[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
BORDER STATION CONSTRUCTION: MINIMIZING COSTS AND LEVERAGING PRIVATE
DOLLARS
=======================================================================
(114-42)
HEARING
BEFORE THE
SUBCOMMITTEE ON
ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
MAY 18, 2016
__________
Printed for the use of the
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee, ELEANOR HOLMES NORTON, District of
Vice Chair Columbia
JOHN L. MICA, Florida JERROLD NADLER, New York
FRANK A. LoBIONDO, New Jersey CORRINE BROWN, Florida
SAM GRAVES, Missouri EDDIE BERNICE JOHNSON, Texas
CANDICE S. MILLER, Michigan ELIJAH E. CUMMINGS, Maryland
DUNCAN HUNTER, California RICK LARSEN, Washington
ERIC A. ``RICK'' CRAWFORD, Arkansas MICHAEL E. CAPUANO, Massachusetts
LOU BARLETTA, Pennsylvania GRACE F. NAPOLITANO, California
BLAKE FARENTHOLD, Texas DANIEL LIPINSKI, Illinois
BOB GIBBS, Ohio STEVE COHEN, Tennessee
RICHARD L. HANNA, New York ALBIO SIRES, New Jersey
DANIEL WEBSTER, Florida DONNA F. EDWARDS, Maryland
JEFF DENHAM, California JOHN GARAMENDI, California
REID J. RIBBLE, Wisconsin ANDRE CARSON, Indiana
THOMAS MASSIE, Kentucky JANICE HAHN, California
MARK MEADOWS, North Carolina RICHARD M. NOLAN, Minnesota
SCOTT PERRY, Pennsylvania ANN KIRKPATRICK, Arizona
RODNEY DAVIS, Illinois DINA TITUS, Nevada
MARK SANFORD, South Carolina SEAN PATRICK MALONEY, New York
ROB WOODALL, Georgia ELIZABETH H. ESTY, Connecticut
TODD ROKITA, Indiana LOIS FRANKEL, Florida
JOHN KATKO, New York CHERI BUSTOS, Illinois
BRIAN BABIN, Texas JARED HUFFMAN, California
CRESENT HARDY, Nevada JULIA BROWNLEY, California
RYAN A. COSTELLO, Pennsylvania
GARRET GRAVES, Louisiana
MIMI WALTERS, California
BARBARA COMSTOCK, Virginia
CARLOS CURBELO, Florida
DAVID ROUZER, North Carolina
LEE M. ZELDIN, New York
MIKE BOST, Illinois
------
Subcommittee on Economic Development, Public Buildings, and Emergency
Management
LOU BARLETTA, Pennsylvania, Chairman
ERIC A. ``RICK'' CRAWFORD, Arkansas ANDRE CARSON, Indiana
THOMAS MASSIE, Kentucky ELEANOR HOLMES NORTON, District of
MARK MEADOWS, North Carolina Columbia
SCOTT PERRY, Pennsylvania ALBIO SIRES, New Jersey
RYAN A. COSTELLO, Pennsylvania DONNA F. EDWARDS, Maryland
BARBARA COMSTOCK, Virginia DINA TITUS, Nevada
CARLOS CURBELO, Florida PETER A. DeFAZIO, Oregon (Ex
DAVID ROUZER, North Carolina Officio)
BILL SHUSTER, Pennsylvania (Ex VACANCY
Officio)
CONTENTS
Page
Summary of Subject Matter........................................ iv
TESTIMONY
Panel 1
Michael Gelber, Deputy Commissioner, Public Buildings Service,
U.S. General Services Administration........................... 3
Eugene Schied, Assistant Commissioner, Office of Administration,
U.S. Customs and Border Protection, U.S. Department of Homeland
Security....................................................... 3
Panel 2
Gary Gallegos, Executive Director, San Diego Association of
Governments, and Board Member, Coalition for America's Gateways
and Trade Corridors............................................ 10
Sam F. Vale, Chair, Public Policy Committee, Border Trade
Alliance....................................................... 10
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Michael Gelber................................................... 19
Eugene Schied.................................................... 23
Gary Gallegos.................................................... 28
Sam F. Vale...................................................... 35
SUBMISSIONS FOR THE RECORD
Gary Gallegos, Executive Director, San Diego Association of
Governments, and Board Member, Coalition for America's Gateways
and Trade Corridors, supplementary information for the record.. 41
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
BORDER STATION CONSTRUCTION: MINIMIZING COSTS AND LEVERAGING PRIVATE
DOLLARS
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WEDNESDAY, MAY 18, 2016
House of Representatives,
Subcommittee on Economic Development,
Public Buildings, and Emergency Management,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:02 a.m. in
room 2253, Rayburn House Office Building, Hon. Lou Barletta
(Chairman of the subcommittee) presiding.
Mr. Barletta. The committee will come to order. Good
morning.
Border security is a fundamental responsibility of the
Federal Government because we must protect both our national
security and the American worker. This makes border stations
critical to our Nation's security and our economy.The purpose
of today's hearing is to review major capital projects at our
Nation's border stations and examine how we can use non-Federal
and private dollars that are sitting on the sidelines to
jumpstart projects to help meet these infrastructure needs.
It is important that the men and women who guard our border
have the resources that they need to better enforce our
existing immigration and trade laws.
There are 167 land ports of entry, also known as border
stations, that, according to GSA, see roughly $2 billion in
trade crossings; 350,000 vehicles; 135,000 pedestrians, and
30,000 trucks daily. These land ports of entry are important to
our national security, as they serve as a line of defense
against those who would enter this country illegally and with
the intent of attacking our homeland.
However, the cost of maintaining and modernizing our land
ports of entry is not cheap. Projects recently completed or
underway in recent years have totaled $1.5 billion. And these
costs don't include equipping and staffing these border
stations. That is why I worked to help craft language enacted
in the fiscal year 2014 appropriations bill to establish a
pilot program for public-private partnerships.
