Practices and Performance Measures for Local Public Agency Federally Funded Highway Projects (2013)

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42 CHAPTER FOUR PRACTICES AND PERFORMANCE METRICS USED BY LOCAL AGENCIES INTRODUCTION This chapter discusses the practices and performance mea- sures used by LPAs when planning, developing, and man- aging federally funded projects. A section is also dedicated to the impacts of the LPA certification program on project performance. Information is based on the results of a sur- vey of a sample of LPAs provided by the state DOTs that participated in the DOT survey described in chapter two. Forty-one out of 105 LPAs responded to the survey; 19 were classified as large agencies, 11 as medium agencies, and 10 as small agencies (see chapter one). The range of participat- ing LPAs is captured in Table 14 and listed in Appendix B. In addition, the original LPA survey questions are provided in Appendix B. TABLE 14 SUMMARY OF THE DISTRIBUTION OF LPAS THAT PARTICIPATED IN SURVEY State No. of LPAs Responded Size Range of LPAs Responded Florida 3 1 small, 2 large Hawaii 1 1 large Illinois 2 1 medium, 1 large Iowa 1 1 large Kentucky 1 1 large Maine 2 1 small, 1 medium Minnesota 3 2 medium, 1 large Missouri 2 1 small, 1 medium Nebraska 6 1 small, 2 medium, 3 large Nevada 1 1 small New York 2 1 medium, 1 large North Carolina 2 1 medium, 1 large Ohio 4 2 small, 1 medium, 1 large Oregon 6 1 small, 1 medium, 4 large Pennsylvania 2 1 small, 1 large Utah 1 1 large Washington 1 1 small Of the 41 LPAs that participated in the survey, 23 are formally LPA-certified by the DOT in their state. All of the LPAs were asked to share their opinion on whether federal regulation should be established to require states to administer a certification program for local agencies to be eligible for federal transportation funds. More than half of the LPAs responded that federal regulations should not be established to require states to administer a certifica- tion program. PROJECT PLANNING AND PROGRAMMING This section addresses information regarding the practices that local agencies use to conduct the planning process for federally funded projects. Organizational Structure The local agencies were asked to describe themselves. A wide distribution of agencies were represented: 20 coun- ties, 16 cities, four municipalities, one regional planning organization, and one merged city/county. More than half of the LPAs reported that their public works and/or engi- neering departments had fewer than 30 people, although 10 agencies had 30 to 100 people and four had more than 100 people on staff. Three local agencies use consulting firms to handle engineering activities. In 33 of the LPAs, a full-time employee was always responsible for managing projects receiving federal funds. However, in the majority of cases, fewer than five LPA employees are involved in developing applications, defining project scopes, or supervising con- struction of federally funded transportation projects. Programming Projects Figure 16 illustrates the range in distribution of federal-aid funds to the 41 LPAs in the past 3 fiscal years and clearly shows that the majority of LPAs received in excess of $600,000. The majority of LPAs reported developing up to five projects annually that are eligible for federal-aid funding; however, seven larger LPAs have been able to develop up to 15 eligible projects. More than half of the LPAs are aware of regional strategies or policies that have been developed by their DOT, MPO, or RPO to assist in obtaining fed- eral funds. For example, Missouri DOT allows Missouri RPOs to assist LPAs with the development and preparation of federal grant applications, as defined under the RPO’s

43 planning contract. This practice was reported to allow for better-developed projects because the RPO has more fre- quent experience with federal requirements, as opposed to an LPA that may seek funding only every 4 to 5 years. In another part of the country, an RPO has identified areas on which projects must focus, such as on safety, system pres- ervation, and multiuse corridors. Another strategy reported was to program federal funds to the planning phase in order to refine and update a project scope to meet more recent regulatory requirements. A number of local agencies alluded to active attendance at training and regional com- mittee meetings that deal with the solicitation and program- ming of federal funds. LPAs are using similar amounts of nonlocal funds to provide the nonfederal match. These funds include those acquired through the state DOT or state aid program, state resource agencies, private funds, and in-kind donations or support. One LPA has had a nonfederal match from the state public works commission, while another LPA has worked with railroad companies to provide the local match for federal-aid projects. Ten LPAs indicated that they are using innovative techniques to provide their match- ing funds, including in-house inspection services, inter- governmental agreements and cooperation, multimodal transportation system development charges, use of local materials and supplies, and matching federal