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6 2.1 Designing a Right-Sizing Policy While agencies can selectively implement techniques from the right-sizing guidebook when- ever there are opportunities to do so, the greatest benefits of right-sizing can be achieved when an agency develops a right-sizing policy. A right-sizing policy should not be understood as a revolutionary new program imposing its own set of criteria and rules on the entire agency at once. Instead, incremental strategies are recommended to integrate right-sizing objectives and opportunities into existing business practices using existing tools and available resources. The starting place will be different for each agency. Some agencies will prefer starting with a very simple program involving only a single busi- ness process or method. For example, they may incorporate a checklist of right-sizing questions at key junctures in the infrastructure life cycle (as described in Section 2.2). Agencies can also use the Performance Based Practical Design Checklist (described in Section 4.10) in the capital programming/state transportation improvement program (STIP) process. Other agencies may wish to start at a more systematic level, integrating economic and technological sensitivity into their transportation asset management plan (TAMP) or long-range transportation plan (LRTP), as described in Section 2.4. That approach will allow them to use the results later to introduce right-sizing into a host of other programming and investment decisions, following a major plan update. An agency should anticipate revisiting its right-sizing policy frequently, adding and modify- ing its provisions as agency capacities, partnerships, and needs change. As a starting place, the following sections outline a basic structure that can help guide development of a right-sizing policy. This outline can further serve to guide the reader to relevant sections of this guidebook. The outline shows the elements that a right-sizing policy should include and suggests which sections of the guidebook can be most helpful to support those elements. Right-Sizing Goals In establishing a right-sizing policy, an agency first needs to clearly articulate why the agency is implementing right-sizing. It is helpful to cite specific examples of problems the right-sizing policy is intended to solve and the expected benefits of solving such problems. To differentiate right-sizing from other policies, the goals should generally fall into one or more of the following categories: â¢ Reduce/Manage Life-Cycle Costs. When this is a stated goal, it is helpful to include in the policy some statistics on (a) the role that life-cycle costs play in the agencyâs overall fiscal constraints, as well as (b) how trends in life-cycle costs affect the agencyâs ability to perform its larger mission. Right-sizing may entail not only reducing life-cycle costs relative to their C H A P T E R 2 Policy Guidance
Policy Guidance 7 current (or historic) levels but also reducing anticipated future life-cycle costs when system expansion alternatives are envisioned or regulating costs relative to the market served. â¢ Achieve Best and Highest Uses of Assets and Revenues. When this is a stated goal, it is helpful to include in the policy some examples of assets or programs that are suspected to be underutilized or unutilized, as well as input the agency has received pertaining to better and higher uses for them. The policy should briefly explain how and why the agency believes better and higher uses are available, and how right-sizing is envisioned to make the assets more valuable or to remove impediments to economic progress. â¢ Align Funding and Decision Making with Users and Beneficiaries of the Asset. When this is a stated goal, it is helpful to be specific about which assets or programs have such a mis- alignment, citing (a) the sources of revenues supporting the assets/programs, (b) the ben- efits believed to be accruing from the assets/programs, and (c) the locus of decision making authority for their use. It is also helpful to identify parties affected by the misalignment. â¢ Arrive at Cost-Effective Understanding of Needs and Solutions. In this case, the objective is to ensure that investment needs are not understood as relating to one rigid forecast or performance standard but rather allows for flexible solutions for a range of potential needs. It is helpful in this case for the policy to highlight examples of standards or forecasting pro- cesses that the agency wishes to consider more closely with respect to changing technology, economic trends, and principles of cost-effectiveness. Right-sizing with this goal in mind also means engaging with partners to recognize the sources of value for a particular infrastructure investment and to whom value from an investment accrues, and to make investment and funding decisions accordingly. A right-sizing policy need not have each of these types of goals. However, if high-level right- sizing policy goals cannot be tied back to at least one of the three categories, then the agency should consider whether the policy really is within the purview of right-sizing or whether the policy might be better characterized in some other way. Scope of Right-Sizing Activity A right-sizing policy should clearly state which asset classes, networks, services, or programs are subject to the right-sizing policy. A right-sizing policy should also state which business pro- cesses are involved. Asset classes may include facility types (such as low-volume roads or urban freeways) and may also be specified by geography (such as roadways serving the Acme Seaport in New Jersey). Table 1 presents agency processes covered in this guidebook that an agency may choose to include in its right-sizing policy. Transportation Asset Management Plan 17 Ongoing Asset Management Implementation for Pavement and Bridges 14 Long-Range Transportation Plan 18 Statewide Transportation Improvement Program 18 Transportation Systems Management and Operations 49 Initiation/Participation in Long-Term Right-sizing Coalitions 41, 51 Near-Term Right-sizing Proposals (initiated internally or externally) 48 Potential Processes to Include in a Right-Sizing Policy Pages in Guidebook Right-sizing Policy Board or Task Force 54 Right-sizing Capacity Building Initiative 60 Table 1. Right-sizing processes and relevant sections: guidebook pages.
8 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming Agencies may wish to begin by identifying only a few relatively easy programs, asset classes, or business processes to include in the right-sizing policy and then gradually expanding into other processes as awareness and benefits of the right-sizing process become more familiar to the agency. As a rule, it is better to err on the side of keeping the program narrowly defined and focused on the goals previously described rather than risk appearing to be overly broad. The risks of overly broad right-sizing efforts are described in Section 2.4. Initiation of Right-Sizing Activity Section 2.3 describes the different ways that right-sizing activity can be initiated in a transpor- tation agency. It is essential that the right-sizing policy is clear about when, how, by whom, and under what circumstances each right-sizing activity is to be initiated and completed. Right-Sizing Agents and Champions A right-sizing policy should indicate who within the agency is responsible for administering, interpreting, and evaluating right-sizing practices and outcomes. It is essential that key managers with authority and responsibility for affected programs and business processes understand the right-sizing objectives and techniques to be engaged. Further guidance regarding recommended agents and champions is given in Section 2.4. Internal Resources for Right-Sizing Establishment of a right-sizing policy should involve key managerial and technical staff in deciding which business processes and techniques to include based on realistic expectations of internal resources and the agencyâs right-sizing goals. Potential right-sizing activities outlined in this guidanceâincluding sensitivity testing, additional screening, and performance-based practical design reviews in the STIP process; engaging staff in capacity building; and administering an application and review process for right-sizing initiativesâall require staff resources in addition to the scope of current agency activity. While some of these activities can be incorporated into existing business processes, the activities are not without additional effort, and the agency should still carefully budget resources to ensure success. Before including a particular right-sizing activity or technique in the policy, it is important to get estimates from technical staff and managers of additional person-hours associated with implementation. The level of effort should be evaluated in rela- tion to the right-sizing objectives to ensure the agency finds the initiative worthwhile and is consonant about committing the needed resources. Because right-sizing entails adjusting to a new way of making investment decisions, it is important not to impose right-sizing requirements or expectations on staff when resources are not available. As a rule, if an agency does not have the resources to consistently implement any given right-sizing technique or practice, it is better not to include the technique or practice in the policy. Internal support and understanding of a right-sizing policy may be undermined by right-sizing efforts that never come to fruition or that only confuse and frustrate the staff, part- ners, and decision makers involved. 2.2 Right-Sizing and the Infrastructure Life Cycle Right-sizing entails systematic consideration and reconsideration of alignment between conditions and objectives at every stage in the infrastructure life cycle. In this sense, right- sizing starts with asking the right policy and planning questions at the right time. The checklist shown in Table 2 presents a series of questions that can guide practitioners to consider how a right-sizing paradigm may come into play through different stages of the infrastructure life cycle.
Policy Guidance 9 What has changed about the purpose and need for this asset/service since its construction? Trip character: Describe any significant changes in trip composition. Consider modal composition, trip length, trip purpose, and trip geography (e.g., primarily serving Interstate, state, regional, or local traffic). For example, has road corridor B changed from serving primarily long-distance commute/freight trips to serving primarily short local trips? Network redundancy: Has the asset/service been in anyway superseded by the introduction of an alternative? Volume: How do current and forecast volumes compare with those for which the asset/service was originally designed? To what extent is the sizing based on peak hour traffic only? For a discussion of the potential wastefulness of matching design to peak hour traffic, see https://www.strongtowns.org/journal/2018/8/13/a-losing- proposition. Development context: Has the development context served by the asset/facility changed meaningfully (consider shifts in density/typology: rural versus suburban versus urban)? Recurring challenges: Does this asset/service have any notable recurring challenges? Consider higher than average crash rates or severity, frequent requests for encroachment permits and/or frequent denials of such requests, frequent complaints from the public. Are there issues related to efficient delivery or return on investment that may point to a different appropriate size/extent/composition/ownership? Changes in best practices: Have there been significant improvements in design/planning best practices that would cause this asset/service to have been delivered differently now if it were designed today? Pay particular attention to issues such as more efficient use of asset footprints and innovative intersection designs. Balance of costs and returns: How do the ongoing costs to maintain this asset/service compare with (a) similar assets/services and (b) the scope of the market served? Efficient ownership and responsibility: Have other partners (local governments or the private sector) expressed interest in changing current ownership or maintenance/cost responsibility for the asset/service? Is there evidence that such requests would lead to efficiencies in delivery? New Construction How do you expect the market served by this asset to evolve over its expected life? Consider trip character, volume, and development context. How sensitive is the need for this project to the following? Forecast volumes Anticipated development â¢ â¢ â¢ Technology assumptions (transportation network companies and connected and autonomous vehicles) Key Right-sizing QuestionsLife Cycle Stage Project Development Major Reconstruction/Replacement What are the intended uses of the asset? What restrictions or regulations are there, or should there be, on how it is used? Where does the funding for preservation, operation, and maintenance come from? Are there other entities from which consent, funding, or permission is needed to use the asset as intended? Are there policies needed to govern changes in the use or governance of the asset? Policy Development Table 2. Right-sizing along the infrastructure life cycle. (continued on next page)
10 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming While Table 2 assists practitioners in framing right-sizing issues, in many ways it also serves as a guide to the types of questions agencies must equip themselves to answer to arrive at right- sizing solutions. At present, transportation agencies are not necessarily prepared to answer those questions for a number of reasons: â¢ They may not have a framework for incorporating them into agency business processes. â¢ They may require additional guidance on selecting the appropriate tools and methods required to answer the questions. â¢ The answers to specific questions may rest outside individual agency walls, with planning partners or with a variety of public and policy stakeholders. This guidebook (1) provides the needed framework; (2) suggests ways to use data, tools, and business processes readily available in transportation agencies to answer key questions and address right-sizing opportunities; and (3) engages with partner agencies and the private sec- tor to realize the potential benefits of right-sizing a transportation facility, program, or sys- tem. Subsequent sections address methods, processes, and success factors for implementing Key Right-sizing QuestionsLife Cycle Stage Project Specific Since the initial scoping/programming of this project, have there been significant changes in the purpose and need? Does the proposed project sufficiently account for alternative solutions such as the incorporation of other modes or technological/operational solutions that limit the cost and footprint of a project? Are there any key local government, community, or business partners that are missing from the process that determined purpose and need? Are there needs or concerns identified by other divisions within your agency or other partners that might affect the appropriate scope for this project? Have the long-term life-cycle costs of this project been determined alongside its up- front design and construction costs? Are there planning partners willing or interested in contributing financially to this project in order to achieve additional value? Systemwide Is there enough funding to maintain the system to existing standards? If not, do you expect this trend to continue? What would be the implications systemwide of relaxing standards on certain classes of overall benefit to society? Have any major employment centers closed, contracted, developed, or expanded since the last long-range plan? Are there (a) local and minor collector roads on the state highway network or (b) freeways or other principal arterials currently under local government control that represent potential ownership misalignment? Design Are there ways to achieve the majority of the performance objectives of the project at a reduced cost? (see Section 4.10) How might the projectâs costs and benefits change if you accepted a lower performance standard or target? Is this project a candidate for innovative intersection treatments? Is this project being designed to serve the appropriate modal mix? Construction Is the DOT the most efficient agency to be undertaking the construction of this facility? Are there opportunities to partner with other entities to combine the construction of this facility with other relevant value-added private or municipal building or development projects? Operations and Maintenance Are there system outliers in terms of maintenance costs, normalized by a measure of market served? Do these outliers serve some other critical need that explains this? Are there pieces of the system that routinely receive complaints from the public? Planning and Environmental Clearance assets? Beyond cost savings to your agency, what would this mean in terms of Table 2. (Continued).
Policy Guidance 11 right-sizing at each of these junctures. It should also be noted that when applying the checklist in Table 2, opportunities for jurisdictional transfer may be identified, though jurisdictional trans- fer is not by definition part of the infrastructure life cycle (see the supplemental white paper on jurisdictional transfer in the contractorâs final report, NCHRP Web-Only Document 263: White Papers for Right-Sizing Transportation Investments). 2.3 Initiating Right-Sizing Initiation is necessarily the first step to implementing a right-sizing strategy for an existing (or proposed new) infrastructure component. It is critically important for an agency to have a clearly defined and well-understood initiation process such that the agency can understand when and how the other elements of right-sizing strategy apply and how to use right-sizing methods and tools appropriately. Without a formal process of initiation, right-sizing is likely to be relegated to an incidental possible outcome of decision making but is unlikely to be consistent enough to achieve the benefits of a right-sizing investment paradigm. What Initiation Needs to Accomplish A principal barrier to right-sizing efforts that has been cited by transportation agencies at all levels is the absence of a right-sizing initiation process. Most agencies have asset manage- ment systems to flag facilities that are ready for preservation treatments. Similarly, there are area transportation partnerships and performance evaluation methods that can be used to identify deficiencies in condition, capacity, safety, and environmental outcomes for undersized facilities. However, there is not a generally accepted trigger for consideration of a right-sizing decision (as defined previously in Figure 1) on an ad hoc or ongoing basis. An initiation process is essential because the available methods and tools for realizing right-sizing opportunities will never be applied if the issue is never raised. Significant changes to infrastructure are often initiated in a few pos- sible ways. The ways include (1) when in the process of asset manage- ment, a practical design audit or review reveals a streamlined option or opportunity to reduce life-cycle cost; (2) when funding constraints lead to program level reconsiderations of funding levels or conditions and performance standards; (3) if a local community requests a change to better facilitate local uses of the infrastructure and surrounding land; or (4) if elected political officials place a facility on an agencyâs agenda. While these situations can lead to right-sizing-type decisions, the current treatment of such opportunities is often piecemeal and does not fully address the alignment or efficiency objectives of right-sizing. Moreover, there may be additional right-sizing opportunities that go unrealized because there is no place within agency business processes for the issues to be raised internally or externally. In the first case (streamlining a project raised in asset management), the simple application of value engineering or least-cost planning prin- ciples may be used to streamline a design (or even an entire program). However, that does not ensure alignment between users, owners, funders, and decision makers in a facility. A typical value-engineering audit or performance-based design review may identify the most efficient way to replace an existing asset with something offering lower life-cycle cost (assuming the same functional requirements as the original design). But the audit or design review may not consider The Right-Sizing Initiation Process Must Ã¾ Provide a clear avenue for entities within or outside the agency to raise a potential right-sizing opportunity. Ã¾ Not be limited to the creation of new projects or to the preservation of existing infrastructure. Ã¾ Have clear criteria for when an asset, facility, or system warrants a right- sizing process. Ã¾ Have clear roles, communication pro- tocols, and timetables for initiating right-sizing.
12 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming all the sources of value in the infrastructure from the standpoint of its users, funders, owners, and decision makers. The value-engineering audit or performance-based design review may miss, for example: (1) the value of a corridor segment as part of a communityâs main street amenity, (2) the poten- tial value that an interchange or intersection may have for the future development of surround- ing land, and/or (3) the role the facility may have in urban or regional growth management strategies. Such considerations can be made part of the review process, but only when the process includes right-sizing assessments, evaluations, checklists, and implementation steps of the type included in this guidebook. Similarly, when a city, county, or other entity requests a review of an existing asset or pro- gram there is rarely a formal process (outside of defining functional classification or entering into formal jurisdictional transfer policies) for such outside entities to initiate a review of the alignment of interests in an existing infrastructure asset or program. It is even less common for efficient and equitable sources of funding to be part of the project development process. Even where such processes exist, there are no currently established methods for reconciling functional requirements for the asset or program among the user, funder, owner, and deci- sion maker perspectives. There are also no established methods for assessing, evaluating, or implementing changes to enhance such alignment. It is not uncommon for a city, county, or developer to ask a state DOT to review an asset or program only to have the DOT come back with a finding that the asset or program is efficiently performing its intended function (as defined by the DOT) and will not be changed. That type of outcome can exacerbate the frustration of the parties involved. Such reviews may also neglect the potential for cost-sharing arrangements across affected parties. A right-sizing initiation process, therefore, is intended to provide a clear mechanism for con- sistently raising those issues. This guidebook proposes a two-pronged initiation strategy pro- viding for: (1) DOT-initiated right-sizing and (2) external proponent initiated right-sizing. The elements of the initiation strategy are further discussed. Regardless of the entry point into right-sizing, an effective policy will guide the realization of right-sizing opportunities through different choices and possibilities as shown in Figure 2. A policy always begins with a process for initiating the assessment of a right-sizing opportunity. The opportunity can be evaluated to determine if there is indeed a misalignment between the infrastructure provided or planned and the value generated by that infrastructure. The policy then guides the agency through forming appropriate partnerships, establishing objectives, eval- uating and implementing options, and monitoring progress. DOT-Initiated Right-Sizing While any agency can initiate a right-sizing initiative, a state DOT typically will play a unique role because of both its ownership of significant right-of-way and assets involved in many right- sizing processes and the fact that the state is often the common jurisdiction shared by other right-sizing partners. For this reason, a critical component of right-sizing entails the state DOT having an explicit process for recognizing right-sizing opportunities. A DOT can initiate right-sizing of its program as a matter of policy through built-in right- sizing processes and can also rightsize individual projects based on initiatives from staff who may become aware of a right-sizing opportunity through the day-to-day operations of the department. Furthermore, a DOT may turn to right-sizing as a responsible way to respond to funding shortfalls or political directives to reduce outlays. In such cases, right-sizing can be a superior option to disinvestment or simply neglecting unfunded facilities. Some examples of
Policy Guidance 13 policies and procedures a DOT can implement to make right-sizing an automatic part of DOT decision making follow. Built-In Right-Sizing: Existing Agency Business Practices A âbuilt-inâ right-sizing policy can be understood as actions built into existing DOT busi- ness processes and practices as a recurring and expected way of doing business. Key junctures in which such policies can be effective are the following: â¢ When the asset management system identifies facilities as nearing the end of their expected lives and recommends preservation or replacement based on asset age and condition (which may occur in the TAMP and also be part of the recurring asset management cycle). â¢ When the department prioritizes projects within the DOTâs STIP as may be informed by targets and programmatic investment levels formed within the LRTP. While each state will differ in its implementation, these key junctures are common to all states, and the examples that follow can be implemented within these processes. In addition, designation of the functional classification of a roadway is discussed as an important mechanism through which right-sizing can be implemented, because functional classification is associated with the purpose and need (function) of the transportation asset. Right-Sizing Through Functional Classification. Whenever a state functionally classi- fies a roadway (or reviews a functional classification), there is an opportunity to enact some degree of right-sizing. This is because different functional classifications carry different design and performance standards that lead the agency to treat facilities differently. However, it may not always be clear to a DOT when a review of functional classification is in order. Even after a review occurs, it still may not be clear what the new classification should be or what complementary improvements, changes, or agreements may be appropriate to support the new function. Agencies that have built-in cycles (e.g., every 10 years) of reevaluating func- tional classifications may not currently apply a right-sizing lens to this process. Therefore, while functional classification is a right-sizing opportunity built in to many DOT policies, Figure 2. From initiation through the right-sizing process.
