Sometimes less IS less.
When transportation investment stretches this far, something is bound to break. By Randy Mace
Doing less for now.
With $230 million less in capital transportation invest-ments, policymakers look to next session.
What’s on their minds.
Talking about transportation with Representatives Ed Mazurek and Peter Rioux. By Maria Fuentes
Maine Northern’s Ian Simpson has plans for Aroostook rail line. By Kathryn Buxton
Message from the top.
Governor LePage speaks at MBTA annual meeting.
Two for the roads.
MaineDOT commissioner and Maine Turnpike executive director headline MBTA panel.
Port of Eastport’s Gardner speaks at Downeast meeting.
ETTI’s ‘trenchless’ construction creates niche in New England.
Technology in the field.
The right technology can increase efficiency and keep a job going well. By Steve Washburn
Prioritizing like never before. By David Bernhardt, P.E.
Sometimes less really is less
At some point, we will stretch our transportation investments so far that something is bound to break
By Randy Mace, MBTA President
For the next two years, Maine will be spending $230 million less on capital improvements to its highways and bridges. Stretching a dollar can be good, and we all know that during the past few years, as our economy has struggled to recover, there has been a good measure of dollar stretching going on.
You can stretch a dollar from here to eternity, but the truth is, eventually, something is bound to break.
Case in point is the Highway Fund budget and biennial work plan. Over the past several years, MaineDOT has become quite adept at stretching a dollar – a skill that Governor LePage praised at the MBTA Annual Meeting in May. That skill has been developed over many years of under-funding, as the fuel tax provides inadequate revenues to run the department. But after years of cutting staff and trimming programs, there isn’t much room left to stretch.
As a result of the cuts in spending, in the coming biennium, Maine will reconstruct only 60-some miles out of its network of more than 8,500 miles of state roads. At that rate, we are expecting those roads to last 280 years before we get a chance to fix them again. That means there is only a slim chance that the really rough road you need to get to work or the roads your company’s trucks depend on will get fixed in your lifetime.
Unfortunately, “stretching a dollar” in this budget cycle also means using funds originally intended for capital investments for short-term fixes instead, that I fear unintentionally may mask systemic problems in the state’s transportation system. That is what is happening now that the legislature agreed to reclassify “skinny mix” paving as “light capital paving.” That means the state is using $4.2 million dollars in Transcap funds originally meant for bridge and road reconstruction for “skinny mix” paving that, under the best of conditions, tends to last only five to seven years. If we have one or two bad winters, it could last as few as three years. Traditionally, capital projects have been defined as having a life of 10 or more years. Maine already spends precious little on its capital transportation, and by changing the definition of capital, we are playing with fire.
The last issue of Maine Trails talked about the problems of putting off critical capital maintenance of our bridges and the effect it can have on the local economy. We have been fortunate to avoid a major bridge disaster, but we have had our share of difficult choices to face. Going back to the crisis that led to construction of the Penobscot Narrows Bridge, completed in 2006 up to the present day struggle to find funding for three key bridges at Maine’s southern and northern borders, we are really stretching the limits of safety.
This is my first column as president of the MBTA, but I have been proud to be part of this organization for quite some time. We have accomplished a lot over the years, and I know that my fellow MBTA members are committed to continuing this good work.
The most important thing will be to stay out front with our message of safety, efficiency and economic development. Policymakers need to hear our voices. They need to be reminded just how important transportation funding is to Maine’s economy. We have heard that next year, there is support on both sides of the aisle for an infrastructure bond package. When the time comes, I will be calling on you to join me in working with our leaders to make sure that they include a robust transportation bond in that package.
We are very encouraged that Governor LePage is committed to re-doubling his efforts to use General Fund monies to fund highways and bridges. As a businessman, the governor understands that the transportation sector contributes heavily to sales tax and other revenues, and we appreciate his leadership in generating more funding for critical transportation projects.
The governor and the legislature have very difficult jobs. Elected officials often make enormous sacrifices in order to do the state’s business. They deserve a lot of credit for that. They also have many difficult, sometimes unpopular decisions. They make those decisions because they want to move the state forward. Because they deal with so many issues, it is important that those in the transportation community make their voices heard. Each and every one of us should get to know our legislators and tell them why we think it is critical to Maine’s future to better fund transportation. If we sit on the sidelines and don’t tell our story, then we can’t expect them to know why investing in our system is so important.
So instead of stretching dollars, let’s stretch our vision. Let’s look ahead to the future and make the commitment to building the kind of transportation system that our children and grandchildren will be proud to use. I know we can do this, because even more than frugality, Mainers are known for their common sense and Yankee ingenuity.
Doing less For Now
With $230 million less in capital investments budgeted for the biennium, policymakers look ahead to what more can be done for transportation in the next session
The first session of the 125th Maine Legislature closed with a hard-won two-thirds majority on the General Fund and Highway Fund budgets. News accounts hailed the votes as benchmarks of bipartisanship. Many went into the session believing it would be nearly impossible to craft a General Fund budget that would win two-thirds support from the legislature. Appropriations Committee co-chairs, Senator Richard Rosen (R-Hancock) and Representative Patrick Flood (R-Winthrop) successfully shepherded negotiations leading to a unanimous committee vote in Appropriations, prior to the successful votes in both chambers.
While the Highway Fund budget received similar support, those closely familiar with cuts to capital transportation spending – a reduction of $230 million in long-term capital investments over the next two years – were less sanguine. Senator Ronald F. Collins (R-York County), co-chair of the legislature’s Joint Standing Committee on Transportation, voiced his disappointment that several measures to boost transportation funding, including a $20 million infusion from the General Fund slated in Governor Paul LePage’s original budget and a measure to reduce Highway Fund payments for Maine State Police operations to a constitutionally appropriate level, did not come to pass.
“Quite honestly, it comes down to priorities,” said Senator Collins. “We tried to stress the importance of maintaining our roads and bridge infrastructure, but creating that sense of urgency was difficult.”
Still, even among policymakers who support transportation investments, priorities and funding strategies vary widely, making the outlook for any gains unclear. The governor and some legislators, including Senator Collins and Senate President Kevin Raye (R-Washington County), would like to see an increase in General Fund support through measures such as a re-allocation of State Police funding. Some legislators, including Senator Raye and House Minority Leader Emily Cain (D-Orono), plan to push for an infrastructure bond in the coming session – a measure that may be unpopular with some in the House and Senate.
Representative Edward J. Mazurek (D-Rockland), the ranking Democrat on the Transportation Committee and a four-term veteran of the state legislature, expressed dismay at the funding impasse which occurred during the legislative session.
“I don’t understand what we’re waiting for,” said Representative Mazurek. “If we want good roads, not to mention the economic benefits that come with investment in infrastructure, it’s foolish not to act, not to mention short-sighted.”
The Maine Better Transportation Association (MBTA) issued an analysis of the outcome of the first session titled The Good, Bad and Ugly of the 2011 Maine Legislative Session. The piece details what MBTA noted “could very well go down in history as having the worst capital investment forecast in the history of the Highway Fund.” The report takes its title from a tough-talking Clint Eastwood movie and details legislative actions that helped contribute to the $230 million decrease.
The $230 million figure is based on data from the Maine Legislature’s non-partisan Office of Fiscal and Program Review. MBTA Executive Director Maria Fuentes said the decrease was created by a perfect storm of negative pressures on the Highway Fund. Highway Fund revenues from gas taxes are expected to be stagnant or decrease as Mainers turn to more fuel-efficient vehicles and continue to curtail driving during the slow economic recovery. The legislature could not agree on an infrastructure bond package to send to voters. To compound matters, the legislature voted to repeal gas tax indexing.
“Indexing has generated $341 million in new Highway Fund revenues over the past nine years and has been the hedge against inflation. Now, that’s gone. It is hard to imagine that our roads won’t get worse if we continue to let transportation funding slide south,” said Fuentes.
MaineDOT Commissioner David Bernhardt acknowledges that the drop in biennial funding is significant, and said that it is important to focus on the number of miles being improved.
