Last week, President Trump announced that the federal government is going to set up a one-stop process for granting approvals for infrastructure projects. This would end the current process under which a project has to be approved by up to 16 different agencies which operate under different rules and according to different standards. It is a wonderful move that could reduce the time needed to get approval for a project by 90% without reducing the government's ability to make sure that the project meets necessary requirements. Such a move would speed up all manner of projects and would result in a drastic reduction in the costs to complete them.
Here are two examples of this problem (one very public and one very personal):
1. The Dakota Access Pipeline project was the subject of innumerable protests and lawsuits. It had to pass all of the approvals of both the state and federal governments and, at the last minute, president Obama decided that it would not get a permit for the final piece of the pipeline that had yet to be built. As a result an enormously expensive project was left incomplete and useless even though it had received all but one approval. Even that last approval was recommended, but then denied when political pressure grew in opposition. President Trump changed Obama's decision shortly after he took office. Because so little of the pipeline remained to complete, the work has already been finished and the pipeline is now in use. But back to the approvals. Opponents of the pipeline had brought two lawsuits regarding those approvals which the pipeline operator fought and won. It also won the appeals from those victories. There was also a third suit which was won at the trial level. Yesterday, the Court of Appeals reversed that decision in part and affirmed in part. For all you non-lawyers out there, what the court did was to send the matter back to the Corps of Engineers to reconsider a small part of the environmental impact of the project which the court felt had not been fully and properly considered. But the pipeline is already operating; does this mean it must shut down? NO. It continues to operate unless a court decides that it must shut or the Corps of Engineers decides that the permit was wrongly issued. In other words, all that happens is that litigation continues, the government spends many millions more to review environmental impacts, the cost of the project continues to rise, with there being no real change in outcome. Simply put, this is legalistic madness of the sort that only makes lawyers happy. (There is nothing like more legal fees to make a lawyer happy.)
2. Some years ago, I was the head of a construction project at a local independent school. We were building an extension onto the existing main building that would allow the school to handle a larger student body. Let's just focus on the water systems for the school to explain the kind of sclerotic and chaotic government requirements that drive the price of public or quasi-public projects up unnecessarily. Let me start by saying that there was no opposition to the school construction. The building was on a large school property and the neighbors were fine with construction of the addition. Because the number of students at the school would rise to over 300 once construction was complete, the state of Connecticut required that the school could only be built if it also built a sewage treatment facility to hand the waste water from the building. Previously, the school had utilized a septic field for waste water. The sewage treatment facility increased the cost of the project by over 25% and the approvals for that facility took over a year to obtain. When the project was put in use, all of the waste water from the building went to that plant. The water which came from that plant after processing was recycled into the toilets in the building. It reduced the need for water in the new building by well over 50%.
Despite the lower need for water, the state of Connecticut also insisted that the school dig a new and larger well system which required a new water purification system as well. It was a different organization within the state government that set this requirement. When we told them that we needed less, not more water, they were unimpressed. We were told that we had to have sufficient water for the building ignoring the recycling of water to the toilets. This new water system added another 3% to the cost of the project.
That brought us to the septic field. Yet another state agency required that we install a new septic field at the school to handle the "increased" needs. We explained that the amount of flow into the septic field would be less than 50% compared to the old buildings because so much would go to the sewage treatment plant and would then be recycled. The state did not care; it required a new and much larger septic field. This increased the cost of the project by around 10%.
As a result of all this, the school had to raise millions of dollars to pay for the extra 40% costs that the state inflicted upon the project. At that point, it occurred to me that there were two other buildings on adjoining properties that might like to join in the use of our sewage treatment plant and thereby reduce potential pollution. There was a public school next door and a church across the street that ran a nursery school. We had already spent millions to build the plant, but the annual operating costs were about $60,000. It seemed to me that the local school board and/or the church might like to tie into our sewage treatment plant and agree to share the operating costs on an equitable basis. It seemed like a win for everyone. The problem was that the state would not agree. We were told that if we shared our treatment plant with the adjoining school, we would become a public utility. That would require meeting a whole new set of regulations, getting a new batch of permits and undertaking another round of costs. The estimate was that it would cost something like half a million dollars to do all this. In other words, the state and its regulations made it impossible for us to share the use of our treatment plant.
I realize that this story is about Connecticut and not the federal government. Nevertheless, it is the same problem that a great many projects face. There is no coordination between agencies; that's why we had to build a treatment plant, well system, and septic system each of which were way too large and mostly unnecessary. Each agency did not care at all about the requirements of the others and, indeed, would not even discuss them. The feds are just the same.
