[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
RECOVERY ACT: PROGRESS REPORT FOR INFRASTRUCTURE INVESTMENTS
=======================================================================
(111-116)
HEARING
BEFORE THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
May 26, 2010
__________
Printed for the use of the
Committee on Transportation and Infrastructure
U.S. GOVERNMENT PRINTING OFFICE
56-726 WASHINGTON : 2010
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
JAMES L. OBERSTAR, Minnesota, Chairman
NICK J. RAHALL, II, West Virginia, JOHN L. MICA, Florida
Vice Chair DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of JOHN J. DUNCAN, Jr., Tennessee
Columbia VERNON J. EHLERS, Michigan
JERROLD NADLER, New York FRANK A. LoBIONDO, New Jersey
CORRINE BROWN, Florida JERRY MORAN, Kansas
BOB FILNER, California GARY G. MILLER, California
EDDIE BERNICE JOHNSON, Texas HENRY E. BROWN, Jr., South
GENE TAYLOR, Mississippi Carolina
ELIJAH E. CUMMINGS, Maryland TIMOTHY V. JOHNSON, Illinois
LEONARD L. BOSWELL, Iowa TODD RUSSELL PLATTS, Pennsylvania
TIM HOLDEN, Pennsylvania SAM GRAVES, Missouri
BRIAN BAIRD, Washington BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington JOHN BOOZMAN, Arkansas
MICHAEL E. CAPUANO, Massachusetts SHELLEY MOORE CAPITO, West
TIMOTHY H. BISHOP, New York Virginia
MICHAEL H. MICHAUD, Maine JIM GERLACH, Pennsylvania
RUSS CARNAHAN, Missouri MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania JEAN SCHMIDT, Ohio
TIMOTHY J. WALZ, Minnesota CANDICE S. MILLER, Michigan
HEATH SHULER, North Carolina MARY FALLIN, Oklahoma
MICHAEL A. ARCURI, New York VERN BUCHANAN, Florida
HARRY E. MITCHELL, Arizona BRETT GUTHRIE, Kentucky
CHRISTOPHER P. CARNEY, Pennsylvania ANH ``JOSEPH'' CAO, Louisiana
JOHN J. HALL, New York AARON SCHOCK, Illinois
STEVE KAGEN, Wisconsin PETE OLSON, Texas
STEVE COHEN, Tennessee VACANCY
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland
SOLOMON P. ORTIZ, Texas
PHIL HARE, Illinois
JOHN A. BOCCIERI, Ohio
MARK H. SCHAUER, Michigan
BETSY MARKEY, Colorado
MICHAEL E. McMAHON, New York
THOMAS S. P. PERRIELLO, Virginia
DINA TITUS, Nevada
HARRY TEAGUE, New Mexico
JOHN GARAMENDI, California
HANK JOHNSON, Georgia
(ii)
CONTENTS
Page
Summary of Subject Matter........................................ v
TESTIMONY
Bowe, Pete, President, Ellicott Dredges, LLC..................... 37
Burkett, Tim, Chief Operations Officer, Biohabitats, Inc......... 37
Fernandez, John, Assistant Secretary for Economic Development,
U.S. Department of Commerce.................................... 8
Harman, Elizabeth, Assistant Administrator, Grant Programs,
Federal Emergency Management Agency............................ 8
Hooks, Craig E., Assistant Administrator for Administration and
Resources Management, Environmental Protection Agency.......... 8
Rainville, Brian, High School Teacher and Son of Dairy Farmers... 37
Salt, Terrence C., Deputy Assistant Secretary of the Army (Civil
Works), U.S. Army Corps of Engineers........................... 8
Trimble, David, Acting Director, Natural Resources and
Environment, Government Accountability Office.................. 8
Walsh, Mary, Chief of Staff, Public Buildings Service, ARRA
National Recovery Program Management Office, General Services
Administration................................................. 8
Welch, Kevin, Senior Project Manager, PCL Construction Services,
Inc., Representing the U.S. Green Building Council............. 37
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
Mitchell, Hon. Harry E., of Arizona.............................. 57
Oberstar, Hon. James L., of Minnesota............................ 58
Richardson, Hon. Laura, of California............................ 64
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Bowe, Pete....................................................... 70
Burkett, Tim..................................................... 74
Fernandez, John.................................................. 76
Harman, Elizabeth................................................ 87
Hooks, Craig E................................................... 107
Rainville, Brian................................................. 122
Salt, Terrence C................................................. 124
Trimble, David................................................... 133
Walsh, Mary...................................................... 156
Welch, Kevin..................................................... 172
SUBMISSIONS FOR THE RECORD
Committee on Transportation and Infrastructure, Majority Staff:..
Chart entitled, ``Bridges Improved by Recovery Act Highway
and Bridge Funds''....................................... xcvii
Chart entitled, ``Miles Improved by Recovery Act Highway
and Bridge Funds''....................................... xcvi
Chart entitled, ``T&I Committee Transparency and
Accountability Information by State and Formula Funding
under the American Recovery and Reinvestment Act of 2009
(P.L. 111-5) (Recovery Act) Submissions Received by T&I
Committee (Data Reported as of April 30, 2010)''........lxxxvii
Chart entitled, ``T&I Committee Transparency and
Accountability Information by State under the American
Recovery and Reinvestment Act of 2009 (P.L. 111-5)
(Recovery Act) Submissions Received by T&I Committee
(Data Reported as of April 30, 2010), Percentage of
Allocated Funds Associated with Project Stages, Clean
Water State Revolving Fund''............................. xcv
Chart entitled, ``T&I Committee Transparency and
Accountability Information by State under the American
Recovery and Reinvestment Act of 2009 (P.L. 111-5)
(Recovery Act) Submissions Received by T&I Committee
(Data Reported as of April 30, 2010), Percentage of
Allocated Funds Associated with Project Stages, Highways
and Bridges''............................................ xciv
Graph entitled, ``America is on a Path to Economic Recovery
from Job Losses to Job Gains''........................... 7
Report entitled, ``The American Recovery and Reinvestment
Act of 2009 Transportation and Infrastructure Provisions
Implementation Status as of May 14, 2010''............... xv
Fernandez, John, Assistant Secretary for Economic Development,
U.S. Department of Commerce, response to request for
information from Hon. Mica, a Representative in Congress from
the State of Florida........................................... 84
Harman, Elizabeth, Assistant Administrator, Grant Programs,
Federal Emergency Management Agency, response to request for
information from the Committee................................. 93
Hooks, Craig E., Assistant Administrator for Administration and
Resources Management, Environmental Protection Agency:.........
Response to request for information from Hon. Mica, a
Representative in Congress from the State of Florida..... 117
Response to request for information from Hon. Oberstar, a
Representative in Congress from the State of Minnesota... 121
Salt, Terrence C., Deputy Assistant Secretary of the Army (Civil
Works), U.S. Army Corps of Engineers, response to request for
information from Hon. Mica, a Representative in Congress from
the State of Florida........................................... 130
Trimble, David, Acting Director, Natural Resources and
Environment, Government Accountability Office:.................
Response to request for information from Hon. Mica, a
Representative in Congress from the State of Florida..... 153
Response to request for information from Hon. Oberstar, a
Representative in Congress from the State of Minnesota... 155
Walsh, Mary, Chief of Staff, Public Buildings Service, ARRA
National Recovery Program Management Office, General Services
Administration, response to request for information from the
Committee...................................................... 166
ADDITIONS TO THE RECORD
International Boundary Water Commission, United States and
Mexico, Edward Drusina, United States Commisiioner, written
testimony...................................................... 180
Natural Resources Conservation Service, U.S. Department of
Agriculture, David White, Cheif, written testimony............. 182
Smithsonian Institution, Dr. G. Wayne Clough, Secretary, written
testimony...................................................... 188
United States Coast Guard, U.S. Department of Homeland Security,
written testimony.............................................. 192
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HEARING ON RECOVERY ACT: PROGRESS REPORT FOR INFRASTRUCTURE INVESTMENTS
----------
Wednesday, May 26, 2010,
House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC.
The Committee met, pursuant to call, at 10:09 a.m., in room
2167, Rayburn House Office Building, the Honorable James
Oberstar [Chairman of the Full Committee] presiding.
Mr. Oberstar. The Committee on Transportation and
Infrastructure will come to order for the purpose of our
hearing this morning, the 19th in a series of hearings we have
conducted to maintain oversight, accountability, and
transparency on this Committee's portion of the Recovery Act
funds, which I call stimulus funding.
There is no question about the use of the funds from the
programs under the jurisdiction of this Committee, especially,
in highway and transit, because those funds go out by formula
to each State, which receives its specific apportionment
according to law, and the distribution is very clear. There is
a very clear path from the time the State DOT obligates the
funds, announces bids, invites bids, awards bids, contract gets
underway, construction work is underway, and the reimbursement
process begins.
All of that is measurable, trackable, and we receive a
report every 30 days, with now 100 percent of the $34 billion
in highway and transit funds obligated, all $34 billion.
Fifteen thousand, eight hundred seventy-eight projects are out
to bid. That is $30.7 billion, 90 percent of the funds out to
bid. Fourteen thousand, six hundred thirty-four projects are
under contract. That is 83 percent of the funds. Thirteen
thousand, one hundred forty-eight projects are actually
underway on job sites. That is 78 percent of the funds. And 12
percent of all the funds, 5,069 projects, are actually
completed already.
The Clean Water State Revolving Fund formula programs,
1,962 projects out to bid. That is 100 percent of the $3.8
billion. One thousand, nine hundred fifty-six projects are
under contract. That also is 100 percent. And 1,836 projects
work is underway, 96 percent of the funding.
In addition, we can account for 1,170,000 jobs in the first
year of the stimulus program on highway, transit, and
wastewater treatment; and an additional 159,066 total direct
indirect and induced jobs, that is, those that are on job site,
the Ready Mix plants that reopened, the sand and gravel pits
that reopened, the rebar, the steel service centers, all of
which would not have been producing without these stimulus
funds. We can account for $2.3 billion in direct jobs, that is,
those that are on job site, $2.3 billion in payroll; $472
million in taxes paid by those working, by those onsite job
persons; and $387 million in unemployment compensation checks
avoided because people are being paid to work and not paid for
not working.
In addition, well over 34,000 lane miles of highway have
been improved, upgraded, replaced. That is roughly equal to
three-fourths of the interstate highway system in one year.
Twelve hundred sixty-one bridges restored, replaced, rebuilt;
10,000 transit buses acquired, purchased, produced by the three
manufacturers in the U.S., all 100 percent American made; and
some 2400 transit stations replaced, rebuilt, restored.
Not only do we have people working, not only are they
paying taxes, they are paying their mortgages, they are not
getting unemployment compensation checks, they are leaving real
tangible benefits behind in permanent improvements that improve
productivity in our total economy.
Think of December 2008, just before we launched the
stimulus. The economy lost 673,000 jobs. In April of this year
the economy gained 290,000 jobs. The Recovery Act really has
stimulated economic development not only on the job sites, on
the projects under the jurisdiction of this Committee, but all
throughout the economy.
We have testimony today from the Environmental Protection
Agency, from the Assistant Secretary of the Army for Civil
Works, the Corps of Engineers, the Public Buildings Service,
Economic Development Administration, and FEMA. We also have
testimony from GAO, which is going to give us a report on their
assessment of success stories and problems and concerns with
oversight by the responsible Federal Government agencies; and
we have a third panel including a dairy farmer from Franklin,
Vermont, the President of Ellicott Dredges, the Biohabitats
Company, and the Green Building Council.
I think on these programs under the jurisdiction of our
Committee there is a good and encouraging success story to
tell. The $1.1 billion in EPA projects that have improved
public treatment works affecting 60 million people, about a
third of those covered by sewers. The Corps of Engineers will
report on their navigation repair and improvement to 284 locks,
commercial ports, 1,124 dam and safety levee projects, and
upgrading of 460 recreation areas. GSA will give us a detailed
report on their insulation of photovoltaic arrays on roofs and
improvement of water systems.
All in all, I think, for the work under the jurisdiction of
our Committee, we can say that, from my perspective, it has
been a success putting people to work, using the funds
productively, leaving permanent benefits behind.
With that, I yield to Mr. Mica, the senior Republican on
our Committee.
Mr. Mica. Well, thank you so much. I must say Mr. Oberstar
and I had the same intentions. We came back right after the
elections, before we passed the stimulus package. We tried to
put together a package that would have truly put people to
work, I believe; probably would have been about $120 billion to
$150 billion. We had support from the Committee. We thought the
bill total would be about $250 billion, $300 billion. As it
turned out, it was $787 billion. About 7 percent went for
infrastructure. Of that, the Department of Transportation had
$48 billion.
And, Mr. Chair, you tried to put as positive a light on the
success, and I think they are trying to get that money out, but
as of May 21st, only 25 percent of the total money had actually
been spent by the Department of Transportation. And today we
are not focusing on the Department of Transportation, we are
focusing on other agencies; and I put the other agencies up
there that are testifying today. I wish the performance could
be better for getting the money out, because we need to get
people to work. We need jobs.
Now, the little chart that I has shows that, unfortunately,
FEMA has probably the lowest percentage out, less than 1
percent of the money out. Then we have some not as bad
performers: 7 percent of money. This is actually money spent.
There is money allocated, and I will talk about that in a
minute. We have two in the 7 percent range, GSA. And GSA has a
huge amount. Let me say for FEMA, they have a much smaller
amount, but a very small amount.
Ms. Norton, if you will note that, maybe we can light a
fire under those people. Got a lot of buildings that we could
acquire, right, Mr. Chairman, Madam Chairman? And we could save
the taxpayers a huge amount of money buying buildings or re-
leasing at 50 cents on a dollar. God, that would be a stupid
deal.
OK, then we have the Corps of Engineers is actually the
best, I guess, in actually spending the money; they have 30
percent spent.
So that is the little report, and you can see by that
chart.
Now, you know, if you believe the stimulus package is
bringing the economy around, maybe again you are smoking the
funny weed, folks, because unemployment actually went up to 9.9
percent across the Country. It is devastating in my State. I
have a couple counties with over 16 percent unemployment in
Florida. In fact, the CBS New York Times poll, now, they aren't
the most conservative group around, found only 6 percent of
Americans believe, now, there is an element of belief in this,
that the stimulus has created jobs.
Well, the Associated Press found that 34 percent of
Americans believe in UFOs. So there is more belief in
unidentified flying objects than there are that the stimulus is
actually helping. And if you look at the data, again, we are
growing in unemployment nationally.
There are some disturbing trends here. Unemployment in the
construction sector is now 21.8 percent. And this Committee,
with our legislation and our effort, could and should get more
people to work. And I know every Member here is hurting in
their respective districts. The numbers of jobs lost since the
start of 2008 is 8 million jobs. They told us if we passed the
stimulus, the $787 billion package, that we would keep
unemployment at 8 percent. Folks, it is not happening.
Finally, let me tell you a couple things. I got this
economic recovery. This is the Florida fact sheet. Other
Members, you ought to get one of these; they probably have them
for every State, maybe the District too, Ms. Norton. But it is
quite revealing. I was shocked to see that Florida requested
$6.9 billion and we got $1.3 billion allocated for Florida. So
far, to date, you know what we have spent? Two hundred thirty
million dollars.
Do you know what every job costs us? This is from the
report, and this data is online from the Administration. We
created or saved 2,000 jobs, and the cost of each job was
$115,000. So I have some issues there.
Then the Government Accountability Office, not the
Republican side of the aisle, but the Government Accountability
Office found that one out of every ten jobs that were saved or
created by the stimulus came from projects that haven't spent
any money yet. That is not me, that is the GAO in their
evaluation of the performance of this program.
Finally, a new phenomena is occurring. We are, what, 16
months into this, 15 months into this? And I was stunned when I
heard this. This is what is called a de-obligation sheet. And
you are going to hear, oh, we have only spent a small amount of
money, but we have obligated a great deal of money in these
agencies. Members ought to get a copy of this. This is the de-
obligation sheet by district.
What is happening is the projects are being de-obligated,
and for several reasons that I looked into: one, States who
have to work in an honest, fiscally responsible manner, in
other words, they have to balance their budget, some of them
are cutting back dramatically on projects because their
revenues are less. So what is happening is they are de-
obligating projects. And then some, of course, are getting re-
obligated.
But this is something to look at. It is taking so long and
it is so difficult to approve some of these projects, and then
the States have shortfalls or local government. These are
hundreds of millions of dollars in de-obligation which is
taking place, a new phenomena that concerns me. And, again, we
have seen the difficulty in getting that money out there.
So I want to get the money out there. We need to cut the
red tape; we need to cut some of the bureaucracy. If we can do
it in Mr. Oberstar's area, with the bridge that took 437 days
to replace over the Mississippi River between Minneapolis and
St. Paul, if we did it there and that was a crisis, an
emergency to replace the interstate, there is no reason that we
can't, in this emergency situation, put people to work and
expedite either a category of funding or specific projects like
we did in Minneapolis and get people working, get projects and
infrastructure underway in this Country.
Thank you, Mr. Chairman. I yield back the balance of my
time.
Mr. Oberstar. Well, you don't yield back time because you
have unlimited time to speak.
Mr. Mica. Well, I meant----
Mr. Oberstar. You concluded what you had to say. Thank you.
It is the practice in our Committee that the Chair and the
Ranking Member have such time as they may need to make their
case, and you have made your case. And I fully agree that our
Committee, and I have said it many, many times, should have had
at least $250 billion of the stimulus, because we can track it,
we know where it is going, the projects go out, the people are
on job sites, and the results are long-term and lasting.
Yet, I think the gentleman's comment about money being
spent is not a complete representation of the picture, because
in the Federal highway program it is a reimbursement program.
