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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Suggested Citation:"Chapter 3 - Findings and Applications." National Academies of Sciences, Engineering, and Medicine. 2010. Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads. Washington, DC: The National Academies Press. doi: 10.17226/14438.
×
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

8C H A P T E R 3 Findings and ApplicationsPART 1: Review of Class I Railroad Permitting and Agreement Processes The railroads’ permitting and agreement review processes are the result of nearly 100 years of interaction with modern high- ways and with highway agencies. The trends apparent in today’s agreement process reflect the legal, engineering, eco- nomic, and operational strategies that affect the modern Class I railroads. The first section of this chapter includes a brief his- tory of modern railroad developments that influence the rail- roads’ approach to project agreements and project reviews. Summary of Railroads’ Perspectives Today, 559 railroads operate in the United States, but the seven Class I railroads dominate the industry, according to FRA. Class Is represent only 1% of the railroad companies in the country but generate more than 90% of the rail revenue. The remaining 99%, generating less than 10% of rail revenue, comprises 33 regional carriers and 519 local railroads (1). Numerous reports indicate that the American rail industry is healthier than it has been for decades. FRA reports that in 2006 the railroads generated $54 billion in revenue and set a new record for freight traffic with 1.77 trillion revenue ton- miles, up 4% from 2005. (The revenue ton-mile is a unit that incorporates weight and distance into the calculation of vol- ume shipped.) Many studies show that for the first time in decades railroads were able to raise rates in excess of inflation and to increase hiring after decades of downsizing (1), at least before the recession of late 2008. However, these accomplishments are relatively recent and are the result of decades of struggle, retrenchment, bankrupt- cies, deregulation, and slow rebirth of the American rail indus- try. In 1920, the American rail industry was the largest U.S. employer, with 2 million workers (2). Today, it has 187,000.The North American Class I railroads overall reduced staff from 209,000 in 1990 to 168,000 in 2006 (1). At the same time, freight volumes, profitability, and on-time performance have significantly increased since deregulation under the Staggers Act of 1980. The Association of American Railroads (AAR) cites numerous efficiency statistics in documenting the resur- gence of the railroads: America’s freight railroads are the most productive in the world. . . . Railroads generated 93 percent more ton-miles of freight in 2008 than they did in 1980, but they did so with 41 percent fewer miles of track, 64 percent fewer employees, 15 percent fewer locomotives, and no increase in gallons of fuel consumed—and at rates that, on average, were 49 per- cent lower when adjusted for inflation (3). These trends have resulted in the railroads operating fewer tracks but having much higher train volumes on those that remain. Train lengths have increased over the decades; it is now common to see trains over 1 to 2 miles long. Mainlines, there- fore, are critical, 24-hour operations that cannot be delayed without serious effects on the just-in-time operation. The AAR reports that between 1980 and 2008 rail employee productivity rose 439%, locomotive productivity rose 126%, and productiv- ity of each mile of track rose 226%. It says that overall produc- tivity, measured in ton-miles per dollar of inflation-adjusted operating expenses, rose 144% since 1980 and the Staggers Act deregulation (3). Productivity rates increased because of track consolidation, railroad mergers, dropping of inefficient lines, and improved operations. The U.S. rail network hit its peak miles in 1916, with 254,000 miles of rail service (2). Today the U.S. has 140,810 miles, or 44% less. Class I railroads control 96,664 miles, regional lines 15,388, and local railroads 22,519 (4). Although the current American rail network is 44% smaller in terms of miles, it is carrying record volumes. Since 1980, ton-miles shipped have risen 93%.

9These successes have made railroads profitable, but they still struggle to earn their cost of capital, since railroads earn only about 7% on net capital, according to FRA (1). This is a modest rate of return compared to some other industries. For decades, American railroads earned the lowest rates of return of any major U.S. industry. Between 1960 and 1979 the aver- age annual return on shareholder equity was 2.3% (2). U.S. railroads have estimated that up to 40% of their revenues are devoted to capital assets, a percentage that is significantly higher than most industries. The high cost of maintenance for track, rolling stock, and yards requires substantial capital investments, which are not liquid or mobile. Investing in a line represents a significant long-term investment for a rail- road. Therefore, railroad executives repeatedly note that they are reluctant to pay for projects that do not provide a proven return on investment. The railroads’ reluctance to invest in or cost-share on high- way projects has also been constrained by the intense compet- itive rate pressures they face. Because railroads competed with barges and trucks for decades, they had not raised rates com- mensurate with inflation. The railroads and FRA repeatedly note that between 1980 and 2006 rail freight rates declined 55% in inflation-adjusted terms. Much of that decrease occurred in the early decades of deregulation. FRA now reports that inflation-adjusted rates increased by 14% between 2003 and 2006, representing a significant new trend, but one that again was suppressed by the 2008 economic downturn. Expansion Concerns After consolidating and abandoning tracks for decades, Class I railroads have been for the past decade in a marginal but steady period of expansion, despite the downturn in 2008. The U.S. DOT’s Freight Analysis Framework 2 predicts an 88% increase in rail freight demand between 2002 and 2035 (5). This increasing demand is spurred by general growth in the econ- omy, increasing foreign trade, and the continued pressure of just-in-time logistics. Current annual volumes are forecast to increase from 1.77 trillion to 3.5 trillion tons moved annually by 2035. These volumes will continue to represent approxi- mately 40% of all ton-miles of freight. This percentage of the nation’s ton-miles represents the heavy lifting of the U.S. freight industry. The major cate- gories of commodities include coal, chemicals, farm products, transportation equipment, and food. Mixed shipments, which include intermodal shipments, are one of the largest single rev- enue categories, according to the AAR (6). Intermodal ship- ments are those that inherently rely on two or more modes, mostly rail and truck or rail and ship, and are generally very time-sensitive deliveries. Intermodal shipments from the coasts into the heartland have repeatedly been predicted to at least double in the comingdecades. The Ports of Los Angeles and Long Beach accommo- date the largest portion of these imports. From there, the ship- ments stream across the continent on trains to warehouses and other distribution points. The trade with China, the growth in India, and the general global economic trade expansion spurred significant growth in the past decade’s rail intermodal ship- ments. Panama is expanding the Panama Canal, which will allow the largest Asian container ships greater access directly to the East Coast and the Gulf of Mexico ports. Such trends could significantly increase intermodal traffic on the eastern and southern coasts, as has already occurred on the West Coast. Again, the higher oil prices of 2006 and 2007, along with the international recession of 2008, have significantly clouded the short- and intermediate-term forecasts for international intermodal trade. However, over the long term, 20 to 30 years, international intermodal trade is expected to steadily increase. A 2007 study examined the effects if the major U.S. rail lines are not expanded (7). The National Rail Freight Infrastructure and Capacity Study, prepared for the Association of American Railroads by Cambridge Systematics, Inc., examined current levels of rail freight capacity, focusing on the 52,340 miles of primary rail corridors that carry the majority of the nation’s freight traffic. The study forecasted that on these corridors an estimated $148 billion (in constant dollars) in improvements will be required over the next 28 years to keep pace with eco- nomic growth and freight demand. Although the large major- ity of the current system is operating at an acceptable level of service, the amount of excess capacity on the rail network has diminished in the last two decades of growth, the study reported. It forecasted that if the 2035 rail freight volumes were to occur on today’s rail network, 30% of the major rail network would be operating above capacity, creating severe congestion. Because of the interrelated nature of the nation’s rail network, this congestion would affect every region of the country. Frustrated shippers would potentially shift freight to already congested highways, the study suggested. Of the $148 billion in constant dollars needed to keep pace with the level of growth through 2035, the Class I railroads could contribute about $96 billion from expected income and operations and the Class II and short-line railroads could con- tribute $13 billion, the same study estimated. That leaves an investment gap of $39 billion, or $1.4 billion annually, to meet the rail capacity needs through 2035 (7). These trends indicate the following: • Major U.S. rail corridors will require additional rail capac- ity and right-of-way. • Railroads will be seeking to optimize their capacity through new technology. • The railroads will face a continuing capital shortage despite their growth.

10• Partnering with public agencies on major corridor projects will become more valuable to the railroad and the public. • It is in the national interest to preserve the maximum capac- ity of these rail corridors to capture the environmental, energy, and congestion-reduction benefits of rail freight. For these reasons, railroads are reluctant to accept any high- way project that can constrain the horizontal, vertical, or oper- ating capacity of a railway—or its potential future expansion. Safety Concerns To understand the railroads’ attitude to the construction of highway projects on or adjacent to their rights-of-way, one must appreciate their attitude toward safety. Safety concerns are paramount to them. Railroading has a lower employee injury rate than many other major industries, including truck- ing (8), but deaths of rail workers still are common nationally. Workers who are required to work in proximity to passing trains can be struck by the trains, by debris coming off the trains, or by items extending from passing trains. In addition to their workforce, the railroads are also concerned about lia- bility for highway construction workers who are killed when working on or adjacent to rail rights-of-way. Highway construction projects can cause derailments that are potentially catastrophic to the railroads. Derailments can be caused by undercutting near the railroad base and inadver- tently lowering the rail grade, by fouling the tracks with debris, or by equipment such as cranes getting too close to the tracks or undermining the rail bed while boring casing pipes beneath the right-of-way. Such derailments and accidents can cause disruptions to shipments that can ripple for days across the busy rail network. Railroads often have guaranteed shipping windows for which they earn premium rates. Missing delivery times results in penalties and potentially lost business. Even more worrisome is the potential for loss of life and property caused by hazardous materials releases. The rail- roads transport only 5% of all hazardous materials (9); truck- ing, which handles many shorter trips of commodities such as gasoline, carries an estimated 53%. However, individual train tanker cars carry large volumes of chemicals, and when they crash they are subjected to intense forces and heat caused by sparks, friction, and impact. This can lead to toxic releases, fires, and poisonous plumes. A summary of crash reconstruction reports from the National Transportation Safety Board (NTSB) provides a litany of examples from recent years. Just one example follows: At 4:56 a.m., central daylight time, on October 15, 2005, westbound Union Pacific Railroad (UP) train ZYCLD 13 col- lided with the rear of standing UP train MPBHG 15 in theUP rail yard in Texarkana, Arkansas. The collision resulted in the puncture of a railroad tank car containing propylene, a compressed flammable gas. The propylene was heavier than air and flowed near the ground into a nearby neighborhood. The flowing gas reached a house where an unknown ignition source ignited the gas, and the house exploded. The single occupant was killed. The fire moved quickly along the flowing gas back to the punctured tank car. A second, unoccupied, home was destroyed in the fire, and a wooden railroad trestle burned completely. Approximately 3,000 residents within a 1-mile radius of the punctured tank car were advised to evacuate the area. The two crews and the employees working at the Texarkana yard were not injured, and they evacuated the area safely. Total damage was $2.4 million, including $325,975 in equipment damage and $2,053,198 in track damage (10). The AAR reports that each year 1.5 to 1.6 million carloads of hazardous materials are transported by rail in the United States; toxic inhalation hazards (TIH), such as chlorine and anhydrous ammonia, account for approximately 76,000 car- loads annually (11). It notes that the rail industry is particu- larly concerned because it legally cannot refuse to ship these materials under government regulations. While TIH materials make up a small fraction of the railroads’ total volumes of freight, they represent significant liability to the railroads. These safety concerns cause the railroads to be cautious in allowing construction activity on or near their tracks. They insist on standard contract provisions to ensure that contrac- tors abide by their safety provisions. They require “flagging,” or control of train traffic through construction sites by trained personnel. They reserve the right to shut down any operation deemed unsafe. In addition, they require indemnification for contractor error and require Railroad Protective Liability Insurance with amounts that vary from $2 million per incident to $10 million aggregate. Railroads are adamant about these provisions. Failure to include them in project agreements will lead to delays with the railroad reviewers. The following summarizes the railroads’ perspectives regard- ing highway projects. Highway Projects Don’t Directly Help Railroads Highway agencies personnel are deeply imbued with an ethos that they exist for the public good. Hence, they deeply believe that the projects they build are clearly and without question necessary for the safety, mobility, and convenience of the nation’s travelers and freight shippers. However, railroads also exist for the public good. They move the nation’s freight, carry its coal, ship much of its chemicals, and transport much of the farmers’ grain to market. Railroads struggle to compete against trucks for trips less than 500 miles. While they struggle to ship goods competitively against trucks that travel on public

11highways, the railroads generally derive little direct benefit from highway projects that, moreover, may constrain them horizon- tally, vertically, or longitudinally. Such projects may give rise to physical constraints, operational delays, and disastrous con- struction accidents. So, while highway agencies innately assume that the projects they bring to the railroads have intrinsic pub- lic benefits, the railroads only indirectly share in those benefits. Railroads Are Private Companies Fundamentally, railroads are legally, financially, and morally bound by their corporate structure to first and foremost pro- tect the interests of their shareholders and, subsequently, their customers. Making money and protecting their assets are not a sign of malevolence but a legal commitment that railroads have as public companies. When shareholders pur- chase stock, they receive an implicit and explicit guarantee that the company assets will be used first and foremost to generate returns on investment. This obligation greatly dis- courages railroads from donating rights-of-way, providing free project reviews, allowing future rail expansion to be curtailed by low or narrow bridges, granting unrestricted access to rights-of-way, interrupting service, or exposing the corporation to liability. Highway agencies do not expect banks to give them free money, or oil companies to provide them free fuel. However, highway agencies have often asked railroads to donate property, provide engineering advice for free, or constrain future rail capacity in the interest of public highway projects. Highway agencies routinely pay $150 to $200 per hour for senior engi- neering consultants to review and manage complex projects. However, some are surprised when railroads do not provide such reviews for free on highway projects that cross railways. Such costs are incurred by the railroads during review of public highway projects. Passing those costs back to the highway agency is routine for the railroads, which otherwise must pass on the cost to shippers or shareholders. Railroads Have Little Tolerance for Interruptions Highway agencies routinely close lanes and even entire free- ways periodically for maintenance and construction. Highway networks have extensive redundancy, which allows motorists to detour onto other bypasses, beltways, arterials, and even local streets. Railroads lack this redundancy. They have fewer routes and each one is optimized for maximum 24-hour, 365-day-a-year operation. Because of the huge costs, railroads cannot afford to build redundant tracks, bridges, or sidings or buy additional rolling stock. Since approximately 1920, the entire business structure of railroads has been to consolidate greater volumes of freight onto fewer, more efficient routes. Therefore, closing a track even for a few hours can lead todisruptive delays, penalties on guaranteed shipments, and rip- pling effects across their national network. Railroads will not accept interruption to train traffic as the highway agencies build overhead bridges, resurface grade crossings, or work adjacent to tracks. One rail executive noted that closures measured in hours rather than days are what the railroad will accept. To close tracks longer would disrupt ship- ments and cause penalties of hundreds of thousands of dollars to the railroads. Railroads take such constraints in stride. It is common for railroads to replace their own bridges in a day, not months or years as highway agencies do. Railroads plan their maintenance in short windows arranged around train schedules. They build bridges for 100-year life spans to avoid repairs. They have unique construction and maintenance equipment that accom- modates rapid activity within narrow windows. These practices are much less common among highway agencies. Safety Is Paramount Train wrecks in past decades have resulted in hundreds of deaths, chemical spills that forced city evacuations, and dis- ruptions to train networks that took days to resolve. Highway projects are not a common cause of derailments, but many construction activities could cause a derailment or accident. Debris left on tracks can cause derailments. Trackside work- ers distracted by equipment noise periodically are struck by passing trains. Changes in track signaling are required when workers are present; and signal confusion is a leading cause of train collisions. Such potential disasters are why railroads protect their rights-of-way. When highway contractors bring cranes, load- ers, dozers, dump trucks, and boring equipment near rail rights-of-way, the railroad wants to monitor carefully the contractor’s actions. Railroad “flaggers” need to be present to warn of approaching trains, which may take miles to stop. The railroad safety engineers must be assured that tracks can be restored to service within minutes if necessary. Railroad attor- neys and safety officers must be assured that trains and their cargos are not threatened by crashes or derailment. Highway agencies and their contractors face complex con- struction requirements, narrow construction windows, and absolute indemnification requirements when dealing with rail- roads. These requirements are generally more restrictive than those highway agencies impose on themselves or their contrac- tors. To the highway officials unaccustomed to dealing with railroads, these requirements can seem onerous and expensive. However, imposing such restrictions is well within the rights of the railroad and is understandable when past construction catastrophes are analyzed. One railroad official described the railroads’ concern for their rights-of-way to be analogous to highway agencies’ concerns for

12their most congested interstate highways. Highway agencies do not allow construction in live lanes of interstate traffic. Simi- larly, railroads cannot allow construction in active rights-of- way without minute-by-minute control. Railroads Were There First Highway agencies generally are influential organizations. They have large budgets, a public mandate, powers of eminent domain, and teams of engineers and attorneys to advocate for what the public highway agency needs. However, railroad companies wield significant rights and protections, too, and these have been recognized by the nation’s courts for decades before highway agencies were even created. These rights and protections go back to the 1850s when the pri- vate capital, private initiative, and private engineering expertise of the railroads were welcomed as the salvation to a land-rich but transportation-poor continent. Railroads, under a series of influential laws and court decisions, were given protection for their rights-of-way, allowed to use eminent domain, and viewed generally as benign and essential public utilities (12). This history instills in the railroad personnel a deep, propri- etary sense regarding their right-of-way and their operations. This can be surprising to the uninitiated highway official who is accustomed to routinely using eminent domain, or the threat of it, to acquire property. A large highway agency may rou- tinely acquire 2,000 or more parcels of right-of-way annually for their projects. Most are small parcels needed when bridges are expanded, curves are flattened, or interchange ramps are extended. Acquiring such property is taken for granted by highway agencies, which have few areas that are generally off limits, except for cemeteries, schools, parks, churches, and historic properties. However, railroads routinely are cautious when the highway agency needs railroad property. Railroads may not acquiesce to takings because of the effect they could have on the railroads’ future ability to add more tracks or sid- ings. The railroad may insist on longer spans and wider pier spacing for overhead highway bridges to protect its right-of- way, regardless of the higher cost to the public. Railroads Want to Be Responsible Corporate Citizens The railroad engineers and executives interviewed for this study stress that they want to be good corporate citizens. They are “corporate” in that they have to represent the best inter- ests of their shareholders and customers. However, they also are citizens who live in and serve the communities through which their railways pass. After 150 years of operation, they expressed uniform understanding that they need to accom- modate highway projects that cross or are adjacent to their rights-of-way.The railroad personnel interviewed consistently offered the following general guidance to sponsors of projects that will interact with their rights-of-way. Coordinate Early Coordination at the project concept or early planning stages was routinely recommended. Early coordination is particularly important for any project that may create horizontal or vertical constraints on the railroad right-of-way or that may be contem- plated to interfere even briefly with track operations. Railroad personnel repeatedly told of initial coordination occurring at the 30% plan-development stage, which sometimes was far too late. At that point designers had already made decisions about overhead bridge type, size, and alignment that may not be acceptable to the railroads. Critical issues, such as pier place- ment, drainage outfalls, vertical clearances, and structure types, may create nonnegotiable issues for the railroads. These basic concepts need to be clarified early. A common issue that was repeatedly cited by railroad per- sonnel was a need for overhead bridge structures to span the width of railroad rights-of-way to accommodate future track expansion. The railroad may require additional track capac- ity that could warrant numerous tracks beneath an overhead structure. Railroad executives routinely stated that their busi- ness plans and needs may change quickly. While a few years ago they might have been content with two tracks, today they want to protect certain rights-of-way for three, four, or even five tracks. Without early coordination, the highway designer will not know what span configuration is acceptable to the railroad. These issues can be particularly important and expen- sive in areas of skewed alignments, expensive rights-of-way, or complex terrain that can increase the cost and complexity of longer spans. Review Commitments When Projects Take Years to Develop Highway agencies routinely complained about railroads chang- ing their requirements for span length and pier location on previously reviewed projects. However, the railroads noted that some highway projects had taken years to develop. Although the railroads might have found acceptable a narrower right- of-way several years before, changing business needs may now require track expansion. Railroad personnel routinely advised that highway project sponsors should update basic assumptions when projects take years to develop after initial coordination. Predicate All Design on Railroads’ Unique Standards The American Railway Engineering and Maintenance-of- Way Association (AREMA) represents a cooperative effort

