Infrastructure in the News: February 4, 2013
BAF IN THE NEWS:
Transportation Issues Daily: Roundup of Reactions to LaHood Resignation
Building America’s Future Co-Chair Former Governor Ed Rendell said: “Secretary LaHood has been one of the stars of President Obama’s Cabinet. From his advocacy for investment in our roads, rails, ports and aviation systems to his incredibly effective implementation of the stimulus transportation funding, especially the TIGER grant program, he covered all the bases with passion and commitment. The mayors and governors of this country know that Secretary LaHood was a champion for their projects and their communities.
National Geographic: Video: Mayor Bloomberg champions the role of cities at WRI event
At Transforming Transportation 2013, a recent World Resources Institute (WRI) event , C40 City Chair and Mayor of New York City Michael R. Bloomberg discussed the role of mayors and cities in contrast to federal governments and international bodies:
Trib Live: Rendell backs Corbett’s gas tax plan
Gov. Tom Corbett's predecessor commends Corbett's idea to raise money for road and bridge maintenance through a higher tax on gas stations.
The Economist: Crying out for dollars
THE Industrial Canal Lock in New Orleans connects two of America’s highest-tonnage waterways: the Mississippi River—which handles more than 6,000 ocean vessels, 150,000 barges and 500m tonnes of cargo each year, as well as much of its grain, corn and soyabean production—and the Gulf Intracoastal Waterway, which runs from refinery-rich south-eastern Texas to Florida. Ships pass from one to the other via a lock that was built in 1921, and is 600 usable feet long, or half the length of a modern lock. Its replacement was authorised in 1956. Construction on the replacement was authorised in 1998, and then stalled by lawsuits. The most optimistic predictions of the Army Corps of Engineers, which maintains America’s inland waterways, see the new lock being completed in 2030.
USA Today: USA TODAY analysis: Water costs gush higher
A USA TODAY study of residential water rates over the past 12 years finds that crumbling infrastructure is forcing repairs from coast to coast, with costs more than doubling in 1 of 4 localities.
Washington Post: Gina McCarthy said to be top contender for EPA
Gina McCarthy, assistant administrator for EPA’s Office of Air and Radiation, at a House hearing. (Melina Mara - The Washington Post) Looks like the field of candidates to head the Environmental Protection Agency is narrowing — perhaps even down to one name: Gina McCarthy, now the assistant administrator for the agency’s Office of Air and Radiation, according to people familiar with the White House’s selection process.
New York Times (Associated press Reprint): Tentative Deal Averts a Port Strike
WASHINGTON (AP) — Port operators along the East Coast have reached a tentative deal on a new contract with the union for longshoremen, averting a possible strike that would have crippled operations at 15 ports, according to a federal mediator.
The Hill: Report: FAA slow to implement new airline-safety regulations
The Federal Aviation Administration (FAA) is struggling to implement safety rules enacted by Congress in 2010 after a deadly airplane crash, according to a report.
Transport Topics: Editorial: Investing in Infrastructure
While Rep. Bill Shuster (R-Pa.) isn’t the only legislator to recognize the problems with the fund, his open mind inspires hope that Congress is finally ready to give a number of ideas a good, hard look.
Portland Press Herald: America's highway bill coming due
WASHINGTON - Oil-rich Texas has built more highways and bridges than any other state, but over the next two decades it will fall $170 billion short of what it needs to keep the sprawling network in good repair.
Think Progress: Two Charts That Make The Case For More Infrastructure Spending
The Bureau of Labor Statistics reported today that the U.S. economy added 157,000 jobs last month, which is not enough to quickly bring down the unemployment rate. At the same time, America faces a huge infrastructure gap that is going to cost it 3.5 million jobs over the next decade.
The Atlantic Cities: Why People Choose Cars, Even When Mass Transit Would Serve Them Better
People don't always make rational decisions. The entire field of behavioral economics, with all its colorfully named biases and heuristics, is based on our irrationality. If that's not enough to convince you, then let us remind you that Here Comes Honey Boo Boo is a thing.
