2014 summit booklet
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WE
WA
NT
YOU
TO T
AK
E IN
FRA
STR
UC
TUR
E SE
RIO
USL
YUTILITY INFRASTRUCTURE
PROBLEMS
SOLUTIONS
BENEFITS
Will BrownDirector of Government Affairs
Bill HillmanChief Executive Officer
3925 Chain Bridge Road, Suite 300 Fairfax VA 22030 · 703-358-9300 · Fax: 703-358-9307 · www.NUCA.com
May 21, 2014
As NUCA celebrates its 50th anniversary year, we remain committed to representing the interests of utility and excavation contractors nationwide. Our nearly 1,300 company mem-bers provide the workforce and material that build and maintain America’s water, sewer, gas, electric, telecommunications infrastructure, including construction site development.
As America’s most effective trade association dedicated to improving conditions in the under-ground infrastructure industry, we see the impacts of neglected infrastructure every day. As business owners, we are constantly fighting a regulatory system that is burdensome and counterproductive.
We recognize the political and budgetary obstacles facing our nation and are here to help. This booklet will outline some of America’s most pressing infrastructure challenges, NUCA’s priorities for addressing these insufficiencies, and why NUCA’s solutions will improve not only America’s infrastructure but also our economic growth. While there are no silver bullets to rebuilding America’s infrastructure or economy, several common-sense solutions will make measurably beneficial steps in the right direction.
NUCA has an incredible network of members. Our members are motivated to make a differ-ence and are ready and willing to help our Senators and Representatives develop common sense solutions to America’s infrastructure struggles.
If you have any questions, or if NUCA can provide you with any of our unique experience or expertise, please feel free to contact NUCA Government Relations Staff at (703) 358-9300.
Thank you for your support.
A Note from the Chairman
Ronald T. Nunes Chairman R.T. Nunes and Sons Inc. Rhode Island Bruce Wendorf Chairman-Elect Forsberg Construction Inc. Florida Jeff Rumer Vice Chairman Underground Infrastructure Tech. Colorado Kara Habrock Treasurer LG Roloff Construction Nebraska Mark Fuglevand Secretary Marshbank Construction Washington Florentino Gregorio Past-Chairman Anchor Construction Corp. District of Columbia Bill Hillman Asst. Secretary/ CEO NUCA Virginia
Executive Committee
2014-2015 NUCA Leadership
Board of Directors Contractor Directors Jason Clark Iowa Trenchless Iowa Kevin Cripps Distribution Construction Co. North Carolina Rick Davis Mountain Valley Contracting Colorado Clay Sorey VA Paving Inc. Florida Kurt Youngs Youngs Excavating, Inc. Indiana Mark Resinger PKF-Mark III Pennsylvania Zach Fusilier North Texas Contracting Texas Fred Chesney Centerline Utilities, Inc. Florida Dan Hernandez Pauley Construction, Inc. Arizona Dan Buckley Flippo Construction Co., Inc. Maryland
Kalani Kamanu Pural Water Specialty Co., Inc. Hawaii David Wirth Dallas One Corp. Florida Non-Contractor Directors Helen Prince CNA Insurance Texas Jim Weist Michael Byrne Manufacturing Inc. Ohio Yvonne Bland HD Supply Waterworks Arizona Directors At-Large Tom Olson Olson Construction Law, P.C. Minnesota Charles Surasky Smith, Currie & Hancock, LLP Georgia
Sustaining Partners
Bronze Partners
Silver Partners
Gold Partners
Diamond Partner
NUCA’s 2014 National Partners:
American Concrete Pavement Association
American Concrete Pipe Association
American Concrete Pressure Pipe Association
American Council of Engineering Companies
American Iron and Steel Institute
American Public Works Association
American Rental Association
American Road and Transportation Builders Association
American Society of Civil Engineers
American Subcontractors Association
American Supply Association
Associated Equipment Distributors
Associated General Contractors of America
Association of Equipment Manufacturers
Construction Management Association of America
Ductile Iron Pipe Research Association
Interlocking Concrete Pavement Institute
International Union of Operating Engineers
Laborers-Employers Cooperation and Education Trust
Laborers’ International Union of North America
Mason Contractors Association of America
NAIOPNational Asphalt
Pavement Association
National Association of Sewer Service Companies
National Association of Women in Construction
National Precast Concrete Association
National Ready Mixed Concrete Association
National Society of Professional Engineers
National Stone, Sand and Gravel Association
National Utility Locating Contractors Association
NUCA
Plastics Pipe Institute Portland Cement AssociationPlumbing-Heating-Cooling
Contractors - National AssociationSPI: The Plastics Industry
Trade Association
The Vinyl Institute Uni-Bell PVC Pipe AssociationWater and Sewer
Distributors of AmericaWater and Wastewater Equipment
Manufacturers Association
THE
PR
OB
LEM
THE
PR
OB
LEM
THE P
RO
BLEM
THE P
RO
BLEM
THE P
RO
BLEM
THE
PR
OB
LEM
THE
PR
OB
LEM
THE
PR
OB
LEM
America’s infrastructure needs have been steadily increasing. Federal investment in infrastructure has not. This has created an infrastructure deficit that will cost taxpayers more in the future. If something isn’t done to invest in America’s infrastructure soon, the gap between what we need and what we spend will continue to grow. If that happens, infrastructure failures will not only be an inconvenience but an economic poison that will reach every American and business.