“Our job is to stretch the dollar and get the most done we can with the funding provided,” said Bernhardt. “By tailoring the level of improvement to the priority of the road and by partnering with municipalities, I think you can see that we have done that. For example, the number of miles being reconstructed will be about the same or more, though the cost per mile is decreasing significantly.”
The budget stretching strategy has required a shift from longer-term capital investments to shorter-term expenditures including light capital paving, known to many as “skinny mix” paving. For example, for this budget, MaineDOT shifted about $4.2 million from its capital accounts to achieve the widely accepted goal of 1,200 miles of light capital paving on state aid roads in very poor condition in the coming biennium.
That trend, said MBTA President Randy Mace, sets a dangerous precedent. “Skinny mix paving has a maximum life of five to seven years.
If we have a bad winter or two, that could be as little as three years,” said Mace. He noted that traditionally, capital projects have been defined as having a life of 10 or more years.
“MaineDOT has become adept over the past 10 years at ‘doing more with less,’ given the budget constraints faced by the Highway Fund. We are putting the best face on the problem that we can, but my concern is that we are just kicking the can down the road. We have dire transportation needs and every year we delay, those problems are growing.”
Representative Mazurek said that, thanks to MaineDOT’s aggressive paving schedule, much of the impact of the budget cuts won’t be felt during the next two years. He stressed the important role “skinny mix” plays in holding together a deteriorating highway network.
“Eight to 12 months from now, things will get tight and we’ll begin to feel the effects in 2013-2014,” said Mazurek.
Gas tax indexing, which for nearly a decade has served as a hedge against rising transportation costs was one important piece of the funding equation that lost out during the session.
Both Senator Collins and Senate President Raye said the repeal of gas tax indexing was an issue that was very important to the new Republican majority in both houses. Senator Collins described indexing as a “noble experiment” that had outlived its popularity as the economy and political make-up of the legislature has shifted. “Originally it was a pretty good concept, but not with the high cost of gas and the fact that not increasing taxes is one of our goals at this time.”
“Indexing has been very unpopular,” said Senator Raye. “It has been seen as a tax increase on auto-pilot, and it has allowed legislators to avoid accountability.”
House Minority Leader Emily Cain (D-Bangor) disagreed, noting that the automatic tax increase argument was simply not true. She said that indexing legislation passed a decade ago has required a legislative two-thirds vote every two years before Mainers saw what typically amounted to a penny increase at the gas pump. Still, she said, it was precisely that accountability that made indexing so easy for many legislators to overturn.
“In repealing indexing, we’re simply taking money away from the roads,” said Cain. “It was just another blow to the Highway Fund.” Still for many, like herself, the decision not to fight for indexing was caught up in current political realities that also made passage of a bond bill impossible during the first session. She spoke of having a new governor with an anti-bond agenda and a legislature with strongly divergent opinions on how best to pay for needed transportation improvements.
“It is no small feat getting a two-thirds vote with this governor and this legislature,” said Cain.
Republican leaders expressed disappointment that more could not be done to bolster flagging Highway Fund revenues with non-bond funding. At the beginning of the session, there was a call for a $20 million transfer from the General Fund. Governor LePage included the funding in his original budget, but that support waned as the session proceeded. First, the proposal was cut back to $10 million, then eliminated altogether as the budget progressed through the Appropriations Committee.
Senator Collins said many in his caucus support increased General Fund support for transportation.
“It’s about creating a partnership between the General Fund and the Highway Fund and working with Appropriations to find other revenues for transportation,” said Collins. He noted that Maine lags the nation in General Fund support for transportation. The national average is 17.65 percent according to data from the Federal Highway Administration. If Maine were to achieve that level, it would represent an additional $104 million in General Fund support every two years. He said that the $20 million pledge from the governor’s office was a hopeful sign.
“Initially, we were very optimistic, but everything was on the table and when you’re talking about having to make deep cuts in other areas, we were vulnerable. The truth is, the Highway Fund certainly could have used it,” said Collins.
Question of police funding
One proposal that appeared to gain traction among Transportation Committee members was for a change in the funding formula for the Maine State Police. Currently the Highway Fund provides 49 percent of state police funding. Two recent studies have found that a more equitable split would be 33-35 percent from the Highway Fund and 65-67 percent from the General Fund – a split that is consistent with the Maine State Constitution.
Senator Collins believes that, although the measure didn’t take hold in the appropriations process during this session, it is something his caucus in the Transportation Committee will continue to push. “We want to reduce the Highway Fund contribution to the mid-30 percent. We submitted legislation on it and it did not pass, but we will keep stressing it, because we believe that is money we should be using for our roads.”
Senator Raye agreed that a second look at how much the Highway Fund pays for state police will “continue to be a priority.” He said he supports a 35-65 split because “it’s logical and it’s fair.”
Governor supports sustainable solutions
According to MBTA’s Fuentes, recent conversations with Governor LePage indicate he understands the importance of a strong transportation system and will propose strategies to provide more predictable streams of revenue. Jonathan Nass, the governor’s senior policy advisor on transportation, said that “the governor has been clear that he does not support tax increases, including indexing or an over-reliance on bonding to fund ongoing transportation needs. Instead, the governor wants to set statewide priorities and reform transportation funding for the long-term by shifting General Fund sources relating to transportation. He supports a reallocation of state police funding and wants to reallocate other General Fund, transportation-related revenue sources such as the sales tax on motor vehicles.”
Transportation Committee leaders agree. L.D. 52: An Act to Dedicate a Percentage of the Sales and Use Tax on Motor Vehicles and Motor Vehicle Parts to the Highway Fund was sponsored by House Chairman Richard Cebra (R-Naples) and carried over until next year. The bill calls for 20 percent of the transportation-related sales tax revenues going to the General Fund to be redirected to the Highway Fund, an estimated boost to the Highway Fund of $36 million per year. In combination with the reallocation of the state police funding formula, this would significantly address the current shortfall in an ongoing manner.
“This is very encouraging to the transportation community,” noted MBTA President Mace. “Given the choice, we would prefer pay-as-you go financing, if the revenues were available.”
Early in the session, Senator Raye and Representative Cain were among those who spoke in favor of a bond, and Representative Cain called the inability to pass an infrastructure bond “a missed opportunity . . . I’m very disappointed we left without passing a bond.”
She said that much of the anti-bonding sentiment didn’t take into account Maine’s conservative borrowing philosophy and favorable debt status. “Instead of borrowing for 20 or 30 years like most states, Maine borrows for 10. And that gives us very favorable rates.” She noted that Maine has very low debt compared to other states in the region. (Recent data from the New England Public Policy Center shows Maine’s interest on debt – $286 per capita – is just 53 percent of the region’s average –$481 per capita.)
Both Raye and Cain believe that a general obligation infrastructure bond – one that would include much needed investments to roads, bridges, sewer and water systems – would have a positive effect on the state’s economy, particularly now, when jobs are scarce. Both are pushing to back infrastructure bond legislation in the next session that would go out to voters as early as June 2012. “Those kinds of long-term, lasting investments create jobs, and they also provide long-lasting benefit to our communities,” said Raye.
Several legislators interviewed for this story were optimistic that the legislature would find a way to make transportation a greater priority in the coming session. Collins is pushing for reallocation of state police funding and discussions about increasing General Fund support. While Collins is not a fan of bonding, both Raye and Cain have an infrastructure bond in their sights.
“Transportation has to be at the top of the list in the second session,” said Representative Cain. She expects her caucus to push for a sizable bond package – one large enough to have a positive impact. “We’re ready to negotiate in good faith and push to get [bond legislation] done,” she said, stressing that the earlier that it goes to vote, the better it will be for the state’s economy. “We need this right now. We need the jobs and we need economic development. We have to do better. The longer we wait, the more it’s damaging to our business climate.”
Senator Raye said he thinks that a transportation bond is something voters can get behind, as well, because the benefits are so apparent. That is essential, because any bond issue passed by the legislature still needs to go to the voters for approval, and Mainers have overwhelmingly supported infrastructure bonds at the polls since the late 1960s.
