Transforming Public Transportation Institutional and Business Models (2012)

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19 c h a p t e r 4 Several themes for successful change can be seen from the case studies, across a selection of public transportation agen- cies that have made fundamental changes in business and institutional models. As a word of caution, every agency also has its own unique political environment, governance struc- ture, institutional capacity, financial resources, perceived role in the regional transportation system, and core mission, and these will influence the transferability of the lessons outlined below. Nonetheless, the “themes for success” summarized in this section merit consideration by organizations, individu- als, advocacy groups, elected officials, and others who are seeking to transform their transit organizations. 4.1 Collaboration and Partnership Are Essential to Successful Change The New Paradigms research (Cambridge Systematics, 1999; Stanley et al., 2003) completed almost a decade ago highlighted the expectation that collaboration and partner- ship play a key role in making fundamental change in busi- ness and institutional models happen. The case study research herein suggests that motivation for change often comes from outside the organization or as part of a collaborative partner- ship. Challenges during the change process often require sup- port and resources beyond those available within an agency; navigating these challenges successfully necessitates strong partnerships. The experiences of the case study agencies high- light the importance of collaboration. In a number of cases, as an agency faced criticism, it was their external partners that defended the agency and allowed change to continue. Given the long-term nature of change strategies, it appears vital that an agency establish partnerships with organizations that have continuity, particularly in cases where the transit agency gov- ernance changes with political cycles. Utah Transit Authority’s Partnership with Business Leaders and Elected Officials. To build support within the community, senior staff at the Utah Transit Authority (UTA) worked closely with local elected officials and other area stakeholders to improve these relationships. After the failure of a funding referendum in 1992, UTA staff recognized that they needed to build more support within the community. UTA’s senior staff now routinely meets with mayors from throughout the region to improve external understanding of the agency, even if there are disagreements on specific issues. Many of the local mayors are now champions of UTA. UTA also actively reaches out to private and public orga- nizations that often serve as transit advocates, including the Wasatch Front Regional Council (the region’s metropolitan planning organization [MPO]), Envision Utah, the Utah Chamber of Commerce, and the Church of Jesus Christ of Latter-day Saints. UTA’s partnership with the business com- munity through the Utah Chamber of Commerce helped build broad support through the business community’s recognition that transit is vital to the region’s economic development. Charlotte’s Partnership with the Local Chamber of Com- merce. Like the chamber of commerce in the Salt Lake City region, the Charlotte Chamber of Commerce recognizes the necessity of transportation investment for the city’s econom- ic competitiveness and has served as one of transit’s strongest advocates. The Charlotte Chamber of Commerce worked closely with the city to lobby the state legislature to allow for a local tax to generate revenue for transit. The organization followed this initial effort with a public campaign to pass the referendum and then several years later led another public campaign to protect the revenue source from repeal. Advance Transit’s Embrace of Philanthropy. Advance Transit, serving parts of New Hampshire and Vermont, embraced a funding model that relied in part on tax-deductible donations to support service. This had the effect of building support for the organization throughout the community. While the revenue generated through outreach for support represents only a small portion of the agency’s operating Themes for Successful Change Strategies

20 ments, collaboration with the state to guide multimodal capacity expansion projects, collaboration with human service agencies through capital support and cost-sharing arrangements, and collaboration with private providers and contractors in major project initiatives as well as in the use of resources and assets. 4.2 Successful Change Requires a Clear Vision In almost all of the case studies, the transit agency, the regional planning organization, the business community, elected officials, or other stakeholders first defined a vision or desired outcome that subsequently helped guide the direc- tion of fundamental change (as described in Table 4.1) and budget, the effect of fundraising efforts has built relation- ships and political support that have served to protect exist- ing funding resources. Denver RTD’s Collaboration for Service Delivery. Col- laboration and resource integration have been the hallmark of the transformation of Denver’s Regional Transportation District (RTD). The RTD has an active role in working with those making service requests, sponsors, contractors, and funding partners to find alternative arrangements when RTD service standards cannot be met or when alternative service delivery schemes can lower the public subsidy. Examples include collaboration with the MPO to manage the grow- ing vanpool program, collaboration