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Talking Freight

Future Surface Transportation Options

August 20, 2008 Talking Freight Transcript

Presentation

Jennifer Symoun:
Good afternoon or good morning to those of you to the West. Welcome to the Talking Freight Seminar Series. My name is Jennifer Symoun and I will moderate today's seminar. Today's topic is Future Surface Transportation Options. Please be advised that today's seminar is being recorded.

Today's presentation will be given by Tony Furst, Acting Associate Administrator for the Federal Highway Administration Office of Operations.

In addition to serving as the Associate Administrator for Operations, Tony is also the Director for FHWA's Office of Freight Management and Operations. In this capacity he directs a multi-level staff, which develops freight policy for the Federal Highway Administration (FHWA); provides data analysis and decision-support tools for transportation professionals evaluating freight projects; develops and promulgates professional capacity building programs and training for freight professionals; provides the truck size and weight program guidance and interpretation; and evaluates and promotes freight technology development for national and international deployment.

Prior to joining the FHWA, Tony held a range of positions in the Department of Transportation with the Maritime Administration as a program coordinator, the Office of the Secretary of Transportation's Office of Intermodalism as a regional coordinator for intermodal projects in the Northeastern States and California, and the Transportation Security Administration as the Branch Chief of the Maritime Infrastructure Security Branch in the Maritime and Land Security Directorate.

I'd now like to go over a few logistical details prior to starting the seminar. Today's seminar will last 90 minutes, with 60 minutes allocated for the speaker, and the final 30 minutes for audience Question and Answer. If during the presentation you think of a question, you can type it into the smaller text box underneath the chat area on the lower right side of your screen. Please make sure you are typing in the thin text box and not the large white area. Please also make sure you send your question to "Everyone". Tony will be unable to answer your questions during their presentations, but I will start off the question and answer session with the questions typed into the chat box. Once we get through all of the questions that have been typed in, the Operator will give you instructions on how to ask a question over the phone. If you think of a question after the seminar, you can send it to the presenters directly, or I encourage you to use the Freight Planning LISTSERV. The LISTSERV is an email list and is a great forum for the distribution of information and a place where you can post questions to find out what other subscribers have learned in the area of Freight Planning. If you have not already joined the LISTSERV, the web address at which you can register is provided on the slide on your screen.

Finally, I would like to remind you that this session is being recorded. A file containing the audio and the visual portion of this seminar will be posted to the Talking Freight Web site within the next week. We encourage you to direct others in your office that may have not been able to attend this seminar to access the recorded seminar.

The PowerPoint presentation used during the seminar is available for download from the file download box in the lower right corner of your screen. The presentation will also be available online within the next week. I will notify all attendees of the availability of the PowerPoint, the recording, and a transcript of this seminar.

We're now going to go ahead and get started. Today's topic, for those of you who just joined us, is Future Surface Transportation Options. Our presentation will be given by Tony Furst, Acting Associate Administrator for the Federal Highway Administration Office of Operations.

As a reminder, if you have questions during the presentation please type them into the chat box and they will be answered in the last 30 minutes of the seminar.

Tony Furst:
Thank you, Jennifer. Good afternoon. I promise, I will not go 60 minutes with the presentation. I will leave more time for questions. This is an informational discussion on options that are coming to the floor. Our interest here at Federal Highway is topical issues. We have a staff member that is doing a lot of work running through different activities that are going on in the freight industry and compiling those into key trends and issues that are advancing in the freight industry. From that we want to start putting together Talking Freight seminars that hit the hot current items.

The one we had originally intended for today was on fuel prices. We were going to have someone talk to us on global supply chains, and we were going to have state DOTs talk about what that means in terms of their investment decisions. We were not able to pull that together with all of the different people that we wanted for the presentation. We decided to shift that to October. It is our desire to keep these interesting and relevant. If you have input please contact us with ideas and topics.

That leads us into today's topic. I don't want to replicate the length of the presidential campaign on this. The reauthorization is still over a year away, or more. There are some general track lines being laid down. What I would like to do is go over a couple of key concept pieces with you. As the field gets more populated with more proposals coming forward, we can revisit them as we go forward in the reauthorization cycle. We will be tracking all of the different proposals as they come forward for reauthorization for the surface bill, over the next year or two. If you have any interest in those regards we'll be able to provide you information on that.