13among the nation’s railroads to develop common standards. AREMA standards provide ready guidance for designers who need to accommodate railroad needs. However, nearly every railroad interviewed noted that it has key deviations from AREMA standards that are unique to its specific railroad. Some want longer tangents between S curves because of the terrain. Some want track centers as wide as 25 feet so maintenance can be done without disrupting trains on adjacent tracks. Some may accept open bridge decks, and others do not. Some rail- roads publish their design standards, some do not. Those who do not, cite potential liability concerns as their reason. In such cases, the designer should use the early coordination process to establish basic project parameters and then should expect com- ments from the railroad at the preliminary design stage. In effect, the railroad will explain how its standards differ from AREMA’s, but the explanation will come in the form of case- by-case project review comments. The full array of unique standards is not available from some railroads. Use Only Experienced Railroad Designers Although state and federally funded projects generally require a “Qualifications-Based Selection Process” for consultants, a firm that is qualified for highway work may not have extensive experience with railroad coordination. Also, local public agen- cies using local funds often tend to select local, hometown firms that may have little experience in railroad coordination. All railroads interviewed suggested selecting firms for proj- ect development based on their explicit experience with the railroad involved. They noted that such expertise can com- pensate for the lack of published design standards. Firms that have undergone repeated project reviews with specific rail- roads are more likely to have experience with the unique design requirements of an individual railroad. Most prequal- ified design firms are experienced with the national highway design manual, A Policy on Geometric Design of Highways and Streets, 2001, published by the American Association of State Highway and Transportation Officials (AASHTO). This “Green Book” is the national standard by which highway design engineers are trained. Despite its 905 pages, however, the Green Book provides minimal guidance on projects involv- ing railroads. Much of the guidance that is provided addresses signage and signals by referencing the Manual of Uniform Traffic Control Devices. This brevity is indicative of the need for reference to the AREMA standards and to individual con- sultation with the railroads. Moreover, the Green Book is a design manual, not a construction manual. There are means and methods of construction that present issues outside of the Green Book standards. Many projects present unique situations because of terrain, adjacent structures, alignment, hydraulics, or other factors that cannot always be addressed in design manuals. In such cases,consultation with the railroads is needed. The interviewees commonly stated that an intimate knowledge of each of the railroads’ standards makes the accommodation of unique situations more manageable for the project designer. Anticipate Time Frames for Review A decision on a project can affect a railroad for decades. High- way bridges are designed for at least a 50-year life span. High- way alignments are seldom changed once constructed. The finality of much highway construction work compels the rail- roads to make a measured, fully informed decision about any project. Also, a project may affect multiple departments within a railroad. The structures department, the operations unit, the construction department, the signal and communication division, and the real estate or legal department routinely all need to coordinate their comments on a project. The need for coordinated, fully considered comments requires time from the railroads. Some offer standard perfor- mance measures for reviews in 30 to 60 days, while others do not. The ones that do not offer guaranteed review times say they are unable to do so because of the wide variation in types and quality of submittals. As is common with many review agencies, the completeness of the submittal is a critical factor in the railroad’s ability to provide timely comments. A representative from one of the national engineering firms that conduct reviews for railroads noted that it is important not only to include the proper information but also to include it in the format and sequence to which the railroads are accus- tomed. Having the right information but in the wrong format can lead to delays and confusion. Another national firm that works for both highway agencies and railroad companies said that a common problem is for state or local officials to blame project delay on railroad reviews. Blame, the firm advised, is the worst strategy for expediting reviews. Often, when delays occur, it is because submittals come late in the project development, they are incomplete, or are not predicated on advice received from earlier rail coordination. Such conditions can add months to the review process. Railroads and experienced engineering firms advise plan- ning on at least 60 days for each review stage. Shorter time frames have been negotiated, particularly when highway agen- cies work routinely with the reviewing firms who are working for the railroads. When highway agencies can reliably predict when they will make a submittal, and when the submittal is complete based on railroad needs, turnaround times can be as short as 30 days. Use Standard Designs and Legal Agreements Many state DOTs and railroad companies have negotiated standard legal agreements and standard designs. Use them,

14advise the railroads. If a local agency faces the need for an infrequent project review, it should obtain and use standard agreements and designs already in place between the DOTs and the railroads. Most of the Class I railroads offer standard legal agree- ments for various types of projects. Pipe and wire crossings, grade crossings, grade separations, right of entries for studies, drainage improvements, or parallel encroachments all tend to have standard agreements. These agreements have been vetted by railroad attorneys, which eliminates the needs for additional legal reviews, and consequently reduces the time for approval. Provide Insurance Correctly Railroads typically require both General Business Liability Insurance and Railroad Protective Liability Insurance, in amounts from $2 million to $10 million. The need for indem- nification is absolute, although the insurance amounts required varies by railroad and occasionally by project type and dura- tion. The railroads and engineering firms frequently cite examples where local project sponsors resist indemnification, seldom with success; resistance leads to project delays. Con- tractor indemnification should be considered as a given. In cases where governments have statutory provisions prevent- ing them from indemnifying third parties, the contractors generally are required to accept the indemnification. One national engineering firm that conducts project reviews for railroads estimates that 20% of its effort is spent on acquir- ing basic, accurate, and timely information from insurance providers. The lack of details on appropriate corporate names, indemnified parties, and even addresses causes repeated delays. BNSF Railway and some other railroads simplify the insur- ance process by allowing states or construction companies to buy riders on their existing policy. This saves time and money, allowing firms to buy policies for short periods dur- ing construction. Expect to Pay for Reviews and Permits Highway agencies offer advice and time to local communities without charge—at least without direct charges. As a result, local project sponsors and some highway agencies object to being charged for railroad reviews, permits, and agreements. They are accustomed to not charging local communities and they expect similar treatment from the railroads. However, when the Ohio DOT adopted a cost-accounting system, it determined that its typical highway engineer cost up to $150 per hour when all overhead costs were considered. Although Ohio does not bill these costs to communities directly for project consultation, the state does so indirectly through fuel taxes, which cover its operation.When highway agencies hire design firms, they routinely pay more than $100 per hour for basic design and review costs. Railroads incur similar costs either when they conduct reviews in-house or when they contract them out to engi- neering firms. It has become routine in recent years for rail- roads to bill these costs back to highway agencies. Sometimes the contract arrangement comes as a preliminary engineer- ing agreement in which both partners agree to escrow review funds at the start of a project. In other cases, the railroads bill the agencies after the reviews. Regardless of the details, the process of billing for reviews is a given. Railroads’ Approach to Agreements The Class I railroads have developed over the decades formal, official processes by which they review proposed highway proj- ects that interact with their facilities. These processes generally are intended to “matriculate” a proposed project through a variety of internal reviews, each of which reflects a major con- sideration of the railroad. These reviews evaluate projects in terms of their effects on the following: • The minimization of train delays during the course of the construction; • The railroad’s long-term track needs; • Any nearby industrial development the railroad may envision; • The safe operation of trains during construction; • Long-term maintenance needs, such as maintaining drain- age, communication devices, or structures; • Internal workforce needs, such as when to schedule in-house crews to do necessary work related to the project; • The cost of rights-of-way or easements that may be necessary; • The scheduling of engineering and other reviews; • Reimbursement for engineering reviews, in-house mainte- nance crew’s work, rights-of-way, or easements; and • Legal review of draft and final agreements. The number of these considerations and their complexity varies by the complexity of the project. Minor highway resur- facing projects conducted at crossings are often addressed with simple letter agreements that do not require extensive reviews. Large projects, such as new grade separations or realignments of tracks, involve all these areas of concern. The railroads generally have different processes for the var- ious types of projects. Among the common categories of proj- ects the railroads have developed are the following: • Pipe and wire crossings of tracks or yards; • Short-term maintenance work that requires temporary access to railroad property;

15• Access to railroad property for engineering studies, such as soil borings or environmental analysis necessary for high- way projects that are proximate to railways; • Paving of crossings; • Installation of safety devices at crossings, such as lights and gates; • Horizontal encroachments onto linear railroad property when adjacent roads are improved; and • Grade separations of crossings, either over or under the railroad. The four largest Class I railroads—Union Pacific Railroad (UP), BNSF, CSX, and Norfolk Southern Railway (NS)—have created “public projects” divisions that serve as the points of contact and coordination for these projects. Amtrak has as well. Kansas City Southern Railway handles the projects through its normal engineering staff. The four largest Class I railroads typ- ically provide standard agreements, design standards, and other routine documents to assist public agencies. (See Appendix A for additional information on railroad processes for addressing agreements.) In interviews with the Class I railroads, all expressed a strong desire to cooperate on public projects. They stated in various ways that their publicly traded corporations have expressly adopted policies that commit them to be corporate citizens who want to enhance the communities in which they do busi- ness. At the same time, all of them have repeatedly stressed the complexity of conducting highway construction work on or adjacent to railroad properties. To reconcile the need to coop- erate on projects while protecting the railroads’ interests, the Class I railroads have developed formal review processes. Standard Review Process Although the seven Class I railroads have differences in their internal project review processes, they also have many similar- ities. These similarities reflect the universal nature of the issues that must be addressed when highways and railways cross. A generic, idealized project review process is summarized below. The summary is not intended to describe in accurate detail any one railroad’s review process, but it reflects the processes described by all the Class I railroads when they consider proj- ects. This summary was assembled after reviewing the rail- roads’ internal workflows and their project agreements, and after interviewing their public projects staff. Typical Project Review Process 1. Initial inquiry about a potential project or initial submit- tal of draft project plans is received. • Record the project into the internal railroad project track- ing and billing systems.• Determine the exact log points of the project. • Establish the internal billing number for all time to be spent on the project. • Write to the agency acknowledging the notification and advising it of the standard issues to consider. 2. Begin the process to notify the internal offices of the pre- liminary project. • Contact internal railroad offices of engineering, commu- nications, rights-of-way, legal, industrial development, and maintenance.  Inform them of the potential project and its essential elements, such as clearances, distribution of costs, and need for in-house force account effort.  Request comments relevant to present and future track needs.  Determine which railroad appurtenances, such as communication equipment or maintenance facilities, may be affected.  If right-of-way for additional tracks is to be provided for, determine which side of existing tracks it should be on.  Determine if the railroad has planned any industrial development near the proposed project.  Determine if special geometric considerations are nec- essary for that location, such as horizontal and vertical clearances, access to the site for maintenance equip- ment, or planned future changes to the alignment.  Determine what the railroad’s right-of-way is at the location and if there are any special legal con- siderations.  Determine if the mechanical department has any concerns.  Determine if the transportation department has con- cerns regarding operations or other issues. • Allow 4 to 6 weeks internally for comments from the notified offices. 3. After receiving the internal comments, summarize them in writing to the public agency. Include the following: • Provide initial comments about the project concept and scope and whether it meets standard railroad designs and specifications. • Seek clarifying details. • Advise as to the need for continued coordination as plans develop. • Inform as to the need for preliminary engineering agree- ment and other necessary initial agreements. • Provide an estimate of costs for preliminary engineering. • Begin the preliminary engineering agreement. 4. The next submittal, which would be some form of prelim- inary plans, is received. • Acknowledge receipt of the plans. • Conduct an initial cursory internal review of the plans.

16• Submit the plans to the contract engineering firm for detailed review. • On acknowledgment by the public agency of the agree- ment to pay the contract engineering firm, the contract engineering firm conducts reviews. • The contract engineering firm determines if changes have been made to the project concept or scope that would conflict with any issues raised by the internal railroad departments that reviewed the initial concept in Step 2. • Circulate any significant changes internally as described in Step 2. • Allow 4 to 6 weeks for internal comments. • Prepare and submit the comments to the public agency. 5. The final plans are received. • Acknowledge receipt. • Get an estimate of the review costs from the contract engineering firm. • Authorize the contract engineering firm’s reviews. • The contract engineering firm reviews the plans to ensure that any changes are in accordance with the earlier com- ments from the railroad. • Seek concurrence from the internal offices listed in Step 2 if any significant plan changes have been made. • Allow 4 to 6 weeks for internal reviews. • Summarize the comments and transmit them to the pub- lic agency for inclusion in the final plans. • Request corrected final plans and review them as to whether they have addressed comments. • Request the necessary number of sets of the final plans. 6. Prepare the project agreement. • Estimate the force account costs. • Prepare the right-of-way provisions. • Include the standard or special provisions necessary to control the contractor during the construction process, such as flagging, coordination with railroad road master, or coordination with train master or local operating official. • Include any long-term maintenance agreements. • Include all payments and contributions from the involved parties. • If the railroad makes a contribution, begin the internal process to secure funds. • Specify the contractor’s insurance requirements. • Transmit the final agreement. 7. The public agency awards the project. • Notify internal divisions of the schedule of work. • Schedule a preconstruction meeting with the public agency and contractor. • Schedule the in-house or contract forces necessary for any force account work. • Schedule flagging. • Ensure that the safety plan is adequate.• Ensure that the operations divisions coordinate any change in train operation to accommodate the con- struction phases. • Ensure that the contractor’s insurance is in place and is legally adequate. • Provide the public agency with a letter authorizing con- tractor to proceed. 8. Construction begins. • Monitor the conduct of the contractor for compliance with safety provisions. • Schedule and conduct force account work. • Inspect ongoing work. • Schedule and conduct flagging. • Collect costs and submit them to the agency for reim- bursement. 9. The project is completed. • Inspect the project and address any deficiencies with the agency. • Record, both in hard copy and electronic GPS format, any final changes to the railway and bridge inventories to reflect the changes created by the project, such as altered alignments, grades, clearances, and signaling. • Record right-of-way or easement changes. • Prepare the final billing. As the railroads frequently stress, the time frames for proj- ect reviews and agreements can vary significantly depending on the complexity of the project and the quality of submit- tals. The unique nature of each railroad’s engineering needs creates special considerations that are not always apparent to the uninitiated public sponsor, or to the sponsor’s engi- neering firm. These special considerations underlie the railroads’ repeated emphasis on the need for projects to be developed by engineers who have experience dealing with railroads and, preferably, with the particular railroad that is affected. The Railroads’ “Desired State” The implied “desired state” for the railroads is included in the best practices and recommendations they repeatedly cite. In the desired state in which they would prefer to operate, the following conditions would be common: • Public highway agencies would have fully developed mas- ter and standard agreements that spell out the roles and responsibilities of the agency and of the railroads in devel- oping and reviewing projects. • Public highway agencies would execute a preliminary devel- opment agreement early in the conceptual stage of every sig- nificant project and use that agreement to compensate the railroad for its staff and consultant review effort.

17• Public highway agencies would approach railroads early in the project-development process and seek their input into the projects’ original purpose, need, and conceptual scope. • Public highway agency personnel would be highly experi- enced in railroad coordination and would only seek design exceptions and minimum clearances when these cannot be avoided. • Experienced consulting firms who have extensive history in working with the particular railroad would be hired to develop the project. • The means and methods of construction would be consid- ered early in the process to minimize incursions into the operating envelope. • Projects would be developed using engineering and con- struction standards unique to the affected railroad. • The project agreement process would begin early in the proj- ect development process. The development of the agreement would run concurrent with the development of plans. The agreement would incorporate the railroad’s standard legal language regarding insurance, indemnification, safety, and other key issues. • Project submittals would occur at the 30%, 60%, and 100% plan-completion stages. • All plan comments would be incorporated into later sub- mittals. • All right-of-way agreements and payments, environmen- tal permits, right-of-entry permits, and insurance require- ments would be secured, accurate, and submitted with the final plans. • The railroad’s construction provisions would be included in the contract plans. • Contractors and state highway personnel would have com- pleted safety training before construction begins. • Preconstruction meetings would be held to coordinate activities with all parties. • Flagging would be scheduled well in advance of the start of construction. • Construction activities would be conducted safely and under the review of the railroad road master’s designee. • At the end of construction, all materials and equipment would be removed and the rights-of-way restored. • As-built plans would be provided. These conditions constitute the idealized desires of the rail- roads’ public projects divisions. All the railroad personnel inter- viewed willingly acknowledged, however, that they understood that circumstances would often prevent these conditions from occurring. They said they realized that some states and localities operate under statutes that do not allow all these conditions to be met. They also realized that meeting optimal design stan- dards in all situations can lead to longer spans and more expen- sive designs, which public sponsors may reasonably resist. Theyacknowledged that public auditors may question the need to reimburse staff time and expenses of railroad reviewers. However, they noted that understanding what conditions they desire makes it easier for a public project sponsor to organize its submittals and processes to better address the railroads’ concerns. Best Practices Several best practices were identified during interviews with the railroads and the review of their processes. The highlights of those are described below. • CSX Transportation publishes a Public Project Informa- tion manual that summarizes the process, agreements and permits required to develop a project. • NS’s website includes an extensive listing of its design guidelines and standards. • BNSF and UP developed a joint set of standards and guide- lines for the development of projects. • Kansas City Southern Railway developed a program for the simplified acquisition of low-cost Railroad Protective Lia- bility Insurance. • BNSF’s attempts to meet at least annually with each state DOT to discuss the project review process. • Some railroads publish permit applications and approval guidelines for basic activities, such as rights-of-entry and maintenance of existing structures. • NS publishes its Special Provisions for construction, which can be incorporated into construction contracts. • The railroads are willing to participate in regular project- tracking and milestone-review meetings with DOTs when DOTs request such meetings. • BNSF assigned an individual engineer to assist the Washing- ton State DOT through the course of an extended multiyear rail-corridor development process. Areas for Improvement Although each of these efforts appears to be a best practice, no railroad seems to have captured and implemented them all. Rather, each railroad had some of the best practices in place but had not fully exploited all the practices identified by the other railroads. Areas for improvement that are apparent include the following: • There appears to be additional opportunity for all the rail- roads to capture the best practices that have been devel- oped by the others. • Railroads and public highway agencies could further develop partnering strategies and agreements to identify common approaches to project development. Such agreements can

