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Table 15 Sample program operating expenses cover program costs. Operating budgets provide the by function and type. following: Allow allocation of resources by function and Fiscal Year (FY) activity. Function Type Actual Aid in tracking costs by program function. Contract Service Service Leases/Service Rentals $500 Inform decision making in: Support Services 1,600 Determining staffing levels, Maintenance Labor/ Fringe Benefits 51,000 Evaluating cost effectiveness of activities Vehicle: Tire, Fuel, Replace 5,000 Non-Vehicle: Storage, 200 and functions, and Equipment Estimating unit costs for future facility planning and expansions. Administration Insurance: Casualty, Liability 6,000 Administrative Personnel 105,000 It is suggested that operating budgets be devel- Dispatcher Space, Equipment 1,500 oped for these programs and incorporated as an Office Supplies 1,200 Utilities: Electric, Telephone 800 identifiable activity or cost center in the state DOT's Planning Facility Siting 600 larger operating plan and budget. Performance Reports 100 Stakeholder Presentations 300 3. B.3.b Capital Budget. The capital budgets of the Operations Fee Collection 900 surveyed programs were robust and well defined. Security 2,900 If these capital budgets are indications of what is Signing 2,100 occurring nationwide, park and ride/intermodal com- Vendor Coordination 200 muter facilities could be viewed as emerging and Other: Marketing Printing, Advertising, Maps 300 formidable cost and activity centers for state DOTs Total Operating Expenses $180,200 and transit districts and agencies. The anticipated future capital expenditures of just nine of the 13 sur- veyed programs represent nearly $1.7 billion pro- grammed conservatively over a 20-year period. This Operations represents the cost to provide the is shown in Table 1. service. This includes fee collection activ- For most of the programs, the capital budgets are ities, lot security and enforcement, traffic constructed outside of the park and ride management control, signing and messaging systems, and unit. One exception is the NOVA which has an active coordination with vendors and other modal role in preparing its capital budget with regional services. stakeholders. The staffs of the Florida, New Mexico OPERATING REVENUES. While most of the programs and Maine DOTs, the MTA, and the Denver RTD do not charge parking fees, the cost to operate their also participate in some way in the capital budgeting facilities must be covered by a funding source. The process. Decisions on capital investments and future typical sources used by the surveyed programs facilities for the remaining programs are made by include: others, outside of the park and ride unit. It is suggested that program staff have a direct Parking fee revenue. role and responsibility for developing the program's Federal funds by program source. capital budget. A sense of ownership and control will State funds by program source. inure to those directly responsible. Moreover, pro- Local contribution. gram staff involvement will likely result in realistic Service contract funds. expectations and outcomes for the future. Advertising. Contributed or in-kind services. Other revenue sources. 3. C Funding Sources and Innovative Financing Techniques OPERATING FORECAST. Once expenses and revenues are estimated or known, they should be forecasts over This section discusses the funding sources used by a 3- to 5-year period, at minimum. The objective is to the surveyed programs for financing their facilities (1) ascertain actual cost and (2) determine if revenues and programs. Those sources not used by the surveyed 36

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programs but suggested for consideration are marked 3. C.1.c Surface Transportation Program (STP). The as "not used by surveyed programs but suggested for program purpose is to offer flexible funding options further consideration." This section concludes with a to states and localities for an array of federal-aid description of innovative financing and maintenance eligible projects. Eligible activities related to park techniques that may be also considered by state and ride/intermodal commuter facilities include: managers. Capital costs for transit projects, whether pub- licly or privately owned. 3. C.1 Federal Fund Sources Transportation enhancements. Federal Highway Administration Car pool projects, fringe and corridor parking facilities, and bicycle and pedestrian service. 3. C.1.a Congestion Mitigation/Air Quality Pro- Surface transportation planning programs. gram (CMAQ). The program purpose is to reduce Highway and transit research, development, transportation-related emissions in air quality non- and technology programs. attainment and maintenance areas. Eligible activities Infrastructure-based intelligent transportation related to park and ride/intermodal commuter facil- systems and capital improvements. ities include: Capital and operating costs for traffic moni- toring and system management. New transit systems and service expansions. Transportation control measures. Rideshare programs; services and programs with air quality benefits. 