No way to smooth things over.
Maine faces a bumpy road ahead, if we can’t find a way to finance maintenance.
By Thomas H. Martin, Jr.
To delay or not to delay?
As Congress puts reauthorization on hold, experts worry about the cost of waiting.
By Maria Fuentes
Questions of transportation. Transportation Committee members Senator Joseph C. Perry and Representative Charles B. Harlow talk about the stimulus, paving cuts and the state of Maine’s transportation network.
By Maria Fuentes
Two sides of the story. Maine Development Foundation and MBTA release report linking transportation investment with economic development.
The $3 billion challenge.
MBTA members celebrate achievements and challenges at 70th annual meeting.
By Kathryn Buxton
All in the family. The Grondin brothers built a construction powerhouse with lots of help from the family.
By Kathryn Buxton
Manzer goes ‘Green.’ Bruce A. Manzer makes inroads with hard work and a cool new paving process.
By Douglas Rooks
No way to smooth things over
Maine faces a bumpy time ahead if we don’t find a way to finance the transportation network we need for our economy to recover.
This is the time of year that Mainers tend to tackle those big, essential tasks that we can’t do during the long winter and spring. We put on new roofs. We paint our houses. We reconstruct our highways and fix our bridges. We also do a lot of paving.
This year, we were waiting for a biennial infusion of road funding before we could get to work. June 30 was the end of Maine’s fiscal year – and the end of the biennial transportation funding cycle, and we knew that funding was going to be tight. With vehicles becoming increasingly more efficient, the impact on fuel tax revenues has been severe. Additionally, the recession that has hit Maine and the country hard, has dealt a blow to the transportation sector since Mainers are driving less and paying less fuel tax.
For several weeks this spring, Maine Legislature’s Joint Committee on Transportation had been working on a temporary solution for this transportation cash crunch. Although they put together several proposals to increase the fuel tax to help span the funding gap, none received the support needed to pass.
Where does this leave us? In my town of Benton, and in towns and cities across the state, we rely on fuel tax revenues for routine paving of state roads that we count on every day.
In fact, in June, MaineDOT cut its maintenance surface treatment (MST) program drastically. In this funding cycle, the state is scheduled to pave only 250 miles of highway when we should be tackling 1,200-1,400 miles in towns like mine all across Maine.
MST paving is a critical piece in MaineDOT’s routine cycle of maintenance. MST paving helps makes Maine’s worst roads passable. It seals the highway surface and prevents water from penetrating the surface. During a wet summer, like the one we’ve been having, water can open up cracks in the surface. During winter, with the expansion of moisture through constant thawing and freezing, those cracks become potholes. MST paving slows the degradation of the road surface. The longer we neglect our highways by delaying this important maintenance, the faster potholes form.
Without a good MST program, our way forward will be rougher.
That means hundreds of miles of state roads will become increasingly vulnerable to cracking and potholes. It means Mainers will pay hundreds of dollars more in maintenance costs to replace tires and align their vehicles. As a society, it will cost us millions of dollars more in deferred maintenance – because every year we fail to perform routine maintenance, the more expensive the maintenance becomes.
It’s not just our roads that are being neglected. The lack of adequate transportation funding hit non-highway modes as well. The legislature also scaled back the Governor’s transportation bond proposal from $127 million to just $71.25 million for the current biennium. That means key investments in aviation, trails, rail and transit have all been put aside. Investments in Maine’s ports have been severely cut back, too. That could risk Maine’s federal match for an important dredging project in Searsport. Those non-highway investments bring longer-term benefits from jobs and increased business investment to improved quality of life.
We are in challenging times, but cutting back on essentials like transportation – particularly when it directly creates so many good paying jobs, saves Mainers money and makes it more cost effective for our businesses to operate – seems shortsighted.
The Transportation Committee is holding two special sessions this summer in an effort to address the funding gap. Be sure to watch your e-mail for updates on the situation.
Finally, in closing, I’d like to say thank you for electing me president and for your continuing support, your willingness and your courage to speak in support of safe, efficient transportation for our state. I look forward to working with all of you in the months ahead. I hope to see you at the MBTA annual convention in September.
To delay or not to delay
Debate continues over the move to delay the federal transportation reauthorization. Should it be delayed? For how long? And at what cost?
By Maria Fuentes
When the American Recovery and Reinvestment Act of 2009 (ARRA) was passed in February, it was touted as landmark legislation that was going to create jobs and jumpstart the sagging economy. States – nearly all of them facing major budget crises – are using the funding to invest in infrastructure, and to shore up other programs that were being decimated by budget cuts resulting from the economic downturn. Transportation infrastructure, that was hailed as being the cornerstone of the stimulus package, made up a scant 7 percent of the total, with highways and bridges receiving only 4 percent. While transportation advocates would have preferred more, the funding was welcome news to most states, including Maine.
Now that much of the funding – at least in transportation – has been obligated, federal and state officials across the country continue to laud the results and their own success at getting the stimulus money out: all 50 states were able to deliver on what they promised, which was to get 50 percent obligated – or committed – by June 30th.
Some states – Maine was the first to do so – obligated the remaining 50 percent well before the federal requirements. Many thought the ability of states to get the money out was a litmus test for the upcoming federal transportation reauthorization, due to expire September 30, and if states could prove their ability to get the money into the economy, it would show Congress how important it is to get the federal bill through both houses of Congress and signed by President Obama.
The price of delay
While Congress has delayed action on reauthorizing SAFETEA-LU (Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users), some in Washington are questioning the logic behind delaying the federal bill, particularly after hailing stimulus funding as a way to jumpstart the stalled economy.
