Guidelines for Analysis of Investments in Bicycle Facilities (2006)

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47 CHAPTER 5 APPLYING THE GUIDELINES The previous chapters described several issues surround- ing any analysis of investments in bicycle facilities; the web- based tool provides the user with a means to performing such analysis. This chapter describes how to apply the guidelines in the field. Applying the described tool—Benefit-Cost Analysis of Bicycle Facilities—provides the project proponent with the basic technical information needed to advance a proposed project through the development process. The project propo- nent will have an initial estimate of capital costs, including cost of design, real estate acquisition and construction, and operations and maintenance costs. Additionally, the propo- nent will have an estimate of use and associated benefits. With this information, the project proponent can develop public support for the project (a key step to success in proj- ect implementation) and proceed into the transportation proj- ect development process. In addition to defining the project and its benefit-cost char- acteristics and initiating efforts to develop public support, an important early development task is to identify potential fund- ing sources and the path to securing project funding. Principal sources of potential project funding include federal transport- ation programs. Some state and private programs may also be sources of project funding. FEDERAL FUNDING SOURCES Federal funds represent the largest potential source of fund- ing for bicycle facilities. The U.S. DOT’s FHWA administers the largest of these funding programs. The principal federal funding sources for bicycle facilities are the Transportation Enhancements (TE) and the Congestion Mitigation and Air Quality (CMAQ) programs. Bicycle projects are also eligi- ble for funds from FHWA-administered programs such as National Highway System (NHS), Federal Lands Highways, National Scenic Byways, and Recreational Trails. Transportation Enhancements The Intermodal Surface Transportation Efficiency Act (ISTEA) established the TE grant program in 1991. TE funds can be used to fund a variety of “non-traditional” projects, such as bicycle facilities. Since the creation of the program, 45% of TE funds have been spent on bicycle and pedestrian facilities. Bicycle facilities that are primarily designed for transportation rather than recreational uses are eligible for TE funds. The Transportation Equity Act for the 21st Century, autho- rized in 1998, provided that 10% of Surface Transportation Program (STP) funds authorized be set aside for TE funding. This TE set aside is estimated between $500 million and $750 million per year. Each state’s DOT is charged with deter- mining project eligibility for TE funding. In some states, a sitting “enhancement committee” is given this responsibility, as well as the responsibility for establishing project priorities. Most states also require matching funds from the project spon- sor of at least 20% of the project budget, with the remaining funding coming from the federal TE funds. The recently passed transportation bill, SAFETEA-LU, also provides sub- stantial funds devoted exclusively to constructing bicycle facilities. CMAQ In 1991, ISTEA also created the CMAQ program. The CMAQ program, jointly administered by the FHWA and the FTA and reauthorized under TEA-21, provides more than $1.3 billion per year to state DOTs, Metropolitan Planning Organizations (MPOs), and regional transit agencies (RTAs) to invest in projects that reduce targeted air pollutants from transportation-related sources. Because CMAQ funds are intended to improve air quality, funds must be spent on projects in air quality non-attainment or maintenance areas. A non-attainment area is an area cur- rently designated by EPA as not meeting the national ambi- ent air quality standards (NAAQS). A maintenance area is one that was at one time a non-attainment area but currently meets NAAQS and has been re-designated by EPA. Desig- nated areas are described in the Code of Federal Regulations. Although all states receive CMAQ funds, those that have non- attainment areas receive proportionally more CMAQ funding than other states. Historically, only 3% of CMAQ funds annually have been used to build bicycle and pedestrian facilities. The over- whelming majority of CMAQ funding has been used for

traffic flow measures and for transit projects. Eligible bi- cycle projects include trails, storage facilities, and market- ing programs. Other FHWA Programs Other federal funding programs for which bicycle facili- ties are eligible provide much lower funding levels than TE and CMAQ and are more restricted in their use. Although NHS funding levels are comparable with overall STP fund- ing levels ($5.5 billion in FY 2003), use of the funds is lim- ited to roadways that are part of the interstate or national highway systems. There is no set aside for enhancements, although up to 50% of NHS funds can be transferred to the CMAQ program. The Federal Lands Highways Program receives approxi- mately $700 million per year, all of which must be spent on parkways, Indian reservation roads, or public lands roads. National Scenic Byways funds can only be applied to desig- nated All-American roads or National Scenic Byways, and funding levels are $25 million per year. The Recreational Trails program is funded at $50 million per year. States must spend at least 30% of their apportionment for this program on recreational trails for motorized vehicles such as snowmobiles. Department of Interior—Land and Water Conservation Fund (LWCF) The LWCF program provides matching grants to states and local governments for the acquisition and development of public outdoor recreation areas and facilities, including bicy- cle facilities. In FY 2004, $160 million was provided to the states through this fund. States receive individual allocations of LWCF grant funds based on a national formula (with state population being the most influential factor). Then states ini- tiate a statewide competition for the amount