3. C.1.d Transportation Enhancements. The pro- Public education and outreach. gram is a component of the STP, cited previously. Fare and fee subsidy programs. Its purpose is to strengthen the cultural, aesthetic, Transportation control measures. and environmental aspects of multi-modal systems. Pedestrian and bicycle facilities. Eligible projects must have at least one of 12 quali- Traffic management, monitoring, and conges- fying activities. Those related in some way to park tion relief strategies. and ride/intermodal commuter facilities include the Telecommunications. following: Travel demand management. Public-private partnerships initiatives. Facilities, safety, and education for pedestrians Experimental pilot projects and innovative and bicyclists. financing. Scenic easements and scenic or historic site acquisition, including historic battle fields. CMAQ funds are apportioned to states by a for- Scenic or historic highway programs includ- mula based on population and the severity of ozone ing tourist and welcome center facilities. and carbon monoxide pollution in their non-attainment Landscaping and other scenic beautification. or maintenance areas. Rehabilitation and operation of historic rail- road transportation buildings, structures, or 3. C.1.b State Planning and Research (SPR). States facilities. are required to set aside 2 percent of their federal-aid apportionments for planning and research. Each Funds from other federal agencies may be credited must ensure effective use of the funds on a statewide toward the non-federal share. basis. High priority is given to applied research on state or regional problems, transfer of technology, 3. C.1.e Transportation Community and System and research for setting standards and specifications. Preservation Program. [Not used by surveyed Major research areas include infrastructure renewal programs but suggested for further consideration.] (including pavement, structures, and asset manage- The program purpose is to address the relationship ment); safety and operations; and policy analysis between transportation, community, and system pre- and systems monitoring. servation plans and practices. The program supports The Virginia DOT uses its SPR funds to develop private sector initiatives. Eligible projects improve the long-range transportation plan, which includes the efficiency of the transportation system; reduce strategies for developing park and ride/intermodal the impacts of transportation on the environment; commuter facilities statewide. reduce the need for costly future investments in 37

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public infrastructure; and provide efficient access to Encourage coordination of passenger trans- jobs, services, and centers of trade. Transit-oriented portation programs and services to ensure the development plans and traffic calming measures are most efficient use of all federal funds. eligible. Grants are issued to states, MPOs, and local Assist in the development of intercity bus governments. transportation. Funds may be used for capital, operating, and Federal Transit Administration project administration. State and local governments 3. C.1.f Section 5307--Urbanized Area Formula and nonprofit organizations are eligible. State appor- Program. The program purpose is to provide transit tionments are based on a statutory formula with capital and operating assistance in urbanized areas. 20 percent allocated by the ratio of non-urbanized land Governors, local officials, and operators of public area of each state to the non-urbanized land area of all transit designate a recipient for an urbanized area states. Other federal funds may be used for one-half with a population of 200,000 or more. The governor of local match. is the designated recipient for urbanized areas with a population of less than 200,000. Eligible activities 3. C.1.i Section 5311(b) (3)--Rural Transit Assis- include but are not limited to planning engineering tance Program. The purpose of the program is to and design of transit projects, capital investments in assist with the development of transit services in bus and bus-related activities, crime prevention and non-urbanized areas. States, local governments, and security equipment, construction and maintenance providers of rural transit services are eligible recip- of passenger facilities, and preventive maintenance. ients. Funds are for training, technical assistance, and research. 