Measure once, think again.
We need to stick to our goals to make our highways and bridges safer and more efficient. By Deborah Dunlap Avasthi
What’s next for our bridges?
Problems with bridges in Fort Kent, Kittery and points in between raise questions about whether we are adequately addressing the bridge backlog. By Kathryn Buxton
What’s on their minds?
Maria Fuentes interviews Transportation Committee members Chairman Richard Cebra, Senator Doug Thomas and Senator Bill Diamond.
What’s slowing the recovery?
Economist Dr. Charles Colgan talks about Maine’s rise from the recession.
A strong bond.
Strongco looks to the U.S. and sees value in the Chadwick-BaRoss market position. By Kathryn Buxton
Measure once, think again
How we measure success is a measure of our achievements
By Debora Dunlap Avasthi, MBTA President
The old saw, “measure twice and cut once,” works well, but only if everyone agrees on a single system of measuring. I’ve been thinking about measuring lately, because, as this is my last column, I have been taking measure of all MBTA has achieved during the past year (more on that later in this column). I’ve also been thinking about how future generations will look back at this time, when Maine faced one of its greatest transportation challenges. Our roads and bridges are at risk, and we have little prospect in these difficult economic times to make measurable progress to fix them.
MaineDOT’s new Capital Work Plan released this spring is an example of just that. The plan has been well received by many because it works to redefine our capital goals based on our immediate funding capabilities. The MBTA testified on the MaineDOT budget earlier this spring, and we understand the financial realities.
It appears that MaineDOT has had to change its yardstick which has resulted in reducing its capital needs by half. That is part of continuing pressures on the department to make due with less. During the last administration, MaineDOT redefined the life expectancy of our bridges, adding 10 years beyond that used by Federal Highway Administration or the Maine Turnpike Authority. Now, there is the request by MaineDOT to redefine capital investment, cutting it from 10 years to just five and redefining “skinny mix paving” as “light capital pavement.”
When future generations look back, they will see thousands of highway miles that have been not yet built to modern standards and are in need of redesign and reconstruction. Many of the roads that are in need of repair are old, narrow highways – minor collectors – without proper drainage or shoulders. They grow worse every winter when the cycle of freezing and thawing opens up bigger and bigger cracks, creating, in some cases, monster potholes. Future generations also will see that we have no clear plan to do anything about these bad roads and potholes, and in fact, may see our investment in capital highway and bridge infrastructure decreased by a whopping $200 million in the 2012-2013 budget cycle.
MaineDOT’s crisis deepening
As MaineDOT’s ongoing fiscal crisis deepens, the agency is attempting to do the best it can with the resources available to it. That is nothing new. During the past two administrations, it has increased efficiency in almost every aspect of its operations. It has reduced its staff; introduced the practice of design-build to speed project delivery and reduce costs; and most recently introduced a new system of prioritization that takes a clear-headed look at funding resources and levels of service when planning capital investments. Still, by changing the yardstick – how we measure progress in caring for our transportation system – we are masking the greater problem. By re-classifying maintenance surface paving or “skinny mix” as “light capital paving;” by extending the life-span of our aging bridges and by minimizing the need of our network of crumbling collector highways, we are putting a Band-Aid on a super-sized problem.
Maine voters want an honest representation of the state’s needs and obligations and have become aware of many instances where past administrations have failed to address key funding problems including unfunded pension liabilities and unpaid hospital bills. Maine is not alone in these issues and the phrase “kicking the can down the road” has become a common description across the country. I just worry that there won’t be any good roads in the future that even a can could roll down.
The Maine Legislature soon will be wrapping up its session, and worrisome issues still remain to be resolved: whether or not to eliminate motor fuel tax indexing and whether to send a transportation bond to the voters. Already, for the first time in three biennia, there is no GARVEE bond to use in the next two years for capital projects. Moreover, while there have been considerable efforts to trim transportation spending, there have been no substantial efforts to look ahead to how Maine can address its transportation needs in the future.
Send bond to voters
A first step would be to send a transportation bond to the voters. As MaineDOT acknowledged in its recent work plan, construction pricing is very positive. I urge all of our members to contact their legislators and support a transportation bond. The time is right. The work needs to be done, and the fiscally conservative way to do it is when prices are at rock bottom. Furthermore, we have many long-term investments to make that will benefit Mainers for generations to come – a strong argument for prudent borrowing if there ever was one.
Investing in our transportation system will support job creation, encourage business investment, increase efficiency and improve safety for everyone in Maine. Now, that is how we should be measuring success!
Finally, I would like to express my gratitude to both my co-workers at Willis and to my family – Evan, Elizabeth, and especially my husband Varun – for their understanding, patience and support during the past year. I also want to offer my thanks to the MBTA board and staff for making this job so rewarding. MBTA is honored to have many dedicated members and to have our organization led by a dedicated and experienced staff. While this year has been marked by its share of challenges, we also have experienced a good measure of success. From voter passage of a $47.8 million transportation bond (Question 6) in June to conclusion of our first annual Worst Road in Maine contest, to successful fundraising efforts for the MBTA Infrastructure and Educational Foundation funds, to a terrific Membership Campaign, I am proud to say that, together, we have accomplished a great deal – by any measure.