with local governments to support localized services through cost-sharing arrange- Transit Agency “Vision” or Desired Outcome Advance Transit (NH/VT) A financially stable transit system that plays a key role in the area transportation system. Capital Area Transportation Authority (Lansing, MI) Expand community reliance on and support of CATA by operating as a market and customer- oriented business, viewing clients as full partners and stakeholders in broadening the scope of its services and the breadth of its partnerships. Champaign-Urbana Mass Transit District (Champaign-Urbana, IL) An agency that uses enhanced technology to improve customer service and meet the expectations of tech-savvy customers. Charlotte Area Transit System (Charlotte, NC) An expanded role for transit in the region’s transportation system that supports the region’s “Wedges and Corridors” growth strategy. Chittenden County Transportation Authority (Burlington, VT) Preserve access to transit services across a multi- county region. Metropolitan Transit System (San Diego, CA) A region that takes a multimodal approach to transportation solutions. Metropolitan Transportation Authority (New York, NY) An agency that is more efficient and consistent with internal business services. Metro Transit (Minneapolis/St. Paul, MN) An expanded role for transit in the region’s transportation system. Regional Transportation District (Denver, CO) An agency that focuses on moving people rather than moving vehicles. San Francisco Municipal Transportation Agency (San Francisco, CA) A city that focuses on multimodal approaches to transportation solutions. Southeastern Pennsylvania Transportation Authority (Philadelphia, PA) An agency that emphasizes customer service in all aspects of its operations. TransLink (Vancouver, BC) A region that takes a coordinated and multimodal approach to transportation investment tied closely to the region’s growth strategy. Utah Transit Authority (Salt Lake City, UT) An expanded role for transit in the region’s transportation system that also supports the region’s “Quality Growth Strategy.” Washington (Statewide) Access to intercity bus service across the state. Table 4.1. Brief description of agency “vision” or desired outcome.

21 and the state watched as the elimination of some intercity bus services isolated a number of smaller communities from any form of public transportation service. The state’s vision for intercity bus service across the state was possible only with a new model in which the state targeted resources to define a network of services rather than respond to disconnected individual grant requests. 4.3 Stable and Supportive Leadership Is Necessary to Support Change Those seeking to fundamentally change an organization, or the role of transit in a region, should prepare for an extended effort that requires stability in leadership. Any change effort will require the support of leadership within the organiza- tion, but some of the most effective change efforts are headed up by leaders who have served their agencies for an extended period of time. These leaders built the support of their gov- erning board, employees, and other key stakeholders as they engaged in the change process. Among the agencies explored in the case studies, a number engaged in a period of funda- mental change under leadership that extended more than a decade, as shown in Table 4.2. 4.4 An Effective Governance Structure Is Required for Fundamental Change In six of the case studies, a change in governance was at the center of the movement toward fundamental change. In five of these six cases, the make-up of the governing body changed. In the sixth case (the UTA), the governing body remained fundamentally the same, but the governing body explicitly changed its role. The common thread through these cases was that the existing governing body required some modification to support a changing role for the transit agency. Transfer to Regional Governance in Vancouver (British Columbia). In Vancouver, the transfer of governance from the province of British Columbia to TransLink, a region- ally governed entity, allowed the region to move ahead on its vision of transit investment and transit-oriented devel- opment to increase the regional transit mode share. It was of critical importance that the province’s delegation of gov- erning authority to TransLink was accompanied by taxing authority. The initial board structure established when the organization was formed was made up of elected officials. The result was skepticism from some, particularly the pro- vincial government, regarding motives behind investment priorities. To address this concern, the board make-up was changed to a composition of both professionals and elected officials. helped stakeholders stay focused through inevitable chal- lenges faced along the way. For most of the agencies studied, a vision was developed in partnership with other organiza- tions and outside stakeholders. In some cases, the vision for change was developed by outside organizations that expected that the transit agency change to fully meet a prescribed role. Charlotte’s Vision for a Regional Transportation System. In the case of the Charlotte Area Transit System, coordina- tion of land use planning and transportation investment was viewed as a means to enhance the role of transit in key trans- portation corridors and to better manage expected popula- tion and economic growth in the region. City planning staff, together with community and business leaders, spent nearly a decade exploring ways to make transit a more central part of the region’s