This pilot program allows for non-Federal donations of real
property and equipment at owned border stations to help reduce
costs to the taxpayer. More recently, language further refining
this program was included as part of H.R. 3586, the Border and
Maritime Coordination Improvement Act.
The intent of this pilot program is not to replace the
Federal responsibility of constructing and maintaining these
critical facilities. To be clear, making sure that we have the
infrastructure and tools in place to enforce immigration and
trade laws is a Federal responsibility. Rather, the intent is
to provide additional tools to GSA and CBP to work with State,
local, and private sector partners to help temporarily address
the funding gaps.
Potential donations under the pilot should not be used to
replace our Federal responsibility or to circumvent our process
of appropriately identifying priorities and needs. Donations,
whether they be of real property or equipment, are not free.
Generally, acquisition costs are only a portion of the total
cost of an asset.
Each project considered under the pilot program should be
limited in scope and be carefully reviewed to ensure it fits
with our national priorities and that the costs associated with
ongoing maintenance and upkeep are assessed to protect the
taxpayer from picking up an unexpected bill down the road.
While CBP owns 42 percent of the owned stations, GSA owns
and manages all of the largest and most heavily used border
stations. The size and complexity of these facilities vary
widely and include facilities with traffic as little as two
vehicles a day and 3,000-square-foot buildings, to large
complexes that see thousands of vehicles and house a multitude
of Federal agencies, including CBP, ICE, Agriculture, CDC, and
the FDA.
Unfortunately, many of these border stations have not kept
up with new technologies, threats, and traffic. We must ensure
that we can effectively screen people and goods to protect our
Nation's security and commerce, but at the same time facilitate
the movement of legitimate traffic and goods. This is a tough
balance, and the facilities and related infrastructure managed
by GSA and CBP are critical to this mission.
Without proper facilities, new technologies like biometric
entry and exit systems that better screen people and vehicles
cannot be effectively deployed. Without space for all the key
agencies to operate, commerce may be slowed, hurting American
businesses and killing job opportunities.
Today, I am pleased to have GSA and CBP, as well as private
and local representatives here with us today. We want to know
the status of projects that we have authorized, what are the
future needs and priorities, and how public-private
partnerships could be effectively used to help temporarily fill
any gaps. I hope we can get answers to these and other
questions today. I look forward to hearing from our witnesses
today, and I want to thank you.
And I now call on the ranking member of the subcommittee,
Mr. Carson, for his opening statement.
Mr. Carson. Thank you, Chairman Barletta. Good morning,
everyone.
The GSA serves an important role as the property and
construction manager for the Federal Government. Today(s
hearing rightly chooses to focus on how GSA can continue to
effectively manage the land ports of entry construction
program.
GSA owns and manages all of the largest land ports of entry
along the southern border. Daily nearly $2 billion in trade
crosses through the border crossings, along with 355,000
vehicles; the 135,000 pedestrians; and 30,000 trucks. Today we
hope to learn how GSA is improving the infrastructure at land
ports of entry, and how they can facilitate more efficient and
secure crossings between the United States and its trading
partners along the southern and northern borders.
I would like to thank Deputy Commissioner Michael Gelber of
GSA for joining us today to outline the agency's role in
maintaining and constructing land ports of entry. The
Department of Homeland Security often has the largest Federal
agency presence at land ports of entry and border stations, so
I am pleased that they will be joining us, as well.
I am also pleased that we have two organizations
representing private sector organizations for coming in today
and giving us their perspective on working with GSA and DHS. I
also look forward to hearing their insights on how DHS is
implementing the pilot public-private donation program that is
meant to speed the development of land ports of entry. Thank
you for coming.
I yield back, Mr. Chairman.
Mr. Barletta. Thank you. On our first panel today we have
Mr. Michael Gelber, Deputy Commissioner, Public Buildings
Service of General Services Administration; and Mr. Eugene
Schied, Assistant Commissioner, Office of Administration,
United States Customs and Border Protection.
I ask unanimous consent that our witnesses' full statements
be included in the record.
[No response.]
Mr. Barletta. Without objection, so ordered.
Each of you is now recognized for 5 minutes. Mr. Gelber,
you may proceed.
TESTIMONY OF MICHAEL GELBER, DEPUTY COMMISSIONER, PUBLIC
BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION; AND
EUGENE SCHIED, ASSISTANT COMMISSIONER, OFFICE OF
ADMINISTRATION, U.S. CUSTOMS AND BORDER PROTECTION, U.S.
DEPARTMENT OF HOMELAND SECURITY
Mr. Gelber. Good morning, Chairman Barletta, Ranking Member
Carson. My name is Michael Gelber, and I am the Deputy
Commissioner of the U.S. General Services Administration's
Public Building Service. Thank you for inviting me to this
hearing on land ports of entry construction.
GSA's mission is to deliver the best value in real estate,
acquisition, and technology services to the Government and the
American people. As part of this mission, GSA maintains a close
partnership with the Department of Homeland Security Customs
and Border Protection to meet that agency's space needs along
our Nation's borders.
CBP is our primary partner among the Federal inspection
agencies stationed along America's land borders. GSA works
closely with CBP to design, construct, maintain, and operate
land ports of entry along more than 1,900 miles of border
between the United States and Mexico, and more than 5,500 miles
of border between the United States and Canada. Of the 167 land
ports of entry along America's borders, GSA manages 124, of
which the Government owns or partially owns 102. GSA's land
ports of entry encompass more than 5.5 million square feet of
space.
CBP operates 40 primarily smaller ports, mostly in remote
areas. These land ports of entry encompass approximately
477,000 square feet of space. Minimizing costs to deliver these
critical land ports of entry begins with effective targeting of
resources at the highest priority projects. GSA looks to CBP to
develop its priority list first. Then GSA, while still working
closely with CBP, integrates these CBP priorities into GSA's
larger, multiyear capital investment plan.