What’s next for our bridges?
Nearly four years after the I-35W bridge collapse in Minneapolis, and following postings in Kittery and Fort Kent, Maine has yet to identify a long-term solution for its backlog of deficient bridges.
This winter, MaineDOT unexpectedly posted the International Bridge connecting Fort Kent, Maine and Clair, New Brunswick. The deterioration of the 81-year-old bridge, which had been on the state’s bridge watch list for years, had raised concerns, particularly because it carries heavy truck traffic from the forest products industry. Still, the posting – which banned vehicles weighing more than three tons from traveling on the bridge – caught many in the community by surprise.
“We all knew it was an old bridge, but we didn’t realize it was in as bad a condition as it was,” said Jesse Jalbert, executive director of the Greater Fort Kent Chamber of Commerce. The posting put local residents and businesses on both sides of the border with Canada in a difficult position. For businesses like Irving Woodlands, it meant rerouting its trucks carrying wood products to the border crossing in Madawaska – an 80-mile round trip. Two mills even suspended operations because, with diesel prices at $4.50 per gallon, the detour was not cost-effective.
“The bridge is a tough one, because it has a lot of overflow from ice and water and it is older than many bridges,” said Representative Charles Kenneth Theriault (D-Madawaska). Theriault sits on the legislature’s Transportation Committee. He said the Fort Kent bridge is economically strategic, because “there are heavy trucks going to Canada where all our raw material from the sawmills is going to.”
According to Fort Kent Town Manager Don Guimond, the impact of the posting caused significant concern throughout the two communities. The posting hampered emergency vehicle traffic – both towns rely on the other’s fire and rescue teams as back up in the event of a fire, accident or other emergency. Local residents also found their movements restricted, because the three-ton limit included many pick-up trucks, a popular personal vehicle for many in the region.
“I would say the failing condition of the bridge really lit a fire under everyone,” said Guimond. In February, MaineDOT and the New Brunswick government announced a plan to allow one-way truck traffic to use the bridge, and both governments agreed to expedite construction of a new bridge. The mediated plan required installation of 11 signal lights controlled by computerized cameras and establishment of truck staging areas on both sides of the river.
‘We could have avoided this’
“This should not have been allowed to get to this point,” said Guimond. He notes that planning for a bridge replacement began more than two decades ago. In 2002, the two countries began the replacement effort in earnest, targeting replacement by 2008.
“Had that occurred, we could have avoided all this,” said Guimond. But economic and political circumstances intervened, and the replacement was delayed when provincial elections in the New Brunswick government caused the plan to be put on hold.
After the posting, the New Brunswick government announced that it is committed to funding its share of the bridge project. The first construction contracts are scheduled to go out to bid in June of this year, and the new bridge is slated for completion in 2014.
Despite the good news, the uncertainty and inconvenience of the bridge posting has taken its toll. Jalbert said that business in downtown Fort Kent is down noticeably from last year, and Guimond’s office continues to field a stream of complaints from residents living in the neighborhood that is being used as staging area for trucks waiting to pass over the bridge.
Rep. Theriault noted that Fort Kent is not the only international bridge in the region that’s due for replacement. “In prioritizing, this bridge has been on the schedule for a long time, but the Madawaska Bridge is long overdue and also heavily used by trucks,” said Theriault. “In fact, there is even more truck traffic now; because of a dispute in rail service, there are daily truckloads of paper from Twin Rivers mills going across our bridge to Canada to be shipped on Canadian National Railway.”
‘A dangerous line’
Maine and New Brunswick were lucky that bridge inspectors learned about the problems in Fort Kent before a serious accident occurred.
“The situation is not good for businesses and residents in Aroostook County, but it is a painful reminder of this dangerous line we are walking when it comes to bridge safety,” said Maria Fuentes, MBTA executive director. “We have very good inspectors, but we are really tempting fate every time we expect to get 10 and 20 additional years of service out of bridges that were built to last only 50 to 60 years.”
Fuentes said the memory of what happened in Minnesota just four years ago should serve as a warning. On August 1, 2007 the I-35W bridge collapsed in Minneapolis, killing 13 people and injuring 100 more. Immediately following the disaster, the nation was in a state of shock, suddenly realizing that thousands of aging bridges across the country were crumbling before our eyes, and there was no plan to replace them.
In Maine, then-Governor John Baldacci issued an executive order, calling for a top-to-bottom review of the state’s bridge inspection and maintenance programs. The resulting 39-page report – Keeping Our Bridges Safe: A report on Maine’s bridge inspection and improvement programs – completed just four months after the Minneapolis disaster, offered a detailed plan for how Maine could address its growing backlog of aging and deficient bridges. The Maine Legislature responded in 2008 by establishing the TransCap fund as part of L.D. 1790: An Act to Secure Maine’s Transportation Future. The legislature established a special pot of money to issue revenue bonds and put it in the newly created TransCap bridge fund – a one-time, four-year investment of $160 million that has served as a down payment on fixing Maine’s bridge problem.
