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or 5 years from now. No utility can plan its budget to provide for these expenses which can be disastrously high because there is no certain way of knowing when the highway department will build a highway through its facilities,
Last year in hearings before the Subcommittee on Roads of the House Public Works Committee, Mayor William Hartsfield, of Atlanta, testified that these Federal-aid projects can bankrupt some municipalities with the demands made upon them to relocate utility facilities.
In directing the preparation of this exhibit, I recalled the statement of Mayor Hartsfield, as I considered the plight of the small utility district I represent, which lies in the area south of the city of Nashville. As in the case of the little community indicated on the exhibit, a Federal-aid project extends for 2 miles through the area in which my client furnishes water to its customers and rate payers.
We have been called upon to relocate our facilities at our own expense, and, under a mandatory injunction of the courts, we have done so. The cost has amounted to $93,000, which represents 12.5 percent of the total investment of this small utility district. I do not know how we will ultimately finance this burden.
In whatever manner the relocation of these facilities is financed, payment for a part of this project to accommodate interstate traffic must be borne by our 5,100 local water subscribers. They will not be able to stand it without an increase in rates, and it would not be fair if they could. In other words, our rate payers are called on to subsidize a heavy portion of a road-widening project for 2 miles south of Nashville on a Federal-aid highway leading to Atlanta and furnishing necessary access to the Arnold Engineering Development Center, a highly important testing laboratory under the supervision of the Department of Defense. Surely this is a nonlocal project. This illustration, so close to home that it hurts, is given to you solely because it is illustrative of a situation which exists in many, many States.
There can be no doubt that the Federal Government, in building a national system of defense highways, is providing for the national welfare and the national defense. The cost of relocating utility facilities is part and parcel of the cost of building this national system of highways.
If Congress is to recognize that the cost of relocating utility facilities should be treated like any other cost of road construction, the Members of Congress should understand the nature of the utility problem and its impact on the users of utility services.
It is beyond dispute that our problem stems from the Federal interest in highway improvement. The President's Advisory Committee on a national highway program in its January 1955 report to the President states unequivocally that a safe and efficient highway network is essential to America's military and civil defense, and to the economy; that the existing system is inadequate for both current and future needs and that it must be improved to meet urgent requirements of a growing population and an expanding economy.
Thus it may be seen that the problem attendant upon highway expansion is a national one that is receiving primary attention at the national level. This being true, the Federal obligation with respect to the cost of relocating utility facilities on Federal-aid highways
should not be made to turn on considerations of local law or contractual obligations or the exercise of police power by States or municipalities.
We know from past experience that this can only result in a complete lack of uniformity of treatment of the users of utility services, and can only be productive of much confusion and delay on vitally needed projects.
It is my considered opinion that the position of the Bureau of Public Roads that this problem should be handled by the States at the local level is untenable. The utilities are only requesting relief in connection with Federal-aid projects. The problem confronting the utilities cannot be divorced from the problem and responsibilities which the Federal Government has itself undertaken and assumed in connection with development of a modern system of interstate highways.
No city attorney for whom I speak desires a subsidy for his municipality. They likewise are not seeking a subsidy for private utility companies. There is no desire to build or improve municipal or private utility facilities at Federal expense, as some claim. However, we emphatically do not want the financial condition of struggling and inadequately financed municipalities worsened by an unfair and inequitable contribution to a program nonlocal in character.
We are likewise opposed to placing the burden of relocation on our local utilities which in turn must recoup this expense from our citizens who are the rate payers. That is why we feel that our Federal statutes relating to highways should be amended so as to include within the definition of construction costs the reimbursement of utilities facilities in connection with Federal-aid highway projects.
Unless and until you can end the discrimination presently existing by enacting into law regulations that will adequately resolve this perplexing problem of utility-facility relocation, it will be a constant deterrent to the development of the fine system of national highways that this committee and the Congress want to provide.
When and if you do this, you will witness a cooperative effort among utilities, State highway departments, and the Bureau of Public Roads, that will, for the first time, bring order out of chaos in Federal-aid highway construction, and produce the needed improvements for national defense that I know to be the ambition and goal of the members of your committee and the Congress.
İn behalf of the National Institute of Municipal Law Officers, I wish to thank the chairman of this subcommittee, Senator Gore, for his kindness and consideration in extending to us this opportunity to be heard, and I wish to thank each member of this subcommittee for his courteous attention and interest.
All of you are busy men, with heavy responsibilities upon you, and we appreciate the time you are giving us. In no other nation on earth can those who have problems that affect their daily lives be heard with such kindness and in such a democratic atmosphere by those in whose hands their welfare and best interests lie.