18include agreed-on milestones, communication channels, review processes, and escalation paths. • The publication of updated design and construction stan- dards could be more uniform and consistent across all the railroads. • Standing process-improvement meetings could be sched- uled periodically between the DOTs and railroads. The analysis of “defects” and the systematic improvement of them is a fundamental aspect of modern quality-control systems such as ISO 9002, Six Sigma, or the Baldrige Pro- gram. A systematic problem-identification-and-analysis process does not seem to have occurred between railroads and the state DOTs with which they interact. • The development of master agreements and standard proj- ect agreements has occurred in many instances but not universally. PART 2: Review of Highway Agency Processes The SHRP 2 R16 project, to reiterate, seeks the following outcomes and objectives regarding highway–railroad proj- ect agreements: • Identify strategies to facilitate beneficial relationships between railroads and public agencies. • Investigate and develop innovative partnering techniques. • Develop a draft model agreement and streamlined permit- ting processes. • Identify barriers that impact effectiveness and propose remedies. • Recommend how to implement the model agreements and streamlined permit process. The task is complex because of the large number of entities involved and the great differences that can exist between projects. Statistics vary as to the number of highway–railroad crossings in the United States, but they are known to number at least 150,000 across 4 million miles of public roads. These crossings involve seven Class I railroads, 33 regional railroads, and 364 short-line railroads. These railroads are interacting with 50 states, an estimated 19,000 municipal governments, and more than 3,000 counties. The projects involved vary con- siderably as well. A “project” can be as simple as granting access to railroad rights-of-way for routine maintenance of adjacent highway property, to as complicated as a multistruc- ture urban highway–railroad grade separation complex. As a result of this great diversity, any description of “typical” proj- ects and processes is unavoidably generalized. This second section of the chapter reviews representative public-agency processes, practices, and time frames. With thecaveat of project diversity cited above, the following discussion summarizes agency processes and practices regarding the most typical types of projects. It also summarizes a representative sample of public highway agencies’ manuals, agreements, and guidance regarding highway–railroad project agreements. Finally, the section reviews a survey of more than 400 public officials who are involved in the railroad–highway project agreement process. Their responses as to the most common problems and their opinions as to best practices are included. Where Projects Originate As mentioned, the U.S. highway system is managed by an array of state, municipal, county, and even township govern- ments. In the West, federal agencies such as the Bureau of Land Management commonly maintain roads on public lands. Native American tribes also are sovereign nations that plan, build, and maintain roads that can cross railways. In some cases, toll authorities, port authorities, parks, or other governmental subdivisions own roads. As a result, projects are generated from many agencies, all of which may have their own unique means of pursuing agreements. Table 3.1 shows FHWA’s breakdown by category of ownership for public road miles in the United States. For ease of description, this analysis focuses on the most typ- ical types of projects—those generated by state departments of transportation and large cities. These agencies generate most of the projects because they manage the majority of high-volume roadways. Although state highway agencies manage only about 19% of all road mileage, the roads they manage are the high- volume interstates and arterials that carry the most traffic. Roads that FHWA categorizes as “local” carry an estimated 13% of total miles traveled; roads in the higher functional classes, which are generally managed by state highway agencies and the larger municipalities, carry 87%.Types of Projects Most highway projects are routine maintenance projects. A comparison of federally reported highway lane miles between Type of Agency Miles of Roads Owned States 780,000 Counties 1,791,000 Municipalities, Townships 1,252,000 Other Agencies 65,843 Federal Agencies 128,349 Source: Highway Statistics 2006, Federal Highway Administration, Table HM-14. Table 3.1. Miles of Road by Agency (13)

191997 and 2006 shows that public highway lane miles increased only 2.1%, or approximately two-tenths of 1% annually over that decade (14, 15). Out of an estimated $67 billion spent on highways annually by all levels of government, the large major- ity of it is spent on maintaining existing infrastructure. Of the estimated 4 million miles of public roads, the vast majority of the mileage is mature, which means it has been built and repaired over the course of many decades. As a result, highway agencies are constantly maintaining the pavement surfaces, bridges, culverts, and other components of those aging high- ways. Of the nation’s 590,000 bridges, the average age is 43 years, which means that highway agencies are constantly repairing or maintaining components of them. In addition to bridges, there are millions of culverts or pipes that carry water beneath the highways. Although there is not a national culvert inventory, culverts or pipes number in the millions and range in diameter from 12 inches to 5 feet. These also are subject to steady degradation and continuous repair by highway agencies. Maintenance Projects Most highway agency personnel are in maintenance. This reflects the fact that the primary activity of the highway agency is to conduct the routine maintenance work necessary to keep highways and their appurtenances from degrading as a result of water, weather, traffic, routine crashes, and other wear and tear. Typical types of highway maintenance work that may involve railroad coordination include the following: • Drainage structure maintenance to keep pipes, ditches, drainage basins, and other drainage components free- flowing and well-maintained. Highway drainage systems almost always connect into the drainage systems of the larger drainage basins in which they are located. This inte- gration requires highway agencies to work with adjacent landowners, sewer districts, and adjacent railroads. • Pavement preventive and reactive maintenance consists of pot-hole patching, thin overlays, sealing of cracks, or stabi- lizing pavement edges. This preventive and reactive mainte- nance is strongly encouraged by most highway agencies and FHWA as an essential strategy to preserve pavements and prolong their use. • Signage and pavement marking improvements are con- stant undertakings. The reflectivity of signs degrades in less than a decade, and pavement marking materials seldom perform well after three years of constant abrasion from vehicular traffic. Signs and pavement markings are essen- tial safety features of highways and require continuous repairs. Signs frequently are knocked down in crashes and require immediate replacement. • Minor resurfacings are another constant undertaking by highway agencies. Asphalt surface treatments are thepredominant pavement treatment and generally have a use- ful life of 15 years or less. As a result, somewhere between 5% and 10% of a state highway system is being resurfaced annually. • Bridges are designed to flex, expand, and drain to accommo- date precipitation, temperature changes, loads, and wind. As a result, their drainage features, their expansion joints, their bearings, and other features require periodic maintenance to prevent premature failure. This maintenance requires both contract and in-house highway agency forces to access the structures, many of which cross over or under railroad prop- erties or are adjacent to them. • Resurfacing highway–rail crossings is a high-profile sub- set of highway maintenance projects. The inherent com- plexity of keeping pavement at a smooth profile with the raised steel rails of railroads creates special maintenance issues that require the cooperation of the highway agencies and the railroads. Safety Projects Approximately 41,000 persons are killed annually in highway crashes, and another 2.5 million are injured. Crashes are esti- mated to cost society $230 billion annually in medical costs, lost wages, and property damage (16). Typical safety projects that involve railroads include the following: • Intersection improvements are a disproportionate per- centage of all safety projects because of the inherent conflicts that occur at intersections between traffic that turns and traffic that stops. When intersections are near railroad cross- ings, their complexity increases significantly because of the frequent need to have railroad crossing signals coordinated with traffic signals. The operation of traffic signal phases is significantly affected by the blockage of tracks when trains pass nearby. • Railroad crossing projects are a specific subset of safety projects, which are recognized and funded through the Sec. 130 funding programs of the Title 23 FHWA programs. Most states and their railroad partners have taken steps to standardize these projects. These projects have been occur- ring for decades and are often similar. As a result, most states have developed standard approaches to simplify these proj- ects with the railroads. Expansion Projects Projects that increase the capacity of the highway system rep- resent a small percentage of overall projects but consume a dis- proportionate amount of attention from highway officials, the public, and agencies that interact with highway agencies. These projects’ disproportionate attention and analysis is caused by

20the need to acquire rights-of-way from property owners, to mitigate their environmental impacts, and the difficulties in paying for what are often expensive undertakings. Typical types of expansion projects that involve railroads include the following: • Highway–railroad grade separation projects that fre- quently increase highway capacity by reducing a major impediment to the flow of traffic. The frequent highway blockages that mainline Class I railroads can cause in an urban area are significant. Major Class I railroads can move more than 80 trains per day. Eliminating these bottlenecks by grade separating major highway–railroad intersections is often a major congestion strategy in cities and on major suburban highways. • Highway widening projects often involve railroad inter- action. Interstates, freeways, and arterials all cross rail- roads and require the widening of bridges to carry the new, widened lanes over or under railways. Highway Agency Processes to Address Railroad Needs Most state highway agencies are approximately 100 years old. As they were organized in the early 20th century and began their efforts to improve highways, they immediately encountered the large and powerful railroads, which at that time were the nation’s largest employers. Decades of statutes and case law rec- ognized the railroads’ rights to control rights-of-way. As high- way agencies improved the nation’s roadway network, they developed decades of experience not only in how to safely cross railroads but also in how to interact with railroad officials to get the railroad approvals they needed to cross or interact with rail- road rights-of-way. In most aspects, the highway agencies’ processes are the mir- ror images of the railroads’ processes. The highway agencies attempt to anticipate the railroads’ requirements and to incor- porate them into standard agreements, construction specifica- tions, and internal project-development processes. All states examined have rail-coordination offices whose job it is to secure railroad approvals. These offices nearly universally serve as a central point of coordination between the highway agencies and the railroads. Most state and local statutes require highway agencies to develop agreements or contracts before they can spend money or enter into commitments. Therefore, the development of an agreement is a major focus of the project-development process if that project involves highway agencies compensating the railroads or making commitments to them. As a result, there are many kinds of project agreements. Agreements, like proj- ects, generally fall into the following categories, each of which may involve a type of agreement or a major area within a larger agreement:• Planning study agreements, in which the railroad agrees to provide personnel, operating data, and planning assump- tions so the highway agency can conduct long-term plan- ning about how railroad facilities may interact with local highway and transit operations; • Preliminary engineering study agreements for highway agen- cies to evaluate project concepts or weigh environmental options for multiple alternatives for a potential project; • Project review agreements, which address the review of detailed plans; • Construction agreements, in which the contractor’s means and methods are limited to ensure safe train operations during construction; • Long-term maintenance agreements for the finished projects; • Routine maintenance agreements to resurface or repair exist- ing at-grade crossings or existing overhead or under-grade crossing structures; • Safety project agreements to install lights, gates, signals, signage, or other safety appurtenances at crossings; • Agreements to close crossings or to develop new ones; • Agreements to grade separate at-grade crossings; • Various right-of-entry agreements so that crews can access railroad properties in order to study geological, environmen- tal, or hydrological aspects of adjacent highway properties; • Various utility agreements allowing highway agencies to improve pipes, drainage features, or even utility pipes and wires that cross or run parallel to the railroads; • Lateral encroachment agreements where improvements to an adjacent roadway may infringe, even temporarily dur- ing construction, on the railroad; and • Agreements concerning rehabilitation of at-grade crossings. Many projects include several of these aspects, which there- fore may be consolidated into one larger, complex agreement. In contrast, other agreements may be simple letters that incor- porate by reference long-standing provisions or specifications that have been programmatically adopted by both the railroad and the highway agency. Agreements also vary because of the different governance requirements of the highway agencies. In some states, the state transportation agency has statewide jurisdiction over nearly all roads, so that the highway agency manages most of the railroad negotiations. Other states are “home rule” states, in which local governments manage local roads. In these states, the local gov- ernments may frequently be the project sponsor and may require direct engagement on agreements. Some state highway agencies share authority for railroad interaction with utility commissions or commerce commissions. In these states, both the highway agency and the commission may be parties to the negotiations. Within cities, the municipal government may be a project sponsor. In large cities such as Chicago, New

21York, and Los Angeles, the municipal government may have dozens or hundreds of crossings and have full-time staff ded- icated to railroad agreements. As a result, the cities may be direct negotiators with the railroads and bring their unique local ordinances and requirements to the agreement process. As a result of these variations, the project agreement process can be diverse. The Project Development Process Every project that uses federal funds must be developed from an official, formal Project Development Process (PDP) estab- lished by the state highway agency. The PDP requires an alter- natives analysis to be conducted for most projects that involve any significant complexity or impacts. Minor maintenance projects, such as a resurfacing, would require only nominal analysis that creates little time delay or analytic cost. Other projects, however, create multiple and iterative analyses that can involve extensive public hearings and comment periods. This public involvement process brings multiple stakeholders into the process, whom the highway agency must attempt to reasonably accommodate. An informed and complete alternatives analysis includes substantial comparative studies of various project alternatives as to cost, feasibility, impacts, and constructability. Each alter- native must be evaluated to determine which has the least detrimental environmental or community impacts. To con- duct multiple analyses requires substantial information and comment from the railroads. As noted earlier, the railroad considerations are diverse. Informed comment about a proj- ect alternative involves reviews from several disciplines and divisions within the railroads. The railroads also want to charge for these reviews, many of which are subcontracted to engi- neering firms. As a result, lengthy and expensive alternatives analyses can result in multiple iterations. Each iteration can take several months of analysis by the highway agency before it submits the new iteration to the railroad for its multiple divisions to review again. As a result, several years of alterna- tives analysis, public comment, railroad review, and envi- ronmental analysis can precede the identification of the final project concept. From the railroad’s perspective, the impact of the project alternatives on its operations is of paramount importance. To the highway agency, the railroad is only one of multiple stake- holders that it needs to satisfy in a complex project. Among its external stakeholders for a complex urban grade-separation project are the following: • City or county elected officials where the project is located; • The affected residents within the neighborhood; • City or county engineering officials concerned about traffic impacts;• Emergency service providers, if crossings are to be closed or traffic patterns changed; • School officials concerned about bus routes; • State historic preservation officers, if any actual or poten- tially historic structures or historic districts are involved; • State and federal hazardous materials officials, because rail- road rights-of-way are assumed to have transported many decades worth of hazardous materials that may have con- taminated rights-of-way or groundwater; • The U.S. Army Corps of Engineers, the U.S. Environmen- tal Protection Agency (EPA), and probably the state envi- ronmental protection agency, if any streams are affected or runoff into public waters is created; • State and federal EPA officials, to review the air-quality impacts or benefits of the project; • The U.S. Fish and Wildlife Service, which generally must receive routine notification in case any threatened or endan- gered species are in the vicinity of a complex railroad– highway project; • Utility companies, to be consulted to ensure that the proj- ect does not require extraordinary and expensive relocation of utilities, such as power substations or sewer lift stations; • FHWA and its attorneys, who need to approve the project (if federal funds are used, FHWA would be responsible for defending the project against any legal challenges resulting from environmental or neighborhood impacts); and • FRA, which may be involved in some cases. These entities would only be the external stakeholders. Inter- nally, a variety of highway agency divisions would be reviewing, commenting on, or suggesting changes to the project concept: • The planning division would ensure that the project agrees with local short- and long-term plans, that it is fiscally bal- anced, and that it has been approved by the metropolitan planning organization. • The environmental division would coordinate approvals from environmental agencies that have jurisdiction over issues of air and water quality, hazardous materials, terres- trial or aquatic species impacts, and historic or potentially historic structures or districts. • The geotechnical unit reviews soil boring data, which can have a major impact on structure type and foundation design. • The traffic division reviews the project for its effect on adja- cent signal systems and traffic patterns. • The design division would scope, hire, and review consul- tants who develop the plans. • A structures division would review issues of structure cost, constructability, and long-term maintenance. • A construction division wants to ensure that plans consider all construction complications.

22• An estimating division needs to provide accurate costs. • The utilities division requires long lead times to coordinate with utility companies that may have to relocate utilities to enable contractors to build the project. • The right-of-way unit must hire appraisers, conduct title searches, and review easements to ensure that all property owners have full and fair compensation for their property. • A contracting and scheduling division needs to review final plans, distribute plans to potential bidders, and actually schedule a bid letting. At least three successively complex stages of engineering generally occur, with each circulating for review. Generally, preliminary plans are produced at the 30% plan stage, which include the following: • An exact alignment; • Dimensions of horizontal and vertical limits; • A structure type selection; and • General “typical sections” that illustrate the general design of the project along its length. After comments on the 30% plans are reviewed, the next sub- mittal advances to a 60% stage, where more details are devel- oped on the following: • The structure design; • General project right-of-way limits; • Consideration of utility impacts; • General quantities of materials; and • Greater design detail. Then, depending on the agency, final plans are presented at the 90% or 100% stage. These would include another succes- sive iteration of detail about the following: • Precise designs on where and how drainage structures will function; • The temporary work limits that may extend outside the final rights-of-way as equipment maneuvers and excavations occur during construction; • Precise delineation of right-of-way takings in sufficient detail for filing deed descriptions, appraisals, and right-of-way negotiations; • Precise plan sheets for every stage and aspect of the project; • Precise cost estimates by project item and stage; • Maintenance of traffic plans; and • Plans for landscaping or restoring the site after construction. Once all these details are approved, the highway agency begins the often complex, expensive, and sometimes con- tentious processes of acquiring the rights-of-way and convinc-ing the utility companies to relocate affected utilities before the project commences. Also, the “permit” process for wetlands or stream impacts cannot begin until precise impacts, such as cubic yards of fill or lineal feet of drainage ditches, are known. The water resources permit processes of the U.S. Army Corps of Engineers and EPA require another round of public notice and comment before the project can proceed. These multiple stages consume considerable cost, time, engineering analysis, and staff resources by the highway agency attempting to complete a complex highway–railroad project. Generally, such large undertakings are pursued when there is a great transportation need. Such need generally produces substantial community and political pressure on the high- way agency to complete the project. Also, such projects often involve multiple funding partners. State highway agencies often pool funds with the affected community or use a con- gressional earmark on such high-profile projects. The mul- tiple funding partners, therefore, experience pressure to control costs. When such large, complex, expensive, and often con- tentious projects then face delays and changes caused by rail- road requests, it can lead to confrontation and backlash from the state and local project partners. As mentioned, at each sub- mittal, the plans matriculate through several different railroad divisions to examine the proposal from its impact on the vari- ous disciplines within the railroad. Divisions such as structures, construction, maintenance, signals, operations, industrial development, and mechanical would be responsible for con- sideration of how the project would affect the railroad during construction, and also in perpetuity after its completion. Rail- roads typically warn of 30-, 60-, and even 90-day comment periods at each review, depending on the complexity of the impacts. If the railroad finds the plans to be unacceptable, this can lead to another series of revisions and another round of submittals and reviews for each project stage. Highway agencies frequently report that it can take a decade to plan, design, and construct a complex project. Financial Impacts on Highway Agencies Earlier, the financial pressures on the railroads were described in general. The railroads have faced substantial downsizing in the face of traffic volume increases just to remain profitable and competitive. The railroads generally refuse to contribute to projects or to provide engineering comments without com- pensation because of the financial pressures they face to cover all their costs and not to pass those costs on to shareholders or shippers. The railroads note they are private, publicly traded companies that are obligated to maximize shareholder value. They note that engineering time is expensive, that rights-of- way are finite, and that their daily train operations are their financial lifeblood.

