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55–807 PDF 2010

RECOVERY ACT: PROGRESS REPORT 

FOR HIGHWAY, TRANSIT, AND 

WASTEWATER INFRASTRUCTURE 

FORMULA INVESTMENTS 

(111–100) 

HEARING 

BEFORE THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

March 26, 2010 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ARCURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

LAURA A. RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

SOLOMON P. ORTIZ, Texas 

PHIL HARE, Illinois 

JOHN A. BOCCIERI, Ohio 

MARK H. SCHAUER, Michigan 

BETSY MARKEY, Colorado 

MICHAEL E. MCMAHON, New York 

THOMAS S. P. PERRIELLO, Virginia 

DINA TITUS, Nevada 

HARRY TEAGUE, New Mexico 

JOHN GARAMENDI, California 

VACANCY 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

CONNIE MACK, Florida 

LYNN A WESTMORELAND, Georgia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

ROBERT E. LATTA, Ohio 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

AARON SCHOCK, Illinois 

PETE OLSON, Texas 

(II) 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... v 

TESTIMONY 

De Rugy, Veronique, Senior Research Fellow, Mercatus Center At George 

Mason University ................................................................................................. 6 

Fisk, Joyce, Truck Driver, Knife River Corporation ............................................. 6 

Freeman, Jeff, Deputy Director, Minnesota Public Facilities Authority, Representing the Council of Infrastructure Financing Authorities ....................... 6 

Luna, Florentino Esparza, Carpenter, Cherry Hill Construction, Representing 

the United Brotherhood of Carpenters ............................................................... 6 

Miller, Brad, General Manager, Des Moines Area Regional Transit Authority, 

Representing the American Public Transportation Association ....................... 6 

Richardson, Nancy J., Director, Iowa Department of Transportation, Representing the American Association of State Highway and Transportation 

Officials ................................................................................................................. 6 

Warton, Jeffery, President, IMPulse NC LLC ....................................................... 6 

Wright, Stephen D., Vice President, Wright Brothers Construction Co, Inc., 

Representing the American Road and Transportation Builders Association .. 6 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Carnahan, Hon. Russ, of Missouri ......................................................................... 41 

Cohen, Hon. Steve, of Tennessee ............................................................................ 42 

Hare, Hon. Phil, of Illinois ...................................................................................... 43 

Mitchell, Hon. Harry E., of Arizona ....................................................................... 44 

Oberstar, Hon. James L., of Minnesota ................................................................. 45 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

De Rugy, Veronique ................................................................................................. 51 

Fisk, Joyce ................................................................................................................ 66 

Freeman, Jeff ........................................................................................................... 70 

Luna, Florentino Esparza ....................................................................................... 82 

Miller, Brad .............................................................................................................. 84 

Richardson, Nancy J. ............................................................................................... 99 

Warton, Jeffery ........................................................................................................ 61 

Wright, Stephen D. .................................................................................................. 71 

SUBMISSIONS FOR THE RECORD 

Committee on Transportation and Infrastructure, Majority Staff: .....................

Report entitled, ‘‘The American Recovery and Reinvestment Act of 2009 

Transportation and Infrastructure Provisions Implementation Status 

as of March 12, 2010’’ ............................................................................... xi 

Chart entitled, ‘‘T&I Committee Transparency and Accountability Information by State and Formula Funding under the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) (‘‘Recovery Act’’) Submissions Received by T&I Committee (Data Reported as of June 

30, 2009) .....................................................................................................lxxxiii 

Chart entitled, ‘‘T&I Committee Transparency and Accountability Information by State under the American Recovery and Reinvestment 

Act of 2009 (P.L. 111-5) (Recovery Act) Submissions Received by 

T&I Committee (Data Reported as of February 28, 2010), Percentage 

of Allocated Funds Associated with Project Stages, Highways and 

Bridges’’ ...................................................................................................... xc 

Page

IV 

Committee on Transportation and Infrastructure, Majority Staff—Continued 

Chart entitled, ‘‘T&I Committee Transparency and Accountability Information by State under the American Recovery and Reinvestment 

Act of 2009 (P.L. 111-5) (Recovery Act) Submissions Received by 

T&I Committee (Data Reported as of February 28, 2010), Percentage 

of Allocated Funds Associated with Project Stages, Clean Water State 

Revolving Fund’’ ........................................................................................ xci 

Chart entitled, ‘‘T&I Committee Transparency and Accountability Information by State under the American Recovery and Reinvestment 

Act of 2009 (P.L. 111-5) (Recovery Act) Miles Improved by Recovery 

Act Highway and Bridge Funds’’ ............................................................. xcii 

Chart entitled, ‘‘T&I Committee Transparency and Accountability Information by State under the American Recovery and Reinvestment 

Act of 2009 (P.L. 111-5) (Recovery Act) Bridges Improved by Recovery 

Act Highway and Bridge Funds’’ ............................................................. xciii 

Chart entitled, ‘‘T&I Committee Transparency and Accountability Information by State under the American Recovery and Reinvestment 

Act of 2009 (P.L. 111-5) (Recovery Act) Submissions Received by 

T&I Committee (Data Reported as of February 28, 2010), Completed 

Projects, Highway and Transit Funds’’ ................................................... xciv 

Freeman, Jeff, Deputy Director, Minnesota Public Facilities Authority, Representing the Council of Infrastructure Financing Authorities, response to 

request for information form Rep. Mica, a Representative in Congress from 

the State of Florida .............................................................................................. 78 

Miller, Brad, General Manager, Des Moines Area Regional Transit Authority, 

Representing the American Public Transportation Association, response to 

request for information from Rep. Mica, a Representative in Congress from 

the State of Florida .............................................................................................. 92 

Richardson, Nancy J., Director, Iowa Department of Transportation, Representing the American Association of State Highway and Transportation 

Officials: ................................................................................................................

Brochure entitled, ‘‘AASHTO Survey of the States, 9,8000 Ready-toGo Transportation Projects’’ ..................................................................... 114 

Report entitled, ‘‘Projects and Paychecks, a one year report on State 

Transportation Sucesses under the American Recovery and 

Reivestment Act′′ ....................................................................................... 118 

Response to request for information from Rep. Mica, a Representative 

in Congress from the State of Florida ..................................................... 58 

Warton, Jeffery, President, IMPulse NC LLC, response to request for information from Rep. Mica, a Representative in Congress from the State of Florida .......................................................................................................................... 66 

Wright, Stephen D., Vice President, Wright Brothers Construction Co, Inc., 

Representing the American Road and Transportation Builders Association, 

response to request for information form Rep. Mica, a Representative in 

Congress from the State of Florida ..................................................................... 83 

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(1) 

RECOVERY ACT: PROGRESS REPORT FOR 

HIGHWAY, TRANSIT, AND WASTEWATER INFRASTRUCTURE FORMULA INVESTMENTS 

Friday, March 26, 2010 

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, WASHINGTON, DC. 

The Committee met, pursuant to call, at 11:35 a.m., in Room 

2167, Rayburn House Office Building, Hon. James Oberstar [chairman of the Committee] presiding. 

Mr. OBERSTAR. The Committee on Transportation and Infrastructure will come to order. 

Apologies from the Chair for the second delay. We were delayed 

to 11 o’clock because it was clear the House was going to remain 

in session last night. But then I was delayed further last night, 

way into the late hours, close to midnight, trying to resolve matters 

with the ′′other body,′′ as we affectionately call our friends across 

the way; and even into this morning, problems still were being 

worked out. 

And so I was unnecessarily delayed by the other body, but necessarily had to delay the beginning of this hearing, the 16th in our 

series of accountability hearings on performance of State DOTs, 

metropolitan planning organizations, transit agencies, the State 

Revolving Loan Fund authorities, and the other Federal agencies 

who have direct spending responsibility under the Stimulus Act 

that Congress passed a year ago. 

It seems like a much longer time than a year, but in that period 

of time, as we will hear in the course of today’s session, we will be 

able to account for 1.2 plus million jobs in the programs under the 

jurisdiction of this Committee, an extraordinary measure of accomplishment. And on direct jobs, directly on job site from highway, 

transit and wastewater, not counting all the others in the Federal 

Government agencies, payroll expenditures of $1.8 billion; Federal 

taxes withheld from those on job sites, $376 million; and unemployment compensation checks avoided, $296 million. That is net overall extraordinarily positive contribution to our gross domestic product. 

In addition, the State DOTs can account for 24,000 lane miles of 

highway improved, built, widened, renewed, and 1,200 bridges either replaced, restored, or reconstructed. Now 24,000 lane miles of 

highway is equal to half of the entire interstate highway system, 

which took us 50 years to build, and this amount of highway improvement has been done in a year.Before I go further and recognize our witnesses, I would like to yield to the gentleman from 

2 

Iowa, Mr. Boswell, who has a plane to catch and who had planned 

to leave town according to our 10 o’clock schedule, but he has delayed his departure. He has witnesses in this morning’s hearing. 

Mr. Boswell, thank you for your wonderful support of our stimulus legislation and all the programs of the Committee. 

Mr. BOSWELL. Thank you, Mr. Chairman. And again, we all 

thank you for your leadership and your vision on trying to teach 

everybody of this complex of transportation and infrastructure jobs, 

good-paying jobs, and they are not exportable. They are jobs right 

here that we need to do, and things we need not do anything. And 

you have certainly been a leader in this. We can’t tell you how 

much we appreciate it. And we are having discussions about the recovery going on and the money to be available to our States, and 

your concept of report back and who is ready to go and so on. I 

think I assured you at that time that my Iowa Department of 

Transportation would be standing and ready to go. And I am very 

pleased that I can report that has been true. They have been right 

up near the top in their responsiveness. 

I am very privileged to have someone I have known for a long, 

long time, who is very much an expert in transportation, and that 

is our Director of the Iowa Department of Transportation, Ms. 

Richardson. So I welcome her today and thank her because I know 

that not only she responded to the direction, she is ready for the 

next round. She is ready. 

And then sitting next to her is Mr. Miller, Brad Miller, a young 

fellow who came to the capital city a few years ago and people said, 

I don’t know if he can can fill the shoes of the guy that went ahead 

of him, but he has, and he has filled them very well. He is the general manager of the Des Moines Area Regional Transit Authority, 

and he is just doing a bang-up job innovating young people to use 

public transportation and making it reliable, dependable, and coming up with a concept to have a location where people can get in 

and out easily and so on. I am sure he will share that with you 

today. 

I am just very appreciative that people in my State and my capital city are responding, and responding in a very expert way to the 

very guidelines that you established. I look across the table and I 

look at the background, we have a lot of people here that have a 

lot of things to share with us. I appreciate it. 

I would just comment about Ms. Fisk, who is a truck driver. 

There are a few of us in the Congress that have an unrestricted 

CDL, so I just share that with you, that I know something about— 

a little bit. I am glad to have you here, the one who has the hands 

on the wheel and using this road system of ours that keeps our 

commerce going, so I appreciate it very much. 

Mr. Chairman, I yield back and thank you for this. I can stay 

a few minutes, but I really appreciate the attention and the leadership that you have given to this extremely important matter to our 

country, across the whole country, and especially for me and our 

State of Iowa. Thank you very much, Mr. Chairman. 

Mr. OBERSTAR. Thank you very much, Mr. Boswell. 

Mr. OBERSTAR. At this time, the Chair will yield to the distinguished chair of our Subcommittee on Economic Development and 

FEMA and a host of other issues, who has been very diligent in 

3 

holding hearings on her Subcommittee’s portion of the stimulus, 

Ms. Norton. 

Ms. NORTON. Thank you very much, Mr. Chairman. 

I must say, Mr. Chairman, you are taking accountability to a 

new level. This Chairman is sitting in accountability hearings on 

the stimulus when most Members of Congress have long since 

gone. Having passed an historic health care bill, they thought they 

were entitled. Well, Chairman Oberstar is entitled to, but in keeping with the way he always approaches his work, here we sit in an 

accountability hearing, and one that I think is important because 

occasionally you hear people say, Well, if you have gotten stimulus 

funds, I am not sure I myself have personally felt it. Well, that certainly is true. 

Chairman Oberstar and many of us would have preferred to see 

a much larger stimulus package, but what these accountability 

hearings have done, Mr. Chairman, is to show that the money has 

hit the ground. And it has hit the ground in no small part because 

of the new accountability—the accountability the likes of which the 

Congress has never seen. 

These pieces of paper, which every Member should carry home 

with her, tracks not only the Subcommittee chairs—because this 

Chairman has held us accountable, I have had five tracking hearings myself—but in turn, the agencies are being held accountable, 

the States are being held accountable. And that is difficult because 

the agencies are pass-throughs for the States, and yet they are 

being held accountable. 

And if you don’t believe the States are being held accountable, 

every Member is going to be looking at this sheet to see where her 

State fits. And I must say, Mr. Chairman, I am pleased to see that 

the District of Columbia on highways and bridges has 85.3 percent 

under contract. And in the United States, among the 50 States, the 

District of Columbia ranks 14th. 

I have said to my State, Don’t embarrass me here; we worked too 

hard to get these funds. I don’t see how there could be any controversy about these funds because the Chairman has put it in 

black and white almost every week to help us track our own jurisdictions and the agencies over which we have oversight. 

So, Mr. Chairman, I thank you for the accountability that you 

are showing through these hearings, and if I may say so, Mr. 

Chairman, for showing up also at the hearings of Subcommittees 

when we are having hearings to hold the agencies under our jurisdiction accountable. 

My own agencies, EDA, GSA, the Smithsonian, a number of Federal agencies, precisely because they know not only am I holding 

them accountable, but the full Chairman is looking at them just as 

hard, have proceeded in ways that I have found satisfactory. And 

if you continue as you have done, not only will those who come to 

these hearings know that this money has been put to good use. As 

the press focuses on how you are putting facts and figures before 

the public, it will be impossible to underestimate what the stimulus 

funding that came through our Committee has done for the American people. 

I thank you again, Mr. Chairman. 

