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77 the current transformation of the organization sustainable. The ever, Texas features a population growth rate roughly double Strategic Planning Office will ensure that NCDOT is continu- the average of the greater country. (90) An increasing pop- ously responsive to the needs of North Carolina's citizens. (88) ulation leads to greater strains on the transportation net- work, especially in the metropolitan areas such as Dallas and Houston. The Texas Transportation Mobility Institute Improvement of Performance Measures ranked DallasFort Worth and Houston as the fourth and NCDOT is in a mode of constant improvement and renewal ninth most congested areas in the nation, respectively. (91) of processes and programs. In establishing performance mea- To meet the mobility needs of such metropolitan areas, the sures, NCDOT has become more transparent to the public governor's Business Council estimates that an additional and political entities, but still recognizes that the journey to $78 billion is required over the next 25 years to invest in high- improving its organizational structure is not over. It aims to way improvements. (29) continue developing metrics toward accountable outcomes. The state ranks number one in the country in terms of These metrics in turn will lead to more projects being deliv- total highway mileage. In 2000, Texas had over 301,000 miles ered on time and on budget, using taxpayer money most of public roadway. Of that, TxDOT is responsible for over efficiently. (80) 79,000 highway miles. That figure is more than any other DOT Another bold step in measuring performance is also taking in the country. (92, 93) The agency maintains 1,132,881 acres of form: implementing a new individual performance manage- right-of-way; nearly 1.5 times the acreage of Rhode Island. (94) ment system that evaluates employees' job performance against The state features a diverse landscape that expands from the an objective set of performance measurements and agency Piney Woodlands of the east, through the prairies of north and values that will help employees to plan their careers and achieve central Texas, to the arid southwestern desert of west Texas. their development goals. These landscapes vary from vast open expanses, to rolling hills, to rough and rugged mountainous regions. The climate of Texas also varies considerably, from the extreme humidity Conclusions of the east to the dry deserts of the west. Hurricanes and tor- NCDOT has made some targeted changes in the last few nados have presented recurring challenges to Texas's popula- years. Bold steps toward a complete reorganization and the tion and its transportation system. In 2005 alone, Hurricanes implementation of performance measures leading to greater Wilma, Katrina, and Rita caused the evacuation of 1.8 million accountability, transparency, and efficiency have shaped vehicles from the Texas Gulf Coast, imposing an overwhelm- NCDOT into an agency intent on expediting the delivery of ing burden on the transportation system. (95) programs and projects. Outcome-based systems, operationally effective processes, a horizontally stable organizational struc- The Basics ture, and a concerted system-wide effort toward continuous improvement are the traits that will define the 21st century The stated goals of TxDOT are to reduce congestion, department of transportation. These trends will continue to enhance safety, expand economic opportunity, improve air serve as the foundation for a new NCDOT. quality, and preserve the value of transportation assets. In furtherance of these goals, TxDOT has implemented four working strategies: to use all financial options to build trans- Texas portation projects; to empower local leaders to solve local Evergreen Contracts for Efficiency transportation problems; to increase competition to drive in Project Delivery down costs; and to demand consumer-driven decisions. (96) For transportation funding sources, TxDOT, like most The Texas Department of Transportation (TxDOT) de- states, relies heavily on federal disbursements, which consti- scribes its mission as, "to work cooperatively to provide tute 38.9 percent of total funding. The state highway fund is safe, effective and efficient movement of people and goods." the second greatest contributor to transportation funding That mission is supported by the department's vision, which in the state, representing 31 percent of the total. The state includes the goal of being a progressive state transportation highway fund is fed primarily by the state motor fuel tax, agency recognized and respected by the citizens of Texas. (89) with additional revenue generated by vehicle registration fees Texas is a large south-central state with the second largest and other sources. (93) population in the United States. With over 24 million resi- Just behind the state highway fund, bond issuance consti- dents and a land area just shy of 262,000 square miles, the tutes roughly 30 percent of funding sources. This is a relatively average population density of the state mirrors that of the recent development, as TxDOT maintained a fiscally conser- United States as a whole, 79.6 persons per square mile. How- vative, pay-as-you-go disposition for the first 90 years of its