14 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming in practice, review of functional classification may be understood as a policy instrument for implementing right-sizing efforts that are otherwise initiated and evaluated through tactics described as follows and in the guidebook. Right-Sizing in the Asset Management Process. In the asset management process, when an agency estimates the investment requirements for preserving its asset conditions, there are key tests and steps that can be taken to enable right-sizing of the preservation program. For example, by considering alternative economic conditions and traffic growth trends, the state can systematically evaluate the size of its preservation outlays under alternative future scenarios. By applying engineering needs analyses in pavement and in bridge asset management models for two or more sets of vehicle-miles-traveled (VMT) assumptions, as informed by historic trends and economic forecasts available from sources like the Bureau of Economic Analysis and state agencies that often develop official forecasts, an agency can readily understand how sensitive the estimated preservation need is to variability in economic growth and associated demand. An agency may wish to observe both historic trends in traffic levels (by functional system) and forecasts of economic growth relative to historical growth to ascertain âconservative,â âlikely,â and âaggressiveâ VMT growth assumptions for each class of roadway, based on alternative economic trajectories. If a state has a travel demand model, the state may even wish to model explicit scenarios showing different levels of underlying economic growth to arrive at these different VMT growth assumptions as inputs to the asset management system. If economic analysis models are available, the findings from asset management systems regarding likely system conditions from different investment levels under different economic futures can be further evaluated in terms of impacts on employment, wages, and gross domestic product. Such sensitivity tests can then be used to ascertain: 1. How much of the agencyâs preservation outlay is dependent on variability in the economy (and associated traffic assumption). 2. Which classes of facilities (if any) may warrant more conservative or modest preservation outlays due to historic or anticipated trends in volume. 3. Strategic considerations regarding the implications of relaxing or enhancing condition stan- dards [international roughness index (IRI) or equivalent] and any anticipated outlays for facility classes where volume growth is likely to be significantly above or below trend. Figure 3 illustrates how traffic forecasting models, asset management models, and economic impact models can be applied together to provide an agency with a menu of potential invest- ment requirements and implications informed by an understanding of likely economic growth. While the discussion that follows targets pavement and bridge assets, the largest category of assets owned by DOTs nationwide, the principles of sensitivity testing can be extended to other asset classes, depending on individual agency responsibilities. Table 3 indicates key assumptions that an agency may wish to make for applying right-sizing in the asset management process. Table 4 discusses how a DOT can apply travel demand models, pavement and bridge condition models, and economic impact models to make right-sizing part of programmatic pavement and bridge investment scenarios and budgeting. Integration of existing data and models as previously described has the potential to yield more dimensions of findings that the agency can readily use in any decision making process. In effect, there are too many possible combinations and permutations of funding assump- tions, economic assumptions, network-build assumptions, improvement cost assumptions, and other factors to summarize in a way readily supportive of an investment decision. Con- sequently, it is recommended that agencies summarize the results of the preceding process by selecting two dimensions (such as investment level versus economic growth expectation),
Policy Guidance 15 Figure 3. Applying right-sizing scenarios in the asset management process (ROI = return on investment, GDP = gross domestic product). Consider high, medium, or low levels of underlying economic growth.Those estimates can be pivoted off Bureau of Economic Analysis forecasts, may come from a state office that forecasts economic conditions, and can be purchased from private vendors. Consider different transportation networkâbuild scenarios. If the state has a travel demand model, build scenarios may account for reassignment of traffic to different functional systems due to already programmed or committed improvements. If there is not a travel demand model, the state should begin by looking at a table showing existing VMT by functional system and considering the share of VMT that may be affected by major improvements over time. The state should begin with its current minimum tolerable IRI or threshold for âgoodâ pavement and its standard for bridge closures or postings. For sensitivity testing purposes, the state may wish to consider levels a certain percentage above or below this level to arrive at upper and lower bounds. The state may wish to test different assumptions regarding cost escalation. Again, the state may select high, medium, and low unit cost (cost per lane mile or per bridge) for different facility classifications based on historic cost records or input from the construction industry. The state may wish to test different funding levels, which depend on available funding sources and agency discretion over how much of its revenue it invests into preservation programs. Policy Assumptions Economic Growth Transportation Network Target Pavement/ Bridge Conditions Unit Costs Available Preservation Funding Table 3. Key assumptions to guide right-sizing in asset management.
16 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming If a travel demand model is available, it is possible to factor different levels of employment growth directly into the modelâs trip generation process and arrive at different VMT assumptions for each economic scenario. If a travel demand model is available, it is possible to code potential posting or closure of bridges at different funding levels directly into the network to arrive at VMT changes for each functional system. If no travel demand model is available, a state may consider programmed improvements and estimate likely VMT growth and shifts among functional systems. This would be based on (1) historic VMT growth relative to historic economic growth; (2) potential shifts in VMT among functional systems based on increases in capacityâ pivoting from existing VMT on the improved facilities; and (3) use of MPO travel models for urban areas combined with approaches (1) and (2) for non-MPO areas. Most of the asset management systems can test different unit cost assumptions and funding levels to ascertain resulting system conditions and agency costs. Most can also be run to demonstrate the funding level needed to arrive at a target system condition. Some can also accommodate scenarios with different traffic growth assumptions. If the available asset management system does not allow for multiple scenarios of traffic growth assumptions, then it is possible to run the model using alternative versions of the input data where the future VMT assumption is adjusted before input to the model and then compare results of successive applications of the models. One challenge for asset management systems is that many only provide short-term forecasts and not long-term forecasts across funding periods. In these cases, successive runs of asset management systems may be needed to consider long-term implications of different strategies, using the different traffic growth rates and ending expected conditions of one analysis as the starting point for a successive analysis. Because many asset management systems frame benefits primarily in terms of agency savings and performance outcomes, it may be helpful to utilize additional transportation economic impact models to translate findings into wider economic and societal implications. If an asset management model provides findings regarding comparative user costs, then the incremental user costs of each scenario (relative to a âbase caseâ or âbusiness as usualâ scenario) can be used directly as inputs into an economic impact model (such as TREDIS or TranSightâRemi Model) to arrive at the relative implications for employment, GDP, wages and other outcomes. If the asset management model only provides the IRI or other measures of pavement condition resulting from each scenario, it is necessary to apply different per-mile VMT and vehicle hours traveled costs at each pavement condition to arrive at comparative user costs as the basis for estimating wider societal outcomes. NCHRP Research Report 866: Return on Investment in Transportation Asset Management Systems and Practices (Spy Pond Partners, LLC., HDR, Inc., and Cohen 2018) (and its associated spreadsheet) is a primary resource for this type of analysis. Other valuable sources include NCHRP Report 720: Estimating the Effects of Pavement Condition on Vehicle Operating Costs (Chatti and Zaabar 2012) (and its associated spreadsheet tool) and NCHRP Project 08(36), Task 118: Performance Measures for Infrastructure Preservation (see http://onlinepubs.trb.org/onlinepubs/nchrp/docs/NCHRP08-36(118)_FR.pdf). These references can be used with or without formalized economic models. Supporting Models Travel Demand Model or Traffic Data Asset Management System Economic Impact Models and Related Methods Table 4. Use of supporting data and models to guide right-sizing in asset management. with simple scenarios (such as aggressive versus modest). Table 5 is an example of how such a matrix might be framed for a typical DOT. Similar tables may be presented from the preceding approach to compare other variables, such as the likely user costs of transportation under each economic scenario and the ratio of preservation investment to user costs saved by that investment for each functional system under each economic assumption. Furthermore, agencies may explore the potential economic cost imposed on users by investing for modest growth and facing higher-than-expected growth levels relative to the agency cost of investing for aggressive growth and facing lower-than-expected growth levels.
Policy Guidance 17 Selection of which performance indicators to assess and how to present such scenarios for use in the regular resource allocation aspects of the asset management process (and in trigger- ing preservation investments) is central to effectively applying right-sizing within the context of asset management. It is recommended that agencies establish a fixed set of metrics to use (and comparisons to make) and use them consistently from year to year. An agency may wish to consult with statewide economic forecasting agencies, as well as consider which areas have been the most volatile in the past. For this reason, the MAP-21 required Transportation Asset Management Plan provides the ideal context for establishing the dimensions and measures for a recurring right-sizing system assessment. Right-Sizing in the TAMP Process. While a state can develop a set of sensitivity tests and scenarios to include in its pavement and bridge asset management systems at any time, the TAMP process provides the context, time, and resources for a state to establish the thresholds, methods, and techniques for the state to consider variability in needs and implications for performance standards over time. A DOT can introduce right-sizing scenarios into its asset management process by including the following elements in the scope of the DOTâs TAMP process: 1. Development and testing of modest, moderate, and aggressive assumptions for economic growth, VMT growth, unit costs, and investment levels for each functional system or asset class to arrive at upper and lower bounds of needs estimates in each subsequent cycle of pres- ervation investment. 2. Testing of these comparative assumptions against pavement and bridge target performance thresholds, using widely accepted benefitâcost methods (including not only agency costs but wider user costs). 3. Arriving at an ongoing procedure for selecting growth assumptions and efficient asset con- dition targets in each cycle. Growth assumptions may be selected based on which trajectory (modest, moderate, or aggressive) seems most consistent with year-over-year performance in the market served by the asset, with corresponding condition targets and investment levels selected accordingly. Those elements within the scope of the TAMP process equip the agency (coming out of the TAMP process) to have a framework for considering economic changes, trends in traffic and demand, and changes in user cost in each asset management cycle between TAMPs when select- ing annual or period funding levels, triggers for preservation projects, and trade-offs between preservation and other programs. When making decisions about relaxing standards, this application of an asset management system can be complemented by use of both the Asset Deficiency Mapping Method (described Rural Freeway Cells include $ of anticipated outlay needed to preserve target conditions. Rural Principal Arterial Rural Minor and Below Urban Freeway Urban Principal Arterial Urban Collector and Below Aggressive Economic Growth Required Preservation Investment Level Modest Economic Growth Moderate Economic Growth Table 5. Example scenario summary matrix.
18 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming in Section 4.7) and the Roadway Utilization/Cost Screening (see Section 4.2). When right- sizing assessments suggest significant reductions in funding or preservation standards for rural areas, it is advisable to further consult the section on scale and complexity: rural right-sizing for caveats and special considerations. Right-Sizing in the STIP Process. In the STIP process, in which individual projects are invested for each program, it is possible for a DOT to implement a right-sizing procedure of auditing proposed projects for inclusion in the STIP in several ways. A state can build right- sizing into its STIP development by 1. Sensitivity testing traffic-related scoring criteria to allow for modest, moderate, or aggressive growth rates (as demonstrated for the asset management process). In these cases, the right- sizing approach entails comparing the scores and ranks that projects would get under each traffic assumption to flag potential right-sizing candidates (see the section on accounting for uncertainty for further recommendations). 2. Applying the Performance Based Practical Design Checklist (see Section 4.10) to all candidate projects before they are admitted into the program. 3. Applying the assessment tools from the right-sizing toolkit (described in Chapter 4) to each proposed STIP project before prioritization to ensure that the scope of the project is appropriate to a holistic understanding of needs given the changing economic context. Some specific assessments from the right-sizing toolkit that can be applied prior to the prioritization process include: â Funding Alignment Review: Using the Funding and Development Awareness Method (described in Section 4.5), an agency can explore potential local, private, or non-federal project beneficiaries and sponsors for projects. When the review finds a potential joint state/local or publicâprivate partnership opportunity, planners may reach out to private and local entities to consider if and how the scope of the project could potentially be shaped to make the case for alternative funding arrangements based on the economic development needs and opportunities found in the assessment. Taking this step can both affect the scope and public investment in the project as it enters the program and may affect scoring if the agency is assessing prioritization points based on matching funding sources. â Congestion Threshold Testing: Using the Congestion Threshold Testing method (described in Section 4.6) can inform the prioritization of an STIP by contextualizing projects scored based on congestion or mobility criteria. Testing the performance (and relative deficiency) of a proposed project location based not only on peak congestion but also on somewhat less-than-peak conditions can help the agency to prioritize those bottle- necks that impose the greatest duration of congestion and that may be the most sensitive to capacity enhancement. â Holistic Project Scoping: Reviewing the proposed list of projects in terms of all available information regarding pavement condition, bridge condition, freight use, congestion, and safety performance surrounding the project can yield right-sizing opportunities. The Proj- ect Scoping Method described in Section 4.8 can be applied to use geographic information systems and data typically available in a DOT to systematically check and help ensure that project scopes reflect the right-size and extent for current or forecast needs. Right-Sizing in the LRTP Process. Because the statewide LRTP process generally focuses less at the project level than at the level of programs and strategic investments, right-sizing in the LRTP will often look much like a combination of the previous recommendations for right-sizing a TAMP and an STIP. Because preservation outlays account for a high percentage of investments considered in most state LRTPs, programmatically right-sizing highway and bridge preservation programs as described for the TAMP process is also recommended for LRTPs. Arriving at modest
Policy Guidance 19 versus aggressive anticipated traffic levels in the LRTP context, however, can also inform per- formance indicators related to capacity expansion and modernization needs as well. Finally, the LRTP provides an opportunity to reevaluate the way in which facilities are functionally classified and associated design and performance standards. The following are key recommendations for using the LRTP process as the basis for right-sizing: 1. Consider different economic and traffic forecasts when quantifying investment needs for each program in the LRTP and for comparing programmatic investment packages. The benefitâcost ratio for each package will be different under each comparative economic growth assumption and, in some cases, the preferred investment levels may vary. 2. Consider using the Congestion Threshold Testing method (described in Section 4.6) to test and validate expansion investment needs for urban facility types if statewide travel models are available. 3. Include within the scope of the LRTP a task to identify right-sizing candidate corridors, facilities, or systems through application of the Trip Length Analysis to Assess Modal Balance method described in Section 4.1 and the Roadway Utilization/Cost Screening method described in Section 4.2. If corridors or regions of the state have an overabundance of short-trip volume on major state facilities, or have exceptionally high preservation costs per trip carried, include recommendations for further study of right-sizing within the body of the LRTP. 4. Consider including a review of facility functional classifications as a normal part of the scope of an LRTP process (if not already performed on an independent cyclical basis). If an agency uses additional asset classifications beyond functional classification to correlate purpose and need with performance and design standards, consider including these desig- nations as well in the review. DOT District Office, Modal Office, or Central Office Initiation In addition to the previous âbuilt-inâ or recurring processes, it is possible that a DOT will have a policy to initiate right-sizing based on corridor studies, special modal plans, or situations when a district engineer or modal office manager notices trends in performance (or receives customer feedback on that matter). It is essential that a department have internally consistent and trans- parent criteria for initiating and validating a right-sizing process. Table 6 presents examples of the type of criteria and information that a department may use to assess and validate the case for a district or modal right-sizing initiative. The criteria in Table 6 are offered as examples only for an internally initiatedâright-sizing initiative. Because there is no âone-size-fits-allâ approach to right-sizing, each state, district, Repeated requests for exemptions to standards Requests for driveway access to a principal arterial have more than doubled in the last year. Documentation of requests and associated building permits/land use changes. Studies showing facility is underutilized or unutilized Transit agency completed a plan showing that only 5% of spaces at a park & ride lot are being used. Documentation of utilization level. Significant change in context since last improvement Major industrial park recently closed or relocated, and land is being converted to mixed use. Documentation of precipitating event and associated changes in local planning/zoning. Event raising legal or financial risk of status quo Reports of cyclists and pedestrians routinely using a highway culvert as a pedestrian tunnel. Case reports of instances of this happening. Supporting InformationCriterion Example Table 6. Examples of the type of criteria to assess and validate right-sizing initiatives.
20 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming or modal office may develop its own criteria based on the nature of its program. However, the preceding examples demonstrate how criteria can be structured to guide where and when an internally initiated, right-sizing review is warranted and how such initiation can be justified. General principles for establishing such criteria include â¢ Criteria be suitable for consistent and fair application across all facilities and programs in the agency, district, or office. â¢ Criteria require a clear rationale for how and why a change in ownership, size, extent, or composition may be needed at this time. â¢ Criteria specify the type of information the agency can use to document and explain why the agency is looking to rightsize this facility or program. Proponent-Initiated Right-Sizing Cities, developers, counties, and other entities outside a state DOT often have the best under- standing of development trends, opportunities, and other changes affecting the transportation asset portfolio. Given this knowledge, it can be beneficial for DOTs to provide avenues for outside parties to help initiate right-sizing projects. Consider the fact that state DOTs have processes for âproponentsâ or outside agencies (or even private or non-profit entities) to nominate projects to a STIP or to apply for a jurisdictional transfer. In a similar fashion, it is suggested that states have processes for outside entities to also make nominations for right- sizing initiatives. The state may wish to solicit and accept right-sizing applications/requests at consistent and well-publicized intervals, or the state may take such requests on a rolling basis. Right-sizing initiatives will have different criteria from STIP projects. One suggested approach is to take right-sizing requests 6 months from when taking STIP project requests such that (1) STIP and right-sizing initiation processes are not confused and (2) right-sizing initiatives suggested in 1 year can be assessed and may inform project selection in the next STIP cycle 6 months later. At whatever juncture the agency accepts right-sizing applications, the following practices are suggested for states to fully take advantage of proponent-initiated right-sizing. Educate Proponents About Right-Sizing To invite proponents from government or other organizations to initiate right-sizing efforts, the agency must first introduce potential partners to the concept of right-sizing and how right- sizing is different from proposing a modernization or expansion project or initiating a juris- dictional transfer. The presentation provided with this guidebook is offered as a resource for educating right-sizing partners in this way. A best practice would be for an agency to kick off its right-sizing policy implementation by holding a workshop (or series of workshops) for all interested constituent agencies and organizations to introduce the right-sizing concept, the application process, and a point of contact within the agency who is administering the right- sizing efforts. In subsequent years, an annual workshop or open meeting to discuss right-sizing opportunities and educate new constituents could be a valuable way to sustain awareness about the right-sizing opportunity and encourage proponents to initiate right-sizing efforts. Create a Standard Application Process A standard application process for a right-sizing initiative should be available for all propo- nents. While there are many ways to structure a right-sizing proponent application, the applica- tion should include the following key sections for proponents to describe. 1. Nature of the Opportunity: describe the location and limits of the potential facility to be rightsized (or the activities of the program proposed for right-sizing). What is the facility or program proposed to be rightsized?
Policy Guidance 21 2. Misalignment of Utilization and Demand: describe how the market demand for either the transportation asset or the land on which it is located may be mismatched to the current (or anticipated future) situation. This may include a facility or route that carries far less traffic than its design can support or a facility that occupies land or community space that could have a better and higher use. It might also include a misallocation of space between different modal uses within a single corridor. What indications are there that this facility or program is using space or other resources that could better be engaged for other purposes? 3. Potential Cost Savings: describe how the current state of the facility or program leads to more than the efficient amount of life-cycle infrastructure cost to a government agency or where and how the current situation is imposing undue costs on private entities using the infrastructure (including travel time, reliability, safety, or other quantifiable economic costs). Which agencies stand to benefit? What avoidable costs do the existing facility or program impose on the governments, businesses, or households? 4. Partners and Beneficiaries: describe who might experience the savings (or enhanced oppor- tunities) available if the facility or program could be rightsized and the nature of these ben- efits. If possible, suggest points of contact and resources (authority, information, financial, or in-kind contributions) that these beneficiaries might be able to contribute to a right-sizing effort. Who are the likely partners and what can they contribute? Provide Open, Consistent, and Transparent Review Objective Criteria and Transparent Process. It is important to review right-sizing propos- als by using consistent and transparent criteria and, where possible, to provide feedback to pro- ponents on why the agency chooses not to follow up on a particular application and how to enhance the application or concept in the future. Table 7 provides examples of potential guide- lines for reviewing right-sizing proposals. Open Consideration. It is recommended that all right-sizing proposals or applications be given at least cursory review against the agencyâs established criteria. Some right-sizing propos- als or applications may be dismissed on the basis that an issue has already been studied and the application has offered no new information since the prior study. It is important to note, however, that if a proponent proposed an earlier STIP project that did not meet selection cri- teria, it may still be reasonable to consider a right-sizing request of the same area, which might identify alternative ways to meet the changing or emerging needs that the unsuccessful project did not meet. It is also important not to dismiss a proponent-initiated right-sizing proposal solely because it relates to assets or policies that are partly outside the agencyâs jurisdiction. Nature of Opportunity Does the program or facility proposed for right-sizing affect the cost, condition, or performance of the agencyâs assets enough to warrant action? How does the utilization of this facility compare with other comparable facilities? Are the claims of âbetter and higherâ uses supported by concrete proposals of better ways to use the land or resources or with examples of where such uses have been achieved elsewhere? Are the sources and magnitude of cost savings given in the application quantified or quantifiable? Have there been studies (or is other objective information cited in the application) verifying how these costs accrue? Do the intended beneficiaries agree with the proponentâs assessment of the opportunity? If so, is there indication of their willingness to participate in a right-sizing effort? Misalignment of Utilization and Demand Potential Cost Savings Partners and Beneficiaries Criterion Key Evaluation Factors Table 7. Examples of review guidelines for right-sizing proposals.