THE PROBLEM
1. Drinking water needs
2. Clean water needs
Spending Needs based on EPA’s Study
Spending Needs based on EPA’s Study
Actual Government Spending
Actual Government Spending
5. SRF Appropriation
3. Total public spending for water supply and wastewater treatment
4. Total public spending for water navigation and water resources projects
0
1.
4. 5.
50
100
150
200
250
300
350
400
Billi
ons
of d
olla
rs
Year
1995 1999 2000 2003 2004 2007 2008 2012
3.
2.
America’s infrastructure needs have been steadily increasing. Federal investment in infrastructure has not. This has created an infrastructure deficit that will cost taxpayers more in the future. If something isn’t done to invest in America’s infrastructure soon, the gap between what we need and what we spend will continue to grow. If that happens, infrastructure failures will not only be an inconvenience but an economic poison that will reach every American and business.
THE PROBLEM
1. Drinking water needs
2. Clean water needs
Spending Needs based on EPA’s Study
Actual Government Spending
5. SRF Appropriation
3. Total public spending for water supply and wastewater treatment
4. Total public spending for water navigation and water resources projects
0
1.
4. 5.
50
100
150
200
250
300
350
400
Billi
ons
of d
olla
rs
Year
1995 1999 2000 2003 2004 2007 2008 2012
3.
2.
America’s infrastructure needs have been steadily increasing. Federal investment in infrastructure has not. This has created an infrastructure deficit that will cost taxpayers more in the future. If something isn’t done to invest in America’s infrastructure soon, the gap between what we need and what we spend will continue to grow. If that happens, infrastructure failures will not only be an inconvenience but an economic poison that will reach every American and business.
THE PROBLEM
1. Drinking water needs
2. Clean water needs
Spending Needs based on EPA’s Study
Actual Government Spending
5. SRF Appropriation
3. Total public spending for water supply and wastewater treatment
4. Total public spending for water navigation and water resources projects
0
1.
4. 5.
50
100
150
200
250
300
350
400
Billi
ons
of d
olla
rs
Year
1995 1999 2000 2003 2004 2007 2008 2012
3.
2.
Billions needed to upgrade America’s leaky water infrastructure January 2, 2012
America's Water Infrastructure Challenge:
Moving from Proposals to Solutions
March 28, 2014
Closing the rural-urban Infrastructure gap: Modernization worldwide needs to be part of a strategy for long-term growth April 15, 2014
Closing the rural urban Infrastructure gap:
Oh Danny Boy, the Pipes, the Pipes Are Failing
December 20, 2011
The trillion-dollar gap How to get more of the world’s savings to pay for new roads, airports and electricity March 22, 2014
THE
SOLU
TIO
NTH
E SO
LUTI
ONTH
E SOLU
TION
THE SO
LUTIO
NTH
E SOLU
TION
THE
SOLU
TIO
NTH
E SO
LUTI
ON
THE
SOLU
TIO
N
THE SOLUTION
To bring America out of the infrastructure deficit, NUCA proposes that Congress and the Administration make two specific items nationalpriorities: increasing the investment in American infrastructure and letting business succeed.
Lift the volume cap on Private Activity Bonds (PABs) for water and wastewater projects
Fully fund EPA’s State Revolving Funds (SRF)
Ensure the longevity of the Highway Trust Fund
Enact innovative infrastructure financing
Approve the Keystone Pipeline
Support regulations that help safety and productivity
Strengthen workforce through immigration reform
Make providing healthcare possible for small businesses
LET BUSINESS SUCCEED
INCREASE INFRASTRUCTURE INVESTMENT
THE SOLUTION
To bring America out of the infrastructure deficit, NUCA proposes that Congress and the Administration make two specific items nationalpriorities: increasing the investment in American infrastructure and letting business succeed.