Philadelphia Inquirer: Corbett taking open policy points to budget address
HARRISBURG - For the first time since he was elected, Gov. Corbett is heading into his budget address this week hiding few, if any, political cards.
KIMATV.com: DOT budget crisis
YAKIMA, Wash.-- When interstates and bridges need repairs, the Department of Transportation has always been there. As more fuel-efficient cars hit the roads, the DOT is struggling to get enough money.
Wichita Eagle: Proposed Oklahoma passenger rail line could boost chances Heartland Flyer comes to Wichita
A Tulsa group is weighing a privately operated passenger train line between their city and Oklahoma City, potentially removing an obstacle for Wichita’s pursuit of the Heartland Flyer.
Transportation Nation: To Replace One Station After Sandy, A Cost of $600 Million
Three and a half years before Sandy, the NY MTA unveiled a new subway station, at South Ferry. The station would enable far faster turn-arounds for trains than the old station build a hundred years ago, speeding commutes for tens of thousands of straphangers each day.
New York Times: Cuomo Seeking Home Buyouts in Flood Zones
ALBANY — Gov. Andrew M. Cuomo is proposing to spend as much as $400 million to purchase homes wrecked by Hurricane Sandy, have them demolished and then preserve the flood-prone land permanently, as undeveloped coastline.
New York Times: Plenty of Money in State Coffers, but Not to Spend
Two years ago, Texas lawmakers didn’t have enough money to spend. Now, it seems, they can’t spend all the money they have.
McClatchy: Politics and road building intersect in Kentucky
WASHINGTON — Interstate 66, once envisioned as a cross-continent highway from the Potomac to the Pacific, ends in a pile of dirt just past a cloverleaf interchange north of Somerset, Ky., the hometown of U.S. Rep. Hal Rogers.
Wall Street Journal: Bottom Falls Out of Debt-Ridden City
By MICHAEL CORKERY
January 31, 2013
HARRISBURG, Pa.—With midnight approaching on New Year's Eve, Sherri Lewis and her two children knelt to pray for a better year ahead.
A few minutes later, she heard a rumbling that sounded like fireworks. The ground outside her apartment had opened up, revealing a municipal disaster that shows how far this city's finances have sunk.
A sinkhole, measuring about 50 feet long and eight feet deep, had swallowed Ms. Lewis's street, damaging water and gas pipes and forcing more than a dozen residents to evacuate one of the city's poorest neighborhoods. "I thought the world was ending,'' says Ms. Lewis, 42 years old.
Harrisburg officials have identified at least 40 other sinkholes around the 50,000-person city. The combination of particularly sandy soil and leaky pipes under Harrisburg's streets make it susceptible to sinkholes, city officials say. But Harrisburg has a bigger problem: The Pennsylvania capital can't afford to replace many of the aging pipes, some of which date back to the 19th century.
A pedestrian walked down North Fourth Street in Harrisburg, Pa., on Jan. 18, where a sinkhole measuring 50 feet long opened up on New Year's Eve.
More photos and interactive graphics
Harrisburg is in default on its debt and has been effectively shut out of the municipal-debt market, which cities and states use to finance everything from building schools to paving roads.
Harrisburg's misery is familiar to many U.S. cities trying to climb out of debt used to finance convention centers, hotels and employee pensions. Some governments are cut off now from funding for necessities such as repairing infrastructure.
On Wednesday, Illinois officials postponed plans to sell $500 million of bonds to pay for school and transportation projects, fearing prospective bond investors would demand high interest rates because of the state's pension problems.
Harrisburg's latest problems started when city officials agreed to guarantee a large portion of the $350 million in debt used to retrofit a state-of-the-art trash incinerator. The project generated millions in fees for Wall Street bankers and lawyers, while leaving taxpayers with a mortgage they can't afford. Amid this borrowing spree, city and state officials say, Harrisburg neglected to invest enough in its aging water pipes.
Today, Harrisburg is struggling to upgrade other critical infrastructure, including a sewage treatment facility that sometimes dumps untreated wastewater into the Susquehanna river.
"We can't do anything right now because no one will lend to us,'' said William Cluck, chairman of the Harrisburg Authority, the city agency overseeing the water-treatment facility.
