR SELECTED INFRASTRUCTURE AREAS IN 2000

DOLLARS, FISCAL YEARS 1981 THROUGH 1994

FEDERAL ESTIMATES OF FUTURE INFRASTRUCTURE INVESTMENT

The seven agencies we reviewed each estimated that billions of dollars were needed for investment in infrastructure. The estimates focused on investments in the

areas of water resources, hydropower, water supply, wastewater treatment, airports,

highways, mass transit, and public buildings and spanned from several years to several decades. The investment amounts vary from GSA’s estimate of $4.58 billion

over the 5 years to repair public buildings to FHWA’s estimate of $83.4 billion each

year over 20 years to preserve and improve the Nation’s highways. The investment

estimates are summarized in table 1.

Table 1.—Selected Agencies’ Infrastructure Investment Estimates

Agency Activities and assets included in estimate

Activities and assets excluded from estimate Time period covered Total estimate (in billions)

ARC ..................... Construction of highways within portions

of 13 States.

Maintenance, retrofit,

or improvements to

completed highways.

1997-completion .......... $8.5 (current 1995 dollars)

Army Corps ......... Construction and major

rehabilitation of

water resources

projects and major

rehabilitation of hydropower projects

nationwide.

Nonconstruction costs,

projects not under

construction, and

critical operations

and maintenance

work.

2001-completion .......... $38.0a

EPA ..................... Construction and upgrade of drinking

water supply systems nationwide.

Costs due solely to

population growth

and costs not eligible for Federal funding.

1999–2018 ................... $150.9 (current 1999

dollars)

EPA ..................... Construction and upgrade of wastewater

treatment collection

facilities nationwide.

Costs due solely to

population growth

and costs not eligible for Federal funding.

1996–2016 ................... $139.5 (current 1996

dollars)
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8 Appalachia includes all of West Virginia and parts of 12 States: Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina,

Tennessee, and Virginia. The Appalachian Highway System is funded by the Federal Highway

Trust Fund and a State match of no less than 20 percent. 9This activity reflects a leading practice.

Table 1.—Selected Agencies’ Infrastructure Investment Estimates—Continued

Agency Activities and assets included in estimate

Activities and assets excluded from estimate Time period covered Total estimate (in billions)

FAA ...................... Construction, replacement, and rehabilitation of airport facilities nationwide.

Costs not eligible for

Federal funding.

1998–2002 $35.1 (constant 1998 dollars).

FHWA ................... Improvements to the

Nation’s highways

based on several

scenariosb.

Costs to construct new

roads.

1998–2017 ................... $50.8–$83.4 per year

for 20 yearsb (constant 1997 dollars)

FTA ...................... Replacement and refurbishing of mass

transit vehicles and

facilities nationwide

based on four scenariosc and construction of new systems.

...................................... 1998–2017 ................... $10.8–$16.0 per year

for 20 yearsc (constant 1997 dollars)

GSA Repair and

alteration of

public buildings.

Buildings owned by

Federal agencies

other than GSA.

Up to 5 years ............... $4.58a.

GSA ..................... Construction of border

stations, Federal office buildings, and

courthouses.

...................................... Up to 7 years ............... $0.75 to $0.8 per year

for 5 to 7 yearsa

aCurrent year dollars from different dates.

bFHWA modeled several scenarios—including cost beneficial investment needed to maintain the current physical condition—that provided a

range of estimates. cFTA’s analysis included scenarios that produced estimates ranging from investments needed to maintain current condition and perform- ance of mass transit to investments needed to improve its current condition and performance.

Note: Estimates for the Army Corps and GSA are Federal investments. Estimates for the remaining agencies are a combination of Federal,

State, and other investment sources.

Source: GAO’s analysis of agencies’ data.

Each of the seven agencies used data from various localities, States, or agency regional offices and aggregated those data to produce a national estimate for infrastructure investment. Each agency’s estimate is described below.