Lift the volume cap on Private Activity Bonds (PABs) for water and wastewater projects
Fully fund EPA’s State Revolving Funds (SRF)
Ensure the longevity of the Highway Trust Fund
Enact innovative infrastructure financing
Approve the Keystone Pipeline
Support regulations that help safety and productivity
Strengthen workforce through immigration reform
Make providing healthcare possible for small businesses
LET BUSINESS SUCCEED
INCREASE INFRASTRUCTURE INVESTMENT
THE SOLUTION
To bring America out of the infrastructure deficit, NUCA proposes that Congress and the Administration make two specific items nationalpriorities: increasing the investment in American infrastructure and letting business succeed.
Lift the volume cap on Private Activity Bonds (PABs) for water and wastewater projects
Fully fund EPA’s State Revolving Funds (SRF)
Ensure the longevity of the Highway Trust Fund
Enact innovative infrastructure financing
Approve the Keystone Pipeline
Support regulations that help safety and productivity
Strengthen workforce through immigration reform
Make providing healthcare possible for small businesses
LET BUSINESS SUCCEED
INCREASE INFRASTRUCTURE INVESTMENT
THE SOLUTION
To bring America out of the infrastructure deficit, NUCA proposes that Congress and the Administration make two specific items nationalpriorities: increasing the investment in American infrastructure and letting business succeed.
Lift the volume cap on Private Activity Bonds (PABs) for water and wastewater projects
Fully fund EPA’s State Revolving Funds (SRF)
Ensure the longevity of the Highway Trust Fund
Enact innovative infrastructure financing
Approve the Keystone Pipeline
Support regulations that help safety and productivity
Strengthen workforce through immigration reform
Make providing healthcare possible for small businesses
LET BUSINESS SUCCEED
INCREASE INFRASTRUCTURE INVESTMENT
THE SOLUTION
To bring America out of the infrastructure deficit, NUCA proposes that Congress and the Administration make two specific items nationalpriorities: increasing the investment in American infrastructure and letting business succeed.
Lift the volume cap on Private Activity Bonds (PABs) for water and wastewater projects
Fully fund EPA’s State Revolving Funds (SRF)
Ensure the longevity of the Highway Trust Fund
Enact innovative infrastructure financing
Approve the Keystone Pipeline
Support regulations that help safety and productivity
Strengthen workforce through immigration reform
Make providing healthcare possible for small businesses
LET BUSINESS SUCCEED
INCREASE INFRASTRUCTURE INVESTMENT
THE SOLUTION
To bring America out of the infrastructure deficit, NUCA proposes that Congress and the Administration make two specific items nationalpriorities: increasing the investment in American infrastructure and letting business succeed.
Lift the volume cap on Private Activity Bonds (PABs) for water and wastewater projects
Fully fund EPA’s State Revolving Funds (SRF)
Ensure the longevity of the Highway Trust Fund
Enact innovative infrastructure financing
Approve the Keystone Pipeline
Support regulations that help safety and productivity
Strengthen workforce through immigration reform
Make providing healthcare possible for small businesses
LET BUSINESS SUCCEED
INCREASE INFRASTRUCTURE INVESTMENT
NUCA, Representing Utility and Excavation Contractors 3925 Chain Bridge Road • Fairfax, VA 22030 • (703) 358-9300 • www.NUCA.com
Support Private Activity Bonds (PABs) for Water and Wastewater
Infrastructure Cosponsor H.R. 4237 in House
Reintroduce the Sustainable Water Infrastructure Investment Act in Senate
Background: In previous Congresses, legislation to lift the volume cap on PABs (the Sustainable Water Infrastructure Investment Act) was introduced by Rep. Geoff Davis (KY) (who retired last Congress) and Rep. Bill Pascrell (NJ) in the House, and Senator Robert Menendez (NJ) in the Senate. The annual volume cap hinders the use of PABs for water and wastewater infrastructure, which are generally multi-year projects and out-of-sight (and thus out of the minds of lawmakers). This modification would allow local communities to leverage private capital markets in combination with other finance mechanisms and provide an influx of low cost private capital to finance water infrastructure projects.
In early 2014, Rep. John Duncan, Jr. (TN) and Rep. Pascrell (NJ) introduced H.R. 4237, the Sustainable Water Infrastructure Investment Act of 2014, which will lift the volume cap on PABs for water and wastewater projects.
Why we need water and wastewater infrastructure exempt from PABs: PABs are used for all sorts of municipal projects, which compete with (and are usually selected over) water projects. Pulling water and wastewater projects out from under the volume cap will allow municipalities more flexibility and opportunity to build these much needed infrastructure projects before their age and deterioration cause cataclysmic problems, both for the infrastructure and for the community’s balance sheet. This funding will create construction and jobs resulting from reliable infrastructure.