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78 existence. In 2007, voters approved Proposition 12, which for the state's vast size. It reflects willful recognition on the part the first time allowed the agency to incur debt to deliver crit- of the department's leaders that a centralized structure would ical transportation projects. (93, 97) have difficulty managing far-flung infrastructure and systems, This ability to issue bonds has resulted in a significant which are faced with widely different challenges and demands. shift in the organization's philosophy. For most of its history, That is why one of the department's operational strategies is to TxDOT would not pursue projects without secured funds. empower local leaders to solve local transportation problems. The project selection process now begins with identification At the central level, the department headquarters is based of need, which is followed by funding considerations. The in Austin. The Texas Transportation Commission, a board department maintains a backlog of projects that are ready appointed by the governor, sets department-level policies. to let, save for funding. As funding sources become available, An executive director leads the department and reports to the that backlog of projects is tapped. (97) commission. (94) The executive director is assisted by four As a means of organizing agency operations and creating a assistant executive directors who oversee several operational framework for setting and tracking goals, TxDOT consoli- activities, namely, district operations, engineering operations, dated operations into five major categories: Plan It, Build It, support operations, and innovative project development. (98) Maintain It, Use It, and Manage It. These categories encom- The department houses 18 divisions (as of November 1, pass all of the department's operations and are listed here in 2009) and six offices. The six offices include the Audit Office, order of agency funding allocations. (94) Automobile Burglary and Theft Prevention, Office of Civil The largest share of TxDOT spending is conducted within Rights, Office of General Counsel, International Relations the Build It category. Approximately 40.4 percent of the depart- Office, and Research and Technology Implementation. The ment's spending goes to construction projects. These projects 18 divisions consist of Aviation, Bridge, Construction, Design, can be generally described as capacity enhancements and Environmental Affairs, Finance, General Services, Govern- include both new projects and those that improve or expand ment and Public Affairs, Human Resources, Maintenance, existing infrastructure. (94) Occupational Safety, Public Transportation, Right-of-Way, An additional 35.5 percent of revenue is spent on mainte- Technology Services, Texas Turnpike Authority, Traffic Oper- nance of the transportation system, or the Maintain It oper- ations, Transportation Planning and Programming, and ational category. The department's maintenance strategy Travel. These divisions provide technical expertise and support emphasizes the safety of existing infrastructure. It involves for categories ranging from bridges to government and public reconstruction and rehabilitation of the state highway system, affairs to traffic operations. The offices and divisions provide including structures and signal systems, as well as the Gulf administrative and technical support to the districts. (98) In Intracoastal Waterway and the ferry systems at the ports of addition to technical expertise on engineering and planning Galveston and Port Aransas. (94) issues, these offices ensure statewide consistency in policy and The third large operational expenditure for TxDOT is the approaches. Plan It category. Planning accounts for 19.1 percent of the Texas has been divided into 25 districts, each loosely en- department's budget. Planning activities are performed for all compassing a metropolitan region, typically spanning several modes and include environmental design activities. Is also counties (see Figure 21). The districts oversee the design, includes acquisition of right-of-way and payment of reloca- location, construction and maintenance of the area's trans- tion expenses when necessary for transportation projects. The portation systems. Each is led by a district engineer. (98) Under planning budget also includes research programs that aim to the department's allocation program, each district is given improve safety and financial or operational practices. (94) a set budget to select and fund certain types of projects. This The remaining five percent of the budget is split between program is intended to give the districts the flexibility neces- what TxDOT describes as Manage It and Use It. Manage It sary to address local needs. (94) includes administration and human resources, while Use It In many regards, the decentralization of decision-making covers issuance of vehicle titles and registration, regulation authority has proven to be a success. There is general agree- of motor vehicle dealers, providing information to the trav- ment internally at TxDOT that the districts are well suited eling public, and provision of public transportation outside to identify and respond to the unique demands of each of of metropolitan areas. (94) their respective areas. With the allocation of limited funds, the districts are motivated to prioritize projects critically and explore creative solutions. Organizational Structure Decentralization has proven particularly effective with proj- The overall organizational structure of TxDOT has been ects where public involvement or environmental concerns are designed to suit the state's unique geography and mission. at play. Senior TxDOT staff feels that when a project is deliv- This structure is decentralized and designed to accommodate ered from beginning to end at the district level, there is greater