Over the past 16 years, GSA has invested more than $1.8
billion from the Federal buildings fund to deliver more than 20
new land ports along our northern and southern borders. Since
2013 GSA has requested over $1 billion in support of land port
modernization, including GSA's fiscal year 2017 request of $248
million to reconfigure and expand the land port of entry in
Calexico, California, and $5.7 million for design and
construction of a new animal inspection facility in Pembina,
North Dakota.
Of these requests, Congress has provided approximately $700
million through fiscal year 2016. Successful execution of these
land port of entry projects improves trade and commerce,
creates jobs, and bolsters our Nation's security. GSA's ability
to fund land ports of entry has historically been supported by
appropriations provided by Congress. Without the full funding
requested in the President's annual budget, GSA cannot execute
the land port upgrades that are critically needed.
In recent years GSA has seen greater interest in finding
alternatives to Federal appropriations to support the delivery
of high-priority land port projects, including by accepting
donations through GSA and CBP existing authorities.
When assessing the viability of any project, whether it is
funded through the traditional appropriations process or
alternative means, GSA and CBP look at the full life cycle cost
of a port. This analysis includes the funding amount and source
of that funding to operate and maintain the facility.
If an alternative funding source might be available to
construct a land port of entry, GSA and CBP still may need to
obtain funding to address the other costs associated with the
project. Thus, acceptance of what appears to be a cost-free
donation could ultimately result in additional costs to the
Government. At the same time, if the investment is required to
address critical commerce and security requirements at the
border, a donation would result in lower cost to the Government
than if the Government had to make the full investment itself.
When evaluating donations, GSA and CBP will continue to
weigh these various cost implications, relative to the
opportunity to impact on CBP operations, border security, trade
and travel, and local and regional economic benefits.
GSA has a longstanding authority to accept unconditional
gifts of real and personal property from other public or
private entities. GSA has used its authority on occasions when
State or local governments and, in a few cases, private-sector
entities have elected to donate land or other real property to
GSA. Congress has supported efforts to find land port of entry
funding alternatives by providing CBP additional statutory
authority to receive donations and reimbursement from State,
local, and private entities.
Congress expanded CBP and GSA's donation authorities
through section 559 of the Consolidated Appropriations Act of
2014. As required by section 559 donation acceptance authority,
GSA and CBP work collaboratively to establish robust evaluation
criteria, incorporating feedback from a broad range of
stakeholders.
Thank you for the opportunity to speak with you today about
GSA's ongoing partnership with CBP to cost-effectively improve
the Nation's infrastructure along America's borders.
I welcome the opportunity to discuss GSA's commitment to
strategic investment in the Nation's land ports of entry, and
am happy to answer any questions you may have.
Thank you.
Mr. Barletta. Thank you for your testimony.
Mr. Schied, you may proceed.
Mr. Schied. Good morning, Chairman Barletta, Ranking Member
Carson. Thank you for the opportunity to appear before you
today to discuss CBP's role and efforts to provide modern,
efficient, and effective land ports of entry facilities in
support of our mission to secure and facilitate trade and
travel into the United States.
Alongside the General Services Administration, CBP
facilities management and engineering directorate oversees the
repair and modernization of CBP's inspectional facilities at
our 167 land border crossings along the U.S. border with Canada
and Mexico.
Most of the land ports of entry were built prior to the
creation of the Department of Homeland Security and CBP. When
they were designed and built to support the distinct and
independent operation of pre-DHS agencies such as the U.S.
Customs Service, Animal and Plant Health Inspection Service,
and the Immigration and Naturalization Service.
Today, CBP consolidated operations incorporate state-of-
the-art technology and professional law enforcement personnel
to maintain the efficient and secure flow of cross-border trade
and travel. Operational success depends on the condition and
utility of our inspectional facilities. As distinct from the
conventional office environment, these facilities are unique
and critical to CBP's mission success.
Today I would like to discuss CBP's role in addressing
infrastructure demand and modernized inspection facilities to
meet the challenge of growing volumes of trade and travel.
Many of the Nation's land port of entries were built more
than 70 years ago. Even those constructed as recently as 15
years ago require renovation or replacement to meet present-day
security standards, enforcement and facilities technologies,
and the growing demand for additional processing capacity.
Trade between the United States and Mexico has expanded
nearly sixfold, from $100 billion in 1993 to $531 billion last
year, with similar increases in trade with Canada. During the
same period, capital investment in the land port of entry
facilities that process this trade and travel have averaged
less than $90 million a year. This historic insufficiency in
investment has led to a compounding current investment need
estimated to be about $5 billion.
A study performed by the University of California Center
for Risk and Economic Analysis of Terrorism Events, or CREATE,
showed that an investment in constructing and staffing a single
new vehicle processing lane at a port can translate to as much
as $25 million in positive economic value.
CBP uses a multistep process to prioritize land port of
entry modernization investments. In coordination with key State
and Federal and local stakeholders, we assess individual needs
at each facility. This assessment process is the underpinning
of our prioritization process. It is metrics driven, its
purpose is to identify candidate locations most in need of
improvement.
In addition to this assessment, numerous other factors come
into play. These include factors such as environmental,
cultural, and historic preservation, land acquisition
requirements, the impact on other projects in the same
geographic area, and other project risks, including the
likelihood of obtaining funds. After our assessment, we
collaborate with GSA's Public Building Service to jointly
develop a prioritized capital investment plan, and we update it
annually to ensure that the available Federal funding is
directed to the areas of greatest need.
CBP actively participates in regional border planning
efforts and works in close coordination with regional
transportation groups. We look carefully at each port's
activity and its regional context, and we work with State and
local stakeholders to determine where and what kind of
inspection facilities are needed, both now and in the future.
In addition to traditional funding streams, thanks to the
support of Congress, CBP has recently received the authority to
enter into partnerships with the private sector and local
government entities to accept donations of real and personal
property. This authority provides CBP and GSA the opportunity
to consider donations and proposals to address local port of
entry infrastructure needs that might not otherwise be
addressed. These donations are expected to reduce border wait
times, support increased flow and volume of traffic, create
jobs, and address critical needs.