Raye said that in the current economic climate, it will be important to formulate a bond package that is focused on “bread-and-butter” investments. “This clearly won’t be the typical ‘Christmas tree’ approach,” said Raye noting that “basics” like roads, bridges, water, sewer and, maybe research investments, will play better among his conservative colleagues and voters than a bond package loaded with “pet projects.” In that scenario, capital transportation investments will play well, he said, making a bond the best hope for immediate relief to the funding crunch.
“Borrowing for transportation is as solid a reason for a government to borrow as there is,” said Raye.
What’s on their minds
Transportation Committee members Edward Mazurek and Peter Rioux offer MBTA’s Maria Fuentes their thoughts about the new MaineDOT Work Plan, user fees, bridges and ‘The Worst Road in Maine’
Maine Trails: The Highway Fund budget recently enacted by the Maine Legislature has $230 million less in funding for capital highway and bridge projects. Do you support continuing to reduce the amount of funding available for capital highway and bridge projects?
Representative Edward Mazurek: No. Doing so is counterproductive to one of the key building blocks to economic development: a strong infrastructure. By reducing the funding to our roads and bridges, we are weakening a vital component of our economic foundation.
Representative Peter Rioux: I supported it this time around – only because it is an initiative that will hopefully force more efficiencies within MaineDOT. But later on, no, we can’t keep cutting unless they are able to find more efficiencies and we can do more with less.
Maine Trails: In the current MaineDOT Work Plan, MaineDOT is programmed to reconstruct 63 miles during this biennium. With roughly 8,500 miles of state roads, how many miles should be reconstructed each year to avoid worsening conditions?
Rep. Mazurek: A minimum target should be a couple hundred miles per biennium. I know that reconstruction is very expensive – but it is well worth it. When we rebuild a road rather than put skinny mix on it, then the road is useable and is in good shape for many years - far longer than just putting a coating on it. We are getting three to five years now on skinny mix roads, versus the 20+ years we would get from reconstruction. In the long run, by saving a few pennies now and not investing the way we should, we are shortchanging ourselves.
Rep. Rioux: Honestly, I think we need to rely on the folks who run the DOT, since they are the ones with the technical expertise. Also, we just don’t know what is going to happen in the future relative to vehicle usage. There are a lot of demands for people to have different forms of transportation and different ways to move around. Will we be using these roads more or less? Everything is changing and we cannot predict the future.
Maine Trails: Most states provide General Fund support for transportation investments – in fact at a national average of 17.65 percent of the total General Fund budget. In Maine, there is no consistent commitment of General Fund monies to support transportation infrastructure, despite the large role transportation plays in the economy and its impacts on things like sales and income tax revenues. Do you think that should change?
Rep. Mazurek: Yes, we have to look at how we fund our highway system because we do have a separate Highway Fund budget that is responsible for all roads and bridges. By not taking anything out of the General Fund budget, there are times when we are saying that roads and bridges are going to take a back seat. What we really need is a steady source of funding for our roads and bridges. It seems to be hit and miss. As a result, we rely heavily on bonding and heavily on federal assistance.
Rep. Rioux: I think at some point we are going to have to look at that. The cost of doing business is going up all the time and that includes building roads. The current funding method will likely fall short in the future.
Maine Trails: The last few work plans have been partially funded by general obligation bonds and GARVEE bonds, but this work plan has neither, and there is a good chance that there will be no General Fund support for transportation at the end of the biennium. Do you support passage of a general obligation bond in the next session to make critical capital improvements to highways, bridges and other modes? What about a GARVEE bond for highways and bridges?
Rep. Mazurek: Yes, I do. We made a mistake by not having any bonds this session. What is going to happen is that the funding may be adequate for 2012 – we will see work being done – but then we fall off a cliff in 2013 or 2014. There will be a funding shortage, and I am afraid we will see our roads really deteriorate.
Rep. Rioux: It is hard to predict at this point. We will really have to wait to see what the needs are next session. If bonding was the only way to fund our needs, then I may support it, but it shouldn’t be our first choice. A lot has to do with what the governor’s priorities are.
Maine Trails: Public investment in infrastructure has been a way to jumpstart the economy during difficult economic times in the past. Do you think that model still works today?
Rep. Mazurek: No question about it. Yes, it does. Public infrastructure – whether it is state, local or federal – is an economic driver. Those projects put a lot of contractors and subs to work. Highway work, paving and bridges – those projects result in the hiring of thousands of people. Those people take their paychecks and put the money back into the community. So state highway work is a vital part of any economic recovery. It is part of our economic system. In times of crisis, the government should step in, put people to work, and make the state and country a better place for us to live in.
Rep. Rioux: Yes, it does work, at least to a limited degree. Sometimes it is hard to say if it is working now: unemployment is very high and the economy is sluggish. But if we weren’t investing in our infrastructure, then things would likely be worse. So yes, investment in our infrastructure is critical to Maine’s economic future, but we also have to remain cognizant of our debt service.
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. Mazurek: One is bridges, because they are vital to keeping our infrastructure going. Our bridges are in horrendous shape – many were built 60 years ago and their life expectancy is running out. One bridge out of commission could tie up an entire region of our state. So maintenance of good funding is really needed.
Another area is arterials – avenues of commerce, avenues of transportation. That’s where our economic livelihood rests. If we have a limited amount of money, we have to pick out the top priorities – where goods and services are moved - and spend money on those roads and bridges. If there is money left over, we can go to the secondary areas where there isn’t as much commerce or roads or economic activity.
Rep. Rioux: Limited dollars have to go to highways and bridges and collector roads. We are a rural state and we need good roads. However, if we have more dollars, we should also be looking at our ports – there is a huge opportunity in our ports to move freight, and this could really help the economy of Maine. Relative to public transportation, that really should be focused in densely populated areas; the same is true of high-speed rail.
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. Mazurek: Yes, I do. It is a top priority. We know that from past experiences. For the past seven years that I have been in the legislature, we have seen that the bridge situation is becoming more and more critical. Right now, there are three big bridges in southern Maine that are in critical condition and need to be fixed in the next few years to avoid interruptions in our infrastructure. So yes, it is definitely a top priority.
Rep. Rioux: Yes absolutely, without safe bridges our roads have little value.
Maine Trails: If you could request the federal government to fund one transportation project in Maine, what project would that be?
Rep. Mazurek: One of the areas would be in fixing up our seaport areas: that is an area we tend to overlook. Being so close to Europe, Maine has amazing potential. I would love to see Sears Island developed as an international port. From Sears Island, we could distribute goods from all over the United States – there is a railroad less than a mile away – to markets across the world.
Rep. Rioux: An east-west highway and continuing the interstate to northern Aroostook from Houlton. Both projects would connect us to New Brunswick in a better way and would create more international commerce.
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. Mazurek: Yes, I do. In the past seven years, I have heard different ideas for funding transportation, but nothing sticks. We are paying user fees, and yes, we should expand into tolling and other user fees.
Rep. Rioux: I do think user fees are a good way to fund our system. If you use a road, you should pay for it. I am not sure how much more we can do with the gas tax. At some point, we will have to do something different. Money has to come from somewhere if we want to continue to have the independence that driving a car allows.
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?
Rep. Mazurek: Yes, there is a good marriage between trucking and rail. People are fearful that if you use rail, you are going to do away with trucking, or vice versa. That is not true. You may take some trucks off the road for certain freight, but there are commodities that are better served by trucks than by rail. What we do need is to ensure that the rail operators become much more cooperative, and they need to work together for the good of the state.
Rep. Rioux: Yes, I support rail transportation, but not at the expense of our highway and collector road system.
Maine Trails: What is your biggest priority for the next session of the legislature’s Transportation Committee? In your opinion, what was the most important achievement by the committee this year?
Rep. Mazurek: I believe we should look at a good, workable bond package and put it out as quickly as we can. That should be one of our top priorities. I really hope that the leadership and Governor LePage will see the value of putting out a bond. By not doing it, we are making a huge mistake. I will push very hard for a bond package. I believe in talking with other members of the caucus, that is a priority.
In terms of accomplishments, I will just say that we survived a very hard year under duress.
Rep. Rioux: Our biggest achievement was suspending the fuel tax indexing. Why? Because that was not a fair tax and we are showing the people that we are trying hard to make MaineDOT more efficient and more cost-effective in the service they provide. I really believe this department can do more with less, and this is one way to show Maine people that we are serious about making MaineDOT more efficient and protecting their tax dollars.