available. Proj- ects are scored and ranked according to the project selection criteria and successful applications are then forwarded to the National Park Service for formal approval and obligation of federal grant monies. The first step for potential applicants is to contact the cooperating state office to find out about local application deadlines, state priorities and selection criteria, and what kinds of documentation are required to justify a grant award. Federal Planning Funds In addition to the federal capital funding sources described above, bicycle projects obtain federal planning funds. FHWA planning funds (3C PL) and State Planning and Research (SPR) funds are two common sources for funding planning studies. Each state receives funding from FHWA based on an alloca- tion formula. The states then distribute 3C PL funds to MPOs 48 and other agencies for funding decisions. MPO recipients program these planning funds through the Unified Planning Work Program (UPWP). Decisions on SPR funds are typi- cally made at the state level. The preliminary estimates of bicycle project costs and benefits developed through appli- cation of the guidelines can be valuable in conveying the relative merits of a project planning study for 3C PL and SPR funds. NON-FEDERAL FUNDING SOURCES The federal government is not the only source for bicycle funding. State and local governments all have the capacity to spend general revenue funds or dedicated revenue on trans- portation projects, including bicycle facilities. The processes for selecting projects can vary widely across state and local governments. Although it is not possible to cover each project selection process in detail, the nature of the estimates gener- ated through the guidelines is such that it should be applicable to any set of criteria or evaluation methods. In addition to government funding for bicycle facilities, some private and non-profit organizations provide grants specifically for the development of bicycle facilities. Two examples of these grants are the Bikes Belong program and the Kodak American Greenways awards. Bikes Belong Coalition Grants In 1999, bicycle industry leaders founded this organization in Boulder, Colorado, with the mission of “putting more peo- ple on bikes more often.” Bikes Belong grants are in amounts up to $10,000, with funding goals including increased bicy- cle ridership, leveraging additional funding, building political support, and promoting cycling. These guidelines can assist an applicant in making the case that a project will increase ridership and promote cycling. Bike paths, trails, and lanes are among the facilities eligible for Bikes Belong grants, with non-profit organizations and public agencies (not individu- als) being eligible grant recipients. The grant program has strived to fund important and influential projects that lever- age TEA-21 money and build momentum for bicycling. From 1999 to 2002, Bikes Belong funded 53 projects for a total of $530,000, with $460,000 in bicycle facility grants leveraging $246 million in federal funding in 23 states. Kodak American Greenways Awards Since 1992, the Kodak American Greenways program has awarded nearly 500 groups across the nation with seed grants to support the development of community-based, action- oriented greenways projects. The program defines greenways as “corridors of protected, public and private land established along rivers, stream valleys, ridges, abandoned railroad cor-

ridors, utility rights-of-way, canals, scenic roads, or other linear features. They link recreational, cultural, and natural features, provide pathways for people and wildlife, protect forests, wetlands, and grasslands, and improve the quality of life for everyone.” In 2004, grants were awarded to 39 proj- ects. Although only one was specifically identified as a bicy- cle facility, many of the projects are multi-use trails that would accommodate bicycles, and bicycle trails are designated as an eligible grant project on the grant application. Grant applica- tions are completed online, and provide several opportunities for applicants to describe project benefits in detail. Securing Federal Funding Through State and MPO Processes As a condition of eligibility for federal funding, trans- portation projects must be included in a federally certified transportation planning process. In urban areas, MPOs are responsible for complying with federal planning requirements. In non-urban areas state DOTs are responsible for transporta- tion planning. In accordance with the federal planning requirements, proj- ects proposed for federal highway capital funds like TE and CMAQ and the others previously described must be pro- grammed in a Transportation Improvement Program (TIP). The federal regulations require the submittal of TIPs on a bien- nial basis. Project planning is also eligible for federal funding. Planning efforts must be included in the federally required UPWP to be considered for funding. Project sponsors attempting to finance a bicycle facility with CMAQ, TE, or other federal highway funds, need to first sub- mit their project to the state DOT or committee responsible for determining funding eligibility. Once project eligibility has been confirmed, sponsors must propose their project for fund- ing through the TIP development process. In urbanized areas UPWPs and TIPs are developed by MPOs, the body responsi- ble for planning and programming all of the federal surface transportation funds allocated to the urban area. Participation in the broader MPO planning and programming process is helpful in advancing projects into the UPWP and TIP. In non-urban areas of states, federal programming deci- sions are the responsibility of the state DOT. Although there are some states, such as Massachusetts, where regional bod- ies in non-urban areas are still given the authority to priori- tize eligible projects for CMAQ or TE funds, in most states both eligibility and prioritization are within the purview of the state DOT. Information resulting from the application of the guide- lines provides preliminary estimates of project cost and iden- tifies