Government Officials, Practitioners and Academics Gathered Together at a Conference...

Government Officials, Practitioners and Academics Gathered Together at a Conference in Sacramento to Discuss California's Infrastructure Crisis

Keston Institute Forum Highlights Broad Range Of Public And
Private Solutions For Financing California's Infrastructure Needs
SACRAMENTO, Calif.--(Business Wire)--
Leading academics and policy-makers gathered in Sacramento
yesterday to discuss solutions to one of California's most pressing
and controversial problems: how to meet infrastructure investment
needs. The event, titled "Paying for Tomorrow's Infrastructure:
Options and Strategies for Sustainable Financing," was hosted by The
Keston Institute for Public Finance and Infrastructure Policy, which
is based at the University of Southern California.

The conference consisted of four major sessions, and attracted
interest from a wide spectrum of institutions and individuals, many of
whom have a critical role in meeting this challenge.

"That over 100 government officials, practitioners, and academics
devoted a full day to discussing infrastructure finance issues
underscores the critical importance this issue plays with the people
of California," said Richard G. Little, Director of the Keston
Institute for Public Finance and Infrastructure Policy at the
University of Southern California.

"There's a serious shortage of high-quality infrastructure
services. The investment we're talking about is not necessarily about
growth, this is about building the infrastructure we need now for the
economy and population that we have today," said David Crane, Special
Advisor for Jobs and Growth to Governor Schwarzenegger, who opened the
conference with the morning keynote address. Crane emphasized the
urgency and enormity of the problem California faces. He also
discussed the wide variety of options for solving problems, stressing
the need to develop beneficial partnerships with the private sector
and to get the most of our every dollar spent.

California State Treasurer Bill Lockyer offered a contrasting
perspective during the lunchtime keynote, calling for political
leadership and public sector action to increase investment.

"Let's explore public/public partnerships as well. Let's figure
out if there are ways to accelerate investment in these infrastructure
needs by forging partnerships between state and local entities," said
Lockyer, who also highlighted his current proposal to establish an
accountable and flexible statewide transportation authority to work
with local and regional agencies that would address the most critical
needs. He also emphasized the potential of immediate and enormous
savings that could be achieved by investing in improved energy
efficient public buildings.

Other panelists included Martin Wachs, Director, Transportation,
Space and Technology, RAND Corporation; David E. Dowall, Director,
Institute of Urban and Regional Development, UC Berkeley; Ellen Hanak,
Senior Fellow, Public Policy Institute of California; Eric J. Brunner,
Department of Economic, Quinnipiac University; Asha Weinstein Agrawal,
Mineta Transportation Institute, San Jose State University; Brian G.
Thomas, Chief Finance Officer, Metropolitan Water District of Southern
California; Steve Heminger, Executive Director, Metropolitan
Transportation Commission; Peter Gordon, Professor of Policy,
Planning, and Development, University of Southern California; Michael
Deane, Office of Water, United States Environmental Protection Agency;
Michael A. Pagano, Professor of Public Administration and Interim
Dean, College of Urban Planning and Public Affairs, University of
Illinois, Chicago.

A highlight of the day was Martin Wachs' historical overview of
transportation finance in California, "When the Gas Tax Runs Dry."
Wachs suggested that user fees for infrastructure are nothing new, but
are absolutely critical to funding future needs. New technology for
electronic tolling has made user fees easier to implement. Moreover,
user fees could actually promote environmental goals and improve the
efficiency of transportation systems overall, in that some commuters
would likely seek alternatives to fees and thus be spurred on to car
pool or take public transportation.

Another highlight was Asha Weinstein Agrawal's informative
presentation of recent survey results that suggested a major
generation gap in attitudes toward financing innovation. According to
the survey, young people are most likely to support private sector
investment in new transportation infrastructure as well as support
potential "green" fees that promote environmental goals.

Prof. David Dowall stressed the need for innovation and change in
the approach to financing infrastructure, pointing out that California
was no longer on the cutting edge. According to Dowall, in order to
catch up and remain competitive, California should look to existing
model programs and strategies implemented throughout the country and
the world. As such, state and local leaders could benefit from lessons
learned elsewhere and adopt approaches to financing that have already
been tested and refined.

Michael Pagano, of the University of Illinois, also emphasized the
importance of critical comparisons, noting that California lags behind
many other states in terms of its overall infrastructure performance
management. He underscored the importance of linking new financing
with sound planning and the efficient use and maintenance of existing
facilities.

Several speakers addressed the central problem with water
infrastructure financing, which is a major disconnect between the
value of water and its pricing in the state. Both Brian Thomas, Chief
Financial Officer of the Metropolitan Water District of Southern
California, and Michael Deane of the U.S. Environmental Protection
Agency spoke about the importance of pricing water appropriately to
promote conservation and manage demand, as well as to support
investment in the facilities that will meet future needs and
environmental goals. Often, the true costs of providing water are not
reflected in its price for users, leading many users to take this
scarce and vital resource for granted.

Ellen Hanak of the Public Policy Institute of California
underscored this point as well, although she focused on the need for
new investment in flood control infrastructure as an even more urgent
problem. Aging levies and deteriorating environmental quality in the
Sacramento Delta could threaten the water supply of the entire state
and poses a major financial and political challenge for state leaders.

While speakers did not always agree on the preferred mechanisms
for new investment in infrastructure, it was clear by the end of the
final session that innovation and flexibility in financing is critical
in the face of such enormous need. Richard Little remarked, "The
magnitude of infrastructure revenue shortfalls is such that we must
consider all options for financing transportation and other vital
services."

About The Keston Institute

The Keston Institute for Public Finance and Infrastructure Policy
at the University of Southern California is a non-partisan research
center that actively addresses California and the nation's public
finance and infrastructure challenges. It is specifically focused on
regional and national transportation and water issues and promoting
economic viability, livability and environmental sustainability.

The University of Southern California (USC), which houses The
Institute within its School of Public Policy, Planning and Development
(SPPD), whose faculty collectively ranks third at USC in terms of per
capita research grants, is one of the nation's leading research
facilities for issues relating to public finance and infrastructure
finance in the nation.

Together with the Keston Institute, the USC School of Policy,
Planning and Development, has created the only educational and policy
degree track in the field of civil infrastructure, with the goal of
making USC a world leader in infrastructure and policy development.

The Institute's ongoing research is exclusively focused on
analyzing core infrastructure challenges facing California and the
nation, while presenting realistic, objective recommendations to
voters and policymakers. For more information about The Keston
Institute, please visit www.usc.edu/keston

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