The State advertises for bids, awards bids, contractors begin
work, the State pays the contractor and then bills the Federal
Government for reimbursement. Those reimbursements lag
significantly. That is the spending part, when the State is
reimbursed.
So the projects and the work and the jobs and the payrolls
precede the so-called spending. So when I said that there is a
very substantial $2.3 billion in payroll, those are people on
job sites, the direct jobs. I don't have payroll numbers for
those in the secondary because I don't think it is appropriate
to try to get those numbers. But we know that there are induced
jobs, and every contractor can tell you that when they win the
bid, they then open their sand and gravel pit, and that means
people working who are not on the job site, but they are
supplying for the job site.
Secondly, for the de-obligation, it is an interesting
phenomenon that when the bids started coming in 25 percent
below final design estimates, States realized that they could
award many more contracts and do much more work, so they de-
obligated projects and then started over again; that is, they
said they are not going to do this project now, we are going to
do it another time, we are going to redesign it, and they got
more for their dollar amount.
Ms. Norton, a few minutes.
Ms. Norton. Thank you, Mr. Chairman. I am very glad that
you clarified that point, because I think that point is of
utmost importance to how this money is being used and that
States are taking advantage of the fact that the one advantage
we have in this recession is that it has lowered the price of
what has to be done and what has to be bought.
I do want to say, Mr. Chairman, that, true to your word,
you have given new meaning to the word oversight. You were
never wanting for that, but these hearings and the 30-day
reports have had a real effect. I have tried to follow your
example. We have had a great number of hearings in our own
Subcommittee, and where I could get out, I have actually gone
and done unannounced site visits.
I do want to correct some of what the Ranking Member said,
because it seems to me you have to talk about these things in
terms of percentages; you know just show a graph and say how
much this, that, or the other. For example, the General
Services Administration has begun work on 74 percent of the
funds. EDA has allocated all and broken ground on 62 percent.
And if I may say so, Mr. Chairman, all but the GSA, which
gets to spend directly, are working through States. So the EDA
and these other agencies don't have the direct control that can
command that the money be spent; we have to use the kind of due
diligence to assure competition. And, yet, look at the effect
they are having.
Mr. Chairman, finally, I want to just say this is something
you don't have to see up close to refute the notion that the
stimulus has done no good. This is where the Bush
administration left everybody: way below the line; so below the
line that nobody thought we would ever rise above that line in
our lifetime. You don't need to see this up close, I think you
have it on your desks, to see where we are now.
This down line has gradually diminished and we have nothing
but up lines in that column. It didn't get that way by osmosis;
it got that way for a number of reasons. This is not the only
Committee that has been working to, in fact, heal the economy,
but, for sure, the reason that there is less unemployment, the
reason that this line looks the way it does has a great deal to
do with what the stimulus funds allocated by this Committee
have done.
And I think the Chairman and the Administration deserve our
commendation for these results, graphic results. You want to
put something up there? Put this up there and explain this
except by what the Administration, this Committee, and other
Committees have done.
Thank you, Mr. Chairman.
[The information follows:]
[GRAPHIC] [TIFF OMITTED] 56726.094
Mr. Oberstar. I thank you for that chart. You get the
Committee award for the most hearings next to the full
Committee hearings. You have been vigorous in your pursuit of
the responsibilities and I thank you for your relentless
pursuit.
Will there be one Member on the Republican side?
Mr. Mica. We don't have anyone.
Mr. Oberstar. We will then begin with our first panel. We
will begin with Craig Hooks, Assistant Administrator for
Administration and Resources Management at EPA. Thank you for
being with us.
Mr. Hooks. Thank you, Mr. Chairman.
Mr. Oberstar. Good to see you again.
Mr. Hooks. Likewise.
TESTIMONY OF CRAIG E. HOOKS, ASSISTANT ADMINISTRATOR FOR
ADMINISTRATION AND RESOURCES MANAGEMENT, ENVIRONMENTAL
PROTECTION AGENCY; TERRENCE C. SALT, DEPUTY ASSISTANT SECRETARY
OF THE ARMY (CIVIL WORKS), U.S. ARMY CORPS OF ENGINEERS; MARY
WALSH, CHIEF OF STAFF, PUBLIC BUILDINGS SERVICE, ARRA NATIONAL
RECOVERY PROGRAM MANAGEMENT OFFICE, GENERAL SERVICES
ADMINISTRATION; JOHN FERNANDEZ, ASSISTANT SECRETARY FOR
ECONOMIC DEVELOPMENT, U.S. DEPARTMENT OF COMMERCE; ELIZABETH
HARMAN, ASSISTANT ADMINISTRATOR, GRANT PROGRAMS, FEDERAL
EMERGENCY MANAGEMENT AGENCY; AND DAVID TRIMBLE, ACTING
DIRECTOR, NATURAL RESOURCES AND ENVIRONMENT, GOVERNMENT
ACCOUNTABILITY OFFICE
Mr. Hooks. Mr. Chairman, Ranking Member Mica, and Members
of the Committee, thank you once again for providing me the
opportunity to appear before you today to discuss EPA's
progress in implementing the American Recovery and Reinvestment
Act.
EPA received $7.2 billion for programs administered by the
Agency to protect and promote both green jobs and a healthier
environment. These programs include the Clean Water State
Revolving Fund, the Drinking Water State Revolving Fund, the
Superfund Program, the Brownfields Program, the Leaking
Underground Storage Tanks Program, and the Diesel Emission
Reductions Program.
As I reported to you last time I appeared before this
Committee, in February, we worked very hard to quickly
distribute 100 percent of the funds to our partners to clear
the way for rapid investment in construction, land reuse, and
redevelopment. With that task behind us, we have closely
monitored expenditures, tracked how quickly cleanup and
construction projects are completed, and documented
environmental and economic achievements, and the news is good.
According to the latest data, recipients of EPA Recovery
Act funds have reported over 9,600 jobs as of March 31. We have
seen an increase of over 2,800 reported new jobs in just about
three months, the majority coming from State Revolving Fund
projects. We are very encouraged by the creation of these jobs
and I believe that they will continue to grow.
A number of these jobs resulted from the Recovery Act
funding that went to train individuals to pursue environmental
careers. One such example comes from a three-year, $500,000
Brownfields Job Training grant given to Florida State College
in Jacksonville. On February 26th of this year, 22 out of 24
students graduated from the first environmental cleanup job
training course.
Of the $4 billion provided to the Clean Water State
Revolving Fund, the March 31 report indicates that 90 percent,
or 1,585 of the non-tribal Clean Water SRF projects have
started construction and 58 are complete. Thirty tribal
projects are underway and nine projects are already completed
there as well.
Currently, 46 Superfund sites have initiated onsite
construction with new or ongoing projects, with the five
remaining Recovery Act funded sites commencing work within the
next two months. Twenty-seven percent of the $600 million are
in rural areas and 20 percent of the Superfund sites have
achieved construction completion, and at 60 percent of the
sites human exposures are now under control.
Of the $100 million allocated for the Brownfields Program
to assess and clean up contaminated land, assessments are
complete for 233 properties. We are currently processing $10.75
million in loans in subgrant activity for Brownfields Revolving
Fund grantees.
We are already seeing numerous examples of how Recovery Act
funds are responsible for many environmental success stories
across the Nation. For example, trash and litter, along with
other pollutants, threaten urban waterways like Indian Creek
and Cobbs Creek in Pennsylvania. On a recent visit to Cobbs
Creek, I was able to see how Recovery Act funds focusing on
green infrastructure are helping to empower local residents to
take important and critical steps to protect their community.
Earlier this month, I also had the opportunity to visit,
personally experience and see the environmental conditions
found in Camden, New Jersey, in the spirit of its residents and
the progress EPA has made in cleaning up areas for reuse by
this community. The Camden Redevelopment Agency is using
$400,000 in Recovery Act funds to conduct environmental site
assessments and support community outreach activities. Cleaning
up this property will facilitate the future development of
several light industry complexes in this area.
Recovery Act funding is also helping EPA's Superfund
response in places like Coeur d'Alene, Idaho. This Superfund
cleanup consisted of removing lead-and arsenic-contaminated
soil and gravel in 260 properties, more than doubling the
cleanup activities completed during the previous construction
season.
Over the next six months, we anticipate many new project
starts, more job creation, and other success stories where
there are measurable public health and environmental results.
We look forward to continuing our work with this Committee, our
partners, and the public to ensure an economically and
environmentally healthier country for all Americans.
Thank you again for inviting me to testify here today, and
I look forward to answering any questions that you might have.
Mr. Oberstar. Thank you for that testimony. I have a number
of questions, which I am sure others do as well, but I will
follow up later.
Mr. Secretary, Civil Works. You call yourself Rock Salt?
Mr. Salt. Yes.
Mr. Oberstar. That is a great name. Please proceed.
Mr. Salt. Yes, sir. Mr. Chairman and distinguished Members
of the Committee, I am Rock Salt, the Principal Deputy
Assistant Secretary of the Army for Civil Works. Thank you for
the opportunity to testify before the Committee today and
discuss the U.S. Army Corps of Engineers' implementation of the
Civil Works appropriation within the American Recovery and
Reinvestment Act of 2009.
The Corps continues to make great strides to accomplish
Recovery Act goals through the development and restoration of
the Nation's water resources activities, protecting the
Nation's regulated waters and wetlands, and cleaning sites
contaminated from early efforts to develop atomic weapons. It
is well known that the Corps has a backlog of critical
infrastructure work for many aging structures, many that are
well over 50 years old. The Recovery Act funds have enabled the
Corps to accelerate repair and improvement of many projects,
thereby mitigating the risk to American lives and property, and
putting many Americans to work.
Work the Corps has underway includes the repairing or
improving of 48 locks and 236 commercial ports to reduce the
risk of failures that would disrupt navigation and be
detrimental to the American economy. In addition, 35 hydropower
projects are being repaired or improved to avoid disruptive
power outages. What the Corps is doing with Recovery Act funds
is not only a short-term stimulus, but also a long-term
contribution to the stability of the American economy and the
well-being of our Nation's citizens.
As of April 30th, 2010, our financial obligations are over
$3.5 billion. Total outlays, primarily comprising payments made
to contractors for work completed, have reached nearly $1.4
billion. We have completed work on over 150 projects. Work is
underway or complete for 284 navigation projects, 304 flood
risk management projects, 143 environmental restoration
projects, 148 environmental infrastructure projects, and 35
hydropower projects, as well as the inspection of 820 levees.
The Corps has awarded over 4,400 contract actions, with 73
percent awarded to small businesses. Almost $1.4 billion, or 44
percent, of the total dollar value has been awarded to small
businesses. In addition, larger companies receiving Civil Works
contracts are encouraged to hire local small businesses as
their subcontractors.
Recipients of Civil Works funds report approximately 6,700
jobs created or retained for the third reporting quarter. Civil
Works investments also support numerous indirect jobs in
industry supplying material and equipment, and jobs are
supported as direct and indirect income generates increased
consumer spending.
The $4.6 billion in Recovery Act funds provided to the
Corps has provided resources for the Corps Civil Works program
to pursue investments that create and preserve jobs and yield
good returns for the Nation's economy.
Thank you for allowing me to testify today. I look forward
to questions from you or other Members of the Committee.
Mr. Oberstar. Thank you'very much, Mr. Secretary. And I
will have questions, but I just want to take this brief moment.
Sunday I was in Rochester, Minnesota. I had been there for
a meeting with local and county government officials on their
transportation needs, but also to tour the Corps' flood control
project. In 1978, the City of Rochester was devastated by a
massive flood following several days of heavy rain. Seven
people died in a nursing home when, trying to get out of the
building and the elevated shorted out, they sank to the bottom
and drowned in their elevator.
I was at a meeting in the yard of the home of an
endocrinologist at the Mayo Clinic with a gathering, and she
said this property was under water, completely under water in
1978. Last summer we had a similar immense rainfall and this
property was dry.
I had the opportunity to bike ride along the bicycle
trails, 30 miles of cycling, I might say, around the flood
control projects of Rochester, Minnesota, to see the permanent
benefits that happen when you do the right thing, when the
Corps, that gets so much criticism from people about not doing
this or not doing something else. This is one of thousands of
projects the Corps has undertaken that have saved lives and
made a difference in the economy. The central city of Rochester
is vibrant again because of that flood control project.
Mr. Salt. Yes, sir. Thank you.
Mr. Oberstar. Not my district, but I supported it. I
introduced it.
Ms. Walsh, thank you for being with us.
Ms. Walsh. Good morning, Chairman Oberstar, Ranking Member
Mica, and other Members of the Committee. My name is Mary
Walsh. I am the Chief of Staff for the Recovery Program
Management Office of the General Services Administration's
Public Buildings Services. Thank you for the opportunity to
appear before you today to discuss GSA's contribution to our
Nation's economic recovery through green modernization and new
construction of our Federal buildings.
The investments we made and continue to make in our public
buildings are helping to stimulate job growth and retention,
and improve the environmental performance of our inventory, as
well as facilitate developments in energy-efficient
technologies, renewable energy generation, and green building
solutions.
I would like to summarize our recent accomplishments. We
submitted an initial spend plan on march 31st, 2009, based on
two overarching criteria: the potential of projects, one, to
put people back to work quickly and, two, to transform Federal
buildings into high-performance green buildings.
As we identified savings from projects underway, we revised
the spend plan to reallocate these savings toward the
enhancement, acceleration, or funding of other projects. To
date, we have revised our spend plan three times, in November,
January, and March. These revisions represent a reallocation of
more than $500 million. Our current spend plan includes 262
projects in all 50 States, the District of Columbia, and two
U.S. territories. Our objective is to deliver projects on
schedule, on budget, and on green.
We established and met aggressive targets to fulfill the
intent of the Recovery Act, including $1 billion in contract
awards by August 1st, 2001; $2 billion in total contract awards
by December 31st, 2009; over $4 billion in total contract
awards by March 31st, 2010. We are on track to meet our next
target of awarding $5 billion in total construction awards by
September 30th, 2010.
We are meeting our performance target of on green by
investing in high-performance green building projects. Recovery
funds also provide us with the opportunity to become a green
proving ground by identifying projects and gathering data to
measure the returns on investment in emerging green
technologies and practices. Our investments are helping to
stimulate the economy. To date, we have obligated over $4.1
billion to more than 500 companies. Notably, GSA's obligations
are awards that flow directly to our contractors in the
construction, real estate, architecture, and engineering
sectors.
Significant activity immediately follows contract award.
For example, contractors must secure financing, hire personnel,
and begin first steps to perform the contract. As progress is
made, payments for work associated with construction or design
projects are outlaid through progress payments. This continues
over the life of the contract and provides steady support for
our economy over an extended period, not just a jolt that lasts
only a few months.
Our Recovery Act funding recipients have reported that
2,683 prime contractor jobs were funded as a direct result of
PBS Recovery Act funding during the reporting quarter ended
March 31st, 2010. I am proud to report that, as of April 30th,
2010, more than 99 percent of GSA's recipients have reported in
539 reports.
GSA's infrastructure investments vary in scope, type, and
complexity, and cover our entire portfolio. Projects range from
the new courthouse in Austin, Texas, to St. Elizabeths in
Washington, D.C., the largest Federal project in the area since
the construction of the Pentagon. At the B.H. Whipple Federal
Building project in Fort Snelling, Minnesota, the facility will
use a geothermal ground source heat pump system for both
heating and cooling that will greatly reduce the facility's
energy usage. Other exciting new approaches to energy
conservation include a net zero energy building at the
Columbus, New Mexico Land Port of Entry.
Apprenticeship and pre-apprenticeship programs are also an
important part of our Recovery Act program. Since the launch of
the pre-apprenticeship program, GSA has made three awards.
These include the Community Services Agency of the Metropolitan
Washington Council, AFL-CIO in Washington, D.C., Oregon
Tradeswomen Inc. in Portland, Oregon, and Warren Electrical
Joint Apprenticeship and Training Trust Fund. CSA graduated 126
pre-apprenticeship trainees, with 52 hired for employment. OTI
graduated 79 pre-apprenticeship trainees, with 22 hired for
employment.
In addition to our Recovery Act funds, we have received
over $428 million of an expected $1 billion in Recovery Act
reimbursable work from other agencies, such as the Department
of State and the Social Security Administration.
Today I have described GSA's accomplishments and
contributions to our Nation's economic recovery through funds
provided by the Recovery Act of 2009. Thank you for the
opportunity to appear before you today. We look forward to
working with you and Members of this Committee as we continue
to deliver this important work.
Mr. Oberstar. Thank you'very much for that very
encouraging, uplifting report. Again, I will have questions
later, as will others.
Mr. Fernandez for EDA.
Mr. Fernandez. Good morning.
Mr. Oberstar. Probably my favorite of all Federal
Government agencies, since I was there at its creation.
Mr. Fernandez. And we appreciate your continued support,
Mr. Chairman.
Mr. Oberstar. For those who don't understand, the shorthand
of that remark is that I was chief of staff for my predecessor
in 1965, when we wrote the Federal Economic Development
Administration and Appalachian Regional Commission legislation,
Mrs. Capito, and I wasn't a Member of Congress, but I feel
ownership of that legislation and I am very proud of what has
been accomplished in Appalachia and in EDA.
So please proceed.
Mr. Fernandez. Thank you, Mr. Chairman and Ranking Member
Capito and Members of the Committee. I appreciate the
opportunity to update you on our progress with our EDA Recovery
Act projects.
As you know, we received $150 million in Recovery Act
funding. By the end of last September, a year ahead of
schedule, we approved 100 percent of our allocation, funding 68
projects in 37 States. We invested $50 million to promote the
development of regional innovation clusters, $37 million to
promote business incubation, $27 million to promote green jobs,
$11 million for trade promotion, and another $25 million for a
variety of other development projects. Our project investments
ranged from $184,000 to $6.4 million.