funds from state grants. In September 2011, California’s Regional Transportation Planning Agencies met to discuss several aspects of federal- aid projects. The group identified an effective programming approach: mandate 2 to 3 years of advanced project pro- gramming, and adopt delivery policies with funds subject to reprogramming if specified project milestones are not met (“Best Practices in Federal Project Delivery” 2011). Expe- dited project selection procedures were applied, especially for local safety projects. A local agency obligation plan document was also developed to be used when projects are programmed in the TIP, and is included in Appendix D. The Orange County Transportation Authority created the Comprehensive Transportation Funding Program guide- lines to provide sequential funding, presented in a two-step approach: (1) a planning phase to address funding requests for planning/environmental, engineering, and ROW activi- ties; and (2) an implementation phase to address ROW acquisition and construction activities (“Comprehensive Transportation Funding Program 2010 Guidelines” 2010). The OCFundTracker is an Internet-based project and programming system that guides a local agency through the project application process (“Orange County Fund Tracker Call for Projects Training Manual” 2011) in California. Basic steps for accessing the database and responding to the Regional Capacity Program call for projects are part of the system. The system also allows the Orange County Trans- portation Authority to simultaneously review LPA project applications and the status of existing projects on a semi- annual basis (“Comprehensive Transportation Funding Pro- gram 2010 Guidelines” 2011). After projects are awarded, the authority can update LPA project cost estimates, review project delivery schedule, and determine the project’s con- tinued viability. FIGURE 16 Range of federal funds that LPAs reported as having been received for transportation projects in the past 3 fiscal years.

44 PROJECT DEVELOPMENT This section discusses how local agencies are developing and meeting the challenges of the preliminary engineer- ing process for federally funded projects. LPAs reported a number of practices used to develop candidate projects for federal funding. One practice is to guarantee the local match portion before applying for federal funds; more than half of the LPAs are engaged in this practice. Other frequently used techniques include advanced project pro- gramming in the STIP or TIP (18 agencies), designating trained LPA staff for administering federal requirements (14 agencies), developing only projects that require CEs (12 agencies), using joint project agreements with the DOT (10 agencies), and actively involving the MPO or RPO in the project scoping and development process (nine agencies). Some other LPAs gave specific examples of practices: • Develop only projects that are high cost, or projects that require no ROW or environmental requirements; • Develop and use a pavement management system and bridge inspection database to submit preventative maintenance, rehabilitation, and reconstruction proj- ects with the best chance of selection for funding and staying within the allocated budget; and • Screen projects listed in both the funded and unfunded categories of the Capital Improvement Program to put forward only the most competitive projects within competitive categories, while also actively engaging the board of commissioners to gain support for com- petitive candidate projects. Half of the LPAs indicated that their MPO or RPO has been proactive in helping to streamline processes for the development of federal-aid projects. Design Phase Conflicts between the DOT design guidelines and a local community’s needs are common on many LPA projects. A number of solutions were reported to deal with these con- flicts, including using design exceptions, allowing LPAs to use their in-house design standards on some LPA projects, providing DOT-generated LPA standards and specifica- tions, and developing context-sensitive solution multiagency teams. The trend reported by the DOT survey was similar to the responses provided by LPAs. DOT-generated LPA stan- dards and specifications that have been established for more than 5 years include those developed by Florida DOT. LPAs were also asked to comment on how the conflicts that arise during the design phase affect overall project deliv- ery. Overall, the main impacts to project delivery were the delayed completion of LPA project reviews, postponement of LPA project milestones, project scope creep, and requests for additional funding. One LPA stated that issues often involve disagreements about lane widths and sight distance based on the AASHTO or DOT highway standards’ appli- cability to an urban environment. In this state, this conflict has resulted in a loss of scope by a proposed sidewalk being removed from an LPA project. Some possible solutions pro- vided by LPAs to minimize the impacts of design conflicts on project delivery included building the negotiation phase into the overall project’s schedule and further emphasis on educating LPA engineering staff. Many