transit system. The approval of a funding source and the shift in governance necessary to achieve this vision took only a few years and benefitted from the extended peri- od of visioning that educated the public on the potential for transit. The value of the region’s vision was later apparent when the transit sales tax was challenged in a repeal referen- dum. Those involved in the process cite a failure to promote the vision among newly arriving residents as the source of this threat. New Vision for Transit in the Salt Lake City Region. In the Salt Lake City region, a number of key leaders, including the Utah Chamber of Commerce and Envision Utah, devel- oped a vision for transit that far exceeded historic investment. Envision Utah, a local non-profit, created a “Quality Growth Strategy,” with the goal of providing a sustainable way to accommodate expected population growth through 2040 in Utah. The focus of this strategy is termed the “3% strategy,” which calls for 33 percent of future development to be accom- modated on 3 percent of the land, near key transit stops and major road corridors. Change was necessary at UTA for the transit system to achieve the role defined for transit in this regional vision. Vancouver’s (British Columbia) Regional Vision and the Link to Institutional Reform. The Greater Vancou- ver Regional District led three different visioning exercises that highlighted the need to better coordinate transportation investment and regional land use. These visioning efforts concluded that the desired outcome could happen only through a shift in institutional responsibility for transporta- tion investment away from the provincial government to a regional governing body with the taxing authority to fund needed investments. Vision for Preserving Intercity Services in Washington State. Washington State recognized that the existing model used to fund intercity bus services was no longer working,

22 A Move Away from City Council Governance in Charlotte. In Charlotte, the transit agency previously exist- ed as a unit within the city government with oversight by the City Council. Under the new structure, agency responsibil- ity is shared among a policy board, the Metropolitan Tran- sit Commission (MTC), and the Charlotte City Council. MTC—which is made up of representatives from city, county, and other area municipalities—sets policy, approves service changes, sets fares, and approves expansion plans. The Char- lotte City Council maintains a separate procurement and contracting function. The effect of this split responsibility has been an increasing reliance on professional staff and a reduction in political influence over day-to-day operations. Administratively, the transit staff remains within the Char- lotte City Government; however, the new governance model has shifted toward a regional approach for transit operations and planning. UTA Board of Trustees’ Empowerment of Professional Staff. In the case of the UTA, the agency’s board struc- ture remained intact, but the role of the board changed to empower the general manager and agency staff. This explicit change in the board’s role took place in the late 1990s just prior to a period of extraordinary success for UTA. The agen- cy’s volunteer board recognized that it was too involved in the management of the organization and adopted the Carver Model form of governance. Under this model, a board sets clear boundaries about what the general manager is not per- mitted to do and sets clear expectations for what outcomes shall be achieved. All contact from board members is with the general manager, who is responsible for managing the staff of the organization. This approach to governance distinguishes professional responsibility from policy direction and is cred- ited as being a key contributor to the agency’s recent success. Two-Step Governance Changes with the Chittenden County Transportation Authority (CCTA). In the case of the CCTA, the governance structure evolved as the state and area transit systems worked to protect transit services that were in jeopardy. The evolution began first as two indepen- dent boards, one responsible for CCTA and services in the central county and the other for the subsidiary operator with responsibility for service in the other four counties within the region. Recently, governance has shifted again with the move to a single governing body with representation from through- out the region. The multistep change in governance allowed the region to gradually transition from multiple service pro- viders in different markets to a single provider responsible for service across five counties. A Voter-Approved Mandate for Governance Changes in San Francisco. With the passage of “Proposition E” in 1999, voters directed the 2002 formation of the San Fran- cisco Municipal Transportation Agency (SFMTA), a semi- <5 Years 5–10 Years >10 Years Advance Transit (NH/VT) Capital Area Transportation Authority (Lansing, MI) Champaign-Urbana Mass Transit District (Champaign-Urbana, IL) Charlotte Area Transit System (Charlotte, NC) Chittenden County Transportation Authority (Burlington, VT) Metropolitan Transit System (San Diego, CA) Metropolitan Transportation Authority (New York, NY) Metro Transit (Minneapolis/St. Paul, MN) Regional Transportation District (Denver, CO) San Francisco Municipal Transportation Agency (San Francisco, CA) Southeastern Pennsylvania Transportation Authority (Philadelphia, PA) TransLink (Vancouver, BC) Utah Transit Authority (Salt Lake City, UT) Washington (Statewide) Table 4.2. Tenure of transit agency leaders during period of change.

