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Sep. 28, 2017

Natural disasters refocus nation on infrastructure

The United States was once the world’s leader in building infrastructure. Today, the U.S. ranks 11th in the overall quality of its infrastructure, according to the latest World Economic Forum Global Competitiveness Index.

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By Brian Lynch

Damage from flooding due to recent hurricanes in the United States may break the previous record from Hurricane Katrina a decade ago. Moody’s Analytics now estimates the cost of Hurricanes Harvey and Irma to range from $150 to $200 billion. Katrina was $160 billion in today’s dollars. Long-term losses to the regional economies will also factor in on top of the losses to property losses. It’s difficult to wrap your head around these numbers and the scope of the challenge.

Reducing the flood risk to low-lying cities like Houston will calls for investment in our nation’s crumbling infrastructure: storm-drain systems, the electrical grid, bridges, roads, and highways for a start. The national discussion had already begun under President Donald Trump months before the hurricanes hit. Unfortunately, there are many competing topics for the Administration’s immediate attention, including healthcare reform and tax reform. The construction industry needs these issues to be addressed, too.

But in the long run, perhaps the greatest legacy the current Administration could leave our nation is fortifying our existing infrastructure in Texas, in Florida, and elsewhere.
The United States was once the world’s leader in building infrastructure. Today, the U.S. ranks 11th in the overall quality of its infrastructure, according to the latest World Economic Forum Global Competitiveness Index.

We are now witnessing first hand the consequences of this decline. Closer to home in California, our recent drought demonstrated the lack of planning and investment in water storage. When heavy rains finally arrived, it quickly overwhelmed the state’s water storage. When the Olivenhain Dam was finished in 2003, it became the first new dam built in San Diego County in 50 years. Imagine the population growth in those 50 years, all without significant new water storage.

Our country’s infrastructure continued to deteriorate during the Great Recession. Federal spending on infrastructure dropped from over $300 billion in 2008 to under $250 billion in 2013. America’s infrastructure is still light years ahead of most nations, thanks to our legacy of earlier infrastructure decisions such as the completion of the interstate highway system. We have been fortunate to reap the benefits in our quality of life for many years. It may not seem like it during your morning commute to work, but Americans spend less time in peak period traffic congestion than most of the world.

President Trump’s Executive Order addressing infrastructure permitting prior to the recent hurricanes provided the first step. It gets all the right people to the table when legislation does get passed. It also provides the construction industry some time to navigate the permitting process.

Putting a coordinated, transparent, predictable process in place provides a solid foundation – something we understand as builders. Speaking recently on Fox News, ABC National President and CEO Michael Bellaman said he sees a lot of desire to make progress at the cabinet level and within the federal agencies themselves.

However, legislative action is really the key. Congress must act. There will be many views on the best way to approach infrastructure priorities and funding. Is there going to be a list of projects, or a set of guidelines? How are these projects funded? Public private partnerships? Matching funds with state funds? Solely federal funds?

There is no need to choose just one. The construction industry would like to see all of the above available. Different types of infrastructure projects provide different services. For those producing a sustainable revenue stream, public-private partnerships are a good fit with potential for interested investors. With projects such as fixing bridges for the safety of the public, these required investment of federal and state funds.

However, those of us committed to the Merit Shop philosophy must maintain our firm stand against Project Labor Agreements (PLAs) on public works projects. Contracts subject to government-mandated PLAs funnel work to favored union contractors and their members, which represent just 13.9 percent of the U.S. private construction workforce according to 2017 U.S. Bureau of Labor Statistics data. They are especially harmful to veterans, minorities, and women construction professionals not as likely to be affiliated with unions.

PLAs drive up the cost of construction by reducing competition and effectively excluding merit shop contractors and their skilled employees from building projects paid for by their own tax dollars by as much as 12 to 18 percent. Increased costs translate to fewer projects funded at a time we can ill afford it.

Brian Lynch is board chairman of the Associated Builders and Contractors San Diego Apprenticeship Training Trust. Lynch has served in governing roles for ABC San Diego since 1995. He is president of Certified Air Conditioning, Inc., in San Diego.

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