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Changes in the administration, debates in Washington, and  ongoing developments in technology, climate change and infrastructure costs make it harder than ever to undertake meaningful transportation plans, corridor studies and prioritize public investments.

 

Choosing between different mixes of long-term transportation infrastructure investments for such an uncertain future is a bit like trying to walk ashore in a rising tide. As soon as you find your path, it disappears! 

The cost of over-build on an asset or transportation system can have life cycle costs that jeopardize an agency’s ability to respond to new challenges. However the societal costs of under-build in terms of safety, congestion and environmental loss can be even more taxing. It is time for transportation planners and engineers to consider the implications of different economic trajectories when assessing future traffic volumes and investment needs. 

What if energy prices (including motor fuel) rise at triple the price currently anticipated? What if foreign trade policies or changes in exchange rates significantly alter the purchasing power of the US dollar and the sourcing of American freight? What if the economy faces another major recession, or changes in trade volumes overwhelm the capacity of US ports? Changes of this type can alter the fundamental assumptions that transportation plans hold about commuting levels, freight traffic, trip patterns, highway and inter-modal capacity and overall system performance.

New tools and data sources are being developed to enable planners to build such considerations into their forecasting and scenario planning. It is increasingly possible to consider aggressive, moderate and conservative estimates of transportation needs, as well as to create investment scenarios that balance and account for different economic possibilities. Incorporating economic possibilities into planning can transform the planning process by:

(1) Adding a level of credibility and relevance to salient economic issues

(2) Responding to tough questions from business stakeholders and elected officials

(3) Enabling plans to account for up-side and down-side risk of proposed projects

(4) Demonstrating how the rationale for prioritization may change with the economy

(5) Clarifying the appropriate overall size of transportation programs

(6) Showing ways to “Right-Size” the life-cycle preservation cost for existing assets

It’s time for a conversation about serious ways to integrate economic uncertainty into the transportation planning and decision making process. 

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It is the often untold story of project evaluations: We can never be fully certain about the results. Whether it is about the selection of the best alternative for a project or about setting priorities among different projects, the results depend to a considerable extent on assumptions we make. Assumptions are embedded in our analytical choices and results: what are the appropriate weights for each factor in a multicriteria analysis? How about the discount rate in a BCA? How accurate are the data sources we rely on? Do we truly know how much a project will cost or the level of future demand?

To be unaware of uncertainties in evaluation results means missing important pieces of information that can help support smart decision-making. Tackling this challenge, Mark Sieber, Chandler Duncan and Naomi Stein of EDR Group presented a poster at the TRB Annual Meeting in D.C., whose purpose was to show a number of different ways to deal with uncertainty in evaluations.

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The poster demonstrated how when presenting the results of evaluations, it helps to avoid the appearance of deterministic accuracy and to account for both the multiple sources of uncertainty, and their respective scopes. Scenario-analysis and exploring sensitivities can help make evident that results consist of ranges of values rather than of one single value. 

The focus on uncertainty can be an uneasy message for decision makers. Prioritizations are easier when you can entirely rely on, and rank based on, a single result. At the same time, results that do consider uncertainty are of no use to decision-makers unless they are accompanied by practical decision-oriented interpretation that help differentiate those conclusions that are possible given the available information from those which should be avoided. The TRB poster presents a number of techniques available to support decision-making in this context. Going forward, EDR Group is determined to follow up on this often-underestimated topic.

 

The poster was the result of an exchange enabled through EDR Group’s affiliation with EBP in Zurich, Switzerland. EDR Group’s Naomi Stein and Chandler Duncan teamed up with Mark Sieber, who joined EDR Group from EBP in 2016, to learn from their respective project experiences in the U.S. and Switzerland about appropriate ways to deal with uncertainty.


 

 

 

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Posted by on in Infrastructure

Every four years, the American Society of Civil Engineers (ASCE) grades the condition of U.S. infrastructure on a scale of A through F. Since 1998, America’s infrastructure has earned persistent D averages. Underinvestment is a much-studied topic. EDR Group’s recent report on this issue to ASCE "Failure to Act: Closing the Infrastructure Investment Gap for America’s Economic Future” found that the most significant investment gap across all types of infrastructure is in the transportation sector, where $1 trillion in additional investment is needed over the next ten years.