local agencies take measures to minimize proj- ect scope increases, and the majority of LPAs consider early collaboration with stakeholders before final project scope confirmation as an effective tool. Other LPAs place restrictions on the project scope, such as not allowing any increases after the final PS&E package has been submit- ted and approved or requiring a firm funding commitment from all project sponsors before considering the project as viable. One LPA reported that if a simple scope is estab- lished to begin with, it is less likely to experience scope increases; another LPA builds in contingency funds for increases before the start of every project. Another LPA presented the concept of becoming a certified LPA and directly managing and overseeing the design phase as an effective tool to minimize scope creep. Categorical Exclusions A large number of LPAs (22 of 41 surveyed) reported that their DOTs have used CEs for their local projects. The LPAs reported generally that the use of CEs saved both time and expense by not requiring the Environmental Assessment or Environmental Impact Statement documents. One LPA reported that its DOT bundled similar projects among the counties in a particular MPO’s region and drafted the CE documentation on behalf of the LPA. In this case, the CE significantly reduced the total time to project delivery on the bundled projects. Table 15 provides general examples of CEs used in LPA projects. TABLE 15 EXAMPLES OF CATEGORICAL EXCLUSIONS (CES) USED BY VARIOUS LPAS Category of Project That Used CE No. of Agencies Restoration (1R); Resurfacing or Restoration (2R); or Resurfacing, Restoration, and Rehabilitation (3R) Projects 8 Bridge Projects (i.e., replacement, rehabilitation, reconstruction) 4 ARRA Projects 2 Safety Projects (i.e., rumble strips, chevrons) 2 Minor Projects (i.e., traffic signal projects) 1 Projects Bundled Together by DOT 1 Roundabout Conversion Projects 1

45 PROJECT MANAGEMENT Only 14 LPAs reported on agency or regional strategies that have been developed to determine the optimal methods of project delivery, although some effective practices that could be considered in other places were included. The use or preap- proval of consultants by the DOT was noted most often as an effective practice. One LPA mentioned that becoming a certi- fied agency was the optimal method to streamline projects; another LPA had developed detailed procedural documents and limited its projects to those with simplified environmental documentation. Figure 17 presents number of LPA methods for improving project oversight during construction. The LPAs were asked to identify the major hurdles to delivering federal-aid projects. Thirty-four LPAs noted that the length of and/or meeting the requirements of the environ- mental process [NEPA, Section 4(f), State Historic Preserva- tion Office concurrence, obtaining permits, etc.] was the most difficult to overcome. A large number of LPAs indicated that delayed communications or approvals from the state DOT or FHWA, and funding limitations during the design or con- struction phases, were also major hurdles in project delivery. Additional input from LPAs included issues associated with ROW acquisition and the consultant procurement process. In terms of funding, a few LPAs also reported hurdles in the length of time to obtain funding agreements and the limita- tions on the use of funds at specific project phases. When asked about innovative practices to overcome project delivery hurdles, 17 LPAs noted the use of CEs and/or programmatic agreements, and 11 LPAs noted the use of abbreviated DOT specifications or in-house LPA materials, inspection, or con- struction specifications. Other innovative practices included mandatory LPA training, a certification process, and the use of more checklists and templates for federally funded proj- ects. One LPA noted that using consultant procurement and working with the DOT to develop approved consultant price agreements was an innovative practice to overcome delivery hurdles. One unique practice noted was turning over archaeo- logical reviews to be done by tribal governments, which sig- nificantly reduced review time. Finally, LPAs were asked to comment on positive impacts resulting from the innovative practices used: 26 LPAs indicated a reduction in total proj- ect delivery time, 16 noted a reduction in project cost, and 12 noticed a higher level of community satisfaction. Some other impacts offered by LPAs included building trust and effective teamwork between the DOT and locals, better tracking of cost and scope changes, and ensuring that funds are spent in the year they are identified for expenditure. Table 16 presents the effective measures reported by LPAs to successfully deliver federally funded projects. Most LPAs indicated that the traditional measure of projects completed on time and within budget is effective. However, others indicated that success could be measured by documenting the improve- ments in safety, in the reduction in crashes and congestion, or FIGURE 17 Summary of methods for improving construction project oversight of LPA projects (respondents checked all that apply).