NUCA, Representing Utility and Excavation Contractors 3925 Chain Bridge Road • Fairfax, VA 22030 • (703) 358-9300 • www.NUCA.com
Provide Adequate Funding for EPA’s State Revolving Fund (SRF)
Background: The Clean Water State Revolving Fund (created in 1987) and the Drinking Water State Revolving Fund (created in 1997) are both administered by the Environmental Protection Agency (EPA). The SRFs provide low-interest loans for investments in water and sanitation infrastructure through federal appropriations and state contributions. These funds ‘revolve’ as loans and as bonds are repaid with interest those funds are allocated for new projects. The SRFs are an integral aspect of infrastructure financing, and really the only program exclusively dedicated to water infrastructure, but the funding levels are not nearly sufficient for the repair, maintenance, and growth needed.
In FY 2014, the SRF appropriation was $2.35 billion, a $4.7 million decrease from FY 2013. This amounts to $1.45 billion for the Clean Water SRF and $900 million for Drinking Water SRF. As expected, the President again proposed cuts to the SRF funding levels by $581 million in his FY 2015 budget proposal.
Why SRF appropriations are necessary: SRF funds work reliably and without loss or waste. State governments, which allocate projects, are overwhelmingly supportive of the program.
The needs of America’s water infrastructure continue to grow, yet federal investment remains level (at best). This is creating a shortfall that could result in substantially higher costs to repair, replace, and rebuild infrastructure and puts American businesses, all of which rely on access to water infrastructure, at a global competitiveness disadvantage.
SRF funded projects put people to work at a low-cost, high-return on taxpayer dollars.
NUCA, Representing Utility and Excavation Contractors 3925 Chain Bridge Road • Fairfax, VA 22030 • (703) 358-9300 • www.NUCA.com
Ensure the Longevity of the Highway Trust Fund
Background: The Highway Trust Fund is facing financial difficulties. The funding mechanisms for the trust fund are no longer providing the capital for the projects that need Highway Trust Fund dollars. Without reforms to the funding mechanisms, the Highway Trust Fund will be unable to fund infrastructure projects. These projects include highway expansion and repaving, utility relocation, and bridge maintenance that are essential to both our private transportation and our businesses’ competitiveness in getting goods to market.
What needs to be done and why: First, new and innovative financing sources for the Highway Trust Fund must be found and utilized to ensure its longevity. Increasing the gas tax, implementing a vehicle-miles-traveled fee, and reforming truck freight charges should all be considered part of the solution. Additionally, the funding sources for the Highway Trust Fund should support highway projects.
The Highway Trust Fund is primarily responsible for financing transportation infrastructure projects and is essential to the upkeep and maintenance of our interstate road system.
NUCA, Representing Utility and Excavation Contractors 3925 Chain Bridge Road • Fairfax, VA 22030 • (703) 358-9300 • www.NUCA.com
Enact Innovative Infrastructure Financing Mechanisms
Background: Federal investment in infrastructure is falling further and further behind America’s needs. In order to keep up, Congress needs to find other sources for investment that can supplement, NOT REPLACE, current federal funding streams. Each of these proposals should be assessed as a part of a greater package of infrastructure proposals. None is a silver bullet, but all will make a meaningful difference.
What needs to be done and why: Public Private Partnerships- P3s are financing mechanisms that fuse private financing and public financing to alleviate the financial burden on communities and share the risk associated with investment.
The Partnership to Build America Act, H.R. 2084- Introduced by Rep. John Delaney (MD), the Partnership to Build America Act would create an infrastructure trust fund funded entirely by private corporate dollars that are repatriated from foreign earnings. These initial dollars can be leveraged into much greater financing potential.
Water Trust Fund Act, H.R. 3582- Introduced by Rep. Earl Blumenauer (OR), H.R. 3582 would create a water trust fund for water infrastructure projects funded by the sale of commercial drinks. The manufacturers of these drinks would voluntarily agree to add a logo to their bottles and contribute a small percentage of the profits to the trust fund.
NUCA, Representing Utility and Excavation Contractors 3925 Chain Bridge Road • Fairfax, VA 22030 • (703) 358-9300 • www.NUCA.com
Approve the Keystone XL Pipeline
Background: The Keystone XL pipeline is a proposed oil pipeline that would stretch from Alberta, Canada, to the Gulf of Mexico. This is the final phase of the proposed pipeline that would deliver Canadian and American crude oil to American refineries. The State Department has released a report concluding that building the Keystone XL pipeline would not substantially worsen carbon emissions—a key criticism of opponents of the pipeline.
