March 3, 2011 - From the February, 2011 issue

L.A. Infrastructure Development Suffers From Lack of Strategic Planning

David Grannis wears many hats in the pursuit of infrastructure development: president and CEO of Planning Company Associates, co-chair of the LAEDC Infrastructure Committee, and a member of teams producing reports for FAST L.A. and Vision L.A. In the following exclusive TPR/MIR interview, David surveys a broad swath of infrastructure opportunities and challenges. Even with the shifting political climate at the Federal level and troubled state and local finances, he still sees ample opportunities for delivering the infrastructure upgrades so critical for the economies of the region and the country-if both the region and the state begin investing in strategic planning for infrastructure investment.


David Grannis

You are a professional with Planning Company Associates, as well as the co-chair of the Infrastructure Committee of the Los Angeles Economic Development Corporation-a committee set up a year ago to pursue opportunities and needs for infrastructure in this metropolitan area as identified in LAEDC's Strategic Economic Plan. Are you more sanguine today than you were a year ago about our options and opportunities?

I'm definitely not more sanguine, but I'm probably more focused.

We're focused on supporting the Los Angeles economy; infrastructure is a key piece of that. As we start looking at the traditional ways we've funded infrastructure, which is, "stand in line and wait for money to show up so we can build our project," we have to do this completely differently. We need a strategy for our Los Angeles economy, and the infrastructure needed to run that economy, that relies on our wherewithal, not on the hope for money from the federal government or the state government.

What were we standing in line for?

California has focused on transportation since the implementation of the interstate highway program. Over the last 30 years, there have been variations with the interstate highway program, greatly resulting from the fact that it had been built out. There have been variations every five or six years, as we've reauthorized transportation spending at the federal level, where Los Angeles would get x amount of formula money, certain projects would get funding, etc. But funding sources haven't kept pace, and we haven't approved additional federal funding for transportation since 1993.

We're now at a stage at the federal level where we can't pretend anymore that we can keep authorizing at a higher and higher level because the gas tax isn't supporting the core program. The Congress and the president have twice in the last 18 months injected General Fund revenue into the highway trust fund just to keep it afloat-billions of dollars. As Congress now faces the notion of reauthorizing and re-building America's infrastructure, there is a harsh reality. We don't have the needed federal funding that is going to support anywhere what we need around the country, let alone in Los Angeles.

What do we need in the way of transportation infrastructure as our agencies have defined that need? What is the amount, and what are the projects?

Not disaggregating for federal/state share (i.e., our overall needs), if you look at the 30-year plans for both Metro and SCAG, we're in the hundreds of billions of dollars of need for both maintaining and growing our transportation systems throughout California. By formula, California would, at best- and that's assuming the feds could find the funding-see in the neighborhood of 10 percent of that need in federal money. That's assuming the feds could come up with a funding source to do a relatively robust infrastructure program under reauthorization.

If we turn from transportation to the ports and water, what do we have in the way of need?

The ports have significant needs. The ports are transitioning to a green infrastructure approach for the movement of goods and an energy approach to how they power their equipment, which is a smart long-term play-all sorts of things are needed to compete globally. It's a very large number, in the hundreds of millions of dollars.

From a water standpoint, we need a massive amount, billions of dollars, statewide. In Los Angeles, the Department of Water and Power has an aging system for water delivery it has to repair and replace. They've done a decent job but it doesn't have enough resources to keep up with demand. We've got 50-year infrastructure all the way around the horn-transportation, water, wastewater, and electrical transmission-that hasn't kept pace with maintenance needs. For the basic maintenance of that core infrastructure system, we just haven't kept up. We've taken a free ride and pretended that we could just keep going on the system that our grandparents built. Now our kids have to pay the bill for deferred maintenance plus the new needs to accommodate a growing population.

You began your career more than 30 years ago working on aviation at LAX. What kind of needs do we need in aviation?

There is a whole modernization program for LAX, but we have more airports in our region that just LAX. There is a need to upgrade safety; there is a need to deal with new generation aircraft; and there is an energy need in powering the systems that move aircraft, freight, and people. Our terminals are old: the last time LAX had a major infrastructure upgrade was the 1984 Olympics. If you fly in and out of that airport versus any other airport around the country, it's not an optimal experience.

