PAGENO="0001" 89th C:n } JOINT COMMITTEE PRI1~rT STATE AND LOCAL PUBLIC FACILITY NEEDS AND FINANCING STUDY PREPARED FOR THE SUBCOMMITTEE ON ECONOMIC PROGRESS OF THE JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES Volume 1 PUBLIC FACILITY NEEDS DECEMBER 1966 Printed for the use of the Joint Economic Committee U.S. GOVERNMENT PRINTING OFFICE 70-182 WASHINGTON : 1966 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 - Price $2.00 O(~~-~ ~ PAGENO="0002" JOINT ECONOMIC COMMITTEE (Created pursuant to sec. 5(a) of Public Law 304, 79th Cong.) WRIGHT PATMAN, Texas, Chairman PAUL H. DOUGLAS, Illinois, Vice Chairman HOUSE OF REPRESENTATIVES SENATE RICHARD BOLLING, Missouri JOHN SPARKMAN, Alabama HALE BOGGS, Louisiana J. W. FULB RIGHT, Arkansas HENRY S. REUSS, Wisconsin WILLIAM PROXMIRE, Wisconsin MARTHA W. GRIFFITHS, Michigan HERMAN E. TALMADGE, Georgia THOMAS B. CURTIS, Missouri JACOB K. JAVITS, New York WILLIAM B. WIDNALL, New Jersey JACK MILLER, Iowa ROBERT F. ELLSWORTH, Kansas LEN B. JORDAN, Idaho JAMES W. KNOWLES, Executive Director JOHN H. STARK, Deputy Director Financial Clerk HAMILTON D. GEwEHR, Administrative Clerk ECONOMISTS WILLIAM H. MOORE NELSON D. McCLUNG JOHN B. HENDERSON GEORGE R. IDEN SUBCOMMITTEE ON ECONOMIC PROGRESS WRIGHT PATMAN, Texas, Chairman SENATE WILLIAM PROXMIRE, Wisconsin HERMAN E. TALMADGE, Georgia JACOB K. JAVITS, New York LEN B. JORDAN, Idaho ARNOLD H. DIAMOND, Consulting Economist DONALD A. WEBSTER (Minority) HOUSE OF REPRESENTATIVES HENRY S. REUSS, Wisconsin MARTHA W. GRIFFITHS, Michigan WILLIAM B. WIDNALL, New Jersey II PAGENO="0003" LETTERS OF TRANSMITTAL DECEMBER 14, 1966. To Members of the Joint Economic Committee: Transmitted herewith for the use of the Joint Economic Committee and other Members of Congress is a study of State and local public facility needs and financing over the next 10 years. It is a staff study prepared for the Subcommittee on Economic Progress with the assistance of a number of experts. The study projects estimated capital requirements over the next decade for such essential public facilities as water and sewer installa- tions, electric and gas supply, transportation, schools, hospital and health facilities, and other public buildings. These structures repre- sent an investment tI~at is fundamental to our growth and which must increase substantially in the years ahead. A companion volume which will be available very shortly will analyze sources of credit funds to finance construction of these facilities. Together it is expected that the two studies will prove valuable to public administrators, policymakers and urban planners, as well as economists. The committee is grateful to the many experts who gave generously of their time to help us in this important work, and, in particular, to Dr. Arnold H. Diamond, Assistant Director, Office of Economic and Market Analysis, Department of Housing and Urban Develop- ment, who, as consulting economist to the committee, undertook the major responsibility for preparing and assembling this study. We are also grateful to the Department of Housing and Urban Develop- ment for making him available to the committee. The views expressed in these materials are those of the contributors and do not necessarily represent the views of the committee, or individual members thereof. WRIGHT PATMAN, Chairman, Joint Economic Committee. DECEMBER 12, 1966. Hon. WRIGHT PATMAN, Chairman, Joint Economic Committee, Congress of the United States, Washington, D.C. DEAR MR. PATMAN: Transmitted herewith is a projection of public facility needs in the United States over the next decade. Public services have grown rapidly in the past 20 years with attendant increase in the facilities supplying them. This has been an important factor in raising expenditures at all levels of government, and, from time to time, has given rise to proposals for reallocating fiscal resources among the three levels of government to reflect burdens for these services. These estimates of future requirements, it is hoped, will in PAGENO="0004" IV LETTERS OF TRANSMITTAL offer valuable aid to public administrators, fiscal officials, program planners, economists, and financial analysts. The study examines the provision of State and local public facilities and the availability of credit resources to help finance them. This study is concerned with existing capital plant and the expected growth in requirements over the next 10 years. The second volume, which will be released shortly, will deal with the credit financing of State and local facilities, with particular reference to the municipal bond market. ~The~ estimates are based on the separate assessment, of each impor- tant category of public facilities, e.g., roads, schools, sewers, airports, ~etc., prepared by a number of specialists. While the estimates repre- sent their best judgment of the facilities needed to provide adequately `for the growing needs of our society, on the basis of a general economic projection for the period covered, it can be expected that some were more moderate than others in projecting increases. `One mildly surprising aspect of the results is that they are closely in line with three other recent studies, each based on a completely different methodology One is ~ projection of capital outlays, pre- sented in chapter I of this study, based on extrapolation from past trends `and correlations-in short, "a mathematical projection"-de- rived from past relationships. The second is based on a recent survey Of the 50 States and derived from an economic model prepared by the Federal interagency study of economic growth and employment opportunities. A third study was prepared by the Center for Priority ,Analysis of the National Planning Association. It might normally be expected that the projection presented here- with, reflecting the so-called' "aspiration standards," might indi- cate greater expenditures than those based' on projections of previous relationships or expectations of public, officials. But the fact that it is not higher does not necessarily reveal a downward bias. In the recentpast, our rate of growth in the public facility sector has been brisk, and it may be that a continuation of this pace would bring us ,closer to realistic aspiration st,andards than one might expect. In any case, comparisQfl of our study with the others will in itself offer a stimulating and `productive undertaking for the people who are looking * ahead in this field of economic activity. ` The professional experts who prepared, this study in response to the committee's request have given generously of their time and energy. The committee is gTateful to them and to their organizations for so graciously making available their time and talents. The participating experts are identified at the beginning of each chapter and in the table of coiltents. The committee is particularly grateful to Dr. Arnold H. Diamond, Assistant Director, Office of Economic and Market Analysis, Depart- ment of Housing and Urban Development, who, as consulting econo- mist to the committee, undertook the major responsibility' for plan- nmg the scope of research, editing and coordinating this study Elea- nor Aeschliman assisted with the editing The study was under the general supervision of John II. Stark, Deputy Director. -` ` ` JAMES W. KNOWLES. PAGENO="0005" STATE AND LOCAL PUBLIC FACILITY NEEDS AND FINANCING Volume 1. Public Facility Needs CONTENTS Page Letters of Transmittal iii Introduction and Summary, by Arnold H. Diamond, consult- ing economist, Joint Economic Committee 1 PART I. GENERAL FORCES Chapter 1 .-State and Local Government Capital Expendi- tures in Relation to National Economic Activity With Projections for 1975, by Louis J. Paradiso and Mabel A. Smith, Office of Business Economics, Department of Com- merce 35 Chapter 2.-Material Requirements for State and Local Public Works, 1946-75, by the Business and Defense Service Ad- ministration, Department of Commerce 55 Chapter 3.-Labor Requirements for State and Local Pub]ic Works, 1946-75, by the Department of Labor 75 PART II. PUBLIC FACILITY CATEGORIES A. BASIC COMMUNITY FACILITIES Chapter 1.-Regional and River Basin Water Supply Systems, by the Corps of Engineers, Department. of the Army, Depart- ment of Defense; Bureau of Reclamation, Department of the Interior; and the Soil Conservation Service, Department of Agriculture 95 Chapter 2.-Public Water Supply Systems, by the American Waterworks Association 105 Chapter 3.-Rural-Agricultural Water Supply Systems: Irriga- tion, by Clifford Dickason and Howard Hill, Economic Re- search Service, Department of Agriculture 125 Chapter 4.-Sanitary Sewer Collection Systems, by Peter II owan, Land and Facilities Development Administration, Department of Housing and Urban Development 137 Chapter 5.-Storm Sewer Systems, by Herbert G. Poertner, American Public Works Association 152 Chapter 6.-Waste Water Treatment Plants, by the Federal Water Pollution Control Administration, Department of the Interior 175 Chapter 7.-Solid Wastes Collection and Disposal Facilities, by Karl W. Wolf, American Public Works Association 184 V PAGENO="0006" VI CONTENTS A. BASIC COMMUNITY FACILITIES-continued Chapter 8.-Electric Power, by the Bureau of Power, Federal Page Power Commission 208 Chapter 9.-Gas Distribution Systems, by the Office of Eco- nomics, Federal Power Commission 223 B. TRANSPORTATION FACILITIES Chapter 1 0.-Highways, Roads, and Streets, by the Bureau of Public Roads, Department of Commerce 238 Chapter 11.-Toll bridges, Tunnels and Turnpikes, by the International Bridge, Tunnel and Turnpike Association - - - 269 Chapter 12.-Offstreet Parking Facilities, by William D. Heath, District of Columbia Motor Vehicle Parking Agency 283 Chapter 13.-Urban Mass Transit Facilities, by Marge Schier, Urban Transportation Administration, Department of Hous- ing and Urban Development 295 Chapter 14.-Airport Facilities, by the Airports Service, Fed- eralAviationAgency 308 Chapter 15.-Marine Port Facilities, by the Maritime Ad- ministration, Department of Commerce 324 C. EDUCATIONAL FACILITIES Chapter 16.-Public Elementary and Secondary School Fa- cilities, by George J. Collins, Office of Education, Depart- ment of Health, Education, and Welfare 342 Chapter 17.-Nonpublic Elementary and Secondary School Facilities, by George J. Collins, Office of Education, Depart- ment of Health, Education, and Welfare 359 Chapter 18.-Area Vocational School Facilities, by the Office of Education, Department of Health, Education, and Welfare 369 Chapter 19.-Academic Facilities for Higher Education, by E. Eugene Higgins and Kent Halstead, Office of Education, Department of Health, Education, and Welfare 375 Chapter 20.-College Housing and Related Service Facilities, by J. Trevor Thomas, Community Facilities Administration, Department of Housing and Urban Development 393 Chapter 21.-Educational Television, by John W. Bystrom and John J. Hurley, Office of Education, Department of Health, Education, and Welfare - 405 D. HEALTH FACILITIES Chapter 22.-Hospital Facilities, by the Public Health Service, Department of Health, Education, and Welfare 411 Chapter 23.-Clinics and Other Outpatient Facilities, by the Public Health Service, Department of Health, Education, and Welfare 423 Chapter 24.-Long-Term Care Facilities, by the Public Health Service, Department of Health, Education, and Welfare. - - 439 Chapter 25.-Community Mental Health Centers, by Martin A. Kramer, Public Health Service, Department of Health, Education, and Welfare 454 PAGENO="0007" CONTENTS VII D. HEALTH FAcILITIEs-continued Chapter 26.-Facilities for the Mentally Retarded, by the Page Public Health Service, Department of Health, Education, and Welfare 461 Chapter 27.-Health Research Facilities, by Francis L. Schmehl, Public Health Service, Department of Health, Education, and Welfare 476 Chapter 28.-Medical and Other Health Schools, by th~ Public Health Service, Department of Health, Education, and Welfare 483 E. RECREATION AND CULTURAL FACILITIES Chapter 29.-State and Federal Outdoor Recreation Facilities, by the Bureau of Outdoor Recreation, Department of the Interior 520 Chapter 30.-Urban Local Outdoor Recreation Facilities, by Jack A. Underhil, Land and Facilities Development Admin- istration, Department of Housing and Urban Development 532 Chapter 31.-Rural Outdoor Recreational Facilities, by Judith M. Huff, Hugh A. Johnson, J. Patrick Madden, and Gary C. Taylor, Economic Research Service, Department of Agri- culture Chapter 32.-Neighborhood Centers for Recreation, Health, and Social Services, by the National Study Service of the National Social Welfare Assembly, Inc 570 Chapter 33.-Arenas, Auditoriums, Exhibition Halls, by Charles R. Byrnes, International Association of Auditorium Managers 591 Chapter 34.-Theatres and Community Arts Centers, by the National Council on the Arts 595 Chapter 35.-Museum Facilities, by Elena Van Meter, American Association of Museums 607 Chapter 36.-Public Libraries, by Nathan M. Cohen, Office of Education, Department of Health, Education, and Welfare 616 F. OTHER PUBLIC BUILDINGS Chapter 37.-Residential Group Care Facilities for Children, by Hannah Adams, Leonard Hippchen and Martin Gula, Chil- drens Bureau, Welfare Administration, Department of Health, Education, and Welfare 625 Chapter 38.-Armories, by Lt. Col. Morris E. Foist, National Guard Bureau, Department of Army, Department of De- fense 642 Chapter 39.-Jails and Prisons, by the Federal Bureau of Prisons, Department of Justice 651 Chapter 40.-Fire Stations and Related Building Facilities, by Donald M. O'Brien, International Association of Fire Chiefs 674 Chapter 41.-Public Office and Court Buildings, by Andrew Kinane, American Public Works Association 680 Chapter 42.-Industrial Plants Financed and Owned by Local Governments, by the Investment Bankers Association 690 PAGENO="0008" PAGENO="0009" STATE AND LOCAL PUBLIC FACILITY NEEDS AND FINANCING Volume 1. PUBLIC FACILITY NEEDS Introduction and Summary* INTRODUCTION In our highly developed economy, we in the United States tend to take for granted that the public services ordinarily provided by State and local agencies will in some way continue to be furnished in increas- ing amounts that keep pace with population growth. By and large, these public services are furnished by State and local public agencies, but significant portions are supplied by (a) private, nonprofit organi- zations, (b) proprietary or profitmaking companies, and (c) sometimes the Federal Government. A large part of these public services involve utilization of buildings, structures, and other public facilities, which may be characterized as the Nation's public facilities capital plant. Financing of this capital plant, or what may be termed "capital outlays," will depend upon the type of institution involved, e.g., the financial resources available to public bodies and to private organizations. As part of its inquiry into the basic economic aspects of human resource investment, the Subcommittee on Economic Progress of the Joint Economic Committee has undertaken an examination of the pro- vision of State and local public facilities by public and private agencies and the availability of credit and other resources to help finance them. The study comprises 2 volumes: The first volume, which is presented herein, is concerned with the existing public facilities capital plant and the growth in requirements that can be expected over the next decade. The second.part, presented in a volume to be issued shortly, is concerned with the credit financing of State and local public facili- ties, with particular reference to the municipal bond market. It will undertake to show prospective increases in such borrowing require- ments and probable sources of credit to finance them. STATE AND LOCAL PUBLIC FACILITY NEEDS A. NEED FOR AND USES OF STUDY 1. Need for the Study During the past two decades there has been increasing concern regarding the adequacy of the Nation's public facility capital plant. The Congress has authorized a number of Federal assistance programs to help finance the development of basic community facilities (water supply, sewage disposal, power supply), transportation facilities, edu- cational facilities, health facilities, recreational facilities, and other public facilities. In each instance the legislative committees having *By Dr. Arnold H. Diamond, consulting economist, Joint Economic Committee. 1 PAGENO="0010" 2 STATE AND LOCAL PUBLIC FACILITY NEEDS jurisdiction over the functional area have held hearings or conducted studies, which in time were followed by legislation to authorize a particular Federal assistance program. The assistance is usually in the form of a grant-in-aid, but at times it has been in the form ofdirect loans or advances, and sometimes in the form of a loan guarantee.' Inasmuch as most of our public f a- cilities are owned and operated by State or local public bodies, the bulk of the Federal assistance has gone to these public agencies, but a substantial amount is made to private, nonprofit organizations. With the passage of years, new unmet public facility needs are delineated, or existing needs are expanded, and the volume of Federal financial assistance has grown. Federal expenditures for public works grants to State and local governments rose from $1,735 million in fiscal year 1958 to an estimated $4,854 million in fiscal year 1967.2 In fiscal year 1967, Federal expenditures for construction by cooperative and other nonprofit groups is estimated at $390 million;' By definition, the Federal assistance programs are designed to aid in the provision of needed public facilities, which means that the Federal assistance under each program is but a partial source of fi- nancing for the particular facility. It is of interest therefore to exam- ine the other sources; and to ascertain what proportion of the total financing is accounted for by the Federal assistance. Equally im- portant in terms of understanding a Federal assistance program would be the knowledge of how many of the facilities, to be aided by a particular~ prog'ram, are already in existence-as well as their value, location, and age. It is obviously important to have some notion as to what these facilities now cost to construct and to operate and what charges, if any, are collected for their use. Finally, evaluation of public facility assistance programs could be materially enhanced by periodic assessment of the capital requirements flowing from antici- pated needs, which could be compared with the volume being con- structed. One might expect that each of the Federal departments or agencies responsible for the administration of a particular Federal assistance program would have reasonably good information regarding the relative importance of the Federal aid to the financing otherwise available for the type of facility for which the Federal aid is provided. Unfortunately, heretofore, this has not been the case, as evidenced by the Federal agency replies to a questionnaire sent out in 1963 by the House Banking and Currency Committee. Relatively few of the Federal agencies were able to answer the question: "To. what extent is the type of facility or applicant aided by the program being financed by private credit without involvement of Federal credit assistance?" Thus, there is a need to develop quantitative information regarding the "universes" in which the Federal assistance programs operate in terms of inventories of existing capital plant, recent trends of capital outlays, and future capital requirements for the facility. If such data could be developed for each category of public facilities, it would then b~ possible to array them in comprehensive tables that would 1 Soil and water loansinsured by the Farmers 1-lome Administration. 2 "Special Analyses of theBudget of the united States for Fiscal Year 1967," p. 67. 3 Ibid., p. 75. 4 Replies of the Federal credit agencies administering the 74 credit programs In existence at June 30, 1963, are published in vol. II of A Study of Federal Credit Programs (issued by the Subcommittee on Domestic Finance, House Banking and Currency Committee, 88th Cong., Feb.28, 1964). PAGENO="0011" STATE AND LOCAL PUBLIC FACILITY NEEDS 3 permit comparisons to be made among the major groups of public facilities and among the component categories. In essence, the chapters contained in this volume represent an effort to provide in a systematic way information on the infrastructure of State and local public facilities in the Nation. It answers such questions as: What are public facilities? What services do they render? How many are there and where are they located? What has been the trend of capital outlays and indicated sources of financing? How many more are needed? To some extent, one can obtain part of this information from the statistical compilations prepared by the Bureau of the Census.5 Similarly, one can obtain some of the informa- tion from reports and studies issued by individual Federal agencies on their program accomplishments or by some of the trade associations. But up to now there is no single source to which one can turn in order to obtain a comprehensive picture of the Nation's public facilities ordinarily provided by State andlocal public bodies and to some extent by private, nonprofit organizations. The study contained in this volume endeavors to fill this void by presenting a series of chapters on the significant categories of public facilities, each prepared uni- formly in accordance with a standard chapter outline. 2. Uses of the Study The vast array of information presented in this volume, much of it available for the first time, is adaptable to many uses, depending upon the needs of the reader. However, several intended uses were envisaged when the study project was inaugurated such as (a) pro- viding a quantification of the Great Society capital requirements insofar as they relate to public facilities, (b) measuring the apparent gap between these requirements and prospective private credit re- sources, (c) providing basic "universe" data inputs to be used in connection with the planning-programing-budgeting system estab- lished by the executive branch, and (d) providing new dimensions for the "shelf" of unmet public facility needs. These uses are ampli- fied as follows: (a) Great Society Gapital Requirements. In his Message on the "Problems and Future of the Central City and Its Suburbs," 6 the President declared: The city is not an assembly of shops and buildings. It is not a collection of goods and services. It is a community for the enrichment of the life of man. It is a place for the satisfaction of man's most urgent wants and his highest aspirations. It is an instrument for the advance of civilization. In prescribing some of the blueprints for the Great Society, the President further declared: By 1975 we will need over 2 million new homes a year. We will need schools for 10 million additional children, welfare and health facilities for 5 million more people over the age of 60, transportation facilities for the daily movement of 200 million people * * *~ Among the most vital needs of our metropolitan areas is the requirement for basic community facilities-for water and sewerage. Many existing systems are obsolete or need major rehabilitation. And population growth will require a vastly increased effort in years ahead * * *. A community must offer added dimensions to the possibilities of daily life. It must meet the individual's most pressing needs and provide places for recreation and for meeting with neighbors. Cf. Governmental Finances (issued annually by the Governments Division, Bureau of the Census) and Construction Review (issued monthly by the Business and Defense Services Administration and which includes data on permits issued for public and private construction, as compiled by the Construction Statistics Division, Bureau of the Census). 6 H. Doe. No. 99, 89th Cong., 1st sess. (Mar. 2, 1965). PAGENO="0012" 4 STATE AND LOCAL PUBLIC FACILITY NEEDS While the public services flowing from the public facilities described in this volume are not the sum total of the goals and objectives of the Great Society, they form an important component. Consequently, these projections of future capital requirements for the different cate- gories of public facilities provide a reasonable approximation of our public service needs for specified levels of service. (b) Capital Requirements and Available Resources. Enumeration of a series of capital requirements for different categories of public facilities carries no assurance that these facilities will, in fact, actually be provided. Whether such facilities will be produced depends upon (1) an assessment by appropriate authorities of the prospective needs for such facilities, (2) a comparison of the relative urgency of such needs with the needs stemming from alternative public and private objectives, and (3) the availability of financial and "real" resources. A statement of needs for public services represents a series of qualitative judgments as to what would be "needed," if certain standards of performance are to be met for a given population, with due allowance for the existing capital plant. Generally such judg- ments are rendered by experts or professionals in the particular field who necessarily regard their sphere of interest as more important than others. Assessment of these "needs" by like-minded experts or professionals can result in considerable refinements and reevaluation of the needs; but the winnowing out process (translating "needs" into actual undertakings) does not become very effective until the "needs" for one purpose are compared to equally meritorious needs for other purposes. Within the constraints of available labor and material resources, the final arbiter is, of course, the availability of financial resources, be they tax receipts, intergovernmental revenues, borrowing, fees, gifts, or donations. All such resources are limited and must be employed for current operations of the spending units as well as for capital out- lays. Conceivably a gap could exist between the capital require- ments reflecting prospective needs and the financial resources available to meet them. The size of this gap could only be determined by first ascertaining what our public facility needs are and then comparing the aggregate of such needs with anticipated financial resources. To bridge such a gap, it would be necessary to make more financial resources available or reduce the dimensions om the purported needs by modification of the standards of performance. A necessary first step in this alloca- tion-budgetary process-would be to find out what our public facil- ity needs are and what criteria were used to estimate these needs. (c) Planning-Programing-Budgeting System. On August 24, 1965, the President announced to members of his Cabinet and heads of maj or agencies his intention to establish a new planning-programing- budgeting system in the executive branch of the Federal Government. This new system-which had been developing in broad outline in the Department of Defense for several preceding years-was formally established within the executive branch by Bureau of the Budget Bulletin No. 66-3 of October 12, 1965. It has since been adopted by all Federal agencies as one of the more important tools of man- agement.7 7 See 1958 recommendations of Joint Economic Committee study on Federal Polici, for Economic Growth and Stability, pp. 6-14. See also, 1963 Joint Economic Committee report, The Federal Budget as an Economic Document, pp. 8-11. PAGENO="0013" STATE AND LOCAL PUBLIC FACILITY NEEDS 5 Essential to the new system are: (1) an output oriented program structure which presents data on all of the operations and activities of the agency in categories which reflect the agency's attainment of end purposes or objectives, and (2) analysis of possible alternative obj ectives of the agency and of alternative programs for meeting these objectives. Such analyses would include comparison of these alterna- tive programs with respect to costs and benefits. As noted in the Budget Bureau Bulletin, the program obj ectives and planned accom- plishments are to be expressed, wherever possible, in quantitative nonfinancial terms. Where relevant, the physical description of the Federal programs is to be related to the entire universe to be served. In other words, under this new system Federal agencies are required to ascertain the dimensions of the universe in which a particular Federal program operates and to determine the relative proportion accounted for by the Federal aid program. To do so, they will need, in the case of the programs aiding the provision of public facilities, data showing (1) the existing capital plant of the public facility category, for which the aid is provided, (2) the recent trend of capital outlays, and (3) estimated capital requirements for specified levels, of performance. In analyzing alternative programs to meet indicated objectives, the Federal agencies will eventually have to determine (1) whether . the program "needs" can be financed by loans or whether they require some form of grant subsidy; (2) the extent to which funds are being, are likely to be, or could be provided from non-Federal sources; (3) the range of capital and operating costs of the . public facility; and (4) the extent to which the prospective users can afford to pay these costs.8 By and large, such information has not been assembled in any systematic manner heretofore. Yet without these "universe" data and related cost and financing information, the comparative analyses and program memoranda called for by the new system. may prove to be difficult to prepare. (d) Shelf of Public Facility Needs. Since the 1930's the view has been expressed by certain analysts ~ that there is a need for a shelf or reserve of planned public works, the construction of which can be started promptly when economic conditions make such action desir- able. They look to the employment and income generative effects of public works construction as one of the means of counteracting reces- sion tendencies within the economy. Before such a shelf of public works can be developed, the respective "public works" needs have to be identified and quantified. While one may question the economic merits of the public works reserve thesis, given the problems associated with the timing of stepped-up public works expenditures, there is no doubt that "public facility" expenditures (by private as well as public agencies) contribute importantly to a growing economy. In fact, a slowdown or curtail- ment of such expenditures could help initiate a general economic 8 Much of these remarks is based on the writer's conclusions set forth in vol. I of A Study of Federal Credit Programs (issued by the Subcommittee on Domestic Finance of the House Coniniittee on Banking and Currency, 88th Cong., Feb. 28, 1964), especially pp. 179-180. 9 Cf. National Resources Planning Board, Economic Effects of Federal Public TVorks Expenditures, 1933-38 (Washington: Government Printing Office, 1940); Special Assistant to the President for Public Works Planning, Planning for Public Works (July 1957); Economic Report of the President (January 1955), p. 57; Robinson Newcomb "Public Works and Economic Stabilization" in Problems in Anti-Recession Policy (issued by the Committee for Economic Development, September 1954); and more recently, "America's Need: Social Services and Jobs," AFL-CIO American Federationist (August 1963). See also, Report of the Joint Committee on the Economic Report on the January 1954 Economic Report of the President. Pp. 13-15. PAGENO="0014" 6 STATE AND LOCAL PUBLIC FACILITY NEEDS downturn. Before public facilities can be constructed, they must first be planned, and this planning should be related to some assess- ment of needs. A periodic assessment of aggregate public facility needs provides, then, a comprehensive picture of the growth poten- tial of an important sector of the U.S. economy, useful to those who have to chart the future course of the economy. B. PLAN OF THE STUDY 1. General Considerations Initially, assembling the requisite mass of data on the public facilities capital plant in the Nation appeared a formidable, if not impossible, assignment, considering the diversity of ownership patterns and the variety of public facility categories. To confine the study of public facilities to those owned and operated by State and local public bodies would overlook the facilities owned by private, nonprofit organizations, including most of the Nation's hospitals, colleges, and neighborhood centers, and significant amounts of recre- ational or cultural facilities. On the other hand, the maj or alternative to State or local public ownership for such public facilities as electric power, gas distribution, airports, marine ports, or parking facilities is ownership and operation by a private, investor-owned company. To obtain a comprehensive picture of all public facffities, irrespec- tive of ownership, it seemed advisable to develop the study along functional lines; that is, to assemble a series of chapters, each dealing with a specific category of public facilities. Within the chapter ap- propriate delineations could be made regarding the ownership distribu- tion of the existing capital plant, trend of capital outlays, and prospec- tive capital requirements. The component data by ownership patterns, as well as the totals for each category of public facilities, could then be aggregated, such as is done in the next section of this chapter, or they could be cross-tabulated according to other needs of the user. The decision to base the study on a series of chapters, each dealing with a specific category of public facilities, materially eased the prob- lem of data assembly. For each public facility category there are groups, generally a Federal agency or a private trade association, that can avail themselves of a substantial amount of knowledge regarding the services rendered, the existing capital plant, costs and user charges, trends of capital outlays, and they are likely to be the most informed as to prospective needs and capital requirements. As evidenced by the chapters in this volume, such materials can be developed by these groups from reports already published, unpublished data in their files, from special surveys, or by informed estimates. 2. Procedure Accordingly, arrangements* were made with private associations or Federal agencies, which were believed to be best qualified, to prepare authoritative chapters on designated public facility categories. To assure uniform coverage, and to permit the tabulation of comparative data, each chapter writer was requested to follow a standard outline, set forth in questionnaire form, that was enclosed with the letter of request transmitted by the Chairman of the Joint Economic Coin- mittee. (See Supplementary data, pp. 20-21.) PAGENO="0015" STATE AND LOCAL PUBLIC FACILITY NEEDS 7 The chapter writers were advised to add such qualifying information and remarks as might be necessary to provide a comprehensive picture of the subject matter. They were given a list of economic assumptions for the years 1966-75 (See Supplementary data, p. 22) as a guide for any projections that may be made for these years. The committee's letter of request prescribed that the requested chapter "should be limited to a factual account of the prevailing or historical situation, supplemented by appropriate estimates and projections. It should omit recommendations, suggestions for changes, or comments on existing or prospective legislation." The chapters prepared under these instructions were then reviewed and edited by committee staff to delete extraneous materials. Also deleted were recommendations for new or enlarged Federal assistance programs or for other Federal legislation, statements that reflected unfavorably upon other public facility industries and reproductions of Federal statutes or agency regulations. This editing was deemed necessary to assure that the intended factual presentation did not become a vehicle for promoting the interests of special groups, be they trade associations or Federal agencies. Aside from these changes, the materials presented in the various chapters represent the viewpoints of the respective chapter writers, identified on the first page of the chapter. Because of their expertise in the specialized areas in which they are active, it is pre- sumed that the matelials they present fully reflect the information available on the subject. 3. Identification of Public Facilities In setting the ground rules for the individual chapters, it became necessary to clarify what was intended by the term "public facilities." It is recognized that the term public works ordinarily applies to under- takings by public agencies `° and therefore could not be used to describe the physical facilities owned by groups other than public agencies. On the other hand, the term public facilities can be interpreted to mean facilities from which public services can be rendered, irrespective of ownership of the facilities. Accordingly, the scope of the study has been defined in terms of public facilities." It is further intended the study be confined to State and local public facilities, that is, (a) public facilities ordinarily provided by State or local public agencies, or (b) public facilities that are to a significant extent provided by State and local public agencies or by private, non- profit organizations. In this way, full recognition would be accorded to the public facilities owned and operated by private, nonprofit orga- nizations, which account for a significant portion of the Nation's public services. Under this definition, facilities entirely owned by the Fed- eral Government (defense installations, post offices, other Federal buildings, space and atomic energy facilities or multipurpose dams) would be excluded from the purview of the study. Similarly excluded would be the capital plant of investor owned private business. 10 Publicly owned housing is not construed as part of the "public facilities" sector in the economy. In- stead, it is regarded as part of the "housing" sector, a sector that also includes housing owned by private, or nonprofit organizations. In a sense, "public facilities" are "nonresidential" structures. However, group housing, such as college dormitories and nursing homes, are regarded by the Census Bureau as "non- residential," and they are, therefore, construed as part of the Nation's "public facilities." 11 Urban renewal expenditures to acquire and cler~r properties are not regarded as public facilities expend- itures. Cleared land, in itself, does not yield a public service. PAGENO="0016" 8 STATE AND LOCAL PTJBLIC FACILITY NEEDS However, it is recognized that there are categories of "State and local public facilities" where a large part of the facilities are owned and operated by the Federal Government (national parks, regional and river basin water supply systems) or by private investor owned com- panies (electric power, gas distribution, urban mass transit, airports, parking facilities, nursing homes). These categories of public facilities are included in the study in order to provide a perspective for the facilities within these categories that are owned by State and local public agencies or by private, nonprofit organizations. Moreover, inasmuch as ownership patterns are not immutable, it seems more meaningful to provide the capital requirements over the next decade for, say, the entire electric power industry, rather than the require- ments of the small segment of the industry accounted for by State and local public agencies, plus private, nonprofit organizations. With these definitions in mind, arrangements were made for the preparation of 42 chapters, each covering a designated public facility category. By and large, the public facility categories are those that reflect commonly used identifications; but at times, owing to the nature of the industry or to the availability of data, it became ad- visable to split an industry into several parts, each with a separate chapter, or sometimes to combine in a single chapter similarly con- stituted activities. Under the grouping Basic Community Facilities there are three chapters dealing with water supply facilities-regional and river basin water supply systems (including watersheds), public water systems (mainly urban) and rural-agricultural water supply systems (essentially irrigation systems). There are four chapters dealing with sewage collection and disposal-sanitary sewer collection systems, storm sewer systems, water waste treatment plants, and solid wastes collection and disposal facilities. There is one chapter on electric power systems and one on gas distribution systems.12 Under the grouping Transportation Facilities there are separate chapters on highways, roads and streets (covering rural and urban highways, roads and streets), toll bridges, tunnels and turnpikes, urban mass transit facilities, parking facilities, airports, and marine port facilities.'3 Under the grouping Education Facilities there are chapters covering public elementary and secondary schools, non- public (private) elementary and secondary schools, area vocational schools, academic facilities for higher education institutions (includ- ing community and junior colleges), college housing and related service facilities and educational television. Under the grouping Health Facilities there are separate chapters on hospitals (mainly general hospitals), clinics, and other outpatient facilities (hospital outpatient departments, hospital adjunct services, and freestanding specialized facilities), long-term care facilities (nurs- ing homes, chronic disease hospitals), community mental health centers,14 facilities for the mentally retarded (community facilities 12 The possibility of a separate chapter on telephone facilities was explored with the National Telephone Cooperative Association and it was concluded that the negligible amount of publicly owned telephone service did not warrant a separate chapter. In the case of street lighting, it was found that information on the subject was virtually nonexistent, perhaps due to the fact that street lighting is considered in many localities as part of the highway or street capital plant. 13 The possibility of a chapter on terminal facilities for trucks, buses, and trains operating on interurban routes, was explored with the Department of Commerce and the respective trade associations. All con- cluded that the prospects of obtaining information for such publicly owned facilities, outside of New York, were slim, and hence no chapter seemed advisable. 14 As detailed in ch. 25, community mental health centers are expected to be the new type of facility for the mentally ill, and, in time, are expected to displace the traditional State mental institution. PAGENO="0017" STATE AND LOCAL PUBLIC FACILITY NEEDS 9 and university affiliated facilities), health research facilities (usually located at universities or hospitals), and medical and other health schools (schools for dentistry, nursing, optometry, osteopathy, phar- macy, podiatry, and public health). Under the heading Recreational and Cultural Facilities there are three chapters on outdoor recreational facilities, one dealing with State and Federal facilities, one with urban local outdoor facilities,. and one with rural outdoor facilities. There is a chapter on neighbor- hood centers for recreation, health and social services (covering the activities of such groups as the Boy Scouts, Boys Clubs, Girl Scouts, "Y's," and other privately operated settlements and neighborhood centers). Other chapters deal with stadiums, arenas, and exhibition halls, theaters and community art centers (cultural centers), museums (including planetariums, zoos, botanical gardens) and public libraries. Under the heading Other Public Buildings are such chapters as residential group care for children (detention homes, institutions for delinquent children, other child welfare facilities), armories, jails and prisons, fire stations,'5 public office and court buildings, and industrial plants financed and owned by local governments.'6 Owing to the programatie viewpoint of some of the Federal agencies that prepared several of the chapters and the limited detail available on certain of the data, there are several chapters where the inf or- mation presented overlaps, in part, material contained in other chap- ters. Thus, there is some overlap between the chapters on (a) high- ways, roads, and streets on the one hand and toll bridges, tunnels, and turnpikes on the other; (b) area vocational school facilities, on the one hand, and public elementary and secondary schools and academic facilities for higher education, on the other; (c) health research facili- ties, on the one hand, and hospitals and academic facilities for higher education, on the other; and (d) medical and other health schools and academic facilities for higher education. For the first two where the overlap is reported to be near 100 percent, appropriate adjustments are made in the summary compilations. For the latter two, the respective chapter writers advise that the overlap is minimal, and therefore the summary compilations have not been adjusted. 4. Chapter Content Each of the chapters presented in the second part of this volume consists of four sections: (A) nature and composition of public work or facility (B) costs and user charges (C) trend of capital outlays, and (D) needs and prospective capital outlays. The first section is de- signed to describe the particular public facility in terms of physical characteristics, services rendered and standards of performance. It~ also provides an inventory of the existing capital plant in terms of number of facilities, location by State and size of city, age distribution,. ownership pattern and estimated current value. The second section is intended to show the current range of con- struction and operating costs for the particular facility. It also indicates the extent to which user charges are employed to pay for the use of the facilities and the relationship of user charges to capital and operating costs. Section (C) depicts the postwar trend of capital loAparallel chapter on police stations was envisaged, but the International Association of Chiefs of Police found that the available data did not permit the preparation of a useful chapter. 18 One may question whether a municipally owned industrial plant that is leased for private use is a. "public facility." Because of the controversy on this subject, data are presented on municipally owned~ industrial plants, but excluded from the summary tabulations. 70-132-66-vol. 1-2 PAGENO="0018" 10 STATE AND LOCAL PUBLIC FACILITY NEEDS outlays, delineating the ownership patterns for these outlays and their sources of financing. Section (D) presents projections of capital requirements for the facilities over the next decade, with appropriate explanation of the "need" considerations taken into account. To the extent possible, expected ownership patterns and sources of financing for the anticipated capital requirements are also shown. (The stand- ard chapter outline used by the chapter writers is reprinted in the section "Supplementary data," pp. 20-21.) The purpose of each chapter is to present a factual description of the particular public facility to the extent data are available. In a number of instances such data are sufficient to permit the authors to comply fully with the prescribed chapter outline. In other cases, as evidenced in various chapters, there is a paucity of information available and the authors had to condense accordingly. Public service needs reflect a series of subjective judgments regarding quantitative and qualitative standards of performance, which may not be acceptable to all. Hence, each author was requested to state explicitly the standards of performance deemed appropriate for the particular facility. Moreover, in projecting capital requirements to reflect future needs, the author was requested to describe the factors taken into account in making the projections. In most chapters these subjective judgments are clearly delineated so that users of the study may make adjustments, if they deem it desirable, in the under- lying assumptions. In other chapters, however, the authors presented their considered opinions, without identifying the assumptions and judgments. 5. General Chapters Three general chapters are presented in the first section of this volume to provide a frame of reference for the specific public facility category chapters that follow. The first chapter describes the rela~- tive importance of State and local public works expenditures to gross national product during the years 1946-65 and provides "best judg- ment" projections of the volume of such expenditures that may be expected during 1966-75. The second and third chapters describe, respectively, the material and labor requirements for State and local public works during the years 1946-75. These two chapters, at least with respect to the projections for 1966-75, are tied to the projections contained in the first chapter.'7 In addition, the chapters examine the importance of State and local public works construction to the material supply, industries and construction employment, trace for the years 1946-65 changes in the capacity of the building materials and construction industries and in the volume of construction employment, automa- tion trends in these industries, cost-price developments, and the adequacy of technically skilled labor to administer the intended public services so as to avoid underutilization of the public facilities capital plant. 17 These three chapters have been interrelated to assure consistency as to projection assumptions. How- ever, since the writers of these three chapters did not have access to the "capital requirements" projections, tl1at were being prepared simultaneously by those writing the chapters on the specific public facility cate- gories, they could not take them into account. The reader, having all these materials at hand, can deter- mine, as appropriate, whether the future supply of construction labor or materials might constrain meeting the various needs, assuming financial resources are available. PAGENO="0019" STATE AND LOCAL PUBLIC FACILITY NEEDS 11 C. SUMMARY OF FINDINGS 1. General Forces As explained above, three general chapters are presented in the first part of this volume to provide an overview of the State and local "public works" 18 sector of the economy. The first analyzes and proj ects State and local public works expenditures in relation to GNP; the second examines the material requirements for such expenditures, and the third examines their labor requirements. Since 1958 the ratio of real State and local government expenditures for structures and equipment to real GNP has fluctuated within a relatively narrow range-between 2.8 and a little over 2.9 percent. Assuming an average annual growth rate in real GNP of a little over 4 percent from 1965 to 1975, a 4 percent unemployment rate and a 1.5 percent increase per year in the GNP price deflator, coupled with various other factors detailed in chapter 1, GNIP is projected (in current prices) to rise from $676 billion in 1965 to $905 billion in 1970, and to $1,180 billion in 1975 (assumption B). If one assumes the average annual growth rate in real GNP at nearly 4~ percent from 1965 to 1975, the unemployment rate at 3 percent, and a 2-percent increase per year in the GNP price deflator, and taking into account account other described factors, GNP is projected at $940 billion in 1970 and at $1,275 billion in 1975 (assumption A). From these GNP projections, it is further projected that State and local government purchases ;of structures and equipment (net of resi- dential buildings), which amounted to $19.5 billion in 1965, would rise to $28.5 billion in 1970 and to $39.1 billion in 1975 under assump- tion B. Under assumption A, such purchases would rise to $29.9 billion in 1970 and to $44.2 billion in 1975.19 After surveying the components of the construction and building materials industries, the authors of chapter 2 conclude that- To meet future increases in construction demand in both the private and public sectors it is expected that the construction and building materials industries will increase their productive capacities. Prefabrication and prefinishing have been and will continue to be important sources of promoting innovation and labor- saving devices on construction sites * * ~`. When one considers all the factors, it is difficult to avoid the conclusion that the construction materials industries should be able to meet the needs of future construction-as they have in the past- through innovation, product development, and increased productive capacity. After reviewing labor market prospects, the authors of chapter 3 conclude that- Employment in the building trades is expected to increase moderately through the mid-1970's, assuming relatively full employment nationally and the high levels of economic activity needed to achieve this goal. Turning to the OBE projections for 1975, the authors estimate that, allowing for increased productivity, 2,802,000 full-time workers will be needed in 1975 for the $41.7 billion of construction projected under 18 Owing to the definitions and concepts employed in national income accounting, the three chapters necessarily deal only with State and local govermnent "public works," as distinguished from the "public facilities" concept used throughout this volume. The latter includes expenditures by other owners. More- over, under national income and product accoimting, public works expenditures relate only to construction (or equipment purchase) expenditures, but omit expenditures for land. In contrast, "capital outlays" (or "capital requirements") embrace expenditures for land as well as for construction or equipment purchase. 18 In July 1966, subsequent to the time when these calculations were made, the estimates in the national income and product accounts were revised for the years 1963-65. The Office of Business Economics advises that the effect of these changes on the above projections is relatively small; the projections of State and local capital expenditures would be raised by about $.5 billion in 1970 and 1975. PAGENO="0020" 12 STATE ~1 LOCAL PUBLIC FACILITY NEEDS assumption A and 2,744,000 for the $36.6 billion 20 of construction projected under assumption B- Thirty-eight percent of these (1,070,000 and 1,048,000, respectively) would hI needed in the construction industry and the balance in sectors supplying the necessary materials and service. 2. Capital Requirements 1966-75 Each of the chapter writers in the second part of this volume 21 was requested to present, in part D of the chapter, estimates of capital requirements for the particular public facility category for each of the years during the period 1966-75. The projections were to take into account the current backlog of unmet needs, accommodations of expected population growth, replacement of obsolete facilities, quanti- tative and qualitative standards of performance. As will be noted, some of the chapter writers distinguished between the current backlog of unmet needs and future requirements, while others combined the two elements. Some of the chapter writers provided projections for each year, as requested; others provided only an estimate for the entire 10-year period. Table 1 compares the estimated capital requirements for all public facility categories by all spending units during 1966-75 with actual outlays for such facilities in 1965 (to the extent data are available). To facilitate comparisons on an annual basis, estimates are also pro- vided for the capital requirements in 1970 and in 1975.22 The es- timates are grouped under six headings: A. Basic Community Facil- ities (water and sewer, electric and gas); B. Transportation; C. Educa- tion; D. Health; E. Recreational and Cultural; and F. Other Public Buildings. Estimated capital requirements for public facilities by all spending units during 1966-75 total $499 billion. For 1970 the estimate(I requirements total $49 billion and for 1975 they aggregate $62 billion, or double the volume estimated for 1965. The largest capital needs are for basic community facilities and for transportation facilities. The following table provides a summary comparison of the estimated requirements with actual 1965 capital outlays, broken down by major groups of facilities. 20 Projected construction figures include $0.5 billion of residential construction. They differ further from the figures cited above ($44.2 billion or $39.1 billion) by the amounts projected for purchases of equip- ment. 21 With the exception of chapter 42 dealing with publicly owned industrial plants. 22 To assure uniformity in the estimates, the following procedures have been employed: (a) the figures for 1966-75 are (1) as provided, or (2) the sum of the unmet backlog plus future requirements, or (3) the sum cf annual estimates with interpolations for intervening years; (b) the estimates for 1970 and 1975 are (1) as pro- vided, or (2) 9.6 percent and 12.6 percent of the 1966-75 projection, the percentages reflecting an annual rate cf increase in requirements of 5.5 percent; and (c) all estimates are rounded to the nearest $10 million (except when they are under $10 million). Further explanations are shown in the footnotes to the table. PAGENO="0021" STATE AND LOCAL PUBLIC FACILITY NEEDS 13 Summary comparison of total capital outlays for public facilities in 1965 with esti- mated capital requirements during 1966-75, all spending units [Dollars in billions} Group of facilities Actual 1965 1 Estimated ~ 1970 1975 1966-75 Water and sewer Electric and gas Transportation Education Health Recreational and cultural Other public buildings Total $3.9 6. 5 9. 2 5. 9 2. 5 2. 5 2 5 $7. 3 8.8 14. 6 7.8 4. 2 5. 2 3. 7 $9.2 10. 2 19.0 10.2 5.5 6.6 3~9 $76. 2 84.9 151.7 82. 2 43.5 53. 1 3 7.5 31. 0 48.6 61.6 499. 1 1 Adjusted to reflect facility categories where data are not available. 2 Excludes publicly owned industrial plants. 3 Includes police stations with estimated capital requirements assumed to be $1,000,000,000 during 1966-75. As will be noted, these capital requirements relate to all spending units-State and local public agencies, private, nonprofit organiza- tions, private investor-owned companies, and, where appropriate, the Federal Government. Since each of these ownership groups finance their activities in different sectors of the capital market, it is useful to provide estimated capital requirements for each of these ownership classifications. Accordingly, table 2 compares the esti- mated capital requirements for public facilities during 1966-75 with actual capital outlays in 1965 for State and local public agencies. Table 3 provides a similar comparison for private nonprofit organiza- tions and table 4 presents the information for private, investor-owned companies 23 State and local public agency capital requirements for public facilities are estimated at $328 billion for the decade 1966-75. For 1970 these capital requirements are estimated at $32 billion and for 1975 they are estimated at $41 billion, which compares to the $20 billion of capital outlays expended by State and local public bodies in 1965. As shown in the following table, over 40 percent of the antici- pated capital requirements are for transportation facilities and nearly 20 percent each are accounted for by education and water and sewer facilities. 23 Each of the requirement estimates for the organizational sectors is related to the estimates presented in table 1 for all spending units. The distribution patterns are either denoted in the respective chapter in absolute amounts or in percentages of total requirements. Where the distribution is not clearly discernible from the respective chapter, the distribution percentages employed for the estimates are described in the fOotnotes to the respective tables. Where the chapter does not provide data on the distribution pattern of the estimated capital requirements, the patterns are "assumed," on the basis of such information as seemed appropriate (identified in the footnotes). No separate table has been prepared on federally owned facilities. PAGENO="0022" 14 STATE AND LOCAL PUBLIC FACILITY NEEDS Summary comparison of public facility capital outlays of State and local public agencies in 1965 with estimated capital requirements during 1966-75 [Dollars in billions] Group of facilities Actual 1965 1 Estimated 1970 1975 1966-75 Water and sewer Electric and gas Transportation Education Health Recreational and cultural Other publicbuildings $2. 7 . 8 8.9 4.9 .8 1. 5 25 $5. 5 1. 3 13.5 5.9 1.3 3.4 37 $6. 8 1. 4 17.7 7.8 1.7 4.4 39 $56. 5 12. 8 141.1 62.0 13.1 35. 0 373 Total 20.1 31.6 40.7 327.8 I Adjusted to reflect facility categories where data are not available. 2 Excludes publicly owned industrial plants. 3 Includes police stations with estimated capital requirements assumed to be $1,000,000,000 during 1966-75. Public facility capital requirements of private, nonprofit organiza~ tions for the decade 1966-75 total $54 billion, or over 10 percent of the total capital re4uirements of all spending units. Capital requirements f or these organizations total $5 billion in 1970 and almost $7 billion in 1975, which compare with capital outlays of somewhat over $2 billion in 1965. As detailed in table 3, the largest segments of these private, nonprofit capital requirements are for college facilities (academic and housing) and for hospitals. For private, proprietary or investor owned companies the capital requirements for public facilities during 1966-75 are estimated aL~ $105 billion, or over 20 percent of the estimated total requirements. These capital requirements are estimated at $10 billion in 1970 and $12 billion in 1975, as compared to capital outlays of some $6 to $3 billion in 1965. As shown in table 4, over half of the estimated čapital requirements of the proprietary companies are for electric power facilities, with sizable amounts for gas distribution systems and storm sewer systems. For Federal agencies the capital require- ments for public facilities during 1966-75 are estimated at about~ $13 billion, mainly for outdoor recreation and electric power facilities 3. Existing Capital Plant Underlying most projections of prospective needs and capital re- quirements are assumptions, generally unstated, regarding the exist- mg capital plant for the particular category of public facilities Such assumptions relate to the existing number of facilities, their age or physical condition, and their degree of utilization. Some of these assumptions can be quantified; others involve qualitative judgments or are susceptible of flexibility. As evidenced by the data presented in table 5, there is usually very good information as to the number of facilities (or where more meaningful, the volume of public service output) for each of the public facility categories. Moreover, as shown in the table, in most instances the number or volume, according to type of ownership, is also ascertainable. In a majority of the chapters, data are presented regarding the distribution of these facilities by States and by popu- lation size of city. Unlike the situation for many of our durable consumer goods, where style changes, built-in obsolescence, and annual improvements PAGENO="0023" STATE AND LOCAL PUBLIC FACILITY NEEDS 15 stemming from technological advances make periodic replacement necessary, most of the Nation's public facility capital plant is con- structed with long-time use in mind. To a surprising degree, many public facilities or structures built 25 to 30 years ago are still very usable today, especially if there have been proper repairs and mainte- nance. On the other hand, when the age of a structure reaches 45 to 50 years or more, it is frequently no longer suitable for use and needs to be replaced. Significant portions of the Nation's public facility capital plant are still being used, even though they were constructed before 1920. For example, 14 percent of the elementary and secondary schools, and 21 percent of the private elementary and secondary schools, were built before 1920. About 15 percent of the public libraries, and 20 percent of State prisons were built before 1900. Given the limited fiscal resources and the higher priorities for other public expenditures of the communities in which they are located, many of these aged facilities may be expected to continue in use for a number of additional years. Not only is there use of public facilities for time periods beyond their anticipated lifespan, but in many instances facilities are utilized more intensively than was originally contemplated. Additional schoolchildren are frequently handled by installing more desks in classrooms; hospital overflows are accommodated by placing addi- tional beds in rooms, or even in corridors; and college facilities are more intensively used by afternoon or evening classes and through trimester and four semester school years. Crowded highways are manifested by slow moving, bumper-to-bumper traffic; overtaxed bridges and tunnels are evidenced by long waiting lines for use; overcrowded airports are mirrored by the stacking of airplanes waiting to land; and during rush hours subway passengers are "packed like sardines." Continued use of over-aged facilities and more intensive use than originally contemplated, are sometimes the practical alternatives to increased capital outlays for public facilities to meet expanding needs. Staggered use of commuter mass transit facilities may help to relieve overcrowding as will double sessions of schools. Popular museums, libraries, or parks are likely to attract large attendances, even though they may be overcrowded; and sports or theatrical events frequently play in "packed" arenas or theaters. Any assessment of future capital requirements for the various public facility categories, as detailed in the previous section, must in some way take into account existing facilities and the extent and duration of their'possible use. The last column of table 5 shows the current estimated value of the existing capital plant for each of the public facility categories. Al- lowing for the categories where estimated current values are not available, the estimated value of the existing capital plant of all State and local public facilities is in excess of $450 billion, perhaps as much as $500 billion. This sum is the approximate size of the esti- mated capital requirements for such public facilities during the decade 1966-75. 4. Costs and User Charges To the extent that data are available, each of the chapters present statistics on capital and operating costs for the respective categories PAGENO="0024" 16 STATE AND LOCAL PUBLIC FACILITY NEEDS of public facilities and information on user charges. The cost data provide some basis for judging relatr~ e construction costs or, to put it another way, an indication of what $1 million of capital outlay is likely to purchase for different categories of public facilities. Table 6 analyzes the extent to which user charges are employed for each of the public facility categories. As will be noted, of the 42 public facility categories listed, user charges are employed .either substantially or moderately in 33. For this purpose, "substantial" means that user charges are employed in all or most instances or, where they are employed, cover all or a substantial part (over 50 percent) of capital and operating costs. "Moderate" means that user charges are infrequently employed or that they cover only a small part (under 50 percent) of capital and operating costs. User charges are employed for all categories of public facilities. classified as basic community facilities and transportation facilities and. for all but one of the categories within the groups classified as health facilities and recreational or cultural facilities. On the other hand, there are no user charges for public elementary and secondary schools, health research facilities, public libraries, and the facilities relating to public safety and administration [armories, jails and prisons, fire (and police) stations, residential, group care for children, and public. office and court buildingsl. Inasmuch as most of the public facilities described in this volume have user charges that cover all or part of capital and operating costs, they are amenable to financing through long-term borrowing, so that the capital cost:s of the facilities can be prorated over several genera- tions of users, each of which can pay all or part of the apportioned. capital costs.24 Financing through borrowing against future revenues,, of course, enlarges the volume of capital outlays that can be accom-~ pushed during any specified period, as compared to capital outlays financed entirely out of current receipts. D. EVALTJATION OF DATA 1. Data Quality Essentially, this volume . is a data source book, full of facts, figures, and expert projections. Many of the chapters contain a wealth of information, sufficient to satisfy most users. However, in some chapters the information is scanty; and upon reading them, one might be inclined to question whether they reflect the ultimate possi.~ bility in conveying information about the subject. Checking with other sources,.one finds t.hat in a number of instances the contents of these chapters are just about all we do know with respect to the kinds of data called for in the committee questionnaire. The paucity of information on capital outlays in the various chapters on health facilities, to cite one area, may be attributed to (a) the "programmatic" viewpoint of the Federal agencies concerned with such matters as health, which results in minimal interest in related activities carried on outside Federal assistance programs, (b) a lack of detail in the construction statistics compiled by the Bureau of the Census, and (c) limited efforts by the executive branch, to take the 24 The increasing concern regarding the adequacy of hospital charges paid by public welfare agencies 021 behalf of indigent patients and by private group medical plans on behalf of their members suggests that future hospital user charges may cover a larger proportion of hospital capital and operating costs. PAGENO="0025" STATE AND LOCAL PuBLIC FACILITY NEEDS 17 necessary steps to see that such data are compiled so that the budget presentations would be more meaningful. To overcome these data deficiencies, it would be helpful to analysts and policymakers to strengthen the data collection resources of such basic fact gathering agencies as the Bureau of the Census, especially the Construction Statistics Division. This Division is currently responsible for compiling statistics on permits authorized and con- struction put in place for various groups of public and private con- struction. If these data are to be useful in delineating the "universes" in which Federal assistance programs operate, they must be broken down in sufficient detail and supplemented by statistics for outlays on land and equipment to permit appropriate comparisons to be made. 2. Other Projections It should be noted that several other studies have been made in recent years dealing in part with public facility needs. One is a study on national goals prepared by the Center for Priority Analysis of the National Planning Association. Based on a series of research memo- randa, the study presents a number of projected expenditures (in- cluding capital outlays) in 1970 and 1975, taking into account certain "aspiration standards." 25 As detailed in table 7 (which lists the public facility categories in line with the classifications employed in this volume), public and private capital outlays for public facilities are projected to rise from $29.0 billion in 1962 to $51.5 billion in 1970, and to $60.8 billion in 1975. These figures compare with the estimates presented above for all spending units of actual capital outlays of $31.0 billion in 1965 and estimated requirements of $48.6 billion in 1970 and $61.5 billion in 1975. The second, known as "Project `70", is a study of the State and local government sector involving proj ections of expenditures and revenues in 1970 of State and local governments for each of the 50 States and the District of Columbia. The projections were made on the basis of a set of economic and demographic assumptions generated by a macroeconomic growth model, chosen from several developed for the Federal Interagency Study of Economic Growth and Employ- ment Opportunities. For 1970, this study projects State and local government capital outlays at $30 billion.26 This compares with the $31.6 billion of public facility capital requirements for 1970 estimated in this volume for State and local public agencies. 3. Appraisal A priori, one might expect that estimates of public facility capital requirements based on separate assessment of over 50 27 different categories of need would result in figures considerably largei' than projections of past trends. As noted above, the aggregate of the separate estimates by ftmctional category of public facilities (that 25 Leonard A. Lecht, Goals, Priorities and Dollars (New York: The Free Press, 1966.) 25 S. Mushkin and G. Lupo, State and Local Government G'apital Outlays: Projections to 1970 (note, dated August 1966). Detailed projections are presented in S. Mushkin and E. McLoone, Public Spending for Higher Education in 1970 (The Council of State Governments, Research Memorandum 374); 5. Mushkin and R. Harris, Transportation Outlays of States and Cities: 1970 Projections (RM 375); 5. Mushkin and E. McLoone, Local School Expenditssres: 1970 Projections (RM 382); R. Rafuse, Jr., T47ater-Supply and Sanita- tion Expenditures of Stateand Local Governments: Projections to 1970 (RM 389); and S. Mushkin, Health assd Hospital Expenditures in State and Local Governments: 1970 Projections (RId 390). 27 In some of the chapters there were several parts, each of which contained a separate estimate of capital requirements. PAGENO="0026" 18 STATE ~D LOCAL PUBLIC FACILITY NEEDS are presented in the chapters in this volume) are in line with projected capital outlays reflecting certain "aspiration standards"; and the public agency component of public facility capital requirements in 1970 are close to those projected on the basis of a survey of 50 States. Moreover, the aggregate 1970 and 1975 estimates for public agencies are in line with the capital outlays projected in the growth models of GNP on the basis of past trends. (The latter are presented in the first chapter.) The GNP growth models project corresponding rises in State and local taxes from Federal financial assistance and from other resources. Consequently, it would appear that the State and local government portion of estimated public facility needs would not require any major alteration of State and local government fiscal resources. Such a conclusion would appear to be at odds with predictions that growing demands on State and local governments for public services will require some reallocation of fiscal resources. Conse- quently, one must consider the possibility that (a) our estimates of public facility requirements are too conservative or (b) that the avail- ability of future fiscal resources of State and local governments may be underestimated by those who suggest reallocation of resources, or (c) that public facility capital expenditures is only one element in a. growing pattern of required public services, and that services, rather than facilities, will make the biggest demands in the future. (a) It is conceivable that many of the chapter authors preferred to employ conservative judgments, especially since they were asked to state their underlying assumptions. Moreover, while backlogs of current unmet needs can be reasonably described, future needs may be more difficult to perceive, since the economic horizon of many analysts tends to be appreciably shorter than the 10-year period called for in the study. These factors, coupled with the arbitrary allocations among ownership patterns made in this study (when they were not provided in the particular chapters) may have contributed to a downward bias in the capital requirements estimates. But if this is so, it would have to be assumed that there were similar "down- ward biases" in the estimates made in the aforementioned NPA and "Project 70" studies, which would be a striking coincidence. (b) Recent experience with Federal tax revenues has found that actual receipts exceed estimated revenues by considerable amounts. To some extent this underestimation may be dtie to lack of familiar.. ity with the fiscal aspects of the "New Economics"; and to some extent it may be due to conservative methods of tax revenue estimation. The GNP growth model projections assume a continuation of the accel- erated growth of the economy experienced during the past 5~ years, which suggests that our State and local tax resources will grow faster than the rate our "conventional wisdom" would cause us to expect. (c) The present study is concerned with the Nation's public facility capital plant and its prospective growth. Hitherto, capital outlays have accounted for about one-fourth of State and local government expenditures. Most of the remaining State and local government expenditures represent outlays for public services. While a large part of these public services involve utilization of public facilities, it does not necessarily follow that future capital requirements for public facilities fully measure public service needs and possible expenditures. PAGENO="0027" STATE AND LOCAL PUBLIC FACILITY NEEDS 19 It may be that an increasing proportion of public funds should be spent on health and educational services, welfare payments, public safety, transportation, recreational and cultural services, manpower training, and the entire range of other activities that have been, or are likely to be, supported by Federal aid under the Economic Oppor- tunity Act or the model cities legislation. Many more nurses, hospital attendants, health, transportation, and utility technicians and operat- ing staff, or park and recreation supervisors, may be needed than the additional personnel called for by the expansion of the public facilities capital plant. Or it may be that public expenditures for such purposes should not be proportionately increased, but rather the additional fiscal resources required at the Federal, State, and local government levels should instead be decreased through tax reductions (if there are fiscal surpluses) or deferment of tax increases (if there are to be fiscal deficits). It remains to be seen which of the foregoing explanations, or the estimates themselves, accurately describe what is likely to occur during the next decade. Be that as it may, it is hoped that the study presented in this volume provides sufficient data on an often neglected sector to aid those who are responsible for making the economic de- cisions that will largely shape the future course of the American economy. Supplementary and supporting data are set forth on the following pages. PAGENO="0028" SUPPLEMENTARY DATA PUBLIC FACILITY NEEDS CHAPTER OUTLINE* A. NATURE AND COMPOSITION OF PUBLIC WORK OR FACILITY 1. Describe the particular public work or facility in terms of: (a) General physical characteristics-structures and equipment. (b) Services rendered-to residential areas, commercial areas, industrial areas, agricultura] areas. ~c) Standards of performance-capacity or quantity of output per capita or equivalent concept, e.g., per capita water consumption, schoolroom facilities per capita, hospital space or library space per capita. (d) Qualitative standards of performance, e.g., primary, secondary, tertiary treatment of sewage, levels of quality of road surfacing, traffic densities, and speed, durability of structures and equipment, frequency cf repairs, ordinary replacement cycle. 2. Existing capital plant in the United States: (a) As of mid-1965, how many of these facilities or structures were in existence or operation? (b) What was the distribution of such facilities or structures by States? (c) What was the distribution of such facilities or structures by population size of city-500,000 or more; 100,000 to 499,999; 50,000 to 99,999; 10,000 to 49,999; 2,500 to 9,999; and under 2,500? (d) What is the age distribution of such facilities or structures, i.e., built (1) before 1900, (2) during 1901-20, (3) 1921-40, (4) 1941-60, (5) since 1961? (e) Of these facilities and structures now in operation, what proportion is owned by: (1) State governments or State agencies; (2) Cities, counties, towns, special districts, public authorities, or other local public bodies; (3) Private, nonprofit organizations, and cooperatives; (4) Proprietary or profitmaking organizations; (5) Federal Government, if appropriate. (f) What is the estimated current value (as of end of 1965) of these facilities and structures? B. COSTS AND USER CHARGES 1. Construction costs and operating costs: (a) On the basis of some standard unit of measure (cost per square foot, cost per mile, cost per connection, etc.), indicate the current (as of 1965) range of typical construction costs for different size facilities or structures of longtime durability; (b) On the same basis, indicate the current range of typical annual mainte- nance and operation expenses (includes repairs and replacements) for different size facilities or structures. 2. User Charges: (a) To what extent are user charges (utility charges, tolls, fees, admissions, lease payments, rentals, assessments, or specific taxes) employed to pay for all or part of the services, occupancy or use of the facilities or structures? (6) To what extent are such user charges sufficient to cover annual mainte- nance and operation expenses plus annual debt service payments on the indebtedness incurred to finance the capital costs of the facilities or struc- tures? Are there situations where user charges exceed the sum of prorated operating and capital costs? *To be followed to the extent feasible. 20 PAGENO="0029" STATE AND LOCAL PUBLIC FACILITY NEEDS 21 (c) To what extent are the costs of such facilities and structures met out of the general tax resources and general obligation borrowings of State and local government units? C. TREND OF CAPITAL OUTLAYS 1. What has been the trend of annual capital outlays (expenditures, construc- tion put in place, or contract awards) for these facilities or structures during the 20-year period 1946-65 in terms of number of units and dollar value (in millions of dollars)? Explain the trend. 2. Of these annual capital outlays, how much or what proportions were ac- counted for by (A) State governments or State agencies, (B) cities, counties, towns, special districts, public authorities, or other local public bodies, (C) pri- vate, nonprofit organizations and cooperatives, (D) proprietary or profitmaking organizations, and (E) Federal Government, if appropriate? 3. What have been the sources of financing for these capital outlays (show dollar amounts or percentage distribution)? From: (a) Appropriations from tax resources; (b) Gifts, bequests, donations, fund-raising drives; (c) Federal Government grant assistance (identify programs); (d) State grants-in-aid (in how many States); (e) Tax exempt municipal bond market (for public bodies); (f) Capital flotations in other security markets (for private corporations and private, nonprofit organizations); (g) Borrowing from the Federal Government. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS 1. In terms of the Great Society, what are the capital requirements (in millions of dollars) for these facilities or structures during the decade 1966-75? (a) Describe the factors taken into account in making this projection (cur- rent backlog of unmet needs, accommodating expected population growth, replacing obsolete facilities, quantitative and qualitative standards of per- * formance). (5) If possible, show these estimated capital needs on a per year basis. (c) To the extent feasible, indicate the proportions of these estimated needs that you would ascribe to (1) cities with populations of 50,000 or more, (2) cities and towns with populations of 2,500 to 50,000, and (3) agricultural- rural areas, cities and towns with populations under 2,500. (d) To the extent feasible, indicate the proportions of these estimated capital outlays that you would expect to be expended by: 1. State governments or State agencies; 2. Cities, counties, towns, special districts, public authorities, or other local public bodies; 3. Private, nonprofit organizations and cooperatives; 4. Proprietary or profitmaking organizations; 5. Federal Government, if appropriate. 2. On the basis of past experiences, projected trends and emerging develop- ments, what are the expected sources of financing for these prospective capital outlays (in millions of dollars or percentage distribution)? From: (a) Borrowing in the tax-exempt municipal bond market (for public bodies); (5) Capital flotations in other security markets (for private corporations and nonprofit organizations); (c) Borrowing from the Federal Government; (d) Federal Government grant assistance (existing or new programs); (e) State grants-in-aid (existing or new programs); (f) Appropriations from tax resources; (g) Gifts, bequests, donations, fund-raising drives. 3. If your estimated capital requirements exceed the amounts you estimate will be supplied by the above identified sources of funds, how would you bridge the gap? PAGENO="0030" Basic assumptions for State and local pi~blic facility needs and financing study Factor Actual 1961-65 (percent) Assumed 1966-75 (percent) A. Annual rates of increase: 1. Population 2. Gross national product 1. 5 5. 9 1. 5 5. 5 3. Personal income 5. 6 5. 2 4. Gross private domestic fixed investment~ 5. Employed civilian labor force 6. Gross national product deflator 7. Wholesale price index 8. Boeckh construction cost index 4. 9 1. 6 1. 5 . 8 2. 5 4. 5 1. 9 1. 5 -. 5 2. 0 B. 9. Index of industrial production - 10. Money supply 11. Selected liquid assets held by public Annual rates .of: 5. 6 3. 3 7. 2 0 5. 0 3. 0 6. 5 C. 12. Civilian unemployment 13. Savings as a percent of disposable income Other parameters: 14. Capacity utilization of industry 15. Average Federal budgetary deficit: National income budget (billion)_ - - Cash budget (billion) 5. 6 5. 6 85. 6 -$2. 4 -$4. 1 4. 0 5. 5 90. 0 0 0 22 0 PAGENO="0031" TABLE 1.-Comparisons of total capital outlays for public facilities in 1965 with estimated capital requirements during 1966-75, all spending units [Dollars in millions] Chapter number and type of facility Actual 1965 Estimated 1970 19Th 1966-75 A. BASIC COMMUNITY FACILITIES 1. Regional and river basin water supply systems 1 - 2. Public water supply systems 3. Rural-agriculture water supply systems 4. Sanitary sewer collection systems 5. Storm sewer systems 6. Water waste treatment plants 7. Solid wastes collection and disposal facilities Subtotal, water and sewer facilities 8. Electric power 9. Gas distribution systems Subtotal, other utilities B. TRANSPORTATION FACILITIES 10. Highways, roads, and streets 11. Toll bridges, tunnels and turnpikes 12. Offstreet parking facilities 13. Urban mass transit facilities 14. Airport facilities 10 15. Marine port facilities Subtotal, transportation C. EDUCATIONAL FACILITIES 16. Public elementary and secondary schools 17. Nonpublic elementary and secondary schools 18. Area vocational school facilities 15 19. Academic facilities for higher education 20. College housing and related service facilities 21. Educational television- Subtotal, educational facilities D. HEALTH FACILITIES 22. General hospital facilities 23. Clinics and other outpatient facilities 24. Long-term care facilities~ 25. Community mental health centers 26. Facilities for the mentally retarded `~ 27. Health research facilities 20 28 Medical and other health schools Subtotal, health facilities E. RECREATION AND CULTURAL FACILITIES 29. State and Federal outdoor recreation facilities 30. Urban local outdoor recreation facilities 31. Rural outdoor recreational facilities - 32. Neighborhood centers for recreation, etc 33. Arenas, auditoriums, exhibition halls 34. Theaters and community art centers 24 35. Museums 36. Public libraries - Subtotal, recreation and cultural F. OTHER PUBLIC BTJILDINGS 37. Residential group care facilities for children 25 38. Armories 39. Jails and prisons 40. Fire stations 41. Public office and court buildings 42. Publicly owned industrial plants Subtotal, other public buildings $67 1,300 (2) 513 1, 140 625 170 $100 2,380 5 260 930 2,450 940 280 $110 2, 810 3 350 1,450 2,850 1, 240 360 $1,060 24,300 2, 750 10,340 25,000 9, 830 2,890 - 3, 815 7, 340 9, 170 76, 170 5,700 809 7,800 990 9,000 1,200 75,000 19,930 6, 509 8,790 10, 200 84,930 8 170 8388 (2) (2) 313 11160 3 12 060 3380 3760 1, 050 580 130 3 15 830 3500 31,000 1, 370 630 150 6 125 650 94000 7,900 10,900 5,970 1,280 8,64~ 14,580 18,980 151,00 12 3,650 13 260 (2) 12 1, 525 16483 178 4, 010 570 2 600 3 2, 250 930 30 3 5, 270 750 790 3 2, 960 1,220 40 41, 800 14 5 960 15 6 300 23, 500 10,620 350 5,926 7, 790 10, 240 82,380 1,926 (2) (2) (2) 31,510 5310 5600 280 330 ~460 5 690 31,980 3410 3780 450 400 3600 3 910 15,710 3,240 6230 2,930 3,340 4800 21 7,210 (2) 4, 180 5, 530 -__43,460 743 23 360 (2) 43 667 (2) 25 103 1,941 1, 190 1 700 460 ~8O 770 700 290 190 1, 420 3 2 200 600 ~lO0 3 1, 010 910 3120 240 11,800 17 600 23 4 800 780 8, 000 7,230 950 1,910 5, 180 6, 600 53, 070 (2) 1 (2) 26191 27218 214 80 3 110 840 15 15 145 90 120 920 ~130 3170 1,370 320 400 3,250 410 635 815 6,525 23 PAGENO="0032" 24 STATE AND LOCAL PUBLIC FACILITY NEEDS I Combined figures for water supply capital outlays by Corps of Engineers, Bureau of Reclamation, and Soil Conservation Service. 2 Not available. 3 Annual figures derived from 10-year estimated capital requirements. 4 $2,420,000,000 in constant prices, adjusted to current prices at assumed price increase at rate of 2 percent per year. Annual rate of increase interpolated during 1971-73 at 3.8 percent per year. 6 Capital requirements, rather than capital outlays, per chapter table G. 7 Shown separately, although included in "Highways, roads and streets"; however, excluded from sub- total for "Transportation." Annual average for years 1946-65. $2,282,000,000 reported in survey; expanded to $4,000,000,000 on the basis of other materials in the chapter. 10 All figures estimated at 120 percent of figures for publicly owned facilities. 11 Average during 1960-62. 13 Average of estimates for fiscal years 1965 and 1966. 13 Average 1960-66. 14 149,000 classrooms at $40,000 per classroom. 11 Shown separately, although included in "Public elementary and secondary schools and academic facili- ties for higher education"; however, excluded from subtotal for "Education" 16 For 1963-64. 17 15 stations at $540,000 each. 18 Includes general and mental hospitals, clinics, nursing homes, related facilities. I~ Combination of community facilities and university affiliated facilities for the mentally retarded. 20 Some of these capital requirements are probably included within the figures shown for "Academic facilities for higher education and hospitals"; but degree of overlap is not ascertainable. 21 Broken down as follows (in millions of dollars): (a) medical schools, $4,259; (b) dental schools, $590; (c) schools of nursing, $1,641; (d) optometry schools, $58; (e) osteopathic schools, $191; (f) pharmacy schools, $307; (g) podiatry schools, $48; and (h) public health schools, $112. To some extent, these capital require- ments overlap with the capital requirements for higher education academic facilities, but the proportion is unknown. 22 For fiscal year 1964-65. 23 Average of high-level estimate of $5,300,000,000 and low-level estimate of $4,200,000,000. 24 Based on discussion with informed sources. 23 Data on detention homes and institutions for delinquent children in the chapter. Data on other child welfare institutions obtained from Children's Bureau, as follows: Maternity homes, $17,000,000, homes for neglected md disburbed children, $264,000,000. 26 For 1966. 27 For 1964. May include in part "police stations." TABLE 2.-Comparison of public facility capital outlays of State and local public agencies in 1965 with estimated capital requirements during 1966-75 [Dollars in millions] Estimated Chapter number and type of facility Actual 19651 -~ 1970 1975 1966-75 $2 1,040 (I) 385 417 625 130 $20 1,900 110 ~ 700 8 1, 570 940 210 $30 2,250 140 ~ 1 090 °1,820 1,240 270 $170 19,440 1,100 ~ 7, 750 ~16, 000 9,830 2,170 2, 599 5,450 6,840 56,460 1 766 44 1,200 60 810 1,850 70 A. BASIC COMMUNITY FACILITIES 1. Regional and river basin water supply Systems 2 2. Public water supply systems 3 3. Rural-agriculture water supply systems 4 4. Sanitary sewer collection systems 5. Storm sewer systems 6. Water waste treatment plants 7. Solid wastes collection and disposal facilities 7 Subtotal, water and sewer facilities 8. Electric power 8 12,250 9. Gas distribution systems 9 550 Subtotal, other utilities 12, 800 B. TRANSPORTATION FACILITIES 10. Highways, roads, and streets 125 650 11. Toll bridges, tunnels, and turnpikes 10 4,000 12. Ollstreet parking facilities 2,400 13. Urban mass transit facilities 12 7, 600 14. Airport facilities 4, 980 15. Marine port facilities 430 Subtotal, transportation 8, 934 13, 540 17, 670 141,060 C. EDUCATION FACILITIES 16. Public elementary and secondary schools 3, 650 4,010 5,270 41, 800 17. Nonpublic elementary and secondary schools 18. Area vocational school facilities 14 (0) 600 790 6 300 19. Academic facilities for higher education 915 1,330 1, 750 13,870 20. College housing and related service facilities II 301 520 720 6 080 21. Educational television 16 - 5 20 30 230 Subtotal, education facifities 4,871 5,880 7, 770 61, 980 See footnotes at end of table, p. 25. 1,260 12, 060 380 230 730 480 13 40 8,170 388 11102 1 242 261 1159 1,420 15,830 500 300 960 530 13 50 PAGENO="0033" STATE AND LOCAL PUBLIC FACILITY NEEDS 25 TABLE 2.-Comparison of public facility capital outlays of State and local public agencies in 1965 with `estimated capital requirements during 1966-'75-Con. Chapter number and type of facility . ~ Actual 1965 Estimated 1970 1975 1966-75 D. HEALTH FACILITIES 22. Hospitals 23. Clinics and other outpatient facilities'8 24. Long-term care facilities 19 25. Community mental health centers 25 26. Facilities for the mentally retarded 27. Health research facilities 23 28. Medical and other health schools 23 1 1 5494 ~ J 34 (5) (5) `~ $380 18 80 `9 100 140 21 110 180 280 `7 $480 18 100 `9 130 220 21 130 240 360 17 $3,930 18 $10 `!l, 060 1,470 21 1,070 1,920 2,880 Subtotal, health facilities H. RECREATIONAL AND CULTURAL FACILITIES 29. State and Federal outdoor recreation facilities 30. Urban local outdoor recreation facilities 31. Rural outdoor recreational facilities 32. Neighborhood centers for recreation, etc 33. Arenas, auditoriums, exhibition 24 34. Theaters and community art centers 25 35. Museums 36. Public libraries~ Subtotal, recreation and `cultural F. OTHER PUBLIC BUILDINGS 37. ResidentIal group care facilities for children 27 38. Armories - 39. Jails and prisons - 40. Fire stations `. 41. Public office and court buildings 42. Publicly owned industrial plants Subtotal, other public bńildings 528 - 1,270 1,660 13, 140 313 360 430 1,700 ---- 530 2,200 : 4,400 :17,600 7,200 3,620 25 270 1,910 600 (`) 14 103 690 350 28 30 190 910 460 26 40 240 1,390 3,390 4,380 35, 000 ` (5) 1 (5) 191 218 214 410 28 50 15 90 130 320 (5) 605 28 70 15 120 170 400 (5) 775 560 150 920 1,370 3,250 (2) 6,250 I Where data supplied in chapter seemed unrealistic, capital outlay figures for 1964-65, as reported by the Bureau of the Census, have been used.' 2 For capital outlays financed `by Soil Conservation Service; in the case of the Corps of Engineers and Bureau of Reclamation projects, the capital outlays are made by the Federal Government. 3 80 percent of estimated capital requirements, per chapter. Assumed to be 40 percent of estimated total capital requirements, per 1959 Census of Agriculture. `Not available. 8 64 percent of estimated total capital requirements, per chapter. 75 percent of estimated total capital requirements, per 1965 experience. 8 Municipal plus one-half, of "State,cooperative and other." `5.5 percent of estimated total capital requirements (or 1965 outlays). ~0 Shown separately, although included in "Highways, roads and streets;" however, excluded frona"Sub- total for transportation." ` , "Capital outlay in 1964. 13 Assumed to be 70 percent of estimated total capital requirements, based on informed judgment. `3 Calculated at 33.6 percent of estimated total capital requirements, per chapter. 14 Shown separately, although included in "Public elementary and secondary schools" and "Academic facilities for higher education"; however, excluded from "Subtotal for education." "Capital outlay in 1964. 16 Calculated at 66 percent of estimated total capital requirements, per chapter. `7 Assumed to be 25 percent of estimated total capital requirements, per 1965 distribution of construction put in place, net of direct Federal construction. 18 Assumed to be 25 percent of estimated total capital requirements, based on 1964 distribution of owner- ship of organized outpatient departments, emergency departments and rehabifitation facilities (last, 1963 data). "Assumed to be 17 percent of estimated total capital requirements, based on distribution of ownership of nursing home beds in 1964. 20 Calculated at 50 percent of estimated total capital requirements, per chapter. 21 Assumed to be 30 percent of estimated total capital requirements for community centers, based on distribution of ownership of existing mental retardation facilities according to State llans of 46 States; assumed to be 50 percent of total requirements for university affiliated facilities. 22 Calculated at 40 percent of estimated total capital requirements, per chapter. 25 Assumed to be 40 percent of estimated total capital requirements, "best judgment." 24 Calculated at 90 percent of estimated total capital requirements, per chapter. 5~ Assumed to be 50 percent of estimated total capital requirements, "best judgment." 26 Calculated at 28 percent of estimated total capital requirements, per chapter. 27 In addition to data in chapter, Children's Bureau estimates-homes for neglected and disturbed chil- dren-$40,000,000. 28 Calculated at 9.6 and 12.6 percent of $520,000,000. 70-132-66-vol. 1-3 PAGENO="0034" 26 STATE AND LOCAL PUBLIC FACILITY NEEDS TABLE 3.-Comparison of public facility capital outlays of private, nonprofit organizations in 1965 with estimated capital requirements during 1966-75 [Dollars In millions] . Chapter number and type of facility . Actual 1965 Estimated 1970 1975 1966-75 3 Rural agricultural water supply systems 1 8. Electricpower' 17. Nonpublic elementary and secondary schools 19. Academic facilities for higher education4 20. College housing and related service facilities 21; Educational television 6 22. Hospitals7 23. Clinics and other outpatient facilities 24. Long-term care facilities 10 25. Community mental health centers I' 26. Facilities for the mentally retarded 12 27. Health research facilities's 28. Medical and other health schools 14 31. Rural outdoor recreational facilities 11 32; -Neighborhood centers for recreation 33 Arenas auditoriums exhibition halls ii 34 Theaters and community art centers 17 35. Museums - 37. ResidentIal group care facilities for children - Subtotal.. - (2) $300 260 625 5 182 3 1 1 8 410 I J (2) (2) (2) (2) 43 (2) (2) 10 (2) - (2) $130 300 - 570 930 400 10 1,070 190 80 140 170 230 420 90 80 10 210 18 60 30 $170 350 750 1, 210 500 20 1,360 250 110 220 200 300 550 120 100 10 280 18 80 - - 40 $1 370 3,150 5, 960 9, 630 4,540 120 11,190 1, 940 870 1, 470 1, 670 2,400 4,330 960: 780 80 2 160 18 620 19 280 5, 120 6, 620 53, 520 1 50 percent of estimated capital requirements, per 1959 Census of Agriculture. 2 Not available. One-half of "States, cooperatives and other." 4 Calculated at 41 percent of estimated total capital requirements. - 5 In 1963-64. 6 Calculated at 34 percent of estimated total capital requirements. 7 to be 95 percent of estimated capital requirements for privately owned hospitals, per ownership of hospital beds in 1964. 8 Includes general and mental hospitals, clinics, nursing homes, related facilities; construction put in place data. SAreumed to be 6opercent of estimated total capital requirements, based on 1964 distribution of ownership of organized outpatient departments, emergency departments and rehabilitation facilities (last, 1963 data). 10 to be 14 percent of estimated total capital requirements, based on distribution of nursing hOme beds in 1964. ii Calculated at 50 percent of estimated total capital requirements, per chapter. 12 Assumed to be 50 percent of estimated total capital requirements, based on distribution of ownership of existing mental retardation facilities. 11 Calculated at 50 percent of estimated total capital requirements, per chapter. 14 Assumed to be 60 percent of estimated total capital requirements, "best judgment." ~ Calculated at 20 percent of estimated total capital requirements, per ownership distribution in chapter. 16 Calculated at 1 percent of estimated total capital requirements, per chapter. 17 Assume-I to be 60 oercent of estimated capital requirements for privately owned facilities (theaters and community art centers). 18 Calc:mlatecl at ~5 pe -cmt of estimated capital requirements for museums, per chapter. 19 Includes $17 millionlor maternity homes and $224 mihionfor homes for neglected and disturbed children~ PAGENO="0035" 27 STATE AND LOCAL PUBLIC FACILITY NEEDS TABLE 4.-Comparison of public facility capital outlays of private investor-owned companies in 1965 with estimated capital requirements during 1966-75 [Dollars in millions] Estimated Chapter number and type of facility . Actual 1965 1970 1975 1966-75 2. Public water supply systems 1 3. Rural-agricultural water supply systems 2 4. Sanitary sewer collection systems 5. Storm sewer systems 7. Solid wastes collection and disposal facilities 6 8. Electric power - 9. Gas distribution systems 8 12. Ofistreet parking facilities $260 (3) 128 720 40 4, 100 770 (3) (3) 50 100 (3) (3) (3) (3) (3) 50 (3) (3) $480 6 230 880 70 5, 500 940 9 530 320 100 80 60 30 410 60 370 70 140 5 $560 10 360 1,030 90 6, 300 1, 130~ 9 690 410 110 90 70 40 540 70 480 90 180 .6 13. Urban mass transit facilities 15 14. Airport facilities 11 15. Marine port facilities 12 22. Hospitals 13 23. Clinics andjother outpatient facilities 14 24. Long-termcare facilities 15 26. Facilities for the mentally retarded 10 31. Rural outdoor recreational facilities 17 33. Arenas, auditoriums, exhibition halls 18 34. Theaters and community art centers 19 35. Museums 20 Total (3) 10, 281 12,256 $4, 860 80 2, 580 9,000 720 7 56 000 9,380 5, 500 3,300 * 990 * 820 590' 320 4,300 600 3,840 720 1,450 50 105, 100 1 Calculated at 20 percent of estimated total capital requirements, per chapter. 2 Assumed to be 3 percent of estimated total capital requirements, per 1959 Census of Agriculture. Not available. Assumed to be 25 percent of estimated total capital requirements, per 1965 experience. 1 Calculated at 36 percent of estimated total capital requirements, per chapter. 6 Calculated at 25 percent of estimated total capital requirements, per chapter. 7 Estimated on basis of data furnished for 1966, 1970, and 1975. 8 Calculated at 94.5 percent of estimated total capital requirements, per chapter. Calculated at 9.6 and 12.6 percent, respectively, of estimated requirements for 1966-75. 10 Assumed to be 30 percent of estimated total capital requirements, based on informed judgment. 11 Calculated at 20 percent of estimated capital requirements for State and local public agencies, per chapter. 12 Calculated at 64 percent of estimated total capital requirements, per chapter. `~ Assumed to be 5 percent of estimated capital requirements for private institutions, per 1964 distribution of hospital beds in 1964. 14 Assumed to be 10 percent of estimated total capital requirements, based on 1964 distribution of owner- ship of organized outpatient departments, emergency departments and rehabilitation facilities (last, 1963 data). 15 Assumed to be 69 percent of estimated total capital requirements, based on distribution of ownership of nursing home beds in 1964. 18 Assumed to be 20 percent of estimated total capital requirements for community centers, based on ownership distribution of existing facilities. 17 Assumed to be 80 percent of estimated total capital requirements, per ownership distribution of existing facilities. 18 Calculated at 9 percent of estimated total capital requirements, per chapter. 19 Assumed to be 40 percent of estimated capital requirements for privately owned facilities. 20 Calculated at 5 percent of estimated total capital requirements, per chapter. PAGENO="0036" 28 STATE A~D LOCAL PUBLIC FACILITY NEEDS C~O ~ OC~ ~`~4 O~-C~-U~-~ ~ g~ 00 GO PAGENO="0037" E. RECREATION AND CULTURAL FACILITIES 29. State and Federal outdoor recreation facilities Areas 23 20,822 19, 076 (11) 30. Urban local outdoor recreation facilities Park acres (thousands) 24 1,730 1,730 23.6 31. Rural outdoor recreational facilities Enterprises (thousands) 23 132 20 25 107 (11) 32. Neighborhood centers for recreation, etc Structures 27 8, 564 8, 564 (11) 33. Arenas, auditoriums, exhibition halls Buildings 1, 200 1, 000 2O~ 2.5 34. Theaters and community art centers Theaters 28 440 (11) (11) (11) (11) 35. Museums Institutions 4,595 1,424 2,619 230 .5 36. Public libraries Agencies 20 7, 257 7, 257 1.3 F. OTHER PUBLIC BUILDINGS 37. Residential group care facilities for children Institutions 00 2, 141 627 1, 500 14 2.3 ~ 38. Armories Facilities 2,786 2,786 (`I) 39. Jails and prisons Institutions 3' 3, 369 3, 369 (11) 40. Fire stations Stations 25, 600 24, 450 1, 150 3.0 41. Public office and court buildings Structures 24, 860 24,860 7.0 ~ 42. Publicly owned industrial plants 52 Plants 526 526 .8 0 I As of 1963. `9 Includes about 550,000 beds in skilled nursing homes and 75,000 beds in chronic disease C) 2 As of 1959. hospitals or units. As of 1962, municipally owned only. 20 A 1964 survey of nursing home beds found 69 percent owned by proprietary groups, Square miles of imprcvement. 14 percent by nonprofit organizations and 17 percent by public bodies. 0 In 1965 there were an estimated 280 to 345 public incinerators, 1,000 to 1,250 sanitary 21 Beds in existing mental hospitlas (500,000 in State hospitals, 25,000 in private, non- land-fills and 17,500 to 21,300 open dumps. profit hospitals and remaining 25,000 in general hospitals distributed equally between 0 Estimated value of incinerators, land-fills, open dumps, collection vehicles, storage, public and private hospitals). and maintenance facilities. 22 Consists of (number of schools): 88 medical, 49 dental, 1,118 nursing, 10 optometry, ~ According to Federal Power Commission. S osteopathic, 75 pharmacy, 5 podiatry, and 13 public health. C) 8 Of the 603,410 miles of gas distribution and integrated company pipeline, 564,580 miles, 23 20,822 areas with 312,300,000 acres, of which 19,076 are State areas with 35,400,000 or 94 percent, are operated by investor owned utilities and 38,830 miles by municipal acres, and 1,746 Federal areas with 277,000,000 acres. In Federal or State recreational "~I owned utilities, areas there are 307,810 picnic tables, 18,164 acres of swimming beach, 17,985 acres of boat ~ 0 As of 1964. access, 31,988 acres of ski slopes, 204,310 tent and trailer camping spaces and 34,899 acres 10 Consisting of 58 turnpikes, 193 toll bridges and 10 toll tunnels, of golf courses. 11 Not available. 24 Selected special facilities include 20,932 playgrounds, 4,978 recreation buildings, 4,013 ~" 12 City owned parking lots in1960. skating rinks, 3,181 swimming pools and 16,616 tennis courts. `3 Privately owned parking lots and structures in 1963. 20 Includes swimming, hunting,lancl based, water based, golf, fishing, playfield, picnick- 14 As of 1963; in 1957 the assignable areas of higher education institutions for instruction, Ing, cabins, cottages, and related facilities. research, and general activities totaled 276.8 million square feet, of which 163.8 million 29 19 percent of total; balance investor owned. were for public institutions and 113 million for were private institutions. 27 Excluding camps. `5 Consisting of 1,689,000 dormitory spaces (917,000 for public institutions and 772,000 28 Includes 35 Broadway, 35 off-Broadway (but in New York City), 155 used for na- for private institutions) and 77,000 married student apartments (60,000 for public insti~ tional tours, 35 resident professional, 150 summer, and 30 musical; excludes community tutions and 17,000 for private institutions), theaters (that may be as many as 40,000), college and university theaters (about 1,500) 10 General and tuberculosis hospital beds; located in 7,586 hospitals of which 437 are and community art centers. Federal, 2,033 are State or local government, 3,569 are private, nonprofit, and 1,547 are 20 As of 1962. proprietary. 30 Consists of 281 detention homes, 280 institutions for juvenile delinquents, and 1,580 17 Data as of 1964-65; includes 2,950 hospitals with organized outpatient departments, child welfare institutions. 2,244 public health centers, 4,513 diagnostic or treatment centers, 1,339 rehabilitation 31 ConsIsts of 3,050 jails and 279 adult felony institutions. centers and 1,623 (1959 data) medical groups. 32 Measured by number and dollar amount of bond issuesduring 1956-65. 18 Of 2,950 hospitals with organized outpatient departments, 812 are State or local gov- ernment, 1,425 nonprofit, 304 proprietary and 409 Federal Government. - PAGENO="0038" 30 *STATE AND LOCAL PUBLIC FACILITY NEEDS TABLE 6.-User charges for State and local public facilities Chapter number and type of facility None User charges Moderate 1 Substantial 2 x x roaus, and streets tnrnnikes Marme nort sacuities A. BASIC COMMUNITY FACILITIES 1. Regional and river basin water supply systems _ 2. Public water supply systems 3. Rural-agricultural water supply systems 4. ~ 11~+4(~?~ t~m~ 5. Storm sewer systems 6. Water waste treatment plants 7. Solid wastes collection and disnosal facilities .---- 8. I~:z~:~c;c 9. Gas distribution systems B. TRANSPORTATION FACILITIES 10. F"~'~' 11. Toll bridges, tunnels, WAU - 12. Ofistreet parking facilities 13. Urban mass transit facilities 14. A4 ~.+ f~,i1iH~Q - 15. C EDUCATION FACILITIES 16 Public elementary and secondary schools X 17. Nonpublic elementary and secondary schools 18. Area vocational school fadilties X 19. Academic facilities for higher education 20. Collegehousing and related service facilities 21 Educational television D~ HEALTH FACILITIES 22.Hospitals 23. Clinics and other outp6tient facilities 24. Long-term care facilities 25. CommunIty mental health centers 26. Facilities for the mentally retarded 27. Health research facilities X 28. Medical and other health schools H. RECREATION AND CULTURAL FACILITIES 29. State and Federal outdoor recreation facilities 30. Urbanlocal outdoor recreation facilities 31. Rural outdoor recreational facilities 32. Neighborhood centers for recreation, etc 33. Arenas, auditoriums, exhibition halls 34. Theaters and community art centers 35. Museums 36. Public libraries X F. OTHER PUBLIC BUILDINGS x. x. x x, Total x x x x x x x x x x x x x x x x x x x x x x x x x x 37. Residential group care facilities for children 38. Armories 39. Jails and prisons 40. Fire stations 41. Public office and court buildings 42. Publicly owned indu8trialplants 12 21 1 User charges are infrequently employed or, when employed, they cover only a small part (under tO percent) of capital and operating costs. 2 User charges are employed in all or most instances, or where they are employed, they cover all or a substantial part (over 50 percent) of capital and operating costs. PAGENO="0039" STATE AND LOCAL PUBLIC FACILITY NEEDS 31. TABLE 7.-Estimated public and private capital outlays for selected public facilities, 1962, 1970, and 1975 [Dollars in billionsj Category Actual 1962 Projected expenditures 1970 1975 1. Basic community facilities: (a) Sewer and water systems (I) Public utilities Subtotal 2. Transportation capital expenditures: (a) Highways (excluding urban streets) (5) Urban streets and highways (c) Railroad and transit construction (d) Airports (e) Inland waterways 1 - Subtotal 3. Educational facilities capital outlays: (a) Elementary and secondary schools (5) Colleges and universities Subtotal 4. Medical facilities construction: (a) Private expenditures (5) Public expenditures Subtotal 5. Recreational and cultural: (a) Recreational facilities 2 (5) Public libraries Subtotal 6. Other public buildings2 Total, all categories $1.7 4.8 $2. 7 7. 0 $3. 1 7.7 6.5 9.7 10.8 8.8 2.9 .1 .3 .3 13.9 5.8 1.1 .6 .4 18.8 7.0 1. 1 .8 .5 12.4 21.8 28.2 3.4 1.2 4.4 2.6 4.0 2.1 4.6 7.0 6.1 .8 .6 1.8 4. 0 2.8 4.8 1.4 5.8 7.6 1.6 .3 2.8 .8 3.3 1.0 1.9 3.6 4.3 2.2 3.6 3.8 29. 0 51.5 60.8 1 includes port facilities. 2 In urban areas only. Source: Leonard A. Lecht, Goals, Priorities and Dollars (New York: The Free Press, 1966), pp. 103, 139, 161, and 185. PAGENO="0040" PAGENO="0041" PART I. GENERAL FORCES 33 PAGENO="0042" PAGENO="0043" CHAPTER 1 State and Local Government Capital Expenditures in Relation to National Economič Activity With Projections for 1975* INTRODUCTION In this chapter it is proposed to examine the relation of capital goods purchases by State and local governments to the course of national economic activity and other relevant factors. Projections for 1975 of State and local government purchases of structures and equipment are also prepared, making use of alternative assumptions with respect to future rates of national economic growth, rates of unemployment, prices, and other factors provided by the staff of the Joint Economic Committee. No attempt is made to analyze or quantify existing or future Federal programs designed to provide aid to State and local governments in order to meet the needs of their changing economies and of the growing population. Rather, reliance is placed on extrapolating the fairly stable relations which have persisted in the postwar period among the national economic and other variables and those of State and local governments. Therefore, a basic assumption is that these relationships will continue to hold in the future to substantially the same extent as they have in the past. Should any marked departures develop from the historical patterns of these relations, a reexamination of the projections herein set forth would be required. Outlays of. State and local governments for structures and equip.~ ment; 1 that is, their capital expenditures, have risen sharply over the postwar period in both current and constant dollars. In 1947 such purchases amounted to $2.7 billion, and in 1965 they were about $20 billion-nearly 7~ times as much. (See chart 1.) This expan- sion compares with a tripling in nonresidential structures and equip- ment expenditures by private business. Also, in contrast to the private sector where outlays for nonresidential structures in 1965 comprised about one-third of total expenditures for nonresidential structures and equipment, State and local government spending for structures constituted nearly 90 percent of their total capital out- lays.2 This emphasis of State and local governments on structures reflects their efforts to meet the pressing needs of the population for nonresidential buildings, such as schools and hospitals, for highways, sewer and water systems, and for other public facilities. * By Louis J. Paradiso and Mabel A. Smith, Office of Business Economics, 15.5. Department of Commerce, with minor editing by committee staff. Mrs. Irene M. Mattia of the OBE staff assisted in the computations, in developing regressions, and in making charts. 1 These include State and local new construction plus purchases of existing structures less construction force account compensation, and net purchases of equipment (purchases less sales). The definitions and measurement conform with those used in the national income and product accounts. 2 State and local government structures include residential buildings which, in 1965, amounted to $500,. 000,000. Nonresidential structures in 1965 would also comprise 90 percent of capital outlays excluding residential building. 35 PAGENO="0044" 36 STATE AND LOCAL PUBLIC FACILITY NEEDS CHART 1.-STATE AND LOCAL GOVERNMENT EXPENDITURES FOR STRUCTURES AND EQUIPMENT Billion Dollars 24 20 - STRUCTURES AND EQUIPMENT 16 / 4 12 : ~ 8. 4, 0 ~ i , 1947 49 51 53 55 57 59 6i. 63 65 U.S. Department of Commerce, Off ice of Business Economics In the early postwar years, 1947 to 1949, State and local govern- ment capital outlays nearly doubled, reflecting a surge in demand arising from the deficits in capital acquisitions incurred during World War II. After 1949, however, while the capital expansion programs still continued strong, the increases were considerably more moderate than in the earlier period. Also, it may be noted that capital outlays rose at a faster pace than did total expenditures of State and local governments up to 1956. From 1957 to 1960 the relative increase was less, and since then the rise has about matched the growth of total expenditures. PAGENO="0045" STATE AND LOCAL PUBLIC FACILITY NEEDS 37 The following table shows for selected years a breakdown of total State and local government expenditures on a national income and~ product accounts basis and the relative proportions: Expenditures (billions of dollars) Percent `distribution Struc- tures and equip- ment Other purchases of goods and services Other expendi- tures Total expendi- tures Struc- tures and equip- ment Other purchases of goods and services Other expendi- tures Total expendi- tures 1950 1955 1960 1965_ 5. 6 9.8 13.6 19.9 13. 8 20.3 32.5 48.3 2. 8 2.6 3.5 4.4 22.3 32.7 49.6 72.6 25 30 27 27 62 62 66 67 13 8 7 6 100 100 100 100 Source: U.S. Department of Commerce. Purchases of goods and services other than structures and equip- ment consist mostly of compensation of employees and spending for nondurable goods. The "other" expenditures consist of transfer payments plus net interest less the current surplus of government enterprises; the ratio of these to total expenditures has been declining since 1950, due to the large expansion in the operations of government enterprises resulting in a sharp increase in their current surplus. State and local government expenditures for structures and equip- ment have differed substantially from GNP, both with respect to trend and to general contour, whether compared in current or constant dollars. Since differential price movements affect dollar values, a comparison in constant dollars may be more useful. Chart 2 shows the movements of the two series, State and local government capital purchases and real GNP over the postwar period. Appropriate price indexes have been compiled for a number of detail groups of structures and equipment purchases, and overall implicit prices derived for the two major aggregates of these outlays. For each of these major groups-structures and equipment-the the implicit price has moved about in line with that for the respec- tive group in the private sector. In the more recent years, however, the implicit price for structures purchased by State and local govern- ments has increased at a somewhat faster pace than that for the cor- responding group in the private sector, mainly due to a different composition and relative importance of the subgroups within the major category. As previously indicated, real capital purchases by State and local governments moved sharply upward in the early postwar years. However, after 1950, the rate of increase moderated considerably, averaging 5.9 percent per year through 1965-still considerably larger than the average growth rate of real GNP of 3.2 percent per year over the same period. The growth rates show further disparities when the period is split into parts. From 1950 to 1957 real purchases of structures and equipment rose at a rate of 7.2 percent per year, but after 1957 the rate was reduced to 4.7 percent per year. In contrast, real GNP increased at 3.3 percent per year in the 1950-57 period but has expanded at an average rate of 4 percent per year since 1957. In both periods the growth rates of State and local government capital purchases exceeded those of real GNP. PAGENO="0046" 8 STATE: A~ LOCAL PUBLIC FACILITY NEEDS CHART 2.-STATE AND LoCAL GOVERNMENT PURCHASES OF STRUCTURES AND EQUIPMENT CoMPARED WITH GNP Em constant prices] Bil. 1958$ (Ratio Scale) Bil. 1958$ 1,000 `B 800 GNP State and Local Government Structures and Equipment 1 -~ t I i 11 ~ 1 RATIO OF STATE AND LOCAL STRUCTURES AND EQUIPMENT TDGNP Percent 4 1 ._.jJij i I I 1947 49 51 53 55 57 59 61 63 6~5 70 Projection U.S. Department of Commerce, Office of Business Economics PAGENO="0047" STATE: AND LOCAL PTJBLIC FACILITY NEEDS 39' Another important dissimilarity between the two series is their movement in recession periods. In contrast to the downturn in real GNP in each of the four postwar recessions-the decline in 1961 is not evident in the annual data-State and local government public works continued to rise by as much as, or more than, in the immedi- ately preceding years. It appears that in recessionary periods, total revenues of State and local governments move contracyclically, and their public works outlays also expand. Continuous vigorous State and local government capital programs, financed by increasing tax revenues and borrowing and by rising Federal grants-in-aid, have thus helped in cushioning recessions and have contributed to the growth of the economy. In contrast, investment in structures and equipment by private business has fluctuated widely and has been an important factor in shaping the patterns of the postwar business cycles. It may be noted that business expenditures for plant and equipment is a lagging indicator, turning down at about the time or shortly after general business activity, begins to decline and rising about 6 months after the turnaround in general business. State and local government expenditures for `plant and equipment, on the other hand, cannot be considered an indicator in relation to the general economy since it has tended to show a continual growth throughout the postwar' period. The lower panel of chart 2 shows the ratio of real State and local government expenditures for structures and equipment to real GNP. The ratio rose sharply, from `1 ~ percent of real GNP in 1947 to nearly 3 percent in 1958. Since then the proportion has fluctuated within a relatively narrow range-between 2.8 and a little over 2.9 percent. Nonresidential buildings, which include the important categories of public schools and hospitals, and highway construction account for roughly two-thirds of total capital outlays. Most of the major cate- gories of public works grew rapidly in the early fifties, but since then the advances have been more moderate; even so, the expansions have continued at relatively high rates-certainly larger than the rate of growth of the economy as a whole. The following table .shows State and local government expenditures for the major categories of structures and equipment for `selected years: Struc- tures ann equip- ment 1 New construction 2 (billions of current dollars) Pur- chases of existing struc- tures Net pur- chases of equip- ment Total , Nonresi- dential buildings High- ways Sewer and water All other construc- tion 3 1950 1955 1960 1965 5.65 9.82 13.61 19.91 5.24 8.95 12. 24 17.83 1.89 3.39 4. 06 5.74 2.09 3.78 5.30 7.23 0.66 1. 08 1.49 2.42 0.61 . 68 1.39 2.44 0.14 .33 .41 .68 0.39 .76 1. 26 1.78 1 Includes new construction and purchases of existing structures less construction force account compensa. tion, and net purchases of equipment. 2 Includes construction force account compensation. Includes residential buildings, public service enterprises, conservation and development, and other construction not elsewhere shown. Source: U.S. Department of Commerce. PAGENO="0048" 40 STATE AND LOCAL PUBLIC FACILITY NEEDS Much of the impetus to the State and local government construc-. tion programs has come from the channeling of Federal funds through grants-in--aid to these governments. These grants have increased steadily throughout the postwar period-from $1% biffion in 1947 to about $11~ bfflion in 1965. Considered by function, Federal grants- in-aid allocated to highways are by far the largest, with public assist- ance and relief, second. In 1964 these two functions absorbed two- thirds of the total grants-in-aid However, allocations to othei functions may be expected to expand rapidly in the coming years as programs such as Federal assistance for health, and the modernization of existing hospitals and construction of new ones get fully underway. Also, the large needs for new educational facilities plus expanding community redevelopment programs and housing development and improvement in urban areas wifi result in rising Federal assistance for these purposes EXPENDITURES OF STATE AND LOCAL GOVERNMENTS With the rising tempo of economic activity, State and local govern- ment receipts have correspondingly expanded and have thus permitted constantly rising expenditures for capital goods and for other pur~ poses. Chart 3 shows that, on a national income basis, expenditures and receipts in the postwar period have been fairly close together with the resulting surpluses and deficits relatively small. The largest deficit-$2.3 bfflion-occurred in 1958, and the largest surplus- $1.7 bfflion-in 1965. In the past 9 years, the aggregate deficit has been just about equal to the aggregate surpluson the national income account basis. However, the deficit or surplus in these accounts does not indicate the change in the outstanding debt of these govern-. ments, mainly because their receipts and expenditures do not include changes in financial assets and land transactions. Also, because the accounts are on a consolidated basis, they include the operations of the pension trust funds, which have been running a surplus in recent years. Moreover, these governments need a larger volume of funds in liquid form to support their expanding obligations. Throughout the postwar period State and local authorities have been borrowing sizable sums with the result that there has been a steady increase in the net debt. In the past 3 years this increase has averaged over $6 billion a year, bringing the outstanding debt as of mid-1965 to $92.8 bfflion. This represents a ratio to their total 1965 expendi- tures of 1.28. While this ratio has been maintained over the past 3 years, it is higher than in 1955, when it was 1.17, and much higher than in 1950, when it was only 0.93. If we assume that pension trust fund transactions, net borrowing, and holdings of liquid assets wifi continue to bear about the same relationship to economic growth as in recent past years, then we may use for purposes of longer-term Proj ection total State and local government receipts as a "proxy" measure of their expenditures. PAGENO="0049" STATE AND LOCAL PUBLIC FACILITY NEEDS 41 CHART 3.-STATE AND LOCAL GOVERNMENT RECEIPTS AND EXPENDITURES (ON NATIONAL INCOME ACCOUNTS BASIS) Billions of Dollars 180 As 170 l6C B 150 140 - 130 120 110 100 - 90 - 80 - 70 - - 60~ Expenditures 50 - - 40 - - 30 - - 20 - - 10- 0 I I I I I III I It It I I I Iii I I i947 49 51 53 5~ 57 59 61 63 65 75 U.S. Department of Commerce, Office of Business Economics 70-122--GO-vol. 1-! PAGENO="0050" 42 STATE ~i~D LOCAL PUBLIC FACILITY NEEDS PROJECTION OF STATE AND LOCAL GOVERNMENT CAPITAL OUTLAYS IN 1975 State and local government purchases of structures and equipment are dependent principally on their tax receipts, borrowing, Federal aid received, and the needs of the growing population. Apart from the Federal grants, the expenditures of these governments are pri- marily dependent upon receipts from their own sources, and these receipts are basically a function of the level of economic activity and, particularly, personal income. Thus, the first requirement in pro- j ecting State and local government expenditures is to develop proj ec~ tions of these two overall measures of the national economy on the basis of certain specific assumptions. 1. Proj ection of GNP The pattern of economic activity and, more specifically, the require- ments of State and local governments are influenced by the growth and mobility of the population, and, of course, by many other factors. Shifts in population-from agriculture to industry and from central cities to suburbs-have greatly affected the rates of growth and the types of needs of different industries and regions. Following the end of World War II, the rate of population growth accelerated markedly to 1.7 percent per year, compared with 1.2 percent during the war period and a much lower rate during the great depression years. The Bureau of the Census has projected the 1975 population3 at nearly 223 million persons (series B). This implies an average annual growth rate from 1965 to 1975 of 1.4 percent-some- what less than that in the years since the end of World War II; in absolute terms, however, the average increase is 2.8 million per year in the next 10 years, only slightly less than the average in the postwar period. The age composition of the population in 1975 is expected to differ from that in 1965, primarily due to a decline in the number of 5- to 9-year-olds. In 1965 the school-age group, 5 to 21 years old, com- prised 31.9 percent of the total population; in 1975 the ratio is expected to be somewhat smaller-3 1.2 percent. While the school-age group wifi continue to increase in the period ahead, the rate of advance is projected to be considerably less than that of the past decade. This has important implications on the expansion required for new school buildings, teachers, and other requirements for education resulting from the pressure of increases in the school-age group. The population rise is eventually reflected in the growth of the labor force, and this, in turn, is one of the basic factors in the expansion of our potential production and economic activity. In the decade prior to 1963, the labor force increased at an annual rate of 1.2 percent. Since that year, the increase has accelerated to 1.7 percent per year, reflecting, in large part, the relatively high birth rate in the early postwar years. According to projections of the Department of Labor, the labor force wifi expand to 93.6 million by 1975 4-indicating an 3 U.S. Department of Commerce, Bureau of the Census, "Population Estimates," series P-25, No. 329, Mar. 10, 1966. 4 Department of Labor, Bureau of Labor Statistics, "Projections of the Labor Force," 1070-80, Special Labor Force Report, No. 49. The expansion of the labor force is to some extent a function of the rate of economic growth. The 1975 labor force estimate assumes high levels of employment and might be con- servative under the assumption of a prolonged high rate of economic activity. PAGENO="0051" STATE* AND LOCAL PUBLIC FACILITY NEEDS 43 average annual rate of growth of 1.8 percent from the 1965 total of 78.4 million. It appears that the economy would have to provide about 1 ~ million new jobs per year over the next 10 years if a low rate of unemploy- ment is to be maintained. In 1965, the rate of unemployment im- proved considerably, averaging 4.6 percent for the year as a whole, and in early 1966, the rate was reduced to below 4 percent. As the economy continues to grow, as more of our people become better educated and more highly skilled, and as workers are trained to fit the jobs which become available, unemployment may well be reduced below presentrates. For projection purposes, an unemployment rate of 3 percent in 1975 is assumed-this with the other associated factors discussed below is designated as assumption A. However, in order to gage the differences if a 3-percent rate should not be achieved, an alternative set of projections has been made on the assumption of a 4-percent rate of unemployment in 1975-this is designated as `assump- tion B. Another ingredient of production is the number of hours worked per week. Average factory hours reached a postwar low of 39.1 hours in 1949 and a high of 41.1 hours in 1965. Although hours worked tend to rise in a cyclical upswing, a modest decline in the work-year is assumed over the next decade. The final major component of output is productivity, commonly measured as production per man-hour. Productivity changes have varied considerably year by year in the postwar period. Productivity rises sharply in a year following a recession, and subsequently tends to fall back to the longer term average. In the past decade, the average annual rate of increase in productivity for the total private economy has been 2.8 percent (on the labor force basis). With continued large expenditures by business on new plant and equipment, much of which is for the purpose of increasing efficiency, the gain in pri.vate productivity in the next 10 years is assumed to average 3.2 percent per year, somewhat higher than the average of the past 10 years. This productivity increase is used in conjunction with the 3-percent rate of unemployment (assumption A). A some- what smaller gain in productivity is used with the assumed 4-percent unemployment rate (assumption B) since investment in more efficient productive facilities may be somewhat less than under assumption A. B ased on the foregoing assumptions and consistent with the 3-percent rate of unemployment (assumption A), the 1975 projection of the GNP would be $940 billion, in 1958 prices. This is equivaleut to an average growth rate in real GNP of nearly 4Y~ percent per year from 1965 to 1975. If we assume a relatively stable price movement-a 2-percent increase per year in the GNP price deflator-associated with the foregoing growth in real GNP, then the GNP in 1975, in the. prices of that year, would be $1,275 billion, an increase of more than seven-eighths over the 1965 total of $676 billion. The alternative projection of GNP in 1975 (assumption B) would be $910 billion in 1958 prices, implying an average growth rate of a little more than 4 percent per year from 1965 to 1975. Using a somewhat smaller price increase-i .5 percent per year-associated with the lower growth rate for GNP, would result in a projected GNP of $1,180 billion in prices of 1975. PAGENO="0052" 44 STATE AND LOCAL PUBLIC FACILITY NEEDS 2. Projection of Personal Income As already indicated, personal income is another major determinant of receipts of State and local governments. Since 1953 the ratio of personal income to GNP has varied from a low of 78.1 percent in 1955 to.a high of 80.8 percent in 1958. The ratio rises sharply in a recession period and declines abruptly in the first year of recovery, thereafter, the changes tend to be relatively small Fluctuations in this ratio are to a lai ge extent a reflection of changes in corporate retained earn- ings (these are excluded from personal income but are included in GNP), which fall sharply durmg a recession and thereafter rebound, particularly in the early phase of the recovery In 1965 the ratio of personal income to GNP was 78 5 pei cent-a moderate decline from the 79 percent in the first year followmg the 1961 recession I he 1975 projection of personal income is derived by utilizing a regression relating personal income to GNP m current dollars for the period 1953-65, excluding the recession years 1954, 1958, and 1961. The regression equation expressed in billions of current dollars is: (1) Personal income=3 752+ 7827 GNP 999 Using the projected 1975 GNP of $1,275 billion, this relation yields a corresponding personal income of $1,000 billion in 1975 under assumption A. The ratio of personal income to GNP in 1975 is 78.4 percent, only fractionally lower than the 1965 ratio. On the alternative GNP projection of $1,180 billion in 1975 (assumption B), personal income, as set forth by the staff of the Joint Economic Committee, is $895 billion. This implies a significantly lower ratio to GNP than for assumption A. 3. Projection of State and Local Government Receipts Having projected the GNP and personal income, we are now in a position to estimate State and local government receipts. The major sources of these receipts and their amounts in 1965 are given below [Billions of dollars] Personal tax and nontax receipts 11. 5 Property taxes 23. 0 All other taxes 1 28.4 Federal grants-in-aid U. 4 Total receipts 74. 3 llncludes corporate profits taxes, contributions to social insurance, and all indirect business taxes other than property taxes. a Personal tax and nontax receipts Over the postwar period an increasing number of States have inaugurated taxing of personal incomes or have increased their existing rates as a means of obtaining additional revenues. As a result, the ratio of State and local govern- ment personal taxes to national personal income has risen steadily over the past decade, from 1.3 percent~ in 1955 to 2.2 percent in 1965, with the rise in the ratio slowing somewhat since 1960. The share of personal income taken by State and local governments is likely to continue to increase in the years ahead. PAGENO="0053" STATE AND LOCAL PUBLIC FACILITY NEEDS 45 A closer relationship between State and local personal taxes and personal income is given by the following regression (in billions of dollars) derived from the more recent period 1960 to 1965: (2) log (State and local personal taxes) = - 3.507 + 1.679 log (personal 2 income) -=. 992. r This equation yields a more conservative projection of personal tax receipts over the next decade than that based on the period 1955-65. The relationship indicates that on the basis of the experience of the past 6 years a 10-percent rise in personal income, for example, would yield on the average a 16.8 percent increase in these personal taxes. The equation provides a 1975 estimate of State and local personal tax and nontax receipts of $33.9 biffion under assumption A. This pro- jection is equivalent to 3.4 percent of the projected personal income in that year. Under assumption B, the projected personal tax receipts in 1975 would be $28 2 billion b. Property taxes. State and local governments, particularly local governments, have used property taxes, for the mOst part, to finance current public school requirements. In response to the rapidly increasing school enrollment throughout the postwar :period, these taxes have risen sharply-from $5 3 billion in 1947 to $23 0 billion in 1965, or an average rate of growth of 8 5 percent per year Despite this large rise, however, the ratio of property taxes to total receipts of State and local governments has been drifting downward over the postwar period In 1947 the ratio was 35 percent and in 1965 it was down to 31 percent. Property taxes follow very closely the movement of State and local government wages and salaries for public education as chart 4 shows. The following equation describes the relationship for the period 1950- 65, in billions of dollars: (3) log (Property taxes) = .353+ .793 log (State and local wages an4 salaries for education) .9995. This relation implies that, over the past 15 years, an increase of 10 percent in these wages and salaries, for example, has been associated on the average with an increase of nearly 8 percent in property tax receipts. Property tax collections in 1975 may be obtained from equation (3) and a proj ection of wages and salaries for education. The latter has shown a remarkably steady rate of growth over the past 15 years when expressed as a ratio per person in the school-age group 5 to 21 years old. In 1950 the average wage and salary for education per school-age person was $108; in 1965 it rose to $306. The average rate of increase over this period was 7.2 percent per year; however, it should be noted that the rate of increase in the number in this age group has been decreasing in recent years. The most recent proj ections of the Bureau of the Census show that the number of 5 to 21 years olds would total 69.5 million in 1975 compared with 62.1 million in 1965, an average rate of growth of 1.1 percent per year-much lower than the 3.2 percent annual growth rate of the past 10 years. Wages and salaries for public PAGENO="0054" $20C $15C $1~OI 8( 6 40 1950 52 54 56 58 60 62 64. 65 U.S. Department of Commerce, Office of Business 46 STATE AND LOCAL PUBLIC FACILITY NEEDS CHART 4.-STATE AND LoCAL PROPERTY ~L'AXES RELATED TO STATE AND LOCAL WAGES AND SALARIES FOR PUBLIC EDUCATION 6C (Ratio Scale) 75 40 32 V 6 8 12 16 20 24 32 40 60 State and Local Wages and Salaries for Public E~fucation ~Bi11ion $) $700 $500'. State and Local Wages $400 ` and Salaries for Public Education 5-21 Year Olds $30~ Million Persons ~rof52l Year Olds 1975 Economics PAGENO="0055" STATE AND LOCAL PUBLIC FACILITY NEEDS 47 education per 5 to 21 year olds for 1975 are obtained by extrapolating the 1956-65 trend (in terms of logarithms). The 1975 proj ection averages $600 per person in the school-age group. This average is then multiplied by the proj ection of the school-age group, 69.5 million persons, to yield a 1975 proj ection of wages and salaries of $41.7 billion. This total implies a lesser rate of increase in the next 10 years than in the past decade. The proj ection of wages and salaries for education, when applied in equation (4), yields an estimated property tax for 1975 of $43.5 billion compared with $23.0 billion in 1965-or a rate of increase of 6.6 percent per year, a considerable reduction from the average rate of gain of 8.2 percent per year in the past 10 years. This proj ection is the same for both the A and B assumptions. c. Tax receipts other than property and personal. These include State and local sales taxes, corporate profits tax accruals, contribu- tions for social insurance, and other taxes not considered above. In 1965 these taxes amounted to $28.4 billion; they have risen steadily over the postwar period from the total of $6.4 billion in 1947. In the aggregate, changes in these "other" taxes are dependent on long-term developments in economic activity. With the exception of corporate tax accurals, which comprise a relatively small proportion of these taxes, they are not strongly affected by recessionary influences; indeed, in every postwar recession, when the GNP dropped or halted its advance, they have risen in the aggregate. However, the overall relationship of these taxes to GNP since 1951 has been quite close with the only marked deviation from a linear regression occurring in 1961. The regression, in billions of dollars, for the period 195 1-65 is: (4) Taxes other than personal and property = -7.18+.0533 GNP r2= .996. This relation indicates that increases in these taxes have on the average conformed with about 5.3 percent of the increase in GNP over the period 195 1-65. Assuming that this relation will hold over the next 10 years, the projection of these taxes in 1975 is $60.8 billion, corresponding to the GNP of $1,275 billion projected in that year under assumption A. This reflects an average growth rate of 7.9 percent per year over the next 10 years-a rate somewhat higher than that of the past decade. For assumption B these taxes are projected at $55.7 billion in 1975. d. Federal grants-in-aid. The role of the Federal Government in relation to the, needs of State and local governments is changing rapidly. Not only are the public works needs of our population expanding, but also the `costs of the projects are rising-for both labor and materials. State and local bodies are constantly striving to raise their revenues by imposing new taxes or upping existing ta~ rates, but even so the additional revenues fall short of the necessary required funds. The Federal Government has assumed a larger share of the burden of financing many of the requirements of State and local bodies, and through its new or expanded programs for improving health and education, and through a host of other measures designed to better the standard of all Americans, it will provide increasing aid to State and local governments. No ~fefinitive projections of Federal grants-in-aid to State and local governments can be made at this time because the Federal programs PAGENO="0056" 48 STATE A~n LOCAL PUBLIC, FACILITY NEEDS are in a state of flux. The expanded operations in Vietnam are now a factor in limiting the Federal funds allotted to State and local bodies. When the activity there quiesces or stops entirely, the Government will proceed to implement fully its domestic programs. Private sources5 estimate that existing programs would call for a rise in Federal grants-in-aid to $30 billion or more in 1975. Relative to assumption A, a large expansion in Federal receipts is indicated, since GNP and income would grow at a faster pace than during the average of the postwar period. This would permit the implementing of existing Federal aid programs for State and local governments and also would provide for some additional future Federal aids to these bodies. Thus, a large growth in Federal grants-in-aid may be envisaged under this assumption, but the amount of increase can only be surmised at this time. For the purpose of calculations associated with assumption A, the Federal grants total in 1975 is placed at $35 billion-derived by applying the same average percentage rate of increase per year over the next 10 years as that which occurred over the period 1960-65, i.e., 12 percent per year. ` In `conjunction with assumption B (the 4-percent rate of' unemploy- ment) it' is assumed that the average annual absolute increase `in Federal grants would be somewhat larger than the "average absolute increase of $1.1 bfflion per year, experienced since' 1962, when annual increases were larger than' the average in the earlier' postwar years~ The assumed total grants for 1975 is $25 billion compared with $11 4 billion m 1965 The above estimates yield the total State and local government receipts from all' sources under assumptions A' and B. These are summarized in the accompanying~ table which includes the projections of the major national variables and of State and local government receipts. , `,` . ~ ` 1965 actual Projection, 1970 -_______ , Al B2 Projection, 1975 ~ ` Al B2 GNP (billion current dollars) GNP `(billion 1958 dollars) Implicit GNP price (1958=400) Personal income (billion dollars) Population (millions) School-age population, 5 to 21 years of age (millions) State and local government receipts-total (billion dollars)- Personal tax and nontax receipts Property taxes All other taxes Federal grants-in-aid 676 0 610.0 111.0 531.0 194.6 62.1 74.3 11.5 23.0 28.4 11,4 940 0 760.0 123.0 740.0 207.0 67.4 115.8 20.4 32. 5 42.9 20.0 905 0 750.0 121.0 700.0 207.0 67.4 109.7 18.6 32. 5 41. 1 17. 5 1 275 0 940.0 136.0 1,000.0 223.0 69.5 173.2 33.9 43. 5 60.8 35.0 1 180 0 910.0 180.0 895.0 223.0 69.5 152.4 28.2 43. 5 55.7 25.0 1 Based on assumption of 3-percent rate of unemployment. 2 Based on assumption of 4-percent rate of unemployment. NoTE-See text for sources and methods and assumptions used in deriving the projections. Source: U.S. Department of Commerce. Assuming that State `and local government expenditures would equal receipts in 1975, on the national income and product basis, the projected expenditures under assumptions A and B would be about I The National Planning Association has estimated a range in Federal grants-in-aid of between $31 and $43 blllionin 1975 in thelrnationaI~regiOnalecOnOmiC projectionsseries, Report No. 66-1-1. PAGENO="0057" STATE AND LOCAL PUBLIC FACILITY NEEDS 49 $173 billion and $152 billion, respectively. In 1965 total expendi- tures were $72~/~ billion, so that these projections represent an average annual rate of increase over the next 10 years of 9.1 percent and 7.7 percent, respectively; these rates compare with 8.1 percent per year from 1955 to 1965. 4. Projection of Structures and Equipment Expenditures To project State and local government capital outlays realistically would involve an examination of the various types of construction programs and other needs for the period ahead, an appraisal of re- gional and local requirements, and of the ability of State and local authorities to finance the projects. Also, the scope and nature of Federal Government aids to State and local governments would need. to be considered. But even projections based on such thorough con- siderations would still involve making conjectures and judgments ai~ many points. No long-term programs or plans are available for the major categories of capital outlays by State and local governments. In addition to many other unknowns, there is the question as to how fully existing programs and legislation of the Federal Govern-~ ment affecting State and local government public works will be imple.