Compiled by Jennifer Jett Prezkop
Change is happening in West Virginia. Small businesses remain the backbone of the state’s economy, and a movement to support and promote the creative class is encouraging new entrepreneurs to take the leap into business ownership. The West Virginia Department of Commerce continues its efforts to recruit new businesses into the state while assisting local manufacturers in marketing their products around the world. These days, West Virginia really is “Open for Business.”
Ensuring the state remains open for economic development has its challenges, one of the most critical being the state’s outdated infrastructure. In order to recruit businesses to the Mountain State, vital pieces of infrastructure like roads, water lines and broadband must be reliable and accessible.
Necessary infrastructure doesn’t end with highways, pipelines and connectivity, though. Looking around us, there are forms of infrastructure that impact every element of day-to-day life, some of which are overlooked during conversations about infrastructure. The success of the banking industry; the health of the state’s construction, engineering and architecture industries; and the evolution of health care are all important infrastructure issues that, when pulled together, create a clear image of what it takes to support and grow cities throughout the state and the state as a whole.
In this infrastructure overview, West Virginia Executive asked industry leaders in multiple types of infrastructure to provide an update on the challenges they are facing and how they are addressing them. While West Virginia’s infrastructure may have its challenges, leaders in industries across the state are paying attention, and they are pushing for action to address the problems that prohibit growth. In order for West Virginians to take advantage of the opportunities at hand, the state’s infrastructure must be a top priority.
Architecture
By Judy Belcher
The word infrastructure typically calls to mind transportation and utilities, but buildings such as schools, courts, libraries and affordable housing are just as vital as roads, bridges and mass transit systems. Schools are the second largest public infrastructure investment after transportation. West Virginia’s schools have an estimated capital expenditure gap of $265 million. Unless buildings are included in the discussion about public infrastructure, taxpayers will be stuck with decrepit community places, higher energy bills, deferred maintenance expenses and vulnerable structures.
When designing new buildings, the state must focus on smart design and energy efficiency. Almost 40 percent of all U.S. energy is consumed by buildings that produce carbon through heating, cooling, lighting and construction. Building codes are the foundation of a resilient, efficient and safe infrastructure. The codes that have been adopted in West Virginia protect life and property and ensure the built environment’s ability to withstand extreme weather events, devastating fires and seismic and geologic events.
Whether living in cities or rural towns, West Virginians deserve quality public infrastructure that uplifts their communities. The infrastructure designed today must be worthy of passing down to our children tomorrow.
Banking
By Sally Cline
Banks play a critical role in maintaining vibrant local economies by creating jobs, lending to small businesses and providing banking services to consumers. Historically, community banks have served West Virginia well. In 2016, West Virginia banks served 2.2 million customers through loan and deposit services, extended $2.6 billion in small business loans and employed 8,858 people.
In recent years, community banks have been disadvantaged by federal regulations. After the recession, federal policy makers surmised regulatory controls could be used to curb future crises, and several new regulations were imposed on the banking industry, many of which disproportionately affected community banks. This led to higher costs of doing business and a significant decline in the number of community banks across the country. The number of bank charters in West Virginia has declined by 15 percent in less than three years.
The future of community banking depends on how the industry responds to excessive regulation and consolidation. It is important banks maintain a diverse and decentralized financial system to support our economies, consumers and small businesses. However, equitable regulation is needed so community banks are not constrained by rules designed for the largest financial institutions.
Broadband
By Robert Hinton
West Virginia significantly trails its neighboring states and global competitors when it comes to scalable and reliable broadband access, but without the appropriate infrastructure, the Mountain State will not achieve superior broadband connectivity. The global transition to a data-driven economy coupled with increasing mobility requires the development of broadband infrastructure systems that support economic growth in a digital world.
Businesses of all types and sizes require infrastructure systems to be profitable and successful. Along with coal mining and other major industries, the state’s small businesses, enterprises and institutions also rely on a dependable broadband connection to conduct business efficiently. West Virginia must encourage internet service providers to develop broadband infrastructure and improve connectivity through the creation of policies and regulations that recognize broadband as essential.
West Virginia has significant opportunities to accelerate the expansion of broadband infrastructure at little or no cost. Access to state-owned highway rights-of-way is critical for both regulated utilities and non-rate regulated broadband service providers. Along with the pursuit of middle-mile and last-mile fiber expansion, the state must attract Tier I networks and long-haul fiber carriers to build the infrastructure needed to reach residential and business customers and reduce the lower-tiered carriers’ ability to competitively access internet exchange points and connect networks.