 Blog_graphic.jpgThe U.S. funds federal spending on highway and transit projects through a variety of user fees that pay into the Highway Trust Fund (HTF). Fuel taxes contribute the largest share of revenues by far. In FY 2014 they constituted 87% of the HTF’s tax revenues. However, over the past 10 years spending from the HTF began exceeding revenues, a condition forecast to worsen over time (see figure at left, source: Congressional Budget Office). Increased fuel efficiency of gas-powered vehicles and popularity of alternative fuel vehicles is key driver of this trend—one that also affects state transportation funds due to their significant reliance on state fuel taxes.

Starting in 2008, Congress addressed the HTF funding problem by transferring money from elsewhere, primarily the General Fund of the U.S. Treasury. The most recent surface transportation authorization bill, the FAST Act, continued this approach, with 25% of trust fund deposits over a five-year period to come from general tax revenue rather than broad-based user fees.

What’s going on at the federal level with the Highway Trust Fund is just one piece of a much broader conversation about how to fund transportation investments and an increasingly focused legislative, political, and research exploration of creative or alternative financing mechanisms.

The November 2016 elections saw residents in a nearly half of all U.S. states voting on a large range of transportation ballot measures and initiatives with over $250 billion at stake, according to the Eno Center of Transportation. Some passed, some did not, but all grappled with the question: who should pay for transportation infrastructure and services and how can revenue generation mechanisms be structured to support sustained long-term investment in a manner that is both efficient and fair?

EDR Group is currently involved in a number of federal and state efforts that address these questions.

In one project, EDR Group is part of a team funded by the National Cooperative Highway Research Program to develop guidance on the Use of Value Capture to Fund Transportation. Value capture (sometimes referred to as value sharing) is the idea that governments may be able to share some of the commercial value created by the access provided by public infrastructure investment, and use this “captured value” to help finance transportation system investments. The project considers a variety of mechanisms including development impact fees; land value-based fees; betterment levies and special assessment fees. The research will help State DOTs assess whether value is indeed being created by transportation investments and then assess a range of value capture mechanisms based on their efficiency, equity, revenue potential, and sustainability. Key questions being answered are: how can value created by public infrastructure investments be shared; what are the legal means and practical methods for sharing value; who benefits and who pays when value capture is implemented, and how has value capture been implemented in the past. A guidebook for policymakers illustrated with case studies and real-world examples will be produced by this project.

In another project, EDR Group is working with the RUC West, a consortium of 14 western states investigation the feasibility of implementing a Road User Charge (RUC) funding system. There are several on-going projects being sponsored by RUC West, including pilot studies, to assess the financial impacts of moving from a fuel-based tax to a mileage-based fee system. EDR Group assessed “revenue neutral” mileage-based road user fees that would be required to replace current gas tax revenues. A key equity concern for the Western states is whether there would be disproportionate impacts on rural drivers due to the greater distances involved in their daily travel. EDR Group’s analysis showed that due to the combination of travel characteristics, mileage driven, and current vehicle fuel consumption characteristics, rural drivers would actually pay less in terms of total dollars spent each year under a mileage-based fee system than with the current fuel-based tax system.

Going forward, innovative finance will continue to be a key issue in the transportation world. But as we fundamentally change the ways that we pay for our transportation investments, questions about the fairness, sustainability and the ability of these new mechanisms to meet our future investment requirements will need to be addressed. Economic principles and methods can provide the insight required to help make these changes. And fostering communications between policymakers and the public will be essential to gain the acceptance needed to make changes in how we fund transportation infrastructure investments in the future.

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The Swiss Federal Offices for Spatial Development, Roads, Transportation, the Environment and Energy jointly released the new Transport Outlook 2040. Ernst Basler + Partner (www.ebp.ch), based in Zurich and an affiliate of EDR Group, worked on this project in collaboration with two other companies. The firm performed the passenger transportation forecast and for the modelling of impacts. The report offers intriguing findings that may be of interest for transportation and land use planners in the US and worldwide.

One finding concerns the decoupling of population, economic and transport growth. Switzerland has a fast growing population and a strong economy. Already the retrospective analysis at the beginning of the project showed that these are the two principal forces for a growing transportation demand. Thus, the kilometers travelled will continue to increase substantially (+25% between 2010 and 2040), but less than the population (+28%) and the economy (+46%). A saturation in the level of vehicle ownership, use of public transport travelcards (passes) and the number of trips taken per person are expected to start to lead to a decoupling of growth rates – something planners have been expecting for decades.

