The stimulus package is a damned-if-you-do, damned-if-you-don't proposition, according to the initial results of the questionnaire. We deployed last Friday to measure infrastructure investment.
Their sense of fiduciary duty compelled most public works managers to apply for some of the one-time windfall. Those who didn't work for communities and utilities whose bond issues offer better interest rates than government loans.
The rest worked overtime to identify projects that might pay a return on their significant investment of time and energy. For many, it wasn't worth the effort. Says one respondent: "The shovel-ready requirement ruins the benefit for small communities because we don't have the money to engineer projects and have them sit on a shelf."
Successful applicants who submitted capital projects planned for 2010 and beyond are scrambling to re-fill the pipeline, which translates into yet more overtime, while searching for additional dollars to maintain their new or improved assets.
They're also scrambling to generate the paper trail that will satisfy atypical federal-funding requirements should the EPA or other federal agency decide to audit their expenditures. (Our December cover story explores the unintended consequences of one such requirement, Buy American, in much greater detail.)
Other successful applicants are negotiating with neighboring colleagues to spend their largesse. One area, for example, is splitting $9.3 million in roads money between 42 communities.
Despite such quirks, projects must move ahead. Reimbursement, however, isn't moving with the same sense of urgency.
The American Recovery and Reinvestment Act of 2009 was never intended to build Depression-era Works Progress Administration infrastructure like the Hoover Dam. Instead, the authors devoted one-third of the legislation's funding to public works in the belief that fixing roads and leaky pipes would put men and women back to work quickly. The jury's still out on that, but in the meantime more roads than usual are being resurfaced, and more pipes than usual are being lined or replaced.
Unfortunately, in the rush to goose unemployment figures, the legislation completely bypasses the greatest need -- maintenance -- while unintentionally increasing that burden. Yes, some operations are using the stimulus to plug short-term budget gaps, but once the money's gone we're all back where we started.
This is the part of the survey results that concern me the most. Last year at this time, even though the economy had just tanked, only one-quarter of respondents to our questionnaire planned on postponing or reducing planned maintenance programs. This year, when the economy is supposedly recovering, more than one-third do.
Our January issue will analyze the results of our annual outlook survey in more detail, both nationally and by region. Thank you to those who took the time to respond.
As I wrote this, I was invited to a meeting next month in Washington, D.C., organized by a group that brings together investors and infrastructure managers looking to leverage government grants and loans. CG/LA Infrastructure LLC expects the world to spend $24 trillion on such projects through 2030. That figure rises to $31 trillion if the U.S. develops a robust investment model.
Believe it or not, we're doing pretty well without one. Combined, Brazil, China, India, and Russia comprise a $170-billion market, but North America (which is primarily the United States) is worth $89 billion. In fact, several of the organization's Top 100 infrastructure projects are here.
The organization doesn't seem to have researched the market for maintaining those assets once they're up and running. There's always money to design and build, but never enough to maintain. Ironic, isn't it?
P.S. Follow me and the rest of the Public Works team on Twitter at http://twitter.com/pwmag.