Keynote Remarks for Transportation Secretary Lyndo Tippett
N.C. Economic Developers Association Mid-Winter Conference
Friday, March 17, 2006 at 11:40 a.m.
Pinehurst
Introduction
Good morning.
Steve, thank you for that introduction.
It is a pleasure to join you here in one of my favorite North Carolina destinations.
I was disappointed that I couldn't participate in yesterday's golf tournament-but I guess it was for the best because it gave someone else the opportunity to take home first prize.
Seriously, I appreciate your invitation to be part of this conference.
The North Carolina Economic Developers Association is certainly a valuable asset to our state, and you do a wonderful job promoting North Carolina and encouraging its future growth and development.
I was pleased to hear this conference was centered on transportation and economic development because now, more than ever, this issue is critical to ensuring the continued success of our state.
Transportation improvements continue to play an integral role in bringing new opportunities to North Carolina, and the North Carolina Department of Transportation has taken an active role in completing the projects needed to attract new business and industry.
For example, NCDOT Division Engineer Pat Ivey and Board of Transportation member Nancy Dunn deserve great credit for their outstanding efforts to ensure that necessary road improvements could be funded and completed to accommodate the Dell site in Forsyth County.
These transportation improvements were key for Dell, and NCDOT's work helped seal the deal and brought a lucrative new opportunity to the area. To date, Pat Ivey tells me we have spent more than $9 million on improvements for this facility.
Similarly, just this month the Board of Transportation approved money to fund improvements for the Cobia Boat Company, which has chosen to locate in the McDowell County town of Marion off U.S. 221.
Marion is in a hard-hit region with job losses and lack of growth, and this new business is certainly a promising opportunity for the community.
Given this, we developed a strong, ongoing partnership with McDowell County officials to make sure the company had everything it needed to set up shop in the area.
The county initially built the access road into the industrial complex, and NCDOT is now reimbursing them for their work, as well as making some additional improvements.
And these are just two of the numerous examples in which transportation has played a direct role in the economic development of our state.
Thanks in great part to your ongoing efforts, North Carolina is an increasingly popular place to live and do business, and we will have many more opportunities to benefit from this tremendous growth.
However, with this expansion also come certain "growing pains" that we have to be prepared to face.
The Effects of Growth and Need for Additional Funding
As you are well aware, transportation is one of the areas most directly affected by population growth.
To put the situation in perspective:
· North Carolina's population grew from 5 million in 1970 to 8.5 million in 2004, and is expected to grow by 4 million more people in the next 25 years.
· Vehicle miles traveled more than tripled, from 30 billion in 1970 to 94 billion in 2004, and are expected to increase 50 percent more by 2020. In our urban areas, many completed projects have already reached 20-year projected traffic volumes in the first 10 years of operation.
· Truck freight hauled in North Carolina is projected to increase to 808 million tons by 2020, a 190-percent increase since 1998.
Many of the state's highways were built as farm-to-market roads and were not designed or built to handle the heavy traffic volumes they carry today.
As a result, an increasing number of the state's most important corridors need significant upgrades.
Additionally, our interstate system, which celebrates its 50th anniversary this year, is in need of major rehabilitation.
These improvements are no easy task for us.
In North Carolina, a substantial portion of the burden to fund local transportation improvements rests on the state level.
In fact, according to a recent census report, North Carolina ranks 19th nationally in per capita highway expenditures on the state level, but only 49th in those same expenditures on the local level.
The situation is also intensified by a rise in construction inflation-more than 30 percent over the last two years alone-making it more costly for us to complete needed projects.
And this funding shortfall will only increase with time.
The stakes are high, and we must do everything we can to pursue additional funding for transportation to help keep pace with North Carolina's rapidly expanding needs.
This goes not only for urban areas such as Raleigh and Charlotte that are growing by leaps and bounds, but also for rural communities that require improved highways to attract new opportunities and provide a higher quality of life for their residents.
As economic development professionals, you play a leading role in advocating for transportation funding and increasing awareness of the connection between transportation and the economic well-being of communities throughout our state-both urban and rural.
