Tuesday, August 20, 2002

I’m Debbie Ricker, and I am one of the owners and founders of L&D Safety Marking and Worksafe Traffic Control Industries along with my sister and my husband. We have been in the highway safety business since 1985. Our companies provide pavement markings and highway sign installation services as well as manufacture and sell signs, traffic safety equipment and supplies. We employ 35-45 people and pay livable wages with an extensive benefit package. Our corporate office in located in Berlin, Vermont and we have divisions in Bow, NH and Hallowell Maine. Our company like many other AGC member companies are small family owned business some in second and third generation so we have a very strong interest and roots in the wonderful State. I would like to start by thanking you Chairman Jeffords and the Committee for bringing their hearing to Vermont.

While accounting practices for private corporations may be the topic of concern in Congress today, the accounting practices for state and local governments will inevitably be the focus in the future as Governmental Accounting Standards require more accountability for the condition of, and the maintenance of roads, bridges and other public assets that taxpayers have invested billions of dollars in over the years. I specifically refer to the Government Accounting Standards Board, Rule 34 that defines ``generally accepted accounting principles'' for state and local governments. GASB 34 requires governments to include long-lived infrastructure assets in their annual financial statements starting with fiscal year 2002.

To properly account for infrastructure assets, governments must develop an asset management plan which at a minimum should identify the condition of pavements, structures, and facilities. That plan should include deterioration rates for those assets so that a determination can be made for the annual funds necessary to maintain those assets at a recommended level of performance.

This whole issue of asset management is important to getting the optimum level of results from the expenditures we make in maintaining our infrastructure. In short “Getting the Biggest Bang For The Buck”. This has been a critical issue in government, more so than business, because of the tendency to balance the budget by deferring essential maintenance since state and local governments are very infrastructure-intensive.

Here in Vermont, because we are a small state with limited resources we have relied heavily on federal funds to meet our infrastructure needs. However, because we are a state with an aging infrastructure in a cold climate our needs are greater than both existing federal and state resources can satisfy, so asset management is all the more critical to us in getting the dollars applied properly to our infrastructure. But more dollars both state and federal are needed to catch up to basic needs.

As for our aging infrastructure: Former Governor Madeline Kunin initiated “Bridge 2000” in 1988 to repair and replace 454 structurally deficient bridges identified at that time. We have approximately 2,700 bridge structures in Vermont. In 1988 The Vermont Agency of Transportation estimated that it would cost 1.6 billion dollars over a ten-year period to repair those 454 structurally deficient bridges. Today with more than 550 structurally deficient bridges in Vermont the cost (including inflation) will more than double in that area alone. In addition the Interstate Highway System in Vermont, which is well over 30 years old, is now in need of rebuilding in many sections. Bridge replacements need to be constructed and over 100 million dollars in culvert work is required on the Interstate alone. That’s not including the estimated eight to ten thousand or more culverts on the state and local systems that will eventually need replacement. A report jointly authored by the FHWA and VT AOT recently sited the need to spend 74 million dollars annually on maintenance and repair of the 320 mile interstate in VT. Vermont is only funding 20 million dollars on those repairs -- clearly one fourth of what is required. It has gotten so bad on the Interstate that one of our AGC member companies doing a basic culvert repair recently discovered a 7-cubic-yard void directly under the under the travel pavement of Interstate 89 in Williston. This area of the Interstate is a heavily traveled thoroughfare and a pavement collapse would have caused serious injury and perhaps death, which brings me to the issue of safety on our roadways.

Tragically more than 41,000 Americans die and 3.5 million are injured in motor vehicle accidents on our highways each year. If the average U.S. crash rate remains unchanged, one child out of every 84 born today will die violently in a motor vehicle crash. 6 out of very 10 children will be injured in a highway crash over a lifetime, many of them more than once.

As more people travel more miles on the highways and as the aging demographics of our driving population change, significant improvements in safe roads are essential to continue our progress in reducing highway fatalities and injuries.

In July of this year the GAO released a report that showed that although 40% of all vehicle miles are traveled on rural roads, about 60% of the traffic accident fatalities that occurred from 1999-2001 took place on rural roads.

When adjusted for vehicles miles traveled, the fatality form accidents on rural roads is nearly 2.5 times greater that the fatalities from accidents on urban roads.