EDA awarded $141.3 million, 96 percent of our Recovery Act
funds for construction projects. EDA's Recovery Act investments
are expected to leverage $981 million in private investment
over the next nine years.
In the three months since I last appeared before the
Committee, a number of additional projects have broken ground,
helping communities and businesses create jobs. To date, 72
percent of EDA's Recovery Act projects are underway, compared
to 41 percent three months ago. These projects total $101.1
million, or 76 percent of our Recovery Act allocation. I am
pleased to report that, to date, nearly all of our projects in
our portfolio met anticipated construction start dates and
other project implementation milestones.
In addition, with our regional offices, we developed
specific outreach initiatives to assist our recipient partners
meet the reporting requirements of the Recovery Act. At the end
of the second reporting period, 100 percent of our Recovery Act
grant recipients successfully met progress reporting
requirements.
EDA's ability to successfully implement the Recovery Act
should be no surprise to those familiar with the Agency. We
have a long history of working with communities to provide
effective technical assistance and capital investments through
our traditional Economic Development Assistance Programs, as
well as through budgetary supplementals such as disaster
recovery initiatives.
EDA designs its programs to support job creation and strong
regional economies. EDA particularly focuses on building upon
two key economic drivers, innovation and regional
collaboration. Many of EDA's traditional programs support these
efforts. For example, the agency's Revolving Loan Fund provides
much needed capital to help grow and create businesses, and
EDA's University Center Program leverages local assets to
support regional collaboration.
EDA's ability to obligate the Agency's entire Recovery Act
allocation a year ahead of schedule exemplifies the flexibility
of its programs and the continued dedication of EDA staff. In
addition, our experience administrating the Recovery Act funds
has given us a unique opportunity to evaluate the strengths and
weaknesses of our programs and processes.
I am personally committed to making our grant application
system work even better for future EDA applicants. Based in
part on our experience with the Recovery Act, I launched a
major process improvement initiative. We are analyzing how we
can make our grant process even more transparent, accessible,
and effective, while increasing the overall return on
investment. We know that our grantees will welcome this kind of
improvement, and we continually reach out to our stakeholders
for feedback. We plan to roll out our improved process by the
end of this year.
Mr. Chairman, EDA has a long and successful history working
with you and this Committee. Though our Recovery Act allocation
has been awarded, our work to improve the economic conditions
in our Country is far from done. The Department of Commerce is
looking forward to working with the Congress on reauthorization
of EDA to develop an even stronger framework for sustainable
economic development that meets the needs of the 21st century.
Chairman Oberstar and Members of the Committee, I want to
thank you for your time today and look forward to any questions
you might have.
Mr. Oberstar. Thank you for that excellent report. Some of
the details which you did not cite, but I will just briefly at
this moment. On page 4 of your testimony, the Northeastern
Minnesota Regional Aviation Cluster is a significant example of
EDA's sustained investment in an area that traditionally had
high unemployment.
The city just north of Duluth, the iron ore mining country,
lost 12,000 jobs when the steel industry crashed in 1982. We
have rebounded, but we are still 4,000 jobs instead of 16,000.
Duluth lost the steel mill, the Coke plant, the cement plant,
the Coolerator plant. Each time they have come back with help
from EDA.
And this aviation cluster cited on page 4 of your
testimony, a driver of economic diversification, not only
making aircraft, but an aerospace industry was started that
supplies the frame of the seats and then the seat covers, and
then the cushions, and then the cleaning of the aircraft, and
then other aircraft precision-engineered parts, saving
thousands of dollars for Cirrus, who have begun again to sell
aircraft.
But the problem is not their customer base. Customers are
available. Customers can't get credit from the banking system
to buy the aircraft. That is not EDA'S problem, that is the
seizure that this economy has been in since the financial
meltdown.
Just a footnote to your testimony.
Now, Ms. Harman.
Ms. Harman. Thank you, Mr. Chairman. Chairman Oberstar and
Congresswoman Capito, Members of the Committee, my name is
Elizabeth Harman and I serve as FEMA's Assistant Administrator
for the Grant Programs Directorate, also known as GPD. On
behalf of Administrator Fugate, it is a privilege to appear
before you today to update the Committee on FEMA's
implementation of the Fire Station Construction Grant, or SCG,
Program.
The Recovery Act provided $210 million to support the
program's construction and renovation efforts. Funding under
the program will enable fire departments to replace or renovate
unsafe or uninhabitable fire stations. These investments in
infrastructure will enable fire departments to better protect
communities from fire-related hazards and help ensure
firefighter safety.
On September 23rd, 2009, Secretary Napolitano announced the
first group of SCG awards. A second group of awards was
announced on February 3rd, 2010. To date, 109 awards totaling
$189 million have been made. FEMA also expects to make
additional grants within the next few months, including three
awards totaling $11.9 million in the next two weeks.
An additional 2.29 percent of the initial $210 million
appropriated has been retained by FEMA to cover management and
administrative costs in accordance with the Recovery Act. The
remaining $4 million in SCG funds are being held in reserve to
cover any budget adjustments related to previously awarded
grants. Once all current grants are reviewed and are determined
to be adequately funded, all remaining funds are available for
additional awards.
Since the passage of the Recovery Act in February 2009, GPD
has worked to move projects forward in a timely manner. GPD has
placed a high priority on the timely completion of all budget
reviews, has worked with FEMA's OEHP to hasten environmental
and historic preservation reviews, and has continually reached
out to our grantees, including the provision of technical
assistance, to help them in meeting these and other
requirements they may face.
As of today, GPD can report the following: 109 awards have
been made; 3 will be made in the next two weeks. The 109
current awards are funding 116 projects; 26 are ready to begin
construction, 3 have begun construction, and 9 will start
construction in July. Beyond these numbers, it must be
remembered that these funds make tangible improvements in the
health and safety of the firefighters who live and work in
those fire stations and in the communities served by those fire
stations.
SCG funding will result in enhancing emergency response
capabilities, including 45 new fire stations will be built to
meet expanded responsibilities. Forty-two unsafe fire stations
will be replaced and 16 will be renovated. Ten stations will be
expanded to accommodate 24/7 coverage and 6 will be expanded to
accommodate increased responsibilities.
Mr. Chairman, the administration of the SCG program has not
been without challenges. These challenges are inherent to the
administration of any Federal grant program. Fire Station
Construction Grant Program was the first time GPD was charged
with the development and administration of a major construction
grant program. This required not just the development of
specific construction grant guidance and application materials,
but also the development of policies, processes regarding
environmental reviews and post-award budget reviews.
We believe that GPD has successfully met and continues to
meet these challenges. FEMA released the SCG grant guidance and
application materials May 29th, 2009, 91 days after the
Recovery Act's enactment. These 91 days included the outreach
efforts and meetings with the fire service on the program.
The program's application period closed July 10th, 2009.
First grants were awarded September 23rd, 2009, 85 days after
the close of the application period. These 85 days included
GPD's convening and working with fire service staff peer review
panels to assist in the application and review and selection of
more than 6,000 applications.
Although challenges presented themselves in the pre-award
period, most significant challenges have been in the post-award
period, specifically post-award budget reviews and post-award
EHP reviews. Each of these reviews are required by Federal law,
entail adherence to a number of statutory required processes
and procedures, and length the time between GPD's awarding of a
grant and a recipient's ability to access those funds.
The budget review process determines whether grantees have
properly explained and documented their funding requests, and
ensures compliance with Federal laws, OMB costs and
administrative principles, and the grantee's own requirements,
including regulations and program guidance.
Currently, 90 grants have cleared their budget reviews and
19 are still in the process. The requirement for EHP reviews
ensures that awarding agencies determines that funds are being
spent in a manner consistent with Federal law governing the
protection of the environment and historic structures and
sites.
FEMA's EHP reviews are managed by FEMA's OEHP. This office
ensures that all FEMA grants, including SCGs, meet the
requirements of 16 principle Federal, EHP, and Executive
orders. Currently, 34 projects have cleared EHP reviews while
82 are still in the review process. There have also been times
when SCG projects have encountered locally driven issues,
including local politics issues, project and spending approvals
from city councils or county boards, and State and local
procurement and contracting requirements, which grantees are
required to address before spending funded projects can be
initiated.
Mr. Chairman and Ranking Member Mica and Members of the
Committee, I firmly believe that as we move further through the
current fiscal year, the number of SCG projects that can begin
construction will accelerate. GPD is working with our grantees
to help them succeed, and we want them to succeed. As we move
forward with this initiative, we look forward to providing this
Committee with additional information on our progress.
This concludes my statement, and I am ready to answer any
questions that you may have.
Mr. Oberstar. You have squeezed a lot of words into a short
period. Barney Frank would be proud of you. You are the only
one I know who can speak as fast as he does. Thank you.
Mr. Trimble, GAO. You are the cleanup batter here.
Mr. Trimble. Exactly. Thank you.
Mr. Oberstar. At least for this panel.
Mr. Trimble. Mr. Chairman, Ranking Member Capito, and
Members of the Committee, I am pleased to be here today to
discuss our work examining selected States' use of Recovery Act
funds for clean water projects. My statement is based on GAO's
most recent report on the Recovery Act being issued today,
which includes a review of the Clean Water SRF programs in 14
States. These 14 States received approximately 50 percent of
the $4 billion appropriated for the Clean Water SRF program.
The 14 States we reviewed met all Recovery Act requirements
unique to the Clean Water SRF. Specifically, these States had
all projects under contract by the one-year deadline and took
steps to give priority to projects that were ready to proceed
to construction. Eighty-seven percent of these Clean Water SRF
projects were under construction by the one-year deadline. In
addition, all of the States in our review met or exceeded the
50 percent additional subsidization requirement and the 20
percent green reserve requirement.
These States awarded nearly 80 percent of the funds as
additional subsidization, primarily as principle forgiveness.
About one-third of the projects addressed the green reserve
requirement and almost all of these received additional
subsidization. In total, the money helped fund 890 water
projects, such as secondary and advanced treatment facilities,
sanitary sewer overflow, and projects intended to address non-
point source pollution.
State officials did face some challenges in meeting
Recovery Act requirements, especially the one-year contracting
deadline. Historically, awarding contracts in this program can
take up to several years. The compressed time frame imposed by
the Recovery Act, as well as the increase in number of
applications, was challenging for some States. New Jersey, for
example, received twice as many applications as in past years.
State programs also had to work with applicants to explain
new Recovery Act requirements such as Buy American and Davis-
Bacon, as well as to provide support to the nearly 50 percent
of recipients that had never received an SRF loan before.
Additionally, when bids came in under projected estimates,
some States had to scramble to ensure that all Recovery Act
funds were under contract by the one-year deadline. While these
lower bids created a management challenge for the States, it
also allowed some States to award Recovery Act funds to
additional projects. Texas, for example, told us that they were
able to fund two additional clean water projects because costs
were lower than anticipated.
Most of the States we reviewed took steps to target
Recovery Act funds to low income communities, generally by
considering a community's median household income when
selecting projects. The States told us that at least 40 percent
of Recovery Act funds, totaling about $787 million, went to
projects that serve disadvantaged communities, and all of the
recipients serving these communities were provided additional
subsidization.
While EPA and the States have taken additional oversight
steps to address Recovery Act requirements, these measures may
not be sufficient. EPA has not established requirements for
States regarding when or how frequently a project must be
inspected, or what steps need to be taken to assess a sub-
recipient's compliance with Recovery Act requirements.
While some States have increased the frequency of
inspections, we identified completed projects and those near
completion that had never been inspected. We also found that
most of the States in the review had not developed procedures
to verify the accuracy of job figures reported by sub-
recipients by using supporting documentation such as certified
payroll records.
The combination of a large increase in program funding,
compressed time frames, and new Recovery Act requirements
present a significant challenge to EPA'S current oversight
approach. In light of this, we are recommending that EPA work
with the States to implement specific oversight procedures to
monitor and ensure sub-recipients' compliance with the
provisions of the Recovery Act funded Clean Water SRF program.
Mr. Chairman, this concludes my prepared statement. I would
be pleased to respond to any questions that you or other
Members of the Committee might have.
Mr. Oberstar. As usual, a very thorough GAO report and one
that adds considerably to our understanding of the program and
also, I think, lessons learned for the future of the SRF
program, which I will come to in a moment.
Mr. Schauer, did you have comments you wanted to make at
the outset?
Mr. Schauer. Yes, a question for the panel. Are we open for
questions?
Mr. Oberstar. Before we do that, I want to supplement the
testimony given this morning. There are agencies not
represented here under the jurisdiction of this Committee:
MARAD, Maritime Administration received $100 million in
funding under the Recovery Act, and of those funds, work is
underway on 66 of the planned projects. New construction of dry
dock facilities, 13 such projects; steel machinery work, 23
such projects; cranes, forklifts, material handling, $21
million for 18 projects; shipyard infrastructure improvements,
6 projects for $6.5 million; training of maritime personnel, $6
million; boat hoists on public facilities, ports and docks, $5
million for four such; and port modernization for facilities
managed by MARAD, 3 projects for $26 million. A good example is
Steiner Shipyard in Bayou La Batre in Alabama, which has
received funding for new launch equipment and a 400-ton boat
hoist.
FAA has initiated or completed work on 663 airport projects
totaling $1.2 billion, 94 percent of their funds. In fact, FAA
and local airport authorities were so efficient in getting
their funds out that I reported for a groundbreaking project,
but by the time I got there it was a ribbon cutting; they had
already completed the project in a relatively short period of
time because they have advantageous contracting authority, do
airport facilities.
Amtrak has replaced 130,000 concrete ties, restored 60
Amfleet cars to service, 21 Superliners, 15 locomotives, and
invested in 270 stations to improve those operations.
Those all add up to jobs created, permanent benefits
resulting, and a net benefit to the whole Country.
Mr. Schauer.
Mr. Schauer. Thank you, Mr. Chairman, for this opportunity.
I want to talk about the issue of American jobs. I
represent the part of the State of Michigan with the highest
unemployment rate in the Country of 14 percent, and I was very
supportive of the Buy American provision that was in the
American Recovery and Reinvestment Act.
First, Mr. Trimble, you touched on that in your testimony.
Can you speak briefly to compliance across agencies with regard
to Buy American provisions?
Mr. Trimble. Yes. Well, my testimony today is limited to
the SRF program, so I am not sure I can speak to the other
agencies. In regard to the Buy America provisions, the States
that we did our work in mentioned that it is a challenge, but
one that they could meet. Where we saw issues or concerns was
in the internal controls to ensure those requirements are met
at the sub-recipient level. While the States were taking
actions and the requirements were clear, our recommendation
speaks to the need for a more uniform set of compliance tools
to make sure that it is happening at the sub-recipient level.
For example, one project in Arizona that the team visited,
the project was already under construction. They were visiting
the project site, they were looking at a water meter. On the
back of the water meter was stamped ``Made in Mexico''. When
the team raised that, the State saw immediately the concern,
took action, and actually went back and replaced about 100 or
so meters that were in question.
On that issue, again, there is a commitment there to do the
right thing. I think what we are speaking to is the need for
more centralized requirements from EPA to the States on how
they need to approach sub-recipient monitoring to ensure all of
these requirements are met.
Mr. Schauer. Thank you.
Mr. Chairman, we need to make sure that each of these
agencies is fully enforcing those Buy American provisions. I
will be bringing to the Congress an issue that I am working
with the DOE, Department of Energy on, a lighting contractor
that manufactures a variety of industrial lighting and
municipal projects, has lost a contract to another company that
provided a lighting fixture that said ``Made in America.'' They
had applied that ``Made in America'' sticker over a sticker
that said ``Made in China.'' Those products actually came from
China. The people I represent are very upset, as am I, about
their tax dollars supporting jobs being created in China,
rather than jobs here.
I have a question, Ms. Walsh, on that topic. My office has
been working with the GSA to try to change the eligibility for
photovoltaic roofing materials. We found that the eligibility
requirement actually favors companies in China. There is a
company in Michigan called Unisolar. They have testified before
this Committee. They have a technology that is very efficient,
doesn't meet the GSA requirements.
So I want to put you on notice about that concern that I
have, but actually ask you to address. In our Committee
information it indicates that GSA has used its appropriation to
install 78 roofs, including 68 photovoltaic arrays for roofs,
and wondered if you can talk about those 6 photovoltaic arrays
on these roofing projects and whether that was material from
China or material from companies in the U.S.
Ms. Walsh. We anticipate that by the end of the recovery
program there will be 68 PV roofs. I will have to get back to
you on where the materials specifically came from on those
projects.
Mr. Schauer. I would ask you to get back to me and get back
to this Committee as a whole. Again, it is our intent that we
are supporting and creating American jobs, and fully complying
with Buy American provisions and making sure that eligibility
requirements don't disadvantage U.S. companies.
Ms. Walsh. Yes, sir.
Mr. Schauer. Thank you, Mr. Chairman.
Mr. Oberstar. Submit that material to the full Committee
and it will be distributed to Members on both sides.
Ms. Walsh. Yes, sir.
Mr. Oberstar. Mrs. Schmidt.
Mrs. Schmidt. Thank you, Mr. Chairman.
Mr. Salt, I apologize if you had this already in your
testimony, but I have a rather lengthy question. Customs and
Border Protection, along with the GSA and the Corps, plan to
spend $7 million, originally obligated at $15.7 million in
stimulus funds, to renovate the Morris Line Port of Entry, the
border station on the U.S.-Canadian border in Vermont.
The border station, which sees 2.5 cars an hour, or about
40 cars a day, is located in the middle of a Vermont family's
dairy farm, and the owners of the dairy farm were told by the
CBP they must sell part of the farm for $39,500 or else the
farm will be condemned.
First off, I question the value of that and I do hope that
the right comps were used, and also factor in the fact that
they will probably use the farm because this doesn't sound like
enough money when you talk a family farm and you destroy it.