Appalachian Regional Commission

In 1997, ARC estimated that it would cost $8.5 billion from State and Federal

sources to complete the Appalachian Development Highway System, a 3,025-mile

system of highways in 13 States.8 The estimate includes costs for project design, environmental mitigation, rights of way access, and construction. These costs were not

adjusted for inflation. They do not include maintenance, retrofits, or safety improvements to completed segments of the highway system. According to ARC officials, the

estimate is probably understated due to the limited amount of detailed information

available in 1997 and because the estimate was prepared before obtaining public

input or identifying and addressing environmental or historic preservation concerns

about specific highway corridors. To produce the estimate, each of the 13 States estimated the cost to complete the system within their State using instructions provided

by ARC and FHWA. ARC and FHWA reviewed the States’ estimates to ensure uniformity and accuracy and assessed the reasonableness of the cost estimates by comparing them to the costs of similar highway projects within the State.9 ARC uses

this estimate as the basis for allocating Federal funds appropriated for the Appalachian Development Highway System. ARC distributes the funds to the 13 States

on the basis of their percentage share of the cost to complete the highway system.

ARC plans to issue an updated estimate in 2002.
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10The Congress provides funding to the Army Corps on a project-by-project basis and each

project has a non-Federal cosponsor that shares in the cost. In addition, fees from vessel operators are used to fund half the cost of new construction and major rehabilitation of the commercial fuel-taxed inland waterway system. 11This activity reflects a leading practice. 12This activity reflects a leading practice. 13The Army Corps also had procedures reflecting the following leading practices: establishing

a baseline inventory of assets; considering alternative ways to address unmet investment needs,

including non-capital approaches; ranking and selecting projects for funding based on established criteria; and developing a long-term capital plan that defines capital asset decisions. 14 EPA provides funding for the construction and improvement of drinking water and wastewater treatment facilities through grants to capitalize State revolving funds. States provide a

matching amount into their revolving funds equal to 20 percent of the total grant. The revolving

funds provide several types of financial support, including loans at or below market interest

rates, guarantees for the issuance of new local bonds, and purchase of existing bonds. 15This activity reflects a leading practice.

U.S. Army Corps of Engineers

As of March 30, 2001, the Army Corps estimated that $38 billion in Federal funds

was required to complete water resources and hydropower infrastructure projects already under construction.10 That amount includes about $37 billion for construction

of new water resource projects, $582 million for work at hydropower plants, and

$217 million for major rehabilitation of water resource projects. These amounts were

not adjusted for inflation. The overall estimate does not include critical operations

and maintenance work for water resources and related land projects; for fiscal year

2002, the Army Corps estimated it would require $915 million for such work. The

$38 billion estimate excludes projects that are not under construction, such as those

in the design stage, and costs not related to construction, such as feasibility studies

and evaluations. Army Corps officials believe that the overall estimate might be understated because it does not consider increases in the cost of completing a project

over time due to changing economic conditions. The estimate is the aggregate of individual infrastructure projects. Local governments, groups, and/or private citizens

who requested assistance from the Army Corps initially identified the water resources projects included in the estimate.

Engineers and other professionals using existing industry data estimated project

costs. The agency also uses cost-benefit analysis to determine which water resources

projects are economically justified and would assist the agency in reaching its goals,

such as improving navigation and flood mitigation.11 The evaluation and cost estimate is sent to the agency’s headquarters, and selected projects are submitted for

funding as part of the Department of Defense’s annual budget. Funded projects undergo several lengthy reviews by the Army Corps, including a feasibility study to

investigate and recommend solutions to water resources problems.12 The estimate

for hydropower investment projects is based on the Army Corps’ inspections, tests,

and evaluations of that equipment. The Army Corps uses the investment estimates

to determine the financial resources needed to manage and repair assets under its

jurisdiction and for new construction.13

Environmental Protection Agency

In February 2001, EPA reported an estimated $150.9 billion in Federal, State,

and local funds was needed to construct and upgrade drinking water facilities between 1999 and 2018.14 The estimate excludes costs ineligible for funding under the

Drinking Water State Revolving Fund (DWSRF), such as costs arising solely from

population growth. The costs were not adjusted for inflation. EPA reported that the

estimate may be understated because some needs covered only 2 to 5 years, not the

20-year period. To develop the estimate, EPA surveyed all of the large water systems in the United States and a sample of the medium water systems. In addition,

EPA conducted site visits to 599 small systems and extrapolated data from these

surveys and site visits to compute the total investment estimate. The States and

EPA reviewed the surveys and supporting cost documentation for medium and large

systems.15 The agency uses the results of this estimate to allocate moneys to the

States for the revolving fund based on each State’s share of the total investment

amount.