22 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming The nature of right-sizing entails that different owning, using, and paying entities must often become engaged. Consequently, an agency should not assume that just because another agency has much of the authority or ownership or resources that a right-sizing partnership is not pos- sible. The question to analyze in evaluating right-sizing proposals is whether there is a plau- sible case that the needed partners (and the agency) could benefit from right-sizing enough to warrant simply exploring right-sizing objectives, conducting assessments, and considering options together. Steps of Due Diligence. In reviewing right-sizing applications or proposals from propo- nents, it is recommended that states 1. Check for recent studies both by the DOT and by other agencies and organizations in the area to determine if they have flagged the same facility or program as the application and had any suggested changes. This check could also be part of the application process. 2. Check the history of projects done in the area identified in the proposal and when the next preservation project is likely, based on asset management criteria. 3. Check performance metrics such as traffic levels or pedestrian counts (if available), delay, crashes, or other factors and determine how they compare with other similar facilities. Simi- larly, check life-cycle costs to see how the agency costs of owning this facility compare with other similar facilities. It is also worthwhile to ascertain how many requests for exemptions to design or access standards there have been over the years. What have been the outcomes of those requests? 4. Interview partners or stakeholders in other governmental units whether or not the units have been identified in the application to get perspectives on (a) if they have experienced the issue raised in the application; (b) if there have been changes in building, zoning, or economic activity affecting the proposed right-sizing candidate; and (c) what it would take to get the given stakeholder or entity engaged in a right-sizing process. The other govern- mental units could be city, county, other state agencies, or private entities. From Initiation to Implementation Partners and Objectives. Once an agency reviews and accepts as actionable a right-sizing proposal, the subsequent steps in the right-sizing roadmap (shown in Figure 2) guide the right- sizing effort. The key actions following initiation entail: 1. Identifying and Engaging Partners: Before even establishing right-sizing objectives, it is advisable to identify and engage key partners based on the substance of the opportunity identified in the initiation process. Because partners play a key role in establishing objectives, the initial outreach should simply articulate how and why the facility or program was identi- fied for right-sizing and articulate that the collaboration seeks to: â Manage public and private sector costs. â Ensure best and highest use of assets. â Secure the best and most appropriate sources of funding. â Identify and achieve target performance for the facility or program in question in the most efficient way. Make clear from the outset that the intent of the collaboration is not simply to unilaterally develop or fund a new state project but rather to find a way to rightsize the infrastructure for the purposes of economic efficiency. 2. Establishing Right-Sizing Objectives, Interests, and Resources: Once key partners are com- mitted to collaborating in right-sizing a facility or program, each partnerâs starting objectives, interests, and resources in the facility must be identified. While the objectives, interests, and resources are likely to be different at the outset, the first step is to clearly list them and engage
Policy Guidance 23 in a dialogue about what changes are important, why they are important, what the payoffs of change are likely to be, and what these payoffs are worth to the collaborating parties. Documenting the objectives, interests, and resources in lists or tables can be a critical step to establishing: â Which objectives are achievable through right-sizing, â What tangible and quantifiable outcomes of the right-sizing effort can be expected, â Who the intended beneficiaries are in the near term and in the long term, and â What the outcomes are worth to the entities (in terms of trade-offs or costs). It is not necessary to have âhardâ dollar values in mind for intended benefits or to have specific right-sizing solutions in mind when establishing objectives, as it is more important at this stage to agree about what a rightsized outcome looks like in performance terms and why. Setting and articulating right-sizing objectives is a juncture in the process where it may be helpful to name the right-sizing objectives and their relative value to partners in the Stratified Return on Investment Calculator described in Section 4.4. 3. Carrying out the Process: Evaluation, Implementation, and Monitoring: Once partners are engaged and agree regarding key right-sizing objectives, interests, and resources and their relative value, it is possible to begin developing and evaluating potential infrastructure and policy options for achieving the objectives. In this respect, while the alternatives are very different in a right-sizing setting, the process follows conventional planning practice for corridor studies or small area plans, in which different alternatives are considered. Right-Sizing and Corridor Management Due to the collaborative nature of right-sizing, the methods on corridor manage- ment included in NCHRP Synthesis 337: Cooperative Agreements for Corridor Management (Williams 2004) and NCHRP Report 661: A Guidebook for Corridor- Based Statewide Transportation Planning (Carr, Dixon, and Meyer 2010) are recommended as highly relevant for carrying out the right-sizing process once objectives are established. The principal differences between right-sizing and corridor management are that while corridor management focuses primarily on transportation performance alone, right-sizing explicitly seeks to reduce costs, find better and higher uses of assets, and identify appropriate sources of fund- ing. Furthermore, while corridor management focuses on a corridor, right-sizing may focus on any facility or system for which a right-sizing need has been initi- ated and validated. The methods and tools in the right-sizing toolkit given in Chapter 4 are tailored to right-sizing. 2.4 Elements of a Right-Sizing Strategy While a structured right-sizing policy can enable an agency to consistently implement right- sizing over time, an agency must also be prepared for unique right-sizing challenges that may not be common to other business processes. Historically, when a transportation agency expanded its asset base to cover a deficiency, it engaged with property owners and other parties largely through right-of-way acquisition and eminent domain. Over time, the paradigm of context-sensitive solutions has highlighted the value of tailoring infrastructure design to the unique needs of a situation, encouraging solutions developed more through stakeholder engagement and less through unilateral action. The right- sizing paradigm goes even further by utilizing the context to inform not only the design but
24 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming also the intended long-term function, ownership, funding, and highest economic use of the infrastructure asset or service itself. Right-sizing addresses the need to identify and align forward-looking specifications, owner- ship, and funding for an asset that may have been built for a purpose and need characteristic of a bygone era. In this context, the power of eminent domain is of little use. There are often severe limits to what a transportation agency can do without engaging partners. Many transportation agencies lack the experience or institutional knowledge to engage in such transactions. Further- more, unlike with system expansion (or modernization), there is no legal power to compel partners into right-sizing efforts. Nor is there typically authority for a state agency to unilater- ally secure the changes in land use, complementary infrastructure, or other supportive activities needed to successfully accomplish the evolution of a transportation asset from a past to a future economic role. In many cases, right-sizing will therefore involve incentivizing partners in ways that system expansion or preservation historically have not, while sharing information, accounting for change, and navigating business environments that may be unfamiliar to many agencies. To assist agencies in managing such processes, the following sections address unique challenges related to (1) partnerships, (2) understanding scale and complexity, (3) the duration of right- sizing efforts, (4) accounting for uncertainty, and (5) capacity building for right-sizing. Partnerships Figure 4 illustrates three factors needed for effective right-sizing. As introduced earlier, if these prerequisites are not present in a single agency, right-sizing requires partnerships. Partner- ships enable agencies to (1) gather the intelligence necessary to identify right-sizing oppor- tunities and establishing stakeholder buy-in to right-sizing goals and (2) arrive at the needed alignment of authority and resources needed to implement and sustain right-sizing solutions. Right-sizing partnerships are the basis for the collaborative agreements depicted earlier in Figure 2. For purposes of this guidebook, collaborative agreements can be both formal and informal and can range from land or asset transfer between agencies to project cost sharing, memoranda of understanding, joint power agreements, and various types of coalitions. Figure 4. Right-sizing prerequisites.
Policy Guidance 25 Identifying Key Partners, Roles, and Incentives As noted in Section 2.3, a variety of organizations might initiate a right-sizing project or program. There is also a variety of triggers that might initiate development and evaluation of a right-sizing strategy. The key partners, roles, and incentives can vary depending on the project or program. However, one element common to right-sizing projects or programs is that they typically involve multiple constituencies and require partnerships that may span multiple public agencies and/or private organizations. Right-sizing partnerships can ultimately result in formal agreements, in informal agreements, or in both. However, identifying and communicating with potential right-sizing partners is essential at the initiation stage as soon as a potential right-sizing opportunity is found. When initiating a right-sizing effort, an agency should recognize that partners would bring both different sets of resources and different sets of needs and objectives to the undertaking. Right-sizing partnerships can be understood in terms of a two-step process: (1) identifying potential partners and (2) providing an incentive for partners to participate in collaboratively establishing right-sizing objectives as the basis for evaluating specific options and ultimate implementation of a right-sizing solution. Identifying Partners. The structure shown in Figure 4 provides an overview of which types of partners to engage, depending on the types of powers, resources, or insight the effort may require. Considering the nature of a right-sizing problem presented at initiation in relation to Figure 4 can yield an understanding of likely roles for different types of partners. In light of these needed roles and resources, it is advisable to develop a preliminary stakeholder list of key partners, roles, and incentives. Furthermore, to the extent possible, the initiating organization should also identify what constituencies each organization serves and what assets they may bring to bear to the right-sizing initiative. For example, a state initiating a right-sizing effort should not only consider the fact that cities have zoning authority, issue building permits, and can assess property taxes or impact fees but also the reality that cities serve local residents, businesses, and developers and rely on these constituencies for both their political authority and tax base. Understanding partners in terms of both the resources and underlying constituencies provides a basis for recognizing factors that may come into play when specifying a right-size solution or evaluating policy or project options. Additionally, different types of organizations may also have different knowledge of, as well as access to, additional partners and affected parties. For instance, state departments of transpor- tation may identify stakeholders through a district office that are unfamiliar to municipalities, while a municipality may identify a set of partners with which the state DOT is unfamiliar (such as neighborhood associations, local economic development agencies, or land-use organizations). Table 8 shows some examples of potential right-sizing partners. Engaging Over Incentives and Objectives. After completing the exercise of identifying potential partners, an initiating organization should next seek to open lines of communication. Prior to initiating the conversation, it is helpful for the initiating agency to be as clear as possible regarding: 1. Background on the rationale of the agencyâs right-sizing program and its objectives of managing life-cycle costs, aligning funding with authority and with user needs, and achieving best and highest use for assets. 2. The problem that the right-sizing effort intends to solve from both the initiating agencyâs point of view and the potential partnerâs point of view. 3. How the problem has been identified as a right-sizing candidate and practical examples of what the right-sizing might achieve.
26 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming Table 8. Examples of potential right-sizing partners by authority, intelligence, and resources. â¢ Control of roadway access â¢ Ownership of right-of-way â¢ Eminent domain â¢ Data on current and historic state asset characteristics, including â Conditions and improvement history â Traffic volume/ composition â Crashes â Improvement costs â Capacity â Environmental constraints â¢ Statewide travel demand and economic models â¢ Federal transportation funds â¢ State highway trust funds (where available) â¢ Extensive capital equipment for construction and maintenance â¢ Staff expertise in infrastructure design and delivery â¢ Building, zoning, and parking regulation â¢ Property tax, impact fees â¢ Police, fire, and other local services/ enforcement â¢ Influence over utilities, sewer/water, and other requirements for new development â¢ Authority to define business improvement districts, homeownersâ associations, and other special districts that may help rightsize facilities â¢ Ownership of local streets and control of ordinances regarding sidewalks, crosswalks, and standards for local facilities â¢ Land use and zoning maps â¢ Data on development trends and property value â¢ Detailed local area socioeconomic data â¢ Data on public health, crime, and law enforcement activity â¢ Understanding of developer building processes â¢ Knowledge of and relationships with local stakeholders, including the developer community â¢ Property tax revenues â¢ Potential revenue from other locally implemented revenue mechanisms (e.g., value capture) â¢ Local facilities (such as police stations, libraries, and town halls) as well as parks and open space â¢ Eligibility for community grant programs not available to DOTs Local government State department of transportation Organization Authority ResourcesIntelligence â¢ Operating authority over transit routes â¢ Operating control of stations and transfer facilities â¢ Knowledge of schedules, ridership trends, and â¢ Operating revenues to run transit services â¢ Vehicles and equipment â¢ In some cases, right-of- way surrounding stations and tracks first-hand knowledge of modal shifts â¢ First-hand knowledge of driving and travel conditions â¢ Freedom to buy and sell property at will, relocate activities and trip destinations based on business objectives. â¢ Authority to establish work rules, for example, work hours, telecommuting, and parking restrictions â¢ Wide property rights to use private land as they see fit (or to allow or deny shared or public uses for transportation supportive purposes) â¢ Understanding of market shifts that provide incentives for where and when economic activity will occur â¢ Understanding of the role transportation performance and amenities have in business location and business growth. Proprietary information about trips, destinations, and traveler segments. â¢ Models regarding consumer preferences in destinations, experiences, and market participation â¢ Fast access to business revenues and financial assets without long processes needed by public agencies â¢ Analytical resources (software, etc.) to predict and analyze markets Major employers, land owners, developers Transit authority
Policy Guidance 27 The agenda for the opening meeting should be as simple as possible. The objective is primarily just to articulate the problem and the rationale for how and why a right-sizing solution may be appropriate. The prospective partner should be invited to offer the following: 1. The partnerâs perspective on the problem, its importance, and how it is or is not experienced; 2. Objectives that the partner may have regarding right-sizing outcomes; and 3. Suggested resources the partner might bring to the process as well as resources needed from the initiating agency. In right-sizing situations, initial partnership discussions may raise unexpected opportunities and needs, as the partners will have different histories and perspectives regarding the asset or facility in question. These discussions are intended to invite participants to analyze circum- stances in a new context, seeking to âincrease the size of the pieâ for all interested participants. The Stratified Return on Investment Calculator (described in Section 4.4) and the Funding and Development Awareness Method (described in Section 4.5) can help inform these conversations as each party explores objectives, potential trade-offs, and rationale for engaging in right-sizing collaboration. The Stratified Return on Investment Calculator can also continue to be used throughout the evaluation of options after a partnership is in place. Once partners have agreed in concept to collaborate in a right-sizing effort, it is advisable to consider whether the right-sizing will take the form of a near-term âproject-styleâ right-sizing undertaking or if the parties may wish to engage in a longer-term coalition to achieve objectives not limited to a single project implementation. The subsequent section in this chapter on Dura- tion of Right-Sizing contains further guidance on how to approach this decision and collaborate in defining the right-sizing effort. As demonstrated in the following example from the City of Dallas, partnership conversations can lead to a new idea of what the best and highest use of land and infrastructure can be, while still supporting a stateâs goals for its transportation system. Identifying Right-sizing Opportunities by Sharing Data and Intelligence Integral to identifying right-sizing partners and defining their roles is determining how to use the information, authority, and funding that different partners may bring to the table. Appropriate integration and use of the complementary data and analytical capabilities of dif- ferent partners is essential for identifying right-sizing objectives, evaluating alternatives, and monitoring outcomes. Once partnerships are established, early discussions should focus on identifying the relevant data, and intelligence sources are required to make an informed right- sizing decision. Chapters 3 and 4 of this guidebook present specific examples from the toolkit of how to apply data and tools for multiple partners to assess right-sizing needs and evaluate alternatives. The partnershipâdevelopment process in right-sizing scenarios allows different agencies to explore both quantitative and qualitative data otherwise unavailable to them and facilitates conversations about that data that they might not normally have. The right-sizing partnershipâ development process also allows one agency to tap the analytical expertise of another. This expertise can span quantitative and qualitative information. For instance, staff at a municipality may not fully understand how the underlying congestion and safety data of a certain highway segment within city limits affect the performance of the entire transportation system. While someone from a state department of transportation may not understand how elements or deficiencies of that same highway segment can affect zoning, land values, and other characteristics of the neighborhoods adjoining that segment.
28 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming Example: Dallas CityMAP In 2015 and 2016, the City of Dallas, together with the Texas Department of Transportation (Texas DOT), under- took a strategic effort (called CityMAP) to rightsize state-owned transportation infrastructure throughout the city. The effort joined the Cityâs performance criteria of enhancing and safeguarding land values and ensur- ing the best and highest use of land with the stateâs criteria of supporting state and inter-regional travel and access. The result was a process that identified significant right-sizing, realignments, transfers, and reuse of land throughout the city creating millions of dollars of land value. When the ideas of âcompact cityâ and âsmart growthâ emerged in the 1990s, planners were challenged to reconcile patterns of higher density development with land-intensive highway design standards for high- volume facilities. In light of more comprehensive understanding of the issues from urban planners, engineers, neighbor hood leaders, economic developers, city leaders, and stakeholders in the business of city building, the art of city design has arrived at a context-sensitive approach to transportation and neighborhood design cognizant of the reality that roadway capacity and livability are not competing objectives. The Dallas CityMAP initiative represents an open and inclusive assessment of the challenges, opportunities, and potential solu- tions for the aging Interstate corridors and adjacent neighborhoods. The involvement of real estate brokers, developers, city and state officials, as well as businesses and households who make up transportation and land markets, was essential for the success of CityMAP. Residents and busi- nesses in the core of Dallas clearly articulated how the reinvention of the major Interstate corridors (including realignment and in some cases removal of existing infrastructure) could provide the chance to improve connec- tivity and quality of life. Consequently, CityMAP has generated an alternative economic geography for the city. The alternative economic geography fundamentally rightsizes and reuses many transportation assets to better and higher uses and replaces some existing assets with newer and more affordable solutions. The alternative economic geography also allows private or municipal entities to take over in places where they can achieve a better and higher use of land for the local and regional economy than had been the case for DOT right-of-way. The aging and, in some cases, obsolete Interstate corridors lacing throughout the urban core of Dallas provide both a challenge and an opportunity for Texas DOT, the City of Dallas, and other public and private stakeholders. These corridors need more than safety repairs, increased capacity, and updated designs. They should also respond to a downtown that no longer serves merely as a central business district. Summary: CityMAP is an example of how a comprehensive partnership including state, city, and private sector interests from the early outset of a right-sizing initiative can establish appropriate right-sizing objectives. CityMAP is also an example of how a comprehensive partnership can leverage intelligence and insight about options and the value of outcomes from both public and private perspectives and arrive at a cohesive âright- sizedâ vision for an urban transportation network. Decision Clinics. One approach to sharing data in right-sizing partnerships is the use of âdecision clinics.â A decision clinic is a collaborative workshop in which technical staff from each partner agency presents to the other the decision criteria, supporting data, and type of analysis they have conducted in relation to a facility or asset in which the two agencies have differed about the role of the transportation infrastructure and its appropriate size, extent, or composition. Engaging in this way enables partner agencies to bring both data and context to conversations that data analysis might not otherwise elicit on its own. One agency may not be aware of the historical background behind another agencyâs decision making about a certain asset and which qualitative circumstances may have influenced a specific decision or series of decisions. Examples could range from political decisions, to targeted community investment,
Policy Guidance 29 to inclusion in a strategic plan (i.e., statewide planning or city master plan). Ultimately, shared expertise allows right-sizing partners to help each other put all data in context to understand current or anticipated performance. With this understanding, partners can work to define right- sizing objectives that benefit all parties. Creating a shared data framework, with a holistic set of indicators, data sources, and methods for assessing the status of existing assets relative to a right-size vision is essential to arriving at the efficiency and economic vitality aims that right-sizing seeks to accomplish. Such frameworks can be vital for establishing right-sizing objectives and for sustaining and monitoring right- sizing progress over time in long-term and permanent right-sizing efforts (as described in the section on Duration of Right-Sizing). The example that follows from a Utah DOTâfunded study in St. George, Utah (analysis previously developed by the research team for the Utah DOT) provides an illustration of how underlying value in places, as provided by local assessor data, can be used in collaboration with network data from a DOT or MPO to yield intelligence about where right-sizing may be needed, and the form that right-sizing may take. Establishing Partnerships that Survive Political Shifts It can be difficult for agencies to commit to fundamental changes in infrastructure when elected political leadership may change (and with it criteria and right-sizing objectives). State DOTs are quick to raise concern that developing a program or plan predicated on how a city might use zoning authority or leverage municipal infrastructure may be like building on quick- sand, as one election could change the directives considerably. Cities can have similar concerns about partnering with state agencies. The Role of Non-Government Institutions. The process of right-sizing can, in some cases, take decades to see through to completion. To maintain consistency and momentum (as described later in the section on Duration of Right-Sizing: Long-Term Right-Sizing: Evolution from Corridor Management), it is advisable for agencies to partner with independent business, social, and civic organizations that provide a trusted and consistent voice regarding the efficient and productive use of resources. Because the intended outcome of any right-sizing is directly tied to the long-term sustain- ability of a community as well as to the transportation system itself, engaging and partnering with civic institutions with long-term vision early in the process is important. Organizations contemplating right-sizing initiatives should begin by identifying and cultivating relationships with well-established civic organizations that have long-term strategic interests in or a specific focus on: â¢ The ongoing viability of transportation infrastructure; â¢ Statewide, regional, and local economic vitality; or â¢ Statewide, regional, and local socio-economic equity issues. In addition to having a long-term vision for a communityâs future, well-established civic institutions typically have historical institutional knowledge of their community as well. While institutional knowledge is important to the exercise of sharing data and intelligence (described earlier), it is equally important when partnering with civic institutions to recognize their role in enabling the right-sizing vision to survive political shifts. The historical perspective of non- governmental institutions on the policies and priorities of prior political administrations can help to avoid pitfalls while an agency works to maintain and pursue right-sizing objectives. Examples of such entities have included groups such as business roundtable groups, Chambers of Commerce, transportation committees, âCommittees of 100,â and other groups
30 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming Pinpointing Objectives in the Rapidly Changing Economy of St. George, Utah Through the first two decades of the twenty-first century, St. George, Utah, has been one of the most rapidly developing cities in the United States (U.S. Census 2010). As the city has developed, new transportation infrastruc- ture has been planned and programmed to understand not only where the new demand will be but also how the rapidly shifting centers of development may change densities and trip making affecting existing infrastructure. When transportation planners confronted the need to expand an interchange to I-15 to serve the growing popu- lation and business of St. George, there were significant questions regarding what types of improvements to arterials and other ancillary facilities would be appropriate to ensure local access to the Interstate. Collaboration between state and municipal government supported an analysis of where St. Georgeâs changing economy was creating the greatest incentives for developers and property owners to rebuild or upgrade exist- ing facilities (thereby intensifying the pressures on the local roadway systems supporting the new interchange). Using parcel-based data from the local assessorâs office, parcels were classified based on their âripeness for (re)development,â based on the comparative value of the structures on the land and the value of the land itself. In areas where land values have risen such that the land is more valuable than the building currently occupying it, there is a strong market incentive to redevelop, potentially with a more intensive use than what currently exists. The following map shows in red locations where land-value relationships available from the municipal government point to a likelihood of growing demand. This parcel-based map of development âripenessâ is overlaid by a DOT map of the volume-to-capacity ratio of existing facilities (shades of red indicate levels of congestion). See Figure 5. The integrated layout makes it clear that a right-sized solution for roadways supporting the I-15 interchange entails increasing east-west connectivity in the highly volatile northern boundary of the study area, supporting efficient access to I-15 in the long term. While this mapping alone does not suggest a right-sizing solution, it demonstrates how the combination of a stateâs congestion analysis, showing the limited capacity of the existing arterial, together with the assessor data, showing increasing development pressure, clearly elucidates right- sizing objectives. This type of collaboration can open the door to consideration of tactics for right-sizing. The tactics include travel demand management, access management, innovative intersection design, TSMO, and a host of similar potential solutions identified not to simply build out the stateâs infrastructure to a âstress testedâ forecast but to target investment based on real business intelligence regarding where access is needed and why. Summary: This example demonstrates how sharing data and intelligence between a state DOT and locality can facilitate a targeted understanding of right-sizing needs, by joining an understanding of transportation perfor- mance with economic development potential. Figure 5. Integrated layout.