4 

Mr. OBERSTAR. Again, I repeat my appreciation and admiration 

for your persistence in holding the accountability hearings which 

have served to spur on the Federal agencies to stay on course, stay 

on track, or be shown to the public for failing to do their job. And 

the first series of hearings, the first 3 months of hearings showed 

great inconsistencies among the States and Federal agencies. But 

after the information was made public and reports to Members and 

calls into State and Federal agencies, they all got on board and 

they moved their projects out smartly. 

Mr. Cummings. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. I thank 

you for convening today’s hearing to enable us to receive an update 

on the implementation of highway, transit, and wastewater infrastructure products under the American Recovery and Reinvestment 

Act. Under your leadership, Mr. Chairman, this Committee has 

kept meticulous records of how Recovery Act funding has been expended. I applaud the diligence of our staff in compiling the data 

that is available to us today. 

You have ensured that we have remained focused on the goal of 

getting this money out the door and flowing into the economy as 

quickly as possible, while also ensuring that funding recipients are 

fully accountable for every single dollar they expend. Today’s report shows that more than $48 billion of the more than $64 billion provided for transportation and infrastructure projects 

under the Recovery Act has now been obligated to more than 

18,500 projects. Further, of the $38 billion provided for the highway, transit, and wastewater infrastructure projects that are the 

focus of today’s hearing, 88 percent of the available funding has 

been put out to bid. Work has begun on more than 12,500 projects, 

totaling $26.7 billion. These expenditures have created or sustained 

nearly 350,000 jobs. These are truly stunning achievements in the 

work that is underway to producing a new and rehabilitated infrastructure that will ensure our future mobility. 

Mr. Chairman, many of us forget that when we enacted the stimulus, we faced an economic crisis of unprecedented proportions. We 

had just had to provide $700 billion in Federal funding to keep our 

entire financial system from melting down. We were uncertain of 

whether even the extraordinary sum would be adequate. 

Against that backdrop, Mr. Chairman, while the current unemployment rate of 9.7 percent is unacceptably high—and I note that 

unemployment among minorities is still higher, with unemployment among African Americans hovering at some 15.8 percent—I 

am certain it would have been far higher had we not made the critical decision to enact the Recovery Act. 

Finally, the fact that we now need reminding of the severity of 

the crisis we face when we approve these expenditures, is perhaps 

the best possible testament to the effectiveness of the Recovery Act. 

I again commend you, Chairman, for holding the hearing today, 

and I look forward to the the testimony of our witnesses. 

With that I yield back. 

Mr. OBERSTAR. Thank you very much for your kind words, but 

also again for the splendid cooperation you and Ms. Norton and all 

the Members of our Committee have extended in ensuring that the 

work of the Committee on stimulus was carried out by the responVerDate Aug 31 2005 12:16 Jul 21, 2010 Jkt 000000 PO 00000 Frm 00098 Fmt 6633 Sfmt 6633 P:\DOCS\55807.0 KAYLA
5 

sible agencies, and each of you doing your respective oversight 

work, and Mr. Cummings as chair of the Coast Guard and Maritime Subcommittee. 

At this time I would ask, without objection, that the statement 

of Mr. Mica, the senior Republican on our Committee, be included 

in the record. He had to be out of town and gives his concurrence 

in proceeding with the hearing without his presence, but his statement will be in the record in full. 

Mr. OBERSTAR. Today’s hearing will focus on the work of the Federal Highway Administration’s transit, fixed guideway, wastewater 

treatment programs. But there is also Amtrak, which has started 

work at 141 projects totaling $1.1 billion, which is 83 percent of 

Amtrak’s funding. Those investments will result in the replacement 

of 80,000 concrete ties, restoration to service of 60 M Fleet passenger cars, 21 Superliners, 15 locomotives, and the improvement 

of 270 passenger stations. 

FAA has completed work or has work underway on 94 percent 

of its $1.2 billion, 663 projects. Those projects went out so fast because of the unique contracting authority of aviation agencies, airport authorities who can advertise award bids, but withhold work 

on a project until the funding is available. We were able to get further ahead on the work than the surface transportation agencies. 

So those aviation investments have produced 155 runway improvement projects, 139 airports that accommodate 11 million takeoffs 

and landings a year, 82 taxiway improvements at 78 airports, that 

accommodate 8 million operations. 

The EPA has awarded $582 million for 57 Superfund construction projects for design projects, and work is underway or completed on 45 of those, at a total of $502 million. 

The Corps of Engineers has committed $3.1 billion for 780 

projects, navigation repair or improvement to 284 locks in commercial ports, 1,124 dam and levee safety projects, maintenance and 

upgrading of 460 Corps of Engineers recreation facilities, lakes, 

and Corps-constructed dams that result in recreation areas. Those 

investments are extremely important to the navigation and movement of people and goods on our inland waterways. 

And the General Services Administration, prodded by Ms. Norton’s hearings, has awarded contracts and begun work on 383 

projects, $2.4 billion, 43 percent of the funding. 

The Economic Development Administration has awarded 68 

grants for $147 million. 

Coast Guard, alterations of bridges; three projects are underway, 

totaling $81 million. 

All of these have resulted in jobs, people working, getting their 

lives restored, such as that of Joyce Fisk, whom I had the unexpected pleasure of meeting last August on the Interstate 35 project 

of Knife River Construction. They were doing 28 lane miles of highway between North Branch and Rush City. And it was a day like 

today, a gloomy, overcast, rainy, drizzly, dreary day; but the clouds 

parted and the sun came out with Ms. Fisk’s smile as she jumped 

down from her truck on the job site and threw her arms around 

me and said, Thank you, I am working. Joyce Fisk represents the 

human face of recovery, of stimulus. 

6 

STATEMENTS OF JOYCE FISK, TRUCK DRIVER, KNIFE RIVER 

CORPORATION; FLORENTINO ESPARZA LUNA, CARPENTER, 

CHERRY HILL CONSTRUCTION, REPRESENTING THE UNITED 

BROTHERHOOD OF CARPENTERS; NANCY J. RICHARDSON, 

DIRECTOR, IOWA DEPARTMENT OF TRANSPORTATION, REPRESENTING THE AMERICAN ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS; BRAD MILLER, 

GENERAL MANAGER, DES MOINES AREA REGIONAL TRANSIT 

AUTHORITY, REPRESENTING THE AMERICAN PUBLIC 

TRANSPORTATION ASSOCIATION; JEFF FREEMAN, DEPUTY 

DIRECTOR, MINNESOTA PUBLIC FACILITIES AUTHORITY, 

REPRESENTING THE COUNCIL OF INFRASTRUCTURE FINANCING AUTHORITIES; STEPHEN D. WRIGHT, VICE PRESIDENT, WRIGHT BROTHERS CONSTRUCTION, JEFFERY WHARTON, PRESIDENT, IMPulse NC LLC; AND VERONIQUE de 

RUGY, SENIOR RESEARCH FELLOW, MERCATUS CENTER AT 

GEORGE MASON UNIVERSITY 

Mr. OBERSTAR. So we are going to begin with Ms. Fisk’s story. 

Thank you for traveling all the way out here. 

Ms. FISK. Thank you for inviting me. 

Good morning everyone, ladies and gentlemen of the Committee. 

My name is Joyce Fisk. I am 35 years old, and I am the mother 

of a 12-year-old boy named Austin. I am married to Gene Fisk, a 

volunteer firefighter and first responder in our community. We 

both work for Knife River Corporation in Minnesota. I drive a 

belly-dump and Gene drives a dump truck. We live in Almelund, 

a small town about 40 miles northeast of Minneapolis and 10 miles 

east of Interstate 35. 

I met Chairman Oberstar while working on I-35 project last summer. It was a stimulus-funded project. And I was thrilled that Mr. 

Oberstar took the time to come see firsthand the job in progress, 

to take the time to talk to someone like me, just a truck driver 

thankful to have a job. Mr. Oberstar told me about the new bill he 

was working on and the progress it was making. I went home that 

evening and wrote a quick e-mail to the Transportation Committee, 

thanking him for taking the time to visit and to see his hard work 

in action. 

As a belly-dump driver, I transport materials to and from a job 

site. I haul material, such as classified rock for the road base, or 

I haul millings away when we do road tear-outs, and I also haul 

bituminous mix to a paver. But I not only drive the truck, I 

amexpected to help maintain them. I grease moving parts, I check 

the oil daily, I crawl in the engine compartment, check for cracks 

in my frame, and I even make small repairs on the road if I need 

to. I put 500 miles or more on a day. 

Driving an 80,000-pound truck isn’t easy. I have to constantly be 

alert for traffic hazards, other drivers, animals, and potholes. And 

it can be a challenge to drive all day without getting tired. 

Even more of a challenge is trying to guess what is going to happen next spring. I get laid off every winter, usually around Thanksgiving, and would usually be recalled in May after road restrictions 

are lifted. Last year was the first time I panicked when I heard our 

plant only had 10,000 tons of mix and no bids were being won. 

7 

We are proud of our company. Knife River has a large workforce 

of knowledgeable men and women who care about their community. We care about each other and provide moral support. But 

with no jobs to bid because of the recession and uncertain government funding, I watched morale fall. It was difficult to stay optimistic, and we started to argue about who was going to get the 

hours. It made work stressful. 

My husband and I started to wonder what were we going to do 

if something didn’t come in soon; are we qualified to get another 

job to sustain the household? What about health care? We bank up 

to 600 hours during the summer that allows us to qualify for 

health care during the layoff season, but if the hours run out, we 

have to pay for the COBRA and the continued coverage. It is almost unaffordable in unemployment and to make a mortgage payment, too. 

What could we afford to give up? Austin might have to give up 

his saxophone. I once had an electric guitar, and my mom made me 

sell it because we needed the money. We decided to sell the pickup 

we were making payments on, so now the newest vehicle we own 

is an 8-year-old Pontiac with 163,000 miles on it. 

We were preparing for a long summer of no work. The previous 

year, 2008, was hard on our industry. We saw close friends lose 

jobs, and we realized we no longer could take ours for granted. But 

then our plant estimator won the bid on the I-35 stimulus project, 

and we were relieved. The project was the heartbeat of a newfound 

source of happiness for many of my coworkers and me, we had 

faith in the economy again. 

But many of our friends are still out of work and there are many 

Minnesota roads in need of repair. Some highways are almost 

undrivable in a tractor-trailer because they have deteriorated to 

the point of being unsafe. We need a long-term dedicated highway 

bill that will allow small companies a chance to rebuild and provide 

real jobs that will last. 

Short-term bills are good for keeping a few companies afloat, but 

the real deal of a 6-year, $450 billion dedication of funds to transportation can restore confidence to companies and their workers. A 

new funding bill can ease the congestion in big cities and heavily 

traveled highways. Funding for light rail transit can save time, 

money, and help clean up our environment. Without future funding, I don’t see manufacturers selling new equipment; there will be 

no companies starting up and offering new jobs. 

Road construction is constant. There will always be a need for repairs. Let’s stop the Band-Aid approach and put money into infrastructure that is going to offer real jobs that are going to last and 

get our economy moving again. 

Thank you for this opportunity to speak today. 

Mr. OBERSTAR. Thank you very much for that heartfelt statement. You just summed it all up so well. Your personal story, 

though, has been repeated 1,200,000 times all over the country; 

people who were laid off, who faced a bleak future and who have 

had a respite; and now our task, our challenge, as you suggested, 

as you appealed for to enact the 6-year authorization bill and continue to extend regular programs of the Federal Highway Program 

and make it possible to do the more complex projects that take 

8 

longer time and involve more effort and more subcontractors, 

where minority enterprises will have more of an opportunity than 

in simple mill and overlay projects. 

Before I go to my next witness, I must observe that on the job 

site—I had driven over I-35 at that point many, many times, 

maybe hundreds of times over the years—but there is a rut so deep 

that my forearm disappeared in it. Where the engineer put his road 

level on the surface, it went right over it, two inches over my forearm—that is not a dainty little forearm either. That was the nature of the project being undertaken. 

It was so heartwarming. I had been at that sand and gravel pit 

that Knife River opened to carry out the project. There were workers doing the classifying of sand and gravel and aggregate who had 

been laid off 2 months earlier, who now were back on the job, as 

Ms. Fisk. 

Staff reminded me, I misstated the number of road miles. I have 

been using a 5-week-old figure. We are now at 34,438 miles of 

highway improvements. 

We will come back to each of the witnesses in due course, but 

our next witness is Mr. Florentino Esparza Luna, a carpenter. 

My grandfather, Alexander Giuseppe Grillo came from Naples, 

Italy, as a carpenter in 1896, settled in Providence, Rhode Island 

to build homes, and then when iron ore was discovered in northern 

Minnesota, the district that I now represent, he and many others 

were lured west to build homes in the iron ore mining country. So 

we come from a family of carpenters, it is very touching for me. 

One of my treasured pictures is a picture of Alexander Giuseppe 

Grillo and me, 5 years old, hammer in hand, pounding nails in the 

home that I still live in. 

Mr. Luna. 

Mr. LUNA. Thank you, Chairman Oberstar, Ranking Member 

Mica, and Members of the Transportation and Infrastructure Committee. It is an honor to join you today. 

My name is Florentino Esparza Luna. I am a resident of District 

Heights, Maryland, and a proud member of the United Brotherhood of Carpenters and Joiners, Local 1145, a local union with the 

Mid-Atlantic Regional Council of Carpenters, MARCC. MARCC 

covers the District of Columbia, Maryland, Virginia, and West Virginia. Local 1145 is based in Upper Marlboro, Maryland, but we 

work throughout the region. 

My message today is simple and straightforward: The stimulus 

passed by this Congress and signed by President Obama provided 

me with the job I have now. I am living proof of the job creation 

from the Recovery Act. The stimulus helped fund the Fairfax County Parkway project near Fort Belvoir, where I work. 

I appreciate being able to work for a private contractor with the 

Federal dollars you provided in transportation. A job means so 

much. Nothing is more important than providing for my family. 