In 1996, EPA estimated that $139.5 billion in Federal and State funds was needed

between 1996 and 2016 for capital investment in water pollution control facilities.

The total included $44.0 billion for wastewater treatment, $10.3 billion for upgrading existing wastewater collection systems, $21.6 billion for new sewer construction,

and $44.7 billion for controlling combined sewer overflows. These costs were not adjusted for inflation. The estimate did not include annual costs for operations and

maintenance and projects that were not eligible for funding under Title VI of the
210

16This activity partially reflects a leading practice. 17This activity reflects a leading practice. 18 EPA also has procedures that partially reflect the following practice: considering alternative

ways to address unmet investment needs, including non-capital approaches. 19FAA provides airports with grants for capital development. FAA allocates most grants on

the basis of (1) a legislated formula that is tied to the number of passengers that an airport

enplanes and (2) categories earmarked for specific types of airports and projects. 20Generally, the Airport Improvement Program allows for all types of airport development except for automobile parking structures, hangars, air cargo buildings, or the revenue producing

areas of large terminals. 21This activity reflects a leading practice. 22FAA also has procedures that reflect the following leading practices: considering alternative

ways to address unmet investment needs, including non-capital approaches and ranking and selecting projects for funding based on established criteria. In addition, FAA has procedures that

partially reflect one leading practice: developing a long-term capital plan that defines capital

asset decisions. 23FHWA provides grants that partially fund the construction and improvement of urban and

rural highways and bridges, including major maintenance of interstate highways. States generally provide a 20-percent match and determine how to spend the money within broad Federal

guidelines. 24This activity reflects a leading practice. 25This activity reflects a leading practice.

Clean Water Act, such as house connections to sewers and costs to acquire land that

is not a part of the treatment process. EPA reported that the estimate may be understated because some needs accounted for only 5 years, not the 20-year period.

EPA developed the estimate from a nationwide data base of wastewater treatment

facilities that is periodically updated by surveying the States.16 The States provided

revised estimates of capital investment needs from their documented plans, which

were supplemented by costs modeled by EPA when the State lacked this information. EPA reviewed all documentation submitted by the States to ensure compliance

with its established criteria.17 In addition, EPA modeled the costs for each State for

combined sewer overflows and activities to control stormwater runoff and nonpoint

sources of pollution. According to EPA, the estimate is also used to assist the States

and Federal Government in program planning and evaluation and to inform the

Congress of the magnitude of the needs.18

Federal Aviation Administration

In 1999, FAA reported that $35.1 billion in Federal and non-Federal funds was

required for airport infrastructure investment projects from 1998 to 2002.19 The estimate primarily includes projects to bring existing airports up to current design

standards, develop passenger terminal buildings, and add capacity to congested airports. The estimate only includes projects that are eligible for funding under FAA’s Airport Improvement Program.20 The estimate was developed by aggregating the

projects contained in FAA’s National Plan of Integrated Airport Systems data base.

The projects originate primarily from airport master plans. FAA officials review

projects to determine if they are eligible for funding and justified, and then the approved projects are included in the data base.21

Because this estimate is not a spending plan, FAA has reported that it makes no

attempt to prioritize the projects or determine if the benefits of specific projects

would exceed their cost. This estimate is prepared and submitted to the Congress

biennially, as required by statute.22

Federal Highway Administration

In May 2000, FHWA issued investment estimates for highways for the years 1998

through 2017.23 These estimates ranged from $50.8 billion per year for cost-beneficial improvements that would maintain the current physical condition of highways

to $83.4 billion per year for all improvements that would improve pavement condition and reduce highway users’ travel costs. The estimates included both Federal

and nonFederal portions of funding; they do not include the costs to construct new

roads. To determine the estimates, FHWA used data from a statistically drawn national sample of 125,000 highway segments as well as information from the States

on forecasts such as travel growth. FHWA officials reviewed the data submitted by

the States and asked the States to correct serious flaws and improve some data submissions.24 FHWA used a computer model to simulate the effects of infrastructure

improvements on a sample of highway sections and used a benefit-cost analysis to

identify economically justified highway improvements.25 While FHWA’s model analyzes these sample highway sections individually, the model is designed to provide

estimates of investment requirements valid at the national level and does not provide improvement recommendations for individual highway segments. In June 2000,

we found that the model was reasonable despite some limitations concerning the
211