3. C.1.g Section 5309--Major Capital Investments (New Starts and Small Starts). The program purpose 3. C.1.j Section 5311(c)--Public Transportation on is to provide capital assistance for new and replace- Indian Reservations. The program purpose is to ment buses and facilities, modernization of rail sys- support tribal public transportation in rural areas. tems, and new fixed guideway systems. Eligible Federally recognized tribes or Alaskan native villages, applicants are transit authorities, states, municipalities, groups, or communities are eligible. The funds may public agencies and public corporations, and boards or be used for capital, operating, planning, and admin- commissions established by states. Eligible activities istrative expenses for public transit projects. The include (but are not limited to) the following: program is funded as a takedown under the larger Preventive maintenance. Section 5311 program. It is also supported with Amer- Extensions and construction of passenger sta- ican Recovery and Reinvestment Act (ARRA) funds. tions and terminals. There is no local match requirement. Security equipment and systems. Maintenance facilities and equipment. 3. C.1.k New Freedom Program (Section 5317). Operational support equipment including com- [Not used by surveyed programs but suggested for puter hardware and software. further consideration.] The program purpose is to assist disabled individuals with transportation to Allocations are discretionary and by statutory and from employment. Grants are awarded for public formula to urbanized areas with rail systems in oper- transportation services beyond those required by the ation for at least 7 years. Americans with Disabilities Act (ADA). To be eli- gible, a project must be a new or alternative public 3. C.1.h Section 5311--Formula Grants for Other transportation service beyond that required by ADA. Than Urbanized Areas. The program purpose is to It must assist the disabled with transportation to and initiate and continue public transportation service in from jobs and employment services. Capital and rural and small areas with under 50,000 populations. operating expenses are eligible. Ten percent of pro- The goal is to: gram funds may be used for program administration, Assist the maintenance, development, and use planning, and technical assistance. of public transportation in rural and small Public agencies, nonprofit agencies, public and urban areas. private transportation providers, and human services 38

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transportation providers are eligible grant sub- 3. C.2.c Excise Tax on Vehicle Sales. Vehicle sales recipients. State funding is apportioned by formula. taxes are normally levied as a percentage of the sales price of a vehicle when purchased or first registered. Other Federal Sources Some states collect vehicle sales taxes that are dedi- cated for transportation and transit purposes, including 3. C.1.l American Recovery and Reinvestment Act (ARRA). The purpose of the American Recovery and Virginia and California. Reinvestment Act of 2009 is to (1) preserve and create jobs and promote economic recovery, (2) invest in 3. C.2.d Personal Property Tax on Vehicles. transportation infrastructure that will provide long- [Not used by the surveyed programs, but suggested term economic benefits, and (3) assist those most for further consideration.] Some states and localities affected by the current economic downturn. levy a personal property tax on vehicles with fees The U.S. DOT issues $1.5 billion in discretionary based on the value of the vehicle. The tax has the grant funds for capital transportation investments. potential of generating increasingly higher revenue These are referred to as Grants for Transportation yields because it is tied to the value of motor vehicles, Investment Generating Economic Recovery (TIGER). which continues to escalate. For the vehicle owner, the Eligible recipients are state and local governments, fees are deductible on itemized federal tax returns. tribal governments, transit agencies, port authorities, This is not the case for the traditional motor fuel MPOs, and multi-state or multi-jurisdictional appli- tax, registration fee, and sales tax. Property tax on cants. The funds are available for obligation until vehicles is levied at the county level in Virginia September 30, 2011, and are awarded on a competitive and dedicated, in part, to transportation services and basis. Eligible projects include (but are not limited to): programs. Highway or bridge projects including inter- 3. C.2.e Vehicle Miles Traveled (VMT) Fees. [Not state rehabilitation and improvements to the used by the surveyed programs, but suggested for rural collector road system. further consideration.] With improved automobile Public transportation projects including projects fuel efficiencies and changing trends in personal related to New Starts or Small Starts. spending and travel, the strength of the motor vehicle Passenger and freight rail transportation projects. fuel tax to support state transportation programs has Port infrastructure investments. and will continue to diminish. Alternative revenue sources based on VMT are being examined. A 2005 Grant funding under the program may be no less National Chamber Foundation study, Future Highway than $20 million and no greater than $300 million; and Public Transportation Finance, recommends however, the department has the discretion to waive VMT fees as a long-term system of funding. The the minimum grant size. Oregon DOT recently concluded its 2007 study, Oregon's Mileage Fee Concept and Road User 3. C.2 State Fund Sources Fee Pilot Program, Final Report, which found that 3. C.2.a Motor Vehicle Fuel Tax. Motor vehicle fuel implementation of mileage-based user fees is feasible taxes account for almost one-half of the revenues and additional tests are underway. used by states to fund highway and, where permitted, transit improvements. The surveyed programs in 3. C.2.f State Infrastructure Bank (SIB) Loan. California, Rhode Island, Virginia, and Florida use All states are authorized to enter into cooperative the motor fuel tax or excise tax to support their park agreements with the U.S. DOT to establish infrastruc- and ride/intermodal commuter facilities in some way. ture revolving funds capitalized with federal trans- portation funds. These revolving funds, or SIBs, 3. C.2.b Motor Vehicle Tax/Fee. Motor vehicle enable leveraging of federal and state resources by taxes and fees include vehicle registration, license lending rather than granting federal-aid funds. They fees, title fees, and excise taxes on motor vehicles, also have the ability to attract public and private among others. In 2004, they accounted for 27 percent investments. Not all SIBs are used as revolving funds. of total state revenues dedicated to highway expen- In some cases, such as in Arizona, the SIB is used ditures, representing the second largest source of as a vehicle to borrow through the tax-exempt bond revenue for most state DOTs. market. Thirty-two states have SIBs. 39

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3. C.2.g Grant Anticipation Revenue Vehicle 3. C.4 Agency Fund Sources (GARVEE). The mechanism is a borrowing tool Agencies that generate their own revenue have created as part of the National Highway System the option of allocating a portion of parking or transit Designation Act. A GARVEE is a bond or note fare revenue. The agency may use a part of its operat- whose principal and interest is repaid primarily with ing and/or capital funds to support the park and ride/ federal-aid funds. At least 16 states have issued commuter intermodal project. It may also have the GARVEE bonds for approved federal-aid projects. legal authority to levy local taxes or issue bonds. Transit agencies use a similar vehicle--Grant Anticipation Notes or GAN--to borrow against future 3. C.5 Innovative Financing Techniques federal grants allocated by formula (Section 5307) or by project (Section 5309). Approximately $3 billion Public-private partnerships represent a range of of GANs have been issued. contractual arrangements in which federal, state, and local governments and special authorities collaborate 3. C.2.h Transportation Infrastructure and Innova- with private entities in the development, operation, tion Act (TIFIA) Loan. The TIFIA program provides maintenance, ownership, and financing of a trans- federal credit assistance to major transportation portation infrastructure project or program. The type investments in the form of direct loans, loan guaran- of the arrangement is defined by the legal, political, tees, and lines of credit. The program is designed to and financial structure of the state or local sponsor. fill market gaps and leverage private investments State transportation agencies are increasingly enter- with supplemental and subordinate capital credit ing these arrangements. Public-private partnerships rather than grants. The Rhode Island DOT is fi- provide benefits that accelerate project development nancing a portion of its T.F. Green Intermodal Fa- and construction; increase operating efficiency; cility Project with a subordinated TIFIA loan se- improve maintenance and asset protection; and limit cured by anticipated revenue from customer facility public sector exposure to risks. At least 21 states charges. have enabling legislation authorizing some form of public-private partnership. Summaries of types of public-private partnerships 3. C.3 Local Fund Sources that may be appropriate for park and ride/intermodal The local funding sources--often used as match commuter programs are provided here. All may be to federal-aid grants--are typically drawn from considered by state DOTs. either a transit agency or local government capital or operating fund. Local funds also represent voter- 3. C.5.a Contractual Leasing Agreements. Several approved sales tax dedicated to a specific transporta- of the surveyed programs utilize contractual leasing tion improvement. agreements with private or public entities. Four options include: 3. C.3.a Local Option Sales Tax. The local option Public Ownership/Public Operation and Main- tax is commonly used by local governments to support tenance: This represents a public jurisdiction transportation programs and services in 46 states. with ownership