Right-Sizing Transportation Investments: A Guidebook for Planning and Programming (2019)

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173 A P P E N D I X B Selection and Development of a Right-Sizing Toolkit While the outreach and research into existing practice conducted in the first phase of the project found that agencies do not see major gaps in the raw data, methods, and tools available to support right-sizing, there was considerable input regarding a need for guidance on how existing data and tools can be used to identify and diagnose right-sizing situations, evaluate right-sizing scenarios, and make a plausible business case for a right-sizing decision or program. Pursuant to this need, the research team developed a menu of specific right-sizing methods and tools. In response to the research needs statement conceived by the panel, input received from agencies in the 2016 and 2017 outreach, and input from the panel at the 2017 interim meeting, the research team convened an internal technical workshop in Tysons Corner, Virginia, on February 15–16, 2018, to define and consider specifications for a menu of methods and tools to support the right-sizing roadmap (Figure 2) presented at the interim meeting. Members of the research team introduced thirty-one concepts as potentially responsive to analytical needs identified. The concepts were evaluated with respect to (1) their responsiveness to the overall research needs statement, (2) their responsiveness to input received from the panel or from transportation agencies since the inception of the research, and (3) their practicality for implementation within the resources available to the project. In the process of considering the thirty-one concepts under these criteria, the team identified opportunities to eliminate redundancy and to consolidate the concepts into eleven. For example, in the long list of thirty-one concepts, there was one concept presented for a multi- party approach to considering the costs and benefits of jurisdictional transfers, another concept presented to index the performance criteria that different stakeholders may have for an asset, and yet another concept presented for stratifying return on investment based on where (and to whom) the return accrues. The three concepts were consolidated into the stratified ROI Calculator. In a similar way, there were several related concepts presented pertaining to assessing the preservation costs of assets in relation to the traffic levels or markets served, which were consolidated into the roadway utilization/cost screening method. Therefore, while the contents of the toolkit in Chapter 4 are derived from a longer list of initial concepts, the earlier concepts were not abandoned but rather were encapsulated into the methods as documented and tested in the guidebook. There are two exceptions to this: two potential right-sizing methods presented from the 2018 workshop are not included in the guidebook because their development would exceed the

174 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming (2) the potential remaining marginal return on investment for each modal component (in terms of societal benefit). The framework is predicated on the economic realization that there comes a saturation point at which additional expansion of infrastructure has exceeded the level of diminishing marginal returns. The point of diminishing returns may vary between modes serving the same trips. For example, there may be corridors where benefit can no longer be achieved through additional highway capacity, but additional transit or bicycle/pedestrian access to transit nodes could yield considerable benefit. The modal balance ROI framework is envisioned to enable planners to view a multi-modal facility, corridor, or system in a way that shows the remaining potential returns that may be available from diverse modal elements. The envisioned use of the method is to allow an agency to ascertain which infrastructure elements are “maxed out” in terms of their potential incremental benefit in contrast to other elements that could still generate significant benefit in the long term. Table 39 shows how such a framework would look for a multi-modal corridor. Table 39 Illustrative modal balance ROI framework. While the table is fictitious, the table illustrates what a modal balance ROI framework would offer to planners for framing investment needs and priorities in terms of the remaining incremental benefit for each modal element of a corridor or sub-area portfolio. In effect, the efficient incremental investment in the system represents the incremental net benefit of investing any further in any given modal element, given the amount already expended (and likely reaching diminishing marginal returns) for existing elements. Data may not always be available to support a monetized efficient incremental investment as envisioned. In such cases, it is still possible that this type of framework can demonstrate the incremental basis for return on investment available not in dollars but by quantifying the activities, jobs, or economic activities that could yet be supported by additional infrastructure on each mode. The framework is not suggested to create right-sizing scenarios but rather to provide a guide to overall investment levels, by mode and program, which can reasonably be expected to achieve economic returns in an area. Modal Elements Size Maximum Feasible or Beneficial Size Potential Beneficial Expansion Likely B/C Ratio for Completing to Maximum Size Cost to Achieve Maximum Size Efficient Incremental Investment Highway 160 Lane Miles 200 Lane Miles 40 Lane Miles 1.05 $40 Million Local Street 300 Lane Miles 375 Lane Miles 75 Lane Miles 1.1 $35 Million Commuter Rail 40 Track Miles 44 Track Miles 4 Track Miles 1.15 $8 Million Rail Stations 3 Stations 4 Stations 1 Station 1.4 $2.5 Million Bus Stop/Station 4 Stops 6 Stops 2 Stops 2 $200K Bikeway 15 Trail Miles 40 Trail Miles 25 Trail Miles 3.12 $8 Million Pedestrian Access 10 Trail Miles 40 Trail Miles 30 Trail Miles 3.4 $6 Million Bike/Ped Crossings 1 Crossing 3 Crossings 2 Crossings 1.2 $4 Million timetable and resources of the project. These include a proposed modal balance ROI framework and the program standards evaluation tool. These two additional tools/methods are recommended for further development and testing in subsequent research and are described. Modal Balance ROI Framework The modal balance ROI framework is a proposed organization of modal elements in a corridor or sub-area that characterizes the transportation portfolio in terms of (1) the level of build-out and