Policy Guidance 31 whose membership is not directly tied to electoral politics. A project that enjoys the support of major civic institutions in establishing and then following through on right-sizing objec- tives is more likely to be successful regardless of changes in elected officials. Success Factors for Engaging Non-Government Institutions. In order to earn the active participation of civic institutions, an agency must be both proactive and thorough. The agency should first familiarize itself with the identified groupsâ timelines and processes for planning and strategic goal setting. Having identified timelines and processes, the agency should then aim to work with the groupsâ decision makers within those processes to not only educate them about how right-sizing considerations affect their long-term planning or strategy but also to create buy-in and advocacy for incorporating those considerations into the planning or strategy itself. This strategy can result in either informal agreements through relationship building, formal agreements through the groupâs agenda-setting process, or both. The Role of the MPO and Other Regional Bodies in Right-Sizing Partnerships One core legally designated function of MPOs is to establish and manage a fair and impartial setting for effective regional decision making in a metropolitan area. This makes the potential role of MPOs integral to right-sizing partnerships, even while (as indicated by the previous sec- tion), right-sizing involvement likely will extend beyond public sector organizations that make up the MPOâs membership. Note that in rural areas, regional planning organizations (RPOs) or DOT-facilitated area transportation partnerships perform similar collaborative program- ming and decision making roles as MPOs. Therefore, those other regional bodies should be understood as included in the remainder of this section, even when only MPOs are explicitly referenced. Regard MPO as a resource but only one partner. Because MPOs often have the models, data, and other information useful for applying the right-sizing toolkit described in Chapter 4 and because MPOs often are the most likely places in which different governmental perspectives are expressed, an MPO can be a key part of right-sizing initiatives. However, it should be recog- nized that an MPOâs explicit function is not to rightsize the transportation system nor can DOTs or other agencies expect right-sizing to implicitly result from the MPO process. None theless, MPOs (and similarly situated organizations) are uniquely positioned to be partners in help- ing an agency set right-sizing objectives. MPOs are a natural forum for convening right-sizing discussions among broad stakeholder groups, they regularly develop regional transportation planning and programming, and they have well-established practices for incorporating public input into their processes. Most likely right-sizing contributions for MPOs and RPOs. An agency interested in initiating a right-sizing opportunity should always include the local MPO (or equivalent RPO, area transportation partnership, or similar entity) as a partner in initial conversations. In addition to having historical institutional knowledge identified as important in data and intelligence sharing, an MPO often serves as a convening body for a variety of different issues, working across jurisdictions as a forum for discussion. As with other planning agencies, MPOs have extensive experience in gathering stakeholder input during their own planning and programming processes. Because of their regional focus, these stakeholders may differ in many ways from stakeholders that normally engage with a state department of transportation. An agency interested in right sizing should engage with, and seek input from, the local MPO for guidance on who appropriate stakeholders may be for a particular project and how best to engage them.
32 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming MPO and RPO roles in programming and implementation. Another primary function of an MPO is to serve as a critical regional planning and programming organization. During the initial partnership conversations around right-sizing opportunities, an MPO can give per- spective regarding other planning and programming efforts. When having those initial partner- ship conversations with an MPO, an agency exploring a right-sizing opportunity should also be prepared to discuss how the tools described in Chapter 4 can inform, can integrate into, or can work alongside the MPOâs own process. The example from the Miami-Dade County MPO demonstrates how an MPOâs experi- ence working with stakeholders can provide an important source of intelligence for assessing right-sizing needs, as well as a starting place for partnerships among potential right-sizing partners. Scale and Complexity of Right-Sizing Efforts Right-sizing approaches should be tailored to the scale and complexity of the transportation portfolio within the scope of the effort. The number of different modes or system components affected by a right-sizing choice, the diversity and complexity of stakeholders and right-sizing partners, the competing uses and demands for an asset, and the forces driving its economic value can greatly affect what makes for a successful right-sizing effort. Area Type as Approximation for Scale and Complexity. A review of practices and con- cerns from throughout the United States demonstrates that agencies understand the scale and complexity of investment choices largely in terms of area types. While the guidebook does not definitively define these area types and recognizes that there are multiple definitions out there, including from the Census Bureau and the Highway Performance Monitoring System, in the right-sizing policy discourse they have come to have the following meanings: â¢ Urban Right-Sizing pertains to densely populated and built-out areas, characterized by com- peting uses for land, money, and infrastructure and the balance of multimodal needs, payoffs, and costs in a changing land and transportation economy with many mature assets and lim- ited space. Right-sizing in urban areas can especially benefit from tactics that seek to leverage municipal and private resources, including coordination of infrastructure investment and funding with targeted redevelopment efforts. â¢ Suburban (or Non-Urban) Right-Sizing addresses populated areas where diffuse spatial pat- terns and business or jurisdictional arrangements impose significant efficiency challenges but without the same options and clearly defined partners available in more dense urban settings. Within this context, right-sizing may require coalition building to overcome jurisdictional fragmentation. Suburban communities or newly urbanizing areas also have the opportunity to apply lessons learned from more built-out areas when shaping infrastructure and financial mechanisms for greenfield development. Older suburbs may additionally be managing hard choices posed by large inventories of aging infrastructure but may nevertheless have emerging opportunities for more efficient land use and transportation combinations based on changing demographics, land uses, and preferences. â¢ Rural Right-Sizing applies to areas where networks and populations are sparse, compet- ing uses for infrastructure and land are limited, and sources of funding or partnership are limited. Rural right-sizing discussions are characterized by needs for resiliency, service to pass-through traffic, and support for sectors such as agricultural or mining resources. In this context, right-sizing assessments must look beyond simple accounting of users or vehicles to understand other indicators of value supported by infrastructure (e.g., acres of agriculture), as well as issues of criticality of connectivity, resilience, and vulnerability.
Policy Guidance 33 Leveraging the Insight of an MPO for Right-Sizing Intelligence: Lessons Learned from Miami-Dade County This MPO [or transportation planning organization (TPO) as they are called in Florida] has three policies that are especially instructive for right sizing. First, the TPO has a rigorous âground upâ process of identifying needs through field-based public involvement and stakeholder engagement aimed at different geographic and demo- graphic communities. Second, the TPO maintains a database on the history of both investment in, and public response to, the conditions and performance of major infrastructure assets. Third, the TPO fosters communities of interest in the transportation portfolio among professionals in corresponding roles across its member agencies. Identifying Needs Through Community-Based Process: Part of the regular job description for some TPO staff includes regular âfield workâ of going out into different regional and neighborhood populations through community-based outreach. It is typical for TPO staff to be staffing tables or booths at shopping malls, cafete- rias at major places of employment, schools, block parties, and other community activities and taking input about transportation system needs and conditions and raising awareness about transportation issues. As this community-based outreach has developed over the years, it has shaped the TPOâs understanding of transporta- tion needs as reflected in the Smart Plan framework. Key aspects of right-sizing needs ascertained through this community-based process that did not appear in modeling or in typical public meetingâstyle involvement have included 1. Nuances regarding the emergence of important gaps in destination access for transit, and the socio- economic implications of these gaps on neighborhoods and families. 2. What influence emerging needs for subtle and low-cost changes such as updating signage, changing the location of a bus stop, or coordinating transit schedules with work shifts can have on the effectiveness of systems. Tracking the History of Significant Assets: Another very significant contribution of the Miami-Dade County TPO is a database the TPO maintains on this public interaction before, during, and after investments are made in transportation assets. The TPO has developed (and continues to develop) an ongoing database on demographic changes surrounding transportation assets, public input received regarding transportation assets, and actions taken. In this way, the TPO is able to consider not only an assetâs history of either having been modernized, preserved, or expanded and when, but also why, what the public or user situation was before the improve- ment, and what it has been since. Agencies seeking to rightsize their portfolios can learn from Miami-Dade Countyâs experience of adding the stakeholder perspective to tracking asset history. This addition provides an important resource for assessing and monitoring right-sizing objectives and outcomes over time. Building Professional Communities of Interest (Across Agencies): A final contribution from the Miami-Dade County experience is the existence of the âpublic involvement management team.â This team consists of public outreach and involvement managers from multiple transportation agencies in the TPO area (including the seaport, transit agencies, the expressway, the DOT, and the school district). The team meets quarterly and corresponds on an ongoing basis to identify public needs from throughout the region. While the focus of the Miami-Dade County public involvement management team has been largely on understanding and respond- ing to public questions, it has raised awareness within each agency about the objectives and needs of the other agencies and how respective agencies view and describe transportation assets. Agencies undertaking right- sizing policies may learn from the Miami-Dade County public involvement management team to potentially expand this concept to form similar communities of engineers, planners, and financial managers to exchange perspectives over time and enable each agency to build capacity for spotting misalignment between asset portfolios and the mix of owning, using, funding, and deciding agencies. Summary: This example demonstrates public involvement practices and partner ships that can be implemented by an MPO to support right-sizing, as well as the role an MPO can play in tracking historical investment and public responses to conditions and performance to provide better business intelligence for right-sizing.
34 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming The different area types will represent different right-sizing needs and sensitivities with respect to the regulatory environment, resource availability, economic development context, quality of life, and modal balance. What follows are guidelines for special considerations in evaluating right-sizing opportunities as well as for engaging partners and achieving right-sizing objectives in each of these area types, along with some recommended tactics to consider in each instance. Urban Right-Sizing Urban environments offer unique challenges and opportunities for right-sizing not typi- cally found in rural or suburban environments. More than rural or suburban environments, urban environments have sufficient density and land value for there to be potentially significant value generation from reuse of former transportation facilities as part of a right-sizing strategy. Urban environments may also have more and/or more clearly defined neighborhood and stake- holder institutions, which can play a role in defining right-sizing goals and objectives but also often have unique needs for ensuring that environmental justice is addressed in the process. Urban areas are more likely than other areas to experience right-sizing as a needed reconstruc- tion, streamlining, or reuse of existing and mature infrastructure in comparison with rural or newer suburban areas where greenfield development may still be driving transportation needs or where preexisting infrastructure is sparse. Of all the area types, urban areas are more likely to have developers and municipal partners receptive to jurisdictional transfer and shared owner- ship. The following considerations can inform right-sizing efforts within the urban context. Characteristics of the Urban Right-Sizing Environment Regulatory Environment. Urban areas are more likely to have well-developed area plans, a more complex regulatory and zoning environment, and more complex infrastructure. For instance, the future use of a transportation asset located within the boundaries of an established area plan may have already been contemplated. Additionally, urban areas are normally older, and their infrastructure was constructed in a less regulated environment, making their current regulatory climate more challenging to deal with issues like air or water quality. This complexity requires larger stakeholder outreach at the outset and potentially greater reliance on the partner- ships detailed earlier in this guidebook. Resource Availability. Urban areas could have either greater or fewer resources than other types of areas to dedicate toward a right-sizing project or program, depending on size, scale, location, and use of the transportation asset in question. For instance, an urban municipality may have more willingness and capacity than a non-urban municipality to take on maintenance of an asset in a jurisdictional transfer situation, but that assetâs size and location may render the upfront capital costs required for a right-sizing project unattainable without outside funding. An organization interested in an urban right-sizing effort may be especially interested in the Stratified Return on Investment Calculator in Section 4.4 to both define and evaluate right-sizing objectives and options and also to identify an appropriate cost-share balance among partners. For instance, an organization may be willing to take on the costs of maintenance of an asset through jurisdictional transfer in return for community benefit. Economic Development Context. As mentioned earlier, urban areas are more likely to have real estate developer interest in transportation assets as developers seek opportunities through publicâprivate partnerships. For instance, the repurposing of an asset could potentially create additional real estate stock that a developer or investor finds desirable. This situation creates economic development opportunities as well as opportunities to share project costs. An orga- nization interested in an urban right-sizing project should work with local organizations to determine the current and potential land value of a transportation asset.
Policy Guidance 35 Quality of Life. Urban areas are similarly more likely to have both demographics that are more diverse and more neighborhood equity considerations. Transportation assets in urban environments also might separate pockets of targeted development or otherwise divide neigh- borhoods of historical significance. For instance, a highway designed for a specific use several decades in the past may cut through an urban environment in a way that creates inequitable barriers or impedes economic progress. An organization interested in pursuing an urban right- sizing initiative should seek to ensure that the project improves the fabric of the community from an equity and a city planning standpoint. Modal Balance. Urban areas are more likely to face competing interests between efforts to plan and create density and walkability, and efforts to move people and freight effectively through an urban environment. Additionally, urban areas also generally have more robust transit networks than non-urban areas. These competing interests create opportunities for organizations interested in a right-sizing project or program to reimagine the urban trans- portation infrastructure in a way that leverages an asset to provide access via multiple modes. For instance, reconfiguring a crash-prone stretch and a congestion-prone stretch of highway to fewer lanes might not only achieve greater safety but also free up space for transit, bicycle, or pedestrian infrastructure. The Development-Sensitive Safety Analysis (shown in Section 4.3) is offered to support this type of trade-off conversation. An organization interested in pursu- ing an urban right-sizing initiative should engage all stakeholders to determine appropriate sources of public benefit and avoid simply shifting deficiencies or user costs from one mode to another. Suggested Tactics for Urban Right-Sizing Account for Effects on Urban Land, Labor, and Consumer Markets. Because there are more competing uses for urban land and more economic activities concentrated in an urban environ- ment, there can potentially be more right-sizing opportunities. There are more entities in the urban environment that may put forward proposals (or resources) for how a transportation asset can create more value, and inefficiencies are more likely to be noticed by stakeholders and brought to the agencyâs attention sooner than in other contexts. The concentration of urban land, labor, and consumer markets in the urban setting, how- ever, also poses challenges with respect to obtaining consensus, and these markets represent sensitive and complex relationships that a significant change in transportation infrastructure or services can either disrupt or enhance. Table 9 shows some recommended techniques for considering urban land, labor, and consumer markets when developing right-sizing objectives and considering options in urban areas. Seek Ways to Leverage Municipal and Private Resources. The urban environment offers unique opportunities to combine a new or modified infrastructure design with the authority and resources of both municipal governments and private developers to devise and implement a right-sizing solution. Recommended techniques for consideration include the following. â¢ Explore the Use of Business Improvement Districts (BIDs). Explore the use of BIDs in funding or owning enhancements to the infrastructure. BIDs provide a mechanism for busi- nesses to participate collectively in both providing funding for improvements and making decisions about how infrastructure will be used. Atlantaâs community improvement districts (CIDs) and their role in the regionâs Freight Cluster initiative are examples of this (see https:// atlantaregional.org/transportation-mobility/freight/transportation-mobility-freight-freight- cluster-plans/). CIDs (or BIDs) can be scoped to provide amenities like enhanced curb access for on-demand transportation, charging stations for electric vehicles, and even autonomous commuting and delivery shuttles as they become viable in the future. They can also be used
36 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming for collectively negotiating special mobility packages with transportation network companies (TNCs) to enable car-free living or commuting, thereby managing travel demand and freeing space previously used for parking. When a transportation asset is understood within a bundle of services provided in a BID or CID context, significant savings and higher value can be derived from the resulting use. â¢ Consider Packaging Infrastructure into Brownfield Development or Urban Revitalization Concepts. This is a growing model for potential repurposing and right-sizing of urban trans- portation assets. Such approaches also address increased interest in diversification of fund- ing sources. In redevelopment areas, private developers may view innovative transportation offerings as critical amenities for making a new land development concept possible. Given this incentive, these cases may involve shared use of the facility with the developer, shared costs in reconstruction or modernization of the facility, value capture from the pursuant develop- ment, and in some cases partial or complete jurisdictional transfer or sale of right-of-way. Agencies can participate in this type of âpackagingâ by collaborating with developers and municipalities in the development of the business plans that developers use to seek private financing or value capture for redevelopment of urban brownfield areas. NCHRP Research Report 873: Guidebook to Funding Transportation Through Land Value Return and Recycling â¢ Will the right-sizing change, enhance, or diminish the value of abutting and surrounding properties? â¢ Do trends in property value and changes in land use since the last improvement support the case for a better and higher market use of the facility? â¢ Have specific businesses, developments, or communities come to disproportionately use the facility and, if so, are there ways they can participate in improvement costs (through business improvement districts, impact fees, or other mechanisms)? â¢ Has utilization of the facility declined or been superseded by other ways in which users are now accessing places and activities in the area? â¢ Is there unutilized or underutilized parking or curb access surrounding the project? How has utilization of parking and curb space changed since the last improvement? â¢ Assessor Data â¢ Zoning Maps â¢ Building Permit Trends â¢ Has the nature of the commuting workforce surrounding the facility changed in terms of modes or work hours? â¢ Has the facility or service to be right-sized had significant changes in the timing of daily peaks or shifted from primarily supporting commuting versus non- commuting purposes? â¢ Are there right-sizing alternatives that can bring households and jobs closer together through co-location instead of additional infrastructure capacity? â¢ Census Bureau (Census Transportation Planning Package, Longitudinal Employer- Household Dynamics, and Public Use Microdata Sample) â¢ Google general transit feed specification â¢ âBig Dataâ on observed originâdestination patterns from new sources such as GPS or cell phones. For example, see State Smart Transportation Initiative at https://atlantaregional.org/transportation- mobility/freight/transportation-mobility- freight-freight-cluster-plans/. Land Markets Labor and Consumer Markets Complex Urban Markets Potential Data/ Information SourcesUrban Right-Sizing Sensitivity to Consider Table 9. Urban right-sizing market considerations.