What needs to be done and why: The Keystone XL pipeline will create thousands of infrastructure construction jobs. These jobs will stimulate the economy, create demand for increased goods and services, and create additional opportunities for infrastructure investment.
The Keystone XL pipeline will help ensure North American-produced crude oil is refined in North America, reducing our dependence on foreign oil. As a result, America could see a surge in refined oil exports further strengthening our economy.
NUCA, Representing Utility and Excavation Contractors 3925 Chain Bridge Road • Fairfax, VA 22030 • (703) 358-9300 • www.NUCA.com
Focus Regulations on Safety and Productivity
Background: Regulations proposed and supported by the Administration should increase safety and productivity. The rulemaking process should be based on a scientifically proven need, not political motivation. Implementation of new standards should balance the specific need with financial, administrative, and institutional feasibility.
Over the last several years, the Administration has proposed rules and regulation that would specifically harm the business community, especially small businesses and contractors. Complying with regulations is the single most burdensome bureaucratic inhibitor to business growth. We need smarter regulation not more regulation.
What regulations do to harm businesses: Silica- OSHA’s proposed rule concerning the regulation of crystalline silica will hurt every business in America. Current requirements for mitigating exposure to silica have worked. The new proposed rule would add billions of dollars in compliance costs to businesses, and therefore their customers, with insignificant impacts on the health of workers.
Injury and Illness- OSHA’s proposed Injury and Illness rule would require businesses to electronically file their injury and illness reports to OSHA. OSHA will then publish this information as a sort of public shaming. The business community objects to this because it creates an uneven playing field and could result in unwarranted business or public scrutiny.
Ambush Elections- The National Labor Relations Board (NLRB) has proposed regulatory action that would decrease communication between employers and employees via "ambush elections," forcing employers to provide private and personal employee information to union officials. The Workforce Democracy and Fairness Act (H.R. 4320) and the Employee Privacy Protection Act (H.R. 4321) would prohibit this.
NUCA, Representing Utility and Excavation Contractors 3925 Chain Bridge Road • Fairfax, VA 22030 • (703) 358-9300 • www.NUCA.com
Strengthen the Workforce Through Immigration Reform
Background: The construction industry has one of the highest employment turnover rates of any industry in America. The current immigration system leaves construction businesses, whose workforce is largely comprised of immigrants, struggling to understand and comply with the patchwork requirements. Employment verification systems are confusing and difficult for employers to use and know when to use. Employers need consistency and clarity in regulations dealing with the hiring of immigrant workers in compliance with the law.
Why immigration reform will help America: Immigration reform will create certainty in the business community. Certainty will allow businesses to create efficiencies and streamline costs, lowering the cost to taxpayers.
Clarifying the immigration requirements and rules will allow the industry to ensure a legal and strong workforce that will benefit all aspects of the economy.
NUCA, Representing Utility and Excavation Contractors 3925 Chain Bridge Road • Fairfax, VA 22030 • (703) 358-9300 • www.NUCA.com
Make Providing Healthcare Possible for Small Businesses
Background: Employers understand that providing healthcare to full-time employees helps them retain valued employees. Unfortunately, the Affordable Care Act contains provisions that actually make it more difficult, costly, and confusing for small businesses to provide healthcare to their employees. Small businesses should not be forced to choose between providing healthcare and closing their doors. Between the confusing regulations, healthcare cost increases, taxes, and penalties, there are several items that should be changed to make healthcare more accessible.
How to help small businesses provide better healthcare. Support H.R. 903- This legislation would repeal the employer mandate that requires businesses to provide healthcare to employees. Repealing the employer mandate would protect businesses from incurring penalties and taxes that make doing business more costly and products more expensive. If a business can’t stay open, it can’t employ.
Support H.R. 763/S. 603- This legislation would repeal the annual fee on health insurance providers required under the Affordable Care Act. This additional fee will either be passed along to small businesses by their insurance providers, or, for companies who self-insure, will be an additional fee that makes providing healthcare more expensive to both the business and the employee.
Support H.R. 2575/S. 1188- The Save American Workers Act would redefine ‘full-time employment’ for the purposes of mandated healthcare coverage under the Affordable Care Act as a 40-hour work week. Currently, the Affordable Care Act defines ‘full-time’ as a 30-hour work week, which changes custom and drastically increases healthcare costs incurred by businesses.
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THE BENEFITS
Investing in America’s infrastructure will build America. Not just America’s infrastructure, but also American jobs, American competitiveness, Americans’ health, and America’s economy.
