[Senate Hearing 107-566]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 107-566
 
                        FEDERAL ROLE IN MEETING
                          INFRASTRUCTURE NEEDS
=======================================================================

                                HEARING

                               BEFORE THE

           SUBCOMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                                 OF THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                                   ON

A REVIEW OF FEDERAL INVESTMENTS AND PRIORITIES IN NATIONAL PUBLIC WORKS 
                                PROJECTS

                               __________

                             JULY 23, 2001

                               __________

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








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         COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS1

                      one hundred seventh congress
                             first session
                   BOB SMITH, New Hampshire, Chairman
             HARRY REID, Nevada, Ranking Democratic Member
JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
JAMES M. INHOFE, Oklahoma            BOB GRAHAM, Florida
CHRISTOPHER S. BOND, Missouri        JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            BARBARA BOXER, California
MICHAEL D. CRAPO, Idaho              RON WYDEN, Oregon
LINCOLN CHAFEE, Rhode Island         THOMAS R. CARPER, Delaware
ROBERT F. BENNETT, Utah              HILLARY RODHAM CLINTON, New York
BEN NIGHTHORSE CAMPBELL, Colorado    JON S. CORZINE, New Jersey
                Dave Conover, Republican Staff Director
                Eric Washburn, Democratic Staff Director
                                 ------                                

           Subcommittee on Transportation and Infrastructure

                  JAMES M. INHOFE, Oklahoma, Chairman

JOHN W. WARNER, Wyoming              MAX BAUCUS, Montana
CHRISTOPHER S. BOND, Missouri        BOB GRAHAM, Florida
GEORGE V. VOINOVICH Ohio             JOSEPH I. LIEBERMAN, Connecticut
LINCOLN CHAFEE, Rhode Island         BARBARA BOXER, California
                                     RON WYDEN, Oregon

1Note: The Environment and Public Works Committee had 
    not reorganized to reflect the change in majority status of 
    the Democratic Party in the Senate that occurred on July 10, 
    when Senator James M. Jeffords of Vermont left the Republican 
    Party to become an Independent. For this hearing, Senator 
    Reid was acting as the Chairman.

                                  (ii)

  




                            C O N T E N T S

                              ----------                              
                                                                   Page

                             JULY 23, 2001
                           OPENING STATEMENTS

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...    21
Reid, Hon. Harry, U.S. Senator from the State of Nevada..........     1
Voinovich, Hon. George, V., U.S. Senator from the State of Ohio..     3

                               WITNESSES

Campbell, Hon. Bill, mayor, Atlanta, GA..........................    10
    Prepared statement...........................................   121
Goodman, Hon. Oscar, mayor, Las Vegas, NV........................    12
    Prepared statement...........................................   123
    Reports:
        City of Las Vegas Infrastructure Needs...................25-149
        Impact of the Maglev Train on the Economy of Clark County 
          and the State of Nevada...............................150-173
        Southern Nevada Water Authority Capital Improvements Pla174-199
Guerrero, Peter, Director, Physical Infrastructure, General 
  Accounting Office; accompanied by: Paul Posner, Managing 
  Director, Federal Budget Strategic Issues; and Kate Siggerud, 
  Assistant Director, Physical Infrastructure Issues.............    32
    Prepared statement...........................................   204
    Responses to additional questions from Senator Reid..........   213
Morial, Hon. Marc, mayor, New Orleans, LA and president, U.S. 
  Conference of Mayors...........................................     7
    Prepared statement...........................................    42
    Report, U.S. Metro Economies, U.S. Conference of Mayors......49-120
Portiss, Robert W., port director, Tulsa, OK.....................    27
    Prepared statement...........................................   202
Williams, Hon. Anthony, mayor, Washington, DC....................    14
    Prepared statement...........................................   200

                          ADDITIONAL MATERIAL

List, Top 100 U.S. Metro Economies, U.S. Conference of Mayors....    49
Reports:
    City of Las Vegas, Department of Public Works, Infrastructure 
      Needs for Southern Nevada..................................   127
    Impact of the Maglev Train on the Economy of Clark County and 
      the State of Nevada.......................................150-173
    Southern Nevada Water Authority Capital Improvements Plan...174-199
    U.S. Metro Economies, U.S. Conference of Mayors..............49-120
Statement of American Society of Civil Engineers.................   214

                                 (iii)

  


              FEDERAL ROLE IN MEETING INFRASTRUCTURE NEEDS

                              ----------                              


                         MONDAY, JULY 23, 2001


                                       U.S. Senate,
               Committee on Environment and Public Works,  
         Subcommittee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9 a.m. in room 
406, Senate Dirksen Building, Hon. Harry Reid (acting chairman 
of the subcommittee) presiding.
    Present: Senators Reid, Voinovich, and Inhofe.

  OPENING STATEMENT OF HON. HARRY REID, U.S. SENATOR FROM THE 
                        STATE OF NEVADA

    Senator Reid. The Environment and Public Works Committee is 
called to order. This is a meeting of the Subcommittee on 
Transportation and Infrastructure.
    Let me say to my guests here, the witnesses today, we're 
going to have Senators in and out of here during the day. 
Senator Inhofe was scheduled to be here. He's still scheduled 
to be here, but his plane is not here, I guess, because of the 
infrastructure someplace. Senator Voinovich will be here 
shortly. The testimony which you gentlemen are about to give 
will be taken down by a court reporter and be shared with the 
full committee. I am grateful that each of you are here.
    Our physical infrastructure represents the backbone of our 
Nation and really of our economy. It gets neglected because of 
cost of repairs and construction accrue in the short run, while 
the benefits are enjoyed in the long run. Too often, short-term 
cost considerations preclude long-term benefits to 
productivity, safety, clean water and the quality of life.
    Anyone living in a major metropolitan area can tell you 
that our highway and mass transit infrastructures are 
overwhelmed and unable to handle our current demand. The 
resulting congestion impairs productivity, reduces air quality 
and negatively impacts our quality of life. This problem is 
only expected to get worse as vehicle miles traveled continue 
to increase.
    To improve the condition and performance of our highways 
and transit systems, the Department of Transportation estimates 
that we need to spend more than $50 billion each year, and this 
doesn't include the billions of dollars in new investments 
necessary to improve our aviation system and develop high-speed 
rail corridors.
    Another key component of our Nation's infrastructure is 
built and sustained and maintained by the Army Corps of 
Engineers. The Army Corps' flood control projects protect lives 
and property, and their navigation projects keep our economy 
moving. Yet they have a backlog of $40 billion in fully 
authorized projects that are waiting for the first dollar 
funding, not to mention a $38 billion backlog of projects 
currently under construction.
    The EPA is charged with protecting and expanding our 
Nation's drinking water supply and upgrading our waste water 
treatment collection facilities. These critical functions are 
at risk due to infrastructure funding shortfalls. The EPA has 
estimated that nearly $300 billion will be needed over the next 
15 to 20 years to upgrade and expand our existing 
infrastructure to ensure the safety of our water supply. In 
March, the American Society of Civil Engineers released its 
2001 report card for America's infrastructure, and gave our 
Nation's infrastructure a D+. The American Society of Civil 
Engineers estimates that we need to invest $1.3 trillion over 
the next 5 years to address our infrastructure problems.
    More information on infrastructure needs detailed in this 
study is included in written testimony provided by the Society 
which will be placed in the record.
    Just this past week, we saw both the importance and the 
fragility of our infrastructure when a train carrying hazardous 
materials derailed in a Baltimore railroad tunnel. This tunnel 
is 1\1/2\ miles long. The impact of this crash is disrupting 
the lives of those who live and work in Baltimore, and it 
should serve as a warning to all of us about the dangers we 
face if we don't adequately confront our Nation's 
infrastructure deficiencies.
    Clearly, our infrastructure investment needs are 
substantial, but I fear our means of funding these is 
shrinking. The tax bill this Congress passed in May will cost 
trillions of dollars in revenues over the next 20 years if 
fully implemented. The surpluses are almost gone as we speak, 
but our infrastructure needs are still there.
    I intend to serve as a person who looks at our Nation's 
infrastructure continually, and I'm going to look forward to 
working with my colleagues on this subcommittee and this 
committee and members of the Senate to ensure that our 
infrastructure gets the attention it needs. Now, the reason I 
say the ``attention it needs,'' I think the only way we're 
going to get some of this is to start talking about what we 
don't have. I think we tend to ignore municipal government. We 
talk about our Federal highway system, but the people live in 
cities, urban areas. America is becoming more urban than it 
was, and people say, why would a Senator from Nevada care about 
urban problems? Nevada is the most urban State in America. Why, 
it's more urban than New Orleans; more urban than Atlanta--as a 
State, I should say Georgia, Louisiana, California, New York. 
It doesn't matter. We're more urban because 90 percent of the 
people in Nevada live in two urban centers. Only 10 percent 
live in rural Nevada.
    So we have to start focusing attention on our cities and 
what we don't have. If a manhole cover blows off, Mayor, you're 
the one that gets the heat. We down here don't get the heat. If 
the roads are jammed in Atlanta, the mayor is the one that gets 
the problem there--Mayor Campbell.
    So I look forward to the testimony from a distinguished 
panel of witnesses. We have four very successful mayors. I 
purposely picked the mayors that are testifying here today. I 
was somewhat prejudiced in the one from Las Vegas, but he's 
done an outstanding job. I would put Oscar up against any mayor 
in the country for being a passionate believer in what we need 
in municipal government. For someone that cares about the city 
that he represents, there is no one any stronger. There may be 
some as good, but no one any stronger.
    So I'm happy to have you each here. I welcome each of you 
and the hands-on experience you bring to this topic. In 
addition, we have Robert Portiss from Tulsa, OK to speak on 
port issues, and Robert Guerrero who is from the General 
Accounting Office, GAO, who I've worked with in the past, and 
well represents our Government.
    I thank each of you for coming. I look forward to your 
testimony. I do say that, Senator Voinovich, if you have an 
opening statement, I'm sure happy to have you make it. Around 4 
o'clock, I have to go offer an amendment on the Senate Floor, 
so we have something to vote on today. So I'll ask you, in my 
absence, to make sure that if we haven't finished that you 
will, if you're able to be here, if you would take over. 
Senator Inhofe is detained, as I indicated earlier, because of 
poor infrastructure. He's stuck at an airport someplace.
    If you have an opening statement, I'd be happy to receive 
it.

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

    Senator Voinovich. I do. Thank you.
    I'm really glad you're holding this hearing today, by the 
way, and I'll try to make sure that I'm here to hold the fort.
    Senator Reid. Thank you.
    Senator Voinovich. I want to thank you again for conducting 
this hearing, Mr. Chairman.
    Infrastructure needs have been the focus of some attention 
over the last two decades, ever since the 1981 report, America 
in Ruins, initially focused attention on the issue.
    Senator Reid. What was the date of that?
    Senator Voinovich. It was 1981.
    Senator Reid. I would just interrupt you, Senator. You can 
remember during the 1980's, major magazines had lead cover 
stories about decaying infrastructure. We still have the 
decaying infrastructure, we just don't focus much attention on 
it anymore.
    Please go ahead. I'm sorry to interrupt.
    Senator Voinovich. We started inventorying. I was mayor of 
Cleveland at the time. We did an inventory of our own 
infrastructure to see what we needed to do about that.
    Then in February 1988 in a report to the President and the 
Congress, the National Council on Public Works Improvements 
concluded that the quality of America's infrastructure was 
barely adequate to fulfill current requirements.
    While there has been progress in the last decade at the 
Federal, State and local levels to better manage our public 
infrastructure, these efforts are undertaken sporadically and 
more on a stopgap fashion, while large-cap investment in 
operation and maintenance needs are not being addressed.
    I recognize that simply devoting more Federal resources to 
infrastructure needs is not the solution. The issue of 
appropriate Federal and State roles, adequate project 
evaluation, priority setting, and program efficiency and 
management must be addressed.
    I believe the first step in dealing with the need for a 
coherent national infrastructure strategy is an assessment of 
our Nation's unmet infrastructure needs. You've got to know 
what they are before you can deal with them. I realize that 
even the concept of unmet needs is difficult to define and that 
every Federal agency will define the term differently. That is 
why as chairman of this subcommittee last year, I asked the 
General Accounting Office to prepare a survey of the unmet 
needs on information that the agencies have available in the 
major public infrastructure areas where Federal assistance is 
provided.
    Specifically, I asked the GAO to report on the needs 
estimates of several Federal agencies, and I'm not going to go 
in and list each of them because I think you know what they 
are. In a just-released report, U.S. infrastructure agencies' 
approaches to developing investment estimates vary. The GAO 
provided a survey of the seven agencies' estimates for 
infrastructure investment, looked at how agencies compare in 
terms of how their estimates are developed and used, and 
examined the extent to which the agencies' procedures for 
developing the estimates embody practices of leading government 
and private sector organizations.
    Of the seven agencies reviewed by GAO in the report, each 
estimated billions of dollars in investment needs. The figures 
range from the General Services Administration estimate of 
$4.58 billion over 1 to 5 years to repair public buildings, to 
the Federal Highway Administration's estimate of $83.4 billion 
per year over 20 years to improve highways. Independent 
assessment of our Nation's infrastructure needs, such as the 
one conducted by the Water Infrastructure Network (WIN), last 
year suggest that trillions of dollars are needed to address 
this country's drinking and waste water needs.
    According to the report I requested from GAO, the agencies' 
infrastructure needs estimates cannot be easily compared or 
added up to produce a national estimate of investment needs 
because of the differences in the methods used, time periods 
covered, spending sources and purposes for their use. I'd be 
interested in hearing GAO's thoughts on how a national 
infrastructure needs survey could be developed. The GAO also 
looked at procedures each agency has in place for developing 
infrastructure needs estimates and whether they reflected some 
practices used by leading government and private sector 
organizations.
    The GAO further examined the strengths and limitations of 
each agency's estimate. A number of the limitations identified 
by GAO suggest that many of the agencies needs estimates might 
be understatements of actual needs. I'd also like to hear GAO's 
thoughts on how these agency estimates could be more accurate. 
We've got to have the right numbers.
    Mr. Chairman, congressional authorization of projects are a 
very important part of the process of developing and 
maintaining our Nation's infrastructure. Equally important is 
having an adequate level of funding to construct, as well as 
operate and maintain these projects. It's no secret that this 
Nation has an aging national infrastructure, which we're going 
to be hearing about. There are a number of reasons why we have 
such great unmet needs. The most significant reason is the 
decreasing Federal investment in infrastructure since the 
1980's, as you just pointed out. For example, GAO reported in 
February 2000, that infrastructure as a percentage of Federal 
spending has steadily declined since the late 1980's. At the 
same time, we're asking agencies to do more and more.
    Last year, I conducted a hearing as chairman of this 
subcommittee to examine the Corps of Engineers' $38 billion 
backlog. At the hearing, I had a number of charts showing the 
breakdown by mission. In effect, what happened there is we 
increased the responsibility of the Army Corps of Engineers, 
having them take on environmental restoration projects, and at 
the same time cut back their dollars to about half of what they 
were in previous years.
    So I strongly believe that Congress and the Administration 
need to develop a strategy to deal with these needs. Again, it 
gets back to how do you balance the infrastructure needs of the 
agencies the GAO looked at, and then, Mr. Chairman, in all due 
respect, the Congress is talking about building schools all 
over the United States of America. You know, can you do both of 
those things? I have to say that one of the reasons why some of 
the needs that our witnesses are going to talk about haven't 
been met is because we're off on some other agenda items, and 
quite frankly too many of them are the result of polling. You 
know, this is more popular. We had a Governor of Ohio who once 
said, never put anything under the ground. You never see it. 
You never get any credit for it.
    [Laughter.]
    Senator Voinovich. But the fact is, we all know what's 
happening in our cities around this country.
    So I'm not going to go on. I'm going to ask that the rest 
of my statement be inserted in the record. I'm anxious to hear 
from the witnesses.
    Senator Reid. Senator Voinovich, one of the things that you 
and I could agree on is, I would be willing to sponsor 
legislation with you to outlaw polling.
    [Laughter.]
    Senator Voinovich. Except for the First Amendment, it's 
fine.
    [Laughter.]
    [The prepared statement of Senator Voinovich follows:]
     Statement of Hon. George V. Voinovich, U.S. Senator from the 
                             State of Ohio
    Thank you, Mr. Chairman, for conducting this hearing today on the 
Federal role in meeting our Nation's infrastructure needs.
    Mr. Chairman, infrastructure needs have been the focus of some 
attention over the last two decades ever since the 1981 report, America 
in Ruins, initially focused attention on the issue. In a February 1988 
report to the President and the Congress, the National Council on 
Public Works Improvements concluded that the quality of America's 
infrastructure was barely adequate to fulfill current requirements.
    While there has been progress in the last decade at the Federal, 
State, and local levels to better manage our public infrastructure, 
these efforts are undertaken sporadically and more in an ``stop gap'' 
fashion while large capital investment and operation and maintenance 
needs are not being addressed. I recognize that simply devoting more 
Federal resources to infrastructure needs is not the solution. Issues 
of appropriate Federal and State roles, adequate project evaluation, 
priority setting, and program efficiency and management must be 
addressed.
    I believe that a first step in dealing with the need for a coherent 
national infrastructure strategy is an assessment of our Nation's unmet 
infrastructure needs. I realize that even the concept of ``unmet 
needs'' is difficult to define and that every Federal agency will 
define the term differently. That is why, as chairman of this 
subcommittee last year, I asked the General Accounting Office (GAO) to 
prepare a survey of unmet needs based on information that the agencies 
have available in the major public infrastructure areas where Federal 
assistance is provided.
    Specifically, I asked the GAO to report on the need estimates of 
seven Federal agencies: U.S. Army Corps of Engineers, Environmental 
Protection Agency (EPA), Federal Aviation Administration (FAA), Federal 
Highway Administration (FHWA), Federal Transit Administration (FTA), 
General Services Administration (GSA), and Appalachian Regional 
Commission (ARC). I requested GAO to focus on water resources (inland 
and deep draft navigation, flood control, and shore protection), 
hydropower, water supply, wastewater treatment, airports, highways, 
mass transit, and public buildings.
    In its just-released report, U.S. Infrastructure: Agencies' 
Approaches to Developing Investment Estimates Vary, the GAO provided a 
survey of the seven agencies' estimates for infrastructure investment; 
looked at how the agencies compare in terms of how their estimates are 
developed and used; and examined the extent to which the agencies' 
procedures for developing the estimates embody practices of leasing 
government and private-sector organizations.
    Of the seven agencies reviewed by GAO in the report, each estimated 
billions of dollars in investment needs. The figures ranged from the 
General Services Administration's (GSA) estimate of $4.58 billion over 
one to 5 years to repair public buildings, to the Federal Highway 
Administration's (FHWA) estimate of $83.4 billion per year over 20 
years to improve highways. Independent assessments of our Nation's 
infrastructure needs, such as the one conducted by the Water 
Infrastructure Network (WIN) last year, suggest that trillions of 
dollars are needed to address this country's drinking and wastewater 
needs. These are impressive figures.
    According to the report I requested from GAO, the agencies' 
infrastructure needs estimates cannot be easily compared or added up to 
produce a national estimate of investment needs because of the 
differences in the methods used, time periods covered, spending 
sources, and purposes for their use. I would be interested in hearing 
GAO's thoughts on how a national infrastructure needs survey could be 
developed.
    The GAO also looked at the procedures each agency has in place for 
developing infrastructure needs estimates and whether they reflected 
some practices used by leading government and private sector 
organizations. The GAO further examined the strengths and limitations 
of each agency's estimate. A number of the limitations identified by 
GAO suggest that many of the agencies' needs estimates might be 
understatements of actual needs. I would also like to hear GAO's 
thoughts on how these agencies estimates could be made more accurate.
    Mr. Chairman, congressional authorizations of projects are a very 
important first part of the process of developing and maintaining our 
Nation's infrastructure. Equally important is having an adequate level 
of funding to construct as well as operate and maintain these projects.
    It's no secret that this Nation has an aging national 
infrastructure. If we continue to ignore the upkeep, and allow the 
deterioration of our infrastructure, we risk disruptions in commerce 
and reduced protection for public safety, health, and the environment. 
In my view, it is up to Congress to ensure that operation and 
maintenance funding levels are adequate and efficiently allocated to 
priority needs.
    There are a number of reasons why the we have such great unmet 
needs. The most significant reason is the decreasing Federal investment 
in infrastructure since the 1980's. For example, GAO reported in 
February 2000 that infrastructure as a percentage of Federal spending 
has steadily declined since the late 1980's. At the same time, we are 
asking agencies to do more and more.
    For example, last year I conducted a hearing as chairman of this 
subcommittee to examine the Corps's $38 billion backlog. At the 
hearing, I had a number of charts showing the breakdown by mission area 
for the Corps' construction appropriation by representative year from 
the decades of the 1960's, 1970's, and 1990's. The charts clearly 
showed the mission growth of the Corps into areas such as environmental 
restoration, remediation of formerly used nuclear sites (FUSRAP), and 
environmental infrastructure.
    At the hearing, I also had another chart that measured our capital 
investment in water resources infrastructure since the 1930's shown in 
constant 1999 dollars as measured by the Corps of Engineers Civil Works 
construction appropriations. The chart showed that there has been a 
sharp decline from the peak in 1966 of a $5 billion appropriation and 
appropriations though the 1970's in the $4 billion level to the 1990's 
where annual Corps construction appropriations have averaged only 
around $1.6 billion.
    I strongly believe that Congress and the Administration need to 
develop a strategy to address the backlog of unmet needs in this 
country, and I fully intend to make meeting these unmet needs a 
priority in the Senate.
    For instance, the condition of our Nation's water infrastructure 
has been a long-standing concern of mine. I like to use the example of 
Mayor Reid of the city of Mansfield, OH, who is facing having to raise 
sewer rates from $30 a month to $100 a month in order to comply with 
environmental regulations. I have also heard from a number of other 
Ohio municipalities about their water infrastructure problems at two 
meetings I held in Ohio on this issue during the last year. Senator 
Mike Crapo also conducted a field hearing on Ohio's wastewater 
infrastructure needs on April 30 in Columbus.
    Aging water systems and increasing Federal requirements are placing 
a heavy burden on our communities. That is why I have introduced in the 
106th and 107th Congresses the Clean Water Infrastructure Financing 
Act. The bill, S. 252, would reauthorize the highly successful, but 
undercapitalized, Clean Water Revolving Loan Fund (SRF) program at a 
level of $3 billion per year for 5 years. In comparison, Congress 
currently appropriates $1.35 billion for the program.
    I am not advocating increased levels of Federal spending as a 
general matter, rather, spending our Federal resources on the right 
things, and among the right things that are not receiving adequate 
funding are many of the worthy projects and programs authorized by this 
committee. So often the attitude in Washington when approaching unmet 
needs is not to address anything that isn't high profile until there is 
a crisis. This is not the way to deal with things.
    I would be interested to hear if today's witness could possibly 
shed some light on what they see as the role of the Federal Government 
in infrastructure funding. To what extent is investment in our Nation's 
infrastructure a Federal responsibility? How should the Federal 
Government finance public infrastructure investments? Who else should 
be involved? What are other non-capital ways to address our unmet 
needs?
    Mr. Chairman, thank you for including the findings of the GAO 
report I requested on today's agenda for this hearing. I just got the 
final report on Friday, and I look forward to reading it in greater 
detail. I would also like to thank the GAO for their hard work on the 
report, and I look forward to hearing from Mr. Guerrero about the 
details of report and what conclusions may be drawn from it.
    Finally, I look forward to the testimony of today's witnesses who 
I'm sure will testify to their own respective infrastructure needs.
    Thank you.

    Senator Reid. We're happy, as I've indicated, to have each 
of you mayors, and you, Mr. Portiss, with us. We're going to 
start with Mayor Morial, Mayor Campbell, Mayor Goodman and 
Mayor Williams.