Dividends or down payment?
A national report released earlier this year has raised questions about how far the nation – and Maine – has come in its efforts to fix its bridges. The Fix We’re In: The state of our bridges was released in April by the Washington-based advocacy group, Transportation for America. It ranked Maine 12th out of the 50 states for bridges in need of significant repair or replacement and said that 15.4 percent of its bridges are deficient compared with a national average of 11.5 percent.
The report captures a snapshot of data on Maine’s bridges based on the most recent information available from the Federal Highway Administration – data reported by Maine just as the state was embarking on the TransCap bridge program. MaineDOT Chief Engineer Ken Sweeney argues that the 2008 data doesn’t take into account all that Maine has done in the intervening years.
“It doesn’t reflect any of the Keeping Our Bridges Safe initiative, and that investment is starting to show dividends,” said Sweeney. He added that in the last few years, the state has put a significant amount of that $160 million in TransCap funding to work to replace, repair and perform critical early maintenance to more than 150 bridges. When combined with core bridge and stimulus funding, the total value of Maine’s four-year bridge investment is estimated at $452 million. That is $60 million shy of the $256-million-per-biennium investment called for in the governor’s bridge report.
Sweeney said that MaineDOT has spent more than half of the initial $160 million set aside in the TransCap Fund for bridges, and will spend down the remaining $55 million of the one-time bridge funds in the coming two-year work plan.
“We front loaded the work into the first two years,” said Sweeney. “We wanted to get out as much work as we could as quickly as possible.”
Sweeney noted that Maine’s share of federal stimulus funding also has helped. MaineDOT used stimulus funding for four bridge projects, including extra work on the Deer Isle-Sedgewick Bridge piers that will further extend the lifespan of that bridge’s rehabilitation.
MBTA’s Fuentes characterized the one-time infusion of special bridge funding created by the stimulus and TransCap as a “down payment” on a much bigger investment that is needed.
“The TransCap program was great, but it was just a four-year program. The problem is much bigger than that. We need to be thinking longer term,” said Fuentes. While the TransCap funds have helped pay for several high profile bridge projects, Fuentes said, you don’t have to look further than Maine’s borders to see that state’s bridge problems are by no means solved.
Problems on the horizon?
“It’s ironic that we have failing bridges at both ends of our state – in Fort Kent and in Kittery. Maine only has to pay for half of those bridges and we still are having problems coming up with the money,” said Fuentes. New Brunswick and New Hampshire, respectively, have pledged funding for the projects that connect Maine to its closest neighbors. In addition, the federal government has committed $20 million in economic recovery funds to the Memorial Bridge replacement.
“The strategic role these bridges play highlights how critical good roads and bridges are to our economy. If one has to close down because it is not safe, that is a major blow to the state and local economy,” said Fuentes.
The Bangor Daily News recently reported that another bridge spanning the international border – the Franklin D. Memorial Bridge connecting Lubec and Campobello Island – was moving slightly. Officials in both Maine and New Brunswick have said there are no immediate safety concerns. The 879-foot long bridge was built in 1962. That bridge is currently not on the MaineDOT’s “watch list,” but will it be the next major bridge to require significant repairs?
Meanwhile, there are 10 other aging, “extraordinary” bridges – bridges estimated to cost between $12 million and $55 million to replace – waiting for funding. Most have been scheduled for replacement in 2014 or later. In total, replacement costs for Maine’s extraordinary bridges adds up to $254 million.
Fuentes notes that, if previously undetected problems are uncovered, having to step in to replace the Lubec bridge – or any one of Maine’s “big ticket” bridges – will require further sacrifice and uncertainty in communities throughout Maine. That is because, Fuentes said, the state lacks a clear plan to secure long-term bridge funding.
“Surprises happen. Just think back to how many times in recent years there have been close calls, “ said Fuentes, citing the Waldo-Hancock Bridge.
Both Fuentes and Sweeney agree that it will be critical to keep focus on the bridge problem. Even after the TransCap bridge funds have been spent, Maine will continue to face a persistent backlog of deficient bridges. Putting a dollar value on those needs is easy. Sweeney points to the recommendations in the Keeping Bridges Safe report that called for $130 million to $140 million bridge investments per year over a decade.
Fuentes said that if the Maine Legislature doesn’t begin to address this in earnest now, the state risks losing ground. Congress has taken earmarks off the table, and all indications are the new federal surface transportation authorization will send fewer dollars to the states than in years past.
Fuentes said that with these factors in mind, prudent borrowing makes sense. “The longer we put off these investments, the greater the cost, because every time we post or close a bridge, Maine drivers pay even more in increased fuel costs and emergency response times.”