For next year, I would like to have MaineDOT model themselves more like private construction firms and private maintenance firms. If MaineDOT can communicate more with the private sector and see how they do business more efficiently, that would help save dollars. That way, they will be more successful in cutting costs and creating efficiencies, while still providing the services that the people of Maine need and still providing a quality workplace so employees will enjoy working there. I think the department can learn a lot from the private sector by getting ideas on how to run things, while ensuring there is still a happy workplace.
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. Mazurek: Old County Road in Rockland would be a good candidate. It is full of potholes; it has a huge crown in it; it has tar patches every three feet – no shoulders – very narrow; and people drive recklessly on it.
Rep. Rioux: I would nominate parts of Route 131 going from Swanville to Waldo – there are sections of it that are really rough, and there is not a firm foundation on parts of it.
Maine Northern Railway’s Ian Simpson looks to improved track speeds, reliability and shipper options to return Aroostook rail line to profitability
By Kathryn Buxton
Ian Simpson has been a railroad man for only seven years, but his grasp of the forces bearing down the newest acquisition in Irving Transportation Services’ rail empire is comprehensive. Aging rail infrastructure, tough winters, high fuel costs and customers facing oppressively tight profit margins come with the territory. Simpson, who is general manager of Irving’s other rail holdings, New Brunswick Southern Railroad and Eastern Maine Railway, is nothing if not pragmatic about the challenges ahead. Still, after just two months of service on the newly dubbed Maine Northern Railway, he is cautiously optimistic.
“Volumes are about what we expected,” said Simpson, speaking via phone from Saint John. “Some of the shippers have been slow coming back on line because of the economy. But on the positive side, some new shippers have jumped on board faster than we expected. It’s not all out but, if anything, the trend looks good.”
The state has estimated that the 233-mile line, purchased from Montreal, Maine & Atlantic Railway for $20.1 million earlier this year, serves an estimated 25 businesses and supports approximately 1,000 jobs in the region. On April 5, MaineDOT announced Eastern Maine Railway had beat out five potential operators with its proposal to operate the line. Just 10 weeks later on June 15, Maine Northern officially launched with the first train, including a freshly painted Maine Northern locomotive.
Eastern Maine’s winning proposal to MaineDOT stressed what Simpson believes are the operator’s chief strengths. “We have a strong presence in the region and good geographic connections. Winters are tough in the region, and we are experienced moving freight through winter conditions,” said Simpson.
He added that Irving’s interest in the fiber and wood industry, as well as the transportation division’s working relationships with other rail carriers in the region – Canadian National, MMA, Pan Am Railways and, of course, New Brunswick Southern and Eastern Maine – were also strong selling points for the Eastern Maine proposal.
Denis Berube director of planning and transportation services for the Northern Maine Development Commission participated in the panel that reviewed operator proposals. He noted that it was not only Irving/Eastern Maine’s familiarity with the region and relationships with other carriers that won them the job. “They knew about frost heaves on the line and how to work plowing into the schedule,” said Berube. “They also had a much more detailed operations and maintenance plan. It was obvious they were ready to go on the spot.”
Simpson’s initial goal is getting freight moving on the line again. The region has been hit hard by the recession that has seen demand for its primary products – lumber, fiber and other wood products– decrease significantly. That decline and a subsequent decrease in freight moving on the line was a deciding factor in MMA’s 2009 announcement that it wanted to abandon the line.
First and foremost on Simpson’s to-do list is rebuilding confidence in the service. “The key thing shippers want to see – they want to see consistency,” said Simpson.
Consistency, he believes, will come with increased track speeds and improved coordination with connecting freight lines, including MMA, Pan Am Railways and Eastern Maine Railway. “We want shippers to have the options that each of those railways provide, whether it’s ultimately price, transit time or equipment. We’ll let the customer choose who they want to hand off to from our line. We work with all three, and each brings a benefit.”
NMR’s primary objective is to “create more options and open up some new markets for its shippers, said Simpson.
“At the end of the day, the customer can only afford so much transportation cost. If you are able to open up new markets, you help make transportation more competitive.”
“A shipper that only has one option can be in a tough spot,” continued Simpson. “When there are two railroads to choose from, there’s an advantage to the shipper. When there are three, that really helps the customer. It’s good for the shipper, it’s good for the other railroads and it’s good for us when we see a growth in carloads.”
Another important element in Maine Northern’s strategy is to improve track speeds on the line. To achieve that, the new company is relying on track upgrades funded by a $10.5 million federal TIGER grant (Transportation Investments Generating Economic Recovery). The funding will upgrade the line that has fallen into disrepair during recent years. Maine Maine Northern will be responsible for operating and providing maintenance on the line.
Work to upgrade the line began on July 11. Nate Moulton, who heads the MaineDOT rail program, said that the goal is to have the work completed as soon as possible – by the end of the next construction season – because “with completion of each portion of work track speeds are raised and the lines become more efficient.”
The first section of line to be upgraded will be the mainline between Grindstone and Frenchville. “We’re focusing on the areas with slow orders,” said Moulton. The goal is for the main line to support track speeds between 30 and 40 miles per hour and 25 miles per hour on the branch lines. Simpson said that would be consistent with track speeds on his employer’s other Maine line.
“Track speeds are critical because our track crews are allowed to operate only 12 hours a day. If a crew goes out on a run five-and-a-half hours to the end point and five-and-a-half hours back, then they can make that trip in one shift and that is efficient. But if track speeds are reduced, we have to stop and send a fresh crew,” said Simpson. And slow track speeds have “a snowball effect” on service, creating added cost to the shippers and negatively impacting the operator’s profitability.
“Think about it. We have to order taxis to go get them, and some of these locations are quite remote. That’s wasted time and wasted effort.”
In addition to the TIGER grant investments in track infrastructure, Simpson said Maine Northern’s parent company Irving is committed to making its own investments in the service. Irving has hadded six locomotives to service its new operation and will rotate locomotives between Eastern Maine and New Brunswick Southern as required to service all of its customers.
“Clearly our biggest investment is in people, and we’re very pleased with the quality and experience level of the individuals we’ve hired,” said Simpson. The company has taken on 30 new employees, most of them based in Maine, to run the line. With 25 employees on the Eastern Maine line and 100 on New Brunswick Southern, Irving now employees approximately 155 in its rail division.
Simpson noted the company also plans to purchase snow removal equipment and will add rail cars as needed.
The company plans to establish what he calls “low tech” reload operations and will help increase the size and condition of customer sidings. These reload sites, he said, may have just a loader to facilitate truck-to-rail transfers for shippers not directly located on the line, but who could reduce their shipping costs significantly by connecting to rail.
“We know that about 25 percent of our customers’ freight touches a truck at one end or another,” said Simpson. With 18 years in the trucking industry before he joined New Brunswick Southern, Simpson understands Maine Northern’s ability to tap into new markets with short-haul connections to rail as perhaps the best way to attract new shippers to the line, particularly as fuel prices continue to rise.
NMDC’s Berube has long been working to develop truck-to-trail transfer sites to “rail in” materials such as road salt, sand, gravel and culverts that would be purchased in bulk for the region’s municipalities. He is helping to establish transfer sites in Presque Isle, Fort Kent and Houlton and thinks that, once municipalities start shipping material using these sites, other customers will be interested in using them as well. “I’ve been pushing this for some time now,” said Berube.
Berube expects that, as transportation costs increase, more northern Maine businesses will move to rail – including fertilizer, chemicals, wood pellet and biomass producers and agricultural and frozen food manufacturers. “There are certain things that are well-suited to rail and, with gas at $4 per gallon, it makes sense. That’s not to say that 100 percent will ship by rail. It may be closer to 25 or 30 percent.”
Simpson said that another strategy will be to encourage shippers to ship in bigger increments to help keep transportation costs down. He talked about working with low-volume shippers to help reduce their shipping costs.