Harrisburg has weathered frequent financial turmoil since the incinerator debt deals, but the city has hit a particularly rough patch at the start of 2013.
Officials had predicted they would be unable to pay city employees as of Thursday, unless they could find a short-term loan to bridge the gap until tax revenue is collected in March.
Throughout the fall, representatives for the city went door-to-door looking for a lender. But RBS Citizens Financial Group, M&T Bank Corp. MTB -1.11% and PNC Financial Services Group PNC -1.17% all turned them down, said people familiar with the discussions. Some of the bankers were worried Harrisburg might seek bankruptcy protection, one of the people said. PNC and Citizens declined to comment on the talks. M&T had no immediate comment.
A state court has appointed a receiver to oversee Harrisburg's finances. The receiver, William Lynch, says he would like to avoid bankruptcy.
The receiver's financial team prepared "Plan D," which essentially involved the city borrowing the money from itself. Harrisburg obtained a $4 million line of credit from fee revenue collected by the sewer and trash departments, the very funding source that is supposed to be used to upgrade underground pipes.
The city had no choice, said Steven Goldfield, a senior counselor at Public Resources Advisory Group and a financial adviser to the receiver. "When you have to patch up deficits year after year like this, and defer capital expenditures, that's when bad stuff happens, like sinkholes," Mr. Goldfield said.
City officials believe the sinkhole outside Ms. Lewis's apartment may have been caused partly by excessive weight on unstable ground.
Earlier that day, the back tires of a city garbage truck broke through the street and got stuck in the pavement. Officials believe leaking underground water pipes eroded sand under the pavement and contributed to the street giving way. The truck was pulled out, but the weight of the towing equipment may have been a factor, the mayor's spokesman says.
At around 3 a.m., city workers called a contractor, who wanted assurances that the city could pay for the repairs. The city is about three months behind on its bills.
Since the New Year, Mr. Goldfield and other advisers to the receiver have been negotiating almost daily with the city's debtholders and public-employee unions, seeking concessions.
Not every creditor will budge. Rosemawr Management LLC is charging the parking authority as much as 10.75% interest on about $10.5 million in bonds. The receiver's team has asked the New York investment firm to forgive a $3 million penalty the authority has to pay if it pays back the bonds early. Rosemawr has refused, according to people familiar with the matter.
Work crews are replacing pipes under North Fourth Street, but many of the city's other sinkholes have temporary patches. It would cost almost half of the city's $50 million budget to permanently fix them, a city engineer estimates. The city is seeking state grants to pay for some of the work.
Ms. Lewis returned home after nine days in a Red Cross shelter and a hotel. While she was away, her apartment was looted. Thieves stole her son's computer and her late mother's jewelry. "I know the city is broke,'' she says. "But that's not our fault."
Politico: Morning Transportation
By Adam Snider and Burgess Everett Featuring Scott Wong and Kathryn A. Wolfe
MT EXCLUSIVE — FTA releases Sandy aid: It took Congress three months to approve a $50.5 billion recovery package after Hurricane Sandy, but the FTA is moving at light speed compared to Capitol Hill. The agency will announce today it’s making available the initial $2 billion in transit money through its brand new emergency relief program, less than a week signed the bill into law. FTA had 60 days to open the money to applications, but it only needed 6 days. Working with FEMA soon after the storm hit, FTA was able to get much of the legwork done ahead of time. The money will go out as the applications come in, and the remaining $8.9 billion can be allotted once interim guidelines are published in the Federal Register. Adam has the scoop for Pros: http://politico.pro/VEs6Sg
SECRETARY STUFF: In the past 72 hours we’ve found out far more about who doesn’t want to succeed Transportation Secretary Ray LaHood than who does. Los Angeles Mayor Antonio Villaraigosa and recently retired transpo lawmakers Kay Bailey Hutchison (for the second time) and Jerry Costello are now all on the record as not interested, while Steve LaTourette indicated he might answer if the White House comes calling. It appears NTSB Chair Debbie Hersman is the most serious candidate yet publicly floated, with the GIANT caveat that the search may center on someone we’ve not heard whispers about, particularly given how tight-lipped the White House is. Here’s a quick rundown, or you can read about Burgess’s Villraigosa story (http://politi.co/11ymd6c) or a team tranpo runddown of the other names for Pros: http://politico.pro/WKc98a
Villaraigosa: “I am flattered and humbled by the speculation that has included my name for a possible Cabinet secretary position, but I am firmly committed to remaining in LA and finishing my term.”
