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P3 bill might be funding solution

Legislation could spark a fix for infrastructure

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In an era when earmark has become a dirty word, state lawmakers have shifted the dialogue to so-called public-private partnerships, or P3s, to begin tackling one of the commonwealth's most languishing issues: transportation infrastructure.

Earlier this month, the House passed House Bill 3, a proposal introduced by Transportation Committee Chairman Rick Geist,R-BlairCounty. If approved by the Senate and signed by Gov. Tom Corbett, the bill would allow the state to lease transportation assets to private firms, which might expedite the process of rebuilding the state's crumbling network.

The commonwealth is behind the eight ball on transportation infrastructure funding, state and business leaders said. A 2010 study by the State Transportation Advisory Committee pegged the annual unmet need at $3.5 billion.

Over the past few months, lawmakers on both sides of the aisle have offered possible solutions to address the funding shortfall. Many of the proposals have paralleled recommendations from Corbett's Transportation Funding Advisory Commission.

In August, the commission drew up proposals that would add about $2.5 billion for infrastructure over a five-year period. The commission's plan included uncapping the gas and oil company franchise tax, increasing fees, moving the state police budget over to the general fund and modernization programs at the state Department of Transportation.

The P3 bill is designed to foster private investment in large-scale, state-owned infrastructure assets — increasing the capacity on Interstate 95, for example — and free up limited public dollars for maintenance and safety projects, Geist said.

"It becomes a home run," he said of his legislation, adding he plans to author a companion piece of legislation that would help address municipal infrastructure needs.

Under a P3, another commission recommendation, the public entity maintains ownership of the asset but contracts with a private group to develop, construct, manage, operate and/or finance a given project. The private company would generate a return through user fees or tolls.

"If that's the only way for us to do it, it should be taken under consideration," Auditor General Jack Wagner said.

Last week, Wagner was stumping for passage of a comprehensive transportation and infrastructure bill under the structurally deficitMulberryStreetBridgeinHarrisburg.

A nylon net was placed under the bridge deck in 2008 to prevent loose concrete from falling onCameron Streettraffic.

"Forget the politics. This is about a life safety issue," Wagner said. "We are going to have a bridge collapse inPennsylvania."

The 2005 collapse of a section of bridge over Interstate 70 inWashingtonCountymagnified the issue of structurally deficit bridges and poor roadways at the state level. A structurally deficient bridge has at least one deteriorating structural component. While not necessarily unsafe, these bridges might have weight and speed restrictions.

Pennsylvaniahas the most structurally deficient bridges of any state in the nation — more than 5,000, or 26 percent of the state-owned inventory — and roughly 8,000 miles of roadway in very poor condition, according to the 2010 study.

If apathy persists over long-term infrastructure investment, the cost will escalate at a dramatic pace, Wagner said.

"You may not just need to repair a bridge, you may need to replace a bridge," he said. "We must take this issue seriously and begin to come up with the funding solutions to address the problem."

A multi-pronged transportation bill also would create tens of thousands of jobs, mostly in the construction sector, he noted.

P3s are as good an option as any, especially in dealing with transportation needs, said Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry.

"We'll certainly find out if there is capital out there," if a bill passes, he said.

The potential also might be there for a private group to invest in a collection of local infrastructure projects through an agreement to purchase and lease back assets to the public entity, said Brian Emberg, senior vice president and chief technical officer at Swatara Township-based engineering firm Herbert, Rowland & Grubic Inc.

Cumberlandand Dauphin counties have contracts with HRG for engineering services. HRG also works with numerous municipalities on prioritizing road and bridge projects.

However, right now there is not a lot of P3 appetite among local governments, he said, mainly because of the size and scope of projects. Tolling is not really applicable to municipal roads and bridges, said Kirk Stoner, director of planning forCumberlandCounty.

"Some people look at the P3s as a silver bullet that will solve a lot of problems," Stoner said. "Someone still has to pay the bill for the project."

The P3s could be one tool in the toolbox, he said. A much larger legislative approach that considers taxes and fees needs to be considered, he said.

"In five or six years, there could be serious problems with weight reductions or closings," Stoner said, adding he hopes to see something clear in the General Assembly that the governor will sign.

The chamber supports many of the proposed tax and user fee bumps, including an increase of the motor fuel tax, Barr said.

"If we want safe roads to drive on and carry the goods we need, we need more money in that system," he said.

Corbett has not said what he might support on transportation. However, increased taxes are not likely to be part of that equation.

What if?

In an era of limited government funding, counties and municipalities are forced to maximize annual liquid fuels allocations that are based on pre-1930s gas consumption formulas.

It is getting increasingly harder to leverage state and federal funds, leaving many, includingCumberlandCounty, to consider self-funding options.

CumberlandCountyowns 28 bridges. Ten have been identified for replacement over this decade — a projected cost of $34 million — but the money is getting harder to come by, Stoner said.

The county receives about $330,000 in liquid fuels, which is to be used for maintenance and replacement costs.

The top three county-owned bridges have been put on the Transportation Improvement Program, or TIP, through the Harrisburg Area Transportation Study. HATS is the regional planning organization forCumberland, Dauphin and Perry counties.

Those bridges are:

  • CraigheadBridgeinSouthMiddletonTownship.
  • OrrsBridgeinHampdenTownship, the county's most heavily traveled bridge with about 10,000 vehicles per day.
  • Wolf's Bridge inMiddlesexTownship.

The county is responsible for 5 percent of the cost for projects on the TIP, while the other 95 percent is state and federally funded, Stoner said.

To help cover other replacement projects moving forward, the commissioners last year set aside $500,000 of general fund dollars, Stoner said. Officials are considering action on a planned contribution of $500,000 to $1.5 million annually for 15 years to address county bridge needs, he said.

"The problem is that bridges are only one of many (county) needs," Stoner said.

The county also is looking at possible bond issues and low-interest loans through the Pennsylvania Infrastructure Bank.

Local officials need to develop strategic plans for how to fund local projects, Emberg said.

"Unfortunately, there are not a lot of options (today)," he said.

Imagine if that preferred route to and from work was altered indefinitely because a weight-restricted bridge was suddenly shut down for fear of a collapse.

How would that prolong the daily trips, impact vehicle fuel and maintenance costs and just plain annoy us after awhile?

"We're comfortable as long we're not inconvenienced," Emberg said.

DauphinCountywas fortunate to be able to leverage state and federal aid over the last three decades for bridge replacements, he said.CumberlandCountyonly shifted its focus away from maintenance to replacement in the last three years.

Historically, the general public has not had an appreciation for the lack of infrastructure investment, he added. It takes a closing or an incident on a bridge or roadway to spark a sense of urgency.

"Our plan is a plan so when 2020 hits we're not making news. We don't want to make news," said Christopher Bauer, HRG's director of transportation.

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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