- mented over the coming years and what new programs and legislation might be forthcoming.6 In view of the aforementioned uncertainties, the only other approach to projecting over the longer term is by developing meaningful rela- tions which portray the historical experience, particularly if they have proved to be stable under varying political and economic conditions. Future events can alter the past pattern, but this is the risk involved in any attempt to look ahead, whether short run or long run. This approach, which has been used in making the foregoing projections, is also utilized to project eapital outlays. As already indicated, State and local government expenditures for structures and equipment comprise a fairly large part of their total expenditures. Since the latter are largely dependent upon the re- ceiptsof these bodies, the volume of capital outlays, together with the borrowing required to finance them, tend to move with receipts or expenditures. Chart 5 shows that real capital outlays moved up rather sharply relative to real total expenditures ~ up to 1954. Since then the relative movement has been more moderate. A linear re- gression for the period 1954-65, in bilhons of 1958 dollars, is (5) Capital out1ays~.414+.287 (total expenditures) ~=.994. The relationship is very close over this period and implies that the change in real capital outlays has on the average reflected nearly 30 percent of the change in real total expenditures. To project real capital outlays it is necessary to estimate real State and local government expenditures; this requires a projection of their implicit price. These prices have moved in a close relation OA detailed analysis for the year i970 using the foregoing considerations is available in an unpublished manuscript, "State and Local Finances, Project 1970," prepared for the Federal Interagency Committee on Economic Growth by th~ council of State Governments. 7 Since purchases of goods and services comprise the bulk of total State and local expenditures, the latter were converted to real terms by the use of the Implicit prices for goods and services-see table 1 in the ap- pendix. PAGENO="0058" 50 STATE AND LOCAL PUBLIC~ FACILITY NEEDS CHART ~.-STATE AND LoCAL GOVERNMENT CAPITAL OUTLAYS RELATED TO TOTAL EXPENDITURES [In constant prices] 3C Projection-1975 *A .~ 25 - - 0 70 ~0 ~0 l~ Total State and Local Government Expenditures (Sillions of 1958 dollars) US Up t fC Off fS E with the total GNP impheit prices over the past 15 years-a 1-percent increase in the latter prices have been accompanied on the average by a 1.7-percent increase in those for State and local government ex- penditures. This larger relative advance is attributable to the way prices of services (measured by wages and salaries) are treated in the government sector of the GNP; i.e., no productivity gain is imputed in measuring real government GNP. In the government sector real GNP moves proportionately to the man-hours, whereas in the private economy real GNP reflects the productivity times man-hours. Thus, the implicit price movements in the private sector reflect the effects of productivity changes whereas in the government sector they do not. The relationship of State and local government expenditures implicit prices with those for GNP for the period 1950-65, with each price index on a 1958 base, is as follows: (6) log (State and local government expenditures imphcit price) = - 1.419+1.714 log (GNP implicit price) ~=.985. Equation (6) produces an implicit price index for 1975 of State and local government expenditures of 174 (1958= 100) for assumption A (which involves an average rate of increase in the GNP implicit price of 2 percent per year), and an index of 160 (1958= 100) for assumption B (which involves a rate of increase in the GNP implicit price of 1.5 percent per year). Using these deflators gives a 1975 projection of real State and local government expenditures of $99.5 billion under PAGENO="0059" STATE AND LOCAL PUBLIC FACILITY NEEDS 51 assumption A and $95.2 billion under assumption B, both in 1958 dollars. Thus, applying these estimates of real total expenditures in equation (5) results in projections of real purchases of structures and equipment by State and local governments in 1975 of $29.0 bfflion (1958 dollars) under assumption A and $27.7 billion (1958 dollars) under assump- tion B; these projected real capital outlays imply an expansion over the next 10 years of 65 percent and 57 percent under assumptions A and B, respectively. The increase over the decade 1955-65 was ~58 percent. Of especial interest is the projection of real new construction ex- penditures by State and local governments which, except for construc- tion force account compensation, are included in expenditures for structures. As indicated eailier, these expenditures in 1965 repre- sented 90 percent of total purchases of structures and equipment. The projection of new construction is derived by subtracting from the projection of structures and equipment those of equipment and "other" structures. Equipment purchases in constant dollars have risen along a well- defined upward trend since 1958, averaging $110 million per year. An extrapolation of this trend results in a 1975 projection of equipment purchases of $2.8 billion (in 1958 dollars); in 1965 such purchases amounted to $1 7 billion Subtracting the projections of eqmpment from those of structures and equipment combined, results in projec- tions of structures of $26.2 billion and $24.9 billion (in 1958 prices) under assumptions A and B, respectively. Expenditures for structures excluding new construction 8 (in con- stant dollars) have risen moderately since 1955. On the basis of an extrapolation of the 10-year trend, these purchases are projected at $0.4 billion (in 1958 dollars) for both the A and B assumptions; the 1965 figure was $0.3 billion. As a result, new construction of State and local governments is projected in 1975 at $25.8 billion for the A assumption and $24.5 bfflion for the B assumption, in terms of 1958 dollars. These projec- tions imply a growth over 1965 of 65 percent and 57 percent, respec- tively, for the A and B assumptions. For certain purposes total capital outlays, excluding residential building construction, are desired, since the latter is affected by special factors. State and local government residential building construction has shown erratic movements over the past 15 years, with no discern- ible trend either in constant or current dollars. With this pattern in mind and in the absence of a detailed analysis of the factors underlying the movements of residential building construction, the 1975 projection was placed at $0.5 billion in both current and constant dollars-equal to the average of each series for the years 1950-65. This yields pro- jections of new construction excluding residential building of $25.3 billion and $24.0 billion (1958 dollars) for assumptions A and B, respectively. The foregoing projections have been derived in constant dollars. The current dollar projections are derived from these by the use of the assumed GNP implicit prices and derived relations of the implicit prices of structures and of equipment to the GNP implicit prices in recent_years. Since 1959 the implicit prices of State and local govern- 8Oonsists of net purchases of existing structures less construction force account compensation. PAGENO="0060" 52 STATE AND LOCAL PTJ]3LIC FACILITY NEEDS nient structures have risen sharply relative to the implicit GNP prices- a 1-percent rise in the implicit GNP price has on the average been accompanied by a 1.6-percent rise in the implicit price of structures- mainly reflecting the relatively faster pace of construction prices generally. On the other hand, in this same period the implicit prices of equipment purchases by State and local governments have shown only a slight rise relative to the movement of the implicit GNP prices. Applying these price adjustments to the constant dollar State and local government capital outlays converts the projections to current dollars. The following table summarizes the 1975 projections in both constant and current dollars ProjectiOns of structures and equipment purchases of State and local government, 1970 and 1975 . ~ ~ Projection, 1970 Actual, 1965 Assump- Assump- tion A tion B Projection, 1975 Assump. tion A Assump- tion B Structures and equipment (billion 1958 dollars) Structures New construction Addendum: Residential building Other'.~. - Equipment Structures and equipment (billion current dollars)_. Structures New-construction Addendum: Residential building Other' - 17.6 15.9 15.6 .3 .3 1.7 19.9 18.1 17.8 .4 .3 L 8 23.2 20.9 20.6 .5 .3 2.3 30.4 28. 0 27.6 .5 .4 2.4 22.6 20.3 20. 0 .5 .3 2.3 29. 0 26.6 26.2 .5 .4 2.4 29. 0 26.2 25.8 .5 .4 2.8 44.7 41.7 41.2 .5 .5 3.0 27.7 24.9 24.5 .5 .4 2.8 39.6 36.6 36.1 .5 .5 3.0 Equipment I Includes net purchases of existing structures less construction force account compensation. The latter item is deducted here because it is included in compensation of employees of State and local governments in the national income and product accounts N0TE.-In July 1966-subsequent to the time when the calculations above were made--the estimates In the national income and product accounts were revised for the years 1963-65. While the upward revisions of GNP and personal income in 1965 amounted to $5 000 000 000 and $4 000 000 000 respectively the effect of these changes on the above projections is relatively small; for example, projections of State and local capital expenditures would be raised by about $500 000 000 in 1970 and 1975 Source U S Department of Commerce PAGENO="0061" STATE AND LOCAL PUBLIC FACILITY NEEDS 53 APPENDIX Regression Equations and Basic Data Used in Deriving the 1975 Projections of State and Local Government Expenditures for Structures and Equipment The following model Was used as the basis for the projections, with all data on a national income and product accounts basis: R2 Period (1) E=R+U (2)R=PT+PTT+OT-f-FG (3) log PT=-3.507+l.679 log PT (4) log PrT= .353+.793 log WS~ (5) WSE=WSEPXP (6) log WSEp=2.341+.029t (1=0 for 1960) (7) OT=-7.18+.0533 GNP (8) log FG= .911-k0499t (t=0 for 1962) for Assumption A FG=9.15+1.15t (t=0 for 1963) for Assumption B (9) SEQc=Sc+EQc (10) SEQc=.414-f-.287Ec (11) Ec=E~IB (12) logIB=-1.419-I-1.7l4logIGNp (13) EQc=1.458-kllit (1=0 for 1961) (14) Sc=SEc-EQc (15) NCc-Sc-Oc (16) Oc~.l68+.0l8t (1=0 for 1960) (17) log Is-1.267-~-l.624 log IGNP (18) log JEQl.632+.l85 log IGNP (19) S=ScXI~ (20) EQ=EQcXIEQ (21) SE=S+EQ (22) NC=S-O (23) O=.165+.019t (1=0 for 1960) 0.992 . 9995 . 998 . 996 . 997 . 995 .994 .985 .991 .611 .947 . 728 60-65 50-65 56-65 51-65 60-65 62-65 54-65 53-65 58-65 55-~65 59-65 58-65 . 626 56-65 The notations used in the above equations follow: (1) E State and local government expenditures, in billions of currentdollars. If State and local govermnent receipts, in billions of currentdollars. U State and local government surplus or deficit, in billions of current dollars. (2) PT State and local government personal taxes, in billions ofdollars. PrT. State and local government property taxes, in billions of dollars. OT State and local government taxes other than personal and property, in billions of dollars. PG Federal grants-in-aid to State and local governments, in billions of dollars. (3) Fl National personal income, in billions of dollars. (4) WS~ State and local government wages and salaries for education, in billions of dollars. (5) WSEP State and local government wages and salaries for education per schoolage person (ages 5-21, inclusive). P Schoolage population (ages 5-21, inclusive). (7) GNP Gross national product, in billions of dollars. (9) SEQo State and local government purchases of structures and equipment, in billions of 1958 dollars Sc State and local government purchases of structures, in billions of 1958 dollars. EQc State and local government purchases of equipment, in billions of 1958 dollars. (11) Ir Implicit price deflator for State and local government expenditures, represented by the implicit price deflator for goods and services purchased by these governments (1958=100). (12) IGNP Implicit GNP price deflator (1958=100). (15) NC0 State and local government purchases of new construction, in billions of 1958 dollars. Oc State and local government purchases of "other" structures than new construction, in billions of 1958 dollars. (17) I~ Implicit price deflator for State and local government expenditures for structures (1958=100). (18) IEQ Implicit price deflator for State and local government expenditures for equipment (1958=100). (19) 5 State and local government expenditures for structures, in billions of current dollars. (20) EQ State and local government expenditures for equipment, in billions of current dollars. (21) SE State and local government expenditures for structures and equipment, in billions of current dollars. (22) NC State and local government expenditures for new construction, in billions of current dollars. (23) 0 State and local government expenditures for "other" structures than new construction, in billions of current dollars. PAGENO="0062" CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CC Co CO CO CO EE~: CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO 4CC CC CCC) CCC) CC CC CCC CC CCC CC CCC CCC CCC CCC )~ ~ C~ CCC CC ~ CC C') CCC CO C) CCC CCC C~ CCC') CC CO C) -C `p (I) O CJ2~ CCC CC ~ o ~ 00 *CC CC C 0 CC CC CC CCC 0~ CC) 0 CCC .0 CC :: 9Cr.) CC C") .4P CC P~-CCCCCCCCC')') C) CC CO CCC C') C) CC CCC CO CC CCC) CC C') C) CCC CCC :i~~ C i ~ ~ C CCC LCCj CC~ (DCC CCC) CC CCCCCCCCCCCCCCCCCC C C) CCC ~ CC CC CC CCC CO C) -I CCC CCC ~ CC CCC) C CI) O C) C) ~0 0-CC U) ~ E CD a ~ C CD 0CC CCCC 0~ C 0 0 0 0) CD CC 0) CD 0 (CC 0 CC C 0 CC 0) (CC H ~ti C') CC CO CC CC CC CC CC CCC) CC ~ ~ CC-CC CC CC CC CC CC C') C") C") C") CC-.) C") CC CCC) CC C) CC C") CC) CC CC ~ C) CC CC CC -CCC CC ~ ~ CC CC CCC') CC CCC CCC) C) -CCC CC CC CC CC CC CO CCC CC-CC') C') CCC") CCC) C') CCC CCC) CD ~ C.n 1~i 0 a ci a a ITi U) CC~ ~ ~f~: COC)CCCC~CC COC') COCOCCCCCCCCCCCCCC~C~CC")CCCC C w LII 0 0) 0 (CC 0 0) (CC (CC CCC -~ -4 ci (CC 0) .4 (CC CC ~0 0') CCC 0 0) z 0) CC CCC) ~ ~ ~ ~ ~ CC CCC) CC CCC) CO CO CO -CCC -C -CCC -C C') CCC) -C C') CC CC CC ~ CC CO CC CC CCC CC) C) CO CC CC CCC CC) CC ~ CC CC-C CO 0 CC 0 C) 0. 0 C) CC-C -C CCC) CC ~ ~ CCC) CCC") C') C") C') C') C') CCC) C-DC) CC-CC')-) CO CC ~ CO CCC') CO -C CCC) C') CC-I C~ ~ C') CC C') C') CC CC CCC) C CC CC-C C CC) CCC C ~ CC CCC') CCCCCCCCCCCCCCCCCC C CCC) -C -CCC ~ CC C') CC CC CO CO CO DCCC) CC CCCC C~ ~ LII ~C) 0 CD CD ~O - CCCC C')CCppC)~)~ CC C~ CCC) CCC') ~ CO CC CC) C CC CCC) CC CO C) CO ~ CI) CC CD~ CDI DC~ B CC CCC) CCCOCCCOCCCQCC~CCCQC(')QOQCCC(')4 0)0 ~ 2~E ~ PAGENO="0063" CHAPTER 2 Material Requirements for State and Local Public Works, 1946_75* I. NEW CONSTRUCTION AND MATERIALS REQUIREMENTS The value of building materials consumed in State and local con- struction rose ninefold. between 1946 and 1965. Over this period, the value of new State and local construction increased only sixfold.' But, the significant factor in the upsurge of total consumption was the physical volume (constant dollar) increase in State and local construc- tion of 300 percent. Viewed in terms of the proportion of total State and local construc- tion expenditures involved, building materials usage rose from 35 to 50 percent in these years. This increase in the relative importance of materials expenditures reflects advances in laborsaving technology, reductions in onsite labor requirements due to the increased use of prefabricated materials, and the faster growth of the more material intensive types of construction. It is not merely a reflection of price changes. The backlog of postponed construction projects in the immediate post-World War II period set the stage for an upsurge in both private and publicly owned construction. During the war, new construction had almost come to a standstill, but maintenance and repair work of necessity continued to be strong. This work, however, while provid- ing a limited market for building materials products, at the same time provided a base for maintaining capacity which was instrumental in fulifiling the materials requirements for new construction immediately after the war. Full capacity production levels were reached very quickly in the postwar period in most building materials industries. Significant price increases for many products were the inevitable result, especially for materials which were heavily dependent upon the boom- ing residential market. Capacity-price pressures prevailed for some industries until the end of the Korean conflict in 1953, but since that time materials production has generally not been pressing capacity and price movements have not been primarily associated with this factor. A. COMPONENTS OF NEW CONSTRUCTION GROWTH In the first post-World War II year, 1946, the physical volume of new construction, both private and public, was more than double that of each of the preceeding 2 war years. Federal, State, and local con- *Prepared in the Business and Defense Services Administration, U.S. Depart- ment of Commerce under the direction of Aaron Sabghir, Chief Economist, Build- ing Materials and Construction Industries Division, by John R. Cambern and Phyllis A. Scott, staff economists, with minor editing by committee staff. 1 For purposes of this study, State and local construction does not include public housing, which, because of many special factors, lends itself to separate analysis. The State and local construction discussed in this chapter includes, however, federally aided as well as nonfederally aided work. 55 PAGENO="0064" ~56 STATE AND LOCAL PUBLIC FACILITY NEEDS struction constant dollar outlays in 1946 were about 15 percent of total new construction. Federal Government construction, however, dropped off somewhat with demobilization, but State and local outlays followed the pattern of private construction and many categories showed an enormous spurt between 1945 and 1946. For example, the value of public educational construction activity in constant dollars jumped by almost 50 percent, highways by 75 percent, and sewer and water by more than 75 percent, in only 1 year's time. All of these are primarily owned by State and local governments. One category which not only failed to show a construction spurt but actually dropped in real activity was hospitals where many projects appear to have encountered difficulties. By 1953, the first post-Korean year, the public sector had grown to ahnost 30 percent of total new construction Although droppmg slightly in the next few years, smce 1958 the pubhc sector proportion remained relatively steady at 30 percent. The physical volume of all new public construction by 1965, was about 250 percent above that of 1947. State and local construction activity, up by about 300 per.. cent was mainly responsible In general, in the first few years after World War II, the most rapid period of growth for most types of State and local construction expenditures reflected a large backlog of unmet public works needs This was an inheritance from the prewar depression years as well as from the restrictions of World War II. The stimulus due to the introduction of new programs of Federal aid was taking effect while State and local governments were showing major improvements in their financial condition Between 1946 and 1949 Federal aid about doubled Thus, Hill-Burton hospital construc- tion assistance funds, which became available beginning in 1947, stimulated hospital construction to become one of the fastest growing categories of State and local public facilities State and local hospitals showed an estimated fivefold increase between 1947 and 1949 Educational construction, even without a comparable stimulus from Federal aid, increased fourfold between 1947 and 1949 and then began to slow down as the wartime backlog was partially eliminated How- ever, the growmg school population as i~ ell as a high rate of population mobility, and housmg development in suburban areas contmued to stimulate school buildmg By the midfifties expenditures reached a physical volume peak (not surpassed until 1965) which ~ as more than double the 1949 rate of outlays Ai~ erage annual giowth over the 20-year period for new public educational facilities ~ as the highest among all State and local construction categories (table 1). PAGENO="0065" STATE AND LOCAL PUBLIC FACILITY NEEDS 57 TABLE 1.-State and local construction activity, 1947-65 1 Activity (millions of 1957-59 dollars) Average annual rate of increase (percent) 1947 1965 Total State and local Nonresidential building Educational $3,279 $13,396 8.2 635 4,351 - 11.3 363 75 57 140 3, 042 397 414 498 12. 5 9. 6 11. 6 7. 3 Hospital and institutional Administrative and service Other nonresidential Nonbuilding construction Sewer Water Highways .Allother 2, 644 9, 106 7. 1 329 286 1,631 398 954 699 6,543 910 6.1 5. 1 8.0 4.7 1 The statistics for 1947 and 1965 are prepared by Business and Defense Services Administration on a com- parable basis by using the "old" Bureau of the Census series which terminated with 1965. The growth of highway construction, traditionally a large expendi- ture item for State and local governments, was stimulated in the first decade after the war by the ABC Federal-aid program under which the Federal Government contributed 50 percent of funds. But, this growth tapered off by the rnidfifties, setting the stage for the new Federal Interstate Highway program under which the Federal Government provided 90 percent of funds. The influence of the new 41,000 mile program was not clearly evident until 1958, when constant dollar expenditures for highways rose 15 percent above 1957. For other types of State and local construction there was also sub- stantial growth from 1946 to 1949 as immediate postwar needs were dealt v~ith. Dips in physical activity took place in the early 1950's, when State and local governments were facing difficulties getting voter approval for financing many projects. In the early 1960's, a new Federal-aid program to aid waste treatment plant construction resulted in a resurgence of growth for this category. The relative affluence of State and local governments as compared to pre-Worid War II years had a favorable influence on the growth rate 1or adminis- trative and service buildings.2 B. CHANGING MATERIAL REQUIREMENTS OVER TWO DECADES Between 1947 and 1965 the proportion of total State and local construction expenditures spent for materials increased from 35 to 50 percent~ (table 2). Seven of the eight major State and local construction categories showed a rising proportion of materials outlays. The eighth category, administrative and service buildings, for reasons not entirely clear, showed a slight decline.3 2 This category includes general office buildings, courthouses, State capitals and city halls, jails and peni tentiaries, police stations and firehouses. 3 The information on materials usage for this State and local category is based on Federal office building construction which may not be typical. 7O-132-----66-vol. 1-5 PAGENO="0066" 58 STATE ~1 LOCAL PUBLIC FACILITY NEEDS TABLE 2.-Relationship of selected materials to State and local construction in 1947 and 1965 Percent of State and local construction outlays i 1947 1965 Totalmaterials2 Metalproducts2 Fabricated structural steel Plumbing Heating and cooling Metal doors, windows and trim Reinforcing steel Lumber products Miliwork Stone, clay, and glass products Cement Concrete products Structural clay products Aggregates (rock products) Bitumen (in highways) Asphalt (ready-mix) Paint Roofing Electrical equipment, fixtures, and wiring devices Pipe23 35.0 - 50.0 10.0 17.0 1. 8 .7 1.0 .3 2.3 3. 3 1.3 1.9 .9 3.3 2.7 .7 2.9 .9 14. 0 17. 0 37 2.8 1.4 5.3 21 6.4 1.3 5. 1 2.2 .9 .1 ~ . 7 .9 2. 0 .2 ~ 2. 5 4.0 5.4 Iron Steel Concrete 1.5 .7 1.0 . 4 .3 1.3 1.1 1.8 . 4 .5 Asbestos cement Clay 1 Based on the value of construction materials consumed in all State and local construction measured in current dollar values. 2 Also includes materials not listed in this table. Pipe categories are duplicative of othercategories. 3 Total pipe and tile component types of pipe listed below are those used in nonbuilding constructiom only. This usage accounts for the overwhelming majority of pipe in State and local construction. Source Prepared by Business and Defense Services Administration Highway construction, which accounted for half the volume of all State and local construction in both 1947 and 1965, is the dominant factor in the increasing overall importance of materials in State and local construction expenditures. For highways the materials share increased from 27 percent in 1947 to 47 percent in 1965. This sub- stantial shift reflects primarily a decline in the importance of on-site wages. Significantly, highway construction in the past two decades had very large increases in labor productivity due mainly to the impact of new road building and earth moving equipment. Higher standards in highway design and construction, which call for more overpasses and better quality pavement, have also strongly influenced materials consumption. Steel usage was particularly affected. Thus, over the span of about 20 years, the use of steel products rose from 5 percent of total costs of highway construction to 13 percent. Similarly, the share of stone, clay, and glass products rose from 14 to 20 percent. A second major factor in the increase from 35 to 50 percent of the materials share in State and local construction is the higher growth rates since 1947 experienced by the more material intensive nonresi- dential buildings category. The materials share in recent years was about 55 percent of total costs for that category as compared to 48 percent for nonbuilding construction. The more materials intensive PAGENO="0067" STATE AND LOCAL PUBLIC FACILITY NEEDS 59 construction had annual growth rates varying from 7 to 13 percent, whereas the nonbuilding categories had growth rates varying from 5 to 8 percent. A third element boosting the share of material costs for construction in general over the two decades is the increasing use of off-site fab- ricated materials which in effect shifts labor costs from the construc- tion site to the factory. For example, concrete products rose con- siderably in importance in State and local construction while its raw materials, cement and rock products, declined in importance. In highway construction specifically, there was a relative increase in the use of ready-mix asphalt, and a decline in the share of bitumens which are mixed on site. Another example involves metal doors, windows and trim, whose share of total State and local construction outlays tripled between 1947 and 1965, as increasing substitution for lumber products took place. Finally, as in the case of highways, the trend toward higher stand- ards and improved design in other types of construction has also been partly responsible for the increasing relative importance of building materials. Expenditures on electrical equipment, fixtures and wiring devices have been particularly affected. The share of total ex- penditures for these products has increased more than three times since 1947, rising from 0.7 percent to 2.5 percent. Similarly, the share of plumbing materials almost doubled during the postwar period, reflecting the inclusion of more laboratories and drinking fountains, and the increasing pipe requirements of new buildings resulting from more one-story spreadout designs in such fast g'rowing buildings types as schools and hospitals. While on an overall basis materials expenditures were increasing their relative importance, some major building materials and products could not maintain their competitive positions during the past 20 years. Thus, in the case of lumber products, usage declined from about 3 to 2 percent of total construction outlays. For education, the largest building category of public construction, lumber usage declined since 1947 from 8 to about 5 percent. This shift was mainly associated with new trends in the design of schools. New designs also explain another important shift, from brick to concrete products in expenditures for schools. Brick usage declined from 5 to 2 percent of school outlays. The greater popularity of concrete products, more than doubling in usage over the years for all types of facilities is associated with the decline in brick and lumber usage. Finally, a slight decline in materials outlays occurred in iron pipe. This reflects a shift to other types of pipe particularly for water facilities construction. C. FUTURE MATERIAL NEEDS OF PUBLIC WORKS The projected increase of from 57 to 65 percent in the physical volume of State and local construction in 1975 over 1965 ~ does not involve the same disparity in growth trends between more material and less material intensive types of construction as during the 1947-65 period. The overall materials share in State and local construction of 50 percent will probably not increase by more than a few percentage 4 This range relates to the alternate projections of constant dollar State and local construction activity presented in ch. 1. PAGENO="0068" 60 STATE AND LOCAL PUBLIC FACILITY NEEDS points in the next decade. This relatively small increase will result mamly from design changes and a continuation of the trend toward off-site prefabrication. These developments as well as the change in the mix of the various types of construction involving the somewhat lesser importance of highway construction, will produce varied effects on the consumption pattern of individual materials. Among the various building materials, fabricated structural steel, lumber prod- ucts, bitumen, and rock products should decline from 1965 proportions (table 2). Metal doors, windows and trim, concrete products, elec- trical equipment, and pipe (particularly concrete) should rise. Other materials should remain relatively stable. With regard to changes in the mix of construction, the greatest rate of increase will probably be in hospital and insitutional construction, spurred by the demands of medicare and other health programs. Administrative and service building construction will also have a higher than average growth rate as expenditures continue to expand for office, fire, police, park, and recreational buildings. While the growth rate of new educational facilities is likely to be considerably below that of the 1947-65 period when the backlog of needs was particularly large, it is still expected to exceed the average growth rate for State and local construction as a whole. The growth of these building types of construction will particularly increase the proportion of total construction expenditures devoted to plumbing, heating, electrical equipment, and metal doors and trim since they are heavy users of these materials. The relative share of expenditures for fabricated structural steel products will be particularly influenced by the growth of administrative and service buildings construction which because of the office building component has a considerably higher usage factor for this material than does other construction. Some types of materials, such as cement, concrete products, pipe and aggregates will be unfavorably affected by the higher growth rate in nonresidential building construction since for these meterials they are inherently comparatively low users. The growth of sewer construction is expected to be second only to hospitals. This growth is related to the increasing concern for the need for greater control of waste disposal and involving the expansion of Federal aid programs to State and localities for sewer construction. The rapid growth of sewer construction will tend to offset the effects of the lower usage of concrete in nonresidential buildings, since such usage in sewer is double that of the average for all State and local construction. Water construction is also expected to show an above average rate of growth, and like the sewer category will benefit from increased Federal aid. The major implication for materials use is in pipe, since sewer and water construction require from four to five times as much pipe per dollar of total expenditures as in all State and local construction. Highways is the only category of State and local construction which is expected to have a lower than average growth rate. It will con- stitute a lower proportion of State and local construction expendi- tures. The average annual rate of increase for highways in the next decade may drop to less than half of the 8-percent average rate of growth for 1947-65. The stimulus of extensive Federal aid for high- ways will probably continue as in the past decade, but the satisfaction of other public works needs will receive greater priority. Nevertheless, PAGENO="0069" STATE AND LOCAL PUBLIC FACILITY NEEDS 61 in 1975, highway construction will still account for the largest single share of State and local construction outlays, about two-fifths of the total in constant dollars. The rapid rise from 27 to 47 percent in the materials portion of highway expenditures experienced in the past two decades is expected to level off. A rapid rise will, therefore, not be a strong factor in shaping the overall material consumption pattern for State and local construction as in the past. In the next decade, increases in construction productivity due to advances in equipment technology are not likely to be as significant as in the past 20 years. The use of reinforcing bars, cement, aggregates, asphalt, and bitumen, those materials heavily used by highways, will reflect the relatively slower growth of highway construction by accounting for lower shares of total costs than at present. D. THE DEPENDENCE OF BUILDING MATERIALS INDUSTRIES ON STATE AND LOCAL CONSTRUCTION New construction activity by State and local governments in 1964 accounted for about one-fourth of all new construction activity. However, for some building materials there was considerably more than one-fourth dependence by supplying industries on State and local construction (table 3). Furthermore, during the past 20 years, many industries became increasingly dependent on State and local construction, because of its above average growth rate. TABLE 3.-Share of shipments for new Stafe and local construction, 20 selected materials in 1964 [Percent of total shipments~ 1 50-percent or more 30 to 49 percent Bitumens Vitrified clay pipe Cast iron pipe and fittings Concrete pipe Portland cement Steel reinforcing bars Aggregates (rock products) 5 to 14 percent 15 to 29 percent ~vIetal doors, windows, and trim Miliwork Fabricated structural steel Iron and steel products Heating equipment Steel pipe Concrete products Structural clay products Less than 5 percent Stone, clay, and glass products Electrical equipment, fixtures and wiring devices Lumber products Paints 1 Based on the value of shipments (fob. plant) for new State and local construction, related to the value of total shipments, except for some materials used in highways which are based on physical ratios (cement, reinforcing steel, aggregates, and bitumens). Source: Prepared by Business and Defense Services Administration. The four materials for which State and local construction in 1964 consumed more than half of the output, are all primarily related to nonbuilding construction. The needs of highway and sewer construc- tion accounted for more than half of the shipments of concrete pipe, and with water construction accounted for more than three-fifths of all shipments. Sewer construction alone provided the market for about two-thirds of vitrified clay pipe shipments. Nearly half of all aggre- `At the time this analysis was made, 1964 was the latest year for which building materials industries data were available. PAGENO="0070" 62 STATE AND LOCAL PUBLIC FACILITY NEEDS gates and reinforcing steel was consumed for pavement, bridges, drainage structures, and pipe in highway construction. In addition, aggregates were also extensively used for highway subbase. Available statistical data do not make possible the determination of the proportion of shipments consumed in 1947 by State and local construction for most materials. Among the cases where comparisons between 1947 and 1964 could be made, there is only one instance where the proportion of total shipments was lower in 1964-steel pipe. This decline reflects a shift to concrete pipe for State and local use while a greater use of steel pipe materialized in private pipeline construction and in other private uses. Cement, bitumens, reinforcing and structural steel are products which became increasingly dependent on State and local construction during the past two decades. This trend was particularly influenced by highway construction which has accounted for one-half of the constant dollar value of all nonfederally owned public works, except housing. Whereas highways consumed about 10 percent of all cement shipments in 1947, in more recent years about one-fourth of all ship- ments went to highways. Reinforcing steel for highway construction represented about one-fifth of all shipments of this product in 1947, but approached one-half of all shipments by the 1960's. Not only has there been a steady trend toward the use of more reinforced concrete in highways but higher standards have called for more use of rein- forcing steel per unit of concrete. The use of more bridges and overpasses for highways since 1947 also nearly doubled the 15 percent of total shipments of fabricated structural steel. The dependence of bitumen on new highways is not only due to the influence of higher standards but also reflects a decline in highway maintenance and repair work relative to new construction. Thus, whereas in 1947 new highways accounted for about a fifth of bitumen shipments, by 1964 this proportion almost doubled. The dependence of materials industries on State and local construc- tion by 1975 is not likely to change markedly from the present. Since the rate of growth in expenditures for State and local construction is expected to be within the range of expectations for all construction, it will continue to account for about one-fourth of total new construc- tion expenditures as it has for the past 8 years. Furthermore, technological and productivity changes in State and local public works will probably be similar to those in the private and Federal sectors so that shifts toward certain materials will be similar in all sectors. One area where the dependence pattern might change because of factors outside the construction industry is iron and steel for which demand depends more on industries other than construction. Assuming no significant shifts in other uses, it is possible that a smaller portion of steel output will be used for construction, particularly in the State and local sector. II. BUILDING MATERIALS AND CONSTRUCTION COSTS A. CAPACITY AND PRICE TRENDS In the immediate postwar period the lifting of price controls and the rush to fill the backlog of unmet construction needs of all types, private and public, sparked a rapid increase in the prices of building materials. PAGENO="0071" STATE AND LOCAL PUBLIC FACILITY NEEDS 63 On an overall basis building material prices increased by more than one-third between 1946 and 1947. This was a maj or factor in the upward spiral of construction costs. Plants producing building materials were operating at or very near capacity. Even these addi- tions to capacity could not keep up with the sizable new construction growth taking place. The Korean conflict of the early 1950's put a temporary damper on capacity expansion and prices of many materials continued to rise even during the period of price controls. The midflf ties saw an upsurge in plant expansion which greatly increased capacity for most building materials industries, still operat- ing at capacity levels. At about the same time some of the newer materials such as aluminum and prestressed concrete began to make inroads into the market of traditional products like lumber and brick. These factors contributed to halting upward price movements. S In the early 1960's many building materials industries were oper- ating well below optimum capacity levels despite the continued growth of new construction. The roofing industry, for example, was operating only a little above half capacity. The cement industry which had tooled up in response to the soaring prospects of the new interstate highway program, expanded very rapidly in the late 1950's and early 1960's. This response seems to have been somewhat greater than was warranted by demand considerations although the need for cost cutting through modernization was an important aspect of plant expansion. Consequently, in recent years cement plants have been generally operating at a level of about three-fourths capacity (chart I). Its price movements effectively depict the imbalance between output and capacity. CHART I. CAPACITY UTILIzATIoN AND AVERAGE PRICE OF PORTLAND CEMENT, 1947-1964 ~oo 7$ I I I 1 _4_____I J B. EFFECTS OF PRICE CHANGES ON CONSUMPTION PATTERNS AND CONSTRUCTION COSTS Price trends for individual building materials, varied greatly during the 20-year period, but because of the dominance of private construc- P~rcer~ o~ capacity utiiize~. Price Inaex (1957-59=100) /4'7 4~~I ~99 ~ ~ ~ 40 ~i %~. ~ Source: Office of Business Economics and~ Bureau o~ La1~or St~-~istics. 1 1 1 1 I I 1 PAGENO="0072" 64 STATE AND LOCAL PUBLIC FACILITY NEEDS tion in affecting total demand, they cannot generally be directly re- lated to changing use patterns in State and local construction. But the substitution of more highly fabricated materials for the purpose of minimizing onsite labor costs and the use of new, inherently less. costly materials in all types of construction were factors which in- fluenced price trends. The average wholesale price rise for all construction materials during 1947-65 was just over 40 percent. However, it should be noted that those materials which are predominantly dependent on the State and local construction sector (table 3) did show above average pric& changes during the period (table 4~, reflecting the more rapid growth of this sector. Only in the case of structural steel did price rises probably have an. impact on its consumption pattern. During the postwar period the prices of structural shapes more than doubled. This contrasts sharp- ly with the price movement of a competitive material, concrete, th~ price of which increased by only about one-third. Although the value' of structural steel increased as a share of State and local construction. expenditures (table 2), the steel tonnage consumed per constant dollar of construction activity was less in 1965 than in 1947. In order to put construction cost developments in the State and. local area in perspective it is necessary to sharply distinguish between the divergent cost trends of highways, and those of all other public works. Because of the precipitous drop-off in unit costs of highway con- struction between 1948 and 1950, the overall average construction cost for State and local facilities declined. This differed sharply from the cost experience for all new construction in this 2-year period. Cost decreases from 1948 to 1949 reflected the effects of the initial postwar recession. In the 1949 to 1950 recovery period the cost decrease for highways was probably associated with increases in productivity rather than with a decline in the price of materials. Unlike other types of construction, between 1950 and 1959, highway costs were subject to sharp cyclical movements, possible due to the changing mix within highway construction. Since 1960, however, highway cost trends have not differed from overall construction costs (chart. II). Prices of materials used for highway construction were stable until 1965, as were the prices of most other types of building materials. During the early 1960's materials prices going into other than highway construction were not of primary importance in the increase in construction costs which reflected mostly rising wages. The prices of all construction materials from 1961-64 were slightly below the 1957-59 level. This was a period of more than adequate capacity, rising productivity, and strong competition from new products and. materials. Actually the prices of some materials such as plywood, aluminum, insulation materials and asphalt roofing dropped markedly and helped to counterbalance the strong forces which were pushing construction costs upward. The cost of educational and hospital building saw a rapid, almost 90 percent, increase over the 20-year span, but this cannot be primarily ascribed to material price changes. The only cost stable years over this period were 1948-50, during which building materials prices, except for steel and concrete, dropped. These products, which ac- PAGENO="0073" STATE AND LOCAL PUBLIC FACILITY NEEDS 65 ~count for about 20 percent of total expenditures for building construe- tion help explain why overall costs did not drop. Another important material in school and hospital construction, lumber, which accounts for 5 to 10 percent of total construction costs had, aside from the early pos.twar years, relatively stable prices during the whole 20-year period. TABLE 4.-Construction material price changes, 1947-65 1 RAPIDLY RISING PRICES 2 Total percent change 1947-65 Structural steel shapes +143 Wire nails +115 Reinforcing bars +107 Asbestos cement shingles +102 Galvanized sheets +94 ~Clay sewer pipe +77 Steam and hot water heating equipment +75 ABOVE-AVERAGE PRICE INCREASES 8 Window glass +72 Portland cement +66 Plaster, base coat +65 Building brick +62 Brass plumbing fittings +62 Millwork +61 Concrete pipe +60 Building wire +56 Concrete ingredients +54 Selected hardwood lumber +46 Building paper and board +44 Gypsum products4 +44 Sand, gravel, and crushed stone (rock products) +43 BELOW-AVERAGE PRICE INCREASES Plumbing fixtures and brass fittings +41 Gypsum lath +41 Clay tile +40 Gypsum wallboard +38 Insulation board +38 Paint +37 Concrete products +35 Metal doors, sash and trim +33 Enameled iron fixtures +30 Douglas fir lumber +29 Vitreous china fixtures +25 Concrete building block +25 Plate glass 4 +24 Heating equipment +17 Prepared asphalt roofing +16 Southern pine lumber +15 Warm air furnaces +11 Asphalt floor tile +9 DECLINING PRICES Plywood4 Insulation materials -6 Softwood plywood -8 Nonmetallic sheathed cable -8 I Based on Bureau of Labor Statistics, Wholesale Price Indexes. 2 The prices of these materials advanced more rapidly during the period than average construction costs which were up 73 percent. 3 The average increase for all construction materials was 42 percent. 4 This is a group index. Some of the component materials are also given in this table. PAGENO="0074" 66 STATE AND LOCAL PUBLIC FACILITY NEEDS CHART II. CONSTRUCTION COST INDEXES, 194E~-1965~ [1957-59=1GO] % 1001 75 5o _____ 25 19116 148 50 52 511 56 58 60 62 611 Source: Bureau of Public Roads, Bureau of the Census, and Business and Defense Services Administration. Sewer and water facilities showed a similar 90 percent increase in construction. By far the most important materials for this type of construction, produced by the stone, clay, and glass industry groups, are concrete and clay pipe. Their prices soared by 61 percent and 77 percent, respectively. Large increases in the price of steel products, which account for about 8 percent of total expenditures for these facilities, was also an important aspect of rising construction costs. III. SIGNIFICANT TRENDS IN BuILDING MATERIALS INDUSTRIES Output of most building materials industries over the past 20 yeais has been primarily geared to the needs of private cOnstruction. How- ever, the major suppliers of rock products and some types of pipe depend mostly on publicly owned nonbiiilding types of construction. The overall growth patterns of building products industries have reflected the substitution of new products for traditional materials as well as the growth and mix changes of construction activity. The impact on a large group of materials differs widely, varying fiom gains of over 10 percent to declines of 10 percent in average annual change in output (table 5). An example of product substitution is the dis- placement of radiators and convectors in favor of warm air furnaces. In the case of brick, an average growth rate of 1.7 percent a year occurred despite the substitution of other products such as concrete foi traditional brick uses, mainly because of the overall increase in construction activity during the 20 years. Technological change in construction as a whole since World War II may be characterized best as a wave of change which has been dubbed the "industrialization of building." As a craft-based and geographi- cally fragmented industry, changes in construction technology have in general been initiated from scientifically based external industries, State and L~ca1 Construction Highway Construction ~ All Construction H1 I i_i rLL I I I II 1 ! t I II[~~ PAGENO="0075" STATE AND LOCAL PUBLIC FACILITY NEEDS 67 in many cases the construction materials producing industries. In this connection, perhaps the most striking trend is the relative de- emphasis of on-site craft activities in favor of off-site fabrication in industrial plants. Many new factory-based power tools now produce prefabricated building products and components which formerly were made and put in place with the `use of hand tools directly at the con- struction site. Prefinishing has increased markedly. In the case of aluminum alone, prefinishing wa's estimated to have tripk.d between 1957 and 1961. Thus major changes in construction productivity both off and on the site have taken place. TABLE 5.-Average annual rates of change in production of selected construction materials 1 (1948-63) Material Unit of measure Production 1948 1963 Average annual percent change FAST GROWTH (5 PERCENT OR MORE) Douglas fir (softwood) plywood Air-conditioning systems, commercial (excluding heat pumps). Sand and gravel Floor and wall tile, glazed and un- glazed. Galvanized sheets Asphalt MODERATE GROWTH (0-4.9 PERCENT) Warm air furnaces Concrete reinforcing bars Cement Gypsum, wallboard, including lath - Water heaters, gas Waterciosets Insulating board and hardboard Lavatories, total Flushtanks, vitreous china Fabricated structural steel Caleined gypsum Cast iron soil and pressure pipe and fittings. Paint, varnish and laquer Construction paper and board Bathtubs, total Asphalt shingles Brick, common and face Glass, sheet (window) Clay sewer pipe and fittings, vitrified.... Steel line pipe Facing tile, glazed and unglazed (hollow). Oak flooring DECLINE Lumber, total Water heaters, electric Asphalt roll roofing Gas-fired direct heating equipment Ponderosa pine doors Insulated sidings, all types Structural clay tile Asphalt siding Radiators and convectors Millions of square feet Thousands Millions of short tons Millions of square feet Thousands of short tons Millions of barrels Thousands Thousands of short tons IJillions of barrels Millions of square feet Thousands do Thousands of short tons Thousands do Thousands of short tons do Millions of gallons Thousands of short tons Thousands Thousands of squares Millions of standard brick Thousands of boxes of 50 square feet. Thousands of short tons do Millions of brick Millions of board feet Billions of board feet Thousands Thousands of squares Thousands ..~do Thousands of squares Thousands of short tons Thousands of squares Millions of square feet 1,871 2 84 319 102 1,643 51 777 1,542 205 5, 035 1,513 3, 408 1,270 3,303 3, 082 2,718 6, 249 1,809 272 2, 592 1,948 30, 026 5, 707 4 18, 947 1,433 1, 888 322 832 37 1,040 20, 913 2, 084 4, 091 2, 560 1, 271 3, 280 60 9, 923 152 831 266 3, 922 111 1,414 2, 683 353 8,658 2, 602 5, 653 2, 102 5,111 4,809 4,097 9, 182 2,590 379 3, 558 2, 600 39, 521 7,398 24,968 1,750 2, 260 366 832 35 050 23,610 1,218 1,986 852 377 794 12 +11.8 ~ +9. 7 +6.6 +6.6 +6.0 +5.3 -4-4.1 +3.8 +3.7 +3.7 +3.7 +3.4 +3. 4 +3.0 +3.0 +2.8 +3.6 +2.4 +2.2 +2.1 +1.9 +1.8 +1.7 +1.7 +1.3 +1.2 +9 +0.0 -.4 -3. 5 -4. 7 -7.1 -7.8 -9. 0 -10. 2 I Source: "Patterns of Output Growth," Survey of Current Business, September 1954. Measured In physical units. 2 1953. 3 1957-63. ~ 1947. PAGENO="0076" 68 STATE ~D LOCAL PUBLIC FACILITY NEEDS Iron and Steel. The basic iron and steel industry is characterized by a high degree of economic concentration. In 1947, 45 percent of the output of the industry was produced by four major companies, and by the midfifties these companies accounted for more than half of the output. But in terms of fabricated products including most building products, only from one-fifth to one-fourth of the industry's output is concentrated in four companies. In the basic steel industry there is a long leadtime between the planning stage and effective utilization of new capacity, generally more than 5 years, whereas for all manufacturing the period is shorter. Thus, the steel industry has not been able to respond quickly to capacity pressures. The long leadtime was felt in the immediate postwar years. Production from expanded plant capacity which came in the late forties was not really available until the miclfifties when there was a significant increase in output. However, the lag in increasing capacity has diminished somewhat in the last few years with the development of oxygen injection which reduces the time required for individual heats and increases open- hearth capacity by as much as 30 percent. An increase in capacity in existing plants can be obtained from capital outlays of approxi- mately 20 percent of the cost of equivalent capacity in new plant. It has been estimated that by 1970 about two-fifths of the Nation's capacity may be basic oxygen and this may reach one-half by 1975. The implications for steel construction products are quite favorable from a cost standpoint. In addition, new welding techniques which permit production of a wider range of structural shapes also promises to reduce production costs. Steel. Iron and steel products will continue to be important in State and local construction although less steel may be used propor- tionately for structural shapes. The supply of structural steel should be adequate to meet projected construction needs, and domestic pro- duction will probably be increasingly supplemented by foreign supply which also may provide considerable price competition for the domestic industry. Another factor pointing toward an increase in steel im- ports, from the present 10 percent of total supply, is the rising impor- tance of reinforced concrete. The types of steel used in this product are particularly heavy import items. For State and local construction the growth in aggregate demand for steel will approximate 3 million tons by 1975 (chart lila). Lumber Products. Since the end of World War II substitutions for lumber products have been increasingly made by a variety of other building materials, especially for structural uses (table 2). The pro- duction rate of the industry showed an average annual decline of 0.4 percent between 1948 and 1963. In nonresidential buildings the emphasis on fireproof and low-maintenance materials has also resulted in a declining use of many wood products. Although the tendency toward continued substitutions away from lumber will continue, some expansion in the use of wood in nonresidential buildings and the greater use of fire-retardant lumber may reverse this trend. Many building codes and insurance provisions have been revised to allow more use of wood. While the consumption level of structural lumber used in State and local construction may hold up, it will continue to become a smaller proportion of total lumber used, with concrete particularly gaining more of the market for structurals (chart Tub). PAGENO="0077" STATE AND LOCAL PUBLIC FACILITY NEEDS 69 CHAnT 111.-Estimated total consumption of five major materials for State and local construction, 1965 and 1975 ~.. Steel b. Lumber 1965 1975 1965 1975 (thousands of short tons) (million board feet) 1965 1975 (thousands of square feet) Source: Estimated by Business and Defense Services Administration. 5,500 8,500 3,000 4,500 c. Cement d. Aluminum 210,000 130,000 1965 1975 (thousands of barrels) (short tons) C. Window glass 240,000 385,000 PAGENO="0078" 70 STATE AND LOCAL PUBLIC FACILITY NEEDS Plywood shipments doubled in the 10-year period of 1947-57, and subsequent to 1957 increased at a faster rate than did construction activity. Plywood's growth has been at the expense of less fabricated wood products in applications such as sheathing and subfiooring. Improvements in sawing techniques have resulted in the effective use of much formerly wasted lumber. Leftover material from sawmill operations is used for particleboard, hardboard, and other products. New processes which mold wood by compression into complex forms formerly confined to metals and plastics may also result in some new markets. Cement. The cement industry, despite a major growth of demand for its products, which forced output to rise 5 percent annually in the postwar period has been encountering serious problems associated with overcapacity. At the end of World II, the industry found that it was somewhat hard pressed to meet the upsurge in demand. Its subsequent major expansion programs, spurred in some measure by highway construction prospects, left the industry by 1960 with much unused capacity which led to falling price levels. Import competi- tion in some areas has also contributed to downward price movements. At the same time, intense competition was developing due partly to the technical changes which took place after the war, and to marketing changes which greatly expanded the geographical scope of the market which could be covered by an individual plant. The modernization of existing plants and the installation of new, highly efficient equipment in new plants, greatly increased the output capability for a producing unit. Centralized control of instrumenta- tion and the increased use of measurement devices has given the ce- ment iudustry one of the fastest productivity growth rates of all the building materials industries. At the same time, new distribution concepts involving the utilization of low-cost water transportation, along with a system of local distribution facilities made it possible for an individual plant to serve a radius of more than a thousand rather than hundreds of miles. Expenditures for capital investment are relatively high in the cement industry, but from a technological standpoint, entry has been relatively easy. A very important factor in encouraging entry has been the prospects of high profit to sales ratios. There is a strong likelihood that cement demand for State and local markets will increase by 1975 by80 million barrels (chart Ilic). Concrete Products. The rise in demand for concrete products has grown much more rapidly than construction activity over the past two decades. This rise has been associated with an improvement in the quality of concrete over the years. Improvements have been made in cement, but a major factor has been improved aggregate selection as well as better control of mixing and placement. High strength concrete has been a large factor in high rise buildings in the postwar period. Prior to World War II 16 stories seemed to be the economic and structural limit for the use of concrete but in recent years its use in higher storied buildings is quite feasible. The increased use of concrete products also has been a factor in the average annual growth rate in the production of sand and gravel of almost 7 percent. An important development in the industry has been the introduction of prestressed concrete. This was used extensively in Europe, but did not make much of an appearance in the United States until PAGENO="0079" STATE AND LOCAL PUBLIC FACILITY NEEDS 71 the 1950's. Even by 1959, 78 percent of prestressed concrete pro- ducing plants in the United States were less than 5 years old. This growth was generated by a trend toward replacement of steel with concrete, but it is also related to the rise in prefabrication. The rise in demand for concrete products in general seems destined to far outdistance the rise in State and local construction by 1975. Aluminum. Aluminum construction products have grown quite rapidly during the last few years because of their substitution for wood and other metals. Since 1948 primary aluminum has had an average annual growth rate of over 9 percent a year Its rapidly increasing usage in such items as windows, doors, and trim has been due to its low maintenance requirements, and increasingly important factor in the material demand picture throughout the post- war period. Growth in aluniinum demand stimulated a rapid expansion in plants in the late 1950's. Some new processes, now being developed, promise capital savings of up to 50 percent. The standard reduction process, however, is still expected to produce 90 percent of the primary output in 1975. New metal to metal and metal to nonmetal bonding methods may continue to stimulate new aluminum products for use in construction. An increase in aggregate aluminum consumption of 70,000 tons is in prospect by 1975 (chart hId). Other Building Materials and Products. The products of the chemical industry, aside from paints and lacquers, have come into prominent notice as construction materials since World War II. Particularly involved are plastic products. Over most of the postwar. period plastics producing industries have grown at an average annual, rate of almost 13 percent a year, making them the fastest growing among industries producing building materials. It has been estimated that in recent years about 18 percent of plastics output was for prod- ucts used in construction. By the mid-1950's about 40 percent of these plastics were in paints, 20 percent in laminates and floor cover- ings, and another 20 percent in wire coatings and electrical devices. Most of the plastic products are used as substitutes for traditional materials. For example, the use of plastic flooring increased markedly at the expense of oak and maple hardwood flooring, and more recently, plastic pipe and plumbing fixtures have been competing for the markets which have been held by traditional materials. Advances in insulation have allowed the use of thinner walls in building construction. Foamed materials, especially in glass and plastics for insulation have made possible the rise of curtain wall exteriors and prefabrication. One of the problems in the expansion of these as well as other new products are the restrictions of local building codes. Current efforts to achieve more unified, flexible and up-to-date codes which put stress on performance rather than enumerating specific materials is a hopeful portent for the next decade. IV. FUTURE PROSPECTS The tripling in the volume of new State and local construction over the past 20 years reflects a greater emphasis in the postwar period on satisfying growing public needs rather than viewing construction primarily as an economic stimulus. Public construction volume has been dominated by two types of facilities-highway and educational. PAGENO="0080" 72 STATE ~D LOCAL PUBLIC FACILITY NEEDS Highway construction alone accounted for about half of State and local construction in the 1947-65 period. The predominance of materials and the development of new laborsaving equipment, whi~h has resulted. in higher productivity in this type of construction, has been a dominant. factor in the increase of the materials share of public construction outlays from 35 to 50 percent over the past 20 years. In educational construction there have also been new material applications such as. increasing use of prestressed concrete in place of brick. In the next decade it is expected that there will be a further shift in the mix of State and local public works expenditures-with hospital, institutional, sewer, and water construction having the highest growth rates. Highway construction is the only major type which is expected to decrease in relative importance, although in absolute volume it wil1~ remain significantly large. These shifts will produce differing growth rates in materials usage. There will be increased emphasis on metal doors, windows, and trim, electrical equipment, pipe, and concret& products with less relative material consumption of fabricated struc- tural steel, lumber products, bitumen, and rock products. Never- theless, it is expected that the overall materials share of total outlays for construction will remain at about 50 percent. In the past a steadily growing private market for building materials. has been an important factor in stimulating the productive capacity which could also supply the vast volume of public works. Thus,. shortages of building materials for State and local construction in the period 1947-65 have not been particularly frequent. Most of the shortages which have taken place have been the result of special factors not directly related to insufficient productive capacity. For example, shortages of structural steel were aggravated by the 1956 steel strike. Shortages of nickel in 1955 contributed to a shortage of stainless steel building sheets. Transportation problems have occa- sionally caused difficulties for lumbermen in supplying the eastern markets. During the Korean conflict insufficient productive capacity did~ finally result in the rationing of such metals as steel and copper. Yet with some product substitution, building materials were available' to support a high level of construction activity. In 1955 and 1956 at the height of the economy's investment boom, shortages in a number of building materials occurred. Structural steel and aluminum were in short supply as were gypsum products. From 1954 through early. 1957 the cement industry, although expanding rapidly in response to' heavy highway construction requirements, was still under pressure to meet demand. Generally, after 1956, few shortages of a serious~ nature seemed to exist. In 1959, during~ the extended steel striker inventories were adequate to supply construction needs throughout the strike period. Construction during the first half of the 1960's seems to have been unhindered by any significant materials short- ages. To meet future increases in construction demand in both the private and public sectors it is expected that the construction and building materials industries will increase their productive capacities. Pre- fabrication and prefinishing have been and will continue to be impol- tant sources of promoting innovation and labor-saving devices on construction sites. This will be particularly true in the lumber and. concrete products industries. The trend for prestressed concrete and PAGENO="0081" STATE AND LOCAL PUBLIC FACILITY NEEDS 73 softwood plywood to be more heavily used in the place of less fabri- cated materials will continue. Similarly, aluminum, glass, and plastics should continue to make inroads in the market for traditional mate- rials. Not to be overlooked is the important role which numerous Federal Government programs will play in stimulating private as well as public construction. Furthermore, actions through appropriate fiscal and monetary policies are likely to avoid sharp swings in the economy. These factors diminish the possibility of shortage or oversupply in the steel industry which requires by its very nature, long leadtimes for the planning and building of new facilities. Since the steel in- dustry must make expansion decisions well in advance of demand itself, it can be expected to respond to a steady growth pattern to which current and future government policy is undoubtedly pointed. Perhaps one of the big question marks is the effects of inflationary conditions on construction. Prices of building materials have risen about 40 percent over the past 20 years. In the next decade it would not~ be unreasonable to expect at least a 10-15 percent aggregate rise. Such a rise could, however, reflect mainly general price movements and result from cost-push type of pressures rather than the effects of inadequate capacity. When one considers all the factors, it is difficult to avoid the con- clusion that the construction materials industries should be able to meet the needs of future construction-as they have in the past- through innovation, product development, and increased productive. capacity. APPENDIX Data for chart I: Capacity and price of portland cement, 1947-64 Year Capacity Price 1957-59=100 Year Capacity Price 1957-59=100 1947 1948 1949 1950 1951 1952 1953 1954 1955 78 84 83 87 91 89 93 94 100 60.9 68.7 70.6 72.1 77.7 77.7 81.5 84.4 87.7 1956 1957 1958 1959 1960 1961 1962 1963 1964 99 84 81 83 75 74 75 74 76 93.2 98.0 100.5 101.5 103.5 103.3 103.1 101.5 101.0 Source: "Business Statistics, 1965," Office of Business Economics, and Wholesale Price Index, Bureau of Labor Statistics. 70-132-66-vol. 1-6 PAGENO="0082" 74 STATE AND LOCAL PUBLIC FACILITY NEEDS Data for chart II: Construction cost indexes for State and local, highway, and all construction, 1946-65 Year BPR State and local Composite Year BPR State and local Composite 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 70.7 80.3 89.8 86.7 78.3 96.1 98.9 95.3 89.9 87.3 (1) 69.8 77.2 76.4 74.6 83.7 87 .4 88.6 87.8 87.9 56 67 75 74 77 84 86 88 88 00 1966 1957 1958 1959 1960 1961 1962 1963 1064 1065 98.8 103.1 100.5 96.4 94.1 95.0 98.5 101.0 102.0 105.9 95.3 99 .5 100.2 99.9 100.7 102.2 104.7 107.7 110.9 114.4 95 99 100 102 103 104 107 109 112 116 1 Not available. Source: Bureau of Public Roads, Bureau of the Census, and Business and Defense Services Adminis- tration. Data for chart III: Estimated total consumption of 5 major materials for State and local construction, 1965 and 1975 1965 1975 A. Steel (thousand short tons) B. Lumber (million board feet) C. Cement (thousands of barrels) D. Aluminum (short tons) 16. Window glass (thousands of square feet) 5, 500 3,000 130,000 105, 000 240, 000 8, 500 4,500 210,000 180, 000 385, 000 Source: Estimated by Business and Defense Services Administration. PAGENO="0083" CHAPTER 3 Labor Requirements for State and Local Public Works, 1946_75* This chapter presents estimated construction employment require- ments for State and local construction activity. These estimates have been derived in the course of work done in the Bureau of Labor Statistics concerning labor and material requirements for various segments of the construction industry based on contractor's records. To provide perspective, employment and related data for the total construction industry are also presented in this chapter. It should be noted that employment requirements for State and local govern~ ment construction activity are estimates for man-years while esti- mates for the construction industry as a whole are estimates of the number of persons employed (monthly report on the labor force) or number of persons on the payrolls of construction contractors (Bureau of Labor Statistics establishment data). I. EMPLOYMENT GENERATING EFFECTS O~' STATE AND LOCAL PUBLIC WORKS CONSTRUCTION In 1947, State and local public works construction amounted to a little more than $2.5 billion and resulted in the employment equiva- lent of 625,000 full-time workers (man-years of employment). Cur- rently nearly $18 billion is being expended, utilizing the equivalent of over 1,800,000 full-time workers (table 1). TABLE 1.-Volume of State and local public works construction and estimated man- years of employment, selected years, 1947-65 Year Value of construe- tion (in millions of dollars) Man-years of employment (thousands) Construction Total Other' Total On site Off site 1947 1950 1955 1960 1965 2, 598 5, 494 9, 375 12, 829 17,864 625 1, 047 1, 377 1, 570 1,862 279 451 585 656 752 (2) 404 518 586 670 (2) 47 67 70 82 346 596 792 914 1,110 `Including workers in architectural and engineering establishments. 2 Not available. `While dollar volume has increased about 600 percent, employment requirements have risen less than 200 percent. The lower labor requirements per mfflion dollars for the later periods result from two * Prepared by the Department of Labor, with minor editing by committee staff. 1 A man-year in the construction trades was considered to be 1,800 man-hours. In other industries, it was considered to be 2,000 hours. 75 PAGENO="0084" 76 STATE AND LOCAL PUBLIC FACILITY NEEDS major factors: (1) price increase, which makes the increase in dollar volume overstate the actual increase in physical volume and (2) the increased productivity which has greatly reduced both the on-site and off-site labor requirements. In 1947 a little less than half (45 percent) of the employment required was in the construction industry. In 1965 the construction industry proportion had dropped to 40 percent, largely reflecting the increased use of prefabrication. It is estimated that a little over half of the employment outside of the construction industry is engaged in making, selling, and transporting the material used to the construction site. The balance of the other employment is utilized in all other sectors of the economy in supplying the raw materials and services required by the construction materials and equipment manufacturing industries. The figures do not include any estimate of resulting government employment or employment generated by the respending of wages and profits which is generally called the "multiplier effect." In general, the total employment effect of various types of con- struction do not vary to any great degree. At present, $1 million of almost any type of construction expenditure gives 1 year of em- ployment to approximately 100 men. The only substantial differences in employment effect of various types of construction are in the industries and occupations affected. (See table 2.) The construction industry, gets the majority, of the employment only in a few types of construction such as dredging and public housing. In most types of construction the employment created by the manufacture and distribution of the materials is greater, generally by about 25 percent or more. The principal differences in the employment effect of various types of construction are in the manufacturing industries affected'. The lumber industry, for example, is affected twice as much by school construction as for hospital construction. The three manufacturing industry groups most greatly affected by construction' are: stone, clay, and glass products; primary metal `industries; and fabricated metal products. Construction trade occupations are also affected in varying degrees by type of construction. For example, three times as many plumbers are used in hospital construction' as in an equal amount of home construction. PAGENO="0085" STATE AND LOCAL PUBLIC FACILITY NEEDS ft 77 -~-"~ ~ * ~)b~ .~ * *c*2u~ ~ ~2 © ~ *c~ ~ &2 ~ ~ 0 ~. g ~-4 .-~ ~t-~ ~ ~ ~ *, ci CO Q oEE~* ~o c~ 0) ° Cl 0 `~ Cl C~ ~ COO 0) t- P. c~ c~-~ ~~dO~d ~ Cl 0 C~ - ~ ~ CO .~ 0) ~ 0) 0) CO Cl ` p. H ~ Cl ~ Cl~ ~ ~ 0 0) E 0 0) 0 0) CO 0) CO 0) 0) 0) CO CO CO CO CO C)) Cl CO CO COClCl-) 0 0) 0 0 cC E 0. 0 Ł0 0 0 CC E ;i; .~ cC ~ ~ ~ *0 - CC.c~ C cx~ ~ C) C C) 0 C) PAGENO="0086" 78 STATE AND LOCAL PUBLIC FACILITY NEEDS II. CONSTRUCTION INDUSTRY EMPLOYMENT AND ITS CHARACTERISTICS EMPLOYMENT TRENDS Employment in the *constructipn industry 2 increased from 3.6 million workers in 1950 to 4.6 million workers in 1965, an increase of 28 percent. However, most of this gain occurred between 195G and 1952 when employment rose to 4.2 million~~~pe~ons. Emptoy~ ment fell to 3.8 million in 1955 Tand, since then, employment has been increasing gradually, except for a few years in the early 1960's. By 1965 employment in the construction industry had reached an all-~ time high, and indications in early 1966 were that employment would go even higher. Increased State and local public works construction. has been an important factor in the 1950-65 increase in construction employment. Construction labor requirements for State and local public works increased ~from 1950 to 1965 by Rbout 300,000 man- years (table 1). However, the proportion of the total increase in construction employment attributable to State and local construction activity would be even greater than implied by the 300,000 increase in man-year requirements because the average construction worker did not work a full man-year. The proportion that wage and salary workers make up of all workers in the construction industry between 1950 and 1965 has been rela- tively constant at about 70 percent. On the other hand, there was some reduction in the proportion of self-employed and unpaid family workers and an increase in the proportion of government workers. SKILL DISTRIBUTION Between 1958 and 1965, total blue-collar workers-craftsmen,. operatives, and laborers-accounted for about four-fifths of construc-. tion industry employment during the period. Construction craftsmen. alone maintained a relatively consistent 50 percent of employment in. the construction industry.3 (See table 3.) Operatives increased slightly and construction laborers declined slightly as a proportion of construction employment. In the white-collar group, clerical workers increased their share slightly. Professional, managerial, and sales. workers had relatively stable shares up to 1965 when professional workers increased as a percent of construction employment and. managerial workers decreased somewhat. SELECTED SKILLED OCCUPATIONS Because of the changing mix of construction activity and because of changing construction techniques, some construction craft occupa- tions between 1950 and 1965 grew faster than others and some even declined. Employment of carpenters in the construction industry 2 The construction industry includes establishments engaged in contract construction and government; agencies engagel in construction and related activities such as highway maintenance and land reclamation. The contract construction industry on the other hand includes wage and salary workers in private estab- lishments performing construction activities, including new construction and maintenance and repair, on a contract basis. 2 The 1950 and 1960 Censuses of Population indicate that the proportion of craftsmen in the construction industry declined somewhat between these years. However, these census data are not directly comparable with the BLS data (Monthly Report on the Labor Force) because 1;he Census of Population data are for April only, a seasonally low month for construction. Also, there are some conceptual differences between the two sources. The census matn arc also not y~~'c with data based on establishment surveys. See footnote on table 2. PAGENO="0087" STATE AND LOCAL PUBLIC FACILITY NEEDS 79 was significantly lower-by 175,000. Employment of painters, paper- hangers, and plasterers was also lower. On the other hand, employ- ment of excavating, grading, and road machinery operators was more than twice as high in 1965 as in 1950. Other significant employment increases were experienced by cement and concrete finishers, elec- tricians, and plumbers. TABLE 3.-Employed persons, by major occupation group, in the construction industry, 1958-65' [Percent distribution] Year 1965 1964 1963 1062 1961 1960 1959 1958 All occupations Professional, technical, and kindred workers Managers, officials, and proprietors, extept farm Clerical and kindred Salesworkers Craftsmen, foremen, and kindred..._ Operatives and kindred Serviceworkers Laborers 100.0 100. 0 100. 0 100.0 100. 0 100.0 100. 0 100.0 5. 1 11 1 5. 3 .2 50. 4 9.9 .5 17. 5 4. 5 12 4 4. 9 . 2 50. 0 9. 9 .5 17. 6 4. 5 12 9 4.9 . 2 50. 8 9. 3 .5 16. 9 4.4 13 2 5. 3 . 2 49. 7 9. 2 .5 17. 4 4. 9 12 3 4. 7 . 2 51. 0 8. 5 .4 17. 0 4.7 12 2 4. 6 . 3 50.4 8. 7 .5 18. 7 4.4 11 9 4. 5 . 4 50. 3 8. 7 .4 19. 4 4. 5 12 1 4. 3 .3 49.8 8. 9 .5 19. 4 1 The data in this table are based on household surveys. A distribution of employment by occupation based on establishment surveys indicates a somewhat smaller proportion of employed persons in the white- collar occupations and a somewhat larger proportion in blue-collar occupations, especially construction laborers. NoxE.-Because of rounding, sums of individual items may not equal totals. Source: Bureau of the Census and Bureau of Labor Statistics. CONSTRUCTION EMPLOYMENT BY TYPE OF CONTRACTOR In viewing employment trends in the construction industry, valuable insight can be gained from examining employment shifts by broad type of construction activity. The Bureau of Labor Statistics collects data for private wage and salary employees on the payrolls of general building, heavy construction, and special trades contractors. However, these data are not directly comparable with the construction employment data (from the Monthly Report on the Labor Force) discussed earlier, which are for all employees (wage and salary, self- employed, government, and unpaid family workers). Also, unlike the labor force data an employee may be counted~more than once if he appears on more than one payroll. In 1965, almost half of the workers in the contract construction division were employed by special trades contractors; about 30 percent were employed by building construction general contractors; and the remainder worked for heavy construction general contractors. (See table 4.) Employment increased by about 80 percent in the special trades contractors major industry group between 1947 and 1965, mainly because of the increasing importance of electrical, plumbing, air conditioning, and other work usually performed by special trades contractors. Employment grew by about three-fourths in the heavy construction contractors major industry group-spurred by a fourfold increase in highway construction (in constant dollar terms), as well as increases in the construction of sewer and water systems, airports, PAGENO="0088" 80 STATE AND LOCAL PUBLIC FACILITY NEEDS bridges, dams, and similar projects. Employment by building con- :struction general contractors increased by about 35 percent between 1947 and 1965-less than half as rapidly as in the other two segments; however, employment was 5 percent lower in 1965 than in 1956, reflecting in part, a slowdown in the rate of increase in residential construction activity. `TABLE 4.-Wage `and salary employees in the' contract construction industry and major subgroups, annual averages, 1947-65 [In thousands] Year ` Contract construc- tion General building contractors All em- Con- ployees struction workers Heavy: construction Special trade contractors All em- ployees Con- struction workers All em- ployees Con- struction workers All em- ployees Con- struction workers 1947 1948 1949 1950 1951 `1952 1953 1954 1955 1956 1957 1958 1959 1960 `1961 1962 1963 1964 1965 1, 982 2, 169 2, 165 2,333 2, 603 2, 634 2, 623 2,612 2,802 2, 999 2, 923 2,778 2, 960 2,885 2,816 2,902 2, 963 3, 056 3,211 1,759 1,924 1,919 2, 069 2,308 2,324 2, 305 2,281 2,440 2,613 2, 537 2,384 2, 538 2,459 2,390 2,462 2, 523 2,602 2,731 762. 0 837. 0 809. 0 875. 0 991.4 983. 2 969. 2 937.1 997.2 1, 074. 6 986. 8 893.6 959. 0 908. 4 874. 9 882.1 914. 1 956. 6 1, 024. 9 689. 0 756. 0 731. 0 791. 0 895. 8 882.3 863.3 832.0 880. 1 950. 4 866.2 ` 775.2 834.4 785.4 752.6 755.8 787. 0 823.9 880.6 363. 0 389. 0 401. 0 419. 0 461. 6 481.4 480. 1 471.0 483. 8 156. 7 576. 0 164.6 586. 5 585. 7 583. 3 593.1 599. 2 610. 5 634. 1 321. 0 343. 0 354. 0 370. 0 407. 0 423. 6 426. 7 418.7 429. 7 493.4 512. 9 498.1 516. 8. 511. 5 505. 7 514.8 522. 5 526. 5 547. 6 857. 0 944. 0 955.0 1, 039. 0 1, 149. 6 1, 168.8 1, 174. 0 1,203.5 1, 320.8 1,367.6 1, 360. 6 1,320.2 1,414. 1 1,390.7' 1,357.9 1,426.6 1,449.3 1,488. 4 1, 552.3 749. 0 825. 0 834. 0 903. 0 1, 005.2 1, 018.2 1, 015.2 1,030.5 ` 1, 130. 1 1, 168.8 1, 158. 2 1,110.3 1, 186. 9 1, 162.3 1, 131.3 1,191.8 1,213.9 1, 251. 2 1,302.9 Source: Bureau of Labor Statistics. EMPLOYMENT OUTLOOK FOR BUILDING TRADES WORKERS IN THE CONSTRUCTION INDUSTRY Employment in the building trades is expected to increase mod-. erately through the mid-1970's, assuming relatively full employment nationally and the high levels of economic activity needed to achieve this goal. (If the high levels of economic activity are not achieved, employment in the building trades will increase at a slower rate than that projected.) In addition to employment growth, tens of thousands of job openings will result from the need to replace experienced workers who transfer to other fields of work, retire, or die. The moderate increase in total employment in the building trades is `expected to result primarily- from the rapid rise in the level of construc- tion activity. The factors that will stimulate construction activity include anticipated large increases in population and in the number of households; a continuing shift of families from the cities to the suburbs; increases in government expenditures for highways and schools; a rise in expenditures for new industrial plant capacity; and higher levels of personal and corporate income. In addition, there will be a growing demand for alteration, modernization, and maintenance work on existing structures. The increase in building trades employment will not be as great as the total expansion in construction activity, because continued technological developments in construction methods, tools and equip- PAGENO="0089" STATE AND LOCAL PUBLIC FACILITY NEEDS 81 ment, and materials will permit increasing output per construction worker. The rates of employment growth will differ among the various building trades. Employment growth is expected to be most rapid for structural metal workers; excavating, grading, and road machinery operators; and cement masons. Among the trades that will have a much slower growth are bricklayers, stonemasons, and marble and tile setters; painters; and carpenters. TABLE 5.-Estimated opening for selected craft occupations in the construction industry resulting from growth of employment requirements and from retirements and deaths, 1965_751 [In thousands] Occupation Employ- ment 1965 Employ- ment require- ments 1975 Openings, 1965-75 Total openings Net growth Deaths and retire- ments Carpenters Bricklayers, stonemasons, and tile and marble setters Cement and concrete finishers 2 Electricians Excavating, grading, and road machinery operators Painters Paperhangers Plasterers Plumbers and pipefitters Roofers and slaters Structural metal workers 665 180 55 165 190 285 10 50 220 55 40 670 200 75 200 265 305 13 55 265 65 60 165 50 30 65 105 95 6 15 90 20 30 5 20 20 35 75 20 3 5 45 10 20 160 30 8 30 30 75 3 10 45 8 8 1 These projections were developed by the Bureau of Labor Statistics in the course of its continuing occupational outlook research program, especially its work for the 1966-67 edition of the Occupational Outlook Handbook. 2 Includes terrazzo workers. UNEMPLOYMENT IN THE CONSTRUCTION INDUSTRY Since the end of World War II, unemployment in the construction industry has averaged more than twice that of all workers. Two major reasons for the higher than average rate of unemployment in the construction industry are: (1) Construction activity is affected by weather and is a very seasonal industry, especially in the less tem- perate parts of the country where the winter months are a slow season; and (2) construction workers have to spend time finding new jobs as individual construction projects are completed. (Construc- tion workers may work for a dozen or more employers in a calendar year.) Over the 1948-65 period, the unemployment rate for experi- ienced workers in the construction industry has been between 2 and 2~ times the unemployment rate for all experienced workers, except in 1953 when it was 2.7. SHORTAGES OF CONSTRUCTION WORKERS Because construction is cyclical as well as seasonal, the demand for construction workers rises and falls significantly over the course of the business cycle. The construction labor force is fairly flexible, with considerable movement of building trades workers between con- struction and other industries.4 But, despite this flexibility, the con- 4 See Special Labor Force Report No. 35-Job Mobility in 1961, Bureau of Labor Statistics, U.S. Depart- ment of Labor. PAGENO="0090" 82 STATE ~D LOCAL PuBLIC FACILITY NEEDS struction industry sometimes is not able to attract sufficient skilled workers during peak periods of demand. Short-term deficiences of skilled building trades workers are not readily alleviated through in- creased training activity because of the long period generally required to train skilled building trades workers. (In fact, training of ap- prentices may be reduced during a period of high demand to the ex- tent that some apprentices prematurely terminate their training program because of the ease of obtaining work at the journeyman. level.) Because of the local nature of much of the construction industry, there may be shortages of skilled building trades workers reported in one region-while at the same time unemployment is higher than normal in another region. This, in combination with the ordinarily high level of frictional unemployment associated with the industry, means that shortages for building trades workers can exist even when unemployment rates for these workers are high relative to the na- tional rates for all workers in the labor force. Current employment data indicate growing pressures on the supply of trained construction manpower during the remainder of 1966. Employment in the construction industry in 1965 averaged 4.6 million, 2.9 percent above 1964. Conversely, unemployment for experienced workers in the industry during 1965 averaged 9.0 percent compared with 9.9 percent in 1964. The current employment rate in construction is the lowest (for comparable months) since Korea. In March 1966, the unemployment rate for experienced workers in the construction industry was 8.8 percent, considerably below the 12.3 percent in March 1965. For carpenters, the rate had fallen from 11.8 percent to 8.1 percent. For other construction craftsmen the rate had fallen from 10.3 percent to 7.8 percent. For laborers the rate fell from 22.7 percent to 15.6 percent. The most recent data indicate that laborers made up approximately one-third of total unemployed construction workers. Currently, shortages of some building trades workers are being reported, especially in the North Central States. Trades most often mentioned as being in short supply are electrical workers, plumbers and pipefitters, ironworkers, carpenters, bricklayers, and sheet metal workers. AGE DISTRIBUTION OF EMPLOYEES IN THE CONSTRUCTION iNDUSTRY In 1960 the median age of male employees in the construction industry was approximately the same as for all employed male workers in the American economy. One major difference was a relatively smaller proportion of construction workers employed in the very young group, 14 to 19 years of age. (See table 6.) This lower proportion of young workers in the construction indus- try is probably due to regulations prohibiting employment of extremely young workers in many of these occupations in many States. Data are not available on the age distribution of building trades workers in the construction industry; however, they are available for selected building trades in all industries. (Approximately 70 per- cent of all building trades workers are employed in the construction industry.) The following table presents these data plus the propor- tion of workers in each occupation 45 and over-a key factor in determining future replacement needs. PAGENO="0091" STATE AND LOCAL PUBLIC FACILITY NEEDS 83 TABLE 6.-Age distribution and median age of all employed males and males employed in the construction industry, 1950 and 1960 (14 years old and over) [Percentage distribution] Years of age ~ 1960 1950 All employed males Employed in construe- tion All employed males Employed in construe- tion Total 100.0 100.0 100.0 100.0 14 to 19 20 to 24 25 to 29 30 to 34 35 to 44 45 to 54 55 to 64 65 and over Median age (years) 5. 7 8. 4 10. 4 12. 0 24.2 20.7 13. 8 4.8 3.2 8. 4 10. 5 12. 7 26.2 21.7 13. 4 3.9 4. 9 9. 7 12.2 12.2 23.5 18.8 13. 0 5.6 2. 9 9. 3 12. 3 12.2 24.6 20.1 13. 5 5.1 40. 6 40. 8 39. 7 40.4 Source: Bureau of the Census. TABLE 7.-Median age and proportion 45 years of age or more for selected building trades, 1950 and 1960 (males, 14 years of age or more) Occupation Median age 1950 1960 Change in years 1950 and 1960 Proportion 45 and over 1950 1960 Briekmasons, stonemasons, and tilesetters. Carpenters Cement and concrete finishers Electricians Excavating, grading, and road machinery operators Painters Paperhangers Plasterers Plumbers and pipefltters Roofers and slaters Structural metal workers 40.4 43.4 41. 7 39.2 37.8 43.6 49.2 41.0 40. 9 36.3 39.2 37. 7 43.3 40. 0 40.8 39.8 45.4 50.9 40.1 42. 2 37. 0 41. 0 -2. 7 -. 1 -1. 7 -1-1.6 +2. 0 +1.8 +1.7 -.9 +1. 3 +. 7 +1.8 39.8 46. 1 41. 6 34.2 25. 6 46.4 57.6 41.1 38. 6 28.3 33.8 30. 4 45. 5 35. 0 37.8 34.3 50.9 65.5 36.4 41. 8 30. 1 37.0 Source: U.S. Bureau of the Census. Seven of the eleven selected building trades shown in table 7 experienced an increase in median age between 1950 and 1960. Only two had a change of 2 or more years. In general, the median age was highest in occupations growing slowest, or even declining, reflecting the relatively slight influx of young workers. For example, the three occupations with the highest median age in both 1950 and 1960-paperhangers, painters, car- penters-recorded employment declines during the 10-year period. POPULATION AND CONSTRUCTION EMPLOYMENT Trends in the contract construction industry are closely related to population growth. A growing population requires additional housing units, schools, hospitals, commercial buildings, factories, and highways. Logically, the relationship between population and construction em- ployment would seem to be particularly close for housing, schools, and hospitals. In addition, population growth increases the need for PAGENO="0092" 84 STATE AND LOCAL PUBLIC FACILITY NEEDS construction workers to perform remodeling, maintenance, and repair work. In spite of the importance of population as a longrun determinant of changes in contract construction by State, other factors also play a significant role. Expenditures for national defense, natural re- sources development, highway construction, and other government programs, as well as shifts in industrial distribution, can obscure the relationship between population and contract construction employ- ment. North Dakota, for example, ranked 3d in contract construction. employment growth between 1947 and 1965, although it ranked 45th in population growth increase. Apparently the increase in construc- tion employment was a result in large part of the increase in military prime contract awards and expenditures for construction of new plants. Employment in heavy construction firms (who build highways7 dams, pipelines, refineries, etc.), is not as dependent upon population as employment by general and special trade contractors, who are more likely to work on schools, homes, medical facilities, and perform. necessary maintenance and repair. UTILIZATION OF PUBLIC WORKS FACILITIES Information gathered from various parts of the Nation revealed that, in the main, public facilities are being fully utilized, although there are a few instances, particularly in medical services, where utili- zation of facilities is below capacity because of shortages of skilled personnel, especially in the nursing profession. Several hospitals were found to have delayed opening of additional facilities or new wings because of a shortage of nurses. The informa- tion gathered may indicate that in some instances construction of additional facilities may be delayed somewhat because hospital ad- ministrators find it difficult to staff additional facilities. However,. most hospitals are required to operate and serve the community in spite of all difficulties. If necessary, this may sometimes mean lower- ing personnel requirements. But in hospitals, which deal with human lives, the possibility of lowering standards for doctors, nurses, etc., is extremely limited. Through the greater use of practical nurses,. nurses aids, medical technologists, etc., manpower shortages have been lowered to some extent. In some States, an accelerated 2-year training program has been utilized to train associate nurses, who sub- sequently qualify as registered nurses. In general, school systems seem to have much more leeway than. hospitals in adjusting to personnel shortages by lowering standards. A school district faced with a pressing school population may be re- quired to utilize all available classroom space with insufficiently accred- ited teachers. There is no widespread evidence that the education structures of this Nation are not being fully utilized. On the con- trary, school construction expands each year throughout the Nation to meet the challenge of a growing population. In New York City, for example, the public school system has had a general shortage of accredited teachers. To solve this problem, the board of education has recruited out-of-city teachers and noneducation degree college graduates as qualified instructors. PAGENO="0093" STATE AND LOCAL PUBLIC FACILITY NEEDS 85 TRAINING CONSTRUCTION WORKERS Workers who entered the construction industry between 1946 and 1965 acquired their skills in a variety of ways. Workers whose skills are not unique to the construction industry, such as accountants, draftsmen, bookkeepers, office machine workers, and secretaries received their training in much the same way as these workers in other industries; for example, through training in high schools, colleges, business schools, correspondence schools, and on-the-j ob instruction. Although construction craftsmen are employed in nearly every indus- try, more than 70 percent are employed in the construction industry and their training is more specifically oriented to that industry than the training of the workers referred to above. Table 8, based on a BLS survey for the Office of Manpower Training and Automation,5 shows the ways in which construction craftsmen (as of April 1963) learned their skills and what ways they thought most helpful. Formal methods included technical school training, apprenticeship, and training in the Armed Forces. On-the-job learning included instruction by supervisors and fellow workers. Casual methods included learning from friends or relatives or "just picking it up." The study showed that construction craftsmen believed casual methods most important in learning their skills, on- the-job training next important, and formal methods least important. About one in nine construction craftsmen believed that apprenticeship was the most helpful way. However, the contribution of apprentice- ship is probably more significant than indicated by this ratio. Most training authorities recommend formal apprenticeship training as the best way to acquire the all-round proficiency of craftsmen in the build- ing trades. This type of training provides the apprentice with a balanced knowledge of his field of work and enables him to perform his operations completely. In large part, apprenticeship provides the highest skilled workers (who provide guidance to others) and a signifi- cant proportion of future foremen. A study of apprentices who completed their programs in 1950 found that by 1956 about 20 per- cent were employed as supervisors, and another 10 percent as con- tractors.° Table 9 shows the average number of apprentices per 100 active journeymen during the 1950-64 period, and provides some indication of the extent of apprenticeship training in the construction trades between 1950 and 1964. Table 10 shows the number of apprentice registrations,completions, and cancellations for construction craftsmen in Bureau of Apprentice- ship and Training registered programs; however, not all apprentices are covered in these data.7 Cancellations represent a loss of potentially highly trained workers, but this loss is not as significant as it appears since many apprentice dropouts secure some training and eventually become skilled journey- men through less formal means. Indeed, many apprentices may drop their apprenticeship because of opportunity for employment at the journeyman level. The proportion of apprentices who complete their apprenticeship varies significantly by occupation. (See table 10.) 5 U.S. Department of Labor, Formal Occupational Training of Adult Workers, Manpower/Automation Research Monograph No. 2, December 1964. Table 11, p. 43. 0 Bureau of Apprenticeship and Training, Career Patterns of Former Apprentices, Bulletin T-147, 1959. "Training of Workers in American Industry," U.S. Department of Labor, Bureau of Apprenticeship and Training, PAGENO="0094" TABLE 8.-All ways and most helpful way of learning current job, by current occupation, April 1963 Current occupation ~. Total in occu- pa- tion ~ All ways of learning Most helpful way of learning Not avail- able ~ Formal training On-the-job learning Casual methods No train- ing needed For- mal train- hag On- the- job learn- ing Casual meth- ods ~_ Not avail- able School Ap- pren- tice- ship Armed Forces On- the- job in- struc- tion Com- pany train- ing course Worked way up From friend or rela- tive Picked it up Other Total, all occupations Construction craftsmen Brickmasons, stonemasons, and tile- setters. Carpenters Electricians Excavating, grading, and road macbin- eryoperators~ Painters Plumbers and pipefitters Tinsmiths, coppersmiths, and sheet- metalworkers Other construction craftsmen Cranemen, derrickmen, and hoistmeni.. 100 100 ~ 100 100 100 ~ 100 100 100 100 100 100 7.5 1. 7 2.5 2.8 2.2 1.9 .7 1. 1 1.7 30.2 39.4 44.7 31.1 72.9 11.2 27.8 55.0 70.9 34. 1 17.5 56.2 54. 8 ~ 56.6 48.7 71.2 47.0 46.9 66.6 58.1 59. 1 60.0 45.4 57.2 53.5 67.8 33.4 72.2 58.7 39.1 44.4 68~ 8 49.2 1.6 . 9 .6 1.0 .5 2.6 1.7 2.3 1.7 8.7 4. 3 6.9 2.4 10.7 .6 5.4 3.0 ~ 10.3 2.0 11.0 12.6 7.0 20.5 * 12.0 15.6 13.7 14. 8 1.2 2.2 2.3 4.9 2.6 .5 .7 4.3 3.4 7.5 29.6 24. 8 27.7 21.9 24.9 23.6 22.9 35.1 20.5 27. 9 35.0 3.6 . 9 1.2 1.9 .9 1.7 4.2 3.9 2.2 1.3 2.3 2.2 3.2 1.2 2.3 4.3 1. 1 4.2 6.0 10. 5 15.1 14.2 1.9 8.6 17.2 5.3 9. 1 5.8 20.4 21. 9 13.2 28.1 6.6 40.6 21.5 10.3 27.4 17. 0 23.3 2.5 1. ~ 1.7 1.4 3.5 2.0 ~ 1.7 1. 1 3.3 14.6 19. 0 20.8 16.2 24.9 14.4 16.5 25.1 16.2 24. 4 15.0 Source: U.S. Department of Labor, Formal Occupation Training of Adult Workers NOTE.-Since some persons indicated more than 1 way, sums of ways, when added to Manpower/Automation Research Monograph No. 2, December 1964. "No training needed," exceed 100 percent. [Percent distribution of civilian workers 22 to 64 years old who completed less than 3 years of college] 0 ci a a Lii en PAGENO="0095" STATE AND LOCAL PUBLIC FACILITY NEEDS 87 TABLE 9.-Average ratio of apprentices per 100 active journeymen for selected occupations 1950-1964 1 Average Occupation 1950-64 Bricklayers 7. 4 Carpenters 4. 3 Electricians 13. 2 Iron Workers 5. 0 Painters, paperhangers, and glaziers 3. 3 Plasterers and cement masons 6. 8 Plumbers and pipefitters 10. 2 Roofers 12. 3 Sheet metal workers 12. 7 1 Based on the number of journeymen working or available for work, to the number of persons working under apprenticeship agreements. Source: Bureau of Apprenticeship and Training, based on data collected by the Bureau of Labor Sta- tistics from building trades unions in 52 cities with 1950 populations of 100,000 or more. TABLE 10.-Registered apprentices in training, new registrations, completions, and cancellations, 1952-64 Year In training on Jan. 1- New regis- trations 1 Completions Cancella- tions 2 In training on Dec. 31- 1952 77, 920 76,801 81,987 81, 737 100,899 114, 166 110, 862 108,814 106, 699 102,963 100,751 103,046 106, 913 109, 836 33, 316 37,102 34,238 47, 238 42,873 38, 506 34, 485 37,894 33, 939 33,446 36,994 36,763 38, 556 15, 679 13,521 15,537 13, 444 14,588 17, 344 20, 255 21,067 16, 656 17,251 16,477 15,559 16, 286 18, 756 18,393 18,951 14, 632 16,565 24, 466 16, 278 18,942 21, 019 18,407 18,222 17,337 19, 347 76, 801 81,987 81,737 100, 899 112,619 110, 862 108, 814 106,699 102, 963 100,751 103,046 106,913 109, 836 1953 1954 1955 1956 1957 3 1958 1959 1960 1961 1962 1963 1964 1965 1 Includes reinstatements. 2 Cancellations are not synonymous with "dropouts," since they included layoffs, discharges, out-of- State transfers, upgrading within certain trades, and suspensions for military service, as well as voluntary "quits." 3 Lathers included for the 1st time, no prior reports for this trade. Source: U.S. Department of Labor, Bureau of Apprenticeship and Training. TABLE 11.-Apprenticeship completions and cancellations in selected building trades, 1964 Occupations Completions Cancellations 1 Construction trades Brick, stone, and tile workers Carpenters - 16, 286 19,347 1,369 2, 882 222 3, 887 266 732 240 770 267 3, 101 282 1,742 526 1, 692 6,255 276 2, 526 182 755 502 1, 711 223 1, 697 1,500 1,340 688 Cement masons Electricians Glaziers Iron workers - Lathers Painters Plasterers Plumbers and pipefitters Roofers Sheet metal workers Construction workers, not elsewhere classified I Cancellations are not synonymous with "dropouts," since they include layoffs, discharges, out-of-State transfers, upgrading within certain trades, and suspensions for military service, as well as voluntary "quits." PAGENO="0096" 88 STATE AND LOCAL PUBLIC FACILITY NEEDS The Manpower Development and Training Act of 1962 provides institutional and on-the-job training programs for unemployed, em- ployed but underskilled, and partly employed workers. MDTA train- ing in the building trades occupations, cumulative to December 1965, has provided training and/or retraining to nearly 11,000 construction workers (see table 12). Training is at the entry level (preapprentice- ship) or represents an upgrading of. skills. For example, 400 journey- men operating engineers and 120 carpenters in California were up- graded in new skill requirements of their trades during 1965. Ap- prentice-entry bricklayer training programs were started to prepare 300 workers in Georgia and 160 workers in the District of Columbia as apprentice-entry bricklayers. TABLE 12.-MD TA training in the building and construction trades occupations, 1962 through 1965 Occupation Institutional On-the-job Projects Trainees Projects Trainees Total Bricklayer Bulldozer operator Cabinetmaker Carpenter Cement finisher Concrete mixer operator Electrician Glazier Heavy equipment operator Structural steelworker Ornamental ironworker Painter Pipefitter 1 Plumber Power shovel operator Sheet metal worker. Tile setter Truck crane operator 289 9,045 . 84 1,674 41 2 24 90 11 29 4 12 13 17 1 41 3 1 1,069 48 596 2,333 341 694 172 320 1,613 341 16 1,446 41 . 15 12 16 20 2 1 2 2 8 5 3 13 588 139 462 20 2 2 8 132 36 180 . 105 1 Includes pipefitters trained in ship and boat industry. Source: U.S. Department of Labor. The most obvious point that emerges for data on training of con- struction craftsmen is that it takes place on the job. Even formal apprenticeship combines on-the-job instruction with classroom work. Obviously, construction contractors and unions play a key role in training the future supply of skilled workers, even when through informal means. III. TECHNOLOGICAL DEVELOPMENTS IN THIII CONSTRUCTION INDUSTRY The Bureau of Labor Statistics has recently prepared a report on the technological developments in 40 important industries.8 Included in the report are the following statements of technological trends in the construction industry. "Continuing increases in the size, capacity, power, speed, and durability of earthmoving equipment, such as trucks, tractors, scrapers, and shovels are re- sulting in the moving of many times the amount of material than was previously possible." $ "Techological Trends in Major American Industries," Bureau of Labor Statistics, Bulletin 1474, issued 1966. PAGENO="0097" STATE AND LOCAL PUBLIC FACILITY NEEDS 89 "New portable construction equipment and handtools are increasingly being introduced.-This equipment, used in all types of building construction to reduce unit labor requirements, job costs, and completion time, includes power trowels, paint and plaster spraying guns, power nailing and stapling machines, and motorized wheelbarrows." "Improvements in forklift trucks, conveyor belt systems, motorized wheel- barrows, pneumatic pipe systems, and conventional cranes are facilitating the moving and handling of construction materials." "Another important development in material handling is the tower crane. Especially useful in the construction of tall buildings, tower cranes can be used to deliver material to any part of the top of a tall building-not just near the edge as do conventional crawler cranes-and to hoist material to greater heights. Be- cause tower cranes can be used to deliver material where it is required, labor crews normally needed to shift material about when using conventional cranes are significantly reduced." "Significant advances continue to be made in paving-Major advances in both asphalt and concrete paving, which are improving the quality of highways and reducing unit labor requirements, construction costs, and completion time of construction jobs, include more portable and automatically controlled mixing plants; larger capacity and higher speed transit mix trucks; and more automatic, electronically controlled grading and paving machines." "Still another significant advance in concrete paving is the slipform method which eliminates the fixed side forms used in conventional paving. Instead, forms are a part of the paving machine (slip-form paver) and slide forward with it leaving the concrete slab edges unsupported. This method of paving reduces costs by eliminating the need for crews to erect and remove forms." "Standardization of dimensions of construction materials and in design (modular coordination) decreases labor and material requirements." "This system, utilizing a standard unit of measurement of 4 inches and its multiples, also is gaining in use in commercial construction." "The trend toward prefabrication (preassembly of building components in manu- facturing plants) will accelerate." "Prestressed concrete structural elements used for larger buildings and heavy construction, such as beams, roof and floor slabs, columns, and pilings, may in- crease by 150 percent between 1964 and 1970." "Among the major factors contributing to this advancing trend toward pre- fabrication are the significant savings possible in time, materials, and onsite labor requirements, the higher degree of quality control possible in factories, and the greater opportunities fof economies of large-scale production and mass- production techniques in construction. For example, a carpenter can install a complete prefabricated door (prehung in its frame with hardware attached) in about one-tenth to one-sixth of the time usually required to hang a door in the conventional manner." "New and improved materials continue to reduce significantly material and labor costs.-By 1970, new products introduced during the decade of the 1960's are expected to account for a substantial portion of all building products sold in this country, reflecting the continuing advances in plastics, steel, concrete, paints, and other materials." "Prestressed concrete products, expected to double in sales by 1970 offer con- siderable labor and other cost savings in many uses. Developments in structural design using high strength steel products can reduce the frame weight of buildings by as much as one-half in some instances, thereby resulting in significant material and labor cost savings." "New paints require less on-site preparation, flow more smoothly, go on in fewer coats, and last longer, thus reducing costs and substantially reducing main- tenance requirements. Adhesives are being more widely used to save time and reduce costs in floor bonding, exterior wall section fabrication, and in drywall erection." "Improvements in design are continually being made-New concepts of archi- tectural and engineering design make possible cost savings and productivity increases. More than a dozen new structural design concepts-all directed toward the economical utilization of space, materials, and the lowering of costs- have emerged since 1945." "New systematic scheduling techniques are gaining acceptance among large con- tractors on complex projects-Techniques such as the program evaluation and re- view technique (PERT) and the critical path method (CPM), particularly when used in conjunction with electronic computers, significantly improve management's 70-1:32-66-vol. 1-7 PAGENO="0098" 90 STATE AND LOCAL PUBLIC FACILITY NEEDS capability to plan, schedule, coordinate, and monitor all steps involved in the com- pletion of a complicated construction project. Basically, PERT and CPM are systems for charting the work flow of an entire construction project in detail." The greatly expanded expenditures for construction by State and local authorities have more than offset the increased productivity result- ing in a steady rise in employment in this sector of the construction industry. Since increased efficiency in the production of any material is fre- quently accompanied by a greater use of that material, the net effect is to offset the disemployment effect of the increased efficiency. For example, the technological changes in the preparation and use of con- crete has actually created an increased demand for concrete workers. It is important to note that the decreased use of certain materials does not always mean a reduction in the number of workers tradi- tionally employed with that material. For example, carpenters frequently install materials which have replaced wood in the modern structures. IV. OUTLOOK FOR LABOR REQUIREMENTS FOR STATE AND LOCAL PUBLIC WORKS, 1966-75 Projections of construction volume for 1975 have been prepared by the Department of Commerce based on two different unemployment rate assumptions. Projection A assumes a 3-percent and projection B a 4-percent unemployment rate for the total labor force. Both of these projections are also dependent on specific assumptions of GNP, personal income, government expenditure, and other factors discussed elsewhere in this analysis. Projection A assumes a 133-percent increase in current dollar value of such construction reaching $41.7 billion in .1975. Projection B anticipates $36.6 billion of State and local construction, more than double the current rates. The constant dollar estimates for the two projections are $26.3 billion and $25.0 billion. Allowing for increased productivity, it is estimated that 2,802,000 full-time workers will be needed in 1975 for this work under projection A, and 2,744,000 under projection B.9 Thirty-eight percent of these (1,070,000 and 1,048,000, respectively), would be needed in the con- struction industry and the balance in sectors supplying the necessary materials and service. * For on-site construction workers, the estimated man-year require- ments for State and `local construction are shown in table 13. `The ratio of constant dollar value for A over B is higher than that ratio for employment since theincreased * * growth of A would presumably increase productivity. PAGENO="0099" STATE AND LOCAL PIJBLIC FACILITY NEEDS 91 TABLE 13.-On-site employment requirements for State and local public construction, selected occupations, 1950-75 Occupation Thousands of man-years 1950 1960 1975A 1975B Carpenters 46 55 73 72 Plumbers 15 20 33 32 Masons 13 20 32 31 Electricians 9 16 32 31 Steel workers 9 13 22 22 Cement finishers 5 10 21 21 Sheet metal workers 5 7 11 11 Painters 5 6 8 8 Plasterers 4 4 8 6 Lathers 3 4 6 6 Operating engineers 66 109 165 162 Unskilled 157 206 307 301 Other 44 68 156 153 Total 378 537 874 856 PAGENO="0100" PAGENO="0101" PART II. PUBLIC FACILITY CATEGORIES 93 PAGENO="0102" PAGENO="0103" CHAPTER 1 Regional and River Basin Water Supply Systems * INTRODUCTION This chapter describes the present situation of storage for municipal and industrial water supply purposes in reservoirs constructed by the Corps of Engineers of the Department of the Army, the Bureau of Reclamation of the Department of the Interior, and the Soil Conservation Service of the Department of Agriculture. In each instance, the reservoirs are the result of dams built for multiple- purpose control of the waters of river basins or other significant drainage areas. Therefore, the dams may involve flood control, hydroelectric power, flow regulation for navigation and pollution control, irrigation, recreation, and fish and wildlife habitat as well as municipal and industrial water supply and other purposes. Only storage is usually provided for the water supply purpose. Pumps, transmission lines, and treatment works must usually be furnished by municipalities or firms using the water. The storage is authorized by several Federal acts as noted below. In a few cases transmission works and pumps have been provided; but treatment works, like for the District of Columbia, are very exceptional. Until recently there has been no call for a systematic effort by the Federal Government to appraise the total national status and need for municipal and industrial water supplies. Present Federal legis- lation, generally, is designed only to assure that municipal and industrial water supply is considered when Federal agencies plan dams for river basin development. However, the Water Resources Planning Act of 1965 now calls for a unified and systematic effort among the Federal agencies and the States to meet all water needs, including water supply. The act requires a biennial appraisal of the demand and supply situation for water for all purposes on a regional and drain- age-area basis. Furthermore, the act provides financial assistance to the States to improve their water resources planning including that of municipal water supply. In addition, the Water Resources Council coordinates the efforts of the Federal agencies concerned, and will cooperate with Federal-State river basin commissions authorized by the act in the preparation of comprehensive plans for water resource development by river basins and major regions. The present schedule for the preparations of comprehensive water and related land resource river basin plans calls for the entire Nation to be covered by 1972. These. efforts of the Water Resources Council, related Federal agencies, and the States are designed to produce a systematic. ap- praisal of the municipal water supply situation for the Nation to the year 2000. Uutil that task is further along, the following informa- tion indicates the situation as it is known today as regards the pro- vision of municipal and industrial water supplies in reservoirs con- *Prepared by the Corps of Engineers, Department of the Army; Bureau of Reclamation, Department of the Interior; and the Soil Conservation Service, Department of Agriculture, with minor editing by committee staff. 95 PAGENO="0104" Allatoona, Ga Baldhill, N. Dak. (1) Beaver, Ark Belton, Tex Do Do Berlin, Ohio Canton, Okia Canyon, Tex Clark Hill, Ga. and S.C Do Council Grove, Kans Dam B,Tex East Brimfield, Mass Fort Supply, Okla Ferrells Bridge, Tex Grapevine, Tex Do Do Heyburn, Okla Do Homme, N. Dak. (1) Hords Creek, Tex Hulah, Okia - Do John Redmond, Kans Lake Texoma, Okla. and Tex Do Do Lavon, Tex Lewisville, Tex - Do - Littleville, Mass Monroe, md Mosquito Creek, Ohio Navarro Mills, Tex Oologah, Okla Do Do Do Do Pomona, Kans Do Proctor, Tex San Angelo, Tex Sam Rayburn, Tex. (2) Tenkiller Ferry, Okla Texarkana, Ark. and Tex. (1) Tom Jenkins, Ohio Toronto, Kans Waco,Tex Do. (3) W. Kerr Scott, N.C Wister, Okla Total Total (rounded) 96 STATE AND LOCAL PUBLIC FACIL:ITY NEEDS structed under the programs of the Corps of Engineers, Bureau of Reclamation, and the Soil Conservation Service. Department of the Army: Corps of Engineers A. NATURE AND COMPOSITION OF PUBLIC WORK OR FACILITY In 1948, the Corps of Engineers initiated a program of providing municipal and industrial water supply storage in reservoir projects. The water so stored is made available to States, municipalities, private concerns or individuals in accordance with specific legislation. For the existing capital plant in the United States, provided by the Corps of Engineers, see table I, "Water supply storage as of June 30, 1965." TABLE 1.-Water supply storage as of June 30, 1965 Project in operation Storage (acre-feet) Local agency served 13, 140 69, 500 108, 000 12,000 113, 700 247, 000 19,400 90, 000 366, 400 163 92 24,400 94, 200 1,140 400 261, 100 85, 000 50, 000 1,250 1, 000 300 3, 650 5, 780 15,400 2, 000 34, 900 21,300 16,400 1, 150 100, 000 415, 000 21,000 9,400 159, 900 11,000 53, 200 38, 000 500 5, 000 2, 500 100 230 160 31,400 80, 400 1, 383, 500 300 13, 400 5, 800 265 91,074 13, 026 33, 000 1,600 4118, 520 4, 119, 000 Cob County-Marietta Water Authority. Eastern North Dakota, Water Develop- ment Association. Beaver Water District, Ark. Fort Hood, Tex. Brazos River Authority, Tex. Brazos River Authority, Tex. Mahoning Valley Sanitray District. Oklahoma City, Okla. Guadalupe-Blanco River Authority, Tex. McCormick, S.C. Lincolnton, Ga. Council Grove and Emporia, Kans. Lower Neches valley Authority. American Optical Co., Mass. Oklahoma State Board of Public Affairs. Northeast Texas Municipal Water Dis- trict. Dallas, Tex. Park Cities, Tex. Grapevine, Tex. Keifer, Okla. Rural Water District No. 1, Creek County, Okla. Graftc'ri and Park River, N. Dak. Coleman, Tex. Bartlesville, Okla. Oil Recovery Corp., Oklahoma. State of Kansas. Denison, Tex. Texas Power & Light Co. Sinclair Oil & Gas Co. North Texas Municipal Water District. Dallas, Tex. Denton, Tex. Springfield, Mass. State of Indiana. Warren, Ohio. Trinity River Authority, Texas. Tulsa, Okla. Collinsville, Okla. Public Service Co. of Oklahoma. Claremore, Inc., Claremore, Okla. Rural District No. 1, Nowata County, Okla. Rural Water District No. 3, Kans. Pomona Reservoir Water Co., Kansas. Brazos River Authority. Upper Colorado River Authority. Lower Neches Valley Authority. East Central Water Authority, Oklahoma. Cities of Texarkana, Ark. and Tex. ~tate of Ohio. City of Toronto, Kans. Brazos River Authority, Tex. Waco, Tex. Winston-Salem and Wilkes County, N.C. Heavener Utilities Authority. PAGENO="0105" STATE AND LOCAL PUBLIC FACILITY NEEDS 97 B. COSTS AND USER CHARGES The Corps of Engineers provides space in multipurpose reservoirs for water suppiy storage. Where necessary, facilities are incorporated in project structures to provide for the release or withdrawal of stored water for water supply purposes. This water supply storage space is sold to States, municipalities, private concerns, or individuals, who, in turn, may sell water withdrawn from the storage space to others. The purchase price of the storage space consists of the total invest- ment cost of specific water supply facilities, plus an allocated share of the investment cost of the joint-use facilities. Since the cost of water supply storage space varies with the cost of the structure, it is not practicable to develop a standard unit of cost. The present trend is for costs allocated to water supply storage space to be in the range of $30 to $100 per acre-foot. The Corps has no information concerning the extent to which tax resources or borrowings are used to cover the cost of purchasing water supply storage space, or the user charges for the sale of water to the consumer. C. TREND OF CAPITAL OUTLAYS Between January 1948 and July 1958 about 3.4 million acre-feet of water supply, worth about $41.3 million, were placed under agree- ment and included in Corps of Engineers reservoirs. The Water Supply Act of 1958 (title III of Public Law 87-88) greatly expanded the authority to include water supply and, subsequent to passage of that act, agreements have been completed covering water supply storage of about 1.8 million acre-feet of storage worth approximately $87.2 million. In addition, 800,000 acre-feet of storage for which contracts have not been signed are included in projects now under construction. The trend of water supply storage contracts is shown in table II. TABLE II Fiscal year Water supply acre-feet Storage space agreements dollar value Fiscal year Water supply acre-feet Storage space agreements dollar value 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 16, 780 80,351 5,800 92,500 606, 950 284, 200 251,263 1,383,500 $572, 030 755,000 785, 000 1,671,420 6, 756, 360 4, 705, 791 2,150,000 13,900,000 1958 1959 1960 1961 1962 1963 1964 1965 1966 637, 600 42,000 86, 200 696,400 443, 100 45,540 16, 782 395, 755 90,781 $10, 931, 473 3,489,021 3, 241, 749 20,030,515 19, 307, 638 4,004,970 1, 415, 323 29, 983, 349 5,745,575 Construction of these projects was and is being financed with ap- propriated funds. The cost of water supply storage is reimbursed by the users in accordance with section 301 of the Water Supply Act of 1958. D. NEEDS AND PROSPECTIvE CAPITAL OUTLAYS It is estimated that approximately 75 million acre-feet of storage will be needed by the year 2000 to assure adequate supplies of water for municipal and industrial use. This projected need is based on expected population growth, anticipated increase in the per capita PAGENO="0106" 98 STATE AND LOCAL PUBLIC FACILITY NEEDS consumption of water, and urbanization and industrialization of vari- ous sections of the country. The most criticsi areas of municipal and industrial water supply shortages over the next 35 years are considered to be in the Texas Gulf area and the southern California area. It is estimated that approximately 8 million acre-feet of municipal and industrial water storage in projects could be constructed by the year 1975, assuming no budgetary or appropriation restrictions. Pro- vision of 8 million acre-feet of water supply storage in Corps of Engi- neers projects by the year 1975 would require the construction of multiple-purpose projects, including projects currently under con- struction, having a total cost of approximately $3 billion. Of this amount, it is estimated that approximately $400 mil]ion would be chargeable to municipal and industrial water supply. If budget and appropriation actions permit full funding of the above projects and these projects are selected for construction in the order now considered optimum, the estimated portion of future expenditures allocable to miraicipal and industrial water supply follows: Millions of Fiscal year dollars 1968 (prior to) 117.5 1968 34.4 1969 36.7 1970 34.1 1971 33.9 1972 39.2 1973 36. 8 1974 37.4 1975 30. 0 Department of the Interior: Bureau of Reclamation A. NATURE AND COMPOSITION OF PUBLIC WORK OR FACILITY The role of the Bureau of Reclamation is one of planning and con- structing multiple-purpose water resource developments involving such functions as irrigation, hydroelectric power, municipal and in- dustrial water, flood control, navigation, fish and wildlife, recreation, and water quality control. These relate, generally within the Western States, to the construction of multipurpose dams and reservoirs to regulate riverfiows and of the necessary conveyance facilities. Munic- ipal and industrial water supplies are usually developed as a part of a multipurpose project, but a few projects where municipal and indus- trial water was by far the greatest purpose have been constructed. The water so produced by the investment of funds appropriated by the Congress is sold to the communities on an acre-foot basis. Needs and requirements for such water are determined after close cooperation with the local entities. Such items as population growth, per capita use, water quality, future industrial growth, and alternative sources of supply are considered. Because of the nature of large multipurpose dams and reservoirs, it is obvious that they have long economic lives, generally well in excess of 100 years. In the case of conveyance canals and associated features, their lives are somewhat less but still usually in excess of 50 years. As of June 30, 1965, the Bureau of Reclamation had 44 projects, either authorized, under construction, or constructed, that included the function of municipal and industrial water supply. Table III PAGENO="0107" STATE AND LOCAL PUBLIC FACILITY NEEDS 99 indicates the distribution of these projects by States. Except for a few isolated instances, all of these projects were built after 1941. Because of the great variation in the size and types of projects con- structed, the sale of water to cities, based on a ranking of population size, varies from a few hundred people to several million. In cases of relatively simple projects, operation and mainte- nance of the structures are many times a local responsibility. In those instances where large, complex, multipurpose developments are involved, particularly those including hydroelectric power, the opera- tion and maintenance are performed by the Federal Government. The Bureau of Reclamation, however, maintains title to these projects and, therefore, the ownership remains with the Federal Government. As of June 30, 1965, the total Federal investment (costs allocated to the municipal and industrial function) was in excess of $400 million. B. COSTS AND USER CHARGES Again because of the highly variable nature of these projects, the range of typical construction costs allocated to mirnicipal and in- dustrial water varies from a few thousand dollars to many millions of dollars. Likewise, the range in operation and maintenance ex- penses is highly variable, depending upon such things as economic and physical desirability of the damsite, whether only storage is involved, or whether both storage and conveyance are provided. The construction and operating costs of these multiple-purpose water resource projects are allocated to the several functions served by the project, using an interdepartmentally approved method of cost allocation. Current reimbursement policy requires that the invest- ment costs allocated to municipal and industrial water supply be returned by the water users to the Federal Treasury with interest within 50 years. Under certain conditions, interest may be waived for a period up to 10 years on a portion of the storage investment costs allocated to municipal and industrial water supply. The water users are also required to pay the annual operating costs allocated to municipal and industrial water supply. Under current policy exe- cution of a repayment contract with the water users for repayment of costs allocated to municipal and industrial water supply is required before construction of the multiple-purpose project is initiated. As a minimum, water rates are set at a level which insures the return of the allocated investment costs with appropriate interest within 50 years and covers the annual operating costs. Water rates may be set at a higher level if such revenues are required to assist in the repayment of project costs allocated to irrigation. However, under no circumstances would the rate be set at a level that would exceed the cost of water if that water were developed by the most likely alternative which would be constructed in the absence of the Federal multiple-purpose project. C. TREND OF CAPITAL OUTLAYS Capital outlays for municipal and industrial water supply facilities made by the Bureau of Reclamation have increased from about $5 million in 1946 to over $35 million in 1965. The annual amounts are shown in table IV. These annual outlays are the proportion of annual construction expenditures for multipurpose projects which are PAGENO="0108" 100 STATE AND LOCAL PUBLIC FACILITY NEEDS properly allocable to the furnishing of municipal and industrial water. After 1961 the amounts shown in table IV contain appropriations for operation, maintenance, and replacement costs associated with Federal operation. The pattern of expenditures has not been in response to any overall program to meet municipal and industrial water needs as such but rather to meeting the municipal and industrial water demands of particular service areas of projects authorized to serve as many purposes as can economically be accommodated. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS That municipal and industrial water needs will increase in nearly all areas in the future is a foregone conclusion. That there will be an increasing amount of municipal and industrial water in connection with multiple-purpose project development seems equally certain. In special cases it may become necessary to build single-purpose projects to provide municipal and industrial water supplies. Table V shows the expected future expenditures for capital outlays which may be allocable to municipal and industrial water service. These esti- mates are based upon presently authorized or planned projects and expected construction schedules over the next 10 years. TABLE 111.-Number of projects containing municipal and industrial water service features Number Number of of State: projects State-Continued projects Washington 1 Nevada 1 Oregon 1 North Dakota 1 California 8 South Dakota 5 Arizona 1 Kansas 4 New Mexico 1 Texas 2 Wyoming 2 Oklahoma 4 Montana 4 Idaho 1 Colorado 1 Utah 7 Total 44 TABLE IV.-Portion of annual expenditures allocable to municipal and industrial water service Millions Millions of of Fiscal year: dollars Fiscal year-Continued dollars 1946 5. 5 1956 5. 8 1947 2. 0 1957 6. 8 1948 2. 0 1958 11. 4 1949 4. 9 1959 12. 6 1950 9. 1 1960 9. 1 1951 8. 6 1961 10. 3 1952 8. 1 1962 15. 1 1953 6. 0 1963 22. 6 1954 4. 6 1964 37. 6 1955 6. 4 1965 35. 3 TABLE V.-Estimated portion of future expenditures allocable to municipal and industrial water service Millions Millions of of Fiscal year dollars Fiscal year-Continued dollars 1966 34. 1 1971 78. 5 1967.. - - - 33 5 1972 - - - - 65 3 1968 24 7 1973 - - - 61 0 1969 36. 7 1974 57. 0 1970 50. 3 1975 53. 0 PAGENO="0109" STATE AND LOCAL PUBLIC FACILITY NEEDS 101 Department of Agriculture: Soil Conservation Service Pursuant to the Flood Control Act of 1944, as amended and supple- mented, and the Watershed Protection and Flood Prevention Act (Pub- lic Law 566-83d Cong.), as amended, the Department of Agriculture cooperates with the States and their political subdivisions in a program to prevent erosion, floodwater, and sediment damages in the water- sheds of rivers and streams and to further the conservation, develop- ment, utilization and disposal of water. Although watershed protec- tion and flood prevention are basic objectives in watershed projects, other purposes, essential to meeting the watershed community needs, are included in the work plan whenever they can be justified and the local sponsors decide they should be included. These other purposes are improved agricultural drainage, irrigation, public recreational or fish and wildlife developments, water quality control, and municpaI or industrial water supply. The work under the Flood Control Act is carried out in 11 authorized watersheds embracing some 31 million acres in 12 States, whereas authority under Public Law 566 is nationwide. The Soil Conserva- tion Service has general responsibility for administering these pro- grams, except for loans and the repayment of advances. Administra- tion of these provisions is the responsibility of the Farmers Home Administration. Specific authority to include provisions for municipal or industrial water supply in watershed projects is contained in Public Law 1018, 84th Congress. Included in that legislation also were provisions authorizing the Secretary of Agriculture to make loans or advance- ments to local organizations to finance the local share of costs of carrying out works of improvement included in watershed projects. Public Law 87-703, September 27, 1962, amending the Watershed Protection and Flood Prevention Act, authorized the Secretary of Agriculture to advance funds to local organizations for developing water supply for future use in watershed projects. This authority is the same as the Secretary of the Army and the Secretary of the Interior has under the Water SupplyAct of 1958 (Public Law 85-500). A. NATURE AND COMPOSITION OF PUBLIC WORK OR FACILITY 1. DESCRIPTION OF FACILITIES (a) Works of improvement in small watershed projects include' multiple-purpose reservoirs for flood prevention, municipal or indus- trial water supply, irrigation, and fish and wildlife or recreational use. Additional features that may be included as project measures for municipal or industrial water supply are limited to intake and outlet works which are an integral part of the reservoir structure and raw water supply lines leading to a treatment plant. Water treatment plants and distribution systems are not eligible for assistance. (b) Water supply is provided for rural and urban communities for residential, commercial, and industrial use. (c) Water supply needs for municipal or industrial use are deter- mined by the sponsoring organization's staff or private consultant and are based on an evaluation of present and foreseeable needs, adequacy of yield from the watershed drainage area, water quality, and cost comparisons with alternative sources. PAGENO="0110" 102 STATE ~D LOCAL PUBLIC FACILITY NEEDS (ci) Multiple-purpose water supply reservoirs normally have a design life of 50 to 100 years based upon the expected sediment accumulation in the reservoir. 2. EXISTING CAPITAL PLANT IN THE 1YNITED STATES (a) As of June 30, 1965, a total of 31 reservoirs, incorporating nearly 112,000 acre-feet of water supply storage for municipal or industrial use, had been constructed in watershed projects under authority of Public Law 566 or the Flood Control Act of 1944. Thir- teen additional reservoirs, having an aggregate municipal and in- dustrial storage capacity of 36,455 acre-feet, were under construction on that date. Watershed work plans bad been completed which provide for 79 more reservoirs having a combined municipal and industrial storage allocation of 131,255 acre-feet. (b) Reservoirs completed and in operation on June 30, 1965, are distributed in 12 States as shown in table VI. Reservoirs under construction are located in 10 States. The 79 structures for which plans have been made but not yet under construction represent projects in 24 States. (c) The distribution of these facilities by size of community served is shown in the following tabulation: Status as of Jan. 30, 1965 . Size of community served 50,000 to 10,000 to 2,500 to Under Total 999,999 49,999 9,999 2,500 Completed (in operation) Under construction Planned 7 12 12 31 1 2 7 6 16 13 21 45 79 (ci) Of the 31 reservoirs in operation, 5 were completed in the late 1950's and the balance since 1960. (e) Water supply facilities installed as integral parts of small water- shed projects are owned, operated and maintained by cities, counties, towns, special districts, public authorities or other local public bodies. (J) The estimated current value (end of 1965) of the municipal or industrial water supply storage in the 31 completed reservoirs is ap- proximately $6,500,000. B. COSTS AND USER CHARGES 1. CONSTRUCTION COSTS AND OPERATING COSTS (a) Construction costs.-A cost analysis of the 126 reservoirs planned to date under the watershed program shows that the cost per acre-foot varies widely. This is due to differences in site conditions and size of reservoir. As might be expected, the unit cost generally is greatest for the smaller reservoirs. The following tabulation illus- trates this relationship: Size, acre-foot Cost per acre-foot 79 reservoirs 47 reservoirs 7 reservoirs 0to999 1,000 to 9,999 Over 10,000 $141.20 114.86 55. 30 PAGENO="0111" STATE AND LOCAL PUBLIC FACILITY NEEDS 103 (b) Local sponsoring organizations, qualified by State law, assume full responsibility for operation and maintenance of municipal and industrial water supply facilities installed under the watershed program. Consequently, only limited information is readily available upon which to determine annual maintenance and operating expenses. From a limited sample of the proj ects, for which some information is available, estimated operation and maintenance costs range from less than $10,000 to about $50,000 yearly depending upon the size and complexity of the facility. 2. USER CHARGES As in the case of operation and maintenance costs, only limited data are available on user charges. Therefore, we are not in a position to state the extent to which user charges cover services, operation and maintenance costs, or liquidation of the indebtedness. C. TREND OF CAPITAL OUTLAYS 1. The following tabulation shows the annual accomplishments since provisions for municipal or industrial water supply were included in the watershed program: Year Number of reservoirs with municipal and industrial water supply completed Capital investment (non-Federal) 1957-59 1960 1961 1962 1963 1964 1965 (to June 30, 1965) 6 l 4 4 5 8 3 $2,084,658 ~ 1,335,847 162,628 587,029 1,706,856 409, 152 2. All of the capital outlays listed above were accounted for by cities, counties, towns, special districts, public authorities, or other local public bodies. 3. The source of financing for these capital outlays was distributed as follows: Percent Appropriations from tax resources and borrowing in municipal bond market- 59 Federal Government grant assistance (ARA) 5 Borrowing from the Federal Government (Farmers Home Administration) - - 36 D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS 1. (a) In projecting the needs and prospective capital outlays during the decade 1966-75, consideration was given to such factors as the current backlog of unmet needs, expanding population and in- creasing per capita consumption, greater industrial needs, and recog- nition by a growing number of communities of the opportunities afforded by participation in the watershed program. (b) The estimated capital requirements to be met by sponsoring organizations for municpal or industrial water supply facilities installed PAGENO="0112" 104 STATE AND LOCAL PUBLIC FACILITY NEEDS in watershed projects are as follows: 1966 fiscal year, $3.2 million; 1967 fiscal year, $11 million; 1968 fiscal year, $12.7 million; 1969 fiscal year, $14.3 million; 1970 fiscal year, $16 million; 1971 fiscal year, $17.8 million; 1972 fiscal year, $19.7 million; 1973 fiscal year, $21.5 mfflion; 1974 fiscal year, $23.5 million; and 1975 fiscal year, $25.5 million. (c) It is expected that these facilities will be provided to different size communities in the following proportions: Percent Over 50,000 1 10,000 to 50,000 17 2,500 to 10,000 32 Under 2,500 50 (ci) Based upon past experience it is expected that cities, towns, counties, special districts, public authorities, or other local public bodies will assume full responsibility for the capital outlays involved. 2. Contingent upon the availability of appropriated funds, it is anticipated that the percentage of capital outlays to be financed through Farmer's Home Administration loans will increase to ap- proximately 50 percent. The balance would be derived from tax revenue, operating income, or sale of bonds in established municipal bond markets. TABLE VI.-TV[unicipal and industrial storage reservoirs in existence or operation June 30, 1965 [constructed under authority of Public Law 566 or Flood Control Act of 1944] Storage allo- cated to Non-Federal cost allocated Population State Community served municipal and indus- trial to municipal and indus- trial served 1. Alabama 2. Arkansas 3. Arkansas 4. Georgia 5. Georgia 6. Georgia 7. Georgia 8. Georgia Roanoke Lincoln Waldron Camelia Temple villa Rica Winder Dalton Acre-feet 500 1,500 2,100 150 72 445 1,200 400 Dollars 21, 017 218, 000 316,600 9,062 3,880 23,712 61,084 40,693 5, 288 82& 1,619 2,963 788 3,45& 5,555 17,868 9. Illinois 10. Kansas 11. Kentucky 12. Kentucky 13. Louisiana 14. Oklahoma 15. Oklahoma 16. Oklahoma 17. Oklahoma 18. Oklahoma 19. Oklahoma 20. Oklahoma 21. Oklahoma 22. South Carolina 23. Texas 24. Texas 25. Virginia 26. Virginia 27. Virginia 28. Virginia 29. West Virginia 30. West Virginia 31. West Virginia 12 States, total Pittsfield Sedan Lewisburg Hopkinsville Plain Dealing Colgate Wilburton Sallisaw Perry Chickasha Duncan do Marlow Edgefield Brady Kaufman Albemarle County Culpeper Keysville Augusta County Green Valley-Glenwood Cameron Keyser Total 30 communities 4,391 660 93 1,757 710 3,000 3, 000 3, 000 2,125 31,700 10,681 14,600 505 120 24,000 1,346 1, 600 500 200 304 241 129 960 223,552 41,600 13,577 218,350 79,095 352,725 249, 547 470,402 59,010 1,500, 000 340,396 323,315 97,050 15, 000 1,012,183 17,728 67, 873 38, 400 15,823 116, 686 105, 000 71,448 167,415 3,772 1,677 512 19,465 1,357 1,689 1,772 3,351 5,210 14, 866 20, 009 20, 009 4,027 2,876 5,338. 3,087 30,969 2,412 733 37,363 600 1,700 6,192 111,989 6, 290, 050 207, 328 PAGENO="0113" CHAPTER 2 Public Water Supply Systems* INTRODUCTION The public water supply utility industry is one of the Nation's oldest industries. Its history can be traced back to colonial times to the system built in Boston in 1652 consisting of wooden pipe and conduits used to convey water from wells and springs to a wooden tank from which people could fill their water buckets. Almost a century later, in 1746, a farmer named Schaeffer piped water from his Pennsylvania farm to the community now called Schaefferstown. This was the first water supply in the United States built to serve an entire town. Despite these early examples, public water service did not enjoy immediate acceptance. People preferred to take water from their own wells and springs. There were, for example, only 16 public water systems in 1800, and 83 in 1850. The situation changed rapidly, however, during the second half of the 19th century, so that by 1890 there were 1,878 public water supply systems serving 22,500,000 people. Today water utilities constitute one of the Nation's largest and most essential industries, serving almost 160 million people. The industry has established a record for safety, reliability, and service unmatched elsewhere in the world. A. NATURE AND COMPOSITION OF THE WATER UTILITY INDUSTRY 1. DESCRIPTION OF FACILITIES (a) General Physical Characteristics The main components of a public water system are: 1. Source of water supply. Surface water sources are lakes, ponds, and streams. Water may be taken directly from a stream on a continuous basis, or a dam may be built, creating a reservoir to hold flood waters. Ground water sources are wells, springs, and infiltration galleries, wells being most commonly used for public supply. 2. C~ollection works and transmission mains. Collection and trans- mission works comprise intakes, pumping stations, and pipelines as necessary to collect and transport the water to the treatment plant or distribution system. 3. Treatment plants. Minimum treatment for sources of excellent natural quality usually consists of disinfection as a safeguard. Treat- ment may be much more extensive in order to produce a safe and palatable water and may include application of various chemicals together with mixing, flocculation, settling, and filtration. Other processes are employed as needed to soften the water and remove objectionable amounts of iron and manganese. *Prepared by the American Waterworks Association, with minor editing by committee staff. 70-132-66-vol. 1-5 105 PAGENO="0114" 106 STATE ~D LOCAL PUBLIC FACILITY NEEDS 4. Distribution works. Distribution works include pumping and storage facilities, water mains and their appurtenances-such as valves, hydrants, service connections, and meters-all of which are needed to transport the water to the consumer, measure it for billing, and afford fire protection. (b) Services Rendered Water utilities traditionally provide water service to residential, commercial, and industrial customers, as well as for general municipal purposes. Residential uses include drinking, cooking, bathing, toilet flushing, air conditioning, laundering, and sprinkling. Commercial service is furnished to a variety of businesses, including restaurants, hotels, motels, laundries, and florists, for the same general purposes. A prime factor in attracting and keeping industry is an adequate water supply to meet such varied industrial needs as water for cooling, process use, and cleaning. General municipal service consists of public uses like street sprinkling, swimming pools, fountains, public buildings, and-most important-firefighting. Provisions for the latter represent a substantial portion of the investment in water works facilities, especially for the smaller utilities. Depending on the type of utility organization and State and local requirements, water utilities render these services both within and out- side corporate limits and on both a retail and a wholesale basis An example of wholesale basis would be the sale of water to another utility or community, which then distributes the water to its own retail customers. An approximate allocation of water to the various categories of users is shown in table 1. Water production The water industry uses average daily per capita water production as a measure of output. This is calculated by dividing the total gallons of water produced or purchased by the utility (or both) during the year by 365 and then again by the total population served. This gives a figure in gallons per capita per day (gpcd). Per capita water production is lowest for small utilities and progresses upward with increasing size of utility, as shown in table 2. Per capita water production varies among utilities. It also varies regionally, as shown in table 3, which includes data for cities of more than 10,000 population only for the years 1950, 1955, and 1960. (c) Standards of Performance The following general standard of performance for public water supply systems is taken from a policy statement of the American Water Works Association: Delivered water should as a minimum meet U.S. Public Health Service Drinking Water Standards. In addition, it should be as free of objectionable taste and odor, color, turbidity and staining elements, and as noncorrosive as practicable. It should be adequate in quantity for all sanitation and other domestic uses; safe and desirable for industrial and commercial use; adequate for fire protection service, and available on an uninterrupted basis with a minimum of fluctuations in pressure. The 1962 Drinking Water Standards of the U.S. Public Health Service prescribe requirements for drinking water and water supply systems used by carriers and others subject to Federal quarantine regulations. Most States have adopted these standards as minimum PAGENO="0115" STATE AND LOCAL PUBLIC FACILITY NEEDS 107 requirements for public water supplies generally. Because the USPHS standards relate primarily to the health aspects of water, many water utilities have adopted their own higher standards to reflect the improved performance that they are able to attain in their operations. A similar step is being taken by AWWA, which is pre- paring goals or objectives for water utilities generally to emphasize such consumer aspects of water quality as color, taste, odor, clarity, soft- ness, corrosivity, and staining. TABLE 1.