Infrastructure                                                                      DOWNLOAD PDF
Approved: July 1998

Introduction
There are billions of dollars in unmet needs to bring America's infrastructure into good condition. These needs span transportation, water, wastewater, flood control, and others. For example only, we will use the transportation system to illustrate these needs. A safe, efficient transportation system is critical to our nation's productivity and economic development. It provides important economic benefits to individuals and businesses throughout the United States, employing over 12 million people, consuming one of every five dollars of total household spending, and accounting for 11 percent of the nation's economic activity.

Federal transportation investment translates into safer travel, tax-revenue generating jobs, efficiencies and costs-savings for American businesses, and a better environment. Investing in our nation's infrastructure system is essential for a competitive economy. The U.S. Department of Transportation estimates that the return on transportation investment is more than two to one in economic benefits.

Over the past decade, substantial progress was made; however, much more work is needed. In order to remain competitive in a global economy, we must renew our commitment to the future and make significant new investments of our own to add to those of past generations.

The Problem Identified
America's public infrastructure system has been placed on hold for so long that it is now in immediate need of substantial investment and repair. The maintenance and reconstruction needs of our nation's highways and transit systems alone outpace the funds currently available. In its 1995 report to Congress on the condition of the U.S. surface transportation system, the Department of Transportation (DOT) estimated that a total of $263.7 billion is needed over the five-year period just to maintain current highway physical condition and capacity performances. An estimated $80 billion is needed to make economically justified improvements. Combined, the cost to meet national highway and bridge needs, is $357.5 billion.

When you compare these figures to the actual conditions of U.S. roads, where only 19 percent are considered in good condition and one-fourth of the bridges on the interstate system are categorized as "deficient, " the need to increase infrastructure investments becomes even stronger.

Advocacy of NSPE
NSPE believes that a cost-effective infrastructure system is vital to our national interests and economic prosperity. The continued deterioration of our essential public facilities must be halted. Critical decisions must be made by all concerned to guarantee the long-term safety and reliability of America's roads, airports, bridges, dams, water and sewage systems, waterways, schools, and energy and communication utilities. A broad range of measures is necessary to ensure that America's infrastructure system will be able to meet tomorrow's needs.

Specifically, these measures should include:

• a national commitment, shared by all levels of government and the private sector, to increase capital spending by as much as 100% above current levels;
• clarification of the respective roles of the federal, state, and local governments in infrastructure construction and management to focus responsibility and increase accountability;
• more flexible administration of federal and state mandates to allow cost-effective methods of compliance;
• accelerated spending of the federal highway, transit, aviation, and waterways trust funds; 
• financing of a larger share of cost of public works by those who benefit from services, when practically afordable;
• removal of unwarranted limits on the ability of state and local governments to help themselves through tax-exempt financing;
• strong incentives for maintenance of capital assets and the use of low-capital techniques such as demand management, coordinated land-use planning, and waste reduction and recycling;
• additional support for research and development to accelerate technological innovation and for training of public works professionals; and
• a rational capital budgeting process at all levels of government. 

None of these steps will be easy or unopposed. But the increasing cost of delay is certain. NSPE urges the President, the Congress, and the nation's state and local leaders to "act on this agenda immediately."

We believe that, in addition to the measures addressed above, new emphasis should be placed on greater involvement of the private sector through privatization of essential public services, broadening the term "public works" to include utilities, and the introduction of state-of-the-art planning systems as a requirement for future rational management. The primary issues that need to be addressed are as follows:

Control
Direction is needed as to the specific roles of the federal government, state governments, local governments, utilities, and private enterprise in infrastructure management, construction, and financing.

NSPE recognizes that infrastructure needs vary from state to state, and even within a state. However, there needs to be some clarification of the respective roles of the federal, state and local governments in the construction and management of infrastructure in order to increase accountability and responsibility.

When Congress enacted the Intermodal Surface Transportation Efficiency Act (ISTEA) in 1991, it did so with broad-based support and consensus from state and local governments, as well as from the various organizations involved in planning, designing, operating, and maintaining the surface transportation systems. As a result, state and local governments were given more responsibility and regional planning improved. As Congress begins drafting a new surface transportation bill, NSPE believes that state and local governments should continue to play strong leadership roles in the construction and management of the nation's infrastructure. Infrastructure facilities under the management of local governments should remain under their supervision and control.In fulfilling their responsibility, local governments need to have better information on what is expected of them. Thus, setting baseline regulations for environmental consequences and coordinating impacts of facilities on adjacent communities is an appropriate involvement for higher levels of government.

