The U.S. aggregate mining industry is hurting, our highways are crumbling, and Congress is making both problems worse.

The recession certainly has caused great pain within the aggregate industry, due in large part to the crash of both the housing market and commercial construction. In 2008, housing starts fell to the lowest level in 50 years.

These two factors severely diminished demand for aggregate, but they’d be survivable if Congress didn’t create a triple whammy.

In 2005, Congress passed the “Safe, Accountable, Flexible, Efficient Transportation Equity Act,” which called for investment by the federal government in a Highway Safety Improvement Program structured and funded to make significant progress in reducing highway fatalities. The act also sought to relieve congestion through highway construction, highway improvements, bridge improvements and other transportation infrastructure.

Funding for most of the program was earmarked to come from the Highway Trust Fund, established in the 1950s to make sure federal gasoline tax revenue was spent on highway maintenance and improvements.

The problem: The Highway Trust Fund authorization expired in September 2009. Since then, it has been extended on short-term resolutions, as opposed to the original 50-year authorization. Some in Congress favor not renewing the program and simply budgeting highway projects annually through the treasury general fund. The big catch with such an approach is that budgeting for highway improvements would be subject every year to politics surrounding the annual budget process.

Already, the lack of a committed funding source has kept many of the larger aggregate producers and complementary industries from being able to conduct long-term capital planning. Why invest capital resources to increase your reserves or make capital investments for large machinery when you can’t confidently project the demand for your aggregate products in the coming years?

The result has been a stagnation of investment, job creation and tax revenue from companies that mine the rock product that will be needed and from the companies that provide the machinery, trucks and other needed products for the industry.

Insiders on Capitol Hill are stating that the issue will not be addressed until a new Congress is elected in November 2010, and probably not until well into the new session of Congress.

So, the next time you are run across a pot hole-filled roadway, a bridge closed for repair (or not being repaired), or if you are just sitting in traffic, remember that part of the cause is a Congress that will not pass a bill that nearly everyone on both sides of the political aisle says we need.

Christopher Hopkins is senior vice president for aggregates and mining for The Saint Consulting Group, email hopkins@tscg.biz, phone, 615-656-3794

Senior Vice President for Aggregates and Mining, The Saint Consulting Group

As the United States fights to free itself from the burden of foreign oil dependency, a new use for coal is being tested by the United States military.  Accelergy, a Houston based company, has developed a fuel that is liquefied clean coal. This will have a positive impact on the coal mining industry as we move forward.

Accelergy has come up with a way to convert the coal into an economical, clear, and arguably clean form of jet fuel.

According to Tim Vail, Accelergy’s CEO, the key is a process fine-tuned at ExxonMobil in the mid-1990s that turns coal or plant matter directly into a liquid. Unlike the often-criticized Fischer-Tropsch process devised in the 1920s, Accelergy’s process does not get convert coal into a synthetic gas before transforming it into a liquid. Eliminating gasification greatly reduces carbon dioxide emissions, as well as the total amount of coal (or biomass) consumed to produce liquids, he said. And it’s cost-effective.

The Chicago Green Technology Examiner has full details.

Christopher Hopkins is senior vice president for aggregates and mining for The Saint Consulting Group, email hopkins@tscg.biz, phone 615-656-3794

It has now been eight months since the expiration of the Federal Highway Trust Fund. While there have been short-term extensions put in place to maintain some of the road funding to the states, it has not been sufficient to keep up with our deteriorating infrastructure.

The Federal Highway Trust Fund was started in 1956 in order to maintain America’s roads and bridges. Through this act, the federal gas tax is earmarked for the maintenance of roads and bridges across the country. The federal gas tax is an incredibly fair user fee:  the more you drive, the more wear you cause on the roads; so, the more gas you use, the more you pay to repair roads and bridges. Americans drive approximately 3 trillion miles per year, but if you do not drive or own a car, you do not pay a cent towards the trust fund.

State and local governments are in dire straits, not knowing if and at what level, federal highway funds will be forthcoming.