23 ment and obtain the desired technology at a lower cost. After implementing the technologies, the C-U MTD restructured the organization to give technology the focus that it needed for the successful implementation of improvements. Realignment of Internal Resources and Partnerships for a Redefined Mission at Denver’s RTD. RTD’s focus on flex- ible perspectives and creativity among staff in building part- nerships outside the RTD required that new, non-traditional skills (e.g., contract negotiation and contract management) and knowledge (e.g., of private for-profit and non-profit enterprises) be brought into the organization and that roles within RTD and among partnering agencies be adapted to better serve RTD’s people-moving mission. RTD continues to build its internal capacity through several leadership devel- opment programs. Southeastern Pennsylvania Transportation Author- ity’s Reinforcement of an Emphasis on Customer Service Through Reorganization. When customer service was made the top priority at Southeastern Pennsylvania Trans- portation Authority (SEPTA), a new customer service divi- sion was created with an assistant general manager of cus- tomer service who reports directly to the general manager. SEPTA’s customer service functions had previously been scat- tered across the organization with elements included in vari- ous divisions. The job of the assistant general manager of customer service is to ensure that customer service is a high priority across the entire organization and that all manag- ers consider customer service during their decision-making processes. Transit’s Elevation to a Department within the City of Charlotte. Charlotte elevated the transit group within the city government structure to become its own department, and the agency’s first general manager was hired in 1999. As part of this change, the city shifted responsibility for service planning, the call center, and safety and security functions from contractor staff to city employees. All of these changes elevated the visibility of transit within the city government. 4.6 Targeted Workforce Development Supports Change In a number of the cases studied, the agency focused atten- tion and resources on the development of its workforce. In some cases, this attention included engagement of employees in the process of change, while, in others, the agency invested in workforce development with direct training related to the change. Denver’s RTD Implements Leadership Development Program. Leadership within RTD recognized the need to independent agency combining responsibilities for San Francisco Municipal Railway’s (Muni) transit network and city streets under the San Francisco Department of Parking and Traffic. In the process, separate commissions governing each of the organizations were dissolved and a single, seven- member SFMTA board of directors was created, appointed by the mayor and subject to confirmation by the city and county board of supervisors. The SFMTA board replaces separate boards or commissions that formerly governed tran- sit, parking and traffic, and taxi and livery services, and, with this responsibility, the regional governing body is required to think across modes. New Representation and Its Effect on the CATA. The consolidation of city-managed transit operations and those run by Michigan State University brought to Capital Area Transportation Authority (CATA) a non-voting board mem- ber from Michigan State University. The academic influence and perspective has increased attention on CATA performance based on data and analysis, which has led to efforts to upgrade technology and management systems. Key governance pro- cesses have been transformed as well. Rather than present a proposed budget for approval each budget cycle, staff facili- tates board discussion on 5-year assumptions for major cat- egories of expenditure and programs, and the board debates and adopts assumptions. This change has contributed to a shift in the board’s focus toward a long-term planning horizon. 4.5 Change Requires Sufficient Internal and External Agency Resources Agencies must determine whether available resources are adequate to achieve desired change and, if necessary, identify strategies to obtain or align resources as needed. In several of the cases studied, the path to change required modifications in organizational structure to reinforce a desired outcome. In other cases, change required outside expertise, hiring new staff, or considering new approaches to procurement. While the needs for new resources varied widely, in all cases the agen- cies identified specific resources that were needed to make the change happen. Champaign-Urbana Mass Transit District Coordination of Technology Investments with Other Agencies. Champaign- Urbana Mass Transit District (C-U MTD) recognized the need to embrace technology and made changes in the organization and in procurement practices to make it happen. In order to implement real-time passenger information, the agency needed to overcome constraints in its funding sources and staff capabilities. The agency partnered with several other smaller transit operators to share the burden of procure-

24 4.7 Change May Require Realignment of Agency Authority with Other Regional Agencies Several of the change efforts documented in the case stud- ies involved a shift of responsibility and/or authority, often with an enhanced emphasis on multimodal transportation planning, project delivery, and finance. In Vancouver, San Francisco, and San Diego, transit and highway planning and development functions were merged. In Vancouver, the integration of transit and highway project development also includes land use planning. In all these cases, more effective transit programs emerged from closer coordination with highway and regional planning. In addition, several of the case studies document a shift in funding and operations authority. Vancouver Realigns Roles for Operations, Transporta- tion Planning, and Land Use Authority. In the Vancouver region, a number of regional visioning efforts highlighted the need to improve the coordination of regional transportation investment and land use planning. The previous structure— one in which the province was responsible for transit invest- ment and operations—would not allow the region to move toward this desired outcome. Only with a shift in responsibil- ity to a multimodal agency with land use authority could the region achieve its desired vision. Shift in Planning Functions to the MPO in San Diego. In San Diego, planning and project development responsibili- ties shifted from the transit agency to the MPO, San Diego Association of Governments (SANDAG), with the goal of promoting a multimodal project development process to better coordinate transportation and land use decisions. SANDAG was able to focus on planning long-term capital investments in complex, multimodal projects, a type of plan- ning that requires expertise not available within a transpor- tation organization focused primarily on project delivery within a single mode. Although the transit agency’s authority in project development was reduced, the change allowed the transit agency to focus more on operations planning. A num- ber of significant operations improvements followed. 