Senator GORE. Thank you very, very much, Mr. Yokley, for a very interesting statement. The committee appreciates your contribution.
Senator McNamara, do you have any questions?
Senator Case. I have no questions, Mr. Chairman, just a personal problem which has been brought before the committee repeatedly. I think it is particularly acute in Florida and Tennessee from where we had the testimony today. In consideration of the 1954 act, at one point in the committee's executive meeting I proposed that we establish 3 percent as the amount of the project cost that we would allow for this purpose. I think we had an estimate from the American Association of Municipal Officials that the average over the country would be 5 percent.
It was pointed out that in the States where the States now recognize the utility cost as a part of the highway project cost, we do share— that is, if the State law is such that it recognizes utility relocation as a part of the cost of the highway project, the Federal Government's share is by sharing the total cost of the project.
Many of those who testified last year thought that the Federal Government ought not to leave it to State law, as you have suggested here. So that, as I say, I did suggest that we permit 3 percent, which would
3 be something over 50 percent of the cost.
But the majority of the committee did not accept that point of view and we understood also there was difficulty in getting that point of view accepted in the House committee, and that is where it rested.
Mr. YOKLEY. I would like to state, if I may, in response to your remarks, if you will recall our testimony at that time, I think last year, we testified that on our own initiative the utility groups had conducted a survey in 12 representative States, and I believe that the results of that survey showed about a 1.8 or 1.6 percentage of the total highway cost, and maybe about half of that of the Federal participation in it.
I have only had an opportunity—I do not have a copy yet, it has not been printed—I have been shown some figures which appear in the report of the Secretary of Commerce which would have helped us if we had had more time to have that and examine it. I understand that the reports and figures given on the basis of the study by the Secretary of Commerce, which was conducted by the Bureau of Public Roads with cooperation from the utilities, bears out substantially the figures in the cost study we made in the 12 States, and in fact brings it somewhat under the 5 percent.
I understand that this study will show about 4 percent instead of 5 percent, Senator, for the total appropriation, and about 2 percent for the amount of Federal.
Senator Case. For the Federal share of the cost ?
Senator Case. At least the conclusion of a majority of the committee last year was that the efforts could appropriately be directed to the several States in that wherever the State law does recognize that as part of the cost, the Federal Government does stand ready to share the cost today.
Mr. YOKLEY. We feel that since it is a Federal problem, as long as we have the situation of its being left to the State laws, that we will always have the confusion and misunderstanding and inequities of it, because where you have an interstate highway traversing several States, maybe in Kentucky you will have one rule on it and in Tennessee another, we feel that the uniformity should be corrected at the Federal level.
We hope that the members of the committee might see fit in a full consideration of it to maybe change their minds this time. We hope that, anyhow. We appreciate all you can do for us.
Senator McNAMARA (presiding). Do you have any questions, Senator?
Senator HRUSKA. No, sir.
STATEMENT OF CHARLES G. BLACKARD, GENERAL COUNSEL,
ELECTRIC POWER BOARD FOR CITY OF NASHVILLE, TENN., AND REPRESENTING THE TVA PUBLIC POWER ASSOCIATION
Mr. BLACKARD. Mr. Chairman and gentlemen of the committee, I just want to say at present I am representing the Nashville Electric Power Co., of which I am general counsel, and the Tennessee Valley Public Power Association, which has included in its membership 126 municipalities and cooperatives in Tennessee, Georgia, Alabama, Mississippi, Kentucky, Virginia, and North Carolina.
I have two statements I would like to file.
STATEMENT OF CHARLES G. BLACKARD, ELECTRIC POWER BOARD OF THE CITY OF
NASHVILLE, TENN., THE TENNESSEE VALLEY PUBLIC POWER ASSOCIATION Mr. Chairman and gentlemen of the committee, my name is Charles G. Blackard. I am general counsel for the Electric Power Board of the City of Nashville, Tenn., and am also representing and speaking for and in behalf of the Tennessee Valley Public Power Association, which association has included in its membership 126 municipalities and cooperatives, distributing Tennessee Valley Authority electricity and power in Tennessee, Georgia, Alabama, Mississippi, Kentucky, Virginia, and North Carolina. Seventy-eight of these distribution systems are municipally owned, 33 are REA-financed cooperatives, and the remainder are county systems.
The electric distribution systems for whom I speak are wholly dependent upon their revenues for the cost of operation, maintenance, upkeep, current and power at wholesale, amortization charges and redemption of revenue bonds or other indebtedness, extensions and additions, a tax equivalent to the city and the counties. Under the statutes and the provisions of the contract between these utilities and the Tennessee Valley Authority and under the covenants with the bondholders of the outstanding bonds, the revenues are earmarked for the above purposes, with provision that all remaining revenues shall be considered surplus and shall serve as a basis for the reduction or elimination of surcharges and/or reduction of rates. To date there has been no surplus, at least insofar as the majority, if not all, of these systems are concerned. These distribution systems have no funds other than those received from the sale of power and electricity.