26For example, the model cannot completely reflect changes occurring among all highways in

the transportation network at the same time, since the model analyzes each highway segment

independently. See Highway Infrastructure: FHWA’s Model for Estimating Highway Needs Is

Generally Reasonable, Despite Limitations (GAO/RCED–00–133, June 5, 2000). 27 In addition, FHWA has procedures that reflect the following leading practice: ranking and

selecting projects for funding based on established criteria. FHWA also has procedures that partially reflect the following leading practice: conducting a comprehensive assessment of the resources needed to meet an agency’s mission and results-oriented goals and objectives. 28FTA provides funding for mass transit primarily through formula and capital investment

grants that generally require a State/local match of at least 20 percent. 29This activity reflects a leading practice. 30 In addition, FTA has procedures that reflect the following leading practices: establishing a

baseline inventory of assets and establishing procedures to review data developed by others.

FTA also has procedures that partially reflect the following leading practices: conducting a comprehensive assessment of the resources needed to meet an agency’s mission and results-oriented

goals and objects and budgeting for projects in useful segments. 31The primary means of financing the operating and capital costs associated with Federal

space that is owned or managed by GSA is the Federal Building Fund, a revolving fund supported by rental assessments to Federal agencies and annual appropriations. 32This activity reflects a leading practice. 33Federal Buildings: Billions Are Needed for Repairs and Alterations (GAO/GGD–00–98, Mar.

30, 2000.) 34 In addition, GSA has procedures that reflect the following leading practices: establishing a

baseline inventory of existing assets and establishing procedures to review data developed by

others. GSA also has procedures that partially reflect the following practices: considering alternative ways to address unmet investment needs, including non-capital approaches, and budgeting for projects in useful segments.

computations.26 FHWA’s estimate is used by legislative and executive branch offices

to obtain general information on the Nation’s overall need for investment in highways.27

Federal Transit Administration

In May 2000, FTA estimated investment requirements of $10.8 billion to $16.0 billion per year for mass transit systems (include buses, railcars, and ferries) from

1998 to 2017, depending on whether the condition and performance of mass transit

systems would be maintained or improved.28 The estimates include the cost to replace and refurbish existing vehicles and facilities and the cost to construct new

mass transit systems. The estimates cover both Federal and nonFederal shares of

costs. FTA used data from local urban transit agencies to determine the age and

condition of mass transit infrastructure and then estimated the cost of either maintaining or improving that infrastructure. FTA developed the estimates using its

Transit Economic Requirements Model. The model compares costs and benefits to

determine if replacing an asset was economically justified.29 The model then aggregated the costs of all the projects that were justified by benefit-cost analysis to determine the total investment estimate for the Nation’s mass transit systems. The

accuracy of the estimates is limited by missing data and imprecise predictions due

to the difficulty in predicting travel growth. FTA uses the estimates to provide general support for its budget and information on changes in mass transit systems.30

General Services Administration

In May 2001, GSA’s data indicated that $4.58 billion in Federal funds was required over the next 5 years to meet the repair and alteration needs of public buildings.31 This estimate does not include investment amounts for Federal buildings

owned by other Federal agencies, including the Departments of Defense and Energy

and the Postal Service. In addition, GSA estimated that $250 million to $300 million

was required annually over the next 5 years to construct new border stations and

Federal office buildings and $500 million annually was required over 5 to 7 years

to construct new courthouses. Regional offices identify investment projects, and cost

data are derived from various sources, including contractors, safety inspectors, and

building engineers. Projects that have estimated costs of $1.99 million or more are

evaluated by headquarters officials and ranked for funding using weighted criteria

that include economic return, project risk, and project urgency.32 In 2000, we reported problems with the quality of data contained in GSA’s data base of repair and

alteration projects—including incorrect data, missing projects, and cost estimates

that were not current.33 GSA is taking action intended to address the problems we

identified and improve the data base, but we have not assessed the agency’s

progress in this regard. In addition, the sources of cost information vary, so the estimates for individual projects may be inconsistent. GSA’s cost data are used as input

in determining funding priorities.34
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35 Executive Guide: Leading Practices in Capital Decisionmaking (GAO/AIMD–99–32, Dec.

