Tag Archives: infrastructure

Infrastructure Week in Illinois intended to sell needed repairs and funds

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This week is one intended to help promote needed funding for infrastructure in Illinois:

With a new Illinois capital program delayed as the state goes 11 months without a budget, transit leaders have been sounding the alarm in both Washington, D.C., and Springfield about the dangers of waiting too long to invest in infrastructure. Business, labor and transit leaders will ramp up discussion nationwide Monday for the start of the thrillingly named Infrastructure Week.

It’s a tough sell — roads, buses and trains seem to work just fine until they don’t, and politicians don’t like to raise gas taxes or other user fees. Regional Transportation Authority Executive Director Leanne Redden admits that funding for bridges, signals and tunnels is not a sexy topic, but it’s crucial to keep the system going the way it should…

The Metropolitan Planning Council, which consulted with RTA officials and other experts around Illinois, determined that meeting the state’s transportation deficit requires an additional $43 billion over 10 years — on top of what is already expected in terms of capital funding…

He noted that no system is going to be in perfect shape all the time — it’s like your house, you want to keep it in a state of at least 90 percent repair, with a few projects on a to-do list. But Illinois’ state of repair is currently below 80 percent and could drop below 60 percent in the next five years, Skosey said.

It is unclear from this article whether this week is aimed at the public – who often doesn’t pay much attention to infrastructure and generally doesn’t like paying increased taxes for public services – or state officials and legislators – who aren’t doing much of anything in Illinois these days. I assume the general goal is to raise awareness but what would they like the public to do? Call a political leader? Vote different in the 2016 election?

Thinking about the role of governments, the public tends to assume or hope that governments will do the prudent thing for the future. In terms of infrastructure, this usually means keeping up with maintenance and taking care of needed changes before the situation gets dire. But, given the short-term outlook of many politicians these days plus many competing interests, infrastructure needs are often kicked down the road. Yet, compared to other major issues that can continue to be kicked down the road, at some point roads, railroad systems, airports, electric grids, and other necessary pieces of infrastructure can and will literally crumble and will require immediate attention.

Getting big companies to pay more for local infrastructure

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The mayor of Cupertino, California wants Apple to pay more for local roads and other services:

Many people in Cupertino, a 60,000-person town in the heart of Silicon Valley, are beginning to organize around their overburdened city. They claim the region is struggling with aging infrastructure and booming companies whose effective tax rate is often quite low. Frustrated by traffic and noise, some in Cupertino are trying to put a stop to more development, which they argue brings more congestion on the roads, parking and train system. But Chang says limiting new development would damage the regional economy and that the real solution should be higher taxes on the wealthy and companies such as Apple…

Convincing local politicians to battle Apple is hard, Chang said. He recently proposed that Apple – which is building a massive new campus its own employees nicknamed the Death Star, or more favorably, The Spaceship – should give $100m to improve city infrastructure. To move on the proposal, Chang only needed to get a single vote ‘yes’ among the three other eligible council members. He failed to get that vote…Meanwhile, the mayor of Cupertino plans to keep pushing Apple to contribute more to the town. Apple paid $9.2m in tax revenue to Cupertino in 2012to 2013, which was about 18% of the city’s general fund budget, according to an economic impact report. Coincidentally that was also exactly the same amount CEO Tim Cook was paid in 2014.

Chang is now working on proposals for a business employer tax that would make companies with more than 100 workers pay $1,000 per employee. Chang argues the employer tax is less regressive than the competing program: a higher sales tax.

Local politicians are often in a tough position in situations like this. Large companies provide prestige and jobs. Many communities would love to have white-collar offices that contribute property taxes and opportunities for local residents. These are such desirable facilities that states and communities race to the bottom in providing tax breaks. (See an example here as well as contrast this to a rural town rejecting a meat processing plant.) Yet, large companies may make heavy use of local services as well as be perceived as sending most of their profits out of the community. So, what do you do when your town needs to pay for roads or the police department or schools and the majority of residents don’t want to pay higher taxes?

I’m guessing that Cupertino has little leverage, particularly if fellow officials and residents are unwilling to go against the big company. Yet, perhaps sustained pressure and some negative publicity might help; one Chicago suburb and its large hospital reached an agreement to help the community meet basic infrastructure needs.