In late July, three Senate committees approved an 18-month extension of current surface transportation programs, first the Environment and Public Works Committee and the Commerce, Science and Transportation committee, and finally the Banking Committee. All three committees have jurisdiction over surface transportation programs. The Obama administration also has signaled its support for the unusually long extension.
One of the notable leaders questioning the delay is U.S. Representative Michael H. Michaud (D-Maine), who represents Maine’s second district. Michaud sits on the House Transportation and Infrastructure (T & I) Committee, and has distinguished himself as a voice for rural states, and as a member of the conservative “Blue Dog” caucus in the house. Michaud recently told Maine Trails: “Delaying reauthorization is unacceptable. We plan to move full steam ahead; we need to get the job done now.”
He noted that the U.S. Department of Transportation (USDOT) recently testified before the T & I Committee, praising the impact of the stimulus – how it has gotten the economy going, how it has created and supported jobs – and he wondered why the administration now wants to put off the reauthorization. “That just doesn’t make sense to me. If the stimulus money has been so good for the country, why would they want to delay longer term, more sustainable investment?”
He continued: “Putting off critical transportation funding is going to hurt our economy, because it is going to hurt our businesses and our workers. If I were on the verge of hiring new employees or buying equipment and I knew that Congress was talking about extensions, I wouldn’t make those investments.”
Still, Michaud conceded that things are still “very much in the air. August break is coming up, and while the house is pushing this, we have a lot of convincing to do with the Senate and the administration.”
$7 billion compromise
Congress has a long history of delaying reauthorizations of transportation bills. In fact, SAFETEA-LU was signed into law nearly two years after its predecessor ISTEA (Intermodal Surface Transportation Efficiency Act) was set to expire. Instead, Congress typically passes continuing resolutions that enable programs to continue without interruption at previous funding levels.
But this time, the stakes are higher. Revenues going into the Highway Trust Fund have declined precipitously, requiring emergency funds from the federal General Fund. As Maine Trails was going to press, the U.S. House passed legislation to transfer $7 billion from the federal General Fund to the Highway Trust Fund’s (HTF) Highway Account. The bill was in response to USDOT estimates indicating the fund will reach a zero balance sometime in August without additional resources.
The transfer is similar to the $8 billion infusion Congress approved last September as a short-term fix to keep the trust fund solvent. It also serves as a compromise between U.S. Representative James Oberstar (D-Pennsylvania), chair of the T & I Committee, and the White House over how to move forward with transportation policy.
The White House and Senate have called for a $20 billion transfer to keep the account afloat until the end of March 2011, but Oberstar has taken issue with the way the administration has wedded the funding crisis to the authorization debate. He has said a temporary patch to carry the account through the end of the fiscal year is all that is needed to give Congress the time it needs to pass a full authorization, complete with new funding provisions. While Oberstar has led his committee’s efforts to pass a $500 billion bill before current legislation expires in September, the White House and Senate leaders prefer an 18-month extension of the current law to buy more time to find new financing mechanisms for highway, transit and rail work.
The Obama Administration says that there is too much on its legislative plate to deal with transportation funding. It cites controversial climate legislation, contentious health care reform, a Supreme Court confirmation and the challenge of coming up with the funding the House T & I has said is necessary.
The sticking point is how to raise $200 billion of the proposed $500 billion transportation program ($350 billion for highways and highway safety, $99 billion for public transportation and $50 billion for high speed rail). According to USDOT and Treasury Department estimates, the federal fuel tax is expected to generate only about $300 billion in revenue over the next six years.
Transportation Secretary Ray LaHood has said that the first priority must be to fix the Highway Trust Fund shortfall so that money continues to flow to the states without interruption.
For some programs, there could be a silver lining, as funding that was supposed to expire with the termination of SAFETEA-LU would now keep going under a continuing resolution until March 2010.
In Maine, the popular Downeaster passenger rail service receives the bulk of its operating subsidy from CMAQ (Congestion Mitigation and Air Quality Funds), created by ISTEA for states to invest in projects that reduce criteria air pollutants regulated from transportation-related sources. Thanks to U.S. Senator Olympia Snowe (R-Maine) and other members of the Maine delegation, an extension to continue using these funds for the Downeaster has been approved in the past. During the past legislative session, Governor Baldacci and the Maine Legislature had hoped to replace the money with state general funds in anticipation of CMAQ funds expiring, but were unable to, due to the state’s economic crisis. According to Patricia Quinn, executive director of the Northern New England Passenger Rail Authority (NNEPRA), the continuing resolution would buy the Downeaster much needed time, keeping its CMAQ funding in place until March 2011. This is welcome news to NNEPRA, which is working with MaineDOT and the congressional delegation to identify operating funding, along with capital funding for infrastructure improvements to extend passenger service to Brunswick, using discretionary grant money available through ARRA.
Submarining the stimulus?
In August, William Buechner, economist for the American Road & Transportation Builders Association (ARTBA), said that delaying congressional enactment of a six-year federal surface transportation program investment bill until March 2011 could “submarine the entire stimulus effort to use infrastructure investment to create new jobs,” adding that “stimulus investments will be undercut without near-term action on the federal highway/transit bill.”
“We learned the hard way over the period 2001 through 2005 that uncertainty about long-term federal funding . . . leads to an overall stagnated transportation construction market,” said Buechner. “Absent congressional action on a long-term surface transportation investment bill this year, the conditions are again lined up to kill job growth in the construction sector and related industries.”
The June 2009 “Fiscal Survey of the States,” conducted by the National Governors Association and the National Association of State Budget Officers, documents the funding problems now facing state transportation departments nationwide. The survey found nearly half the states already have cut – or plan to – their funding for transportation programs this year or next.
