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23 Likewise, the highway agencies report significant financial that an increase in cost demanded by a railroad for one essen- hardship attributed to the railroads' needs for engineering tial project leads to the deferral of another essential project. payments, compensation for rights-of-way, larger and more complex structures to allow for future track expansion, and The Debilitating costs for intangible benefits such as air rights. The highway Effects of Inflation agencies' financial hardship has been regularly documented in national studies and federal analyses. Several definitive These already-inadequate levels of investment have been fur- studies in recent years all reached the same conclusion--the ther eroded by the unprecedented construction price infla- amounts appropriated for transportation are seriously below tion since 2005. A global tipping point in oil demand driven the levels needed to improve or even sustain the system at by the flourishing economies of China and India spurred today's congested levels. record petroleum and construction prices from 2004 through In December 2007, the National Surface Transportation early 2008. Although oil prices moderated in 2009, construc- Policy and Revenue Study Commission reported that the cur- tion prices remained significantly above unit prices of 2005 rent 18.3 cent per gallon federal motor fuels tax would need to and earlier. increase by an additional 40 cents to meet highway investment Highway construction is particularly prone to oil price needs. It estimated that the nation is spending only 40% of increases because of the energy-intensive nature of steel, what is needed to sustain and improve the highway network. asphalt, concrete, and excavation. Asphalt obviously is a petro- The commission's most conservative forecast indicates that leum product and its price is heavily influenced by oil prices. the nation needs to be investing at least $199 billion annually The manufacture of concrete is energy intensive. Extracting, in transportation through 2020. Today, the nation is spending crushing, and delivering aggregate all depend on large amounts from all sources $86 billion. The commission report forecasts of diesel fuel. These factors have caused the construction infla- that at current levels of investment, delay per traveler on urban tion rate to significantly exceed overall price rises. principal arterials would increase by 20% by 2020, by 50% in AASHTO and many other groups have noted the dramatic 2035 and double by 2055. Since more people will be traveling reduction in state DOT construction purchasing power caused in a growing population, total hours of delay on principal arte- by inflation. FHWA's Price Trends for Highway Construction rials would double by 2035 and quadruple by 2055, the com- notes a 52% increase in its composite construction cost index mission forecasts (17). between 2000 and the end of 2006. The large majority of it The FHWA's 2006 Condition and Performance Report occurred in 2005 and 2006 (21). notes than an increase in capital outlay of 87.4% above cur- These pressures create great resistance within the highway rent levels would be required to reach the projected $131.7 bil- agencies to increase project costs, particularly if the benefits lion level that provides the optimum highway investment are not apparent to the public. Agencies have objected to hav- level, according to its complex modeling (18). For transit, the ing to pay monopolistic fees for the railroads to provide inter- report says the average annual cost to improve both the phys- nal crews for force account work, flagging, and inspection. ical condition of transit assets and transit operational perfor- The highway agencies also have complained of having to pro- mance to targeted levels by 2024 is estimated to be $21.8 billion vide longer structures to provide room for track expansion, in constant 2004 dollars, 73.0% higher than transit capital even when the track expansion needs are uncertain. spending of $12.6 billion in 2004 (19). The Texas Transportation Institute's Travel Time Index Survey of State shows that from 1995 to 2008, the additional time needed to and Local Agencies travel in the peak hour versus nonpeak times increased from 27% to 38%. However, these numbers include all urbanized A web-based survey was designed to query state and local trans- areas, including the relatively small and lightly congested ones. portation agencies about best practices, streamlined processes, When the largest urban areas are examined, the severity of con- and challenges in the relationship between state and local agen- gestion is noticeably increased (20). The Texas Transportation cies and the railroads. An e-mail message with a link to the Institute's 2007 Annual Urban Mobility Report notes that survey was sent to each state department of transportation annual hours of delay per traveler rose from 21 hours in 1982 and to each member of the project advisory panel. Approxi- to 43 hours in 1995 to 51 hours in 2004 to 54 hours in 2005-- mately 400 local transportation officials also were sent an an increase of 157% in 23 years. explanatory letter about the survey that included a link to it. These types of national estimates have been replicated fre- (See Appendix B for the survey instrument and a detailed quently at the state and local levels. The state and local high- summary of responses.) way agencies that are negotiating with railroads feel significant The survey listed 27 suggested best practices that the team pressure to constrain costs. They repeatedly said in interviews had identified during earlier research stages. The survey