Last year CBP and GSA selected three proposals for further
planning and development. This spring we expect to announce
additional selections, and we look forward to continuing to
work with our partners for the shared goal.
In closing, thank you again, Chairman Barletta and Ranking
Member Carson, for the opportunity to testify. And thank you
for the interest and support of port of entry projects. And I
am happy to answer your questions.
Mr. Barletta. Thank you for your testimony. I will now
begin the first round of questions limited to 5 minutes for
each Member. If there are any additional questions following
the first round, we will have additional rounds of questions,
as needed.
Mr. Gelber, we have authorized projects valued at nearly
$1.5 billion in recent years, with some of those projects being
for--that's 30 years before. On some of the major projects,
Calexico, San Ysidro, and Alexandria Bay, can you give us a
summary of where you are with those projects and will
additional authorizations be required?
Mr. Gelber. Yes, sir. San Ysidro was a three-phase project,
and funding has been provided for all three phases. The first
phase is nearing completion, if not--significant portions of
that phase have been completed. In an oddity of that particular
project, phase 3 then became the second phase, as we were
coordinating that project with the Mexican Government, and then
we have also received funding for phase 2. So all three phases
have been funded, and they are in various stages of
development.
Calexico is a primary--primarily--excuse me--on San Ysidro,
the notable thing about that facility, it is the busiest land
port of entry in the world. Calexico is primarily a facility
for the transmission of agricultural projects between the
United States and Mexico. The funding for those two projects--
phase 1 has been provided in the President's budget. The
request for fiscal year 2017 is to provide funding for phase 2.
Alexandria Bay funding has been provided in fiscal year 2016
for the first phase of that project, and the expectation is in
fiscal year 2018 the remaining second phase funding request
will come in for that work, as well.
Mr. Barletta. Thank you. Mr. Schied, as major expansions
and improvements come online at some of the busiest border
stations, is CBP able to keep pace, from an equipment and
staffing standpoint? And how does CBP ensure the infrastructure
we are building will actually be fully staffed and equipped?
Mr. Schied. So thank you. So CBP is--we get the timeframe
for these projects, we work within our appropriations process
to make sure that the requisite number of staff get included in
CBP's budget request. CBP's--Congress generously provided a
couple of years ago 2,000 additional officers for CBP. We have
had a certain challenge hiring those officers, but we are
making substantial progress to hiring up to the congressional
floor.
And in the future, as these major projects come on,
especially the types such as San Ysidro, we will work into our
budget request the staffing so that we can keep those lanes
open. Obviously, having the lanes open is critical to the
effective use of that facility.
Mr. Barletta. Thank you. Mr. Gelber, you highlight in your
testimony the importance of alternative resources such as
donations from non-Federal and private sources. But, as you
point out, donations are not free. How does GSA evaluate the
total cost of a real property donation to determine if it makes
sense for the taxpayer?
Mr. Gelber. We look at what the long-term costs would be to
accept a donation. So when some entity is providing us either a
facility or land, we look at what it would cost to operate and
maintain that infrastructure. We work very closely with CBP to
ensure that whatever staffing resources would be required are
also factored in to the equation.
So again, it is an evaluation of, potentially, the 10-, 20-
, 30-year costs of accepting what on the surface may be a free
thing.
Mr. Barletta. And this is for both Mr. Gelber and Mr.
Schied.
Language pending as part of the Border and Maritime
Coordination Improvement Act makes clear the donations can only
occur on a targeted, limited basis, limiting the total value of
donations to $50 million. Because there are costs of
maintaining and operating donations, P3s should not be viewed
as a replacement to the Federal responsibilities.
Can you talk about what you are doing to ensure there are
proper limitations on the use of the donations?
Mr. Gelber. I can start. Again, our primary concern is to
ensure that while the entity--the thing that has been given to
the Government is purported to be free, that the long-term
costs of operating and maintaining that thing is, in fact, a
manageable amount. And that is, it is suitable for the budget
of the facility.
There have been donation attempts where individuals or
entities have wanted to donate a property to us that we would
then have to lease, for instance, and that isn't a donation, it
is just a long-term contractual arrangement that the Government
would be entering into, and we are not interested in doing
that.
So again, the key issue for GSA is does the thing that is
being given to the Government meet the needs of the Federal
agencies that are going to use it? And, if that is the case,
what are the long-term costs of that thing? And if those costs
aren't appropriate, can't be budgeted for, then the GSA would
not recommend accepting the donation.
Mr. Schied. I think, from the CBP perspective, one of the
critical elements that we look at is the operational utility of
the potential donation. I think as you, Chairman, mentioned in
your opening statement, the long-term cost of these facilities
is going to be in operations and maintenance, and particularly
the staffing. So something that might be free, if it expands
our capacity beyond and we are having to rob Peter to pay Paul
from an operational standpoint, then we have got to be careful
about what it is that we accept.
I think, as we go through these processes, you know, from
our first round of donations, I think we saw--the ones that we
accepted were relatively modest projects. I think a common
theme of them is that they improved operational efficiency at
the ports of entry, and I think that is exactly the kind of
project or projects that we are looking for.
Mr. Barletta. Thank you. I will recognize Ranking Member
Carson.
Mr. Carson. Thank you, Chairman.
Mr. Schied, in your testimony you discuss how some land
ports of entry were built over 70 years ago, and the ports of
entry constructed as recently as 15 years ago are not able to
accommodate the growing demands of additional processing
capacity, new security requirements, or even enforcement
technologies.
Sir, have design requirements evolved in the last 15 years?
And how are they being incorporated into ports of entry that
GSA is constructing today?
Mr. Schied. Certainly. So I would venture to say that 15
years ago there was very little in terms of design standards
for the ports of entry. I think that has been one of the
successes between the relationship with CBP and DHS--or CBP and
GSA, that in the past 10 years or so we have identified
standards for ports of entry.