I work for Cherry Hill Construction on the Fairfax County Parkway project in nearby Virginia. After being unemployed for over 4 

months, I started work on this project in December of 2009. I am 

a skilled carpenter. I build concrete forms and perform other carpentry work on this huge, multimillion-dollar project. There are 30 

carpenters working on the project now. The project is expected to 

9 

employ about 150 workers in the construction trades. It will take 

well over a year to complete. 

We are building the extension to the Fairfax County Parkway. 

My contractor will perform the first two phases of the work. The 

project involves extending the parkway, grading, draining, building 

a sound wall, and more. The project should make a big difference 

in Northern Virginia, where, as you know, traffic can be terrible. 

I sincerely appreciate the support of the Members of Congress 

who voted for the Recovery Act. You played a key role in helping 

me provide for my family. I have a wife and two children. It is not 

easy getting by on an unemployment check. I would much rather 

be working, building my community’s transportation system. I 

know that is also true for construction craft workers throughout 

the industry. 

Construction workers are struggling. Many of the work opportunities in the residential and commercial parts of the industry dried 

up with the recession. About 20 percent of the members of my local 

union are unemployed. Even with an employment rate twice the 

national average, my local union is doing better than the rest of 

the construction industry. 

As you know, Chairman Oberstar, the employment rate nationally in construction is over 27 percent. Too many construction 

workers simply cannot find work and provide for their families. It 

would be a lot worse if it wasn’t for stimulus. The Recovery Act allowed me to put food on my family’s table, allowed me to provide 

health care for myself and my family, and I am also able to put 

money into retirement so that I can retire in dignity. 

The Carpenters Union and my employer also invest in the future 

workforce by making investments in apprenticeship and training. 

The Carpenters Union believes not just in jobs, but in long-term careers. Unfortunately, the high unemployment rate in construction 

and in my union has made it difficult to find work opportunities. 

That is why the support from this Congress and this President in 

providing real jobs through the American Recovery and Reinvestment Act has been so important to me and my brothers and sisters 

at Local 1145. All construction workers hope that Congress will 

make more of these investments in our economy. 

Thank you for the opportunity to testify today. I sincerely appreciate it. 

Mr. OBERSTAR. Thank you very much for that wonderful, heartwarming testimony. We started off with two home-run hitters here 

of a very personal testimony, a personal experience. To me, that is 

reward enough for the hours put in, the hundreds of hours we have 

put in on crafting this bill, beginning in December of 2007, moving 

it through the House in September of 2008, but with resistance 

from the previous administration, they vetoed the bill. Then we 

had an election. President Obama said he would sign a stimulus 

bill—or President-elect Obama at the time. And, as President, he 

did sign it. 

As for the future of transportation, this is it; this is the bill that 

we reported from Subcommittee for the 6-year authorization. It is 

750 pages—probably a few more will be added once we finish the 

final legislative drafting. It will be a total transformation of the Department, of the Federal Highway Administration, the Federal 

10 

Transit Administration. And we will be able to move projects much 

more expeditiously. We found lessons learned in the stimulus that 

States can move projects out much faster than in the traditional 

scheme of things, and we are incorporating those lessons learned 

into this bill. 

So we are moving ahead, and your encouragement is very important for me and for my colleagues on this Committee. I know Mr. 

Mica has many times said we just have to move ahead with this 

bill. All the Members feel that way. We have had difficulty getting 

the Senate to concur with us, but Senator Boxer made a statement 

at a hearing 2 weeks ago, and again last week, that she will move 

ahead with the bill and start with our document as the foundation 

for it. So I am very encouraged that we will be able to complete 

the bill in this session of Congress. 

Ms. Richardson, Director of the Iowa Department of Transportation, you have already been generously introduced by Mr. Boswell. 

Ms. RICHARDSON. I am Nancy Richardson, Director of the Iowa 

Department of Transportation. And on behalf of the American Association of Highway and Transportation Officials, AASHTO, I 

amhere to talk to you about three things: 

First, the success that States are achieving through the Recovery 

Act; second, the States’ ability to spend further funding on additional ready-to-go projects; and third, the role of transportation in 

rebuilding and sustaining our Nation’s economy and the importance of passage of a new Federal Highway and Transit authorization bill. 

But first, Mr. Chairman, let me thank you and your Members of 

the Committee for your commitment to transportation, which led to 

the enactment of the HIRE Act that extends the highway and transit programs through the end of the year. This means that Congress can now turn its attention to your priority and ours, the enactment of a comprehensive, multiyear bill. 

Speaking of economic recovery, as you know the Recovery Act 

had a March 2 use-it-or-lose-it deadline, and I am happy to report 

today that every State obligated every highway dollar they were eligible to receive, and not one dime was returned to Washington for 

redistribution. We are proud of the thousands of jobs the economic 

Recovery Act enabled us to support in Iowa and across the Nation, 

and of the long-lasting economic benefits of this capital investment. 

The States’ record of 100 percent obligation of these funds by the 

deadline did not happen just by accident. It took early planning 

and preparation and quick action. I am particularly proud of the 

pace of getting the Recovery Act funds put to work in my State of 

Iowa. I am pleased that Iowa has consistently ranked in the top 

five States in your Committee’s rankings of how States have moved 

to get the Recovery Act funded projects out to bid, under contract, 

and underway. My State is just one of 50 examples of how the 

States have put the Recovery Act money to swift and good use. 

Prior to the act even becoming law, the Iowa DOT worked with 

local partners to identify potential projects which would qualify for 

funding. We wanted to be ready to hit the ground running when 

the bill was passed, and we were. 

11 

Through these partnerships, we were able to quickly identify 

over 645 miles of highways and streets, 55 miles of trails, 36 

bridges and structures, and four freight rail projects that were in 

need of improvement or replacement and were ready to make use 

of Iowa’s $358 million. 

Work has begun in Iowa on over 200 projects, and as of March 

15, $215 million, or over 60 percent, of the highway funding available to Iowa has been received from the FHWA as reimbursement 

for payments to contractors and vendors. This funding was injected 

directly into our economy last year and was responsible for creating 

or retaining jobs all across the State. 

When spring arrives and the construction season begins again in 

Iowa, we will see the remaining $143 million in Recovery Act funds 

being used to once again support jobs, aid economic recovery, and 

continue to improve Iowa’s transportation system. 

The same success has occurred as a result of the transit capital 

funding. With the $25 million in transit funds for Iowa’s small 

urban and rural transit systems, we were able to identify for much 

needed replacement 216 old transit vehicles. As of the end of February, 136 of those transit vehicles ordered had already been delivered and put into service in Iowa. 

Congress and the public also expect transparency and accountability in our administration of Federal funds, and I amconfident 

that the DOTs and our local partners will meet and exceed those 

expectations. 

But what does this mean to Americans? First of all, it has meant 

jobs. I understand that every Member of the Committee has been 

given a copy of AASHTO’s report: Projects and Paychecks. It found 

that States have created or saved 280,000 direct, on-project jobs. 

Total employment related to the projects has reached 890,000. 

While transportation received 6 percent of total Recovery Act dollars, as of this past December, it was responsible for at least 14 

percent of the total direct jobs saved or created to date. 

But the real story is about people, the people whose jobs were 

saved or who went back to work, the people who were able to make 

their mortgage payments, put their kids through school, and pay 

for health care, as you have just heard. These investments in our 

Nation’s transportation network, first and foremost, have put and 

are putting paychecks in people’s pockets. And although the primary focus of the Recovery Act was job creation and short-term immediate economic stimulus, we should not overlook the fact that 

these investments will provide long-lasting benefits with improvements to the Nation’s transportation network. 

We are very appreciative of Congress’ recognition of the role that 

transportation can play in this Nation’s economy, and we want you 

to know, Chairman, that we remain poised to support continued 

economic recovery and job growth. 

Earlier this year, AASHTO went back to the States to determine 

additional ready-to-go projects. The States have identified more 

than 9,800 projects valued at close to $80 billion that could move 

through the Federal approval process within 120 days of enactment. The Recovery Act is working, and the States could do more 

of the same if additional jobs were available. 

12 

Finally, we urge you to enact a multiyear highway and transit 

bill before this Congress adjourns. We believe the $500 billion surface transportation funding target that you, Chairman Oberstar, 

have established, is a reasonable goal for this 6-year authorization 

period, and Congress should seek to fund it. 

We need a balanced bill that increases funding for both highway 

and transit, and funds continued progress on high-speed rail. We 

also need a balanced bill that meets the needs of both rural and 

urban parts of the country. Mr. Chairman, we stand ready to work 

diligently with you to see that reauthorization happens promptly. 

In closing, let me say thank you to Congress for providing us Recovery Act funds for transportation improvements. The States’ 

DOTs have taken seriously your confidence in us that we could 

swiftly and wisely spend the money in order to benefit the economy, and we have delivered. We stand ready to swiftly and wisely 

spend additional funding that you might provide for continued economic recovery. 

And finally, we urge you to continue your efforts and advocacy 

for passage of a well-funded, balanced, multiyear highway and 

transit bill. 

Thank you, Mr. Chairman. I appreciate the opportunity to testify 

and will be happy to answer questions. 

Mr. OBERSTAR. Thank you very much for that splendid testimony. Congratulations on the superb achievements in Iowa under 

the stimulus, as you have reported, and for the work of AASHTO’s 

report, Projects and Paychecks. It is well-documented with photos 

of the successful projects all around the country. I just love stuff 

like that, it just gets me going. 

And this is the AASHTO proposal for 9,800 additional projects, 

and nearly half of those are projects that Mr. Horsely, your executive director, has said can be under contract within 90 days, and 

the rest within 120 days. That would satisfy the requirements of 

the bill we passed in December in the House, which, unfortunately, 

the Senate has yet to complete action on; they have only dealt with 

half of it. 

And for readiness, there are many touching stories, but one that 

really sticks in my mind is that of Secretary Gary Ridley of Oklahoma, who, in my visit out there to Tulsa and Oklahoma City, 

pointed to the Inner Dispersal Loop project or the loop around 

Tulsa. He said, We began designing this in November after your 

hearing—the one I held in October. He said, That Committee is serious, we better be ready. I told my engineers we are going to do 

18 months of design in 4 months, and I want you to take your design and engineering plans to church with you on Sunday, because 

if I need you, I will call. And they did and he did, and they had 

it designed more than halfway through the $76 million project, 

which includes 44 bridges, by the way. So you have got a great 

story, and all of your colleagues across the country and all the 

State DOTs have great stories as well. 

Mr. OBERSTAR. Now we will move to transit with Brad Miller, 

General Manager of the Des Moines Area Regional Transit Authority, speaking for APTA. 

Mr. MILLER. Thank you, Mr. Chairman. 

13 

Chairman Oberstar, I am honored to submit testimony regarding 

the Des Moines Area Regional Transit Authority’s use of funding 

for the American Recovery and Reinvestment Act, which has already created jobs in central Iowa and around the country, while 

improving public transit. 

DART serves Iowa’s capital region with a service area population 

of just over 400,000. While DART and Des Moines may be somewhat smaller than some of the other transit systems your Committee has heard updates from, I am pleased to report the funds 

have had a profound, positive impact for our 16,000 daily riders. DART received $7.8 million in funding. Not only has DART been 

awarded all of our ARRA funding and will sign contracts for 100 

percent of the funds by June, but DART has already drawn down 

and cut checks for nearly half the funds, getting these dollars into 

the economy and generating dozens of good jobs and improving the 

transportation services in Des Moines. I don’t think our story is unusual, as FTA has awarded more than 99 percent of the $8.4 billion 

that was made available for transit under ARRA. 

DART spent more than one-third of its ARRA funds on bus replacements, and I was thrilled to see the funded buses roll onto our 

property—as shown in the picture—just 2 weeks ago. The Committee has no doubt heard significant testimony of the strong need 

for funding of our country’s infrastructure to achieve a state of good 

repair. This policy is as true for small-and mid-size transit systems 

as it is for our Nation’s aging rail systems and deteriorating 

bridges and highways. 

Not only did the ARRA funds benefit DART in Des Moines, but 

I am also pleased to report that ARRA funds supported the replacement of more than 180 small buses and 17 large busses at other 

transit systems throughout Iowa. Iowa takes great pride in its expansive network of rural transit services in all 99 counties of the 

State. The senior citizens and job seekers living in Iowa’s small 

towns who rely on public transit are also seeing the benefits of 

ARRA. 

DART used $1 million of ARRA funds to help build an energyefficient expansion for our bus storage facility. The project is well 

underway, and the contractor has identified over 30 full-time jobs 

and more than $200,000 in construction wage and benefits that 

have already been created by this ARRA-funded project. 

The recovery funds have moved DART’s number one capital 

project priority a step closer to construction by supporting the design of the LEED-certified transit hub in downtown Des Moines. 

Now a design has advanced for this important facility that will create not only 200-plus direct construction jobs, but will will also be 

a catalyst for additional job growth as DART will be able to vacate 

its outdated transit mall along Walnut Street and provide space for 

first floor retail and small businesses. 

Finally, DART is one of the many transit systems to gratefully 

use 10 percent of our allocated ARRA funds for a one-time source 

of operating assistance. While not every system was chosen to use 

this flexibility, preliminary results from an APTA survey now underway show that about a third of the approximately 150 agencies 

responding to the survey so far are using a portion of ARRA funding to prevent layoffs, avoid fare increases, or maintain service. 

14 

With the help of nearly $800,000 in ARRA funds for operations in 

Des Moines, along with pay reductions and furlough days from me 

and my nonunion staff, we were able to reduce our budget gap and 

save more than 30 bus operator jobs. 

As the general manager of a 150-bus system like Des Moines’, it 

is Yours Truly that makes the presentations at public meetings 

and listens to the hundreds of riders who tell me they are going 

to lose their jobs if we cut their bus service. 