-Public water supply use by category 1 Use; percent Type of use: of total Residential 45 Commercial 18 Industrial 32 Municipal 5 Total 100 1 Ilirshleifer, 3.; DeHaven, 3. C.; Milliman, 3. W. "Water Supply Economics, Technology, and Policy." University of Chicago Press (1960), p. 25. TABLE 2.-Mean per capita production of water utilities of varying size Population served (thousands) Number of cities Mean production gpcd ltoS StolO 10 to 25 25to50 50 to 100 100to250 250to500 Over 500 97 261 308 184 109 80 28 H 121 123 124 137 129 137 131 147 I Seidel, H. F., and Cleasby, 3. L. "A Statistical Analysis of Water Works Data for 1960." (Un- published.) TABLE 3.-Regional trends in mean per capita production of water utilities 1 Geographic region Mean production-gpcd 1950 1955 1960 New England Middle Atlantic Northeast central 111 145 132 127 115 226 189 123 139 130 127 109 220 193 108 118 116 124 119 205 202 Northwest central South Mountain Pacific 1 For cities of more than 10,000 population only, from Seldel, H. F., and Cleasby, 3. L. "A Statistical Analysis of Water Works Data for 1960." (Unpublished.) In addition to meeting domestic, commercial, and industrial water needs, the water industry has important responsibilities for fire pro- tection. In this regard, the "Standard Schedule for Grading Cities and Towns of the United States With Reference to Their Fire De- fenses and Physical Conditions" of the American Insurance Associa- tion (formerly the National Board of Fire Underwriters) prescribes standards for grading the fire defenses of cities, guides insurance com- panies in their underwriting procedures, and serves as the basis for PAGENO="0116" :i~ Co~ Co Co~ ~ c~ -i c~ co co co co ~ co co Co 0 0 CO Co CO 01W c1~ t:i~ Co 0+10 coIl Co a o a Il Ill 10 I' 110-0 Co10 CO 11 Co z 1111 o (11 0 CI) 0 0 Co 0 ~CO 1.111 ~I1 ~a 11 Co Co Go Co Co Go ~0 +1 Co Il0 Il Co Co 01 -E E~ E:1111*0 Co+1~11~ E ~~CG~F Co 10 10 ~Co -~Co C)-~)-~-1 ~Co5~ $~ Co Co Co 0+0+ Co 0+ Co Co Co Co Co Co -1 Co Co C ~. Co Co Co Co Co Co Co Co 0+ Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co z 1111 COO 100 10111 0 11 PAGENO="0117" STATE AND LOCAL PUBLIC FACILITY NEEDS 109 Table 7 shows the distribution of water utilities by type of owner- ship. The breakdown gives the number of municipally owned and investor-owned utilities by class size and total population served. Seventy-one percent of the water utilities are municipally owned; 29 percent are investor owned. Municipally owned utilities serve 85 percent and investor owned 15 percent of the population served by public water systems. The examples of dual ownership are so few that they may be safely omitted from the analysis. Investor-owned water utilities include individual, partnership, and corporate enterprises. This type of utility comes under the regulation of public service commissions in all but two States. TABLE 6.-classification of water utilities according to population size 1 Population group Number of utilities Population served Under 500 SOOto 1,000 1,000to5,000 5,000tolO,000 10,000to25,000 25,000toSO,000 50,000tolOO,000 OverlOO,000 Total 5,433 3,751 6,054 1,503 1,225 573 298 399 1,724,981 2,901,512 14,269,131 10,150,890 16,707,415 14,791,775 12,900,250 77,156,210 19,236 150,602, 164 1 Statistical Summary of Municipal Water Facilities in the United States, Jan. 1, 1963. U.S. Public Health Service, U.S. Department of Health, Education, and Welfare, Washington, D.C. (1965). TABLE 7.-Distribution of U.S. water utilities by type of ownership Population group Municipally owned utilities Investor-owned utilities Number Population served Number Population served Under 500 500 to 1,000 1,000 to 5,000 5,000 to 10,000 10,000 to 25,000 25,000 to 50,000 50,000 to 100,000 Over 100,000 Total 3, 245 2, 762 4, 692 1,113 876 362 173 245 1, 127, 491 2, 195, 468 11, 636, 921 8,595,635 13, 768, 010 12, 283, 770 10, 405, 000 67,843, 060 2, 078 922 1,315 372 340 204 123 147 564, 720 644, 004 2, 545, 255 1,471,450 2,812, 050 2,384, 570 2, 411, 750 8, 646, 280 13, 468 127, 855, 355 5, 501 21, 480, 079 I Statistical Summary of Municipal Water Facilities in the United States, Jan. 1, 1963. U.S. Public Health Service, Department of Health, Education, and Welfare, Washington, D.C. (1965). Municipally owned utilities include those owned by municipalities, water districts, counties, and other forms of government organization. In all but a few States-notably Indiana, Maine, Montana, Nevada, West Virginia, Wisconsin, and Wyoming-they are not regulated by public service commissions. At the end of 1965, it is estimated that there were more than 20,000 water utilities serving 157 million people in the United States. Assuming that today's cost to provide water works facilities averages $300 per capita, the current replacement value of the water industry is more than $47 billion. PAGENO="0118" 110 STATE AND LOCAL PUBLIC FACILITY NEEDS B. COSTS AND USER CHARGES 1. CONSTRUCTION COSTS Table 8 shows the incremental costs of waterworks for varying periods in the development of the water industry. It is interesting to note that the investment for the last decade almost equals the amount spent during the previous 35 years, and that the expenditure since the end of World War II is more than three times the amount spent during the entire previous history of the industry. Average per capita investment in water facilities has risen accordingly and for 1956-65 it averaged $275. It continues to grow as the result of rising costs and the necessity for utilities to go further for new water sources. Figure 1 illustrates water utility cost indexes for two typical types of systems, the weighted components of which are shown in table 9. TABLE 8.-Incremental costs of water facilities 1 Period New invest- ments (millions) Growth in population served (millions) Per capita investment Before 1896 1896 to 1910 l9lOto 1920 1920 to 1946 1946 to 1955 1956 to 19652 $450 510 640 3,350 7,050 10,200 22.7 15.3 12.0 40.0 30.0 37.0 $20.00 33.30 53.00 83.75 233. 00 275.70 1 Howson, L. R., "50 Years' Experience With Water Utility Costs and Revenues." Journal AWWA, 51:693 (June 1959). 2 Figures for 1956-65 have been added to Howson's original table. Population growth Is based on data of the U.S. Public Health Service and the U.S. Department of Commerce. TABLE 9.-Weighted components for two typical plants I [In percenti Component Plant A Plant B Land Reservoirs Buildings Pumps, motors, and soon Mains Services Meters 1 5 10 5 60 10 7 2 13 17 25 5 32 2 4 2 100 Other equipment Total 100 I Pick, H. H., "Cost Indexes for Water Utility Property." Journal AWWA, 56:1021 (August 1964). PAGENO="0119" STATE AND LOCAL PUBLIC FACILITY NEEDS 111 Construction costs vary considerably, depending on size of utility, type and proximity of source of supply, type of treatment, and other factors. This is illustrated in figure 2, which shows the total invest- ment in waterworks expressed in dollars per million gallons of average daily capacity for each of six water systems, the general features of which are given in figure 3. Plant investment costs range from $700,000 per million gallons daily to more than $1,700,000 per million gallons daily. Portions of the totals are allocated to various categories: source of supply, pumping station and treatment, trans- mission and distribution system, fire hydrants, and a miscellaneous category including such things as offices, laboratory, and other equipment. It should be added that the graphs in figure 2 are based upon the historical cost of the works, which are much less than the reproduction cost at current prices. The annual operations and maintenance expenses for the six utilities, expressed in dollars per million gallons of water produced, are shown in figure 4. Expenses range from $100 to $250 per million gallons, and are broken down into the following categories: source of supply, pumping, treatment, transmission and distribution, customer accounting, and general expenses. 900 800 700 600 2 500 E z *~ 400 300 200 100 FIGuRi~ 1. TYPIcAL WATER UTILITY COST INDEXES The cost indexes for two existing water plants are shown for the period 1913-63' with 1913 as the base year. The weighted components of water utility property are given in table 9. Data for plant A are indicated by the solid line; data for plant B by a broken line. From: Fick, Henry H., "Cost Indexes for Water Utility Property." Journal AWWA, 56:1022 (August 1964). 0 1913 1917 I 1921 1925 1929 1933 1937 I 1941 I 1945 1949 1953 1 1957 1915 1919 1923 1927 1931 1935 1939 1943 1947 1951 1955 Year PAGENO="0120" SOURCE OF SUPPLY PUMPING & TREATMENT TRANSMISSION & DISTRIBUTION r DISTRIBUTION STORAGE FIRE HYDRANT OTHER From: Hazen, Richard. Water Is Not Free. Proceeding, 8th Sanitary En~ Confereiice on Cost Aspects of Water Supply, Univ. of Illinois Experiment Urbana, Ill. (19~6). UTILITY OWNERSHIP AVE. PRODUCTION -MGD SOURCE OF SUPPLY Number Type PUMPING REQD. FILTRATION REQD. SOFTENING REQD. FIGURE 3 PLA~ T FACILITIEs Fiorn Hazen Richard Water Is Not Free Proceethngs 8th Sanitary Engi neeriiig Conference on Cost Aspects of Water Supply, Univ. of Illinois Ex- rperiment Station, Urbana, Ill. (1966). STATE AND LOCAL. PUBLIC FACILITY NEEDS 112 1.800,000 1.600,000 .400,000 .200,000 1.000,000 800,000 600,000 400,000 200,000 0 ~i - . ~ ~ ~ ~ A B C D E F FIGURE 2. PLANT INVESTMENT A B C D E F I I M I M M 52 22.3 22.0 17.3 9.2 8.9 8 I I 3 I 3 SURF G.W. SURF. SURF. SURF SURF. G.W. G.W. PART YES YES YES YES PART NO NO YES PART YES YES NO NO NO NO NO PART PAGENO="0121" STATE AND LOCAL PUBLIC FACILITY NEEDS 113 A B C D E F FIGURE 4. ANNUAL EXPENSE, OPERATIONS AND MAINTENANCE Hazen, Richard. Water Is Not Free. Proceeding, 8th Sanitary Engineering Conference on Cost Aspects of Water Supply, Univ. of Illinois Dxperiment Station, Urbana, Ill. (1966). 2. WATER UTILITY FINANCING AND USER CHARGES The following conditions prescribe a test for self-sustaining water utility operations: To furnish good service, a water utility, whether municipally or investor-owned, should receive sufficient revenue through water sales and other charges to- (1) cover operation and maintenance expenses, taxes or pay- ments in lieu of taxes, depreciation, fixed charges or return on investment, and (2) provide sufficient surplus to pay for ordinary capital addi- tions and attract the necessary capital for major expansion. Investor-owned utilities in all but two States and municipally owned utilities in at least seven States are under the jurisdiction of State regulatory commissions. Under such control, water utilities formu- late rate schedules to provide gross revenues approved by the com- missions. Of the total number of utilities, 65 to 75 percent are unregulated. Most of these are municipally owned. Most are supported out of revenue from rates, a few by a combination of rates and taxes. Gen- erally, municipally owned utilities may be classified according to two general types of financial operation: 1. Self-supporting enterprises.-Such utilities receive sufficient rev- enue through rates, charges, and fire protection tax levies to meet all expenses, maintain and expand the system, and contribute funds to the municipality in lieu of taxes. They maintain a separate identity PAGENO="0122" 114 STATE AND LOCAL PUBLIC FACILITY NEEDS from other public functions and have control over their funds in sep-. arate accounts. To finance large capital additions, they have au- thority to issue revenue bonds. Their revenues after operating and maintenance experses must be adequate to pay the interest and redemption. 2. Tax-supported enterprises.-Typical of this group is the utility that is budgeted and accounted for within the city's overall operations. Revenues from water sales are deposited in the general municipal fund together with other receipts, including tax receipts, out of which the expenditures for all city operations, including the water utility, are made. In such cases, taxes are levied to meet payments on bonds issued to expand the water system. The bonds would be general obligation bonds backed by the taxing power of the municipality. Regardless of the type of financial organization-and there are a number of variations-revenues from water rates are employed to a large extent to pay the costs of doing business, including operation and maintenance expenses, taxes, debt service, payments to the general fund (municipally owned utilities) or dividends (investor-owned utilities), and payments to reserves and surplus. Water utilities obtain most of their income from water sales. A study in 1955 covering 78 municipally owned utilities showed that water sales furnished 92 percent of total income, with residential customers providing 56 percent, commercial customers 18 percent, industrial users 17 percent, and municipal service 1 percent. The largest single source of income after water sales is fire service. Most investor-owned and about one-half of the municipally owned utilities, according to a 1960 AWWA survey, levy a charge for fire service, usually in the form of a hydrant rental in the range of $10 to $50 per fire hydrant per year. Revenue sources and disposition for 875 municipally owned and 90 investor-owned utilities of all sizes in 1960 are shown in Table 10. TABLE 10.-Water utility revenue sources and disposition I Item ~ Municipally owned Dollars per million percent gallons Investor owned ~__ Dollars per million percent gallons Revenue: Water sales All other Total Disposition: Operating and maintenance Taxes Debt service Current capital additions To general funds or dividends Reserves and surplus Total 302 28 330 91.5 8.5 382 20 95 5 100.0 402 100 174 3 62 48 20 23 53.0 1.0 19.0 14.0 6.0 7.0 188 88 35 35 33 23 47 21 9 9 8 5 330 100.0 402 100 1 ~ F. Seidel and j. L. Cleasby, "A Statistical Analysis of Water Works Data for 1960" (unpublished). The income of the municipally owned group averaged $330 per million gallons, of which $174 was spent for operation and maintenance and the remainder for taxes, debt service, current capital additions, de- PAGENO="0123" STATE AND LOCAL PUBLIC FACILITY NEEDS 115 posits to the general funds, and reserves and surplus. Investor-owned utilities received $402 per million gallons and paid $188 for operation and maintenance. It should be noted that this group paid $88 per million gallons for taxes and $33 for dividends as compared with $3 for taxes and $20 in lieu of taxes paid by the other group. Both municipally and investor-owned utilities may be able to fi- nance small capital additions out of current earnings. To finance large additions, municipally owned utilities issue revenue or general obligation bonds. Investor-owned utilities issue mortgage revenue bonds and short-term notes. C. TREND OF CAPITAL OUTLAYS 1. ESTIMATED ANNUAL CAPITAL OUTLAY Various public and private organizations publish data on the capital outlay for water utility facilities, including: McGraw-Hill, Inc., of New York City in its publication "Engineering News-Record"; the U.S. Department of Commerce, in such publications as "Construction Review," issued by the Business and Defense Services Administration, and "Historical Statistics on Government Finances and Employ- ment," a report of the Bureau of the Census; and the U.S. Department of Health, Education, and Welfare, in "Sewage and Water Works Construction," and "Water and Sewer Bond Sales in the United States," both publications of the U.S. Public Health Service. None of the above-mentioned publications report the total capital outlay for water utility facilities which would represent contract and direct expenditures of both municipally and investor-owned segments of the industry. In fact, the various published data are not strictly comparable because of different collection and reporting methods. They provide, nevertheless, a good indication of the trend in water utility construction expenditure. Annual values reported by the various organizations for 1946-65 are shown in table 11. Two of the columns in the table are related only to municipally owned utilities. The third represents the Business and Defense Services Administrations' estimates of total construction put in place for both municipally and investor-owned utilities, in- cluding contract and force account construction. The annual expenditure for waterworks construction grew steadily during 1946-65. The rate of growth is indicated by table 12, which compares contract award figures as reported by the U.S. Public Health Service in actual and constant dollars. Table 12 shows that in actual dollars annual public water utility construction rose during a 13-year period (1952-64) from $227 to $654 million, an increase of $427 million, whereas in constant dollars (19 57-59 base), it grew from $303 to $532 million, an increase of only $229 million. Water utility construction was curtailed during World War II and picked up slowly immediately following the war when prices rose sharply and population expanded rapidly. As a result, the industry accumulated a sizable deficiency in facilities, which it has been correcting gradually ever since. A substantial backlog still exists, as is explained in part IV of this statement. PAGENO="0124" 116 STATE AND LOCAL PUBLIC FACILITY NEEDS TABLE 11.-Indicators of annual water works construction [In millions of dollars] . Year ENR contract awards 1 USPHS contract awards 2 BDSA total waterwork construction 3 1946 1947 1948 1959 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 109 139 209 207 215 209 231 247 245 314 356 369 306 373 454 430 391 227 283 293 394 441 457 419 5°~ 645 573 507 590 654 451 527 572 788 800 838 856 989 950 1, 145 1,050 1,082 1,188 1,300 1 Annual total public works contracts for waterworks construction reported by "Engineering News Record." Minimum project included for 1946 was $22,500; for 1947-49, $23,000; for 1950-54, $34,000; for 1955-58, $44,000; and for 1059-62, $53,000. 2 Annual contract awards for public waterworks construction as reported by the U.S. Public Health Service in "Sewage and Waterworks Construction, 1964." The figures exclude engineering, architectural, legal, and financial fees and contract expenditures of investor-owned water utilities. 3 Construction put in place, including contract construction, force account construction, and materials and equipment for municipally owned and investor-owned water utilities, as provided by the Water Indus- tries and Engineering Services Division, Business and Defense Services Administration, U.S Department of Commerce. TABLE 12.-Comparison of annual water utility contract awards in actual and constant dollars 1 Year Actual dollars (millions) Constant dollars 2 (millions Year . Actual dollars (millions) Constant dollars 2 (millions) 1952 1953 1954 1955 1956 1957 1958 227 283 293 394 441 457 419 303 358 353 453 485 481 419 1959 1960 1961 1962 1963 1964 504 645 573 507 590 654 480 597 516 441 500 532 I Sewage and Waterworks Construction, 1964. U.S. Public Health Service, U.S. Department of Health Education, and Welfare, Washington, D.C. (1965). 2 Constant dollars are reported on a 1957-59 base, using the "Engineering News-Record" construction cost index. 2. SOURCES OF EXPENDITURE A breakdown of capital outlay by source of expenditure is unavail- able, but an indication is given by table 13 which shows the number and total value of bond issues for municipal waterworks construction in 1964 according to various issuing authorities. Municipal author- ities led in number of issues with 381 out of a total of 607, followed by special water districts with 157, and statutory authorities with 36. In total dollar volume, municipalities again led with $305 million out of a total of $769 million, followed by State authorities with $250 million. The State bonds relate to California's huge Feather River project. PAGENO="0125" STATE AND LOCAL PUBLIC FACILITY NEEDS 117 Table 14 gives a breakdown of the public bonds issued in 1964 according to type of issue. General obligation bonds accounted for 64 percent and revenue bonds for 36 percent of the total value. Investor-owned utilities, which comprise 29 percent of the total number of utilities and serve 15 percent of the total population served, obtain capital from various sources-loans, bonds, and common and preferred stock-in proportion to debt ratios prescribed by State public service commissions and in accordance with policies that will assure satisfactory credit rating and low money costs. In its esti- mates of total waterworks construction in table 11, the Business and Defense Services Administration has assumed that investor-owned utilities account for about 20 percent of the total annual investment in facilities. TABLE 13.-Water and sewer bond sales in 1964 1 [Dollar amounts in thousands] Type of issuing authority Number of issues Amount Percent of total State county Municipality Township Special district Statutory authority Total 3 0 381 21 157 36 $250,000 12,849 305,798 5,653 102,805 02,202 32.5 1.7 39.8 .7 13.3 12. 0 607 769,307 100.0 1 Water and Sewer Bond Sales in the United States, 1964. U.S. Public Health Service, U.S. Depart. ment of Health, Education, and Welfare, Washington, D.C. (1965). TABLE 14.-Types of water and sewage bonds sold in 1964 1 [Dollar amounts in thousands] Type of issue Number of Value issues GENERAL OBLIGATION BONDS Unlimited tax UnlimitedtaxsecuredbyutilityreVenue Unlimited tax secured by special assessment Limited tax LimitedtaxsecuredbyutilityrevenUe Limited tax secured by special assessments 374 9 22 12 1 4 $467, 914 6,610 3,654 11, 090 522 695 REVENUE BONDS Utility revenue Special tax revenue Rental revenue Total 179 1 5 607 271, 043 122 7,657 769,307 1 Water and Sewage Bond Sales in the United States. U.S. Public Health Service, U.S. Department of Health, Education, and Welfare, Washington, D.C. (1965). PAGENO="0126" 118 STATE AND LOCAL PUBLIC FACILITY NEEDS Both municipal and investor-owned segments of the industry spend substantial sums each year on force account construction and direct purchases of equipment, the investment varying from 20 to 25 percent of the total annual capital outlay, according to studies of the BDSA made during 1952-59. Sources of funds for this work are water sales revenue taxes, short-term loans, bonds, contributions in aid of construction (for example, customers-financed main extensions, serv- ice connections, arid meter installations), and advances in aid of construction (subject to refund over a period of time). Water utility policies vary considerably in the method of financing of this type of work. Up to 1965, Federal and State loans and grants were not a significant factor in water utility development, with the exception of the work performed during the 1930's. As is pointed out in part IV, this situa- tion is expected to change as a result of legislation passed in 1965. Prior to 1965, there were the following Federal programs: 1. The Farmers Home Administration of the U.S. Department of Agriculture has made loans for the construction of rural wrater systems since 1938. These systems serve farm areas with a low population density that cannot be served economically by conventional public water systems. Rural supplies differ from public supplies in that they are designed to furnish considerably less water per capita, use pipelines of smaller diameter, and do not normally provide conventional fire protection. Table 15 shows the number and amount of FHA loans made during 1961-65. 2. Grants and loans made for the construction of water utility facilities, as provided under the accelerated public wOrks and public facility loan programs, are summarized in table 16. 3. Financial assistance has been provided for storage of public water supply in connection with the reservoir projects of the Corps of Engineers, the Soil Conservation Service, and the Bureau of Reclama- tion. The terms call for repayment when the storage is used for public water supply. TABLE 15.-Farmers Home Administration credit assistance, 1961-65 1 Fiscal year Number of loans Amount loaned Direct funds Insured funds Direct funds Insured funds2 1961 18 15 $1,408,700 $536,900 1962 55 28 5,928, 950 4,213, 050 1963 72 63 7, 054,925 7, 638, 770 1964 99 168 10,876,680 23,023,000 1965 138 249 13,285, 720 37, 069,960 I This information supplied by the Farmers Home Administration, U.S. Department of Agriculture. 2 by private investors and insured by the Government. PAGENO="0127" STATE AND LOCAL PUBLIC FACILITY NEEDS 119 TABLE 16.-Community Facilities Administration-Accelerated public works pro- gram grants and public facility loans for water utility construction PUBLIC FACILITY LOANS, 1956-65 ~Dollar amounts in thousands] Year Number of projects Amount Estimated total cost 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 Total 17 41 51 37 22 51 87 80 41 68 $1,624 7,249 11,611 5,872 6, 306 6,791 32,633 18,603 8,031 33,419 $1,805 7,443 12,227 6,448 7, 728 7,428 35,477 29,830 10,847 45,203 495 132,139 164,436 ACCELERATED PUBLIC WORKS PROGRAM GRANTS, 1962-64 1962 117 1963 818 1964 86 Total 1, 021 23,114 108,147 12,728 50,096 245,642 25,621 143, 989 321, 359 I Data supplied by the Community Facilities Administration, U.S. Department of Housing and Urban Development. D. WATER INDUSTRY NEEDS AND PROSPECTIVE CAPITAL OUTLAYS 1. CAPITAL NEEDS Public water supply capital investment to meet population and industrial growth requirements, replace worn out and obsolete facili- ties, and partially eliminate a sizable construction backlog is estimated to grow from $2 billion in 1966 to $3 billion in 1975. The total outlay for the 10-year period would amount to $24 billion, more than twice the amount spent during the previous decade. Table 17 shows the cost breakdown for the 1966-75 period. The basis for the estimates is given in the following discussions on popula- tion growth, depreciation, and deficiencies. (a) Population growth Of the present U.S. population of 195 million, the industry serves 157 million people or approximately 80 percent of the total. Over the next 10 years, the population is expected to grow at a rate of 1.5 percent, or roughly 3 million per year, reaching 225 million by 1976. Public water supplies will serve at least 80 percent of the annual increase and probably more. It is assumed in this report that 2.5 mfflion more, or 83 percent, will be served each year. The cost to provide water system capacity for growth alone is estimated to rise from $775 million in 1966 to $1 billion in 1975. This is based on the assumption that the initial cost will be $300 per capita and construction prices will increase 3 percent per year, a low figure in view of the price rise experienced in 1965. The formation of water district, authority, or metropolitan water systems serving several communities will reduce per capita construc- tion costs. On the other hand, many systems will develop water PAGENO="0128" 120 STATE AND LOCAL PUBLIC FACILITY NEEDS sources that are located greater distances away, or provide more extensive treatment for polluted sources, both of which will result in increased per capita costs. (b) Depreciation To offset depreciation and obsolescence, it is estimated that the industry should spend at an annual rate of 1.5 percent of its current replacement value. This amounts to $630 million in 1966 based on a replacement value of $48.5 billion. The annual expenditure will rise to more than $1 billion in 1975, assuming that population growth needs are met. TABLE 17.-Capital requirements of the water utility industry, 1966-75' Item 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 U.S. population (millions) Population served by public water systems (millions) Per capita investment to serve popu- tion increase (dollars) 195 157 310 198 159. 5 320 201 162 330 204 164. 5 340 207 167 350 210 169. 5 360 213 172 370 216 174. 5 380 219 177 390 222 179. 5 400 Total annual investment to serve popu- lation increase (millions of dollars) - -- Replacement value of systems (billions of dollars) Annual depreciation and obsolescence 2 (millions of dollars) Annual cost of correcting deficiencies (millions of dollars) Total aimual expenditure (millions of dollars) 775 48.5 730 560 2, 070 800 51 765 575 2, 140 825 53.5 800 595 2, 220 850 56 840 610 2, 300 875 58.5 875 630 2, 380 900 61 915 650 2, 470 925 63.5 950 670 2, 550 950 66.5 995 690 2, 640 975 69 1, 030 710 2,720 1, 000 72 1, 080 730 2,810 `Figures denote population at beginning of year; an annual increase of 3,000,000 is assumed, of which 2,500,000 will be served by public water supplies. 2 Estimated at 1.5 percent of replacement value. 3 Based on studies of Picton and Faust and on the assumption that deficiencies will be corrected over a 15-year period. Investor-owned and some municipally owned utilities provide funds for at least part of this type of expenditure by accruing depreciation reserves from water sales revenues. (c) Deficiencies R. J. Faust' estimated in 1960 that it would take $1.9 billion to improve the quality of the water delivered by public water systems. He was referring to the need for many utilities to go beyond the production of a safe water by providing treatment to remedy objec- tionable characteristics, including tastes, odors, hardness, and corrosiveness. W. Picton 2 in 1962 reported that many water systems lacked suf- ficient capacity to meet the water demands of their consumers under all conditions. He estimated that the cost to correct system deficien- cies was $5,157 million (in 1960 dollars). Although the annual investment in public water systems has in- creased steadily since the above-cited studies were made, the quality and capacity problems have not been corrected. Lack of adequate system capacity continues to show up in various parts of the coun- try at different times, as, for example, in the Northeast during the `Faust, R. J.. "Challenges in the Water Industry." Willing Water, 4:7:3 (July 1960). 2 Picton, W. L. "Construction Requirements for Water and Sewerage Works, 1962-70." Construction Review (September 1962). PAGENO="0129" STATE AND LOCAL. PUBLIC FACILITY NEEDS 121 1961-66 drought. In this instance, a survey showed that 129 of 351 water utilities that answered the questionnaire restricted water serv- ice during 1964 because of inadequate capacity in source, transmission, treatment, or distribution facilities. Because a recent analysis of utility deficiencies is not available, the estimates of Faust and Picton have been employed to indicate the investment required during 1966-75 to eliminate the industry's con- struction backlog. Their cost estimates have been combined, con- verted to the 1965 price level, and spread over a 15-year period. To account for rising construction prices, it is assumed that the cost to correct deficiencies will increase 3 percent per year. 2. CAPITAL OUTLAY On the basis of past performance, it is highly unlikely that the water industry will spend $2 billion in 1966 for construction. A real- istic estimated would place the t~otal expenditure at $1.3 to $1.5 billion, or $500 to $700 million short of the desired level. The industry has the resources, however, to achieve a higher level of plant investment and to overcome rising costs. By raising water rates, it can obtain the revenue necessary to finance the projected programs. It is expected that Federal assistance programs resulting from legisla- tion passed in 1965 will have a prominent part in water utility financing during the next decade. (a) Water Rates Rate increases have been occurring at the rate of 1 in each 7 utilities in any given year according to an AWWA survey in 1960. Within the 4 years prior to the survey 55 percent of those reporting had had rate increases, and within the 10 years before the survey, 90 percent `had raised their rates. A number of rate schedules, however, had been in effect for more than 20 years. Rate increases according to the survey commonly fall in the range of 10 to 35 percent. A brief review of the history of rate increases since the end of World War II shows that rates and, consequently, water sales revenue rose only slightly during 1945-50, while construction, operation, and maintenance costs increased sharply. As a result, many utilities were unable to finance expansion programs. During 1950-55 some of this lost ground was regained, and during 1955-60 rates improved generally, leaving water utilities in a much healthier financial position. Further increases are required, however, to keep pace with rising costs and to finance improvements. Water rates traditionally have been kept too low. The average customer pays considerably less for water service than for other utility services, as shown in figure 5, which compares the annual revenue per customer of electric, gas, telephone, and water utilities. The chart, representative of a limited number of utilities located principally in the Midwest, shows that during the 1952-63 period average water utility revenue per customer rose from $40 to $71; electric, $155 to $254; gas $124 to $209; and telephone, $131 to $218. 7O-182---66--yoL 1-4 PAGENO="0130" 122 STATE AND LOCAL PUBLIC FACILITY NEEDS 2/5 250 225 200 175 E 150 U ~ 125 100 75 50 25 1953 1955 1957 1959 1961 1963 Year FIGURE 5 AVERAGE ANNUAL REVENUE PER CUSTOMER FOR UTILITIES 1952-63 Since 1952 average annual revenues per customer have increased as follow s water utilities, from $40 to $71; electric, $155 to $254; gas, $124 to $209; and telephone, $131 to $218. From: Patterson, W. L., Comparison of Elements Affecting Rates in Water and Other Utilities. JOURNAL AWWA, 57:554 (May `($5). (b) Availability of Private Investment Capital The water industry has not experienced difficulty in securing capital fUnds, nor should it in the future, provided that rates are raised to assure sufficient net income. Very small utilities pose a special problem because their debt issues are small and costly to underwrite. Investors may regard them as too risky, particularly if their financial records are incomplete. Occasionally, their water supply development costs may be extremely high in relation to potential revenues. The answer in such cases frequently lies in consolidation of the small units into larger district or authority systems. Small systems also may be absorbed by or connect to existing larger systems. Water utilities generally have low debt ratios. Table 18 shows the ratios of debt to gross plant for 358 municipally owned water utilities in 1960. The median debt ratio for this group was 32 percent. Debt ratios of investor-owned utilities are regulated by public service commissions within prescribed limits. With adequate rates and sound accounting practices, water utilities would be able to attract capital at reasonable cost. 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The Housing and Urban Development Act (Public Law 89-117) authorizes $200 miffion in grants to finance up to 50 percent of the cost of basic public water and sewer facilities. It is estimated that $50 miffion of this will be spent on public water supply facilities in fiscal 1966 and again in 1967. The Public Works and Economic Development Act (Public Law 89-136) authorizes $500 million per year for 4 years in grants of up to 50 percent for public works in economically distressed areas. The law also authorizes $170 million per year for loans to assist in public works development and improvement. Public Law 89-240, the Rural Water and Sanitation Facilities Act, increases the loan insurance limit of the Farmers Home Adminis- tration to $450 million, authorizes $55 million a year in grants for facilities, and provides $5 million in grants for planning. The law covers both water supply and waste disposal systems in rural areas (towns up to 5,500 population). Grants are limited to no more than 50 percent of the project cost. PAGENO="0133" CHAPTER 3 Rural-Agricultural Water Supply Systems: Irrigation* INTRODuCTION This chapter is confined to a discussion of irrigation water supply systems that are either public facilities or group facilities operated by various types of irrigation water organizations. The public bodies and other groups treated here include: mutual irrigation organizations, commercial water suppliers, irrigation districts, the U.S. Bureau of Reclamation, the Bureau of Indian Affairs, and some States and cities. Much of the information is presented here as complete and compar- able Ofli~ within a broad region, such as the Western or the Eastern United States. The statistical information was supplied mainly by agricultural census publications and Bureau of Reclamation reports. A. NATuRE AND COMPOSITION OF IRRIGATION FACILITIES 1. DESCRIPTION OF FACILITIES (a) Physical Oharacteristic~ Irrigation facilities usually include several systems, the number and type varying between and within regions according to the nature of the irrigation water supply, the time that the facility was con- structed, the local topography, soil conditions, etc. Irrigation facili- ties always include a source of fresh water. This source may be a natural lake or stream, but it is usually a constructed reservoir or a ground water source. * A water conveyance system is also present and consists of canals and ditches and/or pipes leading from the water supply source to the place of use. Large ditches and canals carry water to a system of smaller ditches, called laterals. Some large conveyance canals are hundreds of miles long. In porous or easily eroded soil the canals and ditches are usually lined with concrete. Gravity serves to propel water from the place of storage through the conveyance system to the point of use. Pumps are used for propelling irrigation water in cases where gravity cannot be employed; for instance, to lift ground water to surface level and from there to the point of use, or to raise water to a higher elevation in a main irrigation canal. Steel or wooden flow gates and valves, plus flow gages for measuring amounts used by individual growers are often part of the conveyance systems, also. Water-application and land-preparation systems are typically not a public enterprise, but they are sometimes a group enterprise. Their *This report was prepared by the U.S. Department of Agriculture. The authors were Clifford Dickason and Howard Hill, Natural Resource Economics Division, ERS, with minor editing by committee staff. 125 PAGENO="0134" 126 STATE ~D LOCAL PUBLIC FACILITY NEEDS cost, being an associated cost of irrigation, is not readily available in irrigation statistical sources. Most water-application systems fall into three main categories: ditch-furrow systems, piped water sprink- ler systems, and field flooding. In the ditch-furrow system, the grow.~ er's fields are furrowed in such a way that each of several parallel furrows abuts a water supply ditch. When water is needed in the furrows, the grower usually inserts tubular plastic or metal siphons at the ends of the furrows to siphon water from the supply ditch, over an intervening few feet of ground, and into each furrow. The standard diameter and flow of the siphons assures an equal flow of water in each furrow. The crops are planted between water furrows, and their roots receive moisture soaking through the soil from the furrows. The ditch-furrow system is employed where the land is quite flat, although the land may have the form of an inclined plane. Ditch- furrow systems are constructed with great care and effort to assure even, level water flow. Often the land itself is meticulously leveled before the furrows are made. Water sprinkler systems are used in situations where they are more practical than ditch furrows because of somewhat irregular terrain, close planting of crops, or infrequency of irrigation need. The pipes are generally of an aluminum alloy, sometimes supplemented by plastic. They often have steel end connections. The pipes are usually movable; and, having irrigated one sector of a field, are rolled or carried on to the next sector. Some wheeled pipe-sprinkler systems move themselves slowly across the fields as they spray water. Since piped water sprinkler systems are not inherently difficult to move, it is often not economical for a grower to build a large stationary pipe system that can spray his entire crop without being moved. Field-flooding is used mainly to suit the characteristics of certain crops, such as rice, alfalfa, and some orchard fruits. Here again, the land is often carefully leveled. In the dry areas of the United States, where water salinity and soil salinity present a problem, subterranean drainage tile systems are often constructed as an associated part of the irrigation systems. These systems fill with residual irrigation water and conduct soluble salts out of the irrigated fields. This prevents the irrigated soil from becoming increasingly saline because of constant evaporation of the slightly saline irrigation water. Most of the elements of irrigation facilities, such as are described above, may be publicly owned or group owned as well as individually owned. Piped water sprinkler systems, for instance, may occasionally be owned by a group and moved from one grower's fields to another. Available cost statistics concerning irrigation water supply systems as public or group facilities usually concern only the cost of supplying the water up to the point at which the grower receives it. Also, land preparation and other associated activities of irrigating crops are usually not done as a group enterprise employing public facilities. Therefore, the treatment of group and public facilities here will proceed only to the point at which water reaches the growers' fields. PAGENO="0135" STATE AND LOCAL PUBLIC FACILITY NEEDS 127 (b) Services Rendered An irrigation system, of course, supplies water at the proper times to the growers' crops. A reliable water supply translates into several services to the grower: (1) it is insurance against destruction of the crop by drought; (2) it reduces capricious variation in crop yields from year to year; and (3) it significantly increases the quantity and quality of crop yields per acre in the geographic areas where irrigation is most prevalent. There are qualitative standards that irrigation systems should meet. For instance, they should provide a reliable, continuously available supply of water to the growers at the times in the growing season when irrigation water is needed by the crops. The allowable water quality in irrigation varies by crops. Some growers irrigate certain types of crops with the effluent from the sewage system of a nearby community. Rather high levels of salt content can be tolerated without continually increasing the salinity of the soil, as was mentiOned earlier; and some crops are considerably more tolerant of salinity than others. Piped water_sprinkler systems, of course, must use water that is filtered free of large particles which would clog the pumps or the sprinkler heads. 2. EXISTING CAPITAL PLANT IN THE UNITED STATES (a) Growth and Distribution * There is a dearth of statistics showing the size and number of various irrigation structures in the United States. Also, there are great variations in size of the various irrigation structures. Therefore, the extent of irrigation facilities provided by various public and quasi- public irrigation organizations can best be expressed in terms of acres of land irrigated. As of 1959, there were over 33 million acres of irrigated land in farms in the United States. The distribution of acreage irrigated by public and quasi-public facilities is shown in table 1. TABLE 1.-Acreage irrigated by organizations; regions and United States, 1920-59 Year Acreage As a percent of total irrigated acreage in- Western States Eastern States 1 United States excluding Alaska Western States Eastern States 1 United States excluding Alaska . 1920 1930 1940____ 1950 1959 1,000 acres 2 12 144 2 12 906 2 16 179 2 14, 714 17, 786 1,000 acres (3) (3) (3) (3) 32 1,000 acres (3) (3) (3) (3) 17, 818 Percent 2 65. 3 2 68. 1 2 68. 3 2 ~ ~ 4 56. 7 Percent (3) (3) (3) (3) 1. 8 Percent (3) (3) (3) (3) 53. 7 1 Conterminous United States, minus the 17 Western States and Louisiana. The 17 Western States are California, Oregon, Washington, Idaho, Montana, Nevada, Arizona, New Mexico, Colorado, Utah, Wyoming, North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, and Texas. 2 The 17 Western States. 3 Not available. 4 The 17 Western States, plus Louisiana and Hawaii. Sources: 1959 Census of Agriculture; vol. III, Irrigation of Agricultural Lands; U.S. Department of Com- merce (Washington, D.C., 1962), pp. Sand XXV; 1959 Census of Agriculture; vol. V Special Reports, pt. 2 Irrigation in 1-lumid Areas; U.S. Department of Commerce (Washington, D.C., 1962), pp. 3 and 6; and 1950 Census of Agriculture; Irrigation of Agricultural Lands; U.S. Department of Commerce (Washington, D.C., 1952), p. 93. PAGENO="0136" 128 STATE AND LOCAL PUBLIC FACILITY NEEDS The total farm acreage irrigated by organizations and single-farm systems appears m table 2 TABLE 2.-U.S. farm acreage irrigated, by geographic divisions, 1959 Acres* Irrigated in 1959, Geographic division: thousands New England 31 Middle Atlantic 148 East North Central 111 West North Central 3, 066 South Atlantic 597 East South Central 137 West South Central 7, 050 Mountain 12, 095 Pacific Continental 9, 787 Hawaii 141 Conterminous United States and Hawaii 33 163 Source 1959 Census of Agriculture Statistics concerning irrigation in the East-and especially invest- ment and organization statistics-are sparse. A brief qualitative description of irrigation in the 30 humid Eastern States follows: Irrigation water has much less effect~ on increasing crop yields in the humid States, because of the more abundant rainfall there. Cer- tain crops respond unusually well to irrigation, however. Arkansas, Florida, and Mississippi were the three States having the largest total area irrigated in 1960. Rice was the leading irrigated crop in Arkansas and Mississippi. Citrus fruits and vegetables were the leading irrigated crops in florida. In 1960, the largest single irrigated crop acreage in the humid States was rice, which was produced on 424,657 acres. Wells were the principal source of irrigation water in 1960, supplying water for 61.7 percent of the irrigated acreage in the humid States. Natural streams and rivers were the water source for 14.3 percent of the area irrigated in the Eastern States. Natural lakes and ponds, drainage ditches, farm runoff, springs and seepage, and constructed reservoirs accounted for the remaining 24 percent. The age distribution of public and quasi-public irrigation facilities is not available. (b) Ownership Proportions The proportion of ownership of irrigation systems by various classes of irrigation organizations cannot be stated in terms of systems or structures. Of the acreage irrigated by systems operated by organi- zations in the 17 Western States, the proportion of land irrigated by each of the various types of organizations in 1959 is shown in table 3. Of the 17.7 million irrigated acres, 6.8 million acres, or 38.4 percent, were supplied partly or entirely from Bureau of Reclamation facilities operated by the Bureau or by the various water users' organizations mentioned.2 (Usually a completed project's operation is turned over to a water users' organization.) Only 4 percent of the total acreage irrigated by organizations received water from Bureau of Reclamation facilities_operated by the Bureau itself. 11959 Census of Agriculture; vol. V, pt. 2, Irrigation in Humid Areas, pp. XVI and XVII. 2 Crop report and related data, 1964. U.S. Department of the Interior, Bureau of Reclamation (Wash., D.C., 1965), p. so. PAGENO="0137" STATE AND LOCAL PUBLIC FACILITY NEEDS 129 TABLE 3.-Distribution of acreage irrigated, by organizations in 17 Western States, 1959 Type of organization Irrigated acres (thousands) Percent Mutual organizations: Unincorporated Incorporated Commercial suppliers Irrigation districts U.S. Bureau of Reclamation projects or storage operated directly by the Bureau U.S. Bureau of Indian Affairs States Cities 2,067 6,733 573 6, 921 711 579 44 73 1L 7. 38. 0 3. 2 39.2 4. 0 3.3 .2 .4 Total 1 17, 701 100.0 1 Total differs from total in table 1 because Hawaii was excluded here. Source: 1959 Census of Agriculture. (c) Current Value of Irrigation Facilities Gross Capital investment chargeable to irrigation by irrigation organizations in the 17 Western States was estimated at $1.38 billion as of 1950. An additional $1.04 bfflion was invested by organizations in the period 1950 through 1959.~ Neither estimate is corrected for capital replacement or for depreciation. Also, the estimates are not corrected for price-level changes. Thus, their total of $2.42 billion does not accurately portray the 1959 net capital value of irrigation systems investments in the Western States. No estimate of total capital investment in irrigation works is avail- able for the 31 conterminous Eastern States, which contained 1.8 million acres of irrigated land in 1959. B. COSTS AND USER CHARGES CONSTRUCTION COSTS The Bureau of Reclamation estimates that the average construc- tion costs of future potential projects in the West will be about $920 per acre of irrigated land or irrigated land equivalent, though many proposals exceed this figure considerably.~1 This estimate was de- veloped for projects identified by the Bureau as potential Federal projects. Approximately two-thirds of the projects identified were classified as potential Federal projects. An ex post approximation of irrigation construction cost can be made for the 17 Western States, plus Louisiana, by dividing the total of new capital investment by organizations, 1950-59 ($1,040 million) by the increase in organiza- tions' irrigated acreage, 1950-59 (2.7 million acres).5 This amounts to $381 per additional irrigated acre. This figure is not corrected for changes in the price level during the 1950's. New capital invest- ment, 1950-59, reported by the Census of Agriculture includes some unknown amount of new capital invested in existing irrigation struc- `"Census of Agriculture, 1959," vol. III; p. 69. 4 "Water Resources Activities in the United States," Committee Print No. 14, Select Committee on National Water Resources; U.S. Senate (Washington, D.C., 1960), p. 19. Irrigated land equivalent is the number of acres fully supplied with irrigation water. It is made up of (a) newly irrigated land, and (b) land presently irrigated but not fully supplied with water. For example, a project may (a) newly irrigate 10,000 acres, and (b) upgrade water supplies for an additional 10,000 acres where supplies had been only 50 percent adequate. The project in this case would be considered to involve 15,000 acres of irrigated land equivalent. 1 "Census of Agriculture, 1959," vol. III, pp. 30, 77, and 192. PAGENO="0138" 130 STATE AND LOCAL PUBLIC FACILITY NEEDS tures that is neither maintenance nor replacement cost and does not necessarily lead to the irrigation of additional acres. Such an invest- ment might have been made to increase a canal's peak flow capacity, or to supplement a pump engine with an additional engine that would increase the capacity of an existing pumping system. Also, supple- mental water might have been provided for existing irrigated acreage by the ]nvestment of new capital 2. OPERATION AND MAINTENANCE COSTS Operation and maintenance costs of supplying water to growers were estimated to average $4.81 per acre for 1949 in the 17 Western States.° No later data are available There are no comparable statistics available for the Eastern United States. An approximation of the typical annual range of operation* and maintenance cost of irrigation water per acre of irrigated land in the year 1964 was made, using selected data from pages 109-111 of the Bureau of Reclamation's "Report of the Commissioner, 1965; Statis- tical Appendix." According to this estimate, the current range of typical operation and. maintenance costs per irrigated acre in projects constructed by the Bureau of Reclamation is from about $3.90 in the Kansas, Nebraska, Dakota, Wyoming, Utah, Montana, Idaho area to about $19.40 in the Arizona-southern California area. Chart .1 shows the numbers of projects having given annual operation and maintenance costs per irrigated acre. CHART 1-FREQUENCY DIsTRnrnnoN OF SELECTED BUREAU OF RECLAMATION PROJECTS' ANNUAL OPERATION AND MAINTENANCE COSTS PER IRRIGATED ACRE ~- Cost p er acre . , NlHnber of projects per 0&M :~ ~cost ca~tegory $ 0 $100 $200 $300 $400 $ 5.00 4 .99 4199 -$299 4399 4499 -$ 5.99 2*5***~3,O .4 ~: ~.. ~. . ... 13 1 16 26 - 16 12 - $600 $ ~.00 $ 8.00 $ 9.00 4700 -$ 8.00 -4 9.00 410.00 13 7 8 . 4. -. . . . . $io.oo$ii.oo . 5 . . . . . $11.00 -$12.00 2 ,~ $12.00 -$13.00~ 2 ~. .. $13.00 -$14.00 1 . . , $14.00 $15.00 2 . 00 $16 00 $16.oo-$17.oo 1 2 . `~ . $17.00 and over 5 Sourc U S i3ure~u of herlamation, ~eport of the Coomissioner, 1965. . . "Census~of Agriculture, 1950," vol. III,rp. 88. PAGENO="0139" STATE AND LOCAL PUBLIC FACILITY NEEDS 131 3. USER CHARGES Complete~ national cost and revenue statistics from cooperatives, irrigation districts, and other organizations are not available at this time; thus, it is not possible to determine the extent to which irriga- tion costs are covered by user charges. Irrigation districts are sup- ported in part by tax levies in addition to water charges assessed~ against users. Aggregate cost and price statistics are available for Bureau of Reclamadon projects. Allocation of project costs (which excludes on-farm associated costs of land preparation, etc.) varies between projects. Revenues for reimbursement of Bureau of Reclamation projects are obtained from payments on repayment contracts, water service, and rental revenues, power revenues, and other sources. Irrigation costs are interest free and are repaid over a contractual repayment period by water users on the basis of their ability to pay, as determined by an economic analysis of the particular project. Irrigation costs above water users' ability to pay are repaid through financial assistance from surplus power revenues, and other miscel- laneous project revenues. In the Bureau's existing reclamation program, including projects authorized, under construction' or completed, the total amount of reimbursable expenditures allocated to irrigation purposes as of June' 30, 1965, was $3.842 billion of which $ 1.875 billion, or 49 percent will be paid for mainly by power revenues.7 Nonreimbursable irrigation costs on. Bureau of Reclamation projects as of June 30, 1965, were $78.4 mfflion.8 Another source of Federal financing of irrigation water sources is through the Watershed and Flood Prevention Act (Public Law 83- 566). Under this program, which is administered by the Department of Agriculture, cost sharing up to 50 percent of total costs is authorized for construction of certain structures, including impoundments for irrigation water.' Comparable statistics concerning charges to irrigators On projects administered by State and local governments are not available. C. THE TREND OF CAPITAL OUTLAYS In 17 Western States and Louisiana, the trend of annual capital outlays for irrigation water supply systems of organizations has been as follows for two recent periods: From 1940 through 1949, $520 million, or an average of $52 million per year. From 1950 through 1959, $1,039.6 million, or $103.96 million per year.9 These capital outlays have been applied mainly to irrigating additional acreage,' but not entirely so. 1. A POSSIBLE ACCOUNTING FOR THE NEW INVESTMENT IN IRRIGATION Of the $1,045.2 million new capital investment by organizations in the 17 Western States, Louisiana, and Hawaii in 1950-59, $496 million was invested in California and $200.8 million in the State of 7 Report of the Commissioner, 1965; U.S. Department of the Interior, Bureau of Reclamation (Wash. lngton, D.C., 1965) p. 79. ~Report of the Commissioner, 1965; p. 77. "Census of Agriculture, 1959," vol. III, p. 69. PAGENO="0140" 132 STATE AND LOCAL PUBLIC FACILITY NEEDS Washington. Various amounts of less than $70 million were invested in new irrigation capital by each of the remaining 15 States.'° If we consider the additions to irrigated acreage rather than addi- tions to capital investment, the largest expansion from 1950 to 1959 was recorded in Texas, which experienced an increase of 2,524,104 irrigated acres. Next was Nebraska, with 1,201,667 newly irrigated acres. Third was California, with an increase of 957,246 acres for the 10-year period." 2. PROPORTIONS OF CAPITAL OUTLAY BY ORGANIZATIONS In the period 1940-50 various proportions of new capital outlays of irrigation organizations for irrigation in 17 Western States were ac- counted for by the following agencies and other organizations: 12 Percent Mutual, unincorporated organizations 1. 1 Mutual, incorporated 6.3 Commercial water suppliers 1. 6 Irrigation districts 8. 3 U.S. Bureau of Reclamation 79. 8 U.S. Bureau of Indian Affairs 2. 6 States . 1 Cities .2 There are no comparable statistics showing the proportions of new capital outlays accounted for by various organizations from 1950 to 1959, except that for the 17 Western States and Louisiana the pro- portion of new capital outlays by the Bureau of Reclamation was 76.5 percent and for all other organizations was 23.5 percent. 3. MEANS OF FINANCING Bureau of Reclamation irrigation projects have been financed by Federal appropriations, contributions, and advances by water users, by the reclamation fund, and other special funds. The reclamation fund is comprised of collections from Bureau of Reclamation project power revenues, royalties from oil leases, sale of public lands and timber, construction repayments from water users' organizations, and other miscellaneous collections within Bureau of Reclamation proj ects. State projects are financed by sources such as appropriations from general tax revenues, bonds, and Federal grants. For sources of finance cities, towns, and counties issue bonds to the public and also receive U.S. loans. In addition, they may receive nonreimbursable aid from the United States in the form of payments of up to one-hall of the cost of certain irrigation system structures (such as dams), that are a part of Public Law 566 projects. Irrigation districts may sell bonds, where this is allowed by State law. In some cases these bonds are purchased by the State. Irri- gation districts sometimes tax local property owners in advance of new capital outlays. The more usual practice, however, is to tax property owners later, when the time comes to retire bonds. If eligible, districts may construct federally assisted Public Law 566 projects, as do cities and towns. In addition, irrigation districts 10 1959 Census of Agriculture, vol. III, pp. 69 and XXVI. 11 1959 Census of Agriculture, vol. III, pp. 8-27. 12 1950 Census of Agriculture, vol. III; p. 95. PAGENO="0141" STATE AND LOCAL PUBLIC FACILITY NEEDS 133 are often empowered to accept State or Federal loans (such as Farmers Home Administration loans) and State grants. Irrigation districts are the chief users of irrigation facilities built and financed by tim Bureau of Reclamation. Unincorporated irrigation mutual associations or cooperatives issue~ bonds and borrow from banks. Incorporated mutual associations issue bonds and borrow on notes secured by liens on fixed capital and. water rights, hut not on the land. They also receive Federal grants and loans. Their capital stock almost always represents funds of the water users themselves and not "outside" funds. When the Bureau of Reclamation supplies facilities for irrigation, the Bureau, of course, is the body that supplies the financial resources. Most commonly, the "water users organizations" are irrigation districts, water districts, and conservancy districts. In order to have irrigation facilities constructed, a water users association must assume an obligation to repay the United States for a certain portion of the cost of the irrigation facilities. This is similar to the repayment of a loan. Still, it is not customary for the title to the irrigation facilities to pass from the Bureau to an irrigation district when the obligation has been repaid, although the irrigation district is likely to assume the operation of the facilities soon after construction is completed. Lastly, commercial water suppliers who are not also water users usually finance construction of facilities with equity capital and with bond sale proceeds. D. PROJECTED CHANGE IN IRRIGATED ACREAGE AND DEVELOPMEN~, 1964-75 As of 1959, nearly half of the irrigated acreage in the Western States and nearly all of t.he irrigated acreage in the Eastern States was supplied with water from privately developed sources. Moreover, farm water-application and land-preparation systems, including those systems on. farips supplied by irrigation organizations, are not con- sidered to be public irrigation facilities. These systems do represent some portion of the total capital structure of irrigation, however, and their purchase can be encouraged or facilitated through such means as cost sharing, credit, and watershed project development. For the United States (mainland), the remaining irrigation potential is estimated to be 40.4 million acres, of which 15.5 million acres are in the East and 24.9 million acres are in the West.13 Potentials for Federal and non-Federal are estimated to be as follows: [In millions of acres] Federal Non-Federal Total Western mainland 16. 2 4.3 8. 7 11.2 24.9 15.5 Eastern mainland United States 20. 5 19. 9 40. 4 in the West, roughly two-thirds of the remaining irrigation potential has been classified by the Bureau of Reclamation as potential Federal projects. The total cost of these projects is estimated by the Bureau 13 Pavelis, George A. "Irrigation Policy and Long-Term Growth Func ions," Agricultural Economics Research, vol. XVII, No. 2, April 1965. U.S Department of Agriculture, p. 55. PAGENO="0142" 134 STATE AND LOCAL PUBLIC FACILITY NEEDS of Reclamation to be about $16.3 billion at 1959 prices, of which about $12.7 billion would be allocated to irrigation under present procedures. Federal irrigation development in the East is expected to be limited to federally assisted small watershed projects (Public Law 566), mainly in the Southeastern and South Central States. Projections of irrigated acreages for 1964 and 1975, and the net increase for 1964-75, broken into West and East sectors of the United States are as follows: 14 [In millions of acres] West East United States Projected irrigated acreage, 1975 - Estimated irrigated acreage, 1964 Increase in acreage, 1964-75 38. 0 34.2 3.8 3.9 2.8 1. 1 41.9 37. 0 4.9 The increase in irrigated acreage is allocated according to the esti- mated distribution of total remaining irrigation potentials in each region, as follows: [In millions of acres] West East United States Federal development Non-Federal development Total additions, 1964-75 2. 5 0.3 1.3 .8 2.8 2. 1 3.8 1. 1 4.9 Bureau of Reclamation estimates of unit investment costs of west- ern irrigation facilities range from $2,780 per equivalent acre in the South Pacific region to $566 in the lower Arkansas-White-Red region. The average is $920 per equivalent acre. These unit investment costs are for the irrigation water supply portion of projects and do not in- clude farm development costs. For western projects identified as non-Federal, the investment cost estimates ranged from $140 per equivalent acre in the Colorado re- gion to $659 in the western gulf region. The average was $310 per equivalent acre of irrigated land. Given existing legislation, Federal irrigation potentials in the East are assumed hčrč to be limited to the acreages that could be irrigated by federally assisted small watershed projects (Public Law 566). At present, there are 15 such projects in the East, costs allocated to irri- gation on a per-acre basis are available for 11 of the proj ects. These costs average $150 per irrigated acre, of which a maximum of half may be borne by the Federal Government. (In practice, approximately half of such costs have been borne by the Federal Government.) 14 Irrigated acreages for 1964 were not available at the time the chapter was prepared. Projections for 1964 and 1975 were obtained from Pavelis, cited previously. The projection reported here assumes modest development of Federal and non-Federal potentials, resulting ultimately in development of half of the remaining potential of each. PAGENO="0143" STATE AND LOCAL PUBLIC FACILITY NEEDS 135 Applying these average cost figures to the proj ected acreage in- creases, estimates of capital needs for irrigation development in the next 10 years are as follows: Federal `irrigation development (Million dollars) West, 2.5 million acres by $920 2, 300. 0 East, 0.3 million acres by $75 1 22. 5 Total 2, 322. `5 1 Federal share of small watershed project construction costs. Non-Federal irrigation development (Million dollars) West, 1.3 million acres by $310 403. 0 East, 0.3 million acres by $75 1 22. 5 Total 425. 5 1 Non-Federal share of small watershed project construction costs borne by local organizations. The estimated capital requirements for irrigation expansion shown above may be considered capital needs in the sense that additional capital will be required to finance the projected development. The projections do not purport to demonstrate the national need for irri- gated acreage by 1975. There is a wide range for investment decisions in both East and West with respect to future irricration development. In both regions, the Federal or non-Federal dev~lopment potential is sufficient to fulfill the projected increase in irrigation development. In the East, non- Federal development is expected to consist chiefly of independent development by private farm operators. Except for small watershed project construction costs borne by local organizations (estimated to be $22.5 million from 1964-75), non-Federal irrigation development in the East is largely independent of State and local government and private organization financing. It is expected that irrigation develop- ment in the East will continue to be carried out largely by individual farm operators. Non-Federal irrigation development in the West includes irrigation by individual farm operators, mutual organizations, commercial water suppliers, irrigation districts, States, and cities. In 1959, non-Federal organizations irrigated 53 percent of all irrigated land in the 17 Western States and Louisiana, and 4 percent of irrigated land was supplied water directly by the Bureau of Reclamation and Bureau of Indian Affairs. Individual farm operators irrigated 43 percent of the West's irrigated land. In the period 1940-50, 35 percent of total capital investment in western irrigation systems was made by single farms; excluding investment in projects operated directly by the Bureau of Reclamation, single-farm investment was 73 percent of the total. Data for single-farm irrigation investment for later periods are not available. However, capital investment by non-Federal irrigation organizations in the West more than doubled between the two periods 1940-50 and 1950-59, from $106 to $244 million. Thus, even if there were no change in the amount of new investment by organizations other than the Bureau of Reclamation by 1975, these organizations would account for over half the projected $403 million non-Federal irrigation investment in the West. PAGENO="0144" 136 STATE AND LOCAL PUBLIC FACILITY NEEDS The means by which new investment will be financed may differ greatly by type of organization. Between the two periods, 1940-50 and 1950-59, nearly 90 percent of the increased investment on western projects, excluding those operated directly by the Bureau of Reclama- tion, was by mutual organizations and irrigation districts. Separate investment data for cities and States are not available for the recent periods, but from 1940-50 their new irrigation investment combined amounted to $1.8 miffion. PAGENO="0145" CHAPTER 4 Sanitary Sewer Collection Systems * A. THE NATURE AND CoMPosITIoN OF SANITARY SEWERS 1. DESCRIPTION OF FACILITIES Sanitary sewer collection systems provide a means of performing one of the most essential services required, if man is to exist in a communal fashion-the removal of wastes generated by him. Man cannot survive when too intimately surrounded by his own body wastes. These wastes including excreta are the breeding grounds of pestilence and the method of transmission of many diseases including cholera, typhoid and paratyphoid fevers, bacilary and amoebic dysentery, hookworm and ascaris infections, poliomyelitis and various other virus infections. As civilization evolved mankind has instinctively improved upon his methods of waste removal. The origin of sanitary sewer collection systems employing water as the vehicle for transporting the waste is unknown, though portions of the Nippur, India, and Tell Asmar, Turkey, systems were con- structed over 6,000 years ago. Waterborne waste systems were constructed throughout the then known world by the Romans. However, with the decline of the Roman Empire waterborne waste systems fell into disuse, and though the nucleus of many systems were subsequently constructed, they were installed as ground or surface drains, and the discharge of excreta into them was pro- hibited by law. Cesspools and pit privies replaced the water flushed devices in city homes, and as population concentrations increased the privies and cesspools proved to be inadequate. They tended to fill and overflow or otherwise malfunction, polluting the local ground and surface water, creating general nuisances and providing rodents and all manner, of pests a friendly environment, thus contributing to the plagues that swept Europe during the middle ages. Following a series of cholera epidemics in London at the beginning of the 19th century, it was demonstrated that the disease was water- borne through contamination of a water supply by leaching cesspools. To eliminate this problem, London in 1815 legalized the discharge of excreta into the existing drainage system of the city, and undertook the construction of facilities for the explicit purpose of providing drains from the existing cesspools to places where it was then con- sidered safe to discharge their contents. These points of discharge were normally surface streams or rivers where the material would be flushed beyond the reaches of the community. In providing a method of waste removal an even greater problem was created, that of stream pollution. When cholera again raged *Prepared by Peter Rowan, Land and Facilities Development AdministratiOn, U.S. Department of Housing and Urban Development, with minor editing by committee staff. 137 70-132-G6-vol. 1-1O PAGENO="0146" 138 STATE ~D LOCAL PUBLIC FACILITY NEEDS throughout London in the mid-1840's and early 1850's this problem of stream pollution was recognized, and remedial steps taken through the construction of interceptor sewers to concentrate all of the drains at a few points so that their discharge might be treated rather than pollute the streams. At the same time efforts were made to provide treatment of raw water supplies. The first American city to follow London's example was Boston, Mass., which legalized the discharge of human wastes into its drainage system in 1833. It was not until 1857, however, that a sewer system in the United States was designed for the specific purpose of collecting waterborne excreta. In that year, both the city of Chicago, Ill. and the (then) city of Brooklyn, N.Y., undertook the construe-. tion of comprehensive consolidated sewer collecting systems. These systems were the forerunners of the modern sanitary sewer collecting systems which are currently providing service in over 12,000 commum-. ties in the United States (a) Physical Cha? acteristics In order that a distinction may be made between the public works categories of sanitary sewer collecting systems, storm sewer collecting systems, and sanitary sewage treatment systems, the following defini- tions have been employed: Sanitary sewage treatment systems include all the various devices used in the treatment or stabilization of sewage or industrial wastes of a liquid nature, including the necessary intercepting sewers, outfall sewers, pumping, power, and other equipment and their appurtenances, and includes any extensions, improvements, remodeling, additions, and alterations thereof. Storm sewer collecting systems include all the various devices used in the carrying off of, or removal of storm and surface water, street washings and other wash water or drainage, and include any extensions, improvements, remodeling, additions or alterations thereof, but exclude any device used in the carry-. ing off of, or removal of lic~uids, . wastes or drainage of an indus- trial, commercial or domestic origin. Sanitary sewers include all the various devices used in the carrying off of, or removal of liquid wastes or drainage of an industrial, commercial, or domestic .origin through a pipe or con-. duit arrangement, either separately (separate sewers), or in com- bination with storm and surface water,. street washings and other wash waters or drainage (combined sewers), including any extensions, improvements, remodeling, additions, or alterations thereof, but excluding all devices included as part of a sanitary sewage treatment systems, and all local buildings and household * connections. . * The modern sanitary sewer collecting system which evolved from * the experience gained in the mid-1800's is a complex arrangement of pipes and conduits strategically located-throughout a community, in such a fashion-as to provide all improved property with a safe and sanitary method of disposal of the waterborne wastes that might originate thereon. The system provides service to not only households, but also to business and commercial establishments and industrial complexes. * * * PAGENO="0147" STATE AND LOCAL PtTBLIC FACILITY NEEDS 139 Since the systems provide a necessary service to any and all parties ~n a demand basis, they are generally considered a utility, and as such the public has come to rely upon them for fully automatic service wherever they are employed. (b) Standards of Performance To be fully functional, collecting sewers must be constructed below the frost line, and at sufficient depth to allow for the drainage of base- ments adjacent thereto. In order to make the system as automatic as possible, the collecting sewers are laid on continually descending grades sufficient to produce self-cleansing velocities (not less than 2 feet per second when flowing one-third full) but not excessive enough to produce velocities in excess of 15 feet per second when flowing eight-tenths full which might damage the facility. In those areas where excessive depths would needlessly be encountered, it is often economically feasible to employ pumping stations to raise the level of the line to a reasonable depth. Similarly where ravines or other low areas are encountered which cannot be conveniently bridged, due to lack of clearance or for some other reason, or to prevent the sewer line from intersecting some other subsurface facility, inverted siphons are employed. To facilitatemaintenance and eliminate as many potential stoppages as possible, access to the system is provided by manholes strategically located throughout the system. The manholes, normally 4 or more feet in diameter, are spaced not more than 400 feet apatt on small lines and 500 feet apart on larger lines (those over 24 inches in diam- eter). Manholes are also installed wherever the slope, direction or size of a line is charged, where two or more lines intersect, or at the terminus of a line. In order to provide for the maximum service area with a minimum of pipe footage, the sanitary sewer collecting systems are normally installed in the center of streets or other public rights-of-way, being equally accessible from properties located on either side. Normally, the line or pipe from the building or other facility to be served to the sewer located in the public rights-of-way is the responsibility of the owner of the properties served and is not considered a part of the public sewer collecting system. The location of the sewers in the public domain al~oprovides ready access to the system for purposes of maintenance and repair. Sanitary sewer systems are normally designed to provide service for the estimated ultimate tributary population, based upon current and projected land use patterns of the area to be served for at least the next 50 years. In those instances where economies of scale dictate a shorter design period, it should not be for a period of less than 25 years. In addition to the population requirement, adequate allowances for anticipated commercial establishment, institutions such as hospitals and nursing homes, et cetera, and industrial complexes should be taken into consideration. Smaller sewers, those less than 24 inches in diameter, should be designed so that when they are flowing full, they provide a capacity of at least 400 gallons per day per person served, with adequate allow- ances for any industrial or commercial wastes and infiltration. In PAGENO="0148" 140 STATE AND LOCAL PUBLIC FACILITY NEEDS the case of combined sewers, an additional allowance for storm and other surface runoff tributary to them must be included. Large sewers should have similar capacities, but due to the inherent time lag of concentrating the full flow of the smaller collecting lines in the larger main or trunk sewers, the per capita requirement when flowing full can be reduced to not less than 250 gallons per day per person served. In order to minimize maintenance and prevent undue stoppages, no sanitary sewer collecting lines should be constructed less than 8 inches in diameter. The selection of material with which the system is constructed should include an appraisal of the characteristics of any possible industrial wastes which might be contributed to the system, the local soil and ground water characteristics, the possibility of septicity occurring in the lines, the durability and strength of the material itself, as well as its ability to withstand abrasion and the continuous pounding caused by traffic passing over it. Under normal circumstances, sewer conduits have a reasonable life in excess of 50 years, as demonstrated by the many sections of sewer systems throughout the United States that were constructed prior to the turn of the century. Of these older conduits, many have had their efficiency substantially reduced by the failure of the material used for joining the pipes. This failure of the joint material has allowed roots, earth, and ground water to enter the lines, thereby blocking them, or increasing the amount of infiltration thereto, and in some instances even' undermining the line to the point of collapse. Routine maintenance alleviates part of these problems through the removal of the tree roots and other materials that tend to block the lines. In- filtration and undermining are often not detected until a major failure on the part of the system is discovered, at which time either replace- ment of some sections of systems has to be undertaken, not because of structural failure or loss of efficiency of the existing sewer collecting system, but, because of radical changes in the use of the area served by the system Areas that were originally utilized for single-family dwellings, have through time become locations~ of high population density concentrations, or even' industrial complexes, whose needs far exceed the design capacities of the original system in the area This problem will continue to persist as `long as" society continues to be mobile, but can in part be met through the planned orderly growth and development of our metropolitan complexes. 2 EXISTING CAPITAL PLANT (a) Growth and DIstribution The inventory of municipal waste facilities conducted by the Public Health Service of Department of Health, Education, and~ Welfare in 1962 disclosed that there were 11,420 communities in the United States served by 11,655 sewer collecting systems in 1961. An esti- mated 118 million people, as well as innumerable commercial estab- lishments and industrial complexes were provided service by these facilities. The number of facilities~ and the estimated population served by them, population size group. and geographic location are presented in table 1. ` " ` PAGENO="0149" 141 STATE AND LOCAL PuBLIC FACILITY NEEDS TABLE 1.-Summary of sanitary sewer systems in the United States as of 196fd Total Type of sewer collecting system ~ Separate Combined Both or undefined Num- her of systems Population served Num- her of systems Population served* Num- ber of systems Population served Num- ber of systems Population served POPULATION SIZE GROUP Under 1,000 1,000 to 4,999 5,000 to 9,999 10,000 to 49,999 50,000 to 99,999 Over 100,000 STATES Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Marylanth Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Total, United States 3, 098 5, 049 1,357 1,510 206 435 216 21 74 161 506 176 91 1~ 346 276 27 91 472 321 438 335 161 161 109 72 144 236 404 168 466 114 300 37 78 210 76 548 359 185 441 284 165 682 69 22 221 181 135 832 75 52 231 230 176 392 71 1,590,516 9, 840, 904 7, 653,310 23, 172, 045 10, 207,350 65, 907, 794 1,495, 043 61,620 710,649 792, 675 11,458,492 1,421, 106 1,491, 656 267, 241 1,323,470 2, 170, 514 2, 268,492 362, 166 302,999 7,908,321 2,867,845 1,576,800 1,468,250 1,263, 145 2, 100,673 479, 453 1,352,909 4,389, 580 6,170,560 2,062,595 779,456 2,643, 725 385, 220 802,230 314,030 283,460 4,504, 015 599, 821 13, 443, 148 1, 751,365 321, 175 6, 776, 295 1,452, 524 927, 080 9,559,417 121, 634 561,975 927, 114 378,257 1,478,443 6,602, 147 695, 635 186, 157 1, 866, 241 1, 628,330 726, 181 2,668,315 222, 275 2, 701 4, 145 1,061 1, 144: 137 274. 214 8 72 141 477 170 66 333 262 27 329 103 400 325 134 158 37 54 81 110 373 164 411 103 275 33 19 169 389 355 127 241 279 116 439 69 18 221 154 126 826 75 202 133 98 306 68 1,347, 460 8,014, 501 5,893, 827 15, 884, 276 6,070, 000 20,098,985 1,493, 218 3, 260 689, 734 705, 285 9,359, 536 1,309,431 574, 837 25, 158 2,111,239 1, 083, 157 362, 166 244,894 1,227, 256 364,915 983, 090 1, 180, 005 563, 080 2,095, 553 68, 720 1,327, 134 619, 165 570, 100 857, 145 755, 056 1, 065, 225 299,680 517, 470 233, 430 45,660 2,314, 640 599, 821 2,709, 148 1,742, 940 118,930 1, 856, 930 1,438, 724 270, 110 2,687 262 121, 634 174, 385 927, 114 343, 162 1, 122, 268 6,486, 007 695, 635 8,390 1,481, 817 373,650 168, 460 712,268 221, 155 212 567 149 188 36 57 1 2 17 3 15 1 2 6 10 107 206 18 2 20 39 7 40 66 27 6 4 13 4 29 9 53 1 48 117 37 137 20 5 7 46 48 34 134,930 1, 159, 195 908, 516 3, 717, 515 2, 258,960 17, 721, 939 20, 000 64,300 2, 057,910 107,000 490,919 2,700 21,500 914,515 48,905 4,833,140 2,445,065 184, 760 107,000 658,620 198,650 16,800 131,760 4,252,685 1,185,710 44,945 19,600 26,790 80,600 91,350 366,375 519, 525 1,020 196, 855 1,735, 680 610,280 707,915 15,925 195, 125 55, 100 8, 555 180, 000 825, 505 425, 471 1, 315, 600 185 337 147 178 33 104 2 13 18 12 3 10 11 8 2 36 12 20 8 33 11 23 60 4 4 49 7 12 30 32 106 3 10 83 5 12 106 4 7 4 5 37 28 51 30 52 3 108, 126 667, 208 850, 967 3,507,254 1,878,390 * 28, 086, 870 1, 825 58,360 915 23, 090 41, 046 4,675. 425,900 239,383 1,323,470 37,775 270,820 9,200 1,847,925 57,865 408,950 181,245 41,445 5, 120 212,083 8,975 2,838,655 1,347, 775 19,740 24,400 1, 533, 555 65,940 257,970 146,450 1, 823, 000 10,214,475 7,405 5,390 3, 183,685 13,800 49,690 6,164,240 387,590 19, 170 161,050 61,140 169,212 204,424 429, 175 132,250 640,447 1,120 11,655 118,371,919 9,462 57,309, 049 1,209 25, 964, 055 984 35, 098, 815 Source: 1962 inventory municipal waste facilities, Public Health Service publication No. 1165. PAGENO="0150" 142 STATE AND LOCAL PUBLIC FACILITY NEEDS It should be noted that over 80 percent of all the systems were designed to exclude storm water runoff as well as other surface drain- age. The remaining systems which were not so designed pose the single largest problem involving adequate sewage collection facilities which must be resolved during the remainder of this century, if the metropolitan complexes are to continue to grow and prosper. This problem of combined services isdiscussed in detail later in the chapter. The physical facilities that made up the 11,655 sewer collection. systems included over 270,400 miles of pipe, over 4 million manholes and an indeterminate number of special structures, pumping stations and related appurtenances estimated to have a replacement value in excess of $8.5 billion in 1965 dollars. New systems, additions and extensions of existing systems that have been undertaken since the inventory have increased the total miles of pipe in service to almost 300,000 miles, providing service to over 130 million people living in 12,600 communities. The current replacement cost of 297,500 miles of pipe including all necessary appurtenances is estimated to be in excess of $9.5 biffion (1965 dollars). Though sewers have been constructed in the United States since before the Revolution, comprehensive systems for the collection of water-borne wastes of a domestic nature did not evolve until the mid 1800's From its beginning in 1857, the growth in the number of such systems was logarithmic, and closely approximated the growth in the number of communities with populations in excess of 2,500 people, until the mid-1920's. Thereafter though the growth rate continued, many of the systems were built to serve smaller population groups. It is now estimated that over one-third of all the systems serve com- munities with populations of less than 2,500. Table 2 presents a historical comparison of the number of urban communities and their population, the number of sewer facilities and the population served by them since 1860. TABLE 2 -Development of sewer collecting systems `en the United States : ~ Year ~ Census popula- tion (in millions) Urban communities Sewer collecting systems Number Popula- tion (in millions) Popula- tion as percent of census popu- lation . Number Popu- lation served (in millions) Population served as percent of- Census tlrbau popu- popu- lation lation 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950. 1960 31.4 38. 6 50.2 62.9 76. 0 92.0 105. 7 122.8 131. 7 151.3 179.3 300 650 1, 050 1,420 1, 800 2,310 2, 790 3,179 3,485 4,077 5,022 6. 0 9. 0 15. 0 22.3 30.4 42.2 54.3 69.0 74. 7 90.1 113.0 19 23 30 35 40 46 51 56 57 59 70 10 100 200 450 950 1,600 3, 000 5,100 8,256 10,600 11,550 1. 0 4. 5 9. 5 16.1 24. 5 34.5 47. 5 61.5 70. 5 80.0 115.1 3 12 19 25 32 37 45 50 53 53 64 17 ill 6~ 72 81 82 87 89 94 85~ 102: Source: Extrapolated data from, "Modern Sewage Disposal" Federation of Sewage Works Association and the "1962 Inventory of Municipal Waste Facilities in the United States," publication No. 1165 (Public Health Service). PAGENO="0151" STATE AND LOCAL PUBLIC FACILITY NEEDS 143 In measuring growth, by number of facilities, a conservative picture of the industry is presented since as urban complexes have evolved, existing independent sewer systems have been integrated into larger consolidated systems. Therefore the number of systems reported at any specific time, is not the sum of all systems constructed prior to the time in question, but the number of identifiable systems in service at that time. No precise data are available regarding the number of new systems built, systems incorporated or consolidated into other systems, or portions of systems that have been abandoned. (b) Ownership Patterns Similarly, no data have been amassed regarding the ownership of sewer collecting systems, since they have normally been regarded as a function of local government. Private, proprietary type systems, though, have been employed for sewage collection where no govern- mental agency, or cooperative group was available to undertake the activity. Due to the large capital investment and low returns thereon, and the inability to restrict service for nonpayment of service charges, the proprietary systems have tended to relinquish their franchise to governmental bodies wherever possible, through sale or other disposal methods. Cooperative systems also have been established where governmental agencies have not been able to provide the service. Subdivisions located in rural or semirural counties have accounted for a majority of this type of ownership. On the basis of information collected by the Federal Housing Administration, approximately 5 percent of their caseload of new housing mortgages in 1960 were provided sewer collection service by cooperative or other nonprofit type corporations. By 1965 the number of such mortgages had decreased to less than 1 percent. Applying these figures nationally to sewer collection systems in general, there could be as many as 500 nongovernment owned systems. Considering this indirect method of estimating, it is con- ceivable that the number has decreased to less than 100, and will continue to decrease as local governments continue to expand their services and consolidate independent systems. B. COSTS AND USER CHARGES V 1. CONSTRUCTION COSTS The costs of sewer collecting systems consist of the initial capital cost for construction, and the recurring costs of operating and main- taining the system. The initial construction cost is by far the larger and least determinate cost of the two. Due to the subterranean construction involved in sewer collecting systems, the cost of a given element of a system varies widely geographically, and even within the confines of a single system. As an example, the material cost for 8-inch pipe, which is the smallest size allowed by most jurisdictions, can range from as little as $0.60 per foot to as much as $2.50 per foot, depending upon the material from which it is made. The type of soil, ground water level in which the pipe is to be laid, depth of exca- vation, and method of placement of the pipe also materially affect the cost of the facility. On a total systems basis, the national average price per foot of pipe when equated to a specific project or PAGENO="0152" 144 STATE AND LOCAL PUBLIC FACILITY NEEDS system may produce a meaningless figure because the average number of feet of pipe per person or per unit served varies geographically, and within geographic areas they further vary on account of popu- lation densities. Historically, it has required an average of 12.06 feet of pipe per each person served, or 38.59 feet of pipe per unit served. However, in some subdivisions it may require as much as 50 to 60 feet of pipe per person served or 160 to 200 feet of pipe per dwelling unit served. Though the size of pipe used for sewer collecting systems varies from 6 inches in diameter to massive box-type culverts, over 96 per- cent of all the pipe in sewer collecting systems are less than 24 inches in diameter. Over* 86 percent of the total footage of collecting sewers are 12 inches or less in diameter. 2. OPERATION AND MAINTENANCE COSTS The large percentage of the smaller sizes of pipe in sewer collect- ing systems, causes the maintenance and repair cost to be fairly uni- form throughout the United States. Though it varies from less than 50 cents per person served to over $10 per person served per year the average maintenance and repair cost is around $2.50 per person per year. The maintenance of a sewer collecting system involves the periodic removal of solids deposited in the lines as well as the removal of for- eign objects, such as junk deposited by vandals, and tree roots which infiltrate sewer lines for moisture. Due to the diverse nature of the materials encountered, separate schedules of maintenance are required. A majority of the problems encountered are solved as they come to light. Routine inspection of lines for necessary repairs are conducted on most systems annually, or semiannually, at which time any de- posits or foreign material are removed. Routine inspections are designed to detect areas of pipe settlement, collapse, deterioration, of joint failure, which then must be corrected by unearthing the pipe, or wherever practical from within the pipe. During the past several years great advances have been made in developing equipment for repairing the smaller diameter pipes from within, thus avoiding needless excavation. The cost of repairs for sewer collecting systems consequently varies more by the method of repair employed, than by the size of facility to be repaired. Since each repair must be evaluated on the basis of the circumstances surrounding it, such as maximum permissible time allowed, disruption to other normal community services, access to the, problem, et cetera, no attempt has been made to determine the range of possible costs involved for repairs. It suffices to say, however, that because of the nature of the service, the cost of repairs is insignificant, compared to the damage arising from failure to remedy the situation. During their early development sewer systems were considered a necessary public service to protect the public health. Their con- struction was financed through direct assessment or general appro- priation, using general obligation funds with no provisions for con- tinuing charges ~o cover operations and maintenance activities. This practice is still employed in many communities. PAGENO="0153" STATE AND LOCAL PUBLIC FACILITY NEEDS 145 8. IJSER CHARGES Prior to the 1900's a very small number of communities employed sewer service charges to support the public borrowing necessitated by the construction of sewer facilities. In several instances sewer charges were used to help offset the cost of operating and maintaining the system. With the ever-increasing demands placed upon local governments for additional services, and the high failure rate of general obligation bonds during the early 1930's, a general trend toward sewer service charges by municipal governments began. This trend bolstered sagging tax revenues and provided a means of entering the then rapidly growing revenue secured bond market. As indicated in the sample survey detailed in table 3, the number of communities employing service charges increased over 600 percent during the 20-year period between 1930 and 1950, and an additional 1,100 percent between 1950 and 1960 over the 1930 base figure. In order to make bond offerings more attractive and to insure collection of the service fees, sewer service charges wherever possible have been combined with water service charges, or established as liens against the property served. In so doing the communities have been able to obtain necessary funding, using combined water and sewer revenue bonds, secured in addition by a general Gbligation lien on tax resources. In many States this type bond is not charged against a community's statutory general obligation debt limit, allowing the community to undertake projects which otherwise would have had to be postponed indefinitely. For communities without established credit, the use of revenue bonds is sometimes the only means by which funds to con- struct a basic system can be obtained through public borrowings. It is of interest to note, that though the yield on revenue-type bonds is generally higher than on general obligation bonds, the difference between yields has continuously decreased during the past decade, as investors have become better acquainted with revenue issues. A recent survey in 1961 of municipal sewer systems disclosed that 63 percent of the respondents employ sewer service charges. Almost three-fourths of those supplying information had established rates that are adequate to cover the cost of operating and maintaining the system as well as debt service charges. Of the remaining communities that employed service charges, almost 80 percent receive at least half of their annual fiscal needs from such charges. The 1961 survey also disclosed that the rate structure employed by the communities for service charges varies greatly. Over 80 percent used water supply data as a base upon which the service charge was fixed. In over 50 percent of the communities, the charge for sewer service was a surcharge based on water consumption. In the remaining communities such items as front footage, number of fixtures used, number of people served, size of water connection or a fiat fee were employed to determine the service charge. An analysis of the outstanding sewer debt of the communities in- cluded in the survey disclosed that over 30 percent of the dollar amount of the debt was completely self-supporting or self-liquidating through the use of the service charge. An additional 4 percent of the debt so reported was self-supporting to some degree. The communities that reported their debt to be completely covered, represented 35 PAGENO="0154" 146 STATE AND LOCAL PUBLIC FACILITY NEEDS percent of the respondents, with an additional 12 percent of the com- munities utilizing a partially self-liquidating debt program. The balance of the outstanding debt reported by these communities repre- sents general obligation borrowings. TABLE 3.-Trend in number of local governments employing service charges by popu- lation size group and decade in which service charge was adopted Population size group Decade 1900- 1909 1910- 1919 1920- 1929 1930- 1939 1940- 1949 1950- 1959 1960- 1961 Date im~ known Total Under 25,000 25,000 to 49,000 1 1 1 2 1 1 3 4 8 8 5 4 10 11 3 27 11 26 22 7 4 1 1 8 9 7 6 48 30 55 49 11 1 50,000 to 99,000 Over 100,000 Undefined 1 Total - 1 3 4 23 33 93 6 30 193 1 Special districts for which no assignment by population size group could be made. Source: Extrapolated data from "Sewer Service Charges" by Lennox L. Moak, Municipal Finance Offi- cers Association of the United States and Canada. 0. TRENDS IN CAPITAL OUTLAY 1. ANNUAL OUTLAYS In the sewer collecting field, statistics on public undertakings have been compiled only since 1951. Unfortunately, no measurement of the amount of private undertaking is available, though it represents a substantial. amount of the total new sewer collecting construction. Many local jurisdictions require that when a builder or developer undertakes a subdivision, he must provide the necessary public water and sewer systems to serve the area. Upon completion, . these are dedicated to the local government along with other municipal type facilities such as roads and storm sewers. In order to obtain a measurement of the private undertakings, estimates were prepared using the number of housing starts per year, and the experience of the Federal Housing Administration with respect to the number of mort- gages for new housing served by public sewer systems. Since 1951, the amount of public undertakings as measured by contract awards rose from a low in 1952 of $225 million to a high of ~$405 million in 1963. Since 1963 contract awards have decreased slightly to their current (1965) level of $385 million. During the same period of time (1952-65) estimated private sewer construction -(based on housing starts) held fairly steady at about $150 million annually until 1960 when it started to decrease to its current level of $130 million. . Combining public and private sewer construction activity by year results in a relatively small increase in the amount of work undertaken annually since 1951. (See table 4.) Comparison of the 1952-56 annual average with the 196 1-65 annual avera~e, produces an 11- percent increase between the two time periods. This relatively static situation reflects a combination of many factors, especially the great demands placed upon the limited financial resources of municipalities by other public services, primarily educational or other visible tangible PAGENO="0155" STATE AND LOCAL PUBLIC FACILITY NEEDS 147 facilities, as compared to "the out-of-sight, out-of-mind" type facility such as sewers. TABLE 4.-Contract awards for sewer collecting systems 195~-65 [Millions of dollars] Source of funds Public 1 Private 2 Total Year: $225 286 211 301 305 247 310 336 359 380 320 405 396 385 $157 150 161 171 140 127 144 155 125 129 131 136 130 128 $382 436 405 472 445 374 454 491 484 509 451 541 526 513 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1 Source: "Sewage and Waterworks Construction," Public Health Service Publication No. 758. 2 Estimated from housing statistics as reported by Bureau of Census. Though tile percent of municipal expenditures obligated for sewage, including sewage treatment, has continued to be relatively constant through the years, the increasing emphasis placed on waste treatment facilities has absorbed the increase in funds available as municipal resources have increased. 2. SOURCES OF FINANCING As indicated in table 4 one-fourth of the capital outlays for sewers annually is undertaken by homebuilders, who in turn pass on the cost of the facility to the individual home buyers. The balance of funds for construction is normally obtained through private borrowings. A limited amount of Federal aid has been provided through the years for sewer construction, either as a part of some other undertaking or for brief periods of time as direct grants to finance construction of sewer facilities (that is, the Public War Housing Act of 1940 and its amendments, $54 million; and the Public Works Acceleration Act of 1962, $128 million). Though no data are available regarding sanitary sewer borrowings from private sources, the gross amount of such borrowings is excep- tionally small. Long-term public borrowings through the municipal tax exempt bond market (as reported by the Investment Bankers Association to the Department of Health, EducatiOn, and Welfare (PHS publication No. 965)) however, account for 63 percent of all municipal undertakings. These borrowings are divided into three general categories on a dollar basis as follows: Fifty-seven percent general obligation bonds Twenty percent sewer revenue bonds Twenty-three percent mixed sewer and/or other type revenue bonds with or without general obligation underwritings. In order to assist local public bodies that cannot sell their bonds on the open market at a reasonable interest rate, the Federal Govern.. PAGENO="0156" 148 STATE ~D LOCAL PUBLIC FACILITY NEEDS ment provides loans through the public facility loans program (which is administered by the Department of Housing and Urban Develop- ment). Under the PFL program 224 loans, have been made through December 1965 to local public agencies involving $102 million for the construction of sewage collecting systems, and waste water treatment plants. In addition, 141 loans have been made for construction projects involving both water and sewer facilities estimated to cost. $76 million. The Department of Housing and Urban Development also administers a program of advances for~ public works planning,. which provides noninterest bearing advances to enable communities to pcepare plans for needed public works. ,The advances become due and repayable only when the planned work is placed under construc- tion. Over 2,400 advances have been processed under this program providing about $57 million to local public agencies to assist in plan- fling of needed sewer facilities, `having an aggregate cost in excess of' $3.3 billion. . In addition to the Federal assistance, approximately one-third, of the States have adopted legislation to provide financial aid for sewerage facilities in the form of grants and/or loans Most of the State grant programs are keyed to the Federal Water Pollution Control Act, either for purposes of establishing eligibility or determining the amount of aid to be provided. California, Indiana, New Jersey, Ohio and Oregon have loan programs to assist communities to design and/or construct sewerage facilities. Delaware, New Jersey, New Mexico, New York, Pennsylvania, and \Termont have enacted grant programs to communities to assist in the development of sewage systems or part thereof. New Hampshire guarantees loans for sewer facilities and participates in a program of annual payments to defray amortiza- tion and operating expenses as do New York and Pennsylvania. The effects of the State aid programs have not been. evaluated. The balance of financing for sewer collecting systems construction which amounts to approximately 25 percent of all sewer construction undertakings, or 37 percent of the municipal undertakings, is obtained from three general sources. They are in order of importance, short term public borrowings, revolving construction funds or sinking funds related to previous borrowings and direct appropriations or "pay-as- you-go" arrangements. The exact amount of each category is unknown, but the general use of short-term public borrowings by municipalities for all purposes has increased from $2.7 billion in 1956 to $6.5 billion in 1965 or an increase of over 140 percent during the last 10 years. The "pay-as-you-go" principle is not adaptable to the sewer collection field generally because of the need to create large surpluses or reserves before construction can be undertaken. How- ever, in areas where small additions to existing systems are to be made, the "pay-as-you-go" method is often employed. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS 1. FACTORS TAKEN INTO ACCOUNT President Lyndon B. Johnson in an address at the University of Michigan (Ann Arbor, Mich., May 22, 1964) stated: In the remainder of this century urban populations will double, city land will double, and we will have to build homes, highways, and facilities equal to all those built since this country was settled. PAGENO="0157" STATE AND LOCAL PUBLIC FACILITY NEEDS 149 In addition to this national challenge, there are over 9 million people now living in urban areas that are not provided with sewer collecting services, yet the areas in which they live have sewer col- lecting systems serving portions of the communities. Over 59 million people are now served by combination sewers, which must be modified, rebuilt, or replaced during the next three decades, if we are to prevent uncontrollable water pollution. Most of the existing sewer systems currently in service have sections which are in need of extensive rehabilitation or replacement. The sum of these shortcomings is that one-third of the total population of the United States, or one-half of the sewered population, is currently provided with less than desir- able sewer collecting services, based upon decent, safe, and sanitary criteria. Yet, capital investment in sewer collecting systems continues to show no increase. To meet fully the challenge that no urban dweller should be denied the sewer collection service required for decent, safe, and sanitary housing by 1975, facilities to serve 41 million additional people must be provided, as well as the innumerable commercial and industrial establishments necessary to support this population increase. Due to the nature of the service provided; replacement, rehabilitation, and/or modification to existing systems will of necessity also have to be undertaken. The complex problem of separating combined sewers estimated to cost between $20 and $30 billion, will be begun by many communities, or continued by others, on a relatively small scale, until economic solutions to the problem have evolved. In recognition of this problem, the Congress in 1965 included in the amendments to the Federal Water Pollution Control Act, a $20 mfflion annual authorization for a 4-year program of investigation and demonstration of methods for controllin pollution from storm sewers and from sewers carrying both storm an sanitary wastes. The solutions evolved from this program will not be available for complete evaluation before 1969-70. Consequently, the findings of the program will not be translated into action programs until the mid 1970's, and the problem is not likely to be brought under control until the late 1980's or early 1990's. If new sanitary sewer collecting systems are the ultimate solution, the rate of expenditures for sewer collecting systems beginning in 1970 will have to be twice the currently estimated rate for the period 1971-75. Therefore, until the results of the new demonstration program have been evaluated, no proper distribution of probable activity between sanitary sewer collecting systems, storm sewer systems, and waste water treatment facilities can be made. Yet, the combined effort of the three categories of the public works beginning around 1970, will require annual capital expenditures of from $2 to $3 billion a year for the balance of the century. As the Nation continues to urbanize, population densities will continue to increase particularly in the existing centers of population concentration. The central cities will continue to rebuild, and as today's suburbs increase in age, they will be replaced by multiunit housing and industrial and commercial complexes. Consequently the number of feet of pipe, or other quantitative measurement of need on a per capita basis will tend to decrease slightly as the population densities increase. This trend wifi be so small as to be inconsequential, unless there is a phenomenal change in the complex of our urban centers PAGENO="0158" 150 STATE AND LOCAL PUBLIC FACILITY NEEDS toward multiunit housing and great open spaces. Such change may gradually occur during the next 30 to 50 years, but during the next 10 years it will be inconsequential, with respect to sewer collecting systems design and construction. With the continuing actual or threatened shortages of water for all purposes, efforts to decrease water uses or consumption for certain purposes through technological advances and changes in living patterns will tend to keep the per capita need at the current level of usage, though many new uses of water will evolve during the period. Consequently, the current design criteria for sewer collecting systems is likely to be continued during the next decade. 2. ESTIMATED CAPITAL REQUIREMENTS In order to (1) provide for the existing backlog of unsewered urban dwellers and the expected increase in urban dwellers during the next 10 years, (2) replace, modify or repair obsolete or undersized facilities, and (3) commence activities toward solving the combined sewer problem through construction of new separate sanitary sewers, it will be necessary that the total annual investment in sewer collecting systems be more than doubled during the next decade. Table 5 presents the estimated capital outlay requirements in millions of dollars, by population size group for the next 10 years, for sewer collection facilities based upon the foregoing considerations. TABLE 5.-Projected total capital construction requirements by community size by year 1966-75 [In millions of dollars] Size of community 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 Less than 1,000 l,00~ to 5,000 5,000 to 10,000 10,000 to 50,000 50.000 to 100,000 Over 100,000 people Total 55 114 83 214 69 233 58 119 88 225 73 240 60 124 91 234 75 255 63 131 96 248 80 269 66 138 101 260 84 283 74 154 113 289 04 314 78 161 HO 304 98 330 85 179 131 336 109 365 94 196 145 370 120 403 104 214 158 403 130 438 768 803 839 887 932 1,038 1,090 1,205 1,328 1,447 3. MEANS OF FINANCING As in the past, the homebuilding industry will account for a portion of the projected needs. On the assumption that housing starts will increase to an annual rate of over 2 million units per year by 1975, the amount of funds expected from this source for sewer collection system construction will correspondingly ircrease by 33 percent. The bal- ance of funds required consequently must be provided through public agencies, which must increase their activities in this area by 115 percent. Based upon past activity, and current estimates of the Investment Bankers Association, the municipal tax-exempt bond market wifi not be able to absorb more than a 70-percent increase in dollar volume during the next decade. Assuming the two premises are correct (1) a 33-percent increase in private funds and (2) a 70-percent increase in public long-term borrowings, other sources of funds must be tripled by 1975 in order to meet the estimated dollar requirement for sewer collection system construction. Considering the variety of demands PAGENO="0159" STATE AND LOCAL PUBLIC FACILITY NEEDS 151 for increased municipal services currently faced by local public bodies, an increase of over 200 percent in the amount of funds available from short-term borrowings, sinking fund and "pay-as-you-go" activities for this specific purpose is problematical. Since the estimated amount of available funds for sewer collecting systems construction will be less than required, the necessary additional funds must come from other sources than those currently employed. Congress in 1965 recognized the need for an additional source of financial aid to communities to assist them in undertaking needed sewer facilities. As part of the Housing and Urban Development Act of 1965 (Public Law 89-117), the water and sewer facilities grant program authorized appropriations not to exceed $200 million annually through fiscal year 1969, for grants, not to exceed 50 percent of the development cost of specific projects to assist communities in the financing of public water and/or sewer facilities (other than sewage treatment plants and their appurtenances). Since there are three general categories of facilities (i.e., (1) water, (2) sanitary sewer, and (3) storm sewer) eligible for this aid, no attempt has been made to prorate the probable amount of funds which will eventually be ex- pended for each of the categories. In addition, Congress has also provided assistance under the Public Works and Economic Development Act of 1965 (Public Law 89-136, authorizations not to exceed $500 million per fiscal year through fiscal year 1969), the Appalachian Regional Development Act of 1965 (Public Law 89-4 authorization of $6 million), and the Consolidated Farmer's Home Act of 1961 as amended (Public Law 89-240, authorizations not to exceed $50 million per fiscal year) for grants and/or loans to construct public facilities including sewer collecting systems. Due to the unique purpose for which each of the programs was enacted, no distribution of probable financial assistance among the eligible categories of public facilities construction has been attempted. An evaluation of the extent to which local public bodies will utilize the various Federal financial assistance programs would be premature. PAGENO="0160" CHAPTER 5 Storm Sewer Systems* A. NATuRE AND COMPOSITION OF FACILITIES 1. DESCRIPTION OF FACILITIES (a) Characteristics, Functions, and Fundamental Principles Storm sewer systems consist of manmade and natural channels and conduits which, together with inlets, catch basins and outfall struc- tures, function collectively to convey surface waters to disposal points outside the area of collection. The waters so collected are generally the residual fraction of precipitation remaining on the land surface after other fractions have been lost to surface ponding, evaporation, and infiltration into the ground. This fraction of the total precipita- tion is referred to as storm runoff, or simply runoff. Another type of sewer system, frequently installed in urban areas in past years, conveys sanitary and industrial wastes combined with runoff. Sewers of this type are termed "combined" sewers. Such sewers intercept sanitary flow in dry weather for conveyance to a treatment plant. During periods of storms a portion of the combined flow is conducted to a treatment plant and the balance is disch arged into the local drainage canals or waterways. Although storm sewers and combined sewers are distinctly different in function, each of these sewer types conveys runoff. To simplify terminology, the term "storm sewers," where used in this chapter, is meant to include both separate storm sewers as well as combined sewers, except where indi- cated otherwise. Surface water resulting from various domestic uses of water, such as auto washing, excess lawn watering and cleansing of walks, drive- ways and parking lots also produce runoff. Many mechanical devices, such as water-cooled air conditioners, sump pumps, condensate equip- ment and some types of industrial equipment also contribute to the total runoff. The amounts thus contributed, with the exception of that from nonrecirculating, water-cooled air conditioners, either do not constitute significant quantities or are not normally produced during periods of precipitation. Although the cooling water from nonrecirculating water-cooled air conditioners, where disposed of through storm sewer systems, is an important factor in the total quantity of drainage in some localities, this fraction will not be included since the problem is nonexistent in some areas and it can be, and often is, controlled by regulatory measures in others. Thus, runoff is considered here to be only the fraction of precipitation result- ing from rainfall or the melting of snow and ice. The general lack of available records and data relating to design and construction of storm sewers became increasingly evident as this *Prepared by the American Public Works Association Research Foundation, researched and written by Herbert G. Poertner, general manager and director of research, with minor editing by committee staff. 152 PAGENO="0161" STATE AND LOCAL PuBLIC FACILITY NEEDS 153 study progressed. This lack of information highlights a need for comprehensive and coordinated programs of research and development in the field of urban hydrology and hydraulics. The inescapable consequence of decisions regarding storm drainage is the selection of space for the temporary storage of storm water. If nothing is done to convey storm water away, it will occupy space near the place where it falls. If a storm sewer is constructed, storm water will occupy space at the downstream end of the storm sewer. Regardless of what decision is made regarding storm drainage, there results a selection of space for the temporary storage of storm water. This is an important fundamental principle. In urban areas space has typically high economic values. Complete economic analyses must include the cost of the space selected for the temporary storage of storm water, since the use of that space for other purposes is curtailed. This concept is relatively new to the field of storm-drainage economics, and warrants thoughtful consideration by all persons who make decisions in that field. A subsequent part of this paper further develops this concept. (b) Services Rendered; Dangers and Damages The runoff produced in rural areas can cause considerable damage to crops, soil, animals, farm buildings, and roads and highways. At times it may even result in loss of life in both humans and animals. The U.S. Soil Conservation Service works with local rural groups to plan and construct drainage facilities to alleviate such problems. Corrective measures employed in rural areas must be entirely different from those used in urban areas. Such measures normally include contour plowing, selective area and crop farming, reforestation, maintenance of natural ditches and watercourses, and the construction of embankments and levees along with judicious location of buildings, feedlots, pastures, crop-fields, roads, ponds, and impoundments. The runoff from urban areas, if not properly conveyed to disposal points, can result in very significant losses. Most important of these is the great damage inflicted upon both real and personal property. As a result of discussing such losses with knowledgeable individuals, it is estimated that the total average annual losses in all parts of the United States in recent years is $1 bfflion or more. However, *this estimate merely indicates the general magnitude of losses since data On the evaluation of losses is not available. Considering the present rate of industrial expansion and population growth in urban areas, it. is not difficult to visualize an increase in losses due to such property damage. Inadequate disposal of runoff often results in widespread loss of valuable time and frequently, causes great inconvenience to urban populations. This is characterized by persons arriving late to places of employment, or perhaps not reporting at all, because of delays in transportation caused by street flooding, or resulting from the need to care for property being endangered by flooding. Flooding of basements can result from unsatisfactory or nonexistent storm sewer systems. The results may vary, from mere inconvenience and loss of use of basement facilities, upward to very serious threats to health and safety. The extensive use of combined sewers presents .a threat of disease to the helpless public in such areas. In commercial areas, where food may be served in basement cafeterias and restau- `VO1326OvoL 1-11 PAGENO="0162" 154 STATE AND LOCAL PUBLIC FACILITY NEEDS rants, such basement flooding admits sewage which could cause disease to spread rapidly to many persons and, if communicable, thence to others over wide geographic areas. In industrial and commercial areas, basement flooding, from combined sewers, frequently causes serious damage to mechanical, electric and process equipment, such as power generating equipment, heating and cooling equipment, transformers, mechanical shop equipment and stored equipment, goods, and supplies. There are, in many communities, low-lying areas which flood frequently due to the runoff from local storms. There are also areas which are inundated by rising waters of natural watercourses. In the latter case, the protective measures to be employed involve the construction of flood control facilities, which are beyond the scope of, and are not included in, this report. In either of the above cases, funds required to minimize property damage are often not available. In such cases a logical solution to the flooding problem.is the use of flood plain zoning. This procedure limits the usage of such areas in a manner which minimizes damages. The construction of permanent structures and improvements are prohibited, in favor of the type of development or usage which will suffer only temporary and relatively small damages. The development of parks and recreational areas in flood plains, in lieu of residential, commercial, and indus~rial develop- ment, is an example. Such zoning does, however, meet with con- siderable opposition from landowners and, in some cases, persons in the government responsible for fiscal matters. (c) Quantitative Standards of Performance and Design The measurement of the standard of performance of storm sewer systems is mainly a quantitative one. A system which is entirely adequate would carry off, without damage, all drainage from mis- cellaneous sources and the runoff resulting from any conceivable storm that may occur in the future, no matter how rare in frequency of recurrence. To conceive and design such a system would be mi- practical and economically unsound. In fact, a greater storm than heretofore experienced may occur after such a system is constructed. The system is then no longer completely satisfactory. Today, storm sewer systems are designed for hypothetical rain- storms of an "intensity, duration, and frequency of recurrence" which appears economically justified for the particular locality. At some future date, when sufficient and accurate data are available for a given geographic locality, and after somewhat more refined methods of data analysis and design procedures have been developed, it will be possible to design a storm sewer system for such a locality in a more precise and meaningful manner than is now possible. The customary design procedure now used is to design storm sewer systems protecting residential areas for the storm likely to be equaled or exceeded, on the average, once in a given period of time. The period used ranges from 2 to 10 years (five is common). Whether the 2-year or 10-year frequency, or another, is selected depends upon the relative value of the property being protected, and the ability to pay. Systems protecting industrial and commercial areas are sometimes designed for storms of greater. intensity. Whether or not a storm sewer system should be built, or improved, should be based, in part, upon a thorough survey and analysis of annual PAGENO="0163" STATE AND LOCAL PUBLIC FACILITY NEEDS 155 benefits and costs. The annual total cost of a storm sewer system can be expressed as the sum of the amortized capital investment, interest on investment, operating and maintenance expenses and estimated annual damages occurring after installation of the system.' If such costs, when amortized over the estimated life of the system, are less than the annual damage expected to be inflicted under existing or anticipated circumstances, there is economic justification for the installation of the system as designed. However, if the annual cost is estimated to exceed the annual expected damage, the design should be revised and further cost analyses made until the benefit-cost ratio equals or exceeds unity. Further analyses may be made, assuming sufficiency of available data, until the optimum design is determined. Naturally, the economic consideration presented above constitutes only one of the many factors influencing the decisions regarding the need or desirability of a sewer project. The adequacy of a storm sewer system of an urban area may also be described in terms of the percentage of total urbanized area that is provided with sewer systems, rega.rdless of the design capacities. Un- like many other public services, the contribution made by sewers toward a community's environment is not normally measured per capita. In summary, the quantitative standards of performance of systems of storm sewers, within an urban area, are generally described in terms of (1) the capacity for handling the runoff from an assumed hypothetical storm, (2) the percentage of the urbanized area which is sewered, and (3) the percentage of the total runoff sewered. (d) Qualitative Standards of Performance and Design Esthetics can influence the design of storm sewer systems and may be considered as a quality measure. As an example, a very large underground conduit may be constructed to carry runoff from a large drainage area; whereas, an open, paved, trapezoidal channel, con- structed more economically on the ground surface may suffice quanti- tatively. The underground conduit would often be demanded to satisfy the esthetic requirements of many communities, and would also be demanded in some developed areas where the loss of usable land areas creates serious problems. Construction material and workmanship are also quality measures. Materials and workmanship of the specified quality may usually be assumed. However, an entirely satisfactory design may, if construc- tion inspection is superficial or missing, result in unsatisfactory performance of the system due to the use of materials and workman- ship which do not meet the requirements of the plans and specifications of the design engineer. Systems of "combined" sewers are not regarded as entirely accept- able in most communities because of the pollution often resulting from overflows carrying sanitary wastes, during period of rainfall. The installation of combined sewers is no longer permitted in some areas. The installation of sewer systems, designed and constructed to meet both quantitative and qualitative standards of performance, often benefits adjacent properties by enhancing land values and by: 1 Knapp, John Williams. "An Economic Study of Urban and Highway Drainage Systems." Johns Hopkins University, Department of Sanitary Engineering and Water Resources, storm drainage research project, Baltimore; Md. 21218, June 1965; 175 pages. Technical Report No. 2. PAGENO="0164" 156 STATE AND LOCAL PUBLIC~ FACILITY NEEDS increasing the usage of existing facilities (such as basements, yards, and streets) and may, therefore, be looked upon as part of a "reclama- tion" program. The importance of careful and efficient design of sewer systems is an important factor affecting quality. 2. EXISTING CAPITAL PLANT OF STORM SEWERS (a) The History of Storm Sewers When our country was first settled, sewers were generally non- existent except for natural ditches and hastily constructed surface swales. It was possible to locate buildings and farm areas in favorable locations and the extent Of damages suffered during flooding was small measured in terms of today's consequential damages. As the urbanization of the country expanded and moved westward, the increased population, commercialization and industrial develop- ment imposed demands upon citizens, particularly property owners, to develop means of safeguarding their health and property. One of these safeguards developed through primitive stages (from the hand-dug ditch to the paved gutter, the rubble masonry ditches, and the underground wood sewer) and later developed into the modern underground conduit systems, provided with inlets, manholes, and catch basins; all integrated into a system of laterals, mains, trunks, and outfall sewers. The development of systems of sanitary sewers naturally received priority as communities became congested. This was necessary to reduce the incidence of epidemics of disease and to provide for the esthetic demands and living standards of a progressing people. As communities grew, transportation became a problem. The horse and wagon, the surrey, and later the horseless carriage, again placed demands upon `the citizens to provide negotiable transportation arteries through the growing communities. It was necessary to divert water' away from the unpaved roadways. Later, storm sewers were the outgrowth of the communities' progress, and `generally developed simultaneously with the construction of street pavements as cities modernized and developed into urban communities. In many rapidly developing urban areas it became evident that a single system of sewers could be designed to serve both the need for disposal of sanitary waste as well as the surface drainage. Many cities thus began to construct systems of combined sewers. A 1964 publication of the U.S. Department of Health, Education, and Welfare 2 names large cities, including Boston, Chicago, Cleveland, District of Columbia, New York, St. Louis, and many others, as being served by combined sewers. Many large urban areas in the United States are served almost entirely by systems of combined sewers. A noteworthy example is the city of Chicago, Ill. Chicago, as of the year 1965, has approximately 4,000 miles of combined sewers and only a'few miles of' separate storm sewers. Combined sewers satisfactorily convey sanitary wastes to disposal points during periods of dry weather but during periods of rainfall, they are generally unsatisfactory, when judged by today"s living standards and functional and legal requirements. For example, with the advent of stringent "laws regulating the disposal of untreated wastes into lakes and natural watercourses, it became necessary for 2 U.S. Public Health Service, Division of Water Supply and Pollution Control, "Pollutional Effects of Storinwater and Overflows From Combined Sewer Systems-A PrellniinaryAppraisal," Washington, D.C., November 1984; 39 pages; publication No. 1246. PAGENO="0165" STATE AND LOCAL PUBLIC FACILITY NEEDS 157 many cities to construct elaborate and costly plants for the treatment and purification of domestic and industrial sewage wastes. Where untreated wastes are an integral part of storm water, as in the case of wastes carried through systems of combined sewers, it becomes economically prohibitive to expend the large sums of capital required for the construction of treatment plants of the capacities needed to satisfactorily treat the total flows. In such cases, operating costs would also be extremely high. As a consequence, treatment plants serving areas with combined sewers have almost invariably been constructed of a capacity adequate to treat the sanitary waste and a fraction of the runoff only. During periods when main sewers are carrying flows greater than treatment capacity, combined sewers divert the excess flow into drainage canals, lakes, or natural bodies of water. This flow carries untreated domestic and industrial wastes into our lakes and streams, and often pollutes one of our most precious resources. Although a few areas continue to construct combined sewers, many urban areas, and most suburban areas, have ceased constructing such sewers, and some areas have begun a program of converting combined sewers into separate systems. Complete conversion is very costly. The District of Columbia began its program of separa- tion in 1954, with plans for completion by the year 2000. The cost for complete separation is estimated to be $300 million. A major research program to determine the feasibility of a rational method of separation of combined sewer systems or at least to mini- mize pollution from such systems, was commenced in the year 1966. It is hoped that methods will be developed, through research efforts, which will make separation feasible from an economic standpoint. The city of Chicago does not have plans at present for a sewer separa- tion prograni. It has been estimated that the total cost of such a program. in Chicago alone would total $2.3 billion. A remedial plan being studied for Chicago, which appears less costly and which should surpass separation insofar as pollution abatement is con- cerned, involves the construction of huge tunnels carved in the limestone strata more than 700 feet below ground surface. During periods of overflow, the wastes from the combined sewers would be dropped through vertical spiliways into these tunnels which con- stitute a large temporary detention reservoir. The wastes would later be pumped to the surface, treated at treatment plants, and/or chlorinated and upgraded in temporary retention ponds, and then released to the natural watercourses at controlled rates. Such a system would prevent pollution of water bodies and would eliminate the excessive damages and inconveniences being suffered by citizens during periods of heavy precipitation. One of the economies being effected in suburban residential areas and parkways results from the construction of open, paved channels, in lieu of underground conduits. Such open channels result in the loss of otherwise usable ground surface, are sometimes hazardous, and are sometimes aesthetically undesirable; they do, however, perform adequately when properly incorporated into a separate storm sewer system. Open channels are frequently improved or constructed through urban areas to serve as major collectors of runoff, and also waters containing a portion of the area's untreated wastes during periods of rainfall. The contamination of receiving waters, from the latter case, is objectionable. In other areas, such major channels carry only runoff, and are usually acceptable. PAGENO="0166" 158 STATE AND LOCAL PUBLIC FACILITY NEEDS Surface drainage systems serving State highways and county roads in rural areas are simply constructed. These systems include inlets, short stretches of conduit, paved or sodded ditches, and hillside gutters. Culverts and culvert pipes serve to carry surface drainage beneath the roadway to the opposite side. The drainage from such systems is discharged into existing ditches, creeks, and rivers and sometimes into ponds, lakes, and bays. Storm systems serving urban highways and roads are generally made a part of the urban storm sewer system. Costs are often shared by the local public agency and the highway agency, based upon a formulated costs-benefits agreement. In some areas such costs are the total burden of the municipality. The funds necessary for such facilities are usually obtained from highway appropriations. (b) Distribution Unlike many other capital investments, systems of sewers are very difficult to measure and evaluate in terms of total capital investment. The reasons for this can primarily be attributed to the general lack of maintaining uniform records of such facilities by the various public and private agencies who were responsible for their construction. Another important factor is that it is difficult for a survey team to make an accounting of existing facilities. Several factors contribute to this; the most important factor is that sewers are generally buried and out of sight. It is often difficult, for survey teams, to determine the conduit sizes involved, the materials of construction, and the total lengths of systems. If such data were generally available from public agencies, and readily accessible upon request, it would be possible to make reasonably accurate summaries of existing storm sewer systems in the United States, on both quantitative and replacement-cost bases. Considerable costly time and effort would be required, however. As an approach to making an approximate determination of existing storm sewer facilities and future needs in the United States, the American Public Works Association distributed a storm drainage questionnaire in 1965 to all urbanized places in the country with a population in excess of 10,000 persons. Replies were received from 627 of these. In addition, a storm sewer questionnaire was distributed by APWA in early 1966 to the central city of each of the 216 standard metropolitan statistical areas of the United States. Eighty replies were received. A third APWA questionnaire on storm sewers was sent in early 1966 to the regional planning commissions of these same metropolitan areas. Where a regional planning commission did not exist, the questionnaire was directed to the planning department of the central city within the metropolitan area. Seventy-nine replies were received. As a result of the three surveys made by APWA, as described above, it is estimated that based on 1965 costs the total capital investment in storm sewer systems in this country is more than $22 billion. This estimate includes an appropriate allowance for the investments in combined sewers. The distribution of the capital investment in such facilities by States is given in table I. Totals by geographical regions can also be made. These estimates of capital investments in storm sewer systems, when divided by the corresponding unit construction costs (dollars in millions per square mile), result in an approximation to the square miles of sewered area. In the table expressing capital PAGENO="0167" H w L~i ~ CD CD ° C*~ CD ~ CD 0 o ~:+ W CI) ~o ~ o-~o ~;4~' ~ ~, ~*CD CI)*0 CD CI) e-~ o ~ CD 0 CI) o ~~tri~xj ~ 11 ~ r 0 0 0 CI CI) 0 0 ci 0 0 t~.j 0) PAGENO="0168" 160 STATE AND LOCAL PUBLIC FACILITY NEEDS A breakdown of the total capital investment in storm sewer systems by population groups is presented in table II. These data were ana- lyzed further to arrive at various averages, such as dollars per capita~ et cetera. Table III presents these averages. TABLE 11.-Capital investment in urban drainage improvements in the United States~ by population groups of cities, .1965 Population group (thousands) Number of cities Population 1965 esti- mated (thousands) Capital investment (millions) Square miles of improve- ment 500 or more 100 to 500 50 to 100 lOtoSO 2.5 to 10 Less than 2.5 Otherurbanplaces Totals 28 109 180 1,344 3,000 13, 000 1,700 30, 000 24,000 13,000 30,000 16,000 9. 000 12,000 55,900 4,500 1,400 4,500 2,700 1,300 1,700 2,800 2,400 900 3,500 2,100 1, 000 1,300 19, 361 134, 000 22, 000 14, 000 TABLE 111.-Capital investment in urban drainage improvements cities of the United States (averages for cities, by population groups), 1965 Population group (thousands) Capital investment 1 Per city (millions) Per capita 2 Percent of market value of taxable property Per square mile city area 500 ormore 100 to 500 50 to 100 . 10 to 50 2.StolO Less than 2.5 $210 40 8 3 .9 . 2 $195 185 110 150 170 145 3.7 4.3 2. 2 2. 5 $270,000 225,000 105, 000 385, 0011 1 Replacement value as of mid-1965. 2 Based on 1965 population. Nopx.-Estimates for population groups under 10,000 are rough approximations. Source: Questionnaire survey by the American Public Works Association, 1965. (c) Ages of Sewer Systems The ages of the country's sewers are variable and difficult to deter- mine. Again, the lack of available records of installations, and re- placements makes age determinations difficult in many areas, partic- ularly the older urbanized areas. In general, it may be stated that most existing underground urban storm sewer laterals (sewer con- duits serving areas in which they are located) were constructed along with the development of property and the construction of buildings in these areas. The cohstruction of main and trunk sewers cannot be traced accurately with population growth as they are generally constructed to serve anticipated urbanization and are often con- structed through relatively unpopulated areas to points of discharge. With good planning, in progressive and economically sound com- munities, main and truck sewer construction generally precedes population expansion. In areas where backlogs of sewer require- ments have developed, the construction of these larger sewers often lags behind urban growth. In some areas storm sewers were installed after urbanization and in these areas the ages of the sewers are not PAGENO="0169" STATE AND LOCAL PUBLIC FACILITY NEEDS 161 related to the era of community development. Such installations are not prevalent, however A prehminar~~ investigation of existing storm sewers reveals that* deterioration is not usually a problem. Many old brick sewers, and some wooden sewers, are in service today and many are in good condition. Most replacements of original installations generally can be attributed to insufficient capacity,. im- proper elevations or other factors related to changes or redevelop- ment within the urban areas. Figure 1 depicts the estimated ages of' storm sewers based on the above. 50 0 FIGuiiB 1.-Age of storm sewers in the United States, as of mid-1965. Source: Prepared by the APWA from Information contained In publications of the U.S. Department of Commerce, Business and Defense Services Administration, Water Industries, and Engineering Services Division. (d) Ownership of Storm Sewer Systems The ownership of underground systems of urban storm and com- bined sewers in the United States lies almost totally with local public agencies. These include the following: cities, towns, and villages; counties; and sewer districts or authorities. Although such sewers are constructed in urban areas by private land developers and by State highway departments, the ownership of such facilities is usually transferred to local public agencies upon completion and approval of construction. A survey of storm sewer facilities made in 1966 by the APWA resulted in responses, regarding ownership, from urban areas having a total of 27,461 miles of underground storm sewers, both separate and combined. This mileage represents approximately 15 percent of the total mileage of underground storm and combined sewers in the urban areas of the country. The responses regarding ownership are tabulated in table IV. This indicates that 84 percent of storm sewer facilities are municipally owned, 11 percent county owned, and 5 percent are owned by public sewer districts or authorities. The same survey indicates that aboveground (open channel) storm sewer systems are also totally owned by local public agencies, although there are some few exceptions. The responses, shown in table IV, indicate for open channels 58 percent municipal ownership, 100 thait 1% 25 50 75 100 Age (years) PAGENO="0170" 162 STATE AND LOCAL PUBLIC FACILITY NEEDS 8 percent county ownership, and 34 percent ownership by sewer districts and authorities. The ownership of drainage facilities along State-owned highways in unincorporated areas are naturally owned and maintained by the respective States. TABLE P1.-Ownership of underground and open channel urban storm sewer systemé Agency claiming ownership Underground systems Open channel systems Miles owned Percent of total reported Miles owned Percent of total reported Municipalities Counties 22,968 3,019 1,474 84 11 5 791 110 467 58 8 34 - Sewer districts or authorities Total - 27, 461 100 1,368 100 Source: From responses of 80 units of local government replying to a 1966 questionnaire survey by the American Public Works Association. B. CosTs, CHARGES, AND BENEFITS 1 CONS2RUCTION COSTS The construction costs of storm sewer systems can best be expressed, for the purpose of a general Overall cost analysis, on the basis of a square mile sewered. Since a sewer system installed in one area may be designed under different criteria and constructed of different size conduits, under different ground conditions and of different materials than a system installed in another area, extreme variations in con- struction costs are understandable. Current construction costs reported by 41 cities widely scattered over the United States in a 1966 questionnaire survey by the APWA, indicate a general variation from $0.5 to $2.5 million per square mile of area served, with extreme variations from $0.05 to $3.84 million per square mile. A straight average of all responses resulted in a unit construction cost of $990,000 per square mile. The weighted national average is $1.55 miffion per square mile. Although some of the variation in constructed cost can be attributed to variations in labor costs, labor productivity, material costs and local economic conditions, the major factors producing cost variations are (1) the nature of the local topography, (2) the surface and sub- surface characteristics, (3) the precipitation characteristics of the area served, (4) the design criteria selected, and (5) the type of system. (The type of system is defined by whether it is primarily a local collecting system, or whether a large percentage of the total length consists of larger sewers, such as mains, trunks, and large open channels and drainage canals.) The first of these factors, the nature of the local topography, can account for construction costs in rather level areas being higher than costs in hilly areas by a factor of two, three, or even more. The underlying reason for this is that although ranoff is greater in hilly areas, much larger pipe sizes are required in flat areas to handle a given flow, since the flow velocities are relatively slow in pipes laid on slight grades. Surface and subsurface conditions also contribute to wide cost differences. PAGENO="0171" STATE AND LOCAL PUBLIC FACILITY NEEDS 163 Some of these cities were reporting on the costs of combined systems and others on separate storm sewer systems. This is not a factor in the costs analysis since the cost of constructing a storm sewer system, assuming that additions or enlargements of the sanitary sewer system are not included, is the same as the cost of a combined system. This is due to the fact that the size of a satisfactorily designed combined sewer is normally determined by the maximum stormflow, the added sanitary wastes usually iiot requiring an increase in the size of pipe. Although "areawide" average cost figures cannot be used to esti- mate the construction cost of a specific project, they are useful in making projections of capital costs that will be incurred for needed storm sewer systems in various areas of the country where cost- influencing factors are similar. These average reported current con- struction costs, adjusted downward to account for lower costs in previous years, were used in tables I and II, together with reported figures of capital investments to obtain estimates for the number of square miles of area sewered in the various States and cities. As stated at the outset of this report, complete economic analyses of storm sewer systems must include the cost of the space occupied by storm water transported by such a system. This concept is rela- tively new to the field of storm drainage economics, and warrants thoughtful consideration by engineers and others who make decisions in that field. 