There are major bridge projects still looming. Sweeney noted that Maine soon will be required to come up half of the funding for the Sarah Mildred Long Bridge, one of the three major bridges spanning the Piscataqua River between Kittery and Portsmouth, New Hampshire. The cost of that has been estimated at $110 million.
“Overall, I think we have gained on the problem, but we will need to maintain investment levels to solve it,” said Sweeney. “We’re okay for now, but four, five or six years from now, we could be back where we started.”
What’s on their minds?
Transportation Committee Co-Chair Representative Richard Cebra, and members Senator Bill Diamond and Senator Doug Thomas offer MBTA’s Maria Fuentes their thoughts about the proposed MaineDOT Work Plan, user fees, bridges and ‘The Worst Road in Maine.’
Maine Trails: The MaineDOT Work Plan was recently released, and the Department is programming to reconstruct 63 miles during the next biennium. With roughly 8,800 miles of state roads, how many miles should be reconstructed each year to avoid worsening conditions?
Rep. Cebra: I believe that Commissioner Bernhardt has developed a reasonable 10-year plan that prioritizes roads and uses maintenance surface treatment to keep together the worst roads.
Sen. Diamond: I am not an engineer, but I do know that 63 miles is unacceptable. That is not going to get us where we need to be. But we have to be leaders and go to the full legislature and acknowledge this is a problem we need to fix. We can’t just let the roads deteriorate more and more. We need to acknowledge the problem, and we need to get all the stakeholders together and figure out what a bond package should look like for highways and bridges. What is fair? How many federal funds are we at risk of leaving on the table if we don’t pass a highway bond package? All that money means jobs, it means improving the economy and it means fixing the roads for our citizens. For me, we can’t just stick our heads in the gravel.
We must understand the reality. If we do nothing this next biennium, things will only get worse. As things stand today, we are looking at a much smaller capital program than the last biennium. So we need to look at all the possible resources. If we get rid of indexing, let’s at least put it off one year until 2013, since we have already planned on having those funds. We have to be realistic and move forward; we can’t just say that for whatever ideological reason, we won’t fix our roads.
Sen. Thomas: We should be doing a lot more miles. The problem is where does the money come from? People are paying all the taxes they can afford to; that’s just the way it is. What we really need to do is to fix the economy. We have looked at it from the perspective that transportation isn’t getting a big enough piece of the pie. But we need more pies. Until we fix the economy, I don’t see how we will be able to do the things we need to do.
Which comes first, the chicken or the egg? Will roads bring economic development? I tried to help towns and the economy with my secondary roads bill. When we involve towns, we can accomplish a lot because towns can fix roads cheaper. We should involve them more, as long as we don’t turn roads over to them – they don’t have the resources to handle more roads.
Maine Trails: The last few work plans have been partially funded by general obligation bonds and GARVEE bonds, but this work plan has neither. Do you support a transportation bond this session to make capital improvements to highways, bridges and other modes? What about a GARVEE bond for highways and bridges?
Rep. Cebra: It is too early to tell. The General Fund Budget and Highway Fund Budget have not yet been enacted – they are still in play. We really can’t determine whether there is a need to borrow money until the budgets have been completed, and we know where we are in terms of capital investments.
Sen. Diamond: I am sponsoring a General Obligation transportation bond bill (LD 894). I put it in early, and I knew all the politics that surround it, but I am still hopeful that reason will win out. I am also realistic enough to know that the most we can get is a small package but a small package with a lot of federal funding match allows us to do more than nothing. Budgets and bond packages always require a great deal of negotiations, and I am totally open to anything. What we can’t do is just say we are doing nothing. We have no choice – we will not be getting any General Fund money this year, notwithstanding that it is in Governor LePage’s proposed budget.
Sen. Thomas: No to both. A GARVEE bond is only getting an advance on monies we are getting anyway from the feds. We should only be using GARVEE for emergencies, like the Penobscot Narrows Bridge.
Maine Trails: Public investment in infrastructure has been a way to jump start the economy during difficult economic times in the past. Do you think that model still works today?
Rep. Cebra: That model works sometimes, but other times it doesn’t. Just look at ARRA – the American Reinvestment and Recovery Act. The country spent billions of dollars and it was a complete failure. So the jury is still out on that.
Sen. Diamond: Yes, I do, and let me give you a small example. In last year’s bond issue, we got $4 million to begin laying rail on the Mountain Division between Westbrook and Fryeburg. Rehabbing the Mountain Division rail line would enable freight rail service for businesses that are clamoring for it. This was a first step toward that goal.
With the exception of the purchase of steel, it was all Maine companies that are doing the rail work. When Maine companies are working, it means Maine jobs are being created and sustained. That’s how bond packages for transportation work. No matter what amount we get in a potential bond, I am convinced it will help our economy.
Back to the rail example: Another $20 million is needed to complete the improvements and there are companies committed to moving freight along that line including wood pellets, asphalt, and other products. That is huge for the economy and that part of the state.