   STATEMENT OF HON. MARC MORIAL, MAYOR, NEW ORLEANS, LA AND 
              PRESIDENT, U.S. CONFERENCE OF MAYORS

    Mr. Morial. Thank you very much, Mr. Chairman.
    Senator Voinovich. Pardon me, Mr. Chairman.
    I'd just like to say that there are a couple of people 
here. Do you mind if I do this?
    Senator Reid. Of course not.
    Senator Voinovich. Marc, I'd like to welcome you. Your dad 
and I were very, very good friends.
    Mr. Morial. Thank you.
    Senator Voinovich. Dutch and I, we served as mayors 
together, a wonderful man, and I'm sure that he's proud of the 
fact that, you know, he's happy that you're sitting in the 
chair that you are.
    Mr. Morial. Thank you, Senator.
    Senator Voinovich. Of course, Mayor Williams and I have 
spent a lot of time together, haven't we, Mayor? We welcome you 
and the other mayors that are here today. Thank you.
    Senator Reid. George, when I said to Mary Landrieu, you 
know, these people in New Orleans, can't they come up with 
first names? You've got Moon and all these others. Anyway, I'm 
glad that you have one.
    Mr. Morial. A nickname sells in a poll.
    [Laughter.]
    Mr. Morial. Mr. Chairman and members of the subcommittee, 
let me thank you all for having this hearing. I am Marc Morial, 
and for the record, Mayor of New Orleans and also president of 
the U.S. Conference of Mayors, a bipartisan organization that 
represents mayors of 1,200 cities with populations of 30,000 or 
more.
    We're delighted that you're having this hearing and we hope 
that all four of us can shed some light and some information on 
where we are and where we need to go.
    I simply want to begin my testimony by thanking you, Mr. 
Chairman, and the committee for your leadership in crafting the 
agreement on the brownfields legislation, S. 350. This is a 
piece of legislation which has been important to the mayors and 
to the Conference of Mayors for a number of years, and if we're 
successful in getting that legislation passed, it's going to 
give us yet another set of tools to deal with the problem of 
abandoned commercial and industrial sites in so many of our 
cities.
    I want to talk to you today about a couple of things, and I 
want to frame my remarks by saying that local infrastructure 
needs are no longer a local issue. Why are they no longer a 
local issue exclusively? As you observed, Senator Reid, Nevada 
is a heavily urbanized State. Most people in the United States 
would be surprised to hear that. But even more importantly, it 
tells the story of what has happened in our Nation, 
particularly in the past 10 to 20 years. That is, cities and 
their suburbs have become the economic units that are the 
engine of the American economy. We argue very forcefully that 
investing in the infrastructure is good not only for the city 
and its residents, but is good for the Nation as a whole.
    Recently, we released the fourth of our studies on the 
metropolitan economies of the Nation. This study, put together 
by DRI and Wharton Econometrics outlines the significant role 
that cities play in the American economy today. Very 
interestingly, of the 100 largest economies in the world, 
almost 50 of them, 47 of them are American metropolitan areas. 
Very significantly, many of our metropolitan areas have 
economies larger than nations. New York City, for example, has 
an economy larger than that of Australia. My own city is larger 
than Syria or even Vietnam in terms of its economic output.
    That is why we hope that there is a fundamental 
understanding that we're going to seek to promote by the 
Congress and the White House, business leaders in this Nation, 
and the American public at large, that by investing in the 
infrastructure needs of American cities will do the Nation's 
economy some good. If we disinvest in American cities, if we 
ignore the needs of American cities, the cost is going to be 
paid by everyone. Our cities are transportation centers. Our 
cities are technology centers. Our cities are centers of higher 
education and learning. Our cities are the areas where the new 
immigrants are flocking. Our cities produced, if you will, 
better than 85 percent of the new jobs created in the decade of 
the 1990's. So I wanted to share that with you.
    What are our priorities as cities, as metropolitan cities? 
We surveyed our members, Senator Reid and Senator Voinovich, 
and they outlined three very important areas. First, our No. 1 
priority is in the area of surface transportation. That's, of 
course, self-evident. It's roads. It's bridges. But it's also 
transit and rail. It's rail transportation. TEA-21 and new 
start moneys that have been allocated since then have put maybe 
150 to 200 new rail start projects on the books in American 
cities. We broke ground in my own city of New Orleans on a new 
Canal Street streetcar line. We're working, in addition to 
that, on two additional projects for which we've received 
commitments from this Congress. Importantly, with all of the 
issues of congestion, with all of the issues of population 
density that many cities are beginning to face, investment in 
surface transportation systems with a new emphasis on rail, we 
think is a smart move for the American economy.
    Second, our members identified water system needs. Many of 
our cities are old. Our drinking water systems, our wastewater 
treatment systems and pipes have become old and have begun to 
crumble. Combine that with the fact that the Congress and the 
agencies have had a very aggressive enforcement effort under 
the Clean Water Act to force cities big and small to make 
significant changes, significant investments in their water 
infrastructure systems. Indeed, we are operating in New Orleans 
under a consent decree through which we're going to have to 
spend as much as $400-$500 million overhauling our city's 
wastewater system, simply the wastewater system, not the 
drinking water system and not what is very crucial to us, the 
drainage system to protect us from flooding.
    So water system needs are tremendous throughout American 
cities. You don't have to be the proverbial rocket scientist to 
understand that the quality of drinking water affects not only 
the residents of a city, but also affects visitors to the city. 
You don't have to be a rocket scientist to understand that the 
quality of the wastewater system affects not only the city 
directly, but also an entire region and the American economy at 
large.
    Third, our members identified schools and libraries as a 
tremendous infrastructure need. I would only add a personal 
observation to the schools and libraries infrastructure need. 
What we've done in my own State, and I would conjecture in many 
other States, and even here at the national level, is invest 
heavily in the infrastructure of the correctional systems. If 
we did for the schools in the next 20 years what we've done for 
correctional systems infrastructure in the last 25 years, we 
could and very much will make a significant dent in the 
tremendous school infrastructure needs that many of our urban 
communities face, and not only urban communities, but our 
entire metropolitan communities.
    I would add one additional point to the infrastructure. The 
mayors are united in supporting those bills that would allow 
Amtrak to access the private markets for its infrastructure 
needs. Why is that important? Because Amtrak's service is 
something that in many respects connects smaller- and medium-
sized communities to larger communities. Amtrak service is also 
something with the advent of high-speed rail that we think 
could take pressure off both the highway system and the civil 
aviation system when you're talking people traveling distances 
from 300 to 500 miles, which is why we strongly urge the 
Congress to act on Amtrak legislation.
    To sum up very quickly, the point I hope that we all leave 
you with today is that our local infrastructure needs are not 
simply a local issue. But to also add, we are not here as 
mayors who are not investing our own tax dollars in our 
infrastructure needs. Every single one of us has an aggressive 
capital program where we're investing in city streets, curbing, 
gutters, water systems; where we're investing in public 
schools, libraries, parks and recreation facilities. But the 
investment that we can command, the investment that we can 
muster alone isn't enough to deal with the tremendous needs 
that the Nation has.
    So we come today looking for partnership, not with a tin 
cup, but looking for a partnership with the Federal Government 
because as our cities go, so goes this Nation. I can say to you 
that a significant investment in the infrastructure of American 
cities is going to do the American economy very well.
    You pointed out in your opening testimony the situation in 
Baltimore. That 1\1/2\-mile railroad tunnel is 100 years old. I 
understand from reading the papers and from talking to people 
that it hasn't had any significant investment in that period of 
time. There are tunnels. There are bridges. There are rail 
systems all across this Nation with tremendous needs that we 
need to address, lest it begin to affect the economic 
performance of our major industries.
    So I thank you for your time.
    Senator Reid. Your full statement will be made part of the 
record and we'll have some questions for you.
    Mr. Morial. Thank you.
    Senator Reid. Mayor Campbell, if you--and I should have 
alerted Mayor Morial--try to keep to 5 minutes as well as you 
can. You know, we're not going to very strict, as you saw with 
Mayor Morial, but try to keep to that so we have time to come 
back, because there are many things in your statements and just 
basic knowledge you have that we'd like to get to.

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

    Mr. Campbell. Don't worry, Senator Reid, I'm going to be 
brief, no matter how long it takes me.
    [Laughter.]
    You're free to use that anytime you like, Senator.
    It's a pleasure to be here. Thank you, and Senator 
Voinovich, I appreciate very much----
    Senator Reid. I will use it.
    Mr. Campbell.--That's where I got it.
    I appreciate very much your having us here. In many ways, 
both of you understand the problems that we're speaking about, 
so it's like preaching to the choir. But nevertheless, it's 
important for the American public to hear about these issues.
    Not only do I come to testify on behalf of the city of 
Atlanta, one of the fastest growing metropolitan areas in the 
United States, but also I chair the Transportation and 
Communications Committee for the U.S. Conference of Mayors as 
well.
    I've been here and been a part of the deliberations and 
discussions. I testified on behalf of TEA-21 and AIR-21, and we 
appreciate the leadership that was shown on both of those very 
important issues. As you heard Mayor Morial, we certainly hope 
that RAIL-21 will be the next prong that will help us to 
improve the Nation's infrastructure.
    Let me give you some sense of overview, Mr. Chairman, to 
tell you where we are, and Senator Voinovich.
    The issue of infrastructure in this country is the most 
critical issue that cities will face. I spoke this morning to a 
U.S. Congress issue on competitiveness in cities, and my 
thought is that other than the issue of public safety, the 
issue of infrastructure and who will pay for the infrastructure 
for cities will be the most pressing issue that this country 
will face over the next 10 years.
    You heard Mayor Morial talk about the $400 million they're 
spending. Well, I've got a better story. We have spent $1 
billion since 1990 to construct and expand wastewater and 
stormwater collection, treatment and control facilities to meet 
Federal and State environmental regulations. We have spent an 
additional $2.3 million for watershed protection projects. It's 
estimated that we will spent $3.2 billion over the next 13 
years to upgrade our system. That's an astounding amount, 
Senators, and I must tell you that puts a serious burden on the 
city's budget. While most people understand that the 
metropolitan area is made up of over 4.5 million people, the 
city of Atlanta proper is about 500,000 people. We have an 
approximate income range of about $36,000, with 25 percent of 
our families making under $15,000 a year. We simply don't have 
the money to pay for that.
    But yet it's mandated, and I must tell you, we have about 
1.5 million that come into our city each and every year. Now, 
if you magnify that across the country, the estimates are about 
$300 billion alone just in wastewater infrastructure needs, and 
about $1 trillion in total water resource demand in cities 
across this country.
    If that's not looked at very seriously, Senators, there is 
no doubt that we will see the same sort of wastewater calamity 
that we're seeing with the Baltimore rail corridor. We have 
some estimates that 75 percent of all the bridges in this 
country are substandard.
    So we understand that if we don't invest in this 
infrastructure redevelopment, then we're going to see America's 
cities, and ultimately the Nation, crumble. You heard Senator 
Voinovich talk about the Governors saying, don't put any money 
in things under the ground. Tragically, that's the view by most 
citizens, and that's the view by most elected officials. 
Because unless it's a sexy item, unless we're seeing something 
that captures the Nation's attention like the rail corridor 
explosion in Baltimore, people don't want to spend the money 
for it. The moneys that are necessary are enormous and the 
complexity of the issues are also enormous.
    We've got surface transportation issues. You see in the 
headline on the front page today, the region's ozone problem 
lies South. That's with regard to Washington vis-a-vis Atlanta. 
We have a tremendous ozone problem, a non- attainment problem, 
a traffic snarl problem. It's a suburban nightmare. We have 
more time spent in commuting in Atlanta than any other city in 
the Nation. As a result of that, for 2 years we were not able 
to spend any of the transportation money. It ended up being a 
plus for the city of Atlanta because we were able to renovate 
old roads and repair bridges, spend it on sidewalks, some of 
our mass transit money. But ultimately, it's an ongoing problem 
for all of us.
    We also, as I told you, you may know, as you heard about 
one of your colleagues being held up coming in on the flight, 
we have the busiest airport in the world. When I took office in 
1993, we had 57 million passengers; last year, 81 million 
passengers. We're estimated to have 120 million passengers in 
2015. We are spending about $6 billion on one of the few 
projects that's been approved for a fifth runway. We, as you 
saw by some of the recent news, some of the delays with regard 
to air transportation. Luckily, we were not in the top 10 with 
regard to delays in airports, but if we don't see more money 
that's invested, and luckily because of AIR-21 we will have 
some availability of those funds, we're going to see more 
delays with the Nation's infrastructure with regard to air.
    So whether it's water, wastewater, whether it's surface 
transportation, whether it's aviation, whether it's rail, you 
understand, Senator and Senator Voinovich, that unless the 
Federal Government becomes a more meaningful partner in terms 
of providing more funding, then we're going to see a total 
collapse of America's cities. When the cities collapse, the 
Nation's economy will collapse. That's a calamity that none of 
us want to see.
    So what I hope that you will look at, Senator Reid, is 
perhaps greater assistance with low interest loans, grants and 
technical assistance to communities to address some of these 
urgent needs. Otherwise, I think we're going to see further 
erosion in the very strong economy that we've had in the last 
10 years, but which seems to be a bit more fragile today. We 
certainly hope that we'll get the cooperation of the U.S. 
Congress to help us in that effort.
    Senator Reid. Your full statement, which I have read, is 
excellent. It will be made part of the record.
    Mayor Goodman.

            STATEMENT OF HON. OSCAR GOODMAN, MAYOR, 
                         LAS VEGAS, NV

    Mr. Goodman. Thank you. Good afternoon, Senator Reid, 
Senator Voinovich.
    It's an honor to be here today representing the city of Las 
Vegas. I'm a lot more provincial than my colleagues. I'm not 
worried about the whole world. I'm worried about my city. I 
love the city of Las Vegas. I got there in 1964. It had 70,000 
people as a population. It now, as a city, has 555,000. The 
county when I got there had about 100,000. We're now up to 1.4 
million. In the year 2020, we're going to be at 2.3 million. 
It's incredible the kind of growth that we have, and it affects 
everything that takes place within southern Nevada.
    We are at a point of bursting, and unless we reach the 
issues which affect our quality of life and keep it the same as 
it is, then we, too, will suffer dramatically, both 
economically as well as in the standard of living that we're 
used to here.
    When I got to Las Vegas, I had $87 in my pocket. I had a 
good education and was able to make a very, very good living 
there. I played myself in the movie Casino, and represented all 
those folks in real life. I thought everything was beautiful. I 
used to walk down to the courthouse and look to either side of 
the street. The trees seemed nice. The roads seemed good.
    Then when I was elected mayor 2 years ago, walking down the 
same streets, I saw that the streets were cracking. The trees 
were getting old. Everything was withering away. I pledged to 
myself that we were going to revitalize the city of Las Vegas, 
the downtown of Las Vegas, or else we would have serious 
problems because we're being challenged every day in our 
primary industry, which is our lifeblood of gaming and tourism, 
by having challenges throughout the country by other people 
having gaming--Indian reservations springing up in California. 
It's vital that we reach the question and issues of our 
infrastructure and our transportation, or else Las Vegas won't 
be the kind of place that it is.
    The first thing we have to do is we have to widen I-15. 
That's crucial. Our basic clientele comes in from southern 
California. They drive in during the weekends. It takes them 
sometimes 6, 7 hours to get there. If they go 40 minutes away 
to an Indian reservation, the Pala Tribe, they're able to get 
basically the same thing and not have the aggravation of the 
travel. So we have to open up that highway.
    We need a speed train. We've been talking about that. 
There's no reason why we shouldn't be the partner for that 
because it goes to the very economic lifeline of our community. 
Once we get into town, we have to have our fixed guideway, the 
monorail going down from the Strip all the way into the 
downtown area, down to the Fremont Street experience, because 
without having Fremont Street healthy, the rest of the valley 
is going to fail. It's going to be like a reverberating effect, 
and affect all of southern Nevada. So we need that.
    These are issues that really are everyday issues, but 
they're issues of the infrastructure, and unless we have some 
help from the Federal Government, we're not going to be able to 
do it. We have a long history of partnerships, as you know, 
with the Federal Government. Las Vegas really was made out of 
the pioneers who built the Hoover Dam; the folks who were out 
at the Nevada test site. These were vital members of our 
community; Nellis Air Force Base. There was a very symbiotic 
relationship between the city of Las Vegas and southern Nevada 
and the Federal Government. We depended upon the Federal 
Government in order to take care of the excesses, to build this 
quality of life that we've come to enjoy.
    If we're cutoff, and I get the sense that perhaps with this 
Administration it's going to be tougher getting the funds that 
are necessary in order to take care of ourselves in southern 
Nevada, and therefore in that whole Southwest sector of the 
United States, it will have this kind of effect, which will be 
catching to the entire Southwest and to southern California, 
and it will be disastrous.
    So I ask you to join with us in providing us the necessary 
funding. The mayors, my colleagues were talking about the 
wastewater treatment. We're going to have to spend $1.2 billion 
for our wastewater, and we have a model in our Southern Nevada 
Water Authority as being a local, inter-regional group that's 
been able to solve the most important problem that existed 10 
years ago, and that was water quality. We now have it under 
control, with the help of the Federal Government, with the help 
of these inter-local agreements and interstate agreements. But 
if we lose our partners, then the very problems that we were 
able to solve will not be able to be solved in the future.
    So I implore you to look at us as your partner, to 
recognize that we need a new airport there in Ivanpah, and to 
say that we don't just belies the truth. In order to have a new 
airport, in order to keep the economy healthy, we need to look 
to you for some help. We're ready to stand up ourselves and to 
do what we have to do in order to get the necessary funding 
that we're able to get, but we're limited, and the Federal 
Government really is our partner and has to continue to be our 
partner in order to sustain the quality of life that we have.
    Las Vegas is a great place. It represents all that America 
is all about, free enterprise, capitalism. We do very, very 
well, but we can't do it by ourselves.
    Senator Reid. Thank you very much, Oscar.
    We'll now hear from the Mayor of the District of Columbia, 
Anthony Williams.

   STATEMENT OF HON. ANTHONY WILLIAMS, MAYOR, WASHINGTON, DC

    Mr. Williams. Senator Reid, thank you for having me here 
today. I also want to thank Senator Voinovich for his support 
over the years and partnership with the District and working 
hard with us in so many, many different ways, recognizing his 
own role as a mayor and his understanding, as you do, Senator, 
of the needs of our metropolitan areas in our country.
    My testimony has been submitted for the record, so I'm just 
going to hit some highlights within the allotted time, 
recognizing that both you and Senator Voinovich have 
Thanksgiving plans.
    The District has made, I think by everyone's observation, 
some tremendous progress financially, tremendous progress in 
diversifying our economy from one relying exclusively or 
predominantly on the Federal Government, to one now relying on 
health care, technology, services and tourism.
    Improvements in services, we believe a reverse in migration 
now, people moving back to the city. But the question is, how 
do we sustain that recovery? Clearly, we have to focus on our 
infrastructure, and in so doing necessarily have to focus on 
our unique relationship with the Federal Government. I'll focus 
on just a couple of things. We have one of the highest levels 
of commuters, after Chicago. We are third in the country, in 
the number of commuters coming into our city. We also have in 
our city one of the highest utilization rates for our Metro, 
and we're proud of that. But therein lies a problem that we're 
facing, and that Atlanta is facing, a problem with air 
pollution and the impact on our infrastructure. We see Metro as 
a way to address this because we are also one of the cities 
with the highest usage for Metro.
    The problem is, the city pays 40 percent of Metro's 
expenses, and we're looking at just over a 25-year period in 
which $3 billion is needed for an infrastructure renewal 
program. This is over and above what we've already pledged in 
Metro improvements. In addition, Metro capital needs are 
underfunded by $100 million annually, representing another $40 
million in unfunded District obligations. The fact is, the 
District is making serious expenditures supporting Metro, and 
is also engaging in some unique strategies to pursue 
improvements in Metro's infrastructure. To give you an example, 
on New York Avenue, there is a unique public-private 
partnership with the Federal Government, the District and local 
property owners who have come together essentially on a one-
third, one-third, one-third basis to put in a new Metro station 
on New York Avenue. But we need help to continue that.
    Highways, as Mayor Morial mentioned, are a key part of our 
surface infrastructure, and here in the District we really have 
a tale of two cities. For our non-transit transportation 
infrastructure, we have the Federal City, a city of less than 
450 miles of roads, and a $250,000 annual per-mile fund for 
maintenance and improvements. Not surprisingly, 70 percent of 
these roads are in good or excellent condition. The other city 
is the local city with nearly 650 miles of roads that have just 
come out of a 5-year period of almost no investment whatsoever. 
While we're spending now $8,500 per year per mile for 
maintenance or improvements, 50 percent of our local roads are 
still in fair or poor condition. We have to address that.
    We have to address the need for surface rail in our city. 
Being one of the most congested cities in the country, our 
Metro has only a limited amount of room for expansion. We 
believe that surface rail can provide some of that capacity and 
bring back the glory days of light rail in our city, which once 
led the country in light rail.
    Our gateways are important, not only to our city as a 
metropolitan area, but our city as our Nation's capital. 
Clearly, Senator Sarbanes has recognized this, our partner 
Congressman Steny Hoyer has recognized this, and a bipartisan 
group in the Congress has recognized the fact that the 
entrances to our Nation's capital are not befitting the 
entrance to America's capital. New York Avenue, particularly 
South Capitol Street are in need of tremendous amount of 
investment to make them serviceable, let alone make them the 
kinds of entrances and gateways to our Nation's capital that 
they should be.
    Finally, I would join with my fellow mayors and talk about 
the need of our city in infrastructure as it comes to water 
pollution. We all know about the progress that's been made on 
the Potomac River, but there is a clear need for improvement in 
our overall watershed. A big reason for the need for that 
improvement is the Anacostia River. Once the birthplace of the 
U.S. Navy and a key historic area of our city, the Anacostia 
River is now one of the most polluted rivers in the country. We 
see a need for $1 billion of investment to provide for a 
combined sewage overflow strategy that will get the river up to 
where it should be in terms of water quality, and will allow us 
to redevelop this watershed, redevelop this waterfront in a way 
that again is not only becoming to our Nation's capital, but 
also uses this river as a way to unite two parts of our city 
that are presently divided, unfortunately, in so many, many 
ways, including by race and by class.
    With that, I'd like to thank again the committee for 
allowing me to testify today, and of course I'm ready to answer 
any questions you may have.
    Senator Reid. Mr. Portiss, we're going to ask you to 
withhold your testimony. We're expecting Senator Inhofe and I'd 
like him to be here when you testify. So if you just sit where 
you are, relax, we're going to ask some questions to the mayors 
at this time, and proceed with you and the GAO at a later time, 
if you just relax. I appreciate your patience.
    First of all, Mayor Williams, let me say this. I was 
chairman of the District of Columbia Subcommittee on 
Appropriations for a number of years. I saw then the tremendous 
need for help, and I tried to develop a number of pilot 
projects. But frankly, the mayor at the time wasn't interested. 
I called him into the office, and he was interested in other 
things. So it kind of soured me on trying to do some novel 
things.
    I've been very impressed with you since you showed up as 
part of the new Control Board, or whatever it was called, and 
then became Mayor. I really believe that the United States 
cannot have a city that is in the deep trouble from an 
infrastructure standpoint that Washington, DC is. You've been 
very kind in not describing some of the real serious problems. 
I mentioned the manhole covers. You know, it's a Federal City. 
It's a lack of enough money to take care. Tell us briefly why 
we have manhole covers blowing into the air, which is dangerous 
for everybody. Why is that happening?
    Mr. Williams. The manhole covers in Georgetown area are 
really the tip of the iceberg. What they represent, these 
manhole covers blowing up, is the fact that the infrastructure 
in Georgetown, whether it's electrical utilities, gas lines, 
water and sewer, in essence, all the utilities, and 
infrastructure hasn't really been updated. One of the primary 
reasons is that the Metro never went into Georgetown, there was 
never an occasion to redo that infrastructure. Certainly as 
you've pointed out, Mr. Chairman, we haven't had the funds over 
the last 15, 20 years to do that infrastructure improvement 
ourselves.
    So it's now only with manhole covers exploding and a crisis 
on our hands that we've begun a comprehensive, systematic 
effort to begin rebuilding that infrastructure. But as I 
mentioned earlier, while we've got an infrastructure effort 
underway in Georgetown, while we're doing an enormous amount of 
repaving, we can't sustain this pace for longer than a 3- or 4-
year period.
    The real tragedy would be to have this comeback of the city 
grind to a halt for lack of sustained investment and effort.
    Senator Reid. Mayor, the reason I mentioned you initially, 
my home is in Nevada, but I live here. I spend a lot of time 
here also. I spent 18 years or so in the suburbs, and I've 
recently moved into the District which, you're right, it's 
really being revitalized. But it's my understanding that some 
of the water systems, the pipes that carry water are 100 years 
old in the city. Is that true?
    Mr. Williams. There are very old pipe systems, Mr. 
Chairman. As a matter of fact, I believe that we still have 
wooden pipes in our city. They're that old.
    Senator Reid. Even though we had manhole covers blowing way 
into the air, and we were very fortunate someone hasn't gotten 
hurt. I mean, this is like a mortar going off. I think that 
you're going to see you're going to get very little help this 
year. I'm familiar with the appropriations process, and I think 
that you need to be more outspoken and demand more help. The 
way I've seen this, it gave the city such a bad reputation that 
in effect we had to have someone come in and start running the 
city. It's only now that you're taking the city back. So I'm 
sure you feel somewhat reserved in going and asking for you 
really need. But I think you're going to have to pass that 
point and start asking, because unless you ask, it's not going 
to happen here.
    So I just say that you're going to have, and I think all of 
you have been very nice here today and talking about 
generalities, water systems, sewer systems, streets, light rail 
and all these things you need. But I think we're going to have 
to start becoming more specific as to what the problems are.
    You know, Atlanta and Las Vegas are a lot alike. Even 
though you're a much older city, the growth in the two areas 
has just been phenomenal. New Orleans and Washington, DC are a 
lot alike--older cities, moderate growth, but old 
infrastructure. You know, I still remember, and I've said to 
John Breaux a number of times, this thing I watched on public 
television, Mayor Morial, about the water situation in New 
Orleans. Those pumps are ancient.
    Mr. Morial. We are built on a slough, and actually, 
Senator, we are a city that sits underwater. So all of our 
water--our wastewater and we have a separate, independent, you 
all call it stormwater, we call it drainage system--we have a 
system of in excess of 100 pumping stations throughout the 
city, which makes our water system one of the largest users of 
electricity and natural gas in the city.
    So we not only have the pipe problem, we also have the 
pumping station problem.
    Senator Reid. How old are some of those pumps?
    Mr. Morial. How old are they?
    Senator Reid. Yes, I saw that. It's hard to believe.
    Mr. Morial. One hundred years old.
    Senator Reid. Oscar, with Las Vegas growing the way it is, 
growth has been phenomenal--the fastest-growing community, 
fastest-growing State. We've held that for 8 or 10 years. What 
do you see as the most demanding need in this vibrant city of 
Las Vegas? Is it water? Is it sewer? Is it streets? What is it?
    Mr. Goodman. The good news, Senator, is none of our pipes 
are 100 years old, because we're not 100 years old. Our 100th 
anniversary, our centennial, comes up in 2005. So that's the 
good news. The bad news----
    Senator Reid. Most everything is new that you put in. I 
mean, we've had so much growth there.
    Mr. Goodman. But the bad news is that unless--everything is 
interrelated. When I became Mayor, I wanted to be the hands-on 
Mayor as to the regional issues. So I appointed myself on the 
regional planning coalition, the regional transportation, 
regional flood, the Southern Nevada Water Authority--those 
kinds of agencies--to get a handle on what takes place in the 
city. I'm convinced that everything has an interrelating 
effect.
    I'll give you an example. We have air quality problems, and 
the EPA is looking at us very carefully. We seem to be getting 
the carbon monoxide issue under control, but once you take care 
of that we have the PM10, which are the dust 
particulates. Then, we have to worry about the ozone. Basically 
all this comes about as a result of traffic.
    So in answer to your question, Senator, I think that we 
have to address the issues of traffic. We're the largest city 
in the United States now that doesn't have a fixed-rail system, 
and that's why it's so crucial that we have the monorail which 
will go down the Strip into the Fremont Street Experience and 
into the downtown. That accomplishes an awful lot of things. It 
helps us economically, of course. It takes the cars off the 
highway. It opens up the clogged up streets so that we can 
enjoy our quality of life.
    So if I had to say that there's an issue that we really 
have to see take place, it's the monorail in the city of Las 
Vegas.
    Senator Reid. Senator Voinovich, let me just ask one more 
question.
    All you mayors should look at Oscar, because the Clark 
County School District, which is now the fifth largest in the 
country, has to build one school a month to keep up with the 
growth.
    Mr. Goodman. With all due respect, Senator, I thought that, 
too, but it's now 14 schools a year. It's just incredible. We 
build a home every 15 minutes. That's how fast it's growing.
    Senator Reid. We dedicated 18 new schools a few years ago. 
We hold the record. The Superintendent of Instruction of Clark 
County, Las Vegas School District is really not a 
Superintendent of Instruction. He's Superintendent of 
Construction. That's all he does.
    Senator Voinovich.
    Senator Voinovich. I just wanted to ask this one question 
before I know you have to go to the floor.
    I have had one formal hearing in Ohio that was conducted by 
Senator Crapo on the issue of sewage treatment and water 
infrastructure needs, and then I had a couple of meetings with 
local government officials. One of the things that came up--and 
I'd be interested in your response to this, particularly from 
some of the organizations that you represent, maybe the U.S. 
Conference of Mayors and the National League of Cities--that's 
been brought up constantly with me is that many of the new 
environmental regulations in terms of storm sewer overflow are 
driving up costs astronomically. They feel that some of those 
regulations ought to be revisited because they defy common 
sense. One example was the Mayor in Mansfield, OH who has a 
holding tank. When you have a flood, the water is sent over to 
the holding tank. They treat it and then return it to the 
stream. They return it at a higher quality than the stream 
quality. But she's now been told that she's got to put in a 
whole new setup that's going to increase her costs to her 
people from $30 a month to $100 a month just to take care of 
the treatment of this water in this holding tank.
    I would just like to have your comment in terms of some of 
these regulations. I know Atlanta's got a problem. You've got a 
conformity problem in terms of the new regs. In terms of the 
new ozone and particulate, Mayor Goodman, you mentioned that. 
The new regs if they come into effect next year, almost every 
urban area in the United States of America is going to go into 
noncompliance, and many of them are not in compliance with the 
current ozone and particulate standards.
    Could you respond to that?
    Mr. Morial. Let me just say this, what you're talking about 
Senator, is unfunded mandates, and those are regulations that 
force us to spend money. I think we would certainly be open to 
looking to see if there are better ways to achieve the goal, 
but I don't think that we would want to step back from anything 
that would sacrifice the quality of water or sacrifice long-
term effects on the environment, because we've learned in many 
other areas that sometimes short-term gain means long-term 
pain.
    But having said that, I certainly think that looking at 
better ways to do things, where sometimes the regulations are 
written by well-meaning people who have very little practical 
experience at the local level. Some of those regulations that 
you refer to, or some of those systems that you refer to may 
have been put together with the best of intentions, but may be 
overburdensome with respect to cities.
    Mr. Campbell. Senator, you indicated that we are also under 
a Federal consent decree. One of the problems is that we don't 
have the sort of consistency in terms of telling us exactly 
what will work and how much it will cost, and then being in 
partnership to get there. A perfect example is this consent 
decree we're under right now with this SSO and the CSO 
Programs, which as I indicated in our testimony, it will cost 
us about $3.2 billion over the next 13 years to upgrade the 
system. That, in and of itself, is an astounding amount, but 
what we also see is that the approval for the CSO, as an 
example, we're now being told that perhaps the CSOs, which we 
were told in agreement that that would solve the problem, now 
may not be adequate to solve the problem. We may have to invest 
even more than what was originally agreed upon to get the job 
done.
    So not stepping back from what we all agree are needed 
environmental regulations to improve the air and the water 
quality, but I think it's a bit disingenuous to say, we in 
partnership agree this is a solution that will work. We spend 
almost $1 billion to put the plants in place with the combined 
sewer overflows to make it work in this partnership, and then 
we're told, well, that doesn't work after all, or at least 
we're not certain it works after all.
    These costs are going to fall on a very limited number of 
constituents. When I tell you that virtually 25 percent of the 
families in Atlanta make under $15,000 a year, and that our 
median income is about $36,000 a year, where will be get the 
money to pay for it? When you say $30 to $100, I must tell you, 
Senator, that's very conservative in terms of some of the cost 
increases that we're going to see. It's not just in Atlanta. It 
will be in Cleveland. It will be in Las Vegas. It will be in 
New Orleans.
    What we're seeing is, if in fact these mandates are 
necessary to improve the water quality or to keep the manhole 
covers from exploding, as you mentioned, Senator Reid, then 
let's have a partnership that recognizes that we all have an 
investment. If we're going to pay for this, let's have a 
consistent solution. Let's be in partnership about how we're 
going to pay for it, because the cities simply will not be able 
to fund it without bankrupting many of the people that we 
serve. If that happens, then this economic growth that's really 
sort of spurred our economy, although we now see some of the 
flatness in our economy now, we're going to continue to have 
problems with sustaining the growth in the future.
    Senator Reid. You know, I say to my two colleagues here, 
the burden for the high cost of infrastructure that we need to 
spend is in urban areas, not in the suburbs where we have 
people that are better off, but in the urban areas where people 
traditionally haven't the money that they have in the suburbs. 
But that's where we must focus our infrastructure needs is in 
the cities. I would like each of you to make sure that you're 
very specific--if you don't have it now, make sure you send it 
to us--what really you need in your cities, specifically. I 
want to hear, Mayor Williams, about Washington, DC--why you 
need to replace your water pipes, because they're old; and New 
Orleans, the pumps, I only know a little about them, 100 years 
old, I would think they can't go on forever--and the same with 
Atlanta.
    Mr. Campbell. The lifespan for most of the pumps and the 
pipes are about 50 years in terms of an adequate life cycle, 
Senator. So we have been living on borrowed time for about 50 
years in some of our cases. We have 100-year-old water pipes 
and those pipes are breaking down incrementally. What you end 
up doing, because you cannot get any consensus about how to pay 
for it, is you patch it. Everybody will tell you that patching 
simply is only buying time. What most of us hope for as elected 
officials, especially those of us with term limits, is we just 
hope that it won't break down massively on our watch, and then 
we'll be able to say we did the best we could, and you'll pass 
it on. As it's passed on and passed on, eventually it will cost 
massive amounts of money, as we are now having to spend in 
Atlanta and virtually every other city in America.
    Mr. Morial. I wanted to make one other observation about 
the suburbs, because the suburbs' problems aren't where our 
problems are today because the systems in the suburbs are just 
frankly newer.
    Senator Reid. That's my whole point.
    Mr. Morial. But the suburbs are just behind us. In other 
words, these suburban communities which grew up in the 1950's 
and 1960's will soon have 60- and 70-year-old water systems, 
drainage systems, road systems. So we're dealing with the fact 
that all of this underground technology is basically 100 years 
old, because it is in the late 1800's and the early 1900's when 
our engineers and technology gave us the ability to have clean 
drinking water, gave us the ability to have underground 
wastewater systems and get away from cisterns and things like 
that.
    So the suburbs are just behind us. I say that to suggest 
that this is going to have to be a national priority for the 
21st century.
    Senator Reid. Senator Inhofe, what I have told Senator 
Voinovich before you came here, with the transportation bill we 
need something to vote on today, so I'm going to go offer an 
amendment now. Senator Voinovich was kind enough to say he 
would take care of the meeting, and that you are the ranking 
member of this subcommittee, and Senator Voinovich certainly 
wouldn't care, I would ask you to conduct this hearing, and 
I'll try to return if I have that chance. What would be my 
suggestion is, I think we're at a point now where rather than 
keep these mayors waiting, let's finish the questioning to the 
mayors and then bring on Mr. Portiss and Mr. Guerrero, and 
complete it that way. So any further questions to the mayors, 
you would handle that for me, I'd appreciate it.
    Oscar, could we hear from you before I leave?
    Mr. Goodman. I was just going to say this, Senator, 
basically what we're talking about as mayors is to preserve the 
quality of life for our constituents. I mean, that's the broad 
issue. When you talk about things like patching up--patching up 
disrupts. You really have to solve the problems and solve them 
quickly. This constant disruption to people's lives, like in 
Nevada and Las Vegas in particular, where we're always working 
on the roads, trying to make bigger roads and make roads wider, 
make roads more safe--it gets to a point where people just 
aren't enjoying themselves in living in a community. I think 
that we really have to look at it in that respect.
    Senator Reid. Let me just say also to my colleagues here, I 
am really very interested in infrastructure in our cities and 
our States, and this is the first of a series of hearings that 
I'm going to hold on infrastructure. I would appreciate it, as 
your staff's already been advised, any ideas you might have on 
how we can get to the bottom of this. The first thing I'm going 
to do is make sure that we, through testimony given to this 
subcommittee, we have an idea of what the needs are around the 
country. Once we decide that, then we'll have to figure out 
something to do about it.
    But this isn't going to be a one shot deal. We're not going 
to hold this hearing and go on to another subject. I'm going to 
spend on this subcommittee as much time as I can on this. 
Especially we need to do it this Congress, because next 
Congress we're going to be faced with a highway bill. So I ask 
you and others to join with me. Also because of some of my 
other responsibilities, I'm going to be holding a number of 
these hearings on Mondays. So I know it's inconvenient for a 
lot of people, but it's one of the times that I have.
    So having said that, Senator Inhofe, I turn the hearing 
over to you.

 OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM 
                     THE STATE OF OKLAHOMA

    Senator Inhofe [assuming the chair]. Thank you, Mr. 
Chairman.
    Let me just make a couple of comments. First, before we 
continue with the questioning of the mayors, first I want to 
say to Mayor Morial, both of us, Senator Voinovich and I, were 
mayors of major cities and served with your father. In fact, he 
and I were on the U.S. Conference of Mayors and we worked very 
well together and we became very close friends.
    Mr. Morial. Thank you. Thank you, Senator.
    Senator Inhofe. I know you're carrying on his tradition.
    Mr. Morial. Thank you.
    Senator Inhofe. As I understand it, we have not heard yet 
an opening statement from Mr. Portiss. Is that right? Well Bob, 
if you don't mind, we'll go ahead and finish the way the 
chairman had suggested. As most of you know, we went through a 
majority change. I was the chairman of this committee, as was 
Senator Voinovich right before me. We actually are operating 
with two former chairmen and a current one.
    Let me just say, as a conservative I've always felt we 
should have a limited role of what government gets involved in. 
But I've been very specific to say that there are two areas--
national defense and infrastructure--that specifically these 
are government roles that we need to concentrate on and 
concentrate our resources on. I feel very strongly about that.
    As a former mayor, I know some of the problems that you 
have--unfunded mandates and all these things that are supposed 
to be doing such a great job. Currently, Senator Voinovich is 
the ranking member on the Clean Air Subcommittee. I used to 
chair that committee. We know the necessity of streamlining and 
I'd like to have all of you address that a little bit, because 
in TEA-21, we talked about streamlining, about doing something 
where we could quickly get through some of these environmental 
demands that are on us. It might be a good idea to hear if any 
of you have ideas on how we could implement this. While we did 
address it in TEA-21, we did not actually put down specifically 
how this is going to be done. Any thoughts that you have?
    Mr. Campbell. Well, Senator, I serve as the chairman of the 
Transportation and Telecommunications Committee of the U.S. 
Conference of Mayors, and testified a great deal on the TEA-21 
passage, as well as some of the particulars.
    Quite honestly, Senator, as I'm sure you can imagine, 
there's a huge chasm between good intentions and reality. The 
streamlining simply has not occurred. In fact, we in cities 
have had really to fight to make certain that our voices are 
heard in terms of how these moneys are spent in TEA-21.
    There is a concomitant issue which is that in some of the 
States, the moneys that were intended in essence to be a part 
of a partnership between the Federal Government and local 
communities have been absorbed by State governments to be 
utilized for State projects, and in essence the money is simply 
being transferred that comes in from TEA-21 and the States 
simply take the posture that they no longer have to find the 
moneys to fund some of those projects.
    What that means is that there is no real streamlining 
that's occurred. We're having tremendous difficulties in 
getting some of the moneys, and we're also not having our 
voices heard, even though, as you may remember, Senators, that 
there was a good deal of by-play between whether or not the 
State Departments of Transportation in essence would be the 
final arbiters on where the moneys were spent, or whether we 
would have the kind of local input which we think is important. 
Both you and Senator Voinovich would appreciate, having come 
out of municipalities, that it's our voices that should be 
heard, because it is local communities that are really feeling 
the brunt of these decisions about where transportation moneys 
are to be spent.
    This issue really needs to be resolved, and one of the 
things that we were told when TEA-21 was passed was that there 
would be some further clarifying amendments that would somehow 
speak to this issue of more local control, some of the issues 
with regard to streamlining, how the moneys were going to be 
allocated, or whether or not we were going to be able to get 
these moneys and put these moneys to use very quickly. In 
Atlanta, that is one of the areas where we've not seen the kind 
of partnership that we really would have hoped for. It doesn't 
mean that things aren't going well. It simply means that if we 
are truly to get the money spent quickly, resolving some of 
these issues with regard to infrastructure needs, particularly 
roads and surface transportation as is contemplated under TEA-
21, we would look for some further clarifying amendments, 
because, to just be very blunt, Senator, it hasn't happened. In 
order for us to be responsive, we need your help because we're 
not getting the job done because the moneys aren't flowing as 
quickly as we would like.
    Senator Inhofe. That's the reason I brought it up, because 
it isn't being done. You're right.
    How about you, Mayor Goodman? Do you have any comments 
about this?
    Mr. Goodman. Basically, the only comment I would make is we 
have the strongest compliance laws in the world in Nevada as 
far as clean air is concerned, but we don't have the folks to 
enforce them. That's been a big problem in Las Vegas. We're 
having a battle right now as to who's going to be in charge of 
our air quality, and we're going to be meeting with the 
Governor this coming Monday, a week from today. Hopefully, the 
city of Las Vegas will have some say in that.
    But basically, it's a question of money. We went up to our 
State legislature and we tried to get money in order to have an 
independent Air Quality Board. They turned us down. We wanted 
to increase the smog test fee, and they wouldn't go for it. The 
Governor said he wasn't going to allow an independent agency to 
take place that wasn't funded. So it all comes down to money, 
as so much of our problems do.
    Senator Inhofe. Would the new standards for ozone and PM 
put Las Vegas out of attainment?
    Mr. Goodman. Yes. Right now, we believe we're barely within 
attainment as far as the carbon monoxide. On the 
PM10, we're hoping that we're able to get that under 
control. We have so much construction taking place there, it's 
very, very difficult. We put in some very tough laws as far as 
construction and contractors' watering and taking care of the 
earth around the projects. But we don't have anybody to go out 
there and make sure that they're complying with the law. That's 
a big problem.
    As far as ozone is concerned, we really, in all due 
respect, haven't begun to really address that issue. That's 
something that's out there.
    Senator Inhofe. Are any of the rest of you--would you find 
yourselves in nonattainment as a result of these standards?
    Mr. Williams. We clearly have a problem down the road in 
nonattainment, Senator, in this region. I would agree with 
Mayor Campbell and everything he said about unfunded mandates, 
on the need to work with the Feds in making streamlining really 
work. But I will say that in this area, one strategy we have 
for addressing this problem is in our Metro. Our Metro is just 
about ready to burst at the seams and really needs some 
investment. We have the highest ridership in Metro, I think 
after New York City, in this region. I think investment in 
Metro is money well spent for a number of different reasons, 
not to mention attaining these standards.
    Mr. Morial. I would just add that one thing that might be 
tried is to deliver more of the resources to the local level. I 
think what you find with the whole setup, which is designed to 
transfer money from the Feds to State Departments of 
Transportation, they in turn are responsible for projects in 
local levels or they work through metropolitan planning 
organizations, is that there are so many steps along the way--
so many rules, so many regulations, so many meetings, so many 
hearings--that the money doesn't get spent.
    One of the problems that I've seen in Louisiana is that the 
simple inflation in construction costs takes projects which may 
have been envisioned in 1997 dollars, but construction may not 
begin until 2001, and no longer the State can afford it because 
the matches increase.
    So I would urge really a serious look at the system in 
terms of the way it works, such that maybe something 
experimental could be tried, and that is delivering some 
resources directly to the local level for certain types of 
projects.
    Senator Inhofe. What I'd like to do for the record, not to 
take up time now, is have each one of you submit your ideas on 
streamlining, and also this whole idea that you could be losing 
some real valuable highway dollars, Mayor Goodman, and that's 
very significant. If Senator Voinovich would forgive me, can I 
tell them my story you've already heard once before?
    Senator Voinovich. Go right ahead.
    Senator Inhofe. I was elected first to the State House of 
Representatives in 1966, and my first trip to Washington was to 
testify before this very committee here, protesting Lady Bird's 
Highway Beautification Act of 1965, saying, ``You can't 
withhold our dollars.'' Here I am ranking member on the very 
committee I testified before back in 1967.
    Well, only one last question, on the use of Darby bonds, 
have any of you been taking advantage of this? That's allowing 
your future revenues--OK, that's fine.
    Do you have any more questions for the mayors?
    Senator Voinovich. I have. Yes.
    As I listened to you today, I've been in your position as a 
member of the executive committee of the Conference of Mayors 
and as president of the National League of Cities. The problems 
are still there.
    Mr. Campbell. The same problems, same bridges, same roads.
    Senator Voinovich. I worked very, very hard with the 
Governors to get unfunded mandate relief legislation passed. I 
was very active in the safe drinking water changes that helped 
to loosen that regulation a little bit to make some common 
sense out of it.
    I would suggest to you that we have a responsibility in the 
Federal level to get out hands around the real costs in the 
various areas where we have Federal responsibilities. I happen 
to agree with Senator Inhofe that we have priorities in 
national defense and infrastructure. I think Americans forget 
that we made the real change in our sewage treatment facilities 
in this country with the 75/25 program that came in at the end 
of the 1960's, and it was discontinued in 1985. Then we went to 
the loan fund program.
    So we need to get a handle on our numbers, but it seems to 
me that you all ought to get together through your respective 
organizations and work with your Governors in the Big Seven to 
come back with some recommendations on how you can tackle some 
of the problems that you have. I would suggest one of them is 
to really look at, as we did with the safe drinking water, are 
we asking you to do some things that don't make sense? You 
know, I think that's really something that's important, 
harmonizing our environmental needs along with practical needs 
that you have in your respective communities.
    Then I think that some real consideration should be made 
concerning partnership. Just what is the proper division of the 
cost of these things? I know in my case, my water rates went up 
300 percent while I was mayor. We had a thing called ``Build Up 
Greater Cleveland,'' where the Urban Institute told us we had 
billions of dollars of infrastructure needs. So we sat down and 
spent the time to really get a handle on what those 
infrastructure needs were. Then we started to systematically go 
at them. It wasn't much fun. People weren't happy with it, but 
at least we knew what we were doing.
    I'd be interested in your thoughts of this WIN proposal. 
You know, WIN has come back with $57 billion over a 5-year 
period. I don't know whether that's going to get the job done 
or not, but I want you to know about reality. OK? Reality is 
that last year, we tried to increase the amount of money for 
grants to States and cities for waste treatment infrastructure 
problems. It was called a Wet Weather Program. It was only $1.5 
billion over a 2-year period. We can't get in this budget right 
now in the current Appropriations bill, there's no money in it 
at all for the Wet Weather Program. We've increased the money 
in the revolving loan fund to about what it was last year.
    I've got a bill in now, S. 252, which would increase the 
loan program from about $1.5 billion to $3 billion a year for 5 
years. That's just a loan program. But that's not enough in 
itself. You've got to have a grant program.
    So we have an enormous problem. I would suggest to you that 
it's not going to be solved unless you get your respective 
organizations--the National League of Cities, U.S. Conference 
of Mayors, National Governors Association, National Council of 
State Legislatures--to come back to this Congress with a 
proposal that you're all going to be in lock-step over to see 
if we can't make some progress on this issue.
    I just want to make one other point--we're talking about 
building schools. I happen to believe that building schools is 
a State and local responsibility. Now, I don't know what's 
happening in Nevada, but I know in Ohio, as Governor of our 
State, I began an infrastructure program. We're going to spend 
$23 billion over the next, I think, 10 years to replace the 
schools in our State. But it's a State responsibility. The 
Federal Government can't do it all. The same taxpayers that you 
have to go to are the same ones that we have to go to. So 
there's a balance that needs to be struck here about what are 
our respective responsibilities.
    I think if the cities came back to us with some kind of a 
proposal on this whole business of waste treatment and water 
and said, look, we feel that we can handle this, but we think 
that's your job, and it was a partnership, I honestly believe 
that we could make some progress in this area.
    So I challenge you to take this on in your respective 
national organizations. Unless you get your national 
organizations involved in this, forget it. It's not going to 
happen.
    Mr. Morial. We will do it. We appreciate the offer.
    Mr. Campbell. Thank you very much, Senators, for hearing 
from us. It makes a real difference to hear a sympathetic ear. 
As you pointed out, there was a 75/25 partnership for a number 
of years. We would love to have a 50/50 partnership that would 
help us to defray some of the enormous costs that we are 
absorbing.
    Thank you very much, Senators.
    Senator Inhofe. Thank you.
    All right, we'll excuse our four mayors and ask Mr. Portiss 
to stay, and also ask Mr. Guerrero if he would come to the 
table.
    While our mayors are leaving, I would only say that those 
of us who serve in the U.S. Senate, and also served previously 
as mayors of major cities, we know what tough jobs the mayors 
have. I sometimes tell, Bob, when I hear my friends complaining 
about something here in the Senate, I say you ought to try 
being mayor of a major city sometime. If you don't like the 
trash system, it ends up in your front yard.
    Let me welcome the second panel. Bob, I hope you will 
forgive me. There were some mechanical problems in Chicago, and 
the plane was 1\1/2\ hours late. I wanted to be here in advance 
of you.
    The way I'd like to do it is to have you go ahead and give 
an opening statement. But before you do, I'd like to share with 
this panel that back in 1970 when I was in the State Senate, we 
noticed that the message wasn't getting through that we in 
Oklahoma were navigable. A guy named Albert Kelly came to me 
with this great idea. He was a World War II submarine veteran. 
He said, Inhofe, what you're going to have to do to show people 
that it's navigable is bring a submarine all the way up to 
Oklahoma. We decided we'd go ahead and do it. We went down and 
made a deal with the Navy to get the retired USS Batfish, about 
the size of a football field, as I recall, Bob, and we floated 
it all the way up the Mississippi into the Arkansas and across 
the line. I remember having to use flotation at some times, and 
having to sink it to get under bridges. But we got it all the 
way up there, and all my adversaries were saying, it's 
``Inhofe's Folly.'' You know, we're going to sink Inhofe with 
his submarine. But it didn't happen because it's still there 
right now as a State Park, completely self-supported. It told a 
lot of people in the world that we are indeed--I remember the 
pictures on the front of a big industrial magazine showing it 
crossing the Arkansas into Oklahoma. So our best-kept secret is 
hopefully getting heard, and we've made a lot of progress.
    So why don't we start with you, Bob, and you tell us a 
little bit about your problems, your victories and your 
challenges.