Some of the factors contributing to these statistics are driver impaired issues such as drivers under the influence, tourists or drivers not familiar with the area, parents with active children in the car, drivers on medication, fatigued drivers, emotionally stressed drivers, and the growing number of older drivers. In addition to these hazards Vermont has additional issues. Being a rural state Vermont has winding and narrow roadways with many seasonal and weather related hazards. In the winter we travel more night hours with reduced visibility from fog, rain, snow, and ice. These elements are very hard on our infrastructure and require higher cost maintenance.

While national statistics show that the overall number of traffic fatalities has dropped by 9% overall due to safer cars, air bags and various other devices there are two areas showing increased fatalities. Those increases occurred in the over 65 aged population and in work zones. The number of fatalities in people over 70 has increased by 39% over the last 10 years. Nearly one in five drivers by 2020 will be age 65 or older.

In Vermont, The Road Information sites the following statistics:

TRIP Shows Vermont                                                     1989                            1999

Drivers 70 and above killed in traffic accidents                 6                                  8
Drivers 70 and above involved in traffic accidents             8                                11

Workzone Fatalities Stats:
Total of 21 Vermont fatalities in the last 8 years.

2001     3
2000     2
1999     3
1998     1
1997     6
1996     1

1995 4
1994 1

As our nation’s population continues to age in the years ahead it will be increasingly important that we make the kind of roadway safety improvements that can help reduce accidents and save lives. While improved transit service has a role to play, it is important to focus on roadway safety improvements because 92% of all surface travel by older citizens takes place in motor vehicles. Highway travel by persons 70 and over is increasing at a faster rate than travel by other Americans.

Other important points to note include:

* Fatalities in workzones have increased over 50% in recent years to reach an all time high of 1093 deaths in year 2000.

· 77% of all fatalities occur on 2 lane roads. Poor roadway infrastructure is a factor in 30% of these fatalities.

--which gets me back to the issue of funding and asset management.

In a state with limited resources Vermont must make some tough decision when it comes to capital spending. The need to fix or repair what already exists in Vermont’s infrastructure inventory is mind-boggling. With 1,000 dams statewide, over 324 public school buildings, 15 technical centers, 2700 long bridges, 14,000 miles of roadway, 320 miles of Interstate, 2,370 miles of state highway, 11,210 miles of municipal roads and 16 public use airports, it is easy to understand the extent of maintenance and repair required. Add to that list new initiatives of recent years in public transportation, recreation paths, rail freight and commuter rail and the enormity of the up-keep problem is compounded.

Vermont faces a major decision: invest in repairs and rehabilitation of the existing infrastructure on an annual basis or replace major parts of the system at a much greater cost in the years to come. A properly planned “Asset Management Program” will help set priorities.

Adequate annual funding of Vermont infrastructure will do much to improve safety for our travelling public and will have a positive effect on Vermont’s economy as well.

Transportation represents 11 percent of the American economy. As a share of the Gross Domestic Product, transportation has held study at just under 11 percent since 1989. Transportation construction is a $160 billion a year industry that employs more than 1.6 million people. Every $1 billion invested in the nation's transportation infrastructure creates approximately 35,000 jobs. Public investment spurs private investment and in Vermont where we’ve lost over 8,000 jobs in the last year we will need all the help we can get.

The U.S. Department of Labor contends for every dollar spent on construction activity there will be a $2.75 return to the economy. The Council of State Governments states that every dollar invested in the highway system yields $2.60 in economic benefits with every billion invested producing 42,000 jobs. In short this means we can maintain what we have and fuel the economy so that resources are available for other non-construction related programs to benefit the society. Franklin Roosevelt recognized this economic reality when in the depth of the depression he created the WPA (Works Project Administration) and the CCC (Civilian Conservation Corp.) putting millions of unemployed Americans to work on public projects nationwide. He knew that construction drives the economy. And whether it is new construction in the fastest growing states of America or reconstruction and rehabilitation in less populated states like Vermont the result is the same. People are put to work, construction businesses are able to stay in business and both are able to pay their taxes necessary for government to provide for other needs in society. Jobs, safety, economic development are all a by-product of funding infrastructure improvements. Its an investment we need to continue.