46 by the positive impacts of infrastructure improvements to roads and bridges (e.g., ride quality, reduction in public complaints, noise reduction). A few mentioned that the minimization of the number of change orders and a reduction in the number of utilities issues are measures of success. Finally, a number of LPAs identified that the public perception of the final project and public acceptance (e.g., minimal number of complaints, calls, and comments from local citizens) are effective means for measuring the success of federal-aid project delivery. TABLE 16 EXAMPLES OF LPA EFFECTIVE MEASURES FOR BUILDING FEDERAL-AID PROJECTS Effective Measures Reported by LPAs No. of Agencies Project completed on time and/or within budget 8 Limited scope creep and no change orders 4 Positive stakeholder and community feedback 2 Others • Build project in less than 7 years • Minimal issues with utilities • Full use of authorized federal funds and minimal use of local funds (e.g., using only 5% local funds) • No loss in annual allocation funds • Improved safety and infrastructure (before/after studies) 4 Audit reviews that result in no negative findings 2 In terms of measures that the DOT also uses to evaluate LPA performance, most LPAs reported that they are tracked on the percentage of projects that are completed on time and specifically on the design phase being completed on time. Many LPAs are evaluated in terms of how the federal funding obligations compare with the programmed fund- ing. Some LPAs are tracked by the amount of project scope increases during project development. Two LPAs reported that their DOTs track their performance related to audit find- ings and the subsequent LPA response time to audit findings. Table 17 provides responses from 11 LPAs on the ques- tion of what performance measures should be used to direct the amount and type of federal funding to local projects. Local agencies were asked whether they had benefited from programmatic agreements between their agency and the DOT or between the DOT and federal agencies (e.g., USCOE, U.S. Fish and Wildlife Service, National Forest Service, U.S. Coast Guard, Department of Environmental Protection, tribal agencies). More than half of the LPAs indicated that they had benefited from programmatic agree- ments and specifically noted improvement in time it took to execute a project. Approximately half of the LPAs provided a description of successful use of a programmatic agreement on a federally funded project, and many referred to the pro- grammatic agreements used on all ARRA projects, Section 4(f), and USCOE nationwide permits. One LPA mentioned a programmatic Section 4(f) that was used on a railroad grade separation project, which was documented to streamline the environmental assessment process. A few LPAs reported that programmatic agreements were used for resurfacing projects and resulted in the design, PS&E review, letting, and construction of federally funded pavement projects in less than a year. Other programmatic agreements that accelerated the time of project completion were related to sewer system improvements, accessibility improvements (sidewalks), wetland and navigable waters impact reconcili- ation, fish coordination issues, ditch relocations/enclosures adjacent to bridges, and historical bridge projects. One LPA mentioned a threatened and endangered species matrix resulting from a programmatic agreement that accelerated project approvals. Another example was a batch biologi- cal assessment for DOT and LPA projects that saved time and costs for multiple projects in one state. Federal funding expedited improvements and gave the LPA the opportunity to make several improvements in a relatively short time. TABLE 17 EXAMPLES OF PERFORMANCE MEASURES THAT SHOULD BE USED TO DIRECT AMOUNT AND TYPE OF FUNDING Performance Measures Reported by LPAs No. of Agencies On-time project delivery and project schedule milestones 4 Project that is within original budget 2 Past performance on federally funded or state-funded projects 2 Successful innovation on aspects of LPA project funding or delivery 1 Safety improvements (accidents, pavement ratings, clear zone) 1 Infrastructure condition improvements, cost-benefit analysis 1 LOCAL PUBLIC AGENCY CERTIFICATION PROGRAM IMPACT ON PROJECT PERFORMANCE The local agencies (22 of 41) certified by their state DOTs were asked about the perceived impact of certification on federal- aid project performance. All but one of the LPAs was aware of training provided by the DOT as part of the LPA certification process. When asked what aspects of the training were con- ducive to the successful development or delivery of federally funded projects, 19 LPAs responded that detailed training on federal regulations and the project delivery process was criti- cal. In addition, the vast majority of the LPAs reported that training accessibility was important, and more than half said that training frequency was critical to successful projects. One LPA noted that the best training occurs in the develop- ment of new programs and when guidelines to streamline the project delivery process are permitted. Another LPA reported that peer-to-peer sharing, problem-solving, and LPA joint advocacy on issues were vital.