IL legislator drops tax by miles driven plan

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Following up on last week’s post, it now appears Illinois will not have a new driving tax anytime soon:

The Illinois Senate president says he will not pursue a proposal to pay for road construction by taxing motorists by the miles they drive.

John Cullerton is a Chicago Democrat. He floated the idea last week because revenue from taxes on gasoline is declining. Cars are more fuel-efficient but they still wear out roads…

Cullerton posted on social media Friday that he intended the plan — which the Executive Committee aired on Wednesday — to spark debate about more efficient ways to fund road-building.

He says he “received a lot of constructive feedback” but will not pursue his plan.

Such a move was likely unpopular but withdrawing the idea doesn’t help the state move closer to the issue: how are roads going to be maintained and improved? Few people like to pay increased costs for infrastructure but they will certainly dislike it if the roads are not in good shape or major repairs cause headaches and future borrowing down the road.

With gas at a relatively cheap point, isn’t it time to at least consider raising the gas tax?

When money is tight in NYC, cut spending on critical water infrastructure

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All big cities need water but when budget priorities were determined, New York City chose to delay building some key water infrastructure:

Mayor Bill de Blasio has postponed work to finish New York’s third water tunnel, a project that for more than half a century has been regarded as essential to the survival of the city if either of the two existing, and now aged, tunnels should fail…

But last year, Mr. de Blasio’s administration, eager to keep a lid on water and sewer rates that had grown by an average of 8 percent annually under Mr. Bloomberg, moved financing for the third tunnel to other projects, Amy Spitalnick, a de Blasio spokeswoman, said.

The city intends to finish the remaining portions of the tunnel sometime in the 2020s, but it has not set a date for completion nor allocated money in the budget to carry out the work. For the foreseeable future, the $6 billion tunnel will remain dry in the two largest boroughs, where well over half the city’s population lives.

“You look back over the last 50 years, whenever there were fiscal pressures, the unseen world of the municipal water system is where weak city leaders turned to cut spending,” said Kevin Bone, a professor of architecture at Cooper Union and an editor of “Water-Works: The Architecture and Engineering of the New York City Water Supply.” “I’m disappointed to hear that they’ve deferred it. It is symptomatic about planning for the future in America.”

Let’s hope that this doesn’t lead to disaster: imagine Queens and Brooklyn without water for three months (which would happen if aging Tunnel 2 fails). This is one of the issues with infrastructure and why the public would be furious if something happened: people don’t pay attention to this stuff until it fails but the issues are largely preventable as long as communities keep up with the necessary maintenance and new construction.

Imagine New York City, the top global city, being incapacitated by not having enough water because city leaders didn’t have enough foresight…

Four reasons American mass transit went awry

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John Rennie Short explains why America’s mass transit infrastructure is in such bad shape today:

The first is the early and continuing embrace of the private car as a form of urban transport. In Europe, expensive gas and restrictive land use measures kept people in dense cities, and urban growth followed along the lines of mass transit, reinforcing and consolidating their use…

Second, as cities were designed to meet the needs of the motorist, mass transit systems that had been owned by private companies were abandoned or effectively dismantled in the late 1940s and throughout the 1950s because they were losing money…

The third reason is that all infrastructure ages and needs costly maintenance and continual improvement, yet funding is often constrained…

Fourth, there is a deeper tension in the U.S., first noted by economist Kenneth Galbraith, between private affluence and public squalor.

It is difficult to overestimate the effect the car had on American social life. Many cities had thriving mass transit systems – railroads, electric streetcars – before automobiles reached the mass public. People had to live closer to where they worked. Street life could be very hectic – just remember all those horses out on the streets of major cities – but there was more interaction. Today? People often prefer driving solo in their vehicle at their own convenience. Mass transit simply didn’t look as appealing with the new option of driving on the table and governments spent lots of money to push driving rather than mass transit.

Is the insistence on driving America’s ultimate enduring response to big government? Residents may be willing to put up with being constrained in other areas but don’t you dare tell me that I can’t go where I want when I want.

Self-driving cars require better maintained roads

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Self-driving cars may have advantages but they might also require spending more on road upkeep:

Shoddy infrastructure has become a roadblock to the development of self-driving cars, vexing engineers and adding time and cost. Poor markings and uneven signage on the 3 million miles of paved roads in the United States are forcing automakers to develop more sophisticated sensors and maps to compensate, industry executives say.