To attract broadband infrastructure investment, the Mountain State must utilize available assets, such as its proximity to major internet exchanges and existing highway infrastructure systems, ultimately leading to a more connected West Virginia.
Construction
By Mike Clowser
Between January and December 2017, construction jobs in the Mountain State grew by 4,300. These improving construction numbers have come from several sectors of the state’s economy, including construction activity resulting from new funding for the West Virginia Division of Highways and Governor Jim Justice’s Roads to Prosperity bond amendment passed by voters last fall. These two initiatives will provide $2.8 billion statewide for road and bridge projects. Engineering and construction firms have already begun hiring people to work on these projects. Those supplying the industry—equipment dealers, steel and other material suppliers and aggregate producers—are also hiring.
Multiple natural gas pipeline projects are also underway in the state. Many contractor, subcontractor, engineering and supplier members of the Contractors Association of West Virginia (CAWV) are working in the oil and gas industry, designing and constructing well pads, retention ponds, access roads and water lines. For the first time in a number of years, CAWV members are also going back to work in the coal industry, performing mine face-ups and working on coal haul roads and other coal-related activities.
While the state’s construction industry as a whole has greatly improved in the past few years, the majority of the growth revolves around North Central West Virginia. Hospitals, office buildings and retail and educational facilities between Clarksburg and Morgantown are keeping the industry busy. Construction activity is also picking up in the Eastern Panhandle with manufacturing facilities such as Procter & Gamble, ROCKWOOL and TeMa North America creating the need for support facilities.
West Virginia’s continued economic upturn and improved transportation system will have a ripple effect as companies move to or expand into the Mountain State. This will create jobs as contractors build to meet the demand.
Engineering
By Michael Haid
Even in a down economy, the need for engineers is ever present. From site development design to chemical operations and civil engineering design to natural resources extraction fields, engineering is a critical service for West Virginia’s economy. However, prior to the emergence of the shale gas industry and the recently passed road bond referendum, the industry was declining in numbers.
Thankfully, the passing of the Roads to Prosperity bond in 2017 has had a dramatic impact on West Virginia’s engineering industry. The general obligation bond itself totals $1.6 billion, and many other legislative changes such as revisions to Grant Anticipation Revenue Vehicle bond limits and parkway tolls will pump even more money into the state’s ailing infrastructure over the next several years.
So far, nearly 20 new firms have focused on doing business in West Virginia, and many of them have opened offices here. Additionally, the core firms that have been here for years have grown substantially. Employment numbers for the firms have risen 30 percent over the last year, and the hope is that the investment in the public sector will lead to long-term private sector investment. Time will tell, but engineers should ride this big wave for years to come.
Water & Sewer Utilities
By Wayne Morgan
Of the many types of infrastructure vital to everyday life in West Virginia, water and sewer utilities are at the top of the list. In total, the state has 326 public water utilities and 293 public sewer utilities in operation. From a consumer standpoint, 652,228 water customers are being served by a public water system, and 449,449 are being served by a public sewer utility.
The West Virginia Infrastructure and Jobs Development Council evaluates requests for water and sewer projects. According to its 2017 Needs Assessment report, pending water projects are in need of approximately $296 million in funding, and pending sewer projects require $395 million. In addition, the requirement to satisfy the state’s combined sewer overflow need exceeds $1.6 billion. The cost of providing water service to every remaining unserved household in the state is approximately $2.3 billion. For sewer service, the estimate is approximately $10.7 billion.
Challenges to meeting the state’s water and sewer infrastructure needs include available funding levels and the state’s geography and geology, which create higher costs for underground infrastructure. While there are far greater needs than there are funds available, state and federal funding agencies are working with public utilities and professional teams to fund water and sewer projects that are ready to proceed to construction.
Transportation
Provided By WV Department of Transportation
West Virginia has a varied transportation infrastructure. The Mountain State doesn’t have any oceans, but it does have ports. It also has groundbreaking bridges and every type of hill, valley, twist and turn on its highway system.
The West Virginia Department of Transportation (WVDOT) is made up of eight agencies: aeronautics, highways, motor vehicles, office of administrative hearings, parkways, public port authority, public transit and state rail authority. Maintaining West Virginia’s transportation system is challenging due to both the state’s terrain and economy, but the WVDOT has many capable employees who rise to that challenge every day.