Fifteen states have cut funding this year and 19 states – including Maine – report they plan to cut their own transportation program funding in 2010.
“The only bright spot in the transportation construction market this year is the additional federal funding made available to the states and local governments through the American Recovery and Reinvestment Act,” Buechner says.
“The stimulus funds are saving a lot of jobs,” Buechner said. But to really boost new job creation in the near term, he said, will “require a strong signal soon to the states and private sector that the federal government is fully committed to a significant, sustained and multi-year investment in transportation improvements programs.”
“That is absolutely required to get states to begin putting the larger, multi-year construction projects out to bid that spur significant capital investments in materials and equipment and create new jobs,” Buechner said. “Otherwise, we’re looking at a constricting or flat market in most states for the next several years.”
The ARTBA economic team estimates the multi-year $337 billion highway and bridge investment called for in the House bill would generate almost 150,000 new American jobs during 2010 compared to status quo road funding, if the measure were enacted this year. About half those jobs would be in the construction industry or its supply chain. The other half would be created throughout the economy.
“If Congress is looking for a second stimulus, they need look no further than the highway/transit/high speed rail program authorization,” he said. “There is no other bill under development or consideration in the Congress that would stimulate anywhere near the same job growth.”
The best evidence for this is a 2003 study by Global Insight that calculated the economic effects of an increase in highway and transit investment. The study found that every $1 billion increase in highway and transit investment generated $2.2 billion of additional GDP as the demand for products and services worked through the economy, almost $1 billion of disposable income for households, and an increase in federal tax revenues of almost $770 million.
The funding question
The House T&I Committee bill shapes the reauthorization, but it doesn’t fund it. That is the responsibility of the House Ways and Means Committee.
Rep. Oberstar’s bill leaves few funding/financing options on the table. It explicitly short circuits tolling of the interstate – a potentially large source of revenue – even though consumer surveys show that tolls are generally viewed more favorably than higher gas taxes.
The bill also severely constrains the use of private investment capital and concession-based public-private partnerships, approaches that potentially could be a source of significant supplementary revenue for transportation infrastructure. The bill would establish a new Office of Public Benefit within the Federal Highway Administration to review and approve (or reject) state plans for toll roads and to oversee new federal requirements for public-private partnership agreements. Instead of doing its best to create a climate favorable to tolling and public-private partnerships, the bill would appear to set up new barriers that could seriously discourage private investors from participating in the nation’s infrastructure renewal.
Two different federal commissions have studied the funding issue and both concluded, to nobody’s surprise, that the HTF needs an infusion of new revenues. In addition to raising the federal fuel tax –at 18.4 cents, it hasn’t increased in 16 years – the menu of funding options includes:
- issuing $60 billion in 10-year treasury bonds to finance increases in funding provided during the first several years of the bill;
- requiring fuel tax exemptions to be reimbursed from the United States General Treasury Fund;
- increasing the per-barrel fee on crude oil and imported gasoline and diesel;
- instituting a transaction tax on speculative trading of crude oil futures;
- implementing other user fees, such as an increase in the Heavy Vehicle Use Tax, vehicle registration fees and container fees to finance freight related infrastructure improvements;
- assessing a freight waybill tax that would act as a sales tax on freight shipping costs, with a 0.1 percent tax on truck freight waybills that would raise $620 million per year and a similar tax on waybills for all transportation modes that would raise $740 million annually;
- and transitioning from a gas and diesel tax to a vehicle miles traveled (VMT) fee system that charges users for each mile driven.
Funding end game?
Whether the delay is a result of real time or political constraints, the extension is likely to pass. If it does, that will give members of both houses time to get through mid-term elections. With mid-term elections behind them, Congress also might be less reluctant to vote for tax or fee hikes.
Other motivation for the delay may lie behind Secretary LaHood’s proposal. The White House may be betting on there being a brighter economic picture by mid-2011. That could allow the administration to propose a gas tax increase without suffering serious political repercussions. Moreover, by pushing enactment of the new legislation closer to the next presidential election, the Obama White House could take credit for a major piece of legislation.
Delay or no delay, the answer to the funding question lies with the House Ways and Means Committee and not the T&I Committee. Ways and Means is taking its time to come up with a revenue title to the bill, but according to press reports a majority of the committee’s members are opposed to any tax increases as a means of filling the $200 billion gap in the $500 billion bill. The committee is not contemplating any substitute revenue measures, either. And without a revenue title, the T&I Committee bill cannot move forward to the House floor.
So, as states struggle to cut their transportation budgets in the face of funding uncertainty, there remain more questions than answers. The only certainty is that the longer it takes to solve the federal transportation funding puzzle, the longer the economy will flounder.
With the economy struggling, it doesn’t make sense to delay and lose the momentum that a post-stimulus boost in infrastructure spending would bring, said Maine Rep. Michaud, “But it may be the only option we have.”
Questions of transportation. Transportation Committee members Senator Joseph C. Perry and Representative Charles B. Harlow talk about the stimulus, paving cuts and the state of Maine’s transportation network.
By Maria Fuentes
Do you think Maine will see real benefits from the federal stimulus package? If so/not, why?
Sen. Perry: Sure. We are the first state to have committed all of our funds to projects, so we are definitely getting the stimulus funds out there in the way it was intended. It has put people to work, and we are starting to get some of our needs addressed. The stimulus is not the only answer, but it is clearly an important piece.
