Effect of Public-Private Partnerships and Nontraditional Procurement Processes on Highway Planning, Environmental Review, and Collaborative Decision Making (2013)

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74 alternative: One of a number of specific transportation improvement proposals, alignments, options, or design choices in a defined study area. (Source: TCAPP) availability payment: A periodic payment made to a conces- sionaire by a public authority for providing an available facility. Payments are reduced if the facility is not available for a period of time, or not being maintained in satisfactory condition. Using an availability payment structure elimi- nates the need for the concessionaire to assume any traffic risk and protects the interests of the public by giving the concessionaire a financial incentive to maintain the facility in satisfactory condition and operating at a specified level of performance. (Source: FHWA) capital improvement: Local planning for the addition of infrastructure such as roads, bridges, water and sewer sys- tems, and other structures. (Source: TCAPP) cash flow model: A valuation method used to estimate the attractiveness of an investment opportunity. Discounted cash flow (DCF) analysis uses future free cash flow projec- tions and discounts them (most often using the weighted average cost of capital) to arrive at a present value, which is used to evaluate the potential for investment. (Source: Investopedia.com) categorical exclusion: An NEPA finding documenting that a proposed transportation improvement does not individu- ally or cumulatively create a significant effect on the human environment and for which neither an environ- mental assessment nor an environmental impact state- ment is required. (Source: FHWA) collaboration: To cooperate with others in a joint endeavor or area of mutual interest to influence or affect the out- come. (Source: TCAPP) collaborative decision-making framework: Series of key decisions properly sequenced and detailed to support col- laborative decisions for capacity projects. (Source: TCAPP) concession: A contractual agreement whereby a public agency engages a private development partner to design, build, finance, operate, and maintain a highway improvement for a specified time period in exchange for the right to col- lect tolls on the facility or receive availability payments. concession period: This is the duration of a concession. concurrence: This is a formal agreement among parties that is documented by the decision makers. (Source: TCAPP) conformity: An MPO-led process to ensure that federal fund- ing and approval go to transportation activities that are consistent with air quality goals. Conformity applies to transportation plans, transportation improvement pro- grams, and projects funded or approved by the Federal Highway Administration or the Federal Transit Adminis- tration in areas that do not meet, or previously have not met, air quality standards for ozone, carbon monoxide, particu- late matter, or nitrogen dioxide. These areas are known as “nonattainment areas” or “maintenance areas,” respectively. (Source: FHWA) congestion pricing: This is a variation on tolling, in which user fees for a transportation facility vary based on the level of traffic volume or the time of day. It is also known as “variable pricing.” (Source: NCSL) cooperating agency: Any federal agency other than a lead agency that has jurisdiction by law or special expertise with respect to any environmental impact involved in a proposal (or a reasonable alternative) for legislation or other major federal action significantly affecting the quality of the human environment. A state agency or local agency of sim- ilar qualifications or, when the effects are on a reservation, an Indian tribe may by agreement with the lead agency become a cooperating agency. (Source: CEQ) corridor planning process: This is a procedure usually done when the long-range transportation plan leaves open the possibility of multiple approaches to fulfill goals and objectives and before the environmental review process. (Source: TCAPP) credit enhancement: Financing tools (e.g., letters of credit, lines of credit, bond insurance, debt service reserves, and A p p e n d i x A Glossary

75 impacts resulting from the alternatives, and demonstrates compliance with other applicable environmental laws and executive orders. The EIS process is completed in the fol- lowing ordered steps: notice of intent, draft EIS, final EIS, and record of decision. (Source: FHWA) environmental review: The process during which proposed transportation improvement projects are examined with respect to the impacts to natural and human communities. (Source: TCAPP) Federal Highway Administration: The division of the U.S. Department of Transportation charged with overseeing the development of highway infrastructure. financial plan: The nexus in which project costs and expected outlays during construction are benchmarked against the revenue generation potential of a project, the debt that such revenue can leverage, and other available funding variables. As such, they are