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State's Paving Crunch Leads to Road to Ruin

September 10, 2008 - AUGUSTA -- Fasten your seat belt and check your suspension system -- Maine roads are about to get worse.

The Maine Department of Transportation (DOT) already was dealing with declining revenue for road maintenance -- the result largely of relying on a fuel tax for funding in an era when gas consumption is falling.

Now the cost side of the equation is going up -- dramatically.

Liquid asphalt, a base for mixing asphalt, has more than doubled in price since early this year, jumping from $307 in January to $765 per ton last month, according to DOT.

The transportation agency last month announced the cost increase forced it to suspend 85 miles of planned road paving this year, work that carried a price tag of $13.6 million.

At the same time, towns and cities across the state are debating how to handle requests from paving companies seeking more money for jobs they bid on earlier this year -- before liquid asphalt prices skyrocketed.

Some are cutting back or delaying paving projects in the hope that prices will fall, according to Pete Coughlan, a DOT official who works directly with municipal officials.

While such a move might be preferable to paying a surcharge on paving needs this year, it doesn't get your roads repaired.

And put off those repairs too long, DOT Deputy Commissioner Gregory G. Nadeau said, and the cost of rehab increases exponentially -- hardly a desirable scenario when revenues are flat or decreasing.

"We've got to think long-term about these problems," Nadeau said. "We are not going to solve these problems overnight. For the last 100 years, our whole transportation system was built on the premise of cheap oil. We have to go the route of thinking that we need to reduce our reliance on foreign oil and that we need a new funding method to fund transportation.

"If we don't, we are going to be continually faced with trying to do more with less to take care of the system."

CRUMBLING INFRASTRUCTURE

And that transportation system is hurting.

The Maine Better Transportation Association said as much in a report released last year entitled "Can We Coast Much Longer?"

Among its findings the association noted that state roads rated poor for pavement and ride quality increased from 6 to 25 percent of the total from 2001 to 2004, while roads rated fair dropped from 62 to 39 percent.

Money for Maine's highway fund also is going the wrong direction as well.

As a percentage of state revenues, the fund was as high as 26 percent in 1975.

Thirty years later that percentage had dropped to 10 percent, according to the report.

"Things were bad last year," association executive director Maria R. Fuentes said, "and things are worse this year."

Fuentes said the average motorist in Maine pays $300 a year in car repairs as a direct result of poor road conditions.

Maine is not alone in this predicament.

Fuentes and DOT's Nadeau each stressed that an aging transportation system is a national problem.

But the problem is more pronounced in Maine than in most states for several reasons, they said.

All states rely on federal money to a great extent to pay for road projects.

Those federal dollars, though, are awarded based on population in large part.

Maine has the disadvantage of being a large geographic but sparsely populated state.

"We have more than twice as many miles of road as New Hampshire," Fuentes said, "but we get about the same amount (of federal money) because we have about the same population."

Charles Banks, Maine Asphalt Paving Association's executive director, said Maine also has the misfortune of being a cold weather state.

That means roads tend to take a beating during the winter, which cuts their life span -- sometimes dramatically -- compared to roads in southern states.

The recent spike in paving costs simply is the latest blow to Maine's road system.

COST CRISIS

Banks said the soaring cost of liquid asphalt gets most of the media attention.

But Banks said the liquid asphalt increase is only part of the problem. Paving companies also are seeing jumps in most of the other costs associated with road projects.

"To just look at the cost of liquid asphalt," Banks said, "is just looking at one piece."

Banks said paving companies in his association are all paying much closer attention to their costs. He said escalator clauses, once rare, probably will become standard operating procedure when contracting for road work in the future.

Such clauses automatically adjust contracts to reflect cost changes so that contractors are not caught absorbing huge losses when material prices soar as they did this year.

Yet putting safeguards in contracts is not a cure-all. Paving companies have other fears as well.

"Another concern," Banks said, "is that because of increased costs, customers just don't have the money in their budget to pay for projects, whether it's a driveway or a highway."

That means paving companies may struggle to find business.

It also means many aging and crumbling roads don't get repaired -- at least not in the short run.

This already has happened this year at the state level with DOT's decision to suspend 85 miles of highway work.

Harder to determine is how much this will impact the local level.

DOT's Coughlan, however, is not optimistic.

Municipalities, he said, rely largely on money from DOT for their road projects. But that money simply is a percentage of the DOT highway maintenance budget, a budget that is shrinking rather than growing.

Coughlan also points out that of Maine's 22,000 miles of road, towns and cities are responsible for about 14,000 miles.

"If you were to rate our roads statewide," he said, "I've got to believe that the average rating is heading downhill rather than heading uphill if prices keep going the way they do."

FUNDING ISSUE

State and local officials agree that the state can no longer rely primarily on the gas tax for road repair funding.

"We really shouldn't be surprised by this," Fuentes said. "When Dana Connors was transportation commissioner 15, 16 years ago, he said we are going to have to find a new funding source.

"On the national level, people made the same recommendation. But nobody found (the new funding source). What they were up against is people not wanting to pay more in taxes. Yet our infrastructure is getting older and older."

In "Connecting Maine," DOT's long-term planning document, state transportation officials project transportation needs for the next 20 years in two 10-year chunks.

They also project a funding gap -- costs minus revenue -- of between $2.5 to $3 billion for that first 10 years.

DOT's Nadeau does not blame state government for the funding shortfall.

Quite the contrary, he praises legislators for approving in their last session $160 million over four years for bridge repair and reconstruction.

Yet that injection of money does not begin to solve the funding problem.

Given the financial realities, Nadeau said DOT has taken steps to cut costs and increase efficiency wherever possible.

In the last few years, he said, DOT has taken 80 trucks off the road, so that today it is covering more roads with fewer vehicles.

State transportation officials also are working with the University of Maine on replacing steel -- another high cost material -- with composite materials.

Those composite materials have become more price competitive relative to steel with the advantage of not rusting, Nadeau said.

DOT is even changing the way it approaches construction projects.

The recent work on Interstate 295 is a prime example.

Nadeau said by closing a 20-mile stretch of highway to traffic during reconstruction, DOT avoided the safety concerns and expense involved with dealing with traffic.

Still, better efficiency and innovative materials and approaches cannot solve the entire funding gap.

Addressing transportation infrastructure needs has to become a national priority that is backed by dollars, Nadeau said.

And national leaders must understand, he said, that Maine is every bit as important as any other state in this regard.

"If our (transportation) system fails," he said, "it is not just a problem for Maine. We are part of the national economy. A lot of important production goes on here that supports the national economy."

BY COLIN HICKEY
Staff Writer, Kennebec Journal, 09/08/2008


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