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24 asked each respondent to indicate if they used any of the listed 13. Dedicate personnel for reviews. Have dedicated person- 27 practices and to rate their effectiveness. It also asked for nel either in the railroad or with the contract engineer- additional best practices. The survey asked if the responding ing firms to focus solely on highway project reviews. agency had any metrics to measure the effectiveness of agency 14. Coordinate projects for locals. Have the DOT coordinate best practices on railroad approval time frames or cost. It pro- railroad reviews and submittals for the local governments. vided respondents the opportunity to rate their own agency's 15. Ongoing reviews. Require reviews at the 30%, 60%, and performance in submitting plans and submittals that addressed 90% plan stage. railroad needs in the review of projects. It requested agency 16. Master agreements. To develop programmatic ap- perspective on reasons for successful and for unsuccessful proaches between railroads and states. project reviews. It provided an opportunity for responding 17. Standard billing agreements. Streamline or standardize agencies to list specific issues in the coordination between the billing process with the railroads. railroads and highway agencies that needed to be addressed. 18. Hold annual meeting. At least annually, have the DOT It also asked agencies if they had problems with indemnifica- and railroad staffs meet to identify common needs and tion or liability insurance. approaches. 19. Enact statutes to close crossings. Enact state statutes that reward, encourage, or require crossing closures whenever Best Practices possible. The following 27 best practices are listed in order of effective- 20. Programmatic right-of-entry agreements. Develop stan- ness as ranked by the survey respondents: dard agreements for routine right-of-entry for processes such as bridge inspections. 1. Have DOT central point of contact. Have one empow- 21. Have standard review times. Have the DOT and the rail- ered point of contact at the DOT to coordinate railroad roads agree on standard review times for submittals. project issues. 22. Prequalify firms. Develop additional prequalification 2. Conduct formal crossing diagnostics. Do not program for engineering firms to ensure that they have railroad a crossing project without a formal diagnostic study. expertise. 3. Open communication. Establish ongoing formal com- 23. Education. Require education for DOT project managers munication channels between the highway agency and and other employees to ensure that they understand rail- the railroad. road requirements. 4. Have one railroad point of contact. Have one empowered 24. Produce manuals. Provide DOT staff procedure man- point of contact at the railroad to coordinate project issues. uals on how to prepare acceptable railroad plans and 5. Require early scoping. Require early predesign scoping submittals. on project concept between the railroad and the DOT. 25. Develop escalation procedures. Have agreed-on escala- 6. Have preliminary engineering agreements. Have for- tion path to resolve issues that cannot be solved at lower mal agreements that allow railroads to be compensated staff levels. for engineering advice during preliminary development-- 26. Reengineer Section 130 program. Because railroad grade even if a project is not eventually constructed. crossing countermeasures are often similar, reengineer 7. Schedule regular meetings. Have standing monthly or the state's Section 130 process to standardize and stream- quarterly meetings--in person or via phone or video-- line it between the DOT and the railroads. to address project schedules with the railroads. 27. Use NHI course. Send staff to the NHI course on rail- 8. Have formal points of concurrence. Establish agreed- road crossing projects. on, regular points of coordination, review, and concur- rence between the DOT and the railroad on projects. The following eight practices were consistently rated as 9. Use experienced engineering firms. Select only engi- "excellent" by the respondents. neering firms that have extensive railroad experience. 10. Standard plan notes. To ensure railroad construction Have a DOT Central Point of Contact requirements are included in DOT plans. 11. Require preconstruction meetings. Require a precon- "Have a DOT Central Point of Contact" is one of two practices struction meeting between contractors, DOT, and the that tied for the most highly rated practice overall, with 22 railroad for any significant project. respondents rating it as an "excellent" or "good" practice. This 12. Hold regional conferences. Bring neighboring states and high ranking in the survey was validated in interviews with railroads together to share best practices and common state DOTs. It was also highly rated by the advisory panel, by issues. railroad personnel, and by state DOT rail coordinators.