The family and a representative, I believe, will be here,
does not want to sell and they believe they will go out of
business if they lose the land. Can you explain the Corps' role
in this situation and what is to be done to prevent this
condemnation which, contrary to the stimulus, will actually put
people out of work?
Would you please tell me what kind of comps you used to
evaluate the $39,000 you are going to offer these people? And
did you look at those comps in relationship to the fact that it
will probably destroy the farm and put them out of business?
Should the port of entry stay opened or closed? Is this
specific property necessary, and how much property is actually
necessary, and can you locate it somewhere else?
Sorry for the lengthy question.
Mr. Oberstar. Before the Secretary responds, that question
is also going to be addressed by a witness from Vermont, the
farmer on whose property, a portion of whose property this
project is to be undertaken. I would note that the funds are
stimulus monies. This issue obviously came to my attention as
well as yours and Mr. Mica. It is stimulus funding through the
Customs and Border Patrol, not under the jurisdiction of our
Committee. The Corps is simply the leasing agent or the
contracting agent, not the initiating agent; and I think that
there is a serious problem here.
And we will hear in the next panel from the witness on this
subject, but I think that there is a way. There is such a short
distance between the property in question and the established
border patrol station that Customs and Border Protection ought
to expand the existing facility instead of taking property on a
new one. I know that the Senator from Vermont and the House
Member from Vermont are both very concerned about it.
Mr. Salt, if you have further observations on this at this
point?
Mr. Salt. The one question that you asked was what is the
Corps' involvement in this. The Customs and Border Protection
Agency did ask the Corps, as other agencies have, to provide
certain services, and the Corps is providing the real estate
support for that project. But as to the requirements and all of
the specifics of your question, I would refer those to the
Customs and Border Protection Agency, as the Chairman
suggested. It is their project and we are only providing real
estate support to them.
Mr. Oberstar. The Corps is not the initiating agency on
this project, but we are going to pursue this further in the
next panel.
Mrs. Schmidt. Thank you, Mr. Chairman. And just as a
question, so who decided what value they were going to give
this dairy farmer? Who made the determination for the monetary
consideration?
And I guess, Mr. Chairman, if I can digress.
Mr. Oberstar. Certainly.
Mrs. Schmidt. In my background, in my past life, I had to
deal with eminent domain issues, and almost always I found, in
my personal experience, they never gave the property owner
their just due for the amount that the Government wanted to
give. So I have kind of a prejudiced notion on the $39,000 just
from my past. So this might be a legitimate amount; it may not
be a legitimate amount. I don't know. I just want to know who
set the value so I can ask the question how did they arrive at
that value.
Mr. Salt. If I can get back to you on that.
Mrs. Schmidt. Thank you. Appreciate it.
Thank you, Mr. Chairman.
Mr. Oberstar. It is interesting that you have that
experience in your resume. Did you have highway project
experience as well?
Mrs. Schmidt. Mr. Chairman, I was a township trustee, so I
dealt with it with the Ohio Department of Transportation and
citizens of my township. And I was a township trustee for 11
years, so I had to advocate for my citizens on a fairly regular
basis when we were doing some road widening projects in our
township.
Mr. Oberstar. There were a number of such concerns in the
early days of the interstate highway program, States being
heavy-handed in dealing with property owners, the result of
which was this Committee initiated and moved through to
enactment the Uniform Relocation Act, which provides a very
rigorous process by which property owners get fair treatment,
fair compensation, and the opportunity, even if the highway
does not directly take their property, but is close enough so
that their business owner's business would be diverted, they
have a right to just compensation, fair market value, and not
have to proceed through court to be compensated. I would like
to hear more about your experience at another time.
Mrs. Schmidt. We will talk later. Thank you.
Mr. Oberstar. Mr. Hare was here earliest, so I will go to
him at this point.
Mr. Hare. Thank you, Mr. Chairman.
Mr. Salt, in your testimony you state that it is well known
that the Corps has had a backlog of important infrastructure
projects, many of these structures, including some that are
over 50 years old. Just a question, then a comment. Well, I
will do the question first.
To what extent has the Recovery Act addressed some of this
backlog? In my district, from west central Illinois, we have
seven locks, and you probably are aware that most of those are
in very poor shape. And we are trying to figure out how we are
going to be able to do that and fix some of these, because I
went to one of the locks and the lock master asked me if I was
left-handed or right-handed. I told him I was right-handed.
He said, well, I want you to hit this portion with your
left hand, your left fist; and I did and a chunk of concrete
the size of a football came off. These locks, it is not really
a question of if they are going to fail; the question is when
are they going to fail, because they are really in bad shape.
And if they fail, we are going to have a serious problem.
So I guess I am putting a pitch and I realize you don't
have all the money, but to what extent has this Recovery Act
and the money that we gave to you folks addressed some of these
aging infrastructure things you guys are in charge of?
Mr. Salt. The Recovery Act was enormously important for us,
particularly with respect to our navigation infrastructure. I
think we tend to focus on the new construction, but about half
of our Recovery Act funds were for operations and maintenance,
which was over $2 billion, and allowed us to address those
needs throughout the Country.
As I said in my oral testimony, we were able to address 284
navigation projects, and over 300 flood risk reduction
projects. Throughout the Country, both with respect to the
Recovery Act and with respect to our general appropriations,
these are becoming our biggest priority for safety issues and
for the performance of the project. These are the priorities
that we are focusing on.
Mr. Hare. Well, let me just say I agree with the Chairman
and, for the record, the Corps does a tremendous job given the
resources. We need to give you more so that what you do better
than probably anybody is to be able to do more of, and at some
point we are going to have to try to address this situation of
how do we come up with the funds necessary to do this. But I
just want to let you know for the record that I have had the
opportunity to work with the Corps and they do wonderful things
for people. So I just wanted you to know that.
Ms. Harman, I just had a question, if I could, for you.
These recovery funds are meant to be used quickly and
efficiently. What steps is FEMA taking to work with the local
communities to encourage them to move towards construction? And
the second part of that is how are you working with them to
expedite the internal processes?
Ms. Harman. With regard to all of our grantees, we have
done an enormous amount of work to help them through this
process and understand what this process is. There were more
than 6,000 applications, and there are 109 awardees, so the 109
is a fairly small amount compared to the 20,000 open grants
that we actually manage each year.
So the nice part of that is that we do have a dedicated
staff with that small number of grants that are able to provide
technical assistance, particularly with the environmental
historic process, which seems to be the long, laborious process
required by Federal law for us to go through, but it is an eye-
opening experience, I think, for the first responders that have
applied for this money, and we are shovel-ready at the time of
application. Some of them had engineering drawings, but as soon
as they accepted that Federal dollar, they now have to go
through the Federal environmental historic preservation
section. So a lot of education, a lot of technical assistance
going on.
With regard to that process of environmental historic
preservation, we work closely with FEMA's Office of
Environmental Historic Preservation. The only part we can
really narrow, that I have control over, is the public comment
period, which is normally 30 days. We reduced it to 15.
But aside from that, we have used the M&A money that we
have to beef up contractors to sort of triage, geez, is this
going to be a renovation project or is this going to be a full
construction project? Renovation ones sort of get more
categorical exclusions, which help get through the process a
little quicker. Those that are pushed for full EAs, we have
assistance from our FEMA regions to help us out with that. So
the process is a long arduous process. If I could make it go
any quicker, I could, but I think I would be breaking the law
if I did.
Mr. Hare. We don't want you to do that.
Thank you, Mr. Chairman.
Ms. Harman. I don't want to do that.
Ms. Norton. [Presiding] The gentleman's time has expired.
Mrs. Capito.
Mrs. Capito. Thank you, Madam Chair.
Ms. Walsh, I would like to ask you a question. You
mentioned the work that you are doing on the Federal buildings
and the green initiatives that you have moved forward with with
the stimulus dollars. We have a courthouse in my hometown,
Charleston, West Virginia, where some of that work is being
done, I think it is $4.696 million.
And you mentioned also in your statement that you are
looking at returns on investments. It is my understanding that
solar panels are being put on the roof of that courthouse, and
I would like to know what calculation on the return on the
investment of the $4.696 million, what you calculate savings,
energy savings will be for that particular building, or at
least a building similar to that, and how you come to that
calculation? When will it begin paying back?
Ms. Walsh. I am going to have to get back to you on the
specific numbers that we are using for that project, for the
calculations.
Mrs. Capito. When you are calculating the cost, is that a
make or break figure for you, if you are going to get return on
your investment or not, when you are deciding which buildings
to place solar panels or green? Because that is not a very old
building is one of the reasons I am interested in it.
Ms. Walsh. We need to look at the the return on investment,
and look at it in the context of the whole project and the
overall contribution to the building. But as far as the actual
calculations, I am going to have to apologize, I don't know the
specifics.
Mrs. Capito. That is OK. That is understandable.
Ms. Walsh. We will get back to the Committee with that
information.
Mrs. Capito. In the general sense, do you make that part of
your calculation, as to whether it actually is going to be an
energy savings bottom line on that particular building when you
are deciding to green the building? Are you making that as a
calculation, that you are going to get a return on your
investment? Is that a factor that is calculated in the decision
to go forward?
Ms. Walsh. We do evaluate the estimated return on our
investments. Also, we are developing a database to track and
record all of the high performance energy elements that we are
installing. Once these features are installed, constructed and
operating, we plan to verify energy assumptions modeling.
Mrs. Capito. So basically it is a more look back rather
than a look forward. You can't calculate that at this point?
Ms. Walsh. We do calculate expected performance based on
energy modeling but until the building is operating and we see
actual consumption, we dont know definitively.
Mrs. Capito. When you are soliciting bids for a building, a
courthouse of that magnitude, have you shortened the time frame
on that or what are you finding? Are you finding a lot of local
contractors bidding on those projects? Not that one
specifically. And are they able to meet the demands of a quick
turnaround? Because I assume the work is being done quicker
than maybe normally would be done under a GSA contract.
Ms. Walsh. We do all the recovery work in accordance with
our procurement requirements.
Mrs. Capito. So you haven't changed that for this.
Ms. Walsh. Right. But we are expediting all of our project
awards in terms of reducing as much time as possible before
solicitations go out. And, once contracts are awarded, we are
accelerating outlays by identifying disinct elements that can
be performed, completed, and paid for, such as site and
foundation work. And with the smaller projects we are seeing
more local contractors involved in those projects.
Mrs. Capito. Let me ask you another question along the line
of courthouses. The GAO report came out, I believe yesterday,
and among one of their findings was that a lot of the
courthouses that had been built over the last 10 years were
basically overbuilt, to the tune of about you could have had
nine more courthouses, too many courtrooms, not taking into
consideration courtroom sharing. It was pretty critical and
said the estimate cost to construct this extra space, when
adjusted to 2010 dollars, this is from the GAO report, is
approximately $835 million, and the annual cost to keep them
rented and renovated and maintained is another $51 million.
Having said all that, why are we building new courthouses
or adding to existing courthouses when this report shows that
we have overbuilt in this particular area? What is your
response to this report?
Ms. Walsh. I have not had an opportunity to review the
report yet. In terms of the projects we selected, we chose
projects that would enable us to put people back to work as
quickly as possible and create jobs, as well as to transform
our inventory into high performance green buildings. And in
terms of the courthouses, those were projects that we could get
going relatively quickly, and they were in the works.
Mrs. Capito. My time is up. Thank you.
Ms. Norton. Thank you, Mrs. Capito. I particularly thank
you for your question on courthouses. I am Chair of the
Subcommittee and the full Committee, both sides, all four of
us, the Subcommittee as well as the Chair and the Ranking
Member, that requested that report. Those courthouses, I
believe, were on the list to be done and could be done quickly.
But her question is a powerful question. Her numbers are
exactly correct. Because the GSA, frankly, was not doing its
oversight job and because the courts had apparently seized
control of a Federal construction program, acting as if Article
3 judges were also in charge of construction. This was an
overbuilt program. We are pulling it back from the judges. This
is an age-old problem. I have only been on the Committee 20
years, and it has been out there hanging all this time until
this GAO report had straightened it out.
To Mrs. Capito, whose question I appreciate, I want to say
that the Subcommittee will not be recommending any new
courthouses until such time as there has been a demonstration
that all of this overbuilding and overspending--and I see my
Ranking Member, who was as ardent in his questioning on this
matter as I was.
There is no light between the minority and the majority on
spending almost $1 billion in overbuilding courthouses, against
the authorized amount of the Congress of the United States. I
hate to say it, but in this instance the courts were lawless,
and they are the ones who, of course, enforce the law and are
supposed to abide by the law.
I want to just take my time to ask just a few questions.
Ms. Harman, I think, for good reason, Members have been
concerned about the firehouse construction. There is broad
support, again on both sides, for the firehouse program, and
that is why we put money in there for firehouses. It does seem
to me that this program was different from other fire grants
and was different from other Recovery Act programs. For
example, did these firehouses have to be peer reviewed by
firefighters themselves?
Ms. Harman. Yes, they were. They followed the same peer
review model that is used for the AFGE grants, as well as the
SAFER grants. There was some screening done pre-going to the
peer review panel because of the number, 6,000, but each award
that was given and each application, for the most part, that
went to peer review panel was reviewed by a minimum of three
peer reviewers.
Ms. Norton. Were there other ways in which these grants did
not get going as soon as other grants did? And is it true that
you only have five firehouse projects begun in construction?
Ms. Harman. There are currently three under construction.
Ms. Norton. I mean, three. I am sorry.
Ms. Harman. Yes. Twenty-six are ready at any moment. All
the EHPs are done, all the budget review is done. You know, we
are getting through the budget review process, of course, the
EHP process, but I don't think we anticipated the almost
opposition, if I can, at the local level. I will give you an
example from a fire chief.
Ms. Norton. Opposition to?
Ms. Harman. To receiving the grant. It is an election year.
I was on the phone with Chief Steward from Rolling Meadows,
Illinois just last week. Our office here is doing a great job
trying to say, hey, we gave you the award, could you please
accept it? At the time of application there was one city
council in place; at the time of award there was a new city
council in place. The award was for $1 million. The city
offered to also pony up $800,000, which was not necessary
because there was no matching requirements. And it sort of
became this battle between the fire chief pushing----
Ms. Norton. What did they want to put $800,000 up for,
then?
Ms. Harman. They actually thought, well, if we don't take
the $1 million award, we are saving $800,000.
Ms. Norton. Sorry? If we don't take it, because they
thought it would only cost----
Ms. Harman. Right.
Ms. Norton. Well, why didn't they then take it and ask that
it be used for another purpose?
Ms. Harman. Well, they do have to build a fire station with
it, but I think they had a grander scheme of the fire station.
But our staff has done such a job of working with them. I
actually have a letter from Chief Steward expressing his
concern in the amount of work that has gone in to just getting
on the agenda of the city council; being on the agenda, being
taken off, waiting two months to get back on a city agenda just
to say, hey, can we accept this award?
Our staff finally said, look, if you don't accept the
award, we are going to go to the next person on the list. Can
you help us out? How can we help you get the fire station that
you have applied for and competed for and won?
And the fire chief is gung ho for it, so we put a time line
on, and there was actually resistance from the city council
saying, well, FEMA won't do that. You know, we got the award;
they wouldn't put a restriction on it saying if we don't do it.
Finally, our staff had to push even further. They have accepted
the award but then, again, our fire chief had to get on the
agenda for the city council just to contract----
Ms. Norton. Well, Ms. Harman, I think we get it. But in a
real sense, although more extreme, more drawn out, your
predicament does illustrate what we go through in the States.
The States don't operate at our command, even though they are
very glad to get our money, and we do have to respect their
processes. On the other hand, the Chairman has been real clear
you can pass on. We are going to pass right over you if in fact
you can't do it. But you can see Members are concerned about
this matter.
Ms. Harman. Absolutely.
Ms. Norton. I have a question for Mr. Fernandez.
Mr. Fernandez, the agency has lots of support on this
panel, and one of the reasons it enjoys this support is that
EDA has been in the forefront of investing in incubators. We
note that although the EDA'S reauthorization proposal has a
loan guarantee and grant program focused on science and
research parks, there appear to be no incubators among your
stimulus projects. Why is that?
Mr. Fernandez. Actually, I believe there were 13 projects
that supported incubation, 4 specific----
Ms. Norton. I am talking about, of course, in your
stimulus----
Mr. Fernandez. In the Recovery Act.
Ms. Norton. Yes.
Mr. Fernandez. And that included I know in Scottsburg,
Indiana, we funded a technology incubator.
Ms. Norton. With stimulus funds?
Mr. Fernandez. Yes. It was a $4.3 million investment for
manufacturing technology incubation. I believe there were three
other incubators. I could get you a specific list of the actual
incubator projects, if you would like that.
Ms. Norton. I may have this backwards. You do have them in
your stimulus or ARRA funding, but not in your reauthorization.
And why is that?
Mr. Fernandez. I don't have the language in front of me. I
know there is some additional language in what we had proposed
to the Congress to bring some clarity on incubation. I believe
the rationale is that we already have tremendous authority and
flexibility within our Public Works program, as well as our
Economic Adjustment Assistance program to invest in incubators,
and, as you know, we have invested in a number of incubators
over the years, so we certainly don't----
Ms. Norton. So you are saying that incubators would in fact
be part of your existing programs? So you don't propose not to
go ahead with the incubator program?
Mr. Fernandez. Correct. And, again, I apologize, I can't
remember off the top of my head. I think there is some language
that we suggested to give us even some flexibility on some
operating support for EDA-funded incubation to ensure that they
are even stronger and more successful.