West Virginia has 38,770 miles of public roads—34,691 of which are owned by the state—and 6,958 bridges. The West Virginia Division of Highways is divided into a central office and 10 districts, each consisting of between four and seven counties. Management at a district level tries to balance the varied needs of the counties, with different challenges presented in different parts of the state. While effort is made to increase the state’s highway system with new roads, most of the work takes place in preserving and maintaining the existing roads. These maintenance activities include ensuring proper drainage to keep water from destroying pavements and rehabilitating older bridges to give them new life.
West Virginia has an assortment of bridges, and all are important. Smaller bridges on one-lane paved or dirt roads are often the only way for citizens to travel from their homes to nearby communities. From the Wheeling Suspension Bridge in Ohio County to the Philippi Covered Bridge in Barbour County to the Phil G. McDonald Bridge—the highest interstate bridge in the country—in Raleigh County, West Virginia’s bridges are proof that a land of mountains and rivers is destined to also be a land of astonishing bridges.
Airports are also vital to West Virginia’s transportation system. From private to commercial and passenger to air cargo, the state’s airports play a significant role in its economy and the communities they serve. West Virginia is home to 24 airports, including 17 general aviation and seven commercial airports. Of the seven commercial airports, five are served by the Essential Air Service program. These airports are also located close to other intermodal forms of transportation, thereby allowing greater access and competitive transportation opportunities to businesses and individuals.
The West Virginia State Rail Authority owns and operates the South Branch Valley Railroad, oversees the West Virginia Central Railroad, maintains train stations in the Eastern Panhandle to connect citizens to Washington, D.C., and banks old rail lines to be used in the future and as rail trails. The authority also works to grow the tourism industry with short-line tourist trains that give riders a way to access beautiful West Virginia landscapes. Many industries, such as the thriving poultry industry, rely on the railroads to move their goods to market.
The West Virginia Port Authority works where highway, rail and water transportation are combined. Barges make use of the state’s rivers as a means of transporting great volumes of material. West Virginia’s ports include the Buffalo-Putnam Port District, Cabell-Wayne Port District, Port of Huntington Tri-State, Jackson County Maritime and Industrial Center and Kanawha Valley Local Port Authority District.
Positioned within 500 miles of the most densely populated centers in the country, West Virginia has great potential to be a hub of industry and innovation. The people of the WVDOT agencies have worked tirelessly to create the systems and opportunities we have and continue to work to expand them.
Health Care
By Danny Scalise
The U.S. health care system is in a state of flux. The landmark Patient Protection and Affordable Care Act enacted in 2010 has been and will continue to be challenged, and insurance premiums and deductibles are increasing for most people. To make matters worse, primary care physicians are getting harder to come by—especially in rural places like West Virginia.
According to the Journal of the American Medical Association, this country is on the cusp of a severe physician shortage. This phenomenon is hard on patients in places like New York or Chicago, but in rural states like West Virginia, the challenges are multiplied by distance, low income, aging population and lower levels of socioeconomic status. In the Mountain State, too many counties have too few primary care physicians. There are many complicating factors, such as the cost of medical education that drives physicians to opt for specializations, thereby increasing their income. When combined with the difficulty of setting up a small practice in a rural area, many students decide to forgo a career in primary care.
Another complicating factor for patients is that physicians are running shy on time because they are required to spend more time typing on a computer. Documentation of the visit and the myriad of forms physicians need to navigate to order tests or treatments are becoming more cumbersome, and each payer presents different requirements. This takes more time away from the patient, making the physician a data entry operator.
In recent years, West Virginia has relied on J1 visa waivers for foreign physicians. Some of the finest medical minds in West Virginia have come from abroad. However, the state does a decent job of producing homegrown physicians. The next step is to have more of them serve West Virginians. In the north, each graduating class at West Virginia University gives the state several physicians. The oldest medical school in West Virginia, it has been providing physicians to the Mountain State for years. Marshall University also provides physicians, and the largest supply of homegrown primary care physicians comes from the West Virginia School of Osteopathic Medicine (WVSOM). WVSOM is the leading medical school in the nation for providing primary care physicians practicing in rural Appalachia.
The quality of the state’s graduates is high, yet the number is not enough to sustain primary care in the state. West Virginia physicians using modern technologies such as telemedicine can alleviate some of the burden, but we need to have a robust broadband infrastructure and sound public policy that permits West Virginia physicians to care for their patients using these technologies and reduces regulatory burdens in the practice of medicine. There is no substitute for a strong patient-physician relationship, and technology should be a way for West Virginia physicians to see more of their patients.