And lastly, healthcare.

LAEDC projects that healthcare will be the leading economic cluster for the next decade in Los Angeles County. So much is needed in that arena, and a lot of those facilities are moving forward. Fortunately, there are other funding sources for some of these things, but there are also regulatory and other government impediments, like OSHPOD, which has been cut back. Thus, we've got a statewide backlog of $23.7 billion of construction in the healthcare arena that could go forward but is in the queue, waiting to be reviewed. We could have thousands of people working now, and better healthcare facilities sooner, so we need to do better.

You began this discussion by suggesting that we have to turn to local resources to meet the needs of our infrastructure, but the numbers you've thrown out would seem to swamp optimism.

There's reason to be optimistic in this because there are positive signs. Those numbers are, at best, rear-view-mirroring where we've been and what we need. We are seeing positive trends. First of all, affecting the diminishing funds of the federal highway trust fund, partly, is the younger generation. The millennials don't drive as much. Our VMT has flat lined in America. Drivers' license applications and vehicle registrations are down amongst that generation. They're choosing to get around in different ways. It could appreciably change our projections if we have different ways of getting around and accessing the events of our lives-work, home, school, play-that could really make a major difference.

The second reason for optimism: the people of this county, in the midst of a major recession and a lot of layoffs, voted to tax themselves to improve infrastructure. They did that through Measure R, and that's a huge positive. We have to keep trust with that support and implement that system smartly. That's what's been proposed in 30/10. That's something that the federal government, the state government, and the business community, candidly, should embrace, creatively leveraging the dollars we're generating locally to deliver that system. It saves resources down the road.

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But it's important to understand, from an infrastructure standpoint, that this is not just a transportation play-it's an energy play. It's a very smart energy play. Those kinds of synergies to me are very positive developments. We have to think more holistically about how we use our resources. Water is a great example: we've seen major reductions in water usage where there are good public education campaigns.

A lot of the 88 cities in L.A. County are doing creative things. It isn't just the DWP doing creative things. The city of Glendale, for example, promoted an artificial turf program. They had displays at City Hall. A lot of people took advantage of that. The city of Pasadena did a voluntary, but good, public education campaign on reduced water usage. People are following it. They've seen significant reductions in water usage.

There are two ways at these problems. These big numbers seem to overwhelm people, but there's different ways at getting at money. One is to conserve, use resources and operate our systems differently. The other way is to build new things. We've got to approach this from both ends of the bookshelf.

Some would say you're now to too optimistic because there's an $11 billion-plus bond waiting to go on the bond for water infrastructure, let alone the high-speed rail commitments, and the loss of funding for redevelopment agencies. Put it all in perspective for us: what should a voter, or a reader of the Metro Investment Report make of these array of challenges and the options before us?

We have to think differently in our individual lives about how do we do things and how do we use the resources that we have in front of us. That's step one. From a voter standpoint, we have to think about it outside of ourselves. We have to think back on how we got all these systems and what they meant to our economy. But, more importantly, we have to think of our children and our future generations. Our parents and grandparents invested in these resources, and they fueled a Golden State and an economy that was phenomenal for the last 40 years. We really haven't made that same level, per-capita, investment.

It is important to have performance measures-we do have to see real gains by those dollars spent. It has to be viewed as an investment, not as spending. There are way too many examples of where we haven't done this as intelligently and as smartly as we could have.

Things like Measure R are reasons for optimism because people had a very specific objective they wanted to achieve, and they supported that. While the numbers are large, the average individual, the voter, you and me, have to think about this in the sense of "what is our legacy, what are we doing for our children." We can't just continue to say "no."

You were involved in a report that was recently released and another one that is about to come out. Maybe you could give reference to both? One is "FAST Moving L.A." and the other is "Vision L.A." Talk about the FAST proposal and then lead into the report coming out in March.