2. USER CHARGES Data supplied, in response to a questionnaire distributed in early 1961, by 170 local governments relating to sewer service charges were published by the Municipal Finance Officers' Association. User charges vary widely in amount but are seldom employed by cities, sewer districts or others to defray maintenance and operation costs. Such costs are normally provided for by general tax revenues, motor fuel tax funds, and vehicle registration funds. It is difficult to separate operating costs from maintenance costs in many cities, since few cities have records available. From answers provided in the APWA survey, annual maintenance and operating costs, combined, were noted to range, generally, from $1,000 to $30,000 per square mile. The extreme variations may be accounted for by the great variation in the maintenance services provided in different areas, the age as well as the type of sewer system, and the effectiveness of street cleaning operations. Most typical large urban areas would probably be found to expend, for maintenance alone (including clean- ing operations), from $5,000 to $15,000 annually per square mile of sewered area. 3. BENEFITS Storm sewer systems enhance the usefulness and hence the value of the areas which they drain. This is the historic economic basis for constructing them. Additional benefits accrue when these systems are designed to serve more than one purpose and when such designs involve the protection of downstream neighbors. An example would be the design of a highway embankment and culvert to serve as a Moak, Lennox L. "A Survey of the Use and Nonuse of Sewer Service Charges in 339 Local Govern- ments in the United States and Canada." Municipal Finance Officers' Association of the United States and Canada, 1313 East 60th Street, Chicago, Ill. 60637, 1962. 66 pages. PAGENO="0172" 164 STATE ANDI LOCAL PUBLIC FACILITt NEEDS dam and spifiway, producing an impoundment upstream from the highway. It is possible that the additional land cost could be offset by the savings in construction cost and the benefits resulting, which would include flood control and recreation facilities. C. TRENDS OF CAPITAL OUTLAY 1. EXPENDITURES, 1946-1965 (a) Trends Information regarding expenditures for storm sewer construction in the United States during the 20-year postwar period was submitted by respondents to the 1965 and 1966 APWA storm sewer question- naires. On the basis of these responses, it is estimated that the total present-day replacement cost of existing urban storm sewer systems in the United States, owned by public agencies, is more than $22 billion including an appropriate allowance for combined sewers. This estimate was made by multiplying the expenditures reported by a factor, the factor being the ratio of total urban population to popula- tion encompassed in areas reporting. It was further indicated by the survey respondents that approxi- mately 49 percent of the total of all capital investments was incurred prior to 1946, and that 18 percent and 33 percent were expended in the decades 1946-55 and 1956-65, respectively. Data published by the Bureau of the Census verify these figures very closely (see table V). These figures show a decided increase during successive time periods. In part, this can be accounted for by the acceleration of urban growth in recent years, higher construction costs, and higher standards of living. Data published by the Bureau of Census was used in the preparation of table V which is a tabulation of expenditures by cities and counties for urban drainage improvements. From this table it is seen that the expenditures of all urban cities and counties in the United States during the 20-year period (1946-65) are estimated to have totaled $3.85 billion. It is estimated that cities alone expended $2.82 billion in the same period. Based on these estimates, city expenditures were 73 percent of the total expenditures by local governments in urban areas. This percentage was somewhat higher in the decade (1946-55) and slightly lower in the decade (1956-75). Future expenditures could reasonably be expected to follow this same trend, indicating that city expenditures will be approximately 70 percent of all local government expenditures during the next decade (1966-75). Infor- mation on annual expenditures made by private land developers is not available; however, it is estimated that the current total expendi- tures by all private developers approximates $0.72 billion, annually. This annual expenditure is expected to increase during the next decade. PAGENO="0173" STATE AND LOCAL PUBLIC FACILITY NEEDS 165 TABLE V.-Capital expenditures for urban drainage improvements in the United States, by year and decade, 1946-65, by public agencies [Dollars In millions] Year Cities and counties Cities only Year Cities and counties Cities only 1965 1964 $417 377 $280 255 1953 1952 $137 129 $103 97 1963 352 231 1951 122 92 1962 290 195 1950 118 89 1961 242 182 1949 83 62 1960 256 178 1948 74 56 1959 236 186 1947 67 50 1958 216 174 1946 53 44 1957 197 153 1956 177 141 Total, 1946-55 1, 095 842 Total, 1956-65 1955 1954 2,759 - 160 152 1,975 -~ 128 121 20-year total ex- penditures, 1946-65 3, 854 2,817 1 Values tabulated in this table have been computed from published Bureau of Census data (represent- Ing expenditures for sewerage and sewage disposal) by assuming that one-third of all such expenditures represent capital costs of urban drainage improvements. Source: Department of Commerce, Bureau of the Census. A publication of the U.S. Department of Commerce,4 dated Feb- ruary 1966, summarizes the total amount of sewer pipe installed in the conterminous United States during the period from 1940 to 1966, and projects estimated future requirements to the year 1980. This information is presented by category of use and by pipe-size class. Figure 2 presents reproductions from this publication and graphically illustrates the estimated annual installations of sewer pipe (measured in millions of lineal feet), in the size classes indicated. The estimates include pipe used for new construction, improvements, and mainte- nance and repair of all sanitary and storm sewers and one-half of pipe required in combined sewers. The same publication attributes approximately 10 percent of all usage of pipe in public sewer systems to storm sewer construction. This percentage is less for the smaller pipe sizes and more for the larger pipe. It is then reasonable to assume that the trend in storm sewer construction since 1940 is repre- sented by figure 2, and that the footage of pipe used annually for storm sewers is approximately 10 percent of these estimated usages. From figure 2 it is seen that the installation of sewer pipe was increasing at a rapid rate during the period 1946-65. The rate of increase was somewhat variable during the period 1946-55; however, it was uniform during the period 1956-65. The total increase in annual usage during this latter decade was less than that during the previous 10 years. The rapid postwar construction rate can be explained by two facts: (1) sewer construction was accelerated to overcome the backlog created by the curtailment of nonessential construction during the war years, and (2) residential construction during these y~ars was progressing at a rapid rate to satisfy the postwar demands. These factors demanded an accelerated sewer' construction program, although the shortage of materials and the rapid rise of prices was a temporary deterrent to construction im- 4 U.S. Business and Defense Services Administration. "RegIonal Requirements for Sewer Pipe in Sew. erage utilities," prepared by K. L. Kollar and A. F. Volonte. Government Printing Office, Washington, D.C. 20402, February 1966. 20 pp. PAGENO="0174" 166 STATE AND LOCAL PUBLIC FACILITY NEEDS mediately following World War II. The Korean emergency also slowed construction projects for a few years, beginning in 1950. After about 1955 much of the backlog was fairly well diminished and the rate of increase of total building construction lessened and became somewhat uniform. The rate of progress of sewer construction naturally followed this same trend. 20 1940 1943 1950 1955 1960 FIGuRE 2.-Annual sewer pipe requirements. [Charts 1, 6, and 11 reprinted from "Regional Requirements for Sewer Pipe in Sewerage Utilities" Peb~ ruary 1966; U.S. Department of Commerce; Business and Defense Services Administration.]' 1965 1970 1975 1980 PAGENO="0175" STATE AND LOCAL PUBLIC FACILITY NEEDS 167 (b) Expenditures by source, 1946-65 (1) Private land developers.-The respondents to the 1966 APWA storm sewer survey, in answer to a question regarding capital expendi- tures in urban areas, attributed a very large share of such current expenditures to private land developers. In the case of residential, commercial, and industrial land development, most cities reported that the developers must install or pay for storm sewers, where sewers are required by subdivision regulations or ordinances. This trend has been increasing in recent years. A successful land developer; necessarily includes such costs in sales prices of land improvements; thus, the buyers or lessees ultimately bear the costs. Many cities surveyed answered that 100 percent of all storm sewer requirements in newly developing areas are paid for by the developer. A few cities reported that the developers shoulder only a portion of these costs, varying from 10 to 90 percent. The majority of cities reported the higher percentages. z z 0 PAGENO="0176" 168 STATE AND :LOCAL'PUBLIC FACILITY~ NEEDS 1950 1955 1963 1970 It appears that private land developers are currently making a total annual investment of approximately $720 miffion in storm sewer construction. This estimate is based upon the following assump- tions: (1) urbanization is presently producing 1,000 square miles of newly developed land area annually, (2) 60 percent of such land area requires storm sewers, (3) the private developer pays 75 percent of storm sewer costs, and (4) the current average unit construction cost is $1.6 million per square mile. This estimated annual expenditure by land developers will be shown to be double the estimated annual capital investment in storm sewers in urban areas by all units of local government. (2) Pi~blic agencies.-Public agencies are responsible for the con- struction of main and trunk sewers and drainage canals. The capital expenditures in urban areas for all such facilities are made by local units of government The funds for such expenditui es sometimes CHART 11 - OVER 24" SEWER PIPE REQUIREMENTS CONTERMINOUS U.S. / TOTAL PUBLIC SANITARY AND STORM SEWER REQUIREMENTSN,~ 3.5 ~ 3.0 S 0 S PAGENO="0177" STATE AND LOCAL PUBLIC FACILITY NEEDS 169 include considerable Federal aid. A Government publication `~ attributes to storm sewer construction about 10 percent of the length of all pipe used for sewers. Since the pipe sizes required for storm sewers are usually larger than the sizes required for sanitary sewers, the costs of constructing storm sewers is greater than for sanitary sewers. Although available statistical information is not complete, analysis of Government reports ~ that capital outlays by all units of local government in the United States for all types of sewerage, including sewage treatment plants, are expended. Seventy-three percent by cities and 27 percent by all other units of local govern- ment. State and local governments and agencies also expend a large amount of funds in urban and rural areas for drainage facilities re- quired for arterial streets and highways. The funds for such con- struction, however, are usually obtained from highway appropria.- tions and, therefore, are considered to be a part of the cost of highway and street construction, rather than a cost of sewer construction. Approximately 7~ percent of such capital expenditures is attributed to drainage requirements other than bridges.6 These will be State, county, and city expenditures provided largely from State and Federal highway funds, supplemented with local government funds. Local governments and agencies also expend funds for the construc- tion of airport drainage facffities. Although such expenditures are appreciable, such drainage facilities are generally provided by funds appropriated for airport construction, or are provided by revenues from airport operations. Therefore, these are not considered here as a part of storm sewer expenditures. 2. SOURCES OF FINANCING Federal aid grant assistance has certainly been a substantial source of funds in the financing of urban storm sewers. However, the bulk of the funds has been from local sources. Such local financing has been accomplished, primarily, through tax exempt municipal bonds, special assessments, and appropriations from general tax resources. Therefore, the sufficiency of available funds from each of these sources in a specific local governmental unit is not only dependent upon the tax rate but also upon the level of assessment of property within the jurisdictional boundaries. Government publications report that about 45 percent of all municipal revenue in the United States is ob- tained from property taxes. Responses from 627 units of local government regarding the financ- ing of capital storm sewer improvement reveal that the maj or financing sources are as indicated in table VI. Although this table shows the number and percentage of respondent agencies which use the specified methods of financing, this is not necessarily an indication of the dollar amounts provided from these sources. It is improbable that the larger areawide projects are financed through appropriations from the general tax fund; such projects would most often be dependent upon cr.s. Business and Defense Services Administration. "Regional Requirements for Sewer Pipe in Sew- erage utilities," prepared by K. L. Kollar and A. F. Volonte. Government Printing Office, Washington, D.C. 20402, February 1966. 20 pp. U.S. Bureau of the Census. "Government Finances in 1963-64." Government Printing Office, Wasb~ lngton, D.C. 20402, 1965. 58 pages. Series G-GF 64, No. 1. Herr, Lester A. "The Place of Hydraulics in Highway Engineering"; presented at the Fifth Annual Highway and Street Conference, Stiliwater, OkIa., Feb. 22-24, 1966. 13 pages. Apply to: Author, Chief~ Hydraulics Branch, U.S. Bureau of Public Roads, Washington, D.C. 70-132-66-vol. 1-12 PAGENO="0178" 170 STATE AND LOCAL PUBLIC FACILITY NEEDS bond issues and aid funds. Private land developers generally secure funds by borrowing from private financial institutions. TABLE VI.-Sources of financing for urban drainage improvements in the United States; cv~rrent and past sources of funds [Agencies using this source and possibly one or more other sources) Sources of funds Number Percent of total respondents (a) Appropriations from tax resources (5) Bequests 457 (1) 161 57 * 360 (2) (2) 73 (1) 26 9 57 (2) (2) (c) Federal Government grant assistance (d) State grants-in-aid (e) Tax-exempt bonds (including municipal bonds and bonds of sewer dis- tricts and authorities) (f) Capital flotations in other security markets (private corporations and organizations) by land developers (g) Borrowing from Federal Government 1 No information but probably negligible m amount 2 No information, but appreciable. Source: Data from 627 respondents to a questionnaire survey of the American Public Works Association, 1965. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS, 1966-75 1 ESTIMATED CAPITAL REQUIREMENTS The capital required to finance the storm sewer facilities needed in new and expanding urban areas and to overcome deficiencies in present urban areas during the decade 1966-75 has been estimated by the American Public Works Association to total $25 billion. This projection is based upon data supplied by respondents to three APWA questionnaire surveys mentioned previously. The estimate includes $13 billion for present needs and $12 billion to provide storm sewer facilities in all new and expanding urban areas. The above figures include both public and private expenditures in growth areas. How- ever, expenditures to correct present deficiencies will involve pubhc funds only. Funds required for the construction of drainage facil- ities at airports and along highways, roads, and most arterial streets are not included. (a) By Local Public Agencies Data used in making the above estimates were supplied, in one survey, by units of local government representing a total population of 78 million. This questionnaire was distributed in 1965 by the APWA Urban Drainage Committee. In another survey, conducted in 1966 by the APWA Research Foundation, data was received from metropolitan planning commissions representing a total population of 33 million. In another questionnaire survey made by the APWA Research FOundation in 1966, data was received from the public works departments of the central cities of many metropolitan areas, the data supplied being representative of 28 million persons. Pro- jections of this data were then made by multiplying reported figures by a factor, being the ratio of the total U.S. urban population to the population represented by those responding to requests for information as indicated above. The $13 bfflion estimate of funds required for "present" needs would be expended entirely by local public agencies. The funds PAGENO="0179" STATE AND LOCAL PUBLIC FACILITY NEEDS 171 required include requirements for: (1) construction of storm sewers in presently developed areas lacking either storm or combined sewer systems, (2) extensions of existing storm or combined sewer systems into such portions of presently developed areas as are not currently served by these existing systems, and (3) for increasing the capacity of existing storm and combined sewers. Funds required for convert- ing existing combined sewers to separate storm sewer systems, in urban areas which currently have such work underway or committed, are included in the $13 billion estimate for "present" needs. However, since most localities having combined sewers have not taken a definite stand in sewer separation programs, only a small portion of the total national requirements for combined sewer separation is included in this estimate of "present needs." A 1964 publication of the U.S. Department of Health, Education, and Welfare,2 based upon a Public Health Service survey, states that the total cost for the separation of all existing combined sewer systems in the United States could amount to "$25 to $30 billion, or even more." This estimate was based on data obtained in surveying 15 U.S. cities, of various sizes and geographical locations, representing sewered populations totaling approximately 21 million (about one- third of the U.S. population served by combined sewers). The esti- mate indicates an average per capita cost of $465 for each of the 59 million persons presently served by combined sewers. It is also stated in this publication 2 that the estimate of cost is probably too small, since many of the component cost data were based on cost figures prevailing in years prior to 1964. Local public agencies will also be responsible for a portion of the capital expenditures for storm sewer construction in newly developed urban areas. A portion (in some cases all) of the total cost of major drainage facilities such as sewer mains, trunks, and drainage canals is normally assumed by the local public agency having jurisdiction. The assumption of a portion of such costs by local government is reasonable since storm sewer systems convey runoff from publicly owned lands. A 1955 publication of the Harvard University Press ~ reports that approximately 50 percent of land in urban areas is used for streets, parks, and other public purposes. Assuming that 25 percent of all such costs are to be borne by local public agencies, then $3 billion (25 percent of $12 billion) is the estimated capital need of local government for the construction of storm sewers in urban growth areas. The total requirements of all local public agencies of the United States for storm sewer construction during the decade (1966-75) is, therefore, estimated to be $16 biffion. (b) By Private Land Developers Approvimately $9 billion is the estimated need of private land developers for the construction of storm sewers during the decade (1966-75). This amount represents the balance of the $12 billion need for sewer construction in urban growth areas, not attributed to local public agencies. 2 U.S. Public Health Service, Division of Water Supply and Pollution Control, "Pollutional Effects of Stormwater and Overflows From Combined Sewer Systems-A Preliminary Appraisal," Washington, D.C., November 1964; 39 pages; publication No. 1246. 7 Bartholomew, Harland, "Land Uses in American Cities." Harvard Planning Series, vol. XV, Harvard University Press, 1955. PAGENO="0180" 172 STATE AND LOCAL PUBLIC FACILITY NEEDS (c) Annual Capital Needs According to a Department of Commerce publication previously referred to, the requirements for sewer pipe in the United States by the year 1975 will be approximately 25 percent greater than in 1966 (fig. 2). If the total capital needs for urban storm sewers approx-. imates $25 billion, the annual urban need for storm sewers during the decade will probably range from $2.15 billion in 1966 to $2.85 billion in 1975. Whether or not expenditures of this magnitude become a reality is, of course, dependent upon problems which may be encountered in funding these needs. Figure 3 presents the annual needs, graphically. (d) Distribution of Capital Needs by Population Groups The $25 biffion capital needs distributed by population groups of urban areas, in accordance with needs as indicated by respondents to the APWA questionnaires, is shown in table VII. This table also distributes the $22 biffion investment in existing storm sewer facilities according to population groups, based upon data supplied by ques- tionnaire respondents. ~ 3,00 2~85 ~ 2 00 .-2.15 43 0 .,.i `4-4 ~ l,,00 C~1.1-4 0 ` ~ t V V V t t * - l-_- -* -I---- 1966 1970 1975 Year Source: Estimates of the American Public Works Associations FIGURE 3.-Capital needs for urban drainage improvements in the United States; Annually, 1966-75 (e) Expenditures of Funds The proportions of the $25 billion of capital needs to he expended by various categories of government agencies and private groups is difficult to forecast. An attempt to roughly approximate such expend- itures for the decade 1966-75 is made as follows: [In billions] (1) State governments and State agencies None (2) Cities, counties, towns, special districts, public authorities, and other local bodies $16 (3) Private nonpiofit organizations and cooperatives - None (4) Proprietary or profitmaking organizations (includes land developers) - - 9 Total (1966-75) 25 PAGENO="0181" STATE ~ LOCAL PUBLIC FACILITY NEEDS 173 TABLE VII.-Capital needs for urban drainage improvements, 1966-75 in the United States, by population groups Population group (thousands) . Existing facilities Capital needs Amount (millions) Percent of total Amount (millions) Percent of total 500 or more 100 to 500 ~0to 100 iOtoSO 2.5 to 10 Less than 2.5 1 Other urban places I $5, 900 4,500 1,400 4,500 2, 700 1,300 1,700 27 20 7 20 12 6 8 $7, 550 5, 010 2,370 7,450 1,320 650 650 30 20 9 30 5 ~ 3 Total 22, 000 100 25,000 100 SUMMARY INTO BROADER POPULATION GROUPS Above 50 2.5 to 50 Below 2.5 1 11,800 7, 200 3, 000 54 33 13 14,930 8,770 1,300 60 3~ ~ 1 EstImates for population groups under 10,000 are rough approximations. Source: Estimates made by the American Public Works Association, based upon data from 527 responses to a 1965 APWA questionnaire survey. 2. SOURCES OF FUNDS Statistics regarding the financing of storm sewer systems in previous years are not available in publications. It is therefore difficult to estimate the proportions of the total needs to be supplied by various possible financing sources. Data received, through a 1966 APWA storm sewer survey, indicates that the maj or sources of financing public storm sewer capital improvements in urban areas would include: (1) general tax resources, (2) tax-exempt municipal bonds, (3) grants from the Federal and State Governments, and (4) borrowing from the Federal Government. These are listed in a descending order of apparent dollar magnitude. Sewers constructed by land developers would normally be financed by private financial institutions. The majority of respondents to the APWA questionnaire stated that capital needs would exceed the amounts available from all pres- ently known sources of funds. The survey indicated that, of the $16 billion required by local public agencies during the decade (1966-75) for financing the construction of storm sewers, it appears that approxi- mately 60 percent can be obtained from sources presently available to local government. The information was supplied by local govern- meuts representing 15.6 million persons. Therefore, 40 percent of the total need (approximately $6.5 billion) must be obtained from other sources or through adjustments of present methods of producing revenue. Some increases of the usual allocations of funds to capital expenditure programs may be feasible within certain units of govern- ment. In response to a question inquiring how the cities propose to bridge this gap, the respondents replied with the following answers: (a) Increase the general property tax rate. (This increase may conceivably be applied to all property within the jurisdiction, or only to property benefited by the sewer construction program.) PAGENO="0182" 174 STATE 1u~n LOCAL PUBLIC FACILITY NEEDS (b) Enact legislation to permit the issuance of additional municipal bonds. (This may or may not result in the need for an increased sales or property tax, depending upon what schedules are followed in the retirement and issuance.) (c) Enact special assessments againstproperty benefited and build sewers as the area benefited is willing and able to pay (the local unit of government may provide a share of the funds.) (d) Request funds from the Federal Government on a gTant basis (in which case payment is not required), or on a cost-sharing basis (which may require partial payment). (e) Request State grants and cost-sharing funds. (f) Utilize a policy of charging a part of the cost of main, submain, and trunk sewers to land developers, where such sewer construction benefits the land being developed. (g) Enact local sales tax legislation, where permitted by State law. It is important that there be an appreciation of the role that storm sewer systems have in producing safe, healthful, and attractive environ- ments. This appreciation is a necessary adjunct to successful financ- ing as it is also important to understand that, regardless of form, expenditures will be made, one way or another. If the citizens do not support expenditures for construction and improvement programs in areas where sewers are needed, they will incur equivalent costs in the form of property damages and economic losses and will remain bur- dened with the same unsatisfactory environments. PAGENO="0183" CHAPTER 6 Waste Water Treatment Plants* A. NATURE AND COMPOSITION OF PUBLIC WORK OR FACILITY 1. DESCRIPTION OF FACILITY (a) Physical Characteristics Waste water treatment plants are more commonly referred to as sewage treatment plants. These are facilities built by municipal and other local governments for the treatment of sewage and other waterborne wastes prior to discharge to a watercourse. Treatment is necessary to protect the public health from waterborne disease, to prevent nuisances, and to prevent or abate pollution of the public watercourses. The treatment facilities serve the entire community. That is, the service is provided for households; commercial enterprises such as hotels, restaurants, and laundries; and industrial firms such as breweries, slaughterhouses, and other food processors and manu- facturers. Each user of the service is reached through a collection system of lateral and trunk sewers. The service is essential from a physical standpoint as well as for health and nuisance reasons, for large quantities of water cannot be used without some means of disposal after use. The term "waste water" arises from this necessity. Treatment facilities are usually built with excess capacity to take care of future growth. Facilities require daily care, oftentimes, with a considerable staff, depending on the scale of the operation and the complexity of the treatment process. Trained operators are necessary in all instances. In large facilities, the staff may consist of sanitary engineers, chemists, biologists, and other professional personnel. Treatment facilities have considerable durability, often lasting as long as 20 years. Still, they require regular maintenance, particularly of pumps, filters, and tanks. Large-scale operations include labora- tories for analysis of the wastes at various points during the treatment process. Office space, equipment storage, vehicle space, and con- siderable grounds requiring landscaping, fencing, and care are also involved. (b) Standards of Performance The treatment of sewage can be accomplished in a variety of ways. The type of treatment selected depends on a number of factors such as the volume and composition of the wastes and the nature of the watercourse into which the treated effluent will be discharged. In some instances, treatment is provided with a minimum of structure in large lagoons or oxidation ponds. Therefore, the term "facility" is more appropriate and inclusive. Usually, however, there is a defi- nite structure or plant consisting of various arrangements of pipes, screens, chambers or tanks, pumps, filters, basins, and sludge drying beds. *Prepared by the Federal Water Pollution Control Administration, U.S. Department of the Interior, with minor editing by Committee staff. 175 PAGENO="0184" 176 STATE ~D LOCAL PUBLIC FACILITY NEEDS The objective is to reduce a given waste material to a condition that is acceptable for discharge to a watercourse without harm to health, esthetics, and the uses for which the particular watercourse is intended. The waste reduction process may include mechanical, bio- logical, and chemical means. The common references to primary and secondary treatment are not precise distinctions in either process or structure. Usually pri- mary treatment involves the removal of settleable, suspended, and floatable solids. Secondary treatment generally goes beyond this stage to remove or reduce dissolved and. colloidal materials not amenable to separation through mechanical means. Facilities are designed for the particular needs of the community. That is, its scale, treatment process, and management reflect the size of the community, its expected growth rate, the composition and vol- ume of its wastes, and the water quality requirements established for the watercourse into which the wastes are to be discharged. As the result of public insistence now manifested in the administration of the Federal Water Pollution Control Act and in the State programs, more stringent water quality requirements are being established. These requirements will have a subsequent effect both on the design and operation of municipal waste treatment facilities. 2. EXISTING CAPITAL PLANT IN THE UNITED STATES (a) The latest data on the number of municipal waste treatment facilities (also commonly referred to as sewage treatment plants) in existence in the United States is as of January 1, 1962. These data are published in the "Statistical Summary of Municipal Waste Facili- ties in United States," Public Health Service Publication No. 1165, 1964. The number of treatment plants as of that date was 9,378. (b) The distribution of these treatment plants by States is shown in the table below: State Number Alabama 112 Alaska 1 Arizona 60 Arkansas 125 California 519 Colorado 144 Connecticut 62 Delaware 20 District of Columbia 1 Florida 253 Georgia 156 Hawaii Idaho 63 Illinois 519 Indiana 167 Iowa Kansas 310 Kentucky 115 Louisiana Maine 12 Maryland 98 Massachusetts 120 Michigan 265 Minnesota 371 Mississippi 89 Missouri 291 State Number Montana 106 Nebraska 221 Nevada 32 New Hampshire 15 New Jersey 281 New Mexico 65 New York 356 North Carolina 194 North Dakota 170 Ohio 403 Oklahoma 259 Oregon 132 Pennsylvania 554 Puerto Rico 60 Rhode Island 20 South Carolina 120 South Dakota 159 Tennessee 110 Texas 659 Utah 69 Vermont 10 Virginia 150 Washington 173 West Virginia 44 Wisconsin 414 Wyoming 61 PAGENO="0185" STATE AND LOCAL PUBLIC FACILITY NEEDS 177 (c) The distribution of the treatment plants by population size is shown in this table below: State Number State Number Under 500 1, 253 10,000 to 24,999 1, 157 500 to 999 1, 830 25,000 to 49,999 420 1,000 to 4,999 5, 015 50,000 to 99,999 200 5,000 to 9,999 1, 409 Over 100,000 136 (d) There are no data on the age distribution of these plants. It is reasonable to say, however, that few of the present-day plants were in existence prior to 1920. A large number of plants still operating were built during the mid-i 930's with the assistance of various Federal public works construction programs. Many of these plants have been improved and expanded, though the number is unknown. Construction was deferred during World War II and again during the Korean war. Since 1957, at least 6,789 projects involving waste treatment facilities were constructed. (e) Virtually all of these waste water treatment plants are owned by local governments. Data on ownership by other entities are not available. The Federal Government owns treatment plants at various Federal installations, particularly at military posts. There are also State-owned treatment plants at State institutions. These Federal and State plants are not included in the 1962 inventory data presented here. (f) The estimated current value of the water waste treatment plants is $3.55 billion as of January 1, 1965. B. COSTS AND USER CHARGES 1. CONSTRUCTION COSTS AND OPERATING COSTS (a) The construction costs presented are based on three measures: per capita, per population equivalent, and per unit of flow. These data were developed from analysis of 1,504 local government projects built with Federal financial assistance from 1956 through 1963. The data show a range of per capita costs, depending on the design size and type of treatment. For instance, for plants designed to serve a population of 10,000, the per capita costs (1957-59 dollars) range from $14.13 to $34.70, with the variance reflecting different treat- ment processes. For plants designed for a population of 100,000, the per capita costs range from $4.38 to $18.29 f or the same treat- ment processes shown in the 10,000 population design group. More complete data on this subject is shown in PIIS Publication No. 1229, Modern Sewage Treatment Plants, How Much Do They Cost? (U.S. GPO 1964). (b) Typical annual maintenance and operation expenses for treat- ment plants designed to serve a population of 10,000 are $1.36 per capita. For plants designed to serve a population of 100,000, the per capita costs are $0.73. 2. USER CHARGES (a) User charges are utilized extensively in the financing of treat- ment plants, particularly in regard to new plants. However, there are no precise figures on this subject. It is known that a consider- able number of communities, including several large cities, cover all PAGENO="0186" 178 STATE ~D LOCAL PUBLIC FACILITY NEEDS or part of the costs through the property tax. The extent of user charge financing is indicated by the fact that about 25 percent of the dollar volume of municipal borrowings for treatment plants is through revenue bonds. Recent experience shows that communities are combining the financing of waste treatment plants with waterworks financing. That is, the revenues of each are pooled to support the bond issues. (h) There are no systematic data on the extent to which user charges cover all operation and maintenance and annual debt service costs. (c) Undoubtedly, a large portion of municipal sewage treatment plant costs are met through general taxation. A reasonable estimate cannot be proven. It is well to note that borrowing through general obligation bonds does not necessarily mean that the repayment is solely through general property taxation. Oftentimes, user charges, special benefit assessments, connecting charges, and other means are used in conjunction with property taxes to repay borrowings. C. TREND OF CAPITAL OUTLAYS 1. Complete data on annual expenditures for municipal sewage treatment plants date from the year 1957, the year the current program of financial assistance under the Federal Water Pollution Control Act got underway. From 1952 through 1956, the annual average was $272 million. Prior to 1952, no data are available. For the period 1957-65, the figures are as follows: Annual expenditures for municipal sewage treatment plants [In millions] Year Total expenditures Total entirely by State and local funds Total with Federal, State, and local funds 1957 1958 1959 1960 1961 1962 1963 1964 1965 421 466 419 431 538 654 815 612 625 278 258 228 223 281 369 375 200 225 143 208 191 208 257 285 440 412 400 The trend reflects the effect of both Federal financial assistance and the stepped-up Federal-State and interstate programs of pollution control. The high year of 1963 reflects the impact of the Federal accelerated public works program which has now expired. 2. The proportionate annual Federal, State, and local govern- ments expenditures are indicated in the immediately previous table. The Federal share of the projects with Federal financial assistance has been averaging about 20 percent. This percentage is expected to increase as new and expanded Federal programs take effect. Only a minor portion is attributable to State financing, probably less than 2 percent. Local governments, chiefly municipalities and special districts, provide the bulk of the non-Federal funds. 3. The sources of financing have been chiefly public borrowings through the municipal bond market. Because many public works PAGENO="0187" STATE AND LOCAL PUBLIC FACILITY NEEDS 179 bond issues are for multiple-purposes and often include storm and waste collection sewers as well as combine waterworks with sewage treatment plants, it is not possible to present precise data on borrow- ing for sewage treatment facilities exclusively. There are several financial assistance programs of the Federal Government that include aid for the construction of municipal waste water treatment facilities. The major program is administered by the Federal Water Pollution Control Administration under the authority of the Federal Water Pollution Control Act. The act authorizes $150 million for fiscal years 1966 and 1967 for grants to State, municipal, intermunicipal, and interstate agencies for the construction of waste treatment facilities. The maximum allowable grant is 30 percent of the eligible cost of a project or $1,200,000 whichever is smaller. In the case of a project which will serve more than one municipality, the grant may be increased to a maximum of $4,800,000. The $1,200,000 or $4,800,000 limitation does not apply if the State agrees to match equally all grants made from allocations any appropriations in excess of $100 million. A grant may be increased 10 percent if a project is certified as being in conformity with a comprehensive metropolitan plan developed by an official State, metropolitan, or interstate planning agency. The Department of Housing and Urban Development has several financial assistance programs. The first is the program of interest-free advances to municipalities to finance the planning of public works. These advances can be used to pay for engineering and architectural services to develop plans and specifications, including the necessary surveys or other fieldwork. These advances are repayable when construction work begins. The second is a program of grants to State and local governments for comprehensive urban planning in metropolitan areas. These grants may not exceed two-thirds of the planning cost. The third is a program of low interest loans to small communities that are unable to obtain loans on reasonable terms elsewhere to finance needed public works. The Farmers Home Administration, Department of Agriculture, also has a program (Public Law 89-240), providing grants of up to 50 percent of cost, to help finance water supply and waste collection, treatment and disposal systems in rural areas. The law defines a rural area as any area which does not include a city or town of more than 5,500 population. Grants may be made only for projects approved by~ the State water pollution control agency. In 1962 and 1963, a number of municipalities benefited from the Accelerated Public Works Act. Funds under this act have been exhausted for some time, but Congress enacted similar legislation last year entitled the Public Works and Economic Development Act of 1965 (Public Law 89-136), administered by the Economic Develop- ment Administration of the Department of Commerce. Basic gTants of up to 50 percent for public works and development facilities are available for those areas that have been designated as areas of sub- stantial and persistent unemployment. Prior to grant approval, the Secretary of Commerce must make certain findings concerning the project's contribution to economic development. Supplementary grants may also be made which would permit States, or political subdivisions thereof, Indian tribes, or private or public nonprofit organizations and associations to take maximum advantage of Federal PAGENO="0188" 180 STATE ~D LOCAL PUBLIC FACILITY NEEDS grant-in-aid programs for public works projects. The supplementary grants are regulated by the Secretary of Commerce and may go as high as 80 percent of the project cost when the State or other entity is unable to meet the required local share in other grant-in-aid programs. Funds are also available in particular instances under the Appa- lachian Regional Development Act of 1965, Public Law 89-4. Section 212 authorizes $6 million for sewage treatment works through fiscal year 1967. These funds may also be supplemented under the pro- visions of section 214 of the act. Several States have legislative authority to provide financial assistance of various kinds for municipal sewage treatment plants. California provides loans at 2 percent interest from a fund of $1 million. Delaware provides 40 percent of the original construction cost or $100,000 whichever is smaller. Georgia has a provision for 30 percent of costs or $250,000 whichever is smaller. Georgia's program, however, has never been funded. Indiana provides for loans for plans and surveys. Maine provides for amounts equal to the Federal contribution and also provides for 50 percent or $2,500 whichever is less for the cost of surveys. Maryland provides for matching the Federal grant, but the total of State and Federal grants may not exceed 50 percent, and also for construction loans and for planning assistance. New Hampshire guarantees the bonds of local governments for sewage treatment works and pays annually 40 per- cent of the amortization charges on construction costs. New Jersey provides for planning grants and for loans for drawing engineering specifications. New Mexico provides for grants to associations formed in rural and unincorporated areas for treatment facilities. Communities must be in existence more than 25 years and not be adjacent to incorporated places. New York provides for planning assistance and for grants for construction. The grants will cover 30 percent of construction costs and as much as 60 percent until the Federal share is made available. New York also provides for assist- ance for operation and maintenance costs up to one-third of such costs. Ohio provides for planning advances for villages which do not have a treatment facility. Oregon provides for the purchase of local community bonds when such communities are unable to meet private market requirements. Pennsylvania provides for 2 percent annually of the construction costs. Assistance up to 50 percent of planning costs is also provided. Vermont provides for assistance up to 20 percent of construction costs. Additional assistance is pro- vided for communities with "limited economic base" who are required by the water resources board to construct treatment facilities. Total aid from all sources shall not exceed 75 percent of construction costs. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS 1. CAPITAL REQUIREMENTS (a) Annual surveys of municipal waste treatment needs are con- ducted by the Conference of State Sanitary Engineers in cooperation with the Public Health Service. The 1966 survey reports that 1,285 communities presently discharging raw sewage require new plants for the treatment of wastes from a population of 6.7 million. An addi- PAGENO="0189" STATE AND LOCAL PIJBLIC FACILITY NEEDS 181 tional 1,694 cities and towns with existing treatment plants require new or enlarged facilities because of obsolescence, insufficient treat- ment or capacity. These communities presently discharge inade- quately treated wastes from a population of 24.6 million. While unsewered towns are not usually major sources of pollution, they frequently experience serious ground water pollution and other public health problems because of individual disposal of sewage. The conference reports 2,661 unsewered communities which require sewer systems and sewage treatment plants for a population of 6.1 million. The estimated cost of the present backlog of 5,640 needed projects is $2.6 billion for treatment plants, interceptors, outfall sewers, and other ancillary works. This survey includes only those municipalities with treatment needs on January 1, 1966. This survey does not anticipate the upgrading of treatment that may be required at any future date. It should also be noted that there are a number of other municipalities that already have adequate treatment but need to extend their interceptors to serve new areas. This additional group will increase the size of the backlog, but we do not have accurate estimates of the magnitude of this need. It is generally agreed that this study of the backlog of needed facilities is very conservative and that it represents the minimum need. There are no firm figures, however, to indicate the size of the full need. The population served by sewer systems in the United States in- creased from 98.4 million in 1956 to 122.4 million in 1962-a 24-percent increase in 6 years. The urban population increased from 96.5 miffion in 1950 to 125.3 million in 1960-an increase of 30 percent for 10 years. Municipal waste treatment needs for the expanding popu- lation have been estimated by the extension of the present (1966) sewered population of 138 million through 1980 using the series B population growth estimate of the Bureau of the Census. Future estimates of population served by sewer systems are as follows: 1970 154, 000, 000 1975 171, 000, 000 1980 190, 000, 000 The cost of providing the waste treatment works needed to serve the increasing population has been estimated on the basis of these population projections and a per capita construction cost of $39.69 for secondary treatment. The municipal waste treatment works currently in operation will eventually have to be replaced because of obsolescence. For the purpose of estimating annual replacement needs, we have assumed an average effective life of 25 years for treatment plants and 50 years for interceptOr and outfall sewers. The cost of replacing the treatment plants reported in the 1962 inventory has been estimated at $3 billion and related ancillary. works at $2.6 billion. Annual needs to replace obsolete treatment plants has been estimated at 4 percent of the replacement value of treatment plants and 2 percent of ancillary works. Annual construction rates required to elimmate the backlog of needed municipal waste treatment works and provide for contmurng obsolescence and population growth within specified periods of time have been estimated in terms of today's construction cost. The PAGENO="0190" 182 STATE AND LOCAL PUBLIC FACILITY NEEDS actual costs, however, will be higher because of the steady upward trend of construction cost. Our sewage treatment plant construction cost index shows an average annual increase of about 2.3 percent of the 1957-59 base of 100 over the period 1930 to 1963. The index has varied considerably from time to time because of war and the flue.. tuating economy. Estimates of future trends are risky at best, but projections are necessary and we have estimated an average annual increase of 2.5 percent through 1980. This is less than the 4.6 percent experienced from 1947 through 1957 and higher than the 1.6 percent of the past 5 years. The application of this data and the estimates indicate that we shall need to spend $341 million annually through 1975 to replace facilities which become obsolescent because of age, technical advance- ment, or population relocation. An additional $262 million will be necessary to provide for population growth. Thus, we see that an annual expenditure of $603 million will be necessary to maintain the status quo. If we desire to eliminate the backlog by 1975, we shall be required to spend an additional $264 miffion annually. Therefore, elimination of the backlog, replacement of obsolete treatment works, and provision for the continuing population growth in our urban areas, will require an average annual expenditure of over $867 mfflion for municipal waste treatment works through 1975. This, however, is in terms of 1964 dollars and does not account for constantly rising construction costs. When we allow for this factor, the average annual cost increases to $983 million to eliminate the backlog and to remain current on the needs resulting from growth and obsolescence. (b) The estimates contained in (a) above assume that equal amounts of the backlog are eliminated each year while keeping current on needs developed by growth and obsolescence. Each year, that construction is postponed, will add to the ultimate cost because of the annual increase in the cost of construction. (c) An analysis of the January 1, 1966 study by the Conference of State Sanitary Engineers shows that the backlog of need falls into the following population size group: Total backlog: Municipal waste treatment needs-1966 Number Population served Estimated cost in thousands Population size group: Under $500 1,460 419,848 $93, 296 $500 to $1,000 1,287 897,510 158,954. $1,000 to $5,000 2,087 4,288, 538 715,050 $5,000 to $10,000 350 2,395,813 243, 058 $10,000 to $25,000 251 3,826, 157 273, 764 $25,000 to $50,000 88 3,207,613 198,524 $50,000 to $100,000 58 4,327, 534 236,237 Over $100,000 59 18,034,761 724,600 Total 5,640 - 37, 397, 774 2,643, 483 PAGENO="0191" STATE AND LOCAL PUBLIC FACILITY NEEDS 183 (d) The extent to which various levels of Government will partici- pate in the estimated capital outlays is very difficult to predict at the present time. State programs vary widely as indicated in para- graph C(3) above, and others are considering legislative proposals in this field. For the immediate future, the cities, towns, counties, and special districts will find it necessary to provide most of the capital outlays. 2. FINANCING METHODS (a) No change is expected in the methods used by local communities to finance their share of the cost of constructing waste treatment facilities (see C(3) above). No estimate can be made concerning the Federal role at this time. The present program expires at the end of fiscal year 1967, but Congress is presently considering legislation which would continue the program. (b) The present methods of financing should yield adequate capital to accomplish the objectives. The principal problem is to predict the likelihood of municipalities responding fully to meet their needs within the time indicated. Except in those cases where the States act to assist with the cost of a project, the municipalities must finance 70 percent of the cost of projects. Much has been said in the past con- cerning the financial problems of municipalities and the competition for the municipal dollar. This competition for the municipal dollar will play a significant role in the response of municipalities to this program. PAGENO="0192" CHAPTER 7 Solid Wastes Collection and Disposal Facilities* Information on the generation and disposal of solid wastes is badly lacking in the United States. The parameters for solid wastes are known only partially and at best only on a sporadic basis for an ex- tremely small number of the communities in the Nation. A. NATURE AND CoMPosITIoN OF SOLID WASTES COLLECTION AND DISPOSAL FACILITIES Technologically the state of the art of solid waste collection and dis- posal appears to~ be rather rudimentary, yet there are considerable variations in handling practices among U.S. communities. Most communities do not collect all the solid wastes produced within their boundaries because of either voluntary or mandatory self-disposal by the producers themselves. Furthermore, the amount of refuse produced and collected varies according to the nature of a corn- muni ty's economic functions (industrial, commercial, residential), according to the habits and styles of living of the residents, income levels, climate, season of the year, and the frequency of collection: 1. DESCRIPTION OF GENERAL PHYSICAL CHARACTERISTICS AND SERVICES RENDERED (a) Terminology and Definition The unwanted and discarded material of a community can be gaseous, liquid, or solid. Refuse is the term commonly applied to solid wastes, which are neither waterborne nor airborne. Refuse is subclassed into garbage, rubbish, ashes and special wastes. These subclasses frequently are defined as follows: Garbage refers to putrescible wastes derived from the preparation, cooking, serving, handling, storing, selling, and processing of foods. Rubbish comprises the nonputrescible wastes of a combustible as well as noncombustible character normally produced by a community. Examples include paper, wood) cloth products, rubber, garden wastes, synthetics, metals, plastics, glass, ceramics, stones and dirt. Ashes are defined as the residue from burning solid fuels and the incineration of refuse. Special wastes include street refuse, demolition and construction wastes, dead animals, outsize objects such as abandoned vehicles, furniture, stoves, refrigerators and trees, sewage treatment residue, medical and industrial wastes. According to origin refuse comes either from domestic, municipal, institutional, commercial, industrial or agricultural sources. The collection of solid wastes involves storage at the place of origin and transportation to the point of disposal. The method of *Prepared by the American Public Works Association, by Dr. Karl W. Wolf, consultant, with minor editing by committee $taff. 184 PAGENO="0193" STATE AND LOCAL PUBLIC FACILITY NEEDS 185 collection of refuse is related to the method of disposal. Separate garbage collection is essential if hog feeding of cooked garbage or other salvage operations are included in the methods of disposal. Combined collection of mixed refuse, including garbage, is made if the disposal is done by sanitary landfill or incinerator. Combined collection, of course, permits combined storage. At the point of origin refuse is stored in a great variety of containers ranging from the familiar metal or plastic garbage can to paper boxes and paper or plastic bags, and from specialized containers at corn- mercjal or industrial establishments to open refuse "vaults." The storage of refuse at the source frequently leaves much to be desired. The hauling of refuse to the disposal site is done in all kinds of vehicles. These include the private car and open trucks as well as specially designed equipment which has an enclosed liquid-tight storage body and provides for some compaction of the collected materials. Regular collection and hauling services usually are per- formed at least once a week where these activities are organized. The final disposal of most of the solid wastes is still accomplished in four basic ways: open dump, sanitary landfill, incineration, and by salvage which includes composting and hog feeding. In addition, some of the garbage ground at the points of origin is disposed of through the sewage system. The severity of the refuse disposal problem is directly related to the density in population settlement patterns. It can be solved more readily by the producer in rural areas where there is ample room for composting, burying, or burning of unwanted materials. rrhe solution is much more difficult in urban areas. Open dumps are smoldering, smelly places where solid wastes are just deposited-without any regulation or organization. Open dumps frequently are found at the outskirts of both rural and urban communi- ties. To reduce the volume and to control rats, deposited wastes are sometimes burned thus causing considerable air pollution. Open dumps vary in their levels of offensiveness. Some open dumps are worked at irregular intervals with bulldozers to level and compact the refuse. This makes them slightly more tolerable than those open dumps which are not so worked and/or "cleaned up" periodically. Open dumps that are worked, are sometimes called "modified" land- fills or "modified" open dumps. The sanitary landfill method of refuse disposal requires that (1) the wastes be reduced in volume on the disposal site by compacting and/or other means, and (2) that the deposited materials be covered with a layer of earth or other inert material at the conclusion of each day's operation. Properly located and operated sanitary landfills produce minimal ground or surface water pollution, prevent the breeding and harborage of insects and rodents, and there is no burning of refuse. The volume of compacted refuse or disposal capacity of each disposal site is often measured in "acre-feet." One acre foot of refuse is the equivalent of 1 acre filled to a depth of 1 foot with compacted refuse. Once completed, sanitary landfill areas can be used almost immediately for recreational purposes and parking. Depending upon the location and fill-depths, the settlement may continue for a decade or more. However, with proper compaction, and in some cases, foundation piling,, the sites may be made usable for commercial and light indus- trial establishments. 7O-132--66--vol. 1-13 PAGENO="0194" 186 STATE AND LOCAL PUBLIC FACILITY NEEDS Incineration reduces the volume of combustible solid wastes by burning at minimum temperatures, generally between 1,250 to 1,8000 F. Burn ing eliminates putrescibles so that the residue from the incinera- tion process may be disposed of in the same manner as any other clean, inert fill material. To minimize air pollution effectively, it is necessary that incinerators be equipped with a variety of air pollution control devices. Incinerators are built in many types and capacities starting from devices akin to backyard burners and in-house units for resi- dences, apartment buildings, hospitals and ms~itutions, to large plants having capacities of more than 2,000 tons per 24-hour period. The newer incinerators are architecturally pleasing and can readily handle mixed refuse. The disposal of solid wastes in a community is handled in various ways. Excluding disposal by the producers themselves, sometimes public agencies perform the complete task with public employees; in other cases public agencies contract with one or more private, profitmaking Organizations; in stifi other instances, all waste disposal is done through agreements between the individual producer and pri- vate enterprise or through various combmations of the above thiee methods. A 1964 survey of 995 communities with. 5,000 or more inhabitants shows the following structure of refuse collection practices: TABLE 1.-Breakdown of refuse collection practices [By type of collection organization 1964J . Percent share of total number Collection organization: of communities Municipal 44.3 Contract 17. 6 Private 13. 1 Municipal and contract 3. 3 Municipalandprivate 15.2~ Municipal, contract, and private 1. & Contract and private 4. 4 Unknown Source: American Public Works Association in cooperation with the U.S. Public Health Service. The above data indic'ite that in 65 2 percent of the communities tha control of solid waste collection w'is ~ ested completely in pu~iili authorities through either municipally owned or contractually ar ranged operations These data tend to correlate with data fro n a 1966 APWA suri~ ey, according to which in terms of tonn'ige, 62 per cent of the coliections wei e handled by public agencies and 38 percent by private organizations Howe~ er, it must be kept in mind that these data do not cover the pr ictices of smaller communities and unin corporated aieas foi which published data are not available It i~ estimated that in the majority of smal1 communities with less than 5,000 popul'ition, the disposal is handled by private companies or the producers of the wastes. Dat i on the public-priv~tte relationship in the ownei ship of disposal facilities are much more difficult to obtain. The 1965 APWA survey on collection practices indicates that 10.3 percent of the contractors and 13.4 percent of the private collection organizations do not use. disposal facilities operated or provided for by public agencies Finally, a limited 1966 APWA survey indicates that about 15 per- cent of the solid wastes in communities of more than 10,000 population are disposed of in open dumps, about 65 percent in sanitary landfills,, PAGENO="0195" STATE AND LOCAL PUBLIC FACILITY NEEDS 187 about 18 percent through incineration, and about 2 percent by other methods. However, it must be recognized that many sanitary land- ifils are sanitary in name only and do not meet the requirements of a location, and at least daily coverage of the deposited wastes with suitable materials. Field surveys in some regions indicate that only about 10 percent of the so-called sanitary fflls apply cover material oh a daily basis. Thus, about 90 percent of the "sanitary landfills" might actually be classified as open dumps, including modified landifils or modified open dumps. (b). Qualitative and Quantitative Standards of Performance Refuse collection and disposal are generally regulated at the county and municipal levels, although in certain cases State regulations also apply. According to the APWA Institute for Solid Wastes and the U.S. Public Health Service, the development of comprehensive survey procedures and the establishment of standards and criteria for the handling of solid wastes are sorely needed. At the present time there are significant differences of opinion as to the character and adequacy of disposal services that should be provided. Much depends upon the attitude, tradition, and the economic position of the residents in a particular community. Qualitatively, the entire process of solid waste collection* and disposal should be carried out in such a manner that the public health and safety of the community is protected, that the extent and characteristics of the service are in accord with the desire of the people, and that the operation is conducted effectively and economical~ ly. To be entirely free from nuisances and menace to public health, the waste materials must be handled so that odors cannot escape, so that insects and animals cannot have access to the material, so that wastes and dust are not thrown about, and so that the air and the surface and subsurface waters are not polluted. The varying desires, attitudes, and opinions of the people currently make the problem of refuse collection and disposal somewhat different for each community. The residents of some places insist on health,ful and attractive conditions and demand prompt and complete refuse disposal. In other communities, the citizens apparently place a much lower value on sanitation and orderliness. The attitudes, plus the economic capability of a community, determine the division of work between the householder or waste producer and the collection and disposal forces. 2. THE EXISTING CAPITAL PLANT IN THE UNITED STATES (a) The Number of Facilities in Operation As of mid-1965, it is estimated that there were 280 to 345 noncaptive incinerators, 1,000 to 1,250 noncaptive sanitary landfills, and 17,500 to 21,300 noncaptive open dumps in the United States. Noncaptive installations are those that are not operated for the disposal of the owner's refuse exclusively. Most open dumps are found in the small rural places having a popu- lation of less than 2,500 people. Such places are estimated to account for 12,250 to 15,000 of the open dumps and for 125 to 150 of the sanitary landfills. Urban areas are estimated to account for 5,200 to 6,300 open dumps and 850 to 1,100 sanitary landfills. PAGENO="0196" 188 STATE AND LOCAL PUBLIC FACILITY NEEDS A detailed breakdown of the estimates on the number of incinerators is given in table II. TABLE 11.-Estimated distribution of the number of incinerators by community size, 1965 Community population (in thousands) Number of communities in United States, 1960 Percentage of communities with incin- erators Average number of incinerators per corn- munity Distribution of incinerators by community size Number Percent i,0000r over SOOto 999.9 250 to 499.9 100 to 249.9 50 to 999 25 to 499 10 to 24.9 5 to 9.9 Total 5 16 30 81 201 432 1,134 1,394 80.0 75.0 50. 0 30.0 25. 0 10.0 7. 0 4. 0 4 2 1.6 1 1 1 1 1 16 24 22 24 50 43 79 56 5.1 7.6 7. 0 7.6 15.9 13.7 25.2 17.9 100.0 3,293 . Source: APWA estimates and calculations. Using several sources of data and methods of calculation and allow- ing for a margin of error of 10 percent either way, the number of in- cinerators in the United States is estimated to range between 280 and 345 units. This excludes privately owned incinerators used exclusively by the owner. The estimated 1965 distribution of the number of open dumps and sani1~ary landfills is given in table III on the following page. Again, a margin of error of 10 percent either way should be allowed. In evaluating surveys on the use of open dumps, modified landfills, and sanitary landfills, one finds that the inventories made by private con~ultants account for a much higher share of open dumps in the total disposal capacity than shown on questionnaire surveys. TABLE 111.-Estimated distribution of the number of open dumps and sanitary landfills, by community size, 1965 Community population ~ Number of places in United States, 1960 Average number of opendumps and/or sani- tary land- fills per com- munity Ratio of opendumps to sanitary landfills (percent) Distribution by community size Number Percent Open Sanitary dumps fills Open dumps Sanitary fills Urban (1,000's): 1,000orover_~_- 500to999.9 250to499.9 lOOto 249.9 50to99.9 25to49.9 10to24.9 Ito 9.9 2.Sto 4.9 Under 2.5 `i.... Subtotal urban Rural: 1,000to2,550-~-- Underl,000__-- Total 5 16 30 81 201 432 1,134 1,394 2, 152 596 4.0 3.5 3.0 2.5 2.0 1.5 1.0 1.0 1. 0 1.0 25:75 34:66 50:50 60?40 70:30 75:25 80:20 90:10 95:5 99:1 5 19 45 120 281 485 910 1, 255 2, 050 590 15 37 45 82 121 163 224 139 102 6 0.1 0.2 0.6 1.4 2.5 4.7 6.6 10. 6 3.1 1.4 3.5 4.2 7.7 11.2 15.2 21.0 13.0 9.4 0.3 6,041 4,151 "9, 598 .10,790 ` 1.0 1.0 -_-- 86:14 99:1 99:1 94:6 `5,760 4,110 9,502 19,372 .934 ` 4l~ 96 1,071 . 29.8 21.2 49.0 100.0 87.2 3.8 9.0 .100.0 Places with less than 2 500 population located m urbanized areas including the standard metropolitan statistical areas Source: APWA-EstimateS and c~ilculatiOns. ,,., PAGENO="0197" STATE AND LOCAL PUBLIC FACILITY NEEDS 189 Estimates of the number of collection vehicles in use are extremely hard to determine. All kinds of vehicles are used and many of the vehicles used serve other purposes as well. Based on a survey of 47 communities, with a total population of 15.5 million people, it is estimated that currently about 30,000 to 40,000 vehicles are more or less exclusively used for the collection of solid wastes. These data also are supported by a 1964 APWA-TJSPHS survey on refuse collec- tion practices covering a total of 995 communities. Of the Govern- ment-owned collection vehicles 68.5 percent are estimated to be com- pactor trucks, 8.3 percent enclosed noncompactor trucks, and 23.2 percent open dump trucks. (b) Distribution of Facilities by State According to data from the 1962 U.S. Census of Governments, five States (California, Illinois, New York, Ohio, and Pennsylvania) account for almost 50 percent of the total U.S. governmental ex- penditures for sanitation other than sewerage. These expenditures cover the collection and disposal of solid wastes but they exclude any debt retirement or interest payments. The State of New York leads the list with 21.9 percent. Another five States (Florida, Michigan, Massachusetts, New Jersey, and Texas) account for more than another 20 percent of the total U.S. expenditures on sanitation other than sewerage. Therefore, 10 States spend more than 70 percent of the total of all such U.S. governmental expenditures ex- cluding the respective debt service payments. A detailed analysis of the distribution of governmental expenditures on sanitation other than sewerage by State and type of government, is presented in table IV on the following page. Although the data refer to 1962, it is reasonable to assume that the distribution pattern roughly remains valid today. The table furthermore indicates that all sanitation other *than sewerage expenditures of governmental units, according to the U.S. census, are made by governments below the State level. On a nationwide basis, 91 percent of these local government expenditures are spent by municipalities, 5.2 by town- ships, 2.8 percent by counties, and 1 percent by special districts. The table excludes expenditures by private disposal organizations or self-service operations which are believed to be substantial. Un- fortunately, no suitable data are available on the geographical dis- tribution of the private disposal effort. PAGENO="0198" C) C) C) `C) C) C) C) Co ~ 0 C) C) C) 0 C) C)) s-C Co C) C) 0 CC C) C) C) C) C) C) ~ UD.CO ~ E ~3~°Coc~ ~iCo ,~ ~ ~ C) ~-~E~; ~ 1190 STATE AND LOCAL PUBLIC FACILITY NEEDS ,C) 0 0 Co Co CoCO 0)0) C) Co 0 on Co Co ~ a~ w;~ ~-4 ~ ~ ~ CC C ~ ~ -~ ~ ~ C) ~ C) C) C) C) C) C) C) C) C) C) C- C- C) C) ~ C)C) -- C)C) Co ii C) C) C- C)CC C) C) C) C) C) C) C) C)C) -- .E Co Co bJ~l C) ~- ~ ~ -; C) C) C) C) ~l C) C) C) C) C) C) C) C) C) C) C) C) `~4 C) C) C) C) C- CCC) C) C) C) C) C) C) C- ~) C-. C)OO C) C- C) C) C) 0~ L~- C-'0~ C) C) C) C) ~: ~ 0) *-C.~ ~ ~Co'0~ ~00)0)~~C)C) ~ ~ ~4~:~CoQC) C) C) ~g ~ IC) C) C) C) C) C) C) - -~ C) IC) C) C) C) C- ~ C I ~ ~o) ~CoCo ~ C) ~- ~ C) C) ~ C) C) C) ~) C) C) C) C) C) CC~4 C) C) C) ~;o `- ~ 0) ~ ~ ~0) C) C) C) `0~ C) C) C) C) C- ~) C- C) C) C) C) C-C) C) C) C) C) C) ~ `~ -~ ~ ~ ~0~CC C) C)C)0)C)C)0CC)C)C)C)C)C)C)C)tC)C)C) C) C) C) ~-C C) `0~ `0~ C) C) C) C) C) C) C) C) C) C) C) I"- C) ~ ,-r~-~ ~ 0)~ 0, Co C) PAGENO="0199" :~ :~ ~ : ** ,~ ~- c~ !~ :~ :~ :~ :c~c~~ * 0 c~ ~- ~ t- 0 0 ~ 0-c~'~ -~o~ ~ ~ ~ ~ ~ ~ ~oe~i ~ ~-~o ~ ~ c~ ~ ~ -t~-t-- 0 o c~ - ~ e~ c~ ~ ~ c~ t- c~ ~ t- ,~ ~4 C~ ~ STATE AND LOCAL PUBLIC FACILITY NEEDS 191 0 0 0 k~r~ d 0~ c~ - ~0 0 o cq o 0 c~ t~. ~ 0~ - cq 0 ~ 0 C~ t'- - - 0 0000 0 t'. ~ 0 cC t- o c~ t-. t- ~ Ot- 0 c~ Cc C4 Cc t~- t'- Cc 0 ~ cc cc Cc cc cc ccc- t- cc ~c ~ ~ t- c~ E 0 0 C) C) cc 0 cc o 00 cc 0 - cc PAGENO="0200" Percent share of State: total number Alabama 1. 6 Connecticut 4. 3 District of Columbia . 2 Florida 3. 7 Georgia 1. 6 Hawaii . 5 Illinois 4. 8 Indiana 1. 6 Iowa 1.0 Kentucky 2. 1 Louisiana 2. 1 Maryland 2. 1 Massachusetts 6. 0 Michigan 2. 7 Minnesota 1. 6 Missouri . 5 Nebraska . 5 New Jersey 11. 9 New York 15. 1 Source: APWA estimates and calculations. Percent share of State-Contmued total number North Carolina 2. 1 North Dakota . 5 Ohio 9. 2 Oregon Pennsylvania 7. 6 Rhode Island 1. 6 South Carolina . 5 Tennessee 1 0 Texas 1. 6 Virginia 3. 7 Washington . 5 West Virginia - 1 & Wisconsin 5. 4 Total for States with less than 0.1 percent of the U.S. total . 3 Total 100. 0 192 STATE AND LOCAL PuBLIC FACILITY NEEDS Moreover, the table shows that the bulk of the expenditures is made in standard metropolitan statistical areas. Again, on a nationwide basis, 79 percent of the sanitation-other-than-sewerage expenditures are accounted for by the standard metropolitan statistical areas though only about 63 percent of the population reside in such areas. Finally, the distribution pattern in the table is based on dollar expenditures. Because of the great variations in the physical capaci- ties of the various facilities, it is judged that expenditures reflect the disposal and collection effort more genuinely than the mere number of disposal installations. In analyzing the distribution pattern in the foregoing table, it must be recognized that most of the incinerators are found in the Eastern States. The distribution of incinerators by States is estimated to be as follows: TABLE V.-Estimated distribution of incinerators, 1965 by State (c) The Distribution of Facilities by Population Size of the Gommuniti~ As in the data on the distribution by State, the information on the distribution of the sanitation effort by population size is based on expenditures rather than the number of installations. Again, data from the 1962 census of governments form the basis for the distribu- tion patterns presented in table VI. However, care should be exer- cised in drawing conclusions from these data since per capita costs are distributed over the entire population of the county rather than the urban population only which normally receives refuse collection and disposal service. This gives a distorted picture of the actual cost of the service provided. Table VI, which appears on the next page, shows that almost 75 percent of the governmental expenditures for sanitation other than sewerage are spent in the densely settled counties with 250,000 or more people. An explanation for this situation is not hard to find; because of their size, large communities have to make self-disposal and backyard burn- ing of refuse illegal. In addition, the population in large communities PAGENO="0201" STATE AND LOCAL PuBLIC FACILITY NEEDS 193 is wealthier, on the average, than that of smaller communities and most likely discards larger quantities of waste. In evaluating the dollar expenditures in this table, it must be re- membered that the setup of the original cost data in local governments is not particularly suited for statistical purposes or comparisons. It is particularly doubtful that all costs are accurately reflected in the figures reported by smaller communities. TABLE VI.-Governmental expenditures for sanitation, other than sewerage, 1962, by size of population on a county area basis County area population (thousands) 1 Expenditures ~ U.S. popula- tion 1960 2 (thou- sands) U.S. popula- tion dis- tribution (percent) Number of areas County U.S. areas distribu- United tion States' (percent) In millions Percent of total Per capita Total 250 and over lOOto 249.9 50 to 99.9 25 to 49.9 10 to 24.9 Under 10 $686 100. 0 4 $3. 83 179,323 100. 0 3, 124 100. 0 513 78 43 32 16 4 74.8 11.4 6.3 4.6 2.4 .5 5.87 2.84 2. 12 1.52 .90 . 73 87,432 27,566 20,319 20,890 18, 028 509 4,579 48. 9 15.4 11.4 11.6 10. 0 .2 `2.5 123 176 293 588 1, 096 848 3. 9 5.6 9.4 18.8 35. 0 27. 3 ~B~fei~s to county area as used in the 1962 Census of Governments. 2 Refers to the areas covered in the 1962 Census of Governments. `Includes areas corresponding to counties but having no organized county government. 4 It should be noted that this figure is based on the entire U.S. population including rural areas receiving no service. Per capita costs in urban areas are thus higher. `Population not covered in the 1962 U.S. Census of Governments survey. Source: U.S. Department of Commerce, Bureau of Census, data revised October 1964. The 1962 U.S. Census of Governments contains a first attempt to measure the expenditures for sanitation, other than sewerage, sep- arately. It excludes any applicable debt service payments which are estimated to add about $80 to $120 million to the operating, mainte- nance, and capital investments as indicated. Furthermore, local gov- ernments frequently omit the 15 to 20 percent of worker fringe bene- fit cost as well as any applicable overhead in reporting expenditures by function. In addition, some communities operate their repair and maintenance facilities on a centralized basis while others do not. Per- sonnel and equipment frequently are utilized for more than one func- tion and costs are not uniformly allocated among local units of gov- ernment. Comprehensive in-depth studies conducted by the APWA of actual expenditures in selected cities suggest that the total annual cost of collecting and disposing of solid wastes might range from $1.2 to $1.5 billion for the governmental sector alone. The foregoing table, of course, excludes the cost of private refuse disposal service which, including all small communities and unincor- porated areas, is frequently estimated to amount from 80 to 100 per- cent of the total public collection and disposal expenditures. In addition, substantial sums of money are spent on refuse containers, garbage grinders and on-site incinerators by the tax-paying public. Thus, it is reasonable to conclude that the total U.S. refuse collection and disposal expenditures probably exceed $2.2 billion and may range as high as $3 billion per year. Previous studies made by APWA as well as others support estimates of larger expenditures in this field. PAGENO="0202" 194 STATE AND LOCAL PUBLIC FACILITY NEEDS The census data are used in this report since they represent a first attempt to obtain the needed information on a nationwide basis More accurate data undoubtedly will be foithcoming m future years, as . uniform accounting and reporting procedures are more widely adopted. (d) Age Distribution of Facilities . .* Based on two surveys made in thelate 1950's and the estimated in- cinerator building activity, since then, it is estimated that 28 percent of the incinerators were built. prior to 1941,. about 59 percent during 1941-60, and about 13 percent since 1961. The ages of open dumps and sanitary landfills are difficult to esti- mate. The service life of these installations varies greatly, depend- ng mainly upon fill-depth, degree of compaction, and size of the area (e) Ownership of the Facilities Now In Operation Noncaptive refuse collection and disposal facilities are generally owned by local governments or private profitmaking organizations or individuals None are known to be owned by State governments, State agencies, the T~ederal Government, or by private, nonprofit organizations and cooperatives. The ownership relationship between local governments (municipalities, townships, counties, and special districts) and proprietary profitmaking organizations is estimated to be as follows: TABLE VII -Estimated distribution of ownership of refuse collection and disposal equipment and installations, 1965 . Type of refuse collection-and-disposal equipment and installations . . Percent owned by- . Local Private, for government profit Organi- zations Collection vehicles 55 75 99 50 75 60 90 45 .25 . . .1 , 50 . 25 40 . . 10 Garage and maintenance facilities Incinerators Open dumps: . Urban areas - Rural areas Sanitary landifils: Urban areas Rural areas Source APWA estimates 1964 APWA USPHS survey of refuse collection practices (f) The ~Estimated ~Current Value of Refuse Collection and Disposal Facilities In the absence of any data on the current value of refuse disposal investments it was decided to use past replacement values taking into account the past conditions in the state of the art of .the disposal equipment technology. Local governments do not tend to use capital investment accounting methods including depreciation and other value (land value) adjustments. Sanitary landfills, if properly operated and completed, often represent land investments of con- siderablé value. For the present analysis the value of the incinerators is calculated at $2,500 to $3,000 a ton of installed capacity. The value of the collec- tion facilities is calculated at an average of $10,000 per vehicle plus 12 percent, according to a 1966 APWA survey, for equipment storage PAGENO="0203" STATE AND LOCAL PUBLIC FACILITY NEEDS 195 and maintenance facilities. The value per sanitary landfill is calcu- lated at an average size of 15 to 30 acres, the cost per acre being $1,500. Land costs are estimated to represent about 40 to 45 percent of the total sanitary landfill value, including operating equipment. Thus, the past investment value per average sanitary landfill can range from $50,000 to $112,000. Open dumps, finally, are valued at land cost alone. Considering the large number of open dumps in small rural communities and the smaller sizes of open dumps, it is estimated that each open dump represents an investment of about $500. In contrast to open dumps, most sanitary landfills are located in urban areas where the land prices are substantially higher. In accordance with the foregoing discussion, the value of refuse collection equipment and disposal facilities at actual acquisition costs is estimated as follows: TABLE VIII.-Investment value (at cost) of refuse collection equipment and disposal facilities, 1965 Millions of dollars 82,000 tons of incinerator capacity 205. 0-246. 0 1,071 sanitary landfills 53. 5-120.0 19,372 open dumps 9. 5- 9.5 30,000 to 40,000 collection vehicles 300. 0-400. 0 12 percent equipment storage and maintenance facilities - 36 0- 48 0 Total 604. 0-823. 5 Source: APWA estimates and calculations. The foregoing data on sanitary landfills exclude the investment value of completed sanitary landfill areas which are still held as property of the community. In case Of a sanitary landfill, the land value usually increases because of land improvements produced by proper sanitary landfill operations. Thus in a strict sense the current value of a sanitary landfill cannot be compared to the current value of an in- cinerator installation. B. COST AND USER CHARGES 1. CONSTRUCTION COST AND OPERATING COSTS (a) Construction Cost for Facilities of Long- Time Durability Construction costs per ton of incinerator capacity have customarily been estimated to range from $3,000 to $6,000. However, a 1966 survey of eight incinerators just completed or still under construction indicates an average construction cost of $4,500 per ton/24-hour daily capacity. Construction cost increases considerably if air pollution control equipment, automated process controls, highly mechanized operations, and adequate storage facilities for the raw refuse are pro- vided. The current construction costs for an incinerator utilizing the improvements available from modern technology are estimated to average $5,000 to $7,000 per ton/24-hour daily capacity. The cost could go as high as $8,000 to $10,000 per ton/24-hour daily capacity for plants incorporating heat recovery systems and buildings suitable for cold climates. The development "construction" cost for sanitary landfills includes access roads, water, drainage facilities, equipment sheds, fencing, lighting, and site beautification. A 1964 survey of 10 sites in IPenn- PAGENO="0204" 196 STATE ~D LOCAL PUBLIC FACILITY NEEDS sylvania indicates that these costs are approximately $55,000 for a 30-acre site. Of course, these costs can vary considerably depending on the terrain, location, and size. Converted to a 10-acre site, the sanitary landfill development costs are estimated at about $18,000. These cost figures exclude the acquisition cost for land and operating equipment. The equipment costs are estimated to average $35,000 ~to $40,000 per site, considering all sites in the country. The current cost for suitable refuse collection equipment is estimated :as follows: Regular compactor trucks: 10 to 20 cubic yards; $10,000 to $13,000 each. Heavy duty compactor trucks: 24 to 28 cubic yards; $15,000 to $20,000 each. Trailers: 30 to 80 cubic yards; $25,000 to $30,000 each. Compactor truck with detachable container and hoisting unit: $15,000 to $30,000. Trailers are used in connection with transfer stations where the refuse is transferred from the smaller collection trucks to the trailers. Transfer stations reduce hauling costs if the hauling distances are great. However, according to a 1964 APWA survey on refuse collec- tion practices, less than 4 percent of the TLS. refuse collection agencies use transfer stations at the present time. (b) Tyj~ical Maintenance and Operation Expenses for Collection and Disposal Facilities The operation and maintenance costs of incinerators vary widely depending upon the plant capacity, efficiency of operations, local wages, the type of refuse burned, the degree of burning, the number of shifts worked per day, and the type of plant; that is, whether it is mechanized or requires manual stoking. Variations in incinerator operating and maintenance costs are reported to range from $0.50 to more than $7 per ton of refuse burned. Based on data from 60 incinerator operations, it is estimated that, excluding amortization cost, average maintenance and operation costs range from $2.90 to $3.60 per ton of refuse burned. The annual maintenance costs are reported to amount to about 5 percent of the total capital cost or approximately 10 to 15 percent of the total annual cost of incinerator plant operation. The operation and maintenance costs for sanitary landfills, too, vary widely. They depend mainly upon the soil conditions, availability of cover material, the type of equipment used, local wages, operations efficiency, and the size of the operation. A cost range of $1 to $1.50 per ton of refuse is frequently reported. A survey made for this report on the operating cost of 50 sanitary landfill operations suggests that the average operating and maintenance cost is about $1.10 per ton of compacted refuse deposited. By contrast, the cost of disposal in open dumps/modified landfills ranges from $0.05 to $0.25 per ton. This cost comparison of the various disposal methods indicates why there are so many open dumps in this country and why many sup- posedly sanitary landfills are not operated as such. Collection accounts for the bulk of refuse removal costs. Ranging from $5 to $25 per ton, collection costs are commonly estimated to make up 65 to 80 percent of total disposal cost. The transportation PAGENO="0205" STATE AND LOCAL PUBLIC FACILITY NEEDS 197 cost, excluding depreciation of equipment, of a typical 18- to 22- cubic-yard-packer truck carrying from 3 to 4 tons of compacted refuse, is estimated at $0.35 to $0.40 per mile. The average trip is estimated to be between 10 and 25 miles in distance. 2. USER CHARGES (a) The Extent to Which User Charges Are Employed to Pay for Refuse Collection and Disposal Services User charges are not uniformly employed throughout the country to pay for refuse collection and disposal services by local governments. They vary from a high of $3.30 per capita per year based upon the entire population of the State of New Mexico to a iow of less than 1 cent or no charges at all for New Hampshire, Delaware, and the District of Columbia. A breakdown of user charges by State is given in table IX below. In evaluating the data given in the table on the following page, it must be recognized that per capita expenditures and service c'harges tend to be substantially higher if they are calculated on the basis of the population actually served. A tabulation of per capita expendi- tures and service charges for refuse collection only, calculated on the basis of the population actually served, is given in table X. TABLE IX.-Per capita expenditures and revenue from service charges `for sanitation, other than sewerage, 1962, by State State Expendi- tare 2 Revenue charges State Expendi- ture 2 Revenue charges United States Alabama $3.83 1.93 $0.68 .31 Missouri Montana $1. 67 2. 36 $0. 17 1. 63 Alaska 2.70 1.86 Nebraska 1.85 .19 Arizona 4.82 .58 Nevada 1.08 .13 Arkansas 1. 14 1. 10 New Hampshire 2. 59 California Colorado 3.44 2.26 1.41 . 27 New Jersey New Mexico 4.69 3.85 .09 3.30 Connecticut 3. 77 . 14 New York 8. 37 .46 Delaware 2.29 North Carolina 2.23 .01 District of Columbia 10.9 North Dakota 1. 83 1.45 Florida 4.97 2.42 Ohio 3.42 .56 Georgia 3.27 1.11 Oklahoma 2.06 2.45 Hawaii 5.51 .83 Oregon 1.02 .11 Idaho Illinois 1. 96 4. 79 1. 04 . 26 Pennsylvania Rhode Island 3. 51 2. 95 . 27 . 01 Indiana L 99 . 04 South Carolina 2. 18 02 Iowa 1.98 .16 South Dakota 1.08 .28 Kansas 1. 85 1. 15 Tennessee 2. 69 .08 Kentucky 1.61 .27 Texas 3. 18 1.59 Louisiana 3.38 .38 Utah 1.83 .35 Maine 1.11 .02 vermont . 75 . 01 Maryland 3.75 .84 Virginia 2. 72 .12 Massachusetts 4. 56 . 05 Washington 2. 86 2. 46 Michigan 3. 89 . 23 West Virginia 1. 62 1. 10 Minnesota Mississippi 1. 66 1.58 . 34 . 07 Wisconsin Wyoming 4.46 3. 34 04 2.48 1 Data refer only to total governmental expenditures and revenues for refuse removal divided by the total State population. 2 Expenditures do not include debt service and retirement payments. Source: U.S. Department of Commerce, Bureau of the Census; PAGENO="0206" 198 STATE ~uw LOCAL PUBLIC FACILITY NEEDS TABLE X.-Range in annual 1960 per capita cost for refuse collection of 38 public agencies financing their system exclusively through service charges, by type of service Extent and character of service Number of cities Maximum Median Minimum Complete residential and commercial service (all classes and almost all kinds of refuse collected) Complete residential service only (some small corn- mercial establishments may he included) Citywide service, but some kinds of refuse not collected or 1 or 2 classes omitted from business area Only 1 class of refuse collected in residential area or business area or partial service throughout the agency 25 6 4 3 $7. 40 ~ 3. 72 4. 58 3. 25 $~. 02 2. 57 4. 01 2. 78 $2. 04 . 64 2. 25 . 24 Source: APWA Refuse Collection Practice, 3d edition, scheduled for publication in the late summer of 1966. The table indicates the great differences in cost and user charges at various levels of service. Again, caution should be exercised in drawing conclusions. Some of the differences are due to variations in wage rates, population densities, collection methods, length of hauls, and other factors. Finally, surveys conducted by APWA in 1955 and 1964 indicate that the number of cities using service charges to finance all or part of their refuse collection increased by about 20 percent in the 1955-64 time period. The current status of financing refuse collection in communities of various sizes is shown in table XI on the following page. The data shows thatthe smaller communities tend to rely more on service charges than do the larger communities. (b) Extent to* Which User Charges Cover Annual Maintenance and Operation Expenses Plus Debt Service User charges significantly exceed the sum of prorated operating and capital costs only in communities where refuse disposal is exclusively handled by private companies. This is the case in less than 13 percent of the Nation's communities according to a 1964 APWA survey of refuse collection practices. TABLE XI.-Method of financing refuse collection services, 1964, by size of communit7j Population size of community Distribution of financing methods in percent Total Number of corn- Percent munities in sample General tax Service charge Tax and service charge Other 5,000 to 9,999 180 10,000 to 24,999 307 25,000 to 49,999 190 50,000 to 99,999 93 100,000 to 999,999 74 1,000,000 and over 6 Total sample 850 100 100 100 100 100 100 47.2 46. 0 51.5 58.0 59.5 66.6 39. 0 38. 0 32.7 28. 0 27.0 0 13.4 16. 0 14.2 12.9 13.5 33.4 0.6 0 1.6 1. 1 0 0 100 50. 1 34.9 14.4 .6 Source: Survey made in 1964 by APWA in cooperation with the U.S. Public Health Service. According to the 1962 U.S. Census of Governments, user charges, on a nationwide basis, cover only 17.6 percent of the governmental operating and maintenance expenditures for sanitation other than PAGENO="0207" STATE AND LOCAL PUBLIC FACILITY NEEDS 199 sewerage. Including debt service, user charges cover only 10 to 12 percent of the governmental refuse removal expenditures. Details of the relationships between user charges and expenditures by type of government are given in table XII. TABLE XII.-Expenditures~and revenue in sanitation other than sewerage for local governments, 1962 [Dollar amounts in millions] Type of local government Expenditures Sanitation other than sewerage revenue from current charges Amount 1 Percent dis- tribution Amount Percent dis- trihution TotaL Counties Municipalities Townships Special districts - $981-$l,200 100.0 $121 100.0 27- 31 893- 1,100 51- 58 10- 11 2.8 91.0 5.2 1. 0 7 101 4 5 5.8 86. 8 3.3 4. 1 1 APWA calculations. Source: U.S. Department of Commerce, Bureau of the Census. In the private refuse disposal field, user charges, of course, must cover all expenditures. (c) Extent to Which the Costs of Refuse Disposal Facilities Are .Met Out of the General Tax Resources and General Obligation Bonds According to AIPWA surveys, it is estimated that about 35 to 36 percent of the communities finance their refuse collection and disposal operations through service charges, 50 to 52 percent through general taxes, and 12 to 15 percent through a combination of taxes and service charges. The extent to which general obligation borrowings of local govern- ments are used for this purpose is not known. However, it is believed that the cost for acquiring incinerators in many cases is financed through general obligation bond issues. Revenue bonds amortized by service charges have also been issued for such purposes. C. TRENDS OF CAPITAL OUTLAYS 1. THE TRENDS OF ANNUAL CAPITAL OUTLAYS FOR REFUSE COLLECTION AND DISPOSAL FACILITIES DURING THE 1946-65 PERIOD Suitable data on the annual capital outlays for refuse collection and disposal facilities during the 1946-65 period are not available. However, based on estimates obtained by the APWA from 47 communities, it is estimated that from $725 to $950 million were expended for capital outlays during the 1956-65 decade. This amount is estimated to break down from $467 to $612 million for col- lection equipment and facilities, $87 to $114 million for sanitary landfills and $171 to $224 million for incinerators. Based on the same survey, the total capital investment for refuse removal facilities during the 1946-55 decade is estimated at about $325 to $450 million. The estimates for the past decade appear to be valid if one considers that the capital investments have not been spread evenly over 1956-65. PAGENO="0208" 200 STATE ~D LOCAL PUBLIC FACILITY NEEDS It is estimated that in 1956 the capital investments amounted to $35 to $50 million while in 1965 they may have reached a rate as high as $145 to $180 million per annum. Furthermore, surveys of selected cities indicate that capital expenditures (including debt service and new investments) amount to about 10 to 15 percent of the total refuse removal cost. Thus, if the total annual refuse removal cost is estimated at $2.5 billion, total capital expenditures would amount to $250 to $375 million per year. Deducting about $120 million for debt service consequently would suggest that current capital investments range between $130 to $255 million per annum. Therefore, it is reasonable to conclude that the current capital invest-. ment in the refuse collection and disposal field amounts to approxi- mately $170 million per year. Breakdown of Capital Outlays by Investor All capital outlays, during the 1956-65 decade, for the establishment of refuse disposal facilities were made by local governments or pro- prietary, profitmaking organizations. It is estimated that local gov.. ernments expended about 70 to 75 percent of the total amount and private organizations the remaining 25 to 30 percent. Expenditures by local governments at 72 percent of the total are estimated to include $170 to $222 million for incinerators, $70 to $93 million for sanitary landfills and about $280 to $370 million for collection equipment and maintenance and storage facilities. 2. SOURCES OF FINANCING FOR CAPITAL OUTLAYS The sources of financing for these capital outlays include appropria- tions from tax sources, tax exempt municipal bonds, borrowings from banks, and private venture capital. It is assumed that almost all incinerators (99 percent or $170 to $222 million) were financed through tax exempt municipal bonds while almost all of the remaining municipal investments in equipment,. landfills, etc. (90 percent or $315 to $415 million) were financed by appropriations from tax revenues or service charges. Thus, about 43.5 percent of the total capital investments were financed by appro- priations from general tax revenues and service charges and about. 28.5 percent by municipal bonds. The remaining 28 percent is esti-~ mated to have been financed mainly by private, profitmaking or-~ ganizations through borrowings from banks and by owner-capital. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS Industrial and technological changes plus an increase in living stand- ards are resulting in the production of ever-increasing quantities of refuse, per person. This increase, coupled with the anticipated popu- lation growth, results in staggering amounts of solid wastes that. must be regularly collected, transported and disposed of. 1. THE ESTIMATED CAPITAL REQUIREMENTS FOR REFUSE COLLECTION AND DISPOSAL FACILITIES DURING THE 1966-75 DECADE Conditioned upon the present situation, the capital requirements for noncaptive refuse collection aud disposal facilities during the 1966-75 decade are estimated to be at least $2.42 biffion in 1965 dollars.. PAGENO="0209" STATE AND LOCAL PUBLIC FACILITY NEEDS 201 This estimate is based on a survey of the capital investment needs. for waste disposal facilities recently conducted by the APWA in 47 communities and the findings of the previous analyses. The amounts. of these capital investment demands are estimated to be as follows: $1.420 billion for collection equipment and storage and maintenance facilities, $340 million for sanitary landfills including land and equip- ment and $660 million for incinerators. (a) Factors Taken into Account in Making This Projection Excepting salvage operations such as hog feeding and composting~ it is common to all disposal methods that, in one form or another,. solid wastes have to be returned directly to the natural environment. by acceptable means. The space requirements vary according to the method used and are as follows: TABLE XIII.-Land requirements for selected refuse disposal methods Disposal method Percent reduction of volume of raw refuse Population served annually by 1 acre-foot Acre-feet required annually for each 10,000 population Open dump (raw, mixed refuse) Open dump with burning, scavenging, and casual compaction Sanitary landfill Incineration 0 15 50 90 412 487 1, 430 2, 080 24.2 20. 5 7. 0 4.8 Source: U.S. Public Health Service; APWA; and various waste disposal planning studies. However, land required for waste disposal facilities is also in de- mand for many other more attractive uses in the metropolitan and urban centers. This, coupled with higher costs through an increase~ in the hauling distances to landfills, is judged to create a strong de- mand for modern incinerators during the next decade. The $660 million investment need for incinerators includes an allow-- ance of from 3 to 5 percent of this amount for land acquisition. The. need for replacement of obsolete facilities is estimated to amount to 40 percent of the presently installed 82,000 tons daily, 24-hour incinerator capacity. Almost 30 percent of the existing capacity is estimated to have been built prior to 1941. Calculated at a construc- tion cost of $6,000 per ton of daily, 24-hour capacity, this capital investment would add 109,000 tons of daily capacity to the present total capacity, whereas 33,000 tons of daily capacity would be elimi- nated because of obsolescence. Thus, the 1975 installed incinerator capacity is estimated at 158,000 tons per 24-hour day of operation. In support of this estimate it might be mentioned that a manufacturer of incinerator equipment forecasts, for 1975, an incinerator capacity of 120,000 to 145,000 tons per day. However, this forecast is based on a normal expansion of the demand and does not provide for stepped- up Federal activities in this field. In estimating the sanitary landfill capital investment needs it is. assumed that open dumps will be eliminated wherever feasible. However, inert waste materials, such as incinerator ash and certain demolition wastes, do not require sanitary landfills for adequate dis-- position. Furthermore, open dumps tend to be smaller in area than sanitary landfills. Thus a number of open dumps will not be con-- verted to sanitary landfills but will be used for the disposal of inert- ~0-132-68-----vo1. 1-14 PAGENO="0210" 202 STATE ~m 1LOCAL PUBLIC FACILITY NEEDS materials. Consequently it is assumed that about 30 percent of the existing open dumps in urban areas will not be converted to saul- ~tary landfills, leaving about 4,000 open dumps to be converted. `Since not all of these open dumps are located in or near metropolitan areas, nor do they belong to outlying communities in a metropolitan complex, their capital investment values for'conversion to landfills is calculated at $50,000 each. In turn, the conversion of open dumps to sanitary landfills is estimated to require about $200 million during i~he 1966-75 decade. , In addition, it is estimated that about half of the existing 1,000 sanitary landfills will need replacement in the 1966-75 decade. at an average cost of $80,000 each. ~This will add $40 million to the sani- tary landfill investment needs It seems that the waste disposal needs in rural areas do not presently justify that each of the 13,600 communities be required to operate a sanitary landfill. Consequently, it may be assumed that refuse dis- posal in rural areas will be operated, more or less, on a countywide basis. This in turn might suggest that about 70 percent of the exist- ing open dumps in rural areas will be closed. Because of their smaller size and lower land costs, the capital investment needs for sanitary landfills in rural areas are estimated at $25,000 each, including part of the cost for the equipment needed. Thus, the capital investment needs for 4,100 sanitary landfills., in rural areas are estimated to be approximately $100 million. The equipment for sanitary landfills in rural areas will not be used on a full-time basis for landfill operations The capital investment needs for collection and transfer equipment plus maintenance and storage facilities are estimated at $1.42 billion during the 1966-75 decade. This includes the replacement of almost all noncompactor trucks of existing truck fleets, costing an average of $13,000 each. The current proportion of noncompactor units, includ- ing open trucks, is estimated at 30 percent of the total fleet, thus requiring a replacement of 10,000 to 12,000 units resulting in an invest- ment of $130 to $156 million. Of course, not all of the open trucks will need to be replaced since a certain number of such trucks will be needed for the collection of oversized (bulky) wastes. In addition, it is estimated that the average sanitary landfill in rural areas would be served by four heavy duty compactor collection vehicles of 24 to 28 cubic yard loading capacity to minimize the cost impact of long- distance hauling. The cost of these vehicles is calculated at $20,000 each. Therefore, the 16,400 vehicles required for the waste disposal service in rural areas would require $328 miffion in capital investments. Consequently, about 34 percent of the total estimated capital invest- ment needs for refuse collection facilities are judged to be needed for providing service where none currently exists or updating the current service to acceptable levels. The remaining $936 million are estimated to be needed for the replacement of worn out compactor trucks, the purchase of new vehicles, and the provision of the necessary mainte- nance and storage facilities. The foregoing estimates have been made on the assumption of a population growth from 195 million people in 1965-66 to 230 million in 1975. In addition, it has been estimated that the production, collection, and disposal of solid wastes will increase, on a nationwide average from the present 0,Th `ton `per capita per year to 1 ton per capita per year in the next decade. ` PAGENO="0211" STATE AND LOCAL PUBLIC FACILITY NEEDS 203 The foregoing estimates appear to be reasonable in the light of the capital requirement projections made by 20 metropolitan or regional planning commissions in urban and in some urban rural areas. These agencies in 1966 estimated that each of them should, realistically, spend an average of $7.5 million during the 1966-75 decade, on capital investments for refuse collection and disposal facilities. Since there are 216 metropolitan urban areas in this country, their total capital investment needs are calculated at $1.6 billion. Since such areas, however, account for about 70 to 75 percent of the population, the total U.S. investment needs on this basis can be extrapolated to $2.1 billion to $2.3 billion. A graphic presentation of the trends in annual expenditures for sanitation on the State and local government levels is given in exhibit I (following) for comparison purposes. The exhibit indicates that those expenditures grow much faster than the population. This is in line with the findings of waste disposal studies made for a number of areas or regions in the United States. Some of these studies reveal that the collection and disposal of solid wastes increased at twice the rate of population growth (b) Capital Investment Needs on an Annual Basis If the projected needs were to be financed over the next decade in equal proportions, the annual investment would amount to approxi- mately $240 million per year. If the backlog, which is estimated to be at least 34 percent of the investment needs, were to be funded dur- ing the first year of the decade, about $820 million would be required. Spreading the remaining $1.6 billion evenly over the 10-year period would add $160 million to the first year's requirements. Thus, it would be necessary to provide more than 40 percent, or $980 million, of the total $2.42 billion capital investment needs during the first year. The remaining $1.44 billion would be required at a rate of $160 million annually during each of the remaining 9 years. Of this amount, approximately $90 million would be required by local gov- ernment, and $70 million by private entrepreneurs. (c) Distribution of the Investment Needs by Type of Area and Size of Community According to the foregoing analyses, $428 million, or 17.8 percent of the total investment needs, are estimated to be needed in rural com- munities. In addition, it is estimated that communities in urban areas with a population of less than 2,500 people will require about 2.2 percent of the total capital need. It is also noted that most of these communities receive their refuse disposal service in conjunction with that of other urban communities in metropolitan areas. There- fore, it is estimated that agricultural areas and communities with a population under 2,500 persons will require 20 percent, or $488 million, of the total capital investment needs. In turn, 80 percent, or $1.932 billion, would be spent in communities with a population of 2,500 or more people. According to the U.S. census, people living in such communities are considered as living in urban areas. It is extremely difficult to make valid estimates of the capital invest- ment needs in different population categories. In order to make such projections, as requested, it is necessary to make some more or less arbitrary assumptions, and use information which is subj ect to further refinement. If, for example, population distribution and past spend- PAGENO="0212" 204 STATE AND LOCAL PUBLIC FACILITY NEEDS ing patterns of expenditures are used, the following estimates could be made. According to the 1960 U.S. census, 52 percent of the popula- tion at that time resided in communities of more than 50,000 inhabi- tants and 63 percent in metropolitan areas. According to the 1962 U.S. Census of Governments about 79 percent of all expenditures for sanitation other than sewerage was expended in metropolitan areas. and about 92.5 percent in communities with a population of more than. 50,000 people. To ameliorate the impact of the disproportionatelY large past expenditure patterns in large urban areas witK the require- PAGENO="0213" STATE AND LOCAL PUBLIC FACILITY NEEDS 205 ments for adequate service, it was decided to average the percentages of population and spending patterns. It is estimated that of the $l.932 billion needed in urban communities with 2,500 or more inhabi-. tants about 70 percent, or $1.35 billion, might reasonably be allocated ~for communities with more than 50,000 inhabitants. This represents about 56 percent of the total $2.4 billion needed. The remainder of :$582 million, or 24 percent of the total, is estimated to be needed in communities with populations between 2,500 and 50,000 persons. (d) Distribution of the Capital Investments by Type of Organization All capital investments during the 1966-75 decade are estimated to be expended by local governments (including special districts) or private organizations. In view of the increasing activity in area and regional refuse disposal, it is estimated that about 70 to 75 percent of the total required investment of $1.69 to $1.80 billion will be ac- ~counted for by local governments, and about $640 to $730 mfflion by ~private organizations. In this estimate it is assumed that private organizations will continue to account for about 45 percent of the collection efforts while almost all of the disposal facilities will be ~estab1ished and operated by local governments. 2. SOURCES OF FINANCING In view of the past investment trends and the demand on the financial resources of local governments for education, highway, water supply, and sewerage investment needs, it is estimated that the capital requirements herein forecast will not be met unless the Federal or State governments underwrite, in one way or another, at least two- -thirds of the $1.8 billion share allocated for the investment needs of local governments Federal financing of municipal refuse collection eqmpment would obviously place the private entrepreneur at an unfair disadvantage. Therefore, Congress may wish to provide Federal funds for refuse collection equipment only in those cases where adequate service, at a reasonable cost, cannot be provided without such assistance. Federal aid at the level proposed would enable local units of government to maintain their investments at ;approximately the same level as they were in the 1956-65 decade. However, Federal aid for refuse disposal equipment and facilities would permit local communities to reallocate funds and increase their capital investment in collection equipment needed to improve exist- ing operations and extend service to areas not presently served by public or private systems. The present state of the current refuse collection and disposal operations reflects the strained financial situation of local governments. The breakdown among the various sources of financing for the capital investments not underwritten by Federal or State govern- ments is estimated to be about the same as presented in the previous discussion under the section "Sources of Financing for These Capital Outlays," on page 200. In evaluating the portion of the investment needs to be borne by the Federal Government it must be recognized that many small com- munities, with their limited tax base and income potential, are not ~ible to take advantage of Federal grants, even on a 4-to-i basis. In midition, the annual expenditures for sanitation other than sewerage, PAGENO="0214" 206 STATE ~ LOCAL PUBLIC FACILITY NEEDS containing mostly direct operating expenses and excluding debt ser\lce payments, might be expected to double on a pei capita basis and almost triple on a total dollar expenditure basis as suggested by the extrapolations in exhibit I. It should also be noted that an increased capital investment of the magnitude proposed in the report would, in addition, add appro~ i- mately $6 to $8 billion to the total cost of refuse collection and disposal service over the next decade. This results from the fact that additional operating and maintenance expenditures must be incurred in connection with this added investment The increased cost would most likely be financed from service charges or general ta'~ re~ enues Furthermoi e, efforts by the Federal Government in research and regulation already begun in the field by the Office of Solid Wastes of the Public Health Service, promise to produce changes in disposal methods under conditions of accelerating technological progress The present unsatisfactory conditions existing in the solid wastes field can be improved through efforts made to develop public awai e- ness of the problems and their consequences Enthusiastic leadership is needed to encourage public suppoi t of financial programs designed to improve refuse collectiOn and disposal service. These efforts, coupled with the establishment and enforcement of acceptable stand- ards, the training of operating and management personnel, improved data collection, and increased research in the, solid wastes field, are needed, to provide safe, healthy, and pleasant. environments for, the' citizens of this Nation REFiImINCi~S American Public Works Association. National Conference on Solid Waste Re- search, sponsored by Environmental Sciences and Engineering Study Section of the U.S. Public Health Service in cooperation with * * `~ Chicago, 1964. American Public Works Association "Paper Bag~ for Household Refuse Han- dling"; a report on four field trials employing disposable paper containers. 1963 American Public Works Association. "Refuse Collection and Disposal for the Small. Community"; a joint study and report of APWA and U.S. Public Health Service, 1953 American Public Works Association. Refuse Collection Practice. 3d ed. Pub. Admin. Service, Chicago (scheduled for publication in the late summer of 1966). American Public. Works Association. Research Foundation. "Solid Wastes Re-~ search Needs," by Robert D. Bugher, prepared for Public Health Service, U.S. Department of Health Education and Welfare, Chicago, 1962 Broome County, N.Y., Planning Board. "Refuse Disposal in Broome County," prepared by * * * and the Broome County Health Department. Bingham- ton 1965 Connecticut. Capitol Region Planning Agency. Refuse study. East Hartford, 1963 Dade County, Pla., Board of County Commissioners. Engineering and economic report on solid waste collection and disposal for Metropolitan Dade County, by Greenleaf engineers and Briley, Wild & Associates. Greenleaf engineers, Miami, 1963. Detroit Metropolitan Area Regional Planning Commission. Refuse disposal plan for the Detroit region. Detroit, 1964. Greater Bridgeport (Conn.) Regional Planning Agency. "Refuse Disposal Prac- tices and Needs in the Greater Bridgeport Region, 1965-2000." Trumbull, Conn., 1965. Greeley & Hansen, Engineers. Newport News, Va., report on refuse disposal. Chicago, 1964. Los Angeles County. Department of county engineer. Report on the status of refuse disposal facilities in Los Angeles County. Los Angeles, 1965. PAGENO="0215" STATE AND LOCAL PUBLIC FACILITY NEEDS 207 Monroe County, N.Y., Planning Council. Solid wastes disposal report for Mon- roe County, N.Y., by Nussbaumer, Clarke & Veizy. Nussbaumer, Clarke & Velzy, Buffalo, 1965. Municipal Finance Officers Association of the United States and Canada. A sur- vey of the use and nonuse of service charges in the performance of refuse collec- tion and disposal functions in 380 local governrne:ats of the United States and Canada, by Lennox L. Moak. Chicago, 1962. Norfolk, Va., Director of Public Works. Report on refuse disposal, prepared by Greeley & Hansen. Greeley & Hansen, Chicago, 1966. Ohio, Tn-County Regional Planning Commission. Refuse disposal study.~ Akron, 1965. Orange County, Calif, Highway Department Ma ter plan of i efuse disposal a proposal. Santa Ana, 1959. Phoenix, Ariz., Public Works Department. Refuse disposal site study to serve the North Phoenix urban area. Phoenix, 1965. Sacramento County, Calif., Department of Public Works. Refuse disposal site survey. Sacramento, 1965. 2 parts. U.S. Bureau of the Census. Census of Governments, 1962. Government Print-- ing Office, Washington, D.C., 1962. PAGENO="0216" CHAPTER 8 Electric Power* The U.S. electric utility industry has grown from an infant born in the 1880's to a giant ranked the largest in the Nation today. It has expanded at a pace nearly twice that of the overall economy, doubling roughly every 10 years and increasing at an annual compound rate of about 7 percent. Electricity provides over 22 percent of the basic energy needs in the United States today and is expected to supply nearly 28 percent by 1975. Total electric plant investment of all electric utilities in the country, both privately and publicly owned, ~amounted to approximately $82 bfflion at the end of 1965. A. NATURE AND COMPOSITION OF ELECTRIC POWER FACILITIES 1. DESCRIPTION An electric power supply system is composed of many interde- pendent parts that serve three more-or-less distinct major functions- generation, transmission, and distribution. The significance of these functions on cost to the consumer, based on composite national sta- tistics for 1962, is shown in table 1. TABLE 1.-Total delivered cost of power, 196~3 [Composition in percent] Fixed charges Operating expenses Total cost Generation Transmission Distribution 28.2 7. 9 22.8 - 22.8 2. 0 16.3 41.1 51. 0 9.9 39. 1 Total 58.9 100.0 Generating plants fall into five principal types: steamplants (fossil fuel ~ and nuclear), conventional hydroelectric stations, pumped- storage projects, internal combustion units, and gas turbines. Steamplants generate electricity from the energy in fossil fuels or nuclear sources by heating water to steam and using the steam, under ~pressure, to drive turbines which convert the energy into electrical form. Hydroelectric plants develop the water power potential of our rivers by using the energy of falling water to drive turbines that turn the generators. Pumped-storage plants are a type of hydroelectric development, where low-cost energy produced for the most part at steam-electric *Prepared by Bureau of Power, Federal Power Commission, with minor editing by committee staff. Acknowledgment is made to Rural Electrification Admin- istration, and American Public Power Association for their assistance in providing information for use in the preparation of this chapter. 208 PAGENO="0217" STATE AND LOCAL PUBLIC FACILITY NEEDS 209 generating plants is used during off-peak periods to pump water from one pooi to another at a much higher elevation. The water is stored in the higher reservoir until the time of peak loads when it is released back to the lower pooi, to generate electricity at a time when its value to the system is at a maximum. Internal combustion and gas-turbine generators are generally small units that frequently provide power for small systems and are adapt- able for emergency and peaking power. Interest in their use for standby purposes has increased significantly during recent months, particularly since the Northeast blackout of November 9, 1965, but their combined capacity presently is only slightly more than 2 percent the total installation in the United States. The basic energy sources used for electric power generation in the United States over the past 35 years are summarized in table 2. TABLE 2.-Sources of electric utility generation-Percentages of total kilowatt-hours, 1930-65 1930 1940 1950 1960 1965 Coal Natural gas Oil Water power Nuclear Total 56 7 3 34 0 54 8 4 34 0 47 14 10 29 0 54 21 6 19 0 54 21 6 18 (1) 100 100 100 100 100 1 0.3 percent. The geographic distribution of generating capacity in the United States is shown in figure 1, which also shows the distribution between hydro and thermal capacity. Figure 2 shows how the efficiency of steam generating units has increased over the past 30 years because of improved technology and the use of larger units with higher tempera-~ tures and pressures. Transmission systems serve the basic function of carrying electricity from the generation area to the load area. The strategic importance of transmission, however, is much greater than is indicated by its 10 percent average share in the overall cost of electricity. Low-cost transmission permits the use of the most economical generation sources at mine-mouth plants or other remote-from-load areas. Ade- quate interconnections between systems provide the key to large- scale, low-cost generating units; to major savings in capacity due to load diversity; to the sharing of reserve generating capacity; and to the most efficient utilization of existing generating capacity. In short, a good transmission system has a significant influence on the cost of all phases of electric power service. Transmission voltages in the United States presently in use range from 22 kilovolts to 500 kilovolts, and even higher voltage lines have been built for experimental purposes and are being actively studied. These high voltages permit the movement of large amounts of power over relatively long distances without the high transmission losses associated with lower voltage lines. The capital cost of high-capacity lines is also being reduced as a result of recent technological improve- ments. Almost all transmission in the United States at present is by alternating current (a.c.), but one 750-kilovolt direct-current (d.c.) PAGENO="0218" :210 STATE AND LOCAL PUBLIC FACILITY NEEDS GENERATING CAPACITY (Industrial Capacity Exciuclocl) 50 1onuary~, ~964 t~ THERMAL ~ HYDROELECTRIC 41.0 38.9 ~ REGIONS 36.2 26.6 24.1 ~ I ii III IV V Vi Vii Viii FIGURE 1 NET HEAT RATES* 20 Net Heat Rate is sMeasure of Plant Thermal Efficiency. 18 As het Heat Rate Is Reduced, Thermal Łtficivcy Is k~ctaaaed. NATIONAL AVERAGE-ALL PLANTS 21.0 1~5 1930 1~4O FIGURE 2 1950 1960 PAGENO="0219" STATE AND LOCAL PUBLIC FACILITY NEEDS 211 line has been contracted for and d.c. transmission may become an important factor in point-to-point movement of power where numer- ous taps and interconnections are not required. Distribution is commonly considered to include all of the facilities needed to deliver power from the utility's primary transmission net- work to the door of the customer. The cost of distribution is much more dependent on load density than on the size of the system. Many small distribution systems are operated by municipalities and other public or private groups and the physical nature of distribution systems permits these small distribu- tors to operate their systems with a quality of service and at costs which are frequently comparable to those of larger power systems. At the end of 1965 the total installed electrical generating capacity in the United States was more than 254 million kilowatts. During the year, over 1.15 trillion kilowatt-hours of energy were generated, or the equivalent of about 6,000 kilowatt-hours for every man, woman, and child in the Nation, considering all household, commercial, industrial, and other uses. Household use amounted to nearly 5,000 kilowatt-hours per family in 1965. Electric utilities in the United States provide service that is among the most reliable to be found anywhere in the world. Many areas go for years without power service interruptions, and recurring outages in any one area are rare. A power system is a complicated mechanism, however, and short duration power failures are caused somewhere in the Nation almost daily by storms, human error, equipment failures, or other factors. Occasionally a local occurrence cascades into a major blackout, such as that experienced in the Northeast on Novem- ber 9, 1965. As technology improves, and as neighboring systems are more strongly intertied, the likelihood of extended outages de- creases. The Federal Power Commission recently established an Industry Advisory Committee on Reliability of Electric Bulk Power Supply, and the committee is making an exhaustive and coordinated study of problems of maintaining service reliability. In addition, almost every utility is constantly checking its own equipment and operating procedures to insure that optimum service is provided. 2. EXISTING ELECTRIC PLANT IN THE UNITED STATES Table 3 shows the total number of plants and the installed capacity of electric utilities in the United States as of December 31, 1965, with a breakdown by States and regions. The table also shows the dis- tribution between steam, hydro, and internal combustion installa- tions. The generation from these plants is carried to bulk distribution centers by a network of nearly 400,000 miles of high-voltage trans- mission lines that serve every part of the Nation. About 1 percent of the transmission system is underground. Practically all of the underground lines are located in congested urban areas. About 5 percent of the total generation in the United States comes from municipally owned plants. A distribution of the generating capacity of these plants by size of city is not readily available, but about half is owned by large municipalities with populations over 100,000. Many small cities own distribution facilities, and many of these own generating plants which, although small, account for nearly half of the national total for all municipally owned plants. PAGENO="0220" 212 STATE AND LOCAL PUBLIC FACILITY NEEDS CO 00 CO ~ CO ~4 0000 0 00 ,0 0 CO 00 e00000000000 cioot- ,oeoC-00-4 0000-0010100CO CO CO ~ - ~O C~ 00 00 C- 0000000~ C- CO CO Co C- 00 00000000 CO CO 000000 CO 000000 ~ C- 0000 00 CO C- 00 CO CO,~ 000 ~ 0000000000 0000 CO ~ C-CO CO -000 000000 -000 ,0 E 00 z CO 000 ~ CO 00~ 00 00 0000 CO C- 0000 ~0 00000-C 0-0000000000 000000 CO C- C- 0000' O C- 0-100 00 00 00 00 000000 0000000-1 ~ 0000 00 00 00 0000 C- 0000 C- CO CO ~ 00 CO O CO ,-000 000000 ~ CC-CO CO~00CO00CO 00 0 000000000000 0000 C- 000000 ~CO CO CO 00 CO 000000 CO0000~CO 00000000000000. 0000000 00 C- 000000 00CO0000 C- 0000 0000 C- 0000 000-10000 0000 000000 CO,00 C-CO C-~0COCOCO 000 0-10000 000-IC- ~ 000000 -00-1 00000000000000000000 00 0-00-1-0 00 C-c0C-C-00000 0000 `0-COt-C-CO ,~0COC-CO00C0OC 00 00 00 0000 ~ 0000 00 ~ 00,-~-0 0000 ,-~ COW,-rCO~, 0 z 0) 0- 0):, 00 0) 00 00 0) 00 0) 00 00 0) COo' 00 0~ 00 0) 0) 00 00 00 0) 0) 00 00 00 0000 C- 000000005 CO'-oCO 0000000000 000000000000 00000000'-OCO CO C-cO 000-4000000 000000000 5 -0 00-00-100 00 ~ 00 000000 C-CO 0000005000000 0000-000 00 CO 00 0000 00-000000000 CO . " -4 ~0~~COCO COCO00~ ~oC-CO~0C~ 00000000000000 ~oo~ CO , . E~ ~ . ~ ~4 CO C- , ~ CO COCOO0COC-COCOCO~ CO0000000000C000000 C~04 00000000 5~~555~ ~ `CO 00000000000000 000000000000 CO~CO 000CC-C-cO 0000-0-100C-00 ,-o~00CO,-o,-o 00000 0000000000 00000C-00C-00 0000 C-' -C-CO -4 CO CO CO CO~0 01 40 `5~~ ~2 -0~' CO~ 0~00C~ ~jc~~-o~ COo1-0~ ,-,-400 ` 00 00 00 * 0 Co ~ ~ CO -0 CO C~ 000000000000000-IC-COO 00C-COC-CO-o,-oo0000 000000 C- 00-4000000 . ` . 000000000000 0000C0 C-C000CO00 COC0~CC©C0CO' 000000000000 0-0040 0-0400-0000 000000004000000 ` 00 0000 00~I . CO-c z00 C-CO CO 00 000000 000000000000 000000 0000000000 C-CO 0000000000 -0 -CI CO 0-1 COOl 0 0004 C- 0000-00000000' 0 00 00 cO 00 00 00 0 PAGENO="0221" South Atlantic: Delaware 4 12 602,290 9 591,050 3 11,240 Maryland - 11 20 3,675,893 2 493,680 14 3,161,040 4 21,173 District of Columbia 2 3 536, 750 1 3,000 2 533, 750 V]rgmla 20 49 5 121 280 26 638 636 14 4 451 111 9 31 533 West Virginia 10 19 3,608,450 9 100,960 10 3,507,490 North Carolina 26 77 6,345,325 51 1,726,558 18 4,606,810 8 11,957 South.Carolina 10 45 2,696,019 25 936,135 17 1,758,370 3 1,514 Georgia 6 39 4,157,585 26 1,056,260 12 3,099,325 1 2,000 Florida _ 28 69 8,245,665 3 38,968 44 8,057,470 22 149,227 ~ East South Central: Kentucky 9 23 6, 092, 183 5 540, 614 16 5, 543, 542 2 8,027 ~ Tennessee 5 34 8,462, 148 26 1,993,200 6 6, 468,650 2 298 -3 Alabama 5 28 8,319,906 16 1, 955, 545 10 6,362,385 2 1, 976 ~"i Mississippi 16 26 1,230,233 14 1,219, 560 12 10,673 West South Central: Arkansas 14 29 2, 015, 176 11 869,340 8 1, 101, 050 10 44, 786 ~ Louisiana 31 59 4,259,498 - 26 4, 071, 899. 33 187,599 ~ Oklahoma 36 65 3, 094,427 5 355, 400 23 2,603, 715 37 135, 312 Texas . 63 165 15, 721,234 22 439,610 79 15, 053, 415 64 228,209 ~ Mountain: Montana 8 26 1,396, 480 20 1,261, 830 5 133,650 1 1, 000 0 Idaho 10 43 1,255, 320 38 1,250, 930 5 4,390 ~ Wyoming 16 45 899, 750 16 212, 540 9 663, 750 20 23,460 ~ Colorado 32 78 1,986, 791 28 265,257 25 1,642,200 25 79, 334 New Mexico 16 30 1, 791, 798 . 2 24, 630 16 1, 719, 129 12 48, 039 Arizona 10 37 3,575,224 13 1,665,040 13 1,869,483 11 50,701 Utah 24 80 801,069 57 209, 425 9 545, 772 14 45,872 Nevada 7 23 1,288,090 8 681,920 5 543,516 10 62,654 ~ Pacific contiguous States: . . 0 Washington 20 61 9,330,105 50 9,090,301 7 236,640 4 3,164 Oregon 12 67 3,188,747 53 2,992,092 10 191,635 4 5,020 ~`~i California 22 199 20,109,159 152 5,190,960 41 14,863,329 6 54,870 ~` Pacific noncontiguous States: Alaska 24 43 221,587 14 82,325 7 89,110 22 50,152 ~ IIawaii 5 15 695, 067 2 3, 350 9 677,225 4 14, 492 1 Total incudes 110 duplications because of utilities having generating plants in more 3 Includes 926,100 kilowatts of nuclear-fueled steam capacity, and 1,359,081 kilowatts than 1 State. of gas turbine capacity. 2 Each type of prime mover at combination plants is counted as a separate plant. (12 I, PAGENO="0222" 214 STATE AND LOCAL PUBLIC FACILITY NEEDS A precise summary of electric power facilities by age is not available,. but inasmuch as the capacity, nationwide, doubles approximately every decade, it can be presumed that about half of the total current installation (capacity wise) is less than 10 years old, about one-fourth is 10 to 20 years old, and about one-fourth is more than 20 years old.. These percentages apply to capacity, but not to the number of in~ stallations. A single plant of the type being constructed today may have more capacity than the combined installation at 100 plants built 30 or 40 years ago. Thus a high percentage of the number of plants in operation today are more than 20 years oId~ There are a few plants still in operation that were constructed shortly after the turn of the century. Table 4 shows the distribution of generation in the United States. by type of ownership for 1964 and 1965. TABLE 4.-Electric utility net generation, United States, 1964-65 [Millions of kilowatt-hours] 1964 1965 Total 983 990 1 054 790 Privately owned Publicly and cooperatively owned Municipal - 756, 183 227,807 809, 535 245, 255~ 49, 600 129,936 48,271 49, 8l~ 145,225~ 50, 217 Federal - Co-ops, power districts, State projects B COSTS AND USER CHARGES 1. CONSTRUCTION COST AND OPERATING COST Construction costs for electric power facilities vary ~widely depend- ing upon type of motive force, location, size, and a myriad of other factors. Average cOsts are therefore reasonably reliable only when they are applied to a large group of facilities within a relatively large' geographical area. On a national basis, and considering all types and sizes of plants currently being constructed, steam generating- plant construction costs average about $130 per kilowatt at today's prices. Hydro plants cost an average of about $250 per kilowatt,. and internal combustion plants about $100 per kilowatt. When these costs are weighted for the various types of plant, the national average' cost for current installations is in the neighborhood of $150 per' kilowatt. Transmission and distribution costs, combined, cost some- what more per kilowatt, on the average, than generation costs, so the' total cost of constructing facilities to deliver power to the consumer, including miscellaneous costs, approximately $400 per kilowatt of' required capacity. The current average cost of electrical energy to all consumers (residential, commercial, and industrial) is about. 1.6 cents per kilowatt-hour. About 41 percent of the total cost of delivered energy is attributable to operation and maintenance costs, including fuel. This percentage' has been gradually decreasing, and may possibly faIl to about 38~ percent by 1975. PAGENO="0223" STATE AND LOCAL PUBLIC FACILITY NEEDS 215 2. USER CHARGES Customer charges for electric service generally involve two corn- ponents-a demand charge and an energy charge. The demand charge relates to the kilowatts of capacity that the utility agrees to make available to the customer upon demand, or within the limits of some specified demand schedule. The energy charge is related to the kilowatt-hours of energy that the customer uses. Residential bills generally do not include a demand charge, per se, but many utilities have a minimum charge for maintaining a service connection. Electric utilities provide what is essentially a monopolistic service. The pattern of assigned service areas and controlled rates has evolved as a matter of mutual interest of utilities and legislative bodies in assuring optimum service to all customers at minimum practicable prices. The statutes of 46 States provide for public service corn- missions with varying degrees of statewide jurisdiction over investor-. owned electric utilities. These commissions typically regulate rates for retail sales; standards of service, issuance of securities, and ac-. counting. Local regulation-directly and by franchise-is a factor in Minnesota, South Dakota, and Texas, where statewide regulations. do not exist. In Nebraska, all electric utilities are publicly owned. The interstate wholesale rates and services of investor-owned u tihties are subject to the jurisdiction of the Federal Power Com-~ mission. The Commission's jurisdiction also extends to accounting, some compulsory interconnections, utility mergers, control of inter- locking directorates, and, in some instances, issuance of securities~ by or of public utilities engaged in interstate commerce of electric energy. Rates for all types of electric service by investor-owned utilities are based on the premise that revenues will: (1) permit recovery of capital investment during the useful life of the facilities, (2) cover annual operation, maintenance, and other costs, and (3) permit a. reasonable return on the investor's capital. While electric rates are geared to the cost of doing business, rate regulation has not limited the incentive of utilities to increase their profits by providing increased. service at the lowest possible cost. Experience has demonstrated that. the electric power industry has been able to keep down cost to con- sumers even when the prices of almost all other basic services were. increasing. According to the BLS Consumer Price Index (based on 1957-59 prices equals 100) the index of electricity prices was 102 in the first quarter of 1966 compared with 102.1 a year earlier; during the same. period the Consumer Price Index for all commodities and services. increased from 108.9 to 111.5. Since 1945 the price index for dec.- tricity has risen about 6 percent while prices of all commodities have. increased, about 85 percent. C. TREND IN CAPITAL OUTLAYS Table 5 summarizes capital expenditures of the industry for the period 1948 to 1966. The data, which were taken from Electrical World surveys, vary in coverage from roughly 84 to 92 percent of the~ entire industry. PAGENO="0224" 216 STATE AND LOCAL PUBLIC FACILITY NEEDS TABLE 5.-Electric utility industry capital expenditures, contiguous United States' [In millions of dollars] Generation Transmission Distribution . Miscellaneous Total (partial coverage) 1 Total (full coverage) 1948 1, 103 400 1, 075 84 2 662 3 000 1949 1,410 400 1, 190 93 3, 093 3, 500 1950 1,275 425 1, 127 109 2, 936 3, 300 1951 1,344 504 1,089 131 3,068 3 500 1952 1,925 577 1,118 118 3,738 4,300 1953 2, 088 647 1, 200 127 4, 062 4, 700 1954 1,939 666 1,288 122 4,015 4,700 1955 1, 548 571 1,343 161 3. 623 4,300 1956 1,479 598 1, 518 186 3,781 4, 400 1957 2, 234 747 1, 566 199 4, 746 5, 500 1958 2, 582 764 1,373 187 4,906 5,600 1959 2,369 708 1,413 180 4, 669 5,300 1960 2, 226 715 1, 565 183 4, 690 5,300 1961 2,114 764 1,550 180 4,608 5,200 1962 1 693 792 1 593 193 4 271 4 700 1963 1,721 837 1, 568 230 4,357 4,800 1964 1,814 1, 047 1, 688 252 4,801 5, 200 1965 1,941 1,181 1,861 269 5,254 5,700 1966 2 2,599 1, 518 2, 019 316 6,452 7, 000 1 Figures may not add due to rounding. 2 Prospective. Source: First 5 columns are from Electrical World Surveys (courtesy of Electrical World) and represent partial coverage. Last column represents FPC estimates of full coverage based on the Electrical World figures. About three-fourths of all electric power facilities in the United States are controlled by investor-owned private utilities. The other one-fourth is about evenly divided between Federal developments and the combination of non-Federal public facilities and cooperatives. Table 6 shows the distribution of ownership for 1944 and 1964. TABLE 6.-Ownership of electric generating facilities Percent of total capacity 1944 1964 Investor-owned utilities Cooperatives - Public - Municipal . State . Federal . 81 76 1 1 23 (7) (4) (13) 19 (7) (2) (10) Total . 100 100 1 The detail does not add to the total due to rounding. 1. INVESTOR-OWNED SYSTEMS The 480 investor-owned systems in the United States today reflect the merger and consolidation of some 4,000 separate investor-owned systems and some 1,000 additional municipal systems which were once in existence. Approximately 320 of these 480 companies are verti- cally integrated systems, generating most of the pOwer they distribute. These systems account for 70 percent of the total electricity generated by the entire industry, public and private Most of the other 160 investor-owned systems are primarily engaged in distribution Until 1961, investor-owned utilities obtained the major portion of their funds for construction from new security issues. Since the PAGENO="0225" STATE AND LOCAL PUBLIC FACILITY NEEDS 217 early 1950's, however, internally generated funds-retained earnings, depreciation and amortization reserves, and deferred taxes-have supplied an increasing share and in 1962 nearly 60 percent of the in- vestor-owned segment's construction funds were internally generated. Amortization and depreciation, which supplied 40 percent of construc- tion funds in 1962, has replaced new debt issues as the most important single source of funds. Table 7 shows the shifts which have taken place in the maj or sources of construction funds since 1950. TABLE 7.-Sources of construction funds, investor-owned electric utilities, 1950-62 Source 1950 1954 1958 1962 Security issues: Common stock Preferred stock Debt Totalsecurities Internal funds: Retained earnings Deferred taxes Depreciation and amortization Totalinternalfunds Total Total construction funds Percent 24.6 9. 5 33.0 Percent 17.5 6. 7 41.6 Percent 14.5 6.6 38.2 Percent 13.8 4.4 22.7 67.1 65.8 59.3 40.9 7.8 25. 1 6. 2 4.5 23. 5 8. 6 5.9 26. 2 14. 0 3.9 41. 2 32.9 24.2 40.7 59.1 100. 0 100. 0 100. 0 100. 0 Millions $1, 920 Millions $2, 950 Millions $3, 794 Millions $3, 360 The overall capital structure of investor-owned systems consists of approximately 53 percent debt, 10 percent preferred stock, and 37 percent common stock and retained earnings. Table 8, which traces the composite of the capital structure of the investor-owned segment for selected years from 1964 to 1962, indicates that there has been little change in the capital structure since the mid-1950's. Approximately 11 percent of the revenues of investor-owned electric utilities in 1962 were paid in Federal income taxes on the earnings of equity capital. Revenues must also cover State and local taxes, which together approximate the magnitude of Federal income taxes. The aggregate of all taxes paid by the investor-owned sector in 1962, exclusive of provisions for deferred income taxes, was about 22 percent of total revenues. TABLE 8.-Composite capital structaere investor-owned electric utilities, 1946-62 [In percent] Year Common stock Earned surplus Preferred stock Debt 1946 1950 1954 1958 1962.. 32.1 29.8 28.7 26. 7 26.8 6.3 7. 1 7.7 8. 5 10. 2 15.2 13.6 12.4 11.3 10.2 46.4 49. 5 51.2 53. 5 52. 8 70-132-GO-vol. 1-15 PAGENO="0226" 218 STATE AND LOCAL PUBLIC FACILITY NEEDS 2. FEDERAL SYSTEMS Federal power agencies are important contributors to the Nation's electric power supply. Federal power is produced at approximately 125 hydroelectric projects which are part of Federal multipurpose water resource developments, and at steam plants of the Tennessee Valley Authority (TVA). Nearly all Federal power is marketed by TVA and four Department of the Interior agencies-Bureau of Reclamation, Bonneville Power Administration, Southwestern Power Administration, and South- eastern Power Administration. As of January 1, 1964, the Interior Department was the marketing agency for the power developed at 95 projects having an installed capacity of 13,900 megawatts. With the exception of TVA, capital funds for Federal systems are supplied entirely by congressional appropriations. Since 1959, TVA has been empowered to obtain funds in the private capital markets by the issuance of revenue bonds. The Government's investment in TVA is junior to the revenue bonds sold to the public. Since the 1959 self-financing act, TVA has been required to pay the U.S. Treasury a "return" or "dividend" on the Government's investment equivalent to the average rate of interest paid by the Treasury on its outstanding marketable debt. TVA is also required to repay $1 billion of the appropriated investment of $1.2 billion within the next half century. Federal systems are not subject to Federal and State income taxes or to local property taxes. TVA, however, makes substantial pay- ments in lieu of taxes to State and county governmental units. There is not complete uniformity in the repayment requirements for Federal projects or in earnings standards for power sold from these projects. Normally, payments are required for the equivalent of an interest assessment and for amortization of the project investment allocated to power. Interest on new projects is currently computed at 3~ percent per annum, the average of the interest rate on all outstand- ing long-term securities of the United States. This figure has gradually risen as the interest rate paid by the Government on new issues- now over 4 percent-has increased. 3. STATE AND LOCAL PUBLIC AGENCIES Local public ownership began early in the industry's development, when numerous municipal systems were organized to provide elec- tricity to previously unserved areas. There were more than 700 public systems in 1900 and over 3,000 by the early 1920's, compared with approximately 2,100 today. Many types of public agencies own electric generation, transmission, or distribution facilities, or combinations thereof. They vary greatly in size, ranging from small towns to the city of Los Angeles. Although it is not a common occurence, a few counties, such as Crisp County, Ga., and three counties in the TVA area, maintain their own systems. However, the most common forms of public power entities, other than municipal systems, are special utility districts (exemplified by the numerous public utility districts of Nebraska, Oregon, and Washing- ton), municipal utility districts (such as the Sacramento Municipal Utility District in California), irrigation districts (some of which, such as the Imperial Irrigation District in California, also maintain electric PAGENO="0227" STATE AND LOCAL PIJBLIC FACILITY NEEDS 219 utility systems) and the various kinds of State "authorities" (such as the Grand River Dam Authority in Oklahoma, the Colorado River Commission of Nevada, the Power Authority of the State of New York, and the Arizona Power Authority). The statutory and constitutional framework within which these public entities were created has tended to maintain their separate identities, and there is great diversity in the nature of their operations. Many municipalities and other local public agencies generate their own power requirements in varying degree, while others purchase power from Federal, investor-owned, cooperative, or other local public systems, and sometimes from a combination of such suppliers. A few are largely confined to the generating and transmission functions. An example is the Power Authority of the State of New York, which sells at wholesale the power it generates at its two big hydroelectric projects at Niagara Falls and the St. Lawrence Seaway. The great bulk of the local public agency systems are municipally owned and serve only the areas of the municipalities themselves. In a relatively few instances (e.g., Cleveland, Ohio), a municipal system and an investor-owned system serve within the same municipality. However, territorial competition between municipal systems and others is usually confined to the expansion of municipal boundaries, which may bring competition to fringe areas previously served by cooperatives or investor-owned systems. The local public agency systems generally obtain their capital investment ftmds from power revenues and by selling debt securities in the public market. In the past, such securities were often general credit; obligations of the municipality, county or State. More recently, however, the emphasis has been on revenue bonds issued by the utility system itself, payable from revenues alone and not backed by the general credit of the local government or by a lien on physical properties. Local public agencies are traditionally exempt from Federal income tax and generally not subject to State income tax. In most juris- dictions, they are also not subject to real property or other local taxes. However, by statute or ordinance in some jurisdictions and by agree- ment or practice in others, most local public agencies make substantial payments in lieu of taxes to their own local governments and often make large additional contributions to such governments. Many of them also make payments in lieu of tax payments to State and county governments. In addition, many municipal systems provide power free or at reduced rates to the city government for street lighting, water pumping, and other municipal uses. Interest on the debt securities of such. local agencies is exempt from Federal income tax and, in most jurisdictions, from State income tax, so that their debt securities command more favorable terms than debt securities issued by comparable investor-owned electric utility systems. 4. RuRAL ELECTRIC COOPERATIVE SYSTEMS The electric cooperative became a significant part of the electric industry beginning in the middle 1930's. Prior to that time, the investor-owned segment of the industry has extended electric service to only about 10 percent of the farms of the country. The Rural Electrification Act of 1936 was designed to stimulate farm electrification through low cost loans by the Rural Electrification PAGENO="0228" 220 STATE AND LOCAL PUBLIC FACILITY NEEDS Administration of the U.S. Department of Agriculture, originally established in 1935 by Executive order of President Roosevelt. The REA program has been extremely successful. Today, as a result of the REA program and the expansion of the investor-owned com- panies' rural electrification programs, 98 percent of the Nation's farms are electrified. There are now almost 1,000 cooperatives participating in the REA program, serving 50 percent of the consumers in the Nation's rural areas. Although REA may make loans to investor- owned and public systems, it appears that the cooperatives have come to be the preferred vehicle for the extension of rural electrification with Federal funds. The vast majority of cooperatives are merely distributors and pur- chase all of their power at wholesale from the Federal power marketing agencies or investor-owned utilities. However, some groups of dis- tribution cooperatives have formed generating and transmission coop- eratives to generate a part or all of their electric power requirements. These "G and T" type cooperatives now supply about 15 percent of the requirements of the cooperative segment. They are also financed largely by REA. The Rural Electrification Administration initially limited its loans to cooperatives to serve communities of not more than 1,500 persons which were without central station service. With the population shifts of the last three decades, some cooperatives now serve sizable communities. However, the cooperative systems typically serve areas of low customer density which, of course, increases the cost of distribution. Cooperatives average about 3 customers per mile of line compared with 20 customers per mile for the industry as a whole. Except in a few States, the cooperative systems are not granted exclusive franchises for their service areas, and there is much compe- tition between them and other systems for service to new loads. The annexation by municipalities of suburban areas initially served by cooperatives is a major cause of territorial competition. In some areas competition has led to the construction of duplicate facilities. In other areas, there are formal or informal arrangements which permit both systems to minimize the cost of service to their respective cus- tomers. Only a small portion of the capital requirements of cooperative systems is obtained from their membership. The remainder is pro- vided largely by long-term mortgage loans from the Rural Electrifica- tion Administration. Interest on such loans is authorized by law at 2 percent per annum. Rates for service of cooperative systems are designed to cover costs and amortization requirements of REA loans and to provide for con- tingencies. Payments by consumers in excess of the cost of supplying electric energy are deemed to be capital. This capital is commonly credited to each consumer on a patronage basis and is retired on a revolving basis when the financial condition of the cooperative permits. Most cooperative systems do not return all such capital, at least until a desired reserve level has been accumulated. Under present law the courts have held the cooperatives not to be liable for Federal and State income taxes. Most cooperatives do, however, pay State and local taxes other than income taxes. PAGENO="0229" STATE AND LOCAL PUBLIC FACILITY NEEDS 221 Capital outlays by type of ownership Table 9 shows the pattern of estimated electric utility construction expenditures for selected years. TABLE 9-Estimated electric utility construction expenditures [Billions of dollars] Year Private Federal Municipal States, cooperatives and other Total 1955 1960 1965 3.0 3.4 4.1 0.4 .4 .5 0.5 .8 .5 0.4 .7 6 4.3 5.3 5.7 Source: Estimated by FPC. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS It is reported that electric utilities expect to invest over $6 billion in new facilities during 1966. This rate of expenditure is nearly double the annual rate that prevailed 10 years ago, and this accelerating trend will have to continue if the production goals anticipated for 1975 are to be met. Projections of the magnitude of future industry growth are difficult, because of the potentials that exist for improved efficiencies in delivering power to the consumer and the possibilities for new uses of electric energy. The estimates are based on a contin- ued improvement in technology as indicated by recent trends, and on population growth, obsolescence, and other factors that are consistent with current general practice. The figures are based on the assump- tion that new power facilities will be designed and built to provide optimum aesthetic values, considering costs and other limiting factors. They do not anticipate extensive replacement for aesthetic reasons of facilities that have remaining useful life. On the basis of the general criteria discussed above, it is estimated that the country's electric utilities will need approximately 315 million kilowatts of generating capacity by 1970 and 415 million kilowatts by 1975. Allowing for retirements of generating capacity in the future because of age or obsolescence, total capacity additions during the years 1966 through 1970 will have to be about 85 million kilowatts, and additions for 1971 through 1975 will need to be about 110 million kilowatts. Yearly capacity additions will range from nearly 15 million kilowatts in 1966 to 20 million in 1970 and 25 million in 1975. Utilizing the preceding forecasts of capacity additions, total con- struction expenditures in the 10-year period would probably be in the neighborhood of $75 billion without any allowance for inflation. Assuming a continuation of the ownership patterns shown in table 6, but with some adjustments to reflect the type of facilities owned by each segment of the industry, total electric utility construction PAGENO="0230" 222 STATE AND LOCAL PUBLIC FACILITY NEEDS expenditures in the years 1966, 1970, and 1975 distributed by type of ownership may be estimated as follows: TABLE 10.-Projected electric utility financing requirements [Billions of dollars] Year Private Federal Municipal States, co- operatives and other Total 1966 1970 1971 5.0 5.5 (i3 0.7 .8 .9 0.7 .9 1.1 0.6 .6 .7 7.0 7.8 9.0 For the publicly owned segment the principal sources of capital funds are revenue bonds, retained earnings, and borrowing from nation- al, State, and municipal treasuries. Cooperatives have traditionally borrowed from the Federal Treasury, but there are indications that they will enter the private money market to obtain some of the capital that will be needed during the next decade. The investor-owned utilities draw on their internal sources as well as on borrowing from insurance companies, pension plans, savings banks, and private investors. The industry as a whole has had no difficulty in raising the capital it has needed for its continuing expansion. There seems no reason to doubt that the industry will be able to obtain sufficient funds to fi- nance the construction program required during the next decade. PAGENO="0231" CHAPTER 9 Gas Distribution Systems* INTRODUCTION In 1966 the gas distribution industry celebrates its 150th year of service; the first gas distribution system was established in Baltimore in 1816, just 2 years after the famous defense of Fort Mdllenry and the writing of the Star-Spangled Banner. The distribution sector of the gas industry in the United States today includes 773 municipal and 728 investor-owned systems. There are no State-owned or co- operative gas distribution systems, while the only Federal systems are limited to serving military installations. (The latter are outside the scope of this study.) Although municipal systems are more numerous than investor-owned systems, they account for only between 5 and 10 percent of the gas distribution business in terms of gas distribution plant, number of customers served, or volume of gas sold.' AbouL 80 percent of the Nation's population live in areas served by gas distributors. Gas use has grown rapidly during the past 20 years as a result of service being extended to more and more communities, population growth, and increased use per customer The demand for gas is expected to continue increasing in the years ahead. To meet the demand, substantial additional investment will be required in distribution systems as well as in natural gas transmission pipelines and gas production. A. NATURE AND Co~IPosITIoN OF FACILITIES 1. DESCRIPTION OF FACILITIES The gas industry in the United States is comprised of three branches-producers, pipeline companies, and distribution com- panies. Ninety-eight percent of the industry's customers are supplied with natural gas 2 most of which is produced in the Southwest. The remaining 2 percent of the customers receive manufactured gas pro- duced by distribution companies or some mixtures of manufactured and natural gas or LP gas. By contrast, in 1938 the industry supplied only 40 percent of its customers with natural gas. In addition to supplying gas to pipelines and distributors, the pro- ducers of natural gas use some of their own gas and sell some directly to consumers (mostly for industrial purposes). About one-quarter of *Prepared by Office of Economics, Federal Power Commission, with minor editing by committee staff. Acknowledgment is made to Advisory Committee on Intergovernmental Relations, Community Facilities Administration, American Gas Association, and Council of State Governments for their assistance in pro- viding information for use in the preparation of this chapter. 1 Based upon data in Gas Facts (New York: American Gas Association, 1965); letter from I. S. Schwimmer ssistant director, Bureau of Statistics, American Gas Association, Mar. 29, 1966, and other AGA records. 2 See: R. 3. Rutherford, "Gas Industry Scores Again on All Points," American Gas Asssciation Monthly, (issue of January 1966), pp. 2-5. At the end of 1965 gas utilities served 38,071,600 customers; 37,310,300 of these customers were served with natural gas. 223 PAGENO="0232" 224 STATE AND LOCAL PUBLIC FACILITY NEEDS the natural gas consumed in this country is delivered directly to ulti- mate consumers and is not handled by pipelines or distributors.3 Natural gas pipelines carry gas from producing areas to major industrial and population centers in all parts of the country. The rnaj or portion of the gas carried by pipelines is destined for delivery to distribution systems, but pipelines also make sales directly to con- sumers. About 53~ percent of the gas customers (exclusive of those supplied by producers as noted above) receive gas directly from pipe- line companies; these sales account for about 20 percent of the gas utility and pipeline sales.4 The distribution systems provide most of the deliveries to ultimate consumers after having received supplies at the city gate.5 For statistical purposes, the American Gas Association makes the following classification of companies: A company classified as a gas distribution utility is one which obtains the major portion of its gas operating revenues from the operation of a retail gas distribution system and which operates no transmission system other than incidental connec- tions within its own system or to the system of another company. For purposes of A. G.A. statistics, a distribution company obtains at least 95 percent of its gas operating revenues from sales to ultimate customers (residential, commercial, industrial, etc.) and classifies at least 95 percent of gas mains (other than service pipe) as distribution. A company classified as an integrated gas utility is one which obtains a signifi- cant portion of its gas operating revenues from the operations of both a retail gas distribution system and gas transmission system. For purposes of A. G.A. statistics, an integrated company obtains less than 95 percent but more than 5 percent of its gas operating revenues from either its retail or transmission opera- tions or does not meet the classification of mains established for distribution companies.6 Statistics on the gas distribution industry as used in this chapter include data on distribution companies and integrated companies as defined above; where distribution and integrated company data are not available, statistics including data on natural gas pipelines are used to illustrate trends. In terms of capital plant the natural gas pipeline companies account for about 40 percent of the gas utility and pipeline company plant; as shown in table 1, this percent has been fairly constant since 1957. TABLE 1.-Natural gas pipeline company utility plant as a percent of gas utility and pipeline company plant Year Percent Year Percent 1954 1955 1956 1957 1958 1959 35.9 3~.7 3S3 39.9 40.2 40.8 1960 1961 196~ 1963 1964 41.6 40.7 41.4 40.2 40.6 Source: Based on data in Gas Facts (New York: American Gas Associates, 1965). The Bureau of Mines shows 1964 natural gas consumption at 15.5 trillion cubic feet. American Gas Association inSicates that sales by pipelines and gas utilities plus use of gas by combination gas and electric utilities for electric generation amounts to about 11.3 trillion cubic feet of 1,032 B.t.u. gas. See: U.S. Bu- reau of Mines Minerals Yearbook: 1964 (Washington: U.S. Government Printing Office, 1965) and Gas Facts, op. cit. 4 Based on data in Gas Facts, op. cit. and Schwimmer, op. cit. 5 For further detail see: Alfred M. Leeston, John A. Crichton, and John C. Jacobs, The Dynamic Natural Gas Industry (Norman, Okla.: University of Oklahoma Press, 1963) pp. 171-183, and Natural Gas: A Study in Indssstry Pioneering (New York: American Gas Association, 1962.) 6 Schwimmer, op. cit. PAGENO="0233" STATE AND LOCAL PUBLIC FACILITY NEEDS 225 Service to customers of gas distribution systems is classified as residential, commercial, industrial or other. Table 2 shows by class of customer the number of customers, therms sold and revenues received for 1964 and 1965. TABLE 2.-Number of customers, therms sold, and revenues received by class of service (all utility and pipeline companies), 1964 and 1965 1965 1964 Percent change Customers (annual average): Residential Commercial Industrial Other Total Sales (thousands of therms): Residential Commercial Industrial Other Total Revenues (in thousands of dollars): Residential Commercial Industrial Other Total 34,345,500 2,806,400 168,200 41,200 33,551,200 2,712,200 159,400 40,500 +2.4 +3.5 +5.5 37,361,300 36,463,300 +2.5 40,400,500 13,839,600 61,236,600 5,368,800 38,696,900 12,734,900 59,120,300 5,360,300 +4.4 +8.7 +3.6 120,845,500 115,912,400 +4.3 4,043,705 1,080,202 2,108,849 183,986 3,894,870 998,386 2,048,527 190,902 +3.8 +8.2 +2.9 7,416,742 7,132,685 +4.0 Source: Rutherford, op. cit. Residential service applies to customers supplied with gas by indi- vidual meter in a single-family dwelling or in an individuals apartment or to not over four households served by a single meter in a multi- family building. Residential customers use gas for space heating, cooking, water heating, clothes drying, incinerators, and more recently, air conditioning. Commercial service includes service to customers primarily engaged in wholesale or retail trade, agriculture, forestry, fisheries, transportation, communication, sanitary services, finance, insurance, real estate, personal services, service to multifamily build- ings, et cetera. Industrial service covers sales to customers engaged primarily in a process which changes raw or unfinished materials into another form or product. Other services include sales to governmental agencies for illumination of public places and sales to public au- thorities under special agreements.8 A measure of the service rendered to consumers is indicated by the use of gas per customer of distribution and integrated companies as shown in table 3. Most of the gas used by residential customers is for space heat; ~ this results in a winter seasonal peak for the gas industry unless some other summer use can be found for gas. Use of storage facilities near markets and interruptible sales to large industrial customers help 7 A therm is 100,000 British thermal units; a British thermal unit is the amount of heat required to raise the temperature of 1 pound of water 1 degree Fahrenheit. The average natural gas sold by utilities has a heating value of about 1,030 to 1,035 B.t.u. per cubic foot. Manufactured gas has about half of the heating value of natural gas. 8 Gas Facts (New York: American Gas Association, Inc., 1965) pp. 240-241. 5 Projected Gas Utility and Pipeline Industry Statistics: 1965-75 (New York: American Gas Association August 1965) shows residential heating for 1964 accounted for 25,640,000,000 therms and other residential uses accounted for 13,057,000,000 therms. PAGENO="0234" 226 STATE AND LOCAL PUBLIC FACILITY NEEDS United States New England Connecticut Maine Massachusetts New Hampshire Rhode Island Vermont Middle Atlantic New Jersey New York Pennsylvania East North Central Illinois Indiana Michigan Ohio Wisconsin West North Central Iowa Kansas Minnesota Missouri Nebraska North Dakota South Dakota South Atlantic Delawarc District of Columbia Florida Georgia Maryland North Carolina South Carolina Virginia West Virginia East South Central Alabama Kentucky Mississippi Tennessee West South Central Arkansas Louisiana Oklahoma Texas Mountain Arizona Colorado Idaho Montana Nevada New Mexico Utah Wyoming Pacific Alaska California Hawaii Oregon Washington TABLE 3.- Use per customer of natural gas from distribution and integrated companies by State and class of service, 1964 [Therms per customer-Annual] Residential Commercial Industrial Other All classes 1, 156. 5 4,733. 6 261, 588.3 121,442. 2 2,691.5 662. 3 2,470. 2 36, 228.3 32,375.0 1, 002. 8 691. 1 658. 2 752. 3 615. 7 2, 460. 7 2,418. 5 2, 545. 5 2, 878. 4 57, 611. 1 32, 321. 4 17, 500. 0 28, 187. 5 (1) 26, 857. 1 3, 000. 0 (1) 1, 174. 7 952. 1 963. 5 1, 027. 2 847. 2 2,931. 3 131,320. 0 16,400. 0 1, 509. 1 721. 0 662. 0 1,262. 6 1, 967. 4 2,326. 0 5,357. 8 85, 500. 0 47, 923. 1 315, 935.8 (1) 13,986. 3 21, 500. 0 1, 146. 5 983. 7 2, 711.5 1,552.3 6, 077. 0 273,457. 6 39,205. 5 3, 030.3 1,321. 5 1, 373. 0 1, 661. 3 1, 884. 9 1,170. 3 5,901. 7 4,394. 8 5, 878. 1 7,357. 2 - 4, 782. 8 164, 211. 7 621, 925. 9 202, 179. 4 563, 600. 0 184, 263. 2 53, 000. 0 26, 750. 0 (I) 22, 060. 6 (l) 2,476. 9 3, 975. 8 2, 926. 0 3, 511. 9 2, 661. 5 1, 523. 7 6,398. 7 264, 168. 5 413, 000. 0 3, 659. 6 1, 536. 0 1, 564. 8 1, 535. 0 1,480. 9 1, 553. 9 1,461. 9 1, 470. 3 6, 635. 5 5,500. 0 7, 284. 2 6,217. 3 5,701. 7 9, 615. 4 8,493. 8 502, 875. 0 360, 281. 2 272, 825. 0 231,325. 0 145, 653. 8 245, 000. 0 349, 000. 0 1, 016, 000. 0 (l) 298, 000. 0 231, 000. 0 303,500. 0 (1) 39, 000. 0 3, 781. 1 3, 975. 3 4, 004. 1 2,905. 0 4, 516. 4 2, 962. 0 3, 74-1. 8 991. 8 4,006. 7 250, 247. 9 18,428. 6 2,314. 8 815. 9 872. 6 280. 7 1, 128. 7 945. 2 927. 0 775. 5 929. 5 1, 653. 9 2, 738. 1 3,455. 1 4,906. 4 5, 177. 8 2, 292. 1 3,233. 0 3,569. 5 3, 760. 9 5,346. 8 520, 000. 0 5, 888. 9 380, 750. 0 224,435. 9 100, 280. 0 234, 052. 6 573,428. 5 182, 000.0 1, 076, 833.3 (l) 6,333. 3 5, 600. 0 32,250. 0 9, 000. 0 87, 000. 0 4,800. 0 45,300. 0 18,200.0 1, 659. 6 1, 209.8 1, 312. 8 2, 806. 5 1, 443. 4 3, 697. 9 3, 931. 9 1, 731. 8 3, 805. 7 1, 183. 8 5,264. 7 354, 285. 7 43,306. 5 2, 755. 2 973. 9 1,511. 6 988. 1 1, 205. 5 5, 175. 3 4,940. 9 4, 157. 9 6, 555. 0 504,800. 0 401, 875. 0 214,857. 1 358, 176. 4 2, 500. 0 38,733. 3 49, 071.4 72, 736. 8 2, 246. 7 2, 577. 2 2,523. 5 3, 965. 5 985. 8 3,821. 2 259,608.4 134,688. 9 1,210. 9 934. 7 1, 135. 9 932. 5 4,470. 6 3, 599. 3 4,731. 0 3,499. 0 699, 727. 0 261,814. 8 290,277. 0 211, 187. 5 254, 000. 0 91, 000. 0 169, 000. 0 140, 909. 1 6, 029. 0 2, 127. 0 3, 157. 2 3, 251. 8 3, 259. 6 1,460. 5 6, 019. 8 419,508. 7 100,724. 1 3, 664. 5 853.5 1,562. 7 1, 141. 8 1, 787. 1 949.3 1, 434. 5 2, 198. 3 1,780.6 4,483.1 6,906. 8 4,988. 0 9, 117. 2 9,714.3 5, 794. 1 3, 191. 0 7, 229. 9 153,266.6 572, 166. 6 343, 250. 0 442,333. 3 1,047, 000. 0 280,315. 7 1,301, 250. 0 837,500. 0 116,571.4 358, 000. 0 7, 000. 0 (1) (1) 87, 800. 0 (1) 44, 666. 7 2,027.2 2, 996. 8 4,511. 9 4, 754. 9 1, 910. 6 5, 194. 3 4,822.3 4,895. 9 1,054.0 - 5, 105. 1 578,820.3 26, 761, 000. 0 3, 160. 1 2, 105. 3 1, 051. 3 9, 000. 0 5, 228. 2 64, 500. 0 593,603. 8 (1) 26, 574, 000. 0 9, 191. 5 3, 039. 6 962. 3 1, 190. 3 3,448. 7 4,516. 0 331,363. 6 821,444.4 (1) (0 3,978.3 5, 951. 4 1 Less than 50,000 therms and/or less than 50 customers. Source: American Gas Association. PAGENO="0235" STATE AND LOCAL PUBLIC FACILITY NEEDS 227 balance the loads. Interruptible industrial customers buy gas with the understanding that service will be curtailed or cut off when high priority customers' requirements call for larger volumes of gas. Firm service is provided to the customers who buy gas under schedules or contracts which provide for no interruptions of service. 2. EXISTING CAPITAL PLANT The principal investment of the gas distribution systems in this country consists of the gas main facilities. Distribution and integrated companies operated 458,640 miles of distribution pipelines, 105,470 miles of transmission pipelines and 39,300 miles of field and gathering pipeline, a total of 603,410 miles of mains in 1964. The location of these facilities by States is shown in table 4. As noted above, there were 728 investor-owned systems and 773 municipal systems in 1965.b0 Over 93 percent of their customers were served by the 201 investor-owned and municipal gas systems with annual revenues of $1 million or more; these large systems are con- centrated in the more populous areas as shown in table 5. Details on the distribution of the 1,300 utilities with less than $1 million revenue are not available. However, further detail is available on the 773 municipal systems which reported to the AGA in 1964.11 As shown in table 6 the concentration of municipals is decidedly in the smaller markets. It can be seen in table 7 that about 97 percent of the industry's growth has taken place in the past 55 years and 65 percent of the growth has taken place in the past 15 years. There is no inventory of pipe underground showing the vintage of the Nation's gas distribution mains, but the figures in table 8, which show the growth of the pipeline network since 1932, attest to the fact that about half of the pipe in use is less than 15 years old. Replace- ment of old pipe is sometimes necessary, usually to allow for carrying of larger volumes of gas but it is estimated that 95 percent of the pipe requirement of the gas utilities and pipelines is for new construction and 5 percent for replacement. 12 Of the 736,200 miles of pipeline in 1964, 603,410 are used by dis- tribution and integrated companies. Of the distribution and inte- grated company pipeline, 564,580 miles, or 93.6 percent, are operated by investor-owned utilities and the remaining 38,830 miles by munici- pal utilities. The distribution of the gas main by type of service and State is shown for investor-owned utilities in table 9 and for municipal utilities, in table 10. 10 Letter from Schwimmer, Apr. 14, 1966, and Government in Gas (New York: PAR Public Information Service, American Gas Association, 1965). 11 Ibid. 12 "Gas Industry Estimates Steel Needs" (New York: Bureau of Statistics, American Gas Association, Inc., Aug. 11, 1965). PAGENO="0236" L~J CD CD CD CD CD ~ CD~ U ~ *, CD CD CD CD CD z~~1~4 ~ ~ ~dZZ ~ ~ P~P11 ~ ~ ~ ~ I ~ ~ a ~ ~ ~ ~ ~CD ~ CD. CD CD CD CD CD 0 CD CD CD CD 0 CD CD CD CD CD CD CD CD CD. 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C) 0 C) C) 1 C) 00 CO CO CO 0 000 0 0 C) C) CCC) C) C) CO C) 0 0000 0 C) CO CO 0 0 ~0 0 ~. 00 H ~ ~ - : 0 ~ C) 000 © 00 C) C) C) 00 0 0 C) C) C) CO ~ 0 C) C) 0 0000 000 ~) C) C) ~ ~ C) C) 0 00 C) C) C) 0 ~*0) ~ ~ COC) 00 0 00 ~-~3 0 © 0000000 ~~0C)~0 ~ 0 0000 002~C) 0 0000 C))~ ~ ~C)COC)-0 0 000000000 03 ~ ~CC~0 0 0000000 0 00~~C) 0 00000 CO ~OoC) 0 000 CO C)~ 0 000 1 0 C) 0 0 01 ~ ~ ~ H to L~j C) Co 00 0~~ 00(0 (0 C) Co (3 0 0 0 0 do C)C)C) C)O~C)CO 00000000 C) 0 CO 0000 CO - C) C) C) C) )-~ C) 0 C) - CO i ~ ~i ~ i ii~i ~ PAGENO="0239" STATE AND LOCAL PUBLIC FACILITY NEEDS United States New England Connecticut Maine Massachusetts New Hampshire Rhode Island Vermont Middle Atlantic New Jersey New York Pennsylvania~. East North Central Illinois Indiana 1\'Iichigan Ohio Wisconsin West North Central Iowa Kansas Minnesota Missouri Nebraska North Dakota South Dakota South Atlantic Delaware - District of Columbia Florida Georgia Maryland North Carolina South Carolina Virginia East South Central Alabama Kentucky Mississippi Tennessee West South CentraL. Arkansas Louisiana Oklahoma Texas Mountain Arizona Colorado Idaho Montana Nevada New Mexico Utah Wyoming Pacific Alaska California Hawaii Oregon Washingto'i 1 Excludes service pipe. 2 Less than 5 miles. 231 TABLE 10.-Miles of main of municipal companies, natural gas, by State and by type of main, 1964 1 Total Field and gathering Transmission Distribution 38,830 110 4,530 34,190 410 (2) 410 90 320 (2) - (2) 90 320 2,880 (2) 2,880 30 2,850 (2) 30 2. 850 1,620 80 420 1,120 740 410 470 80 140 210 70 600 200 320 4,010 180 3,830 450 480 630 750 1,640 60 10 30 10 80 50 440 450 620 670 1,590 60 8,370 1,070 7,300 2,580 3,120 590 1,090 990 210 610 30 190 30 2,370 2,510 560 900 960 12,640 10 2, 190 10,440 5,370 810 960 5,500 10 1,200 160 150 680 4,170 640 810 4,820 6,600 20 510 6,070 370 1,800 290 4,140 20 60 180 30 240 310 1,620 260 3,880 1,190 - 140 1,050 320 540 330 (2) - 60 20 60 260 520 270 (2) 1,110 20 1,090 1,010 100 20 1,010 80 PAGENO="0240" 232 STATE AND LOCAL PUBLIC FACILITY NEEDS The volue of the gas utility and pipeline plant of natural gas dis- tribution and integrated companies at the end of 1964 is shown in table 11. TABLE 11.-Gas utility plant of natural gas distribution and integrated companies as of Dec. 31, 1964 (gross plant excluding manufactured gas plant) [In millions] Investor owned Municipal Total Total utility plant and adjustments Productionandlocaistorage Underground storage Transmission Distribution Generalandintangible2 Construction work in progress $14, 940 $860 $15, 800 1,430 695 3,045 8,835 725 210 115 5 (1) 645 65 30 1,545 700 3,045 9,480 790 240 I Less than $5,000,000. 2 Includes plant acquisition adjustments and plant adjustments. Source: Schwimmer, op. cit. B. COSTS AND USER CHARGES 1. CONSTRUCTION AND OPERATING COSTS The American Gas Association reports that 21,530 miles of distri- bution pipe were installed in 1964. Construction expenditures amounted to $784 million during the year or an average cost of $36,414 per mile. According to the AGA, "this average construction cost per mile of distribution main includes the expenses involved in bringing gas service to new customers and the strengthening of service to existing customers."13 The total mileage of natural gas pipeline of investor-owned distribu- tion and integrated companies at the end of 1964 was 564,580 miles, as shown in table 9. During 1964, $1,421 million were expended for the operation and maintenance of these lines (including $1,205 million for operating expense and $216 million for n'aintenance).'4 This expenditure represents an average of $2,517 per mile, if which $2,134 is operating expense and $383 is maintenance expense. No data are available to measure the average per mile cost for operation and maintenance of municipally owned utilities. 2. USER CHARGES Investor-owned utilities set rates at levels designed to recover total operating and maintenance expenses, depreciation costs, taxes, and return on investment. Municipal utilities set their rates to recover all costs including debt service and payments to municipal govern- ments in lieu of taxes. There may be isolated instances of municipal utilities operating at a deficit but these would be exceptions to the general practice of gas distributors. Outlays for facilities and struc- tures of municipal utilities are normally met from retained earnings or from special bonds rather than out of the general tax resources and general obligation borrowings of the municipalities. 13 Schwimmer, op. cit. 14 Gas Facts, op. cit. pp. 195-198. This excludes $3,356,000,000 purchased gas costs. PAGENO="0241" STATE AND LOCAL PUBLIC FACILITY NEEDS 233 The rates of investor-owned distribution utilities are generally regu- lated by State commissions and the rates of municipal distribution systems are generally fixed by the municipal authorities. Prices for gas paid by all distribution systems to interstate pipeline companies are regulated by the } ederal Power Commission. C. TREND OF CAPITAL OUTLAYS The growth of the gas distribution pipeline network (see table 8) has been paralleled by increasing construction expenditures for distri- bution facilities (see table 12). Chart 1 shows the comparison of growth trends for the latter expenditures, natural gas production, number of gas customers, and average use per customer. TABLE 12.-Construction expenditures for gas distribution facilities, 1946-64 [Dollar amounts in millions] Year Expenditures Year Expenditures 1946 1947 $105 178 1956 1957 $534 ~ 1948 1949 219 240 1958 1959 541 643 1950 299 1960 696 1951 331 1961 687 1952 349 1962 708 1953 1954 383 423 1963 1964 752 784 1955 500 Source: Gas Facts. As shown in table 13, the concentration of utility plant for all gas distribution and integrated companies (including natural, manufac- tured, mixed, and LP gas companies) in the investor-owned segment of the industry has declined only slightly during the past 10 years. TABLE 13.-Gas utility plant-All distribution and integrated companies, 1954-64 [Dollar amounts in millions] Year Investor- owned utilities Municipal utilities Total Municipals as percent of total 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 $7,670 8, 115 8,780 9,490 10, 200 11, 195 11,875 12,980 13,690 14, 615 15,305 $400 445 440 530 605 540 690 740 795 890 940 $8,070 8, 560 9,220 10,020 10,805 11,735 12, 565 13,720 14,485 15, 505 16,245 5.0 5.2 5.8 5.3 5.7 4.6 5.4 5.4 5.4 5.7 5.8 Source: Derived from Gas Facts. Includes manufactured gas plant. Based on the trends in plant expansion, it appears that municipals probably account for about 5~ percent of the construction expenditures for gas distribution facilities in recent years. 7O-132---66-vol. 1-16 PAGENO="0242" 234 STATE AND LOCAL PUBLIC FACILITY NEEDS CHART 1 CONSTRUCTION EXPENDITURES, PRODUCTION OF NATURAL GAS, GAS CUSTOMERS AND USE PER CUSTOMER 4000 `3000 2000 1000 1- 800 600 500 400 40 ~ 30 T 20 15 ~- 12 10 do -`6 5 40 30 d 20 ~ 15 12 10 6-' 800 600 500 400 300 200 100 1946 300 Sources of financing for the construction and expansion of gas distribution systems are not available in detail. Since 1946 investor- owned gas utility and pipeline companies have received 64 percent of their new capital from debt issues, 28 percent from common stock issues and 8 percent from preferred stock issues.1° In addition, internally generated funds have become increasingly important; internal sources provided financing for about one-third of the gas utility and pipeline construction in the late 1950's and are now providing about half of the construction ftinds. 15 Based on data in Gas Facts plus information from AGA. PAGENO="0243" STATE AND LOCAL PTJBLIC FACILITY NEEDS 235 The sources of financing for all construction by municipal utilities are not reported. Certain of the smaller municipal utilities are eligible for loans from the Community Facilities Administration. Such loans to municipal utilities have been used to supply less than one-half percent of total construction expenditures by all gas distribu- tion systems.'6 D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS The projected expansion of the Nation's gas pipeline network, including field and gathering, transmission and distribution mains, as estimated by the American Gas Association is shown in table 14. TABLE 14.-Projected miles of main, gas utility and pipeline industry, 1964-75 [In thousands] Year Field and gathering 1 Transmis- sion Distribu- Total tion 1964 (actual) 1965 1966 1967 1968 1969 1970 1974 1975~. 61. 0 63.1 64. 5 65.9 67.4 68.7 70.0 75. 1 76.3 205.4 210.9 216.3 221.6 226.8 231.9 236.8 255. 5 260.0 469.8 491.4 514.3 537.6 559.1 581.6 604.3 699. 1 724.1 736.2 765.4 795.1 825.1 853.3 882.2 911.1 1, 029.7 1,060.4 `Excludes field and gathering facilities of producers. Reflects only field and gathering mains of pipelines and distribution companies. Source: Projected Gas Utility and Pipeline Industry Statistics: 1965-75, op. cit. Construction expenditures of the gas distribution and integrated utility and pipeline companies for this period are projected as shown in table 15. TABLE 15.-Projected gas utility and pipeline industry construction expenditure by function, 1964-75 [In millions of dollars] Year Construction expenditures Total Production and local storage Transmis- sion Under- ground storage Distribu- tion General 1964 1965' 1966' 1967' 1968' 1969 1970 1974 1975 1,701 1,913 1,979 1,847 1,801 2,037 2,071 2,265 2,315 120 191 160 152 145 171 169 165 164 616 688 842 680 647 683 688 700 701 84 784 121 809 97 795 118 798 103 821 97 971 105 992 120 1,152 123 1,196 97 104 85 99 85 115 117 128 131 `Represents forecasts based on estimates submitted by individual gas companies. Source: Projected Gas Utility and Pipeline Industry Statistics, 1965-75, op. cit. 16 Letter from Melvin S. Frazer, Acting Commissioner, Community Facilities Administration, Depart- ment of Housing and Urban Development, Mar. 7, 1966, Indicates that from 1957 through 1964 CFA loans of $16 million were made for gas projects. During this period construction expenditures (see table 12) totaled over $5,400 million. PAGENO="0244" 236 STATE AND LOCAL PUBLIC FACILITY NEEDS These projections of miles of mains and construction expenditures reflect five basic assumptions: 17 1. A continuation during 1964-75 of the long term economic growth of the country. 2. Natural gas supply will be available from producers for pipelines, and from pipeline for distributors as required to meet customer demands. 3. Competitive fuel prices will maintain their same relative position to gas prices. 4. Future major technological changes in the fuel industries have not been incorporated. 5. A continuation of the general inflationary cost trend. In preparing these projections the following factors were given consideration: 18 1. Accommodating the growing population. 2. Supplying customers with any increased demands per customer that will develop. 3. Supplying additional customers in areas where the number of customers will increase more rapidly than population. No projections have been made indicating growth by size of coin-. munity or size of service area. The outlook for construction expenditures as shown in table 15 is heavily weighted by the projected operations of the investor segment of the industry. The stability of the relative position of investor- owned and municipal systems in the Nation's gas industry is il- lustrated in table 16. TABLE 16.-Municipal gas distributors as percent of industry totals Year Cus- tomers 1 Sales' Revenues 1 Gas utility plant All Distribu- plant 2 .tion plant only2 New corn- munities initially served with gas 2 1958 1959 1960 1961 1962 1963 1964 4.4 4.6 4.7 4. 8 4.8 4. 8 4. 7 6.8 6.9 6.9 7. 0 7. 1 7.2 7. 3 5.4 5.3 5.4 5. 4 5. 4 5. 4 5. 4 5.7 4.6 5.4 5. 4 5 4 5. 7 5.8 7.5 6.7 7.2 7. 1 7 7 7. 0 7. 1 29 26 9 16 9 11 (3) `As percent of total gas distribution, integrated and pipeline companies. 2 As percent of total gas distribution and integrated companies. 3 Not available. Source: Based upon information received from AGA and Gas Facts. The investor-owned utilities are expected to finance their expansion program for the next 4 years approximately as follows: 50 percent from internal sources, 45 percent from debt issues, and 5 percent from new equity issues.19 Assuming a continuance of the trend toward in- creasing use of internally generated funds and decreasing use of new equity issues, while the relative use of debt issues has remained fairly constant, there will be a slight increase in the use of internally gener- ated funds in the latter part of the decade. ° Schwimmer letter, Mar. 29, 1986. 1~ Ibid. "Ibid. PAGENO="0245" STATE AND LOCAL PUBLIC FACILITY NEEDS 237 With respect to the outlook for financing of municipal gas utilities, a study by the Council of State Governments indicates that about half of their projected construction expenditures will be financed with bond issues. The balance will presumably come from internally generated funds. Some municipal systems serving small communities will be eligible for loans from the Department of Housing and Urban Devel- opment as they have been in the past. However, such loans will provide only a small proportion of the municipals' needs. All available studies on the gas industry point to continued financial strength. Both the investor-owned companies and the municipals should be able to finance their expansion as they have done in the past. PAGENO="0246" CHAPTER 10 Highways, Roads, and Streets* A. NATURE AND COMPOSITION OF HIGHWAY PLANT IN THE UNITED STATES 1. DESCRIPTION OF FACILITIES At the end of 1964, there were 3.6 million miles of roads and streets in the United States. These ranged in type of service from the highest class of modern multilane, controlled access freeways, serving intercity and interstate traffic movements, through the collector roads that move people and goods from the producer to the consumer, down to the local roads and streets that provide access to the farms, the industries, and the residences of nearly everyone in America. We truly live in the age of the automobile, and as a Nation on wheels we must place great dependence upon the highway network to move our commerce, to afford us access to working, living, and recreational areas, and to provide for the great variety of services in the protection of life, health, and safety that our populace demands and expects. The term "highway" includes roads, streets, and parkways, and also includes rights-of-way, bridges, railroad-highway crossings, tun- nels, drainage structures, signs, guardrails, and protective structures, in connection with highways. "Highway," "street," or "road" are general terms denoting a public way for purposes of vehicular and pedestrian travel, including the entire area within the right-of-way. In rural areas, or in urban areas where there is comparatively little access and egress, a way between prominent termini is called a high- way or a road. A way in an urban area, with or without provision for curbs, sidewalks, and paved gutters is ordinarily called a street. The right-of-way consists of the entire strip of land set aside or devoted to highway use. It encompasses all the essential elements of a highway cross section, such as traffic lanes, a~ixiiary lanes, shoulders, highway signs, traffic control devices, roadside developments, and median strips. The roadbed itself is the ~Taded portion of the right- of-way upon which the base course, surface, shoulders, and median are constructed. The thickness of the surface and base and the type of pavement are determined by volume and composition of traffic, availability of materials, arid the experience of con tractors. Pavements may be considered as three general types: (1) High,; (2) intermediate; and (3) low. High-type pavements are for high-volume traffic, provide smooth riding qualities, and good antiskid properties in all weather. The surface should retaia its qualities and should provide adequate supPort for the exnected volume and. weights of vehicles without mid uc fatio~ue, thus keepi ag maintenance costs to a minimum. Inter- *Prepared by the Bureau of Public Roads, U.S. Department of Commerce, with minor editing by committee staff. 238 PAGENO="0247" STATE AND LOCAL PUBLIC FACILITY NEEDS 239 mediate-type surfaces vary all the way from relatively low-cost sur- face treatments to pavements that are oniy slightly less costly and lower in strength than the most expensive high-type pavements. Low-type surfaces range from surface treated earth roads and stabi- lized materials to loose surfaces such as earth, shell, and gravel. Highways range from single-lane rural roads to high-speed multilane facilities of eight or more lanes. Single-lane roads are considered suitable only in low-traffic-density areas where the average daily traffic is fewer than 100 vehicles. A single-lane road may vary from 8 to 14 feet wide and serve traffic in both directions. By far the greatest mileage of highways consist of two lanes, but the mileages of four, six, eight, and more lane facilities are increasing rapidly. Lane widths are usually determined by a combination of factors such as speed, traffic composition, traffic volume, and, of course, cost. There is still a large mileage of highways with lanes less than 12 feet wide, but for a modern high-speed facility, 12 feet is generally con- sidered to be a minimum acceptable lane width. A highway shoulder is the portion of the roadway contiguous with the traveled way for accommodation of stopped vehicles, for emer- gency use, and for lateral support of base and surface courses. It varies in width from practically nothing on low-traffic rural roads, to 12 feet or even more on major roads, where the entire shoulder may be stabilized or paved. Traffic control signs, ]ights, and markings, are provided for the con- venience and protection of motorists, but lighting of rural highways is seldom found or considered to be justified except on critical curves, intersections, long bridges, tunnels, and areas where roadside inter- ference is a factor. Intersections are points of conflict and potential hazards: Ingress and egress on most highways are accomplished by direct at-grade con- nections. Local conditions and cost of right-of-way influence the type of intersection selected as well as many of the design details. It is mostly on divided, controlled access highways that special struc- tures are provided to eliminate intersections at grade, with ramps and speed-change lanes provided for safe entry and exit. The gradients on secondary and minor rural roads generally follow the natural contours of the land. In mountainous terrain the grades are frequently quite steep and the sight distance critically reduced. On major high-speed highways, gradients are limited so that reason- able speeds can be maintained by both automobiles and trucks. For design speeds of 50, 60, and 70 miles per hour on the Interstate System, gradients generally are not steeper than 3, 4, or 5 percent, except in rugged terrain where 2 percent steeper grades may be permitted. The road and street systems in the United States have grown but little in extent in recent years, the total mileage increase since 1956 being less than 1 percent per year. The Nation's needs lie generally not in a large increase in mileage, but in improvement or replacement of existing highways. As one indication of improvement progress, the mileage of unsurfaced roads and streets has been declining at an average rate of 2 percent during recent years. The effects of the expansion of urban areas and population are reflected in the fact that municipal mileage has increased an average of nearly 4 percent per year since 1956. PAGENO="0248" 240 STATE AND LOCAL PUBLIC FACILITY NEEDS 2. EXISTING CAPITAL PLANT (a) Distribution and Growth A comparison of total, municipal, and unsurfaced mileages for the years 1956-64 follows: [In thousands of miles] Year Total mileage Municipal mileage trnsurfaced mileage 1956 3,430 1957 3,454 1958 ~ 1959 3,503 1960 3,538 1961 3,573 1962 3,600 1963 3,620 1964 3,644 379 389 405 416 430 446 455 475 491 1,107 1,082 1,031 1,008 989 985 953 927 914 The distribution by States of the total mileage at the end of 1964 is given in appendix table A. Of the 491,000 miles of city streets, 62,000 are under State control and are, for the most part, the more important cross-city connections of the main trunkline systems, including most of the major urban expressways and arterials. The remaining 429,000 miles are generally the local community and residential streets for which the cities have responsibility for maintenance and improvement. No recent inventory of local streets has been made, but upon the basis of a study of 1961 local mileages by city population groups, it is possible to estimate that the 429,000 miles of local government streets would be arrayed as follows: Population group Mileage Number of cities Average mileage per city lJnder 5,000 5,000to 9,999 10,000 to 24,999 25,000to49,999 50,000 to 99,999 100, 000 and over Total 130,743 47,102 64,791 43,237 40,403 103,091 15, 172 1,420 1, 141 422 209 140 8.62 33.17 56.78 102,46 193.32 736.36 429,367 18,504 No precise correlation exists between the mileage of streets and the population of the community, but a composite ratioS of 240 persons to 1 mile of street was developed in 1961 for cities under 100,000 popU- lation, taken as a group. Much study has been made of the service life of various types of roads, and the various elements comprising the road, such as land, grading, surfacing, and structures. Some of the factors developed from such studies will be discussed later. First, two other factors must be understood: (1) Roads not only wear out, they become func- tionally obsolete as a result of community growth, unanticipated changes in community patterns that change the volume of traffic, technological improvements in vehicles, and general reorientation of the economy that results in increased traffic movements and/or PAGENO="0249" STATE AND LOCAL PUBLIC FACILITY NEEDS 241 speeds that exceed the capacities of the roads, even though structurally they may be sound; (2) the measurement of needs, which will be re- ported in a later section, is perhaps the best indicator of the extent to which the highway plant is-or will become-inadequate for the next decade. During the years 1956-64, inclusive, the States built, reconstructed, or resurfaced a total of 317,000 miles of rural State highways, an average of over 35,000 miles per year. This same network of roads totaled 620,000 miles in 1955; 681,000 miles in 1964. Thus, in terms of turnover, the entire system can be expected to have some degree of improvement over a period of about 20 years. No similar data are available for local roads and streets. From a physical standpoint, some studies have assigned the follow- ing depreciation rates for highways: Annual rate (percent) Right-of-way 0 Grading 1 Surface and base 3 Structures 2 From values determined in Bureau of Public Road studies, an an- nual weighted rate of 1.39 percent could be used for cost amortization purposes. Obviously, this rate would not necessarily be a typical one, nor would it reflect obsolescence. The record of rural mileage built by the State highway departments since 1923 is as follows: Mile~ 1923-40 550,000 1941-60 632, 000 1961-64 136,000 Because many roads have been reconstructed or resurfaced more than once during this time, this tabulation can afford only a measure of the volume of construction activity, but not an approximation of the age distribution of the rural State highway system. (b) Ownership Patterns As will be seen from appendix table A, the States are responsible for some 743,000 miles of roads and streets, or about 20 percent of the total; local governments administer nearly 2.8 million miles of high- ways or 76 percent; while about 4 percent of the mileage is under Fed- eral control, chiefly in the public domain areas. Trafficwise, however, the main rural roads, which are generally State-administered routes, carry about 75 percent of all vehicular travel on rural roads. Thus, based on traffic volumes, the States have a far larger share of responsi- bility for highways than the mileage statistics would indicate. It is estimated that the current value of the Nation's highways (excluding toll facilities) was $63 billion at the end of 1964. B. COSTS AND USER CHARGES 1. CONSTRUCTION AND OPERATING COSTS Typical construction costs: Many factors determine the cost of building a mile of highway, not the least of which is the cost of land acquisition, which in some urban areas can exceed the physical costs PAGENO="0250" 242 STATE AND LOCAL PUBLIC FACILITY NEEDS of construction. Other factors are governed by the geometries of de- sign, such as vertical and horizontal curvature, width of roadway, number and frequency of interchanges, etc., and by the type of ter- rain, which may be mountainous, rolling, or flat. For rural roads in rolling terrain some average construction costs are as follows (exclud- ing land acquisition and on-site engineering costs): Roadway width Type Average cost per mile 24 feet Federal-aid secondary Do Federal-aid primary, noninterstate (medium type) Do Federal-aid primary, noninterstate (high type) 48 feet divided Federal-aid interstate 570480. 000 100-125, 000 160-200, 000 600-700, 000 The cost of urban highways is generally much greater than that of the rural sections. On the Federal-aid Interstate System, the costs to build urban sections (again excluding land acquisition and on-site engineering costs) can be expected to average $1.5 million per mile for four-lane construction; $3.3 million for six-lane; and $5.3 million for eight-lane construction, based on current price levels. Typical annual maintenance and operating costs. Here again there are many variables, such as traffic volume and frequency of heavy axle loads, terrain, number of lanes and interchanges, winter maintenance (snow and ice control), other traffic services, toll road operations, etc. In 1964, $1,055 million was expended for maintenance of the 681,000 miles of rural State-administered highways, or slightly more than $1,500 per mile, on the average. During the same year, $171 million was identified as maintenance on the 62,000 miles of municipal State highways, or over $2,700 per mile, average. From preliminary studies, the cost of maintenance and traffic services on completed sections of the Interstate System show the following weighted average annual costs: Costs per mile Rural sections (excluding interchanges) $2, 593 Urban sections (excluding interchanges) 5, 120 Rural sections (including interchanges) 3,153 Urban sections (including interchanges) 9,698 2. USER CHARGES Although highways have many aspects of a public utility in that they provide a service to the users, and the pricing of this service is in many respects based upon frequency and extent of use, here the analogy ceases. Many students of highway taxation argue that there are three classes of beneficiaries of highways, and that costs of highway transportation should be borne among the three according to the benefits derived. These three are: (1) The user, who would be ex- pected to pay most of the costs of freeways and other major traffic arteries; but lesser amounts of the costs of collector roads and local land-access roads and streets; (2) the community which benefits collectively from highways that make possible such community services as fire and police protection, ambulance, and other lifesaving services, and sanitation facilities among others; and that should pay for a large share of the cost of collector and local roads from general PAGENO="0251" STATE AND LOCAL PUBLIC FACILITY NEEDS 243 taxation; (3) the land, which without access to transportation would have little value and hence should pay most of the costs of residential streets and other local land-service roads through property taxes or assessments. Some would maintain that all benefits to land and the community are in reality user benefits that have merely been transferred. These arguments are brought out here by way of explaining that user charges for highways are not necessarily intended to be sufficient to cover all highway costs. In 1964, $12.6 billion of income was applied for highway purposes (exclusive of borrowings). Of this amount, $10.0 billion was provided from user taxes, fees, and tolls (including $3.6 billion of Federal highway trust fund revenues), and $2.6 billion from nonuser taxes, appropriations, and miscellany. Interestingly enough, in that year an additional $2.6 billion was collected from users, but not applied for highways (the Federal excise tax on auto- mobiles and parts and accessories, and State user taxes applied for nonhighway purposes). Thus on balance there was a trade-off whereby user taxation actually would have been sufficient to provide all funds applied to highways. Appendix table B lists for each of the years 1946-65, inclusive, the amounts of user revenues allocated for highway purposes, together with amounts provided from nonuser sources. Maintenance, opera- tion, and annual debt service payments are then recorded as charges against these revenues, with the excess shown as an amount available for capital outlay. Also shown as available for capital outlay are the amounts of Federal-aid funds paid in reimbursement to the States for work performed, together with small amounts of direct Federal outlays; and proceeds of construction bond issues. Since 1956, the Federal-aid highway funds have their source in excises on motor fuel and on certain automotive products that are placed in the Federal highway trust fund, and that are considered to be user revenues. Although there was no trust fund prior to 1956, the annual revenue from the Federal tax on gasoline was more than sufficient to cover the annual Federal-aid highway appropriations, but there was no explicit linkage. The data in table B are also arranged so as to show the sources of funds collected by each of the four levels of government: Federal, State, county, and city; and the direct outlays by each for the purposes indicated. C. TREND OF CAPITAL OUTLAYS Table B records the capital outlays for highways during the period 1946-65. The term "capital outlays" is understood to include con- tract and force account construction; preliminary and construction engineering on site; and right-of-way costs, including land acquisition, utility and tenant relocation costs, condemnation costs, etc. It does not include the costs of sidewalks or street lighting, unless part of a road construction contract. The table shows the expenditure according to three functional classes of highways: main rural roads, which include the major interurban highways and toll roads; local rural roads, which include collector and feeder roads, both under State and local jurisdiction; and urban streets and highways, which include both connections of State highways and local city streets. PAGENO="0252" 244 STATE AND LOCAL PUBLIC FACILITY NEEDS As a secondary classification, table B shows capital outlay according to the governmental level administering the expenditure: Federal, State, or local units. Because the States administer the Federal-aid highway programs, Federal-aid expenditures are a component of those shown for State agencies. The small amount of direct expenditures by the Federal Government are those administered by the U.S. Forest and Park Services, and other ancillary programs. In accordance with the requirements of national growth and increas- ing dependence on highway transportation, the trend of highway expenditures has been upward, save for brief periods of slight declines, not in themselves significant. As the highway programs are geared to the economy and the demands for transportation as evidenced by such factors as population growth, car ownership trends, travel, and disposable income, among others, the outlays for highways have moved in large measure with the gross national product. Some of the sources of financing highway capital outlays are known explicitly, such as Federal-aid funds and borrowings. The remainder of the funds are supplied from current Federal, State, and local income, chiefly from user taxes which provide not only appropriations, but State grants-in-aid as well. It is not possible to isolate these elements. For example, State grants-in-aid are frequently available for both road construction and maintenance, and may even be commingled with, and augmented by local government revenues and lose their identity as a discrete source of funds either for capital outlays or for operations. The funds available for capital outlay (pt. C of table B) have exceeded the expenditures (pt. D), in most years, chiefly because bond proceeds are not usually expended entirely within the year in which sold, but may be carried in part as a reserve. At the end of 1964,. the States had reserves (excluding debt and sinking funds) totaling $2.2 billion. The States have been the chief roadbuilding agencies throughout the period covered, and have accounted for an increasing proportion of total outlays between 1946-65; from 66 to 80 percent. Some 875,000 miles out of a total of 3,650,000 miles of roads and streets in the United States are eligible for improvement with Federal aid highway funds, or about 24 percent. Table C classifies .the State and local road systems according to their eligibility for Federal assistance as part of the Interstate System, other Federal aid primary system routes, and the Federal aid secondary system. The "urban" classification of Federal aid highways refers to mileages within munici- palities and other urban places having a population of 5,000 or more; all other Federal aid highways being classed as "rural." This explains the fact that some "rural" mileage (in places under 5,000 population) is found on local municipal street systems. Table D, using the same format as table C, records the 1964 capital expenditures by the States on Federal and non-Federal systems; while table E records the 1964 estimated capital expenditures by allunits of government. From table E it will be seen that $6.4 billion out of a total of $8.2 billion, or 78 percent, of all capital expenditures were for roads comprising Federal aid systems; and that a similar percent- age of total outlays were made on State-administered highways. All of this is by way of emphasizing that road improvements are concentrated on roads under the States' administrative control, and on systems eligible for Federal fund participation. PAGENO="0253" STATE AND LOCAL PUBLIC FACILITY NEEDS 245 D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS Pursuant to Public Law 89-139, the Bureau of Public Roads is directed to report to Congress in January 1968 estimates of the future highway needs of the Nation. It is impossible at this time to report on what these needs will be, and so for purposes of the study, prior estimates of needs have been used, principally those contained in the highway cost allocation study prepared and submitted to Congress as authorized by section 210 of the Highway Revenue Act of 1956 (70 Stat. 387), and the 1965 Interstate System cost estimate, published in 1965 as House Document No. 42, 89th Congress, 1st session. To the extent possible, these prior studies have been adjusted and modi- fied to make them applicable to the 10-year period, 1966-75. Table G tabulates the forecast of capital requirements in terms of amounts that probably would be assigned to State agencies, and to local governments; and in terms of the three functional classes of highways. Of the total of nearly $126 billion of estimated needs, 84 percent will be required for main rural roads and for urban streets in nearly equal proportions, with the remaining 16 percent required for local rural roads. Table F projects estimated receipts for highways, "fixed" costs, and funds available for capit~al outlay during each of the years 1966-75. Projections of user revenues are based on economic projections of population, car ownership, travel, and slight annual increases in weighted motor-fuel tax rates. The present resources of the Federal highway trust fund are assumed to be extended without change through 1975. The amount of capital expenditures in table F are then summed, and entered in total in table G. In virtually all comparisons of needs with anticipated resources, the former exceeds the latter. T his is the finding as shown on table G, whereby a deficit of nearly $25 billion is forecast and is explained by the fact that needs are postulated without regard to restraints upon financing resources, but rather are a measurement of deficiencies in terms of engineering and geometric standards in light of probable levels of service demands. In other words, needs are calculated On the basis of eliminating most of the impediments to free flow of anticipated traffic volumes by some future target date. Experience has shown that this objective has rarely been realized. With the notable exception of the Interstate System, which has a 1972 target date for completion, the remaining Federal, State, and local highway programs do not envision a "completion" date. Rather, the programs look to long-range efforts to renovate, upgrade, and otherwise bring highway systems to higher standards, recognizing that adequacy is an elusive term in the context of dynamic and chang- ing demands for transportation. This is by way of explaining that there is no real answer to the question of how to bridge the gap between resources and needs. The public must measure the demand for schools, for housing, and for other needs of society against that of highway transport and allocate its support accordingly. Certainly, priority programs can and will be developed both at the Federal and State levels that will produce the financial resources to meet delimited needs. Most of the non- priority needs, particularly those in rural areas, will probably not be met within the next decade, or for some other time thereafter. PAGENO="0254" 246 STATE AND LOCAL PUBLIC FACILITY NEEDS CO CO 5 C) C) C) CO C) Co 000000 CO C) - t- Co C) t- 5 CO 5 CO C- Co C) CO 00 Co Co 00 Co Co 00 C) Co C) Co Co S00 Co CO CO C- 00~) 00 Co Co CO CO 00 CO Co CO CO C) C) C) C) C-C) CO Co C) 0CC))- 00 C) C) CO Co COt-Cot- CoCO COC)0CC)C)Co00CoCo COCOCoC) C)00 C) 0 0 C 0 `0 C ~ E~ C) C) Co Co 0000 C) Co Co C) Cot- 00 Co C 00 Co Cot-Co Co 0CC) Co 00 CO C) Co C) 00 C) C) Co CO CO Co C) Cot-CO Co Co 00 Co Co S CO Co Co C) Co Co Co CO ~`~~0C-C)Co 00 Co C) 0CC-C) 00 C) Co 0CC) 00 Co ~` ~ o-~ C) COCo Co C-C) ~ ~ ~C ~H0~0 ~ H~ CO : ~ H C~CO~ t-~ o0~ Co 1 CO E C 0 0) Co CO 00 0) $ Co CO 0) CO 0) C) C) C) Oo C) C) C) C- Co C) 0~ C) Co C)000000 00 CoCoCo *Co00C)C-00COC)00CO00 {C) COC)CoC) Cot-COC)CO00CoCoCoCO Co Co00CoCO 00C-Cot-CCt-C)CO00CO C 0 00 Co Co Co C) C) C) 00 CO C) 00 Co Co C) C) C) Co Co 0CC))- 00 CO C) Co Co C) CO Co C) Co 00 Co C) C) Co C) 0CC) COt- Co Cot-C) Co CO C-Co 000000 Co 00Co Co CO Co 00 Co 00 CO C) C) C) C) 00 C) 00 Co 00 Co C) C) C 0 C Co `0 +~CoC) CCo~ 00 CO Co C-Co Co Co C) Co C-C) C-Co C) Co Co Co C) C) Co-CC) OCCo 00 CoCO~C-CO 0)) Co ~ ~ tC) C) C Cl) ~ C)00 Co C) C) CO C) C) CO 0000Co00 Co Co C- Co C- Cot- C) C-C-C Co CO 00 Co C) Co C) 00 00 CO C) 0CC) C) CO CO Co 0) 0CC) Co ~C)C- ~C .~OJ OOC) ~ CC) ~`0C)CCC~.o, C C~ ~ ~ 000-~~ PAGENO="0255" STATE AND LOCAL PUBLIC t- - - - ~ c~ cfi ~D ~ ~ C~ - ~: t- ~ ~D r~. ~c - ~ - ~ - - t- - t~- - - - - - - - - t- t~- - - - - - ~ - - - - ~ - ~ © - - - ~ - - p- ~ ~ - - - - - - ~ ci ~ t~- - - - - - ~ - - - ~ P- P- Ci t~- C~C ~ - - H Hi .~ ~ ~ ci :~-~cici~ - ~ FACILITY NEEDS 247 PAGENO="0256" 248 N. - ~ C' C-. C' C~ C-. N- ~÷~-. -.- ~- CC 0 CC E CC 0 cC CD `0 CC~ ~ f~c~cC ÷~0~ ><0cCC~c ~ -. : ~ ~ ~ : :~ ~ ~ ~ ~ ~ ~ STATE AND LOCAL PUBLIC FACILITY NEEDS ~-. co cc ccc - ~ cc ~c N. CC - CCC CC Cl ON. ~~CC0CCC~~ q.p ________ 0 ____________________________________ 0 0 C) ccc ccc CO $ ccc ccc'. 0~ CC C) C) C) C) C) Cc 0 0 ri~ H C~ 0 ~C/D CC Cl) ccc~ cC~~CC~ - C' 0 ~ PAGENO="0257" STATE AND ~JOCAL PUBLIC ~A(JILITY N~rs 249 CO C) ~ ~ ~ ~ E.I~ CC~ ~ .Ec~g - C) ~ CC ~C CC CC CC CC CC CC CC ~ ~ CC t. 00CC CC 00 t- CC CC ~ 00CC co CC -OC CC ~ ~ 00 CC) CC CC CC) ~ CC CC CC `0~ 00CC CC 00 CCC CC CC CC 00 CC 00 C) `00CC CC CC CC CC CC C'- CC CC CC CC CC CC CC 00CC 00 C'- 00CC CCCCCCCC)0 C) CC) C) CC CCCCCCCCCCCC 00 CC ~ CO ~ 00 C) C) C) ~ _______________________________ ~ ~ ~ - -C) CC ~ CC C) ~ C)CC)QC)C) ~ -~ ~z ~ ~ C~ C)C)C. ~0 C~ C)~E C) C) CCC .C) ~C)ocE. C~ CC CCCC 000000CC CC CC 00CC CC 00CC CC CC CCL'- CC 00CC 0000CC CCC'- CC CC CCCC CCCC 00 CC CCCC CC 7O-l32-66--vol. 1-_-i 7 PAGENO="0258" TABLE B.-Receipts and disbursements for highways by all units of government, 1946-65 [In millions of dollars] A. Current receipts for highways: I Highway-user revenue Tolls Property taxes and assessments General fund appropriations Federal funds Miscellaneous Subtotal Transfers in Total - B Disbursements (fixed charges): Maintenance Administration and policing Debt service Subtotal Transfers out Total - C. Funds for capital outlay: I Excess current revenues (A less B) Federal funds: Highway-user revenue - General funds Miscellaneous Subtotal - Transfers - Bond proceeds - `T'nta.l - - _____ I 1,616 89 ~ 353 367 ~ 12 0 68 2,505 487 `-d 2,992 1,081 ~ 251 381 1,713 487 ~ 2,200 ~ 792 Federal Govern- ment State agencies Counties and townships Munici- palities Total Federal Govern- ment State agencies Counties and townships Munici- palities Total 1946 1947 8 1,454 57 1 7 16 10 1,471 64 1 222 91 314 144 61 213 418 8 16 14 22 52 12 1,598 60 1 8 17 21 246 107 31 79 257 19 17 32 8 1,672 18 305 313 352 78 2,337 409 12 1,708 22 351 359 34 106 8 1,690 618 430 2,746 12 1,730 710 540 1 7 339 132 178 373 24 102 219 26 106 932 189 386 4 8 380 181 166 432 27 101 265 35 114 8 649 388 499 14 351 7 1,507 409 12 727 460 560 23 414 4 8 1,037 513 358 1,916 12 1,187 583 418 170 3 653 105 72 -- - 830 170 3 324 3 543 127 122 173 -150 -- 147 57 3 50 46 173 153 327 -290 238 80 2 107 122 327 309 857 118 1,156 1,428 23 158 37 911 236 244 PAGENO="0259" 1). Capital outlay by road system: Main rural roads Local rural roads - 21 Urban streets and highways Total 21 A. Current receipts for highways: 1 Highway-user revenue Tolls Property taxes and assessments General fund appropriations Federal funds Miscellaneous Subtotal Transfers in Total B. Disbursements (fixed charges): Maintenance Administration and policing Debt service Subtotal Transfers out TotaL C. Funds for capital outlay:' Excess current revenues (A less B) Federal funds: Highway-user revenue General funds 402 Miscellaneous 5 Subtotal 407 Transfers -369 Bond proceeds Total 38 782 7 135 196 111 5 842 190 180 492 8 500 -434 429 5 254 100 181 475 3 478 22 142 185 35 35 1 100 136 1948 532 146 100~ 799 35 958 208 212 1,415 212 780 2913 328 1949 13 13 13 1,812 65 60 34 1 10 267 84 20 24 120 325 1,833 99 387 469 13 15 2, 080 71 70 2 11 291 81 23 26 131 332 1,971 29 2,000 20 382 434 35 524 89 2,890 15 41 2,262 22 407 47 559 816 114 638 577 35 459 154 5 8 13 475 171 169 478 33 324 43 3,467 1, 282 255 15 5 10 2,297 501 190 866 498 38 713 347 50 815 539 103 614 30 117 484 389 1,926 15 161 852 104 640 127 - 524 13 1,354 644 8 577 603 36 9 646 172 00 2,105 108 422 483 1~ ~ 3,243 648 c~ 3,891 1,351 ci 288 W 392 2,031 C) 648 2,679 ~ 1,212 492 8 500 535 146 964 402 365 270 1,281 4 83 259 407 122 475 268 1,846 66 1, 525 2,247 See footnotes at end of table, p. 260. PAGENO="0260" TABLE B.-Receipts and disbursements for highways by all units of government, 1946-65-Continued [In millions of dollars] D. Capital outlay by road system: Main rural roads Local rural roads Urban streets and highways Total A. Current receipts for highways: I Llighway-user revenue `lolls Pro'serty taxes and assessments General fund appropriatiOns. - - Federalfunds Miscellaneous Subtotal Transfers in Total II. Disbursements (fixed charges): Maintenance Administration and policing - - Debt service Subtotal Transfers out 982 89 169 03 Total ~ 1,118 ~ 419 0 610 CD 2,147 ci 2,515 CD 142 488 462 CD 17 -i 138 ~-` 3,762 ~ 754 4516 ___* 1,557 ~ 334 481 Federal State Counties Munici- Federal State Counties Munici- Govern- ment agencies and townships palities Total Govern- ment agencies and townships palities 1948 1949 37 10 992 1,108 236 362 61 108 9 253 431 272 10 250 19 319 37 1,240 255 253 1,785 61 1,488 279 319 1950 1951 - 17 2,275 72 39 47 2 12 327 77 30 23 31 154 308 54 2,300 115 481 424 17 131 .. 17 2,488 93 44 52 2 12 343 95 31 25 37 145 323 55 17 2,433 43 448 489 570 165 3,468 697 17 2,677 51 483 531 585 172 17 2,476 937 735 4,165 17 2,728 1,014 757 6 11 514 192 210 557 44 104 346 51 139 1,423 298 453 6 11 .. 477 221 223 596 47 104 378 55 154 17 916 642 705 36 536 19 2,174 697 17 . 1,021 692 747 49 587 13 2,372 754 17 1, 558 741 555 2, 871 17 1, 713 796 600 3, 126 Total PAGENO="0261" C. Funds for capital outlay: 1 Excess current revenues (A less B) Federal funds: Highway-user revenue General funds Miscellaneous Subtotal Transfers Bond proceeds Total D. Capital outlay by road system: Mainrurairoads Local rural roads Urban streets and highways Total A. Current receipts for highways: 1 highway-user revenue Tolls Property taxes and assessments General fund appropriations Federal funds Miscellaneous Subtotal Transfers Total B. Disbursements (fixed charges): 482 2,666 1,416 413 699 2,58 ~ ______ 0 3,055 Ci 201 W 598 ~ 522 19 177 4572 0 909 5,481 1,734 398 512 tIn 2,644 W 909 475 8 918 196 180 1,294 475 8 471 11 1, 015 218 157 1,390 471 11 483 -431 425 402 6 89 483 164 655 482 -425 416 535 9 79 180 52 1,745 291 344 2,432 57 1,966 306 337 55 - 1,232 95 321 13 236 16 329 1,245 386 666 54 1,406 97 349 10 262 13 337 55 1,648 265 329 2,297 54 1,852 285 337 1952 1953 19 2,776 133 42 46 3 13 377 96 40 35 41 174 347 72 2,814 187 551 485 19 158 19 3,003 146 40 66 3 13 403 111 41 49 42 195 371 70 19 - 2,997 56 529 581 669 188 4,214 825 - 19 3,255 80 571 615 727 214 19 3,053 1,110 857 5,039 19 3,335 1,186 41 Administration and policing Debt service Subtotal Transfers out Total 7 618 618 409 1, 652 7 636 649 442 12 229 51 70 362 12 260 56 70 237 104 149 490 241 108 163 19 1,084 757 773 49 28 19 2,504 825 19 1,137 818 813 69 675 22 19 1,841 822 647 3,329 19 1, 955 882 697 3,553 See footnotes at end of table, p. 260. PAGENO="0262" TABLE B.-Receipts and disburs~ments j'or highways by all units of government, 1946-65-Contjnued [In mfflions of dollars] C. Funds for capital outlay: 1 Excess current revenues (A less B)_~ Federal funds: Highway-user revenue (1pn~~r~~1f1i,,,1Q Federal Govern- ment State agencies ~ Counties and townships Munici- palities Total Federal Govern- ment State agencies Counties and townships Munici- palities 1952 1953 1,212 Transfers Bond proceeds Total - 1). Capital outlay by road system: Main rural roads Local rural roads - Urban streets and hishwavs 288 210 1,710 1,380 304 244 A. Current receipts for highways: 1 Highway-user revenue E,~ 20 535 20 620 21 -503 485 797 17 103 1 209 ~55 1,109 641 -560 541 1,037 18 106 1 203 52 2,494 408 420 3,374 81 2,958 428 62 1,584 132 374 13 324 18 379 1,597 518 771 74 1,802 145 488 14 368 19 415 62 2, 090 355 1954 379 2,886 74 2,435 401 1955 415 Tolls Property taxes and 1 General fund appror. - -- Federal funds Miscellaneous Subtotal `FrcrnsfAr~ IT) Total 09 1,928 620 ~ 21 641 1,346 `d - 3,915 1,816 C) 587 922 &325~ 3,643 270 678 556 222 3,244 167 56 51 3,518 65 19 19 4 49 3,297 3,583 14 43 224 209 420 222 642 106 376 538 53 19 19 40 73 164 98 584 763 4,884 19 3,943 604 822 152 245 962 87 671 261 4 15 438 99 48 56 46 240 404 76 19 3, 583 1,236 1,008 5,846 19 4, 030 1,275 5,388 1,019 Total PAGENO="0263" B. Disbursements (fixed charges): Maintenance- Administration and policing Debt service Subtotal Transfers out - Total 0. Funds for capital outlay: 1 Excess current revenues (A less B) Federal funds: Highway-user revenue General fund Miscellaneous Subtotal 681 Transfers -607 Bond proceeds ---- Total D. Capital outlay by road system: Maintenance rural roads Local rural roads Urban streets and highways Total A. Current ecelpts for highways: I Highway-user revenue Tolls Property taxes and assessments General fund appropriations Federal funds Miscellaneous Subtotal Transfers in Total 701 480 1,881 ~64 82 455 110 195 685 549 629 2,367 21 772 4,324 2,435 ~ 661 ~ 1238 ~ 4,334 0 4,135 318 ~-4 817 547 ~ 41 ~ 265 ~ 6,163 CI) 1,206 7 12 664 294 318 677 59 110 456 72 207 1,804 437 635 7 12 693 297 380 19 1, 276 883 846 61 735 18 2,876 952 19 1,370 913 875 74 757 32 3,021 1,019 19 2,159 907 753 3838 19 2,283 949 789 63 18 1,424 329 255 2,008 363 18 751 21 1,747 32 294 588 2,317 18 95 1 254 681 2,666 772 -687 70 17 206 335 74 4,329 442 510 5,355 85 3, 0 1 75 2 366 147 621 22 394 20 65 2, 388 616 1,106 78 2,412 170 718 23 413 13 507 75 3 134 436 465 4,110 78 3,300 449 507 1956 1957 20 3,909 251 112 114 3 15 464 113 52 57 49 258 425 9 3,969 315 722 650 20 258 41 4,062 290 38 124 5 16 4 4 111 54 68 52 333 398 87 20 4,386 76 647 725 881 284 5,934 1,085 41 4,514 92 670 779 938 335 20 4,462 1,372 1,165 7,019 41 4,606 1,449 1,273 7,369 See footnotes at end of table, p. 260. PAGENO="0264" B. Disbursements (fixed charges): Maintenance Administration and policing Debt service Subtotal Transfers out Total C. Funds for Capital outlay: 1 Excess current revenues (A less B) Federal funds: Highway-user revenue General funds Miscellaneous Subtotal Transfers Bond proceeds Total P. Capital outlay by road system: Main rural roads Local rural roads Urban streets and highways Total A. Current receipts for highways: I Highway-user revenue Tolls Property taxes and assesssnents General fund appropriations Federal funds Miscellaneous nI L:rj 2,205 628 846 3,679 1,206 ~ 4,885 2,484 ~ 1,936 135 33 `-.4 C) 2, 104 5,777 3,017 824 1,813 5,654 TABLE B.-I?ecei~pts and disbursemen~ for highways by all units of government, 1946-65-Continued [In millions of dollars] . Federal Govern- ment State agencies Counties and townships Munici- palities Total Federal Govern- ment State agencies Counties and townships Munici- palities Total 1956 1957 8 12 . 775 340 419 764 65 119 542 105 190 2,089 522 728 24 17 830 412 481 784 567 76 123 124 241 20 - 1,534 988 948 71 837 26 3,339 1,085 41 1,723 1,083 984 82 931 41 20 2, 522 1, 019 863 4,424 41 2,806 1,066 972 - 632 371 25 1,940 353 302 2,595 632 371 25 1,936 135 33 1,800 383 301 1, 028 -797 - 776 1,067 21 102 313 1, 028 1,482 2, 104 -1,284 1,256 701 28 123 365 231 3, 783 475 615 5, 105 820 3, 757 534 666 87 2,745 208 938 26 438 10 563 2, 771 733 1,511 130 - 2,987 229 1,175 30 465 23 615 - 87 3,891 474 563 5,015 130 4,391 518 615 4, 198 325 1958 4 19 521 145 60 62 53 358 374 116 4, 264 397 879 576 46 300 4,428 396 1959 9 20 512 153 49 66 54 389 346 135 4,503 470 901 547 s~ 319 46 57 124 55 48 135 PAGENO="0265" 46 4,704 104 749 777 Subtotal Transfers in Total B. Disbursements (fixed charges): Maintenance Administration and policing Debt service Subtotal Transfers out Total C. Funds for capital outlay: 1 Excess current revenues (A less B) Federal funds: Highway-user revenues General funds Miscellaneous Flnhtnthl 963 6,462 55 5,007 389 1,270 115 743 815 990 6,795 401 1,331 46 4,808 1,526 1,352 7,732 55 5,122 1,558 1,391 8,126 24 22 - 886 467 508 846 81 126 613 155 260 2,369 725 894 25 30 023 505 579 874 91 124 659 134 285 2,481 760 988 46 1,861 1,126 1,053 102 1,028 42 3,988 1,270 55 2,007 1,176 1,089 100 1,078 55 46 2, 987 1, 155 1, 070 5, 218 55 3, 183 1, 189 1,133 1,969 140 31 1,821 371 282 Bond proceeds D. Capital outlay by road system: Main rural roads - 2, 474 1, 969 140 31 2, 221 125 27 1, 939 Urban streets and highways Tntc~l 369 2, 140 2, 140 2, 373 -2,273 2,247 26 -3,080 3,059 21 913 140 299 1,352 669 153 336 135 258 -133 4, 981 537 581 5, 966 2 -707 5, 667 3, 462 259 1,287 23 499 27 3,485 893 656 1,970 A. Current receipts for highways: 1 Highway-user revenue Tolls Property taxes and assessments General fund appropriations Federal funds 135 5,008 549 656 6,348 543 ins 3, 605 270 594 1060 1,518 Miscellaneous Q,~1-f,~f~1 4,229 1,331 ~s. 5,160 t~'i 2,566 2, 221 125 ~ 27 0 2,373 1,118 Fd l~097~ 3,627 C~ 856 2,174 519 899 761 61 374 22 - 474 25 631 61 103 5,402 521 631 70 54 340 438 164 61 1061 4, 868 450 80 4,731 9 4,810 426 19 499 513 853 54 170 662 61 61 164 52 380 165 55 154 5,375 763 1, 066 7,265 61 5,563 792 1, 141 101 847 413 1,361 111 918 410 8 16 521 192 61 5,476 1,610 1,479 8,626 67 13 378 489 61 5, 674 1, 710 1, 551 7,557 1, 439 8,996 C~i cc footnotes at end of table, p. 260. PAGENO="0266" TABL~I B.-J2eceipts and disbursements for highways by all units of government, 1946-65-Continued [In millions of dollars] Federal Govern- ment State agencies Counties and townships Munici- palities Total Federal Govern- ment State agencies Counties and townships Munici- palities Total . 1960 1961 27 30 4 1,006 532 604 922 96 117 685 152 296 2,640 810 1,021 61 28 33 2, 142 1,135 1, 133 4,471 61 2, 251 1, 179 1, 201 1,235 78 48 1,261 1, 281 103 55 1,040 922 738 575 100 162 636 157 301 B. Disbursements (fixed charges): Maintenance Administration and policing Debt service Subtotal Transfers out Total C. Funds for capital outlay: I Excess current revenues (A less B) Federal funds: Highway-user revenues General funds Miscellaneous Subtotal Transfers Bond proceeds Total D. Capital outlay by road systems: Main rural roads Local rural roads Urban streets and highways Total A. Current receipts for highways: 1 I-Iighway-user revenue Tolls Property taxes and assessments General fund appropriations Federal funds Miscellaneous 61 3,377 1,213 1,181 5,832 61 3, 532 1, 282 1, 256 2,803 160 39 2,099 397 298 2, 794 2,803 160 39 2,808 172 42 2, 142 428 295 3,002 -2, 551 2, 521 680 28 85 2 454 3,002 1,219 3,002 -2,741 2, 710 718 29 153 2 401 451 5,300 510 754 7,015 281 5,570 610 698 141 3,294 237 1,452 12 475 13 666 3,306 853 2, 131 139 3,487 245 1, 705 59 491 28 646 60 2,728 870 1,094 4,692 1,439 ~ 6, 131 2,865 2,808 ~ 172 W 42 3,022 1272 ~ 7,159 ~ 3,546 ~ 875 2,379 6,800 60 141 4,983 500 666 6,290 139 5,437 578 646 1962 1963 64 5,155 480 73 179 9 16 527 207 58 67 58 397 466 161 5,231 554 924 746 64 398 52 5,363 497 50 208 10 17 564 209 58 63 60 407 508 177 5 436 574 971 767 52 443 PAGENO="0267" STATE AND LOCAL PUBLIC FACILITY NEEDS 259 ~ c~ c~ t- ~ c~ 0 `0 0 0 0 0 PAGENO="0268" TABLE B.-Receipts and disbursements for highways by all units of government, 1946-65-Continued 15 ~47 Total 3,331 1,212 ~ 1,308 ~ 5,851 ~;s- 1,836 ~ 7,687 3,398 ~ 3,740 307 l:~j 61 ~ ___- a 1,170 8,676 4,062 tn 1,051 ~ 3,057 ~ 8, 170 [In millions of dollars] B. Disbursements (fixed charges): Maintenance Administration and policing Federal Govern- ment State agencies Counties and townships Munici- palities Total Federal Govern- ment State agencies Counties and townships Munici- palities 1964 1965 1,236 772 754 1,022 116 165 838 201 342 3,111 1,136 1,261 18 49 1,363 830 783 1,069 122 172 881 211 353 Subtotal Transfers out Total C. Funds for capital outlay: 1 Excess current revenues (A less B) Federal funds: Highway-user revenue General funds Miscellaneous Subtotal Transfers Bond proceeds mM-i 62 4,324 1,418 1,432 7,236 62 2,762 1,303 1,381 5,508 67 2,976 1,363 1,445 1,562 115 51 1,728 1,666 117 53 67 4,642 1,480 1,498 3, 536 247 55 2,341 - 521 337 3,239 3, 536 247 55 3, 740 307 61 2,470 561 367 - - *_ 3,838 -4,029 3,978 634 36 114 15 411 3,838 1,159 4, 108 -3,998 3,942 640 39 115 17 415 D. Capital outlay by road systems: Main rural roads Local rural roads United streets and highways Total ~-l91 6,953 671 803 8,236 110 7,052 715 4,093 22 4,115 4,038 24 179 266 590 1,035 163 272 616 2,331 36 726 3,093 2, 290 38 729 179 6,690 648 726 8, 243 163 6,600 678 799 729 `Included in pt. A are all funds available for highways except Federal funds and bond proceeds applied to capital outlay. These funds are Included only in pt. C. 2 Funds to meet these deficits were drawn from reserves. PAGENO="0269" STATE AND LOCAL PUBLIC FACILITY NEEDS 261 TABLE C.-1964 mileage classified by administrative and by Federal-aid systems Highways eligible for Federal-aid funds State administered highways County and township roads Local municipal streets Federal domain roads Total On Federal-aid systems: Interstate rural Interstate urban Other FAP rural Other FAP urban Secondary rural Secondary urban Total Not on Federal-aid systems: Rural Municipal Total Grand total I 34, 318 6,583 187, 083 17, 680 298, 781 8,328 9 3 676 48 301, 064 3, 554 12 220 174 1,230 7, 173 7,335 237 21 109 34,339 6, 806 188,170 18,979 607,127 19,217 552, 773 305, 354 16, 144 367 874,638 181,364 12,999 2, 039, 597 414,719 126, 713 2,347,674 427,718 194,363 2, 039, 597 414, 719 126,713 2, 775,392 747, 136 2,344, 951 430, 863 127, 080 3, 650,030 1 Includes mileage in Puerto Rico, and thus exceeds totals In table A. TABLE D.-1964 highway capital expenditures by State agencies, by adminis- trative and by Federal-aid systems [In millions of dollars] Highways eligible for Federal- aid funds State admin- istered highways County and township roads Local municipal streets Federal domain roads Total On Federal-aid systems: Interstate rural Interstate urban Other FAP rural Other FAP urban Secondary rural Secondary urban Total Not on Federal-aid systems: Rural Municipal Total Grand total 1, 872 1,468 1,304 741 590 14 26 1, 872 1,494 1,304 754 800 26 210 13 12 5,989 210 51 6,250 342 31 56 11 398 42 373 56 11 440 6,362 266 62 6,690 TABLE E.-1964 highway capital expenditures by all units of governnlent, by administrative and by Federal-aid systems [In millions of dollars] Highways eligible for Federal-aid funds State administered highways County and township roads Local municipal streets Federal domain roads Total On Federal-aid systems: Interstate rural Interstate urban Other FAP rural Other FAP urban Secondary rural Secondary urban Total Not on Federal-aid systems: Rural Municipal Total Grand total 1, 873 1, 513 1,306 746 616 14 10 251 26 23 29 24 1, 873 1, 539 1,316 769 896 38 6,068 261 102 6,431 349 33 595 667 168 1,112 700 1, 812 382 595 667 168 6,450 856 769 168 8, 243 PAGENO="0270" Federal Govern- ment TABLE F.-Receipts and disbursements fth- highways by afl units of governmeu-Porecast, 1966-76 [In millions of dollars] Federal Govern- ment A. Current receipts for highways: I Highway-user revenue Tolls Property taxes and assessments General fund appropriations Federal funds State agencies and District of Columbia Counties and townships Munici- palities Total State agencies and District of Columbia 67 Counties and townships Munici- palities Total 6,454 597 10 18 65 63 6,529 678 65 626 230 469 535 1,095 830 67 300 57 168 525 1966 1967 - 6,783 8 - 630 18 661 - 72 230 69 309 62 73 64 478 563 181 Subtotal Transfers in Total B. Disbursements (fixed charges): Maintenance Administration and policing Debt service Subtotal Transfers out - Total C. Funds for capital outlay: I Excess current revenues (A less B) Federal funds: Highway-user revenue General funds Miscellaneous Subtotal Transfers out Bond proceeds Total 6,864 712 1, 139 865 69 552 67 7,416 121 941 1,198 1,300 639 9,724 1,958 69 7,794 124 979 +1,266 1,359 +667 10,201 2,057 67 7,537 2,139 1,939 11,682 69 7,918 2,245 2,026 12,25 18 49 1,432 878 810 1,124 128 180 925 223 363 3,499 1,278 1,353 19 50 1,499 922 838 1,182 134 182 - 980 234 379 3 680 1,340 1,399 67 3, 120 1,783 1, 432 120 1, 511 55 6, 130 1,958 69 3,259 1,879 1,498 122 1, 593 56 6,419 2,057 67 8,476 3,782~ 4,903 1,552 3,888 498 51 2,634 587 373 1,566 8,088 69 5,138 1,620 1,649 3, 594 2, 780 625 377 3,888 498 4, 041 505 4, 041 505 51 48 48 4437 -4 158 - +4, 119 873 +35 118 +4 422 4,437 1,413 4, 594 -4,408 +4, 368 800 ----- +35 121 - - +5 429 4, 594 1,350 279 7, 626 740 799 9, 444 - 186 7,948 781 811 9,726 PAGENO="0271" Local rural roads Urban streets and highways A. Current receipts for highways: 1 Highway-user revenue Tolls Property taxes and assessments General fund appropriations Federal funds Miscellaneous Subtotal Transfers in Total B. Disbursements (fixed charges): Maintenance Administration and policing Debt service Subtotal Transfers out Total - C. Funds for capital outlay: 1 Excess aurrent revenues (A less B) Federal funds: Highway-user revenue General fund Misceflaiseous Subtotal Transfers out Bond proceeds 730 769 rn 7,451 782 L~i 1,200 870 72 567 10,942 ~ 2237 0 13,179 4,010 1,467 ci 1,507 ~ 6,984 CD 2,237 I~fJ 9,221 ~ 3,958 ~ 4,305 610 50 4,965 D. Capital outlay by road systems: 187 187 7, 137 4,381 24 4,405 293 641 1, 121 186 2,463 40 731 3,234 705 731 8,760 4,687 326 2,622 29 667 34 769 186 7,635 4,716 1, 179 3,425 9,320 1968 1969 71 7,076 662 73 318 8 18 679 231 60 74 65 491 565 181 7,158 745 1,170 869 71 559 72 7,368 698 74 327 8 18 696 231 58 75 66 504 565 182 71 8,129 127 996 1,325 1,376 696 10,572 2,148 72 8,467 130 1,011 1,382 1,392 725 71 8, 256 2,321 2, 072 12, 720 72 8, 597 2,393 2, 117 19 52 1,588 968 882 1,209 140 186 1,024 246 388 3,840 1,406 1,456 20 52 1,671 1,011 925 1,249 147 188 1,070 257 394 71 3, 438 1,967 1, 535 123 1, 658 58 - 6, 702 2, 148 72 3, 607 2, 052 1, 584 126 1, 721 59 71 5, 405 1, 658 1, 716 8, 850 72 5, 659 1, 710 1, 780 4,189 591 48 2, 851 663 356 3, 870 4,189 591 48 4,305 610 50 2,938 683 337 4,828 -4,638 +4, 597 725 +36 121 +5 429 4,828 1,275 4,965 -4, 770 +4, 728 650 +37 121 +5 429 190 8,173 820 790 9,973 195 8,316 841 771 10, 123 See footnote at end of table, p. 267. PAGENO="0272" TABLE F -Receipts and disbu, sernents for highways by all units of governrnenl-Forecast, 196~b~-75-Continued D. Capital outlay by road systems: Main rural roads Local rural roads Urban streets and highways _______ ________ _________ _________ _________ _________ _________ Total A. Current receipts for highways: I Flighway-user revenue TOlls Property taxes and assessments General fund appropriations Federal funds Miicellaneous _________ _________ _________ _________ _________ _________ _________ Subtotal Transfers in __________ __________ __________ __________ __________ __________ __________ Total - _______ _________ _________ _________ _________ _________ _________ B. Disbursements (fixed charges): Maintenance Administration and policing Debt service __________ _________ __________ __________ __________ __________ Subtotal Transfers out - Total ________ _________ _________ State - Federal agencies Counties Mumci- Govern- and acid palities Total ment Districtof townships - Columbia Federal Govern- ment 1968 State agencies and District of Columbia Counties and townships Munici- palities Total 1969 190 4 903 345 2,743 34 690 34 807 4,937 1, 225 3, 584 195 4,990 350 2, 71 37 717 36 835 5 027 1 262 3,662 190 7,991 758 807 9,746 195 8,131 790 835 9,951 1970 . 1971 74 7, 660 732 75 8 19 708 232 76 66 512 568 7, 744 817 1, 220 875 74 --- 580 75 7, 950 755 76 346 8 19 ~ 234 58 77 67 sw 572 188 8 035 841 1 250 882 75 592 337 58 - 185 74 8 804 132 1,025 1,442 1,407 754 11,310 2,328 75 9,127 134 1,044 1,499 1 429 782 11 675 2:415 74 8,936 2, 467 2, 161 13, 638 75 9, 261 2,543 2, 211 14,090 20 54 1,769 1,050 . 949 1 288 152 193 1, 112 268 ..~ .402 4 189 1524 21 54 1,879 1,090 980 1,320 158 195 1,173 278 407 4 393 1,580 1,582 74 3, 768 2,141 1,833 -- 127 1, 782 60 7, 257 2,328 75 3, 949 2,226 1, 673 128 1,858 61 7 558 1t415 74 5 909 1 760 - 1 842 9 585 75 61i~ 1801 1 919 9 979 0 0 t-4 0 0 (11 PAGENO="0273" C. Funds for capital outlay: I Exc~s current revenues (A less B) Fedetalfunds: Highway-user revenue - General fund cc Miscellaneous - Subtotal - Transfers out Bond proceeds - o Total ~ D. Capital outlay by road systems: Main rural roads Loealruralroads Urb8n streets and highways Total A. Current receipts for highways: I Highway-user evenue Tolls Property taxes and assessments General fund appropriations Fedei~al funds Miscellaneous Subtotal Transfers in Total B. [)ishursements (fixed charges): Maintenance Administration and policing Debt service Subtotal Transfers out Total See footnote at end of table, p. 267. 5, 128 Ci) Li~ö ~ 10, 408 5,156 1,318 3,799 10,273 8,630 ci 889 ~ 1,320 1r1 624 12, 443 C~ 2,598 ~ 15, 041 4,830 ~ 1,686 hd 1,633 L'~ 8,149 CI) 2, 598 4,408 619 50 3,027 707 319 4,053 4,408 619 50 4,509 568 51 3, 086 742 292 4,120 4,509 568 51 5,077 -4,882 +4,839 650 +38 123 +5 437 5,077 1,210 5,128 -4,928 +4,884 600 +39 123 +5 437 195 8, 516 868 761 10,340 200 8,570 904 734 195 5,075 360 2,851 38 737 37 865 5,113 1,292 3,753 200 5,119 360 2,877 37 758 38 884 195 8,286 812 865 10,158 200 8,356 833 884 1972 1973 76 8, 240 778 77 354 9 19 745 236 62 77 68 540 579 197 8,326 865 1,285 892 76 613 77 8, 543 801 78 362 9 19 766 239 63 78 69 554 586 199 76 9,449 136 1,071 1,559 1,461 811 12,057 2,506 77 9,784 138 1,096 1,619 1,486 841 76 9, 585 2,630 2, 272 14, 563 77 9,922 2, 715 2, 327 21 55 2, 004 1,128 992 1. 352 1 4 197 1, 236 - 287 411 4, 613 1,634 1,600 22 55 2, 141 1,165 1,014 1,383 169 201 1, 284 297 418 76 4,124 2,315 1,713 130 1,934 61 7,847 2,506 77 4,320 2,405 - 1,753 131 1,999 62 76 6,439 1, 843 1,995 10,353 77 6, 725 1,884 2, 061 10,747 PAGENO="0274" TABLE F -Receipts and disbursements for highways by all units of government-Forecast, 1966-75-Continued Federal Govern- ment agencies and District of Columbia Counties and townships Munici- palities Total Federal Govern- ment State agencies and District of Columbia Counties and townships Munici- palities 1972 1973 C. Funds for capital outlay: 1 Excess~current revenues (A less B) Federal funds: Highway-user revenue General fund Miscellaneous Subtotal Transfers out Bond proceeds Total D. Capital outlay by road systems: Main rural roads Local rural roads Urban streets and highways Total .~. Current receipts for highways: 1 Highway-user revenue m~ii~ - 3,146 787 277 4,210 3,197 831, 266 4,617 518 52 4,617 518 52 4,731 517 53 ..~ 5, 187 -4,987 - . +4,942 550 ._~ +39 123 +6 437 5, 187 1,110 - 5,301 -5,050 +5,050 - 550 +39 125 +7 445 200 8,638 949 720 10,507 205 8,797 905 718 - 200 - 5,151 363 2,894 33 784 39 890 5,184 1,347 - - 3,823 205 5,234 369 2,955 34 805 40 911 200 8,408 856 890 10,354 205 8,558 879 911. 00 Total 0 4,294 ~. 4,731 517 ~-d 53 ~ 5,301 0 10,715 5,268 ~ 1,379 ~ 3,906 ~ 10, 553 LTJ ______ 00 9, 243 938 1, 400 910 79 653 Property taxes and assessments General fund appropriations Federal funds 78 Miscellaneous 8,850 825 80 371 1974 . 1975 9 20 789 245 65 79 69 571 599 206 8,938 914 1,360 924 78 642 79 9, 154 848 82 379 9 20 812 252 65 80 70 588 616 209 PAGENO="0275" Subtotal Transfers in Total- B. Disbursements (fixed charges): Administration and policing Debt service Subtotal Transfers out - 78 10,126 1,128 1,524 12,856 79 10,463 1,158 1,563 13,268 140 1,683 872 2,695 142 1,744 902 2,788 78 10,266 2,811 2,396 15,551 79 10,605 2,902 2,465 22 56 2,291 1,206 1,027 1,415 174 203 1,334 310 422 5,062 1,746 1,652 23 56 2,457 1,247 1,048 1,446 181 206 1,380 318 430 5,306 1,802 1,684 78 7,024 1,924 2,129 11,155 78 ~ 4, 524 2,500 1, 792 132 2, 066 63 8, 460 2,695 79 4, 752 2, 591 1,833 133 2, 128 64 16,051 C. Ftsnds for capital outlay: 1 Excess current revenues (A less B) Federal funds: Highway-user revenue General fund -- Miscellaneous - Subtotal Transfers out_ Bond proceeds -- Total D. Capital outlay by road systems: Main ri~ral rnad~ 79 7,343 1,966 2,192 4,837 492 54 3, 242 887 267 4,396 4,837 492 54 4,929 545 55_ 3, 262 936 273 5,383 -5, 178 +5, 131 525 +39 125 +8 445 5,383 1,095 5,529 -5, 319 +5, 271 500 +39 125 +9 445 205 8, 898 1, 051 720 10, 874 210 9, 033 1, 100 727 Local rural roads -- Urban streets and highways - Total 205 5,309 377 2, 996 35 5,344 - 5,350 826 1,408 210 377 41 933 3,970 3,035 205 8,682 902 - 933 10, 722 210 8, 762 1 Included in part A are all funds available for highways except Federal funds and bond proceeds applied to capital outlay. These funds are included only in part C. 8,792 2,788 ~ 11, 580 L~i 4,471 4,929 545 ~.4 55 0 C) 5,529 1,070 ,.~ 11, 070 5,386 C) 1,434 4,027 10,847 L~j CI) 36 847 43 926 949 949 PAGENO="0276" 268 STATE ~D LOCAL PuBLIC FACILITY NEEDS TABLE G.-Forecast of capital requirements and capital outlays, 1966-75 [In millions of dollars] . Capital requirements * Capital outlays Amounts requirements exceed outlays By State governments: Main rural roads Local rural roads Urban streets and highways Total By local governments: Main rural roads 55, 280 6,104 31, 510 50, 199 5,493 23, 227 5, 081 611 3, 283 92,894 83,919 8,975 435 13,437 18,885 337 7,472 8,956 98 5,965 9,929 Localruralroads Urban streets and highways Total 32, 757 16, 765 15, 992 Total: 55, 715 19, 541 50,395 50, 536 12, 965 37, 183 5, 179 6, 576 13, 212 Main rural roads Local rural roads Urban streets and highways Total 125, 651 100, 684 24, 967 PAGENO="0277" CHAPTER 11 Toll Bridges, Tunnels and Turnpikes* INTRODUCTION Toll facilities have made up important segments of the transporta- tion system of the United States since pre-Revolutionary days. In Connecticut, for example, a toll ferry crossing between Rocky Hill and Glastonbury has been in continuous operation since 1655-121 years before the Declaration of Independence. Although many ferries still survive, when we speak of toll facilities in our day we are more likely to mean turnpikes, bridges, and tunnels for the use of which a direct user fee is charged. In one sense, there is no basic difference among these three types of facilities. A turn- pike is a highway over land; a bridge is usually a highway over water: and a tunnel is usually a highway under water. But in the development of Federal and State law applicable to these facilities, some important distinctions have been made over the years and it is necessary to go back into history to understand and appreci- ate these. A. NATURE AND CoMPosITIoN OF FACILITIES I. TOLL ROADS 1. BRIEF HISTORY The first turnpikes in this country were direct descendants of those in England and they reached their first full flowering after the American Revolution. The principal reason was that neither the new Republic nor its individual States was able to assume the financial burden of providing the transport facilities needed to bind the young Nation together. In 1792, Pennsylvania pioneered in the field by authorizing incor- poration of a company to build and operate a road from Lancaster to the port of Philadelphia. The turnpike was completed 4 years later and its success prompted similar projects in other areas. In the next quarter century, State legislatures chartered hundreds of private turnpike companies and some 8,000 miles of roads were constructed The bubble burst in the 1830's under the competition from canals and railroads, coupled with the high cost of maintaining and operating the turnpikes. The toll roads gradually fell into disrepair except where the citizenry kept portions open for local use. Toll bridges, with relatively lower maintenance costs and fewer competing facilities, fared better financially. Between 1843 and 1857 some of the States became fascinated with plank roads and during that period over $10 million in bonds were issued to build more than 7,000 miles of these all-weather roads. *Prepared by the International Bridge, Tunnel, & Turnpike Association, with minor editing by committee staff. 269 PAGENO="0278" 270 STATE ~D LOCAL PUBLIC FACILITY NEEDS The plank roads declined and practically disappeared by the l860's~ when it became evident that the pavement needed replacement after about 5 years. Moreover, the public became concerned about the abandonment of turnpikes with no provision for incorporating them into the system of public roads. The development of the automobile revolutionized not only trans- portation, but also the means of financing the needed roads. In 1901, New York initiated the annual motor vehicle registration fee. The original Federal-Aid Road Act of 1916 for the first time made Federal funds available to the States as assistance in providing roads. Section 1 of that act provided "that all roads constructed under the provisions of this act shall be free from tolls of all kinds." Section 2 provided that "necessary bridges and culverts shall be deemed parts of the respective roads covered by the provisions of this act." In 1919 the first motor fuel tax was enacted in Oregon and in 1932 the first Federal gasoline tax was imposed. Between 1920 and 1940, something like 1 mfflion miles of highways were built or improved, mostly from the proceeds of highway user taxes of various kinds. The Federal statutes and policies relative to toll facilities were reemphasized in the Federal Highway Act of 1921 and in much sub- sequent legislation. Despite the opposition to toll roads the first modern toll road-the Pennsylvania Turnpike-was built almost en- tirely with Federal assistance. It was opened to traffic between the vicinities of Harrisburg and Pittsburgh on October 1, 1940. Thus there was some inconsistency in Federal policy toward aid to toll roads during this period; with the Bureau continuing to oppose the use of Federal-aid funds on such projects while other agencies were providing assistance. However, assistance by such agencies as WPA, PWA, and RFC was more likely prompted by the policy of supporting projects that would create a demand for materials and employment during times of economic distress, than from any endorsement, per se, of the toll method of financing.1 The success of the Pennsylvania Turnpike created a postwar boom in toll road financing and by the mid-1950's some 30 States had built, were building, or were planning toll roads. The boom appar- ently reached an end in 1956 with passage of the Federal-aid Highway Act of that year. This provided for 90 percent Federal financing of the 41,000-mile Interstate System and a substantial increase in Federal funds available for the "regular" highway networks. On the surface, it appeared that a Federal contribution of 90 cents on the dollar to bmld new, limited access highways through the most heavily traveled traffic corridors would discourage any furth er sub- stantial private investment in toll roads or, for that matter, in bridges and tunnels on interstate routes. This proved to be a false assump- tion as will be shown later The 1956 act The Federal-aid Highway Act of 1956 authorized the inclusion of toll roads, bridges, and tunnels in the Interstate System where they met the standards. The historic prohibition on the use of Federal funds for construction, reconstruction, or improvement of toll roads was continued, but the legislation blazed some new trails in Federal policy by permitting Federal funds to be used for approaches to toll roads. It provided: I "A Review of Federal Statutes and Policies on Highway Toll Facilities," U.S. Department of Coin. merce, Bureau of Public Roads. PAGENO="0279" STATE AND LOCAL PTJBLIC FACILITY NEEDS 271 1. Federal-aid funds may be expended on projects "approaching any toll road, bridge, or tunnel to a point where such project will have some use irrespective of its use for such toll road, bridge, or tunnel." 2. Interstate System funds maybe expended on projects "approach- ing any toll road on the Interstate System, although the project has no use other than an approach to such toll road: Provided, that agree- ment satisfactory to the Secretary of Commerce has been reached with the State prior to the approach of any such project- (1) that the section of toll road will become free to the public upon the collection of tolls sufficient to liquidate the cost of the toll road or any bonds outstanding at the time constituting a valid lien against such toll road covered in the agreement and their maintenance and operation and debt service during the period of toll collections, and (2) that there is one or more reasonably satisfactory alternate free route available to traffic by which the toll section of the System may be bypassed. This recital of some of the Federal legislation affecting toll facilities has been made because of its direct bearing in many cases on past, present, and future financing of such facilities. 2. EXISTING CAPITAL PLANT (a) Growth and Distribution According to information available to the International Bridge, Tunnel & Turnpike Association, there are now 58 toll roads. Of this total, 20 are considered in a special classification because they are comparatively short in length, were designed for special purposes in- cluding seasonal tourist-recreational use. This report is centered on the 38 toll roads which are considered a full-fledged part of the public highway system. Prior to 1900, there were only three toll roads constructed, all of which fall into the scenic, seasonal, or recreational class. Their total cost was $305,000. From 1900 through 1919, there are no toll roads recorded as being constructed. From 1920 through 1929, four toll roads costing $10,358,000 were constructed: the Wantagh Parkway, the Saw Mill River Parkway, and the Hutchinson River Parkway in New York State, and the Broadmoor-Cheyenne Mountain Scenic Highway in Colorado. How- ever, the Saw Mill River Parkway and the Hutchinson River Parkway did not become toll facilities until 1947, when toll stations were installed and tolls collected for the first time. In 1934 construction was begun on the Merritt Parkway in Con- necticut, which incorporated the first features of modern design. Through 1939, several other parkways were constructed in the State of New York at a cost of over $8,238,000 to bring the total toll road investment by 1940 to $29,638,000. From 1940 to 1949, five toll roads were built; the Wilbur Cross Parkway in Connecticut, the first sections of the Pennsylvania and Maine turnpikes, the Buccaneer Trail in Florida and the recreational Equinox Skyline Drive in Vermont, at a total combined cost of $113,791,000. The greatest period for construction of toll roads in the United States was from 1950 through 1959, when a total investment of over PAGENO="0280" 272 STATE ~D LOCAL PUBLIC FACILITY NEEDS $4,817,669,000 was recorded. This pace slowed briefly upon passage of the 1956 Highway Act, but following 1960, there was a resurgence in the construction of toll roads, and new investment totaling: $571,366,000 was recorded between 1960 and 1965. The grand total of the investment in all 58 toll roads in the T5nitect States on which information is available up through 1965 is slightly in excess of $5,538,762,000. Table 1 shows the 38 major toll roads by name, State, year of completion, and mileage. TABLE I Toil road State Miles Year completed Connecticut Turnpike Connecticut 129 1958. Merritt and Wilbur CrossParkways do 66 1940. Denver-Boulder Turnpike Colorado 17 1952. Delaware Turnpike (John F. Kennedy Memorial Delaware 11 1963. Highway). Airport expressway Florida 8 1961. Buccaneer Trail do 15 1950. Sunshine State Parkway _...do 265 1956-110 miles. 1964-155 miles. Illinois Tollway Illinois 187 1958. Indiana east-west toil road Indiana 156 1956. Kansas City Expressway Kansas 5 1959. Kansas Turnpike do 236 1956. Kentucky Turnpike Kentucky 40 1956. Bluegrass Parkway do 65 1965. Mountain Parkway do 43 1963. Mountain Parkway extension do 32 1963. Western Kentucky Parkway do 127 1963. Maine Turnpike Maine 106 1947-43 miles. 1955-63 miles. John F. Kennedy Memorial Highway Maryland 42 1963. Massachusetts Turnpike Massachusetts 123 1957. Boston extension do 12 1965. New Hampshire Turnpike New Hampshire 15 1950. Everett Turnpike .____do 40 1957. Spaulding Turnpike .~do 25 1957. Atlantic City Expressway New Jersey 44 1964. New Jersey Turnpike do 131 1951. Garden State Parkway ~._...do 173 1954. New York State Thruway: Main line New York 426 1954-381 miles. 1955-42 miles. 1956-3 miles. Niagara section do 21 1956-7 miles. 1959-8 miles. 1960-6 miles. Erie section do 70 1957. Garden State Parkway connection do 3 1957. Berkshire section do 24 1958-18 miles. 1959-6 miles. New England section do 15 1958. Hutchinson River Parkway do 15 1927.' Saw Mill River Parkway do 30 1026.' Ohio Turnpike Ohio 241 1955. H. E. Bailey Turnpike Oklahoma 86 1064. Indian Nation Turnpike (sec. A) do 41 1966. Will Rogers Turnpike do 88 1957. Turner Turnpike do 86 1953. Pennsylvania Turnpike Pennsylvania 470 1940-160 miles. 1951-167 miles. 1954-33 miles. 1957-110 miles. Dallas-Fort Worth Turnpike Texas 29 1955. Richmond-Petersburg Turnpike Virginia 34 1956. West Virginia Turnpike West Virginia 88 1954. Total 3,880 I Toll stations established in 1947. (b) Age of Facilities Total length of all 38 major toll roads included in table I is 3,880 miles. Of this mileage, 271.4 miles, or approximately 6.9 percent, was completed and in operation prior to 1946, and 93.1 percent, or PAGENO="0281" STATE AND LOCAL PUBLIC FACILITY NEEDS 273 3,564 miles, was opened to traffic between 1946 and 1965. Some 2,432 miles were completed from 1955 to 1965 inclusive, so that a little over 62 percent of these modern toll highways were built within the last 11 years. (c) Description of Facilities The 38 major toll roads in the United States are, with few excep- tions, high-speed expressways having divided roadways with two or more lanes in each direction and with limited access to and from other highways by grade separated interchanges. In general, the functional design of modern toll roads corresponds to construction standards required (and permitted) on the Federal System of Interstate and Defense Highways, of which many toll roads are a designated part. Design standards on some toll roads built prior to establishment of I[nterstate standards are not entirely in accord with present Interstate requirements. On the other hand, they also exceed Interstate design standards in many instances. The function of a modern toll road is to provide safe and economical high speed automotive travel over considerable distances without interruption by cross traffic. In order to attract traffic at a level sufficient to discharge obligations incurred by the original investment, toll roads must provide and maintain a considerably higher level of service than other alternate routes. They must follow the highest standards of maintenance to provide if at all possible a smooth, dry and safe driving surface, even during periods of adverse weather conditions. They must provide adequate highway patrol and other services to assure a higher level of safety and a free flow of traffic. In addition, most toll roads provide on-the-road service facilities including restaurants and service stations. Toll roads also provide emergency highway services to motorists with disabled vehicles, a service not normally provided on other public highways. ~In 1965. the major toll roads reported that a grand total of 676,- 782,999 vehicles utilized their facilities, driving a total of 19.28 billion vehicle miles, an increase of 10 percent over 1964. (d) Ownership All of the 38 major toll roads (table I) are owned and operated either by a State highway department or by toll road authorities or commissions created by State law. The State highway departments owning and operating toll roads include Colorado, Connecticut, Dela- ware, Florida, and Maryland. The Florida State Turnpike Authority, a separate agency, owns and operates the 265-mile Sunshine State Parkway. r~Because they are, by law, State agencies, toll road authorities and commissions are given through enabling legislation certain authority and specific responsibilities within that authority. While the specific provisions of such enabling legislation may vary in detail from one State to another, such enabling acts generally provide that a toll road authority or commission may be established, in some instances out- lining its requirements and describing the facility or facilities author- ized, their financing, construction, and operation in the public interest. PAGENO="0282" 274 STATE AND LOCAL PUBLIC FACILITY NEEDS II. TOLL BRIDGES AND TUNNELS 1. BRIEF HISTORY Bridges, causeways, and tunnels are being combined under a single category because their functions are basically the same. Toll bridges came into being for the same reason as toll roads. They became feasible and practical because of the demand for crossing a body of water at a particular point. Ferries powered by horses or oxen had a limited capacity and were adaptable for use only on relatively short crossings. As the demand for better crossings grew, enterprising individuals, and sometimes companies organized for this purpose, began constructing toll bridges under special charters to connect the primitive road system in the early years of our Nation. Thus, the first toll bridges, like toll roads, came into existence as a venture of private enterprise. In a young, growing country having very limited tax resources, the advantages of private financing, ownership and operation of toll bridges were obvious. Public funds were not available, a crossing was definitely required and the private enterprise approach was the fastest and least painful way of providing a bridge, while at the same time avoiding direct responsibility for its operation and maintenance. Unlike early toll roads, construction and operation of toll bridges flourished, and the trend toward publicly owned and operated toll bridges did not become general until about 1930. Original statutory and policy opposition of the Federal Government to the imposition of tolls on all highway facilities was softened as to bridges in 1927. The "Oldfield Act" of that year provided that Federal-aid highway funds could be extended to the construction of any toll bridge and approaches thereto under certain conditions. These were: (1) that the bridge be owned and operated by States or their political subdivisions, and (2) that "all tolls received from the operation thereof, less the actual cost of operation and maintenance, are applied to the repayment to the State or States, or political sub- division or subdivisions thereof, of its or their part of the cost of con- struction of such bridge and, upon the further condition that when the amount (so contributed) shall have been repaid from the tolls, the collection of tolls for the use of such bridge shall thereafter cease, and the same shall be maintained and operated as a free bridge." The statute was further amended in 1956 to include tunnels as well as bridges and has remained part of Federal law. Federal-aid funds were used in the construction of a number of bridges and/or approaches under the Oldfield Act, but several of these have since become toll free and only eight were in operation as toll facilities by the end of 1964. The trends toward governmental ownership and the creation of special authorities and commissions to finance and operate toll bridges were revolutionary. Many of the original structures built by bridge companies had, by the late 1920's, become old or~ obsolete so that~ an entirely new and larger facility was required. In some instances, the original bridge owners could finance a new structure or rebuild the existing structure to new specifications. Others were not in a position to do so. The result was that a privately owned bridge was sometimes purchased by a municipality, a county or a State, which in turn operated it or created an authority or commission to provide, operate, PAGENO="0283" STATE AND LOCAL PUBLIC FACILITY NEEDS 275 ttnd maintain a new structure. In some cases, financial failure of the original venture made it necessary for the owners to sell the structure. In others, disasters, including serious floods or fires, rendered the original structure useless and unsafe, which in turn led to a transfer of ownership. The trend toward public ownership and operation of toll bridges has continued to the present time. Vehicular toll tunnels in comparison to bridges are a rather recent development made possible by tremendous advancements in tech- nology. Their functions and services are essentially the same as toll bridges. 2. EXISTING CAPITAL PLANT As of early 1965, there were 193 toll bridges and causeways located entirely within the United States, according to information compiled by the International Bridge, Tunnel & Turnpike Association. There are also 10 toll bridges crossing the border from the United States to Canada and 11 between the United States and Mexico. Table II lists these bridges by State, indicating that a number are bistate bridges. It is difficult to arrive at figures reflecting true or total investment in toll bridges in the United States. Tabulated below is a listing of bridges by number constructed in each 10-year period and a corre- sponding reported investment cost. TABLE II United States: Alabama Arizona California Colorado Connecticut Delaware-New Jersey Florida Georgia-Florida Georgia-South Carolina. - - - Illinois Illinois-Indiana Illinois-Iowa Illinois-Kentucky Illinois-Missouri Indiana-Kentucky Iowa-Nebraska Iowa-Wisconsin Kansas-Missouri Kentucky Kentucky-Ohio Kentucky-West Virginia - - Louisiana Maine Maine-New Hampshire - - - Maryland Maryland-Virginia Maryland-West Virginia. - - Massachusetts Michigan Minnesota-Wisconsin Mississippi Missouri United States-Continued Missouri-Iowa Missouri-Nebraska Montana New Hampshire New Hampshire-Vermont - New Jersey New Jersey-Pennsylvania - New Jersey-New York New York New York-Pennsylvania - - New York-Vermont Ohio-West Virginia Oregon-Washington Pennsylvania Rhode Island South Carolina Texas Virginia Washington West Virginia West Virginia-Virginia Total International crossings: Michigan-Canada 2 Minnesota-Canada New York-Canada 7 Texas-Mexico 11 Total 21 Grand total 214 Number of bridges 1 1 8 1 8 1 18 1 1 2 3 9 1 7 1 5 1 2 1 3 3; 3~ 4~ 1 5 1 1 1 2 2 2 4 Number of bridges 1 2 1 1 1 8 10 4 19 1 2 4 7 1 2 1 2 10 10 1 1 193 PAGENO="0284" 276 STATE AND LOCAL PUBLIC FACILITY NEEDS TABLE III Year Number of Investment Prior to 1899 1900-09 1910-19 1920-29 1930-39 1940-49 1950-59 1960-65 bridges 8 5 ~ 43 34 23 82 14 $17,297,620 1,254, 840 ~ 772,250 154,185,850 431,261,230 64, 208, 300 1,346,816,450 644,693,960 Total 218 2,694,490,500 Improvements to toll bridges over this period amounted to $254,355,000 making the total investment in bridges $2,948,845,500. Four bridges of the 218 recorded are now toll free. III. TUNNELS 1. HISTORY Exclusive of those tunnels which are a part of combined bridge- tunnel or road-tunnel projects, there are now 10 vehicular tunnel projects, including 1 between the United States and Canada. The first of these was the Holland Tunnel constructed by the Port of New York Authority between New York and New Jersey and opened in 1927 at an original reported cost of $50,813,600. From 1930 to 1939, a total of $224,800,000 was utilized to build three major tunnels: the Sumner Tunnel in Boston, the Detroit- Windsor Tunnel between Michigan and Canada and the Lincoln Tunnel between New York and New Jersey; plus $8,200,000 for tunnel improvements. From 1940 to 1949 the Bankhead Tunnel in Alabama and the Queens Mid-town Tunnel in New York were completed at a cost of $69,910,000. This amount plus an expendi- ture of $8,200,000 for tunnel improvements brought the investment for this period to $78,110,000. A total of $319,046,000 was invested in the construction of new tunnels and the improvement of two existing tunnels between 1950 and 1959. The new tunnels constructed in these years include the Baltimore Harbor Tunnel, the Brooklyn Battery Tunnel in New York and the Callahan Tunnel in Boston. The Mid-town Tunnel in Hampton, Va. was constructed at a cost of $41,700,000 in 1960. The total original cost of these 10 tunnels is reported as $703,769,600. Improvements made over the years are given as $11,748,000, making the total tunnel investment $715,517,600. Approximately 99 bridges and causeways are less than 20 years old, 20 are over 20 years old and 34 are over 30 years old. Bridges 40 or more years old total 65. All of the 10 tunnel projects are less than 40 years old. Two are 5 years old, one is 10 years old, and one 15 years old. Five were com- pleted a little over 20 years ago. The Holland Tunnel was completed in 1927. PAGENO="0285" STATE AND LOCAL PUBLIC FACILITY NEEDS 277 2. DESCRIPTION OF FACILITIES Toll bridges in the United States can truthfully be described as encompassing every size and description. They vary from the Oidtown Bridge between Maryland and West Virginia built at a cost of a little over $12,000 to such giants as the George Washington and Verrazano-Narrows Bridge in New York, the Golden Gate Bridge in San Francisco, and the Chesapeake Bay Bridge-Tunnel project be- tween Cape Charles and Norfolk, Va. From a standpoint of construction and design, the largest bridges are suspension type structures, others are steel truss, some are steel or concrete trestle bridges, some are bascule bridges and others are steel and concrete arch structures and some are various combinations of types. In traffic-carrying capacity, they vary from a simple 2-lane bridge to the 14 lanes of traffic accommodated by the George Wash- ington Bridge on 2 levels. The basic function of a toll bridge or tunnel is, of course, to provide an expeditious, safe, and direct crossing of a body of water or other geographical barrier along a route desired by vehicular traffic. In order to perform this function, the bridge or tunnel must be constructed at a point where established traffic desires can be served and to such design standards that it will assure good direct traffic service so that it may discharge the financial obligation incurred in its construction plus cost of operation and maintenance. In 1965, the International Bridge, Tunnel, & Turnpike Association received reports showing that a grand total of 676,467,519 vehicles utilized 90 bridge and tunnel facilities during the year. Ownership Exclusive of the few bridges and one tunnel in private ownership toll bridges and tunnels in the United States are owned and operated either by a special public service authority or by a State or local government. In some cases, these authorities or commissions were created by States, others by cities and/or counties under State enabling legislation. In a number of cases, such authorities are bistate in nature and were organized under enabling legislation of two States with concurring legislation adopted by Congress. Among these are the Port of New York Authority (New York and New Jersey), the Delaware River & Bay Authority (Delaware and New Jersey), the Delaware River Port Authority (Pennsylvania and New Jersey). In cases where bridges or tunnels cross international boundaries, special approval is required not only from the State or Province in which they are to be located, but by international compact or other agreement between cooperating countries to authorize the construction and operation of the facility. B. OPERATING COSTS AND USER CHARGES 1. OPERATING COSTS For purposes of this report, operating costs are considered to include administrative costs, operating expenses, maintenance costs and over- head costs which are basic and essential to the operation of toll facilities. PAGENO="0286" 278 STATE ~D LOCAL PUBLIC FACILITY NEEDS Operating costs on toll bridges and tunnels vary widely in relatioii to the physical size of the facility, the amount and kind of traffic~ handled, the age of the facility and its geographical location. Iii brief, a short two-lane bridge with traffic volumes of perhaps 4,000 to 5,000 vehicles per day will have small operating expenses in comparison to a six-lane bridge handling 50,000 vehicles a day. The costs of personnel and maintenance in a large metropolitan area will normally be higher than those in a comparatively small city. Considering these and many other local and individual factors, there appears to~ be no common denominator which can be applied to develop an. average cost for the operation of toll facilities. Although detailed~ reports of operating costs on all toll bridges are not available, it is estimated that these total costs as defined above for toll bridges and. tunnels in the Tlnited States exceed $75 mfflion annually. Operating costs for toll roads are somewhat different, but they again vary widely for the same general reasons as indicated for bridges. Generally speaking, total operating costs of toll roads, including administration, maintenance and overhead expenses essential. to the operation, vary from $20,000 per mile to over $40,000 per mile annually. A toll road carrying high volumes of mixed traffic will. have greater operating expenses than another of equal length having a much lower volume of traffic. A toll road in a northern climate will have comparatively higher operating costs than one in a warm climate. Similarly, a toll road traversing a heavily populated area will have higher operating costs than one passing through a rural area, and a toll road 15 years old will have higher annual maintenance costs than one built in 1964. Taking these and other factors into consideration, it is estimated that the total cost of operation, including administration, mainte- nance, and necessary overhead expense, exceeds $150 million annually for the 38 major toll roads in the United States. 2 USER CHARGES All toll facilities, regardless of size or location, provide funds for their operations and debt service through placing a user charge on all vehicles using their facility. The "user-pay" principle is the basis for their existence. On toll bridges, the user fees or tolls vary from a 5-cent toll for passenger vehicles to $4.95. A few facilities also make a small charge per passenger and some for pedestrians. Truck user fees are, of course, higher than passenger vehicles. These are usually divided into classes based generally upon size and weight. The classifications adopted vary from one facility to another. Passenger car toll rates on toll roads can bes1~ be described as ranging from 1 cent per mile to about 3.5 cent per mile. Again, these rates reflect differences in the original cost of construction, the amount of passenger car traffic in relation to commercial trucks and buses, debt retirement and interest costs, and costs of operation and maintenance. Toll rates fQr commercial vehicles are higher than those of passenger vehicles on toll roads As in the case of bridges and tunnels, commercial vehicles are generally classified by size and weight and a toll rate is established for each class. A number of facilities have adopted commuter discount rates for passenger vehicles and volume discount rates for commercial vehicles. PAGENO="0287" STATE AND LOCAL PUBLIC FACILITY NEEDS 279 Some toll agencies also have charge accounts for trucks and buses. These special rates and regulations vary considerably from one agency to another. Basically, the toll structure (schedule of toll rates by class of vehicle) is designed to produce sufficient revenue from user fees to provide for the operation and maintenance costs of the project and for interest on and retirement of the debt incurred in its financing. This involves adopting a rate schedule that is fair and equitable for each class of vehicle and one which will attract sufficient traffic to meet all financial obligations incurred. Since toll schedules are calculated and adopted well in advance of project completion, actual experience may in some instances indicate that the rates are too low or too high. As a result, there have been instances where toll schedules have been adj usted upward to meet fiscal requirements or downward in the interest of the public service. C. TREND OF CAPITAL OUTLAYS 1. ANNUAL TRENDS The trend of reported capital outlays for toll facilities between 1946 and 1965 is tabulated on an average annual basis below. An annual average is utilized primarily because expenditures for all projects do not lend themselves to annualallocations due to size of the project, its method of financing, improvements added, and other reasons. Type of facility Capital in- vestment, 1946-65 Annual aver- age, 1946-65 Tolls roads Toll bridges - $5, 389,035,000 2,002, 170,400 361, 784, 000 $269, 451, 750 100, 108, 000 18,089,000 387, 648,750 Toll tunnels - Total - 7,752,989,400 As shown above, the average annual capital outlay for toll facilities between 1946 and 1965 is reported at over $387 million a year. Investment by levels qf government Except by visiting each toll facility or authority and making a de- tailed investigation, it would be impossible to determine the role of the various levels of government in financing toll facilities over a period of 50 years. Many of them were financed in various ways and sometimes by more than one agency. In general, it may be said that over 90 percent of all toll facilities presently in existence were financed through an authority or commission created by State and local governments for this purpose and in certain instances via enabling legislation by Congress. 2. SOURCES OF FINANCING Toll facilities, are financed by the sale of bonds which fall into three general classifications. Revenue bonds are those supported only by the income from the toll project. Limited obligation bonds are issues secured wholly or partly from the proceeds of highway use taxes, such as the State gasoline tax, but which do not carry the further guar- PAGENO="0288" 280 STATE AND LOCAL PUBLIC FACILITY NEEDS antee of the State's credit. General obligation bonds are backed by the full faith and credit of State, county, or municipality. Revenue bonds usually carry a higher interest rate than either lim- ited obligation or general obligation bonds because of the greater risk. involved. In some cases, a combination of two or more of these financ- ing methods is employed, notably in the financing of the New York Thruway, which is worthy of further comment. The thruway is a 559-mile toll road running through the principal traffic corridors of New York State, the main trunk connecting New York City with Buffalo. It was begun as a free facility shortly after World War II, but it soon became obvious that it could not be corn- pleted for a generation or more from tax resources. It was decided to make it a toll road and the New York State Thruway Authority was created to finance, build, and operate the facility. It obtained its first financing from short-term notes, com- prising a $10 million loan in 1950 and a $60 rnfflion loan in 1952. In 1951, the New York electorate authorized the State guarantee of $500 mfflion of thruway authority bonds, which was considered sufficient to cover the cost of the thruway as then contemplated. In 1953 the short-term notes were retired from proceeds of the authority's first issue of State guaranteed bonds. It became apparent, meanwhile, that rising construction costs and additions to the thruway system would result in a final cost greatly in excess of the authorized $500 million of State guaranteed bonds In 1954 the legislature granted the authorit'~ po~ver to issue ie~ enue bonds to finance completion of .the project. The revenue bonds have first. claim on thruway income, even over the State guaranteed issues, and this situation held the interest costs on the revenue bonds to a. low level. The Garden State Parkway in New Jersey also was financed largely by State guaranteed bonds., But these cases are the exceptions, rather than the rule. Another unusual feature in both cases is the fact that there are "free" sections on both toll roads where Federal aid was made available. Bond issues, of course, have financed many nontoll highway projects and are continuing to do so, but these are outside the scope of this report. Total investment in tolifacilities ` It is difficult to arrive at figures reflecting the value of `all toll facilities presently operating in the United States. A survey of the membership of the International Bridge, Tunnel & Turnpike Associa- tion, and data gathered from many different sources indicate that the original cost and improvements made for all toll facilities in existence are as tabulated below:' Investment to date 38 toll roads $5 248 203 000 Toll bridges 2, 948, 845, 500 Toll tunnels 715, 517, 600 Total 8, 912, 566, 100 If the investment of $290,559,000 for the 20 special purpose toll roads is included, the original investment in all toll f'tcjhties is cal- culated as a little over $9.2 billion. This total does n6t reflOct their present or "replacement" value PAGENO="0289" STATE AND LOCAL PUBLIC FACILITY NEEDS 281 New toll facilities now under construction are estimated to cost $627 million, including $192 million for toll roads and $435 million for bridges. New tunnels are planned but are not yet under construction. D. THE OUTLOOK: 1966-1975 Forecasting activity in the provision of new and expanded toll facilities over the next decade involves the cloudiest of crystal balls. Aside from the ever-present possibility of a major war or depression, predictions must be hedged by- 1. Uncertainties as to the amount of Federal and State financ- ing available during this period. 2. Conditions in the bond market. 3. The impact of other forms of transportation on motor vehicle highway travel. Even assuming that pending legislation is enacted to provide the necessary financing to complete the National System of Interstate and Defense Highways on schedule in 1972, there is presently no provision for a Federal-aid highway program thereafter. It is generally assumed that there will be one but its size, direction and Federal-State matching ratios are unknown quantities. At the State level, matching of Federal-aid funds in the required ratios has been a serious problem in some cases and will mount as more of the new interstate and other highways are opened. Under existing law, the States bear the entire cost of maintaining the Federal-aid roads. Also, under existing law, a State may decide to build a section of the Interstate System as a toll road provided no Federal ftmds are used Under the dual compulsion of limited budgets and the need for pro- viding a traffic facility faster than the flow of Federal-aid funds would permit, additional States may turn to toll financing of portions of their Interstate or other highways. This was done, for example, by the States of Delaware and Maryland in 1962 to finance Interstate 95 through those States. Conditions in the bond market naturally affect the timing of pro- posed borrowing. Early in 1966, the New Jersey Turnpike Authority sought to market a $440 million bond issue, but rejected the bid it received as too high. Another imponderable is the effect on highway travel of other forms of transportation during the next decade. Highway needs may or may not be diminished by fast rail service, increased use of jet planes for short hauls, and more exotic forms of transportation such as under- ground tubes, hydrof oils and air-jet vehicles. Nevertheless, a survey of the member facilities of the International Bridge, Tunnel & Turnpike Association shows this picture for pro- jected new projects and capital improvements between 1966 and 1975. New facilities Improvements Tollroads Toll bridges Toll tunnels $540,000,000 728, 000, 000 45, 000, 000 $602,000,000 367, 000, 000 200, 000 Total Total 1,313,000,000 969,200,000 2,282,200,000 W-132---66-vol. 1-19 PAGENO="0290" 282 STATE ~D LOCAL PUBLIC FACILITY NEEDS This includes only those projects planned to a point where general cost estimates are available and is limited only to members of the IBTTA who replied to the survey questionnaire. There may be other projects that are not now planned which may become a reality. Nor does this figure take into account the fact that new toll authorities and commissions are being created and that other toll projects are un- doubtedly being planned on which specific information is not available. Such projects may well increase the total of $2.282 billion. More than 2,200 miles of new toll facilities including toll roads and 47 bridges are presently under construction or planned, according to the Special Committee on the Federal-aid Highway Program, House Committee on Public Works. The cost of only a portion of these is included in the $1,313 million above because firm cost esti- mates are not yet available for the remainder. It is believed, how- ever, that if all of these projects move on to become a reality, total expenditures for new proj ects, and for extensions to and improvements of existing projects, may approximate $5 billion between 1966 and 1975. This general estimate, assumes of course, that a continuing and uninterrupted high level of economic activity will be maintained throughout the period and that the present provisions of Federal highway law will not be changed in a way which will have an adverse effect on existing or projected toll facilities. PAGENO="0291" CHAPTER 12 Offstreet Parking Facilities * A. NATURE AND COMPOSITION 1. DESCRIPTION OF FACILITIES Offstreet parking is a service that is provided by both the private and public sectors of our urban communities. In the public area it is planned, financed and operated by a variety of municipal agencies. These are city departments, parking agencies, parking boards and autonomous parking authorities. In all cases there is legislative action which usually defines the limits these bodies possess. These official groups have a keen interest in assuring that the motoring public is provided with a coordinated system of terminal facilities. In the post-World War II years the crushing impact of demand for parking space in urban areas, large and small, became apparent to most American cities and as a result many legislative proposals were introduced and enacted into law by the various State legislatures and in city councils throughout the land. Many reasons were behind this governmental movement into a field that had been one primarily of private enterprise. Among these reasons were that private industry could not meet the challenge alone, either due to difficulty in financing parking developments on a broad basis or lack of ability in acquiring properly located sites which would relate to the overall transportation plans of the urban area. The general physical characteristics of the plant and equipment involved in such installations are the surface parking lot which may be operated by automatic gates, attendants, parking meters or in a variety of other methods. This is the most elementary of the methods for storing the vehicle. Next in the order of complexity would be the open ramp garage, followed by the underground garage which is usually only found in the largest urban areas and almost without exception beneath publicly owned land providing a multipurpose use of the land for a park and vehicle storage area. In both of these types of garages very sophisticated equipment is utilized to maintain complete control of occupancy levels and to provide very rigid financial controls on the operations. In addition there have been limited numbers of mechani- cal parking garages developed and installed throughout the country. Usually these are found on very high priced land in areas where there is a very high demand for short-term parking with a resultant high turnover. The latest trend in some areas of the country is the *Prepared by William D. Heath, Executive Director, District of Columbia Motor Vehicle Parking Agency and Secretary of the International Municipal Parking Congress, with minor editing by committee staff~ 283 PAGENO="0292" 284 STATE AND LOCAL PUBLIC FACILITY NEEDS multipurpose building; that is, an office building with a certain amount of parking provided as an integral part of the building. Quite fre- quently the reason for the provision of parking integrally is to comply with local zoning ordinances which require the provision of parking based on various scales. Services Rendered T he parking services rendered by municipalities are iii great part con- fined to the commercial heart of the city, however, there are exceptions to this. In some cases where a parking shortage has occurred in an industrial area the municipality has stepped in to relieve the deficiency. In the case of a manufacturer who may be thinking of moving his plant to an outlying a.rea because of the difficulties his employees have parking, it can he to the economic benefit of the community from a fiscal standpoint for the city to provide the parking facilities rather than to lose the tax revenues from the plant. Other municipalities have found it desirable and necessary to provide offstreet parking in residential areas, an outstanding example of this is a midwestern city which has provided a great many residential parking lots. Another facet of municipal parking is the provision of parking facilities in neighborhood shopping areas. Tlěis has generally occurred in the older and larger cities where the neighborhood centers were situated in a strip development along streetcar lines and before the automobile became a part of the American way of life. Other cities which are located in the center of recreational areas have had to establish park- ing facilities to serve the users of such areas. Examples of this type are found both on our east and west coast where large numbers of persons are attracted by the pleasures that the oceans afford. A recent study conducted for the Automobile Manufacturers Association disclosed the distribution of central business district parking facilities by population groups, registered vehicles, and area. (Figs. 1-5.) The durability of parking structures can be equated with any corn- mercial building constructed of reinforced concrete or structural steel. Maintenance of these structures is of limited nature and consists primarily of sealing and waterproofing of floors, painting and striping of stalls. One of the greatest factors of obsolescence found in older garage structures has been the increase in size of the vehicle over a period of years. Many old structures designed for three cars to a bay have had their capacity reduced by one-third because of this factor. Using modern techniques the garage of today is a clear span structure and any change in the size of vehic] es will only result in the repainting of stall lines with very minimal loss of space. PAGENO="0293" STATE AND LOCAL PUBLIC FACILITY NEEDS 285 FIGURE 1 CENTRAL BUSINESS DISTRICT PARKING SPACES IN RELATION TO URBANIZED AREA POPULATION PAGENO="0294" 286 STATE AND LOCAL PUBLIC FACILITY NEEDS URBANIZED AREA POPULATION- isso FICUIIE 2 CENTRAL BUSINESS Dismicr PARKING SPACES PER REGISTERED VEs1IcI~, 1980 The spaces per registered vehicle decline as the urban area increases in population. When urbanized area population approximates 100 000, central business district parking spaces approximate 110 per 1,000 registered vehicles. When the urbanized area reaches one million people, there are approximately 40 spaces par registered vehicle. For Los Angeles (with an urbanized area population of six million) there are only 18 spaces per 1,000 registered vehicles. -4- ~` -~ - - - - - - - `a 2 IoI_-___~._~ ----" 1 - - - - - - - - - - - - - . , 0 - 11:1 ~: I `t 1 I ~ ~IiI I i ~ I~I-B I - ~If1I -4~ ~ I 101000 00,000 100,000 600,000 6II.t10N --I MILLION 0 MILLION PAGENO="0295" STATE AND LOCAL PUBLIC FACILITY NEEDS 287 P~n~aNc SPACES PER SQUARE Miu~ OF CENThAL Bus~ss Dismicr On a square~rniie basis, the number of downtown spaces increases gradually as urban population r~saa Parking spaces per square mile of downtown approaimate 15,000 for urban populations of 100,000, and 23,000 for urban populations of 500,000. When urbanized areas np~roach two million, parking spaces per square mile level off at about 30,000. I.. N., z IX 0 GO IX I eo * I I GARAGE 70 . . . . ~0 . * . LOT * -. : . ,0 . . . 40 . . . . . . 30 . . . 2 CuRB 1' * . MILLIUN 0 MILLION ~O,CO0 00,000 510,000 MILLION URBANIZED AREA POPULATION-1960 FiGURE 4 URCA~flZED AREA POPULATION- ~O FIGURE 3. DismiisunoN OF CENTRAL BUSINESS Disnuer PARKING SPACES ~w TYPE OF FACILITY PAGENO="0296" 288 STATE AND LOCAL PUBLIC FACILITY NEEDS URBANIZED AREA POPULAtION - 1960 F[GURE 5 OFF-STREET PAJuar~TG SPACES IN RELATION TO URBANIZED Am~ PoPvL~rIoN As urban areas increase in size, the nunther of garage spaces increases at a faster rate than parking lot spaces. Central business districts in urbanized areas of 200,000 or less usually have fewer than 1,000 spaces in parking garages. This number increases substantially as urban areas etilarge; there are about 5,500 garage spaces in urban areas of one million in population The total oh street spaces a~ eraged 2 {~$0 in urbanizea areas of 100 000 13~1X)OLn areas of one million, and about 28,000 in urbanized areas of two million population. PAGENO="0297" 00 ci 0 p ci 0 DV Z ~-c H H H ~ p V ~Vci .ciO ~ CD CD CD CD ~ ~ ~ ~ci ci~ ~ ~ ~ciV_V~ 0~C~ ~ ~Vi CDQ~ ~t~fl V (1V-(V ~ pV ~t(~j 0+ V ~ V tO V V CC C) CC C) C) CV) C) CC CC CCCV) (CCC CV) ~) 0 C)C) (C (C C) CV) CC ~ CCCV) CCC) C) CV) (0 CC CC ~ CV) 00 ~ CC Ct CC (0 0 CCC) V) CV) CC 000+ CC CCC) C) CC CC CCCV) (CCC C) CC 00 CV) CCC) CCC) CC CC 00CC CC CC CC CCC) CCC) ~ C) C) CC CC CC C) 0000 CCCV) CC CC 00 V0 C) ~ CC~ t~ CC C) CCC) CC (CC) 00 V0 CCC) CCC) C) ~ CC CC CC tO C) 0000 CC ~HQ ~ ~ ~ ( C Cl) CC~ p Cl) ~ 0i~ ~ CDCD ~lp C) ~O 0+4 ~ C cci to ~- Cfr~~:tCl) ~ ~ C~ C~~tCl) C) ~ cci CD o+ *0 Cci ~ -~ cici _.CD ~ ciQ p © cci. ~-* CI) C C ~cci CI) H p cci H 0) 1) 0 w H H 0 0 ci 0 0 I-I t:0j t~0j CD ci 0 0) 00 C) ~ CCC) V)~ CV) CC C) CCCV) CCC) (C CCC) 0000 (CV CC CCC) CC 00CC CCC) C) 100 CC V-~00CC CCC) C) CCC) C) CC CC 00CC ~) C) CCC) 00 CV) 00 _~ ~ (CC) CCC) ~ ~V)0~ C) PAGENO="0298" 290 STATE AND LOCAL PUBLIC FACILITY NEEDS Census of Business for 1963 published by the U.S. Census Bureau-Continued Region, division, and State Auto parking Total Parking lots Parking structures Estab- lish- Receipts (in thou- Estab- lish- Receipts (in thou- Estab- lish- Receipts (in thou- ments sands of ments sands of ments sands of . (number) dollars) (number) dollars) (number) dollars) West North Central: Minnesota 176 8,893 143 4,766 33 4 127 Iowa 94 2,136 83 1,314 11 822 Missouri 331 11, 179 287 7, 244 44 3,935 North Dakota 22 426 20 (D) 2 (D) South Dakota 9 111 8 (D) 1 (D) Nebraska 68 2,735 51 1, 214 17 1,521 Kansas 49 1,166 39 613 10 553 South Atlantic: Delaware 26 828 23 (D) 3 (D) Maryland 184 5,613 146 2,860 38 2,753 District of Columbia 286 13,848 237 (D) 49 (D) Virginia 90 2,526 79 1,588 11 938 West Virginia 72 1,846 64 1,468 8 378 North Carolina 140 2,880 129 2,301 11 579 South Carolina 42 548 40 (D) 2 (D) Georgia 207 7, 764 153 4,096 54 3, 668 Florida 265 8, 048 234 6, 064 31 1,984 East South Central: Kentucky - 133 3, 213 122 2, 574 11 639 Tennessee 237 5, 921 200 3, 757 37 2, 164 Alabama 152 2, 694 142 2, 087 10 607 Mississippi 32 425 28 276 4 149 West South Central: Arkansas 65 1,338 51 (D) 14 (D) Louisiana 164 5, 325 135 2, 669 29 2, 656 Oklahoma 158 3,494 139 2, 092 19 1,402 Texas 712 19, 956 618 12, 478 94 7, 480 Mountain: Montana 5 (D) 3 14 2 (D) Idaho 8 105 8 105 0 0 Wyoming 7 234 7 234 0 0 Colorado 180 5, 680 161 4, 118 19 1, 562 New Mexico 17 213 17 213 0 0 Arizona 76 1,989 69 1, 636 7 353 Utah 59 1,498 54 1,055 5 443 Nevada 37 1,406 35 (D) 2 (D) Pacific: Washington 203 9, 203 151 4, 069 52 5, 134 Oregon 93 5,124 77 4,062 16 1,062 California 1,385 49,764 1,197. 30,249 188 19,515 Alaska 0 0 0 0 0 0 Hawaii 20 1, 504 19 (D) 1 (D) (D)-Withheld to avoid disclosure. There is no definitive material available on the age of such facilities but from experience we can be sure that the greater part of them have been constructed since the post World War II years. B. CosTs AND USER CHARGES 1. CONSTRUCTION AND OPERATION COSTS For the open parking lot, based on a per parking stall basis, 1965 construction costs range from a low of $200 per space to a high of $1,300 per car space with an average of $719 per car space. Of necessity all of the construction cost estimates in this section must exclude land costs because of the great variance that would exist between such costs in the central business district of a large urban area and such costs in a smaller urban area. While there would be some difference in construction costs for like areas it is believed that these are not significant and no weight is placed on such differences. PAGENO="0299" STATE AND LOCAL PUBLIC FACILITY NEEDS 291 For the open deck garage structure construction costs range from a low of $1,700 per car space to a high of $3,582 per car space with an average of $2,270 per car space. Here again a great variation can exist in the price range per car space. This can be attributed to architectural treatment of the structure, the amount of sophisticated electronic equipment for control purposes and quality of installations for customer convenience. The most costly form of construction is the underground parking garage. There is a saving grace, however, in that without exception such facilities are constructed in public land, usually a park, and there is no cost of land attributed to the facility. Upon completion of the parking facility the park on the surface is restored and in most cases to a higher degree than existed before the construction. Examples of this type of construction are found in the larger cities such as: Pittsburgh, Chicago, San Francisco, Los Angeles, Detroit, Kansas City, Philadelphia, and many others. Construction costs for this type of parking facility range from a low of $3,100 per car space to a high of $6,500 per car space with an average of $4,250 per car space. There will not be a great deal of difference in these construc- tion costs for different size facilities as the size of a parking facility is based on the parking demand that is forecast for the area. Of necessity there must be a minimum size of a facility otherwise the ramp and aisle areas would make it uneconomic. The usual limiting factor for this type of facility, other than parking demand, is the street or highway capacity to serve it properly. Annual maintenance costs of the surface parking lot vary greatly de- pendent upon whether it is an attendant facility, metered facility, or operated by means of automatic parking gates that are actuated by the insertion of a coin or card. The geographical location of the facil- ity also has a great bearing on such costs. In our northern cities snow removal is a large item that does not occur in the warmer climes. In one of the maj or cities their maintenance costs for attendant park- ing lots were $9.10 per car space, for metered lots $30.75 per car space and for gate-operated facilities they averaged $11.20 per car space. It should be noted, however, that their operating costs were in a direct inverse ratio. Reported maintenance costs for surface parking lots were from a low of $3.14 per car space to a high of $51.76 per car space. The $3.14 cost came from a southern city where they have no snowfall and the $51.76 cost came from a northern city that experiences heavy snowf all. Excluding these highs and lows the average maintenance cost for surface parking lots averaged $21.18 per car space. For the open deck parking garage maintenance costs per car space go from a low of $5.73 per car space to a high of $22.04 per car space for an average cost of $10.03 per car space. Variations in reported data in this item occur because some cities include certain items as operat- ing expense while others call it a maintenance item. The cost of maintenance per car space for underground garages ranges from $6.19 per car space to $15 per car space. Annual operating costs for parking facilities are subject to wide- spread differences. As an example a metered facility has a low labor cost, a self-park facility has moderate labor costs while an attendant park facility has high labor costs. Also the size of the facility has a very great bearing on the operating cost per unit. Operation costs PAGENO="0300" 292 STATE AND LOCAL PUBLIC FACILITY NEEDS of metered lots range from a low of $11.70 per space to a high of $32.26 per space with an average cost of $17.90 per space. Lots operated by gates frequently require the services of a cashier and the average annual operating cost of this type of facility is $17 per car space. Lots which are operated as attendant park facilities naturally have the highest operating costs. The lowest cost reported for this type of operation was $54.65 per car space while the highest cost was $192.30 per car space with an average of $82.32 per car space. 2. USER CHARGES (a) Parking fees, lease payments, rentals and assessments are all used in one form or another to pay for all of the services and use of the facilities. (b) A recent survey made by one of the major bond rating services of parking revenue bonds disclosed the following: (1) The survey covered 52 rated bond issues for 39 cities (45 bond issues) and 7 single project agencies. (2) As of November 1, 1965, 51 of the 52 issues totaled $195,384,000 in outstanding bonds, one issue unknown. (3) About 70 percent of the 45 city bond issues with about 80 percent of the bonds were for midwestern and eastern cities. (4) Pennsylvania had the largest State total with $40,281,000 outstanding and Chicago led the cities with $30,474,000 out- standing. (5) Twenty of the forty-five city bond issues originated in cities of Jess than 100,000 population. (6) Debt service coverage for the 52 bond issues ranged from a low of 0.62 to a high of 5.17. City bond issues average 1.62 and single project bond issues averaged 1.68. The overall average for the group was 1.63. (7) About 70 percent of the 52 bond issues are rated BB or BBB. These issues averaged 1.41 in debt service coverage. The 17 issues rated A averaged 2.33 in debt service coverage. (8) Only 4 of the 52 issues showed a debt service coverage of less than 1. (e) The extent to which municipal parking facilities are paid for from general obligation borrowings is impossible to estimate. In many localities onstreet parking revenues and off street parking revenues are placed into general funds and expenditures for this type of facility are made from the general fund. C. TREND OF CAPITAL OUTLAYS The 1963 Census of Business reported that there were 9,141 privately owned parking lots in the United States. The latest data for munici- pal parking lots in cities over 10,000 population was for the year 1960 and at that time there were 3,861 city owned parking lots. It is estimated that from 1960 to 1963 there were 639 municipally owned parking lots established for a total of 4,500 facilities. Combined with the 9,141 privately owned lots this gives a grand total of 13,641 parking lots in operation at the end of 1963. The municipal opera- tions contain 476,858 offstreet spaces and based on 1965 construction PAGENO="0301" STATE AND LOCAL PUBLIC FACILITY NEEDS 293 cost data of $719 per car space represent an investment of almost $345 million (excluding cost of land). This does not take into account the amount invested in the 9,141 privately owned parking lot facilities or the larger amount invested in the 2,128 privately owned parking structures and the unknown number of municipally owned parking structures. Assuming that the privately owned lots are on an average similar in size and construction characteristics to the munici- pally owned lots we arrive at a capital investment of approximately $700 million in parking lots (excluding land) based on 1965 construc- tion costs. The trend of dollar expenditure for offstreet parking facilities must of necessity increase as our urban population grows and the production of motor vehicles show yearly gains. The Census Bureau Bulletin on City Government Finance in 1963-64 showed that cities expended $102 million during fiscal 1964 for parking facilities while they expended $80 million for the same services in fiscal 1963. This was an increase of 28 percent in 1 year and represented the greatest increase for any one service provided by the cities. The source of financing municipally owned facilities is listed with the most frequently used method first and the other methods in descending order: 1. General obligation bonds secured by both parking revenues and full faith and credit of the city government. 2. Revenue bonds secured by revenues of the parking system (off- and on-street parking revenues). 