At the same time, NSPE recognizes the that the federal government must play a key role by providing funding and leadership for water, wastewater, flood control, roadway and other transportation improvements, planning activities, research projects, and advanced technologies. The federal government must act as a full and responsible partner on a long-term basis in the national effort to increase and sustain public capital investment. These policy issues deserve national debate and clarification by the U.S. Congress.

NSPE further believes that mandates should be considered carefully and accompanied by appropriate funding and allow cost-effective methods of compliance rather than rigid technical requirements.

Projects of a large scope affecting a large geographic area may appropriately become a federal responsibility. However, if other levels of government are able to cooperatively deal with the problem, they should be left to the more localized authority. Many grand regional projects have been advocated by federal agencies without regard for their socioeconomic impacts. Many such plans have fortunately been supplanted with more modest, cost-effective, and efficient solutions. Plans of this type have been successfully demonstrated in many recent experiences with water resources projects, region-wide wastewater facilities, and large urban transportation projects planned to serve relatively uncongested areas.

Local governments usually have a difficult time allocating resources to critical local needs. Research on how much service is enough to meet demands on public works as well as police, fire, health, and welfare services would be helpful to those who are trying to juggle available local dollars.

Many government agencies (large and small) lack the expertise and systems for comprehensive infrastructure management and planning. State and federal funding for this type of activity should be given priority attention in order that adequate planning and management systems are put in place to perpetuate and enhance the usefulness of the infrastructure investment.

Financing
Restructure the infrastructure financing mechanism by redefining national public works trust funds; adjusting federal, state, and local tax laws to facilitate tax exempt financing; establish consistency in federal funding programs.

Infrastructure improvements will need efficient and effective financing mechanisms to meet the needs of future generations. There is stiff competition for available dollars. Many public works facilities, however, can successfully operate on an enterprise basis either as publicly owned or investor-owned utilities. Water supply, storm water management, wastewater, solid waste, and hazardous waste disposal facilities are examples of possible enterprise utilities. Sometimes these utilities are best owned and operated by a private entity. Rates that utilities charge their customers not only provide the dollars to construct and operate systems, but they force governments into more businesslike decision-making processes. Further, the more the utility is run as a business, the more clearly local officials can evaluate comparisons with privatized management alternatives.

Trust funds established from user fees and maintained solely for the facilities of the user have provided a sound financial base for our transportation system. This concept should be extended into other areas of infrastructure. It is NSPE's position that all such trust funds should be operated on an enterprise basis and remain segregated from the omnibus budget at the federal level or the general fund at the local level.

Bonding is a most frequently used method of accumulating capital for local infrastructure facilities. Financing infrastructure facilities using borrowed funds not only provides the dollars needed for construction, but has the further advantage of placing the burden of paying for improvements on the future users of the facility.

Unfortunately, many bonding options available to local governments in the past have been foreclosed by state and federal limitations. Even though the bonds in many cases are to be actually repaid from system revenues, not taxes, tax limitations by several states and new taxation laws at the federal level have hindered local financing options. NSPE urges state and federal legislators to readdress their taxation policies to provide better mechanisms for local financing.

Several states have implemented bond banks to assist local financing efforts. Federal restrictions on the uses of funds from federal programs are seen as an impediment to local financing. Furthermore, the withholding of highway and airport trust-fund dollars and the letter of credit decision under the Clean Water Act Revolving Loan Fund prevent leveraging of federal dollars to initiate effective state bond banks. Congress should revisit these issues in the interest of meeting infrastructure needs.

The regulatory environment needs revision, both from the standpoint of environmental protection and the regulation of gas, telephone, electric, and water utilities, to provide economic incentives to construct infrastructure. When political decisions on infrastructure projects are made, the cost of the capital investment is too often the only cost considered. As a result, once a system is constructed, the maintenance of the capital investment is left to the vagaries and politics of the moment. The lifetime maintenance costs of properly maintained infrastructure projects can be as large as five to ten times the original capital investment.

NSPE believes that life-cycle costs must be considered at the time initial decisions are made on new projects so that legislators can understand the scope of the total commitment necessary, not only for construction but also for maintenance of the structure.

NSPE further believes that a strong commitment to proper maintenance and inspection cannot be contravened if the public interest is to be protected.

Research and Development
Reverse the trend of minimal private and public R&D funds in the infrastructure arena by breaking down government agency resistance to change.

NSPE shares public concerns that a shortage of engineers is looming that will impact construction and service delivery in the future. A contributing reason for the shortage is the inadequate funding of research and development of infrastructure. Professional engineers are uniquely qualified to provide technical leadership to these research activities.