Another significant finding is that the best way to reduce vehicular traffic growth is not necessarily achieved by merely focusing transportation investment in cities. This can be Sieber_Blog_Graphic.jpgseen by the results for three alternative scenarios. These scenarios reflect different tendencies the development of society, policies, urban patterns and travel behavior could manifest until 2040. While the scenario «Sprawl» highlights a major trend in urban patterns of earlier decades, the scenarios «Focus» and «Balance» extrapolate the current endeavor of planning authorities to re-urbanize cities and concentrate the growth in urban areas. They provide a compact use of space and shorter distances. While it is obvious to the planning community, that «Sprawl» produces a rampant share of road traffic, many people are surprised to see the same effect, only smaller, in the «Focus» scenario. In comparison, the compact use of space in the «Balance» scenario leads to a decrease of person-kilometers travelled by both road traffic and transit.

The urban patterns in the scenarios do not appear from nowhere, but are the result of a change of mind in society and according policies. It is necessary to understand what fuels the accelerated concentration in urban areas in the «Focus» scenario. It does not happen by itself. In this scenario, public authorities actively redirect the flow of investments towards urban areas. Public spending on subsidies for agriculture and on transit in rural areas would be cut, leaving the remaining population in rural areas with the car as their only choice. Switzerland would no longer be the vice world champion in train ridership.

The only thing we know for certain about the future is that it is unpredictable. This is why scenarios are necessary to understand the range of possible changes and their impacts. This example from our affiliate Ernst Basler + Partner shows in many ways, that scenario work has the potential to surprise even hard-boiled planners.

Transport Outlook 2040 Website

Mark Sieber Bio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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To secure funding for projects through the federal TIGER or FASTLANE grant programs, it is critical to demonstrate not only a great project in terms of benefit-cost ratio, but also why the project has economic consequences. Successful TIGER grants for highway or bridge projects have tended to go to applicants who can show community or regional benefits. The new FASTLANE grant program seeks applications that can demonstrate national freight significance and visible economic outcomes.

Rural and freight projects can easily be overlooked if the sources of benefits are not understood to go beyond the regular travel time, reliability and mileage savings. In rural areas, where traffic volumes are often low – a strong accessibility and livability case can be essential to a strong application. In 2014 EDR Group performed the Benefit-Cost analysis for the largest TIGER award given that year – the Kentucky Mountain Parkway Extension. Access to state parks, health care and other amenities supporting livability and quality of life was an important consideration that may have been overlooked without going beyond typical engineering measures. In writing other winning applications, such as the 2013 Rhode Island Apponaug Bypass and the 2015 Mississippi River Bridge in Missouri, we also relied on important considerations about how projects would affect business operations on the ground and community quality of life.

When it comes to freight projects where generalized models of travel demand tell only a sliver of the story, it becomes important to also demonstrate downstream supply chain effects or business productivity, using freight data.

The deadline for the newest round of TIGER Grant applications is April 29, 2016 (see: https://www.transportation.gov/tiger  ). The deadline for the new FASTLANE grant program is April 14, 2016 (see https://www.transportation.gov/fastlanegrants/fastlane-nofo  ). EDR Group provides consulting service support for both grant programs. Read more about these past awards on EDR Group’s web site at: www.edrgroup/TIGER .

To develop a grant application for your project, please contact Chandler Duncan (cduncan@edrgroup.com ), tel +1.617.338.6775 x203

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Posted by on in TRB 2016

Today is my last day at the conference and while it wasn't so jam-packed as the others, it might have been my favorite.

This morning I and a client from the MPO in Colorado Springs (PPACG), Craig Casper, presented our poster on the sensitivity of project rankings to underlying land use and growth assumption.

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While standing in front of a poster for 2 hours has the potential to be a little dull, this time around I actually benefited from a remarkable window into the MPO planning world. Not only did I get to learn more about the multicriteria ranking process used by PPACG (to which our TREDIS analysis provided just one input), I also got to watch members from agencies across the country share and discuss best practices for planning and project evaluation.

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MPOs, like many public sector agencies, grapple with conflicting demands from many different constituents and oversight entities. They also struggle, like the rest of us, with the reality of uncertain future conditions and the limitations of technical forecasting methods. But rather than throw our hands up in the air, we work ever so incrementally towards better information--from both models and public input processes--and ultimately towards better and more transparent decisions.

Not such a bad thought to leave with.