In the private sector, construction and aggregate companies are unable to make long range capital plans and in turn are not able to participate more in the economy by adding jobs and capital outlays. And the delays are costing jobs; the U.S. Department of Transportation estimates that for every $1 billion of federal spending on highway construction, 28,000 jobs are created, this in a construction industry that is experiencing an estimated 21.8% unemployment rate.

There is a serious need for these road repairs. In 2007. the National Bridge Inventory listed 12% or 74,000 of bridges in America were “structurally deficient”.  In 2009, the American Society of Civil Engineers gave the overall infrastructure in the country a grade of “D”.

Some highlights from the society’s report card:

• Bridges got a “C,” with one in four rated structurally deficient or functionally obsolete.
• Levees, most of them older than their designed lifespan and privately owned, got a “D-minus,” with repair costs put at $100 billion.
• Dams got a “D,” with 4,000 dams deemed deficient and half of those considered to have “high hazard potential.”

• The nation’s roads got a “D-minus,” down from “D.” Americans spend 4.2 billion hours stuck in traffic a year at a cost of $78.2 billion, or $710 for each motorist, the report said.

The government needs to pass the Federal Highway Trust Fund renewal; it is a program that has bi-partisan support in Congress, but the partisan politics of Washington, D. C., will not let it be taken up during an election year. Rather it is placed into the general fund where it is raided for pet projects that have nothing to do with infrastructure.

Meanwhile, bridges and roads further deteriorate, people remain unemployed who should not have to, Congress goes on recess and the bickering continues.

Christopher Hopkins is senior vice president for aggregates and mining for The Saint Consulting Group, email hopkins@tscg.biz, phone 615-656-3794

By Owen Eagan,
Senior Vice President for Transportation, The Saint Consulting Group

Recently, the issue of transportation gained political undertones in Hawaii as the governor’s race started to unfold there (See “Honolulu rail project: political football or policy football?” http://bit.ly/aZeYY7).  Now, transportation has taken center stage in the Texas GOP primary race for governor, even becoming the subject of a “comparative” ad by U.S. Senator Kay Bailey Hutchison (See “Texas GOP primary: KBH promises to deal with transportation – mañana” http://bit.ly/bSl1n6).

Transportation projects can be among the most controversial land use issues because they not only involve NIMBYs, but they also usually require some form of public financing or subsidies.  Further, these projects become harder to justify when public resources are strained in difficult economic times.  Therefore, it is imperative that private sector interests seeking to develop large scale transportation projects do their political homework.

This includes conducting a political viability assessment to determine whether a project is feasible and, if so, the resources needed to ensure its approval.  Without building the necessary political support and giving politicians cover, you risk your project becoming the third rail.

Owen Eagan is senior vice president for transportation for The Saint Consulting Group, email: eagan@tscg.biz phone (818) 239-4769; http://tscg.biz/transportation

Governor Linda Lingle of Hawaii has asked Mayor Mufi Hannemann of Honolulu to revise plans for the city’s proposed $5.3 billion rail project in light of financial issues.  Specifically, she suggests building a portion of the elevated project at street level to save costs and has promised a thorough review of the project to see that all alternatives have been considered (see http://bit.ly/73uYMS).

The Honolulu rail project, a 20-mile light rail project from east Kapolei to Ala Moana, was approved by voters in November 2008.  A final environmental impact report is currently being reviewed by federal transportation officials, which the governor must approve in order for the project to move forward.  While there is some merit to the governor’s concerns, there is some speculation that this is more about politics than policy.  First, Lingle is a Republican and Hannemann is a Democrat.  Second, though Lingle is unable to run for reelection due to term limits, Hannemann is currently seeking her seat.

Lingle’s position is supported by the Hawaii chapter of the AIA, which has expressed concerns about the project’s visual impact. In fact, Lingle cosponsored a public forum on January 18^th with the AIA to discuss alternatives (see http://bit.ly/6vtmR9).  However, a strong case can be made that a street level train will increase transit time and decrease ridership (see http://bit.ly/6ykKGh).   It’s unfortunate that this project has become a football of any sort but, if it has to be a football, let’s hope it’s a policy football and not a political football.