“Maybe a shipper that’s moving two cars a day can move two blocks of five or one of 10 instead.” He said that Maine Northern wants to work with shippers to perhaps expand a siding and enable them keep their transportation costs at a minimum. He noted the most important thing will be improving the reliability of the schedule. That will lead to increased business on the line. “We want to keep the pie growing by 10. . .20. . .50 percent. We need to see the region strong. So clearly, we need to find ways to help the shippers.”
One investment that does not appear to be on Maine Northern’s whiteboard currently is reviving the line between Limestone and Caribou.
“That track is certainly in poor condition. We would need significant incentive to make that investment. That doesn’t mean it can’t or won’t be done,” said Simpson. The state owns that track, and MaineDOT has stated that its primary interest in the rail line has been one of economic development.
Since it was chosen to run the Aroostook County line, there has been speculation whether Maine Northern plans to connect its freight customers with a Canadian port or a Maine port. Looking at the map, the most obvious connection is with the port of Saint John, New Brunswick, served by Maine Northern’s sister railway, New Brunswick Southern. Searsport is another option, with connections via MMA. That Saint John connection has some in Maine wary. In a June 7 Bangor Daily News editorial, Searsport-based harbor pilot David Gelinas expressed concern and urged the state to closely monitor the new rail service’s operations to make sure Maine ports are not negatively impacted.
Gelinas wrote: “Legislators, taxpayers and the many transportation workers who rely on the port of Searsport for their livelihood should be concerned about the implications of the proposed operating agreement. The new arrangement may fundamentally change the rail corridor away from its historic terminus in the port of Searsport, shifting it instead eastward into Canada and the port of Saint John.”
Simpson said that a port connection – whether in Canada or Maine – “is not something we’ve even thought about.” As for moving more freight via New Brunswick Southern to Saint John, that does not seem likely at the current time. Currently one of New Brunswick Southern/Eastern Maine’s biggest shippers is based in Saint John and connects with MMA at Brownville Junction to ship out of Searsport. “Ultimately the shipper will make the decision on their port of choice for imports or exports, and we will help facilitate this,” said Simpson.
Providing a rail connection for Eastport would be more problematic. The nearest rail line to the port is the state-owned Calais Branch line, and that line hasn’t seen freight service since 1984. Still, Simpson is open to the possibility of establishing an intermodal link – if the business is there.
“My hunch is that the business isn’t there right now. But if Eastport wanted to establish a short haul link, we could get it all the way to Calais or St. Stephen,” said Simpson. “It would be a terrific opportunity to pursue, and we would work with Eastport to put a package together.”
In the end, it is Simpson’s personal mix of pragmatism and willingness to collaborate on creative, workable solutions for shippers that is likely to inspire the confidence – and that bodes well for the new rail service.
Already, Maine Northern is getting good word-of-mouth from shippers, according to Berube who said, “They’ve had a good start, but those tracks need to be brought up to standard. We need better tracks.”
Message from the top
Governor LePage greets MBTA members at 72nd annual meeting
The MBTA’s 72nd annual meeting on May 19 at the Augusta Civic Center began on a high note, with an address from Maine Governor Paul LePage. Maine’s first Republican governor since John McKernan left office in 1995, LePage is known for his straight talk, and passion for improving Maine’s business climate. His sometimes blunt assessment of policy has made headlines, but he was clearly at home in the crowd, dominated by business owners, town officials and others invested in the state’s transportation future.
During his talk, the governor shared his diverse views on transportation and transportation funding with the nearly 200 MBTA members and friends gathered for the annual event.
“As we all know, transportation – especially our road transportation – is our backbone,” said Governor LePage after a warm introduction by Senator Tom Martin (R-Kennebec County), an MBTA board member and former MBTA president. The governor touched on almost every mode of transportation – road, rail, ports and aviation – and he expressed strong opinions on the priorities Maine should focus on as it moves ahead. He spoke about the need to emphasize the basics, to “get our fiscal house in order,” to “stretch dollars” and make better use of transportation funding, so “we don’t fall further behind in our maintenance.” He also called for a no-frills approach to getting the job done.
“I want functional designs,” said LePage. “When we’re prosperous, we can make things beautiful.”
The governor also had high praise for MaineDOT Commissioner David Bernhardt and his staff. “MaineDOT supports our agenda for making Maine great.” He talked about the challenges ahead for the department and called on staff “to optimize the limited resources we have to make repairs.”
From transportation, the governor shifted his remarks to the bigger picture of state government and the General Fund shortfall that was still under debate in the Maine Legislature. Using his particular brand of folksy common sense that helped win him the office of governor, he talked about the “hard work” that would be needed to “fix the shortfall” and that the “only way to make it go away is to have a government that we can afford.”
Before the governor left the MBTA gathering, he seemed to indicate a softening stance on bonding and spoke of the transportation industry’s need to get their legislators to weigh in on transportation funding in the coming year. He also reiterated his opposition to raising taxes, apparently referring to any effort to either increase the gas tax or raise any other tax to support transportation investments. “I will tell you, raising taxes will send us right back into the recession.” LePage also called on Maine to get back to its roots and to exploit opportunities in forestry and agriculture. “We need to prepare our students to take on the jobs we are going to create in the future. We need to focus on the trades, on industry and construction.”
There were several other key players on the state’s political and transportation scenes at the meeting. The Maine Turnpike’s interim executive director Peter Mills and MaineDOT Commissioner David Bernhard spoke at a special MBTA panel discussion earlier in the day. Outgoing MBTA president Deborah Dunlap Avasthi introduced a room full of transportation leaders, including former MaineDOT commissioners Roger Mallar and John Melrose and several state legislative leaders including: Transportation Committee members Senator Bill Diamond (D-Cumberland); Representative Kenneth Theriault (D-Madawaska); Representative Alex Willette (R-Mapleton); and Representative Kimberley Rosen (R-Bucksport). Also in attendance were House Majority Leader Phil Curtis (R-Madison), Assistant House Minority Leader Andre E. Cushing III (R-Hampden) and Senator Earle McCormick (R-Kennebec).
U.S Senator Susan Collins sent a video greeting to MBTA members underscoring her long-standing support for important transportation initiatives, including securing legislation for a permanent 100,000-pound weight increase for trucks traveling the interstate, and funding for the Memorial Bridge replacement in Kittery. House Majority Leader Representative Phil Curtis, also a consultant for MaineDOT’s Local Roads Center, spoke about the need to do everything “a little better, a little smarter to make the ride a little smoother.”
Dunlap Avasthi talked about the legislative session and negotiations regarding the Highway Fund that still had more than a month to go at the time of the May meeting. She found several bright spots in what has been a challenging time for the industry as it has struggled to recover from the recession and as state dollars for transportation have grown increasingly scarce. She spoke about the importance of the Maine Turnpike Authority to the state. The agency has been under fire during the current session after a report from the Office of Program Evaluation and Accountability (OPEGA) looked at a number of issues within the agency.
“We must remember that 95 percent of OPEGA’s findings were positive,” said Dunlap Avasthi, urging everyone to keep in mind that the “turnpike is an incredible engine for the state of Maine’s economy.”
She also said that we couldn’t rely entirely on Yankee ingenuity to maintain our transportation system, and noted that despite the well-intended efforts of MaineDOT’s new work plan to deploy short-term fixes on the state’s badly deteriorating roads, Maine could not continue to let its highways languish. With just 63 miles of highway reconstruction scheduled in the upcoming biennial work plan, Dunlap Avasthi noted that it would be more than 280 years before Maine would be able to address much needed maintenance on its 8,500-mile network of state roads.
Incoming MBTA President Randy Mace showed he was ready to take up the charge for safer, more efficient transportation that Dunlap Avasthi was leaving behind. He spoke about the uncertainty of state funding for transportation, as the legislature had yet to take up either General Fund support for transportation or debate on a transportation bond. He urged MBTA members to stay engaged in the fight, and said that even if legislators could not agree on a bond this session, “that doesn’t mean we shouldn’t continue to fight for what is right.”