23Likewise, the highway agencies report significant financial hardship attributed to the railroads’ needs for engineering payments, compensation for rights-of-way, larger and more complex structures to allow for future track expansion, and costs for intangible benefits such as air rights. The highway agencies’ financial hardship has been regularly documented in national studies and federal analyses. Several definitive studies in recent years all reached the same conclusion—the amounts appropriated for transportation are seriously below the levels needed to improve or even sustain the system at today’s congested levels. In December 2007, the National Surface Transportation Policy and Revenue Study Commission reported that the cur- rent 18.3 cent per gallon federal motor fuels tax would need to increase by an additional 40 cents to meet highway investment needs. It estimated that the nation is spending only 40% of what is needed to sustain and improve the highway network. The commission’s most conservative forecast indicates that the nation needs to be investing at least $199 billion annually in transportation through 2020. Today, the nation is spending from all sources $86 billion. The commission report forecasts that at current levels of investment, delay per traveler on urban principal arterials would increase by 20% by 2020, by 50% in 2035 and double by 2055. Since more people will be traveling in a growing population, total hours of delay on principal arte- rials would double by 2035 and quadruple by 2055, the com- mission forecasts (17). The FHWA’s 2006 Condition and Performance Report notes than an increase in capital outlay of 87.4% above cur- rent levels would be required to reach the projected $131.7 bil- lion level that provides the optimum highway investment level, according to its complex modeling (18). For transit, the report says the average annual cost to improve both the phys- ical condition of transit assets and transit operational perfor- mance to targeted levels by 2024 is estimated to be $21.8 billion in constant 2004 dollars, 73.0% higher than transit capital spending of $12.6 billion in 2004 (19). The Texas Transportation Institute’s Travel Time Index shows that from 1995 to 2008, the additional time needed to travel in the peak hour versus nonpeak times increased from 27% to 38%. However, these numbers include all urbanized areas, including the relatively small and lightly congested ones. When the largest urban areas are examined, the severity of con- gestion is noticeably increased (20). The Texas Transportation Institute’s 2007 Annual Urban Mobility Report notes that annual hours of delay per traveler rose from 21 hours in 1982 to 43 hours in 1995 to 51 hours in 2004 to 54 hours in 2005— an increase of 157% in 23 years. These types of national estimates have been replicated fre- quently at the state and local levels. The state and local high- way agencies that are negotiating with railroads feel significant pressure to constrain costs. They repeatedly said in interviewsthat an increase in cost demanded by a railroad for one essen- tial project leads to the deferral of another essential project. The Debilitating Effects of Inflation These already-inadequate levels of investment have been fur- ther eroded by the unprecedented construction price infla- tion since 2005. A global tipping point in oil demand driven by the flourishing economies of China and India spurred record petroleum and construction prices from 2004 through early 2008. Although oil prices moderated in 2009, construc- tion prices remained significantly above unit prices of 2005 and earlier. Highway construction is particularly prone to oil price increases because of the energy-intensive nature of steel, asphalt, concrete, and excavation. Asphalt obviously is a petro- leum product and its price is heavily influenced by oil prices. The manufacture of concrete is energy intensive. Extracting, crushing, and delivering aggregate all depend on large amounts of diesel fuel. These factors have caused the construction infla- tion rate to significantly exceed overall price rises. AASHTO and many other groups have noted the dramatic reduction in state DOT construction purchasing power caused by inflation. FHWA’s Price Trends for Highway Construction notes a 52% increase in its composite construction cost index between 2000 and the end of 2006. The large majority of it occurred in 2005 and 2006 (21). These pressures create great resistance within the highway agencies to increase project costs, particularly if the benefits are not apparent to the public. Agencies have objected to hav- ing to pay monopolistic fees for the railroads to provide inter- nal crews for force account work, flagging, and inspection. The highway agencies also have complained of having to pro- vide longer structures to provide room for track expansion, even when the track expansion needs are uncertain. Survey of State and Local Agencies A web-based survey was designed to query state and local trans- portation agencies about best practices, streamlined processes, and challenges in the relationship between state and local agen- cies and the railroads. An e-mail message with a link to the survey was sent to each state department of transportation and to each member of the project advisory panel. Approxi- mately 400 local transportation officials also were sent an explanatory letter about the survey that included a link to it. (See Appendix B for the survey instrument and a detailed summary of responses.) The survey listed 27 suggested best practices that the team had identified during earlier research stages. The survey

24asked each respondent to indicate if they used any of the listed 27 practices and to rate their effectiveness. It also asked for additional best practices. The survey asked if the responding agency had any metrics to measure the effectiveness of agency best practices on railroad approval time frames or cost. It pro- vided respondents the opportunity to rate their own agency’s performance in submitting plans and submittals that addressed railroad needs in the review of projects. It requested agency perspective on reasons for successful and for unsuccessful project reviews. It provided an opportunity for responding agencies to list specific issues in the coordination between railroads and highway agencies that needed to be addressed. It also asked agencies if they had problems with indemnifica- tion or liability insurance. Best Practices The following 27 best practices are listed in order of effective- ness as ranked by the survey respondents: 1. Have DOT central point of contact. Have one empow- ered point of contact at the DOT to coordinate railroad project issues. 2. Conduct formal crossing diagnostics. Do not program a crossing project without a formal diagnostic study. 3. Open communication. Establish ongoing formal com- munication channels between the highway agency and the railroad. 4. Have one railroad point of contact. Have one empowered point of contact at the railroad to coordinate project issues. 5. Require early scoping. Require early predesign scoping on project concept between the railroad and the DOT. 6. Have preliminary engineering agreements. Have for- mal agreements that allow railroads to be compensated for engineering advice during preliminary development— even if a project is not eventually constructed. 7. Schedule regular meetings. Have standing monthly or quarterly meetings—in person or via phone or video— to address project schedules with the railroads. 8. Have formal points of concurrence. Establish agreed- on, regular points of coordination, review, and concur- rence between the DOT and the railroad on projects. 9. Use experienced engineering firms. Select only engi- neering firms that have extensive railroad experience. 10. Standard plan notes. To ensure railroad construction requirements are included in DOT plans. 11. Require preconstruction meetings. Require a precon- struction meeting between contractors, DOT, and the railroad for any significant project. 12. Hold regional conferences. Bring neighboring states and railroads together to share best practices and common issues.13. Dedicate personnel for reviews. Have dedicated person- nel either in the railroad or with the contract engineer- ing firms to focus solely on highway project reviews. 14. Coordinate projects for locals. Have the DOT coordinate railroad reviews and submittals for the local governments. 15. Ongoing reviews. Require reviews at the 30%, 60%, and 90% plan stage. 16. Master agreements. To develop programmatic ap- proaches between railroads and states. 17. Standard billing agreements. Streamline or standardize the billing process with the railroads. 18. Hold annual meeting. At least annually, have the DOT and railroad staffs meet to identify common needs and approaches. 19. Enact statutes to close crossings. Enact state statutes that reward, encourage, or require crossing closures whenever possible. 20. Programmatic right-of-entry agreements. Develop stan- dard agreements for routine right-of-entry for processes such as bridge inspections. 21. Have standard review times. Have the DOT and the rail- roads agree on standard review times for submittals. 22. Prequalify firms. Develop additional prequalification for engineering firms to ensure that they have railroad expertise. 23. Education. Require education for DOT project managers and other employees to ensure that they understand rail- road requirements. 24. Produce manuals. Provide DOT staff procedure man- uals on how to prepare acceptable railroad plans and submittals. 25. Develop escalation procedures. Have agreed-on escala- tion path to resolve issues that cannot be solved at lower staff levels. 26. Reengineer Section 130 program. Because railroad grade crossing countermeasures are often similar, reengineer the state’s Section 130 process to standardize and stream- line it between the DOT and the railroads. 27. Use NHI course. Send staff to the NHI course on rail- road crossing projects. The following eight practices were consistently rated as “excellent” by the respondents. Have a DOT Central Point of Contact “Have a DOT Central Point of Contact” is one of two practices that tied for the most highly rated practice overall, with 22 respondents rating it as an “excellent” or “good” practice. This high ranking in the survey was validated in interviews with state DOTs. It was also highly rated by the advisory panel, by railroad personnel, and by state DOT rail coordinators.

25In a centralized-point-of-contact model, the central office coordinates, prioritizes projects, schedules, and ensures that agreements and approvals are on schedule, and the district technical contacts work directly to resolve technical issues and keep the project on schedule. This model enables the cen- tral point of contact to help with any additional coordination required between the central office and the railroad when required. Examples of agencies using this practice are the Florida, Nebraska, Iowa, Washington, Pennsylvania, Min- nesota, Texas, New Mexico, and Ohio DOTs; the Arkansas Highway and Transportation Department; and the Illinois Commerce Commission. Although the railroads were not asked to participate in the survey, in separate interviews the railroad personnel also strongly supported having a central point of contact in the DOTs. Conduct Formal Crossing Diagnostics The second of the two practices that tied for highest number of responses for an “excellent” practice was “Conduct Formal Crossing Diagnostics.” It was one that the railroads also iden- tified in interviews as a best practice. It was rated “excellent” by several states and local agencies. Establish Ongoing Communication Channels “Open Communication—Establish ongoing formal commu- nication channels between the highway agency and the rail- road” received the second highest number of responses as “excellent.” In interviews with state transportation agencies, this practice was identified as one of the essential elements to successful workings between the railroads and the state trans- portation agencies. This practice was listed as a reason for success of projects and reviews. Open communication was cited as one of the key elements for good working relationships between railroads and state transportation agencies. Agencies such as the Penn- sylvania and Washington DOTs attributed meetings and ongo- ing communications to facilitating easier exchange of ideas, expediting revisions to agreements, expediting approvals, and building trust between both teams. Open communication was attributed as being especially helpful when the teams dis- agreed on projects, schedules, agreements, billings, or processes. Some agencies in the survey and interviews noted that agency personnel sometimes avoided scheduling meetings to avoid confrontations when there was a difference of opinion or ideas between the two teams. One of the respondents in the survey noted, “Sometimes, an adversarial relationship develops between the railroad and the highway agency on some projects. Some DOT proj- ect managers try to avoid having to deal with the railroad ifpossible.” In agencies where open communication was integrated into the workings between agency and railroad personnel, both teams often found workable solutions to challenges. Have One Empowered Railroad Point of Contact “Have One Empowered Railroad Point of Contact” received the third highest number of responses as “excellent.” This also corroborated agency feedback during interviews that having multiple points of contact in the railroads created confusion and delays. It led to inconsistency in dealing with project issues and led to waste of resources. Railroad per- sonnel noted that this approach led to railroad staff receiv- ing calls from state agency personnel regarding projects about which they had no knowledge. Often the railroad person receiving the call had no involvement or informa- tion about the project and would have to redirect the calls. Besides being a waste of time, it often led to confusion and difficulty in prioritizing project needs and often caused project delays. Often the same divisions within the railroads worked on both public and internal projects. Most Class I railroads have a public projects manager who coordinates the work between the agencies and the railroads. Prioritization of project work was also done by the public projects manager, an area outside the railroad technical team. Because of this separation of the railroad technical team, direct calls to them from state and local transportation agency staff often did not result in good responses. Having an empowered railroad point of contact helped coordinate public works within the different areas of the railroad and made for smoother and quicker information flow. Agencies that had a single or few designated points of contact with the railroads reported it was easier to revise schedules and project priorities if a situation required shuf- fling of priorities. Require Early Scoping “Require Early Scoping” received the fourth highest number of responses as “excellent.” This practice enables both sides to bring up differences and concerns early in the process. It was also one factor that helped eliminate or change alternatives that either railroads or the agencies had strong reservations about. It often helped minimize the so-called “being held hostage to last-minute decisions,” in which concessions are demanded late in a project when the project sponsor cannot afford further delays. One of the agencies in the survey noted, “When comments and needs are expressed early and are con- sistent throughout the development of the project [it] leads to a more successful outcome.”

26Preliminary Engineering Agreements Three practices tied for the fifth highest number of responses rated as “excellent.” One is the practice of having preliminary engineering agreements that allowed railroads to be compen- sated for engineering advice during preliminary development even if the project is not eventually constructed. At the advi- sory panel meeting there was much brainstorming and dis- cussion about this practice and overwhelming support to change the regulations that covered how and when railroads could be compensated for preliminary engineering work. The advisory panel in its first meeting discussed the fact that the railroads, as private businesses, had to charge for the hours of work done irrespective of the final decision to construct a project. Several states have said FHWA will not allow com- pensating the railroads until the final agreement is signed. Many projects in the preliminary stages never get to construc- tion or have a final agreement signed. Railroads never got compensated for such work. One of the railroads discussed having hundreds of thousands of dollars of uncompensated expenses attributed to its public projects division as a result. The participants at the advisory panel meeting felt that in view of the project objective to smooth relationships and devise mitigation strategies to improve the workings between rail- roads and local and state transportation agencies, this issue needed to be resolved and a better and simpler mechanism to compensate railroads for preliminary engineering work needed to be devised. Railroads, like other private businesses, are accountable for the profitability of their units and operations. There is a nat- ural inclination to focus on work that brings in revenue ver- sus work that will not be compensated. The state agency and the railroad representatives felt strongly that the inability to pay for preliminary engineering reviews was one cause of dis- cordance and delays. Have Scheduled Regular Meetings “Have Scheduled Regular Meetings” is the second of the three practices that received the fifth highest number of responses as “excellent.” This was also identified as a good practice dur- ing interviews with two of the Class I railroad representatives. The railroads identified this practice as one of the factors in expediting reviews and approvals on projects. They noted that the frequency of the conference calls varied from biweekly to monthly to quarterly, depending on the maturity and progress of the projects. These scheduled calls helped address project issues and schedules and enabled timely correction on activ- ities that were off schedule. Have Formal Points of Concurrence “Have Formal Points of Concurrence” is the last of three practices that received the fifth highest number of responsesas “excellent.” This practice helps to ensure adequate com- munication and shared understanding of progress by both the railroads and the highway agencies. Generally, the points of coordination and concurrence were recommended to be at the preliminary planning stage, at 30% plan completion, 60% completion, and 90% completion. These four stages allow for early agreement on the preliminary concept scope and then further concurrence as that general scope translates into an increasingly detailed set of project plans. Highway Agency Practices As has been mentioned repeatedly, documenting “typical” practices is subject to arbitrary generalization because of the large diversity of public agencies. However, several of the largest states have railroad-agreement manuals that illustrate their processes and provide insight into the state’s general approaches. The difficulties states face in securing railroad agreements is apparent, even in the dry and formal language of the process manuals. One state’s draft manual refers to the “coveted, yet ever elusive, construction and maintenance agreements” needed from the railroads for each project. Another state warns its districts emphatically to expect a year or more delay in receiv- ing railroad approvals. A third state notes that one of the rail- roads provides agreements after a review of at least 6 months, while another major Class I railroad requires 12 months. It is apparent that the states frequently experience long review times and delays. They warn districts to plan such uncertainties into project schedules. These manuals refer to the standard agreements, specifica- tions, and contract provisions the states have developed to ensure that the railroads’ concerns are routinely addressed. The documents attempt to streamline the review process by addressing known and long-standing railroad concerns pro- grammatically in all projects. The internal project managers, the outside design consultants, and ultimately the contractors are all required to incorporate these requirements directly into the project-development procedures. Two of the more comprehensive approaches are summa- rized below. The first is the Texas Department of Trans- portation’s rail coordination manual. It outlines the steps and responsibilities of its project managers to enable them to secure railroad agreements. The second is a summary of the Illinois DOT master agreement with CSX. The master agreement spells out the routine steps and provisions that both entities use to streamline their interactions. Texas Department of Transportation The Texas DOT is updating its rail project manual to try to fur- ther improve its interactions with the railroads. As with many other departments, it advises its internal project managers to

27seek immediate involvement of the railroads as soon as a proj- ect is approved for preliminary development. It requires a DOT railroad project manager to seek a site visit with the rail- road to get initial comments from it before plan preparation. If a structure is involved, the project manager is to attempt to get a DOT bridge project manager present at all meetings with the railroad. Projects are also recorded in an agreement status report, which tracks the progress of agreements. The report is updated monthly and shared with internal Texas DOT divi- sions and the railroad. Quarterly updates are sent to the dis- tricts and to the district rail coordinators. In addition, a letter of authorization is issued by the Texas DOT, which serves as a standard preliminary engineering agreement allowing the rail- road to charge the DOT for reviews and consultations. After initial concurrence from the railroad regarding proj- ect approach, the project manager secures the field surveys, soil drillings, signal diagnostics, and other items that will be fundamental to the project. These likewise are shared with the railroad. As detail design begins, the rail manual requires the use of standard drawings and project design elements that are specif- ically developed to meet the railroad’s requirements. These include the following: • Detailed geographic and typographic information; • Typical roadway geometry; • Location of all utility poles and lines; • Top-of-rail profiles for approximately 1,000 feet in each direction of highway intersection; • Drainage features and calculations to ensure no increase in discharge into railroad drainage systems; • Assurance that any demolition will occur in accordance with railroad specifications; • Casing adequate to prevent cave-in will be used around drilled shafts that are subject to railroad surcharge; • All minimal clearances required by the railroad are met for vertical and horizontal clearances; • At least one additional track is accommodated in the design; • All construction activities will remain at least 21 feet above the rail and 12 feet horizontally from it; • The contractor will submit plans for erosion and sediment control to be approved by the railroad; • Erection over the right-of-way will not cause disruption to railroad operations and construction windows will be pro- vided by the railroad; • Contractors must remain outside 50 feet of the track center when trains pass; • All permanent clearances will be verified before final project closeout; • A clear description of all work done by Texas DOT and railroad employees will be provided; • All railroad equipment and utilities that may need adjust- ment will be delineated;• Boring data will be provided; • The summary, description, and sequence of work will be described; and • All temporary crossings will be detailed. The Texas DOT has standard drawings and plan notes for typical railroad items, unique to each railroad. For instance, the standard plan sheet for a bridge to be constructed on UP right-of-way refers to the specific UP standards that must be met. These standard drawings and notes are provided uni- formly to accommodate the known requirements of this specific railroad. “Coordinate with UPRR while performing the work outlined in this Contract, and afford the same cooperation with UPRR as with TxDOT,” says the standard plan note. “Arrange and conduct the safe operation of the tracks and property of UPRR and traffic moving on such tracks, or the wires, signals and other property of the UPRR, its tenants and licensees, at or in the vicinity of the work,” the standard note advises the contractor. “The Contractor is responsible for train delay costs and lost revenue claims due to any delays or interruption of train operations resulting from Contractor’s construction or other activities.” The standard provisions for a UP bridge project include another 91 separate paragraphs of instructions, all intended to ensure that Texas DOT bridge projects are predicated on the railroad’s unique requirements. These provisions address the key railroad requirements discussed earlier, including issues such as safe conduct of construction activities; lack of interference to train operations; adequate insurance; railroad control over flagging and inspection; safe shoring to not harm tracks; and the exclusion of people, equipment, and materi- als from the minimum construction clearance envelope. The Texas DOT advises its project managers to expect review times of between 2 months and 6 months for simple projects and up to two years for complex ones. Illinois DOT Master Agreement The Illinois DOT is one of several state departments that have developed master agreements for highway improve- ments involving the railroads. This overarching agreement includes the major considerations required by both the rail- road and the department of transportation. As individual projects arise, they are amended to the master agreement to save time. Among the major items included in the master agreement are the following: • As with a partnering agreement, the master agreement notes that both parties desire to cooperate for the mutual benefit of themselves and their customers. • They agree to process a separate, descriptive addendum for each individual project.