Ms. Norton. Mr. Fernandez, I just want to bring to the
attention of the full Committee something that we understand
you are going to be doing and that is, in its own way, akin to
our own process that we pass the money on to someone else if
you don't in fact use it rapidly. As I understand it, you are
going to proceed to use a process that has proved very
effective in the Delta Regional----
Mr. Fernandez. Regional Commission.
Ms. Norton.--Commission. I am sorry, the Delta Regional
Commission. And that is a kind of clawback. And, again, to the
full Committee, this is the first time I have ever seen this
done effectively, but if the private entity does not produce
the jobs it has indicated it will produce, then the Delta
Commission has a kind of payback. Of course, contingencies are
allowed because there can be reasons why a project does not
produce jobs. And, of course, there is some negotiation.
But by having in place this clawback, that you have to give
back some of the money, in fact, the Delta Commission, who
testified before us, was able to show that this has been a very
effective way to get people to be up-front and clear about
promising and not over-promising. You indicated you would be
spreading that, and I would like to know when and how.
Mr. Fernandez. Yes. As you and I have discussed this, we
are interested in how the Delta Commission administers their
clawback. There are some complexities that are a little bit
different for our agency in terms of the intermediaries that we
invest in or co-invest in have much more direct control over
the ultimate job creator that is built around a particular
investment.
So there is some complexity, but we are very interested in
looking at how we can embed those types of provisions. We do
have authority today and a tremendous amount of ability to hold
folks accountable for the investments of taxpayer dollars
already, and where there are cases where they are not moving
forward with projects as agreed to, we have the ability to
recapture those dollars under existing authority.
The clawback provision, I think, the other way to look at
it, as well, as part of this process improvement initiative
that I mentioned in my testimony. I think we have to look at
what we are doing at the front end as well, so the depth of due
diligence that we engage in as part of an application process
should be really very vigorous so that, in fact, we are
ensuring success of the investments at the front end. But if
folks don't meet their obligation, they certainly should be
held accountable.
Ms. Norton. Yes. And people at the front end will negotiate
very carefully about what they promise and will tend to over-
promise less.
Ms. Walsh, I won't ask you for answers to these questions,
but I would like to have the answers to these questions within
the next 14 days. You have testified that the largest project
ever attempted by the GSA and the largest since the Pentagon is
underway here under the jurisdiction of the GSA and is underway
here in the District of Columbia.
I do have reports on a biweekly basis on how many jobs are
being created. There has been an apprenticeship program, and
these funds, I understand, have been fully allocated, and I
commend GSA on that; allocated throughout the Country. And
because this project is so big and because there are 15 other
projects in the District of Columbia, again, because it is the
seat of government and there are many government buildings
here, these projects are now underway using apprentices and
pre-apprentices.
We would like to have some idea of how many apprentices,
just let's say apprentices, and that includes pre-apprentices,
of course, and perhaps they should be disaggregated, because
pre-apprentices are people who are less trained, they don't
have the full apprentice status.
Since this money is out there and people will expect that
since we put money out there, that they will in fact be hired,
how many apprentices are contemplated to actually get positions
in jobs in the jurisdictions where you have awarded the money?
How many would you calculate? I understand that there could be
differences. How many apprentices will be hired? How many pre-
apprentices will be hired? The $3 million in money out there
for distribution to a number of districts of this money.
We don't want to leave people thinking that everybody who
thinks of himself as a pre-apprentice or apprentice is going to
find a job in some kind of Federal program, and the only way to
do that is to be up front with people about the number of jobs
that are anticipated. And I wish you would get back to me with
that.
And I am very interested in the 15 projects in the District
of Columbia. These are the big green projects here, where you
have old Federal buildings that nobody has looked at probably
since they were put up during the New Deal, when Franklin
Delano Roosevelt did precisely what we are doing. He said this
is the time to build the infrastructure for the Federal
Government.
So if you look down on Constitution Avenue and Pennsylvania
Avenue, you will see 1930-some dates on all those buildings.
You are doing massive changes in some of those buildings, and
the kinds of changes that we need most because they are going
to save us money in air conditioning and heating and other
energy conservation.
Would you, within two weeks, get to the Chair and to me a
status report on the status of all 15 projects in the District
of Columbia; where they are located, at what stage of
construction they are; how many jobs? I won't get to
apprentices there, I am interested in how many jobs have been
provided in what specific categories and how many jobs are
contemplated to be provided in this bunch of buildings located
in the Nation's capital?
Thank you'very much.
Ms. Walsh. Yes, ma'am, we will get back to you.
Ms. Norton. Next, Mr. Cao. Do you have any questions, Mr.
Cao?
Mr. Cao. I do, Madam Chair, and thank you'very much.
Madam Chair, you know, you and I, for the past year and a
half, we have been very frustrated with Federal agencies in
regards to the rebuilding of New Orleans, and obviously one of
the agencies that we were frustrated with was the Army Corps of
Engineers. And again we are dealing with an emergency in the
Gulf, and it seems to me that the bureaucracy that is so
inherent in the structure of the Army Corps is impeding their
ability to make very quick decisions.
On May 11th of this year, the governor of Louisiana
requested an emergency authorization to construct a sand
barrier along our Barrier Islands to provide a critical
structure that will block the flow of oil into our sensitive
waters and estuaries. And it has been over two weeks and the
Army Corps of Engineers has not provided a decision with
respect to the permit, and one of the reasons that they gave
was they had to do an environmental study.
Now, if I were a layperson looking at the Gulf of Mexico
and the oil is floating in, it seems to me that the impact from
the oil, the oil threatens to destroy the way of life, the
marshes, the estuaries in the Gulf, why are we spending time to
do an environmental impact study, when the oil threatens to
destroy everything? So it seems to me that the bureaucracy of
the Army Corps of Engineers is impeding their ability to make
very common sense decisions.
So my question to you, Secretary Salt, is what is the
delay? I really don't understand.
Mr. Salt. In light of the current circumstances, the Corps
is using its emergency authorities and is using its emergency
protocols to consider the request of the Governor. I think you
are correct that the Governor first put forward his proposal on
the 11th of May. Just last Friday, though, the State amended
its request and asked us to focus on a different, smaller set
of sand berms. The Corps is proceeding with its analysis on
that and expects a decision----
Mr. Cao. But it seems to me that the longer we delay, even
a day, two days, three days, can lead to very devastating
effects to the Gulf Coast region, especially to the marshes and
to the estuaries. How hard is it to make a decision with
respect to allowing the berms to be built or not? It seems to
me that any environmental impact that comes from the
construction of this berm can be addressed at a later date. The
priority now is to build it to keep the oil out. And the answer
to the question is either a yes or a no. And I don't know why
it takes a week to make a decision. I can make one right now.
Mr. Salt. This is probably the wrong forum to discuss that
question. I would just say that it has been my experience, and
in my understanding in this case, that the Corps has been
processing this most recent permit request very quickly.
Picking up on your point, under the Corps' protocols, the
environmental assessments it is doing are what I would call
screening assessments, and answering the questions like what
are the protocols if there is oil in the sand and----
Mr. Cao. If I can inquire further, I believe the President
has declared a state of emergency to the fishing industry.
Wouldn't that state of emergency allow the Corps to waive some
of these protocols to make very expedient decisions?
Mr. Salt. Sir, they do. They don't waive their protocols,
but they have a modified set of protocols that allows them to
make an emergency decision that then is followed with a more
formal process that begins in 30 days. And again, the permit
application that the Corps is now considering was received on
Friday by the Corps. It is now in the final stages of the
decision process and I expect a decision very shortly.
Mr. Cao. Madam Chair, again, it just deals with this very
frustrating bureaucracy that we have to deal with through the
Army Corps of Engineers, and I believe that we have to find
ways in order to streamline their decision making to allow them
to provide us with very quick decisions in case of emergencies
in the future.
And this is a question to the panel. Are there any
resources unallocated from the Recovery Act that we can somehow
redirect to help the Gulf regions to address the oil spill?
Mr. Hooks. As far as EPA'S resources are concerned, 100
percent of our resources have already been obligated. We
actually don't have any additional resources.
Mr. Cao. Mr. Salt?
Mr. Salt. I would say right now I am not aware of any
requirements that are unfunded. I think we are proceeding with
general revenues to do the work. You mentioned the permitting
issue. Right now, our primary involvement is to expedite the
permitting along the lines of your questions earlier.
Mr. Cao. Ms. Walsh?
Ms. Walsh. We have allocated all of our funds, sir.
Mr. Cao. Basically, that is the same answer from everyone?
Mr. Fernandez. No.
Mr. Cao. OK, good.
Mr. Fernandez. I have a slightly different answer. We are,
as you know, Congressman, we have deployed staff from our
regional offices out of Austin, as well as Atlanta, to provide
technical assistance and begin coordinating with the coastal
community leadership.
We believe we have some minimal modest amount of funds that
may be available to help out of existing fiscal year. But we
are talking a few hundred thousand dollars, not millions, so it
is a modest amount. But, as you know, the President has
proposed a $5 million supplemental appropriation for EDA to
become much more engaged in the recovery efforts, and we hope
that the Congress will act on that request.
Mr. Cao. Thank you'very much.
I yield back.
Ms. Norton. The gentleman is in overtime and there is going
to be a bell soon. I will try to get as many Members as
possible.
Mr. Johnson.
Oh, excuse me, Mr. Fernandez, I understand that you have to
leave to go to NASA in Florida. You are excused.
Mr. Johnson?
Mr. Johnson. Thank you, Madam Chair. And, Madam Chair, with
all due respect, I would be remiss as Chair of the Judiciary
Committee's Subcommittee on Courts and Competition Policy, were
I not to speak out to voice my disagreement with the conclusory
allegations against our Judicial Branch of Government with
respect to courthouse construction projects, the recent
courthouse construction projects.
Preliminary findings by GAO have been disputed by GSA,
which has primary authority in this area, about the cost of
overbuilding to the tune of about $600 million. It is alleged
in the GAO report 800 and some odd million dollars was misspent
for overbuilding that was not authorized by the Congress. GSA
disputes that to the tune of about $200 million that they would
admit to. Of course, $200 million is a lot of money Eight
hundred million is a lot more.
And there were some reasonable explanations given for the
increased expenditures, along with an agreement that, in the
future, any overruns, if you will, will be, if they are 10
percent or more of the price which Congress approved, then the
GSA would come back to Congress for authority.
And again I want to emphasize that the Judicial Branch
participated with the GSA insofar as their projected need for
additional courthouse space based on judgeships that were
recommended by the Judicial Conference, which ended up not
being approved by Congress, and those judgeships were approved
and courthouse construction done, these estimates done in
excess of 10 years ago. So I think there are a number of
reasons for these overruns, but they are not certainly
attributable to Judicial Branch misconduct.
But I do have a couple of questions. I have one city in my
district. The name of that city is Pine Lake. It is the suburbs
of Atlanta, Georgia. That project that the city has spent money
on, it is a Clean Water Revolving Fund project. The project was
shovel-ready, it was under contract by the deadlines, but yet
the State of Georgia refused to fund the project.
What I would like to know is what is the decision-making
process insofar as State recommendations and local readiness?
What kind of discretion does the State have and is it such
discretion that would allow a project to not be funded for
reasons other than the merits of the project itself?
Mr. Hooks. In terms of the Clean Water SRF program, the
State almost has 100 percent discretion in terms of what
projects they actually select. Before the State ultimately
makes their decisions, we do have an opportunity to evaluate
what is termed their intended use plan, what is the description
of the types of projects that they intend to fund on an annual
basis. But once we approve that plan, at that point in time it
is the State's determination on which projects will ultimately
be funded.
Mr. Johnson. Thank you.
And for all of the panelists, I would like for you to
respond. I sent a letter on April 21st to the U.S. Department
of Transportation, which was signed by 15 other Members of
Congress, expressing concern over disadvantaged business
participation in Recovery Act programs or projects. This letter
was the result of media reports indicating that as little as
two and as much as six percent of Recovery Act funds spent by
the State Departments of Transportation went to disadvantaged
businesses. I think we would all agree that these numbers are
disturbingly low.
Now, I know that DOT is not here today; however, I would
like to ask the panel how your agencies have awarded contracts
and if you can provide details on disadvantaged businesses'
participation in your contracts.
Mr. Hooks. Mr. Congressman, I can speak primarily to the
contract funds that we obligated under stimulus, which was
primarily in our Superfund program. The majority of our money
under the Clean Water and Drinking Water SRF programs, $6
billion out of the $7.2 we received went out in the form of
grants.
But in terms of our contracts, for our small disadvantaged
businesses, we have a goal of 10.5 percent. We are at 12.4
percent. For our 8A firms, we are at 5.4 percent; our women-
owned businesses, 1.7 percent; Hub Zone, 2.6 percent; and our
service disabled vets, 11.2 percent. So our small business
goals were at 56.5 percent overall. I think we have done a
pretty good job in terms of Superfund. But, again, as I said
earlier, we don't have the ability to direct the subgrants for
our SRF programs.
Mr. Johnson. Thank you, Mr. Hooks.
Ms. Norton. The gentleman's time has expired. You are two
minutes over your time, Mr. Johnson.
Mr. Johnson. Thank you, Madam Chair.
Ms. Norton. Mr. Johnson, I am pleased to award you the time
and understand your concern in the first part of your remarks
with the GSA report. I just want to say again that our concern
is with overspending no matter who overspends.
But I am sure GSA and the courts will be pleased that there
is at least one defender to the definitive GAO report showing
$1 billion in overspending by the courts, especially in light
of the fact there is 9.9 percent unemployment in this Country
today, and a lot of us would rather have seen that money go
into jobs and economic development where there is not
overspending.
I am compelled to make that point, since even the GSA was
not willing to defend a great deal of the overspending. It had
to defend its part of the overspending. And even the courts
conceded that there had been overspending. I did not want to,
in fact, offer an apologia for what amounted to lawless
overspending because the overspending was of the authorized
amount that the Congress of the United States had voted, and
the last people who ought to be disobeying the law are judges
or the judiciary.
Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you'very much, Madam Chairwoman. I
want to just first emphasize, as you said before, that there is
no light between us, that you and I, and I would the Committee
and clearly your Subcommittee, is totally united on these
issues, and I want to thank you for your leadership there.
Two questions to Ms. Walsh, if I may. GSA owns and
constructs a number of border stations. I am trying to find out
if GSA is exercising its independent judgment and expertise,
and I am going to throw out one specific issue, for example.
Does it make sense to have an eight-lane border station, is
that appropriate, eight lanes, for a crossing that sees less
than 40 cars per day? If you were looking at it and you had a
crossing that had less than 40 cars a day, would your standard
be eight lanes?
Ms. Walsh. We work with DHS to determine the requirements
for each land port of entry.
Mr. Diaz-Balart. I know, but I am asking is eight lanes for
40 cars? Under any standards, that sounds like government out
of control. Eight lanes, does it make sense? Is that the kind
of standard that you would usually use for the ones that you
own and run and construct, eight lanes for less than 40 cars,
for a station that handles less than 40 cars a day? Does that
make any sense to you? Or, speaking of overbuilding, is that
not classic overbuilding?
Ms. Walsh. I am not sure which project you are referring
to, and I would have to defer to the requirements that we work
out with our customer agency.
Mr. Diaz-Balart. Well, my understanding is that there is a
border crossing in Vermont that has, again, less than 40
crossings per day, and it is foreseen to be built as an eight
lane border station. And, again, since among the things we are
talking about is overbuilding and wasting money in
overbuilding, it seems to me that I don't know how you justify
eight lanes with less than 40 cars a day.
Now, you have other border stations already that you run.
If you have a border station that has six lanes and it has less
than 40 cars, do you suggest that it go to eight lanes, or is
that excessive?
Ms. Walsh. We do build also to accommodate future
requirements. But in terms of the specific border stations, I
would have to go back and check and get the Committee the
information on the number of lanes and whatnot at the various
border stations.
Mr. Diaz-Balart. All right. And the other part of my
question, though, is if there is something planned by the
stimulus, do you have the ability to exercise your judgment as
to what makes sense, is it eight lanes, is it six lanes, or do
you just have to go forward with it and build it, regardless of
what the need may actually be?
Ms. Walsh. I didn't hear the last part of your question.
Mr. Diaz-Balart. Or do you just go forward with it because
that is what is in the bill, regardless of what the actual need
may be?
Ms. Walsh. I think we discuss the requirements at length
with our customer to make sure that they make sense. We would
be happy to set up a meeting with you to discuss this issue, if
you would like.
Mr. Diaz-Balart. Great. I would like to. I would like to
find out because, again, what we are trying to do is avoid,
obviously, unnecessary expenditures.
Ms. Walsh. Absolutely.
Mr. Diaz-Balart. On the same vein going now back to the
courthouses, I know that it has already been discussed a little
bit, but we had a hearing, the Chairwoman had a hearing
yesterday, I believe it was yesterday, on this very issue,
where one of the things that came out and that there was no
debate on was that the standards as to what the needs for
future courthouses would be is frankly just plain wrong. It is
not working. I mean, that was agreed to by everybody.
And yet the courthouses in the stimulus that are going to
be built are there because they were using these, frankly,
erroneous standards. So we know that the need may not be there,
and I think there is absolute agreement to the fact that those
standards that were used to determine what the needs were were
dead wrong, and I mean dead wrong and that we have been
overbuilding because of that.
That is what standard, unfortunately, was used for these
courthouses in the stimulus bill, and yet are we still going to
move forward? Is the Administration still going to move
forward, even though now we know, because we have the reports,
now we know--maybe six months ago we didn't, but now we know
that those numbers are wrong, are dead wrong, they are way
overinflated. We may not need those. We know that is the case.
We have the reports that say that those are wrong.
And yet is the intention going to be to continue to spend
money, knowing ahead of time that that money may be, wrongly
spent because the standards that were used to determine that
those courthouses were needed were wrong? Again, we know that
they were wrong now. We didn't know, maybe, particularly when
the bill was done, but we do know now, so what are we going not
do about it? What is the Administration going to do about that?