I ask you to continue partnering with us to ensure that North Carolina has the resources it needs for every community to grow and flourish in the years to come. As Gov. Easley says, that's One North Carolina.
Along those lines, the Thinking Ahead! transportation working group was formed last year to help develop new ways to meet more of North Carolina's short- and long-term transportation needs.
The group brings together transportation stakeholders and experts from across the state, including Bill Carstarphen, who is with us here today.
Among the efforts, the group hosted a series of regional forums throughout the state this past fall to gather public input from communities about how to meet more of their transportation needs.
A final report is now in the works.
Implementing the Statewide Transportation Plan
As you can see from our agenda card, NCDOT's top goal is to seek and implement new measures and resources to meet more of the state's transportation needs.
Our department is already doing everything in its power to help generate new funds for transportation and make the most of its existing resources.
One of the primary ways we are working toward this goal is through the implementation of the investment strategy outlined in the 25-year Statewide Transportation Plan, which the North Carolina Board of Transportation adopted in the fall of 2004.
Though estimates are currently being updated, at the time of its adoption the plan anticipated a nearly $30 billion gap between transportation needs and funding over the next 25 years.
This means at current funding levels about one-third of North Carolina's transportation needs over the next 25 years will go unmet. And we're also looking at a $16 billion shortfall in just the next 10 years.
Fortunately, by allocating our available resources as the plan recommends we can meet more of our state's needs, particularly through maintenance and modernization improvements.
However, simply shifting our money around will not solve the problem.
Additional funding for transportation is needed to fully meet the diverse demands of our state.
Seeking Expanded Use of Public-Private Partnerships
A promising option for getting more transportation dollars is through the expanded use of public-private partnerships.
These partnerships allow the department to work with private entities to build and maintain mutually beneficial transportation facilities.
NCDOT is currently pursuing legislation that will give us greater flexibility to explore a broad range of public-private partnerships.
This type of partnership is an integral part of furthering economic development, and we are optimistic about the possibility of working with the private sector to help meet our state's transportation needs.
Many businesses and industries consider the presence of a strong transportation infrastructure as one of the most important factors when choosing a site for their operations.
The bottom line is that we must have a top-notch transportation system to be economically competitive in today's market, and companies have a vested interest in building and maintaining quality transportation facilities.
I urge you to help your communities think "outside the box" about ways they can contribute to transportation improvements that will attract new business to our state.
Other Innovative Financing Solutions: Tolling and GARVEEs
Our elected officials and citizens have already demonstrated a willingness to pursue innovative solutions for funding.
In addition to my role as Secretary of Transportation, I also serve as the chair of the North Carolina Turnpike Authority, which was formed in 2002 by the General Assembly.
The Authority's powers were expanded this past year, when we were given legislative approval to design and construct up to nine toll facilities across the state.
Toll funding remains one of our most promising solutions for the future, allowing us to complete much-needed projects considerably sooner than through traditional pay-as-you-go funding alone.
Last month, the Authority traveled to Texas to study how the Lone Star State is using toll funding to meet its transportation needs.
We learned a lot on this trip. For instance, we found that in Texas, toll funding is being considered for every new state highway.
While North Carolina is certainly not considering using tolls to that degree, it speaks well for the security and effectiveness of toll financing.
And with the passage of new legislation in 2005, NCDOT is also moving forward with a new funding tool known as Grant Anticipation Revenue Vehicles or GARVEE bonds.
Already used by many states, these bonds allow us to borrow against future federal funding, thus accelerating our transportation dollars to complete needed projects sooner and reduce inflation-related costs.
We have been approved to issue $950 million in GARVEE bonds, and we are currently in the process of evaluating candidate projects.
Land-Use Planning
In addition to pursuing additional funding for transportation, we also need your help encouraging communities to make wise land-use decisions.
Though each request made by a developer is given due consideration, NCDOT's first concern is preserving the mobility of a community and ensuring that citizens can easily and efficiently move from one place to another-both in the short- and long-term.