(In the interest of full disclosure, Saint Consulting was a consultant for the Go Rail Go campaign, the campaign advocating passage of the ballot initiative.)

Owen Eagan is senior vice president for transportation, The Saint Consulting Group, email eagan@tscg.biz, phone 818.239.4769

In 2005, the US Supreme Court found in Kelo v. City of New London that local governments could seize private property by eminent domain for economic development purposes. So, if you’re a politician and you’re confronted with a decision as to whether to take private land by eminent domain for economic development, what kind of test would you apply to determine whether the public benefits outweigh the private interests?

Would it be based on the ability to attract and retain new businesses in the area?  Would it be based on developing a complementary business mix for the business community?  Would it be based on the tax revenue or jobs that could be created?  Whatever the reason, it would have to be based on sound public policy, right?  Not necessarily.

Both the Kelo case and one recently cited in Washington state suggest that like any other land use decision, politicians will likely more often than not make eminent domain decisions not on policy but on politics.  That is, if politicians see a development opportunity that is politically popular and has little to no political opposition, they are likely to support the land taking.  The converse is also true.  In fact, our success rate at Saint Consulting is greater than 90% because our consultants are so good at assessing the political viability of real estate development projects.  Eminent domain cases are no different.

An interesting eminent domain case with Kelo implications just arose in Washington State, which involves the taking of a parking lot near the airport for the development of an entertainment center (see “Kelo rears its ugly head… west coast style” http://bit.ly/5W6gVO).  Airports have become major economic drivers, resulting in the emergence of the “aerotropolis” with many businesses being integrated into airport development.  In Seattle’s case, it’s easy to see how this development might make economic sense.

However, when it comes to eminent domain, the politics surrounding these issues can be more complicated.  For instance, according to The Saint Index, 80% of people disagreed with the Kelo decision, with 63% saying they disagreed strongly.  Therefore, opposition to the proposed Seattle project could likely be easily generated.

But, regardless of your position on this issue, the affected parties would be well advised that, in addition to gathering their facts and legal opinions, they do their political homework.  Just having the facts on your side is never enough when it comes to political decisions.

Owen Eagan is senior vice president for transportation, The Saint Consulting Group, email eagan@tscg.biz or phone (781) 831-2494

What is the most important piece of information for voters on ballot initiatives?  Is it knowing who the sponsors are?  Is it knowing who the endorsers are?  Is it knowing if there are any tax or cost implications?  Is it knowing whether the issue is related to partisan politics?  Is it knowing whether the issue is a vote of conscience?  Is it knowing that the issue is related to complex public policy and should be left up to the legislature to decide?

While all of these aspects are important considerations for voters, they all have something in common regardless of the issue they address.  That is, they are all contingent on the most important piece of information for voters.  Give up?  It’s the ballot language.  The ballot language is the single most important piece of information because it is the one bit of information that every voter is guaranteed to see.  Get it right and your chances of success dramatically improve.  Get it wrong and you are destined for failure.

So important is the ballot language that it is the first issue that the opposition will likely challenge through decision-making authorities and/or legal channels.  When it comes to transportation issues, whether you’re considering light rail, a toll road or highway improvements, you need to make sure you get the language right before you go down the ballot initiative path.  Otherwise, your journey might be over before it even starts.

Owen Eagan is senior vice president for transportation for The Saint Consulting Group, email eagan@tscg.biz , phone 781.831.2494

The Saint Consulting Group often does seminars for trade associations, client real estate departments and other groups. A popular topic is “How to Kill a Real Estate Project”. By learning the techniques that opposition groups utilize to derail a project, developers can learn how to avoid common mistakes and identify plan weaknesses.