 STATEMENT OF ROBERT W. PORTISS, PORT DIRECTOR, TULSA PORT OF 
                       CATOOSA, TULSA, OK

    Mr. Portiss. Thank you, Mr. Chairman.
    I was really pleased that I was able to wait and that you 
had me wait until you showed up.
    It really is an honor to be here, and it was an honor to 
sit among such distinguished mayors as well from our principal 
cities in this country.
    For the record, my name is Bob Portiss. I have held the 
position of port director for the Tulsa Port of Catoosa, a 
2,500-acre inland international seaport located about 10 miles 
northeast of the city of Tulsa in Rogers County, OK, since 
1984. My employment with our public port authority actually 
began in 1973. I have to give you a little history about the 
port because needless to say, most of you would not know 
anything about it, except for what Senator Inhofe has shared 
with you.
    Oklahoma began offering barge transportation 3 years 
earlier, in December 1970 when the McClellan-Kerr Arkansas 
River Navigation System was completed. This system begins at 
the confluence of the White and the Mississippi Rivers located 
approximately 500 miles north of New Orleans on the Mississippi 
River, and extends 445 river miles through Arkansas and 
Oklahoma. Seventeen locks and dams permit barge freight to 
stair-step the 420-foot elevation change to reach our port at 
the head of navigation.
    Authorized by the Rivers and Harbors Act of 1946, the 
McClellan-Kerr, which cost $1.2 billion to build, has resulted 
in over $3.2 billion of non-Federal public and private 
investment in Oklahoma and Arkansas, creating some 55,000 jobs. 
Freight handled on the system currently averages 12 million 
tons per year, carried in 8,000 barges. That's the equivalent 
of 120,000 railroad cars or 500,000 trucks, which if used 
instead would, of course, add significant congestion to our 
already constrained railroad and highway systems.
    All of this was made possible by a joint venture offered to 
Arkansas and Oklahoma. The offer was simple. The Federal 
Government would build a waterway to Oklahoma if the five 
principal cities along the system would each build a public 
port providing access to barge transportation. Tulsa was one of 
those cities. Their commitment delivered what I believe is the 
largest fully developed inland port complex, believe it or not, 
in our country today--the Tulsa Port of Catoosa.
    I know of no other inland port that has 2,500 acres of 
contiguous land area. This land and the initial infrastructure 
was paid principally for and through a $21.2 million general 
obligation bond issue of the citizens of the city of Tulsa in 
Rogers County. That seed money has since grown to over $45 
million in public investment, and some $300 million in private 
investment generated by the 53 companies now located within the 
complex who currently employ 3,000 people. Obviously, the joint 
venture has worked well for our States and for the Nation, at 
least thus far.
    The future success of the system will depend in great part 
on whether Congress will continue to provide, maintain and 
operate our Nation's waterway infrastructure. The current 
outlook admittedly is not favorable. Fortunately, the Congress 
has approved additional funding above the President's current 
budget for O&M. But even so, the critical O&M backlog will 
still increase by more than $300 million in the next fiscal 
year.
    Locks and dams--this is where the real hurt lies. Locks and 
dams along our Nation's waterways are aging and severely 
deteriorating, over 44 percent of them being at least 50 years 
old. Many are underutilized for modern commercial barge tows, 
which must then be broken up and reassembled at each lock. It 
is estimated that as a result, river traffic is delayed some 
550,000 hours annually, representing an estimated $385 million 
in increased operating costs borne by shippers, carriers and 
ultimately consumers.
    Sadly, the current trend is to keep studying the problem, 
rather than fixing it. As an example, the current study 
concerning the modernization of the Illinois and Upper 
Mississippi has been underway for 11 years at a cost of $54 
million, and yet we are no closer to finalizing the study today 
than we were in 1990. Favorable congressional action is also 
required at our own level for Montgomery Point Lock and Dam, 
without which our navigable waterway may not exist anymore. 
Congress has allocated some $23 million for this current fiscal 
year for the project, way short of the $45 million that we've 
asked for. Delaying this project could literally shut down our 
waterway, as I mentioned, simply because of a lack of water.
    Another item affecting our future is the need to increase 
the authorized depth of the McClellan-Kerr from 9 to 12 feet, 
enabling us to operate at peak capacity, being able to load 
barges more fully--approximately 100 trucks per barge, rather 
than the current 60 truckloads per barge would lower the cost 
of products, thereby enhancing our customers' ability to 
compete in world trade.
    In conclusion, it is time for Congress to take 
responsibility for providing the funds necessary to rebuild, 
rehab, maintain and modernize our Nation's inland waterway 
navigation system. Our system has been the envy of the world 
for decades. Now the rest of the world is taking up the 
challenge, with the realization that water is the only way to 
remove significant amounts of freight from the highways.
    Our congressional and State leaders must understand that 
maintaining a viable National inland waterway transportation 
system and protecting the environment are not mutually 
exclusive objectives. They can be accomplished by encouraging 
local and Federal agencies to work together as in past years, 
thereby continuing to provide jobs and enabling us to 
effectively compete in the international marketplace. The 
alternative of abandoning the system that has helped our Nation 
to be so strong and which has proven to be a good Federal 
investment is clearly not in our best interest.
    Thank you.
    Senator Inhofe. Thank you, Mr. Portiss.
    I think the way we're going to conduct is go ahead and 
continue with you now, before getting to Mr. Guerrero, if 
that's all right.
    I think it's really important--you had mentioned on this 
Montgomery Point Lock and Dam, which we've worked on together 
now for I guess a decade or longer than that--that it's not a 
matter of shutting it down. One of the big users up in Enid 
ships a lot of wheat--Lou Myberg--and was talking about how 
they make their contracts some years in advance. If there's any 
doubt as to the ability of the waterway to carry them, then 
they'll make another contract. In other words, we would 
contract ourselves out of the business of using the waterway. 
This is something that's very hard to sell here on the Hill.
    Now, there's a lot of competition for dollars. You 
mentioned $24 million is not an adequate amount. What was the 
amount? Was it $50 million or $51 million?
    Mr. Portiss. Forty-five million dollars.
    Senator Inhofe. It's what?
    Mr. Portiss. Forty-five million dollars is the actual 
amount requested in order to complete it as previously 
scheduled, and that was in 2003.
    Senator Inhofe. How much can you do now with the $24 
million if we were to be able--now, you know, we did get a 
little bit extra through the help of Senator Reid and Senator 
Domenici just after this amount had been established. But what 
is your estimate in terms of what this would set us back? When 
is the latest we can come up with the rest of it necessary to 
complete the Montgomery Point Lock and Dam project?
    Mr. Portiss. In talking to the district engineer from 
Little Rock, if they do not receive at least I believe $35 
million, then their option will be to shut the project down 
until the next fiscal year. Because apparently the Corps does 
not have any extra money to transfer from some other project to 
Montgomery Point Lock and Dam in order to continue with 
construction.
    Another option they've looked at is the possibility for the 
contractor to fund the balance of the money that might be 
needed for this year--let's say up to the $35 million that 
maybe they could squeeze by with, but that's not in the cards 
either.
    So the outlook looks very dismal if we're not able to 
increase the amount above $24 million, and again that's just 
based on my conversation with----
    Senator Inhofe. So you say they might have to shut down 
until they wait and see what happens next year, and if that 
comes up to the $45 million. What would happen during that 
shut- down? What costs would be incurred that would not 
otherwise be incurred?
    Mr. Portiss. I don't think there would be any immediate 
direct cost. The problem is how soon will the water level in 
the Mississippi drop that magical 15 feet that the senior 
hydrologists with the Corps have been predicting for some time, 
which was the impetus--the justification, if you will--for 
building Montgomery Point Lock and Dam. That could happen 
starting next year, for example, and then we would be in 
trouble because instead of having nine feet of navigable depth, 
we may be down to something quite a bit less. That would be--
well, at that point, we just simply cannot economically load 
barges. You have to have your full 8.5 feet.
    Senator Inhofe. Also, there could be a contractual problem, 
too, because people have contracted to have that capacity.
    Mr. Portiss. That's very true.
    Senator Inhofe. So I just wonder if we might be incurring 
any exposure if that would happen.
    You know, you mentioned something I think is very 
significant, and the mayors probably maybe they really didn't 
get into this. But as to what you relieve--have there been any 
studies made on, let's say, how much did we carry, let's say, 
all the way into the port last year? What kind of figures are 
you looking at?
    Mr. Portiss. Two million tons by waterway, barges alone.
    Senator Inhofe. OK. What would that have translated to if 
you'd used trucks?
    Mr. Portiss. Oh, I don't remember that off the top of my 
head.
    Senator Inhofe. But it does serve to relieve congestion. 
That's my point. You know, I served 8 years on the 
Transportation Committee in the House, and then when we came 
over to the Senate in 1994, until this year I was not active on 
this committee, and now just coming back to it. The amount of 
congestion that's taken place in that interval from 1994 to now 
is just really unbelievable. That was the most shocking thing 
that I had learned during the time that--after coming back to 
the Transportation Committee. But I know that it would be 
something mathematic that can be worked out, but it's a message 
we need to get out--that it's not just rail; it's not just, you 
know, it affects rail and truck traffic, too.
    Mr. Portiss. Senator, we rely on, as you know, rail, truck 
and barge have to work together simply because barges can't go 
door to door. When you figure that there are 60 semi- trailer/
trucks to every single barge full of grain, all of a sudden 
that illustrates the magnitude of what we're talking about in 
terms of just taking trucks off the road.
    Senator Inhofe. Yes.
    You mention in your testimony about the Upper Mississippi 
and Illinois Waterway, and you're very familiar with how inland 
waterway systems work.
    Mr. Portiss. Yes, sir.
    Senator Inhofe. Why do you support the construction of new 
locks in the Upper Mississippi River? What effect does this 
have on us, down where we are?
    Mr. Portiss. We, as an example, the inland waterway system 
is our water transportation highway. We regularly ship cargo to 
and from such diverse locations as Minneapolis-St. Paul, 
Chicago, Pittsburgh. If the highway isn't there, then we're no 
longer in the inland waterway business. As has been--another 
factor I think to consider is it's totally absurd to think 
about shutting down the Mississippi or restoring it to its 
original condition as a river, as some have suggested. Sixty 
percent of our Nation's agricultural exports go down the 
Mississippi to the Gulf Coast. How are we going to handle it if 
we don't have an inland waterway system, if we don't have a 
viable Mississippi? So I don't think it's something that really 
needs to be studied. We just need to get on with the program.
    Senator Inhofe. Bob, what year did you come with the Tulsa 
Port of Catoosa?
    Mr. Portiss. Yes, sir, in 1973.
    Senator Inhofe. In 1973.
    Senator Voinovich, he's been there a long time. I've known 
him since that time, too. My father-in-law was very 
instrumental in the development of that waterway.
    Mr. Portiss. Yes, sir. You've been a 100 percent solid 
supporter, Senator.
    Senator Inhofe. Senator Voinovich, do you have any 
questions you'd like to ask Mr. Portiss?
    Senator Voinovich. No, I do not.
    Senator Inhofe. All right, Mr. Portiss, I appreciate very 
much your coming. I know the problem with the Montgomery Point 
Lock and Dam. I know the necessity of the 12-foot channel. Is 
there any other challenge out there you'd like to share with us 
so that we would be able to use this?
    Mr. Portiss. I think there's a couple. One of my colleagues 
from the back of the room--thank you, whoever it was, I think I 
know who it was--said 80,000 trucks is the equivalent of 2 
million tons. Thank you very much, whoever did that.
    I think a couple of other things I'd like to share with 
you, and really, my statement is considerably longer than what 
I read into the record, as you might well guess. But another 
area that really concerns those of us that are in the inland 
waterway business--probably two areas. One is the Endangered 
Species Act. If this Act is to be reauthorized, it simply must 
be done with needed reforms. The implementation of its 
provisions has thus far resulted in actually stopping projects 
permanently.
    Senator Inhofe. Give us an example.
    Mr. Portiss. The Arkansas shiner, just recently Senator, 
was designated as having a critical habitat in western 
Oklahoma.
    Senator Inhofe. Yesterday a lawsuit was filed by the Farm 
Bureau, I believe.
    Mr. Portiss. I saw that. Literally by declaring it a 
critical habitat, and as I understand it, U.S. Fish and 
Wildlife Service has complete control over as to what that land 
is going to be used for, without any compensation to ranchers 
or farmers in the western part of our State. I think the reason 
the lawsuit was filed, based on some hearings that I've 
attended and where I've listened to these people talk about it, 
I mean literally, it's just shutting down their farms, their 
ranches. That just can't be.
    Senator Inhofe. Yes, we had testimony on another 
subcommittee of this committee that it cost the average farmer 
with run-off from one of those areas about $700 a year. So 
those things add up to our rapidly endangered--real endangered 
species, that's the Oklahoma farmer.
    Mr. Portiss. The only other thing I was going to add is you 
mentioned earlier about TEA-21 or NEXTEA. Any new bills like 
that, we really need to find a way to--the concept makes sense, 
and that is for multi-modal transportation links. But so far, 
at least at our facility, and my colleagues along the river in 
Arkansas and Oklahoma have found the same thing to be true, 
it's really difficult to access those funds, and I don't know 
why. It's just very difficult.
    Senator Inhofe. All right. Anything else?
    Mr. Portiss. No, sir. I think that's it.
    Senator Inhofe. OK, I appreciate it very much your being 
here, coming from Tulsa, and then also tolerating my tardiness.
    Mr. Portiss. Oh, no, no, no.
    Senator Inhofe. I look forward to seeing you after the 
meeting.
    Mr. Portiss. Thank you, sir.
    Senator Inhofe. Mr. Guerrero, if you have any opening 
statement, we'd like to hear it at this time.

STATEMENT OF PETER GUERRERO, DIRECTOR, PHYSICAL INFRASTRUCTURE, 
 U.S. GENERAL ACCOUNTING OFFICE; ACCOMPANIED BY: PAUL POSNER, 
 MANAGING DIRECTOR, FEDERAL BUDGET STRATEGIC ISSUES; AND KATE 
  SIGGERUD, ASSISTANT DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES

    Mr. Guerrero. Thank you, Senator.
    I'd like to submit our written statement for the record and 
just summarize my remarks.
    Senator Inhofe. Without objection, that will be the case.
    Mr. Guerrero. With me is Paul Posner who is our Managing 
Director at GAO for Federal Budget Issues. We were asked, as 
you know, by Senator Voinovich to do this work, and I'll be 
talking about the work today.
    As you've heard, a sound public infrastructure plays a 
vital role in encouraging a more productive and competitive 
national economy and in meeting public demands for safety, 
health and improved quality of life. As you heard from the 
mayors today, when problems occur with the performance of 
infrastructure, they can be very visible and their effects can 
be widespread.
    I'm here today to discuss the Federal Government's role in 
ensuring a sound public infrastructure. My testimony will focus 
on the Federal Government's role in funding civilian 
infrastructure, and I will also discuss estimates for major 
areas of public infrastructure developed by seven Federal 
agencies.
    With regard to the Federal Government's role, it's safe to 
say that it exerts a very important influence on infrastructure 
investment and development at all levels of government and the 
private sector. The Federal Government's influence can be seen 
in several ways--acquiring and maintaining federally-owned 
assets; providing funding for infrastructure that's owned and 
operated by others; and influencing the way that infrastructure 
projects are designed and built through legislation and 
regulations.
    The Federal Government has spent an average of $59 billion 
a year since the late 1980's on the Nation's civilian 
infrastructure. As shown by Figure 1 in my written testimony, 
this spending showed a slightly upward trend through the 
1990's. But the Federal Government, as we heard here today, 
isn't the only player in meeting the Nation's infrastructure 
needs. As shown in Figure 2 in my written statement, State and 
local governments also contribute significantly and there's 
been an upward trend beginning in the 1980's that in certain 
areas even exceeded Federal spending.
    With regard to infrastructure estimates by the seven 
agencies we reviewed, each agency estimated billions of dollars 
will be required to build or repair the Nation's roads, 
wastewater treatment works, dams, airports, courthouses and the 
like. The estimates contained in Table 1 of my testimony range 
widely and cover various periods of time. For example, GSA 
estimated it would need $4.5 billion to repair public buildings 
over the next 5 years. At the other extreme, the Federal 
Highway Administration estimated up to $83.4 billion would be 
required in each of the next 20 years to improve the Nation's 
highways.
    In between are 20-year estimates by EPA of nearly $300 
billion to construct and upgrade drinking and wastewater 
systems; $11-$16 billion estimated by the Federal Transit 
Administration per year for the next 20 years for mass transit; 
$38 billion for Army Corps projects already in progress; $35 
billion for airports; and $8.5 billion for highways within the 
jurisdiction of the Appalachian Regional Commission.
    Certain estimates, such as those prepared by the Army Corps 
and by GSA are for Federal spending alone. Other estimates, 
like those prepared by EPA for drinking water and by the 
Federal Transit Administration for mass transit, involve all 
levels of government and the private sector.
    Let me now put these numbers in perspective. First, while 
these estimates encompass major areas of public infrastructure, 
they cannot easily be compared or simply added up to produce a 
national estimate of our needs. This is because they are 
developed using different methods and are for different time 
periods. A fundamental reason that estimates were prepared 
differently and lack comparability is that they are developed 
and used for different purposes. Some agencies, such as the 
Army Corps and GSA, for example, use those estimates to manage 
and repair their own assets, while other agencies such as EPA 
and FTA develop estimates to identify national needs and help 
you fund those needs.
    Second, the seven agencies develop their estimates using 
some, but not all of the capital budgeting practices used by 
leading private sector and government organizations. Those 
practices include establishing a baseline inventory of assets, 
using cost-benefit analysis to identify economically-justified 
investments, and ranking and selecting projects for funding 
based on established criteria. Some agencies followed more 
leading practices than others. For example, the Army Corps had 
procedures that reflected six of the eight leading practices.
    Nonetheless, following these leading practices does not 
always ensure a quality estimate, and each estimate has 
limitations associated with using data of known poor quality.
    Third, some investment estimates span several decades and 
investment needs can change significantly over time with 
changes in technology, the efficiency of delivering 
infrastructure services or the employment of strategies that 
alter the demand for infrastructure. For example, energy 
efficiency standards can affect how many power plants we build. 
Year-round scheduling of public schools and universities can 
affect how many schools we need to build. User fees and tolls 
on roads can influence the congestion on highways.
    Finally, these estimates mostly focus on the condition of 
infrastructure, rather than the desired outcomes--for example, 
less traffic congestion as a desired outcome. We caution 
against relying on estimates of need that are based primarily 
on the condition of existing infrastructure if desired outcomes 
are not clearly articulated and the cost and benefits of 
alternatives for achieving those outcomes are not fully 
considered.
    This concludes my statement. I'll be happy to answer any 
questions you may have.
    Senator Inhofe. Thank you, Mr. Guerrero.
    I'll go ahead and turn this over to Senator Voinovich. He 
is the one who made the request.
    Senator Voinovich.
    Senator Voinovich. Thank you, Mr. Chairman.
    I haven't read the report. I got it on Friday and I am 
going to read it, and so I'll be following up with some 
specific questions. But you took the information that each of 
the agencies had in terms of their estimates. You just said, I 
think, that in some instances you wouldn't rely on these 
estimates because they leave something to be desired.
    How do we get to a point where we can get a real handle on 
what these costs actually are? Or is it many agencies are 
afraid to really confront the costs that they have? Or in the 
alternative, they figure even if they do, it doesn't make any 
difference because the money won't be forthcoming.
    Mr. Guerrero. Let me correct a misimpression if I gave 
that. I didn't intend to suggest these numbers were not 
reliable. They are not comparable. In other words, the 
Congress--if you were to ask us--if you were to look at these 
numbers and say, what is the national estimate of need here for 
infrastructure, you would be hard-pressed to come up with a 
national need because the numbers cannot be easily compared. 
They're prepared using different assumptions, different 
methods, they're for different time periods, and so forth. Some 
of them use cost-benefit analysis to compare different 
projects, and only those that are considered economically 
justified----
    Senator Voinovich. But what I'm saying is that could you 
come up with a set of criteria that would say to agencies, 
these are the criteria that we want you to use over a period of 
time, and here are accepted practices in terms of how you go 
about estimating costs so that we could get to the numbers--
maybe not tomorrow, but somewhere down the road.
    Mr. Guerrero. Yes, I believe that's possible. If I could 
turn that over to Paul Posner, who could probably elaborate 
further on that.
    Mr. Posner. Yes, we've given that a little thought. OMB--
this does require some more central leadership, I think, to 
really address what you're saying. Analytically, the criteria 
are fairly apparent and we laid it out in the report. We have 
eight what we call best practices that have partly been 
gleaned, by the way, from an earlier work we did looking at 
best practices in capital planning in 12 corporations and 
States.
    OMB for several years following up on that has developed a 
capital programming guide requiring Federal agencies for the 
first time to develop capital plans. It's hard to believe 
agencies have not done that before because, unlike State and 
local governments in the private sector, they don't have to go 
to the market to raise money or go to the voters. They've been 
able to essentially get by without it.
    One possibility might be to add on, in other words, some 
kind of guidance on how to do this, because clearly determining 
needs is the first step in that capital programming guide. 
Every year agencies are required to go through a deliberative 
process to do that. Theoretically, OMB could work with the 
agencies to incorporate some more consistent criteria in that 
guide, and then that would provide probably some more 
uniformity in how the agencies go about doing this thing.
    Senator Voinovich. In terms of when you're putting it 
together, you were just looking at the Federal side. You heard 
these witnesses earlier--we have infrastructure costs. I think 
the EPA--- what was it?--$300 billion in 20 years to deal with 
the infrastructure cost for water and sewers during that 
period. There's been more recent from the WIN organization that 
it's even more than that.
    Now, the numbers that you came up with--that's the total 
number, not just the Federal share.
    Mr. Guerrero. That's correct. For most of the agencies, 
it's the investment required at all levels of government. There 
are some exceptions, obviously. The numbers we present in our 
report for GSA and the Army Corps would be just for those 
agencies managing Federal properties.
    Senator Inhofe. What percentage of that would be Federal?
    Mr. Guerrero. What percentage of, for example, the 
wastewater? I believe historically it's about 25/75 percent is 
the rough approximation. Seventy-five percent would be the 
investment made by the State and local governments and 25 
percent by the Federal Government. That has changed 
historically. Around 1970 when we put a lot more money into 
upgrading sewage treatment to a secondary level of treatment, 
the Federal Government's role in that and the amount that the 
Federal Government provided was probably proportionally higher. 
But today, it's about 75/25.
    Senator Voinovich. You heard me ask the questions of the 
mayors to come back with, looking at the environmental 
regulations and the guidance and so forth that have come out. 
Has GAO ever looked at that issue in terms of what additional 
costs will be incurred as a result of some of these new 
regulations? The reason I bring it up is when we did the 
unfunded mandates legislation--it started in Ohio. We really 
went out of the way to identify specifically what these 
unfunded mandates were. What's really amazing to me is that no 
one had ever done it before. Then we shared it with others 
States and they started going through the exercise.
    Have you done that at all, do you know, in terms of GAO 
looking at, say, environmental costs of the new regs dealing 
with CSOs or stormwater overflow?
    Mr. Guerrero. Yes, we've done work in different areas. 
Specifically, very recently we did work on the--not the 
combined storm overflows, but the requirement for stormwater 
permitting, which has been highlighted also as an unfunded 
mandate. We can provide you with information on some of those 
programs to the extent we've done work on them. We'd be happy 
to give you specific information. To the extent, we haven't 
looked at the additional costs associated with some of those 
requirements, we could look at that for you.
    Senator Voinovich. Because I know with the safe drinking 
water, when you got into that here in Congress that the regs in 
some instances, most of the water systems were under 10,000, 
and they were requiring the most highly sophisticated equipment 
to do it, and it would have bankrupted most of the 
jurisdictions that were being asked to do the work.
    Mr. Guerrero. Yes, in the drinking water area, for many 
years we studied that particular problem. There's a real 
difficulty that smaller systems have complying with the 
standards. They don't have, as you heard from the mayors in the 
earlier panel, they don't have always the tax rate base to 
spread those costs that a larger jurisdiction can absorb those 
costs more easily. When Congress reauthorized the Safe Drinking 
Water Act several years back, it tried to address that in terms 
of how those standards were set. The extent to which that's 
been successful or not I think is something worth looking at.
    Senator Voinovich. You indicated that following a leading 
practice does not ensure quality investment estimates. What do 
you mean by that?
    Mr. Guerrero. Well, for example, if you use cost-benefit 
analysis to assess whether a project is economically justified, 
but the data are not good or the assumptions are faulty, you 
might come up with a result that is not all that useful. So 
it's how you apply those best practices is critical. The key 
area that all of the agencies suffer from, no matter how good a 
job they try to do here, is the data they have to work with 
have limitations. EPA, for example, in estimating the costs of 
wastewater treatment and drinking water treatment only get data 
that goes basically 5 years out. Congress is asking it for a 
20-year estimate of needs. So the agency has to take a guess at 
what that would look like, and to a large extent, really 
doesn't provide a full 20-year estimate because it doesn't have 
that data. That's why you have the discrepancies between the 
WIN report and EPA, where WIN is saying, oh no, it's much 
higher, because EPA hasn't extrapolated these costs into the 
future. They've only taken the first 5, 6 or 7 years, whatever 
they were able to get. EPA acknowledges those limitations, and 
every agency suffers from some of those same kinds of data 
limitations.
    Senator Voinovich. Do you think that someone objective like 
GAO would look at, say, the WIN numbers and the other numbers 
and be able to come back and tell us whether you think they're 
reasonable?
    Mr. Guerrero. Well, I know that CBO did that analysis. I 
have a staff person here. What would we add to the CBO 
analysis? Do you have any sense of that?
    Ms. Siggerud. No, I don't.
    Mr. Guerrero. CBO did look at the WIN numbers and tried to 
reconcile why there were those kinds of differences. My 
impression was they encountered some difficulty with that.
    Ms. Siggerud. Yes, the difficulties that they encountered--
well let me first of all add a few other things to the 
differences that we noted between the WIN estimate and the EPA 
estimate.
    Mr. Guerrero. Let me introduce Kate Siggerud from the 
General Accounting Office.
    Senator Voinovich. I didn't hear your name, Kate.
    Ms. Siggerud. Kate Siggerud.
    In addition to what Peter mentioned about the timeframe 
differences between these estimates--the 20 years. Usually the 
communities that reported to EPA in their survey usually only 
reported about 3 to 5 years worth of plans. The WIN estimate 
also includes some maintenance costs that are not generally 
included in EPA's estimates, as well as some financing costs 
that aren't included in EPA's estimates.
    Essentially, EPA's goal in doing its clean water and its 
safe drinking water survey is to look at what are the costs of 
implementing the Safe Drinking Water Act and the Clean Water 
Act. Another objective is to determine what would be required 
in terms of EPA funding to those communities. Of course, the 
funding under the statute only covers certain items. For 
example, it doesn't cover maintenance and it doesn't cover 
drinking water or wastewater facilities for new communities. 
Therefore, the EPA estimate is much different in scope than the 
WIN estimate. That really goes to explaining the difference in 
numbers there.
    We'd certainly be glad to provide some additional detail 
comparing the two, and also summarizing what CBO found in terms 
of their comparison.
    Mr. Guerrero. I think the bottom line probably is it's safe 
to say that EPA's estimates of needs are much lower than what's 
actually needed. Now, how much lower is open to question, and 
I'm not sure we--I believe the CBO could not, and I'm not sure 
we could do any better job of telling you precisely how to 
bridge that difference between those two estimates. But I think 
it's fair to say the EPA's estimates are low, and probably in 
the wastewater area alone, EPA estimates they're probably 
underestimated by some $80 billion, and that's no small sum of 
money.
    Senator Voinovich. Let me interrupt for just a moment.
    Mr. Portiss, we'd be glad to excuse you, and I hope we have 
a chance to visit maybe back in my office in a little while, 
but our business with you has----
    Mr. Portiss. That would be great. Thank you.
    Senator Voinovich. All right. Great. Thank you, Mr. 
Portiss.
    Senator Inhofe. Thank you.
    Senator Voinovich. Well, Mr. Chairman, based on what I've 
just heard, doesn't it make it so much more important than when 
agencies are doing regulations, that they really look at cost-
benefit in terms of those regulations? In other words, they've 
passed the regs. They've come up with estimates of what the 
costs are, but when you go back and review them, you find out 
that they've really low-balled it in terms of really capturing 
the real costs that are incurred by whoever it is that are 
going to have to comply with them. We have the unfunded 
mandates. I think it's over $100 million that they have to come 
back. I think for local communities, it's $50 million.
    But wouldn't you agree that that ought to be given a higher 
priority than perhaps it's being given right now by Congress?
    Mr. Guerrero. I think what happens with--first, cost-
benefit analysis is probably done in almost every case where 
those requirements are imposed because it's been a longstanding 
practice and requirement under Executive orders going back to I 
think the Carter Administration, but it maybe even predates 
that. Those Executive orders have been refined and refined over 
time, and every President has required EPA to do cost-benefit 
analysis of its regulations. But those analyses are done, as 
you can appreciate, looking prospectively before anything is 
actually implemented. So it's a best guess at a point in time.
    It is useful to look back. We issued a report a year or so 
ago about the importance of looking retrospectively at how well 
these estimates are done and whether some of them need to be 
adjusted, and if so, what we can learn from making those 
adjustments and what the implications are in terms of where the 
rubber hits the road with the mayors and localities across the 
country.
    I would say that EPA does as good a job as it can do, doing 
prospective cost-benefit analysis. What it doesn't do is stop, 
look back, and do the retrospective to see, was it right? Was 
it even in the ballpark? What did it overestimate? What did it 
underestimate? What does that imply in terms of do we need to 
revisit what we're asking people to do?
    Mr. Posner. If I could just interject one other point. I 
think one of the most important criteria we have here for 
judging an agency's estimating practices is whether they put a 
cost-benefit screen on the proposed Federal project as well. 
Because as we talked about, funding is limited at both levels. 
The State and locals are concerned about mandates without 
money. We have encroaching entitlements and other things that 
are gradually shrinking the discretionary spending we have to 
allocate to this pool where we have tremendous needs. 
Obviously, effective cost-benefit analysis--I think of the ACIR 
report that was done in 1993 that talked about high performance 
public works, which is kind of a nice way to think about it. We 
could think of ways to strengthen those claims, given the 
greater pressures we have at the Federal level.
    I just wanted to bring one thing up to your attention. We 
at GAO have suggested--and now this year for budget process 
reform is an important year because those discretionary caps 
are expiring--establishing for purposes of this kind of thing 
an investment component inside the discretionary caps. In other 
words, not a traditional capital budget where you go out and 
borrow like the States do, but given our overall unified budget 
framework and the need to continue to cap spending, that you 
might have a separate component devoted to what we call 
investment kinds of programs--infrastructure, human capital, 
R&D--which most economists potentially suggest can improve 
productivity just as well as surpluses can. The Congress over 
the year makes two decisions. One is, what's the total size of 
the surplus, and at least another decision is some explicit 
consideration be given to how much do we invest in promising 
programs for the future where, again, these estimates of needs 
could come back into the process in a more systematic way. So 
that's just saying needs are limited at both levels and there's 
a process that we might think about, to think about our scarce 
resources as well.
    Senator Voinovich. That would certainly deal with one of 
the questions I asked about school construction. That's an 
enormous undertaking by the Federal Government. Once you get 
into that, that could just continue to go. But the fact is that 
you don't get into this issue of weighing that versus something 
else unless you know what that something else is. I think 
that's the point you're making, is there are certain 
fundamental costs that we have that we should identify and say 
these are things that we really need to get at. They're really 
not discretionary. They are fundamental things that need to be 
done by the Federal Government if we're going to have the 
infrastructure to have a viable economy and at least clean 
water. So I think that's a terrific suggestion that you make. 
You're just saying is, you've got the surplus. You can do this 
with it. You can do that. But these are costs that you just 
can't get away from if you're being realistic and practical 
about things.
    Mr. Posner. Right now, those decisions, as you indicate, 
are made in a number of appropriations subcommittees and a 
number of other forums, but they're never brought together for 
the Congress to consider as a whole and rank against each 
other.
    Senator Voinovich. Yes, and the same thing, Mr. Chairman, 
in the WRDA bill--$39 billion, and you've looked those numbers 
over. They seem pretty reasonable that they came up. I think 
the way standard is that it's $39 billion worth of these 
projects which have either received some design or some 
construction money. We continue to pass WRDA bill after WRDA 
bill after WRDA bill, and don't provide the money. I think this 
year, $1.5 billion or something like that to implement WRDA.
    Would you say those numbers were good?
    Mr. Guerrero. The $39 billion? We had reported $38 billion, 
so it's there. It's in the ballpark certainly. The Army Corps 
reported appropriations for those projects last year was $8 
billion.
    Senator Voinovich. Eight billion dollars was appropriated 
last year?
    Mr. Guerrero. Eight billion dollars for water resource and 
hydro--not just what we heard from Mr. Portiss today, the 
inland waterways, but also some of the other areas under the 
Army Corps jurisdiction, including dams and hydro and so forth.
    Senator Voinovich. I'd like to look at that.
    Mr. Chairman?
    Senator Inhofe. No, I was listening and it occurred to me 
that in our MILCON in Defense in the Armed Services Committee, 
it seems to me we have a very rigid set of criteria that's used 
that seems to work pretty well. I know you folks are not 
directly involved in that, but have you, Mr. Posner, have you 
ever looked to see if that's something that could be emulated 
or maybe it should not be.
    Mr. Posner. Not specifically. I do know one thing that 
Defense does in their budgeting for capital that's very 
important is they have a tradition of budgeting up front for 
all of the costs of a segment or a total project, which the 
Corps of Engineers does not do. They do what's called 
incremental funding. We, OMB and a number of other observers, 
including the President's Commission on Capital Budget of 
several years ago, argued that really when we go about funding 
these things, however good your needs assessments are, you 
ought to be prompted to pay for the costs up front, because 
that's the only time you really get to look at it. That's when 
you lock in the Federal Government's decisions. By and large, 
DOD in the budget process has observed that up front funding 
principle, perhaps more than any other agency in government.
    Senator Inhofe. That's interesting. Why is it that the 
Corps has followed this incremental approach?
    Mr. Posner. I'm not exactly sure of the history. Typically, 
when we look at their budget documents, and we just did a 
report, we'd be glad to make available to you, for the Senate 
Budget Committee for Senator Domenici several months ago, where 
you look at their projects. Typically, you're funding maybe 
just a portion of the costs of completing a facility every 
year. That way, potentially, you could fund more projects in a 
given year, but over time you're subject to cost overruns and a 
lot of other problems because of that approach.
    DOD has always maintained for their own discipline 
internally and to support their planning programming budgeting 
system, that up front funding is an important discipline for 
them.
    Mr. Guerrero. So your point is well taken. Different 
agencies employ different best practices. In this particular 
case, a best practice that DOD as a whole may employ, but not 
the Army Corps, is the notion of up front budgeting as opposed 
to incrementally funding, which puts the project at risk, of 
course, to overruns and so forth. You know, we have a table in 
here where we identify of the seven agencies we looked at, how 
well each of them are adhering to these best practices. It's a 
real mixed bag, so there's room for improvement by the agencies 
in terms of how they do their capital planning. That would also 
improve the estimates of numbers that are reported to you.
    Senator Voinovich. We had a capital budget when I was mayor 
and we had a capital budget when I was Governor, and some 
people have proposed that maybe the Federal Government ought to 
look at a capital budget. But I think that suggestion you just 
made a couple of minutes ago maybe is the beginning of that 
kind of approach. But does anybody ever sit down at OMB and 
look at the big picture, and start to look at priorities for 
the country and then kind of go back and start to allocate 
resources and make those hard decisions that one has to make in 
terms of doing a budget?
    We have this, in my opinion, ridiculous 13 appropriation 
bills that I think is going to end up causing us a train wreck 
at the end of this year, like it has the last couple of years. 
But does anybody from your observation ever look at the big 
picture and try to have national priorities and balance things 
up and do that? Or is it everybody just focus on their own 
little area and then hope it all works out?
    Mr. Posner. Boy, I would guess that their answer would be 
that's the President's job, and in some sense it does get done. 
As you know as a mayor and a Governor, that's the job that 
ultimately falls to the chief executive.
    We have looked at this question. I mean, generally OMB has 
to put the pieces together somehow. What we have is a new tool 
that I think can help in this regard. It's under the Government 
Performance and Results Act. Every year, OMB has got to prepare 
a government-wide performance plan that not only talks about 
how much money is going to each agency, but ultimately how much 
money is going to each outcome across agencies. So if we're 
talking job training or if we're talking economic development, 
the idea is in one document you want to force tradeoffs across 
agencies, programs, even tools of government. A tax expenditure 
for low-income housing, for example, should be traded off 
against the HUD Section 8 program and against other kinds of 
loans and loan guarantees so that you can have a decisionmaking 
process that's truly comprehensive. I think that's what you're 
getting at.
    OMB has produced that report every year. It's published in 
the President's budget. But it's not a driving document. It's 
an after-the-fact compilation of decisions they make in the 
more traditional route. We have suggested, in fact, that more 
of a government performance results perspective, using outcomes 
as your decision units, could make for a more comprehensive 
decision process. But so far, they haven't taken us up on our 
challenge with regard to that.
    Senator Inhofe. You know, Senator Voinovich, when I was 
elected in 1986 to the House, I came up here and I realized 
having gone through the same thing that Senator Voinovich 
mentioned when he was mayor and Governor, that we had very 
rigid and separate operating and capital budgets. We knew 
exactly where we were at all times. We depreciated our stock. 
We followed the guidelines that the Federal Government imposes 
on everyone in America except for themselves.
    A guy who was at that time serving from New York in the 
House of Representatives, who was a CPA by the name of Joe 
DioGuardi and I put together a task force. We were going to 
come up with an accounting system for the Federal Government. 
We worked on it for 4 years, Senator Voinovich, and nothing 
happened. So maybe this discussion here today can be the start 
of something.
    I had the Secretary of the Air Force into Tinker Air Force 
Base this past Friday, and just looking at the way we do 
business--no depreciation schedules. You don't really know 
where you are at any given point, except it's money in and 
money out. Does this bother you?
    Mr. Posner. Yes, I think it's fair to say that your work 
may have ultimately to fruition because we now have Federal 
accounting standards. All agencies are required, theoretically, 
to put together depreciation schedules, have them audited every 
year. DOD has not in fact been able to be audited still. 
They're one of the agencies that has not been able to pass a 
clean audit, and there are longstanding problems with financial 
management that, as you well know, go back years. One of them 
is they can't get a good inventory of their property, plant and 
equipment, which as you rightly say, we expect everyone else in 
the country to do.
    There's a lot of reform going on. We feel there is progress 
being made. But at least we have accounting standards now. So 
that's the CFO Act and the following amendments have gotten us 
on the right track at least.
    Mr. Guerrero. You know, one of the things we point out in 
our report is that over the last few years, there have been 
various reforms like the one that Paul mentioned. I'll just 
rattle off maybe six. There's a Chief Financial Officers Act. 
There's a Government Performance Results Act that we talked 
about. There is a Federal Acquisition Streamlining Act, OMB 
Circular A-11, OMB's Capital Programming Guide, and our own 
Leading Practices Guide.
    When you take the sum total of all this over the last, I 
would say, 6 years or so, there has been a concerted effort to 
improve how the Federal Government budgets, reports and thinks 
about these kinds of issues. It's really a very daunting task. 
All of these are different pieces of a puzzle that can help us 
answer this question. I think to some extent, we're doing a 
good job in some areas, and maybe not as good in other areas. 
We just need to continue to monitor how these different reform 
initiatives are working and are they producing the intended 
result, which is really to get the Congress, in the end, better 
information to make better decisions.
    How do you feel? Are these things helping you? Or is this 
turning out to be largely a paperwork exercise for the agencies 
involved, and you're still not getting the information you 
need.
    So that's something we'd be happy to continue to monitor 
and work with you in the future on, in terms of where can we 
continue to go in terms of improving how report these things 
and how useful that information is to you in terms of 
decisionmaking.
    Senator Inhofe. Well, I don't want to steer this into the 
Senate Armed Services Committee or into Defense, but there is a 
real serious problem there. You buy a submarine and then one 
day it's gone, but nobody knows what happens in between.
    Mr. Posner. I think just to followup quickly on what Peter 
said, I think we've made substantial progress in developing an 
infrastructure of information. Now we're trying to figure out 
how do we integrate it in decisions. For example, we have 
performance information now in these annual performance plans. 
We have a budget accounting system that's still often oriented 
toward old-style kind of reporting and decision units, where 
you're talking about salaries and expenses on one side, but the 
performance information is outcome-oriented on the other. So 
how we bring those perspectives together in a way that prompts 
Congress to think about it as they make decisions--that's the 
challenge going forward.
    Senator Voinovich. Start off with finding the time to do 
it, because we spend all our time on the budget and 
appropriation bills, and we have very little time for 
oversight. Many of the agencies that we're charging with 
responsibility to do the things that you just talked about are 
so busy with directing their attention to it that they haven't 
got time to follow through on the management things that 
they've got to do. You've got to wonder at the way we're 
organized whether we're going to be able to deal with this next 
century in terms of our challenges.
    I have no other questions.
    Senator Inhofe. I don't either. I appreciate very much your 
taking the time. Sorry for the long wait, and you're dismissed.
    [Whereupon at 5:13 p.m. the subcommittee was adjourned to 
reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]
Statement of Hon. Marc H. Morial, Mayor, New Orleans, LA, on behalf of 
                     the U.S. Conference of Mayors
    Mr. Chairman and members of the subcommittee, I am Marc H. Morial, 
Mayor of New Orleans.
    I appear today on behalf of the U.S. Conference of Mayors where I 
serve as the organization's president. The Conference is a bipartisan 
organization that represents mayors of the more than 1,200 cities with 
a population of 30,000 or more.
    Mr. Chairman, I want to thank you and other members of this 
subcommittee for holding this hearing today to examine the ``Federal 
Role in Meeting Infrastructure Needs.''
                                overview
    Let me begin by emphasizing that the Nation's mayors believe that 
the Federal Government needs to be a strong leader in partnering with 
cities on local and regional infrastructure projects. We also believe 
that the Federal Government is uniquely situated to ensure sufficient 
flows of public capital in meeting the Nation's growing infrastructure 
needs, including the preservation of existing critical assets, to 
support an expanding economy.
    In my testimony today, I offer some of the mayors' perspectives on 
the necessity for increasing Federal commitments to infrastructure 
investment. In providing these views, I include findings of a recent 
survey of the mayors on these issues. I also offer up a new context or 
benchmark--investing in our Nation's most potent economic engines, 
cities and their metropolitan economies--to guide future Federal policy 
decisions on infrastructure investment. Finally, I describe several 
infrastructure projects in the city of New Orleans to illustrate some 
of our needs in this area.
    Mr. Chairman, I would begin my remarks by thanking you and the 
other members of this committee for your leadership in crafting the 
bipartisan agreement on brownfields and in moving this legislation, S. 
350, forward so successfully in the Senate. This legislation will make 
a real difference in cities, counties and regions throughout the 
Nation.
    There is a clear nexus between recycling America's land through 
brownfield redevelopment and the infrastructure issues before us today. 
For too long, we have let these properties--thousands and thousands of 
acres of land in existing communities and places with substantial 
infrastructure in place--lay idle, as development races relentlessly to 
undeveloped and pristine land, ever further away from our built-up 
areas. We know that this pattern of development has been highly 
consumptive of our public infrastructure dollars, as we chase ever 
spreading and lower density development and its associated needs. This 
form of land use requires infusions of capital for new facilities and 
systems that is disproportionate to the number of people and economic 
activity that we are attempting to serve. This is occurring all the 
while incumbent system needs, both modernization and rehabilitation, 
are overlooked or ignored, facilities that serve a substantial majority 
of our citizens.
    When past conference president and then Fort Wayne Mayor Paul 
Helmke testified before this committee at your March 1999 hearings on 
livability and open space, he helped develop your record on the many 
linkages among brownfields, infrastructure and urban development.
    By embracing S. 350 and other brownfield-related policies, we will, 
for the first time, take significant action to help decelerate the 
several decades-old pattern of outward development, while renewing our 
attention to the substantial public and private investment we have made 
in existing communities and places. In the very fast growing and 
relatively new cities and regions, broader brownfield reuse efforts 
will not be as potent as it will be in most other areas. However, it is 
a crucial first step in redirecting our public resources inward to 
places where most Americans now live and work and where the Nation's 
most crucial economic assets are located.
    The mayors applaud this committee's leadership on S. 350 and we are 
anxious to see final congressional action on brownfields legislation 
over the next several weeks. We strongly share Committee Chairman 
Jeffords' goal to have this legislation enacted this summer.
           federal role in meeting local infrastructure needs
    Mr. Chairman, let me provide some of our key perspectives on the 
challenges before this committee, the Congress and the Nation in 
addressing our Nation's growing infrastructure needs.
Local Infrastructure' Needs Are No Longer a Local Issue
    Mr. Chairman, if there is one perspective that I believe is most 
important to this hearing today, it is that `local' infrastructure 
needs are no longer simply a local concern. These needs are of national 
significance, of national economic importance and of substantial cost, 
exceeding local capital resources.
    It is a given that one of the fundamental functions of government 
is to ensure that the Nation has a modern and efficient infrastructure 
to support our societal and economic endeavors. Among the challenges we 
face locally, like all leaders in government, is to find ways to 
reinforce in the public's mind the importance of investing in these 
infrastructures. Sometimes, we can't immediately see the benefits, or 
in other cases, the benefits are longer term. We know that investment 
in the Nation's infrastructure is more than an exercise in shifting 
responsibility among levels of government.
    An overriding theme of the Conference's recent efforts has been to 
call attention to the role of cities and their metropolitan economies 
in fueling U.S. economic growth. At some point in Nation's economic 
development, many of the infrastructure needs in cities and regions 
ceased to function as `local' infrastructures. Increasingly, these 
systems are National infrastructures in their scope and importance. 
Later in my statement, I share some of the Conference's work on 
metropolitan economics to bolster this claim.
    Whether it is Mayor Williams' efforts that anchor a metropolitan 
economy that influences three States and the District of Columbia, an 
economic engine that last year outpaced the economy of Austria or Hong 
Kong. Or, it is Mayor Campbell's city that anchors a metropolitan 
economy that generated more output than Norway or Denmark. Consider the 
New Orleans region, an economic engine that now accounts for nearly 
one-third of my State's total output and easily surpasses the economies 
of Kuwait or Syria.
    As we look at the broader issue of infrastructure investment, we 
see the Federal Government as an investor, a partner in building 
national prosperity. It is an undeniable reality that the U.S. economy 
will grow or stall, based on the economic performance of our Nation's 
metro economic engines. Our metro economy reports show this 
convincingly. They underscore how infrastructure assets fuel the output 
of these metropolitan engines.
    As mayors, we see infrastructure investment, particularly larger 
scale projects that often surpass locally available resources, as one 
of the pathways to improved productivity and economic performance of 
our metropolitan engines. These are investments that influence and 
shape the rate of U.S. economic growth.
    Look at Mayor Campbell's capital plan for Hartsfield, a city-owned 
facility that serves more people than any airport in the world. This 
one asset has helped define the economic prosperity of the Southeastern 
United States. There are numerous examples everywhere of how these 
infrastructure assets, while perhaps none so dramatic as Hartsfield, 
now fuel metropolitan output and, in turn, underpin our States and U.S. 
economic growth.
    In recent remarks to the National Press Club, I made the point that 
the improved health of our Nation's cities and their influence on their 
metropolitan economies helped drive one the most significant economic 
expansions in this Nation's history. This did not happen by accident.
    Mr. Chairman, when Fort Worth Mayor Ken Barr testified before this 
subcommittee in last Congress, he first introduced this panel to some 
of our work on metro economies as well as our perspectives on the 
implementation of TEA-21. The report that we just released now provides 
data over the 10-year period, 1990-2000, covering all of the Nation's 
most recent economic expansion.
    We believe that our metro economies data is a powerful tool in 
helping this committee fashion policies to partner with States and 
local governments on infrastructure. It can be a new standard upon 
which to gauge the effectiveness of financing strategies and other 
efforts and can help policymakers make more strategic investments for 
the future.
    With this context of metropolitan economies as a roadmap for making 
more strategic infrastructure investments, I want to offer some further 
observations on where we are in meeting our infrastructure needs.
Sequencing of Major Federal Commitments to Infrastructure
    With the enactment of TEA-21, the mayors saw this as a milestone in 
the national debate on rebuilding the Federal partnership on 
infrastructure investment. With this legislation in 1998--where the 
Federal partnership commitment to surface transportation nearly 
doubled--mayors and others viewed this as the first installment in a 
broader effort to increase our public commitments to the Nation's 
infrastructure.
    Building upon this legislation, Congress substantially increased 
funding commitments to the Nation's aviation system with the enactment 
of AIR-21 in the last Congress. Again, capital commitments to airport 
capital needs and our national aviation system more broadly were raised 
to the next level.
    Both initiatives--AIR-21 and TEA-21--were badly needed and enacted 
just in time, as our world-class highway and aviation systems labor 
under rising demands. But these are not the only systems that are 
overburdened.
    Mayors anxiously awaited this Congress, looking to engage you and 
others on the need to further enhance our Federal partnership 
commitments to other infrastructure needs. As you know, mayors have 
been seeking action on new initiatives to increase capital commitments 
to intercity rail, rail transit, water and wastewater, parks and school 
modernization, areas of need that are now on the congressional agenda 
and in the queue for legislative action.
    We see the need for a longer-term Federal infrastructure strategy 
that builds upon the gains that we made under TEA-21 and AIR-21, while 
extending this investment thrust into other areas, through initiatives 
such as WATER-21 and RAIL-21.
    You have already built a record on the rapidly escalating needs in 
the water and wastewater area, with need analyses by the Water 
Infrastructure Network (WIN), American Water Works Association, U.S. 
EPA and others.
    One of your committee members, Senator Voinovich, has already 
stepped forward with a legislative plan to begin closing the gap in 
this area of need. The funding gap here is driven by what is needed to 
maintain the integrity of existing systems, while investing in new 
facilities to meet Federal standards.
    One of the areas that the mayors believe warrants particular 
attention, along with an expanded Federal commitment, is rail 
transportation. In January, I led a National Mayors' Summit on A 
National Rail Policy for the 21st Century to begin to begin pressing 
for increased investment in the Nation's rail infrastructure, both for 
passenger and freight.
    The mayors are seeking enactment of the ``High-Speed Rail 
Investment Act of 2001'' (S. 250) as the first installment in this 
broader national commitment to the Nation's rail infrastructure. Mr. 
Chairman, I want to underscore the strong support of the mayors for S. 
250, legislation that will help us further modernize our Nation's 
intercity passenger rail capabilities.
    Rail transit is another key element of this national policy. Today, 
these systems are taking root in every part of this country, with more 
than 200 projects--be it light rail, heavy rail, commuter rail, 
trolleys and other fixed guideway projects--now being studied, planned 
or constructed. Later, I provide examples of rail projects now underway 
in the New Orleans area.
    It is now estimated that the pipeline demand for capital for these 
rail projects already exceeds $35 billion, against an expected Federal 
commitment in the next fiscal year of about $1.1-$1.2 billion. In our 
survey, the number and geographic distribution of mayors who cited 
light rail or other rail transit projects as their city's number 
surface transportation priority represents a sea change in surface 
transportation investment priorities.
    In the wake of the 1991 ISTEA law, when local areas were given the 
opportunity to help shape transportation priorities for their local 
areas and regions, rail investment moved to the forefront of the 
transportation agenda. We can no longer afford to view this need as an 
issue for cities and regions of the Northeast or Midwest, it is now 
national in scope. To amplify this point, consider the pending fiscal 
year 2002 Transportation appropriations bill, which was recently 
approved by the Senate Appropriations Committee, where 38 States are 
represented in the `new starts' program.
    We believe there is much to be done on the rail transportation, 
both intercity and local projects, that the mayors would urge this 
committee to consider and work with us on strategies to accelerate 
investment in these projects.
    Mr. Chairman, we recognize revenue expectations have changed 
dramatically since the first of the year, when mayors and others began 
pressing to allocate portions of the surplus to these priority 
infrastructure needs. Nonetheless, we believe we must still find ways 
to finance these infrastructure needs. Mayors are certainly open to 
creative mechanisms, like the bond/tax credit approach set forth in S. 
250, legislation we strongly support, to further our progress in 
addressing our Nation's infrastructure needs.
    It is not just about more money or doing things in the same old 
way. In the water and wastewater area, we are seeking reforms that will 
promote more competition among private companies in delivering more 
cost-effective solutions to our needs. This effort includes seeking 
changes in procurement practices and laws to move us away from the more 
traditional design, bid and build processes to design/build models. We 
are also advocating approaches that emphasize standards-based 
compliance, not facility-based compliance. We have called for the 
adoption of tax and other incentives to attract more private capital in 
support of our efforts. While we are seeking ways to reduce the costs 
and promoting new partnerships with the private sector, we don't want 
to understate the reality of the needs in this area. We know that there 
is also an urgent need for an expanded Federal partnership on water 
investment, one that includes additional financial commitments to local 
areas, to address the surging needs in this area.
    As the revenue outlook improves, we would certainly urge you and 
others to work to dedicate some portion of any future surplus revenues 
and be open to new revenue sources to finance the many infrastructure 
needs that we are discussing here today.
City Infrastructure Priorities
    To prepare for this hearing, the Conference surveyed 160 mayors to 
solicit their priority concerns on infrastructure. First, we learned 
that surface transportation was the No. 1 priority, with more than 50 
percent of the mayors choosing this area (defined as highways/streets 
and transit/rail). One quarter of the mayors indicated that water and 
wastewater was their city top infrastructure priority, followed by 13 
percent of the mayors selecting schools/libraries as their top 
priority. The remaining respondents chose aviation, telecommunications, 
parks and other areas of need.
    I would point out that these responses generally follow the 
functional areas where cities play a dominant role. Cities with 
counties, for example, own and operate about 80 percent of the Nation's 
streets and highways, explaining their strong interest here. Many 
cities do own, but most largely participate in the governance or policy 
direction of the Nation's transit systems, which are generally regional 
providers. With regionalization of many water and wastewater services 
since the 1970's, cities are less dominant in these services, 
particularly treatment functions, but most own or are responsible for 
the collection and delivery systems. While schools are most often a 
function of independent schools districts, libraries are generally a 
city function as are urban parks. The relative priority of aviation can 
be explained by the fact that in most metropolitan areas there are only 
one or two owner/operators who are directly responsible for this 
infrastructure.
    Anticipating the importance of surface transportation issues to the 
cities, we asked each of the respondents to rank their top three 
priorities in surface transportation, choosing from a menu of ten 
items. Nearly 50 percent of the respondents indicated that highway/
street maintenance and rehabilitation was their top priority, 
emphasizing the interest of cities in system preservation. Highway/
street capacity was the top priority for 22 percent of the cities, 
followed by transit capacity as the top choice for 14 percent.
    In addition to strong support for streets and transit, I would note 
that 28 percent selected bridge replacement/rehabilitation, 26 percent 
selected pedestrian/bicycle/school crossing and 25 percent selected 
intermodal facilities/system integration as among their top three 
concerns. These survey results do follow to some degree the basic 
structure and principles embedded in the TEA-21 legislation.
    When mayors were asked to describe what Federal actions would be 
most helpful in meeting city transportation needs, the self-selected 
responses (i.e. specify concern) were very consistent. Additional 
funding was cited most often, followed by requests that more funding 
flow directly to cities and local areas, rather than stopping at the 
States. Mayors were also asked to list the single most important 
project in their city. While there was a broad cross-section of 
responses, it was notable how many cities indicated that light rail, 
commuter rail, high-speed rail, continued Amtrak service or other 
transit projects among their selections.
    Mr. Chairman, I would like to offer a couple of observations on the 
survey that we conducted. It follows some of what we found in our 
previous survey that Mayor Barr presented to this committee in the last 
Congress. First, we know that TEA-21 substantially increased the 
funding commitments to surface transportation. What we don't know yet 
is how the bulk of these funds move around in the system, given the 
absence of transparency in the flow of dollars within the States. This 
was the central theme of Mayor Barr's testimony to this subcommittee 
during the last Congress.
    But we do know that there are some rapidly rising needs in the 
surface transportation area, particularly in the growing demand for 
rail projects. Despite dramatically increased funding and the 
flexibility that is provided under TEA-21, many States are not taking 
full advantage of what the law allows, particularly in aiding local and 
regional transportation priorities.
    The point to be made about our infrastructure needs is that isn't 
just about more money, it is also about understanding how current 
funding is being allocated. TEA-21 was about more than sparing 
Governors or the States the political inconvenience associated with 
raising State transportation dollars, it is also about addressing 
transportation needs in cities and in our metropolitan areas. That is 
what our efforts on metropolitan economies is all about--to make the 
point that we need to be using these dollars strategically to make the 
investments that keep their metropolitan engines running. And, 
sometimes, these investments may not be the highest priority for State 
agencies, but are most important to the cities or the metropolitan 
areas.
    Mr. Chairman, I know that we will have an opportunity to discuss 
these issues with you during renewal of TEA-21, but I thought it was 
important to indicate how the mayors are thinking about these issues.
Comeback of America's Cities and U.S. Metro Economies
    As I previously noted, I recently had the opportunity to address 
the National Press Club on the Comeback of America's Cities. My message 
was simply that we have a new reality before us--American cities, the 
new American City, can no longer be defined by mere political borders 
or by the jurisdiction that a mayor may serve over. I also made the 
point that infrastructure investment is one of the ``keys'' to 
furthering this Comeback of America's Cities and the continued 
prosperity of this Nation's economy.
    Of particular importance to Federal policymakers is the reality 
that the growing health and strength of America's cities and their 
metropolitan economies is now the very reason why America's economy 
came back.
    Mr. Chairman, we have the data that backs this up. Several years 
ago, we retained one of the Nation's foremost economic firms, DRI-WEFA, 
to compile annual reports on the economic output of our Nation's 
metropolitan economies. At the Press Club, I released our new report on 
the Gross Metropolitan Product (GMP) for the Nation's 319 urbanized 
areas. It also documented the output of our metro economic engines over 
the last decade.
    Our Metropolitan Economy Report, U.S. Metro Economies: The Engines 
of America's Growth, A Decade of Progress, tells a story that is as 
significant as any story that's been told in the last 25 years. If you 
look at American cities--cities as the integral parts of the economic 
units we call metropolitan economies--and then rank them in terms of 
the strength of these economies with the Nations of the world, it 
changes the way you think about the policy choices before the Nation. 
Ranking these metro economies, not with States, not with regions but 
with the Nations of the world, these areas represent 47 of the 100 
largest economies in this world.
    These numbers are so compelling that the economy of New York--yes, 
the economy of metropolitan New York--is larger than the economy of 
Australia. Looking at the economies of other cities in their broader 
metro context, you will find that the economy of Chicago is greater 
than Taiwan, Argentina, Russia, or Switzerland. Philadelphia and 