1998).

OVERALL COMMENTS ABOUT THE ESTIMATES

Some perspective is called for in reviewing the investment estimates by the seven

agencies. First, the investment estimates encompass major areas of public infrastructure, but they cannot be easily compared or simply ‘‘added up’’ to produce a

national estimate of all infrastructure investment needs because they were developed using different methods and were for different time periods. A fundamental

reason that the estimates were prepared differently and lack comparability is that

they are developed and used for different purposes. Some agencies use the information to determine the financial resources needed to manage and/or repair their own

assets, while other agencies develop estimates at the request of the Congress to provide general information to decisionmakers or to help direct Federal funding to

States, localities, and other parties.

Second, the seven agencies all had procedures for developing investment estimates

that reflect some practices used by leading private sector and government organizations. Those practices include establishing a baseline inventory of assets, using costbenefit analysis to identify economically justified investments, and ranking and selecting projects for funding based on established criteria. (See app. I for additional

information on eight leading practices that pertain to developing and using investment estimates.) Some agencies followed more leading practices than other agencies.

For example, the Army Corps had procedures that reflected six of the eight practices, which included establishing an inventory of assets; considering alternative

ways to address unmet investment needs, including noncapital approaches; using

cost-benefit analysis; and developing a long-term capital plan that defines capital

asset decisions. Nonetheless, following the leading practices does not ensure a quality investment estimate and each estimate had limitations associated with the quality of the data used in developing it. Correcting such limitations will improve the

quality and reliability of the agencies’ investment estimates.

Third, some investment estimates span several decades and investment needs can

change significantly over time with changes in the efficiency of delivering infrastructure services or pricing strategies that alter the demand for services. For example,

the consolidation of smaller water systems or the introduction of user charges can

reduce the need to expand or replace infrastructure. Fourth, many of these estimates are totals for the entire infrastructure network—involving all levels of government and the private sector. The Federal Government’s role in financing these

amounts should be recognized and, in some cases, this role might be small compared

to other levels of government or the private sector. Finally, these estimates mostly

focus on the condition of infrastructure rather than the desired outcomes (e.g., less

traffic congestion) that can be expected from additional infrastructure investments.

We caution against relying on estimates of need that are based primarily on the

condition of existing infrastructure if desired outcomes are not clearly articulated

and the costs and benefits of alternative approaches (such as using strategies to

manage demand rather than building new infrastructure) for achieving those outcomes are not fully considered.

Mr. Chairman, this concludes my statement. I will be happy to answer any questions from you or any member of the subcommittee.

APPENDIX

LEADING PRACTICES IN CAPITAL DECISIONMAKING CONCERNING INVESTMENT

ESTIMATES

In 1998, we identified the practices of leading government and private-sector organizations in capital decisionmaking.35 The following eight practices relate to developing and using investment estimates.

• conduct a comprehensive assessment of the resources needed to meet an agency’s

• mission and results-oriented goals and objectives;

• establish a baseline inventory of existing assets, evaluate their condition, determine if they are performing as planned, and identify excess capacity;

• consider alternative ways to address needs, including noncapital alternatives;

• use cost-benefit analysis as a primary method to compare alternatives and select economically justified investments;

• rank and select infrastructure projects for funding based on established criteria;
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36This practice was identified as a result of information collected during our review of the

seven agencies’ investment estimates.

• budget infrastructure projects in useful segments;

• develop a long-term capital plan that defines capital asset decisions; and

• establish procedures to review data developed by others and use independent

reviews of data and methods to further enhance the quality of estimates.36

RESPONSES BY PETER GUERRERO TO ADDITIONAL QUESTIONS FROM SENATOR REID

Question 1. Your work in reviewing the investment estimates of various agencies

is a good start to looking at national infrastructure needs in a more comprehensive

manner. Now that you have completed your review, what specifically can we do to

get agencies to improve their analyses and to develop more uniform processes for

estimating infrastructure needs?