3. Revenue bonds secured only by the earnings of the offstreet facilities. 4. Combination of revenue and general obligation bonds. 5. General obligation bonds only. 6. Capital reserve funds. 7. Private capital and other methods. D. NEEDS AND PROSPECTIvE CAPITAL OUTLAYS As noted in the preceding section outlays for municipal parking facil- ities increased 28 percent from 1963 to 1964 for a total expenditure of $102 million. With the ever-increasing numbers of motor vehicles on our streets and highways and the increasing urbanization of Amer- ica it would appear as though a 15-percent increase per year for the years 1966 through 1975 would be ultraconservative. This will re- quire capital expenditures for municipally owned parking facilities of $2.4 billion during this decade. While at the present time about one- half of the municipally owned parking spaces are in cities below the 50,000 population level it is believed that because of the increase of population in urban areas that approximately 80 percent of this expenditure will occur in cities with populations of 50,000 or more. It is further believed that the municipally owned facilities account for about 30 percent of the total supply of parking; so on that basis the private sector will require about $5.5 billion for construction of ofFstreet parking facilities. It is estimated that this expenditure would be made exclusively in cities with a population of over 50,000. This will give an estimated total expenditure of $7.9 billion for the decade 1966 through 1975. PAGENO="0302" 294 STATE AND LOCAL PUBLIC FACILITY NEEDS The municipal capital outlays will be made almost exclusively by cities, counties, towns, public authorities, and other local public bodies while the expenditures by the private sector will be made by proprietary or profitmaking organizations. The expected source of funds for the municipal facilities will be the borrowing in the tax-exempt municipal bond market and appropria- tions from parking revenues. It is not feasible to give a percentage distribution to each method because of the variety of methods used in municipal budget processes. The source of funds for the privately developed facilities will be exclusively capital flotations in other security markets. As parking facilities should be self-amortizing, whether municipal or private, there should be no gap between revenues and expenditures. If such a gap is projected there would be recourse to either of two actions. Eliminate the project or increase the fee schedule to make it a self-supporting project. If neither of these actions are practical there is a third course of action for a municipality. It can create an assessment benefit district within the area of influence of a project and assess the property owners who would benefit from the parking facility. PAGENO="0303" CHAPTER 13 Urban Mass Transit Facilities* A. NATURE OF URBAN MASS TRANSPORTATION FACILITIES 1. DESCRIPTION OF FACILITIES As U.S. cities have grown in size and number, urban mass transpor- tation facilities have not grown with them. Unlike other public facilities such as water and sewage systems which lagged behind population growth and increasing concentration of population in urban centers, mass transportation facilities actually decreased in the years following World War II. This was due to several causes, the most important being a great increase in the number and use of private automobiles, coupled with a decline in mass transit service and an increase in its fares. Urban mass transportation is defined in this chapter as the move- ment of people within urban areas by large-capacity vehicles operating as common carriers. Mass transportation facilities, therefore, consist of bus, trolley coach, rapid transit, and surface or elevated electric railway systems. Railway commuter service, although a vital part of urban mass transportation, especially in the larger metropolitan centers, is not included in this analysis because of the difficulty in separating it from the railroads' long-distance, intercity service. Since urban areas vary so widely and there is no consensus on the ideal transportation system or the correct level of service, general standards of performance for mass transportation systems have not been set. The situation is not analyzed by reference to standards of performance but rather in terms of an urban transportation problem. In the 1966 edition of his book The Metropolitan Transportation Problem, Wilfred Owens of the Brookings Institution states: Every metropolitan area in the United States is confronted by a transportation problem that seems destined to become more aggravated in the years ahead. Growth of population and expansion of the urban area, combined with rising national product and higher incomes, are continually increasing the volume of passenger and freight movement. At the same time, shifts from rail to road and from public to private transportation have added tremendous burdens to highway and street facilities. They have created what appear to be insuperable terminal and parking problems. Continuing economic growth and the certainty of further transport innovation threaten to widen the gap between present systems of transportation and satisfactory standards of service. Manifestations of the transportation problem in urban areas include the mass movement between work and home and the cost that it represents in money, time, and wasted energy. The transit industry is experiencing rising costs and financial difficulties, while the rider is the victim of antiquated equipment and poor service * * ~ *By Marge Schier, Urban Transportation Administration, U.S. Department of Housing and Urban Development, utilizing data furnished by the American Transit Association, with minor editing by committee staff. 295 PAGENO="0304" 296 STATE AND LOCAL PUBLIC FACILITY NEEDS Half a century of neglect has meant a long-term deterioration of transit service and failure to keep pace with technological change. Rising costs and declining patronage have led to a succession of fare increases and further reductions in service. In many cases, it has been impossible to set aside necessary allowances for depreciation of equipment, and the industry as a whole has been unable to attract sufficient capital to renew, modernize, or extend its services for the nearly eight billion riders per year who depend on public carriers. 2. EXISTING CAPITAL PLANT (a) .M~ass Transit Facilities and Their Distribution by State and City As of the end of 1964, common carrier intraurban transportation in the United States was provided by approximately 1,152 transit sys- tems. Of these, 1,129 were exclusively motor bus, 14 electric railway, both subway and elevated (including joint trolley coach and/or motor bus operations), and 9 trolley coach and motor bus operations com- bined. (See table I.) Table II lists the number of transit companies, both privately and publicly owned, operating in each State and the number and type of transit vehicles in use in each State. Only five cities in the United States now have high-speed rail rapid transit systems. These are New York, Chicago, Philadelphia, Boston, and Cleveland. A new system is under construction in the San Francisco metropolitan area by the San Francisco Bay Area Rapid Transit District and is scheduled for completion in 1969. Table IV indicates the distribution of transit systems among cities of varying population. It should be noted that rapid transit systems are confined to cities of 500,000 population or above. The smaller cities rely primarily on bus systems for their public transportation. On December 31, 1964, there were 2,173 miles of surface, subway, and elevated railway track, 986 miles of trolley coach, and 118,300 miles of motor bus routes in intraurban service in the United States. The equipment operating on these routes consisted of 10,624 railway cars, 1,865 trolley coaches, and 49,200 buses. TABLE 1.-Number of urban transit companies in the United States, 1951-64 (50 States and the District of Columbia) Dec.31- Electric railways (including joint trolley. coach and! or motorbus operations) Trolley coach and motorbus operations combined Trolley coach (cx- clusively) Motorbus (exclusively) Grand total 1951 1952 82 75 70 65 61 44 40 35 34 31 118 17 14 14 23 22 24 25 23 22 20 16 13 12 12 11 10 9 2 2 2 2 1 0 0 0 0 0 0 0 0 0 1 535 1,522 1,510 1,496 1,399 1,261 1,265 1, 250 1,225 1,208 1,217 1,177 1,162 1,129 1 642 1,621 1,606 1,588 1,484 1,327 1,321 1, 301 1,272 1,251 1,247 1,205 1,186 1,152 1953 1914 1915 1916 1957 1958 1959 1960 1961 1962 1963 1964 `Companies with 100 percent freight and/or switching operations eliminated as of fan. 1, 1961. Source: American Transit Association. PAGENO="0305" STATE AND LOCAL PUBLIC FACILITY NEEDS 1 Partially estimated. Source: American Transit Associationi *70-132----66-vol. 1-20 297 TAELE 11.-Geographical distribution-Number of transit companies and number of transit vehicles, Dec. 31, 1964 Number of transit vehicles Division and State Number of transit companies Rapid transit cars Surface streetcars Trolley coaches Motor- buses I Total transit vehicles 1,560 344 863 122 52 35 144 344 1,865 60 160 987 18 149 491 60 9, 064 299 7, 443 1,322 299 6,947 496 88 1, 234 United States: New England Middle Atlantic East North Central West North Central South Atlantic East South Central West South Central Mountain Pacific contiguous States Pacific noncontiguous States New England: Maine New Hampshire Vermont Massachusetts Rhode Island Connecticut Middle Atlantic: New York New Jersey Pennsylvania East North Central: Ohio Indiana Illinois Michigan Wisconsin West North Central: Minnesota Iowa Missouri North Dakota South Dakota Nebraska Kansas South Atlantic: Delaware Maryland District of Columbia Virginia West Virginia North Carolina South Carolina Georgia Florida East South Central: Kentucky Tennessee Alabama Mississippi West South Central: Arkansas Louisiana Oklahoma Texas Mountain: Montana Idaho Wyoming Colorado New Mexico Arizona Utah Nevada Pacific contiguous States: Washington Oregon California Pacific noncontiguous States: Alaska Hawaii 1,152 107 292 208 82 162 73 83 35 107 3 12 46 10 27 101 87 104 66 36 36 35 35 25 17 3 12 16 33 22 34 7 18 28 18 21 22 12 12 17 10 44 4 26 11 70 2 49,200 3,300 15,735 9, 870 3,640 6,435 1,635 2,720 720 4,920 225 180 115 30 2,265 165 545 7,710 4, 150 3,875 2,770 630 3,760 1, 550 1, 160 960 410 1,810 20 65 210 165 90 930 1,340 1,245 410 500 160 725 1,035 395 645 485 110 175 600 200 1,745 70 15 10 335 70 15 160 45 635 260 4,025 15 210 61,689 4, 003 24,201 12,301 3,710 6, 435 1,635 2,904 720 5,555 225 180 115 30 2,968 165 545 14,657 4,180 5,364 3, 286 662 5, 551 1,550 1,252 960 410 1,880 20 65 210 165 90 930 1, 340 1,245 410 500 160 721 1, 035 395 645 485 110 171 724 200 1,805 70 15 10 335 160 45 766 260 4,529 15 210 30 833 160 58 370 32 32 525 92 18 35 89 60 131 144 360 PAGENO="0306" 01 1* a 00 a 0~00. ~ ~ P ~ 00 CO 00 (tO ~1 0000000000000000000000 ~I 001000 00 ~ CO (00000 ~ 0000-400-10000 1~ 000000001 CO 03 CO -10003(0 1~. 0000-100 00 0130-' 0000 CO 0010 CI) 00-' (000 ~ 001 CI) (0 00 CO 00. (tO 00 ~. (tOO 0 31 0 0 H 0 00 0 00000000000000 00 CO `-1000000000000 CO 00 0000000000 CO -I 00000000000000 -`1 -1 -1 100. o00. CoO 00 0 l-~ 0000000000000000~o00~..(00000000000(000 ~ oloO( 0-~'1 ~!_ 0 00 00 01 01 001 01 0 00 j0~-~ 100000000000 `-10000 3-00-1000000000000000000 CO 0010-1 CO 00(0-I CO CO0000(0(0(0(000(0(0-.1(0 ~.2 01~~0-~ ~ CD ~ ~ ~ C/I 0000(0000000000000000000001000 00-1 ~ 0000 ~ 0000000000000(0 CO 0100000000 030000 -1 COO0 ~I00000000000000-100COI00 -100 000000000000000000000000000000000000000000 000000000000 0000000000000000000000000000 COQ PAGENO="0307" STATE AND LOCAL PUBLIC FACILITY NEEDS 299 rates because the financial future of these transit companies is so precarious. Tables V, VI, and VII present data on the inventory and age of transit vehicles over a period of years. To make this data meaningful in any interpretation of transit capital equipment needs, some measure- ment of the useful lives of transit vehicles must be attempted. In the case of buses, the useful life varies according to the conditions under which they are operated, to economic factors such as the finan- cial condition of the operator, and to the technology existing at the time they were manufactured. Recent improvements in the field of metallurgy, for example, have increased the useful lifespan. Those buses built immediately after World War II are inferior to those produced today in terms of physical endurance and performance. Keeping these variations in mind, however, the useful life of a bus can be roughly estimated to be from 12 to 15 years. No estimate need be made for streetcars and trolley coaches since these are being abandoned by most systems in favor of buses. For rapid transit cars, 35 years has been advanced as a rough meas- ure of useful life. Again it may vary depending upon circumstances, especially upon the financial ability of the system to purchase new cars. Using these criteria, an analysis of table V reveals that approx- imately one-third of the transit buses in 1964 were beyond their useful lifespans. Roughly, about 1.2 percent of the buses were from 33 to 24 years old; 32.5 percent from 23 to 14 years; 45.7 percent from 13 to 4 years; and 21.6 percent were under 4 years. It is more difficult to analyze the data on rapid transit cars since 10-year breakdowns are not provided. In 1964, 7.8 percent were more than 64 years old; 30.1 percent from 43 to 24 years; 38 percent from 24 to 4 years; and 24 percent less than 4 years old. TABLE V.-Age distribution of transit vehicles (as of Dec. 31, 1964) Year built Number of transit vehicles Rapid transit cars 1 Surface streetcars Trolley coaches Motor. buses 1 Total transit vehicles Before 1900 During 1901-20 During 1921-40 During 1941-60 Since 1961 Total 0 711 2, 730 3, 451 2,172 0 0 1 1 5 J ` 0 0 0 f 171 ~ 1, 694 0 0 0 610 38, 475 10,115 - 0 711 ` 12,287 9, 064 1, 560 1, 865 49, 200 61, 689 Further breakdown of motorbuses: 1921-30 0 1931-40 610 1941-50 16,010 1951-60 22,465 1 Estimated. Source: American Transit Association. PAGENO="0308" 0 00 00CC CC CC CC CC CC CC CC CC CC CC CC CC CC CC CC CC CC CC CC 0000 000000 ~-1 0000 00000 CC 00000000000000000000 ~1 CC CO Co-0 00 -CCCCCO 00CC -~ 0000 CO 000000CC 000000 0000CC000000co00 00CC 00CC 000000000000000000 © 000000 © 00CC 0000000000 (I) 0 p 00 00 00 0000 ~ 00000000 000000000000 00 CCCOCC©©COCCCCCCO©00000000C00 0000CC 1 CO 00 CD ~ ~C ~ ~ ~ P 00 0' P 00000000000000 100000000000000 100000.00 -~ C000000000©CoooCO00Co ~ 0000000000 -~ -100 0000000000000000000000000000000000000 01.0 w H 00.00 ~ C_CC Coo, 00. C~ 00(0 CD ~. ~. CD Co 00. C~ CD Co ~0 40-~ 00 0000Co000 000000000000000 ~ CC ~ CO OCj ~ 000000000000000000 00000000 00 COCC©00~~O0©0~ CD 00 ~ ~C.,l CD P ~ 0000000000000.00000000 000000 00000000 0-Co 000 -~ C- 1000-C CO 00 C-~CC 000 10(0000000 000 0000 00 000 CC CO 00 00 00 0000 0000 0000 001000 03 C ~. - 00 (000 -10000CC 00 00 000 00 00 CO 00 00 00 CC 00 00 Co 00 CO 00 ~o3 ~C 00~ (01 000.00 ~ 000-1 0~0.!~C 00000000000000000000000000000000000000000 001001000000~1000000000000000000000000000000 20.3 000 00 2 C~ 000000000000 00~C0000 C~ ~ 0~ 0=0 0= CD 0~~ 40-~ C0~ 4o-. Co 01(0 ~~C(0 !~ 0 a CO~ ci 0_C a Co a -~ 100 ii ~ 0000 00. CD CCCCCC00000CCC-0000000o000co0000000000 000000 (0 0000 00000000 10 10 00 CCC CC 00CC CC -1 0000 00000000C010000000000C0CC000-400000000(0 0000 000 1000 100000 (000 CO CC 0000 (0 000000 0000 000000 00 10 -1 Co 000 CC 00 00 (0 0000 CO Co tooo 0000 PAGENO="0309" STATE AND LOCAL PTJBLIC FACILITY NEEDS 301 Most publicly owned systems are owned by municipalities and op- erated by them within the city limits and contiguous territory, but about a third are owned by public corporations such as the Alameda- Contra Costa Transit District, the Massachusetts Bay Transportation Authority (Boston), and the Port Authority of Allegheny County (Pittsburgh). TABLE VIII.-Distribution by types of ownership, number of transit companies, number of transit vehicles (Dec. 31, 1964) Ownership by- Number of transit companies Number of transit vehicles Rapid transit cars Surface street- cars Trolley coaches Motor- buses 1 Total transit vehicles State government or State agencies Cities, counties, towns, special districts, public authorities or other local public bodies Private, nonprofit organizations or co- ~operatives Proprietary or profitmaking organizations ~: Total 0 77 0 1, 075 0 8,568 0 496 0 882 0 678 0 1,136 0 729 0 19,000 0 30,200 0 29,520 0 32, 169 1,152 9,064 1,560 1,865 49,200 61,689 1 Estimated. Source: American Transit Association. (d) Current Value One indication of the current value of urban mass transportation facilities is gross investment. As of 1964, over $4 billion was in- vested in the transit industry as a whole, including railway, trolley coach, and motorbus (table IX). TABLE IX.-Gross investment of the transit industry as of Dec. 31, 1940, 1945-64, segregated as to mode of service (50 States and the District of Columbia) [Thousands of dol1ars~ Year Surface railway Rapid transit Total railway Trolley coach Motor bus Industry total 1940 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957_ 1958 1959 1950 1961 1962 1963 1964 $1, 574, 600 1, 570, 000 1, 456, 600 1, 279, 100 1, 060, 000 998, 000 913, 000 811, 000 801, 000 780, 000 692, 000 616, 000 577, 000 485, 000 334, 000 296, 000 259, 000 235, 000 229, 000 175, 000 165, 000 $2, 014, 000 2, 050, 000 2, 050, 900 2, 050, 900 2, 051, 000 2, 112, 000 2, 147, 000 2, 186, 000 2, 191, 000 2, 200, 000 2, 250, 000 2, 286, 000 2,303, 000 2, 385, 000 2, 497, 000 2,560,000 2, 636, 000 2, 732, 000 2, 813, 000 2, 901, 000 2, 979, 000 $3, 588, 600 3, 620, 000 3, 507, 500 3, 330, 000 3, 111, 000 3, 110, 000 3, 060, 000 2, 997, 000 2, 992, 000 2, 980, 000 2, 942, 000 2, 902, 000 2, 880, 000 2, 870, 000 2, 831, 000 2, 856, 000 2, 895, 000 2, 967, 000 3, 042, 000 3, 076, 000 3, 144, 000 $58, 700 78, 500 82, 400 97, 800 120, 300 139, 300 146, 400 164, 400 174, 200 172, 200 166, 900 161, 900 149, 900 143, 000 139, 000 125, 000 117, 000 115, 000 106, 000 70, 000 65, 000 $451, 800 569, 500 602, 900 656, 100 675, 100 697, 100 718, 000 743, 700 749, 500 753, 600 759, 600 762, 600 772, 500 785, 700 777, 700 796, 700 817, 000 837, 000 854, 000 879, 000 897, 000 $4, 099, 100 4, 268, 000 4, 192, 800 4, 083, 900 3, 906, 400 3, 946, 400 3, 924, 400 3, 905, 100 3, 915, 700 3, 905, 800 3, 868, 500 3, 826, 500 3, 802,400 3, 798, 700 3, 747, 700 3,777,700 3, 829, 000 3, 919, 000 4, 002, 000 4, 025, 000 4, 106, 000 Source: American Transit Association. PAGENO="0310" 302 STATE AND LOCAL PUBLIC FACILITY NEEDS B. COSTS AND CHARGES 1. REVENUES AND COSTS No analysis of transit costs can be meaningful without consideration of the changes in transit use. Prior to World War II, the peak of transit traffic was reached in 1926. In that year, over 17 billion passengers were carried by all modes of urban mass transit in the United States (table X). Following 1926, changes in our society brought about an increase in the use of private transportation and a corresponding decrease in mass transit ridership. Automobiles became cheaper and more plentiful and roads improved. As urban areas expanded, the private automobile became more useful as a flexible, rapid means of transportation. Between 1935 and 1960, urban population increased about 60 percent, estimated automobile travel in urban areas (in miles) increased by 170 percent, while mass transit rides declined about 25 percent. This trend of decreasing use of mass transit facilities has continued to the present despite a period during World War II when restrictions were placed on the use of the private automobile. The declining volume of passengers was accompanied by a decline in transit operating revenues, as shown in table XI. LONG-TERM TREND OF TRAFFIC TABLE X.- Total passengers carried on transit lines of the United States [In rnlllionsl Year Electric railways Trolley coaches Motor- buses Total Rapid Surface Total transit 1912 1920 1925 1926 1930 1935 1940 1945 1946 1947 1948 1949 1950 3951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1, 041 1,792 2,264 2,350 2, 559 2,236 2,382 2,698 2,835 2, 756 2,606 2,346 2,264 2, 189 2, 124 2,040 1,912 1, 870 1,880 1, 843 1, 815 1,828 1, 850 1,855 1,890 1,836 1,877 11, 109 13,770 12,924 12,895 10, 530 7,286 5,951 9,426 9, 027 8,096 6,506 4,839 3,904 3, 101 2,477 2, 036 1,489 1,207 876 679 572 521 463 434 393 329 289 1 12, 150 15,562 15,188 15,245 13, 089 9, 522 8,333 12, 124 11,862 10,852 9,112 7,185 6, 168 5,290 4, 601 4, 076 3,401 3, 077 2,756 2,522 2, 387 2,349 2,313 2,289 2,283 2,165 2,166 16 96 542 1,298 1,354 1,398 1,558 1,691 1,686 1, 658 1,666 1, 587 1,387 1,223 1,163 1, 003 843 749 657 601 547 413 349 1,484 2, 009 2, 481 2,625 4,255 9,946 10,247 10,374 10,759 10,193 9,447 9,227 8,901 8,280 7,643 7, 269 7,062 6,903 6, 540 6,498 6,425 5,993 5,865 5,822 5,813 12, 150 15,562 16,672 17, 254 15, 586 12,243 13, 130 23,368 23,463 22, 624 21,429 19,069 17,301 16, 175 15, 168 13,943 12,431 11, 569 10,981 10,428 9, 770 9,596 9,395 8,883 8,695 8,400 8,328 1 From U.S. Census of Electrical Industries; remaining figures are American Transit Association estimates. PAGENO="0311" STATE AND LOCAL PUBLIC FACILITY NEEDS 303 TABLE XI.-Trend and distribution of transit operating revenue in the United States by types of service, 1940 and 1945-64, inclusive (50 States and the District of Columbia) [In millions] Calendar year Railway Trolley coach Motorbus Grand total Surface Subway and elevated Total 1940 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 .. 1959 1960 1961 1962 1963 1964 $328. 3 560. 1 543.6 510. 4 474.6 402. 5 361.7 318. 9 279. 7 250. 6 204.2 175. 5 139.4 115. 3 99. 1 93.0 87.6 79. 9 73.3 61.2 55. 6 $128. 3 149. 4 157.5 156. 6 191. 7 218. 0 216.4 214. 7 213. 9 239. 5 269.2 264. 3 271.4 267. 6 266. 5 272. 2 281.8 285. 7 293. 0 287.4 295. 8 $456. 6 709. 5 701.1 667. 0 666.3 620. 5 578. 1 533. 6 493. 6 490. 1 473.4 439. 8 410.8 382. 9 365. 6 365. 2 369.4 365. 6 366.3 348.6 351. 4 $25. 5 71. 2 74.5 79. 3 92.8 114. 4 124. 1 134. 1 149. 8 153. 5 143.9 133. 2 130.0 117. 5 103. 2 91. 0 81.9 78. 7 76. 0 56.2 46. 4 $256. 7 $738. 8 605. 5 1,386.2 626.4 1,402.0 649. 5 1,395. 8 733.8 1,492.9 760. 5 1,495.4 753.9 1,456.1 808. 9 1, 476. 6 862.3 1, 505. 7 873.6 1,517.2 858.8 1,476.1 857. 7 1, 430. 7 879.7 1,420.5 889. 7 1, 390. 1 885. 2 1,354.0 924.9 1,381. 1 955.9 1,407.2 945. 4 1, 389. 7 961. 2 1,403.5 985.8 1,390.6 1, 010. 3 1, 408. 1 Source: American Transit Association. Changes occurred in these years also in the use of transit facilities during the day. Due to an increasing separation of residential and employment centers, greater use of the automobile for recreation and shopping, and the postwar shift from a 6- to a 5-day workweek, mass transit riding has become highly concentrated in the 4-hour period of each working day Monday through Friday when persons commute to and from their places of employment. This concentration of ridership in a brief period of time is one of the main reasons for con- tinuing high costs in the transit industry despite an overall reduction in the number of passengers. Equipment and manpower needed for the peak hours are not used to their greatest capacity during the off-peak period. Table XII shows a deteriorating financial picture for mass transit since the war. A striking change has been the decline in the ratio of operating income to gross operating revenue. This ratio declined from 10.77 percent in 1945 to 0.5 percent in 1958. It rose again from 1959 to 1962 but fell in 1963 and 1964 when operating deficits occurred. One of the largest items accounting for an increase in operating expenses has been labor. In many cities the cost of labor has in- creased 100 percent in this period. The cost of replacement parts and fuel is also about double what it was before World War II. Part of the labor and fuel costs are due to traffic congestion, not met by corresponding increase in passenger revenue. It is estimated that delays in downtown traffic absorb at least 18 percent of the total vehicle running time. PAGENO="0312" CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD ~ CD CD ~CD CD CD r~ CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD `~ ~ CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD~CDCDCDCD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD oCD CD ~ -~CDD- CD ----~-~"---,. CD CD -~ CD CD CD CD CD CD CD CD CD CD CD CD DC-CD CD t~ CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD ~___~J~ CD CD CD CD CD CD CD CD CD CD CDCD CD CD CD CD CD CD CD CD CD ~z ~ ~ CD - CD CDCDCDDCD ~~DDCDCD ~ C CD ~CD ~D CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD ~ ~-CD'd CD.0~CD CD ~ CD r~'~ k CD CD CD CD CD CD CD ________________________________ ____________ CD CO DC 0 4~. 0 __________________________________ _______ CD CD _____________ ___ ~ CD ~ CD CD CD 0 C 0 0 CD ~ ~ 0 ___________________ ____ DO 0 CD 0 _____________ ___ CD 0 -CD D0CD~ ECDCD DC-CD CD CD CD CD CD CD CD CD CD CD CD CD CD DC-CD -1 CD ~at~a~ ~i~riiov~i oiri~iia rivoori ci~v a~ivj~ CD 0 0 0 0 CDCDCDCDCDCDCDCDCDCDCDCDCDCDCD~CDDC- CD CD CD CD CD CD CD DC-CD DC-CD CD CD CDCD CD CD CD CD CD CD CD C~ CD `~ ~ D-~ . ~ ~ ~0 CD ~o C ~ ~ CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CO CD CD CD ::::::::::~: ~0 CD D~ C~ CD ~ CD ~ ~DD CDCD CDCDCDCDCDCD ?P °F ©PDOPCDCDDC CD CD CD CD CD CD CD CD CD DC-CD DC-CD CD CD CD CD CD CD CD CD CD CD CD CD DC-CD CD CD CD CD CD DC-CD CD CD CD DC-DC-CD CD CD ~Z ~ 0 CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD 00 CDCDCDCDCDCDCDCDCDCDCDDC-CDDCDCDCDCDCDCDCDCD CD CD DC-CD CD CD CD CD CD CD CD CD CD CD CD CD CD ~ CD CD CD C~ CD Cl CD PAGENO="0313" STATE AND LOCAL PUBLIC FACILITY NEEDS 305 In 1964, transit companies paid $78 million in taxes, approximately 57 percent of which were Federal and 43 percent State, county, and local. It is estimated that about 25 percent of all taxes paid by transit companies are of the franchise type. Frequently amounting to from 2 to 5 percent of gross revenues regardless of the financial position of the company, these were levied by municipalities when transit companies had a monopoly of local transportation and were taxed to pay for the privilege of using the city streets. They are retained in many instances, although the private automobile now offers direct competition to mass transit. 2. USER CHARGES Rising costs and declining patronage made it necessary for transit systems to raise fares. Tables XIII and XIV show that the median fare increased from 7 cents in 1944 to 20 cents in 1963 in cities of 25,000 population and over. In 1944, no fare was over 10 cents. By 1963, 35 percent of the transit systems charged 25 cents and 32 percent, 20 cents for a single zone of travel. TABLE XIII.-Percentage distribution of cash fares in effect in U.S. cities having a population of 25,000 or more,1 selected dates, 1944-63 Cash fare (cents) 2 Dec. 31, 1944 Sept. 1, 1950 Apr. 15, 1955 Sept. 15, 1960 Aug. 22 , 1963 35 30 0 0 0 0 0 0 0 1.07 (3) 3.65 25 0 0 0 17.38 35.83 20 0 0 11.11 36.27 32.12 15 0 8. 25 53.66 35.41 21.39 10 43.77 68.69 24.32 3.43 3.30 5 33.01 8.01 .21 0 0 Other Total 23.22 15.05 10.70 6.44 3.11 100. 00 100. 00 100. 00 100. 00 100. 00 1 Each city system is counted as a unit. If 2 or more independent systems operate in a city, each is counted separately. 2 Fares are separate fares for 1 zone of travel. 2 Since August 1963, Akron and Youngstown, Ohio, have moved to 35.cent fares. Source: American Transit Association. TABLE XIV.-Median and modal cash fares on public transportation lines in U.S. cities of 25,000 and over, selected years, 1944-63 [In cents] Year Median fare Most common fare 1944 1948 1950 1952 1954 1956 1958 1960 1961 1962 1963 7 10 10 10 15 10 15 20 20 20 20 10 10 10 10 15 15 15 20 20 1 20-25 25 1 34.22 percent of fares at each level. Source: Data gathered by the American Transit Association. PAGENO="0314" 306 STATE AND LOCAL PUBLIC FACILITY NEEDS C. TREND OF CAPITAL OuTLAYS No figures are available for capital outlays for mass transit facilities during the 1946-6 5 period with the exception of the expenditures made by State and local governments (listed in table XV). Under the 1964 Urban Mass Transportation Act which first made Federal funds available for mass transit facilities and equipment, 44 projects have been approved from the passage of the act to the end of July 1966. These permit Federal capital grants of almost $157 million for transit facilities to be matched by local and State funds of $106 million. TABLE XV.-Capital outlays for transit facilities by State and local governments [In millions] Year: Amount Year-Continued Amount 1952 $67 1959 $102 1953 52 1960 94 1954 62 1961 120 1955 81 1962 90 1956 109 1963 168 1957 120 1963-64 155 1958 134 1964-65 242 Source: Bureau of the Census, "Governmental Finances," various issues. D. NEEDS AND CAPITAL REQUIREMENTS Rapid population growth and increasing urbanization in the United States will require greatly augmented expenditures for mass trans- portation facilities. It is estimated that U.S. population will reach 250 million by 1980 and 350 million by 2000. In 1980, 75 percent of the U.S. population wifi be living in urban areas comprising only 2 percent of the land area. By that year, 40 urban complexes of over 1 million each will contain 140 million people. The Institute of Public Affairs in a study completed in 1962 for the Housing and Home Finance Agency Administrator and the Secretary of Commerce estimated that mass transit needs (including commuter railroad as well as rapid transit and bus systems) would amount to $9.8 billion for the following decade. About $7.6 of this would be needed for commuter rail and rapid transit facilities. The Department of Housing and Urban Development updated these estimates in 1966. It foresaw the capital needs of urban transporta- tion from 1966 to 1975 as $10.9 billion, including $8.6 billion for rail facilities authorized or planned, $1 billion for possible future rail facilities, and $1.3 billion for bus replacements. The latter does not take into account bus system expansion or the replacement of such facilities as shops and administrative facilities. The American Transit Association estimates the normal number of bus replacements each year as in the neighborhood of from 2,500 to 3,000. The following estimates were made of the major metropolitan rail transit system capital needs from 1966 to 1975: Atlanta, $329 million; Baltimore, $531 million; Boston, $590 million; Chicago, $930 million; Cleveland, $60 million; Los Angeles, $900 million; New York, $2,500 million; Philadelphia, $506 million; San Francisco, $1,230 million; Seattle, $111 million, and Washington D.C., $950 million. Table PAGENO="0315" STATE AND LOCAL PUBLIC FACILITY NEEDS 307 XVI compiled by the American Transit Association gives details on some of the rapid transit and commuter railroad projects already authorized or in prospect at the present time. It is difficult to break down capital needs on a yearly basis since so much depends upon the timing of the contemplated projects. HUD estimates, however, that almost $2 billion will be required in the next 3 years for the capital needs of the major metropolitan rail transit systems alone. Sufficient knowledge of future conditions is also lacking to make a determination of how much of the capital outlays will be obtained from operating revenues and how much from Federal, State, and local government sources. TABLE XVI.-Rapid transit projects authorized or in prospect, urban transit industry System Number of cars, cost System cost and improvements Allegheny Port Authority Studying the conversion of Castle (Pittsburgh). Shannon streetcar line to rapid transit. Atlanta 375 cars; $29,200,000 66-mile system. Estimated cost $29,200,000. Chicago Transit Authority 180 under construction by $45,000,000 for new projects exclusive Pullman-Standard; $19,000,- of cars (left). Extension of our John 000. F. Kennedy (Northwest) Express- way. Longrange needs $300,000,000. Cleveland Transit Authority_~_ 30 cars; $2,200,000 $13,200,000 total. Extension to Hop- kins International Airport. Massachusetts Bay Transporta- 300; $22,500,000 $225,000,000 authorized for projects. tion Authority. Haymarket Sq. to Reading, Mass., an extension at $53,000,000. 113.~ miles, Boston-Quincy-Braintree, the Old Colony Route. Conversion of Highland Branch from P CC cars to rapid transit. ivinwaukee - Special mass transit study committee formed. Talk of buying abandoned North Shore or developing rail transit. New York City Transit Au- 200 cars on bid, 600 cars on Plans to buy an average of 200 cars per thority. order, Budd Co.; $68,800,000. year. Various extensions proposed. DeKalb-Chrystie-Sixth Ave. tunnels $100,000,000. Manhattan-Queens tunnel (proposed), $86,000,000. PATH (Trans-Hudson) 162 on order, St. Louis Car; Multi-million-dollar program to mod- $17,000,000; 50 optional. ernize physical, electrical equipment. Has option to take 50-plus additional cars for use in northern New Jersey connecting service. Philadelphia 300 at least Voters approve $87,330,000 bond issue to extend Broad St. subway. Sepact (Southeastern Pennsylvania Trans- portation Compact) plans to modern- ize 216.8 route miles of commuter lines for $103,200,000-modern cars, upgraded physical property. San Francisco (BARTD) 450 cars; $71,000,000 75-mile system, $792,000,000. Seattle Puget Sound regional transportation study will recommend an overall transit plan. Southern CaliforniaRapidTran- 800 to 900; $69,000,000 58 miles proposed, $694,000,000. sit District (SCRTD, Los Angeles). Washington, D.C 600 cars 24.9 miles, $431,000,000. Revised plan. Source: Modern Railroads, January 1965. PAGENO="0316" CHAPTER 14 Airport Facilities* A. NATURE AND COMPOSITION OF FACILITIES 1. DESCRIPTION OF FACILITIES (a) Physical Characteristics There are approximately 9,500 civil aircraft landing facilities in the United States composed of airports, heliports, and seaplane bases. The national airport system which is considered a key to our national aviation system is composed of approximately one-third of these, plus some additional planned facilities for a total of 4,106. Over 90 per- cent of this total are airports, as distinguished from heliports and seaplane bases. Although the airports comprising the national sys- tem range across the entire spectrum in size, physical characteristics, and service provided, each one has the same common function, i.e., to provide an area for the safe takeoff and landing of aircraft. In size, they range from as small as 20 acres up to 10,000 acres. The runway orientation and configuration are probably the most variable of the physical characteristics. The orientation of a runway is primarily related to the direction, intensity, and duration of the surface winds and, to a lesser extent, to the topography and soil conditions of the site. Thus, a runway can be orientated in practically any compass heading. The configuration of the runway system in addition to being related to surface winds also has an effect on airport capacity. The configuration of the runway system can be a single runway layout or a multirunway layout. The multirunway con- figuration can be two or more intersecting runways, two parallel runways, or any combination of these. Each runway has an area surrounding it which is designated to be cleared of obstructions to permit safe ingress and egress of aircraft. A taxiway system is normally provided to permit ground maneuver- ing of aircraft between runway and apron. Needless to say, more complex runway configurations require correspondingly more complex taxiway systems. Although the paved runways and taxiways are considered adequate for all aircraft traffic, the area between the taxi- ways and runways is graded to standards which minimize damage to aircraft in the event of inadvertent or accidental maneuver of the aircraft off of the paved surfaces. The taxiway system can serve one multipurpose apron or several separate single-purpose aprons, such as passenger, cargo, parking, servicing, hangar, or holding. Such facilities as passenger terminals, cargo terminals, and hangars are contiguous to these aprons. *Prepared by Federal Aviation Agency, Airports Service, System Planning Division, with minor editing by committee staff. 308 PAGENO="0317" STATE AND LOCAL PTJBLIC FACILITY NEEDS 309 Each terminal area is served by access roads and parking areas designed to accommodate the various vehicles attracted to and used at the airport. The airports comprising the national system serve both air carrier aviation and general aviation. General aviation is the term applied to that part of civil aviation engaged in pleasure, instructional, and commercial and business flying other than air carrier. The extent of activities within this segment of civil aviation precludes listing all the purposes and missions it fulfills. Airport capacity is usually measured in terms of the number of air operations per unit of time. An air operation is defined as the takeoff or landing of one airplane. The runway system is therefore the maj or controlling element of the airport facility complex which influences airport capacity. In this context, a single runway has a capacity of from 140,000 to 150,000 annual operations depending upon the type of aircraft involved. Airport capacity can be increased by the con- struction of additional runways. The relative orientation of the runways in the airfield configuration greatly influences the increased capacity realized by the construction of additional runways. For instance, adding a runway to a 1 runway airport may increase the capacity to only 160,000 annual operations if the 2 runways inter- sect near their midpoints. If, on the other hand, the 2 runways intersect at their ends and the operations are away from the intersec- tion 100 percent of the time, the capacity is increased to between 230,000 and 270,000 annual operations depending on the type of aircraft involved. The optimum two runway configuration for capacity is referred to as open-parallel runways. In this instance, the runways are separated at least 5,000 feet with the passenger terminal between the runways. The capacity for this scheme ranges from 300,000 to 400,000 annual operations depending on the type of aircraft involved. There are many variations of the examples cited with corresponding varying capacities. (b) Standards of Performance The standards to which airports in the national system are designed and constructed depend on the type of aircraft used to provide the service desired. These aircraft range from small single-engine, piston- powered general aviation aircraft weighing less than 12,500 pounds, to large multiengine turbojet, high-performance aircraft currently weighing up to 325,000 pounds. The runway length provided for these aircraft at sea level and 59° F. ranges from approximately 1,500 feet to as much as 10,500 feet. These lengths are increased for eleva- tion and temperature above the standards of sea level and 59° F. The pavement strength of the entire airfield and the runway length are predicated on the specific critical airplane in the group of aircraft for which the airport is designed. The remaining standards, i.e., runway and taxiway widths and clearances, traverse and longitudinal grades, and approach clearances, are in turn related to the runway length provided. Visual aids including controls and power supply are provided to permit continuance of operations under adverse weather conditions. 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CC- C CCC C Co C-CO C C C DC DCCC 0 ~1 ~CD CCC CCC CCC CCC CCC C CO CD PAGENO="0320" 312 STATE AND LOCAL PUBLIC FACILITY NEEDS TABLE II.-Distribution of airports, seaplane bases, and heliports by population size of associated city, December .1965-Continued State 50,000 100,000 and over to 499,999 50,000 to 99,999 10,000 to 49,999 1 000 to 9,999 1 Under 1,000 1 ~ Un- known 2 Pennsylvania Rhode Island 18 1 35 0 14 62 5 208 3 100 2 25 0 South Carolina 0 11 16 56 7 3 South Dakota 0 1 9 43 40 8 South Pacific 0 0 1 0 0 4 Tennessee 4 14 21 51 16 0 Texas 55 40 13 129 417 163 21 Utah 0 5 5 38 12 8 Vermont..... 0 0 6 17 12 2 Virginia 2 6 32 31 22 10 Virgin Islands Washington 0 6 0 10 1 2 29 0 78 0 72 0 7 West Virginia 0 2 4 11 20 9 8 Wisconsin 2 7 1 20 96 35 43 Wyoming Total 0 0 0 6 36 27 17 381 466 174 1,433 3,833 2,225 1, 035 1 Requested breakdown of population group 2,500 to 9,999 and under 2,500 is notavailable. 2 Privately owned facilities which serve only the owner or small group; therefore, the actual population is unknown. TABLE 111.-Recorded airport facilities, 1927-65 Year (Dee. 31): 1927 1930 1933 1936 1939 1942 1945 1946 1947 1948 1949 1950 1951 1952 (b) Ownership Pattern The individual State totals of publicly and privately owned airports, seaplane bases, and heliports reported in mid-1965 and in December 1965, are included within table I. A publicly owned facility is. one owned by State governments, State agencies, cities, counties, towns, special districts, public authorities, or other local public bodies, and the Federal Government. A privately owned facility is one owned by private, nonprofit organizations and cooperatives, proprietary or profitmaking organizations and individuals. Private airports (5,988 in number) constitute 63 percent of the Nation's total airport facilities. Of the 3,556 public airports in operation, only a small percentage is owned and operated by State governments or State agencies. Counties, cities, towns, public au- thorities, or other metropolitan or local public bodies own, operate, or lease for operation by far the larger percentage of publicly owned airports. Number reported airports, seaplane bases, and heliports 1, 036 1, 782 2, 188 2, 342 2, 280 2, 809 4, 026 4, 490 5, 759 6, 414 6, 484 6, 403 6, 237 6, 042 Number reported airports, seaplane Year (Dec. 31)-Con. bases, and heliports 1953 6, 760 1954 6, 977 1955 6, 839 1956 7,028 1957 6, 412 1958 6, 018 1959 6,426 1960 6,881 1961 7,715 1962 8, 804 1963 8, 818 1964 9, 490 1965 9,547 PAGENO="0321" STATE AND LOCAL PUBLIC FACILITY NEEDS 313 Federal Government ownership and operation of airports is very limited. The two airports used by air carriers serving the Nation's Capital are owned and operated as Federal airports. Employees of the airport management at these two airports are Federal employees. The current value, calendar year 1965, of publicly owned airport facilities including real estate is estimated to be $5 billion. B. COST AND USER CHARGES 1. CONSTRUCTION AND OPERATING COSTS The range of typical initial capital costs of airport construction is indicated in table IV. The construction costs are identified by type of airport facility, and are estimated both in total amount and on the basis of an accepted standard unit of measure. For most facilities this unit of measure is the cost per linear foot, per square foot, or per square yard. Costs for terminal air traffic control (ATC) facilities and navi- gational visual aids are estimated as total facility costs. Typical costs are shown for four types of airports in table IV in order to present the range of both scope and cost. Also, two ranges of facilities have been included for airports used by airlines and for those used by general aviation exclusively. All facilities are normally expected to have at least a 20-year long-time durability and are considered to be permanent facilities. This is consistent with the policy and procedures followed for other public work facilities. The range of typical annual airport maintenance and operation ex- penses are identified by the type of airport facility in table V and, thus, can be directly associated with the cost breakdown of table IV. Op~rating expenses have been given as a separate item for those facili- ties where this expense represents a significant outlay relative to the total maintenance and operating costs. For example, major operating expenses are associated with electrical utility for lighted runway and tax way facilities and for salaries of personnel operating ATC facilities. TABLE IV-Range of typical airport construction costs [Historical dollar costs] AIRPORTS USED BY AIRLINES Airport facilities Large Small Total Per unit Total Per unit Landing area: Runway (lighted) Taxiway (lighted) Aprons. Aircraft hangar facilities Terminal area: Building (administration) Auto parking and ground access~,. Servicing facilities (airport) Terminal ATO facilities Navigational visual aids $1, 000, 000-$8, 000, 000 500,000- 1,000,000 500,000- 2,000,000 500, 000- 5, 000, 000 10, 000, 000-20, 000, 000 100, 000- 200, 000 100, 000- 200, 000 900, 000 1, 095, 000 1 $200-$800 275~ 150 29 3 5- 25 3 50- 75 2 2- 4 10- 25 $500, 000-$2, 000, 000 300,000- 700,000 50,000- 150,000 200, 000- 500, 000 2, 000, 00- 5, 000, 000 50, 000- 100, 000 50, 000- 100, 000 450, 000 375, 000 `$lOO-$SOO 150 25 `2- 15 3 25- 50 2 2- 4 5- 15 See footnotes at end of table. 70-132--GO--vol. 1-21 PAGENO="0322" 314 STATE AND LOCAL PUBLIC FACILITY NEEDS TABLE IV.-Range of typical airport construction costs-Continued AIRPORTS USED B.Y GENERAL AVIATION ONLY Large (public) Small (private) Total Per unit Total Per imit Landing area: Runway (lighted) Taxiway (lighted) Aprons Aircraft hangar facilities Terminal area: Building (Administration) Auto parking and ground access... - Servicing facilities (airport) Terminal ATC facilities Navigational visual aids $500, 000-$l, 000, 000 300, 000- 700, 000 50, 000- 150, 000 100, 000- 500, 000 . 100, 000- 500, 000 10, 000- 50, 000 20,000- 50, 000 340, 000 85, 000 1 $i00-$300 1 50 2 6 3 2-5 3 15-35 2 2-4 5-10 $90, 000-$500, 000 10, 000 5,000- 10, 000 (4) (4) 1,000- 5,000 (4) (4) 7, 000 1 $30-$lSO 1 25 2 2-4 (4) (4) 2 1-4 (4) (4) 1 Per linear foot. 2 square yard. 3 Per square foot. 4 available. TABLE V.-Range of typical annual airport maintenance and operation costs AIRPORTS USED BY AIRLINES , Airport facilities Large Small Total Per unit Total Per unit Landing area: Runway (lighted): Maintenance Operation Taxiway (lighted): Maintenance Operation Aprons: Maintenance Operation Aircraft hangar facilities: Maintenance and operation Terminal area: $5, 000-$10, 000 2, 000- 5, 000 3, 000- 7, 000 3, 000- 7, 000 2, 000- 5, 000 5, 000- 10, 000 10, 000- 15, 000 1 $1. 00 1 50 1 50 . 50 . 10 2 10-. 50 1. 00-2. 00 $2, 000- $5, 000 1, 000- 3, 000 1, 000- 3, 000 1, 000- 3, 000 500- 1, 000 1, 000- 3, 000 5, 000- 10, 000 i$O. 50 1 .30 1 25 1 30 3 . 05 2 10-. 25 Building (administration): Maintenance and operation Auto parking and ground access, snainte- nance and operation Servicing facilities (airport) maintenance and operation Terminal ATC facilities: Maintenance Operation Navigational visual aids, maintenance and oper- ation 25, 000- 50, 000 5, 000- 10, 000 10, 000- 25, 000 100, 000 200, 000 100,000 1. 00-2. 00 2 5* 00-0.25 1. 00-2. 00 10, 000- 15, 000 2, 000- 5, 000 5, 000- 10, 000 75, 000 125, 000 50,000 2 . 05-. 15 See footnotes at end of table. PAGENO="0323" STATE AND LOCAL PUBLIC FACILITY NEEDS 315 TABLE 17.-Range of typical annual airport maintenance and operation co$ts-Oontinuecl AIRPORTS USED BY GENERAL AVIATION ONLY Airport facilities Large (public) Small (private) Total Per unit Total ~__ Per unit Landing area: Runway (lighted): Maintenance Operation Taxiway (lighted): Maintenance $2, 000-$5. 000 1,000- 3, 000 1, 000- 3, 000 1 $0.50 1 30 1 .25 $800 900 200 1 $0.25 1 .30 1 25 Operation Aprons: Maintenance 1,000- 3,000 500- 1, 000 1 .30 2 .05 300 150 1 .30 2 .05 Operation Aircraft hangar facilities, maintenance and opera- tion Terminal area: 1,000- 3, 000 2-000-- 5, 000 2 10-. 25 15Q-5~~ (4) 2 05-. 25 (4) Building (administration), maintenance and operation Auto parking and ground access maintenance and operation Servicing facilities (airport) maintenance and operation Terminal ATO facilities: 5,000-10, ooo 500- 1,000 2,000- 5,000 2 05-. 15 (4) 100-500 (4) (4) 2 05-. 10 (4) Maintenance Operation Navigational/visual aids: Maintenance and 15, 000 75,000 (4) (4) (4) (4) operation 15, 000 2, 000 1 Per linear foot. 2 Per square yard. Per square foot. 4 Not available. Annual maintenance and operation expenses vary widely depending upon the degree of maintenance assumed under the individual leasing policy of the owner, and on the degree of services required. At large metropolitan airperts the public services constituting annual mainte- nance and operating expenses extend to police controls, passenger information, operation of nurseries, first-aid stations, etc. Frequently, at small community airports, the only expense to the community is the mowing of the grass. To a very large degree the expenses of the owning public agency depend upon its leasing policy. For example, many small communities have a commercial, rent-paying tenant who sells gas, offers flight services, and takes care of what maintenance and operating burdens the owning municipality incurs. At most publicly owned (i.e., municipal) airports, there is an annual budget for total expenses. 2. USER CHARGES The range of typical average user charges is indicated in table VI These charges are identified by type of facility used and on the basis of typically accepted fees, admission, lease payments and rentals found within the industry. Included within table VI is an indication of the nonapplicability of particular services at one type of airport or another. PAGENO="0324" 316 STATE AND LOCAL PUBLIC FACILITY NEEDS TABLE VI.-Range of typical airport user charges Airport facilities ~ Airports used by airlines Large Small per unit Total Per unit Landing area, landing fee ~ Aircraft service area: Hanger fees Single-engine aircrafL.. Multienginelight Multiengine heavy Terminal area: Tie-down fee Building concession space rental. Building administration space rental. Observation deck fee Ground transportation support. Vehicle parking fee Aviation activities: Aircraft rental (available) Flight instruction fee Ground school fee Industrial facility rental Total user charge revenu& $100 000 to $150,000 at 6 ~o 18 each. $50,000 to $200,000 $200,000 to $250,000 $150,000 to $200,000 $150,000 to $200,000 $150,000 to $200,000 (Air carrier: 15 to 35 cents) (1,000 pounds gross maximum weight.) $75 to $100 per month - $lOOto$l5opermonth $150 to $200 per month $1 to $20 each $6 to $12 per square foot per year. $2 to $9 per square foot per year. 10 to 25 cents per person. 25 to 50 cents per bour $50-l00/hour (heavy) -- (1) (1) $1 to $25 per takeoff or landing. ~ $50 to $75 per month. $75to$lO0permonth. $100 to $200 per month. $1 to $5 each. $3 to $9 per square foot per year. $1 to $6 per square foot per year. Free. 25 cents per hour. ~ $25 to $50 per hour (light). $10 to $20 per multi- engine. $40 each. 0 $0.5 to $1 million Airport facilities Airports used by General Aviation only Large (public) Small (private) Landing area, landing fee Aircraft service area: Hangar fees: Single-engine aircraft Multiengine light Multiengine heavy Terminal area: Tie-down fee Building concession space rental Building administration space rental...... Observation deck fee Ground transportation support Vehicle parking fee Aviation activities: Aircraft rental (available) Flight instruction fee Ground school fee Industrial facility rental Per unit $5 each $50 to $75 per month $75 to $100 per month $100 to $150 per month $1 each $3 to $9 per SF per year $1 to $3 per SF per year Free Maximum 25 cents per hOur.. $15 to $25 per hour (large)~... $5 to $10 per single engine.~~ $20 each Per unit Free. ~ $10 to $25 per month. $20 to $50 per month. $30 to $17 per month. Free. $1 to $6 per SF per year. (1). (1). Free. $10 to $15 per hour (small). (1). (1). I Not available. There is evidence of a trend within the industry to record both costs and revenues in a fiscal accounting system which lends itself to determining the extent user charges are employed `to pay for all or part of the services used. There is growing acceptance of the concept that airport user charges should be directly related to the measured costs of providing facilities used. This has not been the case in the past. Hopefully, the planned expenditures will be offset by revenues from user charges. Only a relatively few public airports have been found to be truly operated on a self-sustaining financial basis. The reasons for this are manifold and complex. However, there are at least two notable causes for such inability. First, the predominant judgment of communities PAGENO="0325" STATE AND LOCAL PUBLIC FACILITY NEEDS 317 to directly subsidize reasonable airport operating costs in return for the commerce attracted to the community. Second, the fact that most airports' fees are governed by their comparability to those charged by others, rather than being based upon the airports' factual operating expense. Long-term self-sustaining airport operation depends upon achieve- ment of that necessary traffic level which will recover the airport's expense through the assessment of reasonable user fees. Throughout the Nation there exist the "haves" and "have nots." Self-sustaining airport operations appear possible through assessment of appropriate user fees at most major terminal cities. Should Federal-aid cease to such airports, it is generally believed that the communities would exercise the wisdom necessary to continue their airports by adjusting such fees as necessary. Such airports are few in number, as illus- trated by the fact that only five major airports accommodate nearly 20 percent of all airline flights. More critical is the question of whether the thousands of other communities can or would respond financially. It is highly unrealistic to expect large public facilities to collect user charges exceeding the sum of prorated operating and capital costs. In those instances where privately owned facilities are operated on a self-sustaining basis with reasonable return on investment, it can usu- ally be expected that there is some attracting force which establishes the level of demand. This may be superior service or even nonaviation related activities. Under the Federal Aid Airport Program (FAAP), the Federal Government shares in the costs of land acquisition and construction for certain limited basic operational facilities and safety related items (namely, runways, taxiways, airfield lighting, service equipment buildings, etc.). The funds for FAAP are appropriated out of the general tax resources. For State and local governments, general tax resources and general obligation borrowings are used. A large percentage of airport development projects has been ac- complished based on local bond issues. The credit standing of local agencies, coupled with income tax exemptions for bond purchasers, have made this form of capital financing attractive. In addition, there has emerged a requirement on the part of local taxpayers to insist that airport development be financed by revenue bonds. With- out the pledge of the total resources of the community, investors and purchasers of these bonds require evidence that the projected revenues to retire the bonds are reasonable and attainable. I\'foreover, to make such bonds marketable it is frequently necessary to encumber the airport with obligations to the bondholders relative to operatnig practices, rates and charges, etc. It is noteworthy that in some instances the principal users (airlines) have agreed to higher landing fees (user charges) in order to make the financing of much needed airport expansion attractive to bond purchasers, and to help sponsors raise their 50 percent share of funding under the FAAP. C. TRENDS OF CAPITAL OUTLAYS ANNUAL TRENDS Annual expenditures for airport facilities constructed inplace are indicated iii table VII. The trend of expenditures is shown as a percentage change from year to year. Prior to 1952, amounts were PAGENO="0326" 318 STATE AND LOCAL PUBLIC FACILITY NEEDS published only in aggregate and thus are not available. For 1947 through 1958, FAAP expenditures are shown in table VIII as Federal intergovernmental expenditures. (Flow of funds from tax revenue resources of one level of government to another are designated inter- governmental expenditures and revenues). Expenditures for airports are influenced by the volume of traffic, by the continuing development of improved aircraft, and by more efficient ways of handling passengers and freight. The volume of traffic, in turn, is dependent upon the rate and nature of the Nation's economic growth, population growth and its regional distribution, and the types and values of commodities transported by air. The change in rate of expenditure reflects development in the state-of-the-art of the aviation industry-the introduction of turbojet airplanes, for example. * Total expenditures by level of government are given in table IX. That portion of total annual expenditures reported to be capital outlay is indicated in table X. Similarly, that portion designated for con- struction expenditure only is shown in table XI. The proportion accounted for by each level of government is also shown in each of these tables. Similar data are not available for private, nonprofit organizations and cooperatives, nor for proprietary or profitmaking organizations. TABLE VII.-Annual expenditures for publicly owned airports [Dollars in millions] Total expend- Year (December 31) itures all governments Percentage change (trend) 1952 1953 1954 1955 1956 1957 - 1958 1959 1960 1961 1962 1963 1963 to 1964 1964to 1965 . $352 385 372 ~ 540 508 524 733 842 1,065 1,082 1,097 1, 109 1,198 +9.4 -3.4 ~ +50.4 -5.9 +3. 1 +39.9 +14.9 +26.5 +1.6 +1.4 +1. 1 +8.0 Fiscal year: 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1~For capital improvements. Source: Federal Aviation Agency. Federal Government expenditures (intergovernmental) Fiscal year-Continued (millions) 1957 $20. 6 1958 42.9 1959 56. 6 1960 57. 1 1961 64.8 1962 57. 9 1963 51. 5 1964 65. 3 1965 70.6 1966 (estimated) 75. 0 Source: Bureau of the Census Governmental Finances, various Issues. TABLE VIII.-Finances of publicly owned airports expenditures under the Federal- aid airport program 1 Federal Government expenditures (intergovernmental) (millions) $5. 1 30. 4 33. 2 30. 4 32. 8 27. 0 17. 5 8.4 16. 5 PAGENO="0327" STATE AND LOCAL PUBLIC FACILITY NEEDS 319 TABLE IX.-Finances of pnblicly owned airports expenditures by level of government [Dollars in millions] Source: Bureau of the Census Governmental Finances, various issues. TABLE XII.-Revenue charges for air transportation [Dollars in millions] Year Total all govern- ments Federal Govern- ment Percent of total State govern- ment Percent of total Local govern- ment Percent of total 1959 1960 1961 $128 150 171 210 232 238 264 $1 3 3 7 3 4 4 0.8 2. 0 1.8 3.3 1.3 1.7 1. 5 $5 7 8 10 13 15 16 3.9 4.7 4.7 4.8 5.6 6.3 6. 1 $122 140 160 193 216 219 244 95,3 93.3 93.5 91.9 93.1 92.0 92. 4 1962 1963 1963 to 1964 1964 to 1965 . Year Total all govern- ments Federal Govern- ment Percent of total State govern- ment Percent of total Local govern- ment Percent of total 1959 1960 1961 1962 1963 1963 to 1964 1964 to 1965 $733 842 1,065 1,082 1,097 1,109 1, 198 $425 500 643 709 736 750 783 58.0 59.4 60.4 65.5 67.1 67.6 65. 4 $24 26 36 35 31 40 46 3.3 3.1 3.4 3.2 2.8 3.6 3. 8 $284 316 386 338 330 319 369 28.7 37.5 36.2 31.2 30.1 28.8 30.8 Source: Bureau of the Census Governmental Finances, various issues. TABLE X.-Total capital outlay for publicly owned airports [Dollars in millions] Year Total all govern- ments Federal Govern- ment Percent of total State govern- ment Percent of total Local govern- ment Percent of total 1959 1960 1961 1962 1963 1963 to 1964 1964 to 1965 $340 422 543 456 428 393 371 $110 179 229 203 203 175 110 32.4 42.4 42.2 44.5 47.4 44.5 29.6 $20 19 27 26 21 26 35 5.9 4.5 5.0 5.7 4.9 6.6 9.4 $210 224 287 227 204 192 226 61.7 53.1 52.8 49.8 47,7 48.9 61. 0 Source: Bureau of the Census Governmental Finances, various issues. TABLE XI.-Airport construction expenditures only [Dollars in millions] Year Total all govern- ments Federal Govern- ment Percent of total State govern- ment Percent of total Local govern- ment Percent of total 1959 1960 1961 1962 1963 1963 to 1964 1964 to 1965 $302 331 433 374 310 279 312 $96 112 140 145 125 97 81 31.8 33.8 32. 3 38. 8 40.3 34.8 26.0 $19 17 27 24 21 25 34 6.3 5.2 6.3 6.4 6.8 9. 0 10.9 $187 202 266 205 164 157 197 61.9 61.0 61.4 54.8 52.9 56.2 63.1 Source: Bureau of the Census Governmental Finances, various issues. PAGENO="0328" 320 STATE ~D LOCAL PUBLIC FACILITY NEEDS In recent years. there has been a gradual annual increase in the outlay of FAAP funds for the growing number of development proj- ects. This upward trend can be attributed to the constant need for more airport facilities to keep pace with the continuing growth of all types of aviation activity. Of the total annual capital outlays, abotit 90 percent is accounted for by projects sponsored by State agencies or by cities, counties, towns, or other local public bodies; the other 10 percent by projects developed and controlled by the Federal Government, including those airports located in or adjacent to na- tional parks. About 35 of the 50 States have a grant-in-aid program for airports, but this source accounts for a small share of the total financing-only as much as 25 percent of project costs. Accordingly, the burden in most instances becomes a municipal burden. Airport revenues collected by each level of government is shown in table XII. Specific information on other possible sources of financing such as gifts, bequests, donations, fund-raising drives, etc., is not available. During the period 1947-65, the combined capital outlay of Federal and sponsor furds for eligible items of public airport development under . the Federal-aid airport program, including the acquisition of land, amounted to approximately $1,669 million. Federal Govern- ment~ expenditures by year are shown in table VIII. The Federal portion obligated was $825 million, programed for over 6,000 projects at over 2,000 airports. The local funding amounting to $848 million does not include additional sponsor funds provided for items ineligible for Federal participation, such as terminal buildings, hangars, parking lots, and other items not related to operational safety. During the period 1956-66, sponsor requests exceeded actual Federal allocations by an average of $86 million a year. In addition, it is estimated that approximately $1.5 billion in real property assets, based on GSA and War Assets Administration records, were conveyed to localS sponsors under the Surplus Property Act of 1944, as amended. Local and State governments financed 76 percent of all airport development accomplished during the 5-year period, 1960-64. With regard to the source of capital financing, the percentages were 68 percent local funds, 8 percent State funds, and 24 percent Federal funds. A recent survey of a fairly representative cross-section of airport management indicates that the percentage distribution of the total amount of airport capital financing was as follows: (1) approximately 13 percent general obligation bonds; (2) 68 percent revenue bonds; and (3) 19 percent from "other" sources. Airport revenue bond financing in excess of $91 million occurred at large hub airports and only $75,000 at lesser hub airports; in fact, the lowest airline activity airports (nonhub) resorted wholly to sources other than bond financing. Specific data on tax exempt municipal bonds and capital flotations in security markets in amounts and percentages by year are not available. The 13,000 members of the National League of Cities indicated in their statement of national municipal policy for 1965 that they lack the financial capability for airport improvement and development. While the inability to financially respond is most acute at the inter- mediate and lesser sized. municipalities, frequently large hub municipal- PAGENO="0329" STATE AND LOCAL PUBLIC FACILITY NEEDS 321 ities are also unable to respond. Airport facilities are classified by the league as being of national significance and essential to the economy and commerce of the United States and, as such, warrant a permanent long-term Federal responsibility for financial support. D. NEEDS AND PRosPEcTIvE CAPITAL OUTLAYS Airport facility development needs have been forecast for the period 1966-69 in the total amount of $1.96 billion. Of this amount, ap- proximately $760 million (39 percent) is required for terminal building or terminal area development-work which is not eligible for Federal aid. The balance of $1.2 billion relates to needed development which is eligible for Federal aid. During the 4-year period, matching Fed- eral aid approximating $300 million is expected to be available. Thus, the residual local and State financial burden will approximate an additional $600 million during this period. Forecast data indicates that most major airports are acutely aware of the development needed to accommodate larger capacity aircraft of the future. Such aircraft will be introduced in quantity during the 1970-75 time period. The capital outlay requirements for FAAP eligible airport development are estimated at over $3 billion during the 10-year period 1966-75. Based on the assumption that work not eligible for Federal aid will continue to constitute approximately 40 percent of the total, it is estimated that the total capital outlay re- quirements for publicly owned airport development needs will approach $5 billion during this decade (see table XIII). Privately owned airports will require another $1 billion. The key forecast factors considered in the projection of these capital outlay requirements are: Over 179 million scheduled airline passengers annually by 1975-almost double today's figures. Hours flown in general aviation aircraft to reach 30 million annually in 1975-an 85-percent increase over that recorded in 1965. Transition from piston to turbine aircraft by 1970, alone, result- ing in extending service from 112 airports at present to 346. Introduction of supersonic transport, vertical short takeoff and landing, and larger capacity passenger-carrying aircraft in the latter half of this 10-year period requiring the construction and/or expansion of appropriate airport facilities. An estimated $670 million FAAP eligible airport development cost requirement during the immediate 2-year period 1966-67; with a cumulative requirement of over $1.4 billion for the 5-year period 1966-70. Attendant with the projected growth and technological ad- vances in the field of aviation, the assumption that the continued FAAP capital outlay requirements for airport development and improvements over the following 5-year period (1971-75) will be equivalent to at least the preceding 5 years plus a 2-percent per annum construction cost increase. Table XIII provides a summary of the estimated 1966-75 airport development capital outlay requirements by year. These estimates reflect aviation needs and are not a projection of probable expenditures. PAGENO="0330" 322 STATE AND LOCAL PUBLIC PACILITY NEEDS Using the 1960 census as the basis, 57 percent of the estimated require- ments is attributable to cities with populations of 50,000 or more; 38 percent to cities of 2,500 to 50,000; and 5 percent to cities, towns, and rural areas with populations under 2,500. TABLE XIII.-Publicly owned airport development capital o'utlag reauirements, 1966-75 [In millions] Fiscal year FAAP eligi- ble require- ments Total devel- opment re- quirements Source of funding Federal 1 Local and State 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 Total $330 340 255 275 260 300 300 310 320 320 $475 ~yj 500 485 480 490 495 505 520 525 $75 n 75 7~ ~ 75 75 75 ~ ~ $400 425 425 410 405 415 420 430 `5~ 450 3,010 4,975 750 4,165 lAssum~g no change in FAA]? funds of $75,000,000 annually. NoTE-Estimates of capital outlay. As in the past, required annual capita.l outlays will be financed primarily by various levels of government, and to only a minor extent by private organizations. Expenditures by local and State governments for airport development have approximated a relatively stable 0.5 percent of their total annual expenditures for all govern- mental functions. Local and State governments financed 76 percent of all airport development accomplished during the 5-year period 1960-64, with the remaining 24 percent financed by the Federal Government. Assuming that no change occurs in the amount of available FAAP funds ($75 million annually), it is estimated that the local and State governments' contribution must increase to approximately 80 percent of the total capital outlay required over the 1966-75 period. Using past experience as a guide, the estimated sources of financing these prospective capital outlays are as follows: revenue bonds-$3,330 million; general obligation bonds-$645 million; Federal Government grant assistance-$750 million; and other sources (State, bank loans,, operational funds, tax levies, et cetera)-$250 million. The ability to float bond issues which pledge future airport revenues to their retirement is, as noted previously, almost exclusively limited to a relatively few of the Nation's major airports. General obligation bond issues are usually possible at large and medium hub airports, but rarely possible at small and nonhub airports which generate from 0.25 percent to less than 0.05 percent of the total annual U.S. pas- senger traffic. The latter type of airports is almost totally dependent upon "other sources" for financing their needed airport development. Small hub airports, which are concentrated in metropolitan areas ranging in population from 100,000 to 500,000 possess limited ability PAGENO="0331" STATE AND LOCAL PUBLIC FACILITY NEEDS 323 to financially respond to their needed airport development, but are nevertheless faced with federally eligible development needs generally comparable to those of medium hub airports. The situation at non- hub airports is even more severe. The ability of such local govern- ments to totally respond to their development needs is very doubtful. It is obvious that the total estimated capital outlay requirements will exceed the amount that can be supplied by local and State funds. In addition to increasing direct Federal aid, a system of Federal loans might be made available to local and State governments to enable an orderly and timely development of the Nation's system of civil air- ports. It would enable development to proceed which would other- wise be delayed or not accomplished because of local government inability to arrange for the required capital financing. In summary, private finances have not been available to supply the total capital expenditures necessary to build and improve airports on the general sustained basis required by civil aviation. States, municipalities, and other local political units alone have been unable to carry the entire capital burden attendant upon the provision of an adequate system of national airports. Federal, State, and munici- pality sharing of development costs distributes such costs to bene- ficiaries in as reasonably an equitable fashion as may be found in any system of public financing. It imposes a one-payment burden upon persons outside of the State in which the airport is located (Federal share), upon State residents a two-payment burden (Federal-State shares), and upon residents of the municipality a three-payment burden (Federal-State-local shares). PAGENO="0332" CHAPTER 15 Marine Port Facilities* A. NATURE AND CoMPosITIoN OF PORTS AND TERMINAL FACILITIES 1. DESCRIPTION OF PORTS AND TERMINAL FACILITIES (a) General Physical Characteristics-Structures and Equipment A port is a shelter-harbor where marine terminal facilities are provided. The facilities consist of piers, wharves, and slips at which ships berth while loading or unloading cargo; cranes and other mechanical handling equipment which keep the cargo flowing between ship and terminal; transit sheds, warehouses, and other storage areas where goods may be stored for shorter or longer periods while awaiting distribution or sailing; and tracks and roadways which provide the access to and clearance from the terminal facility. Thus the terminal must be served by railroad, highway, or inland waterway connections. `In brief, the harbor is a water area affording a natural or artificial haven for ships. Only when it has been developed for transacting business between ship and shore does a harbor become part of a port. Therefore, a port normally consists of a harbor plus marine terminal facilities. A marine terminal is that part of a port or harbor which provides berthing, cargo handling, storage areas, and railroad and roadway clearance facilities. Terminal facilities are all those arrangements and systems, mechanical or otherwise, which make easy transference of passengers and commodities between ship and shore. The three most common types of marine terminals, based on use of facility and the service they perform, are freight or cargo terminals where traffic is mainly mixed general cargo and a few passengers car- ried by freighters, passenger terminals where only passengers are embarked or disembarked with their baggage along with small amounts of lightweight cargo, and bulk cargo or specialized terminals where such products as petroleum, grain, coal, ore, and miscellaneous dry and liquid hulk cargoes are stored and handled. A fourth type of specialized facility is the container terminal which is increasing in number and importance and is specially designed for the accommoda- tion of containerships and the handling and storage of van-sized con- tainers in connection with the ocean transportation of containerized cargo. IPhysically, a marine terminal may consist of only a single pier or wharf or it may comprise a number of piers and wharves grouped together and operated as a unit. Usually, the terminal includes open or covered storage facilities, or a combination of both, and often the entire facility is enclosed by a fence. *Prepared by the Maritime Administration, U.S. Department of Commerce, with minor editing by committee staff. 324 PAGENO="0333" STATE AND LOCAL PUBLIC FACILITY NEEDS 325 In the United States, except for the specialized facilities for tanker vessels, there are two basic ship berthing facilities: (1) the simple straight pier or so-called finger pier, and (2) the marginal wharf or quay. A pier type of structure projects into a body of water at an angle with the. shoreline normally permitting the berthing of vessels on the two sides of the pier and if the structure is sufficiently wide at the .head of the pier as well. The wharf type of structure parallels the shoreline and provides berthing for vessels at its offshore face only. (b) Services Rendered Commercial areas: The port provides the whole range of serv- ices and the various kinds of accommodations which are usually grouped under the heading of terminal facilities for ships, passengers,. and cargoes. The most important of all ship servicing elements are the berthing facilities provided at marine terminal facilities. Ade- quate berthing* facilities in a port serve the demands of shipowners and steamship operators for piers and wharves at which to berth their ships and work cargo with safety, economy, and dispatch. Berthing facilities should be backed up by adequate transit sheds, warehouses, open storage areas, and sufficient mechanical cargo handling equip- ment to meet the needs of the entire marine terminal complex. Other terminal facilities necessary for the servicing of ships include outfitting berths, repair berths, and bunkering berths. The common utilities available at these and other berths are electricity, fresh water, steam, and compressed air. Finally, specialized terminal facilities serve the needs of special purpose ships and their cargoes. These include petroleum storage and pipeline systems for loading and dis- charging bulk petroleum products, grain elevators for transferring bulk grain, loading and unloading equipment with conveyor belt systems and car dumper facilities for handling bulk coal and ore, wharf cranes fitted with grab buckets for handling miscellaneous bulk cargoes, conveyor systems for handling bananas and other delicate fruits, and swift handling arrangements for moving frozen meats and and produce between ship and cold storage facilities. A port of reception may be illustrated as follows: Imported goods are first landed on the wharf apron from the ship; moved to the transit shed at shipside where they are checked, tallied, sorted, and inspected by customs; they are then transferred to a storage warehouse from where all or only part of the goods may be transported out of the port area by railroad, motor truck, lighter, barge, or coastwise vessel. The marine passenger terminal provides facilities for accommodating passenger ships and the ocean passenger traffic through the port. This passenger trade through the port requires terminals designed with certain special features for expediting baggage handling and customs inspection and other facilities such as restaurants, restrooms, offices for conducting immigration formalities, and port health req uirements. Most port administrative agencies have control over waterfront industrial site areas. The port authorities have developed so-called industria.l zones for the purpose of encouraging industry participation in port expansion programs. These zones and the industrial plants which locate there are often served by modern port and terminal facilities as well as by connecting highways, railroads, electrical facili- PAGENO="0334" 326 STATE ~D LOCAL PUBLIC FACILITY NEEDS ties, utilities, et cetera. Many ports construct general or special purpose buildings for long-term lease to manufacturing and commer- cial firms. A small port~ generally reserves the waterfront area for its own public use, giving industrial leases in the immediate backland, together with constructing or providing such services needed for access to shipside, as pipeline, roadway, or rail spurs. Agrarian interests of the port require specialized terminal facilities for receiving, storing, and shipping their products. If the commodities are bulk grains for export, the port must have a public grain elevator complete with berthing accommodations for ships and barges, loading spouts for transferring grain to ships, marine legs for unloading barges, grain storage bins, and a rail car and truck dumper system. Special facilities are also needed in the port for handling fresh fruits, produce, animal and dairy products, including refrigerator ships, cold storage plants, and refrigerated rail cars and trucks. Pipeline delivery systems and storage tanks are special facilities for liquid bulk vegetable products. Most ports have set aside and developed certain areas of the harbor for the accommodation of yachts, small boats, and fishing vessels. These facilities afford shelter for small craft and provide the necessary mooring arrangements, boat slips, and marine railways or ramps for launching, drydocking, and removing boats from the water. In a number of ports, and at outport locations, there are terminal facilities owned and operated by the Department of Defense. These include Army ports of embarkation, Navy operating bases, and miscellaneous installations such as ammunition piers and petroleum depots. (c) Quantitative Standards of Performance The practical operating capacity of a marine terminal is the volume of cargo which can be handled onto and through the terminal's precincts with reasonable efficiency and with only infrequent conges- tion. Generally, an ocean terminal's capacity is limited by any one of three distinct and independent functions: (1) the movement of cargo into or out of rail cars, trucks, and barges; (2) the transit storage of cargo at the terminal; and (3) the movement of cargo into or out of vessels. At U.S. ports, the function dominating the practical operating capacity of a commercial marine terminal is the capacity for moving cargo into or out of vessels berthed at the terminal. This capacity is basically the product of two components. First is the cargo handling rate expressed in long-tons per day per berth which can be reasonably attained; second, the number of days in a year that the berths can be occupied under normal operating conditions. Where a terminal contains a large number of berths, the occupancy per berth and the efficiency and capacity under these conditions can be high. At the other extreme, where a public terminal has only one or two berths, ship arrivals cannot be matched nearly as well with ship departures. Sailing shcedules can be more closely coordinated in the case of private terminals. Since the use which can be made of each berth is greater at terminals having a large number of berths, PAGENO="0335" STATE AND LOCAL PtJBLIC FACILITY NEEDS 327 the operating capacity of a terminal increases at a greater rate than the proportional increase in the number of berths. Recorded observations in 1956-57 at large modern terminals in Pacific coast ports of the United States indicate an annual per.. formance figure of 94,000 tons per berth for general cargo. In 1955- 56, at a principal Atlantic coast port, performance records of both antiquated as well as the most modern berthing facilities shows that the average amount of cargo handled per berth per year was 59,444 tons. In 1957, the annual average volume of general cargo handled per berth at the same port increased to 63,055 tons. Considering all three U.S. coastal regions, an estimate of 75,000 tons of general cargo per berth per year was considered to be a fair average for the base year 1960. It is expected that during the next 25 years improved conditions should result in an increase of general cargo handling efficiency. Ac-. cordingly, it is estimated that the handling rate at terminals on the Atlantic, gulf, and Pacific coasts will increase by 5,000 tons per berth for each 5-year period up to 81,000 tons per berth by 1966 and as high as 100,000 tons per berth by 1985. It is estimated that the average annual tonnage capability of a Great Lakes berth would be about 20 to 25 percent less than the 75,000 tons per berth estimate for the three ocean coasts, or approxi.. mately 60,000 tons per berth annually for base year 1960. It is estimated that Great Lakes general cargo capacity will increase from the estimated 60,000 tons per berth per year in 1960 to 78,000 tons in 1966, thus reaching nearly the same berth capacity estimated for ocean coast ports for the same year. A bulk petroleum berthing facility which is capable of loading and/or discharging petroleum products at a rate of 5,625 barrels or more per hour is considered to have a maximum capacity of 15,000 tons per 24-hour day. This is based on the assumption that the average T2 tanker can be loaded and/or discharged in one 24-hour day. By averaging the number of berths with a capability of handling less than 5,625 barrels per hour, it is estimated that each such berth has a daily maximum capacity of 9,500 tons. Based on the number of petroleum berths and annual total capacity of 1,642.5 million tons estimated in base year 1960, the annual petrol- eum tonnage capacity of the two classes of petroleum berths on three ocean coasts is 3.83 million tons for a berth of 15,000 tons per day capacity (15,000X70 percent X365), and an average of 2.42 million tons for a berth of 9,500 tons per day capacity (9,500x70 percent X365). The annual average petroleum tonnage capability on the Great Lakes is calculated to be 1.59 million tons per berth of 9,500 tons per day capacity (9,500 X 70 percent X 240 days). It is estimated that, based on the storage capacities of the individual grain elevators on the Atlantic coast, an average annual minimum turnover of 5.6 times or a minimum volume of some 250 million bushels is required to keep the port elevators at a profitable level of operation. On the gulf coast these figures are 5.8 and 180 million bushels, respectively. Assuming an average turnover of grain through PAGENO="0336" 328 STATE AND LOCAL PUBLIC FACILITY NEEDS the elevator of 5.7 times per year and based on elevator storage ca- pacity of approximately 160 million bushels, the minimum annual handling for profitable operations on all three ocean coasts would be approximately 24.5 million tons or an average of about 400,000 tons per berth. It was estimated that the 1960 annual capacity of coal berths on the three ocean coasts approximated 357.7 million tons (1.4 million tons X 70. percent to obtain effective vessel working time X 365 days). The total of 357.7 million tons divided by the total rnrn~iber of berths equals an annual average of 8.7 million tons per berth. The 1960 annual capacity of all coal berths on the Great Lakes was 285 million tons (1.7 X 70 percent X 240 days of navigation season). The total of 285 million tons divided by the total number of berths equals an annual average of 3.57 million tons per berth. On the basis of New York's brief operating experience, it appears that the practical and effective capacity of a container berth for an operation like that of the Sea-Land Service, Inc., is about 500,000 tons per year. The Sea-Land terminal operations in the port of New York have reflected a containerized general cargo rate of 280 tons per gang-hour as compared to the approximate 15 tons per gang-hour normally handled on a conventional break-bulk cargo ship. (d) Qualitative Standards of Performance In general, port facilities are more than adequate on a quantitative basis to serve the maritime industry in times of peace and during war or crisis. Many are not adequate on a qualitative basis due to the~ current requirements imposed by technological developments in both sea and land transport. However, substantial numbers of these antiquated terminals are in the process of modernization or removal for new, modern, facilities. In the past 17 years (Jan. 1, 1946-Dec. 31, 1962), a total of some $1,619,600,000 has been spent on piers, wharves, and docks alone in all U.S. ports for handling of bulk and general cargoes. This total figure was expended for waterside facilities only. It does not include many other construction projects in the broad field of port develop- ment which have also been built at these harbors, such as barge terminals, shipyards, harbor floating equipment, ferries, bridges, tunnels, expressways, airports, railroad yards, and other transporta- tion facilities. In the foreseeable future, there is no sign that this nationwide port building and modernization program will diminish in tempo. Impres- sive long-range building plans continue to be projected at seaboard ports. In the economical design of piers and wharves an estimate of the commercial life of a structure is of considerable importance. Some port engineers consider that it is not profitable to spend money for permanence of piers and wharves in excess of that required to give them a life of about 40 years. As few as 25 years has been allowed as the commercial life of wharf structures in some ports. On the other hand, there are ports where construction has been based on a life of 100 years However, it is seldom advisable to make the total PAGENO="0337" STATE AND LOCAL PUBLIC FACILITY NEEDS 329 initial cost of building a pier or wharf very large by installing a facility with a life longer than 50 years. There is no doubt that a port structure built to last over 50 years is cheaper in the long run, and requires smaller annual amortization and depreciation than with only a 25-year commercial life, because the period of amortization is longer and the longer lived structure more durable. Currently, based on the commercial life of U.S. port facilities, the average life of pier and wharf structures has been estimated to be 48 years. The average life of other facilities has been calculated to be 46.5 years for transit sheds and storage warehouses; 43.5 years for cold storage plants, grain elevators, and bulk handling facilities; and 40 years for roadways, paving, and pier or wharf utility systems. The combined average life of all U.S. port structures is calculated to be 45.8 years. 2. EXISTING CAPITAL PLANT IN THE UNITED STATES (a) Number of Facilities As of mid-1962, there were some 2,100 marine terminal facilities or structures providing about 4,200 deepwater berths of all categories located in 170 U.S. ocean ports on the Great Lakes, and Atlantic, gulf, and Pacific coasts, including Alaska and Hawaii. The 2,100 port terminal facilities do not represent all existing port berthing structures in the United States, but only those marine terminals which can accommodate oceangoing vessels alongside a pier or wharf with a minimum berthing depth of 20 feet or more in ports on the 3 ocean coasts, and 18 feet or more in ports on the Great Lakes. These facilities are the most significant ones from the standpoint of trade and commerce and make up the backbone of U.S. port facilities which serve the U.S. merchant fleet and foreign shipping throughout the world. In addition to the 2,100 terminals selected, there are substantial numbers of marine port facilities located outside established port limits, on rivers, bays, canals, and connecting waterways. Besides deep-draft berthing facilities for accommodating ocean- going vessels, there are innumerable shallow-draft facilities used to berth tugboats, barges, lighters, fishing vessels, yachts, harbor craft, and other types of light-draft floating equipment. Military water terminals are a separate category of port facility and comprise a substantial number of individual pier and wharf structures which provide some 1,000 deep-draft berths on the 3 ocean coasts of the United States, not including Alaska and Hawaii. These include berthing facilities for handling ammunition, petroleum, and general cargo at military installations located within the immediate port area as well as those located outside the port limits such as isolated sites on the coast or at some distance inland on a river or other waterway. (b) Distribution of Facilities by State Thirty States account for nearly 170 primary ocean ports and over 2,100 individual marine terminal facilities. The distribution of these port terminal structures by State is contained in the following tabulation. 70-132-66-Vol. 1-22 PAGENO="0338" 330 STATE AND LOCAL PUBLIC FACILITY NEEDS Distribution of port termiiial facilities by State . State Num- her of Total nuns- her of Number and type of terminal ports ter- minals General Open Bulk Other cargo (no (shedded) shed) liquid Grain Coal Ore bulk New York 6 334 California 21 237 91 35 17 6 1 21 Texas 10 157 105 85 31 5 2 9 Washington 11 132 64 45 31 56 3 3 Louisiana 4 113 51 21 7 1 1 6 Wisconsin 5 99 36 25 3 1 2 Florida 13 ~3 14 30 10 14 19 7 5 Ohio 91 29 24 6 Michigan 90 10 29 6 5 16 13 12 Maryland 89 8 20 31 12 15 3 21 Massachusetts 77 48 10 3 1 1 6 Pennsylvania 75 34 29 21 4 1 Virginia 68 19 13 3 5 1 Oregon 68 17 26 12 2 6 S New Jersey Illinois 54 46 4 30 21 15 27 5 1 7 2 Minnesota 2 44 10 21 9 1 2 1 Hawaii 9 41 31 18 1 6 3 5 3 Alaska 15 29 7 3 Alabama 29 13 12 North Carolina 2 23 6 8 13 6 1 1 2 Georgia 2 23 4 1 2 Indiana 2 22 12 South Carolina 21 11 ltj 1 Rhodelsland 19 8 1 1 1 2 Maine 18 3 6 7 7 2 Connecticut~ 13 4 6 1 1 Mississippi 7 1 6 5 1 New Hampshire Delaware Total 5 4 1 4 3 1 1 2 116 168 2,121 703 717 376 86 82 41 (c) Distribution of Facilities by Size of Port City Out of a total of over 2,100 selected marine terminal facilities divided among nearly 170 ocean port cities in the United States, as few as 15 of them in the largest population group account for 46.9 percent or roughly one-half of the total terminal facilities in the country. In descending order of population range, the next group of port cities number 27 and account for 23.1 percent or nearly one-fourth of the total terminal facilities. The next three groupings of port cities, taken together in desceflding order of population range, total 87 ports and account for 27.7 percent of the total terminal facilities. Based on descending order of population range, the last group of port cities number 39 and account for only 2.3 percent of the total capital plant. DistributionS of port terminal facility by size of port city (national summary) Number of Number of ports facilities Percent of total capital plant - Port city population: 500,000 or more 100,000 to 499,999 50,000 to 99,999 10,000 to 49,999 2,SOOto 9,999 2,500 or less Grand total 27 19 23 ~ - 995 490 215 294 78 49 46.9 23.1 10. 1 13.9 3.7 2.3 168 2,121 100.0 PAGENO="0339" STATE AND LOCAL PUBLIC FACILITY NEEDS 331 (d) Age Distribution of Facilities The date of construction was available for only 396 out of a total of 2,121 marine terminal facilities. Therefore, based on the number and percentage of the 396 terminals which were built during each of the required time frames and applying these percentages to the total of 2,121 terminal facilities, an estimate was obtained of the number of the total facilities built within 5 selected time periods. Accordingly, the age distribution of the 2,121 marine terminal facilities which comprise the principal deep-draft berthing facilities on the Great Lakes and the three ocean coasts of the United States, including the States of Alaska and Hawaii, are presented in the following tabulaton: Age distribution of port facilities Number built (actual) Percent of Number built total (esti- (estimate) mate) Date of construction: Beforel900 4 1.0X2,12L__~ 21 1900-20 70 177X2,121_~_ 375 1921-40 88 22.2X2,12L__ 471 1941-60 192 48.5X2,121__ 1,029 Since 1961 42 10.6X2,121_~ 225 Tota~~--- 396 2,121 1 Combined average age of pier and wharf structures is estimated to be 24.6 years. (e) Ownership of Facilities In the management and administration of U.S. seaports, there is a wide variation in the powers and duties exerted by local port authori- ties whose activities may vary with the functions performed, the size of the port, the number of functions to be performed, the size of the staff to be employed, and the scope of the port's legal jurisdiction. In some ports, practically all terminal facilities are owned and operated by railroads or other private interests and the local port authority performs only perfunctory administrative and regulatory functions. In the opposite extreme, practically all facilities are publicly owned and operated under the control of the port authority. Local government agencies still appear to be the dominant form of port administration and own some 70 percent of the publicly owned port facilities in the United States. On the other hand, State govern- ment agencies own some 30 percent of the publicly owned port facilities. However, the greatest number of port facilities in the United States are privately owned and operated by profitmaking organizations. Among the private proprietorships there are a small number of private nonprofit organizations and cooperatives which own and operate only a very insignificant number of port terminal facilities. The nonmili- tary agencies of the Federal Government make up the final class of proprietors and account for the ownership of only a small percentage of the total port facilities. A summary breakdown of the number and proportion of port facilities owned by the several classes of owners is tabulated, as follows: PAGENO="0340" 332 STATE AND: LOCAL PUBLIC FACILITY NEEDS Ownership of port facilities * Number of terminals (estimate) Percent of U.S. total (estimate) Type of ownership: Private (profitmaking organizations) Local government agencies State government agencies U.S. Government agencies (nonmilitary) Private (nonprofltmaking organizations) ~. 1,359 499 214 43 6 64.1 23. 5 10 1 2.0 0. 3 Total - 2,1211 100.0 (f) Value of Facilities As of the end of 1965, the (then) current value of all categories of port terminal facilities and structures is estimated to be about $3.4 billion. The probable original cost (new) of the entire capital plant was deter- mined by working backward from present estimated value of all types of port terminal structures. The combined average age of all port terminal structures was estimated to be 24.6 years and thus 1941 be- came the base year for original or new cost. The construction cost index for December 1965, was converted to base year 1941, i.e., 1941 equals 100, and from the adjusted cost index the estimated origina.l or new cost of facilities in 1941 was determined. Three general values were estimated: (1) Cost new or original cost; (2) 1965 replacement cost; and (3) 1965 actual cash value, as follows: Cost new (estimated) $1, 886, 700, 000 1965 replacement cost (estimated) 6, 792, 100, 000 1965 actual cash value (estimated) 3, 396, 100, 000 B. COSTS AND USER CHARGES 1. CONSTRUCTION COSTS AND OPERATING COSTS OF PORT TERMINAL FACILITIES (a) Typical Construction Costs Based on acceptable engineering cost estimates of various port facility structures, the range of current typical construction costs for different types of port terminal facilities are tabulated, as follows: Type of terminal (single berth) 1965 average 1965 average cost per total unit linear foot cost of of berthing construction (estimated) (estimated) General cargo facilities: General cargo (ehedded) General cargo and open (unshedded) Specialized facilities: * Bulk liquid (petrol and other) Dry bulk (all types) Container $3, 500 $2, 500, 000 2,800 2,000,000 1,400 1, 000, 000 5,700 4, 000, 000 2,800 2,000,000 (b) Maintenance and Operation Expenses Maintenance and Renewals: Based on records spanning a 17-year period, January 1, 1946 to December 31, 1962, the following table shows the range of annual modernization and rehabilitation expenses PAGENO="0341" STATE AND LOCAL PUBLIC FACILITY NEEDS 333 incurred by various ports in the United States. These expenditures include all additions, replacements, improvements, and restorative Work to existing facilities which do not result in additional new berths. Average annual modernization and rehabilitation expenses in selected ports of the United States by coastal region [In thousands of dollars] coastal region General cargo facilities (shedded and open) Specialized facilities (dry, liquid bulk, and container) Total annual expenses (all facilities) Great Lakes Atlantic coast Gulf coast Pacific coast (including Alaska and Hawaii) Total 331 7,146 1,827 3, 035 1,432 3,084 1,284 889 1,763 10,230 3,111 3,924 12,339 6,689 19,028 Maintenance and operating: The cost of maintenance in a sampling of representative ports of the United States is estimated to be about 37.5 percent of all operating costs. Direct operating expenses make up the principal part of all operating expenses, and most of the payroll expenses relate to direct operations. Operating expenses are esti- mated to be about 62.5 percent of total port expense. 2. USER CHARGES (a) Port Operating Revenues As a public agency, a port authority must depend upon its own resources and those of the State or local government unit which sponsors it. The port's own resources include its income and loans based on expected income and in some cases taxes which it may levy over an area designated as a special tax district. Port management must seek sufficient revenues to sustain the oper- ation of a successful port enterprise. The principal revenues obtained by a port are derived as a result of providing and performing certain normal functions such as maintenance of publicly owned marine terminal facilities, leasing of publicly owned facilities, dredging slips along publicly owned wharves, collection of port dues and charges, pro- motion of traffic through the port, construction and replacement of facilities, and similar functions. It is conceded that a port authority is entitled to levy charges which at least attempt to defray over a period of time the costs of performing any of these normal functions. An earlier study which was made of the port revenues 1 of some 30 representative ports of the United States showed that the average percentage distribution of total income was as follows: Percent Wharfage, dockage, tollage, etc 27. 7 Other terminal services 35. 5 Rentals and leases 24. 7 Other operating means 12. 1 Total 100. 0 I In addition to these so-called port/terminal operating revenues, there are miscellaneous port dues and charges such as harbor dues, pilotage fees, towage charges, and quarantine dues which are not normally included under said operating revenues. PAGENO="0342" 334 STATE AND LOCAL PUBLIC FACILITY NEEDS (b) Adequacy of Port Operating Revenues Ratemaking has become a difficult and very important aspect of port management. The reward for efficient ratemaking in terms of attracting trade and yet producing a good level of revenue is very significant. There are limits to what can be done with port fees, and dues, such as harbor dues, etc., and, as stated, these revenues do not normally accrue to terminal owners and operators. In some ports more can be done in regard to special services such as fumigation, compressing, and elevation. Warehousing rates are by necessity related to warehouse rates for the community as a whole. Switching rates are subject to regulation by the State's public utility commission and the Interstate Commerce Commission. But much can be done with dockage, wharfage, terminal services, including service charges and rentals. Adequate charges are sometimes made difficult because of the competition of railroad-owned terminals and industrial termi- nals, who derive their principal revenue from other sources such as line hauls, sale of end products, etc. Revenues derived by the port authority from the operation of its terminals and waterfront facilities are applied to the payment of the cost of operation and administration including interest on bonds or other evidences of indebtedness. Usually any balance in favor of the port authority is paid to the treasurer to be used for the purpose of providing a sinking fund or special reserve fund with which to pay at or before maturity all bonds and/or notes or other evidences of in- debtedness. In some instances where port revenues are insufficient to pay the cost of operation, administration, special reserve fund re- quirements, interest on bonds, and similar costs of operation, a special local or State tax may be levied, subject to local or State limitations and regulations, on all taxable property within the territorial limits of the local port jurisdiction in an amount sufficient to meet the deficiency. There are very few ports where user charges exceed the sum of prorated operating and capital costs. (c) Financing Costs of Port Operations and Improvements Expenditures could be financed through increased harbor fees, local or State taxes, or through borrowing. It has become rather common practice to set up general port funds into which all revenues, taxes, and appropriations go and out of which capital and operating needs are met. Special reserve funds may be set up by a port. Many ports have (1) a leased wharf fund; (2) a harbor improvement bond fund; and (3) a harbor maintenance and development fund. As a general statement, practically all public port authorities in the United States today are extended some form of local public aid. Such aid may be in the form of direct appropriations, general obliga- tion bonds of the city or State, taxes levied in behalf of the port, and the assignment of actual or potential tax means as security for port bonds and other certificates of indebtedness. There is a growing trend toward the financing of general cargo facilities with revenue bond issues as against general obligation bonds. This has largely been made possible by the ability of the public body to pledge addi- PAGENO="0343" STATE AND LOCAL PUBLIC FACILITY NEEDS 335 tionally the revenues from facilities originally built by general obli- gation bond issues which have been amortized. A local public port body is in an enviable position to build a public terminal operated for all users on a tariff basis. In contrast, where construction is by private interests, lending institutions would require guaranteed income from the facility in the form of a long-term lease, which usually indicates a single user for a single purpose. Moreover, public bodies can borrow at lower interest costs because the interest income on their obligations is tax exempt. Practically all new general cargo port terminal construction in the United States today is undertaken by local public authorities, whereas bulk and industrial and other specialized terminals are normally pro- vided by private interests for their own, nonpublic, use. There is no general demand for any Federal financial assistance with respect to the latter facilities. It is estimated that 6 percent of the costs of port facilities and struc- tures are met out of general tax resources and bond borrowings of State and local government units. Informatively, 36 percent of such costs are met by the port revenues of said government units; 50 per- cent by private interests and the balance by State grants and Federal Government loans and grants. C. TREND OF CAPITAL OUTLAYS FOR PORT DEVELOPMENT 1. ANNUAL CAPITAL EXPENDITURES Total port development expenditures for the Great Lakes and the three ocean coasts of the United States, including the States of Alaska and Hawaii, during the 17-year period January 1, 1946 through December 31, 1962, were $1,619,600,000. This reflects an increase of $400,249,000 or 33 percent over the $1,219,351,000 expended during the 14~-year period ending June 30, 1960. The rate of capital expenditures for port development purposes has accelerated remarkably in the last 10 years. In comparison with the 10-year period immediately following the end of World War II, the overall yearly average expenditure has risen from $62.9 million to $95.4 million during the 1960's. The regional pattern and emphasis of expenditures for port develop- ment have remained relatively constant, maintaining, for the most part, the historic relationships among port areas. The annual rate of port development expenditures in the United States continues its overall upward trend, and ports are continuing to carry out a vigorous program of modernization and expansion. It should be noted too that announced plans for future development in almost every port area indicate that this program of construction and rehabilitation promises to continue for some time to come. The following table gives a summary breakdown of port devel- opment expenditures by coastal region in the United States. Annual data are shown in the succeeding table. PAGENO="0344" 336 STATE AND LOCAL PUBLIC FACILITY NEEDS Trend of capital outlays for port terminal facilities in the United States by coastal region Jan. 1, 1946 to Dec. 31, 1962 FIn millions of dollars] Coastal region Number of new general cargo berths added ~ - Shedded Open General cargo facilities (sbedded and open) Specialized facilities (dry, liquid bulk and container) Total capital outlay (all facilities) Great Lakes Atlantic coast Gulf coast. Pacific coast (including Alaska and Hawaii) ~ Total. 40 129 59 99 16 38 22 21 65. 7 1 (3.9) 497.3 1 (29. 3) 151.8 1 (8.9) 249.7 1 (14. 7) 132. 2 1 (7.8) 266. 6 1 (15. 7) 142.6 1(8.4) 113.7 1 (6. 7) 197.9 1(11.7) 763.9 1 (45. 0) 294.4 1(17.3) 363.4 1 (21.4) 327 97 964. 5 1(56.8) 655. 1 1(38.6) 1, 619. 6 1 (95.4) 1 Overall annual average capital outlay over 17-year period, Jan. 1, 1946, to Dec. 31, 1962. Trend of capital outlays for port terminal facilities Jan. 1, 1946 to Dec. 31, 1962, in the United States Total U.S. capital outlay for port development 1 Average annual rate of capital outlay (millions of dollars) Years Millions of dollars 2 Percent* gain Years Privately owned facilities (64 percent) Publicly owned facilities (34 percent) ITS. Govern- ment- owned facilities (2 percent) All facilities (100 percent) 1946-55 1946-57. 1946-60 1946-62 629.2 887. 0 1, 219.3 1, 619. 6 40.9 3 37.4 ~32.8 1946-55 1956-57 1958-60 1960-62 49.3 82. 4 85. 1 102. 5 21.4 1.2 43.8 2.8 45.2 2. 6 54.4 3. 2 62.9 129. 0 132.9 160. 1 1 Includes selected ports of the 3 ocean coasts, Great Lakes, Alaska, and Hawaii. 2 Accumulative. 8 Excludes military facilities. 4 Between 1955 and 1957. 5 Between 1957 and 1960. 6 Between 1960 and 1962. 2. DISTRIBUTION OF ANNUAL CAPITAL EXPENDITURES The following table shows the proportions of capital outlays which are accounted for by the various types of ownership of port terminal facilities in the United States. Proportions of overall annual average capital outlays accounted for by various types of ownership of port terminal facilities, Jan. 1, 1946 to Dec. 31, 1962 : Type of ownership ~ Annual dollar amounts of average capital outlays (millions of dollars) . Percent distribution of average capital outlays (estimate) Private (profitmaking organizations) Local government agencies State government agencies U.S. Govermnent agencies (nonmilitary) Private (nonprofitmaking organizations) Total 61. 2 22.4 9. 6 1.9 .3 64. 1 23. 5 10. 1 2. 0 . 3 95.4 100.0 PAGENO="0345" STATE AND LOCAL PUBLIC FACILITY NEEDS 337 3. SOURCES OF FINANCING FOR CAPITAL EXPENDITURES Based on percentage distribution, the following table shows the' dollar amounts of capital expenditures proportioned among the various sources of financing for the construction of port terminal facilities. Proportions of overall annual average capital outlays accounted for by various sources of financing for construction of port terminal facilities, Jan. 1, 1946, to Dec. 31, 1962 Sources of financing Annual dollar amounts of average capital outlays (mil- lions of dollars) Percent dis- tribution of average capital outlays (estiniate) Capital flotations Port revenues Taxexemptmunicipalbondlflarket Borrowing from Federal Government Federal Government grant assistance State grants-in-aid Appropriations from tax resources Gifts, bequests, donations, fundraising Total 34.4 4.8 2.9 1. 9 1.9 .9 .9 ~ 50 36 5 3 2 2 1 1 100 D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS FOR PORT DEVELOPMENT 1. CAPITAL REQUIREMENTS (1966-75) The capitol requirements for port terminal facilities during the decade 1966-75 are estimated to be $1,281.5 million. The reason for such a large capital outlay during the next decade can be traced to the substantial numbers of antiquated terminals in the Nation's ports. Many are not adequate on a qualitative basis due to the current and future requirements imposed by technological developments in both sea and land transport. The long-awaited re- placement of these outdated terminals is being given new impetus with the disclosure that the major shipping lines are in the need of specialized terminals to fill their needs, particularly with respect to the processing and handling of containers at an extremely rapid pace. The use of containers in the movement of ocean commerce will develop with intensity in the next decade. Today, a noteworthy general port facility building program is underway and several ports have unique' long-range master plans to provide additional terminals to meet shipping needs as far in advance as 1980. Encompassed in these programs are container, general cargo (break- bulk), liquid, and dry bulk, terminals of the most modern design. The container terminals and general cargo terminals are designed with long ship berths, wide aprons, large and more efficient transit sheds, cargo distribution buildings, and generous amounts of open storage space for flexibility of operation, truck and trailer park, and spacious accommodations for the various modes of connecting transportation. PAGENO="0346" 338 STATE AND LOCAL PUBLIC FACILITY NEEDS (a) Factors Upon Which Projection Is Based In approaching the means of estimating the projection of prospective capital outlay to meet the needs of the port and shipping industry during the decade 1966-75 it was necessary to construct some com- merce projections in order to determine future needs. The application of projected national indicators such as population growth, income, industrial growth, power consumption, production, natural resources, potential markets, and similar barometers were some of the factors considered in arriving at estimates of future trade. The projections were placed into categories of general cargo, dry bulk, and bulk liquid so as to match the types of marine terminal facilities to accommodate their transshipment. Utilizing this forecast, calculations were then made to determine the port terminals needed to handle the projected tonnage of break- bulk general cargo, containers, petroleum, grain, coal, ore, and other miscellaneous types of commodities (bananas, chemicals, gypsum, cement, etc.). The number of terminals needed in the various com- modity categories and the capital requirements per year are shown in the following table. PAGENO="0347" 00 0) 0~ 0) 0 00 cO a - ~CO ~thc~ 0000 ``~`~ ~c3 ~ ~.0 00 `0' 00~-c CO CO CO CO 00000000 ? `0' ~ 0 Q 0000 -~00'~ C00000 cd~ CO `-0 `-0 - - `0' 0~ ~, ~ 0') 000000 , ci ci ci ci 00000000 CO CO ~ cot- CO cc cc 00 00000000000000 00000000C0 00 0- , ~.0 0') 0000 Ci 0000000000 CO CO 4~ ~-0 !~!!!!~ ~1_ r~ ~ 0 ci CO cocococo Co 0-00 CO CO CO CO CO ~0000'0"0'~ ~ ci CO E ~ ~-0 00-0' 00 ~-~-000 00000000000000 ? :~;;;; ~, ~.c0 00000000000000 00000000000000 CO C) cot-00~00t- ~oc~ C'o4-cici3 C~CCC Ci 00 Ci Ci E ~ ~-0 000000000000 00000000000000 0 C) ~cti'cici3 ~d ci cd 00 z- 00 E ~ ~-0 00-0' ~I~-c 0000 00000000000000 ,-0 0 C) 00 CO CO CO CO CO CO CO CO CO CO CO CO CO 00 ci -0-~ CO ~O 00-0' 00,-o~00-lci 00000000000000 CO `0 0 c/I -dO ~ 0~Oo CO ~ -d'- 0 cl ~ ~ ~ ~ 00) ~ ~ ~ ~ (0 C1~O(0E'.E0 cI3~ ~ ~(0~E~0) 0~' c0-~0)~0) /I.0)~I0)~,+I Eo ~ ~`~E1'1~ ~0~oco c~op~ooo STATE AND LOCAL PUBLIC FACILITY NEEDS 339 0 C) Cl 0100 00000000 PAGENO="0348" 340 STATE AND LOCAL PTJBLIC FACILITY NEEDS (b) Estimated Capital Needs for Port Facilities The estimated capital needs per year during the decade 1966-75 are shown in the following table: Millions Millions Year: of dollars Year-Continued of dollars 1966 112. 0 1971 129. 2 1967 115. 5 1972 - 133. 4 1968 118. 5 1973 137. 5 1969 122. 5 197& 141. 1 1970 125. 7 1975 145. 8 (c) Distribution of Gapital Outlays for Port Facilities by Size of Port Ł`ity The capital need for cities with populations of 50,000 or more is estimated to be $1,025.8 million; for cities and towns with populations of 2,500 to 49,999 is $226.1 million; and for towns with populations under 2,500 the capital need is estimated to be $29.6 million. A breakdown is shown in the following table. Distribution of capital requirements for port terminal facility by size of port city (1966-75) Port city population Number of ports Percent of total capital plant Capital re- quirements (millions of dollars) 500,000 or more 100,000 to 499,999 50,000 to 99,999 Subtotal, 50,000 or more 10,000 to 49,999 2,SOOto9,999 Subtotal, 2,500 to 49,999 2,500 or less Grand total 15 27 19 46.9 23. 1 10.1 600.5 297. 1 128.2 61 80. 1 1, 025. 8 45 23 13. 9 3.7 178. 5 47.6 68 17. 6 226. 1 39 2.3 29.6 168 100. 0 1,281. 5 (d) Distribution of Capital Outlays for Port Facilities by Form of Ownership The State governments or State agencies are expected to expend an estimated outlay of $129.4 million; the cities, counties, towns, special districts, public authorities, and other public bodies $301.2 million; and the proprietary or profitmaking organizations $821.4 million during the decade 1966-75. Details are indicated in the following table. Proportions of estimated capital outlays accounted for by various types of ownership of port facilities (1966-75) Type of ownership Percent dis- tribution of total capital outlay Dollar amounts of total capital outlay (millions of dollars) Private (profitmaking organizations) 64. 1 Local government agencies 23. 5 State government agencies 10. 1 U.S. Government agencies (nonmilitary) 2. 0 Private (nonprofitmaking organizations) .3 Total 100.0 821.4 3(11. 2 129.4 25. 6 3.9 1,281.5 PAGENO="0349" STATE AND LOCAL PUBLIC FACILITY NEEDS 341 2. EXPECTED SOURCES OF FINANCING FOR ESTIMATED CAPITAL NEEDS A significant proportion of the total capital requirements will be spent by State, bistate, city, county, or regional agencies responsible for port development. The public projects will be financed largely by port revenues, revenue bonds, or tax-supported bond issues, with some financing by direct tax levies, and with little Federal participa- tion expected. The sources of financing for the $1,281.5 million may be as follows: Proportions of estimated capital outlays accounted for by various sources of financing for port development (1966-75) Sources of financing Percent distri- bution of total capital outlay (estimated) Dollar amounts of total capital outlay (millions of dollars) Capital flotations 50 Port revenues 36 Tax exempt municipal bond market 5 Borrowing from Federal Government 3 Federal Government grant assistance 2 Stategrants-in-aid 2 Appropriations from tax resources 1 Gifts, bequests, donations, fundraising 1 Total 100 641. 0 461.2 64. 1 38. 4 25.6 25.6 12.8 12.8 1,281.5 PAGENO="0350" CHAPTER 16 Public Elementary and Secondary School Facilities* A. NATURE AND COMPOSITION OF PUBLIC SCHOOLS 1. DESCRIPTION OF FACILITIES (a) Physical Characteristics Public school facilities are of various types ranging from one-room structures of wooden frame to massive steel-ribbed and masonry buildings. In the cities multistoried structures often touch the side- walk and provide limited land area for a playground. In the suburbs the average facility occupies only a small proportion of the acreage available and ample space can be found for parking, grass, and several play fields. TABLE 1.-Number of acres in the median school site by organizational level for selected decades United States: 1965 Completion date of original building Elementary Combined Secondary Before 1920 - 1 5 3 1940-49 4 10 10 1960-65 10 3 15 8 27 11 Medianailsites Source: George I. Collins, National Inventory of School Facilities and Personnel, Spring 1962. Washington, D.C., Department of Health, Education, and Welfare, Office of Education. 1963. The structural characteristics of permanent school buildings and additions are shown in table 2 for selected periods of construction. The characteristics of school construction reflect the gradual transition from the predominant type of buildings constructed "before 1920" to the more modern look of a slab-on-grade, one-story, masonry outline filled with glass, and more fire resistive than structures of earlier periods. The urban and nonurban school structures were different before 1920 and in the sixties also reflect notable differences. Before 1920, the typical urban school was multistory, masonry, with wooden interiors. In the sixties, it is still multistory, masonry, but more fire resistive. The nonurban schools before 1920, were single story, wooden, and combustible. In the sixties with the great growth in the suburbs, the elementary schools are mainly single story, but utilize steel framing with masonry walls and are more fire resistive. Secondary schools in the suburbs are multistory and otherwise similar to the elementary structures. (b) Services Rendered School facilities must, above all other considerations, serve the main objective of the educational program-learning. Learning in public *This chapter was prepared by Dr. George J. Collins, National Center for Educational Statistics, Office of Education, Department of Health, Education, and Welfare, with minor editing by committee staff. 342 PAGENO="0351" STATE AND. LOCAL PUBLIC FACILITY NEEDS 343 y and secondary education is attained by children'from~as 1 years old to as old as 20. Generally most of the population ages of 6 to 18 years old is attending public and nonpublic y and secondary school facilities. In 1947, the total enroll- in public schools was about 25 million pupils, and by 1965 it 42 million. An additional 6 million pupils in 1965 attended schools. Number and percent of permanent bnildings and additions with selected structural characteristics for the United States: 1962 Total Before 1920 1920 to 1939 1940 to 1959 After 1959 Structural characteristic Num- Per- Num- Per- Num- Per- Num- Per- Num- Per- ber cent ber cent her cent her cent ber cent nanent build- tions 170, 726 100. 0 29, 683 17. 4 44,438 26. 0 75,233 44. 1 20, 551 12. 0 50,878 29.8 17,936 10.5 20,132 11.8 10,880 6.4 1,824 1.1 113,995 66.8 12,246 7.2 23,391 13. 7 61,039 35.8 16,811 9.8 vall 28,275 16. 6 10,431 6. 1 8,995 5. 3 7, 603 4. 5 1,052 . 6 * Se wall 2 123, 732 72. 5 18,429 10. 8 32,330 18. 9 56,388 33. 0 16,295 9. 5 57,687 33.8 16,631 9.7 18,052 10.6 19,290 11.3 3,395 2.0 42, 656 25. 0 2,256 1. 3 7,726 4. 5 23, 871 14. 0 8,690 5. 1 ng3 51,711 30.3 9,210 5.4 13,469 7.9 23,237 13.6 5,693 3.3 76,122 44.6 4,024 2.4 13,438 7.9 43,322 25.4 15,133 8.9 40,023 23.4 13,522 7.9 12,213 7.2 12,197 7.1 1,877 1.1 tsements. ne, brick, blocks, or tile. )resents the vertical supporting members of the building. ge 3. Collins, National Inventory of School Facilities and Personnel, Spring 1962. Washing- T~ fl artment of Health, Education, and Welfare, Office of Education. 1963. 3.-Percent of population 3 to 19 years old enrolled in school for the United States: 1947 and 1965 U.S. Department of Commerce, Bureau of the Census, Current Population Reports P-20, No and U.S. Department of Health, Education, and Welfare. Office of Education, Samuel Schloss 1-, 4-, and 5-Year-Olds in Nursery Schools and Kindergartens, 1966. Standards of Performance Standards of performance are not available for education on a per basis. The ratio of pupils to instructional rooms provides one used measure of the adequacy of school facilities. School consist of regular instructional rooms, special instructional and general-use spaces. The regular instructional rooms are in elementary schools and in secondary schools for instruction the subjects not requiring special equipment. The number of pupils attempting to learn in a room provides one to measure the current standard of performance. This is the room ratio. The median number of pupils to a room has been relatively con- * elementary rooms but secondary rooms are becoming more (See table 4.) Although there is widespread agreement small classes provide more opportunities for learning, there is. = single acceptable standard. Among the important conditions ich effective learning takes place are: readiness of the pupil, n, level of maturity, socioeconomic background, . nature of PAGENO="0352" 344 STATE AND LOCAL PUBLIC FACILITY NEEDS the subject matter, experience and ability of the teacher, n instruction, and others. Judgment of teachers and principals upon experience with the general level of pupil ability, the biity for supervision, and the demands of society, frequently 25 pupils to an instructional group. [n team teaching situati classes are much larger and others much smaller, depending upon specific objectives of the instruction. In general, however, area needed for conventional teaching and team teaching is when a given level of quality space and enrollment size are constant. TABLE 4.-Median number of pupils in a roOm for the United States Elementary 1961-62 ` 27. 6 1964-652 27.4 Teachers' preference 25. 0 I George J. Collins, "National inventory of School Facilities and Personnel." 2 George 3. Collins, and William L. Stormer, "Conditions of Public School Plants," U.S. Health, Education, and Welfare, Office of Education, Washington, D.C., 1965. The medians shown in table 4 do not reflect the wide disi pupil accommodation in rooms. These disparities are reflected table 5. TABLE 5.-Percent of pupils in selected number of pupils to rooms, Spring 196~3 Percent of all Number of puplis to rooms: publ' Less than 20 20 to 29 30 to 39 40 or more For a nation with 42.1 million pupils in public schools and million instructional rooms 1 in use and with half the pupils exceeding 27 pupils, it would take an additional 180,000 ins rooms to meet the level of performance preferred by teachers principals (i.e., 25 pupils to a room). Table 6 shows the number of additional rooms needed to overcrowding using five different measures for determining crowding. TABLE 6.-Number of additional instructional rooms needed to eliminate ing as determined by varying measures of pupil accommodation for the States: 1965 Measure of pupil accommodation Level I: Elementary 25 pupils to a room Secondary 20 pupils to a room Level II: Elementary 25 pupils to a room Secondary do Level III (median): Elementary 27.4 pupils to a room Secondary 27.5 pupils to a room Level IV: Elementary 30 pupIls to a room Secondary do Local appraisal: Elementary Locally determined Secondary do 1 Instructional rooms are designed or remodeled for class instruction and include all regul laboratories, and shops. PAGENO="0353" `STATE AND LOCAL PUBLIC FACILITY NEEDS 345 Another standard' of performance. is the number of special instruc-. rooms needed to accommodate the pupil population. The these special instructional rooms in schools to eliminate over- 1 schools, to replace inadequate facilities, and to provide space * am improvements are.shown in table 7. The special instruc- oms needed for overcrowding are part of the total number of onal rooms needed to eliminate overcrowding. (See table 6.) *~~-~ial instructional rooms needed to replace inadequate rooms 2 also included in the rooms reported as inadequate in table 8. improvements are an additional need from the demand of 0 improve education. 7 -Number of special instructional rooms needed in public schools for the United States: 1965 Total Overcrowd- Inadequate Program Im- Annual con- ing provements struction rate TOtal special instructional rooms 87,000 37, 000 30, 500 10, 500 6,050 tory ` 20, 500 7, 500 8, 000 5, 000 1, 200 )ratory 9, 000 4, 000 3, 000 2, 000 550 ps 14, 000 6, 500 4, 500 3, 000 900 12, 000 5, 000 4, 000 3, 000 500 19, 500 8,500 6,000 5,000 1,200 6,500 2,500 2,500 1,500 800 * 5,500 3,000 2,500 (1) 1,800 1 Does not include needs for Elementary-Secondary Act of 1965. NoTE-The above estimates are based mainly on infonnation from school officials In the 1964 survey of s. Major findings from this survey have been reported in the previously referenced publica- "n of Public School Plants, 1964-85. General-use spaces for libraries, auditoriums, gymnasiums, and are also important instructional spaces needed for most Schools with only one or two rooms can most often do with- these special facilities, but the average elementary school and the secondary school require these special spaces. The absence spaces is reflected in table 8. 8.-Estimated number and percent of pupils without libraries, audi- torium,s, gymnasiums, and cafeterias, far the United States, 1965 General-use facility Number Percent les oriums 11,800,000 8,000,000 28 19 iasiums 13,000,000 31 ,rias 9,300,000 22 NoTE-Based on National Inventory of School Facilities and Persennel, Spriny 1965-table 5. Table 9 shows the number of general-use spaces needed to eliminate ling, to replace inadequate facilities, and to provide program ients. Many of the inadequate general-use units are needed replace combustible structures. There are 5,500 libraries, 2,700 ms, 6,200 cafeterias and 2,000 gymnasiums with combustible ~s. rooms are reported for conditions of educational obsolescence, fire and safety, health and tural, or population movement. 70-132-66-vol. 1-23 PAGENO="0354" 346 :SThTE AND :LOCAL PUBLIC FACILITY REEDS -TABLE 9.-Number of general-use: facilities needed to eliminate overcrowding, replace inadequate facilities and to improve programs for the United St Needed facilities Total general use 82 500 Libraries 24 100 Cafeterias 19 500 21,000 Auditoriums, little theaters 17,900 N0TE.-This table shows current needs for special facilities and general-use areas. Cafete auditorium needs are based on accommodating 200 pupils at the elementary level, 400 at tI Theneedcould bereduced if areaswere used for dualpurposes. Figures intheflrst column sho- backlog second column is present annual construction rate (d) Structural~Standards of Performance - Since 1956 the Office of Education has collected and publis evaluations of classrooms, but the sigmficance of these data occasionally questioned, because the criteria for evaluation from place to place In consequence, the survey, Concl'ittort School Plants 1964-65,' included a number of definitive concerning important educational, fire safety, health, struct environmental conditions of buildmgs Data obtained in rec these questiOns are summarized in table 10. More detail is appendix table A, which provides comprehensive State- information on structural condition and educational adequacy classrooms as reported by local school officials As table 10 shows, 88 percent of all classrooms are c educationally adequate, and the majority of these are in - which are structurally sound and in good repair. A su minority of these adequate rooms, however, are in deteriorati mgs-21 percent of all rooms in buildings which need repairs, and percent in buildings requiring modernization or major rehab TABLE if .-Number of rooms used for instructional purposes, by various of adequacy of the buildings, and plans for improving the sitwation for the States, 1965 Number Percent Total number of rooms i - 1, 550, 000 Total adequate rooms - 1,361,300 Adequate rooms m buildmg requiring No change 803,700 Minor repairs - 325,400 Modernization or rehabilitation_ - _~__ 233,200 Total inadequate rooms 182,900 Inadequate rooms in building requiring: No change 9,800 Minor repairs 12,300 Modernization or rehabilitation 29,800 Rooms in buildings that should be abandoned 103,300 Makeshift spaces not counted in above 27, 700 .i Because of rounding, items do not add to totals. The remaining classrooms, comprising 13 percent of the should be replaced, either because they are inadequate for edi i George 3. Collins and William L. Stormer, Condition of Public School Plants 1964-65. D.C., Department of Health, Education, and Welfare, Office of Education. 1965. PAGENO="0355" STATE AND LOCAL PUBLIC FACILITY NEEDS 347 or because they are in structures which should be abandoned. ion on these rooms is summarized in the lower part of table Table 11 presents information on the numbers of students adversely by certain definitive shortcomings in public school buildings. category is accompanied by an estimate of the number of as required to overcome the deficiency, but it should be noted ~e estimates are not additive, because the categories are not exclusive. TABLE 11.-Classroom conditions in the public schools, 1965 1 * Problem . Number of pupils adversely Number of classrooms needed affected Led classrooms (30 or more pupils per room) 12,645, 000 57, 009 Led classrooms (over national average, 27 pupils per room) 19, 187, 000 107, 000 al service 64 000 2,000 iped into building 185, 000 9, 009 ng 2, 036 000 84, 000 e World War I 5, 131, 000 200, 000 -, makeshift or offsite classrooms 2, 135, 000 78, 000 ;tructural deterioration 1,308, 000 52, 000 Using outdoor privies 518, 000 19,000 1 50 States, District of Columbia, plus 4 outlying areas. NOTE.-The above figures are related to 1964-65 enrollments. They do not reflect the need for additional accommodate new public school enrollments which will increase from 42,800,000 in 1965 to 370. 2. EXISTING CAPITAL PLANT IN THE UNITED STATES (a) By mid-1965, there were 1,550,000 classrooms in public schools. addition to the classrooms, the general-use facilities numbered ately 213,800. -Estimated number of general use facilities for the United States ~1966 Number General facilities 213, 800 I school libraries 52, 300 iS 24, 100 or lunchrooms 46, 000 ns 27, 700 rn facilities 42, 500 Auditoriums (40, 200) Cafeterias (21, 100) Gymnasiums (30, 500) ipurpose rooms 21, 200 tts with no general facilities 16, 000 d on national inventory of school facilities and personnel, 1962, table 18. Distribution of Facilities by State The distribution of school plants, buildings, rooms and pupils the States and outlying areas is reported in table 13. Distribution by Population Size The Office of Statistical Standards of the Bureau of the Budget has 219 standard metropolitan statistical areas (SMSA's). An ~ county or a group of contiguous counties which contain at one city of 50,000 or more inhabitants, or "twin" cities with population of at least 50,000. PAGENO="0356" E 0 0 ~ C .~ C C ~ ~ C C ~-1~CC t- ~CC~t~-C C ~4C ~ C~-4~CC C C CCC,-l t- C C C ~ C ~ C C C C C 348 STATE ~D LOCAL PUBLIC FACILITY NEEDS C~Ct- CC~CC'-4CC Ct~-t'-~~ C C t~ C ~4 ~4 t- C ~ C C ~- C C C C C C C C C C C C ~ ~ C C ~ C C ~ H 0 C©~CC ,CCCC?-~CCCCCC0~CCC C) t'-CCCCCCC CCCCCCt~CCCCCCOOt'. C ~ C C g~ ~ ~ E CCC C C C C C C C C C C C ~ CCC C ~ C C ~ 0 C CC CC CC~CC I I i ! ~: :~t~:~: ~ ~ ~ C C ~. ,~ 0 ~ .0 C ~ ~ C C C C t-~ C t~- C C C C C C ~ C C ~ C C t'.. ~ ~ C C ~C C C C C C C C C C C C C C C - C CCCCCCCC~~CC~CCCCCC~ 2 ri 0 C C ,-rC ~ C ~ C C ~ C C ~ ~ C C C C C ~ C ~0 0 0 7 .~ ~ I I ~ C C C - C C C C C C C C ~- C C C C C t-. C C C C ______ ___ - TTT~TTT C I ~ ~ C .E C ~ ~ PAGENO="0357" 0 0 z CO CO CO 0 CO CO CO 0 CO CO CO CO CO ________________________________________ CO 0 0 CO CO ,0 CO 0 CO 0 `0 `0 CO 0 CO 0 H H 0 CO a CO .a~ o.a~ ~ ~ CO ~ ~ * ~ ~ ~ ~ 0~~: .CO~CO COo CO~CO °CO:a oE-E~CO C~0 ZZZZZZZZooo~o~~ STATE AND LOCAL PUBLIC FACILITY CO~COCOCO ~O~COCOCOCOCOCOCOCOCOCOr-CO CO CO ~OCO~4CO ~COCC CO~CCCOCOCOCOt'-COCO CO ~ O~~~tt' COCOCO COCO COCOCO ~ COCOCO~C CO CO NEEDS 349 COCO~COC0COt~COCO COOCO'I'COCO ~ CO CO COCO 01 CO ~ CO ~ CO CO~I CCCOCO~ CO ,4COCO COCO -ICC CO CO CO CO CO CO CO ~ CO COO CO CO - C- CO 010 ~ CO CO CO COO ~ CO CO 1 ~CCC-~C0COCO ~CO~COCO~CCOICO CO CO CO - CO - CO CO - CO CO CO ~ CO CO CO CO CO CO C- CO CO CO COCOCOC-COCOCO 01-0CC-COOl CO COCCI-CO ~IC COCOCOCOCOCOCO,-C~-IO0~ COCICO COCO COt~ICOt~,II `COt-COO t-~CO C- - CO COCOCOI-ICOCOC_CCO CO CO ~-l CO CO CO CC ~ CO CO ~ `C- CO CO CO CO CO CO C- CO CO CO ~ CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO~I CO CO CO ~ ~ CO CO ~I C- COOl ~ CO CO~ ~CO COCOCO~COCO CC `~CO~ , ~ ~ ~ C~ CO CO CO CC CO~CCO COt- COCOCOt-~COCOCOCO~COCOCO `COCOCOCO COCO~ , `CO ~-~- CO ~I ~ CO 1 ~ CO CO C- C- CO CO CO CO CO C- CO CO CO CO CO CO CO CO CO 8~z :~ `~CCCO~ O~'C~~ ~ ,-~ C~CO~ CO CO~ 01 ,4',-~ CO CO ~ COCOC- `COCO COC-COCOC-t-COCOC-CO'~COCO ~CO `CO~ ,COCCO ~OI'CICO~CO OCOCOCO ~OC-COCO CO ~ . ,,-ICOCOCOCOCOCOCOCO~COCO~COCOCO~CO `COCOCOCO COCOCOCOCOCOCOCOCOCOCO~C-COCOCO~CO ,COCO~I ~COCOCOCOCOCO~COCO~COCOCOOO~CO `0CC-COO C CO CO 1 ~ CO COCOCOCOCOCOCOC-COCOCOCOCOC-COCO~OCCOC- `COCOCOCO ~ CO CO CO CO C- CO CO CO CO CO CO CO CO CO CO CO CO C- CO CO CO CO CO ~ CO COCOCOCOCOCOCCOCOCOC-C-OCOCOCOC-COCOCO CO~COCO COCOCOCOCOCOCOCOCOCOCOCOC-COCOCOC-CO ,~COCOC ~C CO CO CO CO C-CO CO CO CO CO CO 1 CO CO CO~ CO CO CO CO : ~ ~ ~ CO CO CO CO C- CO 2~h~ , ~C~5 CO 0 0 CO CO 0 PAGENO="0358" ~35O STATE~ AND LOCAL PUBLIC FACILITY NEEDS ~Phe report in table 13 separates the data into: (1) Urban or central cities-that is, Detroit, Pontiac, and I within the SMSA; (2) Urban fringe the remaining schools within the SMSA's, and (3) The areas outside the SMSA's. The separation between urban and urban fringe areas is of interest to public education, because it reveals that crowding of is greatest in urban centers This is illustrated by the te below. TABLE 14.-Number and percent of pupils in rooms with 30 or more pupils urban, urban fringe, and areas outside SMSA's, 1965 Area Pupils Percent Urban 4,300,000 Urban fringe 2,000,000 Outside SMSA's 3,200,000 The approximate distribution of pupils and rooms among six classifications of population 5 a further refinement of the data m table 13 TABLE 15.-Estimated number of rooms by population size of city for the States, and outlying areas, 1964-65 Rooms Total Cities with population of- 500 000 or more - - - - 100 000 to 499 999 - - 50,000 to 99,999 10,000 to 49,999 :2,500to 9,999 Under 2,500 - -- (d) An analysis of the structural characteristics of the 93,0( school facilities surveyed in the National Inventory of School i and Personnel: Spring 196~d reveals that generally three periods construction are significant-before 1920, 1920-40, and after The investment in public school facilities is relatively new. than one-half of the schoolrooms were constructed since World II. Data are summarized in table 16. TABLE 16.-Estimated number and percent of instructional rooms in buildings by date of completion for the United States, spring 1965 Number Data of completion: Total 1 1, 550, 000 214, 000 242, 000 161,000 103, 000 513, 000 317,000 Before 1920 1920 to 1929 F iO3Oto 1939 r 1940 to 1949 ~ 1050 to 1959 r lO6Oto 1965 Percent 1 Because of rounding items may not add to total. N0TE.-Based on National Inventory of School Facilities and Personnel, 1968, table 8. PAGENO="0359" STATE AND LOCAL PUBLIC FACILITY NEEDS. 351 Ownership Public school facilities are legally owned by the State and held in by public school districts created by the State educational In an inventory of 93,000 public schools conducted in c~~hool officials reported 98.5 percent of the schools as publicly This includes schools owned by public authorities and leased - schools. The remainder (1.5 percent) of the schools are not y public school districts or authorities, but are used as in- al facilities. Estimated Current Value The estimated current value of public school facilities is $58 billion, the replacement value at current costs would be $80 bffiion. B. COSTS AND USER CHARGES 1. CONSTRUCTION COSTS AND OPERATING COSTS (a) During 1965, based on `an analysis of projects reported in Management, construction, costs per classroom ranged from to $135,000. There is substantial variation among States, both climatic differences, which are related to type of ion, and other differences, related to wage differentials and factors. Within States, costs vary among urban, suburban, rural communities; they also reflect factors such as the number type of classrooms in a project, structural characteristics, equip- and functional qualities, such as air conditioning, thermal and wall or floor coverings. National average data are ~ed in table* 17. Averages for each State are given in ap- ,bleB. .-. 17.-Number of projects, rooms, and cost per classroom and per pupil for the United States, 1964 Grade level Number of projects Number of rooms Cost per classroom Cost per pupil New 1,158 20,513 31,600 1,178 Additions 1,517 8,070 32,400 1,100 New ` 859 22,190 47,600 1,811 Additions - 1,417 10,353 48,800 1,911 ~All construction 4,051 62, 026 40,300 1,505 NOTE-Estimates are based on reports of project costs by individual school districts. They are intended ;ive; that is, to include land, site development, architects fees, construction, and initial equip- However, variations in reporting practices and other factors are known to result in omission of amounts, especially with respect to land and equipment. Source: School Management "Current Trends in School Facilities," July 1965, p. 111. (b) For the 1965-66 school year the budgeted maintenance ex- ~s for the United States were $610 million. The average *nce expenditure per pupil was $15. Maintenance for includes salaries and expenditures for keeping grounds, * , and equipment in a reasonable condition of efficiency through repairs or replacement of property. PAGENO="0360" 352 STATE AND LOCAL PUBLIC FACILITY NEEDS The budgeted expenditures for operations were $1.8 bfflion the 1965-66 school year. The average operating cost per p about $43. per pupil. Operating costs cover activities c with keeping the physical plant open and ready for use. The: cleaning, heating, lighting, and care of grounds, but do not repairs or replacement of facilities or equipment. It might be supposed that larger schools could be operated efficiently and that per pupil costs for maintenance and o would decline as the size of the school plant increased. Instead,~ appears that the use of part-time employees and the practice contracting for services largely equalize per pupil expenditures these purposes among schools of varying size. There is, however, substantial relationship between total educational expenditures expenditures budgeted for maintenance and operation. Data marized in table 18 provide evidence of this relationship an large variations which are not apparent from averages. TABLE 18.-Variation in. budgeted expenditures for maintenance and 1965-66 Total district expenditure per pupil ~ Expenditure Maintenance $200 or less $201.to$250 $7.84 9.06 13.28 15.68 19.71 22.71 23.85 37.47 $251 to $300 $301 to$350 $351 to$400 $401 to $450 $451 to $500 $501 ormore Operation 2.. USER CHARGES (a) Funds for the construction of facilities are obtamed fr( (20 percent), local (72 percent), local authorities (7 percent), Federal taxes (1 percent). Current educational expenses, i those for maintenance and operation, are obtained from tax collected by State (39 percent), local (57 percent), and Federal percent). Pupils and their parents do not pay user charges but subject to the same general taxes as the general population. public authorities purchase school facilities, local school usually pay fees for lease of the building equal to the payments bonded indebtedness incurred by the public authority to c the school. When the bonds are paid the school districts are the school. (b) Extent user charges cover expenses.-Pupils pay no direct that cover annual debt services or operations and mai expenses. Rental fees paid by community groups seldom PAGENO="0361" STATE AND LOCAL PUBLIC FACILITY NEEDS 353 than the cost of utilities, cleaning, and custodial service; and often not even these three essentials. (c) The cost of facilities is generally obtained from general obliga- bonds. In the following section a breakdown by source of ~ll be reported. C. TREND OF CAPITAL OUTLAY 1. 1946-65 During the 20-year period, fiscal 1946 through fiscal 1965, the tion of elementary and secondary school facilities has multi- many times; $111 million was spent in 1946 and $3.5 billion spent in 1965. There has been constant construction to meet needs of increased enrollment and replacement of obsolete fa- The increases in construction were most rapid immediately the war and as the postwar babies entered school in the early 1950's. Since 1956 the number of classrooms constructed each year ranged between 65,000 to 72,000 with the 10-year average being Some of the fluctuation in the rooms constructed and ex- es is caused by the construction of large secondary schools take more than 1 year to complete. Consequently the rooms usually reported in the year of completion, not necessarily the when the debts or expenditures are incurred. 2. PROPORTION OF ANNUAL OUTLAYS All construction reported was for local school districts. A very ~ction of 1 percent were Federal schools. 3. SOURCE OF FINANCING CAPITAL OUTLAYS Most of the financing (about 80 percent) during the period has been local school districts (see table 18). Most of this has been by sale of bonds. During the later years of the 1940's the States to recognize the financing problems and made some significant tions in the area of financing school construction. It must noted that nearly half the State contributions have been in the of loans or advances, with the burden of repayment still on the school district. School building authorities have accounted ly $200 million a year of public elementary and secondary construction. Approximately another $200 million a year coming from current taxes and accumulative building funds. The of gifts and private construction appear to be insignificant the total picture; however, they undoubtedly may be very signifi- to the individual school districts involved. PAGENO="0362" 354 STATE AND LOCAL PUBLIC FACILITY NEEDS TABLE 19.-Capital outlay and tax-exempt bonds sold for public elem~ secondary school facilities for the United States: 1946-66 [Dollar amounts in millions] Fiscal yearending June 30 Classroom units con- structed Expendi- tures Expenditure by source State Public authority Local school district Federal grant Public La~ 815 Totals 1946-65.._ 1,089,674 $44, 794 $5, 421 $2, 956 $35, 373 $991 1946 (3, 900) 111 (*) (*) (110) 302 1947 (7, 000) 205 (*) (*) (200) - 395 1948 (13, 500) 412 (*) (*) (400) - 476 1949 (21, 000) 664 (*) (*) (650) J 370 1950 (30,900) 1,014 43 (*) (950) - 854 1951 (38,900) 1,316 124 21 1,167 4 986 1952 (44, 600) 1, 563 194 66 1,260 43 957 1953 (55,100) 1,995 208 218 1,451 118 1,451 1954 (58,800) 2,200 180 204 1,711 105 1,667 1955 60,005 2,310 163 130 1,896 121 1,634 1956 63,283 2,607 196 211 2,111 89 1,804 1957 68,660 2,982 247 334 2,334 67 1,870 1958 72, 070 3,062 327 242 2,424 69 1959 69,453 2, 539 324 (200) 1,941 74 1960 69,400 2,823 370 161 2,226 66 1961 72, 214 2, 864 (370) (120) 2,315 59 2,357 1962 72, 089 2,987 372 1~»=5 2,448 42 2,568 1963 65, 300 2, 700 (372) 240 2,035 53 2,274 1964 69,300 3,116 526 177 2,391 22 2,569 1965 (65, 200) (3, 524) (705) (257) (2, 533) 29 2,823 1966 (69,000) (3,800) (700) (250) (2,820) (30) NOTES 1. Includes only schools operated by local school districts. 2. Items are taken from various reports and publications in the Office of Education. 3. Items in parentheses are estimates. 4. Items not available are indicated by an asterisk. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS (a) Capital outlay requirements for public elementary and s schools during the decade 1966-75 reflect three components: (1) Replacement of dilapidated and obsolete facilities and tion of overcrowded classrooms. (2) Accommodation of new enrollment, which is expected to by about 6 million students during the decade. (3) Provision of arrangements to offer innovative services plementary programs which will broaden and deepen the range educational experiences available to all and to insure that ~ feasible pupils from all races and walks of life attend school I Although there is no universally accepted standard of adeq - school facilities, the first two of these components can be expi terms of numbers of classrooms required. These should insure, at minimum, that the most seriously outmoded and unsafe school ings are replaced and that present and future pupils can be ac dated without serious overcrowding. With a rapidly ~ population, the total elimination of local-and temporar~ crowding is probably not feasible. In general however, it is s for purposes of these estimates, that no significant proportion of pupil population should be housed in facilities more crowded the present median, which is between 27 and 28 pupils per The average accommodation will, of course, be somewhat lower. PAGENO="0363" STATE AND LOCAL PUBLIC FACILITY NEEDS 355, It is more difficult to estimate, in terms such as classrooms or square~ the facilities needed to insure a better balanced and richer aal program, and the opening of more equal opportunities vantaged children. In some cases, much can be accomplished. by using more carefully selected-and frequently more expen- ~s for new schools. In other cases, progress may be sought the development of a network of supplementary education perhaps accompanied by changes in the attendance areas of served by those centers. In many situations, however, y in the large cities, the achievement of educational goals jire more substantial departures from traditional patterns of organization. In many instances it will probably require n of large amounts of city land and development of educa- parks-a solution now being seriously studied by several cities. -stimates of required expenditure are difficult because solutions vary so greatly from community to community. It is known, that only large outlays will provide satisfactory conditions most situations. Available evidence tends to indicate that the included here are definitely conservative. Capital outlay requirements for the decade are estimated as shown Miflions - ent of outmoded and unsafe facilities and reduction of overcrowd- ing (400,000 classrooms) $20. 6 lation of new enrollment, including an allowance for migration (350,000 rooms) 16. 2 ent of education programs and extension of opportunities for dis- advantaged pupils 5. 0 Total 41. 8 In the above summary~, facility needs have been translated into dol- ~ditures, by assuming an average cost of $49,000 per classroom. ~ necessary to allow for a higher cost: (i) If there is further increase in construction costs beyond the te of about 3 percent per year; or (ii) If the construction of a substantial proportion of the needed must be postponed to the latter part of the decade. For ~asons, including the long planning time required for effective ~tion of urban systems, it seems likely that some postpone- will occur, but no precise year-by-year estimates of future building can be made. Distribution of Capital Outlays by Size of Community Only the roughest estimates of this distribution are possible. On and, the urban fringe areas are expected to grow most rapidly. the other hand, needs for replacement of facilities are generally in the central cities and, to a lesser extent, in communities f standard metropolitan statistical areas. In fact, it appears i of these three sectors should account for about one-third of Dl building activity during the decade. * Spending Agencies for Capital Outlays The overwhelming majority of projected capital outlays will be I by cities, counties, towns, and other local districts, responsi- for operation of public schools. A small proportion-perhaps as as 6 percent-will be expended by school building authorities. PAGENO="0364" STATE AND LOCAL PUBLIC FACILITY NEEDS CO 0 to ~ 0) .~0 .~ .