Houston are larger in output than Hong Kong.
    But even more significant is looking back on the 1990's, a decade 
of great economic growth, a decade of new jobs and a decade of 
expansion in new sectors of the economy, like technology. When we look 
at where those jobs were created, where that new economy flourished, it 
was in American cities and in their metropolitan economies. Almost 90 
percent of the new jobs and in excess of 90 percent of the technology 
jobs were created in these areas.
    Consider other findings. With 20 percent of the land area and 80 
percent of the Nation's population, these 319 areas last year accounted 
for about 85 percent of all U.S. economic output, a share that is 
projected to rise over the next couple of decades.
    What is particularly striking in its policy implications is the 
finding that in 2000 the output of the top 10 metropolitan areas 
exceeded that of 31 States.
    Mr. Chairman, when you look at Nevada, we can readily detect what 
you know about the challenges before your State, and why infrastructure 
investment is so crucial to the continued economic success of your 
State and the Nation. The single fastest growing metropolitan economy 
in the United States over the last 10 years was the Las Vegas 
metropolitan area, an economic unit strongly influencing your State's 
growth, with spillover into Arizona. From 1990-2000, this metropolitan 
economy increased its output from $20.5 billion to $54.6 billion, an 
astounding increase of more than 166 percent. This represents an annual 
average growth rate of more than 10 percent.
    When you combine the output of the Las Vegas and Reno metro 
economies, you see that these two areas account for about 90 percent of 
the entire State's economic output. In Oklahoma, as another example, 
the metro economies of its two largest urbanized areas, Tulsa and 
Oklahoma City, account for about 62 percent of the State's output.
    Mr. Chairman, we would strongly urge you and other members of this 
committee to examine this data and consider its implications as you go 
forward in setting infrastructure investment policies for the Nation. 
We think this is new information and offers further support to a 
broader congressional infrastructure agenda.
                         new orleans priorities
    To provide local context for my remarks, I have described some of 
the major infrastructure projects where the city of New Orleans is 
seeking Federal assistance. These projects in rail transportation and 
sewerage infrastructure simply illustrate the scale of the challenges 
before us.
Canal Streetcar Project
    The New Orleans Regional Transit Authority (RTA) is developing a 
5.5-mile streetcar project in the downtown area, along the median of 
Canal Street.
    The Canal Streetcar spine will extend from the Canal Ferry at the 
Mississippi River in the central business district, through the Mid-
City neighborhood to Carrolton Avenue, where one branch will continue 
on Canal Street to the Cemeteries and another will follow Carrollton 
Avenue to City Park/Beauregard Circle. The corridor is located in an 
existing, built-up area that was originally developed in the streetcar 
era. Much of the corridor lies within the central business district and 
historic areas, where employment and housing densities, mix of uses, 
and pedestrian-oriented development are generally good. The central 
business district includes a high-density mix of office, retail, hotels 
and leisure attractions.
    The total capital cost of this project is estimated at 
$156,600,000, of which our RTA is expected to seek $125,300,000 in `new 
starts' funding.
New Orleans Central Business District to Armstrong Airport Light Rail 
        Project
    The CBD to NOIA light rail project is a new start project 
authorized under TEA-21. The project is intended to provide commuter 
rail transportation via light rail vehicles between the Central 
Business District and the Louis Armstrong International Airport. In 
TEA-21, funds were provided for preliminary work associated with the 
project.
    Although we don't have final estimates of the total project costs, 
it will be a substantial project and we will need the Federal 
Government as a partner.
Desire Streetcar Project
    The Regional Transit Authority (RTA) is restoring a 2.9-mile 
traditional streetcar line in downtown New Orleans, as part of the 
locally preferred alternative for the Desire Corridor. The Desire 
Corridor streetcar project will operate along North Rampart Street and 
St. Claude Avenue between Canal Street and Poland Avenue. The proposed 
streetcar alignment will loop at Canal Street and use exclusive right-
of-way in the median of city streets, as much as possible. The project 
will serve the communities of Iberville, Treme, Faubourg, Marigny, St. 
Roch, and Bywater. Six major bus transfer points with construction of 
center platforms, canopies, passenger benches, and landscaping will be 
provided: 16 intermediate stops with less elaborate center platforms 
are also planned. The project also includes the purchase of 13 new 
vehicles.
    The capital cost estimate of the streetcar project is $93,500,000, 
of which RTA will be seeking $65,500,000 in FTA funding.
Sewerage and Water Board Inflow & Infiltration Project
    The City has embarked on a very ambitious plan to correct the 
inflow and infiltration of its sewerage lines beneath the streets of 
the City, as required by a consent decree entered against the City by 
the U.S. EPA.
    Because most of the New Orleans area is below sea level, over time 
the New Orleans Sewerage and Water Board developed an elaborate 
drainage system to remove the rainwater that falls every year in 
tropical amounts on the city. Partially because the system was built in 
the early part of this century, and also because of the great amount of 
subsidence and settlement of the soils in the area, the New Orleans 
Sewerage and Water Board normally spends approximately $5 million per 
year on line repair and replacement alone.
    Although the repair and upgrade of the system is a continuous 
process, we have not been able to keep up with the highest 
environmental standards set by the Federal Government. The Board is 
under a consent order from the Justice Department to undertake this 
project, with the total costs of the project expected to exceed $400 
million.
                            closing remarks
    Mr. Chairman, I want to thank you for this opportunity to appear 
before you today to offer the perspectives of the Nation's mayors on 
the Federal role in meeting our infrastructure needs.
    This is a very high priority concern for the mayors and other local 
elected officials and we will stand with you and this committee as you 
examine ways to sustain and expand the Federal partnership commitment 
to infrastructure investment.
    On behalf of the Nation's mayors, I thank you for this opportunity 
to present the views of the Conference and its members on these 
important issues.
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          Statement of Hon. Bill Campbell, Mayor, Atlanta, GA
    Good afternoon Mr. Chairman and members of the Transportation and 
Infrastructure Subcommittee. I am Bill Campbell, Mayor of the city of 
Atlanta. It is a pleasure to come before you to discuss Atlanta's 
infrastructure needs and the Federal role in investing in local 
communities.
    I am testifying today principally on behalf of the city of Atlanta. 
At the U.S. Conference of Mayors, I chair the Transportation and 
Communications Committee, a position that I have held throughout 
congressional deliberations of TEA-21 and AIR-21. In this capacity, I 
can offer some additional perspectives on the challenges before the 
Nation in addressing our infrastructure needs.
    I am also pleased to join my colleagues, Mayors Morial, Goodman, 
Streeter and Williams, to address the demands placed on city 
infrastructure systems and the solutions that the Federal Government 
can pursue in collaboration with cities and other municipalities.
    My point of reference in my remarks is Atlanta, and the broader 
Atlanta metropolitan region, but the problems that I express are fairly 
typical of urban areas around the country. Many other areas share some 
the same challenges in dealing with growing demands for infrastructure 
investment.
    At the same time, we are somewhat of an indicator of what lies 
ahead for others. Among the largest metropolitan areas in the country, 
we had the highest rate of growth over the last decade. We grew much 
faster than the national economy, growing at an average annual rate of 
8.4 percent, increasing our gross metropolitan product (GMP) from $73.4 
billion in 1990 to $164.2 billion in 2000. Mayor Morial will talk about 
metropolitan economies in more detail and the importance of these 
regions to U.S. economic growth.
                                overview
    Mr. Chairman, I am proud to say that Atlanta is thriving. Over the 
course of 10 years, the population of the metropolitan area, which 
consists of 10 counties, has grown from 2.5 million to 3.4 million. 
These individuals represent a wide range of income, racial and ethnic 
diversity. They are the foundation of our vibrant community.
    Growth in the region has brought greater economic development, 
housing and job opportunities to the city of Atlanta. We are a leader 
in global productivity, serving as the anchor of economic activity in 
the South. To maintain this level of balanced growth requires not only 
strong business investments, but also sufficient and modernized 
infrastructure. As we experience this unprecedented expansion, we are 
challenged to provide solutions through our surface transportation, 
aviation and water infrastructure systems. Recognizing the 
interdependency and interconnectivity of our success on the local level 
with national policy priorities, I offer ways to strengthen the Federal 
investment in local infrastructure needs.
                         surface transportation
    Our region, like Los Angeles and a number of other cities, is 
facing the challenge of reducing severe traffic congestion on the 
highways and roads. In Atlanta, we have moved aggressively and 
decisively toward building transportation alternatives to protect the 
environment and increase the quality of life of residents.
    One such alternative is rail. In Atlanta we are using MARTA--our 
transit system, buses, and eventually, commuter and high-speed rail to 
move people to and from their jobs and recreation while simultaneously 
reducing pollution and congestion. This involves coordination on a 
local, regional, and State level. Plans are in place for an intermodal 
facility that will serve as the hub of transportation, residential and 
commercial activity for the downtown.
    Our success is strengthened by the cooperation of the citizens of 
Atlanta who are making lifestyle adjustments to embrace alternative 
modes of travel. It is because of this changing culture that the vision 
for rail development must expand beyond the boundaries of the City. 
High-speed rail provides the mechanism for linking communities and 
addressing the impediments to effective growth.
    The State of Georgia, Federal Railroad Administration, Norfolk 
Southern and Amtrak are working together to roll out high-speed rail 
throughout the State. They are planning to build a line that will 
connect Atlanta to Macon and, ultimately, Savannah. We are pleased that 
Congress has provided the initial funds to study the development of 
this line.
    High-speed rail would significantly reduce travel times. It is 
estimated that Amtrak's connection between Atlanta and Birmingham 
currently takes 3 hours. With high speed rail the trip time can be 
reduced to 2 hours by 2010. Atlanta to Charlotte is currently 5.5 
hours, and is expected to be reduced to 3.5 hours. This is a major 
difference and will provide further incentive for people to ride rail 
versus driving.
    I strongly support the High Speed Rail Act and urge Congress to 
pass the legislation to improve the efficiency of our overall 
transportation system and reduce congestion on our roads and in our 
skies.
                                aviation
    We must not only address congestion on the ground but deal with 
gridlock in the air.
    The fact that the Nation's flying public is facing gridlock in the 
skies is obvious to everyone. Federal Aviation Administration forecasts 
indicate that airline passenger traffic will increase 59 percent to a 
billion passengers annually by 2010. Those forecasts suggest further 
that some 70 percent of that traffic growth will occur at the Nation's 
28 largest airports. Ironically, these are the very airports for which 
the primary cause of delays is lack of capacity, especially runway 
capacity.
    Atlanta Hartsfield International is now the busiest airport in the 
world, surpassing even Chicago O'Hare. Hartsfield handles 6 percent of 
the Nation's passengers annually and generates $15 billion in the 
Atlanta metro region. Hartsfield is also the most delay-impacted 
airport in the country with 9 minutes of delay per flight and will 
increase to 15 to 20 minutes per flight in 2005 without the 
construction of our new fifth runway, which we have broke ground on 
this past April. The fifth runway is part of a $5.4 billion Capitol 
Improvement Plan. These delay times cost the airlines operating at 
Hartsfield over $250 million in the year 2000 alone. Let's not stop 
there.
    Congress helped by passing AIR-21 last year, increasing the Airport 
Improvement Fund to $3 billion annually, and by allowing airports the 
option of increasing the local Passenger Facility Charge for 
infrastructure and noise abatement projects. I was pleased to see the 
House and Senate Appropriations Committees in the Fiscal Year 2002 FAA 
Appropriations fully fund the AIP program by honoring the so-called 
``firewalls'' erected around the Aviation Trust Fund in AIR-21. Let's 
not stop there.
    I would urge the Congress to address the impediments to reducing 
airway gridlock by passing environmental streamlining legislation as 
proposed by the Airport Council and American Association of Airport 
Executives that will expedite review of runway expansion proposals. We 
must not circumvent our environmental approval process. However, the 
problem of taking 10 years to build a new runway must be addressed, and 
these streamlining proposals have great merit in my judgment.
                            water resources
    Along with the growth on the roads and in the air, we are also 
facing challenges to our water infrastructure system.
    Four years ago, I developed the Regional Atlanta Watershed Program, 
a comprehensive regional approach to resolve our water infrastructure 
needs by addressing the environmental quality and supply of the urban 
watershed, rivers and streams. This cooperation has expanded, through 
the efforts of Governor Barnes, into the North Metro Atlanta Regional 
Waste District. Through the district, water resource needs will further 
be coordinated and addressed on a regional basis.
    In addition, the U.S. Army Corps of Engineers is completing a study 
to carry out water-related environmental infrastructure and resource 
protection development projects. We are very pleased with our 
partnership and look forward to working with this subcommittee in the 
next year to move toward the construction phase.
    The efforts of the Regional Atlanta Watershed Program involve 
protecting the quality of the Chattahoochee River, one of the most 
heavily used water resources in the State of Georgia. It has a finite 
supply of water. Therefore, the health of this resource, lakes and 
riparian streambanks is vital not only to Georgia, but also to our 
downstream neighbors in Alabama and Florida.
    Rapid growth has significantly increased water withdrawals from 
surface and groundwater resources, resulting in greater demands on the 
supply. This trend is expected to continue. In addition, increased 
pollution from stormwater runoff from roofs, roads, driveways and 
parking lots has transformed the watershed. This degradation is 
exacerbated by wet weather overflows from old, combined sewers that 
drain into community tributaries.
    Since 1990, we have spent $1 billion to construct and expand 
wastewater and stormwater collection, treatment and control facilities 
to meet Federal and State environmental regulations. We have 
implemented innovative re-engineering and strategic outsourcing 
programs to reduce operating costs. Our innovative approach to 
wastewater treatment has helped reduce costs for capital facilities 
such as phosphorus control programs. We spent an additional $2.3 
million for watershed protection projects. However, in order to comply 
with EPA Federal consent decree for our SSO and CSO programs, we 
estimate that we will need over $3.2 billion over the next 13 years to 
upgrade our system. This is an astounding amount.
    This will put a serious burden on the City's budget. The median 
family income for Atlanta is approximately $36,950, with 24 percent of 
our residents making less than $15,000 per year. While there are 
approximately 500,000 people who reside in the city of Atlanta, over 
1.5 million come into the City each day to work or for recreation. I am 
sure you can see the challenge we face. And we are not alone. There is 
estimated to be more than $300 billion in wastewater infrastructure 
needs and $ 1 trillion in total water resource demands in cities across 
the country.
    Mr. Chairman, I am asking Congress to provide greater assistance 
provide greater assistance with both low interest loans, grants and 
technical resources to communities to address these urgent and 
demanding water resource needs. I would hope that Congress could give 
greater authority and resources to the Army Corps of Engineers, who are 
experts in dealing with water issues, to reduce costs, prevent flooding 
and habitat degradation and address the needs of our aging sewer 
infrastructure. The direct intervention and assistance from your 
committee and your colleagues in the Senate and House will help 
maintain both the sustainable development of the metro-Atlanta region 
and strong quality of life for citizens and visitors. Importantly, this 
will ensure that the economic engine of the Southeast can continue to 
provide good jobs and services for our people.
                                summary
    As my colleagues from the other cities have expressed, we share 
many common problems. Mr. Chairman, I wanted to underscore one of the 
points that Mayor Morial emphasized in his statement dealing with the 
importance of local infrastructure to the Nation's economic prosperity. 
As a leader of a region that has helped drive our Nation's economic 
growth, I would urge you to recognize the importance of an expanded 
Federal partnership on infrastructure investment to your own interests. 
These projects are not only crucial to our local and regional areas but 
they are to the investment that will help sustain the Nation's future 
economic prosperity.
    Again, let me thank you, Mr. Chairman and the members of the 
subcommittee, for your leadership and recognition of the importance of 
this issue.
    Thank you for this opportunity to appear before you today.
                               __________
         Statement of Hon. Oscar Goodman, Mayor, Las Vegas, NV
    Good afternoon Mr. Chairman and members of the committee. I am 
Oscar Goodman, Mayor of Las Vegas, NV. It is a pleasure to come before 
you today to testify on the infrastructure and transportation needs of 
southern Nevada and the city of Las Vegas.
    Over the last decade, the City and the metropolitan area of 
southern Nevada grew the fastest of all the cities our size. Yet, we 
are simultaneously ranked as the 14th densest major metropolitan area 
in the country. In southern Nevada, we are doing a good job at 
balancing growth and economic strength and vitality with sound 
infrastructure and community development. In the next two decades, I 
expect we will continue to grow at a phenomenal pace and we will 
successfully meet the new challenges of growth head on.
    We need only to look back at the last decade to see how ingenuity, 
hard work and strong partnerships can work to make our future in Las 
Vegas bright. We just recently celebrated the 10th anniversary of the 
creation of the Southern Nevada Water Authority (SNWA). The SNWA is a 
regional leader, and I assert a national leader, in water quality, 
conservation and resource planning. Ten years ago water resources and 
quality was the most pressing issue for our valley. Today, providing 
safe and reliable water resources is still a significant on-going 
public concern, yet we have made significant progress in banking water 
resources, constructing a sound water delivery system, and achieving 
higher levels of conservation. This success is in part due to 
significant community leadership, intergovernmental coordination at the 
local level, and support from neighboring States and the Federal 
Government.
    It is this kind of partnership between local communities and the 
Federal Government that I would like to focus my comments on today. I 
truly believe many of our accomplishments and future accomplishments in 
southern Nevada hinge on a successful partnership between our local 
communities and the Federal Government. Similarly, the National League 
of Cities is pursuing its ``Investing in Communities'' agenda. Cities 
around the country struggle to build and maintain infrastructure and to 
find the resources to perform this public service adequately. So, 
southern Nevada is not alone in the infrastructure race.
    I mentioned our major issue of the last decade was water--for the 
next decade and possibly longer, the issue for southern Nevada is air 
quality. Air quality will change the way we approach the issue of 
transportation in southern Nevada. We have focused significant Federal, 
State and local dollars to improve roadways, and we certainly need to. 
In comparison to other metropolitan areas, we do not have sufficient 
roadways. In fact our freeway density is half that of Los Angeles and 
Orange County. Just recently, we identified approximately $7.6 billion 
in roadway and transit needs for our valley in the next 20 years. 
However, we will need to shift toward alternative modes of 
transportation to best preserve our air quality. There is no way we can 
build enough roadways to accommodate our population. Therefore, we are 
pursuing monorail lines, trails systems, bus only lanes on major 
roadways, and a high-speed train to southern California.
    The monorail alone is a significant investment. The project's total 
investment will be approximately $575 million for a 5-mile system 
connecting the Las Vegas strip to downtown. The unique nature of this 
project is that a majority of the funding comes from the private 
sector.
    Transportation is not the only infrastructure area in need of great 
attention. We still face significant investments in our water and 
wastewater systems. The public is becoming more and more acutely aware 
of the condition of our water and sewer lines. This infrastructure is 
often taken for granted, ``out of sight, out of mind.'' Many of the 
water and sewer systems around the country were built in the early 
1900's. As a result, over the next 10 to 20 years many of these 
investments will be reaching the limit of their capacity and working 
condition. In addition to replacement of these older systems, Las Vegas 
will continue to invest in extending our current system to accommodate 
new growth. Within the next 20 years, the Las Vegas valley will face a 
treatment capacity deficit of approximately 144 million gallons of 
wastewater per day. The cost to fill that gap is estimated at 
approximately $1.2 billion.
    Obviously, these are not little ticket items. They are significant 
investments. Congress invested significant Federal dollars in measures 
such as TEA-21, Air--21 and hopefully will invest in a water and 
wastewater infrastructure bill this session or in a future Congress. I 
cannot stress enough how having those Federal dollars available to 
supplement local investments can make or break many significant public 
projects. Whether it's the innovative public-private monorail system in 
Las Vegas, or the I-15 widening project between Barstow and Las Vegas, 
those Federal dollars are key to the success of such projects.
    In addition to being Mayor, I serve or have served on numerous 
regional governing boards that manage many of the regional projects I 
mentioned here today. I feel I am in a unique position to share with 
the committee a well-rounded perspective on the needs of southern 
Nevada. I encourage you, if at all possible, to keep the level of 
investment of Federal dollars in State and local projects from 
dwindling. As a country, we can be most successful working together and 
leveraging the public tax dollar to the benefit of all its citizens 
through these kinds of public investments. All of us want clean air to 
breathe, safe water to drink and efficient transportations systems. We 
have and can continue to address these significant public issues with a 
strong partnership between the Federal and local governments if we all 
keep those goals in mind.
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       Statement of Hon. Anthony Williams, Mayor, Washington, DC
    Good afternoon Chairman Reid, Senator Inhofe, and members of the 
committee. Thank you for this opportunity to testify before the 
Committee on Environment and Public Works' Subcommittee on 
Transportation and Infrastructure.
    Before I begin, I wish to also acknowledge Mayor Marc Morial of New 
Orleans, the new president of the U.S. Conference of Mayors and a 
strong voice for transportation improvements, especially rail 
transportation. The Council of Mayors has been focusing on the 
transportation and infrastructure issues that are facing are major 
cities.
    Transportation is a critical issue to the general public. In fact, 
in Washington, DC, transportation was picked as the second most 
important issue in our Neighborhood Action planning sessions--second 
only to public safety. Neighborhoods are concerned about traffic, 
pedestrian safety, parking, development, and mobility. All issues that 
become increasingly significant as we attempt to increase the 
District's population by an additional 100,000 residents over the next 
10 years.
                      the district and the region
    I am sure you are all aware that nationally, the Washington 
Metropolitan area is classified as the third most congested area in the 
country. The District, though, can be part of the solution to this 
problem. Already, the District is the core of the metropolitan region 
and of the regional transportation network. It plays a vital role in 
the economic health of the region and in the region's transportation. 
One-third of the region's office space and nearly 500,000 jobs are 
located here. And these jobs are concentrated. We have the second 
largest concentration of jobs in the country, after New York City and 
tied with downtown Chicago.
    Job concentration is part of the solution to gridlock because it 
reduces travel distances and the number of trips. Also, concentrated 
job centers can be more efficiently served by mass transportation. 
Washington, DC is second only to New York City in the number of 
commuters who use mass transit every day. More than 50 percent of 
District residents use mass transit for their home to work trip each 
day. This saves energy and saves money that would have to go into 
building many more highway lanes to serve those riders if they drove.
    However, many people do drive to the District each day. The 
District is already second only to New York City's Manhattan in the 
number of cars that enter downtown every weekday. These users of the 
District's road infrastructure are largely from outside the city. In 
fact, approximately 70 percent of the cars on our roads each day are 
registered outside the District--and because of the District's unique 
financial structure, these vehicles do not contribute significantly to 
the maintenance and capital costs they impose directly on our 
transportation infrastructure.
    The District is also the largest contributor to the operations and 
capital costs of the Washington Metropolitan Area Transit Authority 
(WMATA)--known to most as METRO. The District pays nearly 40 percent of 
both operating and capital costs of the METRO system. And while the 
recent growth in METRO ridership, the highest in the country in some 
categories, ensures traffic does not come to a complete standstill, it 
has a substantial impact on the District's finances. Its like that old 
joke: ``We're losing money on every unit, but we are making up in 
volume.'' Metro ridership increases cost the District more each year in 
operating subsidy payments, increasing roughly 10 percent between 
fiscal years 2001 and 2002--one of the largest jumps in any District 
program.
                          the federal presence
    The Federal presence has a major impact on the District's unique 
transportation role. Federal workers account for one-third of METRO 
riders and as the District's largest employer, the Federal presence 
adds to the heavy burden on our roads.
    This special relationship to Washington and the region has not gone 
unrecognized by the Federal Government over time. There have been 
significant Federal contributions to two of the most important regional 
transportation projects ever undertaken. These are the long-term 
investment in METRO and the new Wilson Bridge. Both of these attest to 
the role the District can play as a model for transportation 
improvements. METRO and the new Wilson Bridge show that the Federal 
Government has recognized the unique role the District plays in the 
region and as the Nation's Capital.
    Thus, as we examine how to maintain and improve the District's 
transportation infrastructure, we look for the Federal Government to 
assume a special role in recognition of this special relationship.
    Maintaining this transportation infrastructure, much less improving 
or expanding it is very costly. While Federal Transportation Equity Act 
for the 21st Century (TEA-21), has provided almost $100 million per 
year in much needed assistance for transportation capital, operations 
and maintenance, this is not enough.
    This inequity can be summed up as a ``tale of two cities'' for our 
non-transit transportation infrastructure. One is the Federal City. 
This is a city with less than 450 miles of roads and a $250,000 annual 
per mile fund for maintenance and improvements. Not surprisingly, more 
than 70 percent of these roads are in good or excellent condition.
    The other is the local city with nearly 650 miles of roads that 
have just come out of a 5-year period of almost no investment. Although 
we are now spending $8,500 per year per mile for maintenance or 
improvements, 50 percent of local roads remain in fair or poor 
condition.
                    transportation funding for today
    As you can see, shortfalls in transportation funding represent one 
of the biggest challenges to improving mobility in the District and the 
region and keeping it economically viable. The District, as part of the 
region's long term transportation planning process, identified 
anticipated funding sources over the next 25 years at $11 billion. This 
includes both $100 million per year in Federal aid and local taxes 
dedicated to the transportation system.
    A 1998 lifecycle analysis by the Federal Highway Administration 
found an anticipated $1 billion needed in the next 6 years for 
transportation improvements. Since the study, our needs have increased 
as have our costs, further exacerbating the funding dilemma.
    Unfortunately, this level of funding will not keep pace with the 
continuing need to rehabilitate, maintain and expand transit services, 
resurface streets, fill potholes, fix curbs and sidewalks, provide 
bikeways and implement other traffic calming and roadway safety 
improvement projects.
    Perhaps the single largest long-term transportation-related 
financial constraint facing the District and the region is the 
investment needed in METRO in the forthcoming 10 to 25 years. METRO 
estimates a $3 billion preservation funding gap over 25 years for the 
its Infrastructure Renewal Program, with the District's share being 
$1.2 billion. This is over-and-above what the District has already 
pledged to METRO improvements. In addition, METRO capital needs are 
underfunded by $100 million annually, representing another $40 million 
in unfunded District obligations. These investments are needed to 
simply maintain the METRO's ability to deliver its core services given 
the current rate of ridership growth.
    The District, like other cities, also face a brewing problem under 
its streets. Aging utility infrastructure, including power and gas 
lines, as well as new technologies (such as fiber optic lines) are 
putting strains on cities' ability to manage and control their rights-
of-way. Perhaps most challenging is the problem of combined sewers. In 
the District alone, this largest source of water pollution will cost 
upwards of $1 billion to address.
    One of the most creative proposals to meet this need has been put 
forward by our Congresswoman, Eleanor Holmes Norton. Her D.C. Non-
resident Tax Credit Act proposal would transfer to the District an 
amount equivalent to 2 percent of the income earned by non-District 
residents working in the city. This would produce some $400 million for 
the District and earmarking a part or all of this for transportation 
improvements would make a significant dent in the District's, and the 
region's transportation needs.
    Clearly, funding shortfalls represent one of the biggest challenges 
to improved mobility in Washington, DC. and in the regions. Working on 
long-term--25-year--regional funding needs, we have discovered that 
both Maryland and Virginia are experiencing similar challenges and we 
look forward to working with Congress and our neighboring jurisdictions 
on solving our shared transportation problems.
               transportation infrastructure for tomorrow
    While funding our existing infrastructure is a major concern to the 
District, we need to look beyond what we are doing today. For the last 
15 or 20 years the District has been largely replacing or 
rehabilitating its existing transportation system--major pieces of 
which are nearing their useful life. Therefore, we are now presented 
with a once-in-a-lifetime opportunity to plan, design and build the 
transportation system for the new millenium, serving our city, its 
citizens and visitors as they now live, work and play.
    We need to look at our major transportation gateways and devise 
ways to make them more attractive and functional. For example, the New 
York Avenue and South Capitol Street corridors do not present the 
appropriate grand entrance into our city that they should. Major bridge 
projects such as the Theodore Roosevelt and South Capitol Street 
bridges represent opportunities to redesign these connections in a way 
that suits our monumental city and better serves commuters, citizens 
and guests.
    Pennsylvania Avenue should be reopened in a way that both serves 
the needs of the 26,000 citizens who used to pass by the White House 
each day and those who live and work within that historic structure. 
The access to the Kennedy Center needs to be improved, reuniting that 
world-class facility for the arts with the rest of the District and the 
monumental core.
    Access to and around our hidden jewel, our Anacostia waterfront 
needs to be enhanced by building the Anacostia Riverwalk and improving 
access across the Anacostia freeway. Our other freeways, the Southeast/
Southwest and the Whitehurst have to be studied for ways to alleviate 
the barrier they represent between communities and the Georgetown 
Waterfront, respectively.
    We also need to look at our transit infrastructure and how we can 
grow that to support the District's own rebirth and internal mobility 
needs. Two new transit routes that need to be explored include 
building--finally--the long needed subway connection to Georgetown. In 
addition, the District should revisit the mistake made almost exactly 
40 years ago when Congress mandated the removal of our world-class 
light rail system. Possible routes for a new trolley include the then-
most popular trolley route--and currently most popular bus route--of 
Georgia Avenue to Seventh Street. This route could connect with the new 
Convention Center, our reawakening retail district and the reborn 
Anacostia waterfront, and Southeast Federal Center.
    The District is also looking at the longer term future of 
transportation by joining with Maryland to compete for a federally-
sponsored Magnetic Levitation Rail (MAGLEV) demonstration project. If 
funded, this project would whisk riders between Washington and 
Baltimore in roughly 20 minutes--essentially rendering each city a 
neighborhood of the other. This sort of aggressive, visionary thinking 
is what Washington and Baltimore will need in order to successfully 
compete for the 2012 Olympic Games.
                         washington, dc reborn
    Our Olympic bid signifies the culmination of the process we have 
begun in rebuilding Washington, DC in terms of its financial stability, 
its attractiveness as a home, its perception and reputation and its 
importance in the region. As part of this symbolic rebirth we must 
commit to rebuilding, refreshing and improving the arteries and 
passageways that serve our Nation's Capital.
    I believe that one can tell a lot about how a city is doing by 
looking at its infrastructure--its roads and trees and sidewalks and 
signs. A city that is doing well and is well managed has a well-
maintained infrastructure. It sends a signal to its citizens and 
visitors through its transportation infrastructure--its largest, most 
valuable and visible asset--that it cares and is a good steward of 
resources entrusted to it. We have made great strides during my 
administration to send that message and I look forward to working with 
each of you, the committee and Congress to keep moving forward.
    Thank you.
                               __________
  Statement of Robert W. Portiss, Port Director, Tulsa Port of Catoosa
    Thank you Mr. Chairman. My name is Robert W. Portiss. I am the port 
director for the Tulsa Port of Catoosa, a 2,500-acre inland, 
international seaport located about 10 miles northeast of the City of 
Tulsa in Rogers County, OK. I am employed by the City of Tulsa, Rogers 
County Port Authority, a public agency.
    My employment with the Port began in 1973 as manager of traffic and 
sales, a position I held until the end of 1974 when I opted for land 
development experience in the private sector. I returned to the Port 3 
years later and, following a series of promotions, was appointed port 
director, a position I have held since 1984.
    Oklahoma began offering barge transportation in December 1970 when 
the McClellan-Kerr Arkansas River Navigation System was completed. This 
System begins at the confluence of the White and Mississippi Rivers 
located approximately 500 miles north of New Orleans on the Mississippi 
River, and extends 445 river miles through Arkansas and Oklahoma. 
Seventeen locks and dams permit barge freight to stair-step the 420-
foot elevation change to reach our Port at the head of navigation.
    Authorized by the River and Harbors Act of 1946, the McClellan-Kerr 
Arkansas River Navigation System cost $1.2 billion to build. This, in 
turn, has resulted in over $3.2 billion of non-Federal public and 
private investment in Oklahoma and Arkansas, creating over 55,000 jobs. 
Freight handled on the system currently averages 12-million tons per 
year carried in 8,000 barges. This is the equivalent capacity of 
120,000 rail cars or 500,000 trucks to carry the same amount of freight 
adding significant congestion to the already constrained rail and 
highway systems. Less trucks on our Nation's highways is welcomed by 
all of us because of less congestion, wear and tear on our roadways, 
and energy savings.
    All of this was made possible by a joint venture offered to 
Arkansas and Oklahoma. The offer was simple--the Federal Government 
would build a waterway to Oklahoma if the five principal cities located 
along the system would each build a public port providing access to 
barge navigation. Tulsa was one of those cities.
    Their commitment delivered what I believe is the largest fully-
developed inland port complex in our country today. I know of no other 
port that has 2,500 acres of contiguous land area. This land and the 
initial infrastructure was paid for through a $21.2 general obligation 
bond issue by the citizens of the city of Tulsa and Rogers County. That 
seed money has since grown to over $45 million in public investment 
through reinvestment of income earned off the land, which incidentally 
is only leased to preserve access to low-cost water transportation, as 
promised, for future generations. That money, in turn, has already 
precipitated some $300 million in private investment generated by the 
53 companies now located within the complex who currently employ 3,000 
people. Obviously, the joint venture has worked well for our States and 
for the Nation--at least thus far.
    The future success of the System will depend, in great part, on 
whether Congress will continue to provide, maintain and operate our 
Nation's waterway infrastructure. The current outlook is not favorable. 
If the President's budget recommendations are adopted, the critical 
maintenance backlog will more than double--from $415 million to $835 
million. Locks and dams and other capital stock along our Nation's 
waterways are aging and severely deteriorating. As an example, over 44 
percent of the inland waterway's locks and dams are at least 50 years 
old. Many are undersized for modern commercial barge tows, which must 
then be broken up and reassembled at each lock. This results in delays, 
increasing operating costs, decreasing efficiency and causes safety and 
environmental concerns. It is estimated that nationwide, river traffic 
is delayed 550,000 hours annually, representing an estimated $385 
million in increased operating costs borne by shippers, carriers, and 
ultimately, consumers. These delays, which are in the range of $250 to 
$350 per hour for a 15 barge tow, will become more severe as system 
traffic grows and as aging infrastructure increases maintenance and 
repair time.
    Sadly, the current trend is to keep studying the problem rather 
than fixing it. As an example, the current study concerning the 
modernization of the Illinois and upper Miss has been underway for 
about 11 years at a cost of $54 million and yet, we are not closer to 
finalizing the study today then we were in 1990. All of this and more 
is set forth in the Marine Transportation System Survey and Analysis 
completed by the U.S. DOT several years ago.
    Favorable congressional action is also required at the local level. 
Montgomery Point Lock and Dam, which is currently being constructed in 
the entrance channel to the McClellan-Kerr Arkansas River Navigation 
System, is destined for shut down this year due to a probable severe 
shortfall in Federal funding. The project needs $45 million for fiscal 
year 2002, and to date the President and Congress have only allocated 
$25 million. This funding deficiency will reportedly force the Corps of 
Engineers to curtail construction pending funding in fiscal year 2003. 
We, therefore, would not realize the benefits derived from the $152 
million already spent on it and will increase the overall construction 
costs. Delaying this project could also shut down our waterway due to 
inadequate water depths for barges. We, of course, would then be out of 
the waterway business altogether.
    Another item affecting our future is increasing the authorized 
depth of the McClellan-Kerr from 9 to 12 feet enabling us to operate at 
peak capacity. We believe this would significantly improve our Nation's 
competitive advantage in world markets. Being able to load barges more 
fully--approximately 100 truck loads rather than the current 60 truck 
loads--would lower the cost of products thereby enhancing our 
customer's ability to compete in world trade. Rivers flowing to the 
Gulf Coast already have 12-foot channels.
    The U.S. Army Corps of Engineers has begun installing tow haulage 
equipment on our locks--all but five have been completed. This 
equipment locks through nine barges leaving the towboat and up to an 
additional eight barges to subsequently lock through thereby 
efficiently doubling the capacity of our locks without having to 
construct new structures. Federal funding for this important 
infrastructure project, like our lock and dam project, will reportedly 
be significantly reduced or curtailed for fiscal year 2002.
    Recent versions of TEA-21 or NEXTEA can help meet local 
infrastructure needs through funding of multi-modal connecting links to 
enable barge, rail, truck, and air transportation to work together in 
an optimal manner. To date, our efforts to obtain any of this funding 
have not been successful. The concept makes good sense, but for some 
reason it is not happening. Connecting rail lines and roads could be 
significantly improved through this program.
    Before closing, I would be remiss in my duties if I did not mention 
the Endangered Species Act. If this Act is to be reauthorized, it 
simply must be done through needed reforms. The implementation of its 
provisions has resulted in projects being stopped permanently without 
regard to the social and economic good of our Nation.
    In conclusion, it is past time for Congress to take responsibility 
for providing the funds necessary to rebuild, rehab, maintain and 
modernize our Nation's inland waterway navigation system. Our system 
has been the envy of the world for decades. Now the rest of the world 
is taking up the challenge with the realization that water is the only 
way to remove significant amounts of freight from the highways. U.S. 
inland waterway ports and terminals--about 1,800 of them--are less 
concentrated geographically than our deep-water ports thereby being 
able to provide almost limitless access points to barge transportation. 
The result is greater flexibility to the users in determining the 
location of industrial facilities requiring water access.
    Our congressional and State leaders MUST understand that 
maintaining a viable national inland waterway transportation system and 
protecting the environment are not mutually exclusive objectives. They 
can be accomplished by encouraging local and Federal agencies to work 
together as in past years, thereby providing jobs and enabling us to 
effectively compete in the international market place. The alternative 
of abandoning the system that has permitted our Nation to be strong, 
and which has proven to be a good Federal investment, is clearly not in 
our best interest.
    Thank you.
                               __________
   Statement of Peter F. Guerrero, Director, Physical Infrastructure 
                 Issues, U.S. General Accounting Office
    Mr. Chairman and members of the subcommittee. A sound public 
infrastructure plays a vital role in encouraging a more productive and 
competitive national economy and meeting public demands for safety, 
health, and improved quality of life. In addition, public office 
buildings, courthouses, and other facilities support noneconomic goals 
and allow Federal agencies to carry out their missions. When problems 
occur with the performance of infrastructure, they can be very visible, 
and their effects can be widespread. For example, traffic congestion in 
the Nation's 50 most populous urban areas is estimated to cost over $39 
billion a year in time and wasted fuel.
    I am here today to discuss the Federal Government's role in 
ensuring a sound public infrastructure and the estimates of future 
investment requirements developed by seven Federal agencies: the 
Appalachian Regional Commission (ARC), Environmental Protection Agency 
(EPA), Federal Aviation Administration (FAA), Federal Highway 
Administration (FHWA), Federal Transit Administration (FTA), General 
Services Administration (GSA), and U.S. Army Corps of Engineers.\1\ My 
testimony will focus on the major areas of public infrastructure 
covered by these seven agencies\2\ and the Federal Government's role 
and funding trends regarding civilian infrastructure.
---------------------------------------------------------------------------
    \1\ This testimony is based on our recent work in the area of 
infrastructure investment trends and investment estimates. See U.S. 
Infrastructure: Agencies' Approaches to Developing Investment Estimates 
Vary (GAO-01-835, July 20, 2001) and U.S. Infrastructure: Funding 
Trends and Opportunities to Improve Investment Decisions (GAO/RCED/
AIMD-00-35, Feb. 7, 2000).
    \2\ The seven agencies develop infrastructure estimates for 
highways (ARC and FHWA), water supply and wastewater treatment (EPA), 
airports (FAA), mass transit (FTA), public buildings (GSA), and water 
resources and hydropower (Army Corps).
---------------------------------------------------------------------------
    In summary, we found:
     The Federal Government exerts an important influence on 
infrastructure investment and development. The Federal Government's 
influence can be seen in several ways, including acquiring and 
maintaining various federally-owned assets, providing funding for 
infrastructure that is owned and operated by others, and influencing 
the way infrastructure projects are designed and built through 
legislation and regulations.
    The Federal Government has spent an average of about $59 billion 
annually since the late 1980's on the Nation's civilian infrastructure. 
This spending showed a slightly upward trend through the 1990's. 
Similarly, spending by State and local governments continued an upward 
trend that began in the 1980's and exceeded Federal spending in certain 
areas.
     The seven agencies we reviewed each estimated billions of 
dollars for future investment in infrastructure. The estimates focused 
on investment in the areas of water resources, hydropower, water 
supply, wastewater treatment, airports, highways, mass transit, and 
public buildings. The estimates ranged from GSA's calculation of $4.58 
billion (in current dollars)\3\ to repair public buildings over the 
next 5 years to FHWA's estimate of $83.4 billion (in constant 1997 
dollars)\4\ per year over 20 years to improve highways. Certain 
estimates, such as those prepared by the Army Corps (for water 
resources and hydropower) and GSA, are for Federal spending; other 
estimates involve all levels of government and the private sector.
---------------------------------------------------------------------------
    \3\ ``Current dollar'' is the dollar value of a good or service 
expressed in terms of prices current at the time the good or service is 
sold.
    \4\ ``Constant dollar'' is a dollar value adjusted for changes in 
the average price level (i.e., adjusted for inflation) for a base year.
---------------------------------------------------------------------------
     Some perspective is called for in reviewing the investment 
estimates developed by the seven agencies. While these estimates 
encompass major areas of public infrastructure, they cannot be easily 
compared or simply ``added up'' to produce a national estimate of 
infrastructure investment needs because, for example, they were 
developed using different methods and were for different time periods. 
In addition, the seven agencies all had procedures for developing 
investment estimates that reflect some practices used by leading 
private sector and government organizations, although some agencies 
followed more practices than other agencies. Nonetheless, following the 
leading practices does not ensure a quality investment estimate and 
each estimate had limitations associated with the quality of the data 
used in developing it. Furthermore, some of these investment estimates 
span several decades and investment needs can change significantly over 
time due to changes in the efficiency of delivering infrastructure 
services or pricing strategies that alter the demand for services. 
Finally, these estimates mostly focus on the condition of 
infrastructure rather than the desired outcomes (e.g., less traffic 
congestion) that can be expected from additional infrastructure 
investments. We caution against relying on estimates of need that are 
based primarily on the condition of existing infrastructure if desired 
outcomes are not clearly articulated and the costs and benefits of 
alternative approaches (such as using strategies to manage demand 
rather than building new infrastructure) for achieving those outcomes 
are not fully considered.
    We did not independently verify the seven agencies' investment 
estimates, but we did rely on past reviews of these data by us and 
others that examined the soundness and completeness of the methodology 
and/or data used to develop the estimates. We reviewed agencies' 
documentation of their procedures to develop the estimates, but we did 
not verify whether these procedures were followed. In addition, we 
compared agencies' procedures with some of the capital decisionmaking 
practices used by leading government and private sector organizations 
that we identified and reported on in 1998.\5\ Those leading practices 
are identified in appendix I.
---------------------------------------------------------------------------
    \5\ Executive Guide: Leading Practices in Capital Decisionmaking 
(GAO/AIMD-99-32, Dec. 1998).
---------------------------------------------------------------------------
the federal role in civilian infrastructure investment and development 
                   and trends of government spending
    While most spending on civilian infrastructure takes place at the 
State, local, or private-sector level, the Federal Government exerts an 
important influence on infrastructure investment and development in 
several ways. First, the Federal Government is directly responsible for 
acquiring and maintaining various federally-owned assets. These 
include, for example, Federal office buildings, dams and flood control 
structures, and the Nation's air traffic control system. The Congress 
directly appropriates the funding for such infrastructure. Second, the 
Federal Government provides funding--such as grants, loans, or loan 
guarantees--for infrastructure that is owned and operated by others 
such as mass transit systems and municipal water supply systems. In 
these cases, Federal funds cover a portion of the capital development 
and improvements required. For example, the Department of 
Transportation provides States, localities, and others with grants that 
partially fund the construction and improvement of urban and rural 
highways and bridges, including major maintenance of interstate 
highways; the States generally provide a 20-percent match for these 
funds and determine how to spend the money within broad Federal 
guidelines. Third, the Federal Government influences infrastructure 
investment through tax incentives. For example, the interest on 
municipal bonds, which are primarily used for infrastructure purposes, 
is exempt from Federal taxes. Finally, Federal legislation and 
regulation influence both the need for and the way infrastructure 
projects are designed and built. For example, meeting safe drinking 
water standards may often require the construction or modification of 
local water systems.
    The Federal Government has spent an average of $150 billion (in 
constant 2000 dollars) annually since the early 1980's for civilian and 
defense infrastructure. Of this amount, about $59 billion was spent 
annually for spending on civilian infrastructure.\6\ As figure 1 shows, 
Federal spending for civilian infrastructure showed a slightly upward 
trend through the 1990's.
---------------------------------------------------------------------------
    \6\ We used information from OMB's budget data base to analyze 
actual Federal infrastructure outlays (spending) for fiscal years 1981 
through 1998, using a broad definition for infrastructure spending that 
included the physical structure and facilities that are intended to 
enhance the private sector's long-term productivity, as well as 
spending for physical capital designed to achieve Federal agencies' 
goals or improve the Government's efficiency. OMB's budget data base 
does not contain State and local spending for infrastructure. See U.S. 
Infrastructure: Funding Trends and Opportunities to Improve Investment 
Decisions (GAO/RCED/AIMD-00-35, Feb. 7, 2000).
---------------------------------------------------------------------------
 figure 1: federal spending on infrastrucutre in 2000 dollars, fiscal 
                        years 1981 through 1998
[GRAPHIC] [TIFF OMITTED] 80651.151