an operative tool for determining whether projects are actually affordable. finding of no significant impact: A finding of no significant impact is issued when environmental analysis and inter- agency review during the environmental assessment pro- cess find a project to have no significant impacts on the quality of the environment. (Source: FHWA) fiscal constraint: A demonstration of sufficient funds (federal, state, local, and private) to implement proposed transporta- tion system improvements, as well as to operate and main- tain the entire system, through the comparison of revenues and costs. For additional information, access http://www .fhwa.dot.gov/planning/fcdef62805.htm. (Source: TCAPP) fiscally constrained: A fiscally constrained plan identifies revenues that are reasonably expected to be available to implement the plan while still providing operations and maintenance of the existing transportation infrastructure. (Source: TCAPP) HOT lanes: Managed highway lanes open to buses and high- occupancy vehicles at no cost, as well as non-HOV vehicles that pay a variably priced toll. Tolls are adjusted using fixed or dynamic rates to maintain free-flow traffic conditions. lead agency: The agency or agencies preparing, or having taken primary responsibility for preparing, the environ- mental impact statement. (Source: CEQ) lead federal agency: This is the federal agency taking primary responsibility for reviewing and approving an EIS. long-range transportation plan: A mandated federal pro- cedure by which state and metropolitan transportation planning organizations develop a multimodal long-range transportation plan that evaluates the current status of the regional transportation system or identifies necessary improvements to the system and guides the advancement of the system for at least 20 years in the future. (Source: TCAPP) metropolitan planning organization (MPO): An MPO is the local transportation planning entity responsible for debt service guarantees) that improve the credit quality of underlying financial commitments. Credit enhance- ments have the effect of lowering interest costs and improv- ing the marketability or liquidity of bond issues. (Source: AASHTO) Decision Guide: A framework of the key decisions in long- range planning, programming, corridor planning, and environmental review phases that includes the informa- tion needed to support collaboration and other impor- tant topics. The Decision Guide is the foundation for all concepts presented in TCAPP, now known as PlanWorks. (Source: TCAPP) design–build: A procurement or project delivery arrange- ment in which a single entity (a contractor with subcon- sultants or a team of contractors and engineers, often with subconsultants) is entrusted with both design and con- struction of a project. This contrasts with traditional pro- curement where one contract is bid for the design phase and then a second contract is bid for the construction phase of the project. (Source: AASHTO) design–build–finance–operate–maintain (DBFOM): A procurement approach in which the responsibilities for designing, building, financing, operating, and maintain- ing highway improvements are bundled together and trans- ferred to private-sector partners. DBFOM projects are either partly or wholly financed by debt leveraging revenue streams dedicated to the project. Direct user fees (tolls) are the most common revenue source; other sources include lease pay- ments, shadow tolls, and vehicle registration fees. Future revenues are leveraged to issue bonds or other debt that pro- vide funds for capital and project development costs. They are also often supplemented by public-sector grants in the form of money or contributions in kind, such as right-of- way. Private partners are normally required to make equity investments as well. (Source: FHWA) environmental assessment: A concise public document for which a federal agency is responsible, used to determine whether to prepare an environmental impact statement for a proposed transportation improvement or issue a find- ing of no significant impact. An environmental assessment includes a brief discussion of the need for the proposed improvement, a listing of conceptual alternatives, a discus- sion of anticipated environmental impacts of the proposed action and alternatives, and a listing of agencies and per- sons consulted. (Source: FHWA) environmental impact statement (EIS): NEPA requires fed- eral agencies to prepare environmental impact statements for major federal actions that significantly affect the qual- ity of the human environment. An EIS is a full-disclosure document that details the process through which a trans- portation project was developed, includes consideration of a range of reasonable alternatives, analyzes the potential