Selection and Development of a Right-Sizing Toolkit 175 yield valuable results for enabling planners to right-size both existing and emerging transportation systems. Program Standards Evaluation Tool The first phase of the research produced a white paper dedicated to the topic of right-sizing programs by altering the standards of condition or performance for an asset class (contained in the separately published technical appendix for this project). Examples from Minnesota and Utah demonstrated how this approach has been used to reallocate funding from less utilized to more utilized systems in both the long and short term. Section 4.7 is dedicated to the asset deficiency mapping method for considering changes in asset conditions when right-sizing preservation budgets are in question. However, the research team identified further opportunities for practitioners to understand the wider societal implications of systematically reducing a pavement, bridge, or congestion deficiency threshold as a means of right-sizing a project or program budget. The guidebook section on right-sizing in the DOT asset management process (see Figure 3) demonstrates how asset management scenarios may be used in combination with travel demand and economic impact models to arrive at more sensitive and efficient highway and bridge preservation standards and outlays than exist in current practice. However, it is understood that many agencies may lack the internal capacity or modeling resources to implement such linkages. To make it practical for agencies to consider wider impacts of relaxing asset condition standards, the research team’s technical workshop envisioned a method for assessing the change in performance and economic risk as condition and associated funding levels are altered for a network. The envisioned tool would allow a DOT to take asset data—for example for pavement— and illustrate the impacts of relaxing performance standards—for example IRI—on a specific asset class. The tool would then highlight an understanding for the agencies that the cost associated with these relaxed standards could be an increase to improvement costs from deferred maintenance, an increased risk to safety and economic development (through, for example, increased operating costs of vehicles), and (alternatively) an opportunity cost for potentially diverting resources to another asset class. The tool would account for as many assets as the agency has data, which need to be at a proper detail level. The methodology would be designed for use on a program level but could also be used as a screening tool within a GIS system for projects that could be right-sized. Overlaying multiple spatial layers and performing an analysis that could combine a quantifiable measure of positive or negative change through these multiple layers would reveal a “heat map.” Such mapping can show where and how the relaxation of standards would affect performance and economic outcomes. Comparing scenarios with this type of mapping can enable an agency to evaluate better candidates for alternative standards. NCHRP Project 19-14 was not able to adequately develop and test a framework of the type shown in Table 39, because it would rely on significant additional research beyond the scope of the project. However, the principles and policy recommendations of the right-sizing guidebook create context for this type of analysis. Subsequent research into methods for evaluating the comparative available marginal returns for modal elements of transportation systems is likely to

176 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming temporal aspect to the assessment can be applied to further identify when a decision about right-sizing may become more apparent or relevant. The tool is envisioned to be used on a program level by managers and those in charge of STIP development. System managers and analysts would populate the tool/databases. However, the outcome of the tool should be understandable and relevant to a broader set of decision makers, because a specialized knowledge base of a specific asset class or department is not required to understand the trade-off of changing conditions, performance standards, and risk over time. When the economic impacts of different standards are understood, the information can support project selection and prioritization. For example, criteria established for assets within each class (e.g., bridge or pavement) can be evaluated with respect to likely economic outcomes. Again, depending on the forecasting capabilities of the tools used as inputs to the methodology, a