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79 Environmental Streamlining During the drafting of the latest transportation funding leg- islation, SAFETEA-LU, Texas successfully lobbied, along with four other states (Alaska, California, Ohio, and Oklahoma), to be a part of a pilot program that granted FHWA NEPA review authority to these individual states' DOTs. The program is intended to provide time and cost savings through more effi- cient environmental review. (95) Best Practices for Texas TxDOT has demonstrated a willingness to explore inno- vative practices in terms of financing projects and project delivery. This experimental spirit is born of the department's desire to meet ever-changing demands in an economically lim- Source: TxDOT ited environment. The department includes "using efficient and cost-effective work methods that encourage innovation Figure 21. TxDOT's 25 Districts. and creativity" in its vision. That creativity and innovation have manifested themselves in a wide array of financing, contract- ing, and project delivery tools. (89) buy-in and support from the public and accountability for Like many states nationwide, Texas has seen large popu- environmental commitments increases. (97) lation growth over the past 20 years and a disproportionate However, the department is currently undergoing a period increase in VMT, due largely to land use growth patterns. This of reorganization. Under this strategic restructuring, TxDOT growth is occurring without a matching expansion in fund- has sought to move some functions to a new regional organi- ing for transportation projects, resulting in a system that is zational tier. This effort is aimed at improving efficiency and increasingly strained. In fact, "from 1980 to 2006, Texas' eliminating redundancies, without undermining the success population has increased by 65 percent, and its road use has of decentralized decision making. This strategy has sought to increased by 120 percent. The state's roadway capacity, consolidate some of the responsibilities from both the district however, has only grown by nine percent." (99) and the central levels. (97) Under the reorganization, Texas has been divided into four Pass-through Financing regions, each containing five to seven districts. Regional tier roles and responsibilities are being established and are not yet To address this disparity, the department has employed a finalized. The goal is to take some of the redundant functions variety of innovative financing tools. For example, TxDOT from the districts and some of the authority of the central of- has pioneered a method referred to as pass-through financ- fice that could be better administered at the regional level. For ing. In this model, any public entity, such as a regional mo- instance, it is thought that some functions such as sign shops, bility authority or local government, or even a private devel- which are currently conducted at the district level, could be oper, can submit an application. An approved application elevated to the regional level, creating efficiency. A single sign entitles the developing entity to finance, design, construct, shop could likely produce signs for five or six districts with- maintain, and/or operate a state highway project. The pro- out a significant loss in quality or responsiveness. (97) gram is open to expansion projects as well as new projects. In Likewise, environmental or design responsibilities, which return for covering the up-front costs, the state repays some are currently conducted at the central level, could be admin- portion of that debt over time, based on a per-vehicle rate. If istered at the regional level for some projects in order to en- there is high demand for the project, the state will repay the hance responsiveness and accountability. It is believed that developer more quickly, while a lesser-used project will be the required environmental review or design approval for paid more slowly. This arrangement provides incentive to many projects is actually rather straightforward and could be pursue high-demand projects and enables their construction addressed at the regional level. This, again, would create greater when the up-front costs may not be available to the depart- efficiency. Other projects, which span regions or involve a ment under conventional funding mechanisms. The depart- higher degree of risk, would continue to be reviewed and han- ment considers this both an innovative financing tool and a dled at the central level. (97) tool for project acceleration. The project is accelerated because