Let's hope that President Trump is able to get this change made. It's time to have a government that helps get infrastructure projects built rather than a sclerotic bunch of bureaucrats who earn a living by impeding such construction.
Here are two examples of this problem (one very public and one very personal):
1. The Dakota Access Pipeline project was the subject of innumerable protests and lawsuits. It had to pass all of the approvals of both the state and federal governments and, at the last minute, president Obama decided that it would not get a permit for the final piece of the pipeline that had yet to be built. As a result an enormously expensive project was left incomplete and useless even though it had received all but one approval. Even that last approval was recommended, but then denied when political pressure grew in opposition. President Trump changed Obama's decision shortly after he took office. Because so little of the pipeline remained to complete, the work has already been finished and the pipeline is now in use. But back to the approvals. Opponents of the pipeline had brought two lawsuits regarding those approvals which the pipeline operator fought and won. It also won the appeals from those victories. There was also a third suit which was won at the trial level. Yesterday, the Court of Appeals reversed that decision in part and affirmed in part. For all you non-lawyers out there, what the court did was to send the matter back to the Corps of Engineers to reconsider a small part of the environmental impact of the project which the court felt had not been fully and properly considered. But the pipeline is already operating; does this mean it must shut down? NO. It continues to operate unless a court decides that it must shut or the Corps of Engineers decides that the permit was wrongly issued. In other words, all that happens is that litigation continues, the government spends many millions more to review environmental impacts, the cost of the project continues to rise, with there being no real change in outcome. Simply put, this is legalistic madness of the sort that only makes lawyers happy. (There is nothing like more legal fees to make a lawyer happy.)
2. Some years ago, I was the head of a construction project at a local independent school. We were building an extension onto the existing main building that would allow the school to handle a larger student body. Let's just focus on the water systems for the school to explain the kind of sclerotic and chaotic government requirements that drive the price of public or quasi-public projects up unnecessarily. Let me start by saying that there was no opposition to the school construction. The building was on a large school property and the neighbors were fine with construction of the addition. Because the number of students at the school would rise to over 300 once construction was complete, the state of Connecticut required that the school could only be built if it also built a sewage treatment facility to hand the waste water from the building. Previously, the school had utilized a septic field for waste water. The sewage treatment facility increased the cost of the project by over 25% and the approvals for that facility took over a year to obtain. When the project was put in use, all of the waste water from the building went to that plant. The water which came from that plant after processing was recycled into the toilets in the building. It reduced the need for water in the new building by well over 50%.
Despite the lower need for water, the state of Connecticut also insisted that the school dig a new and larger well system which required a new water purification system as well. It was a different organization within the state government that set this requirement. When we told them that we needed less, not more water, they were unimpressed. We were told that we had to have sufficient water for the building ignoring the recycling of water to the toilets. This new water system added another 3% to the cost of the project.
That brought us to the septic field. Yet another state agency required that we install a new septic field at the school to handle the "increased" needs. We explained that the amount of flow into the septic field would be less than 50% compared to the old buildings because so much would go to the sewage treatment plant and would then be recycled. The state did not care; it required a new and much larger septic field. This increased the cost of the project by around 10%.
As a result of all this, the school had to raise millions of dollars to pay for the extra 40% costs that the state inflicted upon the project. At that point, it occurred to me that there were two other buildings on adjoining properties that might like to join in the use of our sewage treatment plant and thereby reduce potential pollution. There was a public school next door and a church across the street that ran a nursery school. We had already spent millions to build the plant, but the annual operating costs were about $60,000. It seemed to me that the local school board and/or the church might like to tie into our sewage treatment plant and agree to share the operating costs on an equitable basis. It seemed like a win for everyone. The problem was that the state would not agree. We were told that if we shared our treatment plant with the adjoining school, we would become a public utility. That would require meeting a whole new set of regulations, getting a new batch of permits and undertaking another round of costs. The estimate was that it would cost something like half a million dollars to do all this. In other words, the state and its regulations made it impossible for us to share the use of our treatment plant.
I realize that this story is about Connecticut and not the federal government. Nevertheless, it is the same problem that a great many projects face. There is no coordination between agencies; that's why we had to build a treatment plant, well system, and septic system each of which were way too large and mostly unnecessary. Each agency did not care at all about the requirements of the others and, indeed, would not even discuss them. The feds are just the same.
Let's hope that President Trump is able to get this change made. It's time to have a government that helps get infrastructure projects built rather than a sclerotic bunch of bureaucrats who earn a living by impeding such construction.
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