Until next year!

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If you get enough biases, you might get a mosaic of an approximate reality

On the challenges of reported economic impacts (Transportation and Economic Development Committee meeting)

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Posted by on in TRB 2016

This afternoon I attended Session 343 on the Role of Transit in Creating a More Equitable Society. Each presentation focused in one way or another on assessing the adequate provision of transit service from a spatial and socioeconomic perspective, as well as the role of transit and automobiles in facilitating access to jobs, services, health care, groceries, day care, and education.

What struck me about the session--and in particular the discussion afterwards--is that we're getting to the point as a community of practitioners where data and analytical capabilities are no longer the barriers to implementation they once were. And so now we have the chance to really talk about which measures are most instructive--to researchers, policy makers, the public--as opposed to which are most simply possible.

Do we want aggregate indicators that take into account the needs of many different population groups? Or do we want individual analyses reproduced over and over again for small scale market segments of the population, with each telling a more specific but more compelling story? Do we want to try to match individuals to their specific needs (e.g. low wage health workers to low-wage healthcare jobs), or should we opt for more generalized but also easier to understand aggregate measures (e.g. total job accessibility from residential areas)?

One presentation even surprised me with a new twist on some very basic concepts. We all know the burden of transportation comes from actual out-of-pocket costs and from time costs. Nevertheless, most accessibility analyses are pivoted off of travel times, alone. Researchers from McGill (Presentation 16-3715) demonstrated how simply adding fare cost to travel time information can yield a considerably different picture of job accessibility:

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A, on the left: job accessibility using a "1 hourly wage" threshold (a combination of fare costs and monetized travel time, using minimum wage hourly rates); B, on the right: simple 1 hr travel time thresholds. (Montreal).

 

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Posted by on in TRB 2016
Presentation on the effect of on-time performance on ridership and revenue (Mark Feldman, Session 233):

The meaning of on-time performance depends on who you ask. Amtrak defines on-time performance using a minutes late threshold that varies by length of the route. But if you're a traveler, 20 minutes late may be a huge deal, or not matter much at all-- it all depends on the purpose and length of your trip, and the flexibility of your plans.

This is a challenge more broadly: internal agency performance measures do not always map to the aspects of performance that driver user behavior and ultimately the broader effects on society and the economy. Both sides of the coin are critical to our ability to prioritize improvements.
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Posted by on in TRB 2016

"Transformation Technologies" is one of the the three "hot topics" designated by TRB for this Annual Meeting, so it's only appropriate that my first session of the conference gave me a crash course introduction to GTFS data and all the cool things people are doing to leverage information published in this format. If you're wondering what a crash course looks like with a bunch of very excited data geeks all interacting with data and documentation in real-time, here's a screen shot from today:

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GTFS is the de-facto standard for transit service information--first defined by google when Portland's TriMet asked: why isn't online trip planning as easy for transit as it is for driving? At current count there are 1000+ public feeds on 6 continents. Wide adoption of the specification allows anyone interested in looking at, analyzing, or mapping transit service information to all communicate in the same language.

Fundamentally, GTFS is a set of (deceptively simple) tables, organized to relate to one another using unique identifiers. Together, a GTFS data set describes transit service in terms of: the geographic distribution of stops (using lat/long coordinates), the routes/trips offered by a given agency, and the schedules and frequency of those services. In diagrammatic form it looks something like this:

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At EDR Group I've been spending a fair amount of my time lately using spatial data and other "join-able" data sources (demographics, economic activity, census journey-to-work patterns, freight flows, etc.) to understand the geography of access provided various transportation systems. GTFS is one cool ingredient in this wider world of merging many information sources into one single spatial framework.

After all-- the whole point of transportation is to give people and businesses access to opportunities.

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Ready to learn.

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Washington National Airport: built, like much of Boston, where once there was only water. Hello DC!

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Posted by on in TRB 2016

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My bags are packed—well, not quite. But it's busy here at the office getting ready for the annual pilgrimage down to DC where everyone in the transportation world gets to mingle with thousands of their closest friends. With approximately 11,500 attendees at last count, TRB really does have the feel of a (very large) family reunion.

Tune in for the next few days and I'll take you through my own personal experience of the conference. Right now it's all about ensuring that our posters and exhibit materials make it down in one piece. And of course, don't forget a few business cards! One of the best things about TRB is meeting other people with common interests and invaluable experience.