28• For the projects amended to the agreement, the railroad will provide a right-of-entry and temporary construction easement. • The railroad agrees to provide comments and approvals to submitted plans and provisions within 90 days of receipt by the agency. • The state will not allow contractors to work until railroad approval is received. • Both parties agree not to change approved plans without the consent of the other. • The railroad will be notified when contracts are awarded. • Preconstruction meetings will be held between the state, the railroad, and the contractor. At these meetings a sched- ule will be agreed to and necessary work by all parties will be coordinated. • The state will inspect the work to ensure that the contrac- tor meets the provisions of the agreement. • The contractor will give 30 days’ notice of needing flagging services and will give 5 days’ notice of cancellation. • The railroad will provide flagging, at state expense. • The state and railroad agree that Railroad Protective Liabil- ity Insurance of $5 million per instance and up to $10 mil- lion aggregate will be provided at state expense. • The state will cover the railroad’s costs for construction inspection, preliminary engineering, and force account work. • The addendum will serve as a right-of-entry agreement. • Twenty-three feet of vertical clearance and 12 feet of lateral clearance will be provided at all times. • The safety and continuity of rail traffic will be protected at all times. Contractor plans will be approved by the rail- road, but the contractor retains liability for his acts. • A separate Special Provisions and Insurance Requirements is included that addresses standard items, such as the following:  The authority of railroad engineering over all operations.  The contractor will not interfere with any railroad oper- ations without written approvals.  The contractor will provide notice before commencing work.  The contractor will abide by all access and crossing provisions.  The contractor will cooperate with the railroad to antic- ipate the railroad’s force account scheduling.  The contractor cannot charge the railroad for any delays to his project on account of CSX force account delays.  The contractor will abide by all railroad construction provisions.  Blasting will be approved by the railroad.  All ditches and drainage will be protected.  The railroad has sole authority over flagging, and the costs will be covered by the agency or contractor.Simplified Billing and Auditing A recurring point of contention between some highway agencies and the railroads was billing and auditing of reim- bursable costs. Some state officials complained of receiving bills for meals, travel, flagging, and engineering expenses that occurred in other states. Prompt explanations were not forthcoming and they complained of protracted efforts to secure justification. Because the states are strictly audited and criticized for paying unjustified expenses, the state offi- cials were reluctant to pay such bills without formal docu- mentation. One state official said it was common for such bills to be turned over to a state agency that settles billing disputes, which took considerable staff time and caused considerable billing delay for both the highway agency and the railroad. It also led to distrust and suspicion of the over- all railroad coordination process, he said. At least one of the Class I railroads complained of considerable ambiguity regarding which costs were eligible and which were not. They noted that they had staff from multiple states work- ing on projects, therefore costs for staff, engineering, and travel outside of the state in which a project was located may be needed. It appeared clear that a chance for process improvement lies in further simplification and standardization of billing. Some examples of simplified processes are the following: • Discussed below is an Iowa innovation to pay for standard track improvements on a lineal foot basis for typical proj- ects, such as crossing resurfacings. • Amtrak said it is negotiating with Massachusetts officials to directly enter bills and their explanation into the state’s billing system, saving both parties the administrative cost of handling paperwork. • Several states pay fixed per-unit prices for components in typical safety-upgrade projects. Summation of State Practices It is clear that many states have gone to great lengths to anticipate the railroads’ requirements, to incorporate those requirements into standard agency practices, and to attempt to make the project agreement process routine and pre- dictable for the railroads. It also is clear from the railroads’ approval of many of these standard processes, that the rail- roads have routinely agreed to practices intended to stream- line the approval process. It is clear also, however, that problems still routinely develop between the entities. These problems lead to disputes over the cost of railroad services, to changes in proposed project plans and to delays in project schedules.

29Selected Case Studies of Best Practices Four states were examined in greater depth to illustrate the types of strategies used to improve the project agreement process. The four were selected to illustrate different aspects of the agreement process. Some of the strategies cited relate to routine projects, such as the resurfacing of crossings. Other strategies are used to expedite complex grade-separation and corridor-improvement projects. These strategies are not unique to these agencies, but they serve to illustrate the types of innovative practices that have been deployed around the country. Iowa DOT Best Practices Iowa DOT has partnered with the railroads, cities, and counties to systematically streamline the process to resurface at-grade railroad crossings. The Iowa process has been continually refined since its initiation in 1976, so that today it expedites all major phases of a typical crossing project. The Grade Crossing Surface Repair Program began in 1976 with $600,000 annually, with one-third participation each from the state, railroads, and local governments. The funding increased to $900,000 and the participation changed to 60/20/20 in 1983. This program funds at-grade railroad crossing resurfacings on a first-come, first-served basis. In 1998 the Crossing Committee was established with represen- tation from the Iowa DOT, railroads, highway authorities, and Wisconsin DOT. The primary objective of the committee is to increase the life and rideability of all crossings and to develop recommended maintenance practices for the crossings. Streamlined Project Selection The Iowa DOT has addressed the delays that some states have experienced in selecting and scheduling the rebuilding of at- grade crossings by streamlining the project-selection process. All state and local crossing projects submitted by cities and counties are prioritized by the Iowa DOT Rail office staff. Assessments of the condition of the crossings obtained annu- ally from the DOT field staff and from the railroads are used in the evaluation and scoring of projects. Prioritization of projects is based on 19 factors that include number of daily trains, rideability, fouled ballast, drainage pattern, rail stabil- ity, average daily traffic, number and percentage of truck traf- fic, speed limit, surface stability, elevation differential, cross section, surface deterioration, tie condition, approach profile, and header area. On a first-come, first-served basis, projects are reviewed, scored, and selected. In the past, projects were selected and scheduled on a four-year cycle. Since the condition of thecrossing could change significantly in four years, the proj- ect selection cycle was changed in 2008 to a two-year cycle. This change was made to keep the safety analysis as close to real-time as possible while providing the railroads and the local highway agencies time to plan for funding. It also keeps the option to advance a project if another falls out of the program. The goal of the Iowa DOT is to reconstruct all at-grade rail- road crossings and then follow up with effective maintenance. Each reconstructed crossing is expected to last between 10 to 15 years. The life of the crossing varies depending on the vol- ume and type of traffic. The DOT field office does basic main- tenance work on a yearly basis. Established Standards and Process for Projects: Use of Best Practices The Iowa DOT has successfully avoided agreement delays by developing with the railroad companies common standards for at-grade crossing projects. Technical aspects for the com- mon standards are based on UP/BNSF drawings of proper subbase depth, compaction, and specifications for track panel and surface material and DOT standards for all roadwork. The agency selected best practices after conducting extensive field trips and reviews of standards, materials, processes, and practices used by other state transportation agencies. The Iowa DOT then brought together best practices in funding, staffing, equipment, material specifications, and streamlined processes for rebuilding crossings. The sequence of steps involved in the rebuilding of the crossings is “cookie cutter,” and serves as a template that is used repeatedly on rebuilding all at-grade crossings. Preconstruction Meeting Preconstruction meetings are held 2 to 3 weeks before the estimated start of construction. The meetings bring together representatives of the state, highway authority (city/county officials), railroads, businesses, school districts, and local emer- gency services. Besides providing the opportunity to discuss and finalize project details, these sessions also serve as a forum to communicate with the community and surrounding busi- nesses about road closures and detour routes. The precon- struction meetings help all parties working on the project to have a clear understanding of roles, responsibilities, and sched- ules while improving community relations. Partnership with Well-Defined Roles and Responsibilities The Iowa DOT and the railroad each brings its equipment and crews to the project site. The roles and responsibilities

30and sequence of steps are well-defined and both sides work collaboratively to complete the project on schedule. Gener- ally, each project takes 5 days to complete. The Iowa DOT attributes the success of the program to the collaboration between the agency and the railroads during the project and beyond it. Both sides combine their skills and expertise effectively to deliver the project. The DOT Design and Materials Offices bring their equip- ment and expertise and the railroads bring their expertise and standards for track structure. Beyond the rebuilding of the crossing, the DOT field offices monitor crossings for mainte- nance needs and take action as necessary (milling, oiling, seal- ing) and alert the railroads when they see any loose panels or structures that need attention. Simple Agreement and Lump Sum Payment A simple agreement is drawn up indicating that the agency will reimburse the railroads for material costs only, at the rate of $400 per lineal foot. This eliminates issues between the railroads and the DOTs on billing, tracking of actual costs, and requirements related to audits. The agreement indicates the total dollar amount based on total lineal feet of surface material and the number of inches the track will be elevated above the existing roadway. Payment is made by the agency within 30 days after receiving the billing. All costs associated with relocation or repair of existing signals, signal wires, and switches are covered by the railroads. This approach also reduces the amount of administrative work required from the railroads. A streamlined project selection process and an estimated project start date, coupled with a simple agreement and pay- ment process allows the DOT and the railroads to plan and assign resources to projects with minimal time spent on negotiations. Annual Meeting Relationship building and open communication were cited repeatedly in interviews and in the survey as reasons for the success of projects. At the conclusion of the construction season each year, Iowa DOT holds meetings with each railroad. At this meeting various levels of management from the DOT and the rail- roads provide an overview of surface repair projects, signal projects, and all completed and future rail projects, as well as issues related to billing and insurance. This serves as a session to share information with others in the organization not actively involved with the crossing projects. The DOT also finds these sessions useful in reinforcing goals, roles, respon- sibilities, and expectations of both sides.Standard Agreements The Iowa DOT has a simple, two-page standard agreement between the agency and the railroad for rebuilding at-grade crossings. The agreement provides a space for the total amount to be reimbursed based on total lineal feet at $400 per lineal foot. An Exhibit A that shows the lineal foot of surface material for reimbursement purposes is attached to each agreement. The only change from project to project is the Exhibit A and the respective total amounts to be reimbursed per project. The well-established Iowa process also eliminates the need for general liability and Railroad Protective Liability Insurance. All the work is done by the DOT staff and railroad personnel, so both are covered by their own self-insured coverage. Florida DOT Best Practices Florida DOT officials say they have a productive and efficient relationship with their railroads because they have imple- mented several best practices that serve their agency and the railroads well. The Florida DOT takes an approach that rec- ognizes the needs of the railroads to protect their rights-of- way, to protect their operations during construction, and to cover their costs for project reviews, say Florida DOT repre- sentatives Fred Wise, state rail manager, and Gary Fitzpatrick, administrator of rail operations. Partnering Meetings The Florida DOT central office staff meets annually with CSX, which is by far the largest operator in the state. At the meet- ing, they discuss policies, pending legislation, and changes in business operations that could affect how the DOT and the railroads cooperate on agreements. In addition, all district rail administrators and coordina- tors meet annually with railroads as a group to discuss issues associated with project delivery, maintenance involving rail- roads, and improvement projects. Before the meeting, they solicit agenda topics from districts and the central office. The central office staff say the meeting is an opportunity for train- ing, coordination, and exchange of best practices between districts and the railroad staff. Quality Assurance Reviews A strategy that appears to be unique to the Florida DOT is the conduct of quality assurance reviews. Every two years, each dis- trict’s railroad coordination process is reviewed by the central office staff to ensure it complies with the department’s policies and procedures. The review helps spread best practices, iden- tify new innovations, and ensure that the DOT maintains a

31consistently productive relationship with the railroads. Any innovations found are shared, and any shortcomings are doc- umented for correction. Master Agreements Another strategy used by the Florida DOT is to have a stan- dardized master agreement for each project and then to use a one-page letter modification for individual approvals. Rou- tine approvals such as the authorization of reviews can be handled with a simplified one-page form, saving the central office, the districts, and the railroads considerable time. For each new project, a new agreement is signed, but the agree- ments are based on routine language that the railroads and the DOT have used many times before. Throughout the course of the project, each activity can be kept on track with the one- page approval that can be issued in a day. The DOT reports that the frustrations of waiting for approvals have been largely eliminated. The authority to issue the one-page approvals has been devolved to the district project personnel, but with over- sight from the central office. Liability Insurance While other states said disputes periodically have arisen with the railroads over liability limits, the Florida DOT has standardized the approach, which the DOT officials say has addressed past problems. They note that in past years when the railroads would try to raise liability limits above statutory minimums, the DOT would resist and a delay would occur. Now, they have a letter of agreement that can be used in cases where the railroad believes a specific location has increased risk and warrants increased liability coverage. The DOT does not accept, and railroads do not request, increased liability limits at all locations. Instead, both parties have agreed to be judicious about the higher limits and the state now agrees to the higher limits when the railroad letter of agreement provides a valid justification. Collaborative Attitude The Florida DOT does not experience the frustration that other agencies report having with the railroads, according to Wise and Fitzpatrick. They describe their relationship with the rail- roads as “mature” and “excellent,” the result of their under- standing and appreciation for the railroads’ perspective. Although the Florida DOT’s various processes have served to simplify the project review process, its railroad coordina- tion staff say the most important component to their good relationship is a sense of collaboration. They say they try to understand the railroads’ perspectives and to compromisewith the railroads whenever possible. They say their attitude of collaboration is reciprocated by the railroads. Pennsylvania DOT Best Practices Pennsylvania DOT (PennDOT) personnel attributed constant and open communication as an important reason for success- ful projects. PennDOT has an office that acts as the liaison between the agency and the railroads. According to Elizabeth Bonini, a PennDOT official and a member of the advisory panel for this project, building relationships has fostered an environ- ment of trust. She said that her office has been able to contact railroad officials at all hours because of the relationship that was built over many years of meetings and discussions. She went on to explain that in no way does this mean that both parties agree with each other on every topic or on the approach to resolve every issue, but it has created an environment where both sides can discuss openly, call each other and express their point of view, brainstorm, and arrive at possible acceptable solutions. Annual Meetings PennDOT conducts an annual meeting with each railroad. The purpose of the annual meeting is to exchange information between PennDOT and the Class I railroads to meet common expectations. These meetings bring together people from dif- ferent areas of the agency and the railroads whose understand- ing of project status, issues, regulations, and processes influence the schedule and delivery of projects. These meetings enable people to have face-to-face discussions. They also enable the agency and the railroads to clarify roles, responsibilities, and expectations. Attorneys from the railroads get to meet attor- neys from the Office of Chief Counsel. PennDOT’s district and central office staff meet representatives at various levels from the railroads’ public works sections. The agency also invites representatives from the Public Utility Commission, Federal Highway Administration, and the Bureau of Rail Freight for these annual meetings. PennDOT’s Bonini and Jack Hubbard, grade crossing engi- neer, say that the agency’s central office also meets with each district and the railroads in separate smaller, project-specific meetings throughout the year as necessary. These meetings helped achieve the following goals. Discuss Issues with 2008 and 2009 Projects The team discusses issues with all ongoing projects and any delays and issues on future projects. This includes flagging, grade crossing closure plans, vertical and horizontal bridge clearance requirements, temporary right-of-way, and insurance and indemnification.

32The agency briefly discusses changes in any of its practices and obtains feedback from the railroads. The agency also dis- cusses billing and invoicing issues and both sides brainstorm on ways to resolve them. At the 2008 annual meeting with CSX, PennDOT reviewed its right-of-way clearance process and time requirements and obtained feedback from CSX. They discussed priority cross- ings that both CSX and the agency would like closed and the incentives that can be used. The agency also discussed billing issues and invoices, including ways to speed up CSX’s process to review and sign railroad reimbursement agreements. The agency staff provided an update on ongoing projects and projects scheduled for the next year. Information sharing about ongoing projects helps attendees not involved in a proj- ect on a day-to-day basis to get an overview. The information about future projects helps the districts and the agency resolve resource conflicts and schedule meetings early in the process. Clarify Communication Points of Contact In interviews and in the survey conducted by the project team, agencies mentioned that a significant amount of time was wasted in redirecting or finding documents sent to the wrong office or the incorrect person at the railroads. Railroads say that sometimes railroad personnel not connected to roadway projects have received repeated phone calls and requests for information from agency staff. Agencies mentioned issues and delays arising from disconnect as a result of different peo- ple in the agency calling the railroads about different aspects of the same project. By clarifying the communication points of contact, the agency minimizes such issues. Legal Issues A railroad attorney noted that his staff reviews state agree- ments on a first-in basis because they have received no order of priority from the agency. Even if a later document requires only minimal review, it will wait in order because the agency has indicated no order of priority for reviews. By having the legal officials from the state and the railroads at the annual meeting and by setting aside time to discuss legal issues, several issues such as the above, are resolved quickly. Additionally, both sides get to know each other. This has enabled the state legal team to call the railroad attorney and vice versa to expedite document review. Clarifications are also simplified when both sides can call and talk with each other. This practice reduced the time to get the necessary legal reviews and approvals to start projects. Reimbursements The attendees discuss reimbursements and resolve pending issues. The state also discusses changes or expected changesin billing, funding, and reimbursement that may affect any ongoing or future project with the railroads. The state also provides an overview of its billing process. It reminds the railroads that when projects approach the 75% agreement amount, the railroad needs to evaluate the budget. If additional funding beyond the approved amount will be required, the railroad needs to inform the agency. This practice allows the agency to review the current status of project funding and, if increases are required and appro- priate, to approve them. Such proactive processes ensure that the project stays on track and work is not delayed, while con- tinuing to enhance the relationship between the agency and the railroads. Update of Major State Initiatives The railroads provide an update of all major railroad initiatives across the nation. The update provides perspective to all at- tendees about impacts to state projects and the work being done by the railroads in other states. This helps common under- standing and clarifies expectations. It also provides informa- tion for resource planning. Discussion on Best Practices Having experts from various areas and different levels of the railroad and the agency at the meeting provides an opportu- nity to share best practices in use in other states and railroads. The agency staff can share practices they found useful in work- ing with other railroads, and the railroads can share practices and processes that they found helpful in working with other state or local agencies or within PennDOT. At the 2008 annual meeting, CSX shared a practice used by one of the PennDOT districts that starts the process for obtain- ing the utility commission’s order for advertising early in the process. This practice helped expedite the overall project. Another practice discussed was that some districts provided preliminary engineering agreements before receiving the Pub- lic Utility Commission agreement while others did not, causing project delays. The discussion highlighted some inconsistencies in practices across districts that led to project delays. By shar- ing and discussing information about the practice, other dis- tricts got to know about the efficiencies and agreed to adopt the practice. Grade Crossing Electronic Document Management System PennDOT has deployed a Grade Crossing Electronic Doc- ument Management System (GCEDMS) that has stream- lined various operations within the agency. Besides helping PennDOT manage all its grade crossing projects within the

33agency, the software helps the railroads working on agency projects. Jack Hubbard, PennDOT grade crossing engineer, says GCEDMS will help the railroads as they work on proj- ects with PennDOT. Some of the benefits are the following: • Virtual visit to project site. The railroads can view up-to- date photographs with location maps of public highway– rail crossings, along with all the FRA crossing inventory information. • Access to the latest project information and documenta- tion. If the railroad is involved with a specific highway–rail safety project or highway–bridge project involving a rail- road facility, it will be able to view most of the information and documentation stored within the system about that project. • Project monitoring. The railroad can monitor the progress of projects in which they are involved from initial develop- ment and design through construction and closeout. • Quick access to additional resources. The application pro- vides links to various key resources almost serving as a single one-stop shop for relevant information. This includes key links to other agency websites (for example, FRA, FHWA, MUTCD, PennDOT, and PUC). • Future single source of all inventory information. Pro- posed major enhancements to the system include allowing the railroads to update their FRA railroad inventory infor- mation within the system along with its GIS mapping. Potential enhancements are expected where PennDOT’s information will synchronize with FRA when it is updated. Simplistically, this will mean that updating GCEDMS will translate to updating FRA systems and that users of GCEDMS will have the latest FRA updated information. Currently, state and federal systems are not integrated in any way, and in the majority of cases, the data in each of these systems are different, thus making it challenging for users to work with them. This enhancement will be of great benefit to railroad personnel, who will in the future be able to access the updated information through GCEDMS. Most software deployments are preceded by business process streamlining and improvements, as was the case with the deployment of GCEDMS in PennDOT. The use of the soft- ware will help railroads and the agency to have a common understanding about projects and also manage projects more efficiently. Washington State DOT Best Practices The Washington State Department of Transportation (WSDOT) is considered to be one of the transportation agen- cies with good business practices and success in working with the railroads. The agency has made improvements to businessprocesses that led to better coordination and communica- tion, both within the agency and with the railroads. Accord- ing to Ahmer Nizam, a project advisory panel member and WSDOT headquarters railroad liaison, open communica- tions, understanding each other’s perspective, and the busi- ness goals of both organizations enable both sides to work toward acceptable solutions. WSDOT understands and accounts for the fact that BNSF’s business goals and customer obligations prohibit track work in the fourth quarter of the year. The agency also knows that there is increasing demand for rail transportation and that the railroads are making more capital improvements. Conse- quently, the railroads have a policy to preserve capacity within the rail corridors, and the agency understands that it must consider this policy when working on expansion of existing structures or building new roads around railroads. WSDOT is currently rebuilding and repairing a larger number of older structures and roads. It also is expanding the highway net- work. Therefore, an unprecedented number of state highway projects are impacting railroad operations. Class I railroads in Washington provide specific design standards for highway improvements around railroads, and WSDOT advises its project offices to incorporate these standards to the extent possible early in design phases. WSDOT understands that there will be many issues and differences with respect to acceptable legal language, design, and other requirements, and that there will be many areas of disagreement on both sides; but continuing to work through the differences toward resolution has been the focus of the agency. Nizam notes that streamlining the railroad processes for engineering and legal review and establishing a mechanism where the railroad reviewer is prompted to contact the WSDOT if there are questions or concerns regarding a submittal will go a long way to expedite project work between the railroad and the agency. The agency has several best practices that have helped keep agency projects on track and could be adopted by other state transportation agencies, with minor changes. Centralized Railroad Coordination Within the Agency WSDOT has centralized all coordination on highway projects with the railroads for about 30 years. WSDOT has seven regions, all working on different projects that involve the rail- roads. Without centralized coordination each region would be communicating with the railroads, trying to get their proj- ects the highest priority. This not only could cause schedul- ing challenges but also would waste time and resources. In such a scenario, the railroads would have to deal with the task of prioritizing agency projects.