Kay Bailey Hutchison: Is she interested? “No, I’m not. … I really am looking forward to the private sector. … if I were going to stay in the public sector, I’d have tried to stay in the Senate.”
Jerry Costello: Costello told MT he got a call from “a friend who works at the White House who wanted to know if I would be interested because he wanted to promote me to the position. He wanted to say ‘Hey, I think Costello would do a good job as secretary.’” It wasn’t a formal search committee, but Costello took his name off the list.
Steve LaTourette: “I haven't been contacted. I’m very happy in my new job. But I’ve never had a president call and ask me to be in his cabinet, so it’s something that would require a lot of thinking on my part.”
No love for LaHood: Well, we finally found someone who’s glad LaHood is on the way out — popular car blog Jalopnik, which said his distracted driving efforts were “reactionary, misguided, promoted far too much government intrusion into how we drive and how automakers build cars, shifted too much attention away from poor driving itself, and it was ultimately ineffective.” http://bit.ly/XQS3rZ
CAPTIVE SHIPPERS: With one of their most ardent champions heading out of office soon, bulk shippers are making a fresh push for lawmakers to overhaul the Surface Transportation Board that settles disputes over freight rail pricing. The clock is ticking down to the moment when Senate Commerce Chairman Jay Rockefeller will retire, taking his advocacy for shippers’ causes with him. That leaves no time to waste for so-called “captive shippers,” companies served by a single railroad that say they’re the victims of monopolistic practices by an industry almost entirely controlled by four railroads. Kathryn for Pros: http://politico.pro/Wp9Iva
WHAT TO WATCH FOR THIS WEEK — Committees: Jay Rockefeller and John Thune sat down last week to begin working on a Commerce agenda — one of a few informal committee get-togethers. Don’t be surprised if the long-awaited subcommittee chairmen, ranking members and panel rosters are finalized at some point this week.
The states: It’ll be a make-or-break week for Virginia Gov. Bob McDonnell’s plan to eliminate his state’s gas tax, which would be a first in the nation. His bill is up for debate in the full legislature beginning today.
AP AVIATION BREAKS — Dreamliner: The same type of lithium ion batteries used to power the now-grounded Boeing 787 Dreamliners is now allowed as cargo on passenger flights. http://yhoo.it/Vwvidg
Rules: A new DOT IG report will show that the FAA is lagging on implementing new pilot training rules and a new database for airlines to check out pilots before hiring them. The FAA said most carriers (90 percent plus) are now using voluntary programs in which pilots report safety isses that “has led to significant training, operational and maintenance program improvements.” http://bit.ly/11g93QL
MORE DOT CHATTER — Costello’s favorites: The former Aviation chairman heaped praise on two of the names we’re hearing most often — former T&I Chairman Jim Oberstar and Hersman. “Former Chairman Jim Oberstar is very interested. He’s well qualified. Debbie Hersman … would be an excellent candidate. She’s well qualified. She used to work with the committee and has done, I think, an excellent job chairing the NTSB,” he said.
Rockefeller sticking by Hersman: Jay Rockefeller, who will chair the confirmation hearing for Obama’s pick for the next DOT secretary, told MT that Hersman “ought to be right in the top tier. I think Debbie Hersman is one of the most extraordinary leaders I’ve ever met.” One of the popular debates has been whether a politician or a bureaucrat would be best for the spot — but Rockefeller doesn’t see that as an either/or proposition. “I think these days it’s more important to have both. … She just knows her stuff. There’s nothing that says you can’t know your stuff and be a terrific spokesperson, particularly a 40-year old woman with a ton of energy.” The West Virginian also said Hersman is like DoD nominee Chuck Hagel, who he called “a foot soldier” and does not believe taking Hersman off the Dreamliner investigation at NTSB would hurt the probe.