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80 without the developer entity supplying the up-front costs, the tract and/or the total duration. As of today, those caps stand project would be delayed. (100) at $2 million and two years, although in certain circumstances, This program is young, having been approved in early these maximums can be extended, and the department is con- 2009, and its success remains to be measured. However, the sidering increasing the caps. (101) program exemplifies the pioneering spirit of TxDOT and its The selection process for evergreen contracts is rigorous. willingness to experiment. This experimentation carries to all The department is careful to select contractors who are adapt- stages of project delivery. able and will perform high-quality work. It is essential that the contractor be able to perform work on a variety of different projects and in different settings. From the department's per- Comprehensive Development Agreements spective, this selection process can be very time consuming. To enable publicprivate partnerships (PPPs) and other (97, 101) innovative methods, the agency has initiated comprehen- However, for the districts, these contracts have proven to be sive development agreements (CDAs). CDAs are contracts a very useful tool for certain types of projects. Specifically, ever- between TxDOT and a consortium of contractors. The agree- green contracts can be very efficient for projects that involve less ment entitles the consortium to perform all or portions of a risk, are less complex in nature, or involve a specific type of task given project's design, construction, operation, and mainte- that is common to many active projects within a district. (97) nance. These agreements accelerate project delivery by allow- Another significant benefit of using evergreen contracts ing for parallel processes. In the traditional model, each phase is that the TxDOT districts have the ability to adjust their im- of project delivery must be completed before the next phase plementation or use depending on the availability of funding. can go out to bid. Under a CDA, these phases can overlap, When funding is scant, the district simply does not issue work as appropriate. (94) orders on the evergreen contract. The agreements generally The agreements have allowed for experimentation with a have a clause that permits the department to allow an ever- variety of project delivery methods. For example, for a 51-mile green contract to sit inactive for six months or a year without segment of State Highway 130, part of the Central Texas any repercussions. This can help the districts weather a down Turnpike, the department initiated a designbuildmaintain cycle without compounding budget constraints. (97) agreement that included a provision for partial financing The TxDOT districts have also made creative use of ever- by the contractor. For another 40-mile segment, TxDOT green contracts by drafting multiple contracts with multiple opted for a full concession. TxDOT estimated that with tra- contractors with overlapping terms so that as one is expiring, ditional funding and contracting methods, the project would another is already initiated so that the district always has a take 20 years. With the CDA in place, the project will take contractor on hand to perform a given activity. (97) half of that time. (94) Evergreen contracts have proven to be an effective tool for accelerating project delivery for small projects and in instances where unforeseen or out-of-scope components arise on large Evergreen Contracts projects. The TxDOT environment, where the decentralized Yet another innovative contracting method that TxDOT districts are granted a great deal of decision-making ability, has employed has been evergreen contracts. These contracts makes this tool particularly efficient. The district decision have given the agency a flexible tool that has both aided in makers are generally most knowledgeable about local projects project acceleration and provided greater control over fund- and therefore can be most responsive by initiating an ever- ing streams in times of economic hardship or prosperity. green contract work order quickly and to the most qualified The evergreen, or indefinite deliverable, contract is a form contractor for the job. of on-call services contract designed to pre-screen contractors Because the selection process is time consuming, some for a specific type of work. The contracts are then exercised on senior TxDOT staff feel that the evergreen contracts should an as-needed basis. They are drafted for a set maximum dol- incorporate longer time spans and larger dollar caps. These lar amount and a set period of time, rather than for a fixed increases would enable more flexibility for the types of project deliverable. When either the preset dollar threshold or the for which they are deployed and reduce the relative amount of lifetime of the contract has reached its limit, a new evergreen time that the department spends on selection versus the life contract must be advertised for bids. of the contract. (97) Evergreen contracts were initially developed to address the The contractor community has been resistant to increas- need for a flexible tool for designing unforeseen or otherwise ing the nominal value or duration of evergreen contracts be- out-of-scope pieces of existing contracts. They were never cause it is felt that they hamper competition. The sense is that intended to be a solicitation method for large projects. As every contractor would like to be able to bid on every con- such, a cap is placed on the maximum total value of the con- tract. (97) There is also concern on the part of centralized sen-