Guidance for Calculating the Return on Investment in Transit State of Good Repair (2019)

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79 C H A P T E R 6 The products of the research described in this report include • A methodology for calculating the ROI of transit SGR investments, • Guidance for applying the methodology, • A spreadsheet tool a transit agency can use to calculate the ROI of a specific SGR investment or set of investments, and • A set of pilots illustrating application of the ROI calculation guidance and tool. As the pilots described in Chapter 5 help illustrate, there are significant benefits to invest- ments to keep transit assets such as buses, rail vehicles, guideways, and facilities in good repair. Relative to the alternative of allowing transit assets to fall into disrepair, investing in SGR saves transit agency capital costs, saves transit users travel time and operating costs, and yields benefits to society in terms of reduced emissions and traffic congestion. While the guidance and tool are intended to demonstrate benefits for all types of SGR benefits, there are some caveats in applying the research. It is important to note the spreadsheet tool is intended as a high-level tool and not appropriate for applications such as detailed life-cycle cost analysis of different project alternatives. In addition, the guidance and tool focus on areas where the benefits are expected to be greatest, such as when an investment may have direct impact on actual or perceived transit passenger travel time. There are many SGR investments that do not directly impact travel time but that are nonetheless needed, such as rehabilitation of aging maintenance facilities or repairs to signaling systems. The guidance and tool are applicable to such investments but may underestimate benefits that are more difficult to predict, such as improvements to worker safety. The research also does not address issues such as the geographic distribution of SGR benefits, to the extent that investing in a certain portion of the system may yield benefits concentrated in specific geographical areas. The results of this research are intended to be immediately applicable for individuals at transit agencies, in particular staff involved with long-range planning and capital programming. However, several areas have been identified that merit additional research in the future. These areas include the following: • Communicating the benefits of SGR investment. This research provides the means for quan- tifying benefits of SGR investments. However, transit agencies face additional challenges— beyond simply obtaining quantitative measures—in trying to persuade their stakeholders and the general public that investments in SGR are needed. NCHRP Report 742: Communicating the Value of Preservation: A Playbook offers useful ideas for communicating technical data that could be a good starting point for communicating the benefits of transit SGR investment. The “building blocks for communicating” that are described in the report include audience identification, message design, message delivery, and market research (1). Application of these Conclusions

80 Guidance for Calculating the Return on Investment in Transit State of Good Repair building blocks to the area of SGR investment and further research on effective techniques for communication would be a valuable extension of the present research. • Developing tools and models for systems. Tools, models, and approaches for analyzing investments in systems (e.g., communication and signaling systems) are not as mature as that for other assets. The Return on Investment Calculator developed through the research can be used for analyzing systems, but supplemental analysis will be required of the user in order to do these assets effectively and incorporate consideration of issues such as technical obsolescence. Further research in advancing approaches for managing the systems asset class is needed. • Expanding scope of investments considered in the analysis. The guidance and tool devel- oped in this research consider the benefits of projects that make improvements in transit SGR. In reality, however, projects do not focus solely on SGR work. Many projects or invest- ments at transit agencies involve both SGR improvements and expansion efforts or other improvements of a service. Further research is merited to apply the research to complex cases where a project addresses multiple asset types and multiple types of needs, including SGR and expansion needs. • Revisiting deterioration models. This research utilizes models adapted from FTA’s TERM. There may be a benefit to revisiting the deterioration models derived from TERM to update and validate these models. • Training and support for guidance implementation. While the guidance and tools are intended to be immediately applicable to transit agencies, some agencies may need additional assistance in applying the tools and putting them into practice. Training and support for agen- cies could involve assistance in setting up the base and investment cases specific to the transit agency, gathering the data necessary for the analysis, making assumptions, and interpreting the results. Reference 1. Crossett, Joe, et al. NCHRP Report 742: Communicating the Value of Preservation: A Playbook. Transportation Research Board of the National Academies, Washington, D.C., 2012.