of either land or a facility In Colorado, a 0.4 percent increase in the Denver entering into an agreement with another public RTD's 0.6 percent regional sales tax is used to support entity to either develop a new facility or main- the FasTrack system--a 12-year, $4.7 billion pro- tain an existing one. gram that includes 21,000 additional parking spaces Public Ownership/Private Contracted Operation at rail and bus stations. The sales tax increase will and Maintenance: This represents an arrange- be used, in part, to support bonding to leverage the ment where some or all of the maintenance full investment needed for the program. In Arizona, and/or management responsibilities for a voters approved Proposition 400, which extends facility, owned by a public jurisdiction, are the Maricopa County 1/2 cent dedicated sales tax for contracted to a private entity. 20 years. Sixteen billion dollars in revenue sup- Public Ownership/Lease to Business for Shared ports the county's 27.7 miles of expanded light rail Use: This represents the leasing of all or a and service enhancements on 26 existing transit portion of property to an adjoining business routes. for shared use of a park and ride facility. 40

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Private Ownership/Lease to Public Jurisdiction: receives the greater of $400,000 or roughly This common leasing arrangement represents 5 percent of gross revenues annually. The a private entity leasing all or a portion of land 90-year lease expires in 2084. The project has to a public jurisdiction for operation of a park two completed development phases and a and ride facility. NOVA often coordinates these third is pending, as follows: agreements with jurisdictions and private land Phase I--completed in 1996--contains over owners. 353,000 ft2 of retail within two buildings and a 1,487-space garage. 3. C.5.b Long-Term Lease of Existing Asset. One Phase II--completed in 2005--contains form of alternative financing is when public trans- over 195,000 ft2 of rental residential units, portation authorities leverage their assets (air rights over 6,000 ft2 of ground floor retail and a and/or property) to generate revenue or in-kind goods 215-space parking garage. and services. This is usually represented by a joint Phase III--completion pending--is planned development agreement with a private developer. to contain over 134,000 ft2 of office and retail Miami-Dade County Transit has an active joint-use and include a 362-space parking garage. policy, which provides guidelines for land develop- ment at and near its fixed rail properties. Several 3. C.5.c Partnerships with Private Consortiums. Miami-Date County Transit joint development proj- [Not used by the surveyed programs, but suggested ects are either completed or underway. Two examples for further consideration.] States create partnerships that include park and ride facilities are: with private consortiums to complete major trans- Dadeland South Metrorail Station: The project, portation improvements. The private sector partner known as Datran, comprises four phases of provides technical and management expertise and mixed-used development representing over enables access to debt and equity markets to secure 782,000 ft2 of office, hotel, and retail space. project financing. Only a few private financed infra- The complex includes 3,500 parking spaces of structure projects of this type have been completed which 1,100 are designated for transit patrons. in the United States, but several are in development in The project was initiated through a swap of California, Georgia, Texas and Virginia, as shown in private land to the county in exchange for Table 16. development rights on and above the station site. MDT receives a guaranteed annual rent or 3. C.5.d Design Build Finance Operate (DBFO). participation rent (percent of total gross income) With DBFO agreements, the responsibility for generated from all uses. The project generates designing, building, financing, and operating a new over $1 million annually for MDT. The 44-year public transportation facility (often referred to as a lease ends in 2082. Greenfield Project) is transferred to the private sector. Dadeland North Metrorail Station: The project Competitive proposals are submitted by the private was initiated through a competitive request-for- proposer and, after review, the state negotiates an proposal process in 1994. Miami-Dade Transit agreement that offers the best value. Table 16. Infrastructure projects in operation or under construction financed with taxable debt and equity. Initial Financing Project Year Open (in Millions) Dulles Greenway (Virginia) 1995 $350 SR-91 Express Lanes (California) 1995 $126 United Toll Systems Toll Bridges (Alabama) 19941998 $38 Camino Colombia Toll Road (Texas) 2000 $90 Adams Avenue Parkway (Utah) 2001 $12 South Bay Expressway/SR-125 (California) 2007 $621 Source: NCHRP Web-Only Document 102: Future Financing Options to Meet Highway and Transit Needs, 2006, pp. 4-10. 41