76 agencies have a higher degree of authority, responsibility, and involvement in the environmental review process. (Source: CEQ) pay-as-you-go financing: Government financing of capital outlays from current revenues or grants rather than by borrowing. (Source: AASHTO) performance measure: Indicators of how well the transpor- tation system is performing with regard to both qualitative and quantitative measurements. Sometimes used as feed- back in the decision-making process. (Source: TCAPP) PlanWorks: See Transportation for Communities—Advancing Projects through Partnerships. practitioner: An individual professional who is directly involved in support of the transportation decision-making process in an ongoing manner. (Source: TCAPP) predevelopment agreement: An agreement that allows pri- vate development partners to participate in the prelimi- nary design of a project during the environmental review process at either a reduced or a deferred cost, in exchange for the right of first refusal to develop the project on a design–build–operate–maintain or design–build–finance– operate–maintain basis. preferred alternative: The NEPA alternative that the project sponsor believes would fulfill its statutory mission and responsibilities, giving consideration to economic, envi- ronmental, technical, and other factors. The concept of the “agency’s preferred alternative” is different from the “envi- ronmentally preferable alternative,” although in some cases one alternative may be both. (Source: CEQ) principal: Cash provided by a private borrower to obtain a loan and later recovered from project revenues after most other debt obligations have been paid off. private activity bonds: Private activity bonds are a form of tax- exempt bond financing that can be issued by or on behalf of state or local governments for privately developed and oper- ated projects. This gives private entities access to tax-exempt interest rates. Under SAFETEA-LU, the total amount of such bonds is limited to $15 billion. (Source: NCSL/FHWA) problem statement: A statement outlining the underlying causes of the corridor or regional problems (not just trans- portation related but also economic, natural, cultural), and written in such a way that the statement is useful for develop- ment and evaluation of potential solutions. Problem state- ments should avoid being mode-specific, although they can relate a specific type of vehicle to the problem. For addi- tional information, access http://www.contextsensitive solutions.org/content/reading/problem-definition-3/. (Source: TCAPP) procurement: The process on the part of project sponsors for obtaining services related to the implementation of high- way improvement projects. Procurement processes for large highway improvement and P3 projects normally include a planning, programming, and coordinating federal high- way and transit investments. Federal transportation stat- utes require that urbanized areas of 50,000 people or more must designate an MPO as a condition for spending fed- eral highway or transit funds. MPOs are responsible for maintaining a long-range transportation plan, a transporta- tion improvement plan, and a regional travel demand model, as well as completing conformity analysis. metropolitan transportation plan: A federally mandated, MPO-led metropolitan planning process required in urbanized areas in the country with populations of more than 50,000 to identify transportation needs and policy over a 20-year horizon. National Environmental Policy Act (NEPA): A federal envi- ronmental policy that establishes a process by which fed- eral agencies must study the environmental effects of their proposals, document the analysis, and make the informa- tion available to the public for comment. For transporta- tion projects, NEPA requires examination and avoidance of potential impacts to the social and natural environment when considering approval of proposed projects. It pro- vides an interdisciplinary framework for federal agencies to prevent environmental damage and contains “action- forcing” procedures to ensure that federal agency decision makers take environmental factors into account. For addi- tional information, access http://www.environment.fhwa .dot.gov/projdev/index.asp. (Source: TCAPP) nonattainment area: Metropolitan areas of the country where air pollution levels persistently exceed the national ambient air quality standards. (Source: EPA) objective opportunity: Specific and measureable statements related to the attainment of goals. An objective opportunity is a potential action within a corridor that has the ability to improve the corridor’s transportation system performance. (Source: TCAPP) obligation authority: The amount of budgetary resources (including new budget authority, balances of unobligated budget authority carried over from previous years, and obligation limitations) available for obligation in a given fiscal year. Within the federal-aid highway program, obli- gation authority often refers to the amount of federal-aid obligation limitation, established annually by Congress in appropriation acts, that is allocated to the states and con- trols the amount of apportioned contract authority that can be obligated by the states in a given fiscal year. (Source: AASHTO) participating agency: SAFETEA-LU defines participating agencies as those with an interest in NEPA projects, as opposed to cooperating agencies, which are federal regula- tory agencies with jurisdiction over environmental issues and permits. The roles and responsibilities of cooperating and participating agencies are similar, but cooperating