project benefits to assist state DOTs in understanding a new proposal’s overall effectiveness particularly as it relates to furthering achievement of air quality improvements. In addition, it permits evaluators to better assess the proposed bicycle project relative to other candidates for funding. As 49 some DOTs and MPOs take steps to create a more transpar- ent planning process with clearly defined criteria, the guide- lines become an important tool for planners to refer to as their proposed project undergoes MPO evaluation. Project Development Transportation projects typically go through several phases in planning and development. Simple projects, such as pur- chase and installation of bike racks, would bypass most devel- opment phases and would likely be limited to minimal design, acquisition, and installation efforts. More complex projects such as a major regional bike path may require addressing more of the phases described in the following steps to imple- mentation although it is expected that most facilities would require minimal comprehensive planning and fewer design phases than major transportation projects. Information from application of these guidelines for market demand and project benefits would likely remain unchanged through the development process unless the scope of the proj- ect were to change to provide a substantially different LOS to the cyclist than that of the original proposal. Regional trans- portation system models are generally not designed to proj- ect bicycle market information in sufficient detail to improve upon the estimates of facility use and benefits provided by application of the guidelines. As project scope becomes bet- ter defined through the development process, more reliable project specific information on construction and real estate costs should become available. This more specific informa- tion should be used to update or replace the cost information in the guidelines as needed to make decisions on funding and programming the proposed project. • Regional Planning—the regional planning process is typically a comprehensive long-range (20-year horizon) review of the region’s transportation needs and goals and identification of plans to meet those needs. The results of the process are presented in the Regional Transporta- tion Plan (RTP). Regional bicycle program goals might be considered in such a process but specific bicycle facil- ities would not likely be addressed other than as elements of a broadly described program. Information resulting from application of the guidelines should be sufficient to evaluate proposed bicycle facility projects, such as paths, in the RTP. • Alternatives Analysis/Corridor Studies—When projects are not well defined, area or corridor studies are con- ducted to develop, evaluate, and define specific project proposals. The product of this effort is typically identi- fication of a preferred project with design and con- struction cost estimates developed to the conceptual/ schematic design (5 to 10%) level. This analysis is typ- ically reserved for major projects as a means of avoid- ing costly design in later development stages on projects

that may not be economically feasible. Bike facilities are typically sufficiently well defined by their setting and of modest cost relative to major roadway or transit projects to preclude the need for this step in the devel- opment process. Should analysis at this level be con- ducted for a proposed bicycle path, the work could be eligible for federal funding assistance through the UPWP. At this level of analysis, guideline information on con- struction costs would be updated based on schematic design and real estate costs would be updated based on estimates from local assessors or realtors. • Preliminary Engineering Design/Environmental Impact Analysis—Major transportation projects and projects with potentially significant environmental impacts are usually advanced through design in two phases: Prelim- inary Engineering (PE) design/Environmental Impact Statement (EIS), and Final Design. At the completion of a PE, the project scope and real estate requirements should be specifically identified and National and State Environmental Analyses should be completed. Federal funding assistance for this and all subsequent project development phases would usually come from capital funding sources, requiring the project be included in the TIP. Construction costs developed from the guidelines should again be updated at completion of this develop- ment phase. If property acquisition is required detailed property plans should be completed at the end of this development stage. 50 • Final Design—Final Design consists of developing plans and specifications in sufficient detail to con- struct the project. This project phase results in final pre-construction cost estimates. If property acquisition is required, the real estate acquisition process, which can be time consuming, should be initiated early in this phase of project development with preparation of appraisals followed by acquisition. Both construction and real estate estimates can again be updated in this phase. • Construction, Operation, and Maintenance are the final project phases. The prescribed tool provides a reliable starting point for urban planners, policy officials, and decision-makers to understand the merits and costs of bicycle facilities. These officials are often presented with information about how much these facilities cost. Opponents of bicycle projects con- sistently use such information to demonstrate how trimming particular projects would preserve funds that could be used for other aims. The described tool and guidelines—and in many respects the underlying research—provide planners, decision-makers, and policy officials with a reliable, consis- tent method to compare bicycle facilities and measure often stated benefits. Such analysis could allow for better use of lim- ited transportation funds. Having a constant measure of the costs and benefits of the bicycle facilities will help decision- makers to pursue broader public policy goals of increased cycling and a healthier population.