We just completed 10 such meetings 3 weeks ago. And I recall 

the story of one woman I met at a public meeting at the Forest Avenue Library in Des Moines. Ms. R. Cofield was at the meeting 

with her 3-year-old daughter to fight to keep the weekend bus service past the House of Mercy residential treatment facility where 

she and more than 40 other single mothers live with their children. 

She said she and the other mothers at the House of Mercy were 

going to lose their jobs at the Qwest telecommunications call center 

in downtown Des Moines if we cut the weekend bus service on 

DART’s route number 5. She asked the question I heard more than 

a dozen times at the hearing: Why are you buying buses and building a transit hub when you could be saving routes? 

I tried my best to explain the limits on using funds for operations 

versus capital expenses, but as the Committee knows, when transit 

is your lifeline to keeping your job to support your struggling family, you are not going to be easily convinced. Luckily, thanks to the 

allowance of the 10 percent of ARRA funds for operating assistance, DART was able to preserve that weekend service that Ms. 

Cofield and many others rely on. 

Certainly, the question of operating assistance is a challenging 

one for the Committee. Undoubtedly, many transit agencies, particularly smaller agencies, would accept a change to allow them to 

spend more Federal money on operations. However, they would 

defer capital projects, including desperately needed bus replacements. 

But these are certainly extraordinary times. DART’s 5 percent 

cut in service and likely layoff of 20 bus operators are the most 

substantial cuts we have had to make since the 1980s. We are extremely thankful to the Committee for the temporary ability to use 

10 percent of the ARRA funds for operations, and would strongly 

support continuing this authorization on a temporary basis. 

I finish my remarks by noting that without a new Federal investment in a long-term reauthorization bill, it will be difficult to maintain the employment benefits that ARRA has already created for 

our agency. Needless to say, we definitely support the Committee’s 

efforts to approve a multiyear transportation bill at the highest 

level of investment possible for public transit. Such a bill would 

stabilize DART’s finances, advance our job-creating capital projects, 

and strongly assist our efforts to improve transit this Iowa. 

Thank you for the opportunity to testify, and I look forward to 

your questions. 

Mr. OBERSTAR. Thank you very much, Mr. Miller, for that splendid testimony, for the before-and-after pictures, and for your remarks on operating assistance. It was very important for us to include that language in this bill. We extend it in the authorization 

bill and doubled the funding for transit over the 6 years of this bill. 

15 

I will now invite Mr. Jeff Freeman, who is the Deputy Director 

of Minnesota Public Facilities Authority, who has an extraordinary 

story to tell us of how they leveraged their funds to achieve a nearly 50 percent increase, or more, of the Recovery Act funds allocated 

to Minnesota and provide clean water for communities that in 

many cases didn’t have it at all. 

I will excuse myself for a few minutes for a meeting with the 

Speaker and invite Mr. Cummings to chair the hearing. 

Mr. CUMMINGS. [Presiding.] Mr. Freeman, please. 

Mr. FREEMAN. Thank you. 

Mr. Chairman, Members of the Committee, my name, again, is 

Jeff Freeman. I am the Deputy Director of the Minnesota Public 

Facilities Authority. Thank you for the opportunity to come before 

the Committee to talk about our Clean Water State Revolving 

Fund program and our experience with the American Recovery and 

Reinvestment Act funds. 

The Minnesota Public Facilities Authority is a multiagency structure financing authority that manages the Clean Water State Revolving Fund, the Drinking Water State Revolving Fund, a State 

Infrastructure Bank for our transportation projects, and several 

other infrastructure financing programs. 

Since the Clean Water State Revolving Fund began in 1989, Min- nesota has received $577 million in Federal capitalization grants, 

added $150 million in State matching funds, and leveraged those 

funds with our own AAA-rated revenue bonds to finance $2.4 billion in clean water projects throughout the State. These low-interest loans have saved cities and their taxpayers over $530 million 

in interest charges. 

This financing has helped local governments rehab and replace 

aging wastewater treatment plants, upgrade systems to meet new 

standards, rehab collection systems, construct new interceptors, 

and a variety of other projects. These are essential infrastructure 

projects that protect and improve water quality, and also, of course, 

have a major economic impact not only in terms of the construction 

jobs that they create, but also in terms of providing a critical foundation for the economic vitality of the cities that have and need 

this infrastructure. 

The enactment of the American Recovery and Reinvestment Act 

in February 2009 provided badly needed capital for these programs, but also created significant challenges for the State Revolving Fund programs. The specific provisions and accountability requirements attached to ARRA required EPA and each State to develop and implement new processes and procedures within a very 

short period of time. In Minnesota, there was a flurry of activity 

between February and April of 2009 as we put together all the 

pieces leading up to our formal application for the funds in midApril. 

On June 8, 2009, we received the official notice that the funds 

had been awarded, and by June 25, 3 weeks later, virtually all the 

funds had been committed for projects that were approved, bid, and 

under construction. Formal loan agreements were then executed 

over the next few months. 

Minnesota’s share of the ARRA funds for clean water was approximately $82.5 billion. We awarded $44.7 million as principal 

16 

forgiveness, and $17.5 million for green infrastructure projects for 

energy and water efficiency improvements. 

Our strategy for the ARRA funds focused on using the principal 

forgiveness aspect in three ways, with an emphasis on creating incentives to get projects moving quickly. We offered 20 percent principal forgiveness to all projects on a first-come, first-served basis, 

if they were open bids and were ready to start construction. And 

we also directed principal forgiveness to deal with particular affordability problems, and as incentive for the green infrastructure 

aspects of the projects. 

To get the biggest impact and fund the most projects, we leveraged those $82.5 million in ARRA funds with over $100 million in 

non-ARRA clean water SRF loans to finance 25 projects, for a total 

investment of $182 million. To date, we have expended over 62 percent of the ARRA clean water funds, and our job reports show that 

there have been 295,000 job hours created, with a total payroll of 

$11.7 million. 

The Clean Water ARRA funds went to a variety of cities and 

projects. I would like to give you a couple of examples. The city of 

Waseca financed a $16 million project for improvements to their 

wastewater treatment and collection system. The undersized system was creating raw sewage discharges to Clear Lake, and impaired water, and also sewage backups in people’s basements. 

To prepare for the project, the city had increased their rates by 

60 percent to an average household cost of $55 a month, but they 

still would have been unable to move ahead with the project without the ARRA funds. The city of Duluth received $5 million to build 

a sewage overflow tank on the shores of Lake Superior to prevent 

overflows into the lake during storm events. The city of Grand Rapids constructed a $30 million project to relocate their primary 

treatment and solids dewatering facilities and incorporated energy 

and water conservation improvements into that project as a result 

of the ARRA funds. 

Our experience with ARRA illustrates some of the features of the 

Clean Water State Revolving Fund that have made it so successful 

in general. The Clean Water Fund utilizes a project priority list, a 

comprehensive list that in Minnesota’s case we have 381 projects 

for about $2.1 billion. Each year we get over $400 million of requests for projects to move ahead to construction. We know that 

not all of those can go ahead because there will be delays for various reasons, so we purposefully put more projects on the list than 

we expect to go ahead, and we use our ability to sell AAA-rated 

revenue bonds as the flexibility of that to provide funding for the 

projects that are able to go ahead. 

When our board approved our intended use plan in the summer 

of 2008, at that time the economy was already slowing down; and 

they recognized the importance of putting more projects on the list 

to give as many of us an opportunity to move ahead. Because of 

that X, we put five times as many projects on the list as we typically fund; and, because of that, we were well positioned to fund 

the ARRA projects when the money came through. 

Mr. Chairman and Members, thank you for your strong support 

of the Clean Water State Revolving Fund. We look forward to 

17 

working with you on reauthorization of the program in the future, 

and I would be happy to answer any questions. 

Mr. CUMMINGS. [presiding]. Thank you very much, Mr. Freeman. 

We will now hear from Mr. Stephen Wright, the Vice President 

for Wright Brothers Construction Company, Inc., representing the 

American Road and Transportation Builders Association. 

Welcome. 

Mr. WRIGHT. Mr. Cummings, I am Steve Wright, President of 

Wright Brothers Construction Company in Charleston, Tennessee. 

I am here today representing the American Road and Transportation Builders Association where I serve as the Southern Region 

Vice Chairman. 

Wright Brothers was founded in 1961 by my father and my 

uncle. Our company performs a variety of highway and heavy construction services. We currently have projects under way in Tennessee, Alabama, Georgia, and North Carolina. 

Mr. Chairman, the Recovery and Reinvestment Act’s transportation investments have been a resounding success. Its impacts, 

however, cannot be truly appreciated without understanding what 

our sector faced prior to the measure’s enhancement. 

The U.S. transportation construction market had been in a 

steady decline since 2007 due to State budgets, the general economy, and an increasing material crisis. The continued recession 

made this bad situation worse. Highway contractors laid off almost 

26,000 employees in 2008 and early 2009. In fact, my company’s 

employment peaked in 2008 at 350 workers, and it has since fallen 

by 34 percent, due largely to declines in the private construction 

market. 

Going into 2009, we faced a severe recession, uncertainty about 

the Federal Surface Transportation program reauthorization and 

continued State budget difficulties. Not surprisingly, this made for 

a very sobering outlook. 

The one bright spot for our sector was the Recovery Act’s transportation investments. My written testimony includes substantial 

information that describes the exemplary pace at which these 

funds have been put to use and their real-world impacts. 

I would like to highlight one point to demonstrate the contribution of the Recovery Act’s transportation investments. 

Figure 2, on page 4 of my testimony, compares the transportation 

contracts awards for 10 months prior to the enactment of the Recovery Act with the awards 10 months after these investments hit 

the marketplace. This information is significant because contract 

awards are a leading indicator of future construction activity. 

Following the Recovery Act, highway construction awards increased 19.4 percent. Bridge contracts are up 14.6 percent. Airport 

awards have grown 61.2 percent. Transit contracts ballooned 216 

percent. 

Because there are a variety of U.S. transportation construction 

investment sources, it is difficult to attribute the increase of contract awards solely to the Recovery Act. However, it is abundantly 

clear that the 22-year negative transportation construction market 

trend began reversing itself in May of last year. This is the same 

point at which we saw Recovery Act funds begin supporting 

projects. As figure 3 demonstrates, this positive trend is continuing 

18 

with highway contract awards growing this January, while awards 

in January of 2008 and 2009 had declined. 

To put a real face on this data, Wright Brothers won four separate Recovery Act contracts. Three of these are small projects in 

Tennessee that have allowed us to save the jobs of one five-person 

concrete crew. We also have a large capacity and reconstruction 

project in Alabama that has allowed us to hire 19 people and has 

saved at least that many jobs. We are expected to add more people 

as we get further into this project. Half of the project is subcontracted, so we represent only a portion of its job impacts. 

The leadership at the Alabama Department of Transportation 

has said that, while this project was a priority for them, they would 

not have had the ability to move it forward without the Recovery 

Act. 

The success of the Recovery Act notwithstanding, the transportation construction industry continues to struggle with unemployment at record levels and great uncertainty about future State and 

Federal transportation investments. I can state with all certainty 

that, as bad as things are right now, they would have been much 

worse without the Recovery Act. 

To sustain and bid on the Recovery Act and re-energize the longterm growth potential of the United States, we must not lose sight 

of the need to enact a 6-year surface transportation authorization 

bill at the investment levels proposed by this Committee as soon 

as possible. 

Thank you for your leadership on the Recovery Act, for the recent transportation extension and your ongoing efforts to deliver a 

multi-year reauthorization bill. 

I appreciate this opportunity to testify, and I am happy to answer any questions. 

Mr. CUMMINGS. Thank you very much, Mr. Wright. 

We will now hear from Mr. Jeff Wharton, President ofIMPulse 

NC LLC. I guess it is in North Carolina? 

Mr. WHARTON. Yes, sir. 

Mr. CUMMINGS. Thank you very much for being with us. 

Mr. WHARTON. Well, good afternoon, Mr. Cummings. 

My name is Jeffrey Wharton, President of IMPulse NC. Thank 

you for this opportunity to present testimony regarding the job creation and retention impacts of the public transit investments included in the American Recovery and Reinvestment Act. 

As a brief background, IMPulse is an overhead contact hardware 

manufacturer located in Mount Olive, North Carolina, with 30 direct employees, plus a large nationwide sub-supplier base. Our 

product, which dates back to 1888 through the Ohio Brass Company, is used to support aerial wires that feed power for light rail 

trains, streetcars, vintage trolleys, and electric trolley buses. IMPulse is a Marmon Group/Berkshire Hathaway Company and is a 

member of the American Public Transportation Association. 

My testimony today is on behalf of my company. 

I am pleased to report that, in 2009, my new project business 

grew 35 percent; and, in 2010, I expect sales to grow another 10 

to 15 percent. I do not believe that my business would have survived without the investment in public transportation by way of 

the ARRA stimulus funding. Our projects include the Los Angeles 

19 

Gold Line extension, the Denver West Corridor line, the Pittsburgh 

North Shore Connector, and the Portland Streetcar Eastside Loop 

project, among others. 

I recognize that most of these projects were already in the funding pipeline as new capital projects; and as the program and 

project authorizations under SAFETEA-LU approached expiration, 

ARRA funding served as an important bridge between that bill and 

the next authorization bill and helped expedite these projects. 

In talking with my supply partners, I have come to learn how 

much they have relied on my business due to the tough economy. 

Shirley Gaines, President of Synehi Castings, a woman-owned 

business located in Greenwood, South Carolina, told me that IMPulse has kept her business afloat. With the decline in the automotive industry, she was able to keep 36 jobs through the orders 

received by IMPulse and the ARRA-funded projects. 

John Petro, a third-generation owner for Warsaw Foundry in 

Warsaw, Indiana, has been able to maintain 44 jobs through the 

transit orders directly from IMPulse. John stated that the only 

sales growth in his business that he has experienced has been from 

the IMPulse transit orders. 