Response. Several approaches could be used to develop improved and more comparable infrastructure investment estimates. First, agencies could more closely follow the practices used by leading government and private sector organizations related to infrastructure investment estimates. We listed several best practices in U.S.

Infrastructure: Agencies’ Approaches to Developing Investment Estimates Vary

(GAO–01–835, July 20, 2001). These practices include:

• maintaining an inventory of existing assets and their condition and performance,

• ranking and selecting infrastructure projects for funding based on established

criteria, and

• taking steps to improve the quality of data used in making the estimates.

In addition, the Advisory Council on Intergovernmental Relations (ACIR) made

recommendations in 1993 concerning infrastructure needs that are still very useful

today. In its report High Performance Public Works, the ACIR noted that it is essential that the federal government identify, assess, and undertake infrastructure

investments that will pay the greatest possible dividends now and in the future.

Doing so requires that agencies evaluate potential infrastructure investments

through defining performance goals and measures for their infrastructure programs.

This establishes the goals or missions that the infrastructure investment is meant

to achieve and how the agency will determine if the infrastructure is meeting those

goals. In addition, ACIR noted that using benefit-coast analysis to evaluate infrastructure investments would demonstrate whether broadly defined benefits exceed

the life-cycle costs of the potential investment.

Question 2. Is it possible to develop a national estimate of infrastructure needs

so we can better track the state of our Nation’s physical infrastructure?

Response. Following all of the practices that I mentioned above would allow a

greater degree of comparability between estimates made by different government

agencies. In addition, to facilitate the compilation of a national estimate individual

estimates should: cover similar time periods; separately identify federal spending

and nonfederal spending needs; clarify whether estimates are for new infrastructure, operations and maintenance of existing infrastructure, or both; and be derived

using similar methods (e.g., by discounting future costs).

Question 3. Since this subcommittee will soon begin the long process of reauthorizing our surface transportation laws, I am particularly interested in your critique

of the Department of Transportation’s estimate of road and transit infrastructure

needs. Can their analysis really help us estimate the cost of addressing the increasing congestion on our Nation’s roads, which itself has been estimated to cost $78

billion a year in lost time and wasted fuel? Is there anything we can do to improve

the usefulness of these estimates?

Response. One of the strengths of the Department of Transportation’s (DOT) estimate of highway investment needs is that it includes several scenarios. These scenarios present different estimates, depending on the outcome that is desired for the

Nation’s highways. One scenario focussed on congestion by estimating the investment required to maintain average travel times at their current (1997) level over

20 years. DOT’s analysis showed that maintaining travel times would require about

$68 billion (in 1997 dollars) in capital investment per year over 20 years. Improving

travel times would require a greater investment. In contrast, all levels of government invested $42.6 billion in highways in 1997. Assuming that spending on highway investments continues at the level that DOT projects, the United States will

continue to lose ground on congestion over the next 20 years.
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Congestion is caused by a combination of factors in addition to inadequate highway capacity, including economic growth and prosperity in the United States,

changing geographic characteristics of metropolitan areas, and demographic

changes. These factors, combined with the likelihood that the United States will not

invest in highways at the level required to maintain travel times, suggests that responses to congestion might usefully include activities in addition to capital investment in highways. These activities include, for example, operating the existing highway capacity more efficiently through use of technology, making better use of capacity by providing incentives to drivers to carpool or drive at off-peak hours, considering the interactions between land use and highway traffic, and encouraging use

of alternative modes of transportation.

Question 4. Do any of these infrastructure needs assessments take into account

the increased likelihood of catastrophic storms that will last for the next several

decades, according to the U.S. Hurricane Research Division of NOAA (National

Oceanographic and Atmospheric Administration)?

Response. We found no indication that the estimates took into account the increased likelihood of catastrophic storms. However, we did not review the specific

assumptions for all the individual projects that make up the investment estimates.

Question 5. What about the three to ten degree increase in average global temperature and the corresponding sea level rise that the National Academy of Sciences

thinks is possible over the next century?

Response. The U.S. Army Corps of Engineers’ procedures for conducting project

feasibility studies call for consideration of alternative scenarios of future sea-level

rise. We found no indication that the other estimates took this into account.