Ms. Walsh. We are proceeding with our four new courthouse
projects. I will have to go back and review which standards are
being applied; off th top of my head I don't know.
Mr. Diaz-Balart. Well, we do.
Ms. Walsh. I can't confirm that they are overbuilding.
Mr. Diaz-Balart. Well, here is the issue that we do know.
We do know. I am pretty sure that the standards that were used
were the standards that we know now are wrong. So I just want
to make it very clear that if the Administration moves forward
on building those courthouses, it is very important that it is
public, that there is no secret that the standards that were
used in order to determine the need are wrong. We know that
they are wrong now; we have the reports.
So if one moves forward and spends those, and I believe it
is several hundred millions dollars, knowing ahead of time that
those numbers that were used were wrong, we are then purposely
knowingly moving forward on, frankly, wasteful projects.
So I would suggest very respectfully that you get back to
us and you determine what are you going to do to make sure that
we are not moving forward on projects that we now already know
are, frankly, not needed or clearly overbuilt, because,
otherwise, to make it very clear, we would be moving forward,
the Administration would be moving forward knowing that we
would be spending several hundred million dollars, whatever the
actual amount is, when most of it or part of it may not be
needed, and that would be a gross misuse of taxpayers' money.
So please get back to us on that, if you would.
Ms. Walsh. Yes. I will get back to you on that.
Mr. Diaz-Balart. Thank you, Madam Chairman.
Ms. Norton. So ordered.
Ms. Walsh, we recognize that you may not have the answers
to all of the questions, but the gentleman raises a fair
question, so we ask you, within 14 days, to get to the
Chairman, who will share the information with the Ranking
Member of the Subcommittee so that we can determine whether
this is the case and, if so, what the Administration is doing
about it.
Have you not been heard? I am sorry. I was about to recess
the hearing.
Mrs. Schmidt. I just wanted to follow up on a question that
I asked earlier.
Ms. Norton. I was supposed to leave here----
Mrs. Schmidt. It is very quick. It will be very quick. It
is regarding the border patrol in Vermont. And I am very
confused as to who is in charge of the design; who is in charge
of the location; who is in charge of the price that they are
going to give to the farmer; how did all of that come about.
So I am asking the entire panel if you would please get
back to me within 14 days and let me know how you arrived at
the price, how you arrived at the location, how you arrived at
the design, how you arrived at the cost of the design, and who
ultimately is the decision maker in this. And that is all I
want.
So I am going to ask each and every panel member if you
could please get back to me with it so that I have a clear
understanding. I have been told that the Army Corps of
Engineers is the one that is handling this and would have the
responsibility, but now I am being told that they are not. So
if everybody on the Committee could get back to me on this
particular project and what their role is and ultimately who
decided where it is going to go, who decided the design of it,
who designed the intensity regarding the 40 cars that go there
every day, the price tag, how you arrived at the figure for the
farmer, and what kind of tactics and mechanisms you used so
that the farmer knew that he was getting a fair and just
treatment. Thank you.
Ms. Norton. The Chair notes that many of those questions go
to an agency that I believe is not here, and that is the
Department of Homeland Security. But I will ask that we attempt
to get answers to the gentlelady's questions.
The Chair was called away, which is why you have had
recurring Chairs. We are going to dismiss this panel and recess
the hearing until the Chair returns. We will have a second
panel. I promise you the Chairman is very clear that the second
panel is very important to this hearing. But this hearing is
recessed until the call of the Chair or his designate.
[Recess.]
Mr. Oberstar. The Committee on Transportation and
Infrastructure will resume its sitting, with apologies to our
second panel for the delay. Unfortunately, other Committee
business has intervened, and Wednesdays, as Counsel on the
Republican side was saying, is our busiest day, and it is.
Every Member is torn in three different directions, and that is
what happened here.
By way of explanation, I had a meeting of the National
Transportation Safety Advocates organization, who are
acknowledging Members of the House and Senate for their work in
support of highway safety. It is something that I have given a
great deal of my time to over the years I have served here, and
I was privileged to receive their award. But you can't just
walk in and say thanks and leave. You do have to say a few
things, which I did.
We will begin with Mr. Rainville, introduced by our
distinguished colleague from the State of Vermont, Mr. Welch.
Mr. Welch. Thank you'very much, Mr. Chairman.
I am grateful to you and to Ranking Member Mica for
inviting a real Vermonter to have a chance to speak to you. You
are going to hear from Brian Rainville. He lives on a family
farm, three generations. It is right on the Canadian border and
he is going to tell you how a project is impacting his farm.
But the primary goals of the American Recovery and
Reinvestment Act are to create quality jobs for Americans and
revive our economy. But equally important, we want that money
to invest in recovery that has lasting benefit, without doing
damage along the way. Not every project falls into that
category, and I think this Committee is demonstrating that it
is open to listening and learning when a recovery project may
have some questionable impact.
So I want to thank you and the Committee on both sides of
the aisle for inviting a Vermonter here, Brian Rainville, to
share his story of how this project will impact his family, his
family farm and our community.
Thank you'very much, Mr. Chairman.
Mr. Oberstar. We want to hear the good news. We also want
to hear those things that didn't go so well or that just didn't
work out at all. That is the purpose of having hearings. As I
said, this is the 19th in our series of oversight and
accountability transparency hearings, during which we have
heard the difficulties that EPA had early going in implementing
its portion because there were some quirks in the law that made
it difficult for them, and many other such circumstances. And
they are all lessons for the future as we go through our
authorization bill and the other legislation under the
jurisdiction of this Committee.
So Mr. Rainville, welcome. You have our full attention.
TESTIMONY OF BRIAN RAINVILLE, HIGH SCHOOL TEACHER AND SON OF
DAIRY FARMERS; PETE BOWE, PRESIDENT, ELLICOTT DREDGES, LLC; TIM
BURKETT, CHIEF OPERATIONS OFFICER, BIOHABITATS, INC.; AND KEVIN
WELCH, SENIOR PROJECT MANAGER, PCL CONSTRUCTION SERVICES, INC.,
REPRESENTING THE U.S. GREEN BUILDING COUNCIL
Mr. Rainville. Thank you. It is a pretty amazing
opportunity today for a child and grandchild and great-
grandchild of dairy farmers to be here.
I live at Morses Line, which has three houses and one
border port. And we have run into a little problem. Instead of
looking at need, we have an agency focusing on want. What they
want to do is spend money. What they need to do is leave us
alone.
In 1983, they identified the port at Morses Line for
closure. They said the traffic volume is low. The geographical
proximity to other ports, 10 miles west there is one; 10 miles
east there is another. There is a duplication of services.
Somehow, Morses Line became a critical port facility in
lieu of the stimulus bill. We are a little confused. We have a
traffic rate of 2.5 cars an hour. It is closed for eight hours
of every day. At midnight, the gate is put down, the sensors
are turned on, and the hard-working men and women of the Border
Patrol go to work.
So we are trying to figure out why this agency is using
eminent domain as a battering ram to work its way onto our
farm. And the only conclusion that we can draw is that if they
don't spend the money by the 30th of September, they lose it.
In testimony this morning, I heard from someone sitting I think
at this very microphone and said, well, that is our protocol. I
am sorry, this is my parents livelihood. And I believe that
carries more weight. I believe stimulus funds should be
administered in the same way that medicine is practiced: First
do no harm.
Our community was not consulted. We asked for a public
meeting and we were told that the agency was reaching out to
the Morses Line community by which they meant my parents, my
brothers and I sitting around our kitchen table. A public
hearing was finally held last Saturday and I was thankful tar
and feathers were nowhere in the room because had they been
available, 18 th century methods would have been applied to
well-meaning people who were trying to do their jobs.
But they never took the step back and asked a fundamental
question: What does Morses Line need? And a facility designed
in 1936 for a different time and place isn't necessarily
relevant in 2010. My family asked representatives very early
on: How are you justifying this project? And they said: We have
the money.
I have never heard that argument before. I spent 10 years
planning the renovation of my farmhouse. My brother worked for
two years to plan a 20-foot addition to our sugar house. We had
a group of people who came in and told us they were going to do
a 12-month feasibility study and we found out four months later
that they had designed and were putting to bid a $15.4 million
facility. Again, the gap is there. What do they need versus
what do they want?
My family said clearly this is vital crop land. Their
environmental assessment said this is a vacant lot. Rather than
weigh the loss against our farm, they compared all our acreage
to all the acreage in Franklin County. They talk in the
environmental report about the most affected businesses. They
talk about the Dollar Store and Stairs Unlimited. Those aren't
even in our community.
At Saturday's public meeting, a young woman stood up and
said, I don't understand your report because you drew a
conclusion and then you twisted your data to get there. Retired
Customs officers who because they are now collecting pensions
instead of wages and have an opportunity to speak about this
very project stood up and called their own agency on the carpet
and said, we know you wanted to close this in 1983. We know
your moratorium report from last fall identifies precisely this
type of port for closure, but the project moves on, so much so
that a mere 12 days or so remain to a 60-day period in which
Customs and Border Protection told my family that if we didn't
sell our property voluntarily, they would take it.
As someone who has taught civics for the last 16 years and
explained to my students that this is a responsive government,
a government that cares about rights, a government that
protects property, I have had increasing difficulty trying to
explain to well-meaning people who want to spend money why they
should leave my family alone.
We have a National Register property. It is a Dairy of
Distinction. In 1981, this Congress wrote legislation
forbidding Federal agencies to unnecessarily convert prime
agricultural soils. But there is money to be spent and the
project moves forward.
I find myself every time I see Representatives using
smaller words and shorter sentences to make the same point, and
I run out of patience. And I ask this Committee today to
reprimand that agency. There is no public good at Morses Line.
There is no reason to spend money at Morses Line when they know
that a gate and sensors and the Border Patrol keep this Nation
safe. And to have veiled this project under economic stimulus
and eminent domain and national security is reprehensible in a
democratic Nation.
I am incredibly thankful to the Vermont Congressional
delegation which asked questions consistently and got us
answers, and secured a public meeting just last Saturday. But I
am out of patience with an agency that refused to give us the
traffic count. My father asked at the first meeting: How many
vehicles come through Morses Line in a year? And they told us
we will find out and we will get back to you.
And we asked and we asked again and we asked again. We
shouldn't have had to file a Freedom of Information request to
get that information. If this was a necessary project, the
agency would have voluntarily given us that. And the mere fact
that I am the only person talking about this project in front
of a microphone tells me this agency knows they have done
wrong. They owe this Committee an apology for the misuse of
stimulus funds. They owe my family an apology for the manner in
which they have treated us. They didn't give us the
environmental report. We found out after it had been available
for eight days and we were already in a 30 day public comment
period.
And just last Saturday, they walked into our town hall
where local government representatives have been asked hard
questions for more than 100 years, and they tried the same dog
and pony show. And when their laptop crashed, taking down their
presentation explaining that this new facility would make us
all safer and they had superior technology, I had to believe
that karma was at work.
I am out of patience with an agency that says a public need
is to spend money. We accommodated a hydro line, major
transmission line into the State of Vermont because it was for
the public good. We accommodated reconstruction of Route 235
because it was for the public good. The public good is not the
spending of stimulus monies.
Mr. Oberstar. Thank you for your heartfelt, impassioned
testimony. I would observe, however, your last paragraph saying
I return to Vermont with hopes of once again being a teacher,
rather than a lesson. I think you go back being both.
Mr. Rainville. Thank you.
Mr. Oberstar. There is a provision of the Constitution
which I refer to quite regularly, and that is the right of the
citizens to petition their government for redress of
grievances. That is the lesson.
And the sequel to the lesson is that I think we will be
able to stop this. I will send to Secretary Napolitano this
portion of the transcript of the hearing, with a recommendation
that the project be withdrawn; that the funds be deflected to
some other beneficial pursuit; and reference the participation
of Congressman Welch, who may join me in the letter if he
wishes, but I will most certainly send that letter and make
very strong representations to Secretary Napolitano.
I will further say that I noticed your observation of a
mere 80 cows. That used to be a pretty good-size milking herd,
at least in my District. We had 80 cows fresh and another 80 or
100 waiting.
What is your pounds per cow over a year? What are you
milking, Jerseys? Guernseys?
Mr. Rainville. It is a Holstein herd.
Mr. Oberstar. Holstein.
Mr. Rainville. Yes, and we are hanging on. We have exactly
the kind of numbers you are talking about. But I have really
been frustrated that folks from my own Federal Government have
walked in and told my parents that they have extra property
they don't need.
Mr. Oberstar. Those are the people and yours are the family
values that we proclaim in this Country and that we want to
preserve. I have seen the same number decline of family farms
in the southern tier of my district as exurbia has extended its
rapacious hand north. And dairy farms and roll crop farms,
instead of pushing up soybeans and corn are pushing up pansies,
daisies and houses and lawns.
Customs and Border Patrol used to be a very friendly,
cooperative agency until it was assumed into the Department of
Homeland Security, which I voted against. I didn't think we
needed anything. I said it will grow into a monster. It has. It
started collecting at a number of Federal Government agencies
that were doing just fine on their own, into one big family.
And once you do that, things become bigger. They started with
134,000, now they are up to 215,000 or 220,000 employees in
this department.
We have just approved funding for renovation of a facility
for their headquarters, St. Elizabeth's Hospital, which I
recommended to President Bush. I said it is the former home for
the mentally disabled. This is a crazy idea. I think it needs
to go there.
But I will just add to your observation. I was up in Cook
County, northeastern part of my District, a couple of years ago
and met with the county sheriff to see how things are going on
the border with Canada. We have the Pigeon River. He said, I
have to tell you this story. The Customs and Border Patrol
decided that they needed training on the northern border for
their folks in Florida. And so they sent them up with a black
helicopter.
And they landed up here in Grand Marais, and then they went
along 40 miles north to the border with Canada, and they were
patrolling the Pigeon River and they saw this conveyance
crossing over from Canada. And when the little canoe got on the
U.S. shores, they swooped down on the intruders, put black
masks over their heads and tied their hands behind their back
and laid them down on the sand and aimed these vicious looking
weapons at them.
All the while, the six people dressed in ominous black,
asked their names and called the names into the county sheriff
who said, and I won't repeat the exact words, but he said:
You've just arrested the Chief of the Grand Portage Indian
Band, who said to them, my people have been crossing over here
for 2,000 years. If you don't want us to do it, just tell us.
don't aim guns at us.
You are a victim. There are other victims, and we will do
our very best to make sure that there are no further victims,
and that you get an appropriate apology.
Mr. Rainville. Thank you. I appreciate that immensely.
Thank you so much.
Mr. Bowe?
Mr. Bowe. Good afternoon, Mr. Chairman.
Mr. Oberstar. You probably don't have anything quite so
dramatic to tell us.
Mr. Bowe. I hope not.
My name is Peter Bowe. I am President of a company called
Ellicott Dredges in Baltimore, Maryland. I am here today to
talk about the impact of the ARRA on the U.S. dredging
industry. Let me start with a few facts.
Dredging is essential to maintain the Country s waterways
and ports. Marine transportation is the most economical and
environmentally friendly mode of transportation we have.
Ellicott Dredges is the oldest and largest company in the field
of making dredging equipment. We got our start in this industry
when the U.S. Government selected us to build all of the
dredges used in the original construction of the Panama Canal
back in 1907.
Our most important markets are overseas and the most common
applications for our equipment are infrastructure projects
other than navigation, for example, in the sand and gravel pits
that you mentioned in your remarks this morning.
Having said that, the ARRA did have a meaningful impact not
only in the dredge contracting industry, but on our company as
a leading U.S. equipment supplier. Our sales from the stimulus
were 10 dredges worth over $10 million. These sales sustained
over 15 jobs out of a workforce of about 200. So that is
meaningful to as a small business. And I think it is worth
noting that about half of our manufacturing workforce in
Baltimore consists of minorities.
Here is a quick sample of the types of projects the U.S.
Army Corps of Engineers funded via the ARRA using a new
Ellicott dredge. In North Carolina, a contractor new to the
industry bought a $1 million machine for river navigation. In
Virginia, a contractor new to the industry also bought a $1
million machine for coastal protection. In our home State of
Maryland, a minority contractor bought a small dredge for river
navigation.
In addition, we had meaningful sales in the domestic power
and mining industries where the customer's original intention
was to hire contractors, but they were forced to develop their
own dredging capacity and buy dredging equipment when the
traditional contractors were busy doing ARRA work.
It is our understanding from the Dredging Contractors of
America that the ARRA has so far funded 100 dredging projects
in 24 States with a value of over $110 million. It is relevant
to know that a manufacturer like us relies on a diverse vendor
base. We are a good example of the ``multiplier effect'' by
which manufacturers buy parts, components and raw materials
from many other companies. Most dredges we make and all of the
dredges used in the above examples use CAT engines. They have
castings from foundries in Pennsylvania and Michigan; hulls
from vendors in Wisconsin, Michigan and Indiana, rust belt
companies.
I might add that we have at least 15 vendors in Minnesota
from whom we buy over $100,000 worth of parts and services per
year. We spend more than half of every sales dollar we receive
on outside vendors, and almost all are U.S. vendors. So
clearly, the actual job impact is much greater than just the
direct impact on our facilities in Wisconsin and Maryland.
The U.S. marine dredging industry does not operate in a way
which maximizes our opportunity for the sale of new dredges,
and here is why. Most of the dredging industry serves the U.S.
Army Corps of Engineers. For years, the Corps has had a budget
well under the requirements of approved projects and it is
always funded on a year by year basis.
Further, Corps practice is to let jobs with very short
mobilization periods. As it takes the better part of a year to
build a new dredge, the long manufacturing process coupled with
a short contracting process is not conducive to dredge
contractors investing in new equipment. As a consequence, the
average age of the dredge fleet in the U.S. is over 20 years,
which is much older than in other countries.
