Category Archives: Infrastructure

Facility Planning: School Renewals

Source: James E. Rydeen, American School and University, June 1, 2008

1950s-’60s schools: Obsolescence or longevity?

Forty-three percent of existing public schools were built in the 1950s-’60s era. This era seems to have gained the reputation of cheap, energy-inefficient buildings that were not intended to last more than 30 years.

A study at one school district estimated it would cost $2.1 billion to fix its aging buildings. Many buildings were well-kept and clean, but their mechanical, electrical and plumbing systems were old and inefficient; the food-service equipment needed replacing; and the facilities did not comply with the Americans with Disabilities Act. Most of the buildings are only 30 to 50 years old and are showing signs of water damage, and wear and tear.

Experience has proven that public schools must be designed for long-term use — much longer than 30 years.

Many institutions keep up with most of their annual facility maintenance, but not with replacing major systems and equipment because annual budgets cannot cover the costs. Avoiding such dilemmas requires planning, scheduling and budgeting for the eventual upgrades.

Costly Returns: How Corporations Could Profit From Inflating the Already High Cost of Repairing the Nation’s Crumbling Water and Sewer Infrastructure

Source: Food & Water Watch, June 2008

From the press release:
A future favorable to investor owned water utilities will result in higher rates, fewer consumer protections, a limited or non-existent federal safety net for low income communities and large infrastructure investments built to maximize profit, not the interest of the public, according to a Food & Water Watch analysis of investor briefs.

“Corporations have a financial incentive to oppose conservation, protection of drinking water sources and other policies and programs that would save money and help offset the economic burden on communities across the nation,” said Food & Water Watch http://www.foodandwaterwatch.org/ Executive Director Wenonah Hauter. “Wasted water drives up a company’s revenue, which flows from people’s water bills.”

In fact, the investor research firm believes that if “faulty underground infrastructure were to interrupt a major city’s water supply for an extended period,” the public would be less resistant to rate hikes that benefit corporations. The analysis also reveals U.S. states where regulators are especially friendly to private ownership or management of water: Pennsylvania, Delaware, and Connecticut, with a nod to California’s recent about face on strong consumer protections and shift toward encouraging privatization of water service.

Although public utilities provide water to about 86 percent of people on community water systems, a private sector push is on to change this. The report, Costly Returns: How Corporations Could Profit From Inflating the Already High Cost of Repairing the Nation’s Crumbling Water and Sewer Infrastructure, analyzed investor briefs by Boenning & Scattergood and reveals that, thanks to some fancy finance and accounting, private utilities tie higher earnings to increased costs.
Executive Summary

Budgeting for Capital Investment

Source: Rudolph G. Penner, Urban Institute, Testimony Before the U.S. House of Representatives Committee on Transportation and Infrastructure, June 13, 2008

From the abstract:
The unified budget of the U. S. government is, in most respects, a cash budget. It is somewhat biased against public investment, because the benefits of such investments accrue over a period of time whereas the cash outlay is immediate. This testimony looks at options for directing more funds to highways, mass transit, and other public investments. It examines higher fuel taxes, tolls and congestion fees; capital budgeting; infrastructure banks; a capital revolving fund; public-private partnerships; and approaches to improving the efficiency of current grants and subsidies. It concludes that tolls and congestion fees are very promising as are public-private partnerships. A capital revolving fund would be useful for agencies that only invest occasionally. A capital budget and infrastructure banks are less desirable.

Redressing America’s Public Infrastructure Deficit

Source: Bernard L. Schwartz, New America Foundation, Testimony Before the House Committee on Transportation and Infrastructure, June 19, 2008

Over the past several decades, we have accumulated a sizeable public infrastructure deficit. As a result, a variety of infrastructure bottlenecks-traffic congested roads, clogged ports, and an antiquated air traffic system, to mention just a few-have begun to undercut our economy’s efficiency and undermine our quality of life.

One of the reasons for this infrastructure deficit is that our system for financing infrastructure has become increasingly inadequate with the passage of time and has not kept up with the practices of other advanced industrialized economies….