Tesla CEO Elon Musk recently called the mundane issue of faded lane markings “crazy,” complaining they confused his semi-autonomous cars…

An estimated 65 percent of U.S. roads are in poor condition, according to the U.S. Department of Transportation, with the transportation infrastructure system rated 12th in the World Economic Forum’s 2014-2015 global competitiveness report...

To make up for roadway aberrations, carmakers and their suppliers are incorporating multiple sensors, maps and data into their cars, all of which adds cost.

 

It would be interesting to see some estimates of the additional costs to keep roads at a level where self-driving cars can safely operate. Does the money saved in less congestion on the roads and fewer traffic accidents outweigh the new maintenance costs?

On the other hand, having to do more frequent construction may not affect drivers as much if all cars are self-driving. Since such vehicles are supposed to improve traffic flow, construction is something drivers wouldn’t have to handle – their cars would do it for them. And, if we have driverless cars, can we have driverless maintenance vehicles?

As people use less water, utilities charge more

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To make up for drops in revenue with reduced water use, water utilities have some ways to make more money:

When customers use less water, that means they’re paying less for consumption. This is a good thing, and not just because it’s more ecologically friendly. In the long run, conservation and efficiency are the cheapest ways utilities can avoid needing to develop new supplies in the future.

But in the short-term, conservation and efficiency can put utilities in a pinch, because their sales fall while fixed costs remain the same. Eventually, they need to find a way to make back some of that lost revenue to cover their costs…

That’s why lots of utilities are hiking up the volumetric cost of water itself, even as people are using less of it. But with equity in mind, many water experts advocate for tiered pricing, where customers who use less water pay less per unit. The more you use, the more you climb up pricing tiers. The larger the price increases between the tiers, the more of an opportunity utilities have to make up revenues—and send a message to ratepayers that they shouldn’t ideally be using so much. Likewise, water rates can fluctuate throughout the year, in accordance with use and weather patterns…

Between crumbling infrastructure and downhill sales, it’s going to be hard for utilities to avoid bumping up customer fees to manage systems more effectively. But they also need to start thinking differently about their own business model and how they communicate changes to customers, since those changes are going to be reflected in customer bills.

Which is to say that customers also need to adjust their expectations about water. Is water a commodity to be purchased at a given rate? Or is it more like a public service, like the police or court systems? It might be better to conceptualize it more like the latter.

The infrastructure for many of these systems are expensive and it needs maintenance. Plus, these utilities are usually companies that need to make some money. And, some have argued for years that Americans should pay more for water and other basic goods like this in order to have a better understanding of its value and its limited nature.

More broadly, this could bring American customers back to a recurring issue: at what point do changes due to environmentalism become too costly? This could be quite a shift for many utility users; if they use less water or electricity or natural gas, shouldn’t they save some money?

The difficulties of projecting costs for big tunnel projects

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Cost overruns on big infrastructure projects are common but may be even worse for tunnel projects, as the case of the California high-speed rail project may soon illustrate:

“You have an 80% to 90% probability of a cost overrun on a project like this,” Flyvbjerg said. “Once cost increases start, they are likely to continue.”…

Although some large tunnels have been constructed elsewhere without difficulty, including the 3,399-foot Caldecott Tunnel in the Bay Area, others have encountered costly problems.

The 11-mile East Side Access tunnel in New York City, for example, is 14 years behind schedule, and the tab has grown from $4.3 billion to $10.8 billion. Boston’s 3.5-mile Big Dig was finished in 2007 — nine years behind schedule and at nearly triple the estimated cost.

Digging stopped on the 2-mile Alaskan Way tunnel under Seattle when a boring machine broke down in December 2013 and had to be retrieved for repairs, causing a multiyear delay with an unknown cost overrun.

The bullet train will require about 20 miles of tunnels under the San Gabriel Mountains between Burbank and Palmdale, involving either a single tunnel of 13.8 miles or a series of shorter tunnels.

As many as 16 additional miles of tunnels would stretch under the Tehachapi Mountains from Palmdale to Bakersfield.