From CBP's perspective, that is of interest because we like
to have a certain degree of interchangeability in the
facilities. Officers will move from facility to facility, even
within a particular day. And so, having a certain
standardization is helpful for us from that standpoint.
Certainly for the projects that we own, we find that it is more
economical to be able to build off of a particular standard,
rather than essentially recreating each project from scratch.
Mr. Carson. Mr. Gelber, there has been much discussion
today about the pilot donation acceptance program. Does GSA
envision this program growing in scope? And how many donations
have actually been executed?
And also, what are the lessons learned since this pilot
commenced?
Mr. Gelber. I think the key lesson learned--if I could
answer the latter part of your question first--is the ongoing
need which we have demonstrated for GSA and CBP to closely
collaborate on reviewing these items. And we do that on a
regular basis.
For the fiscal year 2015 cycle, three donations were
accepted over--I believe eight were submitted. Many more may
have been cleared. The process is CBP reviews them first and
then GSA and CBP review those that have made the initial
screening together. Two are in the cities of Donna and Pharr,
Texas, and there the provision is for additional inspection
booths and some additional inspection lands. In El Paso, Texas,
the provision is for a--to remove a traffic--two traffic
medians that are currently obstructing traffic.
So these are relatively modest changes to the facility, but
they still need to be looked at to ensure that when that
construction occurs, it is done in a fashion that is
appropriate and doesn't create a problem for the Government in
the long term.
And so, we view the donation program as an opportunity to
assist CBP meet its mission requirements at smaller stations.
Larger infrastructure improvements are more challenging and
require greater attention by the Government and, as such,
haven't seen the large-scale donations that we have seen in the
donation program.
Mr. Carson. Thank you, gentlemen. Mr. Chairman, I yield
back.
Mr. Barletta. Thank you. The Chair recognizes Mr. Costello
for 5 minutes.
Mr. Costello. Thank you, Mr. Chairman. To both the
gentlemen, depending on the proposed infrastructure project,
the Department of State often times must also issue permits.
And the question becomes what are you doing to ensure that
proposals considered under the pilot program are in accord with
the State Department's project, and how are you coordinating
with the Department of State as it may be applicable on the
front end to ensure that there are no delays to the project as
a result of Department of State requirements somewhere along
the line.
And if you have experienced any delays along the line, do
you have any recommendations in order to--how we might be able
to get the Department of State to be a bit more accommodative,
if that question may be applicable?
Mr. Gelber. If I could start, the primary involvement of
Department of State is the issuance of what is referred to as a
Presidential permit, which authorizes the construction of a
border station, a land port of entry.
For an existing land port of entry, the State Department is
not engaged, because the facility already exists and a
Presidential permit has been provided. If there is no planned
change to the nature of the border crossing, then the
Department of State would not be engaged in the review of the
donation. So when the State Department is engaged, it tends to
be, again, for a larger project that has been subject of much
discussion over numerous years because the creation of a new
border crossing is a fairly involved process, involving two
national governments, State and local governments, as well.
So we have had--GSA's experience is a very productive
relationship with the State Department when there is a need for
the issuance of a Presidential permit, which would be when a
new station is being created.
Mr. Schied. I don't have much to add. Obviously, one of the
important--more so, I think, than coordination with the
Department of State, from an international standpoint, is with
the counterparts in the foreign government, just to make sure
that any changes to the American side of the infrastructure are
in--generally, in concert with ongoing projects on either the
Canadian or Mexican side.
Mr. Costello. Thanks. I will yield back.
Mr. Barletta. I want to thank both of you for your
testimony today. Your comments have been helpful to today's
discussion, and we will now move on to our second panel.
[Pause.]
Mr. Barletta. Thank you. On our second panel today we have
Mr. Gary Gallegos, executive director, San Diego Association of
Governments and also representing the Coalition for America's
Gateways and Trade Corridors; and Mr. Sam Vale, chair of Public
Policy Committee, Border Trade Alliance.
I ask unanimous consent that our witnesses' full statements
be included in the record.
[No response.]
Mr. Barletta. Without objection, so ordered. Each of you is
now recognized for 5 minutes.
Mr. Gallegos, you may proceed.
TESTIMONY OF GARY GALLEGOS, EXECUTIVE DIRECTOR, SAN DIEGO
ASSOCIATION OF GOVERNMENTS, AND BOARD MEMBER, COALITION FOR
AMERICA'S GATEWAYS AND TRADE CORRIDORS; AND SAM F. VALE, CHAIR,
PUBLIC POLICY COMMITTEE, BORDER TRADE ALLIANCE
Mr. Gallegos. Well, good morning and thank you, Chairman
Barletta and Ranking Member Carson, for having us here this
morning. And thank you for holding this hearing today to
discuss the growing importance of utilizing innovative funding
strategies to implement critically needed improvements along
the United States border.
Today's fiscal environment requires strategic investments
in border infrastructure that, you know, maximize limited
resources and incentivize what we would call leveraged
partnerships. I appreciate the opportunity to testify today on
the unique funding or financing approaches that we in San Diego
are exploring to help provide the need to safely and
efficiently move people across our border crossings with
Mexico.
Today I am not only representing the San Diego Association
of Governments, but also representing the Coalition for
America's Gateways and Trade Corridors. SANDAG serves as a
forum for regional decisionmaking in San Diego County that
incorporates all 18 cities and the county government along the
U.S. border, where we have a combined population of a little
over 5 million people. We are also the federally designated
MPO, or metropolitan planning organization for the San Diego
region.
And in my capacity as executive director of SANDAG, I am
proud to serve as a board member of the coalition, a diverse
coalition of more than 60 public and private organizations
dedicated to increasing Federal investment in America's
multimodal freight infrastructure. The coalition works to bring
national attention to the needs of the U.S. multimodal system
and to educate Members of Congress and the public on the need
to develop consensus for Federal investment policy that
supports intermodal connectors, trade corridors, freight
facilities, and gateway access.
