By Kevin McCarty and Judy Sheahan
August 25, 2008

More than 50 mayors and other city leaders joined with Conference President Miami Mayor Manny Diaz and Host New York City Mayor Michael R. Bloomberg August 14 and 15 to examine strategies to move the nation forward in combating rising infrastructure needs, grounded in investments that will help reduce our nation’s energy dependence and curb greenhouse gas emissions.

Diaz presided at the second of five ’08 Mayors’ Action Forums, which will underpin recommendations of the nation’s mayors to the next President of the United States to influence his 100-day agenda to present to the 111th Congress.

“We need to have Washington begin to listen to the agenda being crafted by mayors,” Diaz told the participants during his opening remarks to frame the purpose of the forum and others throughout the nation.

Bloomberg, who has emerged as a national leader on infrastructure, expressed his appreciation to Diaz and the mayors for convening the Mayors’ Forum in New York City. “I want to thank the mayor [Diaz] for putting infrastructure in the spotlight because it really is a key issue,” he said.

He described his own efforts to address the nation’s infrastructure challenges, both at the national level and in New York City. “Governor Rendell, Governor Schwarzenegger and I are going around the country to talk about infrastructure.”

“The federal government has just walked away from infrastructure investment,” Bloomberg said before reminding his colleagues that “there is no leadership in Washington” and that “we have to get both of these candidates to face the issue.”

In his remarks, Bloomberg discussed the extension of the subway to serve the west side of Manhattan, stating, “We are building a subway extension because our state is broke and won’t give us any money.” Another project, he explained, is the construction of a third water tunnel where the city has already invested $1 billion. “If one of our tunnels collapsed, it would make half of our city uninhabitable.”

Brian Pallasch, Managing Director of Government Relations and Infrastructure Initiatives for the American Society of Civil Engineers, discussed his organization’s “scorecard,” an initiative that has been grading the quality of the nation’s infrastructure since 1996. Pallasch explained that ASCE’s grading system was built off of the work the National Council on Public Works Improvement two decades earlier

“The overall grade with last scorecard (2005) was a D, showing little improvement from our last grade in 2001 that was a D plus.” In some areas, he explained, there has been some progress, such as improvements in solid waste and condition of bridges.

During his review of the various infrastructure categories, Pallasch called attention to a key statistic that has been a priority for the Conference’s water advocacy efforts. “About six billion gallons of clean drinking water are lost everyday, due to leaking pipes and broken water mains,” he said. The 2005 Scorecard placed total infrastructure investment needs at $1.6 trillion over five years; ASCE is planning a March release of its 2009 Scorecard along with updated need estimates.

Anthony Perl, Professor and Director of Urban Studies at Simon Fraser University Vancouver, joined the mayors to examine some of the challenges posed by tightening oil supplies and rising costs and the growing burdens its places on the U.S. transportation sector and urban infrastructure. “Peak oil is going to drive some changes in the ways infrastructure in general, cities in particular, and transportation within and between cities is developed,” Perl said.

“We are not running out of energy and not running out of oil, but we are going to be running out of the kind of oil and energy that got us to this point in time,” he said. Going forward, Perl explained that oil will be more expensive, harder to get and have many more environmental consequences. This reality, he noted, challenges local leaders to develop different transport options to reduce the U.S. transportation sector’s nearly sole reliance on oil, which accounted for 98.5 percent of all energy use in this sector, the highest in the world.

Perl explained the benefits of a shift to electricity-fueled systems, from electric trolley buses to high'speed trains, reducing this sector’s dependence on oil (see accompanying chart). He also cited the relative stability of electricity costs, as compared to oil prices, and the opportunity to use the existing utility infrastructure to bring renewable energy sources into the mix to fuel mobility and curb energy use.

“But while the U.S. has been drawing that map (1992 illustration of potential high speed rail corridors), Europe built 10,000 miles of high'speed rail and places like Taiwan and South Korea have built high'speed rail networks,” he said to illustrate how little has been done in the U.S. to develop high-speed rail and tap electricity to power mobility.

Conference Vice President Seattle Mayor Greg Nickels called attention to the strong linkages between the nation’s climate challenges and the transportation sector. “Roughly one-third of U.S. greenhouse gases come from the transportation sector,” Nickels said. In many metro areas, including Seattle, transportation represents the largest source of emissions, representing about 60 percent from all transportation sources, including aviation and marine activities.

Tackling climate and transportation together, including providing more travel alternatives, can deliver relief to taxpayers where household expenditures are rising because of the reliance on petroleum. “Transportation is now the second largest expense for most American households, consuming on average 20 cents out of every dollar,” Nickels said.

Urging more attention to the investment needs of cities and metro areas to build and expand travel options to curb emissions, improve mobility, reduce congestion, and cut transportation costs, Nickels said that “54 of the 100 largest metros do not have any rail transit service and has relatively weak bus systems.” The lack of travel options means “millions of Americans are tethered to their cars.”

Austin Mayor Will Wynn, who chairs the Conference’s Energy Committee, urged increased attention to the energy infrastructure needs and policies to support the increased use of renewables in meeting the energy needs of cities, including how infrastructure systems are powered. “DOE’s national interest electric transmission corridor designations should be withdrawn and revamped to promote renewable energy sources,” he said.

In his remarks, Wynn emphasized that there were a number of short-term actions that could be taken in addition to revising DOE’s corridor designation process, including renewing renewable energy tax credits, funding the Energy Efficiency and Conservation Block Grant program and accelerating investment in energy storage systems, particularly at the user level and investing in smart grid technologies.