77 investment proposal offers value for money in compari- son with the most efficient form of public procurement. (Source: The World Bank) purpose and need statement: A brief written statement specifying the underlying purpose and need to which the agency is responding in proposing alternatives included in an EIS. Purpose and need statements articulate the objectives that the proposed transportation improve- ments are designed to achieve. EIS analyses assess the ability of different project alternatives to meet the objec- tives established in the purpose and need statement. (Source: CEQ) real toll concession: A concession awarded to a private devel- opment partner to design, build, finance, and operate a transportation project for a predetermined concession period in exchange for the right to collect all revenues generated by the project during the concession period. (Source: FHWA) record of decision: A federal environmental decision docu- ment issued by FHWA approving an EIS and explaining the basis for the project decision, and summarizing miti- gation measures incorporated into the project. (Source: TCAPP) regional plan: See metropolitan transportation plan. resource agencies: Federal agencies with regulatory and/or permitting authority related to protection of natural or cultural resources. Examples include (but are not limited to) the U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers. (Source: TCAPP) revenue bond: Bonds issued by the public sector to finance the construction or maintenance of a transportation facility. Unlike general obligation bonds, these are not backed by the full faith and credit of the government but, rather, depend on revenues from the roadway they finance. (Source: NCSL) Second Strategic Highway Research Program (SHRP 2): A research program authorized by Congress to address some of the most pressing needs related to the nation’s highway system: the high toll taken by highway deaths and injuries, aging infrastructure that must be rehabilitated with mini- mum disruption to users, and congestion stemming both from inadequate physical capacity and from events that reduce the effective capacity of a highway facility. These needs define the four focus areas in SHRP 2: • The Safety area is conducting the largest ever natural- istic driving study to better understand the interac- tion among various factors involved in highway crashes (e.g., driver, vehicle, and infrastructure), so that better safety countermeasures can be developed and applied to save lives. • The Renewal area is developing technologies and insti- tutional solutions to support systematic rehabilitation request for qualifications, after which the project sponsor invites a shortlist of the most qualified bidders to submit detailed proposals. See project delivery. project concepts: A transportation improvement idea that, when advanced through the stages of planning, environ- ment, design, and construction, would satisfy an iden tified need and was considered in the context of the local area socioeconomics and topography, future travel demand, and infrastructure improvements in the area. (Source: TCAPP) project definition: This is the act of assessing alternative designs and alignments for highway improvements and identifying a preferred, approved alternative, with a cate- gorical exclusion (CE), finding of no significant impact (FONSI), or record of decision (ROD). project delivery: This is the act of procuring private-sector services. See procurement. project development: The general process of seeing a trans- portation project from the beginning (when a need is iden- tified from an existing plan and then the plan is programmed) through to the end (when the plan is approved for imple- mentation). (Source: TCAPP) project sponsor: A public-sector agency is an agency that advances and procures a transportation improvement project. public affairs: A term used to describe an organization’s relationship with stakeholders with an interest in the orga- nization’s undertakings and operations. Public affairs practitioners engage stakeholders in order to explain the organization’s policies, provide factual information, and gain support on issues that could affect the organization’s ability to operate successfully. The field of public affairs combines government relations, media communications, issue management, information dissemination, and stra- tegic communications advice. (Source: publicaffairsnet working.com) public outreach: Public outreach is the act of communicat- ing and engaging with the public to inform them about an agency’s activities (e.g., the development of highway improvements) to gain feedback and support. public–private partnership (P3): A contractual agreement formed between public-sector and private-sector partners, which allows more private-sector participation than is tra- ditional. The agreement usually involves a government agency contracting with a private company to renovate, construct, operate, maintain, and/or manage a facility or system. Although the public sector usually retains owner- ship in the facility or system, the private party will be given additional decision rights in determining how the project or task will be completed. In some P3s, the private sector may also finance some or all of a project. (Source: FHWA) public-sector comparator: A procedure used by govern- ments to make decisions by testing whether a private