Rep. Harlow: I do – definitely! Especially when you look at the I-295 project between Gardiner and Topsham, which was a critical project that needed to get done. My area also benefitted because the stimulus funds provided money for the Veranda Street Bridge in Portland, and I hope it will provide funding for the Casco Bay Island Transit District (CBITD), as well as rail. [Editor’s note: The federal government announced that CBITD would receive stimulus funding for a replacement ferry after this interview with Rep. Harlow.]
What about Maine’s transportation infrastructure has hurt the state’s economy? What has helped the economy?
Sen. Perry: Improvements to rails and ports have helped us compete in the global economy.
One thing that has hurt is the 80,000-pound weight restriction on portions of the interstate. If we could increase the weight limit to 100,000 pounds consistently throughout the state, that would certainly help the economy. Another issue is posted roads, which hurt our rural economy. This is a function of our inability to bring our transportation infrastructure to a modern standard.
Rep. Harlow: The turnpike – and the interstate as a whole – have both been very helpful to the economy, as has been the Downeaster. On the marine side, Hapag Lloyd has been an economic boost to the Portland region. When we improve Portland Harbor, we will have even more economic activity as Portland is becoming an even bigger destination for cruise ships.
On the negative side, we are Vacationland and a key destination for tourists; however, the roads leading to some of our most important attractions are horrible. Maybe the roads don’t keep tourists away, but the state of our roads is certainly not encouraging them to come back. Tourism is our biggest industry, and we ought to be encouraging them to stay.
What is the most critical transportation need facing the state and the people in
Sen. Perry: The most critical need is having a reliable system. The highways are the backbone of our system, and the other modes must all work together to work efficiently. All the modes are interlinked. We are at the end of the pipe line in terms of the geography, but in terms of importing, we are at the beginning of the line.
Rep. Harlow: The most important need is repairing the arteries that connect different towns, like Route 302, Route 9 and Warren Avenue to Westbrook. These are the critical links that bring regions and communities together and also are vital to commerce.
Based on what happened during this past session, the MaineDOT can only fund 250 miles of maintenance surface treatment (MST), when it should be funding 1,200 to 1,400 miles. Your thoughts?
Sen. Perry: It is beyond a shame that we are neglecting our roads in this way. Our roads are such an important piece of our entire economy in the state of Maine, not to mention the hundreds of employees of construction companies that won’t be doing this work.
It is also a shame that the little bit of MST we are doing comes at the expense of our long-term capital improvements. All in all, we have this investment of 8,500 miles of roads that we are neglecting. The long-term result is going to be more costly.
Rep. Harlow: We need to increase the gas tax. It is a user fee and the more you drive, the more you should pay. The cost of the fuel tax proposal would only have cost motorists – on average – an additional $50 per year. I don’t feel good at all that we didn’t fix this problem – it is irresponsible. People have told me that they don’t mind increasing the fuel tax as long as we ensure it goes to fixing the roads.
What was the most significant transportation success this session?
What was your biggest disappointment?
Sen. Perry: Educating the legislature on the needs, and ongoing efforts to educate the public on the needs of our transportation system might be – in the long run – the most important thing to come out of this session. When people understand the need and the costs, they will support a system. If they don’t understand the need, it will be hard. The gas tax is certainly a funding mechanism that has outlived its usefulness. Maybe there will be an opportunity in the long-run to find a stable, dependable, adequate funding source.
My biggest disappointment was adjourning without funding maintenance paving. Again, the little bit we are doing comes at the expense of long-term TransCap funds that help address our earlier concerns about posting and inadequate roads.
Rep. Harlow: I was pleased about the passage of LD 862: “An Act to Improve the Health of Maine Citizens and Safety of Pedestrians,” which I sponsored. I am proud that my daughter Denise came up with the concept and asked me to submit the bill. She is a world-class runner and Olympic qualifier who has run in five marathons. I am an advocate for bicyclists and pedestrians. I used to teach driver ed, and we need to do more to educate motorists about safety relative to biking and walking. The new law requires that motorists stay three feet away from runners or walkers on public roads. This is a safety issue.
My biggest disappointment was when we failed to come up with a means of paying for the roads. I hope we do it later this year when we get back together. I must say this is a great committee to work with. I love being on this committee. I have been on five legislative committees and Transportation is my favorite.
What about outside of transportation?
Sen. Perry: As chair of the Taxation Committee, I was proud that we were able to pass significant tax reform into law. If you look at tax reform as strictly how much money any individual Mainer is going to save on their tax bill, it is not terribly significant, maybe $200 per filer. That is a nice break but it doesn’t change anybody’s life. What we did will move the state further ahead in a positive way – specifically, reducing our top tax rate by over 20 percent from 8.5 percent to 6.5 percent. Over time, that is going to pay far bigger dividends than the actual dollar savings that any one of us might enjoy next year.
I liken it to investing in an adequate transportation system. If we neglect it, the dire effects will not show up next year, but over time, these things really matter. Especially when we change the negative perception of our state and make us more attractive and competitive nationally.
Rep. Harlow: The gay marriage bill was the most important legislation we passed this session.
Which airport do you most frequently fly out of (Portland, Bangor, Boston, Manchester)? How many times a year do you fly?
Sen. Perry: I don’t fly a lot, but usually I fly from Bangor. Maybe once or twice a year. It is no bargain driving hours and spending money on gas, tolls and parking, and dealing with traffic and crowds, when Bangor is so quick and convenient. We are fortunate to have a world-class airport in Bangor.
Rep. Harlow: Portland, but I fly very rarely.
What is the most common constituent complaint you hear about transportation?