This is what I'll go over today. Before I get started I suggest to those of you that have not done so to read these particular proposals. The GAO report [Surface Transportation Programs: Proposals Highlight Key Issues and Challenges in Restructuring the Programs] you can get from their website (http://www.gao.gov/new.items/d08843r.pdf). The USDOT [Refocus. Reform. Renew. A New Transportation Approach for America] vision for the future you can download from the DOT web site (http://www.fightgridlocknow.gov/reform/reformproposal08.pdf). The commission report [National Surface Transportation Policy and Revenue Study Commission Transportation for Tomorrow] is available again at the commission's website (http://www.transportationfortomorrow.org/final_report/). We can get those to you. We will make sure those get to everybody and are available for people as we move forward.

GAO's reauthorization principals. GAO has done a whole host of research that resulted in a number of recommendations to Congress. These are the four that you see on the slides. The first step really is to identify the areas of national interest and specify goals and objectives that are outcome-based to deal with the areas of national interest. Incorporate performance and accountability into funding decisions to make them more outcome oriented. It would hold the grantees accountable for the types of activities they're pursuing. Funding is constrained. This idea is to move forward with the bang for the buck. Post project evaluation, better use infrastructure. Greater tool flexibility. GAO has laid out this as a key way to better target resources that we have out there to improve the efficiency of the transportation system. It will sustain us to improve the infrastructure we have. The funding sources need to be able to support that activity. Those principals were part of what GAO has been recommending to Congress for a number of years. Congress asked me to take a look at the existing restructuring proposals and condense and distill from all of those key themes and elements.

GAO went through seven different stakeholder restructuring proposals. They went through AASHTO's, the DOT's new vision, they looked at the bipartisan study, and the Brookings Institute. They looked at the National Surface Transportation Policy, which put out some information recently. There will be more of these type of restructuring proposals coming out. We will keep tabs on them and crosswalk them as they come out. Of the seven, GAO identified five key themes . One through four are linked to what GAO proposed as its guiding principals. What they say is to define the federal role in freight goods movement. These all focused on the idea of freight goods\movement as a key responsibility for the federal government. All of them echo performance and accountability in transportation projects, better management of the assets, and multiple funding sources to ensure the long-term sustainability. Also the linkage of policy and funding to environment. There was also concern about energy security. A number of the proposals have decided there needs to be a linkage between our environmental and energy policies. A number of them have talked about this and a link to trade policy as well. If the trade is coming to our shores, we need to link our transportation policy to that trade policy as well.

With that let's go ahead and look at the Department's proposal. There are basically six major themes that have come out of the Department's proposal that is put on the web. A clear and more focused federal role. This is reflective of what GAO has talked about and what a number of others have geared themselves toward. It provides discretionary grant funding, bottleneck projects, projects with national or regional significance. It then goes to a data/technology approach to safety. It emphasizes safety. It looks at safety challenges across the United States. Rather than try and target safety dollars toward particular programs, you let the data and the technology decide for you what the most important themes are and where they need to be focused.

This goes to the idea that we need to be using performance measures and benefit cost analysis along the lines of what GAO has indicated. Ask the states to list goals. It uses benefit cost analysis for projects receiving federal support. The increased state flexibility has a whole host of programs that are identified to a much smaller group of programs. It gives the states the flexibility to use the program dollars in a way that they think is the most appropriate. The last one there is more efficient environmental stewardship. Ways to use the environmental regulations, not to sidestep any of them, but to streamline how they're applied. Set and track projects toward environmental goals. Create a program to have areas meet targets.

The core programs in the Department's activities are the ones that you see here. The Federal Interest Highways (FIH), Metro Mobility Program (MM), Mobility Enhancement Program and Highway Safety Improvement Program (HSIP). What they have not done within DOT's proposal is identified particular dollars. They've created a pie chart. Certain percentages should be allocated to particular areas. The largest is for the Federal Interest Highways, it's about 45% or so. Metro Mobility is about 33%. 12% is for all of the other activities.