All told, this is a major project that might just draw attention from the public and scholars for decades to come. Is it possible to even finish it? What will be the end cost? Will it enhance transportation and life in California? There is a lot at stake here and big costs will not help. From the article, it sounds like part of this is due to falling behind schedule – this adds more money as the project takes more time and costs tend to go up over time – and is also due to the unique geological features of California – fault lines and possible earthquakes – which produce additional complications.

I’ve seen numerous people suggest that projects like these illustrate how difficult it is for the United States of today to complete major projects. This may be needed and/or helpful but a lot of good things have to happen before the line even becomes operational.

Three tips for avoiding turning a $250 million bridge into a $13 billion one

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A new book chronicling the long saga of the new Bay Bridge offers these lessons for avoiding massive cost changes/overruns:

Reference other projects. Frick points to a couple ideas for controlling mega-project costs. Scholar Bent Flyvbjerg, who has studied infrastructure cost overruns around the world—and who often boils them down to political deception—has promoted the idea of basing costs on a “reference class” of similar projects already completed. The fear with that is project leaders won’t bother to keep costs down if they know they can hit a certain number, but Frick says that possibility bothers her less than the uncertainty surrounding costs that goes on right now.

Widen early cost ranges. Giving a precise cost number out to multiple decimals, as the state legislature did with its $1.285 billion estimate in 1997, makes the figure seem more scientific and precise than it really is, and creates that much more public frustration when the costs keep rising in the future. “In the early planning stages, ranges in the projects would be really important to provide,” she says.

Track progress more closely. Frick also suggests that officials pay more attention to “transaction cost economics”—an approach that “analyzes project development over time,” she writes, in an effort to identify the precise “political and economic origins” of new costs. This fuller accounting also considers costs that often go overlooked, such as the time and energy that go into public participation. Without better cost estimates, projects will continue to suffer from the type of strategy described to Frick by one senior engineer:

“Basically at the onset of a project I think the higher ups prefer a dollar amount and schedule that doesn’t shock the public.”

Which, as the Bay Area knows, only makes the shock that much worse when it finally arrives.

The typical resident is going to look at this and ask how in the world this was allowed to happen. Large infrastructure projects have a lot of moving pieces but the change in price is still hard to understand. Of course, there may be a political penalty for adhering to this advice – a higher projected cost upfront is likely to limit support. Yet, going with an unreasonably low projection with no cost range borders on dishonesty.

Two solutions for Chicago railroad gridlock

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The solution to Chicago’s railroad gridlock is not money, according to a new report:

One proposal said that rail dispatchers working for each of the six major freight railroads, as well as separate rail traffic dispatchers at Amtrak and Metra should be located in a unified control center to coordinate trains and improve on-time performance. It’s not the first time the idea has been put forth. Most of the track in the U.S. is owned by freight railroads and they generally oppose sharing control…

The panel also said that several rail-modernization projects that have been awaiting funding for years should be prioritized.

One is the 75th Street improvement project near the Dan Ryan Expressway in Chicago to eliminate rail conflicts at three rail junctions and one rail-roadway crossing. It involves building two flyover structures, almost 30 miles of new track and new bridges at four locations. The project would eliminate the most congested rail chokepoint in the Chicago terminal district, at Belt Junction, where more than 80 Metra and freight trains cross each other’s paths daily, officials said…

The report also called for expediting the Grand Crossing project in Chicago, as well as improving the approximately 40-mile segment of Norfolk Southern’s rail corridor, used by both freight and Amtrak trains, between Chicago and Porter, Ind.

Centralization and clearing up important bottlenecks. Sounds pretty easy, right? Alas, solving these issues takes a lot of time. I’ve been tracking some of these Chicago area railroad gridlock issues for several years (see an earlier example or two) and change is slow. And this isn’t just because of money issues. There are 160 years of history built into the Chicago railroad lines. There are numerous properties around these sites. There are multiple big corporations as well as government levels and bodies involved. Even if these are changes that everyone agrees are good, the wheels of major infrastructure just often do not turn quickly.

I wonder what it might take to get the residents of the Chicago region to see this as a major issue that needs to be addressed. It does affect daily life for many from using commuter train lines, experiencing blocked at-grade crossings, and the noise and pollution generated by nearby trains. Yet, I imagine many area residents don’t know much about the issue and wouldn’t quite be sure how to affect change (assuming a good number wouldn’t want to pay higher taxes to help provide the funding).