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25 In a centralized-point-of-contact model, the central office possible." In agencies where open communication was coordinates, prioritizes projects, schedules, and ensures that integrated into the workings between agency and railroad agreements and approvals are on schedule, and the district personnel, both teams often found workable solutions to technical contacts work directly to resolve technical issues challenges. and keep the project on schedule. This model enables the cen- tral point of contact to help with any additional coordination Have One Empowered required between the central office and the railroad when Railroad Point of Contact required. Examples of agencies using this practice are the Florida, Nebraska, Iowa, Washington, Pennsylvania, Min- "Have One Empowered Railroad Point of Contact" received nesota, Texas, New Mexico, and Ohio DOTs; the Arkansas the third highest number of responses as "excellent." This Highway and Transportation Department; and the Illinois also corroborated agency feedback during interviews that Commerce Commission. having multiple points of contact in the railroads created Although the railroads were not asked to participate in the confusion and delays. It led to inconsistency in dealing with survey, in separate interviews the railroad personnel also project issues and led to waste of resources. Railroad per- strongly supported having a central point of contact in the sonnel noted that this approach led to railroad staff receiv- DOTs. 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- Conduct Formal Crossing Diagnostics tion about the project and would have to redirect the calls. The second of the two practices that tied for highest number Besides being a waste of time, it often led to confusion and of responses for an "excellent" practice was "Conduct Formal difficulty in prioritizing project needs and often caused Crossing Diagnostics." It was one that the railroads also iden- project delays. tified in interviews as a best practice. It was rated "excellent" Often the same divisions within the railroads worked on by several states and local agencies. 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 Establish Ongoing Communication Channels was also done by the public projects manager, an area outside "Open Communication--Establish ongoing formal commu- the railroad technical team. Because of this separation of the nication channels between the highway agency and the rail- railroad technical team, direct calls to them from state and road" received the second highest number of responses as local transportation agency staff often did not result in good "excellent." In interviews with state transportation agencies, responses. Having an empowered railroad point of contact this practice was identified as one of the essential elements to helped coordinate public works within the different areas of successful workings between the railroads and the state trans- the railroad and made for smoother and quicker information portation agencies. flow. Agencies that had a single or few designated points of This practice was listed as a reason for success of projects contact with the railroads reported it was easier to revise and reviews. Open communication was cited as one of the key schedules and project priorities if a situation required shuf- elements for good working relationships between railroads fling of priorities. and state transportation agencies. Agencies such as the Penn- sylvania and Washington DOTs attributed meetings and ongo- Require Early Scoping ing communications to facilitating easier exchange of ideas, expediting revisions to agreements, expediting approvals, and "Require Early Scoping" received the fourth highest number building trust between both teams. Open communication of responses as "excellent." This practice enables both sides to was attributed as being especially helpful when the teams dis- bring up differences and concerns early in the process. It was agreed on projects, schedules, agreements, billings, or processes. also one factor that helped eliminate or change alternatives Some agencies in the survey and interviews noted that agency that either railroads or the agencies had strong reservations personnel sometimes avoided scheduling meetings to avoid about. It often helped minimize the so-called "being held confrontations when there was a difference of opinion or ideas hostage to last-minute decisions," in which concessions are between the two teams. demanded late in a project when the project sponsor cannot One of the respondents in the survey noted, "Sometimes, afford further delays. One of the agencies in the survey noted, an adversarial relationship develops between the railroad "When comments and needs are expressed early and are con- and the highway agency on some projects. Some DOT proj- sistent throughout the development of the project [it] leads ect managers try to avoid having to deal with the railroad if to a more successful outcome."