February 2011, Vol. 66 No. 2

Editor's Log

Editor's Log: Half-Full

Robert Carpenter, Editor

Underground Construction’s 14th Annual Municipal Sewer and Water Infrastructure Survey appears this month. While compiling and writing the report each year is always extremely interesting and revealing, I found this year’s survey to provide a particularly telling insight into the municipal market.

One somewhat surprising mini-trend was that several survey respondents felt that, when money was a preeminent concern, retreating to conventional, open-cut construction was necessary. It wasn’t that people weren’t sold on trenchless benefits (many were well-educated users of trenchless construction/rehabilitation methods). Rather, trenchless methods were viewed as more expensive and a greater construction risk. Clearly more comparative data and education are needed. Open-cut certainly has its well-establish place within the market – and remains absolutely necessary and important to all underground piping work — but construction methodology decisions should be based on project specifics, not a general perception and assumptions.

For many smaller communities, the good news was that these communities are very interested in utilizing trenchless applications. The bad news was that trenchless remains out-of-reach for many small markets largely due to remote locations requiring high costs affiliated with travel and staging logistics.

Several cities are being hit with the double whammy of EPA pressure or even consent decrees to bring their systems into environmental compliance. Bad economy or not, there is no relief in sight. EPA enforcement, via the U.S. Justice Department, has actually ramped up its activities. Virtually every city called before the EPA enforcement division capitulates and agrees to develop and enact a plan to bring their systems back into compliance.

Cities all over the country are out of compliance. Bad economic times exasperate the situation but odds are the circumstances that led to non-compliance were in place long before the EPA gets involved. Cities capitulate because they are clearly in the wrong – facts, figures, environmental samples, etc. almost always overwhelmingly build an iron-clad case in favor of the EPA.

That’s a challenge that faces our industry as we continue our market recovery – how can we convince municipal governments that placing a priority on their underground infrastructure is essential to the long-term economic – and physical – health of their communities? That new park that was built at the cost of repairing a leaking sewer main will pale in the light of EPA prosecution for unhealthy sewer/water systems.

As public works officials enter another year of flat or reduced budgets, many have settled into a siege mentality, fighting desperately to maintain systems and services against seemingly growing odds of failure. Indeed, a rather depressing scenario, but three years of cutting budgets, delaying projects and reducing staffs have a way of doing that to people.

However, in comparing comments from the previous year, one could also sense a spark of hope, even anticipation by city representatives that 2011, especially the back half of the year, could be different. They see budget projections not quite as dire and tax bases and revenue streams stabilizing.

Maybe it’s faith that the new political dynamic in Washington will begin to make progress on key issues impacting cities. Maybe it’s just New Year giddiness. But whatever the reason, city personnel are more hopeful than they’ve been in three years. That’s got to be a good thing – for all of us.

A closer look at the spending numbers gives credence to a positive market outlook. The overall spending numbers aren’t particularly impressive, projected to rise only slightly. Most financial outlooks we’ve reviewed and developed all speculate that it will take both 2011 and 2012 before the construction industry finally pulls out of its current funk in 2013.

But the key difference in 2011 is that the market is becoming self-sustaining again. It took billions in stimulus dollars (and creation of a new definition for the term ‘shovel-ready’ as it took almost three years for the funds to be fully dispersed), to artificially prop up the market. In 2011, the dollars are real, generated by the industry itself.

We cannot underestimate the significance of that fact. It represents an industry finally rising off the floor and, at least in 2011, getting back on its knees. In 2012, the industry should stand and in 2013 begin taking serious steps to recovery, growth and, at long-last, a healthy market.

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