Two for the roads
Bernhardt and Mills map out plans for Maine’s highways at MBTA panel
The room was packed on May 19 for the MBTA special panel discussion at the Augusta Center. The event preceded the organization’s 72nd annual meeting and more than 60 MBTA members and other leaders in the transportation field came to hear what the speakers had to say. The panel, titled New Era–New Priorities, was headlined by MaineDOT Commissioner David Bernhardt and interim Maine Turnpike Executive Director Peter Mills. Both had been recently appointed to their posts: Bernhardt by Governor Paul LePage during the early days of the new administration; and Mills by the Maine Turnpike Authority (MTA) board of directors after the resignation of the agency’s long-time executive director, Paul Violette.
Both speakers have taken up their posts at a time of major change. Bernhardt took over MaineDOT just as state government, including the Highway Fund, was facing major austerity measures. Mills assumed his post as the authority was addressing legislative scrutiny about its spending practices and operations. Everyone in the room was anxious to hear how recent political, economic and policy changes were impacting both agencies.
Bernhardt’s presentation focused on his department’s work to make the best of the limited funding it has by establishing tightly defined priorities based on customer service levels and key highway corridors. Mills, in his turn, spoke about re-defining how the agency financially supports key MaineDOT initiatives within its corridor and how the highway serves Maine industries, including tourism.
Bernhardt began the session with a straightforward accounting of what is shaping up to be one of the most austere MaineDOT budget cycles in several decades. He spoke first about the 2011 project schedule, of which $118 million for 81 projects had been advertised since January 1: $16 million for bridges, $97 million for highways and $2.3 million for multimodal projects. He said another $111 million in projects was expected to be advertised and awarded within the next 90 days. The commissioner then shifted his focus to the $998 million 2012-2013 biennial work plan and budget that was still under discussion at the state legislature – a major portion of which is slated for highway and bridge maintenance and improvements.
While the new work plan has more than $230 million less in capital investments than the 2010-2011 work plan, Bernhardt took a decidedly optimistic view of the situation, highlighting MaineDOT achievements including an aggressive effort to address Maine’s backlog of deteriorating bridges and the creation of the four-year TransCap bridge program that generated $160 million in special one-time funding enacted by the Maine Legislature in 2008. That program is coming to a close, and Bernhardt hailed its success. So far approximately 150 bridges have been either replaced, repaired or rehabilitated.
Bernhardt said that when MaineDOT spends the $55 million remaining of those bridge funds, “we will have ended up doing what we said we would do four years ago.”
Much of what he spoke about was making do with the resources available to the department, focusing on “keeping roads serviceable” and doing “what we can afford.”
The Maine Turnpike Authority’s new chief offered a look at what is ahead for the 109-mile toll highway. But that was not before he addressed the elephant in the room – the report released earlier this year by the Maine Legislature’s Office of Program Evaluation and Accountability. That report led to the resignation of Mills’ predecessor Paul Violette and instigation of management and spending reforms. He jokingly referred to recent months as the turnpike has faced “nine times as much controversy as MaineDOT with just one-ninth the highway.” He also spoke about L.D. 1538, legislation that creates greater transparency in how the agency operates. The legislature passed the bill in early June and Governor LePage has since signed it into law.
Mills addressed concerns about proposed legislation supported by Maine Treasurer Bruce Poliquin that would require agencies including the MTA, Maine State Housing Authority and the Finance Authority of Maine to send bonds out to public vote.
“This is not a bill that should see the light of day,” said Mills.
Mills also addressed the future of the highway and his vision for turning the turnpike into “a red carpet entrance to the state of Maine.” That vision calls for remaking turnpike service areas with the Maine brand – including Maine-made products such as Giffords Ice Cream and Linda Bean’s “perfect Maine” lobster rolls.
Mills talked about the future of tolling in Maine at a time when a few legislators and organizations have been pushing to divert toll revenues for other projects, from buses to bridges. He urged caution in protecting the funding sources for the highway that carries a majority of all commercial traffic in the state and said we should not divert tolls to other projects just because “we don’t have the courage to raise the gas tax.” He instead underscored ongoing collaborations and funding support the MTA provides MaineDOT on projects including the Memorial Bridge in Kittery, alternative modes programs GO MAINE, ZOOM Turnpike Express and Eastern Trail Bridge and ongoing work with MaineDOT on the Gorham Connector and York County Connections studies to improve critical transportation networks within the MTA corridor.
Port growth, expansion topic at MBTA Eastport meeting
Chris Gardner can’t be blamed for sounding boastful these days. By any measure, the Eastport Port Authority (Gardner is the authority’s executive director) has had its fair share of challenges to overcome. Those challenges and a considerable number of the port’s recent triumphs were the subject of Gardner’s presentation at the MBTA Eastport Meeting on June 16 at the Eastport Chowder House.
Eastport is the easternmost and deepest of Maine’s three deepwater ports. It’s also the U.S. port that is closest to Europe. In the past several years, like all U.S and European ports, Eastport has faced a drop-off in activity due to the recession. Yet in Eastport, the recession threatened to take an even greater toll on the port when the Domtar pulp mill was idled on March 5, 2009.
According to Gardner, immediately one thing became clear to him: Eastport needed to re-establish a key transportation connection to the port.
“We need to put rail through to Eastport,” said Gardner. The port commissioned a study by HNTB to look at what it would take to re-establish rail service in 2009.
Port officials also began looking for opportunities to diversify. One market that looked promising was bulk materials transport – including shipment of wood pellets – but the port would need to make a major investment in a new bulk materials handling facility before it could tap into that market.
The Maine Port Authority included Eastport in an $88.7 million TIGER grant application (Transportation Investment Generating Economic Recovery) in 2009. The U.S. Department of Transportation funded only $14 million out of $89.7 million that the Maine Port Authority had requested, and Eastport’s proposed rail transfer facility was one of the casualties.
Still, Eastport has made good use of the $2 million in federal recovery funding it was able to secure for a new bulk materials handling facility, adding another $4.5 million in state transportation bond support and additional financing secured by the Eastport Port Authority through First Bancorp.
As Gardner put it, “The turtle can’t move much, unless it sticks its neck out.”
The port broke ground on the 13-acre-plus facility earlier this year. (MBTA member T-Buck Construction is the general contractor on the project and several other MBTA members are subs). Gardner took pride in describing its 850-foot bi-directional conveyor that will not only support Maine exports of wood chips, wood pellets and aggregate materials, but can be used for inbound bulk freight, as well.
“If you need to do something big and build something different, you need to put a new tool in the box,” said Gardner.
The port director also had high praise for Skip Rogers, former Federal Marine Terminal general manager who was instrumental in launching a new market for the port – the shipment of pregnant dairy cattle to Eastern Europe. The port shipped its first shipment of 470 cows to Turkey in July. Since then, Sexing Technologies, a genetics company based in Texas, has shipped more than 1,200 head from Eastport. The cattle shipment received critical permitting from the U.S. Department of Agriculture, thanks to support from local state legislator and Maine Senate President Kevin Raye, and members of Maine’s Congressional delegation, Senator Susan Collins and Representative Mike Michaud – and Gardner was profuse in his thanks to them for helping the port get back on its feet.
The turnaround has been significant. In 2010, Eastport logged more than 400,000 tons of freight through its docks, a record. Still, Gardner has no plans to ease up in his push to continue to diversify the port and improve its infrastructure and transportation connections.
“Our next challenge? RAIL,” said Gardner. “If our state wants to get serious about rail, we need to get serious about connecting rail to our ports.”
MBTA President Randy Mace also spoke at the meeting, updating the transportation leaders at the meeting about the legislative session that was in its final weeks. He praised legislators for successfully negotiating what could have been rancorous spending cuts to reach unanimous approval of the 2012-2013 General Fund budget.
“That was no small feat,” said Mace. He also expressed concern about the Highway Fund budget just passed that allocates $230 million fewer dollars for capital investments than the previous biennium. “This may be the worst Highway Fund budget Maine has seen since the Eisenhower years,” said Mace. He said that the MBTA plans to push for passage of a robust transportation bond during the next session, and continue to work with legislative leaders to reduce the Highway Fund share of state police funding and increase General Fund support for transportation infrastructure.