Sen. Perry: The big trucks going through downtown Bangor and up Route 2 in Hermon is No. 1. The truth is that in my senate district, we really don’t have some of the problems that rural Maine has. I used to be in sales and there is hardly a road in this state that I haven’t traveled. I used to go to every corner of the state. I know first-hand the problems that rural Maine has in their transportation system.
Rep. Harlow: I hear a lot about Route 302, because it is all broken up. It is a terrible road and we need to fix it!
How have your transportation habits / commuting habits changed in the last year?
Sen. Perry: I know that last summer, after prices hit $4 per gallon, we did things differently. Prior to that, we didn’t think twice about making the 25-mile drive to our camp on Green Lake, or whether we should take one car or two. We were driving less, and we certainly planned our trips much better. We do coordinate a little better and drive a little less, and I do try to use the car that gets the best gas mileage.
A pet peeve I have is when people go to New Hampshire to buy their gas. I always buy my gas in Maine – even when I am down there, I refuse to buy gas in New Hampshire. We need those revenues to stay in Maine.
Rep. Harlow: My transportation habits haven’t changed in the least.
What is the worst and best road you frequently travel on?
Sen. Perry: The City of Bangor keeps their roads up well, and the interstate is in pretty good shape. Like I said, we are fortunate that way.
Rep. Harlow: The best road is the interstate and the worst road is Route 17 between Rumford and Rangeley.
Two sides of the story
The maine development Foundation and Maine Better Transportation Association have released a new report that looks at the benefits of investment in transportation and, in counterpoint, the effects of neglect of the state’s transportation infrastructure.
The Difference is Night and Day: Why investing in highways and bridges is an investment in prosperity is a behind-the-scenes look at the data that the economic research organization examined when it included a transportation indicator in its annual Measures of Growth report. The council first included the new benchmark in its 2007 report, giving transportation a red flag indicating that the state’s pattern of underinvestment presents a significant impediment to the state’s economic development.
“We looked at both the positive and negative consequences of investment or underinvestment, and the conclusion we came to was very clear,” said Maine Development Foundation President Laurie Lachance. “A well maintained, efficient transportation system can bring new business to the state.
It can help make existing businesses more competitive. It also nets significant safety and quality of life benefits for our citizens.”
The report includes 18 facts about transportation investment. Nine show the dangers of underinvestment and neglect; nine demonstrate the benefits of adequate, strategic investments.
Taking on the $3 billion challenge
MBTA ushers in 70th year with new slate of officers, big challenges
More than 200 mbta members, friends and family in May gathered in Augusta to mark the beginning of a new year for the organization, the 70th such gathering since its founding in 1939. There were several new members to meet and greet and lots to say about the shortfalls in the Maine Highway Fund and the Federal Highway Trust under discussion at the state capitol and in Washington, D.C.
Maine Senate President Elizabeth H. Mitchell (D-Kennebec County) and Senate Minority Leader Kevin L. Raye (R-Washington County) talked about shrinking transportation funding and growing needs that Raye called the “$3 billion pothole.” Three billion dollars is the estimated shortfall that MaineDOT faces during the next 10 years if new transportation funding is not secured. Raye also told of his recent brush with the state’s crumbling infrastructure, when a chunk of concrete from a bridge hit his car, causing more than $2,000 in damage.
Outgoing President Gregory A. Dore summed it up when he described a dire funding situation fueled by a slow economy and falling gas tax revenues. He said the situation has been made only momentarily better by federal stimulus spending of $130 million: “While the stimulus funding was a great boost for this year – it is only a drop in a multi-billion dollar bucket,” said Dore. He added that MBTA is working with legislators and other interested parties to help find a solution, “even if it is a partial solution, so we don’t dig an even bigger hole. It is critical that we get new revenues into the Highway Fund.”
That message was heard, not only by members, but by state law--makers attending the event, including Senator Richard W. Rosen (R-Hancock), Assistant House Minority Leader Philip A. Curtis (R-Madison) and House Majority Whip Seth A. Berry (D-Bowdoinham). The legislature’s Transportation Committee was well represented by committee co-chairs Senator Dennis S. Damon (D-Hancock County) and Representative Edward J. Mazurek (D-Rockland); Senator Walter R. Gooley (R-Franklin County); Representative William P. Browne (R-Vassalboro); Representative Ann E. Peoples (D-Westbrook); Representative Douglas A. Thomas (R-Ripley); Representative Kimberley C. Rosen (R-Bucksport); and Representative Charles Kenneth Theriault (D-Madawaska).
MBTA business took center stage, as well. Dore introduced the 2009-2010 Executive Committee, led by incoming MBTA President Thomas H. Martin, Jr., of NITRAM Excavation & General Contractor. Dore praised Martin’s commitment to the future of transportation – and his “unique blend of experience in both the public and private sector.” He told how the MBTA’s new president grew up in the construction side of the industry. His father had founded T.H. Martin in Benton, and Tom worked for his father’s company, as well as on the public side, for the public works departments of Auburn and Windham (he was director of Windham’s department). Dore also lauded Martin’s civic dedication. Martin is a past president of the Maine Chapter of the American Public Works Association, has served on the MBTA board for five years and chaired its Infrastructure Golf Tournament.
Martin took the podium and talked about his goals for the coming year that include continuing to raise public awareness of the crucial importance of investing in Maine’s transportation infrastructure and working with lawmakers to address the funding gap. He also urged his fellow members to help expand the membership and continue to strengthen community partnerships essential to the MBTA’s mission of advocacy for safer, more efficient transportation for Maine.
With the MBTA business complete, comedian Rich Ceisler – a self proclaimed “stand up chameleon” – brought down the house with his hilarious take on modern life, but not before he paid homage to the reason why everyone had gathered for the evening.