I would like to ask if we could advance a couple of slides
to give the committee some perspective on the region context.
[Slide]
Mr. Gallegos. We could go to the next one, please. Click
through all of those.
[Slide]
Mr. Gallegos. What this tries to do is show that, on the
California and Mexico border today, we have seven border
crossings. Four of those are in San Diego. As was highlighted
in the earlier panel, San Ysidro is known as the busiest
international border crossing in the Western Hemisphere,
literally millions of pedestrians and vehicles cross each year.
Otay Mesa is our major commercial gateway for international
trade between California and Mexico, and it serves over 800,000
trucks annually.
Land border crossings like these are facing rising
passenger and commercial traffic levels and congestion, as a
result of increased international trade and levels of personal
travel. Border crossings are a source of our economic mobility
for our region, as well as the Nation. People and goods
traverse our vibrant binational region daily.
However, due to the current 1- to 3-hour border wait times
that occur daily, this represents lost economic opportunities
and impacts our economy in a negative way. As a result, in 2005
SANDAG launched an initiative to innovatively plan and finance
a state-of-the-art border crossing which we will refer to as
Otay Mesa East.
Can you go to the next slide?
[Slide]
Mr. Gallegos. So, recognizing limited Federal resources
available to implement new border crossings, it was determined
that a new approach to financing border infrastructure
improvements was needed. SANDAG has partnered with the
California Department of Transportation, also known as
Caltrans, in trying to develop this new border facility.
In order to facilitate this new financing approach, State
legislation was passed that authorizes SANDAG to issue bonds
for acquisition, construction, completion of transportation
facilities, and to impose tolls and user fees for the use of
the State route that would lead to the new border crossing.
Under this strategy, the region will capitalize on its
experience and strength with tolling. SANDAG has been involved
in variable tolling on Interstate 15 since 1996. We believe a
variable tolling approach will not only serve as a source for
new revenue for new border crossings, but will also serve as a
mechanism for managing demand, which we think is important.
By utilizing SANDAG's financial authorities, we will be
able to maximize public investment in the port of entry by
utilizing toll revenues and then hopefully being able to
leverage those with State, Federal, and local dollars. This
would permit us to develop a new port of entry faster than
following traditional funding processes.
Based on estimates, coupled with increased capacity and
higher levels of service, we estimate that this new port of
entry would generate a little over $4 billion over a 40-year
period. This toll revenue would allow SANDAG to underwrite
about $650 million worth in bonds that could be used to pay for
the new facility.
This vision for the 21st-century border will decrease
dependency on Federal dollars by focusing on new partnerships
that help leverage the Federal dollars, establish a
transportation demand tool that will help improve the
efficiency of our border crossings, implement a border wait
time detection system that would allow for a statewide--or a
systemwide approach, and to managing traffic congestion at the
border, something that doesn't happen today. And it would also
allow for improving roads on both sides of the border that make
our system more efficient.
We believe that this new border crossing will provide much-
needed traffic relief and serve as an economic engine for our
region and the State.
Go the next slide.
[Slide]
Mr. Gallegos. So I wanted to use this slide to illustrate
some of the progress we have made today. We have managed to
leverage about $150 million of State and local dollars with
about $286 million in Federal dollars. And what you see there
in magenta, that first section has recently been completed and
is now open to traffic. And the sections in blue and brown are
the ones we are working on, and we hope to have those at least
to sign and ready to go to construction by 2018, at the
earliest.
You can go to the last slide.
[Slide]
Mr. Gallegos. And so, let me close by saying that SANDAG,
as well as the Coalition for America's Gateways and Trade
Corridors, are delighted to have this opportunity to address
critical border issues of border station construction and look
for ways to maximize and leverage dollars.
And I also want to take this opportunity to thank the
Members of Congress for the last transportation bill. For the
first time it starts really addressing dollars for freight, and
helps us hopefully maintain the competitive edge that I think
this country has globally.
So with that, Mr. Chairman, I want to thank you, and I
would be pleased to answer any questions you may have.
Mr. Barletta. Thank you for your testimony.
Mr. Vale, you may proceed.
Mr. Vale. Chairman Barletta and Ranking Member Carson and
members of the subcommittee, my name is Sam Vale, and I am
testifying on behalf of the Border Trade Alliance. We also are
part of the South Texas Assets Consortium, which is a
participant in the 559 Program, and we do operate a small,
private port of entry. For 30 years the BTA has been providing
analysis and advocacy for a U.S.--Canada and U.S.-Mexico border
issues.
We will start with a fact: Adequate infrastructure produces
less congestion and more efficient cross-border trade, as well
as generates taxable income. Staffing of the inspection
agencies has admittedly been deficient, primarily because of
challenges on the hiring processes. And we understand that they
are looking for solutions to get this taken care of in the
future.
The average age of the border station is around 40 years,
but the commercial truck inspection stations and infrastructure
are woefully inadequate, and we need to start focusing on that.
That is an important part of job creation within the United
States.
For example, we have done a $250 million upgrade at the
Mariposa Port of Entry in Arizona for fruits and vegetable
imports, but yet today there is not enough staffing to keep all
the new lanes operational all the times that they should be.
This project was completed in 2014, and we are--still haven't
got the staffing.
In south Texas we are growing dramatically in manufacturing
and produce. And all of this could have been predicted 10 years
ago if we had looked at the infrastructure being built in
Mexico.
We are--our recommendation is that, with future border
station construction, that when it is being planned, that the
committee also needs to work with your colleagues in the
committees that have oversight over CBP staffing, Federal and
State highways, and truck inspections, because you all got to
be on the same page, because it doesn't come to fruition until
you get there.
The section 560 and 59, it is a viable, creative option to
assist the Government in some of its expenses. The donation
acceptance program is great, but there is two ideas that must
drive them. One is flexibility and the other is return on
investment. Flexibility is a must, particularly in the design
processes that is going through.