    Similarly, as figure 2 shows, spending by State and local 
governments continued an upward trend after netting out inflation that 
began in the 1980's and exceeded Federal spending in certain 
infrastructure areas. A 1999 Congressional Budget Office (CBO) study 
reported that State and local spending for transportation and water 
resources, supply, and treatment rose from over $88 billion (in 2000 
dollars) in fiscal year 1981 to $152 billion in fiscal year 1994.\7\
---------------------------------------------------------------------------
    \7\ See Trends in Public Infrastructure Spending, Congressional 
Budget Office (May 1999). CBO defined infrastructure to include 
spending for highway, mass transit, rail, aviation, water 
transportation, water resources, water supply, and wastewater 
treatment. State and local spending excludes Federal grants and loans.
---------------------------------------------------------------------------
figure 2: state and local spending for selected infrastructure areas in 
              2000 dollars, fiscal years 1981 through 1994
[GRAPHIC] [TIFF OMITTED] 80651.151

         federal estimates of future infrastructure investment
    The seven agencies we reviewed each estimated that billions of 
dollars were needed for investment in infrastructure. The estimates 
focused on investments in the areas of water resources, hydropower, 
water supply, wastewater treatment, airports, highways, mass transit, 
and public buildings and spanned from several years to several decades. 
The investment amounts vary from GSA's estimate of $4.58 billion over 
the 5 years to repair public buildings to FHWA's estimate of $83.4 
billion each year over 20 years to preserve and improve the Nation's 
highways. The investment estimates are summarized in table 1.

                        Table 1.--Selected Agencies' Infrastructure Investment Estimates
----------------------------------------------------------------------------------------------------------------
                                    Activities and      Activities and
             Agency               assets included in    assets excluded       Time period     Total estimate (in
                                       estimate          from estimate          covered            billions)
----------------------------------------------------------------------------------------------------------------
ARC.............................  Construction of     Maintenance,        1997-completion...  $8.5 (current 1995
                                   highways within     retrofit, or                            dollars)
                                   portions of 13      improvements to
                                   States.             completed
                                                       highways.
Army Corps......................  Construction and    Nonconstruction     2001-completion...  $38.0a
                                   major               costs, projects
                                   rehabilitation of   not under
                                   water resources     construction, and
                                   projects and        critical
                                   major               operations and
                                   rehabilitation of   maintenance work.
                                   hydropower
                                   projects
                                   nationwide.
EPA.............................  Construction and    Costs due solely    1999-2018.........  $150.9 (current
                                   upgrade of          to population                           1999 dollars)
                                   drinking water      growth and costs
                                   supply systems      not eligible for
                                   nationwide.         Federal funding.
EPA.............................  Construction and    Costs due solely    1996-2016.........  $139.5 (current
                                   upgrade of          to population                           1996 dollars)
                                   wastewater          growth and costs
                                   treatment           not eligible for
                                   collection          Federal funding.
                                   facilities
                                   nationwide.
FAA.............................  Construction,       Costs not eligible  1998-2002 $35.1
                                   replacement, and    for Federal         (constant 1998
                                   rehabilitation of   funding.            dollars).
                                   airport
                                   facilities
                                   nationwide.
FHWA............................  Improvements to     Costs to construct  1998-2017.........  $50.8-$83.4 per
                                   the Nation's        new roads.                              year for 20
                                   highways based on                                           yearsb (constant
                                   several                                                     1997 dollars)
                                   scenariosb.
FTA.............................  Replacement and     ..................  1998-2017.........  $10.8-$16.0 per
                                   refurbishing of                                             year for 20
                                   mass transit                                                yearsc (constant
                                   vehicles and                                                1997 dollars)
                                   facilities
                                   nationwide based
                                   on four
                                   scenariosc and
                                   construction of
                                   new systems.
GSA Repair and alteration of      Buildings owned by  Up to 5 years.....  $4.58a............
 public buildings.                 Federal agencies
                                   other than GSA.
GSA.............................  Construction of     ..................  Up to 7 years.....  $0.75 to $0.8 per
                                   border stations,                                            year for 5 to 7
                                   Federal office                                              yearsa
                                   buildings, and
                                   courthouses.
----------------------------------------------------------------------------------------------------------------
aCurrent year dollars from different dates.
bFHWA modeled several scenarios--including cost beneficial investment needed to maintain the current physical
  condition--that provided a range of estimates.
cFTA's analysis included scenarios that produced estimates ranging from investments needed to maintain current
  condition and performance of mass transit to investments needed to improve its current condition and
  performance.
Note: Estimates for the Army Corps and GSA are Federal investments. Estimates for the remaining agencies are a
  combination of Federal, State, and other investment sources.
Source: GAO's analysis of agencies' data.