Policy Guidance 37 (Vadali et al. 2018) should serve as a key resource for participating in such development pro- cesses. Proactively collaborating directly with local economic development groups to become aware of brownfield development opportunities and participating in building the business case is essential for this type of right-sizing (as described in the later section on Agency Capacity Building for Right-Sizing). Leverage the Cityâs Power to Regulate Access, Parking, and Land Use for Right-Sizing. Leveraging the cityâs power to regulate access, parking, and land use for right-sizing within an urban right-sizing agreement can create significant leverage for reducing life-cycle costs and achieving better alignment between owning, paying, using, and deciding entities for an asset. When setting right-sizing objectives and selecting tactics in collaboration with urban municipal authorities, state agencies can benefit from negotiating for cities to use their zoning author- ity, for regulation of parking, and other mechanisms such as impact fees (if the city has them) in conjunction with the stateâs authority to regulate vehicular access points (e.g., driveways or roads) along state-owned infrastructure. In highly urbanized environments, it may be prudent to adopt the starting position that at least one right-sizing alternative should be considered that consists entirely of operational and regulatory strategies coordinated between state, municipal, and private authorities, with any alternative involving construction understood as incremental enhancements to these policies. The Virginia Department of Transportation has developed a toolbox of alternatives, which highlights solutions of this type (see http://www.virginiadot.org/ projects/resources/Arterial_Management_Plans/AMP_-_Toolbox_of_Alternatives.pdf). â¢ Evaluate Transit and Cargo-Oriented Development Alternatives. A prevalent right- sizing challenge in complex urban environments involves balancing the use of infrastructure between commuting and other purposes, as well as between freight and passenger uses. This challenge reflects the challenge of urban planners to balance industrial, commercial, and res- idential uses of land. There is a well-established and growing literature on transit-oriented development techniques as addressed in NCHRP Research Results Digest 294: Transit-Oriented Development: Developing a Strategy to Measure Success (Transportation Research Board 2005). It should be understood that transit-oriented development is not in all cases by its nature right-sizing. However, the techniques in the transit-oriented development (TOD) literature are especially pertinent when forming and evaluating right-sizing techniques in the urban envi- ronment. While TOD alternatives are often evaluated based on multi-modal transportation performance, evaluating such alternatives in a right-sizing context invites further consider- ation of their effects on long-term agency infrastructure costs, alignment of funding with beneficiaries, and opportunities to better utilize existing transportation assets. Because freight infrastructure often involves port authorities, railroads, and large-scale industrial users (factories or industrial parks), cargo-oriented development (COD) represents a similarly helpful paradigm for assessing and right-sizing the alignment of incentives, as well as benchmarking potential changes in the best and highest use of both land and infrastructure designed for freight. The Center for Neighborhood Technologyâs reports Cargo-Oriented Devel- opment (COD): Concept and Opportunity (Center for Neighborhood Technology 2013a) as well as Cargo-Oriented Development (COD): Analysis and Implementation (Center for Neighborhood Technology 2013b) include practical examples of measures for cargo-oriented development, which may be compared over time in order to ascertain the case for right-sizing freight infra- structure, as well as potential roles for businesses, developers, and other partners. When port authorities, railroads, or industrial developers are known to be making significant investments (or divestments) from locations in the urban environment, it is opportune for transportation agencies to consider initiating right-sizing initiatives to either partner with these entities or to assess complementary projects, transfers, or policies to leverage this private investment to make the agency asset portfolio current and efficient in light of the change.
38 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming Right-Sizing in the Urban Environment: Rochester Inner Loop Example The reconstruction of the Inner Loop East is a restoration project within the confines of a below-grade high- way. For decades, the Inner Loop East Expressway circled the City of Rochesterâs central business district, cutting off the downtown area from adjacent densely populated neighborhoods. This grade-separated expressway was underutilized by vehicular traffic, stifled downtown redevelopment, and discouraged use of alternative modes of transportation. In order to encourage sustainable economic growth and create a livable, vibrant downtown, Rochester reconstructed a segment of the Inner Loop into a modern âcomplete streetâ flanked by mixed-use redevelopment. It did not require any displacements and only required temporary or permanent easements from seven parcels. Because of the growing interest in removing the barrier effect of the existing highway, the city submitted a series of TIGER Grant applications and eventually was awarded a TIGER Grant in 2013 for $17.7 million. The city and state also committed $5.9 million in local funds. After securing funding, partnerships grew to include regional and state partners and led to the formation of a project advisory committee that convened represen- tatives of the city, New York State Department of Transportation, Monroe County Department of Transporta- tion, and the Genesee Transportation Council MPO. It was the city, however, that spearheaded this initiative and made the case for the feasibility and cost-effectiveness of removing this expressway by documenting esti- mated cost savings associated with no longer needing to maintain the existing facility and bridges over it. The city was not only willing to be the champion but was also willing to take on management of the project and assume the jurisdiction for the resulting facility from the state. Originally, the city envisioned a design for reconstruction that mirrored the Inner Loop, with a curve through the city. Through the public meeting process, the design changed to something that more closely represented the internal street grid that existed before the Expressway was built. Residents believed that this was the best solution to re-knitting neighborhoods and to restoring the historic urban form. A local design center and resi- dents who were passionate about returning the street grid played a key role in the development of this alter- native design. The project turned what had previously been a significant barrier between downtown and surrounding areas, neighborhoods, and districts into an at-grade boulevard that has improved connectivity and created new land parcels for development. The city has already issued requests for proposals for developers to bid on parcels of property. The project opened roughly six acres of land to mixed-use redevelopment, which will leverage addi- tional commercial and residential space. Given the publicâs positive views of the results, the city is seeking fund- ing to start the planning for the second phase. The city is calling this phase Inner Loop North. This phase will connect additional neighborhoods and Rochesterâs successful public market to the central business district. Summary: This example demonstrates a case of right-sizing in an urban context, addressing opportunities from assessment of the best and highest use of transportation infrastructure and jurisdictional transfers, as well as the role of non-governmental entities in establishing and executing right-sizing objectives. Urban Right-Sizing Case Example. The following example from Rochester, New York, illustrates some of the unique challenges and opportunities an agency may experience in an urban right-sizing process. Suburban or Non-Urban Right-Sizing Right-sizing in suburban or developing non-urban areas involves different policy and eco- nomic challenges from their urban or rural counterparts. Suburbs and developing non-urban areas are likely to have some of the least efficient land-use/transportation arrangements of all
Policy Guidance 39 areas in terms of vehicle mileage and public infrastructure costs per acre of developed land (see https://www.strongtowns.org/journal/2017/1/10/poor-neighborhoods-make-the-best-investment), as well as some of the most dispersed patterns of land and infrastructure ownership, revenue, and authority of all area types. Characteristics of the Suburban or Non-Urban Right-Sizing Environment Regulatory Environment. Suburban areas often have policies in place that make greenfield projects an incentive, expanding development while lowering density. These policies can create financial strain on governments as revenues generated by greenfield development can struggle to both keep up with expanding the transportation system required to accommodate the develop- ment as well as maintain the newly developed system. Additionally, local system design require- ments like required lane widths may create an imbalance between size and need. Specific tactics for overcoming these challenges are described in the section that follows. Resource Availability. Because suburban areas are often already characterized by lower densities than urban areas, as well as by higher percentages of residential land (which gener- ate less municipal revenue than commercial or industrial uses), some suburban municipalities may struggle to have the resources (financial or otherwise) to actively participate in right-sizing solutions. In other cases, issues may stem from jurisdictional fragmentation constraining the coordinated application of resources. Furthermore, while the most valuable urban land may be owned by businesses and developers that are well organized to participate in right-sizing decisions, the most valuable suburban land may be owned by individual households who may lack the organization or incentive to participate meaningfully in right-sizing partnerships. To address the potential lack of resources and jurisdictional fragmentation in suburban or non- urban environments requires an understanding of right-sizing objectives and outcomes from the perspective of multiple parties. The Stratified Return on Investment Calculator in Section 4.4 can support this. Additionally, an organization interested in pursuing a right-sizing project or program should seek to leverage a regional resource like an MPO as a convening body to identify areas of common ground across jurisdictions. Economic Development Context. Development interests in suburban and non-urban areas can differ from that of an urban area or rural area. In an urban area, land can be a scarce resource, while a suburban or non-urban area may have an abundance of land but, as described previ- ously, be challenged with density issues. At the same time, economic development in a subur- ban or non-urban area is still important, transportation infrastructure has significant economic impact in those areas, and removing development as an incentive should be approached warily. Rather, right-sizing in suburban and non-urban areas entails having a clear picture of where the community is along a development trajectory and identifying opportunities to leverage new development or redevelopment (and associated private investment) to prevent the types of prob- lems right-sizing is intended to solve. For example, suburban and non-urban areas can devise arrangements that involve private and local partners in funding and managing assets from their very inception, seek solutions with life-cycle costs in mind, and otherwise learn from the lessons of their urban counterparts. Quality of Life. While some suburban or non-urban areas may still face equity issues similar to those of an urban area, transportation infrastructure is less likely to be viewed as a problem- atic barrier than it is in a denser urban environment. As stated earlier, suburban or non-urban areas have more land available, and are more likely to be on a trajectory of expansive design and less density. Therefore, an agency interested in a suburban or non-urban right-sizing project or program is less likely to see a groundswell of support for right-sizing initiatives like freeing land through repurposing transportation assets. However, the face of, and market for, sub urban and urbanizing areas is changing as younger residents show preferences for urban living in
40 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming many markets. In response, suburbs increasingly seek to offer amenities like transit availability, complete streets, and mixed-use environments to retain their value. These solutions represent opportunities to match infrastructure portfolios to emerging needs while also delivering cost efficiencies. When suburbs are undertaking such strategies, transportation agencies can often find or introduce proposals to right-sizing public agency transportation assets as part of such a âpackageâ of amenities in collaboration with private developers and municipal planners. Modal Balance. Suburban or non-urban areas differ from both urban areas and rural areas in terms of approaches to modal balance. Less density creates less demand and produc- tivity for transit routes. Nevertheless, suburban or non-urban areas also offer opportunities to achieve efficient modal balance in targeted ways as they mature and become more mixed use. Some of the transit-oriented and cargo-oriented design standards previously outlined may be deployed within targeted nodes of development in suburban and non-urban areas, to better align land use patterns with goals of modal balance. Suggested Tactics for Suburban or Non-Urban Right-Sizing Design Still-Evolving Areas for Long-Term Efficiency. For all the challenges of suburban or urbanizing non-urban areas, the comparatively lower density of transportation networks and relatively large share of privately owned land in such environments creates an opportunity for right-sizing. Urban environments have a tightly woven web of markets, interests, owners, and users concentrated around potentially right-sized facilities. Suburban and urbanizing environ- ments may (1) still be evolving such that there is an opportunity to implement more efficient infrastructure patterns from the outset and (2) may be subject to redevelopment, densification, and land-use change that allows for consistent implementation of right-sizing principles. In particular, the Trip Length Analysis to Assess Modal Balance (described in Section 4.1) can be useful in areas that are not fully urbanized to pinpoint facilities and locations where amenities for shorter trips can be part of the right-sizing alternative. Channeling infrastructure resources into facilities supportive of shorter trips, while also coordinating with municipal authorities and developers (much as described in the previous section on urban right-sizing), can actually shape the urban form toward transportation efficiency in ways not possible in heavily build-out urban areas covered by legacy infrastructure. Another right-sizing method that can be especially prom- ising for suburban and urbanizing areas is the Roadway Spacing Analysis method (described in Section 4.9), which focuses on building resilient networks with ample connectivity that can support eventual build-out densities. Through using those methods, in collaboration with devel- opers and municipal and county authorities, it is possible to identify chances to right-size emerg- ing transportation systems when they are still developing, reducing future life-cycle costs, and positioning the area for the best and highest long-term use of not only its land but also each dollar of transportation investment. Leverage Sources of Value in the Suburban Economy. Many of todayâs suburbs were built on a presumption of segmentation of uses. They date back to a time when markets valued the relatively large home size and parcel size available for the money, combined with reasonable access to a work location within a larger city without the perceived âbig-cityâ problems of crime, taxation, and other challenges. While the early twenty-first century has brought a resurgence of urban areas and development trends show that an increasing share of todayâs knowledge workers under 30 prefer urban environments, many suburbs in fact still house some of the nationâs most prolific knowledge workers. Suburbs like Los Altos Hills, California (outside San Jose); Westlake, Texas (near Dallas); Paradise Valley, Arizona (near Phoenix); and Bronxville (outside New York) have very high concentrations of highly skilled and educated workers and executives in leading industries.
Policy Guidance 41 One avenue toward right-sizing in a suburban environment is to leverage this source of value. Right-sizing proponents can assess where concentrations of knowledge workers are located and collaborate with municipal authorities and developers to do the following: â¢ Utilize the land available in the suburban environment to co-locate businesses near where the workers are. â¢ Focus on operational and multi-modal solutions to connect pockets of knowledge workers with job locations (in contrast to simply building additional capacity based on where facilities show signs of deficiency). â¢ Consider opportunities to use existing right-of-way together with municipal or private invest- ment to provide urban-style amenities (such as complete streets and mixed uses) to enable economic activity to occur within the suburban community instead of making incentives for longer trips to nearby cities. While the approaches previously described are long-standing urban planning practices, the evaluation of combined land-use and transportation alternatives against measures of life-cycle cost; alignment between paying, owning, and using entities; and best/highest use of existing facil- ities can form the basis of a business case for new types of suburban development. In effect, the right-sizing case (and evaluation) may complement the transportation performance, livability, and other criteria used to evaluate such scenarios. By presenting the fiscal infrastructure savings, lower public costs per taxpayer, and potential for enhanced private sector property value, the right-sizing perspective on integrated growth and travel demand management can change how alternative strategies are received, prioritized, and chosen. Use Coalitions to Overcome Jurisdictional Fragmentation. âJurisdictional fragmenta- tionâ is a lack of revenue, authority, or political will residing at any one level of government to consistently implement a right-sizing solution. Limited municipal revenues in suburban areas (or non-urban but developing urban areas) can result from (1) a higher share of residential property (taxed at a lower rate than industrial or commercial), (2) the desire of suburbs to keep tax rates low (and the use of regulatory authority at a minimum) to attract and retain resi- dents, and (3) the more spread-out geography of suburban development that often leads to a transportation corridor (or trip-making pattern) spanning multiple jurisdictions. Because of jurisdictional fragmentation, suburban right-sizing may require a longer dura- tion, opportunistically achieving incremental steps of progress over time. To survive through cycles of turnover in elected officials and political tides in diverse cities and towns also requires strategic coalition building. Organizations like homeowners associations and potentially multi- jurisdictional special districts like the business and community improvement districts described in the previous section on Urban Right-Sizing can also be pertinent in suburban areas. However, special districts in suburban areas may have fewer potential members and initial sources of funding, land, or other resources. The corridor coalitions in the corridor management literature (and described in detail in the upcoming section on long-term right-sizing: evolution from corridor management) are an instructive paradigm for providing a right-sizing context that overcomes jurisdictional fragmentation. In the unique case of suburban and non-urban cases, it may be especially important to â¢ Initiate a long-term right-sizing initiative with a multi-jurisdictional right-sizing study to engage partners, establish right-sizing goals, objectives, and benchmarks. â¢ In addition to key state, municipal, and county entities, engage regional business and eco- nomic development groups in the leadership of initial study to position such groups (which are relatively independent of political shifts) to anchor and perpetuate the right-sizing vision over time. â¢ Follow the guidance recommended in the subsequent section on long-term right-sizing.
42 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming Consider Value-Capture Mechanisms to Support Infrastructure Costs in Greenfield Development. While many consider value-capture mechanisms as primarily urban tools, they can also ensure better alignment between infrastructure expansion and cost responsi- bility in suburban-style/greenfield expansion into unincorporated rural areas. Serving new greenfield development can be costly in terms of both up front and life-cycle infrastructure costs. Small units of government covering residential areas may not be able to or wish to fund infrastructure expansions to serve these types of brand-new developments. At the same time, these developments can create private land value, thus creating an incentive for private actor participation in infrastructure funding. The following section illustrates one example of this type of mechanism. Obstacles to implementation include (a) gaining adequate buy-in and financial commitment from private actors and (b) creating a fair and acceptable nexus between benefits to be gained and cost obligations. These mechanisms can be overcome by (a) defining specific requirements and processes to fairly establish and approve a value-capture mechanism and (b) including a variety of apportionment mechanisms (see example that follows), including the particularly common one of matching subdivision boundaries. Note that there are ranges of value-capture mechanisms, many of which must be defined prior to enabling legislation. To investigate further, refer to NCHRP Research Report 873: Guidebook to Funding Transportation Through Land Value Return and Recycling (Vadali et al. 2018). Suburban or Non-Urban Right-Sizing Case Example. The following example from Montana demonstrates how a non-urban but rapidly developing area can utilize coalitions and special districts to both shape the pattern of development toward infrastructure efficiency while also aligning infrastructure funding with user benefits and development potential. Rural Right-Sizing Right-sizing in rural environments involves other policy challenges not common to urban or suburban settings. Rural facilities are likely to have some of the lowest volumes on a transporta- tion network. Their value is more likely than in any other area type to be in connecting remote locations to each other, providing access to highly disbursed resources (such as farm-to-market roads connecting widely disbursed farms to larger customer and supplier networks) or provid- ing resilience as opposed to serving capacity. Furthermore, when capacity needs do arise in rural areas, they often follow seasonal peaks (e.g., planting, harvest season, or tourist season), leaving many assets unutilized or underutilized most of the year and generating most of their economic value during a relatively small period of the year (e.g., either in a harvest season or tourist season). For all of these reasons, compared with urban or suburban areas it is easy for rural transpor- tation systems to appear to be over-sized if seasonal need, demand for movement of goods, and resilience are not considered. Furthermore, rural areas that are largely unincorporated may lack local units of government equipped to financially participate in right-sizing agreements and have land markets in which few developers are likely to find value in the adaptation or reuse of any facilities after a jurisdictional transfer. It is not unreasonable that rural stakeholders may tend to view right-sizing initiatives or transfers of redundant assets as simply disinvestment in their region and may be the most averse to right-sizing efforts. The following discussions outline special considerations for undertaking right-sizing efforts in rural areas. Characteristics of Rural Right-Sizing Environment Economic Development Context. The economic impact of transportation infrastructure in rural areas differs from the economic impact in urban, suburban, or non-urban areas in distinct ways. As noted, the primary users of a transportation system generally reflect distinct economic sectors prevalent in rural areas like agriculture, tourism, and mining or other resource
Policy Guidance 43 Example of Value-Capture Districts in Montana Montana State Statute, Title 7, Chapter 12, Part 21 (Montana Code Annotated 2015), authorizes counties to create improvement districts in unincorporated areas for the purposes of enabling property owners to self- fund a broad range of infrastructure improvements, including roadway projects. The mechanism is imple- mented within a district authorized by the county to correspond to the specific proposed improvements, and the costs of the improvement (typically 100%) are shared across all property owners within that district. The approval process involves notice of intent to create a district and an official protest period. If during that period protests are registered by property owners who would be assessed for more than 50% of the costs of the proposed improvements, then the improvement district cannot move forward. Exceptions to this protest process can be made by a county for projects related to the environment and public health. In addition, some property owners may have previously waived their right to protest through their property purchase agree- ment, typically when buying a house from a developer in a subdivision. With respect to the creation of improvement districts, county governments primarily play a facilitation role. County governments will provide help with the application process, provide support for initial costs estimates in some cases, and help coordinate the process and work for its completion. Engineering and all other costs associated with the improvement are the responsibility of the property owners, with the county supporting the engineer selection process, managing the tax collection, and putting the work out to bid. Counties may finance up-front costs through a variety of mechanisms, including issuing bonds, state loans, or direct county loans. These costs are then paid back over time with the stream of fees paid by property owners. Some districts require the simultaneous establishment of an owner-funded maintenance district to ensure future mainte- nance costs of funded infrastructure do not become a burden to the county. Additionally, counties may require additional financial commitments from property owners in the event the improvement district is in a very undeveloped area, because that imposes additional financial risk. Districts may include land not fronting on proposed improvements, as long as the county board rules that those additional properties will also benefit from the improvement. Multiple assessment methods are legislatively authorized, including distribution of total improvement costs: (1) evenly across all owners, (2) in proportion to property area, (3) in proportion to property value, (4) based on the prices of connections (e.g., for a utility), or (5) based on the linear feet of a property abutting a street improvement. Districts are defined to correspond to subdivision boundaries and are used to facilitate development in a way that protects county funds and avoids undue taxpayer burden. Lewis and Clark County has more than 80 such districts in place. For example, the most recent district covers maintenance of roadways within a subdivision (e.g., snow plowing, grading, culvert cleaning, or weed spray- ing). Cascade County recently approved a rural improvement district to rebuild and widen a 1.2-mile stretch of road (Fox Farm Road) adjacent to a 1.5-mile section that the Montana Department of Transportation is plan- ning to rebuild. Together the 2.7 miles of rural road serve a growing suburban area, and the improvements will address safety concerns on the existing roadway. Without the rural improvement district, the improvement would not be affordable within the county budget. The district includes parcels served by the road, in addition to those directly adjacent to it (Cascade County, Montana 2016). Summary: This example demonstrates one approach to aligning funding for transportation infrastructure with the sources of value supported by that infrastructure. By using a value-capture mechanism, Montana ensures that property owners are given the ability to self-fund infrastructure that supports their communities and cre- ates private land value while at the same time ensuring that infrastructure expansions are matched to available funds. The improvement district mechanism helps create alignment between infrastructure expansion and cost responsibility, particularly when it comes to suburban-style/greenfield expansion into unincorporated rural areas. Success factors in implementing this type of mechanism include having very specific legislative require- ments for establishing an improvement district and creating a fair and acceptable nexus between benefits to be gained and cost obligations.