In Part 1, we looked at strategic opposition topics and arguments such as traffic, schools, noise and dust and threats to the character of the community to derail projects. In Part 2 we look at wetlands, environmental issues, community and infrastructure concerns:

G. Vital wetlands would be destroyed

1. The proponent has not adequately assessed the wetlands.

2. An independent species inventory should be conducted at the proponent’s expense.

3. No work should take place until a full summer inventory is taken and a full assessment made as to species.

4. Filling wetlands destroys natural habitat for animals and plants, endangering the ecosystem.

5. Replicating wetlands is not acceptable to the neighborhood even if the law allows it. The proponent should redesign or move the store.

6. Filling wetlands will cause flooding in the residential neighborhoods.

7. Dust and air pollution from the project will adversely impact the habitat.

8. A septic system will endanger the wetlands. The proponent should be required to install a force-fed system with a tight tank.

9. The proponent’s enormous parking lot will substantially increase the amount of impervious surface in the area, injuring the ecology.

H. The site is an environmental nightmare

1. The proponent should be required to have a full environmental inspection done at the site, and the results should be made public.

2. The city should hire an independent environmental firm at the proponent’s expense, to evaluate the site and report findings publicly.

3. The proponent or current owner must be required to do a full cleanup before any part of the permitting process takes place, or we lose our leverage.

4. The former site owner is in Chapter 11. We’ll never get the site cleaned up if we don’t require the proponent to do it in advance of granting building permits.

5. The proponent should be required to post a bond in twice the amount of the estimated cleanup costs and be given one year to do a complete cleanup.

6. The proponent must pay for citizen monitors to watch the cleanup, monitor progress, and report any discrepancies or disturbing findings.

7. All contaminated soil must be hauled off-site and out of town, and replaced with clean fill. No soil storage, burning, or other treatment should be allowed on site.

8. All construction or demolition debris must be removed from the site on a daily basis so as not serve as an attractive nuisance for children or pets.

9. At the end of each work day, all potentially dangerous conditions, equipment, or materials shall be repaired, removed from the site, or so secured and locked that curious children could not be injured.

10. Proponent shall provide at least one police detail officer at the site during nights and weekends during the entire construction period.

11. Proponent must be required to prepare and submit a comprehensive rodent control program before beginning any demolition, so as not to attract rats to the residential neighborhood.

12. The proponent must pay for soil, air, and water monitoring equipment to be in place and operating during the cleanup process.

13. The proponent must pay the cost of monitoring the aquifer and for continual testing of the town water supply, wells, reservoir, and drinking water at the home faucet.

14. The proponent must pay the cost of test wells, to be drilled periodically where and when the city’s consultant suggests, to discover and monitor any plume of pollution.

I. Environmental concerns need to be addressed

1. Proponent should be required to plant a tree for each one he cuts down in clearing the wooded site. Plantings can be in parks and schoolyards.

2. Storm water runoff must not drain into the ground water, or must be filtered and fitted with oil/chemical separators to avoid pollution from oil, gasoline, antifreeze, grease, road salt and other chemicals.

3. The proponent should be required to make public a list of all hazardous, flammable or toxic chemicals it plans to carry or store in the facility.

4. Sinks and drains must not carry chemical waste into the ground water.

5. Sinks in the butcher area must drain into a tight tank.

6. No photo processing or dry cleaning should be allowed on the site.

7. Floor drains in warehouse areas storing household chemicals and other toxins must drain into a tight tank.

8. If automotive supplies are to be sold, proponent should be required to include a motor oil recycling station and equipment in the building plans.

9. The proponent should be required to set aside substantial greenbelts and green islands to reduce the mass of his project and to reduce the area of bituminous impervious surface.

10. The proponent’s landscape and parking lot design are not environmentally friendly nor safe for pedestrians.

11. The proponent’s exit plan will cause backups, leading to needless air pollution from vehicle exhausts.

12. Proponent should be required to pay for air quality monitoring and sample analysis, and the results should be published in the newspaper on a weekly basis. The city should engage a consultant to extrapolate the impacts on air quality from the projected traffic volume, queuing, and idling (including vehicles in both the parking lot and loading area).

13. Proponent must be required to use hydro fluorocarbons (HFCs) in refrigeration units, and not be allowed to use hydrochrlorofluro-carbons (HCFCs) or any interim or so-called R-22 products.