Sen. Thomas: Of course it does.
Maine Trails: Knowing we have to set priorities on where to spend our limited transportation dollars, where are the best places to spend those limited dollars?
Rep. Cebra: I support following the MaineDOT’s prioritization plan that prioritizes roads based on a variety of factors. We need to work on the most important roads first, and then work down the list. Times are hard and it is important to prioritize.
Sen. Thomas: We first have to make sure we don’t have any catastrophes in the wings, and I think the MaineDOT has done that – no bridge collapses. We have to look at safety issues first, and some of our roads are getting to the point that safety is a huge issue. After safety, we need to look at where we spend our money to grow our economy.
Maine Trails: Maine was recently ranked 12th worst in the nation for the condition of our bridges. Do you think finding a way to fix our bridges should be one of our priorities?
Rep. Cebra: Yes, of course it should be one of our priorities. What we need is to have a lot more General Fund participation in funding roads and bridges, just like most other states do. I heard recently that on average, other states have 17 percent of highway and bridge projects generated by general revenues. In Maine, that would add up to over $50 million per year.
Sen. Diamond: How can they not be? We do not want to see a disaster like we have seen in other states. Keeping bridges safe is a basic survival function of state government. Bridges are maybe even more important than roads because of the consequences if we don’t keep them safe.
And it doesn’t make good conservative financial sense to wait a year or two. We must understand the consequences – the longer we wait, the older the structures get, and the more expensive it is to fix them.
Sen. Thomas: First of all, I would want to know what the criteria of the study was. I was here when the state did the bridge study, and the list the state came up with had a lot of problems: some of the bridges on the list were too narrow, some were turnpike bridges which aren’t the responsibility of MaineDOT, there were private and railroad bridges on it that shouldn’t have been. In terms of prioritizing bridges, if we have a structurally sound bridge but it is too narrow, for instance, it should take a back seat. Bridge safety should be our first priority, but safety should be underlined.
Maine Trails: Now that the four-year TransCap Bridge Program bonds are used up, what is your plan to keep up the pace of bridge investments so we don’t stay at 12th worst in the nation?
Rep. Cebra: There is still $55 million left in the TransCap Bridge Fund, so we should definitely issue the last bond this year. Beyond that, we must prioritize state spending so more money is going into job creation through investment in roads and bridges, and less is going to other areas of state government that are draining – not enhancing – the economy.
Sen. Diamond: In theory, we should be spending more general fund money on transportation. In reality, it is very hard to do that when you have budget shortfalls. The folks on the Appropriations Committee hear from people who are suffering, and who lack the most basic needs – that is the reality of what legislators deal with. Getting General Fund dollars from this year’s budget is not realistic – we need to look elsewhere. Bonding is a realistic option we should consider.
What we need to do is have a long-range plan. Figure out what we need and then develop a plan, and that needs to include finding other resources – other ways of funding. It has to be negotiated so all parties involved feel a little uncomfortable – there’s nothing wrong with changing people’s minds, but that will take bold leadership.
Sen. Thomas: If we are 12th worst now, given all the money we have spent on bridges recently, then we have really switched priorities. We should be more creative when it comes to bridges - I think the “bridge in a backpack” technology shows some real potential. There are more ways to solve a problem than just pouring money into it. The bottom line is we need to use creative solutions to be sure that bridges are safe.
Maine Trails: If you could request the federal government to fund one transportation project, what project would that be?
Rep. Cebra: I would ask them to come up with the long-term maintenance funds needed for the three bridges connecting Kittery and Portsmouth.
Sen. Diamond: Completing the Mountain Division rail line. Even though some of it is in my district, most of it isn’t. It is in western Maine, and making that rail viable will create real jobs. There are manufacturing companies that are anxious to bring jobs here, including Tony Wood, who owns a wood pellets operation. Other companies are willing to come to the area strictly because of the promise of freight rail – that is their motivation because they need to ship their products by rail. This is all about freight and getting that line ready. There has only been $4 million put in since the state purchased the line years ago.
We need to fix the bed and upgrade the rail, and studies show that it can be done for $20 million. That makes the rail viable again. There are six or eight companies that will use it to haul gravel, cement, wood pellets – again those are companies that will hire Maine workers.
Sen. Thomas: The single most important thing the feds can do is to increase the weight limit on the interstate.
Maine Trails: We’ve seen some major increases in gas prices in recent weeks and months. Where do you see the price of gas in two years? How will that impact transportation planning?
Rep. Cebra: If the fuel cost gets up to $5, that will reduce revenues going into the Highway Fund because at that rate, people will definitely be driving less. This is one of our problems with the funding mechanism we have come to rely on. We really – as a state and as a country – need to find alternative funding for highways and bridges over the long-term.
Sen. Diamond: I think in two years it will be high. We will have some fluctuations back and forth, but it will continue creeping up. I expect in two years it will be higher than it is today. Of course, the problem is there is an incentive for fuel efficiency and, as good as that is, it means less money for the Highway Fund. So we go from crisis to crisis.