~ CO H - 0)00 0.) ~ ~ 0) 0) III 00 to ~0) 000 C- o~ 0000 C-CC CO 00000000000000000000000 CO co to 00toootococo C-to 0000000000 t- t- ~-o00 ~:2~ ~ 10 0000000000000000-000000000 t- 000000000 C'~ 00~CO~-tC~ z to ~ ~ 10 ~ *~ ~ P-~2~ 4~c~ 00000000~CO~C000000000000000000000000CC00oO 1-000- 0000 C- C- 000000000 C- CO C- 0000000000 0000 0000 00 `C1~ 0000 -4 00 00; 400000000000 C- 00 00000000000000400000 00000000000 C- 00000000000 0000000000000 00000 0000 CC 000000 CC CC 00 00 00000000 000000000000000000-C~ 0000000000000000000 000000000000000000 00 0000 C- 000000000000 00000000004CC- 0000 -a- ~CO CO;~ .~ CO ~ci~ 010 ~ ~i Po ~C~4000000 ~ 00 E 0) Z 00 0000000000-i 04000000-000000 1'- 000000 oi ~ to CO ~ 10 ~ 0) ~ ~0 ~0) P*40) C0010-0000000000000000~lC-00C-000000000 ~-400000-000000to00000000toto00t-00CC0000C0 ~00 - 10 0) .0 ~ ~ 40000000000000 C- 0004 00000000000000000000 00 0000000040 CO~ 40 00000-00000000000000 0) i-0to 000 0000000000000000 ; ; Co fl~ ~0Q E~° I ~4 ~ E Z 0000000-0CC-CO C- 000000 C- 00000000000 0000 :;;;~;;;::;;;::~; ~000C00000COtoC~~0000~ 00 CO H ,`O H ~ to.~o~C ~CCO~0) E ~ CO ~ :~ .0to~0~0 COo.o~10~.0 ~CO +0.o,_~ COCO~~'~ 0CO.d~0)0)0)COCO 0) 0 0) 10.2 .2 .~1 0040 CO 0) 40 `0) .~ 00 .0 0 z 00000000000000 C- 400000CC 4040000000004000 404000000000 C- 00000CC- 0000004000 00400000 00) 0100 ~CO .2 z 00 00004000400000 000000 C- 00-4400 C-to C- 0000 C- 000000400000 0000000040000-00 C- CO CC) CC 00 00000000000000000404CC- 000004000-000000 z 0000400040 40 C400C-00C0 40 C- 00400CC- 4000000 00 C- 00004000000000000000 0000000-0-0000 00000000000000000000000 00 400000 000000 000000000000 00 00 .E 0) .0 .2 0) 0 0) 0) .2 `0) 0) to `0) 0 0 CO 40 CO 0) to .0 0 z ,02 E 0) z 00 0000 0000 4000000000 PAGENO="0365" STATE AND LOCAL PUBLIC FACILW~ NEEDS 357 0100000000000000 4040 ~ 400100 01 ~ 004 0001 t- 000440000 00 441 `04000040004044 Ci 1'- 04400 Ci 00.04-0004 ci 040000400001,4 `04.01-001000 000- -4 Ci Ci Ci C Ci 041-I Ct-It'- -~d i~3 `i~~4o~i~d04 ~ 40041001-:- ~ ci ci 00 Ci ci ii `04000000000000 Ci 40041-040004--i 0000044 Ci `04 4"- -4 `-4 444 ~ ~ ~o0c~ cc~ cic~ to 1410404140 I'- 000000 04000000000000 Ci 04~0000000000 441 i41 IC 4411~ Ci 0140000401 04141 i-OCt ~40400400 04001- `-04410000000004000000000000004000044~ Ci Ci 04 Ci 4000 d 1-44-000000 ~- 04 CCCI 014040014004004040001'0000 04~44~000000 044 t-. Ci Ci 04 1'. 00000404 041~ 40004044100000440 040000400040400000400000004000004004 44' 0140 40 Ci 404444'. `444 0-4044 411 Ci 0404,- CI 4040 4'- -oio Cii- 04~01 -040044400-4 iii -444 4Q CC CC -4 t~i~ii~04 `444 1.4044041 .400004 1"- `04404 `444 00441 `444 1.40-04 101.100404 04104 0044440000000004 41 ill -ICC -I `-4 00000400i-Ii-i.-ii-o CICi404-4004404'-4'.00404t',.CCCiCCCCCcqoC Ci cC4-t'-40C41CiCi 004004401'- 4'- 1- 40t4004~,. ~ 0004iC4040t~40404004 04000000CiC1 IC Ci 0400000000 0000404110-4444001 01 04044 CiiC4000c'iCi040104 ci 4410104 00 04 0404040 041 `-I Ci Ci CO 00 04400040 00441 Ci ~-~0 0104 Cl 000000044110 04 404000404001444041- 0440 o4104i0400440Qt~. 1-04404040404040404004 Ci CCi004Ci04t~C 04 Ci04000040t0~ot-to~,-i 04 1-1- 40 40 0040 00 00 Ci 40 00101-0440Ci1-4441-.40 1-00t'-04144440404004CiCi40401.411-1-404040 40 I0Ci0ii0Ci~O 0-004440000100004100400004440400-400000010001040-104040400-4000 40 00400000404004 Cl 04041 Cl ~ ~ ~- ~-r 04'CiCCiiOi.O04CI .444 C00iOio'440'-iCt-4000 00110 4-4040041040-. -i 0401 Ci 00 Ci 04 CCI 40 Ci 0040000000 4410440 404040 `-000 Ci 40400404 00400440044040014441-1-4444414000 1040011-1-014-0-00404040000004 CC 000044140000404 1-400040400004 04401-0-10010044100,40 Cl 4410040104040,04040 00 444441 041 i-I Ci00,-~ 400004401-iCiooIC400040CiCCi1-04C04 041004414040404004044040 04 4000001-400400 04 `0 C-I CC Ci Ci 0411.40 40C~-IC1 0400040440 00Ci 44440 Ci 00 4004 ~ ~s 0404'C404 IC1-40Ci1-400440400-40Ci40040440404004 044004014004 0440014004 Ci 00000400000404 4004040100 00040 04 044040,-~-l40,-O0440 C4)~ 1- 04 0004000040,-i 104000041014040 40014040Ci04C41400i0c41404000Ci00040140404001 Ci 04Ci04044004 0404040004 40 Ci i-Cl 40400040 40 0140 01400001 Ci 04 ~ 00 401-40404000 1-044010Ci40CC40~i0i400040010-Cl04 ~ 4004' CC 0 -~ L~ ~h ~ ~ ~ ~ `-~~ ~ ~ `~ Q~i~ i~~'~1'i'o~ cEi~N ~ ~ o~ 0~~4100 ~ ~ ~ ~ ~ o~4 0~_4~ ~ E ~ E'~'~ E ~ ~ ooc~~ PAGENO="0366" -t 1 I II I I: (~3 C~) z F j~~i ~1r !IP ~ P ~11 ~:HI~~t 0 0 0 CD 01014010101 CD 19001190101190000 ~ 0010.4 tTj ~ ~ 0113 CO CO 0101010113190903 ~ 19030309 ~ 030113130113 033-'CD3-~0CD 01019000001 ~ 1001190000010103 03010' 033 030 ~0 000 ~ 00 ~ 00'0190100900 ~ 0 ~ 0101 0101010101001 01010 00100001 001 000 000010101010 0101 01001 0100000000 ~- 01 . 0 CO ~ CD 3000 0000 03000 COO ~0 010300 ~ 01 ~CO 0001 ~ CO CO 09C0 CO 0~ 10 ~ 03C0.4 ~ 000001.410 .400100119010190303 000030190119033-'CD ~ 0 ~ C3.410.4.43-~OCD00CD00O1001 ~ 010100100030 ~ ~ 0001 ~ ~ 00100003 o-& 00 ~ 13190 o-' ~0 0' PAGENO="0367" CHAPTER 17 Nonpublic Elementary and Secondary School Facilities* A. NATURE AND CoMPosITIoN OF NONPUBLIC SCHOOLS 1. DESCRIPTION OF FACILITIES Physical Characteristics The predominant type of school building used for nonpublic schools 4istive (52 percent), multistory (56 percent), masonry exterior mt), with steel (34 percent) or masonry framing (27 percent). Nonpublic schools can be subdivided into church related, and ~h related or private. Church-related schools are pre- tly Roman Catholic. Roman Catholic schools are generally ~n the more populated areas of the Nation and the profile of characteristics described above is greatly influenced by the number of Roman Catholic schools. Some Roman Catholic, churôh-related schools, and private schools are located in the "preparatory" school setting of multiple building campuses large acreage. This is evident from the large number of acres the mean as compared to the median size of site for nonpublic (See table 1.) 1.-Number of acres in the median non-public-school site by organizational level for selected periods/or the United States, 1965 Elementary Combined Secondary 1 2 7 2 5 8 3 6 14 2 4 10 Mean, all sites 5 26 50 Source Based on George I Collins National Inventory of School Facilities and Personnel Spring 1962 U.S. Department ofHealth, Education, and Welfare, Office of Education, 1964. Services Rendered Nonpublic schools serve the Nation in a free society by providing thoices to parents in fulfilling the requirements of compulsory n outside of public education. For some, these choices may a school where religion is taught, or the quality of education for smaller class size and a greater emphasis on individual on, or a chance to live in a total school environment away home. In another sense, nonpublic schools serve the State in g schools which eliminate the necessity of providing additional schools. Nonpublic schools serve the population from ages 3 19 years with nursery, kindergarten, elementary, secondary, and ndary or preparatory educational programs (see table 2). *This chapter was prepared by Dr. George J. Collins, National Center for ial Statistics, Office of Education, Department of Health, Education, ~re, with minor editing by committee staff. 359 PAGENO="0368" 360 STATE ~D LOCAL PUBLIC FACILITY NEEDS TABLE 2.-Fall enrollment by organizational level of public and nonpublic schools for the United States, 1965-66 Total Elementaryl Secondary 2 Number Percent Number Percent Number Percent 1965 . Public 48, 744,000 100 42 144 000 86 4 6,600, 000 13.5 31,716, 000 65.1 26 416 000 54 2 5,300,000 10.9 17,028, 000 34.9 15 728 000 32 3 1,300, 000 2.7 Nonpublic 1 Elementary includes nursery and kindergarten schools. 2 Secondary includes postsecondary or preparatory schools. Source: Samuel Schloss, "Fall 1965 Statistics of Public Schools"; and Kenneth A. Simon, "Dig tional Statistics"; Washington, U.S. Department of Health, Education, and Welfare, Office of Education, 1.966. (c) Standards of Performance Standards of performance are not available on a per capita basis The ratio of pupils to instructional rooms provides one widely used measure of the adequacy of school facilities. The median nu pupils in a room for elementary schools is 39.2 and for secondary schools, 25.4 pupils. The comparable medians for public schools are 27.6 for elementary and 26.3 for secondary school pupils. The disparity in pupil accommodations in nonpublic schools is shown in table 4. Especially noteworthy is the comparison between public and nonpublic schools in the proportions of pupils accommodated classrooms with 40 or more pupils. TABLE 4.-Estimated number and percent of pupils in a room of public and nonpublic schools for the United States, 1965 - Nonpublic Public Number Percent Number Percent Less than 20 891, 000 13. 5 1,405,800 2L3 1,900,800 28.8 2,402,400 36.4 5,978, 000 14.2 23,576,000 -- 10,904,000 25.9 1,632,000 3. 9 20 to 29 30 to 39 40 or more Source: Based on National Inventory of School Facilities and Personnel, Spring 19611. Washington, U.S. Department of Health, Education, and Welfare, Office of Education, 1964. Table 5 shows the number of additional rooms needed to eliminate the: crowded conditions in nonpublic schools using- varying kinds of pupil accommodation. As this table makes clear, the overwi - majority of additional rooms needed to eliminate overcrowding for Roman Catholic schools. PAGENO="0369" STATE AND LOCAL PUBLIC FACILITY NEEDS 361 -Number of additional instructional rooms needed to eliminate overcrowding in nonpublic school as determined by varying measures of pupil accommodation for the United States, 1965-66 Total nonpublic Roman Catholic Other church related Private 81, 000 78, 000 2,200 800 Elementary, 25 pupils; secondary, 20 pupils. jlic median) 55, 200 53, 700 1, 100 400 Elementary, 27.6 pupils; secondary, 26.3 pupils. 41,400 40,400 700 300 Elementary, 30 pupils; secondary, 30 pupils. Source: Based on National inventory of Scheol Facilities and Personnel, Spring 1962. Another standard of performance is the number of general-use rooms 1 to accommodate the pupil population. Table 6 shows the I number and percent of pupils without four types of general- is. -Estimated number and percent of pupils in nonpublic schools without libraries, auditoriums, gymnasiums, and cafeterias for the United States, 1965-66 General-use facility Number of pupils Percent vies 2, 442, 000 37 toriams 1, 914, 000 20 onasiums 2, 366, 000 51 ;erias 2, 112, 000 32 Source: Based on National Inventory of School Facilities and Personnel, Spring 1962. The number of general-use facilities needed to replace combustible os and eliminate overcrowding is shown in table 7. 7.-Number of general-use facilities needed to eliminate overcrowding and to replace inadequate facilities in nonpublic schools for the United ,States, 1965-66 Major Annual General-use facilities Combustible renovation or Overcrowding Total construction replacement rate Total 3,200 9,050 33, 000 45,250 18,400 - 850 2,300 10,500 13,650 4,600 700 2,200 8,100 11,000 2,000 o 200 550 7, 000 7,750 1, 100 450 1,500 7,400 9,350 2,200 400 1,000 1,400 4,300 600 1,500 2,100 2,200 NoTE-This table is based on the number of combustible and overcrowded facilities reported in the Na- ory of School Facilities and Personnel, Spring 1962. The need is based on accommodating 200 mentary schools and 400 pupils in secondary schools. The need could be reduced if areas were tiple purposes. 7O~-132-66-vol. l-24 PAGENO="0370" 362 STATE AND LOCAL PUBLIC FACILITY NEEDS (d) Structural Standards of Performance Nonpublic schools were using about 227,000 instructional rooms in the school year 1965-66. About 8,400 were improvised or makeshift and about 9,500 were nonpermanent. (See table 8.) About 79,700 rooms or 36 percent of the nonpublic school rooms are combustible, constructed before 1920, makeshift, or nonpermanent. TABLE 8.-Number and percent of rooms in public and nonpublic schools - United States, 1965 Number Percent Number Percent Total (unduplicated) Completed before 1920 Combustible 79,700 34. 2 397, 500 51,300 15,900 9, 400 9, 500 23. 6 7.3 3. 7 4.2 214, 000 155, 000 32, 500 46, 000 Makeshift or improvised Nonpermanent NoTE-About 7,400 rooms are both combustible and completed before 1920 in nonpublic about 50,000 public school rooms are in each category. Based on the National Inventory of Sct - - - and Personnel. 2. 1 Many of the structures completed before 1920 could be remodeled or renovated; some should be abandoned. Public school officials re- ported 233,000 rooms or 15 percent needed major remodeling or reno- vation and 182,000 rooms or 13 percent were inadequate or should be abandoned. (See table 10 of chapter 16 on public elementary secondary school facilities.) There is every reason to believe that nonpublic schools would exceed the percentages for public schools in each of these categories for renovations and inadequate rooms with nearly 10 percent more rooms in older buildings than public schools. (See table 8.) 2. EXISTING CAPITAL PLANT IN THE UNITED STATES (a) It is estimated that in 1965-66 there are 227,000 instructional rooms in nonpublic schools. In addition to the instructional there are 38,600 general-use facilities (see table 9). TABLE 9.-Estimated number of general-use facilities in nonpublic schools for the United States, 1965-66 Number Total Centralized school libraries Auditoriums Cafeterias Gymnasiums Combination facilities 1 Auditoriums Cafeterias Gymnasiums Other multipurpose rooms 1 Facilities with more than 1 function; i.e., auditorium-cafeteria. Nonpublic Public 9, 800 5, 600 8, 500 2, 700 6, 900 (6, 800) (3, 200) (4, 900) 6, 800 PAGENO="0371" cu - 0 0 CI) 1;L1 1;tl ~ ~ 0 0 ~ o *~ C) +~ .~ ~- U ~ rOCOCO ~ ~ ~ M-~ T~ p.4 ~ ~ ~ p~1r~ i~ o GC.,-4Q0 ~ Cl)-4-~ C) 0 C) ~z; ~C)C) ~ 1~;~1 ~ll1 ~ ~ ~ CI) ~ -4-DC) 0 ~ M.~ C) ~ p 0~-~C) ~ ~ C) ~. ~ C)C)~ -11 ~1' 0 0 0000000008800000000000000000000008000880000000 8 0000000 ~ 001001-01-8001-01-80 C. ~-l 0 100 ~ ~ 1000 1- `.4~ ~ Cl 100 Cl 10 CC Cl ,-CCI ~-4 10 ~-l ~-4 `d~ 0 0 CC Cl Cl C) Cl) 0 0. p~ 0 10 0 0 ~ IcC 0000000000000000000000000000000000000000000000 0000000000000000000000000000001000000 0000000000000 00000000000000000000000000 &0 Cl) 1)000000000000000 0000100 CC) CC) 10 CC) CC) Cl) ,-C 01010 Cl) 000)0001 0,-C 1'- 10CC) 1- CII- CC) CC 010 10CC) CICC)C0CC)C)0 01 CC Cl 0101000,10 Cl `C)C CC) COO ClC0ClClC)0CC)?C)~~ 010100 0CC CC)~CC)8CC)CC)~0 0,-CCC)COCC ClC1)CCC-C~ Cl) ,~ 0 ,cc CO 0 8 cC 0 00000000000000000000000000000000000000000000 00100 2~ZC-,oC-CCC1CC)C'l0Q ,-C C-C ,-C .4 cC) 0. 0 0 ,0 Cl) 000000000000000000000000000000000000001000 1010CC) CC 011~0010-1000 01001~00010001.00000 ,-~CC00 COt-Cl 1~0000000000000 ~ `C) `-1.-ICC) 10 CC) 010100000000 Cl) CO. 0.-C) CC .-C ~ ,-C)C~) .-C0 00 0 10 0 - 0 1,0 0 ~ 0~ c1'~l)Ic Ccl 0 - ~ .~ - ~ `~C)0 c~C `Ol) ~ 0C),~-~~0 Cl _lC~Ř_ 000 ~ *-~0~J ~ )Cl 00 ~ E ~ ~dbL;~~.E C C dlC~1~ 0.~ ~ ~ cc IC IC ~- ~ ~ .CC~QZZZZZZZZ000~~~ PAGENO="0372" 364 STATE AND LOCAL PUBLIC FACILITY. NEEDS TABLE 11.-Estimated number of rooms in nonpublic schools by populati city for the United States, 1965-66 Population of cities Rooms Percent Total - 227, 000 500,000 or more - 100,000 to 499,999 50,000 to 99,999 10,000to49,099 - 51, 000 58, 000 30, 000 41,000 9, 000 32,000 22. 5 25.6 18.1 14.1 2,500 to 9,999 Tjnder2,500 - (d) Uompletwn Date of Rooms An analysis of structural characteristics of school buildings indicates that three periods of construction are significant: Before 1920, 1920- 40, and after 1940. More than one-half (57 percent) of the rooms in use in nonpublic schools have been completed since World War II. For public schools during this same period there were 60 percent. The investment in nonpublic school facilities parallels public school construction with two exceptions. For the period of construction before 1920, nonpublic schools have 21 percent of their classrooms in use today, while public schools have only 14 percent. The numerical difference shows public schools with 214,000 rooms in use today and nonpublic 48,000, which have been in use for over 45 years. From the construction period between 1920-39 public schools ob- tained 26 percent of their rooms, while nonpublic schools have 21 percent. TABLE 12.-Estimated number and percent of instructional rooms in permanent buildings of nonpublic schools by date of completion for the United States, 1965-66 Date of completion Number Percent Total Before 1920 1920 to 1929. 227,000 100 48,000 32, 500 21 14 1930to 1939 1940to1949 1950 to 1959 1960to 1966 16,000 19,000 66,000 45,500 7 S 29 29 (e) Ownership Less than 1 percent of the 16,600 school plants are on school sites owned by public authorities. More appropriately, the ownership of non-public-school facilities may be divided by Roman Catholic, other church-related schools, and private school plants (see table 13). A school plant may house one or more schools, such as an elementary school (grades kindergarten to 8) and a high school (9 to 12). Thus, there are approximately 19,000 nonpublic schools in 16,600 school plants PAGENO="0373" 365 STATE AND LOCAL PUBLIC FACILITY NEEDS ~.-Estimated number of non-public-school plants by religious affiliation for the United States, 1965-66 Classification Number Percent Total 16,600 100.0 -iolic 12,000 72.1 srelated 3,200 19.5 Private 1,300 7.7 1 100 .7 NoTE-Enrollment distributions are different: Roman Catholic is 90 percent. Estimated Current Value The estimated current value of non-public-school facilities is $5.7 but the replacement value at current costs would be $9 billion. computation for current value is based on an expenditure of per classroom constructed in 1964 with a 2.5-percent reduc- according to the Boeckh Construction Index. The value of xis completed over 40 years ago, however, is corrected to Consequently, the values of those rooms completed from 1920 to 1930 are also adjusted proportionately to correspond with the n factor needed for rooms that have been in use over 40 years (table 14). This correction adds $418 million to the value of non- ~hool facilities. TABLE 14.-Estimated value of non-public-school facilities, 1965-66 Boeckh Adjusted Rooms Total value Total 227, 000 $5, 739,500,000 9,000 $15,000 48,000 720,000,000 12,000 16,000 32,600 520,000,000 17,000 17,000 16,000 272,000,000 - 22,500 22,500 19,000 427,500,000 - 30,000 30,000 66,000 1,980,000,000 40,000 40,000 45,400 1,820,000,000 B. COSTS AND USERS COSTS 1. CONSTRUCTION COST AND OPERATION COSTS Construction Cost Available information on the cost of nonpublic school facilities is .tary. It may be assumed that the range in cost is similar to that reported in the chapter on public elementary and secondary and that variations among States are also similar to those n appendix table B of that chapter. There is good evidence, discussions with nonpublic school officials, that facilities costs nonpublic schools are moderately lower than those for public at the same grade levels. This is mainly because nonpublic Eave usually provided somewhat smaller sites, have depended heavily on multistory construction and have provided less costly amenities, such as lavatories. Secondary facilities are more costly than elementary; and in recent years, a pronounced trend in PAGENO="0374" 366 STATE AND LOCAL PUBLIC FACILITY NEEDS Catholic schools toward concentration on the development of ary education has resulted in an average cost per classroom for school construction which is somewhat higher in the nonpublic in the public sector. (b) Maintenance and Operating Expenditures Comprehensive information on the cost of maintaining and operating nonpublic school facilities is not available. It is assumed that penditures approximate those reported in the chapter on pub]i - facilities. However, because, on the average, a larger number nonpublic school pupils are accommodated in a classroom, it probable that per pupil expenditures for these purposes are so lower in nonpublic schools. 2. USER CHARGES (a) and (b) Although many pupils are accepted in nonpubli on full or partial scholarships, the majority pay tuition and fees, which range from a few dollars to several thousand dollars a year. no precise information available on the proportion of nonpublic cational expenditures which are met from charges to students, known that these charges almost invariably leave a deficit to be from other sources. Whether the deficit should be allocated to tenance and operating expense and debt service or to other - -- educational costs is largely an arbitrary matter. (c) At the present time, costs of nonpublic elementary and ary facilities are not met to any significant degree from tax res = general obligation borrowings of State and local government units. C. TREND OF CAPITAL OUTLAY 1. 1940-65 The nonpubic schools like the public schools, have made an mous effort to accommodate the huge postwar increase in the school-age population; and from 1940-50 to 1960-66, the average annual - penditure for nonpublic elementary and secondary facilities i more than 600 percent. (See table 15.) Expressed as a proportion of new public school classrooms, however, the rooms constru nonpublic schools declined from an average of 18 percent in th of the forties to 9 percent in the period 1960-66. For a corn period, the average number of nonpublic classrooms completed year has remained relatively constant, but costs have continued rise substantially, both because of the increasing emphasis on ary school construction and also because of the continuing increase in building costs. TABLE 15.-Estimated capital outlay for nonpublic elementary and second facilities, 1946-65 [Dollar amounts in thousands] Year Rooms constructed Expenditures Total Annual Percent of public Total Annual 1940-49 19,000 1, 900 18 $427, 500 $42, 750 - 1950-59 66,000 6,600 13 1,980,000 198,000 1960-66 45,400 6,500 9 1, 820,000 260, 000 Percent of public PAGENO="0375" STATE AND LOCAL PUBLIC FACILITY NEEDS 367 2. SPENDING AGENCIES FOR CAPITAL OUTLAYS Funds from local, State, and Federal Governments to nonpublic ~re estimated as very small. Public ownership Of 0.7 percent the nonpublic school sites, however, was reported in the National y of School Facilities and Personnel conducted by the Office Education in the spring of 1962. The number of profitmaking rns is also very small. It is estimated that about 98 percent the funds for capital outlays shown in table 15 were accounted f Or nonprofit organizations. 3. SOURCE OF FINANCING FOR CAPITAL OUTLAYS Financing of capital construction for nonpublic schools is primarily gifts. However, mortgages are used in some instances, and are also provided from higher echelons of church-related )flS. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS 1. CAPITAL REQUIREMENTS Establishment of facility standards and decisions about capital r nonpublic schools are the responsibility of the organizations operate those schools. It might be assumed that it would be bo generalize at least about the Catholic schools, which account rcent of the nonpublic enrollment. However, control of these Las been largely decentralized and standards are known to vary In this section, mainly to facilitate comparison between the public private sectors, the present median pupil accommodation in the schools will be used as the basis for estimates. It cannot be 1 however, that this basis is or will be accepted as a standard ublic school officials. It should be noted, furthermore, that ) finance the necessary capital outlay usually represents only first step toward achieving smaller classes in schools which now )date large numbers of pupils in each room. This is because number of pupils per room often corresponds closely to the 1 Df pupils per teacher. The amortized per pupil cost of addi~ ~ssrooms is by no means small, but it is substantially less than of the teachers required to staff the rooms. For all of these estimates of capital outlay requirements given here should recognized as primarily for purposes of illustration. In the decade 1956 through 1965, estimated enrollments in nonpublic ~ncreased from about 4.4 million to about 6.6 million. In the 1 through 1975, the anticipated increase will be much smaller: Office of Education projections place the 1975 enrollment at 7 million. Hence, it appears possible that the nonpublic schools may be able to me inroads during this decade on their very large backlog of ated needs. It must be anticipated, however, that a sub- backlog will still remain at the end of the decade, unless these: an develop new sources of financing. PAGENO="0376" 368 STATE ~D LOCAL PUBLIC FACILITY NEEDS Total estimated needs for the decade are summarized below: (a) Replacement and renovation of dilapidated and obsolete facilities 1_ - (b) Elimination of present overcrowding (c) Accommodation of added enrollment, including allowance for mi- gration Total 1 This estimate assumes that all makeshift, nonpermanent, combustible, and off-site roori the remaining rooms built prior to 1920 would be replaced. It also assumes that of the 171,000 e which would remain in use, 34,000 would be completely renovated. The new classroom equi\ renovated facilities is estimated as 8500 rooms. The outlay required for these facilities at current estimated costs for nonpublic schools-about $40,000 per classroom-would approximately $6 billion. No confident predictions can be made about actual future tion of nonpublic classrooms. During the decade 1956 through under extraordinary enrollment pressures, construction averag 6,600 rooms per year. However, resources of the schools are to be severely strained, and it is unlikely that they will be able continue building at this rate. Without assistance from new of funds, it appears likely that average annual construction exceed 6,000 rooms. If construction in 1966-75 approximates 6,000 classrooms ~ total outlay during the decade, assuming a cost increase of 3 per year, would be about $2.8 billion.1 The backlog of unmet remaining at the end of the decade (on the basis from which needs have been estimated here) would be about 89,000 rooms, costs projected to 1975-between $4.5 and $5 billion. 2. DISTRIBUTION BY POPULATION SIZE OF COMMUNITY It is impossible to estimate closely the future distribution = outlay by size of community. Nonpublic school students, at are very heavily concerntrated in urban areas. Hence, a aimed primarily at replacing obsolete buildings and reducing: overcrowding would require the bulk of the construction in ti However, enrollment increases, as in the public schools, are ex~ be mainly in the suburbs and the needs of these new pupils are to receive priority in allocation of limited funds. The disi below is presented with the proviso that any estimate represe more than a guess: SMSA's-Urban SMSA's-Urban fringe Outside SMSA's Total 3. SPENDING AGENCIES FOR CAPITAL OUTLAYS Barring some unforeseen development in the pattern of organization, the overwhelming majority (i.e., 98 percent or more) expenditures for capital outlay will be by private nonprofit ( tion. 1 This reflects an estimated average cost over the decade of nearly $47,000 per classroom. Sc ~or a discussion of construction cost differences between public and nonpublic schools. PAGENO="0377" CHAPTER 18 Area Vocational School Facilities * A. NATURE AND COMPOSITION OF FACILITIES 1. INTRODUCTION 1 In a broad sense, all education contributes to vocational competency, tr technology grows in complexity, the basic general education ents for successful employment in most fields are increasing more rapidly than could have been anticipated even a decade two ago. But as occupations become more specialized, as well demanding, the broad general accomplishments of the stand- school curriculum constitute less and less a sufficient quali- for satisfying employment, and more and more are only a y prerequisite for the acquisition of specific occupational skills. - - `~hese implications of a changing job market are recognized and in an educational system which can anticipate future needs, plight of today's high school dropout may increasingly become plight of tomorrow's high school graduate. More and more, in other words, we are moving into an era of al specialization for all. However, while it is clear that the i, the architect, the lawyer, and the international expert, for receive specific occupational preparation in their specialized schools, the term "vocational education" has not traditionally used to refer either to such professional training nor to the I, although still only partially specialized, liberal arts 3 leading to a baccalaureate degree. As it is now commonly vocational education refers to all formal occupationally 3d subprofessional instruction, which may be offered as part a regular secondary or postsecondary educational program or may especially designed for those who have dropped out of school or been long absent from formal educational activities. The ilay be youth or adult, and the student's goal in such training be either initial entry into or advancement within the chosen Dnal field. With this very broad definition, it is clear that the field of vocational n potentially encompasses part of the formal education all of the great majority of Americans who do not complete 1 reate programs. Thus, it is not suprising that the Federal for vocational education, which is distributed through the goes ultimately to about two-thirds of the public secondary * Prepared by Program Planning and Development Branch, Division of Voca- and Technical Education, Bureau of Adult and Vocational Education, Office of Education, with minor editing by committee staff. I This section is intended primarily to define the scope and limitations of this chapter. 369 PAGENO="0378" 370 STATE AND LOCAL PUBLIC FACILITY NEEDS schools in the country, to most of the public community and junior colleges, and even to many of the 4-year institutions of higher edu- cation. Table 1, which summarizes data reported by the States, provides a 20-year record of enrollments in programs receiving this support. TABLE 1.-Enrollment in vocational education classes [In thousands] Postsecond- Persons Fiscal year Total I Adult ary Secondary with special - needs 2,013 609 466 939 . 2,228 715 525 987 1947 2,509 854 609 1,045 [948 2,836 1,210 522 1,105 1949 3,096 1,373 560 1,163 1950 . 3,365 1,521 596 1,247 3,363 1,475 562 1,326 1952 . 3,166 1,326 475 1,365 1953 3,100 1,218 444 1,438 1954 . 3,165 1,313 362 1,490 1955 3,314 1,389 396 1,529 1956 3,413 1,456 399 1,558 1957 3,522 1,523 385 1,613 1958 . 3,629 1,577 388 1,664 1959 3,701 1,642 343 1,717 1960 . 3, 768 1, 686 341 1, 741 . 3,856 1,725 348 1,783 4,073 1,825 329 1,919 1963 4 217 1 908 359 1 950 1964 4,566 2,025 400 2,141 1965 . 5,431 2,379 2 207 2,819 1966 4 . 5, 790 2, 514 580 2,696 1967 4 6 368 2 786 726 2 857 1 Detail may not add to total because of rounding. `Apprentice enrollment included under adult. Prior to fiscal year 1965, apprentices are postsecondary. 3Representsenrollment in adult and remedial programs for prevocational training in basic skills. 4 Projected figures for these 2 years. 5 Although enrollments in these programs are expected to grow rapidly, there is no adequa~ projection. NoTE-Data in this table do not include enrollments in programs under the Manpower I ~nd Training Act. Because increasing proportiOns of young people are baccalaureate programs or at least deferring occupational specializa- tion until they have completed high school, it is especially noteworthy that the number of secondary students in vocational programs have represented, during this 20-year period, a fairly constant proportion- approximating 20 percent-of all public school enrollments in grades 9 through 12. In part, this may reflect a broadening in the d of vocational education, but it also reflects. a growing awareness an "academic" or "general" curriculum which terminates at the school level no longer provides, for many students, a very good prepa- ration for entry into the labor market. There is good evidence the States are increasingly alert to the expanding needs for occupa- tional training and that they are moving rapidly to broaden the of opportunities for occupational training and to bring these oppor- tunities within reach of more of those who can benefit from them. Since most vocational programs are carried out in conjunction more comprehensive education programs (and use, at least in part, joint facilities), it is not now possible to provide any complete ac- counting of vocational facilities per se. Most of these must be included under elementary and secondary schools or under higher -education. In part, however, facilities for a small but growing seg- PAGENO="0379" STATE AND LOCAL PUBLIC - FACILITY NEEDS 371 of the vocational education enterprise can be fairly clearly shed. These are the facilities for a group of institutions -we come to be known as area vocational schools and which one of the most significant efforts to expand vocational opportunities. It should be noted that an important focus these schools is on the victims of a changing technology, including whose jobs have disappeared and those whose skills must be and expanded for them to function effectively in jobs which been redefined. Thus, there is only partial overlap between schools and the existing educational establishment, and it is Sate to treat them separately. Accordingly, information I in this chapter pertains exclusively to area vocational school 2. -DESCRIPTION OF FACILITIES General Characteristics of Area Vocational Schools The core of meaning in the phrase "area vocational education is best indicated by the language in the Vocational Education of 1963 which defines such schools to include: (A) A specialized high school used exclusively or principally for the pro- vision of vocational education to persons who are available for full-time study in preparation for entering the labor market, or (B) The department of a high school exclusively or principally used for providing vocational education in no less than five different occupational fields to persons who are available for full-time study in preparation for entering the labor market, or (C) A technical or vocational school used exclusively or principally for the provision of vocational education -to persons who have completed or left high school and who are available for full-time study in preparation for entering the labor market, or - - (D) The department or division of a junior college or community college or university which provides vocational education in no less than five different occupational fields, under the supervision of the State board, leading to immediate employment but not leading to a baccalaureate degree, -~ -- -ilabe to all residents of the State or an area of the State designated and by the State board, and if, in the case of a school, department, or division in (C) or (D), it admits as regular students both persons who have high school and persons who have left high school. Standard of Performance The necessity for developing vocational school facilities on an area .ects the fact that shops, laboratories and other special spaces for training in many occupational fields cannot be eco- y provided for very small numbers of students. This point - ifiustrated by the following estimates of minimum facilities for -Lctivties Square feet - lagriculturalshop 2,400 s laboratory 3,200 - -hanics facility 6, 000 When such a school can be designed to serve a sufficiently large on, however, the physical area (about 100 square feet per - and the cost per student of adequate facilities appear com- - - to those for secondary schools in general. Similarly, there is - reason to anticipate differences between these two types of schools the useful life of the average physical structure, which may be d at 30 to 40 years or more, depending on structural charac- and quality of maintenance. Because vocational schools are PAGENO="0380" 372 STATE AND LOCAL PUBLIC FACILITY NEEDS more dependent on specialized equipment, however, it must be anticipated that they will have a somewhat higher overall rate of obsolescence. This point deserves emphasis, because much vocational education involves training in quite specific skills and the student who receives his training on out-of-date equipment will enter the market with a very serious handicap (c) Existing Capital Plant in the United States As of 1965, based on reports from the States, 613 institutions, either completed or under construction, had been designated area ye- educational schools. The distribution of these schools by State shown in table 2. The distribution by population size of city is not known. Of these 613 schools, 144 represented new construction and 64 had been remodeled since 1963,2 but information as to the age of the remaining schools has not been reported. TABLE 2.-Distributiom of area vocational schools by State, 1965 Alabama 15 New Hampshire Alaska 1 New Jersey 17 Arizona 8 New Mexico 2 Arkansas 8 New York 8 California 78 North Carolina 24 Colorado 4 North Dakota 1 Connecticut 25 Ohio Delaware 3 Oklahoma 2 District of Columbia 6 Oregon 11 Florida 5 Pennsylvania 17 Georgia 20 Rhode Island 7 Hawaii 5 South Carolina Idaho 5 South Dakota 1 Illinois Tennessee Indiana 2 Texas Iowa Utah Kansas 10 Vermont 11 Kentucky 14. Virginia Louisiana 32 Washington Maine 5 West Virginia Maryland 6 Wisconsin Massachusetts 3 Wyoming Michigan 19 Canal Zone Minnesota 19 Guam Mississippi 18 Puerto Rico Missouri 14 Virgin Islands Montana 2 Nebraska 4 Nevada 1 All of these area schools are publicly owned and are adm~ either by State or by local boards of education. Based on ink furnished by the States, their estimated total value in 1965 V miffion. B. CosTs AND USER CHARGES There are substantial variations, both among regions and - the same region, in the cost of constructing and equipping vc school facilities. Nationwide, in 1964-65, construction costs ranged 2 Among the 208 newly constructed or remodeled schools were: 27 specialized high schools, 62 of comprehensive high schools, 76 technical or vocational schools, and 43 departments in in higher education. A similar breakdown by type for the remaining area schools is not available. Total PAGENO="0381" STATE AND LOCAL PUBLIC FACILITY NEEDS 373 to $27 per gross square foot, with an average of approximately per foot, or about $1,850 per full-time student. These costs site development, architects' fees, construction, and fixed equipment, but exclude land and movable equipment. In much of this construction, trends follow recent trends in industry toward the adoption of modular patterns and the elimination of interior bearing walls, to allow maximum flexibility for adaptation to changing tech- nological requirements. Reliable data on costs of operation and maintenance of vocational education facilities are not available. Area vocational schools, as public institutions with a broad educa- mission, do not, in general, charge users for their services. ~ult courses are conducted on a fee basis, but such fees cover, at most, a very small proportion of the cost of maintenance and n. With very minor exceptions, current expenses of these schools, like those of other public schools, are met from tax revenues.3 C. TRENDS OF CAPITAL OUTLAYS Until passage of the Vocational Education Act of 1963, all funds for construction of vocational school facilities were obtained from local or State sources. However, historical information regarding capital out- lays is not available. In fiscal year 1965, Federal matching funds for construction of area vocational schools became available for the first time; and in that year, a total of nearly $86 million (approximately one-half Federal) expended or allocated for those 208 area school construction projects which have been discussed in an earlier section. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS: 1966-75 (a) Capital Requirements Preceding sections of this chapter have presented-as far as possible, based on State reports-a separate accounting of facilities for area vocational schools, because these schools exemplify an emerging concept of special interest. It has been made clear, however, that these facilities cannot be clearly separated from facilities covered in chapters on public elementary and secondary schools and on institu- tions for higher education. In part, this is because many facilities are shared by different types of educational programs, in part because present accounting procedures do not make the necessary distinctions. Arrangements are now underway to collect more comprehensive statistical information about vocational programs. At present, how- ever, it is not possible to project future needs for area vocational schools, as such, nor to distinguish between vocational needs and needs projected in other chapters of this report. Specific problems are the following: (1) The extent to which the increase in vocational students will be accommodated in area schools is unknown. This will depend largely on State policies withrespect to the designation of such schools and may vary greatly among States. (2) The precise distribution of area school students between second- ary and postsecondary schools or colleges is unknown and the future `Federal, State, and local expenditures for vocational education, excluding programs funded under the Manpower Development and Training Act, are shown In app. A. Area vocational schools, of course, constitute only a small part of the total activities covered by these funds. PAGENO="0382" 374 STATE AND LOCAL PUBLIC FACILITY NEEDS distribution cannot be predicted on the basis of information available. (3) There is no adequate basis for predicting the facilities which be required for adult programs, over and above those prograr~ -- will be accommodated by the extra-shift operation of facilities included in projections of needs for full-time students covered chapters. Capital outlay requirements for all vocational-technical e facilities during the decade 1966-75 have been estimated at mately 2,860,000 student work stations. This is based on the tion of a very sharp increase in vocational student enrollments about 5 4 million in 1965 to about 14 million in 1975 It is ~ssiimen that the schools will operate three shifts-two during the day and in the evening Hence, each station will serve three students predicted growth will reflect both an increase in the proportion regular secondary and postsecondary students in vocational ~] - - and also a great expansion of adult programs, serving both those are unemployed or underemployed and those who will need n because of changes in the job market. At current estimated facifity costs of about $1,850 per work the capital outlay required to meet those projected needs would approximately $5.3 billion. However, the recent trend in. cost vocational facthties shows an increase of at least 3 percent per If this trend continues, the average cost during the decade ~ oe the neighborhood of $2,200 per work station. At this. level, capital outlay will approximate $6.3 billion. (b) Distribution of Needs by Population Size of Community There is no adequate basis for. estimating this distribution. (c) Spending Agencies for Capital Outlays It is anticipated that all projected outlays will be expended local public bodies. APPENDIX A.-Expenditures of Federal, State, and local funds for vocational education, by year, 1945-65 1 [In thousands of dollars] Year Total 2 Federal State Local 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 19653 . 65, 642 72,807 83,252 103,339 115,131 128,717 137,354 146,466 145,951 .151,289 164, 761 175,886 190, 726 209,748 228,315 238,812 254, 073 283,948 308,000 332,785 588, 655 20, 005 20, 628 21,087 26,200 26,409 26, 623 26,685 . 25,863 25,366 25,419 30, 351 33,180 37, 063 38, 733 41,399 45,313 48, 010 51,438 54,582 55,027 146,300 15,348 18,538 22,180 25,834 30,439 40,534 44,208 47, 518 52,218 54,550 57, 591 61,821 67, 524 72,305 79,534 82,466 89, 155 . 104, 264 112,685 124,975 175, 767 * 30, 289 33, 641 39,985 51,305 58 283 61,561 66,462 72, 784 68,367 71,320 76, 819 80,884 86 139 98,710 107 381 111,033 116 909 128 246 141,633 152,784 266, 589 1 Does not include funds from Manpower Development and Training Act. 2 Detail may not add to total because of rounding. . . . . . . 3 Estimate based on reports received to date. PAGENO="0383" CHAPTER 19 Academic Facilities for Higher Education* A. NATuRE AND COMPOSITION 1. DESCRIPTION OF FACILITIES General Characteristics and Services Rendered Institutions of higher education exist in every State in the Union in all the larger and more populous outlying areas. More than * I Of the entire number of approximately 2,200 institutions are .e control of State governments or of cities, counties, or other ions of States. Twelve are controlled by the Federal Govern- The remaining 64 percent are controlled by religious sects, tions within one professional group or another, or self-per- g groups of public-spirited persons. These institutions present the widest range imaginable in type of on offered. Junior colleges typically provide only the first years of training at the post-secondary level, usually including courses creditable toward a baccalaureate degree and courses ng terminal vocational programs. Universities commonly addition to a full undergraduate course in liberal arts, graduate ding to the doctorate, as well as courses preparing for entrance at least two or three of the learned professions. Between these extremes fall the hundreds of institutions which reflect a very ectrum of general and special educational needs and purposes. TABLE 1 -The American higher education establishment 1963 1 Public institutions Private institutions All institutions Number of institutions Enroll- ment 2 Number of institutions Enroll- mont 2 Number of institutions Enroll- ment 2 Thousands Thousands Thousands * - 88 1,188 58 558 146 1,746 * ~olleges 101 459 684 768 785 1, 227 Logos 159 396 27 13 186 409 il schools 26 55 31 75 57 130 eology and religion 3 201 46 201 46 2 1 44 18 46 19 sional schools 3~ 8 10 71 58 79 68 es 360 548 217 74 577 622 Total 744 2,657 1,333 1,610 2,077 4,267 i By fall 1965, the number of institutions had increased to 2,207, of which 1,417 were privately controlled. 2 Enrollments are resident degree-credit enrollment and hence do not correspond precisely to data presented this chapter. 3 These categories include only the independent professional schools. Many students in professional of course included in university enrollments. Source: Resident and Extension Enrollment in Institutions of Higher Education, Fall 1963 (OE 54000-63). *This chapter has been prepared by Dr. E. Eugene Higgins, of the National Center for Educational Statistics, and Dr. Kent Haistead, of the Bureau of Higher Education, U.S. Office of Education, Department of Health, Education, and Welfare, with minor editing by committee staff. 375 PAGENO="0384" 376 STATE ~D LOCAL PUBLIC FACILITY REEDS TABLE 2.-Institutions and proportionate enrollments, by size of student body Number of institutions Percent of Size of student body I __________ __________ ___________ all institu- tions all enroll- Public Private Total ments Less than 200 200 to 499 55 122 129 156 137 79 44 22 ` ` 287 318 347 271 44 45 17 4 842 440 476 427 181 124 61 26 16.5 21.2 22. 9 20.5 8. 7 6.0 2.9 1.3 500 to 999 1,000 to 2,499 2,500 to 4,999 5,000 to 9,999 10,000to 19,999 20,000 or more Total 744 1,333 2,077 100.0 I Based on resident degree-credit enrollment. Source: Resident and Extension Enrollment in Institutions of Higher Education, Fall 1963 (( Tables 1 and 2 present summary mformation, mcludmg en data, by type and size of institution. As table 2 shows, insi with enrollments of under: 1,000 constitute about 60 percent of institutions but account for less than 15 percent of the students. contrast, those colleges and universities with enrollments of 5,000 more comprise less than 10 percent of the institutions but acc almost 60 percent of the students. (b) Enrollment Growth in Higher Education The recent rapid growth in higher education enrollment is table 3, which summarizes data from 1946 to the present. In years immediately following World War II, public and privatE tions represented approximately equal segments of the total population. During the postwar period returning veterans, su by the GI bifi, caused an enrollment surge in both types of tions which was followed by a brief decline in the early fifties. sequently, enrollments recovered rapidly frOm the low point during the Korean conflict; and in recent years there has been tinuous and accelerating growth, with the increase being largest in public sector. As a result, degree-credit enrollment in 1965 re a 168-percent increase over 1946 and is more than double the ment in 1955. Of more than 53'~ million students now enrolle 65 percent are now in publicly controlled institutions, compared 50 percent in 1947. Junior college enrollments, especially in institutions, have increased even more rapidly than those in colleges and universities. In total, these have more than qu~ since 1946; and although the pattern of development in highe tion varies considerably from State to State and cannot be p with full confidence, there is good reason to anticipate a coi trend toward increased emphasis on 2-year institutions. PAGENO="0385" All insti- tutions 4-year Institutions ~_ Junior colleges Total Public Private Total Public Private 2, 078, 095 2, 338, 226 2, 408, 249 2, 456, 841 2, 296, 592 2, 116, 440 2, 148, 284 2, 250, 701 2, 499, 750 2, 678, 623 2, 946, 985 3, 068, 417 3, 258, 556 3, 402, 297 3, 610, 007 3, 891, 230 4, 206, 672 2 4, 528, 516 3 4, 987, 867 5, 570, 271 1, 889, 956 2, 116, 181 2, 197, 067 2, 227, 630 2, 079, 020 1, 916, 353 1, 908, 772 1, 990, 434 2, 183, 766 2,369, 647 2, 598, 702 2, 698, 454 2, 872, 045 2, 990, 802 3, 156, 390 3,370, 227 3, 614, 344 3, 900, 710 4, 274, 591 4, 725, 027 (1) 989, 372 1, 036, 266 1, 047, 681 986, 413 895, 661 921, 902 992, 923 1, 131, 533 1, 232, 619 1, 383, 112 1, 463, 489 1, 580, 561 1, 645, 946 1, 742, 137 1, 893, 423 2, 075, 917 2, 319, 521 2, 583, 805 2, 914, 660 (1) 1, 126, 809 1, 160, 801 1, 179, 949 1, 092, 607 1, 020, 692 986,870 997, 511 1, 052, 233 1, 137, 028 1, 215, 590 1, 234, 965 1, 291, 484 1,344, 856 1,414, 253 1,476, 804 1, 538, 427 1, 581, 189 1, 690, 786 1, 810, 367 188, 139 222, 045 211, 182 229, 211 217, 572 200, 087 239, 512 260, 267 315, 984 308, 976 348, 283 369, 963 386, 511 411, 495 453, 617 521, 003 592, 328 627, 806 713, 276 845, 244 (1) 163, 005 154, 175 170, 899 168, 043 156, 329 191, 798 210, 635 263, 693 265, 891 298, 559 316, 791 331, 671 356, 922 393, 553 458, 296 520, 987 553,302 621, 978 739, 918 (1) 59, 040 57, 007 58, 312 49, 529 43, 758 47, 714 49, 632 52, 291 43, 085 49, 724 53, 172 54, 840 54, 573 60, 064 62, 707 71,341 74, 504 91, 298 105, 326 1 Not available. 2 Excludes 271,816 students in undergraduate programs not chiefly creditable toward a bachelor's degree. 3 Excludes 332,427 students in undergraduate programs not chiefly creditable toward a bachelor's degree. Excludes 397,140 students in undergraduate programs not chiefly creditable toward a bachelor's degree. NoTE-Prior to 1953, Includes ant y resident degree-credit students; In 1953 and subsequent years includes extension degree-credit students. Academic Facilities Covered by this Report The foregoing review of enrollment trends provides an important - -* for the remainder of this chapter-an analysis based primarily the most recent comprehensive information on higher education facilities provided by an inventory conducted by the Office of Educa- tion as of December 31, 1957.' Institutions participating in the y represented about 96 percent of all students enrolled, and the results thus provided a wealth of detailed information relating to the entire establishment in existence at that time. In the years, however, construction required to meet the needs of a more than 80-percent increase in the number of students has made this y substantially out of date as a census report, although its norms of experience or practice are still useful. A new inventory will be made as of September 30, 1965, and will be updated annually; but since only crude updating of the 1957 data is possible now, the 1957 inventory necessarily provides the basis for most of the information to presented here. Academic facilities will be defined to include all those which have classified under three major categories, designated "instruc- ""research," and "general." They thus exclude the "auxiliary" ~ind "residential" facilities which are covered in another chapter. 4, 5, and 6 show the composition of these categories. Per- *centages in these tables are based on assignable area 2; that is, on the total area which could be explicitly allocated by function. Elsewhere this chapter, facilities are generally reported in terms of gross square feet, because the latter is more appropriate for cost estimates and for a 1 Higgins, E. Eugene, and Mary B. Fuller. College and University Facilities Survey, Part 3: Inventory of College and University Physical Facilities, December 31, 1957. U.S. Department of Health, Education, and ce of Education (OE-51007). Washington: U.S. Government Printing Office, 1965. 573 pages. 2 Such areas were reported in net square feet, defined as the area of a space measured from the inside walls ignoring minor architectural projections or setbacks. 70-132-66--vol. 1-25 STATE AND LOCAL PUBLIC FACILITY NEEDS 377 -Degree-credit opening fall enrollment in higher education institutions, bg level and control: Aggregate United States, 1946-65 Year PAGENO="0386" 378 STATE AND LOCAL PUBLIC: FACILITY NEEDS number of other purposes. When facilities are to be separated by function, however, gross area data are inappropriate because they are obtained from outside building measurements and are thus available oniy for buildings which usually serve several functions. TABLE 4.-Percentage distribution of total assignable area ~ instructiona~ by function and cOntrol-Aggregate United States Function Public Private Instructional facilities category 100 00 Educational laboratory schools 4 8 General or academic classrooms 25. 07 Homemanagementlaboratory,houses .38 Instructionallaboratoriesandshops 31.77 Library 13.68 Museum .88 Otherinstructional. 1.48 Physical education 2 18.08 Teaching hospital 3 81 1.01 20.25 1 Exclusive of areas for w ~ieh fan tion was not reported exclusive of detail areas of buildings for which total assignable area only was reported; exclusive of buildings shared with institutions of less grade.. . 2 Includes fleidhouses, gymnasiums, swimming pools, and enclosed areas of stadiums when - serving the physical education programs; includes spectator seating area in fieldhouses and gymnasiums. TABLE 5.-Percentage distribution of total assignable area 1 for research fa function and control-Aggregate United States Function Public Research facilities category 100. 00 Agriculture 33. 20 Astronomy Biology Chemistry *Dentistry Engineering Mathematics and statistics .21 6.54 6.47 .31 11.55 .. 33 *Medjcine 10.18 NOt identified 23. 68 Other physical sciences Physics Socialsciences 2. 06 3.88 1.50 1 See foOtnote 1 for table 4. TABLE 6.-Percentage distribution of total assignable area 1 for general by function and control-Aggregate United States Function . Public . Private General facilities category 100. 00 Armories 1.34 Auditoriums 8.16 Chapels .35 Extension service and experiment stations . 87 Faculty clubs and facilities . 36 Faculty offices 24.32 Garages 2.61 General storage 7. 28 Maintenance shops, stores, and services 11.04 Multipurpose 8.10 *Nonteaching hospitals . .69 Other general 11. 03 Power and heating plants 4.61~ Staff offices 18.22 Theaters 97 Private 1 See footnote 1 for table 4. 2 Less than 0.05 percent. PAGENO="0387" STATE AND LOCAL PUBLIC FACILITY NEEDS 379 The totals of assignable areas (net square feet) represented in tables 5, and 6 are as follows: Control of institution Public Private Total 97, 394, 000 68, 216, 100 165, 610, 100 12, 484, 800 6, 271, 800 18, 756, 600 53,854,500 38,537,400 92,391,900 Total 163,733,300 113,025,300 - 276,758,600 Attention should be called to the fact that a small part of the facili- included above and elsewhere in this report overlap with those ` other chapters of this study. These are the hospital facili- appearing in tables 4 and 6, and the medical and dental research appearing in table 5 (identified by asterisks). It has not feasible to eliminate these facilities from subsequent detailed ns, but the total overlap can be closely estimated, to provide basis for adjusting national totals. The estimates follow: Percent itutions 3.30 :..tjtutions ~ 11 ions 4. 04 Standards for Academic Facilities Data already presented give some indication of the tremendous in types of facilities used in higher education. There are, in such large variations among regions and among institutions of types and sizes that only the most general statements can made about requirements for educational adequacy based upon s of experience or practice. Some further indications of this are provided by tables 7, 8, and 9. Table 7 shows, for types of institutions, the assignable area per student in each the three major facilities categories, and in total. The other two 1 1 3sent data on "student capacity" for selected types of fadii- Explicitly, they express the number of seats or student stations tages of total enrollment and thus provide some evidence on a of these facilities. Such data, however, must be in- with great caution, and only in the context of detailed in- i about scheduling problems, multiuse possibilities, and other - pertaining to the specific institution under consideration. 10 indicates that there are substantial "economies of scale" for ial institutions which enroll large numbers of students, but increasing criticism of some of our large universities for their ality and "factory like" atmosphere suggests that some of aomies may be purchased at a higher cost than has sometimes ized. The average area of academic facilities per student (full time and time) at all institutions of higher education in 1957 was approxi- 135 gross square feet, and this average has probably sub- r declined, as the institutions have struggled to meet the ented demand of the last few years. Although it is evident in the final analysis, needs for facilities must be determined for institution individually, a number of States have adopted, for purposes, a standard of 150 square feet per student; and PAGENO="0388" 380 STATE AND LOCAL PUBLIC FACILITY NEEDS this figure has recently been used by the Office of Education as basis for estimates of aggregate demand. TABLE 7.-Area per student in major facilities categories at institutions of: types (based on data from 1957 facilities inventory) Instruc- tional 2 Re- search 2 Gen- eral 2 Total Instruc- tional 2 Re- search 2 Universities 60.7 13.8 41.2 115.7 43.1 9. 1 Liberal arts colleges 49. 2 1. 4 23. 5 74. 1 66. 7 1. 2 Teachers colleges Technological schools 65. 6 98. 7 . 6 4. 1 27.3 42.2 91. 5 145. 0 47. 1 52. 1 1. 2 7.2 Theological and religious schools Other independent professsional schools 143. 1 25.3 96.6 265. 0 75. 3 73.3 1. 8 12. 9 Junior colleges and technical insti- tutes All institutions 34. 2 .2 9. 9 44. 3 70.5 .4 56. 4 7. 2 31. 2 94. 8 56. 7 5. 2 Percent of all academic facilities 59. 5 7. 6 32.9 100. 0 60. 4 5.5 Academic class- rooms Instructional laboratories Libraries Public Private Public Private Public 1.. 4 11 1-~ All types University Liberal arts college Teachers college Independent technological school Theological and religious school OtherindependentprofessionalschOOl Junior college Technical institute 83.3 93.8 35.8 30.0 94. 4 71. 2 87. 0 89. 3 131.9 59. 5 67. 2 75. 5 109. 7 74. 2 72. 6 119.9 80.8 122. 9 73. 1 39. 7 31. 7 33. 0 48. 1 67.0 28. 2 73. 5 24. 5 34. 2 22.4 36. 4 10.4 36. 6 33. 1 50. 5 1 Exclusive of educational laboratory or demonstration schools. TABLE 9.-Percentage of fall 1957 enrollment that could have been ac at one time 1 by selected instructional facilities, by enrollment group- United States Public institutions assignable area I per student (in square feet) Private instituti area 1 per stud-- feet) 1 Assignable area, rather than gross area, was used for this breakdown, because gross are - from outside measurements of buildings, and many buildings serve multiple functions. 0 area assignable to specific functions contributes about 70 percent of gross area, but this propoi to substantial variation. 2 See text (p. 377) for definition of these categories. 3 Figures for "all institutions" represent weighted averages, to which certain types of in~ tribute negligible amounts. Although the "mix" of institutions has probably changed since 1957, data in table 1 provide a general indication of the mix on which these averages were based. TABLE 8.-Percentage of fall 1957 enrollment that could have been ac at one time 1 by selected instructional facilities, by type of institution- ; - United States Type of institution Enrollment group Academic classrooms Instructional laboratories Public Private All groups Below 500 500to999 1,000 to 2,499 2,500 to 4,999 S,000 to 9,999 10,000 and more Public 83.3 Private 93.8 35. 8 30.0 148.4 102.8 91.6 83. 5 74. 1 76.8 135.9 122.4 100.9 82. 6 73. 1 62.8 Libraries Public 1... I 2~ 61. 6 49. 7 39. 0 40. 4 32. 3 29. 5 40.4 40.2 33. 6 24. 7 22.3 22. 0 lExciusive of educational laboratory or demonstration schools. PAGENO="0389" STATE AND LOCAL PUBLIC FACILITY NEEDS 381 2. EXISTING CAPITAL PLANT FOR HIGHER EDUCATION Distribution Colleges and universities in the aggregate United States reported 00 square feet of gross area in their instructional, research, general facilities categories of buildings at the end of 1957. ns were requested not to report those buildings that were on remote institutional properties that were not used for nal purposes, or which were used by relatively small portions ~dent body for only a short period of time each year, such as tt stations, observatories, field camps, farms, ranches, and it properties; hospitals not owned by the institution even some limited research and/or instruction may be carried on them; and public schools, not owned by the institution, which are ~ractice teaching. Gross area is defined as the sum of the areas at each floor level within the principal outside faces of exterior walls, neglecting iral setbacks or projections. All stories or spaces which have ices with clear standing headroom (6 feet, 6 inch minimum) which are being used or can be adapted for use are included. area, therefore, consists of assignable areas (areas having func- as adopted for the study) plus unassignable areas (restrooms, stairs, wall and partition thicknesses, and the like). The gross areas for instructional, research, and general facilities are presented in table 10 by region, State, and type of ~r the aggregate United States. It should be noted that as the date of the survey Alaska and Hawaii were considered outlying Also, it should be pointed out that the Canal Zone, Guam, three of the U.S. service schools did not participate in the study. A comparison of data in table 10 with information relating to ~ area presented in table 7 reveals significant differences in the proportions of facilities included in the major categories. ~erences result from the fact that gross areas were categorized the basis of primary function of each building, as reported by each a. It turns out that gross area data substantially exaggerate proportion of space devoted to research and greatly understate prQportion given to gen~ral uses. In table 10 and in subsequent therefore, attention should be directed mainly to the total as evidence of the distribution of all academic facilities, of specific function. Information on the distribution of facilities by population size of not available. Age and Condition of Academic Facilities Table 11 summarizes regional data which show the period of initial ~y of facilities existing in 1957. It should be noted that in period immediately following World War II, occupancy was not .y a reliable indicator of the actual age of buildings. This is many of the buildings first occupied by educational institu- during the years 1946 through 1948 were actually war surplus - converted to temporary educational use. In general, how- it may be assumed that age and period of occupancy coincide. PAGENO="0390" C) C) Co Co 0.) 0~ Co Cot C) 0.) C) Co Cot C) C. CO Cot Co Ii ~ C 382 STATE AND LOCAL PUBLIC FACILITY NEEDS C-. Co Co Co C- Co Co Co I-CC Co `-I Co Co -I Co Co Co Co Co Co Co Co Co ~ Ct~~ Co Co~ C ~CoCoCo C Co ~ C Co~ .~ ~ ~ : :~ ~ Ct~CoCCCo~Co~CC~ Co CoCo ~ -~ ~ - ~ ~ ~;:~g~ ~ ~ CCC-CCCoCoCCCCCCCo Co CoCCCCCCCoCoCCCCCoCoCCCo C) Co CoCoCoC-CCCoCCCCCo Co CoCoCoCoCoCoCoCo CoCoCo Co Co CoCo Co C C Co CC Co Co Co Co Co C-Co IC Co Co Co Co Co C--. Co Co C-- Co C- C--Co Co Co Co Co Co ~ Co Co Co Cot-Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co CoCoCoCoCo .C ~ ~ CC E Co Co Cot-Cot-5CoCoCoCo Co ~ Co~CoCoCoCoCC GO Co Co Co~CoCo Co CoCoCCCoCoCCCoCoCCC'CCoCC CoCC~CCCCCCCCoCoCCCoCCCo CoCGCoC-CCCCCoCoCoCCCoCO Co ~ Co Co CC Co Co Co Co CC Co Co Co Co Co ~ Co Co Co Cot- Co CC Co Co CC Co Co Cot-Co Cot- Co Co Co CC Co Co ~ Co Co Co Co Co CC Co Co CC Co Co Co ~ ~ C C Co Co Co Co CoOl Co I- CC C-Co Co Co Co Co Co Co CC Co CC CO Co C CC C z ~j~: *~ c~ -~ ~ ~ ~ ~ 00 - C tC~ ~ *- C~~CC~ ~C ° oZZZc~> C z PAGENO="0391" STATE AND LOCAL PUBLIC FACILITY NEEDS 383 00 C .~ .~ b0~ CCC 00 CC .0- 00 0000 00CC 0000 0000CC CC C- CC CC - 00 CC CC 0000 0000CC 00 00CC 00 00 00 00CC 0000 00 CC CO 00000000000000 C- 00 CC 00 000000 00 0000 CC 000-000000000000 C-CC 00CC CC Cl 0000 ~ 0000 C- 00000000000000000000 00 CC 00000000 00000000CC CC 0000 CCC- 00 C- 00CC 00CC CC 00CC 0- ~0 C- 1- 00CC CC00C-0000000000C-0000000000 00 000- 0000CC 00CC 0000 00CC 00CC 00CC 0000000-CC CCCICCCC CC CC 00 00 000000000000000000000000C-0000C-CC CC 000000 C- 00000000CC 000000 C- 000000CC 00 C-CC 00000000CC00C-CCCC00CCCC0000 00 0000010000C0C1000001CC CC CCCI C- CCCI 010000,-CC CC 00'-C0000 00CC0100 0000 00 ;-C 00CC CC 00 0000 0000 00 CC 00 ~C 00CC00CC00CC00000000CC00CC00000000CC~ 0000 00000000000000C-00CCCCC-00 00 00 00 00 0000CC 00 C~CC00CC CC CICCCCC-'-CCCCC00CCCCCCC 00 0000 C-CC CC 0000 C-C- ,-C CC00CC00t~00CCCCCC00CC00C00000000 CC CCC,-CCCCC00CC00C-CCC-CC 00CC 0-00 000000000000 C- C-CC C- CC00CCCCCCCCCC 00CC CC 00000000000000000000000000 C- CC00CCCCCC00CCCCCCCC CCC- C-CCCC C- IC CE - EC... :.~ *~CC'~ ~O C~C~ -g~0'~ *~ C C'~ ~ I~E 00CC ~ ~ E~ ~ CC~000QCC~o~Q~co.,., ~CCC00C00~~ 00 ~ -~ ZOwEoE~~ ~.. -~ZZO~~ C~ ~ C/C PAGENO="0392" Region and facilities category Through 1899 1900-1919 Public 1920-39 1940-57 Through 1899 Private 1900-1919 1920-39 TABLE 11.-Gross areas of instructional, research, and general facilities categories of buildings,' by region, category, period of initial occupancy, and control: Aggregate United States [Area in hundreds of square feet] ci w 1940-57 0 Aggregate United States 139 262 424 741 752 632 1 009 108 218 936 301 806 493 898 512 (49 Instructiotril 2 108 235 306 126 567 02o 696 181 173 809 225 894 3(5 539 387 309 Research - 15, 516 78, 429 117, 985 197, 626 20, 148 43, 904 80, 495 65, 270 General 15, 511 40, 186 67, 622 115, 301 24, 979 32, 008 47, 864 60, 070 Northeast - 30,817 54,665 90,272 92,626 107,538 141,430 213,309 170,855 Instructional 116, 940 Research 35, 962 ~ General 17, 953 North central -- Instructional 49 831 141 173 154 619 173 571 52 498 71 803 101 446 96 949 Research 7,880 50, 367 51, 370 65, 187 2, 445 3, 681 18, 994 14, 492 General 5 615 18 208 22 792 33 994 7 181 9 376 8 723 11 924 25, 179 2, 707 2,931 63,326 40,832 7, 497 6,336 209,748 72, 732 10,587 6, 953 228, 781 65, 933 20,905 5, 788 272, 752 80, 487 13, 891 13, 160 62, 124 91,614 36, 798 13, 018 84,860 152, 372 41,988 18,949 129, 163 123, 365 PAGENO="0393" ~n,ifh - 25,785 92,718 270,749 859;248 29,425 :57,673 109,825 158,937 Instructional Research- General West 17,783 2,849 5, 153 71, 269 11,057 10,392 206, 510 37,711 26, 528 254, 255 63,565 41, 428 24,898 935 3, 592 48, 636 2,528 6, 509 78, 480 17,694 13, 651 124,955 10,619 23,363 18,525 66,681 -154,789 264,083 19,632 17,843 41,388 58,553 Instructional 14,759 52, 425 33, 028 47, 698 ~ Research 2,080 9508 1,819 4,197 ~ General 1,686 4,748 6,541 6,658 ..~ U.S. service schools ____________ ________ Instructional Research General * - Outlying parts d)~ 0 C) Instructional 427 5, 538 8, 630 217 213 767 Research - 849 795 General 430 1,539 1,155 172 1 Exclusive of buildings shared with institutions of less than college grade. (public, 4,493; private, 166). 2 Exclusive of area of buildings for which year of initial occupancy was not reported Exclusive of area of buildings for which year of initial occupancy was not reported ~ (public, 3,355; private, 3,362). (public, 4,497; private, 1,206). C) 2 Exclusive of area of buildings for which year of initial occupancy was not reported C) Cl) 809 72 115 9,819 -- 633 126 72 115 5,306 751 3,762 857 7,926 10,580 217 213 127, 626 188, 486 15, 709 13, 841 17,468 46,423 2,877 897 9, 695 29, 174 1, 046 3, 105 PAGENO="0394" 386 STATE I AND LOCAL PUBLIC FACILITY NEEDS In the 1957 inventory, institutions were asked to report the condi- tion of buildings in one of three categories: 1. Satisfactory; 2. Needs maj or rehabilitation now; 3. Should be razed now, but need for space and lack of money for replacement force continued use. Table 12, which summarizes results of this query, reveals that about one-sixth of all academic facilities either required maj or rehabilitation or should have been retired from use at the time of the inventory. (c) Control of Higher Education Facilities Except for the distinction between public and private institutions, which has been maintained throughout this chapter, reliable inf or- mation on the proportions of facilities under different types of con- trol is not available. Based on the most recent data, the distribution of institutions of higher education among the various control categories is as follows: institutions State governments or agencies 424 Cities, counties, special districts, etc 354 Private nonprofit organizations 1, 385 Proprietary organizations 32 Federal Government 12 Total 2, 207 However, the additional data, such as enrollments, which would permit estimates of the distribution of facilities, have not been aggregated by these categories TABLE 12.-Gross areas of instructional, research, and general facilities categories of buildings,' by region, condition, category, and control: Aggregate United States [Area in hundreds of square feet] Region and condition Public Total Instruc- Re- Gen- tional search eral Private I Total Instruc- Re- Gen- tional search eral 1,936,466 221, 419 176, 754 3,449 1,396,491 162; 889 119, 007 2,535 349,936 40, 143 23, 179 791 190,039 18, 387 34, 568 123 1,310,531 140, 287 77, 608 3,597 987,615 103, 730 61, 890 2,678 185,499 22, 098 2,288 98 137,417 14, 459 13, 430 821 269, 114 205, 179 41,696 22, 239 635, 069 443,059 128,639 63,371 232,998 21,721 14,395 175, 012 18, 008 12,159 37,190 3, 132 974 20,396 581 1,262 569, 069 43, 146 22,374 480 395, 913 29, 417 17,249 480 117, 264 9,833 1,542 55,892 3,896 3,583 777,685 519, 271 174,804 83, 610 400,462 323,379 39, 612 37, 471 610, 730 94, 763 71,314 878 405,940 64, 692 47,957 682 139,935 23, 560 11,113 196 64,855 6, 511 12,244 324,986 46,396 27,026 2,054 265, 662 33, 582 22,617 1,518 30, 962 8, 278 372 28,362 4, 536 4,037 536 Aggregate United States 2, 338, 088 1, 680, 922 414, 049 243, 117 1, 532, 023 1, 155, 913 209, 983 166, 127 Condition 1 Condition 2 Condition 3 Not reported Northeast Condition 1 Condition 2 Condition 3 Not reported North Central Condition 1 Condition 2 Condition 3 Not reported See footnote at end of table. See Education Directory, 1965-66; Part 3, Fligher 1iiducation; U.S. Office of Education, 1966. Institu. tions with less than 4-year programs constitute the great majority of those controlled by cities, counties, and special districts, and a substantial majority of those under proprietary control. PAGENO="0395" STATE AND LOCAL PUBLIC FACILITY NEEDS 387 12,-Gross areas of instructional, research, and general facilities categories of by region, condition, category, and control: Aggregate United States-Con. Public Private Region and condition -~ Total Instruc- Re- Gen- Total Instruc- Re- Gen. tional search eral tional search eral South 751,900 551,071 116,283 84, 546 357, 707 278,002 31,942 47,763 West U.S. service sehools. - - Outlying parts 644,085 62,289 43, 631 1,895 474,817 46,316 28, 671 1,267 103,302 8,329 4, 057 595 65,966 7,644 10, 903 33 304,248 31,142 21,274 1,043 233,371 27,611 16,360 660 31,352 220 272 98 39,525 3,311 4, 642 285 507, 713 383, 319 78, 871 45, 523 137,416 110, 276 9, 790 17,350 422,111 39, 836 45, 090 676 323,007 31, 632 28, 094 586 66,992 4,844 7, 035 32,112 3,360 9, 961 90 111,076 19, 386 6,934 20 91,689 12, 903 5, 664 20 5,921 3, 767 102 13,466 2, 716 1, 168 10, 815 5,989 751 4,075 8,897 1,703 215 4, 459 1,513 17 751 3, 687 190 198 20, 861 16, 093 1, 644 3, 124 1,369 1, 197 172 17, 645 13, 256 1, 366 3, 023 1, 152 980 172 1, 107 728 278 101 217 217 2, 109 2, 109 1 Exclusive of buildings shared with institutions of less than college grade. (d) Estimated Value of Facilities The value of academic facilities existing in 1965 has been estimated based on the following: 1. 1957 values, as repoi~ted by the institutions which partici- pated in the inventory. 2. 1958-60. Institutional reports of capital outlay for new academic facilities. (One-half of the outlay for the fiscal year 1958-59 was added as the assumed cost of construction during the 6 months between the inventory and the first fiscal year covered by these reports.)4 3. 1961-65. Estimated outlays, based on reports to the Office of Education which indicate a general continuation of the steadily increasing effort put forth by the institutions during the preceding 5 years. Estimated increases were 12 percent annually through 1964 and 10 percent for 1965. All values and costs were adjusted upward to take account of non- ng institutions. Then, based on experience data, values increased by 3.25 percent per year as an allowance for rising tion costs. They were deci~eased by 2 percent per year to depreciation. See the following: IN. Robert and Leslie F. Robbins. Progress in the Construction of Higher Education Facilities, 1951-59. U.S. Department of Health, Education, and Welfare, Office of Education (OE-51002). Wash. ington: U.S. Government Printing OftIce, 1952. pp. 1, 14. New Construction and Rehabilitation on College C'ampuses, 1959-60 and 1960-61. U.S. Department of Health, Education, and Welfare, Office of Education (OE-51002-61). Washington: U.S. Government Printing Office, 1963. pp. 1, 9, 11, 19. PAGENO="0396" 388 STATE AND LOCAL PUBLIC FACILITY NEEDS Results of these estimates and computations are summarized below [Thousands of dollars] Period of construction Institutional control - Public Private Total Through 1957 Jan. 1 to June 30, 1958 Fiscal years 1959-61 Fiscal years 1962-65 Total 3, 594, 920 125, 928 893, 735 1, 894, 038 3, 054, 570 70, 237 503, 768 974, 430 - 6, 649, 490 196, 165 1, 397, 503 2, 868, 468 6, 508, 621 4, 603, 005 11, 111, 626 Precise information on additions to academic facilities i from the large outlays of the past few years is not available. Esti- mates place net additions during this period at about 230 million gross square feet, indicating that the aggregate facilities now in use exceed 600 million gross square feet. B. COSTS AND USER CHARGES 1. CONSTRUCTION COSTS AND OPERATING COSTS (a) Construction Costs Average costs in 1964-65 for several different types of academic facilities are shown below. These costs are per gross square foot, including land, buildings, fixed and movable equipment, and improve- ments such as utilities and landscaping. Figures in parentheses in the first column indicate the number of projects included in the average. The third column shows the cost range within which the majority (i.e., 65-70 percent) of the projects fell. Facility function Mean cost 1 standard deviation range Library (124) Library and classroom (47) Library and sciences (11) Classroom and science (25) Science(i50) - General classroom (37) $25.48 23. 44 27. 00 26.87 28.24 27. 14 $19.16-$31.80 17. 19- 29. 69 20. 38- 33. 62 17.89- 35.95 19.75-36.73 20. 67- 33. 42 Weighted average . 26. 57 Based on the data above, the typical cost used currently for budget- ing purposes is $27.50 per gross square foot. (b) Costs of Maintenance and Operations In academic year 1957-58 all institutions of higher education spent * $408,938,467 for operating and maintenance of their physical plant. Included in this amount are salaries, wages, supplies, other expenses, ~nd equipment for operation and maintenance of the insti plant, excluding those appropriately chargeable to auxiliary enter- PAGENO="0397" STATE AND LOCAL PUBLIC FACILITY NEEDS 389 - - and organized activities relating to educational departments. In 1957-58 the total gross area of academic facilities in the United States was approximately 387,011,100 gross square feet. Unit once cost in 1958 was therefore approximately $1.06 per square foot per year. To update this cost to 1964-65, a 3.6 annual rate of increase is used which represents the rate of in salaries for the skilled maintenance trades and unskilled rkers. For 1964-65 the derived unit maintenance costs equal per gross square foot per year. 2. USER CHARGES In higher education, user charges are principally tuition and fees against students for educational and general purposes. No proportion of this student income is designated for educational as opposed to maintenance and operation expenses. User 3xpressed as a percentage of current educational expenditures both educational services and plant operation and mainte- are indicated below. 1959-60 1961-62 In millions In millions General administration $587 $736 Instruction and departmental research $1. 803 $2, 216 Library $136 $178 Subtotal $2, 526 $3, 130 and operation of the physical plant $474 $566 $3,000 $3,696 $1,196 $1,547 as a percent of total 39.9 41.9 Since colleges and universities are continually expanding, their expenditure burden is best represented by the total of debt ~t and new construction expenditure. A very small corn- f student tuition and fee income is restricted for plant expan- and debt retirement, but, as shown below, this component ly a trivial part of the total burden. 1959-60 1961-62 In millions In millions capital indebtedness and interest $176 $262 $1,197 $1,555 Total $1,373 $1,817 :restricted for these purposes) $15 $23 ident fees as percent of total 1. 1 1.3 The extent to which the cost of higher education facilities is met - eral tax resources and general obligation borrowings of State local government units is indicated in the next section. (See 14, lines 2, 3, 5, and 6.) PAGENO="0398" 390 STATE AND LOCAL PUBLIC FACILITY NEEDS 0. TRENDS OF CAPITAL OUTLAYS The most reliable estimates of capital outlay for academic now available cover only the period since the 1957 facilities inventory. These estimates, together with estimates of the area added to each year, appear in table 13. Of these annual capital outlays the distribution by spendin~, iigenuy has been estimated for 2 recent years, as follows: [In percenti 1963-64 1964-65 Public institutions 67 7 Private insitutions 32.3 Total 100.0 Information on sources of financing for capital outlay is sun in table 14. The following notes provide references to items in table which relate to specific items of information requested by committee: (a) Appropriations from tax resources-lines 1, 2, and 3 (g) Gifts, bequests, donations, etc.-line 8. (c) Federal Government grant assistance 1-line 1. (d) State grants-in-aid (all States)-line 2. (e) Tax exempt municipal bond market-lines 4, 5, 6, and (public institutions only). (f) Capital flotations in other security markets-lines 4, 5, and 7 (private insitutions only). (g) Borrowing from Federal Government-line 4. TABLE 13.-Estimated capital outlay [In millions of dollars] Breakdown of total Breakdown of total Year Total - __________ ___________ Public Private Federal 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65~ -. 1965-66 613 628 715 788 882 1,352 1,701 412 387 455 515 597 829 1, 000 201 24i 260 273 285 523 701 382 634 PAGENO="0399" STATE AND LOCAL PUBLIC FACILITY NEEDS 391 TABLE 14-Estimated percentage distribution of funds by source for new academic construction and rehabilitation completed by higher education institutions Public institutions Private institutions 1960-61 1963-64 Esti- mate 1 1964-65 1960-61 1963-64 Esti- mate 1 1964-65 Appropriations and grant income from public sources 1. Federal Government 2. State government 3. Local government Loans for plant funds from general obliga- tion or revenue-bonds, mortgages, bank loans, notes, etc., issued by 4. Federal Government 5. State government and state au- authority 6. Localgovernment 7. Institutions of higher education_ - -- Other funds 8. Gifts and grants from private sources 9. Loans from other institutional funds 10. Transfers from other institutional funds 11. All other sources Total Estimated capital outlay (in millions) - 60. 5 51. 5 61. 3 8. 4 11. 1 28. 0 3. 4 54. 3 3. 0 5. 3 43. 9 2. 3 25. 1 34.4 1. 8 7.2 1.2 8. 7 1. 1 1.3 28. 5 . 5 . 8 30. 1 37.3 29.9 14. 6 12. 0 24..9 12.9 6.3 10. 9 16.3 3.5 17. 5 .7 12.8 2.7 13. 7 . 1.9 12. 7 12. 0 17. 6 7.3 9. 2 11. 2 8. 8 77. 0 76. 9 47. 1 * 6. 6 .6 1 2 . 8 4.3 2.2 3. 2 1. 5 3. 4 1.7 2. 5 1. 2 54. 0 5.7 12. 4 4. 9 60. 5 9.1 4. 6 2. 7 37.0 5.6 2. 8 1. 7 100.0 $387 100.0 $597 100.0 $829 100.0 $241 100.0 $285 100.0 $523 1 Estimated values are based on the assumption that the source mix percentages for all incomes other than Federal funds administered under titles I, II, and III, HEFA, will remain the same as the 1963-64 distrI- bution. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS: 1966-75 (a) Capital Requirements Facility needs for higher education in the decade 1966-75 have been estimated as follows: Million gross square feet Backlog of unmet needs 133 Facilities required for new enrollment 561 Rehabilitation, estimated at 7.5 percent of requirements for new enrollment. Hence, equivalent to. 42 Total requirement for decade 736 At estimated building and equipment costs of $27 per square foot for fiscal year 1965, the capital outlay requirements for the decade 1966-75 would be slightly under $20 billion. However, since recent experience indicates a rise in construction costs of at least 3.25 percent annually, it is prudent to assume that the average cost of facilities to be constructed during the decade will be at least $32 per square foot. At this cost, the required capital outlay will be approximately $23.5 billion. The estimated requirement for rehabilitation included above is based on information showing that new construction and rehabilitation typically account for about 93 percent and 7 percent respectively of facility expenditures. PAGENO="0400" 392 STATE ~D LOCAL PUBLIC FACILITY NEEDS Other assumptions in this estimate are: (1) That the allowance of 150 gross square feet per student wilibe adequate to meet future educational needs. (2) That enrollments will increase during the decade by an average of slightly over 5 percent per year, leading to a total enrollment in fiscal year 1975 of approximately 8.7 mfflion students. As far as space is concerned, the per student allowance will probably be adequate It should be noted, ho~v ever, that the need to educate students for a world of increasingly complex technology, together with changes in educational technology itself, are expected to add very rapidly to the demands for costly equipment in higher education. This allowance, therefore, translated into dollar equivalents, is prob- ably quite modest. Capital outlay requirements will be very sensitive to changes in enrollments. Hence, the uncertainty of the enrollment & - used here should be emphasized. Specifically, it should be that enrollment projections make no allowance for the effect of the Veterans' Readjustment Benefit Act of 1966, nor do they take into account the growing belief that the education of most students should be extended at least 2 years beyond high school, graduation. The projection does imply an increasing ratio of college enr to "college-age" (18-24) population, as shown below: Percent 1960 22 1970 1965 25 1975 `Whether the estimated increase' will be sufficient to reflect rising demand for higher education is a matter of judgment.' Even small changes in the ratio will have substantial effects, because the popula- tion in this age group is large. To be `explicit, an increase in 1975 ratio of only 2 percentage points (from 33 to 35. percent) would require an upward adjustment in the projected enrollment ot more than half a million students. At'construction costs estin~"-' - 1975, such an increase would mean an added capital outlay' require- ment' of approximately $3 bfflion.5 (b) Distribution of Needs by Population Size of Community The proportions of projected facility needs ascribable to places of various population sizes cannot be reliably, estimated at this time. `In view of the increasing preponderance of large institutions it education, it can be assumed that the bulk of the `required construction will occur in communities of substantial size (c) Types of Institutions Responsible for Projected Oittlay The proportions of prospective capital outlay to be expended by public `and private institutions are estimated as follows:. Public, percent; private, 41 percent. ` ` . `. . In the public sector, the proportion of funds to be expended other than State governments and State agencies cannot be reliably estimated. In the private sector, the overwhelming majority of institutions are nonprofit. , , .. ` `` sIn fact it appears likelythat the effect of enrollment increases, beyond thelevelscurrently pr bepartialfy offset by gains in theefficiency of the educational process, and by increases in the av of the "academic year," resulting from the current trend toward the adoption of quarter ar ` calendars in higher education. PAGENO="0401" CHAPTER 20 College Housing and Related Service Facilities* A. NATURE AND CoMPosITIoN OF FACILITIES 1. DESCRIPTION OF FACILITY "If a graduate of the ôlass of 1920 were to set out today on a touri of the housing at his old alma mater, he would be struck above all by its variety. The off-campus rooming house, the dormitory quad-~ rangle, and fraternity row are still there-dressed in a different style, perhaps, but still recognizable. But the apartment village for married students is new. So is the center for graduate students~ And so is the nearby subdivision where the faculty are building homes. Colleges are housing more people of more kinds, and they realize that a large and varied population demands extensive and varied facili- ties." 1 In broad terms, college housing includes housing facilities occupied by individuals associated with an institution whether on or off cumpus, privately or institutionally owned. This discussion will deal only with that part of college housing which is owned and controlled by the institution, and limited to the housing requirements of the college student. Included are residence halls for single students, apartments for married students, houses for special groups and for graduate stucents. Since the college housing complex is the student's home away from home, other facilities which affect the physical. and social well-being such as food service facilities, student centers, and infirma- ries are also included. The structures may be small, large in size, single story, or' high-rise~. incorporating a wide range' of architectural design and floor' plan varying with the need and characteristics of the institution, its boa- tion and circumstances. Whatever the nature of the facility, its size or design, it needs first. of all to serve the purposes and programs of the institution's educa- program Since institutions vary widely in their philosophies and objectives, it would be expected that the housing patterns would reflect such differences. While definitive statistics are not available `on institutional housing policies, tabulations from American Council: of Education and Office of Education publications for the school year 1962-63 are informative * Prepared by J. Trevor Thomas, Community Facilities Administration, Department of Housing and Urban Development, with minor editing by Com- mittee staff. 1 Rlker, Harrold C., College Sludent8 Live Here, Educational Facilities Laboratory, 1961. a~a 7O-1il2-66--vol. 1-26 PAGENO="0402" 394 STATE AND LOCAL PUBLIC FACILITY NEEDS Percentage of full-time enrollments housed, fiscal year 1963 [In percent] Single student dwellings Men Women Total Sources: Oartter, Allan, "American Colleges and Universities, American Council for Edu Gleazer, Edmund I., Jr., "American Junior Colleges, American Council for Education," 19 Fall Enrollments in Education, 1962," U.S. Office of Education. While institutions may vary widely in the amount and type housing facilities provided, there seems to be near unanimity them in the durability of the facilities constructed. Edu buildings ~ expected to last for 50 years. Many hon extend over such a period. The design and construction incorporate enough durability to achieve useful service over period with as little maintenance as possible. 2 EXISTING C4~PITAL PLANT IN THE UNITED STATES Current information is not available on the quantity of college housing in the United States Publications of the Office Education and the American Council on Education do information on which to base estimates of the inventory of d for single and married students. Estimated capacity, college dwelling units, school year 196~2-63 Single student dwellings Married student dwellings Public Public Private Men Women Total 1962-63 1 310,000 299,400 610,~ 43,100 1 Tabulated from "American Universities and Colleges-American Junior Colleges," Amen on Education, 1963 and 1964 and extrapolated to 100 percent of enrollment. If it could be assumed that the percentage of, students hot the same in 1965 as in 1962 (see table p. 396), the inventory Of in the fall of 1965 would be as follows: Single student dwellings Married student dwellings Public Private 60, 000 17, 000 * Public Private Men Women Men Women Fall of 1965 462, 000 455, 000 409, 000 363, 000 Public institutions: 4-year 2-year Private institutions: 4-year 2-year Total, public and privato: 4-yoar 2-year Total, all institutions Student families 31.76 7.85 42. 97 54. 16 36.20 15.49 48. 67 7.67 63. 09 76.44 54.30 25. 55 38. 24 7.79 50.58 65. 00 43.10 19.27 33.54 50. 69 40. 06 PAGENO="0403" 395 STATE AND LOCAL PUBLIC FACILITY NEEDS Similar information is not available for related service facilities such as dining halls, infirmaries, and student centers. From the tabulations of housing reported in the American Council on Education publications, distribution of these facilities by regions is revealed as follows: Geographical distribution of single and married student housing, school year 196~-63 Region Single student dwellings Married student dwellings Public Private Men Women Total Men Women Total Public Private Northeast Middle Atlantic Southeast Middle West Southwest Far West Puerto Rico Total 21,875 29, 568 68, 298 80, 596 70, 116 32,976 393 26,170 33,967 53, 841 80, 150 61,338 32, 501 376 48,045 63, 535 122, 139 160,746 131,454 65,477 769 67,854 47,443 40, 147 63, 096 28,880 23, 380 851 55,367 40, 077 41, 844 61, 985 30,840 25, 014 850 123,221 87, 520 81, 991 125, 081 59,720 48,394 1,701 359 1, 748 8, 156 14, 546 10, 168 7,729 2,644 2, 462 2, 380 2, 730 2, 279 2, 096 65 303,822 288,343 592, 165 271, 651 255, 977 527,628 42,706 14,656 The above table is based on an incomplete report representing institutions enrolling 94 percent of total full-time private college enrollment and 98.7 percent of total public college enrollment. While no study has been made on the distribution of college housing by community size, the records of the Department of Housing and Urban Development, cumulative to December 31, 1965, reveal such distribution for approved loans for the 16 years of the program. These loans represent housing spaces equal to more than one-third of the total number estimated in use in the fall of 1965. Net approved loans by community size college housing program Population Cumulative through Dec. 31, 1965 1 -_______ Number Percent Program total Under 500 500-999 1,000to2,499 2;500to4,999 5,000 to 9,999 10,000 to 24,999 25,000 to 49,999 50,000 to 99,999 100,000 to 249,999 250,000 to 499,999 500,000 to 999999 1,000,000 and over 2, 537 29 100. 0 1. 1 33 146 183 307 458 322 260 307 179 193 120 1.3 5.8 7.2 12.1 18.1 12.7 10. 2 12.1 7.1 7. 6 4.7 1 1st loan approved in August 1951. PAGENO="0404" 396 STATE AND LOCAL PUBLIC FACILITY ~EDS Based on the methods and sources used in estimating the capacity of existing college housing facilities, the age distribution of such facilities is estimated as follows: Percentage distribution of single student housing occupancy capacity by period of initiat Period of initial occupancy ~ Public Private Public and private Through 1899 1900-1919 1920-39 1940-57 1.03 3.65 11.57 21. 50 28.81 33.44 4.68 7.80 11.74 22.73 24.62 28.53 2.70 5.55 11.65 -.. 26.88 31. 20 1958-61 1962-65 Total ioo oo 100 00 100 00 Ownership of these facilities is estimated to be distributed as follows: Percentage distribution of ownership of single student dwellings and married student apartments by public and private categories Ownership ~ Single . student dwellings Married student dwellings Pubic educational institutions 54. 29 45.71 . 77.92 22. 08 Private nonprofit organizations Total 100.00 100. 00 Information on the current value of existing college housing struc-~ tures is not available. From the, experience under the college hous- ing program, the current estimated average cOst of dwelling space for a single student is $4,650 and that for a married student is $12,500. Assuming these values to represent current construction costs, re~ placement value of existing college housing residential facilities are. estimated as follows: E8timated replacement value of existing college housing residential facilities [In millions of dollarsi . Type of institution Single student dwellings Married student . dwellings ` ` ` ` Total . Public Private 5 960 5 3, 589.8 750 0 212. 5 6 ~10 5 3,802.3 Total - 9, 550.3 962. 5 . 10, 512.8 PAGENO="0405" 397 STATE AND LOCAL PUBLIC FACILITY NEEDS B. COSTS AND USER CHARGES An analysis of 148 projects financed under the Federal college hous- ram placed under construction during fiscal year 1965 reflects following information on unit costs of college housing facilities: ~ costs per square foot, college housing program projects placed under con- struction, fiscal year 1965 f projects 148 $41. 25 $17. 01 $8. 29 -rtile $19. 70 tile $14. 78 Median costs for the same projectsby regions were as follows: Median Region Number of square foot projects structural costs ~~nth t 17 $19e0 itic 19 18.36 29 14.22 31 1624 27 16.41 ~arW~st 25 19.57 Total 148 Historically, colleges have attempted to operate housing facilities a break-even basis and only rarely have charges been so regulated -duce an operating profit. It has been customary to segregate me from housing facilities and to employ that income to pay of the services attendent to the occupancy and use of such The revenue bond concept under which most college housing loans made developed as a method of financing under which a facility produce sufficient income to pay all operating costs plus a debt requirement which would amortize the cost of the facility, rest, during the term of the loan. While this objective may :~~~a1 attainable during the early years of the college housing loan , it is difficult of attainment now with current student charges construction costs. The latest Information for Applicants published by the Department ag andUrban Development (August 1962) contains illustrations M. & 0. expense ranging from $70 to $140 per student per year. g the current college housing 3-percent interest rate, a per construction cost of $4,650, and a 48-year-loan term with percent coverage, the annual debt service requirement is $230. ~ i~iiition of the M. & 0. expenses above produces required income from $300 to $370 per student per year. Contrasted to this are the dormitory rates actually charged during 1963-64 as PAGENO="0406" 398 STATE ~D LOCAL PUBLIC FACILITY NEEDS reflected in the Office of Education's "Basic student charges" for that year.: Percentile ~ School year room rates Men Women.. 90th 75th 50th 25th $299. 271 210 171 121 $310 274 214 171 126 10th Thus, only at the 90th percentile Of student charges and at the lower end of the range' of required income, does the income approach an amount sufficient to cover M & 0 charges plus debt service If a~ more realistic estimate of $200 per student per `year for M~ & 0. charges is used, current student charges at the 90th percentile provide only 70-percent coverage of M. & 0. and debt service requirements~ - There are, of course, exceptions to the pattern, notably those institutions which' by a combination of higher student charges, effective management and low-cost structures of `comparatively short lifespan have reported a profit on student housing operations. Since these methods produce higher cost of college attendance~ and often abnormally high maintenance charges in later years, most colleges have been reluctant to adopt them. Definitive data on the extent to which costs for college facilities are being met from general tax resources and general obliga- tion borrowings of State and local government units would only be available after an extensive survey and analysis. However, published Office of Education surveys for 1951-59 and 1959-61 and unpublished data for 196 1-64 showed institutions reporting fund sources as follows: Sources of funds for new construction of residential facilities completed `PUBLIC INSTITUTIONS ` Appro- priations Tax levies General, obligated bonds HHFA revenue bonds Other revenue bonds Gifts, grants Other sources 1051-56 (average) 1956-57 1957-58 1055-59 1959-60 1960-61 1961-62 1962-63 1963-64 20.8 12.6 4.4 7.3 18.9 15.4 10.5 8. 6 3.7 0.7 1.3 .9 , .5 .8 .8 .1 .8 .5 4.1 4.0 8.8 9.1 3.3 3.8 5.8 4.8 2.5 65 8 21.1 48.4 34.6 46.7 57.1 16.2 56.4 13. 2 44.2 30.5 43.4 25.4 55.6 24.4 45.3 42.8 0.8 .2 .1 .2 1.3 .5 . 2 .3 7.8 12.4 4.5 9.4 6. 1 5.3 14.3 5. 6 5.2 PRWATE INSTITUTIONS 1951-56 1.5 0' .3 329 38.3 1956-57 0 0 .3 , 35.4 2.4 27.3 34.5 1957-58 2. 2 0 0 57.3 0 15. 2 25.3 1958-59 2.4 0 1.8 64.3 0 13.1 1959-60 1. 1 0 . 2 63.7 . 5 12.4 22. 1 1960-61 0 0 .9 51.9 .2 26.0 21.0 1961-62 0 0 5. 6 57.6 . 1 18. 4 18.3 1962-63 0 0 0 75.7 .8 9.7 13.8 1963-64 0 0 .3 60.6 .4 14.6 24.1 PAGENO="0407" STATE AND LOCAL PUBLIC FACILITY NEEDS 399 C. TREND OF CAPITAL OUTLAYS The trend of annual capital outlays for college housing construction closely the trends in enrollments at colleges and universities: Enrollement Facilities Degree credit enroll- ment (in thousands) Index, (1959-60= 100) Estimated value of facilities 1 (in thou- sands) Index (1959-60= 100) 3,068 90 4,361,457 87 3,258 96 4,624,318 92 3,402 100 5,008,418 100 3,610 106 5,344,949 107 3,891 114 5,710,079 114 4, 206 124 6,204, 130 124 4,529 133 6,687,322 133 1 Higher education facilities survey, pt. 3, with annual increments as reported by colleges in Office of v construction series. While information is not available for construction completed in and 1965-66, the Office of Education's new construction reported the following for the years 195 1-52 through 1963-64: Residential and auxiliary facilities completed [In thousands of dollars] Residential Auxiliary Residential and auxiliary facilities facilities Year completed ________ ________ ________ Public Private Public Private Resi- Auxil- Total dential iary - 42,967 26, 193 13, 320 8,143 69,160 21, 463 90, 623 - 56, 624 18, 331 15,464 3,466 74, 955 18,930 93, 885 - 27,186 42,640 18, 116 10,885 69, 826 29, 001 98,827 - 42,123 54, 984 17, 551 12, 507 97, 107 30, 058 127, 165 - 91,648 82,323 13, 629 12, 025 173, 971 25, 654 199, 625 - 169, 708 69, 105 17, 932 6,143 138, 813 24, 075 162, 888 - 103,436 70, 682 22, 764 10,757 174,118 33, 521 207, 639 = 143, 767 73,474 25, 896 19, 724 217, 241 45, 620 262, 861 - 177, 456 110, 052 55, 650 40,942 287, 508 96, 592 384, 100 - 139,730 118, 681 49, 194 28, 926 258, 411 78, 120 336, 531 - 148,903 135,090 34,050 47,087 283,993 81,137 365,130 - 216,875 174, 047 43,891 59, 238 390, 922 103,129 494, 051 - 251, 591 153, 776 49,874 27, 951 405, 367 77, 825 483, 192 Total 1, 512, 014 1,129, 378 377, 331 287, 794 2,641, 392 665, 125 3, 306, 517 D. NEEDS AND PROSPECTIVE CAPITAL OUTLAY The needs and capital outlay for college housing are assumed to * direct relationship to the increases in full-time students in and universities. It has been further assumed that the ~nts will vary as changing mixes occur in enrollments (i.e., versus private; 4-year versus 2-year; men versus women; Cost factors used are those gained from the experience of the * housing program in recent years. The capital outlays listed required to meet the housing needs of the estimated increase te student enrollments in the fall of each of the years listed. on enrollment projections may be found in exhibit I. PAGENO="0408" `400 [Dollar amounts in millions} Reporting institutions in the Office of Education's college -university facilities survey, part 2, planning for college and u -physical plant expansion 1956-70, reported expected sources oi as follows: Percentage distribution of proposed sources of funds for residential and facilities planned by higher education institutions 1956-70 Sources of funds Public Auxiliary Residential 100. Private Auxiliary Appropriations: State Local Federal Taxes: 25.08 17 13. 16 15.97 .05 4.39 1.30 State Local State earmarked Local earmarked Bonds: . 38 .88 .51 . 12 . 82 .02 .66 . 04 State Local Institutional Revenue 3. 20 .44 2. 06 40. 16 2. 53 .01 .38 69. 65 .90 29.97 Other sources: Gifts and grants Outside borrowing Endowment investment 6. 03 .88 .36 1. .51 . 25 .05 53.99 1.91 1.45 Investment of college funds Other.. Uncertain 2.84 3. 73 2. 00 .01 1. 63 4. 15 6.33 Source: College and University Facilities Survey, pt. 2, U.S. Office of Education, 1950. Applying these estimates to the prospective capital outlay* the following: STATE I AND LOCAL PUBLIC FACILITY NEEDS Prospective capital outlay, college housing, 1966-75 Total Public institutions Private institutions 1966 1967 1968 1969 1970 1971 1972 1973 1974 .1975 Total $672.2 713.6 535.9 376.3 523.5 474.6 742.1 610.6 714.9 716.6 $532.6 668.7 341.8 213.5 403.7 417.5 553.6 ~ 510.9 503.4 6, 080.3 4, 543. 1 Percent 57.23 42. 77 Using the experience of the college housing program, the pr of the estimated need ascribed to varying community size is e as follows: Population; More than 50,000 2 500 to 49 999 50 Less than 2,500 PAGENO="0409" STATE AND LOCAL PUBLIC FACILITY NEEDS 401 Estimated sources of financing, college housing, 1965-75 [In millions of dollars] Public Private Total )ns: State $1, 029. 9 $1, 029.9 Local 4.4 $3.2 7.6 Federal 323. 6 31. 2 354.8 State 86.2 86.2 Local 9.8 9.8 State 158. 2 158. 2 Local 3.3 3.3 Institutional 33. 9 9.8 43.7 Revenue 4,044.2 2,353.3 6,397.5 Gifts and grants 121.6 1,561.3 1,682.9 Borrowing from financial institutions - 19.3 115. 4 134.7 Endowment investment 5. 6 101. 0 106.6 Investment ofothercollegefunds 127. 1 133. 2 260.3 Other .5 2.8 3.3 Uncertain 112. 7 231. 9 344.6 Total $6,080.3 $4,543.1 $10,623.4 ExHIBIT 1 ASSUMPTIONS ~, Degree-credit Enrollment (Aggregate United States) 1. It is assumed that enrollments are related to live births occurring * the period 18 through 21 years before the time of enrollment. - ~ate assumptions are made about graduate school enrollments the historical data available lumps them with undergraduate nts (see p. 4). 2. It is assumed that the historic trend for an increasing proportion~ - live births to be enrolled each year will continue, and that the' on for men will continue to be different from that for woman. 3. It is assumed that both the total and increased enrollments at service schools and at private theological and religious schools continue to be too small to affect estimates significantly. The 1 data available did not permit the enrollments at these insti- o be subtracted from the national totals. 4. It is assumed that assumptions 1 and 2 will continue to be true ~nrollments at private institutions, as well as for total national nts (see pp. 5, 6, and 7). a. It is further assumed that the historic trend for an increasing proportion of total private enrollments to occur at 2-year insti- tutions will continue, and that the proportion for men will con- tinue to be different from that for women. b. It is assumed that the remaining private enrollment will occur at 4-year institutions. 5. It is assumed that the remaining total national enrollment will public institutions. a. It is further assumed that the historic trend for an increas- ing proportion of total public enrollments to occur at 2-year insti- tutions will continue until stabilizing in the fall of 1972, and that the proportion for men will continue to be different from that for women. PAGENO="0410" 402 STATE AND LOCAL PUBLIC FACILITY NEEDS b. It is assumed that the remaining private enrollment occur at 4-year institutions. Design Capacity of Housing Required The following assumptions are based upon subjective eva of information reported by four separate studies of college during the spring of 1956 and the fall of 1957, 1960, and 1962. studies differ in scope, participation and bases. Valid objecti parisons cannot be made among them. 6. It is assumed that private 4-year institutions, excluding logical and religious schools, should provide additional d( spaces for 90 percent of the increase in men and women enrolled time, and have student family units for 2 percent of their total time male enrollment. 7. It is assumed that private 2-year institutions should udditional dormitory spaces for 35 percent of the increase in i 100 percent of the women enrolled full time, and have studen units for 1.4 percent of their total full-time male enrollment. 8. It is assumed that public 4-year institutions should provi tional dormitory spaces for 40 percent of the increase in men and percent of the increase in women enrolled full time, and have family units for 4.5 percent of their total full-time male enr 9. It is assumed that public 2-year institutions should have tory spaces for 8.6 percent and student family units for 0.3 of their total full-time male enrollment, and dormitory space 1w percent of their total full-time female enrollment Comparison o.f full-time, degree-credit enrollments, with live births during period 18 to ~1 years earlier (aggregate United States) [In thousands of students] Men Women Enrollment in fall of- Full-time Live births Percent of Full-time Live births enrollment 18 to 21 years births enrollment lSto 21 years earlier enrolled earlier 1962 ` 1963' 1964 1 1965 1 1,822 1,914 2, 121 2,434 6, 026 6,106 6,323 6, 690 30. 2 31.3 33. 5 36. 4 1, 100 1,176 1,320 1,503 5,708 5,783 5,988 6,335 1966 2 - - 1967 2 19682 1969 2 1970 2 1971 2 1972 2 1973 2 1974 2 1975 2 2, 657 2,914 3, 055 3, 153 3,319 3,491 3, 697 3,855 4, 038 4, 219 7,047 7,452 7,561 7, 561 7,700 7,862 8, 089 8,203 8,360 8, 506 37. 7 39. 1 40.4 41. 7 43. 1 44.4 45. 7 47. 0 48. 3 49. 6 1, 669 1,857 1,973 2, 068 2, 202 2,346 2,515 2, 652 2, 806 2,962 6, 676 7,052 7,173 7,179 7,316 7,470 7, 690 7,801 7,949 8, 093 Percent of births enrolled 1 Actual. 2 Estimated. SourceS: Live births: Bureau of Census; actual enrollments: Office of Education; estimated Community Facilities Administration. PAGENO="0411" C 0 C) C) C) C) C) © C) C) C) C) C) C) C) C) C)C)C)C)C)C) ~1cqC) C) ci3 ~ co co c- C') ci c'i C) C) ~ C) w r~1 0~ 0) C) C) C)) C) 0~ 0) C) C~i ~C) 0~ .C) 0) GO 0) C) 0~ 0) C C 0 0 C 0 0 C) C) ~ C) C) C) C) C) ~ C) C) C) C) C) C) C) C'- cc) C) cc) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C'- C) C) C) C) C) C) C) C) C) C'- C) C ~ *~ C) ~ -~ 0 Ei c)cc~ccD~ ~ 0) ~ ~ ~)- C) C) C) Ci C) C) C) C) C) C) C) C) C) C) ~ C'- C) C) C) C) C) C) C) C) C) C) C) ~C)~t~:C'i' C) C) C)'O~ C) C) C) C) C) C) C) C'- 0'- 00 0 ~ C ~ ~ ~ ~) C) ,~ 0 Ei C'- C) C) 0-C) C) C) C) C) C) C) C) C) C) C)C)C)C)C)C)C)C)C)C)-Oct'~CiC) ~ C) C~) C) Ci C) C) C) C) C) C) C) C) C) C) ~ C) C) C) C) C) C) C) C) C) C) I'- C'- 0-C) 0 ~ C) C) C) C) C) C) C) C) C) C) C) C) C) C) ~ ~c~~-r C)C)t-00C)C)C)C)C)C)C)C)C)c'i ) C~ C) 0-.) 0-. ~ 0) ~ 0-~ ~ C) o~ ~ C)) ~ C) .~ .C) 0~ ;~`_ ~ 0) G00-~ ~C) ~ ~0) .-~ ~ C)0~ .~C) O)C) .- ~ ~ .-c C ~ Ei C) C) C)C)c'- C) C) C) C) C) C)C)CiC.)CiC)C)C)C)C)G)C)C) ~) C) )S. ~ P-.) ~ -~ C) ~ S-, C) ~ .0- ~ ~`_ .~0 GOC) ~ 0-. ccc~ ) *0-0~) 0_~ C) -~0~) ~ ~C) C) *C)0) -.~.ci) .C) 0-. ~_) ~ *0 C) .~ .0 0 C) ~ ~ E~ 0 ~ 0 ~ ~ C) C) C) C) C) C) C) C) C) C) C) C) C) C) ~ C)C)C)C)C)C)C)C)C)C)C)C)C)C) ~ """" C)C)C)C)C)C)C)C)C) C) C) C) 0'- C) C) C) C) C) C) C) C) C) C) C) C) C) C) C'- C) C) C) C) C) C) C) C'- C) -~cc~j' ~0_~ ~C) 0)*~c) ~) .~0_ 000) C) -~ 0) ~ 0~ 0) ~0.-. C© C~ .~0) 0~c-.) ~0-. ~ ~C C) ~) ~ 0) C) ~ C)C'.C)C)C)C)C)C)C)C)C)C)C)C) ~ ~ C) C'- C) C) C) C) C) C) C) C) C) C)-C'C)C) Z ~ ~ C 0 E- C) C) C) 0C) C) C) C) C) C) C) C) C) C) C)C)C)C)C)C)C)C)C)C)C)©C)C) 000 0cC'Ci ~ 0 ~ ~ C)CiC)CiC)C)C)C)C)C)C)C)C)C) C).C)~C)~C)~©_C)_ ~ C ~ C 0 E~ C) C) C) C) C)C)C)C)C)C)C) C) C) C) C)C'0C)C)©C)C)C)C)C)C)C)C)C) ~C)t-~c~icd ~ C ~ C) 000-00 C) C) C) C) C) C) C) C) ~ C) C) C) C) C) C) C) C) C) C) C) C) C) C) C C 0 0-C) C) C) C) C) C) C) C) 00 C) C) C) C) C) 0-C) C) C) C) Ci C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) PAGENO="0412" 404 STATE AND~ LOCAL PUBLIC FACILITY NEEDS Reported capacity of residence halls for single persons, fiscal year 1963 Publi~ Private Public and private Men Women Men Women Men Women Total 4 year institutions 2-year institutions Total 289 297 280 8~7 14, 525 7, 516 254 906 231 838 16, 735 24, 139 544 203 512 665 1 056 868 31, 260 31, 655 62, 915 303,822 288,343 271, 641 256, 077 575,463 544,320 1, 119, 783 Reported capacity of dwellings for married students, fiscal year 1963 Public Private Total 4-year institutions 2-year institutions Total 42, 159 547 12, 485 423 54, 644 970 42, 706 12,908 55, 614 Percentage of full time enrollments housed fiscal year 1963 Single student dwellings : Student families Men Women Total Public institutions: 4-Year 2-Year - Private institutions: 31. 76 7.85 42. 97 54. 16 ~ 36.20 15.49 33. 54 : 48. 67 7. 67 63. 09 76.44 54.30 25. 55 50.69 38. 24 7. 79 50. 58 65. 00 ~ 43. 10 19. 27 40. 06 2.80 . 19 1.31 . 58 2. 21 . 27 1.96 4-Year - 2-Year - Total, public and private: 4-Year 2-Year Total, all institutions Source Cartter Allan American Colleges and Unwersitzes American Council on Education 1964 Gleazer Edmund 3, Jr., American Junior Colleges, American Council on Education, 1963; Opening FaU Enrollments in Education, 1962, U.S. Office of Education. PAGENO="0413" CHAPTER 21 Educational Television * A. NATURE AND COMPOSITION OF PUBLIC WORK OR FACILITY 1. DESCRIPTION OF FACILITIES (a) Educational television broadcast (ETV) stations operate on television channels which have been reserved for noncommercial educational use. A total of 632 channels have been reserved for this purpose by the Federal Communications Commission. The same general physical characteristics apply to both commercial TV and ETV stations. Each station requires a transmitter, antenna, and related equipment in order to transmit a signal. Space to house the transmitter is also required. Program producing ETV stations require a wide variety of production equipment including TV cameras and videotape recorders. In addition, program producing ETV stations require studio and office space. Repeater ETV stations, which receive all of their programs from other sources, usually only require space to house their transmitters. (b) The maj ority of the existing ETV stations are physically located in urban areas. Because of their transmitting power, however, ETY stations provide a broadcast service to nonurban, agTicultural, and sparsely populated areas in addition to the urban areas where they are physically located. On the average, ETY stations devote almost 50 percent of their broadcast hours to instructional television pro- grams most of which are intended for classroom reception in elemen- tary and secondary schools. Many credit and noncredit higher education ETY courses are also provided. The remaining broadcast hours are generally devoted to cultural and entertainment programs and programs of a community service nature such as j ob training and basic health information. (c) The average ETV station is on the air between 9 and 10 hours ~ day and operates 5 days a week. (d) Pursuant to Federal Communications Commission Rules and Regulations, noncommercial educational broadcast stations are licensed only to nonprofit educational organizations upon a showing that the proposed stations will be used primarily to serve the educa- tional needs of the community; for the advancement of educational programs; and to furnish a nonprofit and noncommercial television broadcast service. Educational purposes as applied to educational television broadcasting means the transmission of educational, com- munity service, and cultural programs. *Prepared by John W. Bystrom, assistant to the Assistant Secretary for Edu- cation, and John J. Hurley, deputy assistant to the Assistant Secretary for Edu- cation, Department of Health, Education, and Welfare, with minor editing by -committee staff. 405 PAGENO="0414" A1a~ama-~ - Alaska- Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan "innesota Mississippi Missouri Montana Nebraska I Nevada 0 New Hampshire New Jersey 1 New Mexico New York 3 North Carolina 1 North Dakota 1 Ohio. 8 Oklahoma 3 Oregon 2 Pennsylvania 5 Puerto Rico~. 2 Rhode Island `0 South Carolina 2 South Dakota 1 Tennessee 2 Texas 5 Utah 5 Vermont 0 Virginia 2 Washington 5 West Virginia 0 Wisconsin 3 Wyoming 0 Total 103 406 STATE ~D LOCAL PUBLIC FACILITY NEEDS The nature of the surrounding terrain, antenna height, and trans- mitting power each have an effect on the total area covered by an ETV station broadcast signal. The maximum effective radiated power for ETV stations operating on VHF channels 2 through 6 is 100 kilowatts and for ETV stations operating on VHF channels 7 through 13 is 316 kilowatts. The maximum effective radiated power for ETV stations operating on UHF channels 14 through 83 is 5 megawatts. The coverage areas of ETV stations average from between 15 to 70 miles. Based on the average operating schedule, it is estimated that most of an ETV station's broadcast equipment fully depreciates over a 10-year period. 2. EXISTING CAPITAL PLANT IN THE UNITED STATES (a) As of June 30, 1965, there were a total of 103 ETV stations in operation in the United States and Puerto Rico (b) These facilities were distributed as follows 5 0 2 0 7 1 1 1 A 0 0 3 0 1 0 1' 1 4 0 1 3 3 0 2 0 (c) The 103 ETV stations in operation as of June 30, 1965, were physically located in cities of the following population size: 500,000 or more 22 10,000-49,999 23 100,000-499,999 41 2,500-9,999 6 50,000-99,999 10 Under 2,500 1 ETV stations provide a broadcast service to a much wider area than the cities wherein they are physically located. For example, ETV station KCSM-TV is located in San Mateo, Calif., which has a population of 69,870. However, the station provides a broadcast service to an area which has a total population of 2,385,866. ETV station WNDT is located in Newark, N.J., which has a population of 405,220. The station currently serves a population of 11,400,000 PAGENO="0415" STATE AND LOCAL PUBLIC FACILITY NEEDS 407 will soon serve a population of 16,300,000 as a result of a recent a grant under the Educational Television Facilities Act. (d) ETV stations were first authorized by the Federal Communica- Commission in 1952. From 1953 through 1960 a total of 51 were activated. An additional 52 stations were activated 1961 through June 30, 1965. (e) Of the 114 ETV stations in operation as of December 31, 1965, or 44 percent were owned by State agencies, including State d colleges and universities; 39, or 34 percent were owned by community associations; and 25, or 22 percent were owned city. and county authorities. No stations were owned by profit- )rgamzations or by the Federal Government. (f) The estimated value of 114 ETV stations in operation as of ~r 31, 1965, was $61.5 million. B. COSTS AND USER CHARGES 1. CONSTRUCTION COSTS AND OPERATING COSTS (a) ETV station construction costs are divided between (1) costs housing station operations (studios, offices, transmitter buildings, and (2) broadcast equipment. The wide range of basic requirements and methods utilized to housing for the operation of ETY stations makes it difficult subject these costs to a standard unit of measurement. For many stations operate as repeater stations receiving all of programs from other sources and thus require no more than a transmitter building. Many stations are provided operating within the existing plants of the universities and school systems which they are licensed. Grants under the Educational Television Facilities Act (Public 87-447) are available for the acquisition of eligible transmission s. As of December 31, 1965, 28 new ETV stations had been I with Federal grant assistance. Of these, 9 were repeater requiring minimal land and building costs. An additional 9 were licensed to school districts or institutions of higher education. A high percentage of nonproject costs for these vere not identifiable since they were absorbed within existing ding plants. The remaining 10 stations were licensed to community associations. Nonproject costs for these 10 break down as follows: Three of the ten stations had land or land development costs totaling $39,700, or an average of $13,233 for each of the three stations. Nine of the ten stations had building costs totaling $1,244,804, or an average of $138,311 for each of the nine stations. Eight of the ten stations had nonproject broadcast and general purpose equipment costs totaling $155,000 or an average of $19,375 for each of the eight stations. Eight of the ten stations had office equipment costs totaling $140,954 or an average of $17,619 for each of the eight stations. The average new station activation grant during 1965 under the nal Television Facilities Act for eligible broadcast equipment PAGENO="0416" 408 STATE AND LOCAL PUBLIC FACILITY NEEDS alone was $235,000. Since these grants were made on a 5( matching basis the total investment in equipment for such would be approximately $470,000. A recent study of ETV stations financing indicates that th( station investment in overall broadcast property is $540,000. (b) ETV station operating expenses vary widely. A station, for example, operates for very much less than a program ducing station. Personnel salaries, the largest single expense account for approximately 44 percent of the operating expense stations. The NDEA study of ETV station financing indicates 17 percent operate with less than $100,000 a year and 39 percent orate with less than $200,000 a year. Only five stations requi than $1 mfflion a year to operate. (c) The estimated first-year operating costs for the 10 ETY licensed to nonprofit community associations and analyzed averaged $201,145. Estimated total salary costs for these averaged $114,440 (57 percent of total estimated operating Of this amount, total administration salary costs averaged : - (16 percent of total estimated operating costs), total pr salary costs averaged $45,210 (23 percent of total estimated costs), and total engineering salary costs averaged ~36,882 (18 of total estimated operating costs). 2. USER CHARGES Under the Rules of the Federal Communications Commissi stations cannot charge for broadcast time in the same manner commercial TV stations. However, ETV stations are com for certain types of services including the production of inst programs for lOcal schools and institutions of higher e Services account for approximately 21 percent of the income ETV stations. In no instance does compensation for servic - the sum of prorated operating and capital costs. Of the 114 ETV stations in operation as of December 31, 50 were owned by State instrumentalities and 25 by local goi agencies. Of these 75 stations, 45 had received matching e grants under the Educational Television Facilities Act tot;a million All other facilities and construction costs for the 7 were met out of general tax resources and general obligation ~ ings of State and local government units. 0. TREND OF CAPITAL OUTLAYS 1. ETV stations were first authorized in 1952. The rate of station activations was initially slow. For example, one station activated in 1953, nine were activated in 1954, and seven in This rate has increased to the point where 16 new stations activated in 1964 and 15 in 1965. 2. Capital financing for the estimated investment of $61.5 in 114 ETV stations was from sources listed below. (a) Approximately $22.2 million was appropriated by the br the 50 ETV stations owned by State agencies. PAGENO="0417" STATE AND LOCAL PUBLIC FACILITY NEEDS 409 (b) Approximately $16.6 million was derived from gifts, bequests, donations, and fund raising drives for the 39 ETV stations owned by nonprofit community associations. (c) Approximately $10.6 million was derived from general obliga- tion borrowings of city and county authorities for the 25 ETV stations owned by such authoriti3s (d) Matching grants under the Educational Television Facilities Act provided $12.1 million. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS In terms of the Great Society, capital requirements for ETV stations in the decade 1966-75 total $354 million. (a) Great Society Requirements National interest -It is a national necessity that the capability exist for providing needed knowledge quickly and universally directly to schools and to homes. Equity.-An ETY signal should be available to every citizen and not limited to those in the centers of wealth and population. Ejfectiveness.-As a result of research and demonstrations over the last decade, it is known that television can be used to teach effectively a wide variety of subjects and to expand educational oppor- tunity. Operation experience to date has shown the great potential of statewide interconnection of television facilities and other network arrangements in providing otherwise unavailable high quality ma- terials at reasonable cost to numbers of people who may be widely scattered. increased need.-In every sector of the public service there are comparable problems which can be assisted by the use of noncommer- cial educational television. These include the limited number of trained professionals, greatly increased knowledge, greatly increased need and demand for services by an expanding population, greater differentiation of functions within the service involving an increase in professional specialties, expanded role for subprofessional and semi- skilled categories, and increased stress on public self-reliance assisted by the distribution of public information. There is an increasing use by private industrial management of noncommercial television for training. Attack on poverty.-The new directions of public policy can be greatly implemented by an effective noncommercial television service. These include emphasis on employment training, increased attention to the needs of certain special groups within the society such as the aging, new efforts to improve the environment in which we live, and greater emphasis on the development of new cultural opportunities. The Federal Communications Commission has reserved a total of 632 ETV channels in order to make possible a minimum service of one ETV signal in every part of the United States and 2 ETY signals in 40 major population centers. More than 500 additional ETV stations would be required to attain this goal. A number of the presently unused reserved channels are located in very sparsely popu- lated areas. It is possible that State and local authorities would 7O~-i32-66-voI. 1-27 PAGENO="0418" 410 STATE ~D LOCAL PUBLIC FACILITY NEEDS determine that activation of such channels would be economically inefficient. For this reason, a total of 400 new ETY stations has been used as a basis for this 10-year projection. (b) The 10-year projection is based on construction of 40 new sta- stions per year with an average total capital investment of $540,000 for each new station. Of this amount, $470,000 is attributed to the cost of broadcast equipment alone for each station. The increasing sophistication of TV equipment, including color equipment, will undoubtedly increase basic costs over the next 10 years. This is offset, however, by the fact that it is estimated that approximately 50 percent of the new ETV stations activated during this peiiod will be' repeater stations requiring a considerably lower equipment invest- ment than program producing stations. The following table sets forth total capital outlay requirements, for 40 new ETY stations per year.. It also reflects broadcast equipment replacement costs based on a 10-year depreciation schedule. [In millions of dollars] . . Capital out- lay-40 new ETV stations per year Capital out- lay-equip- ment replace- ment costs Total capital outlay, 1966-75 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 Total 21.6 21.6 21.6 21.6 21.6 21.6 21.6 21.6 21.6 . 21.6 5.4 7.2 9.1 ` 11.0 12.8 14.8 16.6 18.5 20.4 22.3 27.9 28.8 30.7 32.6 34.4 36.4 38.2 40.1 42.0 43.9 216. 0 138. 0 354. 0 N0TE.-Allestimatcs are based on 1965 dollar values. (c) ETV stations provide a broadcast service to a much wider area than the cities wherein they are"physically located.' Of the 400 new ETY stations used as a basisfor the 10-year projection,it is estimated that 200 would ~be program producing-transmitting stations, physi- cally located near major population and education centers in the States. The remaining 200 ETV stations would be repeater stations retransmitting materials provided by program producing .stations to more sparsely populated areas.. ` (d) It is estimated that capital outlays for 400 additional ETV stations and yearly broadcast equipment replacement costs would be expended as follows: ` (1) State governments or State agencies, 50 percent. (2) Cities, counties, towns, special districts, public authorities or other local public bodies, 33~ percent. (3) Private, nonprofit organizations and cooperatives, 16% percent. (4) Proprietary or profitmaking organizations, none. (5) Federal Government, none PAGENO="0419" CHAPTER 22 lilospital Facilities* A. NATURE AND COMPOSITION 1. DESCRIPTION OF THE FACILITIES and (b) Physical Description and Services This chapter will be mainly concerned with general short-term Information on tuberculosis hospitals is included wherever nd appropriate.1 The origin of hospitals in the United States dates back to colonial At first, any efforts to care for the sick were incidental to for the poor and unfortunate through almshouses. Philadel- General Hospital, considered by some to be the oldest hospital the United States, traces its history back to "Old Blockley" which was originally established as a public almshouse in - The first incorporated hospital in America, known as The ania Hospital, was established in Philadelphia in 1751 solely the care of the physically and mentally ill without regard to *: status, race or creed. Other early hospitals grew out of a to provide a place for clinical practice for medical schools, in York, Massachusetts, and Connecticut. These early hospitals chiefly of voluntary sponsorship, other than church or public. For the next century, hospital construction progressed slowly. the first census of hospitals was made by the U.S. Bureau of i in 1873, only 178 hospitals were listed. During this period growth, ideas were changing with regard to the place of the in society. It ceased to be considered principally as an nent for the care of the indigent sick and gradually developed a place for the treatment of people of all classes of society. Ideas wing, also, with regard to the requirements for adequate care the sick, as. well as the concept of preventive medicine. In the early years of the 20th century, rising levels of income stimu- local efforts to construct facilities needed to meet broadening for hospital care. Private fortunes created during the era ial expansion contributed greatly to the building of hospitals. 1909, a hospital census listed 4,359 hospitals. The growth of accelerated steadily through the prosperous decade following War I. The distribution was uneven, however, with over- in some communities and a complete lack of facilities in *Prepared by Division of Hospital and Medical Facilities, Public Health Department of Health, Education, and Welfare, with minor editing by Itaff. hospitals please refer to the chapter on Community Mental Health Centers. Chronic is are included in the chapter "Long-term Care Facilities." 411 PAGENO="0420" 412 STATE AND LOCAL PUBLIC FACILITY NEEDS With the coming of the depression in 1929, new hospital tion practically ceased. More than 700 hospitals were unable find sufficient operating funds and were forced to close. World War II hospital construction remained at minimum. lowing the war, growing demands and increasing shortages national attention on the need, for hospital facilities as a maj of postwar planning. In October 1944, a Commission on Care was organized under the sponsorship of the Public HealtI ~ind the American Hospital Association, to study hospital The direct outgrowth was the enactment of the Hospital Survey Construction Act (Hill-Burton) in August 1946 as title VI of Public Health Service Act. The purposes of the program th }.ished were twofold: 1. To assist States in inventorying existing facilities as a basis determining their need for additional facilities and for d ~comprehensive plans for construction of needed facilities, and 2. To provide the necessary incentive, through Federal assistance to the States, for constructing long-needed public and nonprofit hospitals, public health centers, and related hospil.... ties-particularly in rural areas. The availability of modern hospital facilities has helped to *~physicians, including specialists, to relatively isolated areas; and ratio of physicians to population in these areas as a whole has fairly constant in recent years. Today the general hospital nized as the focal point of community health, the training gr health personnel, and a center for medical research. Nev -- in some areas and particularly in metropolitan centers, the plant is outmoded, poorly located, and sorely in need of re: or replacement. Physical characteristics of general hospitals are not readil~ to generalization. Little comparison can be made between one-story 20-bed hospital on the outskirts of a small town and 500-bed multistoried and multistructured teaching hospital in State's largest city. Of necessity the small rural hospital is not to have the variety of medical skifis, costly equipment and sp facilities of the large urban hospital. Today's general hospitals range widely in size and services i depending upon location, number of persons to be served, and availability of other health facilities. The average size of a hospital is about 125 beds, of which 85 are medical-surgical, 2 rical, and 15 pediatric. Basic services and departments include blood bank, central supply, clinical laboratory, elect: graph, medical record department, outpatient and emergency ments, pharmacy, X-ray diagnosis, operating rooms, deliver postoperative recovery room, medical library, premature and a physical therapy department. As hospitals increase in size, the variety and types of services vided increase correspondingly. For example, the 400-bed may consist of a number of wings, units, or separate buildings . . provide, in addition to the services listed above, the followin~ or departments: cancer clinic, . dental department, medical service department, X-ray therapy, school of nursing, ra isotope `facility, `electroencephalograph, and a psychiatric unit. PAGENO="0421" STATE AND LOCAL PUBLIC FACILITY NEEDS 413 Tuberculosis hospitals were often located far from urban centers the introduction of modern drug therapy in the 1940's. This * ~cordance with the then-prevalent theory that an abundance fresh air and the avoidance of the stresses of urban living were in the treatment of the disease. Since then, potent chemo- tics have enabled an increasing proportion of patients to ie major part of their treatment through outpatient care after period of hospitalization. This practice, together with the in the rate of new active cases, has served to drastically the demand for tuberculosis facilities. Many such hospitals, ny the smaller State or local government tuberculosis fadii.. have either closed or converted in whole or in part to other uses. Quantitative Standards of Performance Hill-Burton State agencies are currently in the process of sub- plans in which, for the first time, all States will determine ty needs for hospital facilities on the basis of utilization rate, occupancy, and population served. Uniform criteria for existing beds and for determining the need for facility ation are also being newly applied. Total beds in existence the present time are equivalent to 3.97 beds per 1,000 population. ~ plans received thus far show a national need for 4.11 general beds per 1,000 population (including 3.97 already in exist- However, among many of the States, the gaps between avail- beds and beds needed per 1,000 population are considerably n indicated by the averages for the Nation as a whole. An additional task facing the country's general hospitals is to re- or renovate approximately 260,000 beds now obsolete due to or safety hazards or functional deficiencies. Final estimates of for modernization and new capacity will be available later in year when all State plans have been approved and summarized. The decreased utilization of tuberculosis facilities is clearly ifius- by preliminary findings from State Hill-Burton plans for fiscal 1966. A national estimate from plans received to date indicates total need for 0.23 tuberculosis beds per 1,000 population compared total of 0.27 such beds per 1,000 population in existence at this Minimum standards for evaluating the structural safety and ef- * of existing hospitals were recently established by the Public Service. These standards refer to: A. Structural resistance to fire. B. Safety of electrical and mechanical equipment, exits, fire alarm system, interior finishes, shafts, smoke barriers, etc. C. Patient areas, including room size, corridor width, nurses' stations, windows, and access to corridors. D. Service departments, including surgical suite, radiological department central supply, and dietary area. The standards may be raised or expanded in scope at the State's Other P115 standards provide that in the nursing department 3nt room should have no more than four beds, not be located any floor which is below ground level, and have a minimum of PAGENO="0422" 414 STATE AND LOCAL PUBLIC FACU~ITY NEEDS 80 square feet per bed in two- and four-bed rooms and 100 feet in single bed rooms. Other requirements or recomim relate to service facilities in each nursing unit, such as nurses' utility room, pantry, storage, and treatment room; also to surgical, obstetrics, emergency, outpatient, contagious disease, atric, and psychiatric departments or units. (d) Qualitative Standards of Performance Certification Of hospitals by the Joint Commission on Acci of Hospitals is one measure of qualitative performance. Since fling the field survey of hospitals in January 1953, the Co: has surveyed all hospitals applying for accreditation and pe:~ resurveyed those fully or provisionally approved. In 1964, the non-Federal hospitals registered with the Hospital Association included 5,712 short-term general and hospitals.2 Of these 5,712 hospitals, 3,415 were accredited.3 average size of these 3,415 accredited hospitals is 183 beds 5,712 registered short-term hospitals average 126 beds. TABLE 1.-Accredited and total registered non-Federal short-term genen and beds, 1964 Hospitals Beds Control ______________________ ___________ Total Accredited Total Voluntary nonprofit Proprietary State and local government 3,402 2,493 870 255 1,440 667 498, 677 46, 022 176, 111 Total 5,712 3,415 720,810 Of the 187 tuberculosis hospitals registered in 1964 with ti can Hospital Association, 108 were accredited.4 As is the case general hospitals, the accredited tuberculosis hospitals are sig larger in average size than the nonaccredited hospitals. Average size of accredited tuberculosis hospitals was 271 while the other tered hospitals averaged 131 beds. TABLE 2.-Accredited and total registered tuberculosis hospitals and beds, 1964 Hospitals Beds Control ___________ ___________ ____________ Total Accredited Total Voluntary nonprofit Proprietary State and local government 14 3 170 10 98 2,060 I 205 37,324 Total 187 108 39,589 2 Short-term hospitals are those having an average stay of less than 30 days. The term "spe as used here includes maternity, EENT (eye, ear, nose, and throat), children's, orthopedic, excludes psychiatric and tuberculosis facilities. Hospitals, Journal of the American Hospital Association, guide issue, Aug. 1, 1965, p. 484. `Hospitals, Journal of the American Hospital Association, guide issue, Aug. 1, 1965, p. 484. PAGENO="0423" STATE AND LOCAL PUBLIC FACILITY NEEDS 415 Federal Government recognition of the importance of accreditation by the Joint Commission is evidenced by the effort made to operate and maintain federally-owned facilities at a level which will meet the accreditation standards. The recently enacted medicare legislation, it is important to note, prescribed that general hospitals currently accredited by the Joint Commission will be deemed to meet all con- ditions of participation in the program provided that they also furnish adequate evidence of an effective utilization review plan. In the case of tuberculosis and psychiatric hospitals, there are additional staffing and medical records requirements considered necessary for the pro- vision of intensive care. Almost all States have established licensure requirements for the full operation of general hospitals. As of the beginning of 1964, how- ever, one State had no licensure law or regulations for general hos- pitals and another State licensed only hospitals operated for profit. Some States, in 1964, did not license some publicly owned hospitals- State, State and county, or county and municipal. Several others license only the maternity departments and only approve or certify hospitals as eligible to receive payments for public aid recipients. In all except five States the licensing agency is the health department. Licensure requirements vary widely from one State to another. A few States have licensure laws which have not been revised for 20 or 30 or more years and do not cover new functions assumed by hospitals in that time or changes in functions existing at the time the law was last updated. A further indication of qualitative standards of performance is the extent to which existing hospital beds need modernization. As mentioned previously under "quantitative standards," Hill-Burton State agencies are now in the process of submitting plans which show the total number of beds needed and the count of existing beds. These State plans also show the number of beds which conform and do conform to the minimum Public Health Service physical plant on standards plus any standards added or increased by the itself. A preliminary estimate, based on the plans received to this time, is that about 260,000 general hospital beds are in of modernization, that is, do not conform to the minimum Is. In terms of population this means that of the estimated existing beds per 1,000 population, an estimated 2.58 beds per 1,000 population conform to the State and Public Health Service Is and 1.39 need modernization. Tuberculosis beds are also being measured against these State and Health Service plant evaluation standards. Again using the plans received thus far, the tentative estimate of tuberculosis which conform to the plant evaluation standards is equivalent 0.18 beds per 1,000 population, or two-thirds of the 0.27 total tuberculosis beds per 1,000 population. 2. EXISTING CAPITAL PLANT and (b) Number of Facilities and Distribution by State At the beginning of 1965, Hill-Burton State plans showed a total of - general hospitals. This number includes facilities that have approved and/or scheduled for construction by Hill-Burton PAGENO="0424" 416 STATE ~D LOCAL PUBLIC FACILITY NEEDS State agencies. State distribution of both general and tuberculosis facilities is given in table 3. Among the States, Texas has the largest number of general hospitals-GO 1, and Delaware the fewest-il. Tuberculosis facilities consisted of 234 hospitals and 103 units in hospitals of other categories. TABLE 3.-Non-Federal general and tuberculosis facilities, by State, Jan. 1, 19651 Hospitals Units2 Hospitals . UnIts2 Grand total, United States and territories_ Total, United States Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota 6,915 6,782 158 26 73 113 561 83 36 11 14 184 190 24 52 266 116 147 156 138 166 62 46 135 272 182 234 228 8 9 2 11 23 7 10 4 103 101 3 9 26 S 1 .3 2 3 1 1 1 4 1 5 1 Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico - New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee_ Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Guam Puerto Rico Virgin Islands 135 166 65 119 20 30 107 55 381 152 62 217 180 86 267 17 75 69 182 601 43 26 111 122 84 171 9 129 3 1 3 1 1 2 1 6 4 10 4 1 18 3 1 7 :6 I 1 `*As reported in Hill-Burton State plans. 2 Units of 10 or more tuberculosis beds in general, mental, or chronic disease hospitals. (c) Distribution of Facilities by Size of Community The distribution by size of community of general and tub hospital facilities inventoried in Hill-Burton State plans can only estimated. Available sources show that almost three-fourths of Federal general hospitals are located in communities of less thai population. In terms of beds, however, less than half are in communities due to the fact that the average size of hospitals ii considerably in the larger urban areas (see table 4) Tuberculosis hospitals do not vary in size directly with con population Nearly half of all tuberculosis beds are located in munities with fewer than 10,000 persons, the result of a once-pi theory that an abundance of fresh air and complete isolation from stresses and strains of urban living were necessary in the treat the disease. PAGENO="0425" STATE AND LOCAL PUBLIC FACILITY NEEDS 417 4.-Estimate of non-Federal general and tuberculosis hospitals and beds by size of community Size of community General Tuberculosis ~ Hospitals Beds Hospitals Beds Total 6, 915 766, 793 234 55, 287 ver 726 171, 762 17 8, 956 -1999 747 154,120 46 8,791 99 477 89,715 27 4,147 99 1,611 191,698 55 11,500 1,846 98,916 29 5,252 Under 2,500 1, 508 60,577 60 16, 641 Source: Hill-Burton State Plan Data, Jan. 1, 1965; and Master Register of Hospitals, 1963. (d) Age of Facilities Data are not available as to the age distribution of hospitals. Many facilities have renovated or replaced at least part of their physical space since their original construction. Information for each hospital as to the construction history of each building or unit would be re- quired in order to be meaningful. - (e) Ownership The estimated distribution of general and tuberculosis hospitals by type of ownership is given in table 5. Private nonprofit general hospitals make up over half of all non-Federal general hospitals in Hill-Burton State plans. In tuberculosis facilities the predominate ownership is by local government with State hospitals next and in third position the private nonprofit tuberculosis hospitals. As can be seen in table 5, however, the relative positions of the ownership groups in both general and tuberculosis hospitals are altered when number of beds is the criterion instead of number of hospitals, due of course to differences in the average size of hospitals. TABLE 5.-Estimate of general and tuberculosis hospitals and beds by ownership Ownership General Tuberculosis Hospitals Beds Hospitals Beds Total Federal Totalnon-Federal State nment Private nonprofit Proprietary - 7,343 878,644 243 57,576 428 6,915 111,851 766,793 9 234 2,289 55, 287 318 42,940 1,514 164,861 3,541 497, 649 1,542 61,343 75 126 28 5 26,593 24,548 3,704 442 Source: Hill-Burton State Plan Data, Jan. 1, 1965; and Master Register of Hospitals, 1963 (f) Oitrrent Value Total assets and plant assets of all hospitals registered by the Ameri- can Hospital Assocation are reported in the annual "guide issue" of Hospitals, the association's journal. Plant assets include all funds invested in, or available for additions to land, buildings, and equip- ment, less any plant fund liabilities. Plant assets plus all other assets such as general fund balance, temporary fund balance, and endowment fund principal make up total assets. Both kinds of assets are shown in table 6. PAGENO="0426" 418 STATE AND LOCAL PUBLIC FACILITY NEEDS In 1964, th~ latest year available, total assets for all 6,402 registered general and special hospitals ~ amounted to $17.9 billion (excludes all psychiatric and tuberculosis hospitals). Of this amount, $13.8 bfflion was plant assets, composed of $8.5 bfflion for voluntary nonprofit hospitals, $3.2 billion representing State and local government facili- ties, $1.9 billion for federally owned general and special hospitals and $0.3 billion in proprietary hospitals. (See table 6.) Total assets of tuberculosis hospitals amounted to $471 million and plant assets were $437 million. State and local government tubercu- losis plant assets are 89 percent of this total, or $387 million. The remainder consisted of Federal-$29 mfflion, voluntary nonprofit- $18 million and proprietary tuberculosis hospitals-$3 million. In reference to the assets information in table 6 and to all other data from the "guide issue" of Hospitals, it should be noted that there is some underrepresentation of proprietary hospitals therein. While the hospitals not represented are probably smaller and involve only a relatively minor volume of patient care, their absence does have some slight effect. B. COSTS AND USER CHARGES 1. CONSTRUCTION COSTS AND OPERATING COSTS (a) Construction Costs There are three main types of construction pertaining to hospitals new buildings, additions to existing buildings, and remodeling In many construction projects, two or all three of these types are in- volved. Construction cost per square foot or per bed is available on a national basis only for a sample of new general hospital buildings aided through the Hill-Burton program. The 1964 survey in table 7 should be interpreted with caution, due to the small size of the sample used in comparison with the voluem of construction nationally. TABLE 6.-Assets of general and tuberculosis hospitals, 196~4 [Assets in thousands] Ownership ~ General and other special 1 Tuberculosis Number of hos- pitals Total assets Plant assets Number of hos- pitals . Total assets Plant assets Total 6,402 $17,890, 126 $13, 822,318 194 $470, 537 $436, 829 Federal Total non-Federal Private nonprofit Proprietary Stateand local government Total short-term Private nonprofit Proprietary State and local government Total long-term Voluntary nonprofit Proprietary State and local government 390 6,012 1,859, 045 16,031,081 1,850, 988 11,971,330 7 187 29, 005 441,532 29, 005 407, 824 3, 564 889 1, 559 11,837,003 428, 847 3, 765,231 8,474, 544 336, 684 3,160, 102 14 3 i70 26, 161 3,312 412,059 18, 195 2, 956 386,673 5, 712 14, 888, 421 11,111,449 -. 3,402 870 1,440 11,422, 566 413,429 3,052, 426 8,216, 608 324, 785 2,570, 056 300 1,142, 660 859, 881 162 19 i19 414,437 15,418 712, 805 257, 936 11,899 590, 046 - - 1 Excludes psychiatric hospitals. Source: Hospitals, Aug. i, 1965, p. 451. Includes all general and special hospitals-short term (defined in footnote 2, p. 414) and long term (hav. ing an average stay of 30 days or more). PAGENO="0427" STATE AND LOCAL PUBLIC FACILITY NEEDS 419 7.-Construction costs of new general hospital buildings in the Hill-Burton program, 1964 survey Building and fixed Total project costs Square equipment costs Project size in beds Number of feet ______________________ projects per bed Per square Per bed Per square Per bed foot foot 5 724 $25.09 $15,267 $26.04 $22, 213 19 707 27.00 19,086 30.82 21, 783 16 708 27.93 19,780 33.31 23, 592 10 723 27.33 19,716 33.33 24,047 6 926 27.93 25, 869 33.21 30,761 3 925 25.95 23,988 30.72 28,404 Total 59 804 27. 19 21,871 32.38 26, 041 Source: tT.S. Department of Health, Education, and Welfare, Public Health Service, Representative Con- s of Hill-Burton Hospitals and Related Health Facilities, January-April 1965, and unpublished There is such a wide variation in hospital projects involving addi- tions that costs per square foot or per bed have little meaning. There * usually some and often extensive remodeling in conjunction with addition and there also may be considerable equipment expense any particular project. Therefore, national data are not meaning- ~ddition or remodeling type projects. (b) Operating Costs The 5,712 non-Federal short-term general and special hospitals ~d with the American Hospital Association had a total expense of $8.3 billion in 1964. Payroll expense was $5.2 bfflion or 62 percent of total expense. Expense by size of hospital, as shown in table 8, greater payroll expense per bed and per patient-day in the )spitals as well as the inclusion for large hospitals of the expense such services and departments as emergency room, cafeteria, outpatient clinics, occupational therapy, and so forth. Another that for food, has been estimated for all registered hospitals - the United States in 1964 at $1 bfflion.6 TABLE 8.