Thune wants ideas from W.H: When MT spoke to ranking Commerce member John Thune, the South Dakotan said he’s looking for someone to pitch ideas about how to fix the Highway Trust Fund. “We have a major issue ahead of us on the highway bill … we’ve got to figure out how we’re going to fund highways,” Thune said. He recalled of the last four years: “We’d bring in the administration officials from the DOT and them what they’re suggestions were. And all they’d say [is], ‘We want to work with you.’” That’s not good enough for Thune, who wants the next secretary and his staff “providing their suggestions about how they would want to deal with some of the big issues that we have in front of us. And just too often they don't do that.”
Did we miss anyone? Are you hearing any names that we haven’t talked about? Do us a favor and shoot us an email — we know how to keep things anonymous.
ATTENTION CNN: High-speed rail and Amtrak advocates aren’t happy with Anderson Cooper’s eight-minute takedown of government spending on HSR (Adam’s coverage here: http://politico.pro/14smkUh). The segment focused on a Vermont route that increased trip times by 28 minutes with incremental track improvements. Now, Vermont Gov. Peter Shumlin’s new budget includes funding to restore service between Rutland and Burlington. Railway Age: http://bit.ly/UKn6cd
- Report: Climbing fuel economy, stagnant gas tax will cause Highway Trust Fund to develop $365.5 billion deficit over next 23 years. http://bit.ly/XcJFTM
- The Chicago Infrastructure Trust has its first CEO, a venture capitalist. Tribune: http://bit.ly/VxlH6e
CABOOSE — Coach Shuster: T&I Chairman Bill Shuster was instrumental in setting up a Capitol Police vs. members of Congress flag football game held every other year to benefit the children of two officers killed in the 1998 Capitol shooting. The members, under Coach Shuster, won the 2009 game. Shuster “showed strong leadership in helping the bipartisan team to victory over a tough opponent and managing the playing time and personalities of Members of Congress and former NFL stars,” a team source said, adding that “having Heath Shuler as quarterback didn’t hurt.” Roll Call has some video from the game: http://bit.ly/Vt1I8G
By Adam Snider
It took Congress three months to approve $50.5 billion in Hurricane Sandy recovery funds, but the Federal Transit Administration is moving at light speed to begin spending the money.
The agency will announce Monday that it is ready to send out $2 billion in transit recovery and rebuilding money, less than a week after President Barack Obama signed the Sandy bill into law.
FTA’s speed is unprecedented. The Sandy package gave the agency 60 days to open up $2 billion of its $10.9 billion allotment; with Monday’s announcement, the agency beats that deadline by a full 54 days.
It’s also the first test of the agency’s new emergency relief program, set up in the 2012 surface transportation bill — a test the agency seems to have passed with flying colors.
After the storm hit New Jersey’s coast in October, FTA and FEMA started work on damage assessments and verifying the cost figures that came in from transit agencies including New York’s Metropolitan Transportation Authority. With that legwork done ahead of time, FTA could move quickly once the legislation was finally approved.
FTA will make grants to states and transit agencies on a rolling basis as the applications come in. An agency official paraphrased the situation this way: All the paperwork has been filled out and the numbers have been double- and triple-checked, so all that’s left is checking the boxes and making sure everything is in order before sending the money out.
The quick response from FTA is a stark contrast to the roller coaster ride the Sandy bill had on Capitol Hill. It was split into two parts and House Republicans scuttled a last-minute vote in the waning hours of the 112th Congress, drawing the ire of New Jersey Gov. Chris Christie, who wasn’t afraid to publicly blast his own party and House Speaker John Boehner for putting off the vote.
Even after the GOP-led House signed off on the measure in mid-January, it still took the Senate nearly two weeks to send the measure to the White House. With the wounds from the Sandy battle still fresh, FTA’s speed will be a welcome change of pace for Northeast lawmakers, transit agencies and residents.