We go to the freight implications. A lot of the activities that you see for Federal Interest Highways and Metropolitan Mobility are performance-based programs. The benefits will accrue to freight and to the passenger carrying public. There's no particular freight role, or freight program within the DOT's proposal. We will go through Federal Interest Highways and the reform individually. When we get to private activity bonds what it does is it takes the cap off. Right now there's a $15 billion cap on the private activity bonds. This proposal removed that cap, there's no cap, and it expands the use of private activity bonds to rehabbing infrastructure. You can only capitalize a certain percentage right now. When we get into more of a discussion of metropolitan mobility boards will be handle those funds. Basically, you can put all of area money into these state banks, as the loans are repaid the recycled funds that come back into the bank are no longer contained by title XXIII or XLIX. Then tolls and direct pricing provide the authority to toll or price any federal aid highway that is eligible to receive funds under FIH or MM.

Key aspects of the Federal Interest Highway program. The investment is focused on interstate systems and other nationally significant transportation assets. Out of the 45% that would be allocated to FIH, 80% of that 45% would be distributed based on formula, 20% would be reserved by the Department as discretionary funding. Within a metropolitan area it goes to a 50% match. Any discretionary dollars that are allocated to projects have to have a 50/50 match. The discretionary piece -- if you recall in SAFETEA-LU there was a program on projects of national or regional significance. That piece of legislation required us to have regulations to implement that program should the next reauthorization bill provide funds for it. We have done all of that. We've had two different notices of proposed rule makings. We've now gotten that into a final rule. It's now with OMB. They will probably have it for another 30 or 45 days. If they need to, they can extend it. We hope to have the final rule on the street by the end of this calendar year. That will help frame a lot of how we can get the discretionary program funding put in place. If you read through the Department's proposal you will see a lot of compatibility. We may have a couple of those pieces of the puzzle in place and ready to go. There's a focus on performance. DOT sets performance goals; they set the performance areas such as travel time, reliability, safety, pavement quality and the like. It lets the state set the targets. The targets have to be ambitious. There's no point in low balling the targets. It will have an effect on the discretionary funding. There's a number of different strategies for the states to pursue. All of that discretion is left to them. There's annual documentation of progress towards the goals. That will be published on annual basis for everyone to take a look at. Benefit cost analysis for projects over $25 million, again, this is only for formula funds. If it's formula funds that you are using and it's over $25 million this is required for any proposals that would come to us.

On the Metropolitan Mobility Program you will see a lot of comparability to the FIH program. Populations over 500,000 people would be managed by a designated metropolitan transportation board, which would be almost analogous to the MPOs that we have in place. Highway and transit funding would no longer be in place. They would decide which way to go with that, highway or transit would not be contained. 70% would be distributed by formula, the other 30% would be for discretionary funding. This one is a 50/50 match requirement. Again, performance focused, along the same lines as the FIH program. The Department would set the performance areas and it would be up to the individual states on how they got there, or the metropolitan regions.

There are number of other ones that deal with freight activity that would be of interest to us. The Motor Carrier Safety Grant Program is interesting. It consolidates ten separate grant programs into one. There would be a uniform administrative take down amount for all grant programs. This provides a lot of flexibility. Again, one of the keystones of this is to provide the recipient of the funds more flexibility to target the funds in areas they think are most efficient.

The TIFIA Act. I don't need to read through all of these, you can see them here. There's some expansion that enables you to be more flexible. It allows direct pricing and guarantees and lines of credit greater than what they currently are under the current program.

The Rest Area Quality Improvement Pilot Program. There's a number of rest areas that are constrained right now on what they can provide to the public. This would create a pilot in ten states to open those up for private sector franchises to enhance the rest areas to provide a full suite of services to the public.

Moving now to the Commission's report. Again the Commission echoes a lot of the things that you heard in the GAO report on how they want to see a stronger federal role and improved effectiveness and accountability. It really is interesting as you start to read through these, the themes keep recurring and are milestones to think through if we were to have a performance-based system and we were to use measures and safety performance measures, how we would do that and how they would play a role in project selection and the like.