34Centralized coordination allows the agency to prioritize projects according to agency goals. It also ensures that there is consistency in negotiations, policies, design, agreements, and all aspects of work on agency projects involving railroads. This consistency significantly reduces the time taken on indi- vidual tasks. Centralized coordination has helped the agency by pro- viding consistency in agreements and design across railroad projects. There is more efficient use of personnel and engi- neering expertise across projects when there is consistency in design and agreements. The regions communicate with the central project office on all railroad projects. The steps involved in project planning, development, and design are uniform across all regions. The regions provide updates on project status and have to notify the central coordination office of all future projects at least one year ahead of time. This formal and consistent process across regions also helps the central coordination office prioritize and plan projects in a timely manner. Internal Partnering Another best practice in WSDOT is the internal partnering that exists within the agency on all highway projects. Accord- ing to WSDOT personnel, the agency approaches the railroad as a single agency rather than as separate divisions. All the ini- tial coordination between the agency and the railroad for highway projects is done by the central railroad coordination office. As the project matures, the central office person is virtually integrated with the regional team on coordinating between the agency and the railroad. Nizam says that this virtual integration ensures continuity of communication and coordination on the project and is one of the reasons for successful projects. The partnering of com- munication and coordination with the technical aspects of the project is vital to keeping the project on track. In WSDOT there is no time lost handing off tasks from one office of the agency to another. The central office real estate services negotiate property management (easement and right-of-way) with the Class I railroads, while the region coordinates with short lines on right-of-way issues. The regional utility engineer provides the coordination required on utility aspects of the projects, except for megaprojects where the region dedicates a full- time utility coordinator to manage the complexity and volume of utility design/coordination required in such large projects. All detailed engineering work is coordinated and supervised by the region itself. This transparent partnering brings together the best of coordination, communication, technical and design expertise, and project management, achieving project goals while accom- plishing the overall agency goals.Annual Design and Construction Conferences WSDOT has an annual design and construction conference where central office and region staffs meet. At this meeting the teams discuss projects and address issues on all WSDOT projects. They discuss the challenges encountered and share information about how the challenges were resolved and the lessons learned. All aspects of any railroad project that needs special attention is also discussed at this meeting. The meeting is an information-gathering and information- sharing opportunity for all WSDOT personnel. Agency person- nel who attend other national conferences share information about best practices from other states that may impact WSDOT. In 2007, information shared included changes to land use planning adjacent to railways, risk analysis method- ologies, federal initiatives, and information on specific engi- neering treatment and case studies. The annual conference is another forum for participants to provide updates on evolv- ing engineering practices, trends, and policy initiatives at the federal level that may have an impact or be useful to WSDOT. Full-Time Railroad Person Dedicated to WSDOT Projects Most Class I railroads have a public projects manager (PPM) who is responsible for coordinating work between the state and local agencies and the railroads. These project managers often are responsible for large territories covering many states. During interviews, state agency personnel identified the busy schedules of the public projects managers as one of the rea- sons for the long turnaround time on reviews. This also was attributed to causing delays in scheduling meetings with rail- road engineers and attorneys. The agency personnel said that it sometimes takes several months for a PPM to respond to a simple question and the delay may cost the agency more than the cost of funding a PPM position. The Class I railroads explain that they operate as a business where each section/division has to be independently prof- itable. The railroads understand that sometimes review back- logs delay highway agencies. However, the uncertainty of future workloads constrains the expansion of public project staffs. WSDOT has addressed the issue by funding a position at BNSF dedicated to agency projects. This dedicated railroad person is responsible for expediting and coordinating reviews and scheduling face-to-face or phone meetings between the railroad and WSDOT to help expedite reviews and approvals of new agreements. This person does the necessary liaison work for the railroad attorneys, clarifies questions, compares new agreements with older agreements, and makes sure that the railroads’ interests are not compromised. The person also schedules regular monthly meetings and more frequent meet- ings if necessary to follow up on all railroad-related action items to keep projects on track.

35Though paying for a PPM may not be feasible for every state DOT, one option would be for adjacent states work- ing with the same railroads to collaborate and fund a posi- tion. This can reduce, if not eliminate, the delays and long turnaround times. It may also provide an opportunity for states to have time-saving similarity in negotiations, designs, and agreements on projects. As adjacent states join together to fund a PPM position with a railroad, they could establish close relationships and open channels of communication and share information on successful practices and lessons learned. Clear Definition and Formal Documentation of Roles WSDOT has formalized and documented in detail the roles and responsibilities of all agency personnel working with the railroads. The agency understands that negotiations with the railroad can take significant time and effort. The agency believes that clarity in roles and responsibilities help both WSDOT headquarters and regions pay the necessary atten- tion to the projects and start work on negotiations and agree- ments in a timely manner. The agency’s manuals list the responsibilities and the processes to be followed within the agency and with the rail- roads. All major tasks, along with roles, responsibilities, and processes to expedite work, where applicable, are detailed in the manuals. For example, the design manual details the cir- cumstances that will require a Washington Utilities and Trans- portation Commission (WUTC) petition and the related roles and responsibilities of the region and the headquarters. Details within the agency’s manuals include who is responsible for performing the construction administration of agreements, construction railroad coordination, railroad billing and com- munication with road masters. It also details steps to expedite various reviews and approvals for different types of projects including grade separation, railroad–highway grade crossing and temporary railroad crossing. This detailed documentation ensures that agency person- nel working on projects know how and when to act on tasks to ensure successful and timely completion of projects. The clarity of roles and responsibilities also helps the agency units coordinate with each other and with the railroads on projects. WSDOT-BNSF Agreement Process WSDOT and BNSF have agreed to a process for review and approval of all new agreements (Figure 3.1). The process defines the activities and steps beginning with the identifica- tion of the need for a construction and maintenance agree- ment to obtaining approval and signature on the agreement. It also shows the expected time for each activity.The agency attributes this formal process for reducing the time to process agreements from several years to 31 weeks. Formal Escalation Process with BNSF WSDOT has a formal escalation process to address issues between the Environmental and Engineering Programs Divi- sion and BNSF. • Level 1: The agency headquarters railroad liaison works with the BNSF public projects manager to resolve all issues that come up between the agency and BNSF. In the event that an issue does not get resolved, the agency headquar- ters liaison can resort to a formal defined escalation proce- dure that moves to the next level in the escalation process. • Level 2: If any issue cannot be resolved in the first 21 days after the first draft is offered (or requested), then it can be escalated to the assistant director of public projects in BNSF and the state design engineer in WSDOT. • Level 3: If after 14 days of escalation to Level 2, the issue still remains unresolved, then either party can escalate the issue to the director of environmental engineering programs in WSDOT and, in BNSF, to the general director of com- muter construction if the issue is engineering related and the director of public projects for all nonengineering- related issues. • Level 4: If 10 days after escalating the issue to Level 3 the issue still remains unresolved, then the issue will be esca- lated to the assistant vice president of engineering in BNSF and the assistant secretary of transportation in WSDOT. Because of the processes, practices, and frequent and open communication that occurs between the agency headquarters liaison and the dedicated BNSF project works manager, only 10% of issues escalated beyond Level 1 from 2005 to 2008. Seventy-five percent of WSDOT railroad projects are with BNSF; the remaining 25% is split between UP and 15 short- line railroads. The agency is considering a similar escalation procedure with UP in the future. Agency Culture and “Desired State” Although most highway agencies are parts of larger state departments of transportation, most such agencies are pri- marily focused on highway construction and maintenance. Few of them have formal authority to build or operate rail- ways, therefore there is little institutional knowledge of how railroads operate. This lack of institutional knowledge under- lies the need for highway agencies to develop additional stan- dards and guidelines to ensure their projects do not conflict with the railroads.

362 weeks 2 weeks Region notifies headquarters that agreement is needed Rail liaison organizes meeting with railroad to discuss project WSDOT incorporates changes identified by railroad WSDOT and BNSF negotiate comments, WSDOT revised plans BNSF Public Projects compiles review comments BNSF Public Projects distributes plans for internal review BNSF Public Projects evaluates revised plans to ensure comments have been addressed BNSF and WSDOT negotiate agreement provisions BNSF orders internal cost estimates for its work Compile final agreements and distribute for signatures WSDOT drafts agreement and forwards to BNSF 2–4 weeks 1 week 6 weeks1 week 8 weeks 3 weeks Approximate duration: 31 weeks Rail liaison sets up on-site meeting with railroad 2–4 weeks Figure 3.1. WSDOT-BNSF agreement process.The state highway agency officials who process railroad agreements seldom are located near the top of their agencies’ organizational charts. Normally, these personnel are housed within divisions of design, preliminary development, or utilities. The highway agencies are seriously underfunded. Increas- ing project costs in order to satisfy the railroads’ needs pro- vides little direct benefit to the highway agency. Although the highway agencies understand that over the long term the shift of freight from highway to rail may well alleviate highway maintenance expenses, those benefits generally are deferred into the future and are difficult to measure. As public agencies, highway agencies are accustomed to not charging communities or other agencies for their exper- tise. Seldom do DOTs charge utilities, railroads, communi- ties, counties, or other local governments when those entities seek advice or consultation from the highway agency. As a result, the highway agency personnel may be unaccustomed to the railroads insisting that the highway agency pay for the cost of meetings, reviews, and comments. Highway engineers are focused on the benefits of the projects they produce, but they are not exposed to anydetriment that their projects may cause the railroads. The railroads’ internal delays and costs are not public informa- tion, as is congestion on highways; therefore, the negative effects of highway projects on railroads are largely undoc- umented. The highway engineer who faces additional costs and delay as a result of railroad requests may see the rail- road’s request as arbitrary and unreasonable. Also, the high- way engineer receives no promotions, praise, or budget increases for satisfying railroads. They may be rewarded, however, for keeping project costs down and delivering projects on time. The self-interest of highway agency officials to receive prompt reviews has led many of them to adopt updated practices to ensure that railroads more quickly approve proj- ect agreements. The history of most of these practices has been rooted in efforts to improve project delivery. As pub- lic pressures for accountability have increased, agencies are increasingly focused on timely and predictable project delivery. As efforts to increase reliability have grown, the attention placed on the approvals needed by outside agencies such as environmental agencies and railroads have increased accordingly.

37The “desired state” for most highway agencies in regard to railroad project agreements could be summarized in the fol- lowing considerations: • Timeliness. Exasperated pleas for timely reviews, timely responses, timely meetings, and timely decisions are the most common requests from highway agencies consulted for this study. In their desired state, firm and predictable time frames would exist for when they could expect responses on requests, reviews, and agreements. • Reliability. Consistent information is desired about what railroads want in terms of right-of-way widths, construction windows, vertical and lateral clearances, and other such basic design and construction detail. The railroads have pro- duced a substantial number of standard drawings, which are consistently used. However, the differences in terrain, elevation, curvature, geometry, and available rights-of-way create the need for exceptions to the standard drawings. Knowing promptly and consistently what the long-term track and right-of-way needs of railroads are at specific proj- ect locations is frequently cited as a highly desired outcome. • Reasonable insurance limits. Railroads have increased their insurance requirements above the federal minimum levels. The current federal levels include $2 million for general liability and $6 million for Railroad Protective Liability Insurance. However, highway agencies report frequent insistence of insurance for $25 million or more for projects in urbanized areas. Such limits can be allowed under federal rules with justification. Consistent, reasonable justification for high levels has often been requested by the highway agencies, as well as flexibility for lesser amounts for minor projects. • Predictable force account timelines. Railroad forces are generally required by union contract to perform any work needed on the railroad right-of-way as a result of changes caused by a highway project. Highway agencies have com- plained about contractor delay if the railroad is not prompt and reliable. The agencies desire assurances as to force account time frames. • Availability. Having a reliable and empowered point of con- tact who can provide dependable information—particularly early in the design process—has been repeatedly cited by highway agencies as a highly desired condition. • Collaboration on simple at-grade crossing rehabilita- tion projects. Having a simple “cookie-cutter” approach to rehabilitating at-grade crossings—with simple standard agreements and schedules—has been cited as a desirable practice. • Reasonable right-of-way pricing. Having reasonable nego- tiated costs for rights-of-way is sought. This may include faster mediation and an improved process for appraising values.Areas for Improvement The best practices ranked by the highway agencies and rail- roads obviously provide opportunities for improvement in the highway–railroad project agreement process. Any agency that has not adopted a full array of the best practices is likely to improve its agreement process by doing so. Although the cited best practices are proven tactics, they do not completely make up a strategic and methodical approach to the agreement process. The adoption of process-improvement models has been become standard in many professional fields and can be drawn on for improving the highway–railroad agreement process as well. Four common frameworks for process-improvement are summarized below. The intent is to illustrate that many disciplines have elevated process- improvement to a systematic framework that continuously improves the process outcome. Drawing on these frameworks provides models that could be adopted or modified for the railroad–highway agreement processes. Project Management Institute The ongoing development of highway and railroad project agreements bears attributes to the disciplines of project man- agement and process management. Project management has been defined as “the application of knowledge, skills, tools and techniques to project activities to meet project requirements” (22). Projects have been defined as temporary undertakings that result in a distinct product. The ongoing management of collections of projects has been defined as program or port- folio management (22). Project and program management have developed their own professional standards of conduct, best practices, and even ethical behavior. Professional study and training in project and program management can be obtained from the Project Management Institute, through various professional organizations, and trade associations. The collective body of knowledge acquired by these groups provides analogous lessons that the highway agencies can apply to their interactions with the railroads. The Project Management Institute categorizes sound project and program management as requiring the following general skills: • Knowledge of basic project management tools, such as critical path scheduling; • Subject matter expertise in the specialty area, such as railroad operations; • Understanding of the project environment, such as the attitudes within highway agencies and railroads; • General management skills; and • Interpersonal and communication skills. Although volumes of materials are produced on sound proj- ect and program management, several of the key strategies from

38those disciplines are particularly relevant to the highway– railroad agreement process. These include the following: • Clearly identifying stakeholders in the approval process and identifying what their requirements are; • Clearly identifying cost, scope, and schedule for all deliv- erables and sharing them with the stakeholders; • Monitoring performance of the schedules and deliverables; • Creating analysis or feedback processes so that stakehold- ers examine underlying causes for not meeting standards of scope, cost, and schedule; and • Adopting a “continuous improvement” ethos in which both parties agree to continue innovating until they regularly achieve their shared customer requirements. Six Sigma Six Sigma is a widely used process-improvement framework that relies on continuous analysis of process defects. When a component or process fails to meet its desired specifications, it is analyzed for root causes of failure, which are then addressed. Six Sigma began at Motorola in the 1980s. Engineers deter- mined they could dramatically reduce manufacturing defects by carefully controlling production processes. They aimed for a virtually error-free manufacturing process that sought a 99.9997% success rate in producing products that met specifications. Six Sigma is expressed in statistical terms and appeals to per- sons with a statistical or engineering background. Its concepts rely heavily on the “continuous improvement” and “insti- tutional learning” practices of other process-improvement systems. It trains a workforce in how to statistically and methodically evaluate the cause of defects and then to contin- uously improve production processes until they are virtually eliminated. It combines quantified analysis of results with workflow process-improvement techniques. It is widely accepted in manufacturing sectors, and it contains many elements that would be relevant to the interactions of highway and railroad organizations. If the “product” is defined as a review or agree- ment that is to be approved within a given time frame, the tracking of agreements that fail to meet “specifications” pro- vides both parties with data for root-cause analysis of process failure. Six Sigma trains practitioners to categorize the defects and to determine their root causes, and then to correct those root causes. ISO Founded in 1947, the International Organization for Standard- ization (ISO) has produced more than 17,000 international standards, which include quality-control and quality-assuranceframeworks for managing processes. These voluntary stan- dards are developed by more than 200 technical committees with membership from more than 150 companies. “ISO Certified” means that an organization has been evaluated and its processes comply with these internationally recognized processes for quality assurance. DOTs in Illinois, Pennsylvania, and Florida have adopted the ISO framework for several core business processes. The Florida and Pennsylvania DOTs rely on the ISO process to ensure their materials testing processes are sound. Illinois has used ISO processes for project management and other man- agerial functions. Like the other systems considered here, ISO provides a strategic managerial system that can be applied to processes for managing almost anything, including project agreements. Its principles include the following: • Customer focus. The organization begins with an under- standing of its customers’ needs and focuses all subsequent activities toward meeting them. • Involvement of people. The organization actively engages all process participants to contribute to solutions. • Process approach. Internal processes are reconfigured to achieve desired results. • Systems approach to management. Interrelated processes are viewed as parts of a system and as such must operate in complementary and mutually supportive ways. • Continuous improvement. Continuous improvement of the organization’s performance is a permanent objective. • Fact-driven decision making. Basing decisions on data and analysis is a key corporate attribute. • Mutually beneficial supplier relationship. Producers and suppliers rely on one another and should have a relation that increases value for both of them. Partnering Program Management, Six Sigma, and ISO are applicable for recurring projects or programs. They are less applicable for cities or counties that only occasionally interact with the rail- roads. In the case of a small city, it may only pursue a com- plex railroad project once in a decade. Another strategy that can be applicable to a stand-alone proj- ect as well as to ongoing programs is the “partnering” process. This process was first articulated by the U.S. Army Corps of Engineers in addressing its large civil works projects. It also has been encouraged by FHWA, some state DOTs, and their asso- ciated contracting companies. In partnering, both parties • Define what a successful outcome would be; • Formally agree that each wants to assist the other in achiev- ing this common success;