J. Community concerns need to be addressed

1. Proponent should be required to make a linkage contribution equal to three percent of the project cost to the community.

2. Proponent should be required to post a $5 million bond to guarantee all traffic mitigation, linkage and other undertakings are completed.

3. Certain members of the permit-granting boards have conflicts of interest and should not be permitted to sit on this project.

4. The proponent should be required to make full disclosure of all ownership and financial arrangements respecting this property and project.

5. The proponent’s promises of jobs are unreliable unless we have a signed contract providing liquidated damages in the event of nonperformance. Proponent must also commit to using union contractors, sub-contractors, and all union labor, or at least to meeting union wages and conditions of employment for all construction trades.

6. The proponent’s promises of tax revenues are meaningless unless the proponent waives his right to file for abatements for the next ten years, in writing.

7. The store should be substantially reduced in size to address concerns of traffic, noise, and pollution. We don’t want or need a 30,000-item selection.

K. The Infrastructure cannot handle the burden

1. The sewer system is overburdened. Proponent should be required to construct a self-contained waste disposal system.

2. The town rubbish system is overburdened. Proponent must make his own arrangements for trash disposal.

3. The police department is under-staffed. Proponent should be required to engage four on-site private-duty officers during the construction period, and two officers at all peak store hours, to be designated as weekdays from 3 to 11 p.m. and Saturdays, all day.

4. The fire department is under-equipped. The proponent should donate a dozen self-contained oxygen units to the fire department as part of linkage and also because firefighters would need them in fighting a fire in a huge structure such as proponent wishes to build.

5. The proponent must design emergency ambulance and fire lanes to assure that they are kept clear of parked cars at all times.

6. The proponent should be required to drill a well to provide for all outside watering needs on site so as not to adversely impact the public water supply; and to install an on-site water recycling system.

7. There is no public transportation to the area. Proponent should be required to provide shuttle buses.

L. The proper procedures are not being followed.

1 The Planning Board should conduct a series of informational meetings before taking up the matter formally.

2. The Planning Board should not rule on the site plan before the matter goes before the zoning board.

3. The Zoning Board should not handle the matter at all; a special town meeting should be called on a matter of this importance.

4. The proponent must be required to show serious hardship, not just inconvenience.

5. The Mayor should place the question on the next election ballot.

6. The City Council should hire a consultant to make a survey of the residents to see if they favor rezoning this parcel.

7. The Selectmen should do their own traffic study, at the proponent’s expense.

Patrick Fox is president of The Saint Consulting Group, email fox@tscg.biz, phone 781 836-4163

As land use political consultants, our job is to educate residents on the merits of our client’s projects and turn their support into political action.  In order to do that, we need to both persuade and motivate people to vote.  In the world of politics, there are few more persuasive messages than those involving pocketbook and values issues.

For public transportation projects, the Natural Resources Defense Council (NRDC) has given us another metric to use as a pocketbook issue.  The NRDC study, entitled “Fighting Oil Addiction: Ranking States Oil Vulnerability and Solutions for Change,” ranked each state on an income-to-gas-price ratio (see CNN report).  Mississippi topped the list as the most vulnerable to spikes in gas prices as residents spent 9.14%, or on average $2,702, of their income on gas last year. 

Exhibit 1 below shows average gas prices throughout the United States in 2008.

Our addiction to foreign sources of oil also presents a good “values” message in support of public transportation projects.  Values messages are incredibly effective and, for many voters, values take precedence over any other political issues.  There’s no better example of this than the presidential election of 2004.  Many people may not have agreed with George Bush’s politics but they knew what he stood for and they voted accordingly.

According to the Bureau of Transportation Statistics, the US transportation sector is almost entirely dependent on petroleum as an energy source and nearly two-thirds of petroleum consumption in this country is imported.  In fact, petroleum products constituted $380 billion, or 56%, of our trade deficit in 2008.  Exhibit 2 below shows the trade deficit and the relative impact of petroleum from January 1998 – January 2009.