Question 6. What impacts might the effects of global warming have on our Nation’s physical infrastructure?

Response. Global warming is expected to raise the sea level and change precipitation and other local climate conditions. These changes could affect, to varying degrees, major components of our Nation’s physical infrastructure. For example, existing coastal infrastructure may need to be protected from future sea-level rise by the

building of bulkheads and sea walls. The operation and maintenance of transportation systems would also be affected, but exactly how is hard to predict. For example, higher average temperatures could result in lower highway maintenance costs,

especially with fewer freeze-thaw cycles and less snow. However, increased pavement buckling could also result from longer periods of intense heat. In addition,

water resources would be affected by changing climate conditions. The U.S. Army

Corps of Engineers’ Institute for Water Resources conducted studies on the effect

that climate changes may have on various U.S. water basins including the Great

Lakes, Savannah River system, and the Boston Metropolitan water supply. For each

study, researchers simulated the operation of the water basin under different climate change scenarios to determine how the basin would respond. The researchers

concluded that, except in very extreme cases, the climate changes would have negligible impact on the basins’ operations.

Question 7. What, if any, changes need to be made in our national building codes

or planning and zoning concepts to deal with this warming?

Response. Anecdotally, we have heard that some localities are addressing the

issue, however, we have not examined the issue or the adequacy of these individual

efforts. For example, the U.S. Coastal Zone Management Act requires State coastal

programs to address rising sea level, and a few States have modified coastal land

use policies to address rising sea level. Regulations along San Francisco Bay require

projects along the shore or on newly reclaimed land to be either protected by a dike

or elevated enough to accommodate accelerated sea-level rise.

STATEMENT OF AMERICAN SOCIETY OF CIVIL ENGINEERS

Mr. Chairman and members of the subcommittee. The American Society of Civil

Engineers (ASCE) is pleased to provide this statement for the subcommittee on the

need for a continued strong Federal role in the construction and repair of the Nation’s critical infrastructure systems.

Last March, ASCE released its 2001 Report Card for America’s Infrastructure in

which the Nation’s critically important foundation received a cumulative grade of

‘‘D+’’ in 12 infrastructure areas.

Shortfalls in Federal and State funding and changing population patterns have

placed a tremendous burden on our aging power plants, water systems, airports,

bridges, highways and schools.
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The reasons for such a dismal grade are numerous: an explosive population

growth and school enrollment that outpace the rate and impact of current investment and maintenance efforts; local political opposition and red tape that stymie the

development of effective solutions; and the growing obsolescence of an aging system—most recently evident in the breakdown of California’s electrical generation

system and portions of the Nation’s decaying water infrastructure.

In short, America has been seriously underinvesting in its infrastructure for decades and our report card reflects that unfortunate reality.

To remedy our infrastructure problem, ASCE estimates that the Nation needs to make an investment of $1.3 trillion over the next 5 years.

Only the Federal Government has the resources to help underwrite the massive

need for a nationwide infrastructure repair effort.

Our 2001 report card follows one released in 1998, at which time the 10 infrastructure categories rated were given an average grade of ‘‘D.’’ While there have

since been some efforts to address infrastructure shortfalls, ASCE’s analysis shows

that conditions remain basically the same. Five categories have gone up slightly but

are still average or below.

Grades in three categories—transit, aviation and wastewater—have gone down.

The evaluation of two new infrastructure areas, navigable waterways and energy,

have kept the grade point average low. Grades ranged from a high of ‘‘C+’’ for solid

waste to a low of ‘‘D¥’’ for schools. Despite being at the extremes, solid waste and

schools received better marks than the ‘‘C¥’’ and the ‘‘F’’ they received in 1998.

Most States have effectively sought alternatives to dumping solid waste into landfills by encouraging recycling—up 50 percent since 1990—and converting waste to

energy. Approximately 17 percent of the Nation’s solid waste is now converted to

energy.

While local governments have increased spending on school construction and

maintenance, problems continue to linger as enrollment outpaces construction in

many communities. Consequently, the cost to remedy the situation has risen from

$112 billion in 1998 to $127 billion. With three-quarters of all school buildings failing to provide an effective environment for learning, due to either outdated facilities

or overcrowding, the situation could worsen before things improve significantly.