39• Develop a level of service agreement that spells out what each expects from the other in terms of service and timeliness; • Identify escalation paths for each to follow when problems cannot be resolved at the lowest level; • Identify a dispute resolution path for when escalation fails; • Agree to remain in constant communication to ensure that problems are identified early and to monitor whether mile- stones have been achieved; and • Periodically, through the course of the project, analyze what went right, what went wrong, and what can be learned for the future. Strategic Framework with Continuous Improvement A major conclusion of this study to date is that a systematic, ongoing, continuously improving formal structure adopted by both the highway agency and the railroad can significantly improve both parties’ perception of the project agreement process. When the two institutions formalize their expecta- tions, definitions, avenues of communication, and ongoing collaboration, a greater degree of satisfaction by both parties becomes evident. Anecdotally, it seemed clear that state offi- cials whose processes included elements of partnering were among the most satisfied with the agreement process. Other officials complained of recurring problems. The process- improvement frameworks of Six Sigma, ISO, PMI, and part- nering are intended to identify such recurring problems and to focus both parties’ efforts on solving them. Data Needs All these process-improvement frameworks rely on data. With- out data, formal root-cause analysis is weakened. Having project-tracking systems are an essential component of improving the project agreement process. Tactical Improvements Even if adopting a strategic framework seems impractical to highway and railroad officials, the best practices cited by the states and railroads offer clear areas for agencies to improve their practices. The following best practices include many ele- ments of partnering and appear to be widely embraced by both highway agencies and the railroads: • Ensure ongoing and continuous communication channels between the railroad and the highway agency. • Have one empowered central point of contact at the rail- road who can coordinate reviews. • Have one empowered point of contact at the highway agency to coordinate submittals.• Adopt formal concurrence points that both parties moni- tor for progress on the project. • Provide dedicated personnel to focus on reviews and agreements. • Hold preconstruction meetings so that the contractors, highway agencies, and railroads have common expectations for the construction project. • Jointly develop standard plan notes or contract provisions that are minimum standards of performance on the job site to ensure safety and the protection of rail operations. • Schedule regular review meetings in which both sides review successes and issues. • Hire only experienced engineering firms recognized by the railroads for the development of project plans. • Adopt standard billing agreements that reduce the adminis- trative costs of both the railroads and the highway agencies. • Adopt master agreements in which both parties agree to standard provisions within all projects to streamline the project agreement process. Funded Staff Positions Another area of improvement that should be examined by state highway agencies is either to fund positions at railroads or to support additional task-order positions at engineering firms dedicated to highway reviews. WSDOT has funded a position at BNSF, and it reports positive results. AASHTO reports that 34 state transportation agencies fund positions at environmental resource agencies (23). These positions are dedicated to processing permits and conduct- ing reviews for the highway agencies. The practice began in the 1990s and accelerated after the Transportation Equity Act for the 21st Century (TEA-21) was enacted in 1998. Sec- tion 1309(e) of TEA-21 gave DOTs the option to spend federal- aid highway dollars to fund positions at other agencies in order to meet cooperatively determined time frames, if such amounts are “necessary . . . to meet the time limits for environmental review” and “if such time limits are less than the customary time necessary for such review.” This authority was extended and broadened in 2005 with the enactment of the Safe, Accountable, Flexible, Efficient Trans- portation Equity Act: A Legacy for Users (SAFETEA-LU). The law retained and broadened the funding authority, allow- ing transportation agencies to support activities outside the National Environmental Policy Act (NEPA) process. A survey of AASHTO members who are funding positions at resource agencies produced a set of recommendations for this practice that are similar to some of the recommendations made for this project. They include the following: • Devote sufficient DOT effort to prioritizing projects and ensuring funded position attention to those priorities.

40• Provide clear expectations through position descriptions and quarterly or annual performance reviews. • Provide accountability measures and joint review. • Develop guidance for funded position programs at resource agencies. • Keep lines of communication open. • Designate a program management person at the DOT. Where multiple DOT-funded staff are employed, designate/ fund the position of a program manager within the resource agency. • Provide orientation to the DOT transportation planning and project development process for funded positions. • Support ongoing professional training for the position. Timeliness Incentives Another variation could be to pay premiums for prompt reviews. Highway agencies regularly pay incentives to con- tractors for early completion of projects. These incentives have become standardized as various contract provisions that can be applied to the specific conditions of construction proj- ects. Highway agencies have paid incentives for early comple- tion, included penalties for delays, and charged “lane rentals” that give the contractor incentives to keep traffic open. They have also used “A+B” bidding, in which A is the price of the construction and B is the length of construction; a combina- tion of both results in the awarded bid. No highway official suggested paying premiums for prompt reviews, and there is only one example of a state agency that funds a position at a railroad to accommodate its reviews. PART 3: Review of Federal Regulations This research project called for the research team to “review applicable federal regulations that impact public agencies and railroads on highway renewal projects and identify con- flicting interests among the participating parties.” Comments from the project panel subsequently directed that the proj- ect team explicitly examine 23 CFR 140.900–140.922, 23 CFR 646.101–646.220, including the appendix to Subpart B of Part 646, and 23 CFR 635.201–635.205. In addition, the team agreed to examine 23 CFR 636. In the final section of this chapter, these regulations are explained and examined in detail. In summary, they relate to how highway agencies can use federal funds to plan and build railroad–highway projects and how they can, or cannot, reimburse railroads for costs related to such projects. The team gathered information about the effects of these reg- ulations on the parties in four primary ways. It interviewed six of the seven Class I railroads in detail. It interviewed 10 states. It conducted a meeting of a project advisory panel. Finally, itconducted a survey of state and local agencies that interact with the railroads on project agreements. The comments relating to regulatory issues were linked to the following topics: • Insurance coverage. Current federal regulations require contractor liability insurance of $2 million per incident, or cumulatively $6 million per year. These limits were last updated in 1982 and are far below amounts now required by the railroads. Using federal funds to pay for higher amounts requires case-by-case federal approvals. • Reimbursement for preliminary engineering. Preliminary engineering costs are eligible for federal reimbursement, including costs for railroad reviews of proposed project concepts and plans. However, if no project is built, federal law requires reimbursement from the states. Some states said this provision limits their flexibility in consulting early with railroads on project concepts. If the consultations lead to a decision not to build a project, the railroads’ costs for engineering reviews are not eligible for reimbursement. • Mandatory project review timelines. Lack of timely responses from railroads was one of the most frequent com- plaints. Several highway agencies said mandatory response times were desired. Cities were particularly adamant about a lack of timely responses to requests to establish quiet zones. • Railroad participation limits. Federal regulations require railroads to contribute little to projects that cross their properties, even for projects such as grade separations that provide some operating benefits to railroads. Some high- way agencies said railroads should recognize the benefit to the transportation system of highway projects and agree to contribute more to them. • Preserving rights-of-way for future track expansion. Extending highway bridge spans over railroads to allow more right-of-way for future track expansion is a recognized federally eligible expense, if the need for the tracks can be reasonably documented. Some highway agencies and some FHWA officials complain that railroads have required longer bridge spans even though these railroads have no firm plans for track expansion. Some highway agency personnel called for more explicit justification from the railroads before accommodating their requests for right-of-way protection. Insurance Coverage Contractors who work on railroad rights-of-way are required to have public liability and property damage insurance to cover not only the railroad but also any other damages that may occur as a result of the project (23 CFR 646.105). In 23 CFR 646.111(a), the liability limit is set at $2 million per occurrence, with an aggregate amount of $6 million for aggregate damages in a year. The Code of Federal Regulations indicates these lim- its were last updated in 1982. Railroads routinely demand

41much higher liability limits from highway agencies. This cre- ates several issues. The highway agency must use state funds to pay for the coverage or it must seek case-by-case federal exemption to pay the higher limits. The case-by-case exemp- tion can add additional time to the project-development process, especially if the highway agency or FHWA believes the insurance requests to be excessive. States and railroads generally agreed that the 1982 limits in 23 CFR 646 are low by current insurance standards. Railroads point out that just a new train locomotive costs more than $2 million and that the minimum liability limits have not esca- lated with inflation, or with modern legal standards. The rail- roads’ position in general has been that highway projects do their private companies little good but can create extraordinary liability. Railroads are required by law to accommodate large amounts of hazardous material shipments. A derailment, explosion, or release of hazardous materials can lead to multimillion-dollar liability. Such liability can increase signif- icantly when freight trains operate on the same tracks as pas- senger trains, or when freight shipments travel through densely populated areas. As a result, both railroads and highway agen- cies say the railroads have required liability limits of up to $25 million for some projects, particularly ones that could affect passengers or populated areas. Some states include stan- dard limits of $5 million per episode and $10 million aggregate liability as a matter of course in project agreements. FHWA’s Federal Aid Policy Guide of June 6, 2005, provides the following guidance for its state divisions to determine if the higher liability limits are warranted: AMOUNT OF COVERAGE (23 CFR 646.111) In determining whether a larger dollar amount of coverage is necessary for a particular project, consideration should be given to: (1) the size of the project in question; (2) the amount and type of railroad traffic passing through the project area; (3) the volume of highway traffic in the project area, includ- ing traffic generated by the contractor’s activities; and (4) the safety rating, if available, for the contractor involved in the particular project. a. The decision of the Division Administrator as to Federal participation in railroad protective insurance exceeding the dollar amounts in 23 CFR 646.111, paragraph (a), should ordinarily be final. Exceptional or unusual cases should be referred by the field offices to the FHWA Wash- ington Headquarters, Office of Safety Design, for decision. As mentioned, the positions of highway agencies are mixed on this matter. In response to a survey question about the issue, 16 agencies reported that insurance was a common problem in agreements, while 21 respondents indicated it was not. In some cases, the agencies agree that the railroads’ requests are warranted, whereas in other cases they contendthe railroads are overly conservative and create needless pub- lic expense. In cases where a project may occur on a railway shared with passenger service or on a highly traveled line in a dense urban area, high liability amounts may be understand- able to the highway agencies. Agencies have said, however, that when those same high amounts of coverage are requested for a rural project, they cannot readily accept the higher costs. The highway agencies also note that small contractors may not be able to secure such an amount of liability insurance and, therefore, cannot bid on such projects. In many states, the aver- age contractor is a small contractor and their exclusion results in fewer bidders. When the number of bidders is restricted for any reason, it generally over time leads to higher bid prices. The FHWA Office of Program Administration reported in December 2008 that it was initiating a Notice of Proposed Rule Making to reexamine the liability limit issue. Some agencies also objected to some attempts by railroads for complete indemnification, even for railroad negligence. However, the insistence on indemnification even for railroad error does not appear to be universal. Several agreements were found in which indemnification requirements were tempered by statements which acknowledged that indemnification would be shared based on each party’s negligence. Federal Eligibility for Preliminary Engineering As mentioned, the railroads routinely charge for their staff’s time when asked to comment on proposed highway–railroad projects. The need to make such charges generally is accepted by most public highway agencies, who understand the railroads’ need to attribute staff hours and costs under their cost account- ing systems. If the costs for project reviews and consultations are not billed back to the public highway project, those costs are passed on to the general railroad customers as overhead. Federal highway regulations recognize the eligibility of project reviews and allow them to be reimbursable under 23 CFR 646.202 and 23 CFR 140.900–907. The regulations are flexible in that they allow the railroads to be reimbursed whether the reviews and consultations are provided by their in-house staff or whether the railroads or highway agencies hire a consulting firm on the railroads’ behalf. A point of contention arises, however, regarding federal eligibility if a project eventually is not built after federal funds have been spent for reviews or consultation. FHWA can seek reimbursement of the funds. In other cases, FHWA may not allow eligibility unless the state first “programs” the project. This includes listing the project in the State Transportation Improvement Program and taking other procedural steps to make the project eligible for federal funding. “Programming” a project consists of several substantive steps, such as provid- ing guarantees that it can be paid for and assuring that its air- quality impacts have been considered.

42Some highway agencies have contended that these formal- ities restrict their ability to consult freely with the railroads at the critical early stages of a potential project’s conceptualiza- tion. Railroads have reported that they have had to write off hundreds of thousands of unreimbursed engineering expenses incurred early in the project-development process because of the preliminary engineering (PE) regulations. At the early stages, a project may be only a concept without any facts regard- ing its costs or feasibility. On the basis of the railroad’s early reaction, the state possibly could decide not to pursue the project as feasible, or to fundamentally change the project concept. While most parties agree that early, often, and con- tinuous communication is beneficial, the federal eligibility requirement can be an impediment, according to several highway agencies and railroads. To comment knowledgeably about a potential project, some degree of engineering analysis, geotechnical assessment, or even railroad operational assessment may be needed. For instance, a request to build a grade separation in an urban environment raises complex questions as to how to elevate the railroad over the highway without significant impacts. The vertical clearance for the bottom of a railroad bridge over a highway should be a minimum of 23 feet. The degree of grade preferable for the railroad’s approach to the bridge is 1%, or 1 foot for every 100 feet of approach. These conditions can cause the railroad approach embankments to extend 2,600 feet on either side of the crossing, or up to approxi- mately 1 mile in total. Creating this length of embankment in an urban setting may mean that adjacent cross streets would be cut off by the embankment, which would change neigh- borhood traffic flows. If the overpass location is within several miles of a railroad classification yard or intermodal loading facility, its effect on that facility would need to be analyzed. Trains often can be stopped while awaiting access into such facilities. Their stoppage can block streets and create impediments for other trains using those tracks. The new, elevated tracks approach- ing the new overpass must be integrated into the network of mainlines and sidings that flow into railroad yards and inter- modal facilities. Not only must the tracks and sidings for the new crossing physically tie into the new elevated tracks, but the electronic signaling and switching systems must also be considered. Again, because of the long tangents and curves required for modern trains, a change in switching and signaling may affect miles of tracks, or even the operations within a railroad’s entire region. Therefore, preliminary discussions can be quite complex regarding whether such a crossing is feasible, what its costs might be, how it may affect a neighborhood, or what types of construction staging may be necessary to build the crossing without affecting busy railroad operations. The highway agencythat is considering the project would like accurate information regarding the project’s costs, engineering concepts, construc- tion duration, and what requirements the railroads may have. The railroads cannot knowledgeably provide such information without factual engineering and railroad operational analysis. Because experienced engineers can cost $200 or more per hour, the preliminary discussions for the feasibility of such a project can run into many thousands of dollars. The ambiguity of whether such early discussions are feder- ally eligible for reimbursement can create delay, particularly if the sponsoring agency is a local government with limited resources who needs to coordinate with the railroad, the state highway agency, and FHWA. Part of the issue lies with the definition of preliminary engineering in 23 CFR 646.204: Preliminary Engineering shall mean the work necessary to produce construction plans, specifications, and estimates to the degree of completeness required for undertaking construction thereunder, including locating, surveying, designing, and related work. (emphasis added) In 23 CFR 140.902, similar federal intent is noted: This subpart, and all references hereinafter made to “proj- ects,” applies to Federal-aid projects involving railroad facil- ities, including projects for the elimination of hazards of railroad–highway crossings, and other projects which use rail- road properties or which involve adjustments required by high- way construction to either railroad facilities or facilities that are jointly owned or used by railroad and utility companies. The concept of “project” has not been consistently applied to consultations about the viability of a project concept in its very preliminary stages. Section 646.206(7)(e) notes that spe- cific authorization from FHWA is required for each project cost prior to the cost being incurred. The railroads’ internal costs for PE before a project is authorized can be used as part of the railroads’ financial contribution to a project, if such contribution is required. However, those preauthorization costs are not eligible for federal reimbursement as PE. Section 102(b) of Title 23 of the U.S. Code requires that if construction or acquisition of right-of-way for a highway project is not commenced within 10 years after the date at which federal funds were provided for PE, the state will repay the funds. However, the code notes that the 10-year period may be extended if the state requests it and FHWA approves the extension. A June 26, 2008, memorandum (Repayment of Preliminary Engineering Costs) from the FHWA Office of Program Admin- istration provides additional leeway for states to seek exten- sion of repayment, or the outright forgiveness of such PE expenditures. It cites the controlling Federal Code but also

43notes that 23 CFR 630.112 provides a slightly longer time frame for repayment, which FHWA Division Offices may use. The memorandum notes that when project termination is the result of compliance with another federal law, FHWA has a long-standing policy of not requiring repayment. For instance, if the environmental analysis leads to a “no build” decision, then the PE funds do not need to be repaid. To require otherwise, would create a “Catch-22” where the agency could be penalized for not conducting an objective environmental analysis or face penalties of having to repay the PE funds if the environmental process results in a “no build” decision. It is FHWA’s view that 23 U.S.C. 102(b) is intended to address the matter of PE projects remaining active for indefi- nite periods of time. While an outright waiver of repayment of PE costs is not prescribed under this section, States may request a time extension from FHWA for repayment of Federal funds on a project that has stalled. The request should be accompa- nied with sufficient justification to the Division offices. Divi- sion Administrators may grant an extension of time to begin the subsequent phase of work only if the justification is deter- mined reasonable and beyond the State’s control. The memorandum lists the following as reasonable exam- ples for time extensions: • Litigation; • Complex consultations with state, federal, or local agencies; • The public involvement process has altered the state’s plan for satisfying the project’s “purpose and need”; and • Projects that use unique implementation or a funding approach to which the state is not accustomed. The memorandum notes that it is not acceptable to forgive PE expenditures because of shifting political priorities, insuf- ficient transportation budgets, or a lack of staffing to pursue the project. Many ambiguous circumstances are possible that can cloud the issue of whether PE funds would need to be repaid. Although “shifting political priorities” do not constitute a valid reason to forgive PE expenditures on a project, clear public opposition to a project that is noted in the environmental process could be a valid justification for dropping a project in the NEPA process. “Insufficient transportation budgets” may not be a valid reason, but localities have the ability to influence the withdrawal of funds for a project through the metropolitan planning organization (MPO) process. If a community opposes a project because of its impact, it can work through the MPO process to remove the project from the regional transporta- tion program, which then eliminates federal funding for the project. Differentiating between an appropriate and an in- appropriate justification for not pursing a project may be quite nuanced and dependent on the unique circumstance.It is not clear from the highway agency comments about PE eligibility if the highway agencies have considered using the NEPA path as a justification for using federal funds for pre- liminary review of projects but then later dropping the proj- ects if the project is not feasible because of environmental and community impacts. An e-mail communication with the FHWA Office of Program Administration indicated that such consideration would be made by the state Division Office under the provisions relevant to a NEPA “no build” decision. Also not clear from the comments is whether the highway agencies have exhausted opportunities to use federal funds for “planning studies” of rail projects. Several categories of federal funds are available for planning studies, including Surface Transportation Program funds. These are widely dis- tributed and flexible funds that states, MPOs, and sometimes counties have as a result of pass-through funding from FHWA to the states. These funds can be used for local planning studies, such as studying mobility, safety, emergency response, and intermodal needs of an area or region. Inherent in such stud- ies can be the expenditure of engineering funds, and possibly reimbursement of expenses to railroads, for the consideration of highway–rail projects. Because such funds are not PE funds, they probably can be construed as not falling within the require- ments for repayment if a project is not built. It is quite common for planning studies to examine projects that are not eventu- ally constructed because of their cost, impacts, or impracti- cality. Again, although the planning study approach may need case-by-case approval, it appears that it could be a mecha- nism for states to use federal funds for early coordination of project concepts. Required Time Frames for Reviews The greatest number of open-ended comments from state and local highway agencies regarding the railroad agreement process was a request for timely responses from the railroads. Timeliness was a consistent theme from highway agencies that ran through every phase of this project. Several states called for a formal highway–railroad project- coordination process adopted into federal code. They advo- cated for mandatory coordination periods and required turnaround times for responses from the railroads. In effect, the highway agencies are asking for a process similar to the long- sought “environmental streamlining” that highway agencies have desired from the NEPA process for highway projects. The environmental streamlining movement has been quite extensive, and attracted considerable discussion in the 2004 transportation reauthorization debates. The streamlining issue is quite complex and contentious. Highway agencies frequently complain that it takes a decade or more to receive environmental approvals for a complex project, such as a bypass or new interchange. However, environmental