Sen. Thomas: I think we will see $5 by Labor Day. It will have a huge effect on our overall economy. It can’t be good.
Maine Trails: How would you improve the transportation relationships between Maine’s trading partners?
Rep. Cebra: The most important thing to do is ensure that the federal government raises the weight limit on Maine interstates to 100,000 pounds. The next thing would be to build a port in Searsport.
Maine Trails: The gas tax was originally designed as a direct user fee, but has lost a lot of its buying power in the past 30 years. Do you think user fees are a good way to fund transportation? If so, what kinds of user fees would you support?
Rep. Cebra: Yes, user fees are an important part of the puzzle, such as tolls on the Maine Turnpike. But we also need to have General Fund fees going into the Highway Fund, as well.
Sen. Diamond: Yes, users fees are effective and we have proven that with the turnpike and tolls, but I don’t have an answer to which user fee would fill in the gap that we are faced with. It is hard to keep raising the gas tax – ours is high in the region. We are as large geographically as the rest of New England, and it is not easy to get around. Anybody in rural Maine has to drive a lot and the price of gas is impacting them.
I congratulate the governor for submitting a budget that actually has General Fund money going to highways up front – moving General Fund money into highways can’t happen without the leadership of a governor.
Sen. Thomas: Yes, but user fees alone can’t solve everything. The Highway Fund should get a share of sales tax revenues. I hate tolls, because they are the most expensive taxes we can collect because it costs so much to collect them. You have to build the tollbooths, hire people to staff them and stop traffic to take pocket change from people. Electronic tolls are also expensive because of the equipment, the programming and the staffing requirements and when people stop, they are wasting fuel.
Maine Trails: Rail is seen as an effective way to move freight – and people.
Do you think Maine should be finding ways to increase investment in this mode of transportation? How?
Rep. Cebra: Maine should be finding ways to increase investment in rail transportation only in those cases where it has been previously proven that the service will be profitable and not a drain on state resources.
Sen. Diamond: Absolutely. The example I gave with the Mountain Division is one. The beauty of this is you can have a private company come in and operate it, but first we need to make sure that the rail is up and running. Once it is ready, we can then lease it to a private company. They can make the money off it, but they will also have the risk.
Sen. Thomas: If there is one transportation need in Maine, it is to improve our freight rail system because improving our freight rail system does more to improve our economy than almost anything else we can do. For folks who own trucks and think rail is competing, I disagree: if we improve the economy, there is more business for both rail and trucking.
Maine used to be one of the most prosperous states in the nation – we have a strong work ethic, wonderful natural resources, not the least of which is water – and water becomes more important every day. We should also build a cargo port on Sears Island. The best cure for rail transportation in Maine is to generate more volume for shippers but currently, we just don’t have the mass. That’s why Searsport is so important – a terminal on Sears Island increases rail traffic while also generating traffic for the port.
Maine Trails: What is your biggest priority for the 125th Legislature’s Transportation Committee?
Rep. Cebra: Ensuring that the $20 million in General Fund revenues get transferred to the Highway Fund, as proposed in the governor’s budget.
Sen. Diamond: Internally, I hope the committee has a real in-depth understanding of the Highway Fund budget, which I think they do, and then we need to use that knowledge to set some goals and directions working with the department for a few years out. There is a lot of talent on this committee, and I have been impressed with how energized committee members are with getting into the details of the budget. The committee is very engaged and we need to use their talent and knowledge, so that we plan out more than one year ahead.
Sen. Thomas: Finding a way to fix secondary roads. We have neglected those roads for so long – those are the state’s posted roads. They need to be fixed and we don’t need to make them into superhighways. But they need to be safe and smooth.
Maine Trails: We have an annual contest called “The Worst Road in Maine.” If you were entering this contest, which road would you choose to enter? Why is it so bad?
Rep. Cebra: Route 114 in Sebago. It is a mess and needs to be reconstructed. It is critical for our tourist economy and for the citizens who depend on that road to get to work, school, etc.
Sen. Diamond: The River Road in Windham. It is a major collector road with a lot of traffic and has been neglected for too long; people come down through the lakes region and it is a significant shortcut to Lewiston and Portland. It has lost its underpinning and is in terrible shape. Cars have rolled over, and there have been serious accidents on it. Fortunately, the current work plan has funding in it to rebuild the upper half and resurface the rest.
Sen. Thomas: Any road that wins that contest would have to be in the second district that has 95 percent of all the roads posted in this state. My entry would be Route 175 in Castine. It is a travesty because Maine Maritime Academy is a huge asset to this state – and look at the goat trail people have to drive on to get there. That probably does us the most harm economically because of how the world economy works now – that should be a huge draw for expanding the economy. MMA is performing cutting-edge energy research with tidal power; it is such a great engineering school – and the road leading up to it is a mess.
What’s slowing the recovery (and us) down?