Therefore, our addiction to oil could also be framed as a values choice between short-term investments in public transportation versus the long-term consequences of our dependency on foreign oil.  When framed that way, that should be another easy choice for people to make.

Owen Eagan is senior vice president for transportation, The Saint Consulting Group, email eagan@tscg.biz, phone

781-831-2494

A new report published by the Urban Land Institute (ULI) has found that transportation efficiencies can significantly reduce greenhouse gas (GHG) emissions and increase savings for consumers.  The report, entitled Moving Cooler, was commissioned by a diverse group of stakeholders representing transportation experts, industry, federal agencies, and environmental organizations and other NGOs (see http://movingcooler.info).

The study analyzed almost 50 scalable transportation strategies, from transit alternatives to more efficient driving.  Implementing bundles of these transportation strategies could reduce GHG emissions by up to 24% below baseline levels in 2050 and provide consumers with an estimated average savings in direct vehicle costs of up to $112 billion annually over a 40-year timeframe.  Among the strategies that contribute most to GHG reductions were land use and smart growth strategies that reduce travel distances, and multimodal strategies that expand travel options.

This report is significant because it provides persuasive information from credible sources and contributes to the debate about the merits of transportation efficiencies.  However, if part of the solution involves land use, smart growth and multimodal strategies, the challenge now becomes, “How do we get that message out and ensure that these strategies are adopted?”  Because all land use decisions are political, the best way of getting that message out is to educate residents about the benefits of these projects and turning that support into political action.

In order to do that, real estate developers and transportation efficiency advocates need to reach out to key stakeholders using traditional political campaign methods.  What this means is meeting with residents and engaging them one-on-one to create a dialogue on transportation issues.  Only then can developers and advocates effectively educate residents and address any concerns they might have.  Our experience shows that these efforts are greatly appreciated by residents as it gives them a voice in the process and develops trust among stakeholders.  In fact, there is no better means of building support for any type of real estate development project.

Following is a broader list of transportation efficiency benefits for communities to consider, including the recent findings of the ULI report:

1.      Protects the Environment

Twenty-eight percent of all GHG emissions in the U.S. come from transportation sources.  Efficiencies in transportation planning could reduce these emissions by up to 24% by 2050 (see http://movingcooler.info).

2.      Saves Money

Transportation policies could provide consumers with an estimated average savings in direct vehicle costs of up to $112 billion a year over a 40-year period (see http://movingcooler.info).

3.      Saves Time

The average driver spends 36.1 hours per year stuck in traffic (see http://mobility.tamu.edu/ums/media_information/press_release.stm).

4.      Increases Productivity

Traffic congestion causes an annual loss of $40 billion to U.S. business http://www.apta.com/research/info/online/ben_overview.cfm).

5.      Stimulates Economic Development

Every public dollar invested in transit returns up to $6 in benefits for communities (see http://www.apta.com/research/info/online/ben_overview.cfm).

6.      Generates Higher Tax Revenues

With a 6-to-1 net return on investment, public transportation generates higher tax revenues for cities and towns (see http://www.apta.com/research/info/online/ben_overview.cfm).

7.      Creates and Sustains Jobs

Every $1 billion invested in public transportation infrastructure supports approximately 47,500 jobs (see http://www.apta.com/research/info/online/ben_overview.cfm).

8.      Enhances Mobility for Seniors

One in four seniors in the 75-plus age group does not drive. Meeting the transportation needs of seniors is a major community objective and national goal (see http://www.apta.com/research/info/online/ben_overview.cfm).

9.      Reduces Dependence on Foreign Oil

Transportation policies could translate into a savings of at least 110 million barrels of oil a year.  At maximum levels of deployment, these savings could yield as much as 660 million barrels per year (see http://movingcooler.info).

10.  Promotes Smart Growth

Changes in land use and transportation options such as transit-oriented development can have significant positive impacts on the environment (see http://movingcooler.info).

Owen Eagan is senior vice president for transportation for The Saint Consulting Group, email eagan@tscg.biz and phone 781-831-2494