44 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming extraction. Moreover, the balance between these sectors and overall population and population- serving industries has shifted over time in response to developmental trends such as â¢ Rural depopulation, â¢ Increasing mechanization and consolidation of farming and other resource extraction activities, and â¢ Increasing agricultural productivity in crop yield per acre. In many rural areas, there may be fewer people than when infrastructure was first delivered. However, there is more intense economic and agricultural activity on the land. Thus, the chal- lenge in many rural areas is how to create economically sustainable transportation networks that maintain necessary access to points of production (i.e., agribusiness) while also accounting for rural demographic trends. This means carefully considering what is sufficient to maintain land access, including recognition that freeway standards may not always be needed and that the original access density of farm-to-market roads may be superseded by the changing struc- ture of the agricultural industry. It can also mean focusing on the best way to connect to higher efficiency networks, such as improving road connectivity to shuttle-train-loading facilities that lower costs for shippers of agricultural goods (Prater et al. 2013). Effectively considering rural access density, network redundancy, and modal options in light of changing yields, land use intensity, and access requirements is important for rural right-sizing. When considering a rural right-sizing initiative, an agency should fully leverage partnerships to ensure that all parties recognize the benefit of the initiative, even though there may be fewer partners available. The ownership of vast areas of land by some agribusinesses, parks, and other entities in rural areas may represent a special opportunity in rural areas to tailor infrastructure characteristics to evolving technologies and markets. In this way, just as urban right-sizing poses the opportunity and challenge of a large number of potential private sector partners, rural right- sizing poses the opportunity and challenge of potentially few private sector partners but partners with significant leverage and control over the use of the infrastructure. Quality of Life. Quality of life in rural areas is less likely to be sensitive to factors such as noise and congestion than to access to resources like health care, education, and consumer markets that may be significantly farther away from rural households than their urban or sub- urban counterparts. The sparsity of travel networks in rural areas represents a unique vulner- ability to rural households, as events like flooding, blizzards, or seasonal peaks in agricultural or tourist traffic can render a nearby town (and its associated lifeline to health care, groceries, and other staples) practically inaccessible (see https://downeast.com/gridlocked/). Furthermore, as the population ages, the potential loss of driving ability makes seemingly inefficient services (from a cost-to-person-served perspective) such as paratransit increasingly essential for resident quality of life. Moreover, unlike in urban areas, alternatives such as TNCs or other private mobility providers can be harder to attract to rural communities based on market appeal, thus constraining their ability to play a role in securing mobility. Modal Balance. While demand for public transit in a rural area may be less than that of an urban, suburban, or non-urban area, shifting demographics and an aging population base are significant factors when considering modal balance in a rural area. Additionally, the future implications of autonomous and connected vehicles are important for rural areas with aging populations, with the potential to provide more transit freedom and allow residents to age in place longer. Multi-modal freight access is also a significant concern to rural communities, as grain elevators, railway yards, inland ports, and trade districts may account for a disproportion- ate level of economic activity. Right-sizing options that involve such facilities can therefore be met with sensitivity. However, the simplicity of rural networks (and the size of private land par- cels) represents opportunities for agribusinesses, farmers, and other landowners to experiment
Policy Guidance 45 with electric and automated vehicle technologies more than their urban and suburban coun- terparts. The technology is rapidly developing in the agricultural sector for different vehicle types (see https://www.agriculture.com/content/fully-autonomous-vehicles-are-coming). Furthermore, the availability of public roadways with significant low-volume periods can make rural areas attractive for early deployment of autonomous and connected vehicle tech- nologies and staging strategies that prepare for, and manage, predictable peaks using technology and operational solutions thereby reducing the need for additional pavement. Suggested Tactics for Rural Right-Sizing Do Not Apply Daily/Urban Assumptions About Capacity Needs. In rural areas, it is par- ticularly important to look beyond volume-based metrics to describe the market support by transportation infrastructure. For example, Stein et al. in NCHRP Synthesis 521: Investment Pri- oritization Methods for Low-Volume Roads (2018) found that transportation decision makers both in the United States and abroad recognize that the value offered by low-volume roads to the economy and society cannot be adequately captured through traffic-volume-based metrics alone. This value includes the role of such facilities in facilitating âaccess to trade, to labor markets, and to critical social services and are particularly important for supporting remote communities.â To address this issue, a right-sizing assessment (and evaluation of right-sizing choices) must incorporate additional criteria into the investment decision-making process that captures these broad objectives. For example, within the context of right-sizing evaluations, one can compare the supply of road infrastructure (whether measured through mileage or life-cycle costs) not only with the vehicular volume carried but also to additional metrics appropriate to the local rural economy such as the volume of crop production per acre in the area served by the road in question. Such measures broaden the consideration of the value supported by infra- structure and can serve to mitigate anti-rural bias of volume-based metrics alone (refer to the Section 4.2 Roadway Utilization/Cost Screening tool for additional discussion and guidance). Consider Severity of Impact Over Number of Users. Another important tactic when con- sidering right-sizing within a rural context is to incorporate metrics or processes that allow decision makers to identify critical infrastructure that if unavailable would impose significant costs on rural residents and establishments (including farms, businesses, hospitals, and other institutions). Such analysis can take the form of identifying the detour length for alternate routes or simply incorporating qualitative criteria that score facilities with respect to their role in providing critical access such as to health care or emergency services, schools, or evacuation routes. Finally, it may be appropriate from an equity and policy perspective to consider the vulnerability of a given area, through metrics such as unemployment. NCHRP Synthesis 521 provides more in-depth case examples of these types of criteria and scoring approaches and can serve as a resource for rural areas. Apply Special Caveats About Applying Statewide âInstitutionalâ Right-Sizing in Rural Areas. In the section on Built-In Right-Sizing: Existing Agency Business Practices, there is discussion regarding the allocation of highway and bridge preservation resources, selection of pavement and bridge performance and condition standards, and sensitivity to economic growth within the context of asset management planning and implementation. The example given recommends comparing highway and bridge investment requirements at different levels of demand growth for different facility types (including urban versus rural freeways, arterials, and minor facilities). It may be advisable to create a special category for a core network of non-redundant bridges and roadway segments in rural areas to be excluded from any pres- ervation funding cutbacks or relaxation of standards when right-sizing preservation outlays. Such a category (and exclusion from funding cuts) can safeguard connectivity across sparse networks in rural areas.
46 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming In the absence of special âprotectedâ categories, if a statewide right-sizing process suggests significant reductions in preservation funding or performance standards for rural facilities it is essential to map the location of the affected facilities. This will ensure that (1) the change will not result in an unacceptable compromise of any non-redundant roadway segments or bridges with strategic importance beyond that of the rest of their functional system and (2) the change does not disproportionately affect communities or areas known to be economically vulnerable from an environmental justice perspective. Apply Special Caveats and Adaptations of the Right-Sizing Toolkit. It is important to apply the right-sizing toolkit selectively when right-sizing in rural areas. In particular, findings of the Roadway Utilization/Cost Screening method (described in Section 4.2) and the Asset Deficiency Mapping Method (described in Section 4.7) must be interpreted with respect to an understanding to preserve a dedicated âcoreâ network of inter-regional and other key connec- tions. Furthermore, while the Congestion Threshold Testing method (described in Section 4.6) is not applicable to rural areas, the methodology could be adapted to consider some threshold of traffic congestion relative to seasonal peaks (whether due to harvest season or tourism) as the basis for assessing transportation need. For example, the method may be adapted to recognize that it may be over-investment to try to resolve seasonal bottlenecks occurring on only 5 days of the year, depending on volumes (and severity of delay), while a right-sized level of investment may be warranted and practical for limiting the deficiency to less than 20 or 30 days of the year. Adaptation of congestion threshold testing to seasonal instead of daily peaks for rural areas also can help to pinpoint opportunities for seasonal relief routes, reversible traffic lanes, conditional use of shoulder lanes, and other solutions to a right-sized understanding of needs in rural areas. Benefitâcost analysis can be used in conjunction with the Congestion Threshold Testing method to arrive at a âbreak-evenâ tolerable number of days in which a rural system or facility may toler- ate congestion before different levels of investment are warranted. Rural Right-Sizing Case Example. The Nebraska DOT provides an example of where an agency has taken a proactive approach to involving rural stakeholders in right-sizing state and local investment in the stateâs rural bridges. Duration of Right-Sizing When implementing any right-sizing effort, it is important to address the likely duration of the right-sizing activity. While right-sizing objectives by their nature are realized in the long term, some right-sizing actions can occur within a matter of months and thereafter simply require monitoring and benchmarking of performance and cost changes against right-sizing objectives. By contrast, other right-sizing objectives may require disciplined and consistent actions by multiple entities over a period of years to achieve the envisioned cost savings or better and higher use of assets. Addressing the likely duration of the right-sizing effort when establishing partnerships and right-sizing objectives creates an opportunity to provide remedies and safeguards for the distinctive risks and pitfalls associated with the duration of the effort. It is expected that right-sizing initiatives will pertain to â¢ A specific project or plan, which entails doing an assessment, right-sizing the asset, and moni- toring thereafter; â¢ An ongoing program, which may entail ongoing procedures or policies to continually reassess the program over time; and â¢ An entire department, which may entail fundamentally changing the agencyâs mission and procedures to make right-sizing a core aspect of how the agency conceives of and achieves its mission. A description of each likely duration with potential pitfalls and remedies for each follows.
Policy Guidance 47 Right-Sizing in Nebraska: Rural Stakeholders Setting the Criteria for Allocating Scarce Funding Right-sizing is an approach that can benefit all communities, urban and rural alike. While the challenges may look different for a rural community, guiding principles and policies that help those communities assess the appropriate size and scope of their transportation infrastructure can have an equal impact in both rural and urban areas. For instance, shifting circumstances recently prompted Nebraska to rethink its approach to its county bridge system. The state has more than 15,000 bridges and more than 11,000 of those bridges sit on the county system. Of those more than 11,000 county bridges, nearly 1,900 are structurally deficient. Additionally, as time has gone on, the way these bridges are used has evolved. Many bridges are used by only a few travelers or are used only a few times a year during harvest and, as farms become larger, equipment and loads have become heavier. Nebraska could not afford to invest in all of these preexisting bridges and needed to right-size both its invest- ment level and its asset portfolio. Because the facilities were primarily in rural areas, the opportunities for adaptive reuse were limited, and stakeholders would be challenged to buy into what may be perceived as âdisinvestmentâ from their facilities. In an effort to address these issues, in 2016 Nebraska enacted the Transportation Innovation Act (TIA), which included the creation of a new County Bridge Match Program (see https://dot.nebraska.gov/projects/tia/bridge-match/). The silos that had existed between counties, the lack of dedicated funding, and the structure of the Nebraska DOT bridge program had typically limited repair or replacement to one or two bridges per county per year, a pace that was forcing the counties further and further behind on their bridge maintenance. After enactment of the TIA, Nebraska DOT set forth to work with its county partners to develop the param- eters of the County Bridge Match Program. Rather than strictly mandating closure for those bridges that were underutilized and structurally deficient due to heavier loads or other circumstances, the TIA gave Nebraska DOT the ability to proactively partner with counties to develop a program that could work in a variety of dif- ferent scenarios. Additionally, projects funded by the program remain under county supervision from develop- ment through construction. This approach fostered collaboration and generated creative ideas that avoided top-down directives from Nebraska DOT. As structured, the County Bridge Match Program offers up to $40 million in matching funds to Nebraska coun- ties. County participation is voluntary, but the program provides incentives for the development of innovative and economical solutions to repair, replace, or eliminate structurally deficient county bridges at the countyâs initiative. Project selection scoring includes an âinnovationâ category, and the innovations that have been developed through the program have ranged from county-to-county collaborative project bundling to the elimination of redundant bridges. Project selection scoring also provides incentives to locally empower right- sizing of rural bridge infrastructure by offering bonus points to a rebuild project if the project also plans for the closure of two bridges. In addition, where appropriate, the program also provides incentives for the use of pipes and culverts as replacement options, optimizing the stateâs infrastructure for what is truly needed. Of approximately 2,000 eligible bridges, in the first year of the program 68 bridges were selected, and in the second year of the program 66 projects were selected for a mix of repair, replacement, and removal. A map of eligible and selected bridges may be accessed at http://maps.nebraska.gov/NDOT/CountyBridgeMatchProgram. A list of selected bridges may be accessed at https://dot.nebraska.gov/media/10791/selected-bridge-sites-2017. pdf and https://dot.nebraska.gov/media/10791/selected-bridge-sites-2017.pdf. The programâs collaborative approach has generated a new perspective for Nebraska DOT and Nebraska coun- ties regarding their transportation infrastructure. Even outside the program, counties are now proactively working together to assess the appropriate size and scope of their bridges and other infrastructure assets. Summary: This right-sizing approach recognized the needs of county and local governments, emphasized partner- ships, and explored cost-saving delivery mechanisms. It demonstrates a case of empowering rural communities to take a proactive role in arriving at right-sizing objectives and solutions when confronting funding constraints.
48 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming Near-Term Right-Sizing: Right-Sizing as a Project Near-term right-sizing can be understood as a right-sizing effort in which a finite set of actions can be identified that are expected to achieve predefined right-sizing objectives. In these cases, the duration of the right-sizing activity is short and, once key right-sizing elements are in place, the only ongoing activity is monitoring and evaluation. The scope of a near-term right-sizing effort may include: â¢ Implementing a new physical design of a facility. â¢ Implementing a policy change in how a program is administered. â¢ Implementing a jurisdictional transfer or sharing agreement. â¢ Implementing a new or altered service or route in an existing program. While the preceding examples cannot always be accomplished in the near term, they are well defined and specific actions that may lend themselves to a near-term solution. When a finite set of actions can be identified, setting a definite timetable is important to ensure both achievement and focus in the right-sizing activity. While near-term right-sizing efforts may be comfortable for many agencies because they are very similar to projects agencies already implement, there are some concerns and safeguards to consider. Warnings and Pitfalls. The greatest risk associated with near-term right-sizing efforts is that right-sizing will come to be seen within the agency as just another incidental feature of a project (or jurisdictional transfer). The distinctive rationale of intentionally shaping infrastruc- ture and policy to reduce life-cycle costs, achieve better and higher uses of existing assets, and align ownership, funding, use and responsibility can fade into the immediate desire to develop and deliver a popular and achievable project. Right-sizing may get reduced to simply an inter- pretation of a projectâs features or potential benefits but not a central rationale driving the scope, ownership, decision-making protocol, and other aspects of infrastructure stewardship. Further- more, because the advantages of right-sizing occur over time, simple completion of the right- sizing project (or implementation of the policy) does not ensure achievement of the objectives if proper monitoring is not in place. Remedies and Safeguards. When right-sizing takes the form of a near-term project or ini- tiative, the following steps can help ensure focus and achievement of right-sizing benefits: 1. Consider Alternatives to Right-Sizing When Setting Objectives. After initiation, when partners begin to establish right-sizing objectives, it is important to ask the question as to whether right-sizing is really needed or if the partners simply agree that some type of change is needed. It is possible that, on assessment and reflection, partners find that needed change may take the form of expansion, modernization, or corridor management. The cri- teria shown in Figure 1 of the introduction to this guidebook are recommended for making this determination. If the central objective is not to achieve a better and higher use of an existing asset or more efficiently manage decisions related to the life-cycle cost of an asset, there is a strong reason to consider what other objectives may be in play and whether the project belongs within the purview of a right-sizing effort. If it is found that right-sizing may be an add-on advantage to a project but not its central purpose, then it is important to clearly pinpoint the right-sizing objectives relative to other aspects of purpose and need and to determine that they are not in conflict. For example, an effort may be initiated under a right-sizing policy but in setting objectives the parties come to realize that the primary issues are simply that a facility is antiquated and capacity deficient. If the facility as built easily justifies its life-cycle cost, is owned and funded by the appropriate entity, and there is no real desire to change its use or function (the facility or program just needs improvement to better perform this function), then it is reasonable to
Policy Guidance 49 â¢ Reduction in lane miles maintained â¢ Change in condition target or performance standard â¢ Implementation of transportation demand management or transportation systems management and operations (TSMO) solutions â¢ Annual or cumulative maintenance/preservation dollars saved â¢ Expansion dollars saved when capacity can be stretched through TSMO solutions, transportation demand management, and other innovations â¢ Change in modal use or restrictions (e.g., conversion of unused rail bridge to a bicycleâpedestrian bridge) â¢ Conversion of an inter-regional arterial into a main street with âcomplete- streetsâ (with associated rerouting of pass-through traffic) â¢ Reduction of through lanes to make room for TNC bays, beautification, bicycleâpedestrian amenities or special purpose lanes (such as bus rapid transit, driverless vehicles, trucks, or others) â¢ Value of property made available for alternative use â¢ Value of economic activity enabled by the changed use of the asset minus any additional user cost â¢ Jurisdictional transfer of facility (and associated change in standards and legal responsibility regarding access, design, and other features) â¢ PublicâPrivate Partnerships with user charges and leasing or shared-use arrangements â¢ Creation of business improvement districts or compacts to fund and maintain key elements or enhancements of previously 100% public right-of-way, assets, or services â¢ Comparative dollar investment in the infrastructure by different partners relative to projected benefit or revenue streams â¢ Findings from use of Stratified Return on Investment Calculator (Section 4.4) Life-Cycle Cost Saving Better and Higher Use of Existing Asset Better Alignment of Costs, Benefits, and Uses Right-Sizing Policy Objective Examples of Potential Near-Term Recommended Actions Quantifiable Measures of Intended Outcome Table 10. Framing table for near-term right-sizing initiative. determine that there are no right-sizing objectives. The initiative may proceed (and be evalu- ated or justified) outside a right-sizing policy. Making such determinations is important so that both the agency and its partners can clearly understand and differentiate right-sizing from other types of projects, and when right- sizing policies, assessments, and criteria most effectively apply. 2. Tightly Specify Objectives and Scope. Ensuring that right-sizing objectives are measurable, specific in terms of problems solved and intended outcomes, is essential to near-term right- sizing efforts. It is advisable to limit the scope of a near-term right-sizing initiative to actions specifically aimed at (1) achieving cost savings, (2) achieving better and higher asset uses, or (3) improving the alignment of resources with benefits. By testing and classifying specific and measurable right-sizing objectives relative to these three classifications, objectives can be kept narrow and within the distinctive purview of right-sizing. Furthermore, quantifiable mea- sures of intended outcomes for each of these three types of objectives can be readily included within the evaluation of alternatives. Table 10 suggests a performance framework to guide and manage the scope of a near-term right-sizing effort. When using the table, it is recommended to enumerate specific objectives as appropriate within each row of the left-hand column to ensure that all objectives fall within the purview of right-sizing. It is then advisable to select and present measurable intended
50 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming outcomes in the right column. Complete the center column last so that recommendations populating the center column can be evaluated in terms of how well they bridge the objec- tives with the intended outcomes. Using this type of structure both ensures that the initiative focuses on right-sizing principles from start to finish while also clearly defining the scope and suggesting a monitoring regime with measurable and quantifiable cost and performance outcomes. 3. Include a Monitoring Regime. While a near-term right-sizing initiative can be implemented through an agenda of well-specified infrastructure and policy changes, its effectiveness relies on ongoing monitoring and evaluation by all parties. While this is true of most infrastructure investments, in the case of near-term right-sizing, a monitoring regime is especially impor- tant because objectives are subtle and long term in nature. For example, if an agency implements a protected left-turn design and signal operation to reduce angle crashes at an intersection where most crashes occur making left turns, it is largely intuitive that the modernization by its very nature solves the problem. Unlike a right-sizing problem, this example represents a baseline engineering need with a clearly defined solution and predictable outcome. A simple before-and-after review of crash data can validate success. By contrast, in a right-sizing situation in which the agency seeks to make valuable land and amenities available for higher use in economic development or to reduce life-cycle costs for the state and enhance tax base for the city by improving and transferring ownership of a facility, the simple before-and-after methods may be insufficient. When there are multiple partners involved, achievement of objectives can be even more complicated. A near-term right-sizing action may achieve the objectives of one partner but not the objectives of other partners. This can be a particular risk when there is a jurisdictional transfer involved and the relinquishing agency ceases to even monitor condition or performance of the facility. For this reason, long-term monitoring strategies are recommended as a final element of near-term right-sizing initiatives. Such monitoring begins with the quantifiable mea- sures of intended outcomes shown in Table 11 and identifies key data sources and entities â¢ Annual or cumulative maintenance/preservation dollars saved â¢ Owning agencyâannual operations and maintenance (O&M) budget and predicted remaining life â¢ Value of property made available for alternative use â¢ Value of economic activity enabled by the changed use of the asset minus any additional user cost â¢ City or county, assessor dataâtables and maps â¢ City or countyârecord of commercial or industrial building permits and build-out; or record of tourism/visitor events attracted â¢ Comparative dollar investment in the infrastructure by different partners relative to projected benefit or revenue streams â¢ Findings from use of Stratified Return on Investment Calculator (as described in Section 4.4 ) â¢ Municipal and countyârecord of revenues received (sales tax, property tax, impact fees, and other sources) before versus after the change â¢ Private business or developerâ reports of additional business occurring on or near the site â¢ Special studies, undertaken by pre- identified right-sizing partners such as surveys or interviews documenting market reaction to the change Note: The monitoring regime must specify frequency of reporting, entity responsible for compiling/distributing reporting, and criteria for reassessing right-sizing solutions. Life-Cycle Cost Saving Better and Higher Use of Existing Asset Better Alignment of Costs, Benefits, and Uses Right-Sizing Policy Objective Quantifiable Measures of Intended Outcome Examples of Possible Supporting Data and Reporting Entity Table 11. Monitoring table for near-term right-sizing initiative.