The FAST program is a great effort; the spearhead of that is Jim Thomas, who has been a civic icon in Los Angeles for a number of years and really cares about Los Angeles and its future. He commissioned a study and felt that there had to be some things we could do right away to alleviate accessibility. He commissioned the Rand Corporation, and they took a look at a variety of things that could be done. From that study, FAST grew into, "let's take some actions now that are sensible and gain community support for those things." These are things that deal with making our surface grid more accessible during peak hours; they're things like couplets that you could do to better utilize the existing system to operate it differently. It's very sensible stuff.

The springboard to the Vision Los Angeles program are some of those sensible things. The notion that Vision Los Angeles (releasing in March) examines is the result of about two years of a process with a variety of partners-the Environmental Defense Fund and the L.A. County Economic Development Corporation are the lead partners, joined by a group of advisors that include NRDC, the East Yard Communities for Environmental Justice, the L.A. Chamber, BizFed, Pasadena Mayor Bill Bogaard, and L.A. City Controller Wendy Greuel—a collection of folks with different perspectives. We're focused on how can we operate differently to significantly increase accessibility in Los Angeles.

The unique thing about Vision Los Angeles is we don't believe that anybody did anything wrong. We believe that the plans that have been developed by SCAG or Metro are good plans. They're very good plans. We need to figure out ways as a society, within our civic fabric, to operate differently from the private sector standpoint, from the institutional sector standpoint, and from the non-profit sector standpoint, to support those kinds of plans and programs.

The anchors for Vision Los Angeles are two events that occurred in the last couple of decades, where L.A. transportation worked really, really well. One was the 1984 Olympics, and the other was the 1994 earthquake. In the first case, we operated because we had a plan but we actually made choices as individuals to do things differently. Business pulled together; they created whole programs around those three weeks to help get their people around, to help alleviate loads during event times of the Olympic games. It made a significant difference, yet we only really saw volumes shift on our freeways by about 5 percent. It was really quite easy to get around Los Angeles at that time. In 1994, two freeways in significantly populated areas collapsed. In the case of the Santa Monica Freeway, because people took responsibility, commute times between the Westside and Downtown for people using the arterial system were less than they were when the freeway reopened. People made choices: they had more choices and we operated those systems differently. Two different circumstances, but very similar in the way that we thought about how to use and operate the system.

That's really what Vision L.A. will speak to: It will speak to how we operate, what can we do now, what can we take responsibility for, and how we benefit our economy, our environment, and all of our people.

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With shortfalls in revenues to the public sector, different jurisdictions-federal, state, and local-are responding differently. How are governments in metropolitan L.A. and California responding to those short falls, vis-à-vis the infrastructure we need?

That's a hard question. We're not really sure where that's headed with the revenue situation at the federal level. It's a brand new Congress, and the president just released his budget with suggested priorities for investing. Congress has suggested priorities for cutting, and the games begin. How Los Angeles and our region approaches those challenges needs to be with an eye to the future of what makes the most sustainable sense for us from the standpoint of energy, infrastructure, water-all the basic needs that fuel our economy and underpin our quality of life. We need to focus on the areas that we need to support and bring some of those resources to bear. The reality is that significant investment levels cannot be sustained at the federal level if there's not a willingness to raise revenue. And so far, haven't seen a lot of evidence that Congress and the Obama Administration are going to raise revenue.

At the state level, everybody is seeing a state that has had a significant structural problem for the last decade, if not longer, and a governor coming to terms with that problem and trying to deal with it, very much head on. Until the budget situation is dealt with head-on, we're going to continue to kick the can down the field. This started about 30 years ago, maybe 35 years ago, with some of our shifts in where revenue was collected and where it went. We have to think differently about that in Los Angeles and all over the state. Our cities need to have more support, from a financial standpoint, more certainty. They shouldn't have to chase big box retail to fund their budgets. At the end of the day, it depends: it's a difference in terms of how we deal at the federal level versus how we deal at the state level. We should pursue a model that allows us to control our own destiny. But the bottom line: we can't rely upon a cavalry that's not coming. We need to cultivate and develop a "control our own destiny" game plan for these needs.

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