44groups and federal resource agencies are adamant that federal environmental laws do not allow them to cut corners. Statutes such as Section 404 of the Clean Water Act or the Endangered Species Act contain absolute provisions that require the avoid- ance of impacts to critical resources such as wetlands, waters of the United States, or threatened or endangered species. Those statutes do not easily accommodate programmatic approvals or other strategies that often are used to accelerate project reviews. The issue of environmental streamlining has been debated for more than a decade and has resulted in several time-saving innovations, both at the federal and state levels. However, the timelines for environmental reviews have not been noticeably shortened for complex projects, except in isolated high-profile cases. The state and local officials responding to this project sur- vey, however, reiterated repeatedly their calls for some kind of streamlining of the railroad process, or for mandatory turnaround times from the railroads. In response to an open-ended survey question, state and municipal railroad coordination officials advocated the following: • Federal regulations should define the review process from start to finish and include standard agreements that the railroads should accept. • The federal regulations should also define the process to use if the DOTs and railroad companies cannot come to an agreement. • Railroads should always promptly respond to agency inquiries. • Railroads should hire more public projects staff to expedite reviews and respond to inquiries. • Railroads should understand and try to avoid the contractor delay claims that project sponsors can incur when railroad decisions lead to project delay. • Project sponsors should be able to advance projects if rail- road companies do not respond promptly to submittals. An agreed-on series of coordination steps with agreed-on timelines theoretically is possible. Highway departments and review agencies have regularly shared such milestones, both for individual projects and for programs of projects. The use of critical-path scheduling is common in the construction industry and often has been used for the project-development process, as well. In such a process, the review milestones are identified in advance and the highway agency reaches under- standing with the various review agencies as to when submit- tals should be expected and what the desired response times are. Following the collapse of the I-35 bridge in Minneapolis, the Minnesota DOT completed a design-build of a new bridge in less than 12 months. Such a feat requires extensive coor- dination and cooperation with various review agencies, and the Minneapolis example demonstrates that such cooperation is possible.In the SHRP 2 R-16 project, the extensive interviews with railroads and highway agencies reveal that it is not common for highway agencies to present railroads with critical-path sched- ules. It is not common for the highway agencies to present a firm program of projects to the railroads, with a clear sense of priorities for review and clearly requested deadlines for the reviews. Repeatedly, the railroads have expressed skepticism that highway agencies could present a clear list of projects that should be reviewed during the course of a year. The railroads— speaking from years of experience—note that the funding of many proposed projects often is very uncertain. They report gaps of years sometimes between when they provide comments on projects and when they next see those projects. The rail- roads noted such gaps uncritically. They expressed under- standing that highway agencies face uncertain funding sources, particularly when locally funded projects are presented. How- ever, during in-depth interviews with six of the seven Class I railroads, most expressed skepticism that highway agencies could routinely provide them with a clear sense of a year’s worth of projects needing review. The railroads indicated they review projects as they arrive, without the ability to anticipate how many projects they must plan to review in a year. Railroad reviews are conducted with a mix of internal rail- road engineers and a mix of outside, task-order consultants. The in-house reviewers generally have a finite review capacity, based on their finite available work hours. However, the exter- nal review capacity of the railroads is more or less infinite, con- sidering their ability to refer review work to a national network of consulting engineering firms. Several of the Class I railroads noted that they have agreements with up to a dozen consulting engineering firms for reviews. Because these review costs are passed on to the highway agency, the cost of the reviews does not present an impediment to the railroads. It would appear possible for the railroads to anticipate the needed review workload for any one state or municipality, if the state or municipality would provide the railroad with a firm, multiyear schedule of which projects will be referred to the rail- road at what time over the course of the next one, two, or even three years. Such firm time frames are anticipated in the fed- erally required State Transportation Improvement Programs (STIP) and the regional Transportation Improvement Pro- grams (TIP) developed by the MPOs. The STIP and TIP are required to be fiscally balanced, which means they should only contain projects that can be afforded. They should by regulation only include projects that have been accepted into the regional plans by the public planning agencies. In short, the STIPs and TIPs are required under federal regulations to be realistic, legit- imate schedules of projects that are to be constructed within the next four years. In addition, each state is required to adopt a project development process (PDP), which is a clear sequence of steps it follows to develop each project. The PDP is intended to provide the public and interested parties an understanding of the steps necessary to develop a project, providing them

45opportunity to comment on such projects at the appropriate decision points. Theoretically, the predictable STIP and PDP milestones should provide a clear path of what railroad– highway projects are under development, what their schedules are, what their milestones are, and, therefore, when railroad reviews should be required. In addition to the federally required lists of projects and their milestones, nearly every state high- way agency has some form of computerized project manage- ment system. These systems can produce lists of projects by their anticipated schedules and needed milestones. In summary, the states in some cases are calling for firm federal guidelines for railroad reviews, but it has not been documented that the states and local agencies have exhausted voluntary efforts to assist the railroads to routinely anticipate which projects they should expect to review over the course of a year. Nor have the highway agencies been able to produce metrics that document the delay which they report. The experience of the environmental streamlining efforts have revealed several major issues that need to be addressed in any project-streamlining framework if a national frame- work for railroad reviews were to be enacted: • The national framework most likely would require standard project development processes across the states. The seven Class I railroads each work with many states. For the rail- roads to adhere to common review time frames, standardi- zation in how the states identify milestones and in how they define these milestones, as well as what elements are included at each milestone’s submittal, would need to be achieved. • A common problem with environmental streamlining with federal review agencies has been that when a resource agency receives a submittal, if it decides the submittal is incomplete, it can request additional information, which “restarts the clock” for the review period. Routinely, resource agencies respond to submittals by requesting more information, which extends the review period. • Many highway–railroad projects are local ones, which neither the state or federal highway agencies control. It will be difficult for the state highway agency to guarantee sched- ules from the local agencies. A subset of the timely review issue was the issue of timely reviews relating to urban quiet zones. At least 2 of the 11 responding cities singled out a lack of responsiveness on quiet zone requests and reviews as particular causes of delay. Railroad Participation Several of the respondents called for greater financial partic- ipation from the railroads for highway–railroad projects. In 23 CFR 646.210, several conditions are spelled out under which railroads either do or do not have to contribute finan- cially to highway–railroad projects. In most circumstances, the railroads do not have to contribute.The section specifically exempts railroads from state laws requiring them to participate in hazard-elimination projects that are federally funded. It also says that projects for the reconstruction of grade separations are of “no ascertainable net benefit to the railroad” and, therefore, the railroads should not have to contribute to them financially. If a project sepa- rates a crossing that has lights and gates, then the railroad con- tributes 5% of the cost of the grade separation. If the crossing is not actively protected, the railroad is not required to con- tribute 5% to the cost of the grade separation. Several of the states that commented in the survey for this project advocated for additional railroad participation. Their logic was that all the modes are linked and that railroad users also depend on the highway network for mobility. They dis- agreed with the contention that a grade separation does not benefit a railroad. They contended that the elimination of a crossing improves railroad operations and that the railroads receive benefits from the crossings. As one state described this sentiment, “Certain railroad companies should rethink their business model to accept the fact that (1) publicly funded highway capacity improvement projects that cross or affect existing railroad rights-of-way are not funded and designed to benefit railroad operations [and] (2) railroad companies use and depend upon the entire transportation infrastructure (including highways) just as much as any other highway user or mode of transportation (i.e., air or ship), and should accommodate highway construction projects accordingly.” Since at least the deregulation of the rail industry in 1980, the railroads have received exemptions from different state requirements on contributions for projects. Histories of the rail industry have noted how in earlier decades the highly reg- ulated railroads were forced to pay for grade separations and other improvements that they neither sought nor benefited from. The federal clarification of their contributions in federal code largely ended such different financial requirements, at least for federal aid projects. The railroad officials interviewed in this study were adamant that their companies cannot have their capital-investment decisions dictated by outside parties, such as the highway agencies. To do so would put them in a uniquely disadvantaged position in which their internal investment needs could be overridden by local agencies who insisted they contribute to highway projects that they cannot control or benefit from. Provisions for Additional Tracks In 23 CFR 646.212, FHWA agrees to participate in the addi- tional costs to provide space to allow for additional tracks to be added when highway projects cross or affect railroad rights- of-way. The section notes that it will participate when the railroad “establishes to the satisfaction of the State highway agency and FHWA that it has a definite demand and plans for installation of the additional tracks within a reasonable time.”

46State highway agencies have complained that railroads have routinely requested wider spans to accommodate additional tracks beneath them without providing documentation that they have definite plans to add tracks. Some of the respondents advocated that railroads should provide greater justification for the additional expense of lengthening overhead bridges. They have argued that without definite plans documenting the need for the additional tracks and when the tracks will be built, the highway agency should not have to incur additional expense to lengthen structures to accommodate those future tracks. The railroads counter that almost all long-term forecasts indicate that rail volumes will grow for decades. They note that a new bridge may stand for at least 50 years, making it highly likely that during the life of the highway bridge, the adjacent railroad tracks will need to be expanded. Providing space for additional tracks on most mainline railroads repre- sents a reasonable assumption, the railroads contend. Accounting Rules Under 23 CFR 140.900–922, a wide variety of railroad costs are eligible for federal reimbursement. Eligible costs include both hazard-elimination project costs and the costs for non- safety projects that affect railroads and that create expense for the railroads. Several stipulations apply: • The project has to be programmed in the STIP. • The work must be federally authorized before it is begun. • Expanded crossings must meet the horizontal and vertical clearance standards set in 23 CFR 646. The provisions allow the railroads to bill for labor, profes- sional services costs, overhead rates, fringe benefits, materials, and insurance. At least one railroad noted its difficulty in documenting that its costs are “reasonable” as required in 23 CFR 140.907, and that the costs are in compliance with 48 CFR 31 of the Federal Acquisition Regulation (FAR). FAR Part 31 consists of 38 pages of federal accounting rules. The FAR rules were developed for a large array of federal contracts, including highly complex defense contracts as well as relatively simple highway projects. To ensure that a company bills its costs in compliance with the FAR requires a degree of accounting sophistication that is unique and applicable only to instances in which charges are billed back through the highway agen- cies to FHWA. At least one of the railroads suggested that simplified accounting requirements would streamline its process and probably lessen its costs. FHWA Lead on Safety Projects In some states, a public utilities commission still plays a role in railroad safety projects. The involvement of these commissionsdates back to the early 20th century when railroads were con- sidered to be publicly sanctioned monopolies, much like power and telephone companies. In states with these commissions, the highway agencies develop arrangements with them to share duties on developing projects and passing through federal funds for the projects. In at least one state, the highway agency was adamant that the Federal Highway Administration should assert its primacy as the lead agency, or that FHWA at least should approve each project specifically. The officials in this state contended that the lack of FHWA sponsorship left primacy for the project with the state utilities commission, which asserted control over projects that do not exist in federal regulation. The state contended that if FHWA approved each Section 130 hazard-elimination proj- ect, the state DOT would be able to exert more stewardship over the projects and not have unreasonable requirements imposed by the non-highway-focused utilities commission. Railroad Reimbursement Costs Several of the Class I railroads have union agreements that require most track improvement work and most “flagging” to be conducted by its union personnel. Flagging involves mon- itoring the approach of trains into a construction zone, which may be impeded by equipment, construction workers, or con- struction materials. Several of the states, and particularly the cities, complained that the railroad costs were excessive and that their taxpayers could save money if the highway agency were allowed to bid this work or to hire its own flaggers. “Railroad force account work reimbursed with public funds should be performed and billed as if it was being paid for by their own company, rather than considered ‘free money’ to perform work outside of what is required/necessary to accommodate the highway improvement project work,” said one state. “Also it would be extremely beneficial if DOT contractors could do some or all of the RR crossing work. This is likely a union issue. However, allowing DOT contractors to do some or all of the work would save our jurisdiction probably tens of thousands in tax dollars,” said one city. The ability to draft federal regulations to override railroad union agreements is probably quite limited. The right to col- lectively bargain is also protected in federal law. It would appear difficult to develop regulations that would counter- mand union agreements relating to railroad construction work and railroad flagging. Federal Representation Four cities that independently responded to the survey called for an undefined but firm statement of federal advocacy on behalf of local governments that interact with the railroads.

47The cities said they have no allies when dealing with the large national railroads, which have their own statutes and federal agency. Their comments included the following: • “Local governments face a very uneven playing field when addressing railroad issues. Railroads have their own DOT agency, separate funding, separate authorities. Local gov- ernments’ funding tends to be filtered through counties, states, and RPOs [regional planning organizations].” • “Railroads always claimed to be federally protected due to the interstate commerce laws. . . . Federal laws need to be addressed that require better service from the railroad.” • “Railroads need to be more friendly to the local people” (from a city official whose city is the headquarters for a Class I railroad). • “We have not had any successful project reviews by the railroad.” References 1. Federal Railroad Administration. Freight Railroads Background. www.fra.dot.gov/downloads/policy/freight2006%20final.pdf. Accessed April 30, 2008. 2. Stover, J. F. American Railroads, 2nd ed. University of Chicago Press, Chicago, 1997, pp. 153, 194. 3. Association of American Railroads. U.S. Freight Railroad Productiv- ity (Sept. 2009). www.aar.org/incongress/∼/media/aar/background papers/usfreightrailroadproductivity.ashx. Accessed July 27, 2010. 4. Office of Freight Management and Operations, Federal Highway Administration, U.S. Department of Transportation. Table 3-1: Miles of Infrastructure by Transportation Mode, 1980–2005. http:// ops.fhwa.dot.gov/freight/freight_analysis/nat_freight_stats/docs/ 07factsfigures/table3_1.htm. Accessed March 5, 2010. 5. Office of Freight Management and Operations, Federal Highway Administration, U.S. Department of Transportation. Tables 2-1 and 2.1M: Weight of Shipments by Mode, 2002, 2006, 2035. http://ops .fhwa.dot.gov/freight/freight_analysis/nat_freight_stats/docs/ 07factsfigures/table2_1.htm. Accessed April 17, 2008. 6. Association of American Railroads. Class I Railroad Statistics (May 24, 2010). www.aar.org/∼/media/aar/Industry%20Info/AAR% 20Stats%202010%200524.ashx. Accessed July 27, 2010. 7. Cambridge Systematics. National Rail Freight Infrastructure Capacity and Investment Study. Association of American Railroads, Washing- ton, D.C., Sept. 2007, p. ES-2. 8. Association of American Railroads. Railroads: Moving America Safely (June 2010). www.aar.org/incongress/∼/media/aar/back groundpapers/railroadsmovingamericasafely.ashx. Accessed July 27, 2010. 9. Bureau of Transportation Statistics, Research and Innovative Tech- nology Administration, U.S. Department of Transportation, and Census Bureau, U.S. Department of Commerce. 2002 EconomicCensus, Transportation, 2002 Commodity Flow Survey, Hazardous Materials, Table 1a, Dec. 2004. 10. National Transportation Safety Board. Railroad Accident Brief: Col- lision of Two Union Pacific Railroad Freight Trains, Texarkana, Arkansas, Oct. 15, 2005. www.ntsb.gov/publictn/2006/RAB0604.htm. Accessed April 17, 2008. 11. Association of American Railroads. Hazmat Transportation by Rail: An Unfair Liability (Sept. 2009). www.aar.org/incongress/∼/media/ aar/backgroundpapers/hazmattransportationbyrailanunfairliability .ashx. Accessed July 27, 2010. 12. Ely, J. W., Jr. Railroads and American Law. University Press of Kansas, Lawrence, Kansas, 2001, pp. 71–105. 13. Federal Highway Administration. Highway Statistics 2006. Table HM-14: Federal-Aid Highway Length, 2006—Miles by Ownership. www.fhwa.dot.gov/policy/ohim/hs06/roadway_extent.htm. Accessed March 9, 2010. 14. Federal Highway Administration. Highway Statistics 2006. Table HM-48: Federal-Aid Highway Lane-Length, 2006—Lane-Miles by System. www.fhwa.dot.gov/policy/ohim/hs06/roadway_extent.htm. Accessed March 9, 2010. 15. Federal Highway Administration. Highway Statistics 1997. Table HM-48: Federal-Aid Highway Lane-Length, 1997—Estimated Lane- Miles by System. www.fhwa.dot.gov/ohim/hs97/roads.htm. Accessed March 9, 2010. 16. Blincoe, L. J., A. G. Seay, E. Zaloshnja, T. R. Miller, E. O. Romano, S. Luchter, and R. S. Spicer. The Economic Impact of Motor Vehicle Crashes, 2000. National Highway Traffic Safety Administration, U.S. Department of Transportation, May 2002. 17. Report of the National Surface Transportation Policy and Revenue Study Commission: Transportation for Tomorrow. National Surface Transportation Policy and Revenue Study Commission, Washing- ton, D.C., Dec. 2007, Vol. 2, Chap. 4. 18. Federal Highway Administration. Status of the Nation’s Highways, Bridges, and Transit: 2006 Conditions and Performance. Chapter 8: Executive Summary. www.fhwa.dot.gov/policy/2006cpr/es08h.htm. Accessed Feb. 11, 2008. 19. Federal Highway Administration. Status of the Nation’s Highways, Bridges, and Transit: 2006 Conditions and Performance. High- lights. www.fhwa.dot.gov/policy/2006cpr/hilights.htm. Accessed Feb. 11, 2008. 20. Federal Highway Administration. Status of the Nation’s Highways, Bridges, and Transit: 2006 Conditions and Performance. Chapter 4: Executive Summary. www.fhwa.dot.gov/policy/2006cpr/es04h.htm. Accessed March 10, 2010. 21. Federal Highway Administration. Price Trends for Federal-Aid High- way Construction. www.fhwa.dot.gov/programadmin/pt2006q4.cfm. Accessed Feb. 11, 2008. 22. A Guide to the Project Management Body of Knowledge, 3rd ed. Project Management Institute, Newtown Square, Pa., 2004, pp. 7–9, 16–17. 23. DOT-Funded Positions and Other Support to Resource and Regula- tory Agencies, Tribes, and Non-Governmental Organizations for Environmental Stewardship and Streamlining Initiatives. AASHTO Center for Environmental Excellence, Washington, D.C., May 2005. http://environment.transportation.org/center/products_programs/ dot_funded.aspx. Accessed March 10, 2010.

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TRB’s second Strategic Highway Research Program (SHRP 2) Report S2-R16-RR-1: Strategies for Improving the Project Agreement Process between Highway Agencies and Railroads examines the process by which highway agencies and railroads develop agreements for highway projects which interact with railways. The report examines the underlying causes of delay in the project-agreement process and developed model processes to address them.

Appendix C of SHRP 2 Report S2-R16-RR-1 is available online in Microsoft Word format.

An e-book version of this report is available for purchase at Google, Amazon, and iTunes.

SHRP 2 Renewal Project R16 also developed two supplemental reports, one report about establishing a collaborative forum between transportation agencies and railroads and another report about the development of tools in this project.

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