Mac Flynn, plant manager for the Brost Foundry that operates 

in Mansfield, Ohio, and in Cleveland, attributes over 29 percent of 

his business to IMPulse, helping to keep 50 to 60 employees working. 

Lastly, Korns Galvanizing Company, located in Johnstown, 

Pennsylvania, has been able to keep 44 jobs through IMPulse orders and the quick implementation of economic stimulus and jobs 

funding for public transit. Previously, they had relied mostly on 

commercial work; and, today, IMPulse is one of the larger accounts. 

I could go on and on with suppliers in Texas, California, Illinois, 

Washington State, and others. As you can see, IMPulse’s transit 

sales have impacted businesses throughout the U.S., and the associated ARRA funding has directly contributed to saving hundreds 

of jobs. 

Let’s face it. Transportation is the backbone of the economy, and 

public transit is an incredibly important aspect of our national surface transportation system. Public transit creates great jobs. 

I want to make substantial long-term investments to grow my 

business and to develop new products and technologies that will 

improve public transit options, but I need a long-term vision from 

our elected officials. 

I truly wish to thank Chairman Oberstar and this Committee for 

your steadfast leadership in advancing transportation investment 

through ARRA and your efforts to pass a new surface transportation authorization bill. 

Let there be no mistake. There is a cliff fast approaching if we 

do not continue to invest and recognize the immediate and invaluable benefit that public transit provides our economy, quality of 

life, and the environment. 

I thank the Committee, and I look forward to answering any 

questions you may have. 

Mr. CUMMINGS. Thank you very much. 

Ms. Veronique de Rugy. Am I close? 

Ms. DE RUGY. Yes, very. 

20 

Mr. CUMMINGS. We thought Mr. Oberstar would be in the chair. 

You know he speaks French. 

Ms. DE RUGY. I was told. 

Mr. CUMMINGS. de Rugy? 

Ms. DE RUGY. Yes. Sure. 

Mr. CUMMINGS. Is that close? 

Ms. DE RUGY. Yes, close. 

Mr. CUMMINGS. You are a Senior Research Fellow with the 

Mercatus Center at George Mason University. Thank you. 

Ms. DE RUGY. Mr. Cummings, it is an honor to appear before you 

today to discuss the allocation of the Recovery Act funds. My name 

is Veronique de Rugy. I am a Senior Research Fellow at the 

Mercatus Center at George Mason University, a research-based organization where I study budget and tax issues. It is in this capacity that I have been tracking stimulus dollars since last February. 

Using recipient report data from Recovery.gov and economic and 

political data from the Bureau of Labor Statistics, the Census Bureau, GovTrack.us, and others, I have compiled a series of facts 

about stimulus spending. My interest is simply to make use of the 

tens of thousands of stimulus recipient reports recently published 

on Recovery.gov and to put the aggregate information contained in 

those reports in a larger context. 

This report is the second of a series of reports, published on a 

quarterly basis, as new recipient reports are released each quarter. 

The data presented here covers the fourth quarter of the calendar 

year 2009 reports of Recovery Act contracts and grants only. The 

complete data set used for this report is available for download at 

Mercatus.org. You can find the details about my methodology in my 

written testimony, but, today, I will highlight some of the main results of my analysis. 

First, in this second quarter for which Recovery.gov reports are 

available, over 65,000 contracts and grants were awarded. The 

total spending reached over $170 billion—that is, roughly, $1 billion awarded per week—and an additional $13.6 billion reported 

received over the previous quarter. This is a sharp decline in 

spending compared to the $156 billion received in the previous 3 

months. At that rate, the government should be done awarding 

stimulus dollars by 2020. 

Second, the total number of jobs claimed to have been created or 

saved overall by the stimulus actually declined from last quarter, 

shrinking from about 634,000 to a little over 597,000 jobs. This job 

shrinkage could have resulted from changes made by the White 

House on how to count jobs. However, it goes to show how terribly 

difficult it is to account for net jobs created from stimulus spending. It also outlines the near impossibility to account for how many 

jobs were saved by the stimulus funds. 

Third, I found, for every $286,000 spent, one job was claimed to 

have been created. 

Fourth, the main argument for enacting the $787 billion stimulus bill was that, if the government spends money where it is the 

most needed, it would create jobs and trigger economic growth. 

Hence, we would expect the government to invest relatively more 

money in districts that have the highest unemployment rates and 

less money in districts with lower unemployment rates. 

21 

Controlling for the percentage of the district employed in the construction industry, which is often used as a proxy for the vulnerability to recession of a district, we find no statistical correlation 

between all relevant unemployment indicators and the allocation of 

funds. This suggests that unemployment, so far, has not been the 

factor leading the awards. Also, I found no correlation between 

other economic indicators, such as income, however you want to 

measure it, and stimulus funding. 

Finally, on average, Democratic districts received one-and-a-half 

as many awards as Republican ones. Democratic districts also received two-and-a-half times more stimulus dollars than Republican 

districts. Republican districts also received smaller awards, on average. 

There are more Democratic districts than Republican districts in 

the Congress. This is why then I checked for the correlation between political indicators and stimulus funds. I found that, with 

the exception of the district’s party’s affiliation, which is whether 

the district’s representation was Republican or Democrat, there is 

no effect of political variables on the allocation of stimulus funds. 

So how much does party affiliation matter? While the effect is 

significant, because of the specifications of the model, more confidence should be placed on the relationship between the two variables than on the quantification of that relationship. In plain 

English, it means that, while I am confident that whether the district is represented by a Republican or a Democrat matters for 

funding, we are not sure what the weight of this particular factor 

was compared to others that went into the decision of spending the 

money, such as the formula, for instance. 

Thank you very much for the opportunity to testify before you 

today. I am looking forward to answering your questions. 

Mr. CUMMINGS. Thank you very much, Ms. de Rugy. 

Let me just ask you something. I just asked staff, you know, 

what you were basing those figures on. I am just curious. You 

know, a third of this money went to tax cuts, right? 

Ms. DE RUGY. The report that I published is based on the data 

that is available on Recovery.gov. This is the data reported by recipients of the stimulus dollars for contract and grants exclusively. 

Mr. CUMMINGS. Okay. I see. I see. 

When we talk about stimulus, I mean, almost two-thirds of the 

money went to two things, one, to tax cuts and, two, to helping 

States address their issues and keep policemen hired and folks 

hired and that kind of thing. So I guess, with what you have got 

left, you are talking about the actual contracts themselves. I see. 

Ms. DE RUGY. Yes. 

Mr. CUMMINGS. All right. Thank you very much. 

Ms. DE RUGY. You are welcome. 

Mr. CUMMINGS. Ms. Richardson, you indicated in your testimony 

that States have $80 billion of ready-to-go projects if additional 

funding were made available. What do you mean by ′′ready-to-go′′? 

How long would it take for those projects to actually begin construction, and would the majority be repayment projects? 

Ms. RICHARDSON. By ′′ready-to-go,′′ when we did the survey, we 

defined that similar to what the Recovery Act had been and said 

that they could be obligated—using that Federal definition of 

22 

′′obligation,′′ they could be obligated within 120 days of enactment. 

We have done some additional analysis of that, and about half of 

those could actually be put to contract within the first 90 days following enactment, which would be even a more aggressive time 

frame. 

With types of projects, the $80 billion has crossed all modes. So 

it is not just highway. You know, it is also aviation and trails and 

transit and other kinds of projects. On the highway side, certainly 

a fair amount of it or a certain amount of it would be in the resurfacing and preservation of the existing system, but there is also a 

mix of projects that would be expansion or the creation of some 

new lane miles. 

Mr. CUMMINGS. Now, you discuss a number of direct on-project 

jobs among the States made possible by the Recovery Act expenditures. Has AASHTO tracked the total DBE participation across the 

States? 

Ms. RICHARDSON. I don’t know if AASHTO has, but I do believe 

that that is being tracked as part of the reporting that we are 

doing either to the Federal Highway Administration or to GAO or 

to someone like that. So that is being tracked. 

We always track that, frankly, on all of our projects. We track 

the percentage that we have achieved, and that data is out there 

for that related to the Recovery Act. I don’t have that number in 

my head, but it is available. 

Mr. CUMMINGS. All right. Thank you. 

Mr. Freeman, have other States provided principal forgiveness, 

as you have done, to your knowledge? 

Mr. FREEMAN. Mr. Cummings, yes. All States have used the principal—the ARRA funds that went to Clean Water State Revolving 

Funds required a minimum of 50 percent be provided as principal 

forgiveness. 

Each State has done that a little differently. In our State, we 

have affordability criteria; and we have used some State funds in 

the past to deal with affordability problems. That is where we directed most of our principal forgiveness funds. I think that is a 

similar experience with other States, but each State has—and that 

is kind of the strength of the Clean Water State Revolving Fund, 

is that each State has some flexibility to design the criteria and the 

procedures to best fit their needs. 

Mr. CUMMINGS. Do you know what has been the experience of 

other States with that process? Do you have any idea? 

Mr. FREEMAN. I don’t have the numbers from other States. I 

know that all States did meet the 1-year—the requirement to have 

the funds under contract and under construction within the 1-year 

period of time and, as part of that, had met all of the principal forgiveness requirements as well. 

Mr. CUMMINGS. Now, is this something you have done in the 

past? 

Mr. FREEMAN. With some State programs, we have provided 

some additional subsidy for communities that have affordability 

problems. We have found that, for smaller communities in particular, the costs for wastewater treatment infrastructure can easily go over $50, $60, $70 a month per household. At that rate, communities just can’t afford to move ahead with projects without 

23 

some additional subsidies, so we have done that with some State 

funds. The principal forgiveness through the ARRA funding gives 

us another tool and a significant share of those funds to be able 

to meet those needs. 

Mr. CUMMINGS. Mr. Miller, you indicate in your testimony that 

you used 10 percent of your allocated Recovery Act funds for a onetime operating assistance infusion; is that right? Is that what you 

said? 

Mr. MILLER. That is right. 

Mr. CUMMINGS. What will happen to your operating budget when 

this infusion is no longer available? 

Mr. MILLER. Well, Mr. Cummings, that is a very good question. 

You know, we are hopeful that the economy will start to improve 

and that some of our other sources of revenue will improve, but we 

certainly would be supportive of additional authorizations to use 

some of our other Federal funds or additional stimulus dollars, 

should they be allocated in the same way. 

Mr. CUMMINGS. You also indicated that you have purchased new 

buses with the Recovery Act funds; is that right? 

Mr. MILLER. That is right. 

Mr. CUMMINGS. I know that purchases have been common with 

recovery funds. You said that you have taken delivery of your new 

buses, but have other transit agencies experienced delays in getting 

buses, given the large number of orders that they have placed? Do 

you know? 

Mr. MILLER. I mean, I have heard that we are very lucky in that 

we have already received the delivery just 2 weeks ago of our buses 

and that some other transit systems have not received theirs. But, 

you know, even under normal times, it takes a year to a year and 

a half to deliver buses. So I have not heard of any particularly long 

delays in receiving buses, and they are already out on the streets, 

driving around Des Moines, Iowa, right now. 

Mr. CUMMINGS. Finally, let me just ask you, Mr. Wright—I just 

have two questions, and then the chairman will take over. 

Mr. Wright, what are the trends in State transportation budgets 

in 2010? Are the States able to afford to maintain their existing 

systems or is even maintenance suffering in this economic environment? 

Mr. WRIGHT. Mr. Cummings, the State I am most familiar with 

is Tennessee, and their program has evolved into, basically, a 

maintenance-only program. They have almost no funding available 

for new capacity. 

Mr. CUMMINGS. So they are just basically maintaining? 

Mr. WRIGHT. That is right. 

Mr. CUMMINGS. Are there any specific changes to the metropolitan planning process that you are advocating for, say, the next reauthorization? 

Mr. WRIGHT. I would encourage anything you can do to simplify 

the process. It takes too long to get a project from creation to contract where we actually begin to work on it. 

Mr. CUMMINGS. Well, I will tell you—and I know he will tell you 

about this—our chairman has been trying to figure out how to do 

that, how we can go about doing what you just said. It has not 

been easy, but we are trying to figure it out. With the reauthorizaVerDate Aug 31 2005 12:16 Jul 21, 2010 Jkt 000000 PO 00000 Frm 00117 Fmt 6633 Sfmt 6633 P:\DOCS\55807.0 KAYLA
24 

tion he is proposing, I think you will be pleased with some of the 

things in there because it goes a long way towards what you are 

talking about. 

Mr. Chairman. 

Mr. OBERSTAR. [presiding.] To extend the conversation you just 

had with Mr. Cummings, the chairman of our Subcommittee on the 

Coast Guard, we established in this bill that has been reported 

from Subcommittee an Office of Project Expediting in the Federal 

Highway and the Federal Transit Administration. 

It is intolerable that it takes 3 years to do, under current law, 

a simple mill and overlay, go over and ground the surface of a 

roadway, reprocess it, and put it back in place, or that it takes 14 

years from idea to ridership for a transit project. That is way too 

long. Bond issues run out. Costs escalate. There have been some 

experiences of up to 50 percent cost increases over the time of a 

transit project. That is just intolerable. 

We have to end this sequential process of endless reviews and 

turn that on its side and have these reviews done concurrently 

with the transformation we spell out in this legislation and craft 

for the future of transportation—do those reviews concurrently, be 

able to do transit projects, new starts and extensions of existing operations in 3 years instead of 14 years. 

The system we have today is new starts, slow starts, and no 

starts. That is not serving the needs of transportation or reducing 

congestion in America’s major metropolitan areas. We have to move 

much faster and put people to work and projects under way much 

faster, and we will do that with this legislation. 

The ARTBA has made a great contribution to our process, to the 

legislative language. Mr. Luane has been like a Marine Corps drill 

sergeant in helping us get this done. So, yes, we are very keen to 

get this bill moving again. 

We reported this document from Subcommittee in June of 2009. 

Unfortunately, the Senate thought they needed 18 months. The administration said they wanted 18 months. I said that delay is the 

enemy of progress. That is way too long. We have to move fast. 