The availability of ARRA funding was most welcome in this
industry. Congress' desire for shovel-ready projects put
pressure on the Corps and contractors to show that they had the
capacity to meet the extra demand. The Corps did a great job
meeting with the industry to plan project roll-outs to maximize
the use of existing capacity and avoid shortages.
But the increase in dredging demand did absorb additional
capacity, and the increase in capacity utilization was
precisely what created the opportunity for us as an equipment
supplier. Importantly, the additional funding from the ARRA
induced contractors new to the industry to come in, in which
case they obviously needed to buy new dredging equipment and it
also induced existing contractors to expand.
The Corps should enjoy long-term benefits from this
industry expansion, not only in capacity as measured by the
number of dredges, but also in the number of new competitors.
The ARRA is responsible for that. New dredging equipment
introduces newer technology and offers more fuel-efficient
production.
All other things being equal, with more contractors bidding
and additional capacity available, the Government should get
lower pricing on future jobs than it would otherwise. In just
one example I cited above, the Virginia project, the low bid,
which came from a new party to the industry, saved the
government over $2 million compared to the next low bidder.
Now, one should ask: What changes could be made on an
ongoing basis to improve the state of the domestic dredging
industry and modernize its capacity? And there actually are two
good answers to this question, both relating to issues now
pending before Congress.
The first relates to a proposal supported by a coalition
called RAMP: Realize America's Maritime Promise. RAMP
represents a broad spectrum of shippers, ship operators, custom
brokers, ports and port users. RAMP strongly supports passage
of H.R. 4844, which seeks to direct that Congress should use
funds from the Harbor Maintenance Trust Fund--derived from a
small fee on imports--for their intended purpose, and that is
funding annual dredging and port-related maintenance costs.
We believe this bill is necessary because contrary to the
intentions of that fund, half of the fees generated are in fact
used to offset the deficit. Using the trust fund as intended
would give dredging contractors a sounder basis for their long-
term planning and hence the confidence to invest in new
capacity, and help support the Country's ongoing maritime
needs.
Secondly, Congress could pass the Water Resources
Development Act and include the language in H.R. 4844 which
will ensure there will be consistent and sufficient funding for
the Nation s ports and harbors on an annual basis.
Though it is likely that Ellicott Dredges will remain an
export-oriented company, it would be terrific if we could
continue at the higher level of domestic sales we now enjoy. We
would like to continue our decade-long trend of growing both
revenues and American jobs.
Thank you'very much for your time.
Mr. Oberstar. Thank you for a very splendid statement. I
will come back to that in a moment.
I want to hear next from Mr. Burkett.
Mr. Burkett. Thank you'very much, Mr. Chairman and Members
of the Committee.
On behalf of Biohabitats, an ecological restoration firm
based in Baltimore, I would like to thank you, the Committee,
two-fold: first, for the opportunity to provide our perspective
on the value to our business of the American Recovery and
Reinvestment Act; and secondly, for entrusting our firm with
the efficient and effective use of those taxpayer funds to
further the science and practice of water quality improvement
and habitat enhancement in and around our urban centers.
Specifically, Biohabitats has been entrusted with advancing
the completion in this calendar year of six projects receiving
stimulus funds totaling $3.1 million. Included in this funding,
Biohabitats is directly providing professional services
totaling $773,000. These seem like small numbers when we were
talking about billions earlier this morning, but to a small
firm like ours, these have a great impact.
On these projects, there is a direct amount coming to
Biohabitats, but there is also a balance of funds going to
survey professionals, restoration contractors for both their
labor and materials.
We have acknowledged a weakening in our private sector
business over the last 18 months, and we really want to
emphasize the fact that this stimulus work has played a vital
role for Biohabitats in bridging that gap. The work that we are
talking about represents about 10 percent of our annual
revenues, and if you translate that into jobs, that is four to
five professional staff, engineers, landscape architects, and
scientists. And then if you want to look at the flow-down from
that, probably another 10 to 15 in surveyors and contractors
and operators that are going to be working for us on these
projects.
For our clients, this funding is enabling us and them to
implement green infrastructure measures, practices that we
believe will provide a cost-effective alternative to a lot of
the gray infrastructure that is currently in place. And this is
all to address the growing challenge that we have in terms of
improving our surface waters such as our rivers, lakes and
coastal waters.
Of the six projects that we have been entrusted with, the
first three are what we call regenerative stormwater conveyance
projects. They are simply stormwater projects replacing gray
infrastructure. One is Carriage Hills. This has already been
designed, constructed and is in place for the Maryland
Department of the Environment near Annapolis. The second two
are for the District of Columbia, specifically the Department
of the Environment at Pope s Branch in Rock Creek, which are
actually going to be designed and constructed for Federal lands
within the Park Service.
The next project is the Wissahickon watershed restoration
feasibility study, working for the Philadelphia District Corps
of Engineers. That project is complete at this time. Another
project which is going to get started in the next month is Bear
Creek Stream restoration for Cuyahoga County, Ohio for their
Board of Health. And then finally, a project which will be
started up in the next two weeks is the Jean Lafitte National
Historic Park invasive tree and wetland restoration project,
certainly something that is very timely given the issues that
are going on down in that area.
The first of these three projects that I mentioned, the
regenerative stormwater conveyance, this is really kind of a
unique blend of stream and wetland restoration techniques that
are being used to restore ecologically sensitive areas that
have been impacted by uncontrolled stormwater discharges. RSC
provides not only the opportunity for safe conveyance of water,
but also the opportunity to reduce flows, which impact our
wastewater treatment plants, large estuaries and also improves
the water quality by naturally filtering that water, allowing
for biological degradation of that material in the stream and
wetland-rich soils in those complexes.
Initial analysis of the RSC projects in the mid-Atlantic
supports the fundamental contention that these projects, when
viewed from the perspective of stacked benefits, meaning
looking at your restored benefits, your restored streams,
reforestation, and water storage actually yield a multiple
return on investment four to six times, meaning for every
dollar you spend, you get four to six back in terms of natural
capital and services provided.
If you were to compare these costs in terms of installed,
they are either at or equivalent to the conveyance costs in
terms of traditional stormwater conveyance pipes. On this
basis, we believe that green infrastructure for stormwater
management yields a true net return on investment for public
dollars, when considered against the one-time capital
expenditure for a conveyance which beyond conveyance really
yields few long-term benefits.
These projects that we are talking about are going to
provide the foundation support for technical advances which
will be shared by other professionals and other public works
departments to really drive innovation in this area.
In terms of the projects in Philadelphia and out in Ohio,
the Wissahickon Creek has long been a scenic and recreational
waterway for Philadelphians, also a drinking water source.
Decades of development within the Wissahickon, like many other
areas, have taken a toll on the ecology, and several segments
of this creek are actually listed among Pennsylvania s 303(d)
listing for impaired waters.
The study that we completed prioritizes restoration within
the Wissahickon very similar to what was mentioned this morning
in terms of Cobbs Creek and Pennypack in Philadelphia, to look
at opportunities to restore areas, implement these initiatives
throughout the watershed, to improve water quality, improve
habitat condition for plant, animal and then human communities.
The stream restoration project out in Ohio is a design-
build stream restoration project for about 1,600 linear feet.
The overall objectives of the project are to improve water
quality in stream; improve aquatic and riparian habitat;
dissipate the stream energy; minimize erosion sedimentation;
protect existing infrastructure within the project site, in
this case we have both bridges and road surfaces that are
impacted; provide stormwater management; and finally to create
a land lab for the city to use with the Department of Health
with the school students, providing volunteer activities and
learning about their ecology.
And finally, our work in the National Park Service at Jean
Lafitte is really a hydrologic restoration. This project came
about from the access channel dredging associated with oil and
gas production, historically. What happened in this is you have
created these dredge dykes. It provides a fertile area for
Chinese tallow, an invasive species to come in and out-compete
all of the natives. So we are actually doing a two-fold here by
taking that dredge materials, putting it back in the canals. We
are going to re-initiate or reconnect the floodplain with the
wetland area, as well as choking out those invasive species.
But in conclusion, I would just say from our perspective,
Biohabitats and our small firm, these projects have been made
possible by the stimulus funding and that jobs were sustained
for a small professional services firm which is hoping to
advance the science of ecological engineering.
This fact is recognized by our firm and by our public
sector clients who have been working hard to advance the
transition from gray infrastructure fixes to green
infrastructure solutions. These projects will no doubt have a
ripple effect for each of our clients and their communities,
and they will be felt for many years to come.
I thank you for the opportunity to address the Committee.
Mr. Oberstar. Thank you for a very enlightening and
uplifting presentation.
Mr. Welch?
Mr. Welch. Thank you. On behalf of the U.S. Green Building
Council and their more than 17,000 organizational members and
nearly 80 local chapters, I would like to thank Chairman
Oberstar and Ranking Member Mica for the opportunity to testify
today.
My name is Kevin Welch. I am a Senior Project Manager with
PCL Construction Services in Denver, and if I might add, a
former resident of Grand Marais.
PCL is a proud member of the U.S. Green Building Council
and delivers sustainable construction solutions by using
methods and materials that minimize harmful effects to the
people and the environment. And as a result, they reduce the
building operating and maintenance costs.
The utilization of sustainable construction by building
owners such as the GSA results in a safer, more efficient end
product and ultimately a higher return on investment for
taxpayers.
PCL has had a longstanding partnership with the GSA and the
U.S. Green Building Council and we are proud to be here today
to talk about our work as part of the Recovery Act.
As previously mentioned, the Recovery Act provided the GSA
with $5.5 billion for facility upgrades and new construction
using high-performing green standards. On behalf of the U.S.
Green Building Council, I would like to commend the Committee
and the Administration for your leadership in including these
provisions in the legislation.
I know first-hand that these programs are putting Americans
back to work, and they also send a clear signal that building
green is a key element in reducing the Federal Government s
environmental and operating footprint.
Today, I want to talk about PCL s contribution to this
effort with our work at the Denver Federal Center. In early
2007, the GSA awarded a contract to PCL to provide pre-
construction services during the design phase of the Denver
Federal Center s utility infrastructure replacement program,
with options for construction and construction management
services following the completion of the design.
The infrastructure at the DFC campus had been installed
nearly 70 years prior and was failing with increasing
frequency. Due to funding constraints reported by the GSA, the
construction for the project was postponed in late 2008. As a
result of the Recovery Act, in February 2009 the Denver Federal
Center received approximately $45 million to significantly
improve the aged infrastructure and to increase the overall
readiness, reliability and sustainability of what is reported
to be the largest Federal complex in the Western United States.
Due to ARRA funding, the GSA was able to quickly retrieve
the design and the project team was able to hit the ground
running. As such, the Denver Federal Center utility
infrastructure replacement project was the embodiment of a
shovel-ready project.
After confirming its budget and schedule, the GSA
authorized PCL to proceed with construction in May of 2009.
Examples of some of the new services include complete
replacement of the domestic and fire water service system with
a single more efficient service; a new 500,000 gallon water
storage tank; and a new pump house with a solar array on the
roof.
The project also includes new and rehabilitated sanitary
sewer services, new and upgraded electrical distribution lines,
paving, flood drainage, and stormwater collection improvements.
In total, approximately 21 miles of new utility services
will be put into place. All told, these improvements, which are
already 40 percent complete, will significantly reduce the
campus water consumption and stormwater runoff, while expanding
the GSA s vision for a more sustainable campus for nearly 6,700
employees who work there.
The project is making the Denver Federal Center a more
efficient place, but also it is putting people back to work.
Over 98 new and retained jobs have been created, including 17
onsite PCL staff members with nearly 51,000 man hours reported
between PCL and our subcontractors in the first quarter of
2010.
With the project scheduled for completion in 2012, it is
estimated that this project will continue to provide new and
retained jobs at this level for approximately the next two
years.
The jobs created and retained as a result of the project
will necessarily help to stimulate and grow our local economy
and the direct benefits of these jobs on the employees of PCL
and our subcontractors who have the opportunity to construct
this critical project are self-evident in this challenging
economy.
I want to thank the Committee for the opportunity to
discuss our contribution to the Denver Federal Center, and look
forward to answering any questions that you have.
Thank you.
Mr. Oberstar. And thank you, Mr. Welch, also for a very
illuminating presentation.
Perhaps, Mr. Rainville, you will be able to go back to your
family, to your students and tell them while you had a bad
experience, there are others who had very uplifting experiences
and beneficial ones, and that because of your presentation
here, we are going to be able to correct the situation. As we
call it, correcting the record here, quaintly, in the House.
Mr. Bowe, you touch very deep strings in my heart when you
talk about dredging inland waterways, the works of the Corps of
Engineers. For seven years, it used to be an annual bill of the
works of the Corps of Engineers. It then became two years, the
Water Resources Development Act. For seven years, it didn't
pass the Senate. In two Congresses, it passed the House, but
didn't pass the Senate. In one Congress, it only got out of our
Committee, but didn't make it to the Floor because it was clear
the Senate wasn't going to act on it.
Then at the beginning of the 110th Congress, I became
Chairman and Mr. Mica and I got together and said we were going
to fix that. We were going to make sure that these things work,
that the legislative process moves ahead. And we took all the
920 projects that had been reviewed by the Corps and approved
by the Committee, that had passed the House at least once, and
re-packaged them all together with new standards requiring
Members to sign a statement that they had no personal or family
financial interest; that there was a local sponsor who requests
the project; that it is within the scope of responsibility of
the Corps of Engineers.
And we weeded out those that didn't meet that standard, and
we brought the bill to Committee; moved it on voice vote from
Committee; and through the House expeditiously with 370-some
votes; passed the Senate. We had a 45-minute conference with
the Senate and sent the bill over to the White House where,
unfortunately, President Bush vetoed the bill. The veto was
overridden.
We had another 378 votes or so margin, so overwhelmingly
bipartisan, and showed that the Members of Congress have a keen
interest in the dredging that is necessary for our ports, our
harbors, with five locks on the Mississippi River that don't
meet the 1,200 foot standard for one each on the Ohio-Illinois
River systems; for restoring the wetlands in the Gulf of Mexico
and eastern Texas, Louisiana, Mississippi, up into Alabama;
restoring the wetlands of the Everglades in Florida.
All those are long overdue, urgent, necessary needs, and we
set them in motion. It would take on the average of $4 billion
a year to $6 billion a year investment in the Corps to
accomplish those works, and the budget fell short. But the
stimulus provided that $4.5 billion incentive to move these
projects ahead.
What I liked about your presentation is your reference to
all the secondary effect of these projects. I have said all
along it is not just the highway pavement contract, just the
bridge builder. It is the Ready Mix plant, the asphalt plant,
the rebar that goes into the concrete; the fence posts, the
fencing, the I-beams for bridges. Those all have to be provided
to this project. The sand and gravel pits, I referenced those
earlier, those were shut down, reopened. People then were
called back to work.
And in your case, you referenced companies that provide the
multiplier effect: the hulls from vendors in Wisconsin,
Michigan, Indiana; hydraulics from New Jersey; and all U.S.-
based vendors.
That is the great success story. You also referenced the
Maritime Administration grants of small shipyards. I did
summarize that work of MARAD.
What lessons do you have for us for the future? We are
getting ready to report another water resources bill. We have
on the order of 1,100 projects that the Committee staff are now
refining into final legislative language. But what
recommendations do you have for us, based on your experience
with Recovery Act?
Mr. Bowe. First, let me thank you and Mr. Mica for your
support. You two obviously get the infrastructure task before
you. In terms of what we recommended, we do recommend a new
WRDA bill, as you just mentioned, and also your support of H.R.
4844, using the Harbor Maintenance Trust Fund fees for their
intended purpose, which will make a lot of this annual give and
take go away.
I understand that Congressman Mica actually just signed on
to support that in the last day or so, so that is a welcome
Member of the group of Congressmen and Senators already behind
it.
Mr. Oberstar. I have said many times, I have never seen a
Democratic road or a Republican bridge, but if we work
together, we can build all American roads and all American
bridges. And we do that on this Committee almost uniquely in
the Congress. We march together on issues that are of
importance, of investment for all America.
And what you do in the dredging, on the Mississippi River,
Mrs. Schmidt, if I may just, then I will yield to you, but the
Mississippi River from northeast Iowa to New Orleans is an 820-
hour round trip for barge traffic. New Orleans is the world's
most important grain export facility. Grain moves in
international markets on as little as an eighth of a cent a
bushel. That 820 hours, that translates to six weeks. Why?
Because the barge tows are 1,200 feet and the locks are 600
feet except for Alton, Illinois, which is a 1,200 foot lock.
So the barge tows come up. They have to be split in half,
send 600 feet through; the next 600 feet through; then lash
them together and go all the way down.
Now, if you look at a map of South America and you see that
point of Brazil that sticks out in the South Atlantic Ocean. At
that point is the port of Recife. It is an export facility for
Brazil. Just below that is the port of Santos, which is a grain
export facility, agricultural export facility. They ship
soybeans and processed sugar and other agriculture commodities
to the same West and East African and Pacific Rim ports that
our farmers ship to, except they have a 2,500 mile advantage.
They are that much closer to those ports than the port of New
Orleans.
So they have a built-in four-or five-day shipping advantage
added onto our three-week disadvantage of moving goods down the
Mississippi River.
Now, that is an investment in America's productivity. It is
not just for the barge operators. We benefit for the dredging
contractors. We benefit for all those who will build the works
to expand the locks. But it benefits America's farmers and it
benefits the heartland of America. It benefits the small towns
of America. We have to make those investments and we got a
start on it, but we need to do more. And there is more yet to
come.
So I will withhold at this point.
Mrs. Schmidt?
Mrs. Schmidt. Thank you, and I am just going to be brief.
