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The need for this legislation was called to my attention by the problems which have developed as a result of the construction of a Federal highway through the center of the city of Jacksonville, Fla. In our city the city owns the electric utility.
The State road board and the Federal highway people agreed on a location which suited them fine, but it did not suit the city of Jacksonville at all, because this particular location necessitated relocation of utility facilities, at a cost of $112 to $2 million. If they had constructed the highway a block to the right or a block to the left, as the city requested, this expenditure could have been avoided or minimized.
Briefly, there are several reasons why cost of public utility relocation should be considered a part of the cost of highway construction. First, the cost of alterations to railroads is already recognized as a legitimate part of the highway construction costs. There is no logical or ethical reason why such discrimination between railroad and nonrailroad utilities should be allowed to continue.
Second, the law as it now stands creates an inequity because in some States this Federal benefit is available and in others it is not. Whatever a State wants to do with its own highway system should be left up to the State involved, but a Federal benefit should not be withheld from a local utility on the basis of a State's highway policies.
Third, to allow the present condition to continue places a double burden on residents of the localities involved by requiring Federal taxation for support of the Federal highway system and also requiring increased local taxes or utility rates to pay for the Federal function of moving the utilities for the Federal highway.
Fourth, as shown by the problem in Jacksonville, the present state of the law leads to economic waste. The public utility is given no voice in determining where a highway is to be located. This means that those who make this decision may effect a small economy or acquire a minor advantage for the highway at the cost of a tremendous expenditure or disadvantage to the public utility.
Since the public pays public utility expenses through its rates or, in the case of municipally owned public utilities, such as those in Jacksonville, through local taxes, this means that a small saving to the public through Federal highway taxes is offset by a large expenditure through public utility charges or local taxes. The net effect is an economic loss.
Before I close, I would like to read a statement by Mayor Haydon Burns, of Jacksonville, which he asked me to make before this subcommittee today:
On behalf of the city of Jacksonville, I strongly urge Federal legislation to include cost of removal and relocation of utility facilities such as electric and signal lines, water mains, and sewers on Federal-aid highways in the Interstate System as a part of construction costs of such highways, and to afford to these utilities similar relief to that now accorded railroad utilities. We stand on our past statements filed before committees of the House and Senate in support of justice of such legislation and are badly in need of same.
Thank you, gentlemen, for permitting me to appear here today on this important problem.
Senator GORE. Thank you, Congressman. The committee appreciates your contribution.
The committee will next hear Mr. E. C. Yokley, vice chairman, committee on municipally owned utilities, National Institute of Municipal Law Officers.
STATEMENT OF E. C. YOKLEY, NASHVILLE, TENN., VICE CHAIR
MAN, COMMITTEE ON MUNICIPALLY OWNED UTILITIES, NATIONAL INSTITUTE OF MUNICIPAL LAW OFFICERS
Mr. YOKLEY. Mr. Chairman, before I begin I would like to state that I have received from home a copy of a telegram from Judge Charles Blackard, of the Nashville Electric and Power Board, with a copy of the telegram sent to you. In that he makes reference to requests for incorporating a previous statement that he had given last year to the House subcommittee and asks that that be made a part of the proceedings.
Senator Gore. Without objection, that will be incorporated in the record, together with the telegram.
Mr. YOKLEY. Mr. Chairman and Senator Case, my name is E. C. Yokley. I am engaged in the general practice of law in Nashville, Tenn. I am special utility counsel for the First Suburban Utility District of Davidson County, Tenn., which organization holds membership in the American Water Works Association and the National Institute of Municipal Law Officers.
I am vice chairman of the committee on municipally owned utilities of the latter organization. I served for 14 years in the legal department of the city of Nashville, Tenn., and held the position of director of that department during 1949, 1950, and 1951.
I appear before you today representing my own utility district, a municipal corporation organized under the general laws of the State of Tennessee, and I also appear for the National Institute of Municipal Law Officers at the request of the Honorable Henry C. (urtis, the city attorney of New Orleans, La., who presently serves as president of the organization.
The National Institute of Municipal Law Officers is an organization composed of the legal advisers of approximately 900 leading American municipalities. At the December 19.52 meeting of this organization held in Louisville, Ky., the following resolution was adopted :
Whereas the Federal-aid highway program has caused, and will continue to cause, municipally and publicly owned utilities to expend large sums to move and relocate utility facilities to accommodate Federal-zuid projects, thus imposing an onerous and unwarranted burden on users of utility service; and
Whereas under the provisions of the Federal-did Highway Act of 1944 railroads are reimbursed from Federal funds for the cost of relocating their facilities in connection with Federal-aid projects but other utilities are discriminated against in that they are not so reimbursed under said act: Yow, therefore, be it
Resolved. That the National Institute of Municipal Law Offi«ers urge the Cone gress of the United States to enact legislation providing that publicly owned utilities be relieved of the costly burden of relocating utility facilities when caused by Federal-aid projects.
This action was prompted by the need for relief by many of our member municipalities in connection with the ever-increasing expense of relocating their utility facilities to accommodate Federal-aid highway construction. Municipalities operate water, sewer, electric, and other utility services.
These respective utility facilities have been carefully located and are perfectly adequate, and in many instances are relatively new, having been financed initially by bond issues, and they are operated and maintained through current budget allocations. Water, gas and electric facilities are operated in a proprietary capacity, and sanitary and storm sewers are governmental operations.
The relocation of these facilities cannot be accomplished without substantial destruction, and in many States the burden of relocating these facilities to accommodate Federal-aid highway construction falls squarely on the municipalities without any reimbursement or benefits. The impact of these relocation expenditures is felt at the taxpayer or consumer level in our municipalities.