CLEAN WATER IS HEALTHY WATER
INFRASTRUCTURE PROJECTS CREATE JOBS
INFRASTRUCTURE JOBSGROW OUR ECONOMY
BUSINESSES GROW ON AFOUNDATION OF INFRASTRUCTURE
BUILDING BUSINESSES BUILDS AMERICA
THE BENEFITS
Investing in America’s infrastructure will build America. Not just America’s infrastructure, but also American jobs, American competitiveness, Americans’ health, and America’s economy.
CLEAN WATER IS HEALTHY WATER
INFRASTRUCTURE PROJECTS CREATE JOBS
INFRASTRUCTURE JOBSGROW OUR ECONOMY
BUSINESSES GROW ON AFOUNDATION OF INFRASTRUCTURE
BUILDING BUSINESSES BUILDS AMERICA
THE BENEFITS
Investing in America’s infrastructure will build America. Not just America’s infrastructure, but also American jobs, American competitiveness, Americans’ health, and America’s economy.
CLEAN WATER IS HEALTHY WATER
INFRASTRUCTURE PROJECTS CREATE JOBS
INFRASTRUCTURE JOBSGROW OUR ECONOMY
BUSINESSES GROW ON AFOUNDATION OF INFRASTRUCTURE
BUILDING BUSINESSES BUILDS AMERICA
THE BENEFITS
Investing in America’s infrastructure will build America. Not just America’s infrastructure, but also American jobs, American competitiveness, Americans’ health, and America’s economy.
CLEAN WATER IS HEALTHY WATER
INFRASTRUCTURE PROJECTS CREATE JOBS
INFRASTRUCTURE JOBSGROW OUR ECONOMY
BUSINESSES GROW ON AFOUNDATION OF INFRASTRUCTURE
BUILDING BUSINESSES BUILDS AMERICA
THE BENEFITS
Investing in America’s infrastructure will build America. Not just America’s infrastructure, but also American jobs, American competitiveness, Americans’ health, and America’s economy.
CLEAN WATER IS HEALTHY WATER
INFRASTRUCTURE PROJECTS CREATE JOBS
INFRASTRUCTURE JOBSGROW OUR ECONOMY
BUSINESSES GROW ON AFOUNDATION OF INFRASTRUCTURE
BUILDING BUSINESSES BUILDS AMERICA
THE BENEFITS
Investing in America’s infrastructure will build America. Not just America’s infrastructure, but also American jobs, American competitiveness, Americans’ health, and America’s economy.
CLEAN WATER IS HEALTHY WATER
INFRASTRUCTURE PROJECTS CREATE JOBS
INFRASTRUCTURE JOBSGROW OUR ECONOMY
BUSINESSES GROW ON AFOUNDATION OF INFRASTRUCTURE
BUILDING BUSINESSES BUILDS AMERICA
NUCA, Representing Utility and Excavation Contractors 3925 Chain Bridge Road • Fairfax, VA 22030 • (703) 358-9300 • www.NUCA.com
Written Statement of Ronald T. Nunes on behalf of
National Utility Contractors Association
before the
Subcommittee on Interior, Environment, and Related Agencies House Committee on Appropriations
addressing
“Putting America Back to Work Through Water Infrastructure Investment”
April 10, 2014
NUCA, Representing Utility and Excavation Contractors 3925 Chain Bridge Road • Fairfax, VA 22030 • (703) 358-9300 • www.NUCA.com
Chairman Calvert, Ranking Member Moran, and Honorable Members of the Subcommittee, the National Utility Contractors Association (NUCA) appreciates the opportunity to submit written testimony regarding job creation and economic benefits that come with investment in water infrastructure. NUCA is a family of nearly 1,300 companies from across the nation that build, repair and maintain underground water, wastewater, gas, electric and telecommunications systems. NUCA also serves as chair of the Clean Water Council (CWC), a coalition of 34 national organizations representing underground construction contractors, design professionals, manufacturers and suppliers, labor representatives and others committed to ensuring a high quality of life through sound environmental infrastructure. These industries work collectively to improve critical underground systems that unquestionably enhance America’s quality of life and global business competitiveness. NUCA commends you for your efforts to make investments in water and sewer but more is urgently needed. In June of 2013, the EPA released the findings from its 2011 Drinking Water Infrastructure Needs Survey and Assessment (DWINSA). This state-by-state study estimated America’s drinking water infrastructure needs to will cost $384.2 billion over the next 20 years. This is a nearly $50 billion increase over the 2007 DWINSA and indicates our country is losing ground and falling further behind. NUCA respectfully requests you address these concerns through the State Revolving Funds appropriations to the Environmental Protection Agency. CONSTRUCTION CONTINUES TO FACE STEEP UNEMPLOYMENT The water infrastructure market has gone from bad to worse in recent years. In addition to relatively stagnant levels of federal funding to refurbish these systems, state and local budgets have been hit hard because of the downturn in the housing market, which in turn has lowered revenues from property taxes. The most recent job-loss numbers released by the U.S. Department of Labor's Bureau of Labor Statistics for March reports that the unemployment rate in construction is currently at 11.3 percent—entering the sixth year of double digit unemployment. The high cost of