Financing America’s Infrastructure

Source: Douglas Rediker, Heidi Crebo-Rediker, New America Foundation
June 9, 2008

From the summary:
America’s basic infrastructure is outdated, worn, and in some cases, failing. Most experts agree that it is inadequate for meeting the demands of the 21st-century global economy. If we are to remain competitive, we must invest in capital assets like roads, ports, bridges, mass transit, water systems, and broadband infrastructure. Many other countries — both rich and poor — see investing in infrastructure as imperative for economic survival and success in an increasingly competitive economic environment. But the United States has lagged in infrastructure investment, in both relative and absolute terms. We are spending less than 2 percent of GDP on infrastructure, while China and India are spending 9 percent and 5 percent of GDP, respectively.

If the nation’s infrastructure needs are apparent, so too are the limits on available funds in federal, state, and local government coffers. In this presidential election year, we can see these limits clearly, as the nation’s spending priorities are magnified by electoral politics. Although significant government funding will likely continue to play a key role in the development of public infrastructure, the scale of our funding needs increasingly compels us to look beyond government to close the financing gap. It is for this reason that public support for private sector infrastructure investment is essential.

The good news is that while the federal government struggles to find funds to address its spending needs there is abundant private capital for infrastructure investment. An estimated $400 billion in global funds are available for equity investment in infrastructure, and the funds available to support the debt component amount to several trillion dollars if we include global central bank reserves, global pension funds, and sovereign wealth funds. Rather than focus on these large pools of global capital as a threat, we should view them as an opportunity. So, while we have enormous infrastructure financing needs, there are also enormous pools of capital available for investment. The trick is to bring the two together in a commercial, sustainable, and politically acceptable way.

Budgeting for Capital Investment : Testimony Before the U.S. House of Representatives Committee on Transportation and Infrastructure

Source: Rudolph G. Penner, Urban Institute, June 13, 2008

From the abstract:
The unified budget of the U. S. government is, in most respects, a cash budget. It is somewhat biased against public investment, because the benefits of such investments accrue over a period of time whereas the cash outlay is immediate. This testimony looks at options for directing more funds to highways, mass transit, and other public investments. It examines higher fuel taxes, tolls and congestion fees; capital budgeting; infrastructure banks; a capital revolving fund; public-private partnerships; and approaches to improving the efficiency of current grants and subsidies. It concludes that tolls and congestion fees are very promising as are public-private partnerships. A capital revolving fund would be useful for agencies that only invest occasionally. A capital budget and infrastructure banks are less desirable.

Issues and Options in Infrastructure Investment

Source: U.S. Congressional Budget Office

The condition and adequacy of the nation’s physical infrastructure–including its surface, air, and water transportation networks; its energy, water, and telecommunications utilities; and its dams and schools–are important for the vitality of the economy and for public health and safety. Yet calls for increased federal investment in infrastructure must be carefully analyzed and weighed against other spending priorities.

Full report (PDF)

GAO-08-763T, Physical Infrastructure: Challenges and Investment Options for the Nation’s Infrastructure

Source: Patricia A. Dalton, Testimony before the Committee on the Budget and the Committee on Transportation and Infrastructure, U.S. House of Representatives, GAO Reports, GAO-08-763T, May 8, 2008

Physical infrastructure is critical to the nation’s economy and affects the daily life of virtually all Americans–from facilitating the movement of goods and people within and beyond U.S. borders to providing clean drinking water. However, this infrastructure–including aviation, highway, transit, rail, water, and dam infrastructure–is under strain. Estimates to repair, replace, or upgrade aging infrastructure as well as expand capacity.

Good Buildings, Better Schools: An Economic Stimulus Opportunity With Long-Term Benefits

Source: Mary Filardo, EPI Briefing Paper, April 29, 2008

From the summary:
The nation’s 97,000 public school buildings comprise an estimated 6.6 billion square feet of space on over 1 million acres of land. And while states and local communities invested over $500 billion in K-12 school building improvements from 1995 to 2004, considerable additional investments are needed to ensure that the nation’s public schools are healthy, safe, environmentally sound, and built and maintained to support a high-quality education.

Today, many of the nation’s schools face the combined challenges of deteriorating conditions, out-of date design, and changing utilization pressures (including intense overcrowding in some communities and rapidly declining enrollments in others). These combined deficiencies impair the quality of teaching and learning and contribute to health and safety problems for staff and students. Building design and facility conditions have also been associated with teacher motivation and student achievement.
See also:
Press release