Policy Guidance 51 responsible for measuring and reporting outcomes to the other entities over time. The monitoring strategy should also include an agreed-upon frequency with which reported outcomes will be compiled into a composite score card and junctures at which parties will agree to reconvene to consider incremental updates or adjustments to the right-sizing actions taken (see Table 11). Long-Term Right-Sizing: Evolution from Corridor Management While incremental near-term âproject-styleâ right-sizing efforts can be highly effective, there are right-sizing objectives that cannot be achieved by a single short-term agenda of policies and improvements in a specific timeframe. Because it may have taken decades or even centu- ries for a portfolio of transportation assets to fall out of alignment with owning, paying, using, and managing interests, it is likely some right-sizing efforts will span multiple years and may need to endure multiple political cycles, administrations, and other changes. Long-term right- sizing can be understood in terms of arrangements to enable agencies to persist in advocat- ing for and implementing right-sizing objectives that cannot be achieved in a pre-determined timeframe. The experience of corridor management, in which corridor coalitions have endured over time to realize long-term visions, is highly instructive for right-sizing. Resources like NCHRP Report 661: A Guidebook for Corridor-Based Statewide Transportation Planning (Carr et al. 2010); NCHRP Report 435: Guidebook for Transportation Corridor Studies: A Process for Effective Decision-Making (Smith 1999); Corridor Approaches to Integrating Transportation and Land Use (ICF International 2009) funded through NCHRP Project 8-36, Task 86; and NCHRP Synthesis 337: Cooperative Agreements for Corridor Management (Williams 2004) are largely transferable regarding how to create an enduring and multi-agency coalition structure for achieving transportation objectives over time. Using these resources, it is plausible to build right-sizing coalitions alongside long-standing corridor coalitions to achieve some of the more aggressive and long-term right-sizing objec- tives facing complex transportation systems. While corridor management began with a focus of centering efforts on a particular roadway and its ancillary facilities, the concept evolved over time to the point that âcorridorâ referred to an entire transportation and land use sub-system. In the case of right-sizing efforts, the scope need not be a âcorridor,â but rather any facility or system for which a right-sizing need has been initiated and validated. When utilizing the cor- ridor management paradigm as a starting place for long-term right-sizing, Table 12 is helpful for understanding similarities and differences between the types of efforts. â¢ Both types of efforts involve broad coalitions, that exist to achieve stated objectives for a transportation system and endure until the objectives are satisfied. â¢ Both types of efforts can be initiated by a study of the system in question to establish vision, goals, objectives, roles, and actions. â¢ Both types of efforts can be implemented through joint powers agreements, compacts, memoranda of understanding, and other multi-agency agreements. â¢ Both rely on consistent long-term attention to selected performance objectives and long-term outcomes. â¢ Right-sizing coalitions and initiatives need not center on a specific corridor but may apply to any facility or sub-system. â¢ Right-sizing coalitions and initiatives focus on making changes to achieve life-cycle cost savings, better and higher uses of assets or better alignment of ownership, funding, use, and authority. Corridor initiatives focus more broadly on a range of performance outcomes. â¢ Right-sizing initiatives may succeed without expanding or adding any new infrastructure, whereas corridor initiatives entail an expansion or modernization building program. Similarities Differences Table 12. Comparing right-sizing with corridor management.
52 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming Warnings and Pitfalls. The greatest risk associated with long-term right-sizing initiatives is that either (1) the right-sizing objectives themselves will fall out of date if the initiatives go on for too long or (2) as staff turnover occurs, political administrations change, and new oppor- tunities present themselves, a right-sizing collaborative or coalition may become a vehicle for purposes other than right-sizing, diluting the effectiveness (and even the original purpose) of the effort. Right-sizing initiatives require a certain tightness of scope that cannot accommodate (and by its nature must resist) the introduction of objectives, alternatives, and compromises that (1) significantly expand life-cycle costs, (2) add to the asset portfolio without relating long term costs to anticipated sources of funding and benefits, or (3) utilize land, infrastructure, or other resources as an expedient pathway to a desired performance outcome at the expense of potentially better uses of the resources involved. In effect, when compared with corridor man- agement initiatives, effective right-sizing initiatives have less room for compromise in their overarching purpose and, therefore, can be harder to sustain over time than corridor manage- ment initiatives. Remedies and Safeguards. The following six recommendations are offered to safeguard a long-term right-sizing initiative in terms of both its sustainability and ongoing effectiveness. 1. Work from a tight mission statement. After initiation, but before firmly establishing right-sizing goals and objectives, it is helpful to create a tight and specific mission statement regarding why the right- sizing coalition or initiative exists. The mission statement should be specific with regard to (1) the facility, program, or system to be right- sized; (2) the vision for intended outcomes of the right-sizing in terms of alignment of incentives, management of costs, and/or better and higher uses of assets or land; and (3) the type of actions by which the vision is realized. In the example to the left, the mission statement makes it clear that the right-sizing focus is on supporting efficient utilization of infrastructure and making resources available for other uses. The mission also enumerates three types of under takings that will characterize what is within the mission of the right-sizing com- pact. This statement may guard the compact against being drawn into projects or processes aimed at enhancing mobility through aggressive roadway expansion or parking facilities (even if a business case may exist for such things). 2. Begin with a comprehensive study. Like corridor management efforts, beginning a long-term right-sizing initiative with a compre- hensive study to determine right-sizing goals and objectives can be a way to establish working relationships and mutual investment between partners, adequately study the underlying issues and arrive at a clear vision of what right-sizing means for a par- ticular asset or system. The scope of such studies is recommended to include the following: â Assessment of avoidable sources of life-cycle cost relative to utilization for the infrastruc- ture or system under study (including specific application of the methods in the right- sizing toolkit); â Identification of any misalignments between the benefits of the facility, the sources of its funding, and the authority to make decisions about its operation and maintenance; â Assessment of potential better and higher uses of existing assets in the long term and development of new funding, use, and ownership/authority arrangements (potentially as the result of scenario comparisons); and Sample Mission Statement The Smallville Right-Sizing Compact serves the central business district of Smallville. The compact envisions a downtown in which all roads, trails, and transit routes are fully utilized while freeing the most possible land, time, and public revenue for business and recreational purposes. The compact achieves this through the (1) innovative design of infrastructure, (2) giving private developers incentives to participate in transportation solutions, and (3) promoting dynamic and multi- modal transportation options.
Policy Guidance 53 â Establishment of a performance framework (with measures, benchmarks, and respon- sibilities) for evaluating right-sizing actions and evaluating progress toward right-sizing objectives over time. 3. Provide a primer for new members or staff. It is recommended that an initiation packet is in place for any new staff or members entering into the right-sizing initiative after the initiative begins. This should include a brief explanation of the mission statement, the performance indicators, and the goals and objectives, as well as some simple criteria for how the right- sizing initiative determines what is and is not within its scope. 4. Include both governmental and non-governmental partners. As described in the guid- ance on partnerships, including business groups, independent economic development organizations, universities, and other partners not directly led by elected officials can give a coalition the staying power to both stay true to its right-sizing vision and endure over time. 5. Establish clear criteria for changes in right-sizing actions and priorities. By establishing clear criteria and simple tests for what actions or projects the collaborative will support, a long-term right-sizing initiative can be very consistent and transparent in limiting its scope and making its role understood. For example, a collaborative or coalition may have a rule that it will only support policies or projects that reduce public right-of-way ownership or that have funding directly tied to users who benefit from the change. The simpler the criteria, the more likely they are to continue to be understood over time and the easier they will be for a succession of partners to apply consistently. 6. Set benchmarks for updated assessments. As shown in Chapter 4, the findings of any right- sizing assessment will be based on current conditions and observed trends. If a long-term right-sizing initiative is undertaken, it is important to clearly define when the assessments used to validate and derive the objectives should be updated. This could involve either (1) indi- cating a minimum frequency of reassessments and reconsideration of right-sizing objec- tives (and the need for the initiative) or (2) establishing certain triggers regarding traffic levels, land use change, safety performance, or other factors to indicate when objectives are to be re-validated or updated. Permanent Right-Sizing: Right-Sizing as a Paradigm Shift In addition to the near-term and long-term right-sizing approaches previously described, an agency may seek to make right-sizing part of both its culture and established practice, without being limited to any specific duration, agenda, or long-term end state. This action can be understood as a paradigm shift, whereby agencies fundamentally understand their role primarily in terms of leveraging existing assets and limited revenues to achieve returns for the public, with constructing, maintaining, and operating transportation infrastructure as an incidental means to an end. In Section 2.3 on DOTâinitiated right-sizing, there are several recommendations about how an agency can institutionalize right-sizing as part of its standard operating procedure through the way it applies asset management systems, uses forecasting models, and establishes needs and criteria in its planning and programming. Warnings and Pitfalls. The greatest risk associated with attempts to institutionalize right- sizing is that right-sizing will lose its meaning and that agencies will perpetuate long-standing practices by simply interpreting or adapting them into the nomenclature of the intended new paradigm shift. If right-sizing becomes a buzz-word, there can be a tendency to want to char- acterize new equivalents of existing practices as âright-sizing solutions,â even if they do not achieve right-sizing objectives. For example, a highway expansion project may be reframed as âright-sizingâ the facility, regardless of its objectives or outcomes, or the projectâs satisfaction
54 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming of context-sensitive solutions or environmental justice criteria may be used as evidence that it must be a âright-sizeâ solution. Remedies and Safeguards. The following recommendations are offered to safeguard right- sizing policies and outcomes when an agency may be seeking to institutionalize right-sizing practices as a permanent matter of policy: 1. Specify right-sizing procedures incrementally. While right-sizing may well change the cul- ture of an agency and enable paradigm shifts to occur, it is important to specify which poli- cies, procedures, criteria, or rules will be changing as an agency implements right-sizing. For example, an agency may specifically define â An internal and external right-sizing initiation and evaluation process; â Right-sizing procedures for developing the STIP (or transportation improvement program in the case of an MPO); â Right-sizing procedures for implementing asset management; and â Right-sizing scope items in LRTPs and TAMP. By defining specific business processes in which right-sizing is to be implemented and training staff on how the right-sizing approach differs from the prior approach, an agency can gradually instill a learned understanding of what right-sizing is and what it is not. Further- more, leadership and agency staff will not feel pressured to connect everything they do to âright-sizingâ but instead will understand right-sizing as a specific type of decision with a specific purpose. 2. Three-part testing. As part of an agencyâs right-sizing policy, it may be beneficial for an agency to have a three-part test to apply to any investment or decision justified based on right-sizing, consistent with the three types of objectives shown in the template for near- term right-sizing (see Table 10). A project, choice, or policy change (not otherwise justified by other agency policies or standards) must meet at least one of the three parts of the test to be justified on the basis of right-sizing. The three-part test is summarized in Table 13. 3. Independent review and oversight of right-sizing choices. A final recommendation for success in permanent or institutionalized right-sizing is the appointment of an independent agency-wide right-sizing review board or task force. Such a board may consist of experi- enced agency leaders from different business units and disciplines, such that knowledge of â¢ Will the proposed change reduce life-cycle costs? â¢ How will the cost savings accrue from the right-sizing action? â¢ Will these costs be saved or merely shifted to other agencies or to the traveling public? â¢ How will the proposed change offer incentives to users and beneficiaries of the program or facility to participate in its costs? â¢ How will the agency enable the proposed beneficiaries to participate in decisions regarding the future of the facility? â¢ Do key affected partners endorse the change? â¢ Does the choice enable an asset or program to be used differently from how it is currently being used? â¢ What new economic opportunities are available as a result of this changed use, function, or ownership? â¢ What indications are there that these opportunities are real and can be expected to materialize? (Examples may include analogous similar cases, commitments from developers or other governmental partners, or other contextual information). â¢ Will the choice meet the transportation need in the most sustainable and equitable way available? Best and Highest Use Test Alignment Test Life-Cycle Cost Test Right-Sizing Tests Key Questions for Determination Table 13. Three-part test for right-sizing.
Policy Guidance 55 all aspects of the agencyâs business process are represented, as is a diversity of districts or major geographic units. The board may also include outside partners representing MPOs, the developer community, and other related entities. The board may meet periodically to review recent decisions made on the basis of right-sizing that have been questioned by either internal or external stakeholders and to review proposed decisions from managers within the agency to determine if a potential project, policy change, or decision can be justified as part of a right-sizing policy. The board can provide peer review, applying the three-part test previously described. If a choice, project, or initiative does not qualify as a valid right-sizing change, then it still may be justifiable under other agency policies but such reviews can serve as an educational opportunity to raise awareness of how right-sizing decisions can be identi- fied, justified, and implemented. Accounting for Uncertainty A principal reason why right-sizing is necessary is because of the rigidity of transporta- tion infrastructure in the face of changing economic and technological realities. Even the best planned or designed infrastructure elements, based on the most rigorous models or the most brilliant insights, cannot be expected to reflect an accurate understanding of the decades of change that follow their inception. While infrastructure assets such as houses, stadiums, office buildings, and factories can be bought, sold, demolished, replaced, repurposed, and even sliced into condominiums, highways, bridges, ports, and rail lines cannot respond to market forces in the same way. As stewards of infrastructure that serve the public interest, transportation agencies generally cannot back out of risky investments, cut losses, invest elsewhere, or engage in other rational behaviors with the same freedom as private asset owners. For this reason, transporta- tion agencies are especially vulnerable to uncertainty and inevitably must periodically follow a right-sizing process to account for changes over time. Both the infrastructure life-cycle checklist (in Table 2) and much of the guidance in Sec- tion 2.2 identify junctures to apply right-sizing assessments to consider current needs and poten- tial ranges of market or economic growth before reinvesting (or disinvesting) in an existing asset. Agencies can complement these recommendations with methods of risk-based asset manage- ment as documented in the 2017 FHWA report Incorporating Risk Management into Transpor- tation Asset Management Plans (FHWA 2017) and the 2016 AASHTO Guide for Enterprise Risk Management (AASHTO 2016). These sources enable any built-in right-sizing process to account for risk in terms of understanding the potential universe of outcomes. The recommendations of Section 2.3 also build on the FHWAâs 2017 report by suggesting how agencies can not only acknowledge demand risk but also establish investment scenarios and policies accounting for it. While not all forms of risk (such as the risk of a catastrophic hurricane, breakdown of agency capacity to manage infrastructure, or risk of terrorism) are germane to right-sizing, two princi- pal forms of uncertainty are pertinent to right-sizing scenarios. These forms include economic risk (described as demand risk in the FHWAâs 2017 report) and technology risk. Economic risk or demand risk can be understood in two ways. The risk can be understood in terms of market demand either (a) outpacing the anticipated utilization of a facility (leaving a deficiency and imposing costs on system users) or (b) falling short of anticipated utilization (leaving the agency with sunk improvement and life-cycle costs into an asset that cannot gener- ate enough societal value to justify its ongoing outlays). Technology risk can be understood in terms of underestimating or overestimating tech- nological advances that may obviate or antiquate a piece of infrastructure before the end of its useful life. This too can lead to either (1) an agency losing the sunk cost of an infra- structure improvement to mitigate a problem that is resolved by advanced vehicle or other
56 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming technological change before the infrastructure improvement can generate its intended ben- efits or (2) an agency failing to invest in key infrastructure elements that will be required by newly emerging technologies. For example, hybrid and electric ultra-low emission vehicle technology (depending on its adoption curve) could erode the incremental air quality benefit of intersection improvements intended to reduce idling or carbon monoxide emissions. While less idling may have a mobility benefit, saving stopâgo time for an electric vehicle has virtu- ally no air quality benefit whatsoever. In the same way, improvements intended to simplify travel environments and reduce driver error may not have benefits nearly as competitive with other projects in an age of driverless (or even semi-driverless) technology. The prioritization of individual improvements in an STIP that is even partly based on benefitâcost or multi- criteria analysis can be fundamentally altered by assumptions made about the adoption rates and effectiveness of new technologies, leaving even the best intended âright-sizingâ solution misaligned with future realities. Risk and Right-Sizing. The economic and technology dimensions of risk are of particular importance in right-sizing, because they represent some of the most likely sources of under- build or over-build, which are the opposite of right-sizing. Right-sizing cannot prevent such risk, but a right-sizing policy can enable an agency to (1) manage its over-build or under-build risk based on understood types of uncertainty, (2) articulate those risks to owners, users, and deci- sion makers evaluating right-sizing options, and (3) monitor those assets and projects in their programs understood to face the highest levels of incremental risk. Using Economic and Technology Scenarios to Manage Under-Build and Over-Build Risk The type of sensitivity testing described in Section 2.3 for considering different potential levels of demand when right-sizing asset management scenarios can be carried further to create sensi- tivity tests pertaining to both economic growth and technology. Economic growth and demand scenarios can be derived by adjusting traffic growth assumptions (or economic growth and housing assumptions in a travel demand model if available) to reflect modest, moderate, and aggressive economic forecasts as described in Sec- tion 2.3. These different potential ranges of demand can then generate different estimated future year traffic volumes (both with versus without any given infrastructure investment). The host of economic benefits dependent on traffic volumes, using valuation methods docu- mented by the U.S. DOT (BenefitâCost Analysis Guidance for Discretionary Grant Programs) and documented elsewhere (TRB Transportation Economics Committee n.d.), will then vary, based on the severity of the anticipated problem to be solved and the number of transporta- tion system users subject to the future condition. Examples of economic benefit levels that will vary with demand forecasts include â¢ Travel time savings, â¢ Reliability savings, â¢ Crash cost (rates may not be sensitive to volume, but number of incidents is a function of volume), â¢ Emissions savings/air quality improvement, and â¢ Market access/productivity gains (as can be quantified using AASHTOâs EconWorks analysis tools at https://planningtools.transportation.org/75/analysis-tools.html). Each project will have three different possible benefit levels depending on which economic trajectory is believed. Benefits will often be highest when economic growth assumptions are most aggressive, as rapid growth generates economic costs for transportation users, justifying project outlays.