The scope and complexity of infrastructure problems throughout the United States merit a far more intense national focus on public works technology. An effective R&D program may be possible only with a concerted federally coordinated effort. For example, by committing only 1% of the cost of new infrastructure construction toward research and development, a coordinated effort between private interests and local, state, and federal governments and the research institutions could be organized to make a significant contribution toward improved infrastructure technology.

In addition, a receptive atmosphere for new ideas must be created. There is tremendous inertia in the regulatory process. Regulations are slow to change. Regulators and public agency managers are often slow to embrace new ways of doing things. By way of contrast, significant technology has been developed in the space program, in development of military systems, and private sector research. Specifically, research in the areas of electronics and data processing leading to new infrastructure planning and management techniques hold promise of technological breakthroughs. There are hundreds of examples where these technologies can be productively applied to management and development of infrastructure if only an environment receptive to change can be created.

Tort Reform
To rekindle the spirit of innovation among American design engineers and constructors, we need to reduce exposure to current excesses in litigation.

NSPE believes that one of the principal reasons that we do not see extensive use of innovative construction techniques is potential liability exposure. The engineer who recommends a new and innovative technique may well be "buying" an expensive lawsuit. If the use of an innovative technique results in a problem, the engineer will be confronted with numerous witnesses who will testify "that isn't the accepted way of doing it." That's usually all a jury needs to hear to assess the designer with a significant judgment.

NSPE is deeply concerned about the impact of tort liability on innovation. We believe that the threat of litigation under our current legal system is a significant factor in stifling innovation. Some type of protection for those who pursue innovation (with the owner's concurrence) is necessary. The basis for this position is that it is the owner and ultimately the public users of the infrastructure who stand to benefit from the innovation; accordingly, it is the public who should accept the risk if the innovative program does not fully meet its initial objectives. Among the possibilities that should be considered are hold harmless clauses and indemnification provisions where innovative processes are employed. Setting aside a fixed percentage of any infrastructure funding to establish reserve funds for this purpose may be one alternative to be considered. The concepts for indemnification in the Clean Water Act Construction Grants Program for innovative or alternative technology could provide an example for addressing this problem.

National Oversight
Infrastructure improvement and management must be pursued from a national perspective.

Only the federal government in concert with local government, state government, and the private sector can provide the continuity, uniformity, and intermodalism of the nation's infrastructure system. To carry forward a national agenda on improved infrastructure, the federal government must maintain a strong role in funding our infrastructure system. Support for funding our infrastructure needs to come from the U.S. Congress, and adequate funds need to be provided to assure the resources for fulfilling this leadership. Similarly, each state should be encouraged to monitor programs within its own purview.

Planning
State-of-the-art planning and management techniques must be installed at all agency levels in order to assure businesslike management of existing and future infrastructure systems.

The issue of creating an improved national infrastructure, as well as providing for the future operation and maintenance of these systems, depends on the implementation of comprehensive planning and management techniques. For example, computer-based graphic information systems provide the basic framework for these activities. The development of data processing systems to organize, analyze, and project these public works inventory data is essential. A national commitment is required in this area, if we are to move to an inventory and planning environment that will provide the vehicle and framework for continued infrastructure maintenance and development.

The capital investment in our infrastructure represents a major commitment of the financial resources of our country and has a tremendous impact on the economic well-being of our citizens. The planning for these projects is at best loosely coordinated and not integrated.

The Department of Defense, independent of public infrastructure projects, constructs and maintains a comprehensive infrastructure system, including roads, sanitary facilities, water supplies, airports, and housing. These facilities should be considered as part of the overall planning process. Savings and improved quality of life should accrue to affected populations and the taxpayer by improved infrastructure systems and the elimination of overlapping or duplicative services.

NSPE believes that any capital investment in infrastructure must integrate existing and planned facilities of the Department of Defense as part of any overall plan.

National Commitment
Society needs to be closely focused on the status of our infrastructure in that it is the very fabric of our way of life and the basic framework for the social changes that take place in a dynamic society.

The enhancements and improvement of our vast network of public works and utility infrastructure has been the engine of unprecedented economic growth. This growth has provided economic opportunity and quality of life improvement for every single American. It is basic that continued aggressive development of the nation's infrastructure will continue to drive our economy toward an ever greater quality of life for all our people. It is also essential if we are to maintain our position in an increasingly competitive world.

Nothing of lasting value will be accomplished unless public awareness is focused on the continuing need for a national infrastructure awareness program.A publicized program of capital budgeting for infrastructure at all levels of government will assist this awareness program. NSPE is committed to working with all interested organizations, public officials, and individuals toward bringing the infrastructure message to the public forum.