Transit received a grade of ‘‘C¥,’’ down from a ‘‘C’’ 3 years ago, and airports received a ‘‘D,’’ down from a ‘‘C¥’’ in 1998. While funds have been made available

through TEA–21 and AIR–21, appropriated to mass transit and aviation respectively, both systems are struggling to meet usage demands nationwide. Transit ridership has increased 15 percent since 1995, adding a strain despite unprecedented

growth in transit systems and increased funding.

Furthermore, existing public transportation systems, such as San Francisco’s BART system and Washington’s Metro system, are challenged by new commuter

patterns that did not exist and were not anticipated when the systems were first

designed and constructed.

Airports are already faced with gridlock on a seemingly daily basis. In the past

10 years, air traffic has increased 37 percent, while capacity has increased only

slightly. The aviation infrastructure, airports, air traffic control system and other

components are not keeping up. Furthermore, local politics impede the discussion

and implementation of solutions to meet the growing demand.

Wastewater declined from a ‘‘D+’’ in 1998 to a ‘‘D,’’ while drinking water remained

a ‘‘D.’’ Wastewater and drinking water systems are both quintessential examples of

aged systems that need to be updated. For example, some sewer systems are a hundred years old. Aged drinking water systems are structurally obsolete.

The shortfalls of $11 billion for drinking water and $12 billion in wastewater only

account for improvements to the current system and do not even take into consideration the demands of a growing population.

Along with drinking water, dams was the only other category to have received the

same grade, ‘‘D,’’ as it did in 1998. In the past 2 years alone there have been 61

reported dam failures and the number of ‘‘high-hazard potential dams’’—those

whose failure would cause loss of life—increased from 9,281 to 9,921 in 1998. Currently, there are more than 2,100 unsafe dams in the United States, which have

deficiencies that leave them highly susceptible to failure.

Energy generation and transmission, a new addition to the 2001 Report Card,

scored a ‘‘D+’’ for its growing inability to meet the population’s demand for power.

More than 10,000 megawatts (MW) of capacity need to be added each year until

2008 to keep pace with the 1.8 percent annual growth in demand. Since 1990, actual

capacity has increased only about 7,000 MW per year, an annual shortfall of 30 percent nationwide.

Navigable waterways, the other newly evaluated category, posted a grade of ‘‘D+.’’

Navigable waterways encompass the Nation’s ports, harbor channels, and inland, in-
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tracoastal and coastal waterways. Together, this network of waterways moves 2.3

billion tons of commercial goods. In the past 30 years, capital investment for public

water resources has decreased 70 percent. The U.S. Army Corps of Engineers has

a $38 billion backlog of authorized projects, which would take 25 years to complete

at current funding levels.

Three categories showed modest improvements. Roads went up from a ‘‘D¥’’ to

a ‘‘D+,’’ and bridges rose from a ‘‘C¥’’ to a ‘‘C.’’ Both categories have benefited from

an increase in Federal and local funding currently allocated to ease road congestion

and decaying bridges.

But, with 29 percent of bridges still ranked as structurally deficient or obsolete

and nearly a third of major roads considered to be in poor or mediocre condition,

we believe that Congress cannot afford to allow promised funding for transportation

to lapse.

Efforts to reduce hazardous waste have improved that category’s grade from a

‘‘D¥’’ to a ‘‘D+,’’ primarily because effective regulation and enforcement of current

policies have largely halted the contamination of new sites. Yet this grade remains

low because the number of sites could grow, creating a backlog in the system.

As dismal as these grades seem, many of the downward trends can be reversed

with increased funding and a renewed partnership between citizens, local, State and

Federal Governments. We have taken for granted that our lights will turn on, our

roads and bridges won’t crumble beneath us and that we’ll have clean and safe

water when we’re thirsty. Without adequate resources, we cannot implement appropriate solutions.

With a projected Federal budget surplus shrinking by the month, Congress must

not delay the effort to earmark the funds needed to restore our ailing infrastructure.

Without these resources, we gamble America’s prosperity on an infrastructure

whose pipes, schools, and airports are literally at the bursting point.

Mr. Chairman, that completes our statement.

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