The next slide talks about the national interest areas and focus areas that the Commission has identified. In this one they identify particular freight transportation piece of this. You will see under that the improved metropolitan mobility. The saving lives, is analogous to what the Department has put forward in its Highway Safety Improvement Program. If you look at the freight transportation piece there's a lot of compatibility with the Federal Interest Highway Program that the Department has put forward. A lot of the key building blocks that you see are also reflected in the Department's proposal going forward. There's a trade focus on this one, as you can see. There are a number of principals that have been identified. A refocus on the importance of the Federal Government paying attention to the interstate commerce. That is in the national interest. We should focus our funds particularly in that area. They also talk about corridor development within the Commission's report. And that is along the lines of what the Department is doing with the Corridors of the Future Program. We've been in negotiations with six corridors, a lot of the activities are reaching conclusion. The development agreements highlight three major areas, one is on performance measures for the corridor where the states would agree on the performance measures. It talks about a way to prioritize projects within the corridors, but that is left entirely to the states. They're free to decide how to do it. A lot of the benefit cost pieces that you see in the Department proposal you would see in those as well. And the idea of innovative finance, other than the highway trust fund, as a sole source of funding for these types of projects, or as a major source of funding these types of projects.

Question and Answer

J. Symoun:
Thank you Tony. We'll now move on to the question and answer session. The first question is from Dan Murray. Has the US DOT determined exactly how tolls, pricing, and public private partnerships will impact freight?

T. Furst:
There's a lot of research going on in that regard. There's a lot of concern that trucks would divert off of those roadways. It is a key concern of ours and a key area of interest and research. We need to understand when we start to toll the system what kind of effect that will have. Dan is right, the answer to his question is no, we don't completely understand all of the impacts. It's an area we need to get a whole lot smarter on. It's an area we have targeted for research and interest here within the department. It is a new area. We'll be looking at it closely.

J. Symoun:
Okay. Thank you. The next question is--Will there be a proposal for freight focused projects to have a separate funding stream?

T. Furst:
Not within the current DOT proposal. This Administration has put forward what it will do, the way it sees the focus of the next reauthorization bill as laid out in the proposal on the website. Whether or not there's one in the reauthorization proposal that Congress crafts remains to be seen. Out of the Department what you see is what you get so far. There will be no particular freight cutout within the Department's proposal.

J. Symoun:
Okay. The next question comes from Caltrans. How will the proposed truck parking pilot be different than the current one?

T. Furst:
There is no truck parking pilot. There's a Rest Area Quality Improvement Pilot, which could affect truck parking along the interstate. There's not really a truck parking pilot.

J. Symoun:
Will there be a proposal for corridors (multimodal, multistate) to be funded as a singular entity project?

T. Furst:
Not within the Department's proposal. Again, what the Department has put out in the concept paper is being flushed out. There is no intent as far, as I know to change or modify the base tenets to include things along those lines. If you think about Federal Interest Highways as the major corridors that's the thinking that the Department has, then once you get these solved, you address the corridor issue.

J. Symoun:
Okay. Going back to the truck pilot question. How does it compare to the current Section 1305?

T. Furst:
Section 1305 is not the same at all as the Rest Area Quality Improvement Pilot in the Department's proposal. The truck parking pilot was to take a look at how to improve truck parking across the entire United States. The two proposals we've funded deal with corridor-wide parking issues. To get information into the hands of the truckers using public sector means. It will be interesting to monitor the two proposals as they move through to completion and understand which of the two works better and what the advantages and disadvantages are. That program is devoted to parking. The Rest Area Quality Improvement Program does not necessarily target only truck parking alone.

J. Symoun:
Okay. The next question, Will the Federal Interest Highway be based on the NHS?

T. Furst:
No. It will not. It's mostly the interstate system and there's a line that will talk about other critically important national corridors that are off of the interstate system. That is left undefined. Within the Freight Analysis Framework we've taken a look at the assets that carry large volumes of freight that are not on the interstate system, but still are very, very significant in the quantities of the goods that they move. That's an example of how to go interstate plus, if you will. Mostly it will be the interstate system and a few other areas, but not as expansive as the NHS.

J. Symoun:
Okay. The next question, Will the proposed Metro Transportation Board (MTB) replace or supplement the current MPOs?