infrastructure projects has, in the economic downturn, caused states and communities to forgo infrastructure projects regardless of need. Federal programs that support infrastructure projects have been reduced or not kept pace with inflation. The inevitable result is less work on this deteriorating infrastructure and fewer jobs for those who do this critical work. By neglecting this fundamental infrastructure, we’re not just turning our back on public health and environmental protection. We’re also missing huge opportunities to put Americans in a broad range of industries back to work. In addition, further delaying these projects only increases the scope of the need required and the cost to taxpayers. ECONOMIC BENEFITS OF INFRASTRUCTURE INVESTMENT Underground water and wastewater projects are generally recognized for their effectiveness in enhancing public health and environmental protection. Often overlooked, however, are the economic benefits that result from this work. It is not an exaggeration to say that clean water projects go hand-in-hand with a healthy economy by creating jobs, expanding the local tax base and generating business and community development. Federal investment has a proven effect of creating tens of thousands of quality, high-paying jobs. Importantly, the job creation and increased economic activity that comes with federal and state funding
NUCA, Representing Utility and Excavation Contractors 3925 Chain Bridge Road • Fairfax, VA 22030 • (703) 358-9300 • www.NUCA.com
enhances local economies and provides disadvantaged communities with opportunities to revitalize, and grow. Three important types of short-term economic impacts stem from water and wastewater infrastructure projects like those supported by EPA’s SRF program. There are:
• Direct effects: The output, jobs, and income that are directly related to the construction of the project.
• Indirect effects: The additional output, jobs, and incomes for suppliers and vendors indirectly
related to the construction project. These reflect the broader impacts in the community such as expanding business among local vendors and suppliers, and the ability to attract new business and development to the project site upon completion of the project.
• Induced effects: The expansion of local commercial business as a result of residual economic
development, income, and tax revenue from the completion of the projects made possible by the completion of water infrastructure work.
SUDDEN IMPACT OF FUNDING WATER INFRASTRUCTURE PROJECTS The Clean Water Council released an economic impact study on the job creation and economic benefits that come with water and wastewater infrastructure projects. Sudden Impact: an Assessment of Short-Term Economic Impacts of Water and Wastewater Construction Projects in the United States takes a comprehensive look at 116 water and wastewater infrastructure projects in five states and 73 counties conducted in 2006 and 2007. The study has been sent to all House and Senate offices and is referred to in advocacy efforts conducted by the CWC to educate policymakers, media, industry and the general public. Copies of the study in print and/or electronic format are available to members of the subcommittee upon request (or can be found at www.cleanwatercouncil.org) The study provides fresh answers to a number of important questions, and hard data to back them up. How many jobs are created by a typical water or sewer construction project? What are these jobs? How much do they pay? How much additional income accrues because vendors and suppliers experience greater demand for their services? To what extent do benefits—such as jobs, personal income, capital expenditures—impact local economies? Though the specific numbers are likely no longer accurate since the study was implemented, the overall conclusion has simply become more apparent. Sudden Impact quantifies what we already know; that indeed, investment in underground environmental infrastructure projects results in significant job creation. Jobs are created in scores of industry sectors outside of construction, and the economic benefits that come with funding water infrastructure are not limited to job creation. Significant impacts on national output, personal spending, and state and local tax bases also transpire. JOB CREATION AND THE “RIPPLE EFFECT” The CWC evaluated the total effect of a $1 billion investment in water and/or wastewater infrastructure in terms of job creation and other important economic factors. Sudden Impact found that every $1 billion could create approximately 27,000 jobs. The average annual earnings within the pipe construction sector were found to be more than $50,000, and about one-half of these jobs are in industries outside of water and wastewater construction, illustrating the broad reach of investment in this infrastructure.