78 state transportation improvement program (STIP): A state transportation improvement program identifying which projects in the MTP/SLRP are to be completed in the com- ing 4-year cycle. study area: The area of analysis defined in a NEPA document for a highway improvement project. toll: A fee paid by motorists to use a limited-access highway facility, often used to cover the costs of construction and operations. Transportation for Communities—Advancing Projects through Partnerships: A decision support tool, now known as PlanWorks, developed through the SHRP 2 Capacity Series focused on a series of 44 decision points in the plan- ning and NEPA processes that shape project outcomes encouraging collaboration and effective and informed decision making. (Source: TCAPP) transportation improvement program: Near-term transpor- tation investment programs maintained by MPOs identify- ing which projects in the MTP/SLRP are to be completed in the upcoming 4-year cycle. The Transportation Infrastructure Finance and Innovation Act of 1998: Federal credit program for eligible transporta- tion projects authorizing U.S. DOT to provide three forms of credit assistance: secured (direct) loans, loan guarantees, and standby lines of credit. The fundamental goal is to leverage federal funds by attracting substantial private and other nonfederal co-investment. (Source: FHWA) unsolicited offer: Unsolicited proposals from private-sector developers to public-sector transportation agencies to design, build, finance, operate, and maintain transportation improvement projects. The ability for an agency to consider unsolicited offers is normally promulgated in state law. value engineering: Value engineering is an organized appli- cation of common sense and engineering and technical knowledge directed at finding and eliminating unneces- sary costs in a project. (Source: FHWA) value for money analysis: An assessment of the monetary value of net life-cycle costs and quality to determine the benefits achieved by using a P3 procurement process rela- tive to public project delivery, also taking into account fac- tors that cannot be expressed in monetary terms, such as any predicted differences in service quality between the delivery options. (Source: VDOT) vision: Vision is a statement representing a community’s desires for the future. (Source: TCAPP) of highway infrastructure in a way that is rapid, presents minimal disruption to users, and results in long-lasting facilities. • The Reliability area is developing basic analytical tech- niques, design procedures, and institutional approaches to address the events (e.g., crashes, work zones, special events, and inclement weather) that result in the unpre- dictable congestion that makes travel times unreliable. • The Capacity area is developing a web-based tool to provide more accurate data and collaborative decision making in the development of new highway capacity to expedite the provision of that capacity while simultane- ously addressing economic, community, and environ- mental objectives associated with new construction. SHRP 2 is administered by the Transportation Research Board of the National Academies under a Memorandum of Understanding with the Federal Highway Administra- tion and the America Association of State Highway and Transportation Officials. (Source: SHRP 2) social media: Forms of electronic communication (such as websites for social networking and for microblogging) through which users create online communities to share information, ideas, personal messages, and other content, including videos. (Source: Merriam-Webster) Special Experimental Project 15 (SEP-15): An experimental FHWA process to identify and test new public–private part- nership approaches to project delivery. These new approaches facilitate the efficient delivery of transportation projects without impairing the FHWA’s ability to carry out its stew- ardship responsibilities to protect both the environment and American taxpayers. SEP-15 addresses but is not limited to four major com- ponents of project delivery: contracting, compliance with environmental requirements, right-of-way acquisition, and project finance. (Source: FHWA) stakeholder: A stakeholder is a person or group that may be affected by a transportation plan, program, or project. Stakeholders may include government agencies that are not part of the decision-making partnership, formal advocacy groups, and informal groups that come together around transportation decision making (i.e., neighborhood asso- ciations). (Source: TCAPP) state department of transportation: State public agencies charged with the maintenance, operation, and development of highway and transportation infrastructure.