T. Furst:
Very, very good question. That is going to have to be determined at the local level. Again, that will all have to be worked out. If you have an entity at the metropolitan region that could cover the entire area with all of the transportation opportunities available to it, whether or not the MPO would come to the MTB or whether it becomes a new entity remains to be seen.

J. Symoun:
Okay. And another question, do you expect standardization for the benefit cost analysis and P3 comparisons?

T. Furst:
I'm sure a number of guidelines will be put out regarding how to quantity benefits so we can compare apples to apples. There are a lot of folks doing benefit cost, I would hate to have to constrain a lot of those, or push everybody into a particular type of pool. With that said, there needs to be standardization on how to look at benefits, or what we're willing to consider as benefits in those. But, then there could be different methodologies that you use to look at it. It goes along the lines with the performance measures, we need to identify the areas that are important and then set up some measures for how to do that and then leave it to the states to figure out how to set the goals and where they want to go.

J. Symoun:
Okay. That's all we have typed in right now. I see one participant has his hand raised. If you want to type a question you can do that, or we'll open up the phone lines, and you can ask it over the phone. If the operator can please give instructions on how to ask a question over the phone.

Operator:
At this time to ask a question please press star one. You will be prompted to record your name. To withdraw press star two. To ask a question, please press star one at this time. Once again, star one is to ask a question. I'm showing no audio questions.

J. Symoun:
Thank you. Tony, anything else that you wanted to add?

T. Furst:
I would encourage people to stay engaged and monitor the proposals We're reviewing proposals and looking at where they're compatible and different. As we get closer to reauthorization and more of them start to get on the table for consideration, I will leave it to the group that engages in Talking Freight to see whether they want to revisit this and do a crosswalk across a number of different proposals. We're early in the process. I do think it was important to lay out for people, the key issues that are coming to the floor, and showing themselves again and again, that people need to pay attention to. And the question of the federal role. And how the debate evolves about the federal role and where the government should focus its interests. And how it should target trust fund dollars, that's a key piece of this next debate. I want to get people tooled into the major elements of this debate so they can pay attention to it. Sift through, in their own minds, how those different proposals play against the general themes that we see moving along.

Audio Question:
We were wondering whether the FIH takes into account movement between the United States and Canada and the implications?

T. Furst:
The FIH formula funds could be allocated along the border regions. They would be eligible under the FIH discretionary program. All of the Metropolitan Mobility dollars would be part and parcel of the issue. We have large metropolitan areas adjacent to the boarder. A lot of those program dollars could be allocated to boarder crossing. It's up to the states and the metropolitan areas to decide how to prioritize those projects.

J. Symoun:
We do have another question typed in. Is a continuing resolution likely for the next bill given the presidential election?

T. Furst:
An endless source of debate. We'll have a new Administration and a new Congress. It wouldn't surprise me if doesn't happen. And we'll have a new Departmental Secretary, a new FHWA Administrator. All of the major political positions will be changing out. They will be getting on board, getting up to speed, it will be March or April before we have the full suite of personnel on board. To think they can go from there to a new bill in six months is aggressive at best.

J. Symoun:
If we don't have anymore questions, I'll conclude today's seminar. If you continue to think of questions, please feel free to type them in or ask them over the phone. We still have plenty of time to address them. Thank you, Tony. And thank you everybody for attending. The recording and presentation will be available online within the next week. I will send out an email when it becomes available. If you would like to receive the follow-up information send me an email if you did not register in advance.

I'd like to give a brief mention about the FHWA Freight Peer-to-Peer Program. The Freight Peer-to-Peer Program (P2P) puts public sector freight transportation professionals in touch with experts in the field and provides technical assistance in order to enhance overall freight skills and knowledge. The program is available to public entities, including State departments of transportation (DOTs) and metropolitan planning organizations (MPOs). To learn more about the program or to arrange a peer exchange, or to discuss participating as a peer/expert please visit the Freight Peer to Peer web site.

The next seminar will be held on September 17 and will be on Commercial Motor Vehicle Size and Weight. If you haven't done so already, I encourage you to visit the Talking Freight Web Site and sign up for this seminar. The address is up on the slide on your screen. I also encourage you to join the Freight Planning LISTSERV if you have not already done so.

Enjoy the rest of your day!

Updated: 03/28/2011
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