    Each of the seven agencies used data from various localities, 
States, or agency regional offices and aggregated those data to produce 
a national estimate for infrastructure investment. Each agency's 
estimate is described below.
Appalachian Regional Commission
    In 1997, ARC estimated that it would cost $8.5 billion from State 
and Federal sources to complete the Appalachian Development Highway 
System, a 3,025-mile system of highways in 13 States.\8\ The estimate 
includes costs for project design, environmental mitigation, rights of 
way access, and construction. These costs were not adjusted for 
inflation. They do not include maintenance, retrofits, or safety 
improvements to completed segments of the highway system. According to 
ARC officials, the estimate is probably understated due to the limited 
amount of detailed information available in 1997 and because the 
estimate was prepared before obtaining public input or identifying and 
addressing environmental or historic preservation concerns about 
specific highway corridors. To produce the estimate, each of the 13 
States estimated the cost to complete the system within their State 
using instructions provided by ARC and FHWA. ARC and FHWA reviewed the 
States' estimates to ensure uniformity and accuracy and assessed the 
reasonableness of the cost estimates by comparing them to the costs of 
similar highway projects within the State.\9\ ARC uses this estimate as 
the basis for allocating Federal funds appropriated for the Appalachian 
Development Highway System. ARC distributes the funds to the 13 States 
on the basis of their percentage share of the cost to complete the 
highway system. ARC plans to issue an updated estimate in 2002.
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    \8\ Appalachia includes all of West Virginia and parts of 12 
States: Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, 
North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, and 
Virginia. The Appalachian Highway System is funded by the Federal 
Highway Trust Fund and a State match of no less than 20 percent.
    \9\ This activity reflects a leading practice.
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U.S. Army Corps of Engineers
    As of March 30, 2001, the Army Corps estimated that $38 billion in 
Federal funds was required to complete water resources and hydropower 
infrastructure projects already under construction.\10\ That amount 
includes about $37 billion for construction of new water resource 
projects, $582 million for work at hydropower plants, and $217 million 
for major rehabilitation of water resource projects. These amounts were 
not adjusted for inflation. The overall estimate does not include 
critical operations and maintenance work for water resources and 
related land projects; for fiscal year 2002, the Army Corps estimated 
it would require $915 million for such work. The $38 billion estimate 
excludes projects that are not under construction, such as those in the 
design stage, and costs not related to construction, such as 
feasibility studies and evaluations. Army Corps officials believe that 
the overall estimate might be understated because it does not consider 
increases in the cost of completing a project over time due to changing 
economic conditions. The estimate is the aggregate of individual 
infrastructure projects. Local governments, groups, and/or private 
citizens who requested assistance from the Army Corps initially 
identified the water resources projects included in the estimate.
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    \10\ The Congress provides funding to the Army Corps on a project-
by-project basis and each project has a non-Federal cosponsor that 
shares in the cost. In addition, fees from vessel operators are used to 
fund half the cost of new construction and major rehabilitation of the 
commercial fuel-taxed inland waterway system.
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    Engineers and other professionals using existing industry data 
estimated project costs. The agency also uses cost-benefit analysis to 
determine which water resources projects are economically justified and 
would assist the agency in reaching its goals, such as improving 
navigation and flood mitigation.\11\ The evaluation and cost estimate 
is sent to the agency's headquarters, and selected projects are 
submitted for funding as part of the Department of Defense's annual 
budget. Funded projects undergo several lengthy reviews by the Army 
Corps, including a feasibility study to investigate and recommend 
solutions to water resources problems.\12\ The estimate for hydropower 
investment projects is based on the Army Corps' inspections, tests, and 
evaluations of that equipment. The Army Corps uses the investment 
estimates to determine the financial resources needed to manage and 
repair assets under its jurisdiction and for new construction.\13\
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    \11\ This activity reflects a leading practice.
    \12\ This activity reflects a leading practice.
    \13\ The Army Corps also had procedures reflecting the following 
leading practices: establishing a baseline inventory of assets; 
considering alternative ways to address unmet investment needs, 
including non-capital approaches; ranking and selecting projects for 
funding based on established criteria; and developing a long-term 
capital plan that defines capital asset decisions.
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Environmental Protection Agency
    In February 2001, EPA reported an estimated $150.9 billion in 
Federal, State, and local funds was needed to construct and upgrade 
drinking water facilities between 1999 and 2018.\14\ The estimate 
excludes costs ineligible for funding under the Drinking Water State 
Revolving Fund (DWSRF), such as costs arising solely from population 
growth. The costs were not adjusted for inflation. EPA reported that 
the estimate may be understated because some needs covered only 2 to 5 
years, not the 20-year period. To develop the estimate, EPA surveyed 
all of the large water systems in the United States and a sample of the 
medium water systems. In addition, EPA conducted site visits to 599 
small systems and extrapolated data from these surveys and site visits 
to compute the total investment estimate. The States and EPA reviewed 
the surveys and supporting cost documentation for medium and large 
systems.\15\ The agency uses the results of this estimate to allocate 
moneys to the States for the revolving fund based on each State's share 
of the total investment amount.
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    \14\ EPA provides funding for the construction and improvement of 
drinking water and wastewater treatment facilities through grants to 
capitalize State revolving funds. States provide a matching amount into 
their revolving funds equal to 20 percent of the total grant. The 
revolving funds provide several types of financial support, including 
loans at or below market interest rates, guarantees for the issuance of 
new local bonds, and purchase of existing bonds.
    \15\ This activity reflects a leading practice.
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    In 1996, EPA estimated that $139.5 billion in Federal and State 
funds was needed between 1996 and 2016 for capital investment in water 
pollution control facilities. The total included $44.0 billion for 
wastewater treatment, $10.3 billion for upgrading existing wastewater 
collection systems, $21.6 billion for new sewer construction, and $44.7 
billion for controlling combined sewer overflows. These costs were not 
adjusted for inflation. The estimate did not include annual costs for 
operations and maintenance and projects that were not eligible for 
funding under Title VI of the Clean Water Act, such as house 
connections to sewers and costs to acquire land that is not a part of 
the treatment process. EPA reported that the estimate may be 
understated because some needs accounted for only 5 years, not the 20-
year period. EPA developed the estimate from a nationwide data base of 
wastewater treatment facilities that is periodically updated by 
surveying the States.\16\ The States provided revised estimates of 
capital investment needs from their documented plans, which were 
supplemented by costs modeled by EPA when the State lacked this 
information. EPA reviewed all documentation submitted by the States to 
ensure compliance with its established criteria.\17\ In addition, EPA 
modeled the costs for each State for combined sewer overflows and 
activities to control stormwater runoff and nonpoint sources of 
pollution. According to EPA, the estimate is also used to assist the 
States and Federal Government in program planning and evaluation and to 
inform the Congress of the magnitude of the needs.\18\
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    \16\ This activity partially reflects a leading practice.
    \17\ This activity reflects a leading practice.
    \18\ EPA also has procedures that partially reflect the following 
practice: considering alternative ways to address unmet investment 
needs, including non-capital approaches.
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Federal Aviation Administration
    In 1999, FAA reported that $35.1 billion in Federal and non-Federal 
funds was required for airport infrastructure investment projects from 
1998 to 2002.\19\ The estimate primarily includes projects to bring 
existing airports up to current design standards, develop passenger 
terminal buildings, and add capacity to congested airports. The 
estimate only includes projects that are eligible for funding under 
FAA's Airport Improvement Program.\20\ The estimate was developed by 
aggregating the projects contained in FAA's National Plan of Integrated 
Airport Systems data base. The projects originate primarily from 
airport master plans. FAA officials review projects to determine if 
they are eligible for funding and justified, and then the approved 
projects are included in the data base.\21\
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    \19\ FAA provides airports with grants for capital development. FAA 
allocates most grants on the basis of (1) a legislated formula that is 
tied to the number of passengers that an airport enplanes and (2) 
categories earmarked for specific types of airports and projects.
    \20\ Generally, the Airport Improvement Program allows for all 
types of airport development except for automobile parking structures, 
hangars, air cargo buildings, or the revenue producing areas of large 
terminals.
    \21\ This activity reflects a leading practice.
---------------------------------------------------------------------------
    Because this estimate is not a spending plan, FAA has reported that 
it makes no attempt to prioritize the projects or determine if the 
benefits of specific projects would exceed their cost. This estimate is 
prepared and submitted to the Congress biennially, as required by 
statute.\22\
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    \22\ FAA also has procedures that reflect the following leading 
practices: considering alternative ways to address unmet investment 
needs, including non-capital approaches and ranking and selecting 
projects for funding based on established criteria. In addition, FAA 
has procedures that partially reflect one leading practice: developing 
a long-term capital plan that defines capital asset decisions.
---------------------------------------------------------------------------
Federal Highway Administration
    In May 2000, FHWA issued investment estimates for highways for the 
years 1998 through 2017.\23\ These estimates ranged from $50.8 billion 
per year for cost-beneficial improvements that would maintain the 
current physical condition of highways to $83.4 billion per year for 
all improvements that would improve pavement condition and reduce 
highway users' travel costs. The estimates included both Federal and 
nonFederal portions of funding; they do not include the costs to 
construct new roads. To determine the estimates, FHWA used data from a 
statistically drawn national sample of 125,000 highway segments as well 
as information from the States on forecasts such as travel growth. FHWA 
officials reviewed the data submitted by the States and asked the 
States to correct serious flaws and improve some data submissions.\24\ 
FHWA used a computer model to simulate the effects of infrastructure 
improvements on a sample of highway sections and used a benefit-cost 
analysis to identify economically justified highway improvements.\25\ 
While FHWA's model analyzes these sample highway sections individually, 
the model is designed to provide estimates of investment requirements 
valid at the national level and does not provide improvement 
recommendations for individual highway segments. In June 2000, we found 
that the model was reasonable despite some limitations concerning the 
computations.\26\ FHWA's estimate is used by legislative and executive 
branch offices to obtain general information on the Nation's overall 
need for investment in highways.\27\
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    \23\ FHWA provides grants that partially fund the construction and 
improvement of urban and rural highways and bridges, including major 
maintenance of interstate highways. States generally provide a 20-
percent match and determine how to spend the money within broad Federal 
guidelines.
    \24\ This activity reflects a leading practice.
    \25\ This activity reflects a leading practice.
    \26\ For example, the model cannot completely reflect changes 
occurring among all highways in the transportation network at the same 
time, since the model analyzes each highway segment independently. See 
Highway Infrastructure: FHWA's Model for Estimating Highway Needs Is 
Generally Reasonable, Despite Limitations (GAO/RCED-00-133, June 5, 
2000).
    \27\ In addition, FHWA has procedures that reflect the following 
leading practice: ranking and selecting projects for funding based on 
established criteria. FHWA also has procedures that partially reflect 
the following leading practice: conducting a comprehensive assessment 
of the resources needed to meet an agency's mission and results-
oriented goals and objectives.
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Federal Transit Administration
    In May 2000, FTA estimated investment requirements of $10.8 billion 
to $16.0 billion per year for mass transit systems (include buses, 
railcars, and ferries) from 1998 to 2017, depending on whether the 
condition and performance of mass transit systems would be maintained 
or improved.\28\ The estimates include the cost to replace and 
refurbish existing vehicles and facilities and the cost to construct 
new mass transit systems. The estimates cover both Federal and 
nonFederal shares of costs. FTA used data from local urban transit 
agencies to determine the age and condition of mass transit 
infrastructure and then estimated the cost of either maintaining or 
improving that infrastructure. FTA developed the estimates using its 
Transit Economic Requirements Model. The model compares costs and 
benefits to determine if replacing an asset was economically 
justified.\29\ The model then aggregated the costs of all the projects 
that were justified by benefit-cost analysis to determine the total 
investment estimate for the Nation's mass transit systems. The accuracy 
of the estimates is limited by missing data and imprecise predictions 
due to the difficulty in predicting travel growth. FTA uses the 
estimates to provide general support for its budget and information on 
changes in mass transit systems.\30\
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    \28\ FTA provides funding for mass transit primarily through 
formula and capital investment grants that generally require a State/
local match of at least 20 percent.
    \29\ This activity reflects a leading practice.
    \30\ In addition, FTA has procedures that reflect the following 
leading practices: establishing a baseline inventory of assets and 
establishing procedures to review data developed by others. FTA also 
has procedures that partially reflect the following leading practices: 
conducting a comprehensive assessment of the resources needed to meet 
an agency's mission and results-oriented goals and objects and 
budgeting for projects in useful segments.
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General Services Administration
    In May 2001, GSA's data indicated that $4.58 billion in Federal 
funds was required over the next 5 years to meet the repair and 
alteration needs of public buildings.\31\ This estimate does not 
include investment amounts for Federal buildings owned by other Federal 
agencies, including the Departments of Defense and Energy and the 
Postal Service. In addition, GSA estimated that $250 million to $300 
million was required annually over the next 5 years to construct new 
border stations and Federal office buildings and $500 million annually 
was required over 5 to 7 years to construct new courthouses. Regional 
offices identify investment projects, and cost data are derived from 
various sources, including contractors, safety inspectors, and building 
engineers. Projects that have estimated costs of $1.99 million or more 
are evaluated by headquarters officials and ranked for funding using 
weighted criteria that include economic return, project risk, and 
project urgency.\32\ In 2000, we reported problems with the quality of 
data contained in GSA's data base of repair and alteration projects--
including incorrect data, missing projects, and cost estimates that 
were not current.\33\ GSA is taking action intended to address the 
problems we identified and improve the data base, but we have not 
assessed the agency's progress in this regard. In addition, the sources 
of cost information vary, so the estimates for individual projects may 
be inconsistent. GSA's cost data are used as input in determining 
funding priorities.\34\
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    \31\ The primary means of financing the operating and capital costs 
associated with Federal space that is owned or managed by GSA is the 
Federal Building Fund, a revolving fund supported by rental assessments 
to Federal agencies and annual appropriations.
    \32\ This activity reflects a leading practice.
    \33\ Federal Buildings: Billions Are Needed for Repairs and 
Alterations (GAO/GGD-00-98, Mar. 30, 2000.)
    \34\ In addition, GSA has procedures that reflect the following 
leading practices: establishing a baseline inventory of existing assets 
and establishing procedures to review data developed by others. GSA 
also has procedures that partially reflect the following practices: 
considering alternative ways to address unmet investment needs, 
including non-capital approaches, and budgeting for projects in useful 
segments.
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                  overall comments about the estimates
    Some perspective is called for in reviewing the investment 
estimates by the seven agencies. First, the investment estimates 
encompass major areas of public infrastructure, but they cannot be 
easily compared or simply ``added up'' to produce a national estimate 
of all infrastructure investment needs because they were developed 
using different methods and were for different time periods. A 
fundamental reason that the estimates were prepared differently and 
lack comparability is that they are developed and used for different 
purposes. Some agencies use the information to determine the financial 
resources needed to manage and/or repair their own assets, while other 
agencies develop estimates at the request of the Congress to provide 
general information to decisionmakers or to help direct Federal funding 
to States, localities, and other parties.
    Second, the seven agencies all had procedures for developing 
investment estimates that reflect some practices used by leading 
private sector and government organizations. Those practices include 
establishing a baseline inventory of assets, using cost-benefit 
analysis to identify economically justified investments, and ranking 
and selecting projects for funding based on established criteria. (See 
app. I for additional information on eight leading practices that 
pertain to developing and using investment estimates.) Some agencies 
followed more leading practices than other agencies. For example, the 
Army Corps had procedures that reflected six of the eight practices, 
which included establishing an inventory of assets; considering 
alternative ways to address unmet investment needs, including 
noncapital approaches; using cost-benefit analysis; and developing a 
long-term capital plan that defines capital asset decisions. 
Nonetheless, following the leading practices does not ensure a quality 
investment estimate and each estimate had limitations associated with 
the quality of the data used in developing it. Correcting such 
limitations will improve the quality and reliability of the agencies' 
investment estimates.
    Third, some investment estimates span several decades and 
investment needs can change significantly over time with changes in the 
efficiency of delivering infrastructure services or pricing strategies 
that alter the demand for services. For example, the consolidation of 
smaller water systems or the introduction of user charges can reduce 
the need to expand or replace infrastructure. Fourth, many of these 
estimates are totals for the entire infrastructure network--involving 
all levels of government and the private sector. The Federal 
Government's role in financing these amounts should be recognized and, 
in some cases, this role might be small compared to other levels of 
government or the private sector. Finally, these estimates mostly focus 
on the condition of infrastructure rather than the desired outcomes 
(e.g., less traffic congestion) that can be expected from additional 
infrastructure investments. We caution against relying on estimates of 
need that are based primarily on the condition of existing 
infrastructure if desired outcomes are not clearly articulated and the 
costs and benefits of alternative approaches (such as using strategies 
to manage demand rather than building new infrastructure) for achieving 
those outcomes are not fully considered.
    Mr. Chairman, this concludes my statement. I will be happy to 
answer any questions from you or any member of the subcommittee.
                                 ______
                                 
                                Appendix
   Leading Practices in Capital Decisionmaking Concerning Investment 
                               Estimates
    In 1998, we identified the practices of leading government and 
private-sector organizations in capital decisionmaking.\35\ The 
following eight practices relate to developing and using investment 
estimates.
---------------------------------------------------------------------------
    \35\ Executive Guide: Leading Practices in Capital Decisionmaking 
(GAO/AIMD-99-32, Dec. 1998).
---------------------------------------------------------------------------
     conduct a comprehensive assessment of the resources needed 
to meet an agency's
     mission and results-oriented goals and objectives;
     establish a baseline inventory of existing assets, 
evaluate their condition, determine if they are performing as planned, 
and identify excess capacity;
     consider alternative ways to address needs, including 
noncapital alternatives;
     use cost-benefit analysis as a primary method to compare 
alternatives and select economically justified investments;
     rank and select infrastructure projects for funding based 
on established criteria;
     budget infrastructure projects in useful segments;
     develop a long-term capital plan that defines capital 
asset decisions; and
     establish procedures to review data developed by others 
and use independent reviews of data and methods to further enhance the 
quality of estimates.\36\
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    \36\ This practice was identified as a result of information 
collected during our review of the seven agencies' investment 
estimates.
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                                 ______
                                 
 Responses by Peter Guerrero to Additional Questions from Senator Reid
    Question 1. Your work in reviewing the investment estimates of 
various agencies is a good start to looking at national infrastructure 
needs in a more comprehensive manner. Now that you have completed your 
review, what specifically can we do to get agencies to improve their 
analyses and to develop more uniform processes for estimating 
infrastructure needs?
    Response. Several approaches could be used to develop improved and 
more comparable infrastructure investment estimates. First, agencies 
could more closely follow the practices used by leading government and 
private sector organizations related to infrastructure investment 
estimates. We listed several best practices in U.S. Infrastructure: 
Agencies' Approaches to Developing Investment Estimates Vary (GAO-01-
835, July 20, 2001). These practices include:
     maintaining an inventory of existing assets and their 
condition and performance,
     ranking and selecting infrastructure projects for funding 
based on established criteria, and
     taking steps to improve the quality of data used in making 
the estimates.
    In addition, the Advisory Council on Intergovernmental Relations 
(ACIR) made recommendations in 1993 concerning infrastructure needs 
that are still very useful today. In its report High Performance Public 
Works, the ACIR noted that it is essential that the federal government 
identify, assess, and undertake infrastructure investments that will 
pay the greatest possible dividends now and in the future. Doing so 
requires that agencies evaluate potential infrastructure investments 
through defining performance goals and measures for their 
infrastructure programs. This establishes the goals or missions that 
the infrastructure investment is meant to achieve and how the agency 
will determine if the infrastructure is meeting those goals. In 
addition, ACIR noted that using benefit-coast analysis to evaluate 
infrastructure investments would demonstrate whether broadly defined 
benefits exceed the life-cycle costs of the potential investment.

    Question 2. Is it possible to develop a national estimate of 
infrastructure needs so we can better track the state of our Nation's 
physical infrastructure?
    Response. Following all of the practices that I mentioned above 
would allow a greater degree of comparability between estimates made by 
different government agencies. In addition, to facilitate the 
compilation of a national estimate individual estimates should: cover 
similar time periods; separately identify federal spending and 
nonfederal spending needs; clarify whether estimates are for new 
infrastructure, operations and maintenance of existing infrastructure, 
or both; and be derived using similar methods (e.g., by discounting 
future costs).

    Question 3. Since this subcommittee will soon begin the long 
process of reauthorizing our surface transportation laws, I am 
particularly interested in your critique of the Department of 
Transportation's estimate of road and transit infrastructure needs. Can 
their analysis really help us estimate the cost of addressing the 
increasing congestion on our Nation's roads, which itself has been 
estimated to cost $78 billion a year in lost time and wasted fuel? Is 
there anything we can do to improve the usefulness of these estimates?
    Response. One of the strengths of the Department of 
Transportation's (DOT) estimate of highway investment needs is that it 
includes several scenarios. These scenarios present different 
estimates, depending on the outcome that is desired for the Nation's 
highways. One scenario focussed on congestion by estimating the 
investment required to maintain average travel times at their current 
(1997) level over 20 years. DOT's analysis showed that maintaining 
travel times would require about $68 billion (in 1997 dollars) in 
capital investment per year over 20 years. Improving travel times would 
require a greater investment. In contrast, all levels of government 
invested $42.6 billion in highways in 1997. Assuming that spending on 
highway investments continues at the level that DOT projects, the 
United States will continue to lose ground on congestion over the next 
20 years.
    Congestion is caused by a combination of factors in addition to 
inadequate highway capacity, including economic growth and prosperity 
in the United States, changing geographic characteristics of 
metropolitan areas, and demographic changes. These factors, combined 
with the likelihood that the United States will not invest in highways 
at the level required to maintain travel times, suggests that responses 
to congestion might usefully include activities in addition to capital 
investment in highways. These activities include, for example, 
operating the existing highway capacity more efficiently through use of 
technology, making better use of capacity by providing incentives to 
drivers to carpool or drive at off-peak hours, considering the 
interactions between land use and highway traffic, and encouraging use 
of alternative modes of transportation.

    Question 4. Do any of these infrastructure needs assessments take 
into account the increased likelihood of catastrophic storms that will 
last for the next several decades, according to the U.S. Hurricane 
Research Division of NOAA (National Oceanographic and Atmospheric 
Administration)?
    Response. We found no indication that the estimates took into 
account the increased likelihood of catastrophic storms. However, we 
did not review the specific assumptions for all the individual projects 
that make up the investment estimates.

    Question 5. What about the three to ten degree increase in average 
global temperature and the corresponding sea level rise that the 
National Academy of Sciences thinks is possible over the next century?
    Response. The U.S. Army Corps of Engineers' procedures for 
conducting project feasibility studies call for consideration of 
alternative scenarios of future sea-level rise. We found no indication 
that the other estimates took this into account.

    Question 6. What impacts might the effects of global warming have 
on our Nation's physical infrastructure?
    Response. Global warming is expected to raise the sea level and 
change precipitation and other local climate conditions. These changes 
could affect, to varying degrees, major components of our Nation's 
physical infrastructure. For example, existing coastal infrastructure 
may need to be protected from future sea-level rise by the building of 
bulkheads and sea walls. The operation and maintenance of 
transportation systems would also be affected, but exactly how is hard 
to predict. For example, higher average temperatures could result in 
lower highway maintenance costs, especially with fewer freeze-thaw 
cycles and less snow. However, increased pavement buckling could also 
result from longer periods of intense heat. In addition, water 
resources would be affected by changing climate conditions. The U.S. 
Army Corps of Engineers' Institute for Water Resources conducted 
studies on the effect that climate changes may have on various U.S. 
water basins including the Great Lakes, Savannah River system, and the 
Boston Metropolitan water supply. For each study, researchers simulated 
the operation of the water basin under different climate change 
scenarios to determine how the basin would respond. The researchers 
concluded that, except in very extreme cases, the climate changes would 
have negligible impact on the basins' operations.

    Question 7. What, if any, changes need to be made in our national 
building codes or planning and zoning concepts to deal with this 
warming?
    Response. Anecdotally, we have heard that some localities are 
addressing the issue, however, we have not examined the issue or the 
adequacy of these individual efforts. For example, the U.S. Coastal 
Zone Management Act requires State coastal programs to address rising 
sea level, and a few States have modified coastal land use policies to 
address rising sea level. Regulations along San Francisco Bay require 
projects along the shore or on newly reclaimed land to be either 
protected by a dike or elevated enough to accommodate accelerated sea-
level rise.
                               __________
            Statement of American Society of Civil Engineers
    Mr. Chairman and members of the subcommittee. The American Society 
of Civil Engineers (ASCE) is pleased to provide this statement for the 
subcommittee on the need for a continued strong Federal role in the 
construction and repair of the Nation's critical infrastructure 
systems.
    Last March, ASCE released its 2001 Report Card for America's 
Infrastructure in which the Nation's critically important foundation 
received a cumulative grade of ``D+'' in 12 infrastructure areas.
    Shortfalls in Federal and State funding and changing population 
patterns have placed a tremendous burden on our aging power plants, 
water systems, airports, bridges, highways and schools.
    The reasons for such a dismal grade are numerous: an explosive 
population growth and school enrollment that outpace the rate and 
impact of current investment and maintenance efforts; local political 
opposition and red tape that stymie the development of effective 
solutions; and the growing obsolescence of an aging system--most 
recently evident in the breakdown of California's electrical generation 
system and portions of the Nation's decaying water infrastructure.
    In short, America has been seriously underinvesting in its 
infrastructure for decades and our report card reflects that 
unfortunate reality.
    To remedy our infrastructure problem, ASCE estimates that the 
Nation needs to make an investment of $1.3 trillion over the next 5 
years.
    Only the Federal Government has the resources to help underwrite 
the massive need for a nationwide infrastructure repair effort.
    Our 2001 report card follows one released in 1998, at which time 
the 10 infrastructure categories rated were given an average grade of 
``D.'' While there have since been some efforts to address 
infrastructure shortfalls, ASCE's analysis shows that conditions remain 
basically the same. Five categories have gone up slightly but are still 
average or below.
    Grades in three categories--transit, aviation and wastewater--have 
gone down. The evaluation of two new infrastructure areas, navigable 
waterways and energy, have kept the grade point average low. Grades 
ranged from a high of ``C+'' for solid waste to a low of ``D-'' for 
schools. Despite being at the extremes, solid waste and schools 
received better marks than the ``C-'' and the ``F'' they received in 
1998. Most States have effectively sought alternatives to dumping solid 
waste into landfills by encouraging recycling--up 50 percent since 
1990--and converting waste to energy. Approximately 17 percent of the 
Nation's solid waste is now converted to energy.
    While local governments have increased spending on school 
construction and maintenance, problems continue to linger as enrollment 
outpaces construction in many communities. Consequently, the cost to 
remedy the situation has risen from $112 billion in 1998 to $127 
billion. With three-quarters of all school buildings failing to provide 
an effective environment for learning, due to either outdated 
facilities or overcrowding, the situation could worsen before things 
improve significantly.
    Transit received a grade of ``C-,'' down from a ``C'' 3 years ago, 
and airports received a ``D,'' down from a ``C-'' in 1998. While funds 
have been made available through TEA-21 and AIR-21, appropriated to 
mass transit and aviation respectively, both systems are struggling to 
meet usage demands nationwide. Transit ridership has increased 15 
percent since 1995, adding a strain despite unprecedented growth in 
transit systems and increased funding.
    Furthermore, existing public transportation systems, such as San 
Francisco's BART system and Washington's Metro system, are challenged 
by new commuter patterns that did not exist and were not anticipated 
when the systems were first designed and constructed.
    Airports are already faced with gridlock on a seemingly daily 
basis. In the past 10 years, air traffic has increased 37 percent, 
while capacity has increased only slightly. The aviation 
infrastructure, airports, air traffic control system and other 
components are not keeping up. Furthermore, local politics impede the 
discussion and implementation of solutions to meet the growing demand.
    Wastewater declined from a ``D+'' in 1998 to a ``D,'' while 
drinking water remained a ``D.'' Wastewater and drinking water systems 
are both quintessential examples of aged systems that need to be 
updated. For example, some sewer systems are a hundred years old. Aged 
drinking water systems are structurally obsolete.
    The shortfalls of $11 billion for drinking water and $12 billion in 
wastewater only account for improvements to the current system and do 
not even take into consideration the demands of a growing population.
    Along with drinking water, dams was the only other category to have 
received the same grade, ``D,'' as it did in 1998. In the past 2 years 
alone there have been 61 reported dam failures and the number of 
``high-hazard potential dams''--those whose failure would cause loss of 
life--increased from 9,281 to 9,921 in 1998. Currently, there are more 
than 2,100 unsafe dams in the United States, which have deficiencies 
that leave them highly susceptible to failure.
    Energy generation and transmission, a new addition to the 2001 
Report Card, scored a ``D+'' for its growing inability to meet the 
population's demand for power. More than 10,000 megawatts (MW) of 
capacity need to be added each year until 2008 to keep pace with the 
1.8 percent annual growth in demand. Since 1990, actual capacity has 
increased only about 7,000 MW per year, an annual shortfall of 30 
percent nationwide.
    Navigable waterways, the other newly evaluated category, posted a 
grade of ``D+.'' Navigable waterways encompass the Nation's ports, 
harbor channels, and inland, intracoastal and coastal waterways. 
Together, this network of waterways moves 2.3 billion tons of 
commercial goods. In the past 30 years, capital investment for public 
water resources has decreased 70 percent. The U.S. Army Corps of 
Engineers has a $38 billion backlog of authorized projects, which would 
take 25 years to complete at current funding levels.
    Three categories showed modest improvements. Roads went up from a 
``D-'' to a ``D+,'' and bridges rose from a ``C-'' to a ``C.'' Both 
categories have benefited from an increase in Federal and local funding 
currently allocated to ease road congestion and decaying bridges.
    But, with 29 percent of bridges still ranked as structurally 
deficient or obsolete and nearly a third of major roads considered to 
be in poor or mediocre condition, we believe that Congress cannot 
afford to allow promised funding for transportation to lapse.
    Efforts to reduce hazardous waste have improved that category's 
grade from a ``D-'' to a ``D+,'' primarily because effective regulation 
and enforcement of current policies have largely halted the 
contamination of new sites. Yet this grade remains low because the 
number of sites could grow, creating a backlog in the system.
    As dismal as these grades seem, many of the downward trends can be 
reversed with increased funding and a renewed partnership between 
citizens, local, State and Federal Governments. We have taken for 
granted that our lights will turn on, our roads and bridges won't 
crumble beneath us and that we'll have clean and safe water when we're 
thirsty. Without adequate resources, we cannot implement appropriate 
solutions.
    With a projected Federal budget surplus shrinking by the month, 
Congress must not delay the effort to earmark the funds needed to 
restore our ailing infrastructure. Without these resources, we gamble 
America's prosperity on an infrastructure whose pipes, schools, and 
airports are literally at the bursting point.
    Mr. Chairman, that completes our statement.
  

                                
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