47 All but four of the LPAs responded that being LPA-certified by the DOT has helped them to better plan for and complete projects that are programmed or specifically designated by Congress. Table 18 presents various responses as to whether certification helped with the success of the individual project development phases. Compliance with Federal Requirements The majority of LPAs reported that being certified has helped them to better comply with federal requirements. Figure 18 addresses specific elements of LPA certification that were rated as being the most effective, including training that is continuously available and the delegation of authority from the DOT to the LPA. Securing Federal Funds Nearly half of the LPAs responded that certification has increased their success in securing federal-aid funds. Two LPAs noted that becoming certified had created opportu- nities for funding projects that previously would not have been eligible. A few LPAs indicated that being certified allowed their projects to proceed without a DOT-qualified consultant or to do work in-house, which resulted in more timely completion of federally funded projects. One LPA noted that although the process is still time-consuming and labor-intensive for a small staff, the guidance of the certification program has improved LPA knowledge of the process, especially when requirements change or are improved. Table 19 presents a general summary of the LPA responses on how certification has helped them secure more federal funding. TABLE 19 SUMMARY OF IMPACTS OF CERTIFICATION ON OBTAINING FEDERAL FUNDS FOR LPA PROJECTS Impact of LPA Certification No. of Agencies Project delivery accelerated and project review time reduced 3 More federally funded projects secured by LPAs 2 In-house project delivery 2 Others • Allowed for participation in Streetscape Enhancement projects • Facilitated access to grant programs through FHWA Federal Lands 2 Project Delivery Project Scope Almost half of the LPAs indicated that being certified helped minimize project scope creep and budget increases. A num- ber of LPAs indicated that being certified gives them more control to keep federally funded projects within the original scope. An LPA-certified employee is better able to oversee the project scope, anticipate the potential issues, and be proactive in resolving any potential bottlenecks in project delivery. For TABLE 18 SUMMARY OF EXAMPLES OF THE POSITIVE IMPACTS OF LPA CERTIFICATION ON PROJECT DELIVERY PHASES Project Phase Number of Agencies Specific Examples Planning/Programming (TIP/STIP) Phase 3 • Shortens the time of planning and implementation of plan • Made LPAs more aware of the system Environmental Review/Permitting 5 • Better understanding of the details of the environmental review process Design Phase/Utilities 6 • Specific requirements to adhere to, which allows LPAs to be more detailed when selecting design firms • Increased familiarity with AASHTO standards • Allows LPA to use in-house design, which results in more direct and efficient project delivery ROW Acquisition 2 • Allows LPAs to be more involved in the actual process Procurement Phase 8 • Requirement for concurrence allows LPAs to scrutinize bids received on a more detailed level • The Ad, Bid, and Award phase through the LPA is a faster process than when done through the DOT • Assigns the responsibility to LPA to advertise, bid, and award projects • More experienced with the selection of consultants for federally funded projects Construction Contracting/Inspection 8 • More detailed inspection leads to better project performance • Allows construction managers, inspectors, and technicians to operate under local processes as outlined in the LPA's standard construction specifications • Contracting and inspection done directly by LPA with some consultant assistance under the direct procurement method • Specific requirements allow LPAs to be more detailed when selecting contractors or consultant engineering inspector firms

48 example, one LPA shared that the scope and budget of each project, as defined in each agreement with the DOT, allows it to closely monitor the finances of federally funded projects. Therefore, the LPA encourages the contractor to use extra care from the beginning of the project, in order to adhere to the project scope and budget. In another example, the LPA jointly developed a scope of services to produce independent cost estimates. This tool allowed the LPA and the consultant to have a complete understanding of the expectations while undergoing the project delivery process. Project Delivery Time When asked what elements of LPA certification they would identify as resulting in reduced project delivery time, eight LPAs noted that certification does not require the same num- ber and frequency of DOT approvals or the use of full DOT design standards. Eight LPAs, however, responded that no elements of certification assisted in reducing project delivery time. One LPA shared that certification allows it to manage and provide the engineering design for federally funded projects. The result is that the step related to state DOT procurement for engineering services is eliminated, a process that has histori- cally taken from 6 months to 3 years on federally funded proj- ects. In addition, because of certification, the permit process will also streamline project delivery time. A few LPAs added that the ability to perform design in-house, attributed to the certification process, reduced project delivery time. Construction Phase LPAs were asked whether improvements in delivering con- struction projects with federal funds had been observed since the inception of their DOT’s certification program. More than half of the LPAs had noticed improvements during the construction phase. One LPA noted that the certification pro- gram provided a fresh look at the LPA standards and guide- lines, resulting in improved processes on all its projects. Another LPA reported that it is better equipped to control the schedule for the design phase and shorten the advertise- ment, bidding, and award phases by being permitted to use its own procurement process. One LPA estimated that being certified saves approximately 1 year in project delivery time, while another LPA simply stated that the reduced time for project delivery also reduced overall project costs. A few LPAs noted that the certification program forms help LPAs be more organized, and that improved training and educa- tion help them complete projects more quickly. SUMMARY Overall, more than half of the certified agencies indicated that the process has helped them meet performance mea- sures for project development and delivery. In addition, they recognized that FHWA is improving its definition of expec- tations for the DOTs with regard to the LPA program. FIGURE 18 Elements of LPA certification rated as being most effective (respondents checked all that apply).