The agencies must demonstrate a willingness to explore new
ideas that are different than what they are used to seeing. To
be blunt, return on investment--real estate investors and the
international trade communities are not charities. They are
looking for something in return. The Government should be
prepared to demonstrate the financial upside for private and
local public sector participation.
CBP appears to be responding to flexibility in the small-
scale donation acceptance program, but they have recently
announced they are even promising 60 to 70 percent improved
processing times in the applications.
Not all border ports of entry need major infrastructure
overhauls or dramatic staffing upgrades. The BTA supports pilot
projects that have taken place in various parts of the country,
and we support the pre-clearance of the Buffalo-bound cargo,
where the inspection takes place on the Canadian side of the
border and then comes to the U.S. We also support pre-clearance
on the Mexican border with the United States. Laredo, Texas,
has a pilot there. Otay Mesa, California, has pilots going. And
there is even one in an electronics plant in Juarez, Mexico.
However, on the other hand, we need to avoid infrastructure
agreements with States and foreign governments that lead to
ongoing financial commitments. The BTA acknowledges that there
is a significant debate over how to construct a new span across
the Detroit River connecting Detroit in Michigan and Windsor,
Ontario. We are not going to get into the details, because that
is another group of issues, but we do have deep concerns over
any agreement between governments to construct new bridge ports
of entry requiring ongoing staffing commitments from CBP and
other agencies without deliberation and appropriations from the
Congress. Should not be done.
The 559 programs have benefitted on the southern border,
because we are living up to our diplomatic notes, primarily
using donated acceptance program funds. McAllen, Texas, donated
the land for the port. Then they later have donated land in
Mexico and helped build a road in Mexico. They built lanes on
the U.S. side. Now they are building--they are going to be
building a border station for truck inspection on the U.S. side
on land that they had already donated.
So, there are a lot of opportunities. That is a great
example of how you do the right thing. But we need to
understand that this is--it is--in a perfect world, the
Government should be able to finance all of these activities,
and we don't have that perfect world today.
But today we do have an option. We can either choose to go
forward with something that would be innovative and creative,
or not. But we have a choice before we just lost
competitiveness and tax dollars. So we are very happy to be
part of that support group.
There is a role for the public and private sector--local
public and private sector and the donation acceptance programs.
Investors have to have confidence. We think you have to look
real seriously at the large projects, because you are not going
to get funding on some of these projects, and you can project
it 30 years, but that could easily be a 50-year if you are
talking about certain stretches of highways and access to how
you have to function, because the border station is no good if
it doesn't--it is like a bridge halfway there if you don't have
all the ingress and egress routes put into what needs to be
done.
The Border Trade Alliance appreciates the opportunity to
testify. We look forward to finding solutions to our border
challenges. I will answer any questions you may find.
Mr. Barletta. Thank you for your testimony. I will now
begin the first round of questions limited to 5 minutes for
each Member. If there are additional questions following the
first round we will have additional rounds, as needed. I will
start.
Mr. Gallegos, the committee has authorized a three-phase
project at San Ysidro port of entry. How will these
improvements, when fully implemented, help address the capacity
issues at that border station?
I went down, actually, to see the station. So how will it
address that?
Mr. Gallegos. So I think first we should acknowledge the
world's busiest border crossing. And so, the fact that they
have, you know, double-staffed the booths should allow us to
get, hopefully, more throughput production out of the new
border crossing. And I think the steps that are taking--that
are still to come in phase 3 and--because the last panel
highlighted phase 3 became sort of phase 2, and phase 2 became
sort of phase 3.
But the one thing that needs to be done and done as soon as
possible in the next two phases is to improve the pedestrian
experience. We have pedestrians who are taking several hours
and cross and facilities that are less than adequate to handle
the pedestrian movement. But we are optimistic that when phase
2 and 3 come, that all that is going to improve.
We should also highlight, Mr. Chairman, for the committee
that we have worked closely in partnership with GSA and CBP to
bring local dollars forward to also make key transit
connections in a key intermodal center that will allow the
local transportation system to integrate with the Federal
investment that is being made. And that is something that I
think we got to work harder at doing better in the future, that
we, you know, not only look at the border crossing itself, but
what are the connections that are necessary to make them work
on both sides of the borders, both on the Mexican and the U.S.
border.
Mr. Barletta. Yes, thank you.
Mr. Vale, as you point out in your testimony, even if we
build the needed infrastructure, without the ability of CBP to
staff and equipment for the facility, we are not going to see
much improvement.
How critical is it that solutions to staffing and equipment
be identified as GSA and CBP evaluate their priorities for
infrastructure needs?
Mr. Vale. It is absolutely vital. That is like--it is like
two parts of the same machine. You can't--it doesn't work one
without the other.
The facilities can--are expensive to build. They are
expensive to maintain. And if you are not using them, you are
not getting your return on investment as a government. You are
not getting your tax dollars. And we really focus right now a
lot on the commercial traffic, because we are being overwhelmed
on the southern border. The Canadian border is down 25 percent
and we are up 25 percent and it is growing.
And it is not that people are not crossing in one place or
another, it is that the pie is getting bigger, and there is
more and more manufacturing going on in Mexico using U.S. parts
to do the manufacturing than ever before. And it is growing.
They have been--in one part of Mexico they call them the Bajio
Central States. They have had $16.5 billion of foreign
investment in the past 3 years, with another 16.5 projected for
the next 3 years. This is all foreign money going in there to
utilize qualified workforce, costs that are--and the market is
the United States of America.
Mr. Barletta. Mr. Vale, you offer some important
suggestions and notes of caution in your testimony when it
comes to private donations. You suggest the more nimble and
focused approach for the P3 program, and caution us about
ongoing financial commitments that may not be apparent in
donated property.
How do you think the process can be more streamlined in
evaluating potential P3s?