“This gig is a dream come true,” Ceisler told his audience. “I’m a big fan of transportation. That’s how I got here tonight.”
The evening closed with a drawing for the Infrastructure Fund Raffle. Three winners were announced: Sandi Gomez of CCB, Inc.; Sarah Marriner of Marriners Inc.; and Conrad Welzel of Maine Turnpike Authority.
All in the family
R.J. Grondin & Sons celebrates 50 years of dirt and iron
By Kathryn Buxton
Tucked into the rolling countryside of Gorham, Maine, you can still see some traces of the family’s former dairy farm. In fact, the shop is set on the foundation of the old barn and the shop office occupies the old milk room. A visitor half expects to see tractors and cows emerge from its bays rather than excavators and dump trucks.
Inside the company’s modern headquarters, set back into a handsomely landscaped hillside, three generations of Grondins have gathered around a conference table. There’s Phil Grondin, Sr. who founded the company with his brother Bob, his father Robert, Sr. and his mother Laurence in 1959. His wife Bette is there, too. Two of Phil’s sons are at the table – Phil Jr. and Larry – as well as Ken, one of Bob’s four children who are involved in the business.
Phil Sr. and his brother built the construction company from the ground up after they discovered some gravel deposits on the farm. Every morning, the brothers would milk the cows, make deliveries and then head off to high school (Phil Sr. went to Cheverus, Bob went to Gorham). Despite growing up there, farm life did not appeal to them.
“That’s seven days a week you’re tied to the farm. The cows always have to be milked,” recalled Phil Sr. of growing up on the family farm. “We were not planning on being farmers.”
When they found the gravel, the boys pitched their father on an idea. What if they sold some cows and bought a flat body dump truck? Their father was skeptical. He had inherited the farm from his father and worked it with his wife and seven children. It had flourished, and he was reluctant to let it go. But he eventually agreed, and one of Maine’s most successful family-run construction firms was born.
Phil Sr. said the brothers’ first jobs were hauling materials that were close at hand on the farm – “a little gravel . . . a little loam . . . a little cow manure.” The brothers spent the next decade building the business.
The descendants of farmers who flourished on an ability to identify and buy good dairy stock, Bob and Phil developed an eye for a good piece of used equipment – and the ability to fix things when they broke down. “Back then we didn’t have a lot as far as cash flow. You were your own mechanic and everything else,” said Bob. There is the time, now famous in the family, when an old Ford 700 dump truck broke down, and Bob fixed it by using the engine from the family station wagon.
His wife, understandably, was unhappy.
“That didn’t go over so well,” said Bob. “But it worked.”
Their mother – known to many as “Memere” – was their bookkeeper. The brothers worked hard, spending their days on job sites. At nights and on weekends they repaired equipment and tackled estimates. They’d have their kids check their math.
“That’s how I learned my times tables,” joked Phil Jr., who officially joined the company in the early 1990s and now holds the title of assistant treasurer.
R.J. Grondin & Sons began by taking on small jobs as subcontractors. R.J. remembered the big players back then were also family owned operations run by the Acetos, the Romanos and the Dalfonsos. One of the toughest challenges they faced was breaking into an already established industry. The brothers were persistent and, over time, their persistence paid off.
“We subbed work from them and eventually started taking on small jobs of our own,” said Bob.
Southern Maine was growing, and there was plenty of work for the enterprising brothers. Because their operation was lean, they were often low bidder on new road and municipal utility projects. They also had a reputation for honesty and quality work that won them a growing number of repeat customers for work that did not go out to competitive bid.
In the early 1970s, the company was growing quickly – there were eight full-time employees. The jobs were getting bigger, and so was the equipment. In 1972, Grondin purchased the first Caterpillar excavator in Maine (Model 225).
One sign of growth was the need to bring in more family to help manage the company. Bob was the company president. Phil Sr. was vice president and treasurer. Tom Hey, the husband of Phil and Bob’s youngest sister Bess, joined the company in 1971. He was taking classes at night to earn his master of business administration degree to help Memere with the books. Bess joined the company soon thereafter to run the office and serve as credit manager. “Tom and Bess gave the company a strong office, so Bob and Phil could focus on the jobs. Phil Sr. always says, ‘Every company needs a Tom Hey,’” said Phil Jr.
In the late 1970s and 1980s, the firm became known for its construction on recreational properties. Grondin built beaches at Sebago Lake – “you can’t do that now,” quipped Phil Sr. The company also constructed three golf courses: The Woodlands in Falmouth, Sable Oaks in South Portland and the Falmouth Country Club. During the early 2000s, Grondin was one of several contractors to work on the Maine Turnpike widening.
The company’s good work has been recognized throughout the industry. Both Phil Sr. and Bob received the MBTA’s Transportation Achievement Award. The company’s work with the Maine Turnpike Authority on the 30-mile highway expansion project won the firm a national partnering award from the Associated General Contractors. Grondin has also been recognized with a national safety award from the Associated Builders & Contractors (ABC), and the company hopes to pass the 1-million-hour mark without a lost-time incident by the end of this year.
By the 1980s, Grondin employed approximately 200 full-time workers. Over the years, the Grondins acquired land to feed the business’s constant demand for materials. The company bought a Scarborough sand pit in the late 1970s that they worked until it was closed in the mid-1990s. Grondin reclaimed the land, created a breathtaking 30-acre pond and developed the site as a luxury residential community. Another piece of land the company owned in Scarborough was sold to the U.S. Post Office in 2002 for a new postal processing center. R.J. Grondin & Sons, of course, did the sitework for the project.