It is my understanding that you are going to be sending a
letter on behalf of Mr. Rainville regarding his issue.
Mr. Oberstar. Correct, to the Secretary of Homeland
Security.
Mrs. Schmidt. I applaud you so much for that. Thank you so
much.
And just what I briefly looked over in the testimony
presented, the stimulus dollars for the most part for projects
that were in this Committee are working. And to that extent, I
am glad and I only wish you, and I know you do too, that we
could get a highway bill so that we could extend this
investment in America's future.
Mrs. Schmidt, if it were left up to you and me, it would be
done.
Mrs. Schmidt. Bingo.
Mr. Oberstar. Because I know where you stand.
Mrs. Schmidt. Exactly. I am going to turn it back over,
sir. Thank you.
Mr. Oberstar. Thank you'very much for your support for the
work of the Committee and for being here today.
Mr. Burkett, these projects that you referenced, which I
think are fascinating, the regenerative stormwater conveyance.
This is sort of the new look in stormwater and in non-
wastewater treatment, isn't it?
Mr. Burkett. We would like it to be the new look.
Mr. Oberstar. Well, it is. It is a movement that is
catching on all across the Country. We have a provision in the
bill that Representative Schmidt just reference, our
authorization of the future of surface transportation that will
apply these principles to the highway program, and use
regenerative stormwater. There is a huge amount of runoff from
our Interstate highway system, our local highways and roads
that carries all the oils and gasoline drippings and the rest
of the waste on the highway system into ditches that go into
creeks that go into rivers, and into estuaries eventually.
We want to stop that. And we have provisions in our bill
that will provide encouragement to State DOTs to do better
planning for regenerative stormwater conveyance. What lessons
have you to share with us for that experience?
Mr. Burkett. I think probably the largest lesson to learn
is the further we can move up into the watersheds to make these
things happen, the better off we will all be. In terms of just
trying to great the Chesapeake Bay or any of these larger
estuaries, at the point or at the end pipe is not the solution.
We need to work further up into the watersheds. We need to
recognize that as our population centers grow, so does the
amount of impervious area, which contributes to stormwater.
So we need to look at ways to manage that. It has impacts
from the State highway system to the wastewater treatment
systems, as they handle combined sewer overflows, the more we
can infiltrate that water near the source.
Projects like Mr. Welch was talking about, where you are
looking outside the building envelope at not large centralized
stormwater facilities, but facilities that infiltrate and push
people towards these what have been called non-conventional
techniques, to consider these as conventional techniques as we
move forward.
There is a lot of very interested parties out there, a lot
of progressive public works departments that have put their
necks out there and are doing some really great things in terms
of what I would call the research and development of the next
stage of stormwater management.
Mr. Oberstar. Your testimony also references not only the
professional staff, engineers, landscape architects, scientists
in your firm, but those beyond the firm who have also
benefitted, equipment operators, laborers. How far out is the
reach of the stimulated jobs?
Mr. Burkett. The reach for each one of these projects where
we are doing them on a design-build basis, you have the
equipment operators, heavy equipment operators that are out
there on the piece of equipment. You have lots of materials
whether it be sand and gravel pits, quarries where a lot of the
materials are being harvested.
The reach is far and wide. Surveyors from the architecture
and engineering industry, that is one industry that has been
decimated over the last six to 12 to 18 months, where no
construction was happening. Surveyors were letting crews go
left and right.
So each one of these projects requires surveys. It is the
first step of the process. Every one of the projects I
mentioned has already had a surveyor out there. They have
already done one, two, three weeks for the survey work. So we
know we have crews on the ground already, even in doing that
work.
Mr. Oberstar. Those architects and engineers are the
harbingers of the future. The Associated General Contractors
have been in town this week, along with others in the
Construction Coalition. I am sure Mrs. Schmidt has been
visited, as I and other Members have. And the Associated
General Contractors say they look to the workload of the
architects and engineers as an indicator of where there
business may be going out into the future. And if they are
doing well, they know that bids will be coming on the design
work they will have completed.
You said choking out the invasive species. What specific
projects have you undertaken with your stormwater conveyance
regenerative projects?
Mr. Burkett. Well, actually if you look at the regenerative
stormwater conveyance project, any restoration project that we
do always involves an invasives management component. Anytime
you disturb soil, you disturb the seeds and oftentimes you have
to give the native plants an opportunity to out-compete the
non-native plants.
Why is that? Well, your natives are the ones that are
drought-tolerant. They are the ones that are pest-resistant.
And therefore for the future of a project in terms of its
operation and maintenance expense, you don't spend you money on
herbicides. You don't spend your money chasing after a problem
that you created during construction.
So each one of these projects always has an invasives
management and O&M piece after it for a few years to maintain
the project. In terms of the Jean Lafitte project in
particular, there is one where you are trying to reinstitute a
hydrologic regime, a wetland, a true functioning wetland where
because of the dredge that was done, it is essentially de-
watered those wetlands. This is an opportunity to essentially
rehydrate those. And once you have done that, the native plants
will have an opportunity to out-compete the non-native plants.
Mr. Oberstar. That is a wonderful, uplifting story, and we
all through the Great Lakes, Ohio is a Great Lake State, have
the invasive species not only the lamprey eel, but the European
round goby and the zebra mussels and spiny echinoderm, and a
host of those; but the purple loosestrife and others of that
nature that spread like wildfire because they have no native
plant to crowd them out and stop them from spreading.
So lessons learned from your experience are very valuable.
Mr. Burkett. We had the good fortune yesterday to actually
be in Buffalo kicking off our work as a small business set-
aside for the Corps of Engineers out of the Buffalo District
under the Great Lakes Restoration Initiative. So there are some
real and tangible evidence in the coming months to push back
against the invasives, to restore our ecology of the Great
Lakes.
Mr. Oberstar. There is a final question I have about the
small business setaside, which is something I insisted on that
we assure that small businesses have a fair opportunity to
compete. Did you find any difficulty in working with the Corps
of Engineers on your small business set-aside status?
Mr. Burkett. No, that was the kickoff for a new award that
we just had. Was the process competitive among the small
business setasides? Yes, it was very competitive. And so there
were a lot of small businesses available to pursue that work.
Had we gone ahead and had to compete against the largest of
the large firms, we would have had a difficult time getting a
toehold to get in there to work with the Corps. We also are
working with the Philadelphia District with a small business
setaside, and I would hope from their perspective, they have
been very happy with the work that we have done for them.
And our firm, by its very nature, we try to push our
clients to be innovative, to push ourselves beyond what we see
right in front of us to what is ahead of us.
Mr. Oberstar. As a dairy farmer, Mr. Rainville knows very
well how vitally important water is for agriculture. And all
the water there ever was, ever will be, is with us today. We
are not making any new water. And it is our responsibility to
husband it carefully. Every day over the continental United
States, we receive 1.2 trillion gallons of moisture. Only about
60 billion of it comes down in moisture. In the end, after
runoff and impervious pavements that contribute to the
increased runoff, it is only about 60 billion gallons available
for surface water every day. That is all you are going to have
to work with and manage, filter through or run off into the
lakes and rivers. Protecting those resources in the way that
you are doing with regenerative stormwater conveyances is
vitally important for the future.
Mr. Welch, in your retrofitting of Federal facilities, have
you had to present, or have the agencies done this, a lifetime
cost analysis of installation of solar facilities?
Mr. Welch. I believe that they have done an analysis. The
GSA has done an analysis for that, or their designers, for our
project. The solar panel that was installed on the pump house
was one to determine the payback of solar panels. It is about
100 square feet, so it is a very small pilot program.
Mr. Oberstar. Earlier in the hearing, Mr. Schauer from
Michigan referenced the solar issue and expressed his concern
that a good deal of the production capability for solar panels,
though invented here, produced initially in America, has
increasingly gone offshore. Have you found difficulty in
complying with the Buy America provisions of the Recovery Act?
Mr. Welch. There is a considerable amount of due diligence
that has to go in place to ensure that solar panels are in fact
compliant with the Buy America Act, and that due diligence has
been put into place on this project, and they have done a great
deal of research and commitment to make sure that it is in
compliance down to the fasteners themselves.
Mr. Oberstar. You have a splendid story about the Denver
Federal Center. I would just observe my first term in Congress,
1975 and 1976, there was a hearing in this Committee room by
the Chair of the Subcommittee on Public Buildings, as it was
called then, and now it has a much longer name, Economic
Development and so on, by the General Services Administration
and the Sheet Metal Workers Union on a study that they had
commissioned of the benefits of retrofitting Federal civilian
office space.
The two-volume study showed that you could generate 135,000
sheet metal worker jobs alone, not including the electrical
workers and carpenters and others who would also be required
for solar panel installation. And that an investment of $175
million a year by the Federal Government to buy from the
private sector the equipment needed to retrofit Federal
civilian office space would bring down over a five-year period
the cost of electricity from solar panels from $1.75 a kilowatt
hour to something in the range of 15 cents a kilowatt hour,
comparable to the seven cents kilowatt hour from the investor-
owned utilities.
I thought that was a splendid way to save energy, to reduce
the cost of electricity to the Federal Government spends. So I
introduced the bill to do exactly these things over a three-
year period, $175 million a year. Jimmy Carter signed the bill
into law. My colleague over in the Senate, Hubert Humphrey at
the time, moved it through that body. And he put the money in
his budget, then he lost the election and President Reagan just
zeroed out the funding for all alternative energy programs.
But then time passes and I became Chairman of the Committee
in 2007. So this is going to be the first thing we are going to
do. We have jurisdiction over 367 million square feet of
Federal civilian office space. The electricity bill is $500
million a year. If we cut that even 10 percent, that is a
savings to the taxpayer. If we cut it even more, that reduces
the amount of coal we have to burn to produce electricity. We
can run all the lights in this room, all the lights in this
whole building with solar panels on the Rayburn Building, and
we are moving in that direction to do that.
And so I directed the Committee staff to go back and dig up
my bill that I had introduced years ago that was signed into
law, and they found it. And they found my testimony before the
Committee still in Committee files. So I said, all right, we
are going to do this with the Department of Energy. We reported
the bill, take funds out of the Public Building Fund, and
retrofit the Department of Energy headquarters. So every day
since September of 2007, the Department of Energy roof is
generating 2.5 megawatts of electricity.
Now, we can do that and apply to buildings all over
America, and you have started to do at the Denver Federal
Courthouse. Then we will make a significant contribution. And
maybe it will cost a little bit more at the outset, but in the
long run, our children will be there to thank us for doing our
part to save the environment and not burn as much carbon, put
that carbon in the air that stays there for 100,000 years.
Mr. Welch. I would agree.
Mr. Oberstar. Mrs. Schmidt, do you have any comments?
Mrs. Schmidt. I have a question for the panel.
Mr. Burkett, a couple of just small questions.
Mr. Burkett. Sure.
Mrs. Schmidt. I know that with the whole Recovery Act, you
have to do some paperwork. You have to have an accountability
to the EPA and perhaps other agencies as well, including job
reporting verification, et cetera.
My question is two-fold. I know sometimes when you get a
whole bunch of paper, it seems to be overwhelming and you don't
know what to do with it. Were you given any guidance on how
they wanted these forms to be filled out? Did you feel that you
were overburdened with them or that they were just necessary
and OK on their own? Just a little feedback on the personal
experience.
Mr. Burkett. I would say that now that we have six
projects, the first of which came through the Maryland
Department of the Environment, they were challenged at that
point to even understand what their own reporting requirements
were.
As we have moved through this process, three, six, nine
months now, everybody has refined their processes. The Corps of
Engineers, the first time we all went, we kind of felt like we
all went through the process together. The second time, they
provided some refinements. The third time, we actually worked
back and forth. And so now we are at a point where it actually
is fairly smooth.
DC government for those two projects, they have an online
system that they have set up. They have their own reporting
requirements as well. So we are reporting not only what is
required under the stimulus funding, but we are also requiring
things that the District of Columbia wants in terms of the
accountability for their projects.
When you have agencies such as Cuyahoga County Board of
Health, I think this is somewhat daunting for them. This is one
or maybe a handful of projects for them. And what they are
actually doing is looking to us, having been through the
process now, to help them to understand what the reporting
requirements are.
There also is the other level below us in terms of our sub-
consultants and having to do a little training of our sub-
consultants. For the District of Columbia, they want them to
report their information directly. Others are asking that that
information be rolled up through us and reported in our
reporting, either on a monthly or on a quarterly basis.
So it is really improving. The larger the entity, the more
sophisticated they are. The smaller the entity, they are a
little bit in awe at first, but they know that this is a worthy
project. They want to go through with it. They are willing to
put up with it as well. So that is the qualitative answer to
the question.
Mrs. Schmidt. To follow up, how could we make it better for
you in reporting? Would videos explaining what different
agencies want help? And do we provide that now? And if not,
maybe we could?
Mr. Burkett. On this side, it seems like a lot of that,
there have been some basic tenets handed out to each one of the
agencies that are distributing these funds. And so they have
kind of been left to their own devices as to how to do this. I
am sure that you probably could go out there and find some best
practices, some entities that are doing it very cleanly,
easily, and try to create a training process for others or
maybe even the information packet for them, to say here is how
you can set up your own system. That might create a little more
uniformity.
With the Corps of Engineers, they are a very process-driven
organization and so when we filled out the information, they
would have little drop-downs. Those drop-downs would have 100
selections. And so what we were doing is going back to the
project managers at the Corps and saying: What do you want us
to fill out right here?
And so the iterations of that process, now the drop-downs
are 30 instead of 100, and we know where we are supposed to
populate that information.
So I am sure that as we get through this process, there are
certainly some best practices that you are seeing in terms of
the reporting that could be filtered out to others, because I
know they would welcome the information.
Mrs. Schmidt. Thank you.
Does anybody else on the panel want to add anything to
that?
Mr. Bowe. It is Peter Bowe here. I heard some comments
about Buy America. I would like the Committee and Congress to
reflect on the issue that the President is promoting something
called the National Export Initiative. He has introduced
legislation, or actually he is committed to a process to double
the exports from the U.S. in the next five years and create 2
million jobs.
Now, the essence of exporting is you have to have two sides
to a transaction, a buyer and a seller, and hopefully we are
talking about American sellers. And I hope that the Committee
exercises caution with respect to how other parties outside the
U.S. have read Buy America.
I might add, our company is selling infrastructure
equipment. We sell to Canadian governmental entities in
competition with Canadian suppliers. We have had great success
doing that. And we do hear from our customers overseas. We do
more business overseas than we do in the States. People ask us:
Are you keeping us out?
I don't control that, naturally, but we do very much want a
two-way street with all of the partners that are willing to
deal with us fairly. And certainly the Canadians and Mexicans
are part of NAFTA, so I don't understand all the implications
of Buy America because we are an exporter, but we do hear
feedback from our partners overseas.
Thank you.
Mr. Oberstar. Thank you'very much for that question, and
for your thoughtful response. I think that is important for us
to keep in mind, particularly with Canada, where we have so
much of a common market. From my District, we export iron ore
to the former Stelco, Steel Company of Canada in Hamilton,
Ontario. Now, that plant has been acquired by U.S. Steel. So
Minnesota ore goes to Canada to make steel in Canada for a
company owned by a U.S. steelmaker. And when the product they
produce then comes to the border, is that Canadian or is it
American?
The workers in the iron ore mine in Minnesota are organized
by the United Steelworkers Union. Those at the plant in
Hamilton, Ontario are organized by the Canadian branch of the
United Steelworkers Union. So is this a foreign product or is
it a domestic product?
We have so much exchange. Where there are no unfair
practices, where there is no government subsidy of the cost of
production as the Japanese are so wont to do with the Bank of
Japan totally subsidizing products, giving export incentives
and eventually discounting the costs so that it is practically
nothing to the Japanese steel producer. That is not fair. We
should not play in that market by Marquis of Queensberry rules
when the rest of them are using black belt karate on us. But
where the field is fair, the market ought to be open.
But there was a great feeling, as Mrs. Schmidt will
remember, when the stimulus bill came to the House floor, these
are U.S. taxpayer dollars. The purpose is to create jobs for
Americans. We want to be sure that American jobs are funded by
these projects.
And there were some problems early on with the State
Revolving Loan Fund, SRF, of the EPA. There are some pumps that
simply weren't built in America, but only built in Canada. And
eventually, there are provisions under the Act, under the basic
underlying law, not just the Stimulus Act, that allow for
exceptions and for acquisition from foreign sources of products
not readily available or not produced at home.
There is another situation where to meet the standard of
treatment of wastewater, ultraviolet application was required.
Municipal wastewater treatment facilities said, well, that
doesn't exist in America. We don't have anything here, so how
can we comply? And EPA didn't know what to do. I said stand
firm. Something will happen.
And a company in Minnesota that makes ultraviolet treatment
for air intake said we can adapt our equipment to wastewater.
They did and that resulted in a company now with 120 jobs,
producing equipment for ultraviolet treatment of wastewater
works.
It is a complicated issue. It is one that we have to
address, think about, and you raised a very thoughtful
question. It is a two-way street and we will continue working
on this issue and learning the lessons from this experience.
You have all been wonderful, instructive, informative
witnesses, and I am grateful for your participation today, and
thank you'very much for your patience throughout this day with
that long recess that we had.
But as you think further on your testimony today and on the
experience, give us your further thoughts. We greatly welcome
your contribution.
Mrs. Schmidt?
Mrs. Schmidt. Thank you.
Mr. Oberstar. No further comments.
With an acknowledgment of our marathoner, by the way, she
is lean and trim because she runs marathons.
Mrs. Schmidt. But I haven't done Vermont yet. I need to.
[Laughter.]
Mr. Oberstar. OK.
Thank you'very much.
The Committee is adjourned.
[Whereupon, at 3:01 p.m., the Committee was adjourned.]
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