Throughout the year, the MBTA hosts several regional forums addressing current issues, including transportation, the economy and trade. To learn more, please visit the Events page at www.mbtaonline.org
ETTI’s ‘trenchless’ construction has created a niche in New England
In the mid-1990s, James Kelly had a vision. The electrical contractor, owner of Enterprise Electric based in Lisbon Falls, had come across a developing technology called horizontal directional drilling (HDD) that was being used with success in other parts of the country. Kelly knew that HDD would be a boon for his industry and would enable crews to install electrical conduit in challenging conditions where traditional open trench techniques were too intrusive. He also recognized that HDD or “trenchless” construction could revolutionize other utility installations – including water, sewer and natural gas.
In 1995, Kelly launched a bold new enterprise called Enterprise Trenchless Technology Inc. (ETTI) and bought the company’s first directional drill and set about the formidable process of introducing the new technology in Maine. James’ son Scott, just 24 years old at the time, stepped in to head ETTI in 1996, so his father could focus on Enterprise Electric, which has its corporate headquarters just down the street in the same Lisbon Falls business park. The elder Kelly currently is ETTI’s treasurer.
Scott is well known for his excellent business sense and dedication to the job. He typically arrives at the office by 5:30 a.m. to deal with phone messages and e-mails before he heads out to the job site. And his day continues well into the evening.
“If you know Scott’s dad, you know that the apple doesn’t fall far from the tree,” said ETTI Vice President of Operations Bruce Hubbard. For his part, Scott Kelly calls his dad “the single most influential person in my life.” The younger Kelly remembered the day his dad gave him what would be the best business advice he has ever gotten.
“He said, ‘First, you are allowed to make profit on a job but never skin a customer, as it will be your last. Second finish a job with the highest quality and ethics regardless if the job is making money or losing money. Third, don’t be good at what you do, be the best at what you do.’”
“Today at nearly 70 years old, my dad still works in the field with his crews installing pipe in ditches and working 24-hour shifts for the power company when storms come through. He never backs down from a challenging project,” said Scott.
Kelly says he has been fortunate to learn from another pro – Hubbard, who joined the business seven years ago. Hubbard, he said, “has been my backbone support. . . he’s another old school guy who just simply gets things done and has a vast background that has truly helped the business grow.”
Directional drilling had been used since the 1920s in the oil industry, where it was initially a survey tool used to settle oil property disputes. In 1934, the new technology caught the eye of Popular Science Monthly which hailed the young and upcoming technology: “Only a handful of men in the world have the strange power to make a bit rotating a mile below ground at the end of a steel drill pipe, snake its way in a curve or around a dog leg angle, to reach a desired object.”
During the 1970s, the technology advanced with the introduction of downhole drills (mud drills) that used hydraulics to power a drill string and enabled the drill pipe to remain stationary. By the mid-1990s, the technology had become increasingly sophisticated and adaptable to a wide range of applications. Electronic guidance systems measure and transmit roll angles, pitch information and beacon temperature. Advanced drilling fluid systems have extended the range of HDD to up to six miles.
These innovations, and the rise of new HDD equipment that adapts the technology to a range of heavy construction applications, has set the stage for ETTI’s explosive growth over the past decade and a half. The company began in 1995 with just one HDD drill and two employees. Today, the company employs 25 and maintains a fleet that includes four directional drills, one that can install pipe up to 34 inches in diameter and distances up to 2,000 feet. The ETTI fleet also includes three slurry vacuum units; eight fusing machines capable of welding pipe from 2 to 18 inches; four electro-fusion machines; three excavators; four yard loaders; three dump trucks; five service vehicles; and a full support of other trucks, trailers and equipment.
Laparoscopy on a grand scale
The chief benefit of directional drilling is that it is considerably less intrusive and more environmentally friendly than traditional open trench construction. In locations where there are wetlands or other environmental concerns, and in high density locations were there is existing road and utility infrastructure, an HDD drill works like laparoscopic surgery on a grand scale, drilling and placing pipes and utility conduits with amazing precision and little disruption to either the environment or local commerce.
There certainly is a “gee whiz” factor about the work ETTI does, because so much is accomplished far below the surface. Hubbard tells the story of a recent project where an ETTI crew installed a 16-inch water main below a pond in North Conway. A fisherman was flycasting, and came over to find out what was going on.
“He couldn’t believe what we were doing, and all the time he could see the fish swimming in the water,” said Hubbard. “Here we were, performing major construction 20 feet below this pristine waterway and all he could feel was a slight vibration under his feet.”
ETTI crews have installed sewer lines under a tidal inlet in Ogunquit, run water and sewer lines under the Maine Turnpike in Gardiner and bored through 500 feet of solid rock in Fryeburg for Nestle Waters North America. In 2009, ETTI worked with Sargent Corp. to install 600 feet of 24-inch water main under Hatcase Pond – a principal water supply for the city of Brewer. The project won ETTI and Sargent a Build Maine Award, one of four the company has taken home during the past decade.
ETTI has weathered the recession without having to lay off staff, but the company has had to watch things closely, as job costs, including fuel and materials, have increased.
“We’ve been impacted just like everyone else in the construction industry,” said Hubbard. “We cut back hours and overtime. We‘ve tightened up our spending and we’re pricing jobs like we did eight years ago, because it’s that competitive.”
Still, last year marked three significant milestones for the company. The company completed its seventh straight year without a lost time injury. ETTI was awarded its largest contract in company history – 9.2 miles of gas transmission main in Freeport and Pownal. That job included more than 50 bores totaling in excess of 17,000 feet and an open cut installation measuring 32,000 feet. The company also hosted a safety seminar that was attended by 450 people and featured Eric Giguere who was buried alive when the trench he was working in collapsed. Hubbard said the event has had a lasting effect on all who were there to hear Giguere’s story.
“It made everyone think ‘That could have been me,’ and that really makes you think about safety,” said Hubbard.
Safety concerns also drove Scott Kelly to help form the Northeast Trenchless Association in 2004. The organization has members from Maine, New Hampshire, Massachusetts and Vermont.
“We started to hear far too many stories of new contractors entering the industry having issues – mostly from inexperience,” recounted Kelly. “The goal behind the trenchless association was education for each company and setting standards and codes of ethics that would help our industry grow. To me, it wasn’t so much the case of who got the jobs, just that each was installed correctly to continue positive things for directional drilling.”
Kelly said that ETTI, like everyone in the construction industry, is experiencing an uneven recovery and commercial work continues to lag from its pre-recession highs.
“Our year actually started off very slow with several larger projects we bid from last season down in Cape Cod put on hold until just recently,” said Kelly. Despite the slow start, he said, ETTI’s crews have been “flat out” since the beginning of June, and there’s no sign of that letting up through the rest of the season. On a recent weekday in June, all but one of ETTI’s fleet of HDD drills are deployed at work sites throughout New England. ETTI’s spotlessly clean, well-ordered, 24,000-square-foot headquarters in a Lisbon Falls business park is quiet, but Dave Racine, ETTI’s warehouse manager, is busy making sure there is a ready supply of parts and the equipment remaining behind is in good working order. Downtime isn’t an option, because the company’s crews are so tightly scheduled. HDD work typically comes in one-day projects, and ETTI’s market stretches from northern Maine to New York City.
“On Monday, we may have a crew in southern Massachusetts, on Tuesday in New Hampshire, Wednesday in northern Maine, Thursday downeast and Friday in Scarborough,” said Hubbard. The challenge of scheduling crews and making sure they have the equipment, manpower and supplies they need is the work of Hubbard who has 41 years of construction experience. Hubbard started with H.E. Sargent in the 1960s, and has worked almost every job in the business from truck driver to project manager for Maine companies including Harry C. Crooker & Sons and CPM Constructors. He joined ETTI in 2003, and his experience and contacts in the industry have been invaluable through the company’s rapid expansion during recent years.
“This business is phenomenal,” said Hubbard. “It’s growing and making advances every day.”
Investing in people and safety
To keep up with the business’s growth, ETTI invests considerable resources in training and safety. ETTI crews are arguably the safest best trained in the HDD industry. The company has logged more than 210,000 hours without a lost time injury.) Kevin Thibeault, another construction veteran with utility experience heads ETTI’s Natural Gas Division. Brian Chase, who has 12 years experience in industrial work, is superintendent of operations, an HDD crew foreman and an experienced journeyman driller and fusing technician.