Land-use planning is a critical part of implementing the statewide transportation plan I mentioned earlier, and we are putting a major emphasis on the mobility, economic development and environmental stewardship benefits that careful planning has to offer.
As our state continues to grow, it will become increasingly imperative that we work together to monitor the development occurring throughout the state.
The Department of Transportation has been working closely with the Department of Commerce and the Department of Environment and Natural Resources to devise a strategy for the future that will ensure North Carolina's long-term prosperity.
A prime example of this partnership is through the tri-agency adoption of a Strategic Highway Corridor policy, which identifies and prioritizes highways that play a critical role in regional or statewide mobility.
This policy serves as the first implementation step outlined in the statewide transportation plan and is a key component in fostering the continued growth of our state.
We have also established another partnership aimed at planning transportation improvements hand-in-hand with economic development and environmental protection.
Known as the Interagency Leadership Team, this partnership's mission is to develop an interagency plan for North Carolina to balance the mobility, natural and cultural resource protection, community values, and economic vitality of the state.
Partners in this team include:
· NCDOT
· DENR
· Department of Commerce
· Department of Cultural Resources
· North Carolina Wildlife Resources Commission
· U.S. Army Corps of Engineers
· Federal Highway Administration
· U.S. Fish and Wildlife Service
· U.S. Environmental Protection Agency, and
· National Marine Fisheries Service.
Meetings between team members provide a valuable opportunity for our agencies to identify opportunities to share activities, enhance collaboration and create mutual benefits.
One of the chief goals of this team is to involve local, state and federal agencies in integrating land-use, transportation and economic development planning.
We are currently working to identify strategies to accomplish this goal and bring together partners on each level to think about and plan for the future.
Improved Project Delivery and Oversight
The Interagency Leadership Team is also a prime example of the type of collaborative relationships we are building to help streamline the process of delivering transportation projects.
We are looking at a number of ways to reduce the amount of time it takes to complete projects, allowing our communities to reap their benefits sooner.
One highly successful method has been design-build, which allows a project's design and construction to be completed under one contract and reduces project completion time by as much as several years.
The program also helps keep inflation costs down by completing projects in a shorter time frame.
The I-85/Ruin Creek Road interchange, the U.S. 64 Knightdale Bypass and the widening of both I-85 and I-77 in Charlotte were the first design-build projects to be completed-each about one year sooner using this method.
Other design-build projects under way include the widening of I-40 in the Asheville area,
the U.S. 17 Washington Bypass in Beaufort County and the U.S. 17 Windsor Bypass in Bertie County.
Each of these projects significantly benefits travel along a major corridor and provides a higher level of mobility.
Another way we are working to improve project delivery is through an important partnership we have in place with the Department of Environment and Natural Resources, known as the Ecosystem Enhancement Program or EEP.
This partnership helps streamline the environmental-permitting process and reduces delivery time for road projects by allowing transportation mitigation to be completed years in advance of construction.
Since the start of the program in July 2003, about 35,000 acres of valuable environmental assets throughout the state have been protected and preserved.
Increased Investment in Rail Infrastructure and Expanded Alternative Modes of Transportation
While people tend to think of highways when they hear the word, "transportation," a multi-modal transportation system that promotes seamless and efficient travel is crucial to success in today's marketplace.
With this in mind, the department has continued to support the House Interim Committee on Expanding Rail Service.
We've worked with the committee to evaluate alternative future transportation investment scenarios and examine the costs and benefits of providing transportation alternatives.
The committee has also considered how these transportation investments could spur future economic growth for North Carolina.
Along with this, NCDOT in 2005 alone invested $1.85 million to fund 12 rail industrial access projects across the state.
Once completed, the companies affected by these improvements will ship a combined 17,700 carloads annually and create or preserve a total of 640 jobs.
The department also contributed $642,402 in grants through our N.C. Moving Ahead! program to fund four short line railroad rehabilitation projects.