In the stimulus, AASHTO, transit agencies, the contractor community, the Associated General Contractors, the Road and Transportation Builders, the building trades, and the truck drivers have 

all shown that, given deadlines, they can perform. They can meet 

those deadlines. They can put people to work and projects under 

way in much shorter time frames than we have done in the past. 

So we are taking those lessons and incorporating them into the future of transportation, but we also need a follow-on to the stimulus. 

There are 30 States that have notified this Committee that they 

will be unable to provide their full 20 percent match under the 80- 

20 Federal-aid Highway Program because the revenues are down, 

because their tax revenues are down, because their gas tax revenues are down. Those 30 States represent 70 percent of the population of the United States. 

The Associated General Contractors did a survey of their top 400 

firms, and they came back to the Committee with a report that, 

when the stimulus runs out, they expect to have 40 to 50 percent 

layoffs because the private sector financing for what the trade calls 

25 

the ′′vertical projects′′ isn’t coming back. Investors simply are not 

making the investments that they were making. 

Knife River told me last year that, in 2007 and 2008, nearly 80 

percent of their work was in the private sector—is that right, Ms. 

Fisk? 

Ms. FISK. I believe it is close to that number, yes. 

Mr. OBERSTAR. —by last summer. Because of the deterioration of 

the economy, the financial meltdown, most of those general contractors were doing 60-plus percent of the work in the public sector. 

But we have to sustain the existing jobs and investments and carry 

that so that the rest of the economy can catch up and so that the 

private-sector investments that had been made in the past can continue to be made in the future. We need to get through this summer. I think this one more summer of stimulus will set the stage 

and move the country forward. 

Unfortunately, while we passed our legislation to fully fund the 

States’ 20 percent share of the Federal highway program in December, the Senate has not done that. They have only passed the extension of current law through the end of this fiscal year and 3 additional months. That is not sufficient. That is not a good service 

to the country. Every witness that we have had over these past 12 

months of hearings has said we need an additional investment in 

transportation and other infrastructure projects to carry us 

through until the private sector has made its recovery and then we 

will see a return. Meanwhile, we have got permanent investments 

and improvements for the future of our transportation system and 

our wastewater treatment system. 

Now, Mr. Freeman, you and Terry Coleman have done outstanding work, as I said, at the outset. You are 25-year professionals. You have been at this program for a long time. What lessons learned from the stimulus would you offer for the Committee 

that we can apply to the future of the State Revolving Loan Fund 

that has already passed the House but that, again, is awaiting action in the Senate? 

Mr. FREEMAN. Thank you, Mr. Chairman, for those kind words. 

The Clean Water State Revolving Funds, of course, are unique 

in that, first of all, these are cities that are building these projects, 

and we are providing the financing rather than doing direct contracting. The Clean Water Revolving Funds operate from a comprehensive priority list, so there are always projects in the pipeline 

that are in various stages of development. The fact that these are 

revolving loan funds rather than straight grants means there is an 

ongoing stream of repayments. The money is always revolving, so 

projects are continually moving through the processing, being funded, and the additional Federal capital and State matching funds 

allow us to leverage those funds and to generate additional lending 

capacity. 

But the key, I think, is that, for the cities that are developing 

these projects and moving them through the process, they need 

steady and predictable funding. They need to know the money will 

be there when their projects are ready, and they need to have a 

clear sense of what the requirements will be. So we are very much 

in favor of the proposed reauthorization of the program. 

26 

We are a little troubled with the 2010 appropriation, because it 

imposed some additional requirements that were not predictable 

and became somewhat disruptive and difficult for the cities that 

were already in the pipeline, for projects that were already bid and, 

in some cases, already under construction. So that is a difficult way 

to fund the process, and certainly a reauthorization bill that will 

again restore kind of the predictability and the steady funding for 

the program will be—you know, we are very much supportive of 

that, and we appreciate your efforts on that, and we will do anything we can to help. 

Mr. OBERSTAR. How were you able to manage the balance of loan 

funds with grant funds? The SRF is a loan program. We provided 

part of the funds as grant money and part as loan funds, and you 

were able to—not just you but your agency was able to leverage 

those dollars to create more funding, including State funds appropriated by the Minnesota legislature, and you were able to leverage 

those into a significantly greater investment than what otherwise 

would have been the case. What did you do? You had some creative 

financing going. 

Mr. FREEMAN. Mr. Chairman, Minnesota is one. I think there are 

approximately 35 or so States that operate their Clean Water Revolving Funds as leveraged programs. 

In simple terms, what that means is we are using the Federal 

capitalization funds and the State match as kind of the seed money 

and then selling, in the case of Minnesota, our AAA-rated revenue 

bonds. They are not backed by the State. They are Minnesota Public Facilities Authority bonds. They are backed by the repayment 

stream of all the loans that we had made previously. 

So using that leveraging ability allows us to give a larger number of projects on the priority list kind of the green light to move 

through the engineering design work, the approval process, and 

then we can have the money available when their projects are 

ready rather than those projects waiting for us to tell them, okay, 

now you can start. They are always moving and always developing 

those projects, and we are able to use our leveraging to have the 

money available when they need it. 

Mr. OBERSTAR. Do other States have a rating system such as the 

Minnesota Public Facilities Authority? If I recall rightly, you 

ranked the projects 1 through 263 on the wastewater treatment 

side and 1 through—what was it?—112 or 113 on the drinking 

water side. By need locally, by the readiness to go to bid and by 

the local financing capability in place, are there other States that 

have similar rating systems? 

Mr. FREEMAN. Yes, Mr. Chairman. All States operate from that 

priority list. That is part of the requirement and the framework of 

both the clean water and drinking water State Revolving Funds. 

In our case—and, actually, those numbers have increased quite 

a bit since, I think, the last time we provided you a list. We now 

have over 280 projects on the clean water list for about $2.1 billion. 

The drinking water list, I think, has close to 300 projects as well. 

So the needs are certainly there. 

We rank those projects—actually, we don’t. Our partners with 

the Minnesota Pollution Control Agency ranks those clean water 

27 

projects based on environmental and public health factors, so that 

is the ranking that we follow. 

Then we work with communities to identify the ones that have 

completed the preliminary planning work and will be ready to go 

to construction, and that is the list that we take then and develop 

the intended use plan from so that all of those cities know, if they 

get to reach a certain point where the planning is done, they can 

then move on, and we will put them in a fundable range on our 

intended use plan and have the money available when their 

projects are ready. 

Mr. OBERSTAR. Very good. 

In our reauthorization of the State Revolving Loan Fund program, we require States to develop management plans and the 

ranking of projects and to develop a long-range program of investment. In using the criteria that you just cited, we hope that the 

Senate will act on that legislation, which is a $15 billion authorization over the next 5 years. I think it is far less than what the Nation needs, but it is responsible funding, and we know that it will 

be fully offset. 

Ms. Richardson, in the Surface Transportation Program, we had 

a two-part requirement for projects to get under way in 90 days 

and others in 120 days. Initially, the State DOT said, oh, that will 

be too difficult for us to meet. But, in the end, all State DOTs have 

far exceeded their original—they have underestimated their own 

ability to perform. 

Now, what lessons are there to be drawn for the future of transportation from your stimulus experience? 

Ms. RICHARDSON. Well, a couple come to mind based on your 

comments. 

One, I think that we cannot underestimate how much work there 

is that needs to be done in the transportation infrastructure in this 

country. So when we go to States and other jurisdictions and say, 

what projects do you have, there is a considerable backlog and a 

lot of needs out there. So I think that there will always be a pool 

of very good projects for us to choose from, whether it is from our 

regular funding or from any special funding. 

The second lesson is the one that you highlight, and that is 

maybe we underestimated our own abilities a little bit. But, you 

know, you are always concerned when you hear time frames like 

that because we are used to longer time frames, but I think, when 

asked to change our paradigm and look at things a little differently, we all were able to come through and deliver in that type 

of time frame. The 120 days to obligation, everybody met. 

I know, as there were discussions about a follow-along stimulus 

in the jobs bill, there was concern that that had language in it that 

said 90 days to contract, but, in fact, when we did the survey of 

States to find out what other ready-to-go projects were out there 

and when we identified over 9,800 projects at $80 billion, I am told 

that somewhere around half of those could actually get to contract 

within 90 days. 

So I think we have learned that we can—with the pent-up demand that is out there and with the kind of work that needs to be 

done just to preserve this system from crumbling, there is certainly 

28 

enough work out there that we could do it quickly, whether it is 

120 days to obligation or 90 days to contract. 

Mr. OBERSTAR. Well, those are important lessons learned. 

The Office of Project Expediting that we will include in this bill 

that has been already reported from Subcommittee will take those 

lessons learned and apply them and expedite the process so that 

we are not doing multiple reviews in sequence that delay project 

delivery. It is not to set aside any environmental concern or other 

permitting requirements of a host of government agencies. Townships and sewer boards and the Environmental Protection Agency 

and the National Trust for Historic Preservation all have a permit 

responsibility, but they can be done concurrently rather than sequentially. 

Ms. RICHARDSON. Absolutely. 

In fact, when we looked at that in our State in the past decade, 

we termed it the ′′can do′′ process, ′′can do.′′ It was to do exactly 

that, to see where in our process we could have things running in 

parallel, rather than sequentially, so that we would take considerable chunks of time out of that lengthy process. 

Mr. OBERSTAR. Well, that is where we want to go for the future. 

Now, what is the situation in Iowa? I mentioned 30 States have 

notified the Committee. Iowa was one of those. Are your highway 

funding prospects looking better or the same as earlier this year? 

Ms. RICHARDSON. Well, I think that, like all States, the economy, 

of course, is affecting our revenue streams, and both in terms of— 

our revenue at the State level comes from fuel taxes and then also 

fees and new vehicles purchased, on their registration fees and 

some fees at the time of purchase. When the economy is not as 

strong, people are not buying as many vehicles nor driving them 

as much, so we certainly have a lag in our revenues from what we 

were projecting. 

I believe that our legislature, at the State level, 2 years ago took 

on the hard task of looking for additional State revenue, and it 

passed a piece of legislation called TIME-21, which is bringing 

more revenue at the State level into the transportation fund, the 

Road Use Tax Fund. It is just that that is ramping up over about 

7 or 8 years. So our legislature has put in place something that will 

bring some additional State funds in gradually over the next few 

years, and I think that will help us continue to have enough match 

for Federal funds. But it is touch and go, and there are other 

States in which it certainly is already a problem. 

Mr. OBERSTAR. That is why we need to get this bill passed—— 

Ms. RICHARDSON. I agree. 

Mr. OBERSTAR. —and the long-term funding mechanism—— 

Ms. RICHARDSON. Yes, I could not agree more. 

Mr. OBERSTAR. —and an additional, maybe, 6-month stimulus 

but also significantly more revenue. 

In this legislation, we expressly prohibited project-specific designations known as ′′high-priority projects.′′ Each State has a ranking process that they have followed. So you made selections of 

projects based on readiness—that is, meeting the criteria of the 

Act, which is through right-of-way acquisition, the environmental 

impact statement completed, the design and engineering down to 

final design, ready to go to bid, provided the money was available. 

29 

Is that essentially the process that Iowa has used and that other 

States have used? 

Ms. RICHARDSON. Yes. 

Of course, there were other criteria that we paid attention to. For 

example, economically distressed areas and making sure we identified those, and we tried to overlay that on our selection process as 

well as making sure that we had a good blend of projects geographically, urban and rural. I think all States paid attention to 

those things. They were in the bill. 

We are very fortunate in Iowa that the process we traditionally 

use, that we were able to use for the Recovery Act, is one that is 

very collaborative with our local partners—the metropolitan planning organizations and the regional planning agencies. We already 

work in concert with them, and they help identify projects. We try 

to have a little bit more local input into helping to define some of 

the projects. That process serves us very well, and it was what, I 

thought, helped Iowa really jump the gun and get going very quickly because we had already talked with those local partners. They 

had helped identify priority projects. 

We had all of ours at the State level, and that meant that we 

had that priority list of projects ready to go when you passed the 

bill. We would be in the same situation before. We have already 

done that. In case there is another stimulus, we have made sure 

we have got that priority list all ready to go. 

Mr. OBERSTAR. That is wonderful. That is very encouraging. Of 

every State DOT director I have to talked to—and I have had conversations with at least half, maybe more than half—30 of them 

are in the same situation. 

Mr. Miller, prior to the stimulus funding, what was the average 

age of your fleet? 

Mr. MILLER. Chairman Oberstar, like all of the systems, I have 

had a very old fleet. I think the average was somewhere around 9 

years, with the typical bus lasting 12. We are just very thankful 

for the stimulus dollars, because, with those, combined with the annual appropriations, our regular Federal dollars, we were able to 

buy, in this one order that is arriving this month, a sixth of our 

fleet or replace about 80 percent of our buses that were over their 

useful life. It has been fantastic. 

Mr. OBERSTAR. Do those new buses provide more passenger capacity? 

Mr. MILLER. Not necessarily more passenger capacity, but they 

break down on the side of the highway, which affects our—— 

Mr. OBERSTAR. Better reliability. 

Mr. MILLER. They break down, certainly, one-fifth as often or 

they cost half as much to maintain as those older buses. So, yes, 

they are a real boon to our system. 

Mr. OBERSTAR. So, just as on the highway side where we are replacing pavement and are making a better ride and drive for people, on the transit side, there is better equipment, a lower cost to 

operate, and a longer service life for the equipment. 

Mr. MILLER. Not to mention the environmental benefits, the 

cleaner engines—and we even have the hybrid bus. So the newer 

buses are beneficial in that area, too. 

Mr. OBERSTAR. Terrific. Thank you. 

30 

Mr. Wright, does the future of funding give you concern—that is, 

what I cited a moment ago about the general contractors being concerned that the private sector investments are not recovering as all 

would have liked and the funding continuing and perhaps even 

winding down from some of the stimulus by the middle of summer. 