Meridian (MS) Mayor John Robert Smith, Vice Chair of the Conference of Mayors Transportation Committee for rail issues, urged mayors to embrace a national vision for a high'speed network of passenger rail services connecting the nation’s cities and their metro areas with other communities along designated corridors. “A national rail network is a new vision for America’s transportation future,” Smith said. Touting the many economic, energy and climate benefits of such a national commitment, he said, “This offers the potential for the biggest infrastructure commitment in this generation.”

Smith explained that an initial installment in a much broader commitment is already in place in Congress, citing the bipartisan agreement on Amtrak/intercity rail legislation. “The Congressional consensus is already line up,” he said, adding that this is “something the next President could move on immediately after taking office.”

Discussing changing trends in travel patterns and growing public support for intercity passenger rail, Smith touted Amtrak’s recent ridership figures. “Last month, Amtrak has the largest monthly increase (13.9 percent) in the railroad’s 37-year history.”

Following these presentations, there were discussions on the Mayors’ Agenda, often focusing on the need for a clear national vision, bolstered by a long-term plan and strong messages to the public and lawmakers on the need for increased investment. A recurring theme of the mayoral discussion was the need to develop a national infrastructure plan, starting with next year’s surface transportation reauthorization that is “energy and climate-centered.” Among the discussions, there was a repeated call for increased investments in city and metropolitan infrastructure to support their economies in sustaining U.S. economic growth. Many mayors urged that in addition to directing resources to a national high'speed network, there was a need for significantly higher commitments to rail investments within cities and metropolitan areas. Economic, energy and environment benefits of infrastructure investment were cited often as central arguments for raising federal commitments to these needs.

In comments on resource constraints, Diaz challenged the federal government to act and find the resources to increase commitments to infrastructure. “How do we accomplish all of these things during bad economic times? As mayors, we have to deliver, and we have to figure out ways to deliver. I wish we had someone in the White House who has been a mayor or thinks of himself or herself as mayor of the United States,” Diaz said.

Albuquerque Mayor Martin Chávez, Co-Chair of the Mayors’ Water Council, briefed the mayors regarding the status of water and wastewater infrastructure investments in the United States and released the findings of a new study outlining the economic benefits of these investments. (see “New Study” article)

Chávez outlined the tremendous financial commitment provided by the cities for water and sewer infrastructure with local government paying for the vast majority of the costs as compared to the state or federal government. (see chart)

“Federal construction grants provided cities with about $56 billion from 1972 through 1990 which was the government’s commitment to help cities comply with the Clean Water Act,” Chávez said. “However, when the grants program ended, the federal government essentially retracted their commitment to help cities comply with the law.” Chávez called this the “Federal Abandonment Gap” that equals about $47.4 billion in lost federal grants from 1991-2007.

Chávez said that the majority of cities (75 percent) are making simultaneous infrastructure investments in all major categories including water supplies, drinking water treatment plants and pipes, and sewer treatment plants and pipes. However, despite this investment, many cities still have leaking pipes that can lose anywhere from five to 40 percent of their water.

Other water priorities were discussed by Chávez including protecting water infrastructure from catastrophic events and water supply availability. A Water Council survey of over 400 cities indicates that 35 percent of those cities will face critical water supply shortages by 2025.

Chávez warned, “Despite the priorities that we are currently funding, this does not take into account the impact that climate change will have on our communities. We need to have adaptation plans ready and be prepared to handle such events as droughts, floods, and rising sea levels.”

The mayors discussed the tremendous challenge of complying with environmental mandates and the need for Congress to fully fund the mandates they enact. Particularly, the mayors discussed their problems with complying with combined sewer pipes and wet weather overflows. One mayor discussed the need to raise his water and sewer rates by ten to 20 percent every year to comply with this mandate. Unfortunately, this has created a situation in not only his city but in many other parts of the country where people who have fixed incomes or are below the poverty rate are financially unable to pay their bills. The mayors discussed a recommendation for Congress to create a LIHEAP-type program (which provides financial assistance for heating and air conditioning) that would instead help pay for water and sewer services.

The mayors discussed the need for a true federal partnership that would provide not only financial resources but also additional flexibility in solving problems. For example, the mayors discussed complying with environmental mandates by using green infrastructure instead of the more traditional, but more costly, approaches.

Chávez outlined potential solutions to meet these needs including asking the federal government for $50 billion over current levels of federal contributions over the next ten years to close the infrastructure “Needs Gap”. The additional $50 billion would come in the following form: $3 billion/yr in grants to cities to comply with sewer overflow infrastructure, and some portion of that should be dedicated to “green infrastructure” approaches; $2 billion/yr in additional SRF loans that are dedicated to addressing the three top city water priorities – Rehabilitation of aging infrastructure, protecting water and sewer infrastructure, and ensuring source water availability; and $200 million/yr for ten years to cover estimated loss to the Treasury for removing state volume caps on Private Activity Bonds for public-purpose water and sewer infrastructure investment

Chávez admitted that there was no single approach that would provide all of the financing necessary to sustain the water infrastructure and support our local and national economies but that a combination of tools including increasing user rates, increasing municipal borrowing, freeing up some grant money from Congress and learning how to tap private equity would be needed to meet this challenge.

The mayors endorsed Chávez’s financial recommendations and discussed strategies to convince the next President, Congress, and the general public about the importance of this issue.

The work of mayors at the New York City Forum will underpin recommendations to be presented to Conference Leaders during the Leadership Meeting in early October.