NUCA, Representing Utility and Excavation Contractors 3925 Chain Bridge Road • Fairfax, VA 22030 • (703) 358-9300 • www.NUCA.com
The “ripple effect” of economic activity that comes with construction projects cannot be understated. Investment in water and wastewater infrastructure projects can generate measurable employment in 325 other standard industry classifications in addition to the immediate construction jobs. Industries such as food services, real estate, health care, automotive repair and maintenance, legal services, retail sales, insurance, amusement and recreation, and various other industry sectors benefit when these projects get off the ground. The ripple effect on economic demand amounts to approximately $950 million per $1 billion invested; a huge return on investment for the federal government. The total effect of a $1 billion investment almost triples national output to an estimated $2.87 to $3.46 billion in economic demand for goods and services from other industries such as engineering, manufacturing, distribution and supply. Investment in underground environmental infrastructure also generates approximately $1.06 billion in personal (household) spending. Importantly, the study reports that approximately $82.4 million is generated for state and local tax bases with every $1 billion invested in these projects. At a time when state and local governments continue to scramble to balance budgets, the need to expand local tax bases is greater now than ever. The message behind these statistics is clear: investment in water and wastewater infrastructure projects is investment in an American asset, creating countless American jobs in hundreds of American industries, generating state and local tax revenue, and turning out considerable fiscal activity through local economies while rebuilding critical infrastructure the country desperately requires. The infrastructure needed to provide for safe drinking water and effective wastewater treatment are fundamental considerations that encourage expanded investment, but think about the economic importance of clean and safe drinking water itself. A community and indeed, an effective society cannot do so without either. Clean water enhances individual productivity in countless ways and is undisputed. However, in times of economic difficulty, the funding of construction projects is therefore an effective way to stimulate growth and development far beyond the construction industry. The State Revolving Funds can and do make a difference in our infrastructure. CONCLUSION America can’t function without environmental infrastructure. It’s necessary for public health and good for business. It connects nearly everything we do on a daily basis, and is a precondition for economic renewal and growth. Investment in this infrastructure creates jobs here—these jobs cannot be outsource overseas. d NUCA strongly supports continued investment in the EPA’s clean water and drinking water state revolving loan fund program. Thank you for the opportunity to submit testimony before the subcommittee, and NUCA is available to answer any questions or provide any further information you require.
Key Findings from Sudden Impact: An Assessment of Short-Term Economic Impacts of Water and Wastewater Construction Projects
in the United States
At the national level, an investment of $1 billion almost triples in size as total demand for goods and services reaches an estimated $2.87 to $3.46 billion
The total effect on economic demand is smaller at the state level, but direct investments in water and wastewater infrastructure can nearly double as expenditures for necessary supplies and household spending impact the economy
Industries indirectly related to water and wastewater infrastructure experience an estimated $918 million in demand. These industries are indirectly affected by investments in water and wastewater infrastructure because they provide services that support project design (e.g., architectural and engineering services) or products and supplies essential for project completion (e.g., industrial machinery and equipment, truck transport)
Ripple effects on economic demand can range across a number of industries and amount to an estimated $949 million. A wide range of industries that are not related, directly or indirectly, to building or improving water and wastewater infrastructure nonetheless see demand for their products or services increase as households re-spend income in the economy. These effects occur in sectors as varied as bookkeeping services, energy and telecommunications, health care, motor vehicles, food retail stores, dining establishments, and amusement and recreation services
An estimated 20,003 to 26,669 jobs can result from a national investment of $1 billion. These opportunities are spread across the economy with more than one-half of the jobs in industries other than water and wastewater construction
The economic security of households is strengthened. Total employee compensation – a category that includes wages and salaries as well as contributions to social insurance programs such as Social Security – is enhanced by an estimated $1 billion. Job creation includes an estimated 8,366 jobs in the pipe construction sector where average earnings of more than $50,000 exceed median household income for the U.S.
State and local revenues increase by an estimated $82.4 million as infrastructure is built or improved, though the size of effects vary by location, size, and type of project
OFFICIAL NUCA CHAPTERS AS OF MAY 2014
NUCA of ColoradoJulie Massaro
NUCA of ConnecticutMatt Hallisey
NUCA of DelmarvaJames Clendaniel
NUCA of DCDebora Harvey
NUCA of Central FloridaKaren DeWitt
NUCA of Northwest FloridaPaula Scott-Lieser
NUCA of Southwest FloridaRhonda Cason
Suncoast Utility Contractors AssociationTheresa Mannix
Underground ContractorsAssn. of S. FloridaJennifer Mancini
NUCA of North FloridaKathy Blackman
NUCA of HawaiiKenneth Sommer
NUCA of IndianaRebecca Golembeske
NUCA of IowaCallie Johnson
NUCA of NebraskaJanet Seelhoff
NUCA of New MexicoJane Jernigan
NUCA of Las VegasDick Schneider
NUCA of the CarolinasLinda Goslee
NUCA of OhioRachel Pinkus
NUCA of PennsylvaniaBrenda Reigle
NUCA of Rhode Island/UCARITimothy Walsh
NUCA of North TexasDeana Butorac
Central & SW Virginia Utility Contractors Assn.Dave Burns
NUCA of WashingtonDan Patsula
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