-Total expense of registered non-Federal short-term general and other special hospitals, by size, 1964 Total expense Size in beds Number of Beds hospitals Amount Per bed Per patient (in thousands) day 583 10,171 $71, 430 $7, 023 $34.67 25 to 49 1,480 52,572 431,363 8,205 35.53 1,449 100,694 936, 165 9, 297 37. 22 100 to 199 1, 095 151,422 1, 640, 957 10, 837 39. 50 200 to299 542 130,759 1,645,119 12,581 43.24 286 97, 018 1, 255, 030 12, 936 43. 47 122 53,755 714,571 13,293 44.15 500 or more 155 124,419 1,654, 588 13,299 44.97 Total 5,712 720, 810 8,349, 223 11, 583 41.58 1 Excludes short-term psychiatric hospitals. Source: Hospitals, "Guide Issue," Aug. 1, 1965, pp. 450-451. 6 Hospitals, Dec. 1, 1965, p. 64. PAGENO="0428" 420 STATE AND LOCAL PUBLIC FACILITY NEEDS * The hospital plant operation department is the administrative unit responsible for plant maintenance. Dollar costs per patient-day for the plant operation department by geographical region and size, esti- mated for 1963, are shown in table 9. For this year, the New England region had the highest estimated plant operation expenses per patient- day, $2.67. The South Atlantic region had the lowest expenses of $1.97 per patient-day. Several factors can be mentioned among those responsible for the rising cost of hospital plant operation. The increasing necessity to modernize facilities is one of the most influential factors. Installs tion of air conditioning, electronic units, and waste disposal systems would be some major examples. Maintenance of electrical and mechanical systems represents an estimated expense of over 40 percent of all hos- pital maintenance costs. In many of the older hospitals, demands on the electrical and water systems far exceed allowances made during the planning for their initial construction. 2. USER CHARGES Patient revenue in 1964 for voluntary nonprofit short-term general and other special hospitals amounted to $5.7 `billion, or $40.40 per patient-day.7 Total revenue for the same hospitals was $6.2 billion, or $43.28 per patient-day. This exceeded by only 2 percent their total expense of $6 billion, or $42.47 per patient-day. The $5.7 billion in patient revenue represents 95 percent of total expense and 93 per- cent of total revenue. Obviously then, patient revenue in general hospitals is not sufficient to cover annual maintenance and operation expenses, which generally make some allowance for depreciation. However, it has been esti- mated that about 20 percent of hospitals do not calculate depreciation~ and 70 percent do not fund it. TABLE 9.-Plant operation department estimated cost per patient day, 1963, by region and size of hospital Size in beds New England Middle Atlantic ~ South Atlantic East North Central West North Central South Central Mountain States Pacific Coast All 1 to 100 101 to 225 226 and over $2. 67 $2.28 $1.97 $2.45 $2. 06 $2. 11 $2. 11 $2. 66 2. 56 2. 46 2. 99 2. 35 2. 16 2.34 1. 83 2. 09 2. 00 2. 50 2.39 2.45 1.90 1.94 2.35 2. 19 1.96 2. 18 2. 02 2. 17 2. 15 2. 70 2.34 2.94 Source: Hospital Management, Tune 1965, p. 41. Practices used by third party payers for handling depreciation differ in various sections of the country. Third-party payers in the East generally allow only historical costs to be depreciated. In the Far West, current replacement cost is generally allowed by the Blue Cross plans and other third-party purchasers of care. It is stifi generally true, however, ~that patient revenue does not provide capital requirements above and beyond' historical cost depreciation, I Hospitals, "Guide Issue," Aug. 1, 1965, p. 451. PAGENO="0429" STATE AND LOCAL PUBLIC FACILITY NEEDS 421 and in some cases capital requirements are not taken into account at all in cost reimbursement formulas. A recent poil of all American and Canadian Blue Cross plans showed that 12 percent (7 out of 59 replying) did not consider depreciation in their reimbursement cost schedules.8 An additional factor is the almost unanimous complaint by hospitals that public authorities do not adequately reimburse even operational expenses for public charge patients. Average annual depreciation costs on a straight line method depend on the expected number of years of useful life. A facility having an expected life of 50 years would depreciate 2 percent yearly. Depending on the age of the facility or equipment, average annual straight line depreciation costs for existing general hospitals would probably fall within the following limits: * Buildings, 2 to 5 percent. Fixed equipment, 3 to 6 percent. Movable equipment, 6 to 10 percent. Illinois requires that depreOiation be based upon historical costs and - ~ permit "interest cost" to be included as a cost. Among 199 hospitals reporting to the Illinois State Health Department, deprecia.. averaged 5.8 percent in 1964, varying from 5 percent for the 300- bed-and-over hospitals to 6.3 percent for hospitals from 100 to 199 beds in size.9 On a per-patient-day cost basis, depreciation added an average of $2.47 to the daily cost, which came to $42.61 for all 199 hospitals. The range by size of hospitals was from $1.90 to $2.78 per patient-day. Capital cost expenditures by State and local governments for general hospitalsalone are not available. Based upon 1964 construction data for all health facilities, State and local governments are now meeting about 18 percent of the capital costs of all such facilities. This is considerably lower than the 40- to 45-percent range of the early and ~*O's. Since that time the national volume of health facility construction has almost tripled while construction by State and local ients increased by approximately 10 percent. Public non- outlays are ob~ously relatively stable and assume a lesser proportion of hospital construction when the volume is high, as is the ~v and seemingly will be for the near future. C. TREND OF CAPITAL OUTLAYS 1. ANNUAL CAPITAL OUTLAY During the 20 years 1946-65 a total of $18.2 billion of hospital and health facility construction was put in place. This amount the value of construction for general hospitals, other types of - s, nursing homes, diagnostic and treatment centers and other facilities. No breakdown is available for each category of Publicly owned construction accounted for $7.4 billion of and privately owned projects came to $10.8 billion. (See table Barbatelli, Ettore. Hospital Plant and Equipment Records. American Apprajsal Co., New York, N.Y~ irtesy of Foundation for Economic and Business Studies, Indiana university.) 24 pages. Unpublished materiaL PAGENO="0430" 422 STATE AND LOCAL PUBLIC FACILITY NEEDS TABLE 10.-Hospital construction: Value put in place, 1946-65 [In millions of dollars] Hospital construction by ownership in current dollars 1 __________ - _______________________ __________ Construe- Total tion cost hospital Calendar year Public index construe. (1957-59= tion in Total Private 100) 1957-59 Total 2 State and dollars local 1946 170 85 64 85 54.0 1947 187 77 47 110 63.5 1948 339 213 115 126 71.6 1949 660 458 289 202 72.5 1950 843 499 353 344 75.8 1951 946 527 395 419 81.7 1952 889 495 382 394 84.4 1953 686 369 303 317 87.1 1954 670 333 298 337 87.8 1955 651 300 278 351 90.4 1956 628 300 263 328 94.8 1957 879 354 309 525 97.7 1958 990 390 355 600 99.4 1959 998 428 370 570 102.9 1960 1, 006 401 345 605 105. 0 1961 1, 140 369 314 771 106.3 1962 1,382 397 342 985 108.8 1963 1,433 403 337 1 030 11L3 1964 1, 741 440 367 1,301 114. 6 1965 1,928 494 400 1,432 118.5 Total 18,166 7,332 5,926 10,832 - 1 Construction of health related facilities, such as nursing homes, Is included. 2 Does not include Defense Department construction. 3 Boeckh composite cost index for apartments, hotels, and office buildings. Source: U.S. Department of Commerce, Bureau of the Census, Value of New Construction I 1946-63, Revised and Construction Reports C 30-65 S Value of New Construction Put in Place 1962-65. In 1946 hospital construction had just begun to respond peacetime health needs of the Nation. An early postwar peak reached in 1951, by which time the "construction put in place" volume of $946 million had increased 456 percent since 1946. next 5 years was a period of declining volume culminating in a low of $628 million in 1956. All sources of funds showed decreases but the sharpest drops from 1951 were in federally projects (mainly veterans hospitals) and in Hill-Burton grar funds (table 11). Since 1956 a strong upward trend of construction put in place has been evident. Construction Federal aid has led the field by almost tripling in volume. important factor in the rise has been a threefold increase since in the construction of nursing home beds, particularly those proprietary ownership. Currently we are riding a wave of precedented construction activity in almost every type of facility. Public interest and concern with health care has never been greater and vigorous strides to meet these expectations are ben by private initiative as well as by public authorities on L State, and local levels. 2. CAPITAL OUTLAY BY OWNERSHIP Hospital construction data from the Bureau of the Census somewhat limited as to detail by ownership. The annual outlays for State and local governments are not published se~ and are therefore shown together in table 10. The same s pertains to nonprofit and proprietary hospital construction data; PAGENO="0431" STATE AND LOCAL PUBLIC FACILITY NEEDS 423 are combined as "private" in table 10. Federally owned construction is shown in table 11 along with a breakdown of hospital totals by federally aided or unaided, and amount of Hill-Burton grant funds. TABLE 11.-Hospital construction: Financing 1946~651 [In millions of dollars] Calendar year Total Direct Federal 2 Non-Federal Hill-Burton Federal share Total Without Federal aid Hill-Burton sponsor share 1946~_ 1947 - 1948 - 1949 1950 1951 :1952 1953 1954 1956 1957 1959 - ~ 1961 1962~.... 1963~~ ~ ~ 170 187 339 660 843 946 889 686 670 651 628 879 990 998 1,006 1,140 1,382 1,433 1,741 1,926 21 30 98 169 146 132 113 66 35 22 37 45 35 58 56 55 55 66 73 94 149 157 238 450 611 710 689 547 584 588 545 756 842 793 793 920 1,155 1,200 1,495 1,664 149 157 232 367 469 568 554 438 502 531 469 581 569 453 473 608 811 842 1,105 1,237 6 83 142 142 135 109 82 57 76 175 273 340 320 312 344 358 390 427 3 41 86 104 87 73 51 41 46 78 113 147 157 165 172 167 173 168 1 Value of new construction put in place. 2 Does not include Defense Department construction Source: Special reports to the Public Health Service by the Bureau of the Census. 3. CAPITAL OUTLAY BY SOURCE OF FINANCING The Social Security Administration for several years now has been ng estimates on the volume and sources of financing for all expenditures in the Nation. Expenditures for "medical ` construction by source of funds for selected years 1950-64 ~n in table 12. The distribution of Government funds, shown table 12, is based on the ultimate source of funds and includes as expenditures those amounts actually paid out by State and vernments and nonprofit sponsors under Federal grant-in-aid IS. This source of funds series by Social Security Administration con- in general of a reworking of hospital construction value put in ~ financing data (tables 10 and 11) plus Defense Department ~tion. Broad assumptions were made as to the sources of r construction of private facilities, other than those receiving grants, due to the availability of only fragmentary data. A number of States have now or in the past had grant-in-aid ts for construction of hospital and medical facilities. As of 1964, 12 States had active programs-Alabama, Alaska, ia, Georgia, Hawaii, Kentucky, Maryland, Mississippi, i, Nevada, New York, and North Carolina. Prior to 1964 t, Virginia, Illinois, Louisiana, South Carolina, Tennessee, Utah had active programs at some time after World War II. Information as to expenditures by year from these State grant-in- programs is not available However, it is known that approxi- PAGENO="0432" 424 STATE AND LOCAL PUBLIC FACILITY NEEDS mately $175 million was appropriated for State hospital grant grams from 1946 to 1963 TABLE 12.-Expenditures for medical facility construction by source of funds ownership, selected years 1950-64 [In mfflions] Source of funds 1950-All Public Private 1955-All Public~. Private 1960-All Public Private 1963-All Public Private 1964-All Public Private Year and Ownership Total Private Public Total Philan- Own or thropy bor- rowed $840 $294 Total $176 $118 $547 State Federal1 and local $2191 1~3 1~oI ~3I 21 9 11 21 1961-All Public Private 1962-All Public Private 495 344 294 176 118 496 50 721 324 194 130 397 370 351 324 194 130 370 27 1,074. 510 255 255 564 605 510 255 255 469 95 1,197 670 335 335 527 426 771 670 --- 335 335 426 101 1,314 757 379 378 557 444 870 757 379 378 444 113 11 11 1, 568 939 470 469 629 508 1,060 939 470 469 508 121 2,003 1,288 644 644 715 3~ 208 1* 585 1,418 1.288 644 644 585 130 2 llnôlüdes Defense Department construction. Source: Social SeciirityAdmtnisttation Office of Research and Statistics. There are three Federal agencies empowered to make loans hospital construction-Public Health Service, Small BusinesE~ istration and Department of Housing and Urban Dev (HUD.). . . . . The ~ Public Health Service, through its Hill-Burton hospitat medical facility~ program of grants and loans has made only loans for $3.9 million since they were authorized in 1958. Small Business Administration, as of December 31, 1965, had i 129 loans to hospitals for $20.8 million under its health faci - program. Through September 30, 1965, the Department of made 118 loans for $79 million under the college housing loan gram, to finance dormitory facilities for student nurses oi in public and nonprofit hospitals with approved training p In addition, the Department of HUD: makes~ interest-free I the advance~ planning of public works, including public hospitals other medical facilities. Through September 30, 1965, PAGENO="0433" 425~ STATE AND LOCAL PUBLIC FACILITY NEEDS advances approved for hospital and the medical facilities numbered. 95 and amounted to $4.8 mfflion. D. NEEDS AND PROSPECTIVE CAPITAL OU~TLAYS 1. CAPITAL REQUIREMENTS The capital requirements for hospital facilities for the decade 1966-75 are: Millions Backlog of unmet need as of June 30, 1965 1 $8,457. 5 Total additional requirements through June 30, 1975 1 7,252. 5 Total estimated need 15,710. 0 1 Includes modernization and additional bed needs. (a) Estimates of capital needs have been limited to general hospitals. The volume of capital outlay for separate tuberculosis hospitals has sharply declined in recent years and the future outlook is for the~ development of such facilities as parts of broader health facility complexes and not as independent institutions. Hill-Burton State plans for fiscal year 1966 provided the basic data-in terms of hospital beds-for developing estimates of current capital needs for general hospitals. From these plans, national totals were derived for (1) total existing beds, (2) total beds needed, (3) beds to be modernized, and (4) beds needed over and above the present supply. Dollar estimates were obtained by applying an. average cost of $25,000 per bed to the national estimates of beds to be modernized and additional beds needed. Experience under the Hifi-Burton program has indicated that, on a cost per bed basis, there are relatively minor differences between the costs of new con-- struction and the costs of modernizing obsolete facilities. Projections of the costs of modernization and needed additional general hospital beds were based on the following assumptions and factors: (1) population growth, (2) a 3-percent obsolescence rate per year, or an assumption of a 33-year hospital "life," (3) an annual increase in bed capacity at the average rate which has obtained over the past decade, (4) maintenance of the current estimated need for beds in terms of beds per 1,000 population, and (5) maintenance of the current volume of nonfederally aided construction, but with some- shifting emphasis from new construction to modernization of facilities. (b) The estimated capital needs (in millions) for general hospitals,. 1966-75 are as follows: Total Moderniza- tion Additional capacity BacklogasofJune30,1965 Annual increments: $8,457.5 $6,795.0 355.0 $1,669.5. 287.5. 1966 1967 1968 1969 1970 1971 - 1972 1973 1974 - 1975 Backlog plus increments 642.5 655. 0 670. ~ 687. 5 710.0 732.5 755.0 777. 5 800.0 822.5 362. 5 372. s 382. 5 392.5 402.5 412.5 425. 0 435. 0 447.5 292. 5 297. 5- 305. 0. 317.5 330. 0~ 342.5 352. 5 365. 0. 375~°~ 15, 710. 0 10,782. 5 4,927. 5. 70-132--66-vol. 1-28 PAGENO="0434" 426 STATE AND LOCAL PUBLIC FACILITY NEEDS (c) It is not feasible to estimate the proportions of these needs by size of community. The bulk of modernization and replacement work needed in the Nation's general hospitals, however, comes from urban areas, particularly the core cities of large metropolitan areas. The existing need for additional capacity is generally located in areas of low per capita income and in areas of rapid population growth. Entire States in the Far West, as well as suburbs of large cities in every section of the country, are experiencing sizable increases in population. (d) The proportion of the estimated capital outlays to be expended by non-Federal entities, is 100 percent. There is no feasible method for breaking this down among the non-Federal entities. PAGENO="0435" CHAPTER 23 Clinics and Other Outpatient Facilities* A. NATURE AND COMPOSITION 1. DESCRIPTION OF FACILITIES Within a relatively short span of years, facilities for outpatient care have expanded substantially in number and volume of services pro-. vided. Diagnostic and therapeutic services are being provided in a variety of facilities, including hospital outpatient departments, diag- nostic and treatment centers, public health centers, and rehabilitation facilities. (a) Physical Oharacteristics Outpatient facilities in the United States can be grouped into the ;following maj or categories: Hospital outpatient departments including scheduled clinics and emergency care services. Hospital adjunct services including laboratory; radiological services (diagnostic and therapeutic); pharmacy; poison center; and rehabilitative services (physical and occupational therapy). Free standing specialized facilities operated by governmental and voluntary agencies and those operated by private practi- tioners, either individually or in group practice. Hospital outpatient departments are defined by the U.S. Public Illealth Service as: "That section of the hospital with allotted physical facilities, regularly scheduled hours, and personnel in sufficient num- bers assigned for established hours, to provide for care of patients who are not registered as inpatients while receiving physician, dentist, or allied services." 1 Physical features commonly found in the outpatient department of a short-term, general, community hospital can be grouped into the fol- lowing general areas for service to the public concerned: Public facilities.-Parking areas; entrances from the street and the hospital lobby; separate lobby with reception, information, and ap- pointment desks; seating for persons waiting for services; toilets; drinking fountains; and public telephones. Administrative o ffices.-Office spaces for executive and secretarial personnel; admitting procedures; business office; cashier's desk; medical records file room; rooms for maintenance and housekeeping services; and storage of supplies. * Prepared by the Division of Hospital and Medical Facilities, Public Health ~Service, Department of Health, Education, and Welfare, with minor editing by Committee staff. 1 U.S. Department of Health, Education, and Welfare, Public Health Service, Division of Hospital and Medical Facilities. Facts and Trends on Hospital Outpatient Services. PUS Publication No. 930-C-6, June :1964. 427 PAGENO="0436" 428 STATE AND LOCAL PUBLIC FACILITY NEEDS Clinic facilities.-Clinics are defined as "those various units cluding adjunct services units) of the outpatient department, re- sponsible for general and specialty management of designated diag-. nostic and treatment procedures." 2 Outpatient clinics will generally require and contain similar spaces and items of equipment common to most physicians' and dentists' offices, or examination and treatment. rooms. In addition to these basic and general facilities, certain clinics~ such as the emergency services unit, will require specialized areas and equipment. The emergency services unit is "that unit (clinic) the outpatient department where services are rendered to outpatients in the diagnosis or treatment of conditions determined clinically, considered by the patient (or his representative), as requiring immediate physician, dentist, or allied services." ~ Required by the very nature of its services, the emergency service' unit ideally has a distinctive architectural design, with physical features augmented by specialized equipment. Typically, the emer- gency services unit is located within the total area of, and adjacent to the other clinics of the outpatient department, providing easy communication of patients and staff personnel between clinics and specialized facilities. In addition to the usual examination and treatment room(s), the major physical features peculiar to this unit include: separate entrances, protected from the weather, with wide, swinging doors for use of patients arriving on foot or by ambulance; a concretewalkway to entrances, without steps; platform for unloading ambulances; a waiting area for relatives and friends of patients: a room for use by police officers and press reporters; facilities for re-S straint of psychotic and alcoholic patients; a poison center; storage spaces for wheelchairs and stretchers: and room(s) with beds and other equipment for observation, treatment, and procedures prior to possible admittance of emergency patients to the inpatient section of the hospital. Commonly included in the equipment specifically provided for emergency care, are: wheelchairs and stretchers; aspira- tion, drainage, and suction equipment; equipment for administration of* drugs, medication, and anesthetic agents; emergency dental equipment; portable X-ray equipment; a storage safe for narcotics and drugs; and a storage safe for patients' valuables. Hospital adjunct services are "those special diagnostic and thera- petitic facilities and services established in. the hospital for assisting in the determination and confirmation of the physician's or dentist's diagnosis, and/or the provision of treatment ordered by and under supervision of a physiCian or dentist." . These services are commonly thought of as including radiological, laboratory, pharmacy, and rehabilitative activities. Additional and specialized adjunct services, such as blood banks, bone and tissue banks, prosthetic, electro- cardiology, and inhalation therapy, may be also offered depending upon program needs and other factors. Each of the major adjunct services normally requires extensive specialized equipment and housing space 2 IbId. ~Ibid. ~ Ibid. PAGENO="0437" STATE AND LOCAL PUBLIC FACILITY NEEDS 429 Dramatic increases in utilization of hospital outpatient services and for extension of services offered for the community's resUents caused a growth of specialized outpatient facilities. These are provided by Federal, State, and local governments, y health agencies, and in some cases by private practitioners, dividually or in group practice. Illustrative of these special- :lities are the following: Public Health Genter.-A publicly owned facility including related such as laboratories, clinics, and administrative offices a local health unit for the provision of public health services. Auxiliary Public Health Facility.-State or local health department* - - - ry and/or clinics physically separated from the central rative office. Diagnostic or Treatment Oenter.-A facility providing community for the diagnosis or diagnosis and treatment of ambulatory usually operated in connection with a hospital, or in which care is under the professional supervision of persons licensed practice medicine or surgery in the State, or, in the case of dental s or treatment, under the professional supervision of persons to practice dentistry in the State. This includes outpatient ents and clinics. Rehabilitation Facility.-A facility providing community service operated for the primary purpose of assisting in the rehabilita- of disabled persons through an integrated program under corn- rofessional supervision, of (a) medical evaluation and services, (b) psychological, social, or vocational evaluation and services. major portion of the required evaluation and services must be i within the facility; and the facility must be operated either connection with a hospital or as a facility in which all medical and health services are prescribed by or are under the general of persons licensed to practice medicine or surgery in the Integrated services may be provided in a facility to care for * pes of disabilities or a single type of disability. Services Rendered Adequate, high-quality outpatient services, including emergency ~lities, are essential elements in the contribution of hospitals to total health program for the community. In terms of diagnostic, ye, and restorative health procedures, such services comple- inpatient care as well as the nonhospital services of physicians dentists. Outpatient services help the hospital to fulfill its role the true focal point of community health, professional education, service to humanity. The extent of services to be offered is ied by the community's pattern of medical practice, pro- competencies, community needs, and the role of the hospital rig the needs or demands of the community. Many hospitals and other medical care facilities find it necessary or to limit the number and types of outpatient services to be 1. Inclusion, or exclusion, of types of services or of persons iaterially affects the planning, design, organization, and over- programs of the hospital's outpatient department. U.s. Department of Health, Education, and Welfare, Public Health Service, Division of Hospital - - I Facilities. Hill-Burton Stale Plan Data: A National Summary as of Jan. 1, 1965. PHS Publication No. 930-F-2 (revised 1965). PAGENO="0438" 430 STATE AND LOCAL PUBLIC FACILITY NEEDS Hospital adjunct services can be formally organized and located to serve either inpatients only, outpatients only, or both categories of patients. Whether these services will be established and operated for both inpatients and outpatients, or solely for the use of the outpatient department, depends upon patient loads and characteristics, man- agerial concepts and decisions, and other considerations. Regardless of the decision for utilization, the hospital's adjunct; services need to be located in proximity to the outpatient clinics with. accommodations to facilitate the flow of patient traffic. In addition to the various general and specialty clinic services offered by hospitals, specialized health and clinic services are offered by Federal and local governments, voluntary agencies, and practitioners. These entities provide a wide range of preventive health services and specialized programs for chronic diseases, accident prevention, and direct patient care. The range of services offered (other than by the Federal Government) is usually determined by community demands and local availability of qualified professional practitioners. Representative of the more commonly offered ized clinical services are those concerned with: Alcoholism Immunizations Cerebral palsy Multiple sclerosis Crippled, children Podiatry Dermatology Psychological Family health Social services Health education Speech Hearing Venereal diseases Chronic long-term disease Well-child (c) Standards of Performance Some measure of the overall magnitude of the increased use of outpatient facilities is indicated by the fact that, in 1955, a total of 4,832 hospitals reported outpatient visits to the American I Association, compared with 5,624 hospitals reporting such visits in 1964. During that decade, total reported outpatient visits increased~ from 73,497,500 to 125,123,200,6 or from 445 visits per 1,000 tion in 1955 to 654 per 1,000 in 1964. Although these increases reflect,. to some extent, more complete reporting by hospitals registered with the American Hospital Association, the actual increase m visits is unquestionably substantial. Included in total outpatient visits are those for emergency services, clinic services, and for diagnostic or treatment procedures upon re- ferral from physicians In 1964, of the 654 total outpatient per 1,000 persons, 139 per 1,000 were for emergency services, 239 per 1,000 were for clinic services, and 112 per 1,000 were for services upon physicians' referral. The remainder, or 164 visits per 1,000 persons, were not classified as to type of visit. Public health centers have increased in number from 468 in 1948 to 1,194 as of January 1965. Auxiliary public health facilities also have grown substantially in number-from 722 to 1,050 in the 1948-65 American Hospital Association. Hospitals, "Guide Issue," pt. II, Aug. 1, i965. PAGENO="0439" STATE AND LOCAL PUBLIC FACILITY NEEDS 431 Services in these facilities vary widely-from purely environ- health activities to extensive preventive services provided to ~t1s. No data are available on the volume of services pro- Only very limited information is available on the standards of per-. ~, in terms of persons served, of all other types of clinics or ~t facilities. A 1964 directory of rehabilitation facilities 1 a total of 288,000 persons served in the 372 centers reporting patient service. These centers, however, represented only half the total participating in the study and only about 20 percent of number identifying themselves as rehabilitation facilities.8 The most current data available on private group practice clinics. k to 1959. At that time, 1,623 medical groups were reported various sections of the country. These multispecialty and single. groups were staffed by a total of 14,841 physicians; about. 5 of these physicians were on a full-time basis. No data )rted on the number of patients served by the various groups.9 Data are not available on the numbers of persons served by free- diagnostic and treatment centers (those not physically d with a hospital) or by other free-standing specialized. operated by governmenta.1 or voluntary agencies. For new construction under the hospital and medical facilities (Hill-. program, outpatient departments diagnostic or treatment. public health centers, and rehabilitation facilities must meet. requirements established by regulation. For example, outpatient departments must be located on the most easily floor and must have convenient access to radiology, phar-. Doratory, and physical therapy units. Public health centers provide administrative, clinical, laboratory, and service areas. to serve the program needs of the center and the population involved. Similarly, rehabilitation facilities must provide. space and proper physical location for the various services.. Qualitative Standards of Performance All outpatient and clinic facilities operated in direct connection a hospital are covered by standards established for hospitals in. Included in requirements for accreditation of hospitals by Joint Commission on Accreditation are specifications relating to Lt services. The recently enacted Social Security Act Amend-. which provide payment for hospital inpatient and outpatient to persons 65 years of age and older, prescribe that hospitals. I by the Joint Commission are eligible to participate in the program, provided they also furnish adequate evidence of effective utilization review plan. 7 U.S. Department of Health, Education, and Welfare, Public Health Service, Division of Hospital and = ities. Hill-Burton State Plan Data: A National Summary as of Jan. 1, 1965. P115 Publica- Nn 1-2 (revised 1965). of Rehabilitation Centers. 1964 Directory of Rehabilitation Facilities, Evanston, Ill., May-- - == rtment of Health, Education, and Welfare, Public Health Service, Division of Public Health Medical Groups in the United States 1959. PHS publication No. 1063, 1963. PAGENO="0440" ~432 STATE AND LOCAL PUBLIC FACILITY NEEDS Nearly all States have established licensure requirements for operation of general hospitals. These requirements extend to the out- patient as well as inpatient service, including rehabilitation facilities, diagnostic and treatment centers, and other clinics. No single accreditation or approval body has been organized for certification of rehabilitation centers. However, specific services withii~ a center's program may be certified by an accrediting group. For example, the American Board of Examiners in Speech Pathology and Audiology, and the American Board for Certification in Orthotics and Prosthetics, Inc., have established standards and certify - in their respective areas.'° Information on quality control of group practice clinics is limited. A 1959 survey of such clinics indicated that "approximately two-thirds ~of the medical groups surveyed reported having some formal or methods for maintaining quality of care. These methods varied ~from minimum standards for staff membership to professional super- vision by a medical director * * * to periodic medical audits by an ~utside review board." Some groups will accept only board-certified specialists." No national accrediting organization has as yet been ~established for such groups. 2. EXISTING CAPITAL PLANT IN THE UNITED STATES (a) and (b). Number of Facilities and Distribution by States Of the 6,665 hospitals of all types (including Federal) reporting the American Hospital Association on facilities and services in a total of 2,950, or 44 percent, reported having an "organized" patient department. An "organized" department is defined Joint Commission on Accreditation of Hospitals as one organi sections (clinics), the number of which depends on the degree of partmentalization of the medical staff, available facilities, and needs of the community. Well over 2,500 additional hospita Teport the provision of outpatient services do not report the o *of "organized" departments. The maintenance of emergency ments was reported by 5,565 hospitals, or 83.5 percent. of the reporting to the American Hospital Association in 1964. No rare available on the distribution of hospital outpatient or en departments by State. At the start of 1965, State agencies which administer .the Burton program reported a total of 1,194 primary public health ters, 1,050 auxiliary public health facilities, 4,513 diagnostic ~ment centers, and 1,339 rehabilitation facilities. In 1959, the year for which data are available, a total of 1,623 medical ~were in operation throughout the country. The distribution of various types of facilities by State is shown in table 1. 10 Association of Rehabilitation Centers, op. cit. 11 U~S. Department of Health, Education, and Welfare, Public Health Service, Division of I ~Methods. Medical Groups in the United States, 1959. PHS publication No. 1063, 1963. PAGENO="0441" `.-"-1 `~-~ J_ CD o_ ~ ~ CD ~D ~ ~* cr~ ~ ~D CD ~ ~ ~d~O CD ~ ~2 ~ ,CD ~ ~* ~ 2~ ~ °~2~ a~'~ ~ -~ ~CD ~ ~-~CD ~-t- ~. ~ ~-~CD ~ ~ ~* CD~CD ~~0zi~ - ~ ~ ř~a p ~ ~ CDCD~ ~ ~:~CD CD (1) - Ľ.d ~ ~ ~CD CD CD ~CDCD ~ CDCD -- p 0 ~-4~ ~ _.LOC~ 0 ~ ~ O~D~jŕ C, ft ~ li ~ -~ C~1 ~ 0 ~ 1-4 ~ `-4 C~ LTJ ~ C,-, * * a PAGENO="0442" 434 STATE AND LOCAL PtTBLIC FACILITY NEEDS At that time, slightly more than half of 1,623 medical groups were located in metropolitan counties containing at least one city ~50,0OO or more residents. Less than one-sixth were in counties jacent to metropolitan counties. The remaining one-third were counties considered for the study as "isolated". The group p1: however, were more heavily concentrated in metropolitan than were the group clinics. Nearly two-thirds of the group p1 were in metropolitan counties, compared with about half of the clinics. (d) Age of Facilities Specific information is not available on the age distribution types of outpatient facilities. Many of the outpatient services distinguished from facilities) date from the establishment of the general hospitals in this country. The Philadelphia Dispen example, opened its doors in 1786. The impetus to the dev of present-day rehabilitation facilities came from efforts to reb disabled members of the Armed Forces during World War II. The first public health center was established in Philadelphia 1912. Since that time their development has been uneven, w.~ ulation to their growth given in fairly recent years through Burton construction program. In 1948, only 468 public health were in existence. Since that time the number has increased but steadily to a total of 1,194. Limited data on medical practice clinics indicate that reporting year of establishment, 258 were organized prior to 51 during 1940-44; 263 during 1945-49; 251 during 1950-54 ai~ 1955 or later. (e) Ownership As reported by the American Hospital Association, the f indicates the distribution by ownership of organized outpatient partments and emergency units in operation in 1964: TABLE 2.-Organized outpatient departments and emergency departments, ownership, 1964 Organized outpatient Emergency departments Ownership departments Number Percent Number Percent Total reporting 2,950 100. 0 5, 565 State or local government Voluntary nonprofit Proprietary Federal Government 812 1,425 304 409 27. 5 48.3 10.3 13.9 1,475 3,086 649 355 Source: American Hospital Association. Hospitals, "Guide Issue," pt. II, Aug. 1, 1965. Of 390 rehabilitation facilities reporting on ownership to the Asso- -ciation of Rehabilitation Centers, Inc., 84 or 21.5 percent were under :governmental ownership, 301 or 77.2 percent were under vc nonprofit auspices, and 5 or 1.3 percent were proprietary. Further details are shown in table 3. PAGENO="0443" STATE AND LOCAL PUBLIC FACILITY NEEDS 435 TABLE 3.-Rehabilitation facilities, by type of ownership, 1963 Ownership Number of facilities reporting Percent Total 390 100.0 Governmental Federal State City or county District 84 21.5 1.3 13.1 6.9 .2 51 27 1 Voluntary nonprofit~ Church or church relate& Other 301 77.2 31 270 7. 9 69.3 Proprietary Corporation Partnership Individual 1.3 3 1 1 .8 .2 .3 Source: Association of Rehabilitation Centers, 1964 Directory of Rehabilitation Facilities, May-June 1964. Data by ownership are not available for other types of clinics or other outpatient facilities. (1) Current Value Information is not available on the current value of any of the categories of clinics and other outpatient facilities, nor are any data available by which even the most gross estimate can be made. B. COSTS AND USER CHARGES 1. CONSTRUCTION COSTS AND OPERATING COSTS The following data are available regarding construction and oper-. ating costs. (a) Construction Costs The following information on construction costs is based on records available through the Hill-Burton program for projects constructed under that program. In all instances, the costs per square foot include the costs of fixed equipment. Average cost data are not available for movable equipment since the use of such equipment varies widely from facility to facility, depending upon the program of service. TABLE 4.-Construction costs per square foot Cost of construction Type of facility: and fixed Diagnostic or treatment center: equipment Directly attached to hospital $32. 00 Free-standing 25. 00 Public health center 22. 50 Rehabilitation facility 21. 00 Source: Unpublished data from Division of Hospital and Medical Facilities, Public Health Service. PAGENO="0444" 436 STATE AND LOCAL PUBLIC FACILITY NEEDS (b) Operating Costs Estimates of operating costs of clinics and other outpatient facilities are available only for rehabilitation centers. For 296 rehabilitation facilities reporting to the Association of Rehabilitation Centers in 1963, income in that year totaled $96.8 million or an average of $327,000 per center. Total expense for the same year reached $101.7 mil1ion-~an average of $344,000 per center. In terms of patients served, annual expense per patient averaged about $458. 2. USER CHARGES (a) and (b)-A thorough search of all available literature has not provided any type of information on user charges for service in clinics or other outpatient facilities. (c).-Data are not available on the extent to which costs of clinics and other outpatient facilities are met out of general tax resources and general obligation borrowings of State and local government units. * C. TRENDS OF CAPITAL OUTLAYS 1. ANNUAL CAPITAL OUTLAY Other than for the types of facilities receiving construction aid under the Hill-Burton program (public health centers, diagnostic or treatment centers, and rehabilitation facilities) data are not available `on the dollar volume of construction for clinics and other outpatient facilities. The original Hill-Burton Act (Public Law 79-725) provided Federal assistance to States and local communities for construction of public health, centers. While separate funds are not designated for the construction of such centers, but are included in the overall authoriza.. tion for hospital construction, the amount of $65.9 mfflion out of a~ total of $2.4 billion has been used for public health center construction from 1948 to June 30, 1965. As of June 1965, Hill-Burton funds had assisted in the construction of 1,045 public health centers with an additional 116 built in com- bination with general hospitals; 726 diagnostic or treatment centers; and 338 rehabilitation facilities. Table 5 shows the number of such projects approved each year and the Federal and State or local funds involved. A more detailed breakdown of the State or local contribu- tion is not available. 2. SOURCES OF FINANCING CAPITAL OUTLAYS Although each applicant for Hill-Burton aid must submit a financial statement including data on the applicant's financial resources, the information relating to public health centers, diagnostic or treatment centers, and rehabilitation facilities has not been summarized. The work involved prohibits undertaking such a summarization at this time. Even were the data readily available, they would represent a very small portion of the capital outlay picture for all clinics and other outpatient facilities. PAGENO="0445" STATE AND LOCAL PUBLIC FACILITY NEEDS 437 TABLE 5.---Public health centers, diagnostic or treatment centers, and rehabilitation facilities approved under the Hill-Burton program, 1948-65 [Dollars in millions] PUBLIC HEALTH CENTERS Fiscal year Number of projects Project costs Total Federal share 1 State and local share Total 1948-55 1956 . 1957 1958 . 1959 . 1960 . 1961 . 1952 1963 . 1964 1965 . 2 1,045 $192. 8 $65. 9 $127.0 464 73 69 64 73 74 42 43 52 48 43 57. 6 13.9 14. 5 16. 6 18.1 15.9 7.2 7.2 9.2 12.2 20. 5 19. 3 5.1 5. 4 6.2 5.4 4.8 2.7 2.9 4.1 5.3 4. 7 38.3 8.8 9.0 10.4 12.7 [1.1 4.5 4.3 5.1 6.9 15. 8 DIAGNOSTIC OR TREATMENT CENTERS Total 726 $316. 9 $110. 5 $206.3 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1 79 55 65 61 86 62 67 75 87 88 .3 38.5 16. 5 25.2 22. 1 18.5 23.2 27.2 44.0 45.8 55.7 .1 11.1 5. 4 9. 3 7. 4 6.8 7.9 10.3 16.6 16.4 19.3 .2 27.3 11. 1 15. 9 14. 7 11.7 15.3 16.9 27.4 29.4 36.4 REHABILITATION FACILITIES Total 1955 1956 1957 1958 1959 1960 1961 1962 . 338 $217. 0 $73. 6 $143.3 43 19 20 32 41 35 43 39 32 34 35.0 11.1 10. 7 20. 6 20. 0 19.9 29.0 21.2 23.6 25.9 . 9.0 3.6 3. 6 7. 7 7.2 8.4 10.5 8.5 7.2 7.9 25.9 7.5 7. 1 12. 9 12. 8 11.5 18.5 12.7 16.5 18.0 1963 1964 1965 1 According to statute, annual Hill-Burton appropriations have a 2-year availability. 2 Excludes 116 public health centers built in combination with general hospitals and not reported as separate projects. Source: Unpublished data from Division of Hospital and Medical Facilities, Public Health Service. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS CAPITAL REQUIREMENTS The capital requirements for clinics and ether outpatient facilities (limited to rehabilitation facilities and diagnostic or treatment centers) for the decade 1966-75 are: Millions Backlog of unmet need as of June 30, 1965 $1, 584. 0 Total additional requirements through June 30, 1975 1, 652. 1 Total estimated need 3, 236. 1 PAGENO="0446" 438 STATE AND LOCAL PUBLIC FACILITY NEEDS (a) Estimates of capital needs have been limited to rehabilitation facilities and diagnostic or treatment centers (frequently the organized outpatient departments of hospitals). No information is available on capital needs or outlays for other types of outpatient facilities, including private group clinics. Hill-Burton State plans for fiscal year 1966 provided the basic data for developing current capital needs for rehabilitation facilities and diagnostic or treatment centers. From these plans, national totals were derived for (1) total existing facilities, (2) total facilities needed, (3) facilities to be modernized, and (4) facilities needed over and above the present supply. Dollar estimates were obtained by applying an average cost of $700,000 to the national estimates for rehabilitation facilities and $550,000 to the national estimates for diagnostic or treatment centers. Projections of the costs of modernization and needed additional rehabilitation facilities and diagnostic or treatment centers were based on the following assumptions or factors: (1) Population growth, (2) a 3-percent obsolescence rate per year, or an assumption of a 33-year "life," (3) an annual increase in the number of facilities at the average rate which has obtained over the past 8 years, (4) maintenance of the current estimated need in terms of facilities per million population, and (5) maintenance of the estimated current volume of nonfederally aided construction. (b) The estimated capital needs (in millions) for rehabilitation facilities and diagnostic or treatment centers, 1966-75, are as follows: Total Modernization Additional capacity Backlog as of June 30, 1965 Annual increments: 1966 $1, 584. 0 139.3 143. 3 148.0 153.7 160.7 167.1 174.5 181.4 188.3 195.8 $864. 0 75.6 79. 0 82.5 86.5 90.5 94.5 99.0 103.6 108.1 113.2 $720. 11 63.7 64.3 65.5 67.2 70.2 72.6 75.5 77.8 80.2 82.6 1967 1968 1969 1970 1971 1972 1973 .1974 1975 Total, backlog plus increments 3,236. 1 1,796. 5 1,439. 6 (c) It is not feasible to estimate the proportions of these needs by size of community. (d) The proportion of the estimated capital outlays to be expended by non-Federal entities is 100 percent. There is no feasible methodl f or breaking this down among the non-Federal entities. PAGENO="0447" CHAPTER 24 Long-Term Care Facilities* A. NATURE AND CoMPosITIoN The past three decades have seen the emergence of a new type of ulity-the nursing home. Prior to the 1930's, only a handful so-called nursing homes were in existence. In succeeding years, their growth accelerated rapidly, brought about by a combi- of medical, social, and economic changes in our society. The impetus was given by the enactment of the Social Security 35, which made public assistance funds available to the needy except inmates of public institutions. As a result, proprietary and nursing homes began to flourish. In 1939, there were Lately 1,200 nursing, convalescent, and rest homes throughout = Lry having a bed capacity of about 25,000. Meanwhile, medical advances were extending life expectancy to a high, resulting in a rapidly growing older population. Acute~ diseases were giving way to degenerative, long-term diseases ~ causes of illness and death. Patterns of housing and living changing, and increased employment opportunities for women reducing the number available at home to care for older family 1 At the same time, the general attitude concerning insti- care was changing considerably. Gradually, the nursing was recognized as having an important role in the total medical picture. In 1954, the Congress amended the Hospital Survey and Construc-. (Hill-Burton) Act to emphasize the need for long-term care Funds were specifically authorized to assist in the construc- of public and voluntary nonprofit skilled nursing homes, chronic hospitals. At that time there were just over 265,000 long-term care beds including beds in chronic disease hospitals and skilled homes. With the advent of "medicare," national concern over nursing or "extended care facilities"-their availability, kinds and of service provided, and future prospects-has reached a new Today, some 13,500 nursing homes with a capacity of 550,000 icensed to operate in the 50 States, District of Columbia, and Rico.' In addition, there are approximately 70,000 beds for Tn chronic disease hospitals or in long-term units of general Across the country, the number of long-term care beds *Prepared by the Division of Hospital and Medical Facilities, Public Health Department of Health, Education, and Welfare, with minor editing by staff. I Unpublished data from Hill-Burton State plans submitted to the Division of Hospital and Medical bc Health Service; and from the American Nursing Home Association. 439 PAGENO="0448" 440 STATE AND LOCAL PUBLIC FACILITY NEEDS (skified nursing homes and chronic disease facilities) averages 34.6 each l,00Qpersons 65 years of age and older. 1. DESCRIPTION OF FACILITIES Over the years, the term "nursing home" has been applied to `wide variety of nonhospital facilities bearing varying names offering a wide range in service. Among these are nursing `nursing home units of hospitals, convalescent and rest homes, `for the aged, boarding homes, and county homes. Services :ranged from a purely domiciliary type of care to full-time prof - nursing service with physical and recreational therapy, ps~ care and the services of other medical specialists. Gradually, however, the definition of a nursing home has tightened to generally exclude the purely domiciliary-type ~tnd to represent one which serves convalescing or other patie are neither acutely ifi nor in need of hospital care, but who do skified nursing care beyond personal services. The Hifi-Bur construes a facility for long-term care (including chronic hospitals and skilled nursing homes) as one which provides nity service for inpatient care for convalescent or chronic patients who require skilled nursing care and related services." 2 (a) Physical Oharacteri~tics Until rather recently, a nursing home generally could be c as a large, multistoried house, usually in an older part of the `munity, which had been converted to a home for elderly persons were either convalescing or chronically ill. Too frequently, space would be cramped, hallways narrow, elevators lacking, -rooms few, `and therapy aid nonexistent. Staff might be limited -the nursing home owner-frequently an elderly woman--and -~ nursing aid or housekeeper-attendant. Many would have `practical nurses as their highest nursing-skill level. Homes a this description still exist today in hundreds of communities out the country. A new image of the nursing home has been emerging in rece however. While they approximate a homelike atmosphere to extent possible, they no longer serve merely as substitutes f dwellings but are developing as genuine medical institutions. of the new facilities are built . as wings on' community hospitals as separate units on' hospital grounds. Most a-re free-standing independently' operated. As. a general rule they are one story, attractive, contemporary design, and planned to serve the needs of the nursing home patient. `The nursing units, a patient areas may resemble those of a. community general Corridors are wide and bright and permit the passage of whe ` Centrally located recreation `rooms and dining rooms are Patient rooms are large enough to allow for movement of using wheel chairs, walkers, canes, or crutche,s, with fu , designed to accommodate the wheel chair patient. Privacy 2 U.S. Department of Health, Education, and Welfare, Public Health Service, Division of Medical Facilities. Public Health Service Regulations-Part 53-Pertaining to the Construct vrnization of Hospital and Medical Facilities, Dec. 29, 1964, P. 2. PAGENO="0449" STATE AND LOCAL PUBLIC FACILITY NEEDS 441 1 bedrooms is provided by screens or curtains. Nurses' systems are installed in each room. Bath and toilet facilities miently located, and in some facilities lavatories are provided each bedroom to encourage self-care. Each nursing unit has a station, and a separate consultation and treatment room is for use by physicians. Physical therapy equipment- in the treatment of certain long-term conditions and disa- is frequently available. Construction of this new type of tome is going on at an increasing pace throughout the country. In general, nursing homes have tended to be small, averaging about beds in 1961 in all nongovernmental facilities.3 (Governmental * -Federal, State, and local-are much larger, on the average, homes under proprietary or private nonprofit auspices. A conducted during April-June 1963, showed that government having nursing care as the primary type of service had an of 125 beds.)4 Homes constructed during recent years are somewhat larger than older facilities. An inventory con- in 1954 gave the average size of nongovernmental homes as beds. A 1965 survey by the American Nursing Home Association that nursing homes how have an average size of about 40 = Services Rendered To appraise the services provided in nursing home facilities, it is it to have some knowledge of the people they serve. A estimate indicates that there are approximately 500,000 in nursing homes at the present time. The very elderly iate; a number of studies have indicated that the average (median) is about 80 years. While cardiovascular diseases e the largest single cause of disability among nursing home senility and fractures (especially of the hip) are among the most frequent causes. Although various studies differ as to relative number of nursing home patients who are ambulatory, or confused, all agree that a substantial proportion (at least )f five) can walk unassisted; from 10 to 20 percent are bedfast; perhaps half are confused part or most of the time. To prevent the mental and physical deterioration to which so nursing home patients are prone requires continuing care and on. It would be expected that, above all, nursing care constitute the primary service. In terms of personnel to nursing care, many homes still have licensed practical nurses their highest nursing-skill level. A 1961 inventory conducted by Public Health Service indicated that among nearly 10,000 non- skilled nursing homes 39 percent had full-time licensed prac- nurses only; 29 percent had full-time registered professional 18 percent had both full-time professional nurses and licensed nurses; but 13 percent had neither full-time registered pro- nor licensed practical nurses. Many of the homes, however, have the part-time services of registered professional nurses and `U.S. Department of Health, Education, and Welfare, Public Health Service, Division of Hospital and lities. Characteristics of Nursing Homes and Related Facilities: Report ef a 1961 Nationwide PHS Publication No. 930-1-5, 1963, P. 14. 4 U.S. Department of Health, Educstion, and Welfare. Public Health Service. National Center for tics, Characteristics of Residents in Institutions for the Aged and Chronically Ill, Series 12, No.2, 65. U.S. Government Printing Office, Washington, D.C., table A, p. 3. `American Nursing Home Association. News release, Washington, D.C., Dec. 29, 1965; 70-132-66-vol. 1-29 PAGENO="0450" 442 STATE AND `LOCAL PUBLIC: FACILITY NEEDS the great majority probably have around-the-clock coverage patients at least by nursing aids. Aside from nurses, however, the full-time employment of professional personnel is the unusual rather than the usual Only the newer and larger homes are likely to provide the s physical, occupational, and speech therapists, recreational `and in relatively rare instances the full-time services of p1 Indications are, however, that concern with active, restorative is growing and that more and more homes are providing some physical and occupational therapy. (c) Standards of Performance Ideally, nursing homes should be planned according to co: needs. Statistics and other requirements relating directly to individual community are needed before planning can be Surveys of community needs and existing resources provide the data for determining the beds required and services to be State Hill-Burton agencies are currently determining the need I long-term care facilities in communities throughout their taking into consideration present utilization, a desirable oc and the population to be served. Preliminary indications are from 45 to 50 long-term care beds are required for each l,OO~ of 65 years of age and older. The ratios may vary widely community to community, of course, dep'ending on the existence community health programs and the availability of other resources. Currently there are about 35 beds per 1,000 aged more than one-third of which require modernization or rep because of fire and safety hazards or functional deficiencies in patient or service areas. Minimum standards for evaluating the structural safety and ciency of existing nursing homes were recently established by Public Health Service for use by Hill-Burton State agencies. relate to- A. Fire resistiveness of construction; B. Safety with regard to such items as electrical and cal services, exit facilities, fire alarm system, interior vertical shafts, smoke barriers; C. Patient areas, including room size, width of nurses' stations, windows, and access to corridors; and D. Service departments, including ventilation, eq and sanitation in the dietary and laundry areas. For new construction under the Hill-Burton program, `homes must meet certain requirements established by r No nursing unit within a home, fOr example, may have more than beds. Although four beds within a room are permitted, it : mended that patient rooms contain no more than two beds. bed rooms must have a minimum of 80 square feet per bed, ai bed rooms must have at least 100 square feet. Each patiei must be provided with a lavatory. Other requirements or mendations relate to service facilities in each nursing unit, such nurses' station, utility room, treatment room, and pantry; areas, recreation areas, and solaria; and departments for occupational and speech therapy, examination and treatment and administration areas. PAGENO="0451" STATE AND LOCAL PUBLIC FACILITY NEEDS 443 (d) Qualitative Standards of Performance All States and territories, except the Virgin Islands, have established requirements for the operation of nursing homes. The responsibility, however, is assigned to several types of agen- cies. In 46 States and territories the licensing agency is the health department, in four States the welfare department, and in the re- States it is in other agencies. Licensure requirements are from uniform and are often the minimum standards that wffl patient's safety. Because of the shortage of nursing homes, ial licensing is not unusual for homes unable to meet upgraded standards. In some States, certain homes are exempt from , such as those sponsored by church or fraternal organizations. the 1961 inventory by the Public Health Service, about half the reported one or more homes which were operating without fully licensed. At that time, beds in these homes accounted 5 percent (16,500) Of the total number of skified nursing home the country. The need for minimal standards which would assure quality care in homes has been recognized by various organizations for many A number of accreditation programs have been initiated by * nursing home associations and various national groups. Just however, an accreditation program has been instituted by Joint Commission on Accreditation of Hospitals. The program 3d to "extended care facilities," defined in brief as institutions g accommodations and nursing and related health care to or more persons (not related to the owner or administrator) for hours or more, but not primarily for care and treatment of the 11. The standards as established by the joint commission are based on the principle the patient must be under a continuing planned program of care, focusing al needs of the patient and rendered in a physical and social environment ides for the safety of the patient and the achievement and maintenance mum level of restoration. Substantial compliance with all the standards ry for accreditation.° The Social Security Administration has recently issued the condi- tions of participation (constituting qualitative standards to be met) extended care facilities in the health insurance program for the Included in the conditions of participation are standards to (1) compliance with State and local laws, (2) administrative nent, (3) patient care policies, (4) physician services, (5) nurs- ces, (6) dietary services, (7) restorative services, (8) pharma- services, (9) diagnostic services, (10) dental services, (11) ~vices, (12) patient services, (13) clinical records, (14) transfer nt, (15) physical environment, (16) housekeeping services, (17) disaster plan, and (18) utilization review plan. 2. EXISTING CAPITAL PLANT IN THE UNITED STATES (a) and (b) Number of Facilities and Distribution by States As of January 1, 1965, Hill-Burton State agencies reported a total about 13,900 long-term care facilities in the United States and 3S. Included in the total were some 13,000 skilled nursing `Joint commission on Accreditation of Hospitals. Standards for Accreditation of Extended Care Facilities. Attached asapp.B. PAGENO="0452" 444 STATE AND LOCAL PUBLIC FACILITY NEEDS homes and chronic disease hospital facilities and nearly 900 long-term care units attached to other hospitals. Altogether, nearly beds were reported-about 550,000 in skilled nursing homes and in chronic disease hospitals or hospital units. Table 1 shows distribution of long-term care facilities and beds among the States. TABLE 1.-Long-term care facilities, by State, as of Jan. 1, 1965 1 Facilities State Chronic dis- Total beds ease hospitals Other and nursing homes 2 United States and territories 12, 997 881 12,983 878 United States Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Guam Puerto Rico Virgin Islands 106 3 2 3 53 8 155 3 1,024 104 148 22 253 4 12 70 4 287 13 168 6 21 6 56 4 744 32 426 26 466 34 49 25 100 6 172 21 195 3 202 2 775 11 522 30 362 52 58 3 416 37 44 22 121 22 9 15 113 5 270 4 36 10 824 57 65 16 36 8 1,024 30 476 15 192 20 492 36 120 1 82 15 82 1 178 14 685 8 57 2 77 3 174 15 364 21 55 14 548 53 17 9 14 3 1 Represents chronic disease and skilled nursing home beds. 2 Chronic disease hospitals and skilled nursing homes. 1 Represents units of 10 or more long-term care beds in general, mental, or turbeculosis hospitals. ~ourot; US Department of Health, Education, and Welfare, Public Health Service, Divish and Medical Facilities. Hill-Burten State Plan Data: A National Summary as ef Jan. 1, 1965, I tion No. 930-F-2, March 1966. PAGENO="0453" STATE AND LOCAL PUBLIC FACILITY NEEDS 445 (c) Rural- Urban Distribution Although current data from all States are not available, the findings the 1961 Public Health Service inventory indicated that States half or more of their people living in rural areas have relatively ~l1ed nursing care beds available than States with the majority their population in urban areas. TABLE 2.-Skilled nursing care beds per 1,000 persons aged 65 and over Percent rural population Number of States' Beds per 1,000 population 18 11 14 9 11.7 23.9 23.3 22.4 `Excludes Guam and Puerto Rico. Source: U.S. Department of Health, Education, and Welfare, Public Health Service, Division of Medical Facilities. Characteristics of Nursing Homes and Related Facilities: Report of a 1961 nventory. PHS Publication No. 930-F-I, 1963, p. 12. Interestingly, the skilled nursing care bed-population ratio was no or metropolitan areas than the overall average for predomi- urban States. A total of 227,723 skilled nursing care beds reported for facilities located in the standard metropolitan I areas. These metropolitan areas have 23.1 beds per 1,000 aged 65 and over-about the same as the average statewide the 34 States with more than half of their population in urban In the recently conducted survey of the American Nursing Home on, responses were received from 20 States and the District - [bia on nursing home construction within the past 5 years, by community. Survey results showed the following: TABLE 3.-Nursing homes constructed during 1961-65, by size of community Size of community Nursing homes Homes Percent Total 2,965 100.0 146 4.9 999 834 28.1 9 410 13.8 9 761 25.7 415 14.0 399 13.5 Source: Unpublished data from the American Nursing Home Association. Aqe of Facilities Unfortunately, data are not available on the age distribution of existing nursing homes. Many, it is known, are converted former residences, undoubtedly built in the late 1800's or early In a recent survey conducted by the American Nursing Home on, the oldest home responding was built in 1879. A total 1,629 homes representing 35 percent of the association's member- PAGENO="0454" 446 STATE AND LOCAL PUBLIC FACILITY NEEDS ship responded to the survey questionnaire. Half of these reported that they had been built within the past 10 years. (e) Ownership All recent nursing home surveys have found that about 90 of the homes are under proprietary ownership. These homes nearly three-fourths of all skilled nursing home beds. Of the profit homes, about an equal number are owned by public church groups, and fraternal and other voluntary orgaf Among these, the public institutions (excluding Federal) have greatest number of beds, as shown in table 4. TABLE 4.-Ownership of skilled nursing homes Type of ownership Homes Be Number Percent NunTher Total reported 9, 582 100. 0 330, 981 Proprietary Public Church related Other voluntary nonprofit 8,297 432 438 415 86. 6 4. 5 4. 6 4.3 236, 845 40, 841 28,740 24, 555 Source: 1961 PUS Nationwide Inventory, p. 14 (see table 2). The ownership pattern found in the recent American Nursi Association survey closely resembled that shown by the 1961 Inventory. Neither survey included facilities owned and by the Federal Government. (f) Current Value Data are not available on the current value of existing homes. Unquestionably, any estimate would extend into the of dollars. An effort was made by the American Nursing Ho~- ciation to obtain such an estimate for those facilities constructi the period 1961-65. Only partial responses were obtained. If partial results could be assumed to represent the value of all constructed during the 5-year period, a value figure approaching billion is estimated. B. COSTS AND USER CHARGES 1. CONSTRUCTION COSTS AND OPERATING COSTS (a) Uonstruction Gosts Wide variations in methods of. construction and contractual cedures present difficulties in arriving at unit cost figures for homes. In some instances costs reported include purchase of movable equipment and furnishings, and architects' fees; in : such costs are excluded. Some owners participate directly in struction work without full contractual procedures. Others general contractual procedures, either negotiated or competitive. quality of materials and workmanship, type and method of Percent PAGENO="0455" STATE AND LOCAL PUBLIC FACILITY NEEDS 447 and price ranges in labor and materials in various localities are J influencing factors. Under the Hill-Burton program, applicants must perform actual ion work by the lump sum (fixed price) contract method. methods must be employed to obtain competitive bidding to awarding the construction contract. Also, applicants must certain minimum requirements for construction and equipment assure properly planned and well constructed facilities which can efficiently maintained and operated to furnish adequate services. Data on nursing home construction costs are compiled periodically the Division of Hospital and Medical Facilities, Public Health which administers the 1-Till-Burton program. Average unit figures for nursing home projects approved under the program out the upward trend in building costs over the past several Data are available only on a square footage and per bed basis not available on a per-person-served basis. TABLE 5.-IsTursing homes: New construction costs Year Building and Axed equip- ment average cost Per square foot Per bed $18.17 18.92 19.96 19.25 $8,476 9,421 10, 712 9,207 * * nths) Source: TJ.S. Department of Health, Education, and Welfare, Public Health Service, Division of Hospital S'acilities. Architectural, Engineering, and Equipment Branch. "Representative Gonst rue- (ill-Burton Hospitals and Related Health Facilities," January-April 1965, p. 1. Processed. A study of 40 nursing homes, conducted in 1961-62 by the Division ;al and Medical Facilities, Public Health Service, in coopera- with the American Nursing Home Association, provided limited on on construction costs. Of the 40 homes selected for 20 were proprietary in ownership and 20 were under nonprofit and built with Hill-Burton assistance. Construction costs - cult to analyze since precise information, particularly among Burton homes, was sometimes lacking and some owners par- in construction without full contractual procedures. More- there were wide differences among the homes in overall area per In the 20 homes built without Hill-Burton aid the total space urn a minimum of 147 square feet per bed to a maximum of D square feet per bed. The trend value of unit cost per bed these homes rose steadily over this range from $1,500 per bed about $4,500 per bed. At the median area of 236 square feet, the cost per bed approximated $3,125. Areas in homes receiving on assistance ranged 300 to 740 square feet per bed. In s, the unit cost per bed extended from $4,500 to about $14,000. the median area of 400 square feet per bed, the unit cost was per bed. PAGENO="0456" 448 STATE ~D LOCAL PUBLIC FACILITY NEEDS On a square footage basis, the median cost for the 20 homes Hill-Burton aid was $12.90 per square foot and for those such assistance, $15.27. When the total unit area was coix however, the unit costs per square foot among the homes showed a measure of agreement. (b) Operating Costs Operating cost data are available only from widely scatterec conducted usually by State or local groups. Such surveys ii wide spread in operating costs per patient day. A variety c account for this spread, including size of the facility, staffing, prehensiveness of care provided and economic status of community. A sample survey of 133 homes was conducted in California late 1963 by the California Association of Nursing Homes, Sani Rest Homes, & Homes for the Aged.7 The total operating cost of 133 homes averaged $10.81 per patient day. The range reported wide, however, from $6.98 per day to $19.91. Wage costs $6.08 per patient day-56.3 percent of the total costs. Food per day accounted for another $0.94, or 8.7 percent of all Again, the ranges within the averages were wide. In Iffinois in 1964 a survey undertaken at the request of th Nursing Home Association, showed similar wide variations in ing costs among the 26 homes studied.8 Total operating cost from an average of $5.24 per patient day in counties with a low of living index to $12.34 per day in counties with a high cost index. As expected, salaries comprised the major portion of cost-55 percent in low economic areas and 50 percent in the - economic areas. Food costs ranged from a low of $0.48 to a high $1.15 per patient day and accounted, on the average, for just 10 percent of the total per diem costs. Plant operation and mince costs reported by the 26 homes ranged from 6.3 percen~ operating costs in homes in the high economic areas to 9.3 p low economic areas. Housekeeping and laundry and linen cc bined generally accounted for 6 to 9 percent of total costs. A nationwide survey conducted in 1965 by staff of the ~ Professional Nnrsing Home obtained operating cost data which cated similar wide ranges in average daily operating costs.9 proprietary homes of 100 beds or more, operating costs per averaged $8.86 compared with $7.76 in homes with fewer than beds. For nonprofit homes the average ranged from $8.03 per in facilities with fewer than 50 to $7.24 per day in facilities with to 99 beds. Nonprofit homes having 100 beds or more reported average daily operating cost of $7.84. No data were reported on breakdown of operating costs such as food, salaries, and math 7 california Association of Nursing Homes, Sanitariums, Rest Homes & Homes for the Aged, Inc. of Patient Care in California Nursing and Convalescent Homes. Sacramento, Calif., June 1964, 50 pp. 8 DeBruyn, Joseph P., IllinoisNursing Homes report on costs. Nursing Home Administratn December 1965, pp. 52-57. Planning guide. Professional Nursing Home, December 1965, p. 23. PAGENO="0457" STATE AND LOCAL PUBLIC FACILITY NEEDS 449 The fragmentary data available as to the wage and salary com- ponent of costs, there is no breakdown between custodial and other personnel. 2. USER CHARGES Only limited information is available on current charges to patients for nursing-home care. No data are available on the extent to which such charges cover maintenance and operation and other expenses, such as debt service payments on indebtedness incurred to finance capital costs of the facilities. The recent survey of the membership of the American Nursing Home Association which brought responses from 1,629 homes-35 percent of the total membership-provides the most current data on charges. As of late 1965, patients in the report- ing homes were distributed by monthly charge rate as follows: TABLE 6.-Distribution of patients by basic ?floflthly charges for room, board, and routine nursing services Monthly rate Patients Number Percent Total Lessthan $100 $100 to $149 $150 to $199 $200 to $249 $250to $299 $300to $349 $35 andover 66, 589 100 906 7, 325 16, 806 17, 170 11,145 7,585 5,652 1 11 25 26 17 11 9 Source: Unpublished data from the American Nursing Home Association. The survey of institutions for the aged and chronically ill, conducted by the National Center for Health Statistics during April-June 1963, provided information on monthly charges for care of residents by proprietary and nonprofit nursing care homes.1° The average most frequent charge for proprietary nursing care homes was $211 per month; for nonprofit nursing care homes, $176 per month. As pointed out in the survey report, "the difference between these esti- mated charges do not necessarily indicate either the amount of profit being made by homes under different types of ownership or the cost of providing care. Possibly the charges made by nonprofit homes-are lower than those made by proprietary homes because they have sources of income other than the individuals being served." 10 U.s. Department of Health, Education, and Welfare, Public Health Service, National Center for Health Statistics. Institutions for the Aged and Chronically Ill: United States April-June 1963, Series 12, No. 1, July 1965, U.S. Government Printing Office, Washington, D.C., p. 15. PAGENO="0458" 450 STATE AND LOCAL PUBLIC FACILITY NEEDS With regard to sources of patient funds the following summarizes the results of the ANITA survey: TABLE 7.-Distribution of patients by sources of funds for payment of nursing home care Percent of patients Total 100 Source of funds: Personal or family funds 37 Medical assistance for aged 27 Other public assistance 17 Social security 15 Veterans' Administration 2 Blue Cross (1) Commercial insurance (1) Other z 1 Less than 1 percent. Source: Unpublished data from the American NursIng Home Association. C. TREND OF CAPITAL OUTLAYS A large gap exists in present-day information on capital outlays for nursing homes. Other than for facilities receiving Federal aid for construction, no data are available on the presumably large dollar volume of work which has been going on in this field. Federal assistance in nursing home construction is provided prin-~ cipally through three agencies-the Public Health Service (Hifi- Burton program), the Federal Housing Administration, and the Small Business Administration. Hill-Burton program.-In August 1946, Congress passed the Hospital Survey and Construction Act, establishing what is generally known as the Hill-Burton program. Federal participation in approved projects may range from one-third to two-thirds of the total costs of constructing and equipping the project. In 1954 the act was amended to authorize funds specifically for the construction of public and voluntary nonprofit nursing homes and chronic disease hospitals. In 1964 the chronic disease and nursing home categories were combined into a single category designated as "long-term care." By June 30, 1965, Hill-Burton funds had provided a total of 50,308 long-term care beds (chronic disease and nursing homes) either in new facilities or as additions to existing facilities. The total cost of these projects amounted to nearly $679 million with the Federal contribution amounting to more than $225 mfflion and the State and local share totaling $454 mfflion. The following table shows the dollar volume of projects approved each year since 1955: PAGENO="0459" - o I I 0 _______ _________ -- - -- - -~3 0 z 0 ~ ____________ ~ _______ 10 - ______ _________ - 10 Z 0 ~ ~ - ____________ - ____________ - ~I ; I 01010* ~II-~0101 01 _____ - _____ - _____ ~4~J ~ CI 0~~CI0~10C) c~0'0~-~t0 Q~001C1I00101 PAGENO="0460" 452 STATE AND LOCAL PUBLIC FACILITY NEEDS `No breakdown of the sources of funds comprising the State and Jocal share of project costs is available. Although a financial statement, required to be submitted by each applicant for Hill-Burton aid, pro- `vides data on the applicant's financial resources, this information has not been summarized. To prepare such a summary is a time-consum- ing project of such proportions that it has not been undertaken. However, a study has been made of the extent to which construction funds for nursing homes were obtained through loans identifiable on the project application as mortgage loans. Of 114 voluntary non- profit nursing home projects approved during the years 1963 through 1965, a total of 61, or 54 percent, indicated mortgage loans as one means of financing their share of the project construction costs. Thirty of these projects were for completely new homes; the others were for additions to existing homes or for nursing home units of hospitals. Not all of the project sponsors reported details of their mortgage arrangements. Of those reporting the majority (58 per- cent) obtained their loans through banks or trust companies, although some obtained the loans through mortgage brokers or savings and loan associations. The loans ranged in amount from $22,000 to $1,250,000 and aver- aged $457,000 over the 3-year period. Not all of the sponsors re- ported the interest rate paid or the maturity period of the loan. those reporting, the loans were obtained for an average of 16 years with some, 23 percent, having loans of less than 10 years and a few, 10 percent, having loans with a maturity of 25 years. Intere - averaged (unweighted) 5.61 percent, although one sponsor reported that a loan had been obtained at a rate as low as 4 percent. Federal Housing Administration.-Mort gage insurance for the con- struction or remodeling of proprietary or private nonprofit nursing homes is made available through the Federal Housing Administration, an agency of the Department of Housing and Urban Development. Purchase of land and cost of site improvement and of certain non- residential facilities such as recreational and social facilities, plus built-in fixtures and equipment, may be included in the mortgage. HOmes obtaining this mortgage insurance must have a capacity of at least 20 beds and must present a certificate of need for the home from the State Hill-Burton agency. Through December 31, 1965, 364 nursing home projects for $213.4 million were insured by FHA to provide 33,159 beds. Small Business Administration.-Under a program inaugurated in August 1956, the Small Business Administration makes commercial loans available to construct, expand, improve, or operate proprietary nursing homes whose dollar volume of receipts is not more than $1 million annually. The amount of the loan is limited by statute to $350,000 and may be either a direct loan or a participation loan jointly with SBA banks and other private lending institutions. A certificate of need for the facility must be obtained from the State Hifi-Burton agency before the loan can be processed. As of December 31, 1965, a total of 506 applications had been approved by SBA for loans to sanatoria and convalescent rest homes. The cumulative amount of the loans totaled $36,763,000. PAGENO="0461" 453 STATE AND LOCAL PUBLIC FACILITY NEEDS D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS 1. CAPITAL REQUIREMENTS The capital requirements for long-term care facilities for the decade 1966-75 are: Millions Backlog of unmet needs as of June 30, 1965 $3, 186. 3 Total additional requirements through June 30, 1975 3, 044. 0 Total estimated need 6, 230. 3 (a) Hill-Burton State plans for fiscal year 1966 provided the basic terms of long-term care beds-for developing estimates of capital needs for long-term care facilities. From these plans, totals were derived for (1) total existing beds, (2) total needed, (3) beds to be modernized, and (4) beds needed over above the present supply. Dollar estimates were obtained by ~ç an average cost of $10,000 per bed to the national estimates beds to be modernized and additional beds needed. Experience the Hill-Burton program has indicated that, on a cost-per-bed there are relatively minor differences between the cost of new *tion and the costs of modernizing obsolete facilities. Projections of the costs of modernization and needed additional n care beds were based on the following assumptions and (1) population growth, (2) a 3-percent obsolescence rate per or an assumption of a 33-year "life," (3) an annual increase in capacity at the average rate which has obtained over the past rears with a gradual lowering of the rate toward the end of the (4) maintenance of the current estimated needs for beds in of beds per 1,000 population, and (5) maintenance of the esti- current volume of nonfederally aided construction for the years of the decade with a gradual "leveling off," thereafter. (b) The estimated capital needs (in millions) for long-term care are as follows: Total Modernization Additional capacity June 30, 1965 $3, 186.3 $1, 882. 6 $1,303. 7 ments: 1966 227. 0 125. 0 102. 0 1967 242.0 138.0 104.0 1968 256.0 150.0 106.0 1969 273.0 165.0 108.0 1970 293.0 180.0 113.0 1971 312.0 195.0 117.0 1972 331.0 210.0 121.0 1973 151.0 225.0 126.0 1974 370.0 240.0 130.0 1975 389.0 255.0 134.0 Total, backlog plus increments 6, 230. 3 3,765. 6 2, 464. 7 (c) It is not feasible to estimate the proportions of these needs by community. (ci) The proportion of the estimated capital outlays to be expended non-Federal entities is 100 percent. There is no feasible method breaking this down among the non-Federal entities. PAGENO="0462" CHAPTER 25 Community Mental Health Centers* BACKGROUND Following a study of the findings and final report of the JoF mission on Mental Illness and Health in early 1963, President I sent to the Congress his special message on mental illness an retardation. In that message the President asked for a bold approach to replace the State mental hospital system with a s~ providing comprehensive mental health services at the coi level. This system would emphasize service which was short intensive rather than long term and custodial. It would also phasize the prevention of mental illness through consultation education, as well as the full rehabilitation of those who have mentally ill. The community mental health center program is on the belief that it will be possible to reduce substantially, within decade or two, the number of patients who receive only care in an institution-or who are not under treatment at a they could be helped by the application of one or more of the methods of dealing with emotional disturbances and the illnesses. The community mental health centers program authorized October 1963, under Public Law 88-164, title II (as amende~ by Public Law 89-105), is designed to stimulate State, local, private action to provide comprehensive mental health services in community setting-close to the homes, families, and jobs of mentally ill. These community centers will provide for the time in the Nation's history the concentrated collaboration a required for a concerted program of prevention, diagnosis, and ment, of the mentally ill. A. NATURE AND COMPOSITION OF CENTERS 1. DESCRIPTION OF COMMUNITY MENTAL HEALTH CENTERS (a) General Physical Characteristics The community mental health center refers not to a facility but to the concept of a program of comprehensive health services available within, and easily accessible to, a community. To make this definition more specific, three key "community," "comprehensive services," and "program" elaboration. *Prepared by Dr. Martin A. Kramer, Chief, Community Mental Facilities Branch, National Institute of Mental Health, National Institutes Health, Public Health Service, with minor editing by committee staff. 454 PAGENO="0463" STATE AND LOCAL PUBLIC FACILITY NEEDS 455 "Community" means all the people within that area, including the children and the aged, the rich and the poor, the residents and the transients, the healthy and the sick (whether the illness be mild or severe, acute or chronic). "Comprehensive community mental health services" include in- patient, outpatient, partial hospitalization (at least day care), emergency, consultation and education, diagnostic, rehabilitation, precare and aftercare, training, and research and evaluation services. All the services provided by a community mental health center must be tied together in a "program," and "program" is synonymous with "continuum of care." Such a program exists when patients, clinical information and professional staff can move easily and quickly from any one element of service to any other according to the needs of the patients. In effect, this establishes a "one-door" policy for mental health services, and the door must be open to any patient and to any qualified professional. While the program demands a one-door policy, however, it does not require one roof. Indeed, it is possible for each of the services to be offered under separate auspices and in separate physical facilities. (b) Services Rendered and Performance Standards For the most part, the facility requirements for a community mental health center will vary widely along two dimensions: (a) the popula- tion served and its service utilization rate, and (b) the treatment pro- gram profile. The first dimension is self-evident. The second refers to the varying emphasis, from program to program, on each element of service. For example, one center might put a heavy emphasis on day care programs and attempt to move inpatients to the day care services whenever and as soon as possible. In this case there would be less need for inpatient beds and more for day care space. The relatively recent rapid developments in treatment techniques (for example, drug therapy) also affect the needs for physical facilities. For these reasons, the most commonly recurring theme in regard to architectural considerations for mental health centers is a stress on flexibility. 2. EXISTING CAPITAL PLANT IN THE UNITED STATES (a) Community Mental Health Centers As of this writing there are no existing community mental health centers consistent with the conceptual requirements outlined above. Thirty construction grant applications have been approved under the terms of the community mental health centers program (title II, Public Law 84-164, as amended by Public Law 89-105). Because of the construction lag time, however, the first "center" will open its doors early in the next year. (b) Other Mental Health Facilities Considering all mental health facilities, there is quite an extensive capital plant on which to build future community mental h alth centers. For example, there are approximately 1,050 general and specialty hospitals which admit psychiatric patients, and have about 25,000 beds for such patients. These, of course, are facilities and PAGENO="0464" 456 STATE AND LOCAL PUBLIC FACILITY NEEDS do not bear a 1-to-i correspondence to program resources. For example, one general hospital may admit patients for three services: inpatient, 24-hour emergency service, and day care. The double counting problem comes into focus here if we note that there are twice as many hospitals with psychiatric emergency service (2,108) as have psychiatric inpatient beds. In addition, there are about 280 public mental hospitals with about 500,000 beds excluding those administered by the Veterans' Admin- istration. Information as to the age of their facilities is not available. The potential future utility of these 280 hospitals in relation to com- munity centers, however, is reflected in these facts: *only about one-third of the hospitals are located in relatively heavily populated areas. *Less than one-third of the hospitals are accredited. *Numerous hospitals in this group had their beginnings many years ago-53 of the hospitals were opened before the Civil War; Another 102 of the hospitals were opened before the Spanish- American War. Another 36 were opened before World War I. By the end of the Second World War, the total reached nearly 240. The facilities in many areas cannot be adapted to the concept of the community mental health center. In addition to the public mental hospitals, there are 258 private mental hospitals with about 15,000 beds. Of these, about 95 are located within relatively heavily populated areas. Apart from these hospital facilities there are also about 2,000 out- patient clinics. These are typically quite small in terms of facility and manpower resources though they do provide fairly extensive organizational resources. B. COSTS AND USER CHARGES 1. CONSTRUCTION COSTS AND OPERATING COSTS (a) Construction costs The estimated cost of constructing one unit is $1,300,000. This estimate is based on the assumption that $18 per square foot would be the average construction cost in 1964-65 for the noninpatient facilities. The assumptions behind that assumption are that approx- imately- Twenty-four percent of patients will utilize the inpatient serv- ice, which will require about 16 beds (Hill-Burton, $20,000 per bed, estimates were used); Sixty percent of patients will utilize the outpatient services (some average "educational facility" costs were used); Sixteen percent will utilize day-night care facilities (the costs of which were estimated to be approximately midway between other two estimates). Beyond these estimates, several other factors were considered: the average per square foot cost of research laboratories (which will appear in the average unit in varying degrees); the cost of emergency service facilities; the cost of rehabilitation facilities; the cost of parking lot construction; etc. PAGENO="0465" STATE AND LOCAL PUBLIC FACILITY NEEDS 457 The difficulties involved in arriving at the average construction cost~ f or a facility which houses at least 10 different functions in varying proportions to each other-and each requiring a different kind of construction-should be obvious. The average cost which finally evolved ($18 per square foot) was tested against the actual costs of several kinds of psychiatric facilities which were built in 1963 and 1964 in different parts of the country. This test demonstrated that the $18 estimate is reasonably accurate when equipment, furnishings,. and architect fees are included. (b) Operating Costs It is estimated that the annual cost of operating one unit will be approximately $1,200,000 of which about 80 percent will be staffing costs. The staffing pattern estimated for a one-half unit (an essential. services center for a population of 100,000) would be as follows: Type Number Cost Total Psychiatrists Psychologists Socialworkers Nurses Psychiatricaids Healtheducators Occupational therapists Supporting personnel (including ElI G technicians, laboratory technicians, X-ray technicians, dieticians, practical nurses, and orderlies) 72 $603, 000 6 4 6 14 24 2 2 14 135, 000 60, ooo 60,000 112,000 120,000 20,000 16, 000 80, 000 Based on this pattern, it is estimated that the staff required for a. unit would probably number about 110, and the cost therefore would reach about $950,000. While these figures represent something of an ideal, the actual staffing patterns of the future are more likely to show fewer numbers of professionals; but with continually rising salaries and operational costs, the dollar figures shown above may remain fairly accurate. 2. USER CHARGES In both the construction and operation of community mental. health centers, there are of necessity many sources of support; the extent to which user changes will provide support, however, can not be estimated at present. While the maj or portion of the existing system of mental health care has rested on State support of the State. mental hospital system, the new direction in mental health programs will require a large assumption of responsibility by local public and private agencies and by the Federal Government. At the same time, the States' financial responsibility will certainly continue, both be- cause the States will have to maintain at least part of the State hospital system for an extended period of time, and because the States will be called upon to support the development of community programs. Gonstruetion funds.-Because the bulk of the cost of mental health care was carried by the State hospital systems, many communities have been able to construct outpatient clinics, and a few have con-. structed inpatient facilities. The two types of achievement have been with and sometimes without Hill-Burton support. As the thrust 70-132--GO-vol. 1-30 PAGENO="0466" 458 STATE AND LOCAL PUBLIC FACILITY NEEDS of the new program is toward centering all mental health services within communities, however, a much larger contribution toward the cost of operation will have to come from the communities. For the relatively few construction grant applications approved thus far, construction support is to be borne by (a) Federal Gov&rn- ment (average 50 percent), (b) State government (20 to 30 percent) ~nd (c) local public and private funds (20 to 30 percent). Sources of operating funcl&-There are 25 States which provide State moneys to assist communities in assuming part (indeed up to 75 and 80 percent) of the costs of public mental health services (as through Community Mental Health Services Acts). Several other States are in the process of considering new legislation which would authorize similar support programs of their own. In large measure, of course, these represent new State expenditures-but it is anticipated that they also will begin to represent some redirection of State funds from the State hospital system to the new community care programs. There is an encouraging movement among the Nation's health insurance carriers to liberalize the coverage of the treatment costs of mental illness. At the present time, substantial benefits are widely available for mental health services on an inpatient basis. The promising new developments lie in outpatient and partial hospitaliza- tion areas, though in these areas, too, two caveats must be added: Actual coverage of outpatient and partial hospitalization services at this time are extremely inadequate, and the high rising costs of health insurance may put such coverage out of the reach of too many people anyway. On the other hand, the 1964 contract agreement between the UAW and the automotive industries includes rather comprehensive mental health insurance coverage for the IJAW members and their dependents (some 2.5 million people), the cost of which will be borne entirely by the employers. This agreement may set a precedent rapid developments throughout the insurance industry. The maj or groups of the uninsured will then be the unorganized workers in the less industrialized and more service-oriented occupations. While the per hour and per diem costs of treating mental illnesses have continued to rise (along with all medical costs), the new methods of short-term intensive treatment are making the per case costs gradually decrease. Hence, the percentage of costs which can be borne by patient fees-out of the patient's pocket or from third party payments-should continue to increase. With the passage of Public Law 89-105 authorizing initial staffing grants for community mental health centers, a great many local programs wifi be able to get started. Once started, and once their value is demonstrated, the resources to keep them going are likely to be found. C. TREND OF CAPITAL OUTLAYS As indicated above, there are at present no community mental health centers in operation, in terms of the comprehensive program envisaged. However, some of the existing mental health facilities as indicated below will be adaptable for use in the program. Assumptions regarding use of existing resources. For many reasons, it is unlikely that more than one-half of the facility resources and administrative footholds presented by existing hospitals and clinics PAGENO="0467" STATE AND LOCAL PUBLIC FACILITY NEEDS 459 will be used in community mental health center projects. The pro- portion is likely to be somewhat higher for existing general hospital and a selected few mental hospital inpatient units. For these pur- poses it is estimated that 600 such units will be used. It can be further assumed that approximately 1,000 of the existing outpatient clinics will fit into community mental health center pro- grams. As a community mental health center becomes more corn- prehensive-i.e., as it provides a greater range of services-more existing community resources will be potentially available. For example, existing rehabilitation facilities, recreation facilities, and residential facilities (for such as halfway houses) may be utilized in a comprehensive community mental health center. While it is not possible to either predict, or to attach a dollar value to, such potential developments, some allowance has been made for them by slightly inflating the probable value of the existing inpatient and clinic facili- ties. This inflation is reflected in the following figures on the dollar value for community mental health center purposes. It is estimated that each of the 600 inpatient facilities expected to be used in com- munity mental health centers has a value of $325,000 in 1965. It is further estimated that each of 1,000 clinic facilities to be used has a value of $100,000 in 1965. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS Year-by-year estimates of capital requirements for community mental health centers, 1965-75, are presented below. The projections are based on the assumption that as the construction of comprehensive community mental health centers gets underway, existing inpatient and outpatient resources will be utilized to provide interim mental health services. These units will be eventually converted into com- prehensive centers dispensing a broad range of mental health services: inpatient, outpatient, hospitalization, consultation-education, diag- nostic, rehabilitation, etc. The program assumes the creation of a total of 2,200 comprehensive centers by 1975, serving a population of 220 million. Projection of need for community mental health centers, 1966-75 Year Amount 1 (millions) Physical units Changeover of existing facilities to centers new con- struction 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 $100 130 185 209 279 301 425 422 435 448 (2) (2) (2) 91 112 131 243 260 260 260 (2) (2) 25 60 90 115 133 140 140 140 Total Total centers~_ 2,934 1,357 843 2,200 1 Represents amounts obligated for construction each year, not completion dates of centers. 2 TJtilization of existing facilities while the construction program gets underway. PAGENO="0468" 460 STATE AND LOCAL PUBLIC FACILITY NEEDS (a) Factors taken into account in making projectiorts.-A physical unit for the purposes of this 10-year projection is a comprehensive community health center serving a population of 100,000. The average cost of constructing such a unit has been estimated at $1.3 mfflion. It is assumed that most characteristics of any center (e.g., staff size and cost of construction) are linear with respect to popula- tion, so that a comprehensive center serving for example 200,000 people would be the equivalent, in terms of cost, of 2 units. It is anticipated that the bulk of the early years' capital outlay will be applied to use of existing facilities. This is based on the. assumption that it will take time for States to begin to shift capital expenditures from State hospitals to community centers and that in the interim it would be desirable to niake at least the essential mental health services available to as many people as possible. (b) Estimated capital needs on a per-year basis. (See above.) (c) All of the community mental health centers envisaged will be located in cities `with populations of 50,000 or more (each compre- hensive mental health center is designed to serve a population of 100,000). (ci) The distribution of estimated capital expenditures for housing community mental health programs, 1966-75, is expected to be as follows: Percent 1. State governments or State agencies 50 2. Cities, counties, and local public authorities 3. Private, nonprofit organizations 1 ~ 4. Proprietary or profitmaking organizations j PAGENO="0469" CHAPTER 26 Facilities for the Mentally Retarded* Note: This chapter consists of two parts: I. Community Facilities for the Mentally Retarded and II. University-Affiliated Facilities for the Mentally Retarded. I. COMMUNITY FACILITIES FOR THE MENTALLY RETARDED INTRODUCTION Mental retardation has been defined as impairment of ability to learn and to adapt to the demands of society. The first step in developing programs for the mentally retarded in the United States was taken in 1848 by the opening of an institution in Massachusetts. Similar institutions were shortly established in New York, Pennsylvania, Ohio, Connecticut, and Kentucky. In 1876, a founded what is today known as the American Association on Mental Deficiency. Special education classes for the mentally retarded were established in Providence, R.I., in 1896. These classes in public schools r the most part, for the mildly retarded. It was not until the 1920's that classes were introduced for the moderately retarded. Parallel with developments in education for the retarded came new ments in the institutional field. Colonies were organized for the twofold purpose of moving part of the population in overcrowded ons to cheaper quarters in rural areas and of utilizing the adult 1 for work on farms owned by the institutions and in domestic type jobs within the facility. Public concern over the problem of mental retardation has increased over the past 10 years. This concern was reflected by the rnent by President Kennedy in October 1961 of a panel of out- ~ consultants with a mandate of preparing a national plant to mental retardation. The report of this panel, "National To Combat Mental Retardation," published in 1963, was ental in pushing the problems of this handicapping condition to the forefront of national interest and attention. From this interest stemmed increased activity at all levels. The Mental Retarda- Facilities and Community Mental Health Centers Construction of 1963 (Public Law 84-164) authorizes grants for construction of - centers; grants for construction of community facilities for the treatment, and training of the mentally retarded; and assistance *Prepared by the Division of Hospital and Medical Facilities, Public Health 1.1.8. Department of Health, Education, and Welfare, with minor editing ittee staff. 461 PAGENO="0470" 462 STATE ~D LOCAL PUBLIC FACILITY NEEDS in the construction of clinical facilities providing specialized services for the retarded and the clinical training of physicians and specialized personnel needed in the program. A majority of States now have legislation making possible public schooling for the retarded and in some 40 States clinical programs for the retarded are available in public health departments. Increased interest and efforts of volun- tary organizations should be added to these growing efforts of public agencies. Most authorities agree that approximately 3 percent of the popu- lation, or about 5.8 miffion in 1965, would be classified as mentally retarded to some degree with about 126,000 additional being born each year. A. NATURE AND COMPOSITION 1. DESCRIPTION OF THE FACILITIES (a) Physical Characteristics The term "facility for the mentally retarded" means a facility spe- cially designed for the diagnosis, treatment, education, training, custo- dial care, or sheltered workshops for the mentally retarded. Such a facffity may be under private ownership-voluntary nonprofit or pro- prietary-or under State or local governmental ownership. It is difficult to describe the physical characteristics of buildings and equipment of facilities for the mentally retarded, since many of the programs are housed in buildings which have been converted from their former uses, as schools, churches, etc. Furthermore, the type, size, equipment, and other characteristics of new facilities will depend upon the scope and nature of the services provided, as well as the pattern of care on the State and local level. Specially designed structures for the mentally retarded should create an environment appropriate to their particular needs. The functional requirements are often complex and may not always be compatible with the creation of an informal atmosphere of warmth and intimacy that is so desirable in these facilities. However, every effort should be made to eliminate any suggestion of an institutional character in the physical setting. In general, structures of one floor are preferable for ease of access and interior circulation and single-story buildings present a more intimate environment. Buildings as modest in size as function will permit; avoidance of rigid uniformity in planning; and skilled use of form, materials, and color will contribute to an informal atmosphere. This informality may be further enhanced by incor- porating patios or landscaped areas in relation to the building. Archi- tecturally, the buildings should recognize community standards and conform to applicable regulations, but the importance of an esthetic appearance cannot be overemphasized. Economical and efficient operation and maintenance of the facility is,. o course, an important consideration in the total design. PAGENO="0471" STATE AND LOCAL PUBLIC FACILITY NEEDS 463 Although programs for the metally retarded may be housed in many different kinds of buildings, there are four broad types of facilities:. (1) Diagnosis and evaluation clinics-those providing diagnostic and evaluation services; (2) day facilities-those providing any or all elements of treatment, education, training, personal care, and sheltered workshop services for less than 24 hours per day; (3) residential facilities-those providing such services for a 24-hour period per day; and (4) group home facility-those providing group home or housing services for individuals being trained to live independently in the community and those who are employed within a community but need some type of minimal supervision. (b) Services Rendered The primary objective of all services for the mentally retarded should be to provide opportunities for each individual to attain his fullest potential. The types of services rendered, however, will be influenced by the number of individuals in various levels of retarda- tion-mild, moderate, severe, and profound-and in age classifications such as children (preschool and school age) and adults. To meet the of the retarded as shown in chart I, taken from the report of President's panel, and also to provide a continuum of care, widely -~rvices have been developed. Chart II shows both the variety and range of representative services needed by the retarded. CHART 1.-Developmental characteristics of the mentally retarded Gross retardation; minimal capacity for functioning in sensorimotor areas; needs nursing care Poor motor development; speech is minimal; gen- erally unable to profit from training in self-help; little or no communica- tion skills. Can talk or learn to com- municate; poor social awareness; fair motor development; profits from training in self-help; can be managed with moder- ate supervision. Can develop social and communication skills, minimal retardation in sensorimotor areas; often not distinguished from normal until later age. Adult, 21 and over, social and vocational adequacy Some motor and speech de- velopment; may achieve very limited self-care; needs nursing care. May contribute partially to self-maintenance under complete supervision; can develop self-protection skills to a minimal useful level in controlled environ- ment. May achieve self-mainte- nance in unskilled or semi- skilled work under shel- tered conditions; needs supervision and guidance when under mild social or economic stress. Can usually achieve social and vocational skills ade- quate to minimum self- support but may need guidance and assistance when under unusual social or economic stress. Degrees of mental retardation Preschool age, 0 to 5, Maturation and development School age, 6 to 20, training and education Some motor development present; may respond to minimal or limited train- ing in self-help. Can talk or learn to com- municate; can be trained in elemental health hab- its; profits from syste- matic habit training. Can profit from training in social and occupational skills; unlikely to progress beyond 2d grade level in academic subjects; may learn to travel alone in familiar places. Can learn academic skills up to approximately 6th grade level by late teens. Can be guided toward social conformity. Source: U.S. Department of Health, Education, and Welfare. Mental Retardation Activities of the U.S. f Health, Education, and Welfare, Washington, D.C., U.S. Government Printing Office, July PAGENO="0472" CHART 11.-Array of direct services for the retarded 1 Life stage Components of special need Physical and mental health Shelter nurture pro- tection Intellectual develop- ment Social development Recreation Work Economic security Infunt Specialized medical followup, special diets, drugs or Residential nursery, child welfare services. Sensory stimulation . Toddler Child surgery. Rome nursing, cor- rection of physical defects, physical therapy. Psychiatric care, dental care. Foster care, trained babysitter. Homemaker service, day care. Nursery school Classes for slow learners, special classes-educable, special classes- trainable, religious education. 1-lome training, en- vironmental en- richment. Playground pro grams. Youth Young adult Psychotherapy Facilities for re- tarded in conflict, Short stay home, boarding school, h~slfway house. ~ Guardianship of person long-term residential care. Work-school pro- grams, speech training, occupa- tional training, vocational counseling. Day camps, resi- dential camps, youth groups, social clubs, personal adjust- ment training. Marriage counseling Scouting, swim- ming. Bowling Selective job place- ment, sheltered employment, sheltered work- "Disabled child's" benefits, health insurance. ~ Total disability as- sistance. Adult Older adult Medical attention to chronic condi- tions. Group homes Boarding homes Evening school Social supervision Evening recreation shops. Guardianship of property, life an- nuity or trust. Old age assistance, OASI benefits. I Not included are diagnostic and evaluation services, or services to the family; the Source: The President's Panel on Mental Retardation. National Action to Combat array is set forth in an irregular pattern in order to represent the overlapping of areas of Mental Retardation. Washington, D.C., U.S. Government Printing Office, October need and the interdigitation of services. Duration of services along the life span has 1962. not been indicated here. PAGENO="0473" STATE AND LOCAL PUBLIC FACILITY NEEDS 465 Among the more important services required in an overall program are the following: Diagnosis and evaluation.-These services involve the diagnosis and evaluation of the individual; the appraisal of resources of the indi- vidual, his family, and the community; and the development of a plan to help the individual develop to the extent of his capabilities. An adequate and thorough diagnosis of all retarded persons is an essential service in any mental retardation program. Since all other services are largely dependent upon the quality of the diagnosis and evaluation services provided, these services are the keystone to the development of a complete array of services in any community. Treatment.-These services include medical and appropriate related ancillary services and therapies to provide for the improvement of the individual: physically, psychologically, and socially. The im- portance of developing and maintaining adequate treatment services for the retarded is emphasized by the fact that a significant number of retardates have associated disabilities such as impaired hearing, difficulty in perceiving, impaired vision, poor muscular coordination, and physical deformities. Education.-These services include curriculums of instruction geared to the needs of the mentally retarded at various levels of retardation and in different age groupings. Training.-Included in these services are training in motor skills, self-help, and activities of daily living; vocational training; and social- ization experience conducive to personality development. Custodial care.-These services cover food, shelter, clothing, and medical care. Also included are special medical and nursing services directed at the prevention of regression in the retarded individual and stimulation of his maturation. Sheltered worlcshops.-These services include vocational evaluation, training, and paid work experience. (c) Standards of Performance Uniform national statistics regarding mental retardation are very limited. In view of this, only gross estimates of the overall magnitude of the problem can be established. One such estimate may be derived through measures of intelligence. Experience has shown that most people with IQ's below 70 have difficulty in learning and in adapting to their environment. On this basis, it is estimated that about 30 per 1,000 population would score below this level. Based on the 1965 civilian resident population of 192 million, about 5.8 million persons would be affected. It should be borne in mind that large numbers of these people are classified in the mild category, and no special facilities or services are needed. In the best judgment of authorities in the field of mental retardation, the number of mentally retarded for which special facilities should be provided is not 30 per 1,000 population but closer to 10 per 1,000 population. Some indication of the number being served in existing facilities for the mentally retarded may be obtained from information reported in 46 State plans. On the basis of this iuformation, it appears that about 1.75 individuals per 1,000 civilian resident population are presently being served in existing facilities for the mentally retarded. Of the 46 States reported, the District of Columbia has the highest PAGENO="0474" 466 STATE AND LOCAL PUBLIC FACILITY NEEDS :ratio-4.53 per 1,000 population, and Florida has the lowest-0.29 :per 1,000 population. Construction projects under the Mental Retardation and -Corn- munity Mental Health Centers Construction Act of 1963 must meet ~certain requirements established by regulation. Each facility, for example, is required to meet certain architectural standards to insure that the facility is fire safe, structurally sound, and so planned as to carry out effectively the proposed program. (d) Qualitative Standards of Performance At the present time there are no standards of performance for facilities for the mentally retarded that have been nationally adopted. No joint accreditation programs or procedures have been established such as those existing in the category of hospitals and related medical care facilities. Some States have developed their own standards for the mainte- nance and operation of these facilities which may include provision for licensing.. Many of the institutions are owned and opera ted by tile State and are under the supervision of State agencies specifically responsible for the care and treatment of the mentally retarded. Other facilities -such as those for day care may be the responsibility of the public -education authorities, while still others are operated by voluntary and religious organizations. Regardless of the sponsorship, some of the States exercise a significant degree of supervision over the quality :and volume of care provided. On the Federal level all Government agencies involred in this field are coordinating their efforts in providing guidance, recommendations. -and financial assistance. These efforts are directed toward improved -care through expanding programs in research and training, additional -and more apnropriately designed facilities, and greater concern for the individual retardate. 2. EXISTING CAPITAL PLANT IN THE UNITED STATES -(a) and (b) Number of Facilities and Distribution by States Information is not yet available as to the total number of existing facilities for the mentally retarded in the United States. However, -some indication of the number of facilities in which the mentally retarded are served may be obtained from the State plans relating to -such facilities. Unfortunately, not all of the State plans have been received to date. On the basis of information presently available, it appears as though there are about 2,600 existing facilities in which the mentally retarded are served in the 46 States from which plans have been - received. - Table 1 shows the distribution of tile facilities serving the mentally retarded by State. As can be seen from table 1, California has the largest number of existing facilities in which the mentally retarded are served, with Pennsylvania and Massachusetts being next in order -of magnitude of the 46 States reporting. PAGENO="0475" 467 Montana- Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Puerto Rico \Tirgin Islands Size of city Number of facilities Percent Totaireported 500,000 or more 100,000 to 499,999 .50,000to99,999 10,000 to 49,999 2,500 to 9,999 Under 2,500 2,571 240 421 290 ~h1~ 428 ~ 100.0 9.3 16.4 113 31.0 16.6 15.4 Source: Based on data compiled from State plans submitted under the requirements of title I, pt. C, of the Mental Retardation Facilities and Community Mental Health Centers Construction Act of 1963, Public Law 88-164. STATE AND LOCAL PUBLIC FACILITY NEEDS TABLE 1.-Number of facilities in which the mentally retarded are served, based on data reported in 46 State plans Total 2,571 Alabama (1) Alaska 11 Arizona 21 Arkansas 27 California 261 Colorado Connecticut 32 Delaware (1) District of Columbia 15 Florida 51 Georgia 38 ~Iawaii Idaho Illinois Indiana 66 Iowa 68 Xansas 58 Kentucky (1) Louisiana 58 Maine 24 Maryland M Massachusetts 163 Michigan 138 Minnesota 102 Mississippi (1) Missouri 118 1 Not available. 12 (1) 4 8 59 26 83 42 12 146 40 37 168 8 10 8 34 87 19 (1) 50 80 20 100 7 26 (1) Source: Data compiled from State plans submitted under the requirements of title I, pt. C; of the Mental Retardation Facilities and Community Mental Health Centers Construction Act of 1963, Public Law 88-164. (c) Distribution of Facilities by Size of City There is considerable variation among States and territories in the distribution of facilities for the mentally retarded by size of city. In `California, the largest proportion of such facilities are located in cities ranging in size from 10,000 to 49,999; whereas, in Pennsylvania, the largest number of facilities for the mentally retarded are situated in small towns (under 2,500). Table 2 presents the distribution of facilities by size of city based on information reported in the 46 State plans indicated in table 1. It should be noted that the distribution of `facilities for the mentally retarded by size of city in which the facilities are located is not intended to represent the service area of the facility. TABLE 2.-Existing mental retardation facilities, by size of city PAGENO="0476" STATE AND LOCAL PUBLIC FACILITY NEEDS 468 (d) Age of Facilities Data are not presently available concerning the age distribution of facilities for the mentally retarded. Since the first institution for the mentally retarded was opened in 1848 in Massachusetts, many of the existingfacilities were probably built in the late 1800's or early 1900's. (e) Ownership Table 3 shows the distribution of existing facilities in which the mentally retarded are served by ownership. It will be noted that almost half of the facilities are owned by nonprofit organizations with proprietary organizations being next in order of ranking. This dis- tribution is based on information reported in the State plans of the 46 States reporting. TABLE 3.-Existing mental retardation facilities, by type of ownership Type of ownership Number of facilities Percent Total reported 2, 571 100. 0 288 11.2 Cities, counties, towns 353 13.7 Nonprofit 1,202 46.8 Proprietary 460 17.9 Not identified as to ownership 268 10.4 Source: Based on data compiled from State plans submitted under the requirements of title I, Part c, of the Mental Retardation Facilities and Community Mental Health Centers Construction Act of 1963, Public Law 88-164. (f) Current Value Information is not available on the current value of existing facilities for the mentally retarded. Furthermore, it would be extremely difficult to arrive at a reasonable estimate in the near future, since many of the facilities are shared with other programs and it woul4 be necessary to appraise each facility to determine the proportionate share of the current value of the facility. A review of the literature reveals that no surveys concerning this problem have been conducted on a national level. B. COSTS AND USER CHARGES 1. CONSTRUCTION COSTS AND OPERATING COSTS (a) Construction Costs A precise estimate of construction costs for facilities for the mentally retarded requires a detailed knowledge of the specific conditions which exist. The many variables that are involved quite obviously are reflected in the cost of a facility. The function of the building and the requirements of its operational program, the type and method of construction, quality of materials and workmanship, nature and extent of furnishings and equipment, as well as the price range for labor and materials in various geographical areas and under certain market conditions are some of the major factors that significantly influence any determination of construction costs. Recognition of the variables which may be involved suggests that a range of costs for construction in each category should be considered. In this connection, the follow- PAGENO="0477" STATE AND LOCAL PUBLIC FACILITY NEEDS 469 ing estimates are made based on previous experience and records available. Data are not available on a per-person-served basis. TABLE 4.-Range of approximate costs Type of facility Cost per square foot Construction and fixed equipment Movable equipment Diagnosis and evaluation clinics Day facilities Residential facilities $20-$30 16- 23 18- 25 $5 4 4 (b) Maintenance and Operation Expenses Information is not available regarding expenditures for maintenance and operations for all~ facilities for the mentally retarded. Further- more, much of the information which is available is fragmentary and inconclusive. Some indication of the trend of expenditures for maintenance and operations, however, may be seen from available data for public institutions for the mentally retarded for the period 1956 through 1965. On the basis of these data, it appears as though the aggregate amounts expended for maintenance and operations have been increasing significantly from 1956 to 1965. Table 5 presents the available information by year. Separate data on the wage and salary bill in general, or on the wage bill for custodial personnel in particular, are not available. TABLE 5.-Expenditures for maintenance of public institutions for the mentally retarded, United States, 1956-65 [Thousands of dollars] Total expenditures Year: for maintenance I 1956 $168, 851 1957 190, 316 1958 214, 813 1959 234, 715 1960 266, 237 1961 288, 386 1962 324, 071 1963 353, 575 1964 391, 764 1965 439, 350 1 Includes salaries and wages; purchased provisions; fuel, light, and water; and other maintenance. Source: U.S. Department of Health, Education, and Welfare, Public Health Service, National Institute of Mental Health. Costs per resident day have also risen for public institutions for the mentally retarded. Table 6 shows the cost per resident for 6 years. TABLE 6.-Maintenance expenditures per day per resident patient, public institutions for the mentally retarded Year: 1956 $3. 19 1958 3. 86 1960 4.51 1962 5.07 1964 5.89 1965 6. 36 Source: 1956-65, U.S. Department of Health, Education, and Welfare, Public Health Service, National Institute of Mental Health. PAGENO="0478" 470 STATE AND LOCAL PUBLIC FACILITY NEEDS 2. USER CHARGES Data are not available on user charges for all facilities for tim mentally retarded, and it is not known to what extent user charges. are employed to pay for services, occupancy or use of these facilities. Undoubtedly, there is wide variation in user charges among different. types of facilities and among States. Some indication of average charges in residential facilities, day facilities, and State institutions. may be obtaifled from information presented in the "Directory for Exceptional Children," published by Porter Sargent, Boston, Mass., in 1965. Based on information reported for 203 privately operated. residential facilities (voluntary nonprofit and proprietary), the average charge approximated $2,300 per year. For a reported 164-day facilities, also under private ownership, the annual charge averaged. about $500. Charges for a total of 61 State-owned institutions, all. identified as primarily residential facilities, averaged approximately $1,200 per year. It will be noted that the average charge in private residential facilities is about double the average charge in State institutions. No explanation is offered in the source document,. but it appears that the charges in the State institutions are largely based on ability to pay. This, for the most part, would probably account for the difference. In view of these and other limitations, extreme caution should be exercised in interpretation and use of these- data. In terms of the total group of community facilities for the mentally retarded, it is not possible to state the extent (in percentage terms) to which the costs of the facilities and structures are met out of the general tax resources and general obligation borrowings of State and local governments. C. TREND OF CAPITAL OUTLAYS Information is very limited pertaining to capital outlays for facilities for the mentally retarded. In fact, the only information presently available is the amount expended for additions, improvements and other capital expenditures of public institutions for the mentally retarded, and the amount expended for projects for the mentally retarded under the Hill-Burton program. can be seen from table 7, expenditures for additions, in ments, et cetera, ranged from $27 million in 1961 and 1962 to $42 million hi 1963. This, of course, is only a small part of the total capital outlays since it only includes public institutions for the tally retarded, and it excludes the initial amount expended for struction of the existing facility. TABLE 7.-Additions,~improvements, and other expenditures of public institutions for the mentally retarded Fiscal year: I 1960 1961 1962 27, 434 1963 1964 Source: U.S. Department of Health, Education, and Welfare, Public Health Service,. Nation of Mental Health. PAGENO="0479" STATE AND LOCAL PUBLIC FACILITY NEEDS 471. In addition to the information on expenditures of public institutions: for the mentally retarded, data are also available on the 70 projects approved under the Hill-Burton program for the mentally retarded. As will be noted from table 8, the total capital outlay for these projects is about $83.8 million with the Federal share amounting to $24.5 million. The largest capital outlay occurs for projects approved in 1964 and 1965 when over half of the total capital outlay was obligated. Table 8 shows the number of projects, total cost, and Federal share,. by year. TABLE 8.-Capital outlay for projects approved under Hill-Burton program for the mentally retarded [Dollars in thousands] Fiscal year Number of projects Total cost Federal share Total 1958 1959 1960 70 $83, 755 $24, 529 1 4 8 13 9 8 8 17 2 508 1,537 7,517 7,126 11,435 8,108 22, 140 23,154 2, 230 43: 774 2,318. 2,989 5,146 3,552~ 3,306 5,677 724- 1961 1962 1963 1964 1965 . 1966 (6 months) . It should be noted that there may be some overlap between the data presented in tables 7 and 8 for 1960-64. However, information is not available to determine the extent of the overlap, if any. Obviously, it is not meaningful to attempt any trend analysis of data on capital outlays, because of the fragmentary information. However, it does appear that capital expenditures for facilities for tha mentally retarded have been increasing significantly since 1960. The only available information on sources of financing for capital outlays is for the projects approved under the Hill-Burton program. Of the 70 projects shown in table 8, 55 projects or 79 percent were reported under State ownership. This accounts for the fact that about three-fourths of the applicants' share was obtained from appro- priations from State governments. Of course, it is not possible to generalize about the sources of financing for all capital outlays for mental retardation, but it does seem that the Federal and State Governments have been the main source of financing in the building of facilities for the mentally retarded. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS 1. CAPITAL REQUIREMENTS The capital requirements for community facilities for the mentally retarded during the decade 1966-75 are as follows: Millions Backlog of unmet needs as of June 30, 1965 Total additional requirements through June 30 1975 83, 016. 9 Total estimated need PAGENO="0480" 472 STATE ~D LOCAL PUBLIC FACILITY NEEDS (a) As previously mentioned, national statistics regarding com- munity facilities for the mentally retarded are very limited. In view of this, only gross estimates of capital requirements for these facilities can be made, and care should be exercised in their use. Additional requirements were estimated on the basis of the annual increase in population and appropriate allowance for replacing obso- lete facilities, which were translated into costs. (b) The estimated capital needs for community facilities for the mentally retarded are as follows: .MiWons Backlog as of June 30, 1965 Annual increments: 1966 $251.4 1967 260. 1968 268.4 1969 278. 9 1970 292.2 1971 305.7 1972 319. 3 1973 333.1 1974 1975 360.7 Total 3, 016. 9 Total, backlog and annual increments (c) Facilities for the mentally retarded frequently serve areas much larger than the immediate community in which they are located. In view of this, it is not possible to estimate the distribution of need by size of community. It is expected, however, that most facilities will be located in areas of greater than 50,000 population. (d) The proportion of the estimated capital outlays to be expended by non-Federal entities, is 100 percent. There is no feasible method for breaking this down among the non-Federal entities. II. UNIVERSITY-AFFILIATED FACILITIES FOR THE MENTALLY RETARDED A. NATURE AND COMPOSITION Because of the importance placed upon the needs for trained spe- cialized personnel for the mentally retarded, the Congress approved part B, title I, of the Mental Retardation Facilities and Community Mental Health Centers Construction Act of 1963 (Public Law 88- 164), which provides Federal grants for the purpose of assisting col- leges, universities, or hospitals affiliated with a college or university to construct clinical facilities with a full range of inpatient and out- patient services. 1. DESCRIPTION OF THE FACILITIES (a) Physical Characteristics Structures, generally, are multistory and in some instances, addi- tions, extensions, or remodeled space in existing buildings may be involved. Special consideration must be given to fire safety, struc- tural, mechanical, and electrical aspects in meeting specific require- PAGENO="0481" STATE AND LOCAL PUBLIC FACILITY NEEDS 473 ments and at the same time, provide a measure of flexibility for pos- sible future expansion of the structure for training programs. To a degree, the teaching methods will dictate that planning includes space and facilities for lecture rooms, conference rooms, demonstration areas, and direct or audiovisual observation. Consideration must be given for the provision of space for comprehensive day care services for the clinical population selected for teaching programs. These services include diagnosis, evaluation, training and education, as well as recre- ation. When required by the project program, space will be provided for residential care of short-term inpatients, and living accommoda- tions for their parents may also be included. Faculty and student space will comprise offices, study rooms, conference rooms, libraries, and research areas. Support space for such purposes as administra- tion, lobbies, waiting areas, toilets, lockers, and maintenance is a necessity. (b) Services Rendered Services rendered to the mentally retarded are primarily clincial and ~iiagnostic in nature which demonstrate the "continuum of care" in the selecting, blending, and using in proper sequence the medical, educational, and social services required by the retardate to minimize his disability in every point of his life span. The kinds and types of services rendered will be influenced by the types of the clinical popula- tion in the various levels of retardation-mild, moderate, severe, and profound. The availability of professionals qualified to teach and train students in the most advanced practices of their respective pro- fessions, will also have an impaét on service. The services rendered to the mentally retarded bear a direct relationship to the training pro- grams and to the clinical practices used for teaching demonstration purposes. (c) Standards of Performance Professional training programs in mental retardation are not subject to the accreditation programs of any national body. As above mdi- cated, institutions are expected to enforce qualitative as well as quanti- tative standards of practice and service to the mentally retarded. 2. EXISTING CAPITAL PLANT IN THE UNITED STATES In 1965 no facilities or structures were in existence of the type en~ visioned by the legislation. B. COSTS AND USER CHARGES As previously indicated, no projects have been completed to date, therefore, no current or accurate data are available to provide any precise estii~nate of cost for training facilities; however, a gross esti- mate by applicants on 10 recently approved proiects ranges fiom $30 to $40 per square foot for total cost, which includes architectUral fees; initial equipment, and other associated construction costs. All Si rue- tures are of longtime durability, and applicants are required to secure an interest in the site sufficient to assure the undisturbed use and possession of the, land for 50 years and to assure the Federal Govern- 70-132-66-vol. 1-31 PAGENO="0482" 474 STATE AND LOCAL PUBLIC FACILITY NEEDS ment that the facility will continue to be operated as a nonprofit facility foi training of specialized personnel foi the mentally retaided for a period of not less than 20 years. 1 CONSTRUCTION COSTS AND OPERkTLNG COSTS Accui ate information is not available regal ding expenditures for maintenance of these facilities for the reason that none are presently in existence Due to the varying scope of programs, a i ange of con- struction costs or of maintenance and operation costs is not very meaningful However, of the 13 piojects approved up till late July 1966 (to provide university-affiliated facilities foi the mentally retarded), the total capual cost per facility has ranged from below $1 million to above $5 million It hes been estimated that the oper- ating cost for such a f'icthty is approxima~ely 75 percent as much `in a single year as the total capi~ai cost. (NOTE.-The total capital cost does not mean simply the depreciation allocated to a single year. It means the total regardless of the number of years over which it might be written off.) 2. USER CHARGES Data are not available on user charges for any approved training facility for the mentally retarded. It is believed that tuition and other charges to the trainees will constitute a minor part of the expense of occupancy and use of these facilities. Likewise, charges for patient care are made nominal due to the low socioeconomic group normally being served, and the fact that, to a degree, inpatients as well as out- patients are admitted on a selective basis to provide proper training opportunities for trainees. Since it is anticipated that a majority of approved facilities wilibe located at State universities and State owned and operated, medical schools, the requirement for matching funds is met out of general tax resources and/or general obligation bonds of State governments. C. TREND OF CAPITAL OUTLAYS No information is presently available to show the amount of annual capital outlays for the mentally retarded by State governments. It is safe to say that universities have been conducting effective training programs for the mentally retarded particularly in special education, social work, psychology, etc. No basis exists for an estimate of these capital outlays. D. NEEDS AND PROSPECTIVE CAPITAL OUTLAYS* 1. CAPITAL REQUIREMENTS The capital requirements for the university-affiliated facilities for the mentally retarded for the decade 1966-75 are: Requirements through June 30, 1975 $327, 000, 000 (a) The projection of the needs was based on experience gained in projects which have been approved as of this date. Due to the preva- lence of mental retardation in the general population and the expected PAGENO="0483" STATE AND LOCAL PUBLIC FACILITY NEEDS 475 population growth, estimates were made on the basis that, as a minimum, the kind and type of facility envisioned by this legislation should be made available to all of the medical schools in the country. Additionally, training programs which emphasize training in the educational and social aspects of mental retardation with limited training in medical diagnosis and evaluation are also considered necessary to provide the manpower resources needed for the mentally retarded. (b) The estimated capital annual needs for university-affiliated facilities for the mentally retarded are: Annual increments 1966-75: Millions 1966 $13. 5 1967 13. 5 1968 20. 0 1969 40.0 1970 40. 0 1971 40. 0 1972 40. 0 1973 40. 0 1974 40. 0 1975 40. 0 Total 327.0 (c) Since, as indicated, approved facilities will be located at in- stitutions of higher learning, it is expected that all approved facilities will be located in metropolitan centers of 50,000 population or more. (d) The proportion of the estimated capital outlays to be expended Federal entities, is 100 percent. There is no feasible method breaking this down among the non-Federal entities. PAGENO="0484" CHAPTER 27 Health Research Facilities* A. NATURE AND CoMPosITIoN OF HEALTH RESEARCH FACILITIES 1. DESCRIPTION OF HEALTH RESEARCH FACILITIES (a) General Physical Characteristics Structure and equipment: Structures constructed under the health research facilities program, consist of modern, equipped research laboratories. Most of the laboratories contain laboratory work benches for the researchers, cabinets, tablets, outlets for gas, e1ec-~ tricity, water and suction, the arrangement, spacing and equippage of which are suited to the particular discipline of research. For example, a laboratory for biomedical research will be structured quite differently from a laboratory designed for research in anatomy. While some movable laboratory equipment will be contained in each laboratory, larger, more expensive, highly specialized equipment such as spectrophotometers, recording and monitoring equipment, steri- lizers, X-ray equipment, etc., will generally be located in a centralized area serving the core needs of several researchers, frequently of differ- ent disciplines; In addition to these types of laboratories, there are those for highly specialized purposes which may bear little or no resemblance to the types just described. These would include biotrons in which tropical, arctic, or any intermediate atmospheric condition can be simulated; high altitude chambers for studies of man's reaction to the of flight in space; hyperbaric chambers, isolation systems, biomedical engineering laboratories, cold rooms, special purpose animal facilities, radioactive chemical and counting rooms, special electronic mo systems, specialized clinical research centers, laboratories for microscopy, etc. Health research facilities today must be structed with many built-in features which were not done in: of 20 years ago. Today, a facility must be readily adaptable the swift changes of direction in research. Sufficient electrical must be provided; special air conditioning and environmental must be built into the facilities; core laboratory arrangements efficient research design must be arranged. With the trend f scale, complex laboratories, capable of serving not only several ciplines, but entire departments, the design of modern researcl tories has become a new architectural and engineering speciality, in which the scientist and the architect are only beginning to constructively together and to understand each other's problems. *Prepared by Dr. Francis L. Schmehl, Chief, Health Research Faciliti Division of Research Facilities and Resources, National Institutes of with minor editing by committee staff. 476 PAGENO="0485" STATE AND LOCAL PUBLIC FACILITY NEEDS 477 (b) Services Rendered As facilities for research and training in the health-related sciences, the services, must be expressed in terms of modern, efficient laboratory facilities. In turn, these facilities provide the basic undergirding for research and the quest for knowledge into the diseases of man by professional research workers and their technical assistants. Pursuit of this research provides the promise of scientific discoveries and medical and surgical techniques which will bring superior care and services to the sick of the future than what is possible today. (c) Standards of Performance Quantitatively, the health research facilities program today is* pro- viding an average of about 200 net square feet of laboratory space per professional research worker, postdoctoral research fellow and trainee, graduate student, technician, and ancillary assistant. (d) Qualitative Standards of Performance The facilities are designed not only for advanced research of today but for adaptation to the changes in direction of future research. It is estimated that the structures and fixed equipment will possess a life- span (replacement cycle) of 50 years and require some type of re- modeling about every 16 to 17 years, or twice during their existence. Movable equipment is given a lifespan of from 5 to 15 years, depend- ing on the durability and obsolescence-ratio of the equipment. 2. EXISTING CAPITAL PLANT IN THE UNITED STATES General: Definitive data on the capital plant in the United States is not available. Information supplied below relates only to that seg-. ment of the capital plant participated in under the Federal health research facilities construction program. As of December 31, 1965, there were 760 facilities in existence that were financed under the health research facilities program. In addi-. tion, 186 facilities were under construction; financing for 99 other proj- ects had been completed, but construction had not yet begun. The following tables show the distribution of the federally aided facilities by States and by population size of city: Number of completed health research facilities projects by region and State, as of Dec. 31, 1965 Number of Region and State projects Total 760 New England 102 Maine 7 New Hampshire 4 Vermont 4 Massachusetts 63 Rhode Island 10 Connecticut 14 Middle Atlantic 153 New York 83 New Jersey 20 Pennsylvania 50 Number of Region and Stale projects East North Central 150 Ohio 37 Indiana 22 Illinois 51 Michigan 19 Wisconsin 21 West North Central 94 Minnesota 30 Iowa 20 Missouri 19 North Dakota 5 South Dakota 1 Nebraska 6 Kansas 13 PAGENO="0486" 478 STATE AND LOCAL PUBLIC FACILITY NEEDS Arkansas 2 Louisiana 6 Puerto Rico 1 Number of completed HRF projects as of Dec. 31, 1965, by population size of city (population data based on 1960 census) projects Total 760 Under 2,500 30 2 500 to 9,999 - - 38 10,000 to 49,999 169 50,000 to 99,999 100,000 to 499,999 207 500,ooo or more 271 According to estimates of the Association of American Medical Colleges, more than half of the medical school basic science buildings in use were built before 1930 and almost one-fourth were constructed prior to 1905. Others have estimated that 40 percent of existing research facilities in institutions of higher education are more than 20 years old. (e) Facilities now in operation owned by: (1) State government or State agency (2) City, county or public authority (3) Private, nonprofit organization Total (f) Estimated current value of facilities, December: 31, 1965: $460 million. B. COSTS AND USER CHARGES 1. CONSTRUCTION AND OPERATING COSTS Experience under the health research facilities construction program indicates the following costs: (a) Standard unit of measure (as of 1965): New construction, approximately $65 per net square foot. Renovation, approximately $45 per net square foot. Number of completed health research facilities projects by region and State, as of Dec. 31, 1965-Continued Number of Region and State projects &uth Atlantic 78 Maryland 15 District of Columbia 7 Virginia 6 West Virginia 4 North Carolina 17 South Carolina 2 Georgia 11 Florida 16 East South Central 35 Kentucky 7 Tennessee 16 Alabama 9 Mississippi 3 West South Central 31 Number of Region and State projects West South Central-Con. Oklahoma 8 Texas 15 Mountain 38 Montana 4 Idaho 1 Wyoming 1 Colorado 13 New Mexico 5 Arizona 9 Utah 4 Nevada 1 Pacific 78 Washington 22 Oregon 11 California Hawaii 2 PAGENO="0487" STATE AND LOCAL PUBLIC FACILITY NEEDS 479 (b) Current range of typical annual maintenance and operating expenses: It is conj ectured that the annual maintenance and operating ex- penses over the Nation may range between $1 and $1.50 per gross square foot. Factors which affect such costs are the research pur- poses and types of facilities constructed; the geographical location of the facilities and the climatic conditions affecting them; wage differen- tials in the areas containing the facilities. 2. USER CHARGES It is conjectured that the grantees' user charge (utilities only) over the Nation may range between $0.25 and $0.50 per gross square foot. Factors which affect such costs are the research purposes and type of facilities constructed; the type of equipment contained therein; the geographical location of the facilities and seasonal climatic varia- tions affecting them (e.g., air conditioning and heating); utility rate variations over the country; labor cost differentials from one area to the next. None of the facilities are rented or leased. C. TREND OF CAPITAL OUTLAYS The following capital outlays were made under the federally aided health research facilities program: Trend of annual capital outlays, health research facilities program, fiscal years 1957-66 [Dollar amounts in millions] Fiscal year Number of awards Cost of facility Federal REF portion 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966' 106 174 199 158 138 97 172 122 115 49 $68 77 75 78 79 80 115 127 115 78 $28 29 30 29 31 31 47 53 50 33 Total 1,330 892 361 1 6 months, through Dec. 31, 1965. The following table shows the type of grantee during the years 1957-65: Accounting of annual capital outlays under title VII A of HRF program [In millions of dollars] Type of grantee Total Grantee share Federal HRF share