4.8 Understanding the Risk of Failing to Change Supports Success In a number of the cases studied, the agency and other stakeholders understood the risk of failing to change and were motivated by the potential consequences. The reality of any effort to embrace fundamental change is that an agency will face opposition to the proposed changes. Understand- ing the risk of failing to change can help balance the natural resistance to change. support and enhance the institutional capacity of the orga- nization through active professional development. To sup- port this objective, the agency has developed a strategic lead- ership development program that consists of the following five elements: 1. Leadership Academy—A 12-month curriculum serving approximately 25 people across the organization. 2. Multiagency Exchange Program—A multiagency exchange program with Los Angeles County Metropolitan Trans- portation Authority and Dallas Area Rapid Transit serving 8 to 10 employees from each agency, with rotations among the agencies. 3. Departmental Training Programs—Each department is responsible for the development of its own professional development program. 4. Mentoring Program—Senior staff members mentor someone from a different department in the agency over a 12-month period. 5. Enhanced Existing Programs—Targeted efforts to make existing programs more meaningful to employees. SEPTA Investment in Workforce Development Despite Budget Constraints. SEPTA invested in training programs for new hires and current employees to reinforce the agency’s increased emphasis on customer service. New employees must now pass a week-long social skills training course before advancing into new-hire technical training. Since 2010, this “social skills” prerequisite training has been mandatory for all new bus and trolley operators. In the fall of 2011, SEPTA expanded this program to new railroad conductor trainees. Another key training program, called “SEPTA Connect,” con- sists of weekly classes for current employees to enhance their technical and social skills. UTA Turns Dissatisfied Employees into Transit Advocates. By the mid-1990s, the agency’s long-term emphasis on fis- cal discipline had had the effect of undermining employee morale. UTA’s senior staff recognized the need to improve employee/management relations and did so by actively engag- ing employees in agency decisions. Working with employees to reach decisions has created stronger buy-in for implemen- tation of all types of changes. UTA also sought to address specific sources of conflict, such as a long-standing differ- ence in pension benefits for management and labor. More fundamentally, senior management changed the employee engagement philosophy to value employees and to promote individual success. These changes have substantially reduced turnover, have helped recruiting, and as an unintended con- sequence, have created a new cadre of strong advocates for UTA who have provided support in the community during local funding referenda.

25 Had the state not changed its approach, many of the less prof- itable routes would have faced elimination, and parts of the state would have been completely cut off from bus service. Protecting Economic Competitiveness in Charlotte. In Charlotte, community leaders believed that if the region did not change its approach to transportation investment and growth management, it would face many of the downsides of growth seen in larger urban areas, like Atlanta, and that the region would lose its economic competitiveness with other parts of the country over the long term. 4.9 Summary The cases studied in this research effort show consistency in approach and strategy within a wide range of circumstances. The agencies studied operate a range of transit modes, have different roles within their respective regions, and are organized under a wide variety of funding and governance structures. It is within this diversity that the themes of suc- cessful change emerge. The appendix to this report includes a detailed summary of each case study agency, with additional background provided on the drivers of change, the strategies undertaken, and the consequences for the organization. Metropolitan Transportation Authority’s Fiscal Reform to Address Fiscal Crisis in New York. In the case of New York’s Metropolitan Transportation Authority (MTA), the desire to consolidate business services in the agency was viewed as a necessary step in the evolution of the organiza- tion. Failure to make this change would have required even deeper cuts in staff and services in other parts of the organiza- tion. Initial detractors of the proposal eventually recognized that the shift in resources would protect staff in other critical parts of the organization and supported implementation. Preservation of Service in Chittenden County, Vermont. The willingness of the CCTA to take over and merge transit services in adjacent jurisdictions protected existing transit services in those communities. Absent an aggressive move to transition the agency from being focused on service in a single county to serving multiple counties, there would have been substantial reductions in service in many parts of the region. Protecting Access to Service in the State of Washington. In Washington, the elimination of intercity bus services and the expectation of further reductions necessitated a radically new approach to the provision of operating subsidies in order to protect this critical service in a number of communities.