What is the outlook from the contractor’s side, from the ARTBA 

side? 

Mr. WRIGHT. It is exactly like what you described earlier. My 

company’s balance of private versus public work has gone from 50/ 

50 to probably 80/20 now, you know, 80 percent being public work. 

The short term with the Federal Transportation bill not being—you 

know, being extended and extended and extended, you know, it 

gives us no faith or no belief that the workload is there. So we have 

not bought any equipment in the last couple of years. 

You know, our capital investment is just down dramatically. It 

has gone from the ability to plan your work, looking ahead, to just 

reactionary to what was absolutely required. When you have a 6- 

month extension, it is hard to go make a 6-year investment. 

Mr. OBERSTAR. That has Caterpillar worried, and it has the other 

equipment manufacturers concerned. 

It is a matter of concern and an astonishment to me that this 

time last year the United States had developed a new export product—used construction equipment. We were filling up containers, 

shipping backhoes and D-4 and D-8 cats and front-end loaders to 

China and India where they were making investments in their 

stimulus programs. 

China has committed 9 percent of its gross domestic product to 

stimulus, $540 billion limited to highway, port, airport, rail, and 

wastewater treatment projects. They are on track to complete an 

820-mile rail line from Beijing to Shanghai, which is the distance 

from Boston to Richmond on the East Coast of the United States— 

822 miles. You will be able to travel that distance in 4 hours with 

220-mile-an-hour, steel-on-steel passenger rail. They have made 

the investment in it, and this time next year there will be full ridership. That is between two megalopolises of 12 million people in 

Beijing and 16 million in Shanghai. The European community has committed $1.4 trillion over a 20- 

year period to upgrade its aviation, water, passenger rail, and highway infrastructure, including building a canal to link the North 

Sea to the Black Sea. That is 2,000 miles across the heart of Europe to move goods more efficiently and more effectively with less 

of an environmental impact and at a lower cost to shippers and 

consumers. 

We are just falling behind. Their plan includes an additional 

7,200 miles of high-speed passenger rail line in Europe. President 

Obama put up $8 billion for passenger rail in this country, but it 

is a drop in the bucket compared to what the European community 

is doing in addition to their already extensive and successful program. So here we come back to the point: Other countries have 

made these investments. They are stimulating their economies. 

They are having great short-term as well as long-term investment 

impacts. 

Now, you mentioned your concern about buying equipment. What 

amortization period do you have to look at as a contractor for, you 

31 

know, these pieces of equipment that I mentioned that are not inexpensive? You don’t just buy it on your credit card. You have got 

to figure out how you are going to pay for that long term, right? 

Mr. WRIGHT. You don’t put a $1 million crane on your credit 

card. We amortize most of our stuff on about 60 months, so it is 

approximately the life of the highway bill. 

Mr. OBERSTAR. Very interesting. So you really want to see a 

longer-term investment and greater stability and a continuity of 

funding? 

Mr. WRIGHT. Absolutely, sir. 

Just this week, there was a conversation in my office about 

should we buy two machines or should we rent them. We only have 

90 days’ worth of work for them. It is hard to make a 5-year commitment to that process when you cannot see any further than 

that. With an appropriate bill in place, you would at least believe 

you would have the opportunity to compete for a market that you 

know is there, that would give you the faith to go ahead and pull 

the trigger, for lack of a better way of saying it. 

Mr. OBERSTAR. What we have seen also in this stimulus period 

is that bids have been coming in 25 percent below original design 

estimates because there is so much competition in the marketplace 

and materials costs even have dropped in the U.S. during this recession period. Was that your experience as well? 

Mr. WRIGHT. Yes, sir, it is. There seems to be three to four times 

as many bidders on projects as people move from the private sector 

back to the public sector in their bidding process; and margins are 

very, very low. 

Mr. OBERSTAR. Now, Ms. de Rugy. 

[conversing in French.] 

Well, thank you very much for—— 

Ms. DE RUGY. I am not sure my mom is as happy about this, 

but—— 

Mr. OBERSTAR. We will translate this later for the reporters. 

President Sarkozy will be in the United States shortly. He, too, had a [French] Of $47 billion euros, which is roughly $60 billion, 

and their recovery plan has created jobs, has stimulated the economy, and has moved France ahead. But you make a good deal of 

reference in your testimony about party affiliation and political 

variables. You must be talking about something other than the programs of our Committee. 

Ms. DE RUGY. The way I looked at the numbers, I only—I mean, 

I only used the data from Recovery.org, and I compared them to 

other publicly available data, government data, and then I ran regressions. The spending that I am talking about covers, you know, 

some of the transportation money. So $10 billion exactly of that 

data that I looked at was spent through the Department of Transportation 

Mr. OBERSTAR. But these correlations of party affiliation and political variables and so on would surely have to be happenstance 

rather than deliberate? 

Ms. DE RUGY. Well, the only thing I can tell you for sure is that, 

when you look at the regressions, we can tell whether the district 

is represented by a Democrat or a Republican matters for the funding. What I cannot tell you is how much this factor has influenced 

32 

the decision compared to other factors, such as the formula or the 

unemployment in the States, even though, actually, my findings 

also find that the money does not seem to be allocated, guided, by 

the level of unemployment in the district. 

Mr. OBERSTAR. In our legislation, we specifically directed, as Ms. 

Richardson said, that priority be given to areas of highest unemployment as measured by the Economic Development Administration of the U.S. Department of Commerce, which has a map of the 

United States by county in which EDA certifies the unemployment 

level for each county and updates it monthly. 

And we wanted those dollars to go to the areas of highest unemployment, the areas of greatest economic distress. And, secondly, 

we wanted an equitable distribution of dollars so that not all the 

money would be used up in the major metropolitan areas, such as 

Minneapolis-St. Paul or Chicago in Illinois or Los Angeles in California. They could consume the State’s entire stimulus allocation in 

one major metropolitan area; that would not be right. 

And State departments of transportation are the ones who have 

made those allocations and they have distributed the funds. And, 

as Ms. Richardson said, they spent a good deal of time assuring 

that projects went to the areas of highest unemployment. 

So I would be very interested to see the backup details for your 

analysis. 

Ms. DE RUGY. Absolutely. All the data is available for download 

at the Mercatus Web site exactly for that reason, because we wanted to be absolutely transparent about—— 

Mr. OBERSTAR. Yes. 

Ms. DE RUGY. So we have put not only the data, the raw data, 

but also the regression that we have used and the result of the 

analysis. 

What I can tell you is the data that we have used for unemployment—so we have used two sorts of data. The first report that we 

did was for the first quarter of the money allocated. We used unemployment level in the districts, and we found that there was no 

correlation. 

The second time around, actually informed by after talking with 

a series of economists who just do econometrics all the time, they 

suggested that a better measure and a better way to assess unemployment level is to actually look at the variation of unemployment 

between time to actually get not only a sense of the unemployment 

level in absolute terms, but also how hit and hurt each given district was by the recession. 

And, again, we were using Bureau of Labor Statistics and Census Bureau data. I mean, these are totally official data. And we, 

again, no matter what type of unemployment indicator we use, we 

find absolutely no correlation. In fact, if I remember correctly, the 

coefficient that we used make it almost look as if it was done intentionally to not, even though I know it is not the case. 

But it is was quite stunning, because I assumed, considering the 

rationale behind the stimulus bill, that we would find a strong correlation. And we tested it many different ways. We used different 

methods. And you can—actually, I would be happy—you don’t even 

have to go to our Web site. I would be happy to even, like, send 

it to you. 

33 

Mr. OBERSTAR. That would be very helpful. 

So you did this on the basis of congressional districts? 

Ms. DE RUGY. Congressional districts, yeah. 

Mr. OBERSTAR. My congressional district, for example, is the size 

of the eastern seaboard from here to Connecticut. 

Ms. DE RUGY. So we controlled for the size. That is what regression analysis do, is to control for the size. 

Mr. OBERSTAR. And my district has the highest unemployment of 

the whole State. 

Ms. DE RUGY. But this is why we do regression analysis rather 

than just comparing numbers, is because it controls for all the variation there could be. 

Mr. OBERSTAR. And the funding in Minnesota is controlled by the 

department of transportation under a Republican Governor, who, if 

he were attempting to manipulate, would have avoided by district. 

But that is clearly not the case. He did not put his hand into it. 

He did not involve himself. 

I don’t know of any other States where Governors have attempted to—there is no evidence on the record that there has been 

any manipulation. 

Ms. DE RUGY. I am absolutely not judging intent. I am just looking at facts. In fact, this report was done—and it is called 

′′Stimulus Facts′′—to provide facts about the stimulus to you, Members of Congress, so you could actually decide what is happening. 

Mr. OBERSTAR. We would be concerned if there were any manipulation at the State level of these funds. 

Ms. DE RUGY. My data doesn’t look at intent. The only thing it 

looks at is results. And, again, this data is based on the data we 

found as reported by recipients of the awards and as posted on recovery.gov. 

Mr. OBERSTAR. Thank you. It is a very interesting correlation, 

and I would like to receive the entire body of data. 

Ms. DE RUGY. Absolutely. I would be happy. 

Mr. OBERSTAR. And I will review it myself. Merci. 

Ms. DE RUGY. Merci beaucoup, Mr. Chairman. I don’t know how 

to say that—— 

Mr. OBERSTAR. [Speaking in French.] 

Ms. DE RUGY. [Speaking in French.] 

Mr. OBERSTAR. All right, after that love affair in French. 

For the future of transportation funding, which has been the big 

obstacle in getting this bill moving, from time immemorial—that is, 

from 1956 forward—we have had the Federal Highway Trust Fund. 

In 1956, the Congress enacted a 3-cent user fee. President Eisenhower signed the bill into law. Three cents in 1956 represented 10 

percent of the cost of fuel, which was 30 cents a gallon. 

In 1982, President Ronald Reagan signed a 5-cent increase in the 

user fee. At the time, he said this 5 cents is budget-neutral; the 

users of the system are paying for their use of that system. And 

this 5 cents represents the equivalent of two shock absorbers in a 

year on your car. 

Fast-forward to 2009, and we have the President of the United 

States who says, ′′I made a commitment in the campaign that I 

wouldn’t raise your taxes,′′ we have Senators who say, ′′We can’t 

raise taxes in time of a recession.′′ 

34 

But, in 1958, the Bureau of Public Roads came back to the Congress and said, ′′That 3 cents isn’t sufficient. We need another 

penny increase in the user fee.′′ Congress passed it; this House 

passed it on a voice vote. You can’t pass the prayer on a voice vote 

today. 

We need to revive that spirit of investment in America’s future, 

just, as I cited a little bit ago, that the European community has 

committed a $1.4 trillion for their future to remain competitive in 

the world marketplace, as China is doing now, as Japan has done, 

as India is doing with their Golden Triangle, a $25 billion highway 

program. 

And we have to move our goods more efficiently in this marketplace. Look, UPS did a survey of their operations nationwide. For 

every 5-minute delay their trucks experience, they lose $100 million in overtime charges, for costs for their truck drivers, in late delivery fees for their customers. 

In the Minneapolis-St. Paul metropolitan area, an independent 

group did a survey of the cost of congestion. Among the companies 

studied was General Mills. They spend $692 million a year moving 

their Wheaties and Betty Crocker goods to market. But for every 

mile an hour their trucks travel below the speed limit, it costs 

them $2 million in overtime charges to their drivers and late delivery fees for their customers. 

There is a business cost to delay. Just try, anywhere in America, 

to get a plumber who will be there between 8:00 and noon. Plumbing contractors told us that they used to make eight or nine calls 

a day; now they are doing four. That means their business is less 

efficient. Because they can’t get through the congestion. 

So we have to make these changes. We have to deliver projects 

more expeditiously. We have to put people to work faster. We have 

to get goods moving more efficiently. We do this with freight movement corridors and a whole host of investments for major metropolitan areas of the country. But we have to finance—we have to 

have a $450 billion investment in America’s future of transportation, recommended by two independent national commissions. 

So what I am proposing for consideration is an idea that I will 

attribute to Mr. Basso of AASHTO, who many years ago worked on 

this idea for AASHTO. And at the time, I said, ′′Jack, that won’t 

work.′′ I have come back to him and said, ′′Jack, it has to work.′′ 

It is a modification of a bonding proposal. We would direct—we, 

the Congress, would direct the Treasury to deposit $130 billion in 

bonds, Treasury bonds, into the Highway Trust Fund to be repaid 

with revenues from the Highway Trust Fund out into the future. 

And we would delay the repayment for the first, perhaps, 4 years, 

giving the economy time to recover, at which time we would need 

to increase the highway user fee, probably by 2014, 2015, and 

begin repaying the Treasury bonds, capital and interest, at the 

Treasury rate of interest. That would give us, with a baseline of 

the current revenues into the trust fund, $450 billion over 6 years. 

Mr. Wright, what do you think about that? 

Mr. WRIGHT. I think it is a wonderful idea. Let’s get started. 

Mr. OBERSTAR. I am hitting you cold. You haven’t had time to 

see this or think it. But, from your perspective, a contractor, busiVerDate Aug 31 2005 12:16 Jul 21, 2010 Jkt 000000 PO 00000 Frm 00128 Fmt 6633 Sfmt 6633 P:\DOCS\55807.0 KAYLA
35 

ness operator, what do you think? Do you think it is a good, workable idea? 

Mr. WRIGHT. It sounds workable to me, sir, yes. I would order 

some equipment. 

Mr. OBERSTAR. Thank you. 

Mr. Wharton, what do you think here? You are on the firing line. 

Mr. WHARTON. Well, Chairman Oberstar, I think that it is definitely needed. As I mentioned in my testimony, we see a cliff, and 

unless there is a long-term solution, you know, there is going to be 

a lot more people looking for work and a lot of businesses closing 

down. So we need to act, and we need to act now. 

Mr. OBERSTAR. Ms. Richardson, you are a practitioner at the 

State level. What do you think? Is this workable? Can you work 

within that framework? 