N.C. Moving Ahead! is aimed at meeting the maintenance and preservation needs of our state and stimulating future economic development. In light of this goal, these projects will positively affect 20 rail customers that ship 25,150 carloads annually.
Investment in aviation also remains a top priority.
North Carolina is home to more than 300 privately owned airports and 74 publicly owned airports, heliports and other landing areas that continue to do big business in our state.
In fact, more than 2.6 million airplanes and 35 million passengers use the state's airports each year, contributing $10.3 billion to the state's economy and providing about 180,000 jobs.
There are more than 7,850 aircraft based in North Carolina alone, and more than 14,611 certified pilots and flight instructors.
And in recognition of the integral role aviation plays in the development of our rural communities, we are working on several initiatives geared at giving our smaller airports the resources they need to grow and expand.
In addition to rail and aviation, we continue to place a tremendous emphasis on improving and expanding public transit services across the state.
Last year, the department helped expand transit service in major cities throughout North Carolina, including Charlotte, Durham, Raleigh, Wilmington and the Triad. This includes the expansion of weekend and night service in a number of urban areas.
We've also established a new regional daily bus service from Raleigh to Charlotte with stops in eight cities.
Along with these improvements, we've also expanded North Carolina's vanpool program, which targets North Carolina residents earning less than 200 percent of the poverty level.
The program transports people to work who would otherwise be unemployed or have to use a large portion of their income for a commute trip. As many as 30 rural vanpools operated across the state in 2005.
Beyond buses and vans, we've worked to encourage bicycle and pedestrian activity by completing $22 million in bicycle and pedestrian improvements in 2005 alone, and we are also looking forward to the debut of Charlotte's light rail system, which is scheduled to begin operation in fall 2007.
An integrated and balanced transportation system improves mobility and helps maintain quality of life to ensure North Carolina's continued prosperity.
Creating More Opportunities for Employees and Business Partners
The future of transportation also rests on creating new opportunities for our own employees and business partners.
NCDOT employs more than 14,000 people, making it one of the largest agencies in the state.
We also work with numerous partners outside our agency both in government and the private sector to carry out our mission.
We consider it an important investment of time and resources to provide programs that will help our employees and partners succeed in the transportation industry and deliver a better final product to our citizens-both in their work with NCDOT and with other members of the industry.
That's why we've launched the Business Assistance Center in Raleigh, which makes business development services such as a state-of-the-art plan room, financial counseling, lending services and marketing assistance readily available to disadvantaged business enterprise firms. Two more centers are scheduled to open in 2006.
We've also developed the NCDOT Contractor Opportunity Program, which provides qualified firms with assistance and advice to improve their ability to compete in the highway construction industry and to bring them to the point they can operate as fully independent and viable firms.
Conclusion
The programs I've highlighted for you today are just a few of the many ways we are currently working to improve transportation and enhance opportunities for economic growth in North Carolina.
Though I've covered a great deal of information this morning, if you take anything away from my message, let it be these two points:
1) Funding for transportation is essential for the continued economic prosperity of North Carolina. We cannot continue to attract and maintain homes, business and industry in our state without a high-quality transportation system that keeps pace with North Carolina's growing needs.
2) This goal is not something NCDOT can accomplish alone. We must all-including members of government, private industry and organizations like this-work together to ensure that we have the transportation resources to sustain our state in the future.
North Carolina cannot afford to wait for transportation improvements, and NCDOT simply does not have the resources to continue the fight for transportation funding alone.
As residents of North Carolina and professional advocates for the growth and development of our state, each of us here today certainly has a very personal interest in meeting North Carolina's transportation needs.
I know that you are already making this issue a top priority, and I ask that you continue to recognize just how critical transportation funding is and join in our efforts to secure additional transportation resources for our state.
I thank you again for inviting me to be here today, and for being such a strong ally to NCDOT as we seek to improve transportation, encourage economic development and ultimately provide a better quality of life for North Carolina.
The great comedian Milton Berle once said, "If opportunity doesn't knock, build a door."
If we want this solved, we're going to have to build our own door.
Thank you.
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