ETTI employees share a family-like sense of loyalty, respect and commitment to the company. That feeling is mirrored by the good the company and its employees do in the community. “We like to keep things home-based,” said Holly Williams, ETTI advertising and marketing manager. Williams joined the company in 2008 and says she can’t imagine having a better employer. She said the company employees has been chipping in to help a local family that lost two daughters when their home burned earlier this year. She said they like to give where the gift can make a difference in the communities where they live and work. ETTI and its employees have been regular contributors to the Aaron Farmer Scholarship Fund. They hold a giving tree at the office to collect donations for local families facing hard times. ETTI contributions also helped build the local hockey rink.
Michelle Hoffman, ETTI’s CFO and office manager, moved to Maine two years ago from South Carolina with her husband, where she had worked in finance for nearly two decades. Hoffman has welcomed the career change from corporate America to a small-town, family-owned business. She said working at a place where everyone strives every day to be the best in their field has made the transition a welcome one.
“In my old job, people came and went. Scott has made this a place where people want to stay,” said Hoffman. She recounted how a big group of her co-workers gave up a weekend day to help her move. “I don’t have any family here, but I call this ‘my little ETTI family.’ It’s a wonderful place to work.”
Technology in the field:
The right technology can increase efficiency, reduce mistakes and make a quantifiable difference at your work site
By Steve Washburn, Milton CAT Product Support Sales Manager
Thankfully, new technologies in best maintenance practices have kept pace with the machines we own and operate, contributing to increased convenience, improved accuracy and reliability, document performance, and a reduction in waste and errors, according to a report released by Milton Cat. Here are some major areas in which these new tools can help.
Our equipment’s eyes
You may have seen this in somebody else’s fleet, or you may be using it yourself. It’s that extra antenna sitting on the machine, and it transmits information--machine location, diagnostic codes, history and alerts via satellite to your office, cell phone or e-mail account.
Faster, easier and environmentally safe fluid changes
Equipment manufacturers are now using on-board systems allowing you to evacuate transmissions, hydraulic tanks and other oil-based reservoirs in your equipment very efficiently. It’s environmentally clean, safe and easy, and a complete engine oil and filter change takes only 20 minutes. There are no leaks, no pans and no mess, and best of all, the entire operation requires no crawling under the machine.
If your machine is connected to your dealer’s service center via a wireless system, every time you do a transmission, hydraulic or oil change, the operation gets automatically time-stamped, offering a reliable level of maintenance verification and record-keeping that increases the value of your machine.
24/7 parts ordering
Chances are when it’s convenient for you to order parts, it’s not within regular business hours. And chances are, your equipment dealer knows that, and has come up with an electronic solution. Now you can order parts and consumables at your convenience, from your office, from the road or from the field, 24 hours a day. Other timesaving features that can truly make a difference in your busy life include real-time price and availability that allow you to make the best purchasing decisions.
Access to product information
Online product support information is a cost-effective alternative to paper and microfiche and a great tool for operations, maintenance and safety manuals, as well as disassembly and assembly schematics, troubleshooting, testing and adjusting for any machine or work tool in your fleet.
Monitoring machine health
Scheduled oil sampling is a program that gives you an insight into the health of your machines. Small amounts of oil and other fluids are collected and stored in the cavities of the components in the engine, power train, hydraulics, braking and coolant system. Samples are labeled and sent to the equipment dealer’s lab, where they will be analyzed and interpreted. Results are sent to you via regular mail or email. Scheduled oil sampling is one of a number of important tools that can be used to support your decision-making when it comes to maintenance, helping you lower your owning and operating costs, maximizing component life and optimizing your investment. Some equipment dealers make oil analysis services available on the web. This option allows you to access your fluid sample analysis history, reports and recommendations, any time, any place. Some key features of scheduled oil services on the web are notifications of new information being posted; search and sort data up to five years back; detailed descriptions and sample history.
Scheduling repairs, reducing downtime
Many new, larger machines come equipped with software that provides a graphic interface for diagnostic testing, troubleshooting and calibration. Generally available on a subscription basis, this application reduces downtime and efficiently schedules repairs. Some of the most important uses include:
- view active and logged diagnostic codes and quickly identify faulty sensors;
- review logged event codes to check on engine overspeeds, high temperature, etc;
- identify the root cause of problems through diagnostic tests;
- calibrate key components to ensure operating efficiency;
- record real-time data;
- view previously recorded data logs to monitor trends in the health of your equipment;
- search help options to guide tasks; retrieve data for fuel used, miles traveled, hours operated and idle time;
- display status of engine speed, throttle position, timing advance, etc.
In summary, nothing beats ongoing, hands-on maintenance, and technology can never replace a good, careful operator. Being aware of the available new tools, however, allows you to choose the ones that make the most sense for your particular fleet, and can save money and help prolong your equipments’ life.
EDITOR’S NOTE: Maine Trails
welcomes guest commentaries from our members. If you would like to submit a guest column on a transportation-related subject for publication, please e-mail email@example.com
or call 207-622-0526 to discuss.
The Matrix: Prioritizing like never before
By David Bernhardt, P.E. MaineDOT Commissioner
The last MaineDOT columns in Maine Trails have examined two major initiatives underway at MaineDOT: Highway Corridor Priorities (HCP) and Customer Service Levels (CSL). Deputy Commissioner Bruce Van Note first outlined how MaineDOT has prioritized all public highways based on their relative contribution to Maine’s economy and quality of life. Chief Engineer Kenneth Sweeney then described how technical performance measures regarding highway safety, condition and service have been translated into a simple, intuitive A through F grading scale.
The full power of these two metrics occurs when they are combined as shown in the table – of “The Matrix” – below. This structure allows MaineDOT to communicate the current state of the system with a customer focus; to provide a fair, structured framework to prioritize programs and projects; and to set goals that match priorities.
Another powerful aspect of this approach is that it transcends all of MaineDOT’s business processes and organizational units. One set of HCP and CSL is being used for everything from Work Plan development to design standards and, ultimately, maintenance levels-of-service. It is the single “sheet of music” to which the entire department marches, and it is being integrated into our culture at a rapid pace. It is a major piece of the continuing transformation of MaineDOT into a customer-oriented agency whose decisions are understandable and trustworthy.
Two examples of the power of “The Matrix” are outlined below.
At the time of this writing, CSLs are still being refined and “ground-truthed,” a process that will occur this year. Based on 2009 data, the breakdown of Priority 1 – 3 highways into their A – F CSLs is shown as follows:
As expected, Priority 1 highways are in the best condition (almost 60 percent are A plus B), and also rate well for safety (only 15.5 percent are D plus F). Priority 1 highways do not fare as well for service compared to Priority 2 and 3 highways, due primarily to congestion on interstate and arterial segments with high traffic volumes as compared to their capacity.
Over the past 18 months, MaineDOT has been developing an improved project prioritization methodology, with HCP and CSL becoming an important backdrop in programming decisions. MaineDOT used HCP and CSL on a trial basis to develop the FY 2012/2013 Capital Work Plan and intends further implementation for the FY 2014/2015 biennium. This process will enhance public accountability and transparency, as well as improve the work plan’s ability to meet Maine’s transportation needs under constrained resources.
A tool that compares current CSLs for a proposed project with average statewide CSLs for the same HCP is shown on page 54. This is an actual project, and the analysis below was factored into the decision to advance this project.
Regarding the highway system, “The Matrix” could be utilized to revise the capital transportation goals set by the Legislature (23 MRSA 73(6)) and estimate the cost to achieve them. Depending on the target CSLs by HCP selected, preliminary analysis indicates that a substantial reduction of the capital funding gap is achievable. This is made possible by changing the focus from national design standards and “what the road needs” to more pragmatic goals reflecting “what the customers need”.
But it doesn’t end there. MaineDOT expects to undertake a similar effort for all modes of transportation by developing asset priorities and CSLs for other hard assets such as airports, rail, and passenger transportation. Someday, direct comparison of CSLs across all modes will allow us to manage transportation assets in a more holistic way.