“At DOT, we continue doing all we can to help our state and local partners make their storm-damaged public transportation systems whole again,” Transportation Secretary Ray LaHood says in a statement going out Monday morning. “The $2 billion we’re making available now will reimburse transit agencies for extraordinary expenses incurred to protect workers and equipment before and after the hurricane hit, and support urgently needed repairs to seriously damaged transit systems and facilities in New York, New Jersey, Connecticut and elsewhere.”
The PATH commuter rail line that connects New Jersey and New York City returned to pre-Sandy weekday service levels only last Wednesday.
The remaining $8.9 billion in FTA money will be available after the agency puts out interim regulations, and in most cases the money will cover 90 percent of operational or capital costs.
By Kathryn A. Wolfe
With one of their most ardent champions heading out of office soon, bulk shippers are making a fresh push for lawmakers to overhaul the agency that settles disputes over freight rail pricing.
The clock is ticking down to the moment when Sen. Jay Rockefeller (D-W.Va.), chairman of the Senate Commerce Committee, will retire, taking his advocacy for shippers’ cause with him. That leaves no time to waste for so-called “captive shippers,” companies served by a single railroad that say they’re the victims of monopolistic practices by an industry almost entirely controlled by four railroads.
Freight railroads are unapologetic about the rates they charge, saying they invest billions in their aging, far-flung infrastructure. They also counter that shippers can just use another method, such as trucks, if they don’t like the rail prices.
Rockefeller is one of a handful of lawmakers who side with shippers and has for years tried to change the way the Surface Transportation Board (STB) adjudicates complaints about freight rail rates.
Bob Szabo, executive director for CURE, an umbrella group for captive shippers, hopes to make the most of Rockefeller’s remaining two years. “We have to take advantage of what we have,” he said.
Szabo said Rockefeller’s replacement at Commerce — probably Sen. Bill Nelson (D-Fla,) — “is not likely to have as much interest in the issue.”
And, Szabo said Sen. John Thune (R-S.D.), the committee’s expected ranking member, has sided with the shippers, but that “it’s not as high on his priority list” as Rockefeller’s.
A Commerce spokesman said Rockefeller will continue to push to “foster a more competitive freight rail system in which captive shippers are no longer forced to pay whatever prices are foisted upon them,” and that Rockefeller is working with colleagues “on all possible paths forward” on overhauling the STB.
Szabo said he expects one of Rockefeller’s most immediate priorities on this issue to be shepherding the nomination of a new commissioner for the STB. Commissioner Francis Mulvey's term has already expired, meaning he can only serve through this year.
He also said he expects Sen. Amy Klobuchar (D-Minn.), who was just named chair of the Senate Judiciary subcommittee in charge of antitrust violations, to line up on the shippers’ side, too.
“She wants to pick up where Sen. [Herb] Kohl left off and move legislation that puts the railroads back under antitrust law,” Szabo said. Currently freight railroads have a number of exemptions from antitrust laws.
As part of CURE’s push, they plan to publish studies of various industrial sectors and how freight rail rates affect the economy. The first, released earlier this week, focused on chemical companies.
According to the report by Escalation Consultants, chemical companies’ cost to ship bulk goods by freight adds up to $1.5 billion that could otherwise go toward new wages and fuel up to 25,000 jobs. It also suggests that chemical and plastics shippers in 2010 paid $3.9 billion in premiums for rates above a 180 percent revenue-to-variable cost threshold.
Patricia Reilly, spokeswoman for the Association of American Railroads, said the report has “no there there,” and said the 180 percent calculation the report uses is “disingenuous or even irrelevant.”
“The rates being charged today are based on the marketplace — just like chemical prices are based on their marketplace. The realities are that rail rates on average have dropped about 45 percent since 1980.
Moreover, federal regulations do not give railroads an unfettered ability to raise their rates,” Reilly said in a statement. She noted that rates above 180 percent are subject to challenge at STB.
“The irony is the very rules these groups propose could actually mean higher costs and lower efficiency across the entire rail network — having a negative effect for all rail shippers,” she said.
Burgess Everett contributed to this report.
“With the very future of federal investment in our transportation infrastructure in question, we’re standing at a generational crossroads, and we must think carefully before we choose a path.”