Policy Guidance 57 Technology scenarios can be derived by identifying key technologies to be tested and reason- able assumptions about both (1) the rate of technology deployment over the life of a proposed project and (2) the likely effectiveness of technologies at changing transportation performance characteristics. For example, the emergence of advanced vehicle technologies (both electric/ hybrid as well as driverless or even semi-driverless technologies) may have significant effects on â¢ Crash rates (and associated safety cost savings available from infrastructure investment), â¢ Emissions rates (and associated emissions savings available from infrastructure investment), â¢ The value of time lost traveling (in driverless scenarios, time spent traveling may represent less opportunity cost), and â¢ The per-mile cost of operating a vehicle (advanced technologies have less fuel cost and may be calibrated to impose less wear and tear). Organizations like the National Highway Traffic Safety Administration have been researching and documenting such effects (see https://www.nhtsa.gov/technology-innovation/automated- vehicles-safety). For driverless vehicles, the relationship between provided infrastructure capacity and system performance may itself change. In all of the preceding cases, advances in vehicle technology have the potential to solve problems that would otherwise represent societal costs, justifying infra- structure investment. The rate of increase in deployment of driverless and electric technologies may make it significantly more difficult to justify public infrastructure outlays as the new tech- nologies may enable alternative solutions paid for by the owners and operators of the vehicles. While it is unknown how fast changes will occur or how effective the technologies will be, it is possible to consider modest, moderate, and aggressive scenarios regarding these technologies, just as in the case of economic uncertainty. By selecting modest, moderate, and aggressive adop- tion rates and performance effects, it is possible to add a technology dimension that reveals how sensitive the return-on-investment for any given project is to technological uncertainty. Integrating Uncertainty into Prioritization and Programming Prioritizing with Two Dimensions of Uncertainty. With two dimensions of uncertainty (e.g., economic and vehicle technology), it is possible to arrive at comparative benefitâcost ratios (or other multi-criteria scores) for use in developing and prioritizing a transportation program. Table 14 summarizes how the comparative calculation of benefits (with only two levels of sensitivity) could yield four different estimates of societal benefit, and thus four benefitâcost ratios for the same project. Given the uncertainty regarding which of these futures are most likely to occur, the most instructive result of this methodology is the difference between the high-growth and low- technology scenario, suggesting the greatest need and potential benefits for transportation infrastructure investments, and the modest-growth and high-technology scenario, suggesting the least need and potential benefit from transportation infrastructure scenarios. Comparing projects with respect to these upper and lower bounds of benefitâcost ratios, as well as the estimated present value of net benefits (or disbenefits) under each scenario, can $ Benefits $ Maximum Benefit for Infrastructure Investment $ Minimum Benefit for Infrastructure Investment $ Benefits Modest Technology Growth Scenarios Modest Economic Growth Aggressive Economic Growth Aggressive Technology Growth Table 14. Benefits with two dimensions of uncertainty.
58 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming reveal the comparative vulnerability of projects to economic and technological uncertainty. Furthermore, by considering the net present value of societal benefits (present value of ben- efits minus present value of costs under each technological and economic scenario), it is pos- sible to consider the potential magnitude of over-spending or under-spending costs. In some cases, there has been a âstress-testingâ practice of building for maximum anticipated build- out or a presumption that traffic growth assumptions should err on the side of aggressiveness so as to prevent deficiencies or the costly need to add capacity before the end of a projectâs useful life. However, there is also significant cost of investing scarce resources to over-build (or over-preserve) a facility in anticipation of benefits that are largely dependent on an aggres- sive economic trajectory or a modest view of the role that technology may play in addressing performance needs. This type of sensitivity testing can be used to highlight both over-build and under-build risk. Table 15 gives an example of how this method can be applied when prioritizing projects for a typical transportation improvement program. In the example, if an agency is prioritizing projects using a simple B/C ratio, stress testing for the most aggressive traffic and economic forecast available without presuming any change in vehicle technology, Project 1 would be ranked first (BCA = 1.83), followed by Project 3 (1.71), and then Project 2 (1.19). However, the department may have reason to expect more modest economic growth (either due to a long-term economic restructuring forecast by other state agencies or because the state or region is reaching its development capacity), and there may be indications that the deployment of advanced vehicle technology is intensifying. In this case, Project 3 would be the top-ranked project (1.43), and neither of the other projects would even generate sufficient benefits to justify their costs. Project 3 would also be the top-ranked project if the agency were seeking to avoid a costly over-build and wanted to concentrate constrained funds only to those projects most likely to generate benefit regardless of how unknown technol- ogy or economic trends may develop. The net present value analysis shown in Table 15 is also helpful for understanding the rela- tive magnitude of potential economic costs associated with either (1) over-building to an eco- nomic and technological future that does not materialize or (2) under-building and leaving a costly deficiency for system users. Using the net present value equation, the ânet user cost of under-buildâ shown in the table represents the present value of benefits that the project would generate for the public under rapid growth with modest technology progress minus the public cost of the project. In effect, if the project is not built, the column represents the anticipated maximum value of transportation performance benefit the public stands to lose resulting from the agency failing to do the project based on overly modest assumptions. In the same way, the next column, the ânet agency sunk cost of over-buildâ represents money that the agency might Table 15. Example of prioritizing with uncertainty (dollars in millions). Project # Cost Max Public Benefit Min Public Benefit Max BCA Min BCA Max NPV Min NPV Net User Cost of Under- Build Net Agency Sunk Cost of Over- Build Highest Uncertainty Cost 1 $2.4 $4.4 $2.0 1.83 0.83 $2.00 ($0.40) $2.0 $0.4 Under-Build ($2.0) 2 $1.6 $1.9 $1.2 1.19 0.75 $0.30 ($0.40) $0.3 $0.4 Over-Build ($0.4) 3 $0.7 $1.2 $1.0 1.71 1.43 $0.50 $0.30 $0.5 None None Note: BCA = benefitâcost analysis, NPV = net present value.
Policy Guidance 59 waste if it were to build for a future that does not materialize or to solve problems that vehicle technology would greatly reduce or eliminate on its own. The final column simply reports which of these potential errors (over-build versus under- build) represents the greatest cost, given the range of defined alternative scenarios. The analysis shows that failing to build Project 1 would impose a greater cost than any other error that might be made due to uncertainty. The analysis also shows that the sunk cost of building Project 2 under overly aggressive market growth (and modest technology) assumptions would be a cost- lier error than failing to build the project at all. Overall, the final column further demonstrates that Project 3 is the âsafestâ project for avoiding any cost due to uncertainty (as it will generate benefits beyond its costs regardless). It should be noted that no single column in the table eliminates the uncertainty (the cost of failing to build Project 2 if needed is still four times the maximum benefit available from Project 3). Even without calculating costs as shown in the preceding example, agencies using multi- criteria prioritization approaches tied to growth in the size of the travel market (for any mode) and assumptions about crash rates, emissions, and the value of time compromised by travel can sensitivity-test multi-criteria scores much as B/C ratios are tested in the example. Successfully Applying Uncertainty Scenarios for Right-Sizing. It is important to under- stand that uncertainty analyses of the type described only have value within the context of a decision-making process in which the uncertainty can be attached to human judgment (and stakeholder input) regarding which futures are most likely or desirable. It is not recommended that any of the columns in Table 15 be used as a singular indicator of the right decisions under uncertainty. Instead, the recommended application is for practitioners to Consider Trends Behind Forecasting Assumptions. Prepare a background review of economic and technology trends included in the sensitivity test (including any state or syndicated forecasts if available). Assess the Risk Appetite in the Policy Environment. Based on stakeholder input and the wider policy environment, assess the agencyâs overall appetite for investment risk. For example, can the agency and its stakeholders better tolerate over-spending or under-performing? How do the potential costs or deficiencies at stake relate to the stateâs overall performance goals and strategic objectives? Consider Forecasts in Local/Regional Perspective. Consider how the different economic and technology trends apply, or do not apply, to the state, region, or system under consid- eration. For example, while a statewide economic forecast may be very aggressive, declines may be anticipated for rural areas. And while advanced vehicle deployment may be already occurring in some cities, the remainder of the state or region may be unready for deployment. (For a statewide program, different forecasts may apply to different districts or regions.) Selectively Integrate Uncertainty Assessments. Based on the three preceding recommenda- tions, consider selecting metrics from the columns in Table 15 to use in multi-criteria project prioritization and for articulating the agencyâs rationale regarding how its investment deci- sion relates to its understanding of likely economic and technological change. For example, while it is not responsible to say the agency knows with certainty what the future will hold, it is possible to brief executive or elected officials on what it could cost to do versus not to do a project a certain way. It is also possible to brief executive or elected officials on whether the cost would be to the agency or to the public users of the system. Managing Uncertainty Through Planning and Programming Agencies can take the preceding type of analysis one step further to establish a link between planning and programming in the context of an LRTP process by strategically utilizing the
60 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming prioritization framework while tracking actual economic and technological change from one programing cycle to the next (between LRTP updates). An agency can use its LRTP as an oppor- tunity to select its modest, moderate, and aggressive economic and technology forecasts and their associated traffic levels, values of hourly travel costs, per-mile operating costs, crash rates, emission factors, and other constructs to create an uncertainty-sensitive programming regime. The LRTP process can give the rationale for why the forecasts and assumptions are made as they are and how they relate to larger goals and objectives, as well as how these changes will ultimately affect performance assumptions and project scoring until the next LRTP. Monitoring and Triggers. The LRTP can identify key technology or economic milestones or indicators for the agency to monitor. When particular economic or technology changes are validated, the agency can then pivot its selection criteria to favor a different technology or market forecast. For example, if economic growth, VMT, and building activity in a region all begin to exceed the modest forecast (and follow a trajectory consistent with the more aggressive forecast), the agency may switch its programming basis to the more aggressive level to hedge against under-build risk. In a similar way, if driverless technology is shown to be deployed at a rate closer to the more aggressive assumption for certain trip or area types and overall crash rates for the affected systems decline, the agency may switch its programming basis to the more aggressive technology assumption. This would raise the bar for what it takes for a design to be justified in terms of safety benefit. Uncertainty Analysis and Project Review. It is also possible to rightsize an STIP or a pro- gram through application of the BCA approach described previously to early project develop- ment (before a project is proposed in the STIP). If a preliminary analysis finds that the rationale for a proposed project is highly sensitive to either unsustainable or entirely speculative eco- nomic and technology developments, an agency can refer the project for a performance-based practical design audit to consider lower cost solutions or specifications that may generate net benefits under more modest conditions. The Performance-Based Practical Design Checklist in Section 4.10, and the Congestion Threshold Testing method described in Section 4.6 can be helpful right-sizing methods to apply in such cases. In the same way, an internal review process for proponent-initiated right-sizing proposal (as described in Section 2.3) may use BCA comparisons (of the cost of preserving or maintaining the status quo) accounting for uncertainty as a consideration in assessing whether the subject facility, system, or program is ripe for right-sizing. If such an assessment finds that the facility would only justify its life-cycle or preservation cost under unlikely assumptions, or that potential over-build cost of main- taining the facility in its current state exceeds a reasonable estimate for what a right-sizing modification may cost, then the analysis can support the case for initiating right-sizing. The analysis can also provide a rough approximation of what the state may invest in the change. Case Example Accounting for Technological Uncertainty The case example of the Kansas City Planning and Environmental Linkages is an example of a right-sizing process that accounted for issues of technological uncertainty. Agency Capacity Building for Right-Sizing Right-sizing transportation infrastructure requires engineers, planners, agency managers, and partners to extend beyond the comfort zone of their core expertise, experience, and immediate jurisdiction. Practitioners in state DOTs are not generally accustomed to under- standing the value of their assets in terms of âbest and highest use,â competitive market forces driving the value of their investments, or concerns about the tax base or owner profits result- ing from a project. Likewise, municipal and county planning and public works agencies are
Addressing Technological Uncertainty: Kansas City PEL Study The John Jordan âBuckâ OâNeil Memorial Bridge is a triple arch bridge over the Missouri River on U.S. High- way 169 that provides a key north/south regional connection. It directly interacts with what locals refer to as the North Loop, the portion of Interstate 70 (I-70) on the north side of Kansas Cityâs downtown, a key east/west connection. While still in safe condition, the bridge is nearing the end of its projected life span and will require significant investments to continue to serve the traveling public in the future. Opened in 1956, the bridge recently cele- brated its sixty-second year of operation. Over the years, the neighborhoods and communities on both sides of the bridge have changed significantly. The need to find a replacement option for the bridge drove the commu- nity to engage in a discussion about right-sizing through a Planning and Environmental Linkages (PEL) study, which concluded in 2018. The study was a joint project of the City of Kansas City, Missouri; the Missouri Depart- ment of Transportation; and the Mid-America Regional Council, the areaâs bi-state MPO. The urgent need to replace the bridge opened the opportunity for the public to assess the other infrastructure assets connected to the river crossing, including the North Loop. The North Loop is an older, divided six-lane highway covering 32 acres, which separates the central business district from the thriving River Market and Columbus Park neighborhoods. Since its construction, the surrounding area has changed in population, use, and purpose. Originally, the river crossing was constructed to serve a growing industrial city. It evolved to carry commuters to post-war suburbs. The North Loop of I-70 was built to serve a different kind of downtown. Constructed in the mid-50s, the Downtown Loop was an âurban renewalâ project and its right-of-way acquisition cut through the central business district and surrounding neighborhoods. Because of its construction, nearly half of some of the residential neighborhoods that once ringed Kansas Cityâs downtown were demolished. When completed, the over 4-mile loop was known as the Alphabet Loop because it featured 23 named exits, using every letter of the alphabet but I, O, and Z. Active engagement of stakeholders was critical to the success of the study. Participants saw their input reflected in how and why decisions were made. Before making any decisions about the bridge and North Loop, the study considered how the Kansas City regional community wanted to grow and develop over the next 50 years and then assessed what new infrastructure investments might support that vision. Over the course of the study, thousands of the regionâs residents participated in person or completed online surveys that influenced the recommendations. The study found there was a desire to replace the existing car-focused highway infrastructure with more human-centered amenities. It was important to the study the public understood the trade-offs that could come with eliminating a portion of a major Interstate. The study used dynamic traffic assignment (DTA) modeling to evaluate regional travel time and capacity impacts of the shifting traffic patterns associated with removing the Interstate. The models were further refined to assess the impact automated and connected vehicles (AV/CV) may have on future capacity needs. Models suggested an approximately 20% increase in the capacity of existing Interstate facilities because of AV/CV by 2040. The study concluded that with some modifications, the North Loop section of I-70 could be removed with relatively minimal impacts on traffic times or congestion. The impact AV/CV fleets make up could provide an opportunity to right-size major pieces of infrastructure. The PEL study indicated that more than 70% of those polled found the delays associated with removing a portion of I-70 to be acceptable, representing a potential shift in how future generations may view personal vehicle- related infrastructure. These changing attitudes, along with changes in technology, may provide a rationale for downsizing major infrastructure projects. Summary: The projectâs stakeholder collaboration, future-focused public input, and modeling that reflected future technology impacts are all lessons that can be applied to right-sizing projects or programs.
62 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming not accustomed to the challenge of balancing performance targets and scarce revenues across a multitude of programs, statewide area-types, and complex federal and state funding rules. Private developers, while increasingly willing to participate in transportation funding and decision making, are often not savvy about how the rights of vulnerable populations, account- ability to elected officials, and funding eligibility considerations play into the motivations of public sector partners. To right-size transportation investments challenges transportation agencies to view them- selves more as business entities equipped with the skills, tools, and know-how to make business decisions. For example, many DOT districts are accustomed to viewing real-estate transactions only from the buyersâ point of view and then only when equipped with the authority of eminent domain. Agencies are now beginning to become aware of the dynamic nature of property value and the role public and private entities play in its determination. Similarly, agencies may be less familiar with understanding the economic significance of the land and assets the DOT owns and how that value may be experienced within the larger economy. Building staff capacity in the market-based principles, practices, and reasoning of right-sizing partners is likely to engender a greater culture of efficiency among agency staff. In such a culture, right-sizing principles can more naturally synchronize with (and enhance) other agency busi- ness practices. The following are suggestions for near-term and long-term steps an agency can take to build its capacity for right-sizing implementation. Right-Sizing Knowledge Areas It is recommended that an agency establish right-sizing capacity-building objectives in con- sultation with trusted partner organizations adept in financial planning and management, land development and management, and legal arrangements and challenges. A state department of commerce or economic development, attorney generalsâ office, and selected statewide associa- tions or non-profits (e.g., representing city managers, planners, and other local professionals) can be of assistance in identifying key disciplines and content. Business schools, urban and regional planning departments, and public administration departments can also play a role in helping the agency identify pertinent skills. While each situation will be unique, likely capacity- building goals and objectives address the following broad categories: Business managerial accounting methods for transportation right-sizing begin with an understanding of how businesses understand the value of assets, services, and other goods over time. Topics include an understanding of how businesses determine investment levels based on anticipated revenue streams, understood risks, and the costs of achieving said revenues. It is also critical to engender an understanding of how businesses respond to lower-than-anticipated rev- enues or higher-than-anticipated costs as well as how businesses approach trade-offs and how businesses try to predict and measure success in terms of shareholder equity. To build the needed capacity, these topics should come to be understood in terms of practical right-sizing contexts. This capacity-building objective should enable transportation agency staff to recognize simi- larities and differences between how needs, alternatives, and outcomes are understood within their agency in contrast to how they will be viewed by right-sizing partners more dependent on changing market realities. Business negotiation capacity for transportation right-sizing involves understanding how different organizations identify different sources of value in business negotiations. Capacity building should educate agency staff regarding key differences between public sector stakeholder outreach and consensus building (in which objectives center on buy-in and inclusion) and business negotiations (in which objectives center on each party obtain- ing the most valuable resources at the least cost). This capacity-building objective should
Policy Guidance 63 enable transportation agency staff to evaluate options and exchange right-sizing proposals and counter-proposals with partners with a proficient understanding of respective economic and business objectives. Comparative public and private sector ROI metrics capacity for right-sizing involves understanding the different ways that ROI is understood within a business and how busi- ness ROI relates to public ROI or BCA used in transportation agency decisions. The role of ROI metrics in business decisions about the efficient level of investment in any given outlay and methods for validating an ROI expectation will be invaluable to agency staff engaging in right-sizing decisions. This capacity-building objective should enable agency staff to under- stand how private sector users of the transportation system evaluate the size, extent, and composition of assets or programs in relation to how the transportation agency may view them internally. Inter-governmental affairs capacity building for right-sizing involves developing an under- standing of the comparative powers and resources of state, regional, local, and county agencies involved in land use and transportation decisions. Key topics include â¢ Understanding the respective powers, resources, and constraints (data and technology avail- ability, tax, regulatory, administrative and other) of state and local government agencies as well as the consequences and motivations associated with using them in a right-sizing context. â¢ Understanding the fiscal implications of state and local infrastructure and land use policy and planning decisions and alternatives on municipal revenues, state agency budgets, and eligibility for ongoing funding. â¢ Understanding the respective legal obligations and limitations of state versus municipal or county agencies and how they affect making right-sizing changes in infrastructure or services. This capacity-building objective should enable agency staff to readily identify and suggest ways that partner agencies can collaborate in a right-sizing process and also understand the value of right-sizing proposals or alternatives within the context of local needs. Right-Sizing 101 While agency staff cannot be expected to build the full body of right-sizing capacity through any singular experience, course, or curriculum, a valuable starting place can involve identifying key champions within key agency business units and providing a 1â2 day âRight-Sizing 101â workshop. This workshop would 1. Introduce the concept of right-sizing (as set forth in Chapter 1). 2. Explain which DOT business processes and procedures and methods are being implemented in the agencyâs right-sizing effort and why. 3. Walk through some case examples and methods of right-sizing decisions and outcomes. 4. Make key staff aware of the preceding areas of right-sizing capacity building and how learning more about them can support right-sizing decisions. The objective of the Right-Sizing 101 workshop is to create a general understanding in key agency roles of what right-sizing is and how the agency is approaching it. Participants are meant to both implement the right-sizing procedures and also inform colleagues about right-sizing objectives and how existing business processes can be carried out to achieve them. Capacity-Building Partnerships and Cross-Training An agency may wish to consider forming cross-training partnerships with other agencies to jointly develop and administer a longer-term (6 months to 2 years) right-sizing curriculum. Each class would include participants from state DOT staff, municipal planning and public
64 Right-Sizing Transportation Investments: A Guidebook for Planning and Programming works staff, economic development organizations, and land or real estate development com- munities. It is envisioned that a defined cohort of 10â40 participants would commit to com- pleting the entire curriculum consisting of monthly modules delivered in the form of a monthly workshop or course offered by one of the partners (or their organization). The modules would cover the capacity-building goals and objectives previously described. Hence, for example, in one workshop a municipal government planner may present a right-sizing case study on planning and zoning authority and in another workshop a developer may present on how the developer makes decisions about participating in publicâprivate partnership projects or the role that the transportation system plays in development decisions. For some more involved topics, instructors from university extension programs or community colleges may participate as well. A key advantage of such cross-training partnerships would be that while agency staff may never become fully proficient in all of the knowledge areas, all would have a colleague in another organization to go to for insight and perspective when making right-sizing decisions. Whether it takes the form of a committed long-term program, as previously described, or an ongoing âlunch and learnâ or webinar series, the objective of the partnership cross-training initiative is threefold. It is to familiarize agency staff and allied organizations with the concept of right-sizing, to educate staff about the right-sizing knowledge areas, and to create working relationships between state DOT staff, county or municipal staff, and private businesses around the topic of right-sizing.