Management & Operations

Consultants Sound Off on Transit Funding Challenges, Trends

Posted on June 26, 2008 by Alex Roman, Senior Editor

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Delon Hampton

Delon Hampton & Associates

What are the key challenges facing transit properties today?

It goes back to the same old thing, which is basically funding. Two aspects of that is the funding of extensions or new systems and keeping existing systems up to snuff.

How can transit properties take advantage of the industry consultants to address those challenges?

The key thing is to get them on board early. If you get them on board after the situation becomes critical, they can still help you, but you don’t get the maximum benefit from their services. If you get them on board early enough, you can do some planning, then hopefully things will not cost as much and you can stay ahead of the curve, so things won’t be so bad that it takes a major effort to get it going in the right direction.

What trends are you seeing in the transit industry right now?

Trying to find some unique financing situations where transit agencies can get the projects done within their budgetary constraints; that is the biggest thing. There are organizations like Houston’s Metro that are trying to use public-private partnerships to aid in the accomplishment of their goals and satisfying the needs of their riders. Public-private partnerships can be a short-term solution.

With reauthorization of SAFETEA-LU around the corner, what changes do you feel need to be made?

Hopefully the new reauthorization will bring about more money from the standpoint of meeting the needs of the people. There’s more need out there now then there is money to help satisfy those needs. Also, offering some emphasis for public-private partnerships can help get things done faster in their various jurisdictions.

What do you think of the New Starts process? Has it become more or less difficult for projects to receive funding?

To a certain degree it’s been a help. It could probably be streamlined more to make it a bigger help. It would be quite helpful if the New Starts process was addressed in the upcoming reauthorization, because you’d be able to get more things done and get them done quicker if you change the process. I know of one agency that has gone back and forth numerous times — they make a submittal for a project and then back comes the submittal with questions, etc., — and this has been going on for years. It would be better just to say no if you’re going to keep making people waste effort and time by going back and forth like that.

Do you feel that high-speed rail will ever become a reality in the U.S.?

No. The reason why, as you well know, is that putting in high-speed rail is an expensive process. Until the federal government puts enough money in the pot to make it affordable to the people who would be building them, I feel nothing significant is going to happen. Now, especially in the built up areas, it would be beneficial, but it’s so expensive. The land is so expensive that unless there’s some sort of relief, it’s not a feasible project. That’s why I think we don’t see any in this country now, and I don’t see any in the near future.

What about the upcoming vote in California?

Hopefully that will pass. I’ll tell you, I think that high-speed rail is something this country needs. I grew up riding trains when I was a boy and always enjoyed it. Even as an adult I enjoy taking train trips; it’s always a very pleasant experience. I’m unabashedly pro-train and, on top of that, we need it in this country. If they can do it in Europe and the Far East there’s no reason why we shouldn’t be able to do it here.

Jerome Premo

DMJM Harris

What trends are you seeing in the transit industry right now?

Among the trends are some really remarkable ridership increases. That trend is important to constantly keep in mind; people are choosing transit. As an industry, we’ve successfully delivered a whole host of big-time projects that really matter for the communities for which they are constructed. The hope and need is for understanding that some of these bigger transit projects are really transformational projects for communities. In other words, they can’t be completed next month. There are so many different factors right now that are working on behalf of transit, so I’m positive about the potential, but short-term actions or responses can really frustrate longer term development of transit and communities.

Do you feel the economy is having an impact on projects or future projects?

Sure. Many different transit properties are financed through sales tax revenues and, as we’ve experienced in years past, dips in sales tax revenues cause cash flow problems, and many of these multi-year programs are obviously based on certain assumptions about income and revenue. If there’s a dip in some of that revenue my hope is that the reaction isn’t to fire the GM, rather it should be to recognize that these are long-term programs and there’s going to be some ups and downs in their implementation.

What do you think of the New Starts process? Has it become more or less difficult for projects to receive funding?

Yes, it’s more difficult. I’m a graduate of FTA’s predecessor agency, so I’ve got a lot of affection for the people, program and agency. The fact, though, is that the money available has, in effect, been largely committed, so there is only a limited amount, if any, remaining in the kitty.

My sense is that the program management is clearly related to the availability, or lack thereof, of funding, so that’s resulting in a stretching out of the review process. If you look at the number of projects entering the engineering phase and moving into full-funding grant agreements they are dropping. All this is occurring at a time when the transit projects that the country has invested in over the last decade are proving to be successful. So there’s a dichotomy here between delivering on tremendous projects on the one hand and the prospect of fewer projects on a go-forward basis. On the other hand, even with the FTA’s constraints, they are still funding some really great projects.

A particularly hot topic these days is sustainability. In what ways are consultants promoting green practices in their own businesses, as well as in project development for transit systems?

We’re making a push internally at our company to behave the right way, not just to tell other people how they must build things. We’ve got, from a company-wide point of view, some remarkable sustainability initiatives underway. They relate to the array of services we provide, particularly in the water and wastewater arena.

My own sense is that the issue isn’t to build into a specific segment of your work a single sustainability practice, it is rather to permeate the culture of the company in how it behaves in all of its practices with sustainable, smart ideas. Frankly, this is an essential value if we’re going to attract young, talented, energetic, creative people. I have kids and they really care about sustainability, and company’s that walk the walk are going to end up being employers of choice.

Is that your company’s greatest challenge right now?

Yes. It’s retaining and rewarding existing staff, while simultaneously attracting great people. We have a vigorous employee engagement program that affords people opportunities to help define the behavior in the workplace. As an example, in L.A., we have a ‘great place to work’ initiative underway. Also, we have a woman’s development forum, which is something we’re enormously proud of.

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