USM economist Charles Colgan briefs MBTA on the long, slow recovery and urges Maine to address issues about funding of investment in public good
The title of economist Charles Colgan’s talk was “Maine Unemployment in the Great Recession and the (Not So Great) Recovery” at the March 10th Cumberland County Meeting. More than 100 MBTA members and friends gathered at the Portland Marriott in South Portland to learn what Colgan had to say about the near future of our long, slow recovery and what it means for the transportation industry.
The meeting is one of several regional MBTA gatherings held every year which address current affairs and transportation topics. MBTA President Deborah Dunlap Avasthi brought the meeting to order and welcomed several special guests in the audience: Representative George Hogan (D-Old Orchard Beach); Representative Jane Eberle (D-South Portland); a large contingent of local officials including several representatives from the Greater Portland Council of Governments and PACTS (the Portland Area Comprehensive Transportation System).Dunlap Avasthi introduced Be Schonewald of Schonewald Engineering Associates, one of the newest members of the MBTA. Dunlap Avasthi also lauded the 2011 MBTA Membership Committee which has gotten off to a strong start for the year, thanks to the hard work of co-chairs Jack Sutton and Grant Maxwell.
When he got up to speak, Colgan was primed to answer all of the questions that were on MBTA members’ minds, including whether there was good news for Maine’s economy and how long it would be before the state could expect to return to the level of prosperity it enjoyed during the mid-2000s.
Colgan, by his own admission, had positive news for the business and community leaders gathered. The talk at the MBTA Cumberland County meeting was his third speech to the MBTA in as many years, and one could almost hear the collective sigh of relief as Colgan began to talk: “Sure, I do have good news,” said Colgan. “But I don’t have all good news.”
The second question on everyone’s mind, Colgan guessed, was “How long?” That is: how long will it be until Maine recovers to pre-recession levels of economic activity and employment? That question, he admitted, was more difficult to answer, because recovery from this recession has been challenged by what he called “significant risks” and atypical growth patterns.
“Two-thousand-and-ten turned out to be very rough,” said Colgan. He was referring to his speech a year earlier that had forecast a somewhat rosier picture for the recovery than eventually played out over the year. Colgan displayed a series of slides detailing different aspects of the economy: GDP growth; the effects of the federal stimulus spending on the state’s economy; an increase in the average hours worked in 2010; and rising corporate profit levels. While all of those indicators pointed to a recovery, Colgan said that job growth has remained stubbornly stagnant throughout the past 12 months.
The good news Colgan had to offer included a backward glance at the past two years that showed Maine had weathered the recession better than many areas of the country. With just a 5 percent drop in employment in Maine, job loss has not been as severe as the recession of 1990-1991. And things appear to be improving, though Colgan remains skeptical of the numbers.
Just hours before MBTA members gathered in South Portland, new Maine employment figures were released for January showing an increase of 7,100 jobs in January – the largest monthly gain ever recorded in Maine.
Colgan said he suspected that job figures, while improving, likely had been inflated by a number of the unemployed becoming discouraged and dropping out of the job market. He said he expected the recovery to continue, but slowly, and predicted that it could be 2014 before Maine would see pre-recession levels of employment.
He similarly predicted that it would take until 2014 for gas tax revenues to recover and provided a bleak view of the buying power of those revenues – because the tax has not been able to keep up with inflation.
“In real dollars, we have made no real progress in investing in our transportation system,” said Colgan. He said that kind of underinvestment is at the heart of the nation’s faltering economy. Colgan warned that we need to address looming issues – including paying for essentials such as infrastructure and health care – or the nation will face serious decline in its potential to weather economic change like we have seen during the past several years.
“This is a bigger problem than the economy. This gets to the heart of who we are,” said Colgan.
The MBTA hosts several regional forums discussion transportation, the economy and trade throughout the year. To learn more, please visit mbtaonline.org
A strong bond
Canadian heavy equipment dealer Strongco’s acquisition of the New England powerhouse is the latest chapter in Chadwick-BaRoss’s storied commitment to the regional market
Outwardly, there are no obvious signs of the big changes happening at Chadwick-BaRoss, Inc. There is a full complement of new and used heavy machinery in the Westbrook dealership yard, ready for the upcoming construction season. Inside the company headquarters in Westbrook, Maine, business is humming.
Moreover, Stuart Welch, who has a long history with Chadwick-BaRoss and has headed the company since 2007, is upbeat about the region’s slow, but solid recovery from the recession. Already, he sees signs of a strengthening forestry and utility construction markets. Welch also is optimistic about his company’s prospects – particularly now that it has joined forces with Strongco Corporation, one of Canada’s largest heavy equipment dealers. Strongco acquired 100 percent of Chadwick-BaRoss shares in February.