Today Grondin has a fleet of about 200 trucks and earthmoving equipment and a workforce of about 130. The company currently operates about a dozen quarries and pits at various locations in southern Maine.
The company also has made strategic investments in the communities where they live and work. Phil Grondin, Jr. retired from the MBTA board of directors this year after 11 years; he also served on the board of USM Institute for Family-Owned Business. Phil Jr. and Tom Hey have both served as MBTA presidents. Phil Sr. is one of the founders of the Maine Aggregate Association. Bob III is a past president of the Maine Chapter ABC. Ken is currently in line to become president of the Associated General Contractors of Maine. Bess Hey is on the board at Southern Maine Community College. Larry is on the board of Maine Aggregates Association, and is a past president of the organization.
The Grondins also have given generously to many community causes over the years, just a few of which include the Westbrook Little League, the Bonny Eagle Robotics competition, Project Graduation and Westbrook Together Days. Then, of course, there is the pier project at Southern Maine Community College in South Portland where R.J. Grondin & Sons, working with Cianbro , Sebago Technics and several other MBTA members, includ---ing Phil’s good friend and former MaineDOT Commissioner Roger Mallar, helped build a multi-million dollar pier and marine education facility.
These days, the company’s distinctive red, yellow and black logo can be seen on job sites throughout southern Maine. Grondin has crews working on public water projects in Portland, Yarmouth and Westbrook. The company also has projects underway in York County. Grondin recently broke ground on a $1.4 million paving project in South Portland where they will install a one-third-mile section of porous pavement for MaineDOT near the Payne Road Bridge in the heavily traveled Maine Mall area. MaineDOT plans to test the performance of the pavement to see if it will work in other high density locations.
Family remains central to the firm’s success, and a new generation of Grondins has stepped into key positions. Four of R.J.’s children are involved in the business: Ken is president of the firm; Bob III is vice president of operations and planning; Chris is equipment manager – “he makes sure all the iron keeps going”; and Vicki manages the office and grounds maintenance. Phil Sr. has two sons in the business: Larry is the aggregate manager or “dirt guy”; and Phil Jr., is the company’s assistant treasurer. Chris’s wife Diana has provided office support since the mid 1980s.
Although she retired in the 1970s, Memere, the family matriarch, remained active with the family and integral to the family business well into her 90s. (She died at age 98 in 2007.) R.J. retired in 2001 and Phil Sr. retired in 2004, but their counsel is frequently sought by their sons and nephews.
The secret to their success in keeping the family peace in their family business is recognizing that “everyone has something that they’re good at,” said Phil Jr.
The transition of the business from the parents’ generation to their children was relatively easy, said Ken, “because R.J. and Phil did it right. . . it was pretty easy to step into.”
Phil Jr. adds that “doing it right” meant having a plan. The transfer took place over several years and included professional advice, ending with Phil Sr.’s retirement in 2004. “Our dads started with a shovel and a bank of gravel, we had a little bit bigger leg up.”
A fourth generation is in the wings, as well. Ken’s sons Jeff and Anthony also work for the company, Jeff as a laborer / equipment operator and Anthony during his summer breaks from college. Chris’ son John also works for the company during the summer.
When asked, Phil says he never regretted leaving the farming life behind him. Heavy construction suited him and his brother. “We could see more rewards in it. The more we did, the more we could see a future in it,” said Phil. “We liked dealing with Maine people where a deal could be made with a handshake.”
The business has changed considerably from those early handshake days with more environmental regulation. “I feel like the general who retires. I used to fight all these regulations, and the younger generation comes along and accepts them,” said Phil Sr.
“Now we do wetland mitigation and vernal pool construction,” added Ken.
“It’s either that or you beat your head against the wall,” said Phil Sr.
Manzer goes ‘Green’
Fast growing Somerset County paver adds a cool new process to its mix
By Douglas Rooks
Bruce manzer didn’t plan to start his own excavation and paving company – at least not at first.
After two years of college and a dozen years of employment at Cianbro, where he worked on projects such as rehabilitation of the Woodrow Wilson Memorial Bridge in Washington, D.C., Manzer wanted to return home. So he went to work for his father Frank at Manzer and Dolan for three years. “What I found out is that he’d sold the company, so I was back on my own,” Bruce said. After a short stint with a large paving company that he found unsatisfactory, he decided in 1996 to start looking for work. He had a one-ton truck and a leased roller. More than a decade later, he runs Bruce A. Manzer, Inc., a $10 million company with 45 employees and plants in Anson and Bethel. The latter is a recent acquisition.
In recent interviews, Bruce, Frank and Bruce’s wife, Crystal, the company’s business manager, described how a one-man operation has grown quickly into one of Somerset County’s most successful businesses.
Frank, though offering advice and occasional assistance, has no operating role in the company. Bruce A. Manzer, Inc. is controlled by the next generation but remains very much a family business. Bruce and Crystal’s two sons, Nicholas and Nathan, have both worked summers for the company, while Bruce’s brother-in-law runs the Bethel plant. Nicholas now attends Endicott College in Massachusetts where he studies sports management. Nathan has enrolled in Husson University in the business program.
Crystal thinks Nathan may one day be interested in working full-time for the company, but hopes he learns the ropes at another paving company first. Bruce says he isn’t sure whether the attractions of home will be sufficient. “They both have watched their father work way too hard,” he said.
During the paving season from May to November, Bruce and Crystal both put in 60-80 hours a week. Crystal says that home life has to take a back seat. “I try to get dinner on the table every night, but that doesn’t mean everyone is able to get there,” she said.