There is no provision, as above stated, that these utilities may expend these funds for the readjustment of their facilities to accommodate Federal-aid highway projects. If these funds which come from the ratepayers must be used to pay a part of the cost of Federal-aid highway projects, this means that this relatively small segment of the citizen body must contribute twice_once through assessment of taxes and a second time through increased subscriber rates. This is, in effect, double taxation, for a project carried out for the benefit of the public generally.
For example, the Federal Aid Highway Act and the Federal funds appropriated and expended thereunder may only be justified on the basis that the Federal-aid highway system is essential to national defense and essential civilian transportation over an integrated system, not to serve merely the convenience of one small locality, but the convenience and welfare of the Nation and all the people therein.
The Nashville Electric Service, which is operated by the Electric Power Board of the City of Nashville, consists of more than 2,500 miles of lines, 65,000 poles,
19,000 transformers and related equipment, representing an investment of more than $10 million. This distribution system, as of the end of May this year had 100,242 customers.
All of these customers pay Federal taxes, out of which the Federal-aid highway funds are appropriated. In addition to making their contribution, as aforesaid, for Federal-aid highways, these same customers are further called upon to make further contributions to the cost of these highways, by removing and relocating the facilities of this system at the expense of the ratepayers, which is, in fact, at their own expense, to accommodate the Federal-aid highway projects.
Another example: A bridge is being presently built across the Cumberland River at Nashville, Tenn. This bridge is a Federal-aid project and was approved by the Federal Bureau of Roads only after it was shown that the said bridge would become an important and integral link in the integrated highway system to serve not only the people of Nashville, but the people from all sections of the country who travel through Nashville from points of termini far distant.
Some few years ago the Electric Power Board of the City of Nashville purchased from the United States of America and the Tennessee Valley Authority a power transmission line which crosses the Cumberland River at the site of the proposed bridge. This easement cost the power board $84,000.
The power board is now told that a portion of this line interferes with the construction of the new bridge and the power board is called upon to relocate said powerline, at its own expense. Both the Federal and the State governments refuse to reimburse any portion of this relocation cost. This is only one example of the many that exist in this area and no doubt a similar situation exists throughout the entire United States.
By mandate of at least two decisions of the United States Supreme Court and one decision of the Court of Appeals of the State of Tennessee, in which certiorari was denied by the Supreme Court, and by express provisions of the Federal Highway Act, the railroads are relieved of the burden of readjusting their facilities at their own expense at railroad grade crossings, to accommodate Federal-aid highway projects.
The nonrailroad utilities, both publicly and privately owned are not relieved of this burden, but, without notice, without hearing, and without receiving benefit, are burdened with these costs. The decisions above referred to held that the effort to charge the railroads with this burden of readjusting their facilities at their own expense, to accommodate Federal-aid highway project, was in violation of the due-process clause and the 14th amendment. We think the nonrailroad utilities should be given the same equal treatment given to the railroads.
Under the regulations of the Federal Bureau of Roads as administered, where facilities of a utility are located within an existing highway right-of-way and their removal or readjustment is required in order that a Federal-aid highway project may be constructed, Federal funds are not eligible for paying any part of the cost of removing or adjusting such facilities, unless it should be determined that either the laws of the State or the terms of the permit, franchise, or agree. ment, pursuant to which the publie right-of-way is occupied, relieve the utility of the obligation to bear such cost.
In Tennessee these utilities, by statute, are granted the unreserved and unlimited right to the use of public thoroughfares, for their utility poles and lines. There is no obligation imposed upon the utility to bear such cost.
Yet representatives of the city of Nashville have, on numerous ocasions, called upon the Federal Bureau of Roads to relieve these utilities of the cost of readjusting their facilities to accommodate these Federal-aid projects.
In one instance the Federal Bureau of Roads granted the relief sought, but in all other instances in which the Electric Power Board of the City of Nashville was concerned the Federal Bureau of Roads refused to permit the use of Federal funds for the readjustment and relocation of these facilities which accommodated Federal-aid projects.
In one instance the Southern Bell Telephone (*o. refused to readjust its facilities to accommodate a Federal-aid project in Nashville. The matter was taken to court and our highest court held that no such obligation was imposed upon the utility.
By relieving these utilities of the burden of paying these relocation and readjustment costs, to accommodate Federal-aid highways, no Federal funds would be diverted and used for the benefit of the utilities located within the highway right-of-way. These utilities in this State have a vested right and a property