“This promises to strengthen the Chadwick-BaRoss brand – and expand the depth of our product line,” said Welch, who will continue to serve as Chadwick-BaRoss’s president under the new ownership. While both Chadwick-BaRoss and Strongco carry the Volvo Construction Equipment and Terex lines, Strongco also carries several complementary lines, including Case Construction, Manitowoc Crane, Terex Cedarapids, Skyjack, Fassi, Allied, Taylor, ESCO, Dressta and Sennebogen. Strongco sees Chadwick-BaRoss’s long-time alliances with Powerscreen and Ponsee as advantageous, as well.
A good match
Welch’s confidence in the new union with Strongco goes deeper than access to expanded equipment lines. Announcement of Strongco’s recent buy-out is the culmination of a two-year search for a compatible investor and goes straight to the heart of the two companies’ philosophies of business.
Welch met Robert Dryburgh (prounounced “Dry-bur-u”), Strongco’s president and CEO, through a family connection, and the two soon found common ground. Strongco already has 24 branches in its native Canada and approximately 500 employees. The addition of Chadwick-BaRoss’s five New England branches will add 100 employees to the company. As Welch explained it, Dryburgh “gets” the corporate culture of Chadwick-BaRoss. Both companies are strongly customer focused, and both have a deep commitment to their employees.
“We felt and Bob Dryburgh felt that there was a lot in common. Bob understands the strength of the Chadwick-BaRoss brand and its position in the New England market,” said Welch. “He also understands how important its people are and the role they play in business.”
For its part, Strongco, a publicly held company traded on the Toronto Stock Exchange, has been searching for a suitable introduction to the United States market.
“The acquisition is in line with our strategy of building scale, in part by acquiring dealerships closely associated with the major brands represented by Strongco and located in regions that are geographically contiguous with our current markets,” Dryburgh said at the announcement.
Welch confirmed that Dryburgh and Strongco have “very ambitious” plans for the U.S. market, and that the acquisition of Chadwick-BaRoss gives the company an important “footprint” from which it will be able to continue its expansion beyond Canada’s borders.
Strongco’s buyout marks the official retirement of George Corey, former Chadwick-BaRoss president, CEO and, most recently, chairman. (Corey has also recently retired from the MBTA board.) The acquisition also marks the end of a long association with majority-owner Dieter Strobl of the Strobl Group, an Austrian company that purchased its ownership stake in the company during the mid-1970s. (Welch also held ownership shares of the company until the buyout this winter.)
While Welch and his team will miss the experienced counsel of Corey and Strobl – both have been instrumental in building the business over the past three decades – the new ownership is proving a chance for a new generation of talent to shine.
Welch said that one of the conditions of the sale was that Chadwick-BaRoss be able to retain 100 percent of its staff, many of whom have been with the business for two decades or longer. In addition to Welch, six other long-time employees will serve as officers in the U.S. company. Ryan Thebarge will be the new chief financial officer, and Gary Thebarge will be vice president of customer service. Michael Sullivan, current Westbrook general manager, and John Thebarge, general manager for the Bangor and Caribou dealerships, also will become vice presidents. Dan Rott and Mark Silva are staying on as vice presidents at the Chelmsford and Concord locations, respectively.
The company also plans to add to its workforce, beefing up its sales and service staff. In Westbrook, the company recently added its first female service technician and plans to add another three or four technicians at its other locations. There are also plans to add two more parts specialists and two or three sales staff.
Poised for recovery
Retaining Welch as president has been another key element in Strongco’s bid to enter the U.S. market. “I am particularly pleased that Stuart Welch has agreed to stay on to lead this business,” Dryburgh said. Dryburgh credits Welch for successfully guiding Chadwick-BaRoss through the recent recession in the U.S.
Welch’s history with Chadwick-BaRoss goes back to the first time he worked for the company as controller from 1978-1981. Welch left the company to attend graduate school and rejoined the company in 1994 as treasurer.
Welch is, himself, proud of the strategy that enabled the company to emerge from the recession without a single layoff at any of its locations. “Two-thousand-and-eight was a pretty good year for us,” recalled Welch. “But by 2009, we very quickly could tell that this was going to have a lasting impact on our core industries,” said Welch. So he pulled together his team to brainstorm on how to exploit the company’s internal strengths – its in-house service and parts team – to weather the downturn.
The move to focus on service was a smart one, and while it does not carry the same profit margins as new equipment sales, it has earned the company remarkable loyalty from its customers who all have been learning to do more with less. That Chadwick-BaRoss’s service and parts were on-call 24 hours a day, seven days a week, has also been critical in cementing the company’s reputation for superior customer service. The strategy paid off with the company adding several new high volume service customers and a resulting 18 percent sales increase in the service and parts divisions.
Welch said that product support will continue to play a role as the economy heats up. He already has seen demand for new and quality used equipment increase, with work now underway to upgrade Maine’s electric transmission grid. Still, he expects regional businesses to continue to hire and to invest in capital cautiously. “This is the ‘new normal,’” said Welch. “Yes, the machine sales will come back, but our industries will continue to be very competitive, and we will be there to help our customers operate as efficiently as possible.”