My short list of things to look forward to:

More soon!

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Input-output (I-O) analysis is an important technique used to estimate how changes in one sector of the economy affect employment, wages, and overall production in other sectors. An economist named Wassily Leontief developed the technique decades ago, receiving the 1973 Nobel Memorial Prize in Economic Sciences for doing so. Today, analysts customize national I-O “accounts” produced by the U.S. Bureau of Economic Analysis in order to study regional (sub-national) effects. These accounts describe how industries, households, and government exchange goods and services, and regional models, in turn, use this information to simulate the magnitude, direction, and timing of economic impacts. 
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When funds are short, agencies are often challenged to justify decisions about which projects to do and not to do. One way that agencies address this situation is by conducting cost-benefit analysis, which quantifies all of the potential benefits of projects relative to their costs and compares which investments seem to offer the best outcomes for the money. Agencies may use cost-benefit analysis to justify a particular project (showing its benefits are more than its costs) or to rank projects based on which ones offer the most benefits per dollar spent (often regarded as a ‘prioritization’ process). Using economic methods to compare the benefits of projects can be an extremely useful and powerful tool both for decision making and for explaining choices to stakeholders. However, challenges arise when agencies find that there are “intangible” (or difficult to quantify) outcomes which are known to be important.

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Increasingly, agencies are interested in understanding the benefits of their investments in terms of the "triple bottom line" or (TBL).  TBL is often presented as a new and important type of analysis in transportation and economics.  It is important for planners, economists, and others involved in transportation decisions to understand what this means, and how it relates to the current state of the practice in transportation economics.

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On June 17th, 2013 a WSJ article entitled “Rail Safety and the Value of a Life[1]” highlighted the financial struggles that regional transit transportation authorities are facing to address safety concerns: both avoiding train crashes and improving deteriorating bridges.   A federal requirement to install anti-crash gear (Positive Train Control – PTC) for all transit systems that carry over 564 million passengers by 2015 is currently being discussed by the Senate Commerce Committee.   While there is debate over prioritizing schedules of investing in PTC versus the backlog of needed bridge renovations, it highlights the urgent need for overall additional investment in transit infrastructure

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How would you rank the following tools –hammer, screwdriver and pliers? Now you might ask: Why would anyone ask such a silly question …for each is appropriate for a different use (even though I could bang a nail with a pliers or screwdriver). Well, it is not very different when someone catalogs all of the various types and brands of “economic” software tools and throws together tools for evaluating user benefits, regional economic impacts, land use impacts and economic development targeting into the same list. Yes, they may all have some common economic element (like putting a $ value on time or access), but each has a different intended use.

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The idea of infrastructure as a necessary ingredient for U.S. economic growth is as old as the republic. Recently, EDR Group completed a series of studies for the American Society of Civil Engineers where we looked at different types of infrastructure and addressed the question of what would happen in the national economy if the infrastructure we have in place decays. The real stories in all four studies are in dollars that will be lost to the nation. The country’s infrastructure is aging, and not keeping pace with population and employment growth. This jeopardizes clean water delivery, sewer and wastewater services, and access to reliable electricity and transportation. These impacts in turn affect locations of businesses and households, and will cost them money as they compensate for poor services.

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Drivers of Behavior: Needs and Fears. Infrastructure planning and policy calls for decision-making that must be justifiable and stand up to public scrutiny. And that means considering not only impacts on users or customers, but also consideration of other factors such as wider economic benefits. And herein lies a problem, for one of the greatest fears of public agency staff is being caught unable to explain the justification for a decision or the logic process by which the wider benefits and costs were estimated.

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“Can’t live without them, and we can’t get enough of them” has been a constant public sector mantra since the call to action in early 2009 through the federal stimulus known as ARRA (American Reinvestment & Recovery Act). The need for validation and evaluation in turning public monies into job retaining/creating activities actually predates the ARRA era and should be a perennial question for any civic leader interested in maintaining or improving the well-being of its working-age residents – through income generation - and the businesses that pay taxes.

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It’s time for a balanced dialog on infrastructure investment needed to support our nation’s economic vitality for the future. We need to get beyond advocacy arguments where someone first decides the answer and then selectively picks facts to bolster it. Let’s learn from the article on high speed rail by columnist Robert Samuelson that was recently published in Newsweek[1]It is useful because it illustrates all three classic elements of erroneous reasoning that many of us learned in school debate and statistics classes:

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