In the colder months, Bruce says he works a more “normal” schedule, but there’s work to be done every day, maintaining and building equipment for the busy months ahead. Vacations are not a typical part of their life, although they make a notable exception as regulars on the MBTA Winter Trip to the islands.
What does make the business go is service, he said. Anyone, he said – or almost anyone – can run an asphalt plant and get paving jobs. What makes the difference is being ready to go out at all hours to provide estimates, to check on jobs and to attend meetings with local officials who decide which firm to hire.
Bruce A. Manzer does work for more than 30 municipalities in Maine and New Hampshire. The firm’s service area extends from Waterville as far north as Jackman, then west into New Hampshire.
“Your personal commitment to your customers is what’s most important,” Bruce said. He recalls a recent request from Solon where the town needed a quick estimate (complete with cross-section and profile) by 10 a.m. the next morning. It was for a culvert project so it could apply for a MEMA (Maine Emergency Management Agency) grant. “I did it on the hood of the truck,” he recalls. “It wasn’t a drafting-table plan, but it did the job.” The town got the grant.
“You’ve got to know the personality and the quirks of each person” who’s making the decisions, he observed. In some towns, that might be a selectman, in others a road commissioner or even a fire chief or assessor, he said.
It’s not that he neglects other aspects of the business. One valuable commodity towns and the state have that they sometimes neglect is the existing asphalt on roads due for reconstruction. “I sometimes have people come to the plant and ask to buy the old asphalt,” he said. “I tell them, ‘You can’t afford it.’” With dramatically higher prices for liquid asphalt, recycled material is worth at least $35 a ton, and the company has figured out ways to use larger amounts in its standard mix. “It definitely makes the paving dollar go farther,” he said.
Manzer estimates that 40 percent of the company’s business comes from municipalities, another 30 percent from Maine DOT, and the remaining 30 percent from commercial work.
In addition to the reconstruction of Route 4 in Madrid (see sidebar) that began in June, another current major contract is rehabilitation of an airport runway in Oxford, Maine. Manzer is working on the reconstruction of Milan Lumber, a 14-acre sawmill where the current site was “mired in mud” for several months a year. The job includes a new base, drainage, drying kilns, office, retention ponds and paving.
On a tour of the company’s gravel pits – located next to the asphalt plant, amid eskers (ridges) left by glaciers on the Sandy River plain, Bruce and Frank talked about some of the fine points of the paving business.
“You’d think that all sand is the same, and it is to the untrained eye,” said Frank. But to work well in asphalt, the grain size of sand needs to be different, and various sands are deposited in specific parts of a pit – the western facing slopes feature sands with distinct properties from those on the east, he said.
Bruce talks about the need for careful, timely purchasing of equipment, more than 200 pieces – trucks, haulers, graders, loaders – that are needed to keep the operation running smoothly. “Knowing what and when to buy can make the difference between a good year and a bad one,” he said.
Crystal Manzer was running her own day care center when the business manager for the paving company left, and she took over on a temporary basis. But soon she proved indispensable. She does the payroll, accounts receivable and payable, collections and accounting; Bruce usually writes the invoices from the job site.
“I didn’t have any intention of being an accountant,” she said, but she has developed a knack for it. She said the decision to join the company “has been good for Bruce and for the business,” though she sometimes would like to have more time for family.
Bruce A. Manzer, Inc. is having another good year, despite the severe downturn in the national and state economy. That doesn’t mean that financial strains aren’t evident, Crystal said. “Everybody has been asking for updated credit references, which are really important to vendors,” she said. “Everybody’s worried about getting their dollars, and that’s understandable.”
During the off-season, there are about a dozen employees at the two maintenance facilities, and though most of the work is seasonal, Bruce finds he’s usually looking for more hires.
“Nobody here has just a set job, where you wait around for the next part of the process,” he said. “You’re not just a truck driver. You have to be a laborer, too. When something goes wrong, and a part needs fixing, you have to get in there and be able to get your hands dirty.”
While pay rates in the business are pretty good, up to $23 an hour, Bruce said that “blood, sweat and tears,” are definitely required. Some people love the work, though, and he wishes there were more training programs, formal and informal, to attract young people into the field.
He recalls one of his own experiences in grade school where an industry program was used. “We experimented with bridges built from popsicle sticks, trying to see how much weight they’d carry.” The results were often surprising. “You might need a 50 pound load to break it.”
Years later, he says, “The challenge is still finding a better way to build a mousetrap.” When he looked at the Green System (see sidebar) offered by Astec, for instance, it seemed obvious that it would enhance the business, and he didn’t hesitate before installing the first such operation in Maine.
And while he respects the technical knowledge needed to run companies, he finds that excavation and paving mostly requires “seat of the pants engineering.”
While further expansion might seem tempting, Manzer said he thinks the business has grown about as large as is feasible given its current structure. He does almost all the estimating himself for 300-400 bids a year, and that wouldn’t be possible if there were much more additional work.
There are times, he said, when he thinks that “the beast is getting too big,” but he enjoys the work so much that he doesn’t want to cut back. Years ago in the paving business, there was real down time in the winter “when you could really goof off,” but no more. Still, that suits him. “If I spent more time sitting around the house, I’d have been dead 10 years ago,” he said.
As for the difficulties of making a living in one of Maine’s most rural counties, with its shortage of jobs and chronically high unemployment, he says there are intangible benefits.
“We get to work with some of the most beautiful vistas in the state of Maine,” he said. He remembers one job on the Height of Land on Route 17 to Oquossoc as a vacation in itself.
Outlooks over the Sandy River, seen from a construction site, “are almost like it’s not real.”
As he sees it, “You’re working and getting paid, and you get to have a picnic every noon.”