Ms. RICHARDSON. Well, Chairman Oberstar, if you and Jack 

Basso say it is workable, I would hate to argue with either of you, 

the two of you together. 

It certainly sounds interesting. I have not heard that discussed 

and haven’t thought a lot about it. The idea of waiting 3 or 4 years 

for the economy to recover would be an appealing part of it, you 

know, would allow to appeal to some of the dissenters, in terms of 

increasing funding. 

I guess one of the other questions would be, is 15 or 20 cents 

going to be enough? But you guys have done the math. 

So I think it is very intriguing, very intriguing. 

Mr. OBERSTAR. Well, this is the first time it has been discussed 

in an open forum. I have tried it out on small groups here and 

there and economists. 

Ms. Fisk, Mr. Luna, what do you think about the future of transportation? 

Ms. FISK. Mr. Oberstar, Chairman, I believe that transportation 

is the backbone of United States. The Eisenhower system, set forth 

back then, really put the plantation down for us. And I think we 

need to move forward. And I think your bill, or proposal, there actually could very well work, and I support it. Thank you. 

Mr. OBERSTAR. Thank you. 

And, Florentino, mi amigo, go ahead, please. Do you think we 

need to make this kind of investment in the future of transportation? 

Mr. LUNA. Yes, it is necessary for everybody, for business. 

Mr. OBERSTAR. And if you had to spend another 10 or 15 cents 

on gasoline every time you filled up, knowing that it makes it possible to make the investment in a transportation system that will 

create employment opportunities, do you think it is worth it? 

Mr. LUNA. Yes, we have to. 

Mr. OBERSTAR. Thank you. 

Jeff Freeman, we don’t fund the wastewater treatment system 

like we do surface transportation, but, just as a consumer of the 

system, what do you think? 

Mr. FREEMAN. Mr. Chairman, I think it sounds like a very innovative idea. And, you know, actually, that is, tying it back to what 

I know more about, with the clean water revolving fund and wastewater financing, that was really—the key to the success of the program is it is an innovative and, sort of, a different approach to how 

36 

financing is being done for municipal wastewater treatment, setting up these revolving funds and using then the ability to leverage 

money. And, you know, in that way, I think your proposal is similar. And I am all for it. 

Mr. OBERSTAR. Thank you. 

Madame Rugy, you are an economist, I take it. 

Ms. DE RUGY. Yes. 

Mr. OBERSTAR. What do you think? 

Ms. DE RUGY. I think that the government doesn’t have any 

money, and, as you have mentioned, each time the government 

spends money, it needs to take it somewhere in the economy. And 

it makes it very hard to actually measure the return, the true return on investment of the dollars invested by the government. 

Fifteen cents, you know, might not seem like a lot to you, to me. 

This 15 cents is on top of the dramatic increase in gasoline prices 

that we have seen certainly in the last 10 years. So, sure, it is a 

marginal increase. But, more importantly, I really think that, you 

know, measuring the return on investment that we make is—I 

mean, just let me give you an example. 

I mean, measuring the performance of government action by how 

much it spends seems to me like the wrong measure of things. 

Like, I can go to the grocery store and spend $100. What matters 

is not so much that I have spent $100, but it is what I have bought 

with it, right? Whether, with this, I have been able to actually buy 

enough food to actually feed my family, and not just with junk but 

with things that are actually good for them. 

And I feel very often in all the conversations that go on is that 

unfortunately the performance of the government is measured 

more by how much it spends than compared to how much it produces. Even when we talk about how many jobs were created, not 

to mention that it is extremely hard to actually measure, as I have 

said in my oral testimony, but very often these measures are very 

arbitrary, and they don’t really quite look at how much economic 

growth has been produced. So, for instance, you can spend government dollars to create a job to dig a hole and create another job 

to fill this hole. Has this created economic growth? Maybe. Maybe 

not. 

And I think it would be—you have talked a lot about accountability. It would be very, very, very important to actually think 

very, very hard about how we can better measure the return on 

government dollars, our dollars. Because, again, for the government to be able to spend money, it needs to either tax it, borrow 

it, or print it. And all of these things have consequences for us who 

live in America. 

Mr. OBERSTAR. In the surface transportation program, however, 

as in our aviation program we have an Aviation Trust Fund, we 

have the Highway Trust Fund. The revenues collected at the gas 

pump do not go into the general Treasury of the Federal Government, they are deposited into the Highway Trust Fund, and the 

U.S. Treasury pays interest on those revenues deposited in the 

trust fund, and they are allocated and reserved only for highway 

and transit funding according to the formulas set forth by the Congress. 

37 

In 1956 our gross domestic product was $345 billion. Today it is 

$13 trillion. In 1956 there was one car per household. That car 

drove on average 6,000 miles a year. Today we have, on average, 

three cars per household that are driving 15,000 miles each. We 

had 1 million trucks in America in 1956. We have over 7 million 

trucks on our highways today. 

Our economy depends on mobility, on movement of people and 

goods. The Interstate Highway System and the National Highway 

System that which the Interstate is now included, have been the 

fundamental reasons for which our economy has expanded at the 

rate that it has grown. 

And we can track these figures with the annual reports of the 

Texas Transportation Institute that measures the cost of congestion. In the 75 major metropolitan areas of this country, congestion 

last year cost those metropolitan areas $86 billion. People are 

spending a week longer in their cars than they would if they could 

drive at posted highway speeds. They are buying four and five 

tanks of gasoline more than they would if they could drive at posted highway speeds. They are also experiencing higher maintenance 

costs on their vehicles because the road surface is in such poor condition that they are buying more shock absorbers and more tires 

and more other equipment for their vehicles. 

Where we improve the roadway, where we make it more efficient 

and safer and save lives, we are improving our economy. The Highway Trust Fund is different from other government investments is 

what I am saying, and so with the aviation program. 

Ms. DE RUGY. Can I add something? 

Mr. OBERSTAR. Yes. 

Ms. DE RUGY. I am not a transportation expert, but I have read 

a lot of reports about transportation funding. And I remember in 

particular a pretty groundbreaking report produced by the Urban 

Institute in 2004, I believe, where they actually looked at the economic literature on transportation spending and acknowledged that 

for a very, very long—in fact, economists agreed that investments 

in transportation was essential to economic growth for exactly the 

reason that you have talked about it, and that it had become not 

clear at all anymore. We seemed to have hit a threshold. 

However, maybe there are other ways to do everything you want 

to do, such as actually making the consumer pay more of the cost 

of the roads they are using. For instance, I will give you an example in France. The A-14 highway, which is a privately owned highway in Paris, that goes out on the west to Rouen and Caen and 

all these, it is privately funded and it has a fee; and it actually 

makes a profit and has actually allowed massive decongestion of 

the Parisian highway system, in particular on Fridays and weekends, Sunday, when people want to come in and out of the city. 

So maybe there is something to be said to actually look at France 

for this. And this is not a government solution. Obviously it was 

facilitated by the government that allowed, but it was privately— 

it is privately owned and it is actually working. Obviously a choice 

is given to people to pay that fee which is pretty expensive, but 

what it does. It actually allows to reduce the congestion on other 

roads. And that is where my expertise ends. 

38 

Mr. OBERSTAR. Same with the bridge in the south of France to 

Spain, massive, I have seen the video of the building of that beautiful structure, massive structure, but that was funded by tolls. Toll 

system. 

Ms. DE RUGY. So maybe you have to look outside of the way—— 

Mr. OBERSTAR. In fact we do that in this bill. We provide in our 

program for metropolitan mobility and access an array of funds for 

those 75 major metropolitan areas of the country who have the 

worst congestion, to use tax credit bonds, tax-exempt bonds, publicprivate partnerships, design-build authority, congestion pricing, 

tolling, but only for new capacity, not tolling existing roadways 

that have already been paid for by the users, and provide those 

metropolitan areas new financial tolling, new financial capabilities, 

as I said, and include tolling as you have suggested, because those 

are unique situations. 

But we are not going to allow tolling of the Interstate Highway 

System. It has already been built and paid for. 

Ms. DE RUGY. I was talking about something else. 

Mr. OBERSTAR. Yes. New capacity that is also a need that we 

have. 

Ms. DE RUGY. It is also possible that if you allow—if there is a 

profit to be made—and I believe that in cities that are very highly 

congested there is a gigantic profit to be made by a private developer—that they would make it independent of government bonds or 

incentives and that would save taxpayers’ money. 

Mr. OBERSTAR. The California legislature approved a toll authority for a private contractor under bidding process to build, as they 

proposed, two lanes of highway, California 90. The tolling company 

won the bid. They built 20 miles of this roadway and set the tolls, 

but few people used it. The tolling company was on the verge of 

bankruptcy. 

The State, however, was experiencing increasing congestion on 

the adjoining State highways with rising fatalities and injuries. So 

the State proposed to build two additional lanes of freeway in that 

corridor. The tolling authority sued the State because they had provision in the State legislative authorizing bill for exclusivity in the 

corridor, no competition from any other source. The State of California wound up acquiring the tolling authority and building two 

additional lane miles of roadway and retired the tolls and continued the roadway. So not in all situations does tolling succeed. But 

there is an appropriate place for it in the future of transportation 

and we provide for it in this legislation. 

Ms. DE RUGY. Maybe the fact that this private company was 

guaranteed no competition had to do—led to actually this company 

not to do the best job it could. 

Mr. OBERSTAR. No. The tolls were too high. That was the conclusion. 

Mr. Miller, for the future of transportation, we provided funding 

in this bill. Mr. Cummings asked you the question, What happens 

when the authority to use capital account moneys for operating expense—in our legislation, we provide authority for up to 10 percent 

of your capital account for smaller systems to use in their operating 

account and only 5 percent for the larger systems. There is considerable tension within the transit community over that provision. 

39 

What do you, what thoughts do you have, not necessarily percentage, but what is the balance, what is the proper balance here 

between operating account and capital account? 

Mr. MILLER. Well, Mr. Oberstar, it certainly is a challenging 

question for transit because, as you know, most of the smaller systems who have the ability to use all of their Federal funds for operations, at least all of—most of the smaller systems in Iowa under 

200,000 do use all of their money to offset local funding. Des 

Moines is an area over 200,000, so we cannot use our regular funds 

for operations, only capital, and we are saving jobs with the great 

ability to use 10 percent of our stimulus dollars. 

Moving forward, certainly again, like some of the other folks 

have testified, there is a cliff; these are one-time funding and we 

are not sure exactly how we are going to be able to handle it moving forward. We would certainly be supportive of a limited ability 

to use some of our Federal funds for options in another stimulus 

bill should that become available or longer term. 

Mr. OBERSTAR. This is part of the tension within our surface 

transportation program. At the beginning of the year, the first 15 

years of the Interstate Highway Program, the Federal funds were 

provided for capital account for construction. Only in the late, or 

only in the mid-seventies did Interstate maintenance become a category of funding. 

The principle was the Federal Government from with the Highway Trust Fund would provide 90 percent of the cost of building 

this new system of roadways—divided, access controlled, superhighways—and the States would then maintain it. But as the 

Interstate aged—and it is 1 percent of the highway mileage of the 

entire United States, it carries 26 percent of the traffic, of the vehicle miles traveled, go on our Interstate—it began to wear down. 

And, reluctantly, the Congress provided a limited amount of 

funding for Interstate maintenance that eventually grew to larger 

numbers as, on average, 15 percent of the Interstate needs to be 

rebuilt almost every year in order to keep pace with the growing 

demands on the system and the deterioration of the bridges. Half 

of the bridges of this country were built in the 1960s with Interstate Highway funds. 

So similarly with the transit. The original concept was Federal 

partnership with transit agencies would be to provide the capital 

to acquire the equipment, and the local entity would maintain it, 

and generally that was a 50/50 proposition. In some cases it is a 

little bit higher. 

We are moving into—we are now firmly in the post- Interstate 

era of transportation. We are in an intermodal era, long overdue, 

but now thinking intermodally, and so it is appropriate I think to 

provide some Federal—some level of Federal funding for transit operations. But we are still— it is still an open question of just how 

much that should be. 

We have set some goals in this legislation, but that will be a continuing dialogue. So I urge you and APTA to think more about that 

subject matter and help us move forward. 

Mr. MILLER. Yes. As I mentioned in my testimony, when I was 

out at public meetings these last few months, talking about our 

service reductions we were going to have to make because of the 

40 

drop in the economy, it was a very tough question to answer: Why 

are you buying buses and spending all this capital money and why 

can’t you save my route? 

And it is a tough question to answer to anybody, to explain that 

that is how we have to do it. So yes, as we are moving forward, 

I think there needs to be a balance. 

Mr. OBERSTAR. Exactly. In the stimulus we thought long and 

hard about that issue. And Bev Scott, the director of the Atlanta 

system, says it doesn’t make sense, on the one hand, for you to provide us funds to buy new buses and for us, on the other hand, to 

lay off drivers of existing buses in the system. So give us some 

flexibility to keep the existing system operating as well as replace 

our fleet and make it more more efficient and reduce our cost of 

operation. 

Well, all of you have been very thoughtful and very contributory 

in your responses and you have helped shape a view of the stimulus up to this point. 

My judgment is, it is doing what we intended; 1,200,000 jobs created, and more to come; 35,000 lane miles of highway improvement 

improved; 1,200 bridges restored, replaced, rebuilt; over 10,000 

transit vehicles acquired. That has created jobs in the production 

sector building those buses, building those rail cars. And we are 

seeing the effects all reverberate throughout our economy. We need 

to sustain it. We need to continue it. And I thank all of you who 

have made your contributions. 

Madam de Rugy, [speaking in French] And everyone else, you 

only get it in English. Thank you very much for your testimony. 

Keep up your great work, each in your respective ways. 

For those who are on the front lines, Ms. Fisk, Mr. Luna, keep 

driving, keep building. 

The Committee is adjourned. 

[Whereupon, at 2:10 p.m., the committee was adjourned.] 

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