Mr. Vale. Well, one of the things you have to do is have a
more accurate predictability of the growth cycles. Now, we have
been visiting with some major manufacturings lately, and they
said under the right circumstances they could make data maybe
through this--southern California creates--make it available to
have it sanitized, because these would be confidential business
plans. But these business plans, up to 3 years, are 85 percent
accurate in what they are projecting.
If we can get that information into the work staffing model
for CBP that will also share it with the GSA of what they are
going--facilities, that is the innovative-type processes we
need to go through, instead of taking a historical look at it,
and linear projections forward. Those are part of the puzzle,
but they are not the best solution. It is to know what business
is planning in produce. Who drives produce? The American
consumer. Who knows them best? The big box buyers, not the
farmer, not the trucker, but the guy who sells it to the
public. We need to get them in the picture.
Mr. Barletta. Thank you. And I recognize Ranking Member
Carson.
Mr. Carson. Thank you, Chairman.
Mr. Vale, there has been a lot of discussion today about
how land ports of entry are basically outdated due to an
increase in trade, post-NAFTA and subsequent investments in
infrastructure by the Mexican Government. Who is responsible
for tracking the infrastructure investments made by either the
Canadian and Mexican Governments? And do you believe it is even
feasible to coordinate those activities between countries to
ensure that land ports of entry are not overwhelmed, due to
mismatched investments along the border?
Mr. Vale. I don't know if the governments do a good job of
it, because they many times have overarching--what they think
of are more important and sexier items to deal with. But the
bottom line is that business does, because the business
investor has to have a return.
We think that if you would have looked in Mexico, for
example, you saw them constructing these highways. You saw them
cross--they built two transcontinental roadways connecting to
the border. They also built the highest--and these are not
overnight projects--they built the highest suspension bridge in
the world. That changes flows and patterns. The dollar and the
investment climate in the world changes it.
Somebody needs to be looking at it. I know business is
looking at it. We look every day at it. We are working on--2
years ago we were looking at Mexico as an exporter of oil and
hydrocarbons. Guess what? Today they are only producing 50
percent of their hydrocarbon needs. Who is going to be selling
it to them? Who has already started doing that? The United
States.
Mr. Carson. Yes.
Mr. Vale. We are--in the smallest port in the country, we
are now export oil tankers into--Mexican tankers going across
the bridge into Mexico to deliver to their consumers.
Mr. Carson. To that point, also in your testimony, Mr.
Vale, you indicated that the CBP should be able to demonstrate
the financial upside for a private-sector donation to the land
ports of entry program.
In your mind, what is the appropriate metric or even order
of magnitude that the CBP should be targeting to even make a
private-sector donation attractive?
Mr. Vale. Well, it is maybe a little easier if you are
talking to a local public sector entity, a city or a county or
a State government, because they have interests for their
taxpayers.
But even private business would like to know that there is
going to be a receptive attitude to what they are trying to do,
that they are not trying to force is down somebody's throat. It
is going to have to meet all the security requirements,
whatever is needed there, but there has to be understood that
this is something good for all the parties. And sometimes you
don't get that reception, it is more like pulling teeth.
Mr. Carson. Yes. Lastly, Mr. Gallegos, what roles do you
believe that the local and State governments should have in
developing infrastructure plans for land ports of entry? And
how can local and State governments augment Federal efforts to
expand capacity at land ports of entry?
Mr. Gallegos. Well, first of all, thank you for the
question. And I think the innovative approaches that we are
proposing is one way to do that. But another, I think, key
component for us has been the development of border master
plans. And in many ways, they are similar to general plans that
cities have, so that if you understand how lands proposing to
be zoned to be used on both sides of the border, both on the
Mexican side and the U.S. side, that those land use plans then
become the drivers for, you know, the businesses, the
investment, the growth that is going to happen in those
borders.
And so, I think local governments working with the State,
working with the Federal Government on both sides of the
border, can develop these master plans as a planning tool to
allow governments at all three levels on our side of the border
and governments on the Mexican side of the border to do a
better job of planning and forecasting what our needs are going
to be in the future. And I think these border master plans are
a fairly new phenomena. We haven't been doing them for a long
time.
Mr. Carson. Mr. Chairman, I yield back.
Thank you, gentlemen.
Mr. Barletta. Thank you.
Mr. Vale, you expressed deep concerns about the proposed
new bridge and border crossing in Detroit going forward without
congressional appropriations. I also have concerns. And the
House limited the donation program. To be clear, it cannot be
used for this project.
This crossing and bridge is estimated to cost several
billion dollars and require 100 or more CBP staff. Where will
they come from? And how could this impact other crossings on
the northern and southern border?
Mr. Vale. The thing that jumped out at us was a $100
million commitment for year one and $50 million every year
thereafter for staffing alone. Good grief, we have to beg,
borrow, and steal to get a guy to work, and every guy that we
get to work on the southern border produces tremendous amount
of economic benefit.
Why would you be doing that on a border that, right now, by
their own admission, is decreasing its exports to the United
States, or our imports are decreasing, which means you need
less staffing and better utilization of the existing staffing?
Sometimes we forget that we have to look at international
bridge ports as a system, and not this community versus that
community. And the number of lanes that are out there may be
built, but if they are underutilized we are wasting
infrastructure.
And oh, by the way, there is not a bridge on the border
congested 24 hours a day.
Mr. Barletta. Well, I want to thank you both for your
testimony today. Your comments have been helpful in our
discussion. If there are no further questions, I would ask
unanimous consent that the record of today's hearing remain
open until such times as our witnesses have provided answers to
any questions that may be submitted to them in writing, and
unanimous consent that the record remain open for 15 days for
any additional comments and information submitted by Members or
witnesses to be included in the record of today's hearing.
[No response.]
Mr. Barletta. Without objection, so ordered.
I would like to thank our witnesses again for their
testimony today. If no other Members have anything to add, this
subcommittee stands adjourned.
[Whereupon, at 10:52 a.m., the subcommittee was adjourned.]
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