The average citizen and user of municipal utility service is a heavily taxed individual. He pays income taxes, excise taxes, and automobile gasoline taxes to the Federal Government. At the State level he pays a very high gasoline tax. He feels that when he does these things he has contributed his fair share of any Federal-aid roadbuilding program. The leaders of our municipalities agree with him, and hesitate to impose any additional burden on this taxpayer, especially in connection with roadbuilding of a character susceptible to use by travelers from faraway places.
This problem serves to compound the difficulties confronting the municipalities under today's conditions. While sources of municipal revenue constantly dwindle, demands for various services by the people continue to pile up. In most municipalities it is a touch-and-go proposition to get through any budget year. Most municipalities have reached the danger point in their lawful debt limitation.
Thus it may be seen that when the average municipality is confronted with demands to relocate its own facilities on and in its own streets at its sole expense to accommodate Federal-aid highway construction, it finds that it cannot do so without the imposition of an intolerable burden on its taxpayers.
As in the case of other utilities, this problem did not plague the municipalities in the early days of Federal participation in highway construction. Federal-aid highway programs had their beginnings about the year 1916 and gradually increased with the years. The real upswing in Federal-aid highway participation, however, began immediately following World War II and has rapidly increased since that time.
As the newly developed programs became a reality, the municipalities that were called on to relocate their utility facilities to accomodate Federal-aid highway construction projects began to feel the pinch. That is why the National Institute of Municipal Law Officers became interested in this problem and adopted in 1952 the resolution to which I have already referred.
The step-up in Federal appropriations for highway purposes, as recommended by the President's Advisory Committee on a national highway program, and as indicated in bills now under consideration by this subcommittee, carries with it the inevitable threat of increased burdens on those municipalities which, under present laws, practices, and regulations will be called on to pay the full bill for utility facility relocations. As a matter of fact, this increasing tempo of urban highway construction greatly aggravates the problem already faced by the utilities at all levels and especially the municipal utilities.
Every municipality is grateful for the assistance it gets through the program of Federal-aid highway construction. The municipalities, however, feel that these huge urban projects with divided lanes,
cloverleaves, overpasses and underpasses, are beyond the pale of Jocal improvements; are national in character and are designed to move traffic at the interstate level and in aid of the national defense. Under the circumstances the municipalities suggest that such an ambitious program of Federal-aid construction transcends the scope and extent of local responsibility.
The hardship imposed on many municipalities faced with mounting demands to relocate their utility facilities by the State highway departments and the Bureau of Public Roads is pointed up by the fact that these projects have frequently been paralyzed in important urban areas due to the inability of local governments to defray the expense of relocating their facilities.
The municipalities are not troubled over contractual rights in and to the use of their streets by their utility services. They hold their streets in trust for their people. They recognize that the public needs all of the uses of the street or highway, that in the public interest, and to furnish services more economically, the streets must be utilized for the accommodation of utility facilities.
The fact remains, however, that while the municipalities of some States receive assistance in relocating their utility facilities, the municipalities of many States are not so fortunate. The same situation exists respecting other utilities both publicly and privately owned.
Even a casual examination of the tables appended to the utility relocation report of the Secretary of Commerce indicates the truth of this statement. The lack of uniformity in the treatment of the problem has created confusion and misunderstanding that has greatly impaired the efforts of our Government in moving forward with its program of necessary defense highway construction.
As its resolution demonstrates, the municipalities which are members of the National Institute of Municipal Law Officers believe that it is most desirable to put an end to the present lack of uniformity of the program in different States and the steadily mounting volume of litigation and delays occasioned thereby.
We feel that the proper solution and the only one which will insure uniformity in administering the Federal highway program lies in amending the Federal highway laws so that utility relocation costs may be included in the definition of construction costs contained in the act, as amended.
It has been said that the effect of the change which we are advocating would be to slow up the highway program. We believe the contrary is true. The existing practice has led to inequity, confusion, litigation, and delay and, unless remedied, will continue to do so. There is presently no uniformity in the handling of this reimbursement problem in the different States. Reimbursement of utilities is allowed in whole or in part in some States and wholly denied in others.
I have heretofore tried to point up the problem faced by municipalities in connection with construction in urban areas. In the smaller communities the discrimination evident under present laws and practices is most severe. I want to point to a particularly inequitable feature.
The cost of relocating utility facilities which occurs in any one year is not borne equally by all utilities and the users of their services. This cost is paid entirely by the relatively few utilities which are unfortunate enough to be in the path of the highway improvements which occur in that year.
I have a chart which will help to illustrate what I am trying to say. Mr. Chairman, I will take but a moment if I may make reference to this chart. Here, gentlemen, we have three communities. Here is what is supposed to represent a Federal-aid highway improvement coming through communities. Here is the town of A designated Aville, the town of B, and the town of C. It may be seen that the highway, as is frequently the case, comes through town A. It misses town C. But the residents and rate payers in town B and in town C, through access roads, use this highway just as much as do the people of town A through which the major artery traverses.
Yet here is a municipality whose facilities have got to be readjusted as a part of the construction cost of this program, while the rate payers, citizens, and taxpayers of these municipalities B and C, are not affected. They get the benefit of the road but they do not pay for the cost of the improvement.
(The chart referred to is as follows:)
Mr. YOKLEY. This is just a sample of what happens in many, many cities, large and small, over the country.
This chart shows three towns and I ask you to assume, as is often the case, that the utility services are furnished by the individual cities and private companies serving only the individual towns. The highway passes through town A but does not touch towns B and C, although their citizens use the highway through access roads.
Because the utility facilities in town A are relocated at great expense, the users of utility services in town A bear that expense. Because the facilities in towns B and C are not disturbed, the utility users in Band C are not burdened. Perhaps their time will come next year