As the Federal Government’s role in funding projects continues to impact the transit industry, many agencies and their stakeholder partners are looking for ways to take on the heavier lift.
METRO spoke with several consultants who not only discussed the nation’s growing infrastructure needs and the current funding challenge, but also their role in the changing mobility model, challenges they face as firms, and ways they could help deliver projects more efficiently and cost effectively.
What is your perspective on the impact this Administration has had on the transit industry in its first couple years?
When the Trump Administration started in 2017, we had concerns with reports from the transition team and outside organizations that the Trump Administration was trying to zero out portions of surface transportation, which included the Capital Investment Grants (CIG) program. We have moved from that starting point to the FY20 budget proposal where the Administration didn’t zero out the CIG program and actually requested funding, including for some projects that don’t yet have grant agreements. That was a marked change from the revised budget for FY17, as well as the FY18 and FY19 budgets.
Perhaps, those moves might mean that we are seeing some grudging recognition that the program enjoys strong support on Capitol Hill and that led to putting some money in the program for FY20. That’s progress, in terms of understanding the role and importance of the CIG program. I would say, we have also demonstrated strong business community support, and that those businesses are typically located in non-urbanized areas, which are often areas where there’s strong Trump support. Members of Congress are realizing the program has a reach that goes far beyond the cities in which the projects are located and that benefits that are derived from the funding of the program go well beyond those cities. We have been successful in broadening the level of support for transit and now probably have more Republican support for transit than just about anytime I can think of in all the years I’ve been working on the program. I think those are some things that started as negatives, but have turned into positives over the last couple of years.
Overall do you feel the industry is pleased with how things are going?
I will say this… we are in a period of transition right now. What I mean by that is that we have to figure out an alternative or supplement to the gasoline tax that allows us to build on it since we don’t have a viable alternative. Frankly, there is not yet a politically viable alternative to the gasoline tax. We’re not yet at the point where we can implement a vehicle-miles travelled tax or other means to capture revenue. Having said that, it’s undeniable that as we begin to see growth in electric or hybrid-electric vehicles, as well as the growth and interest in autonomous vehicles, the gasoline tax will increasingly cease to be a surrogate for the impact on the wear-and-tear on the nation’s transportation system. Finding an alternative becomes imperative as how people travel and the vehicles used in the surface transportation system move to electric and/or autonomous vehicles over the next 10 to 20 years.
Honestly, most of the innovations have come at the state and local level where folks are beginning to look at different methods to raise revenues beyond the use of the gasoline tax and to begin to capture the impacts of electric vehicles, transportation network companies (TNCs), and autonomous vehicles, when those vehicles begin to emerge.
Is there any groundswell forming that supports at least raising the gas tax?
That is a very good question. There is support in the House, as evidenced by Peter DeFazio, Earl Blumenauer, and a number of House Democrats that have expressed support. But for every indication of support, we get thrown a curve ball by Senate Democrats who are now trying to leverage the gas tax to offset the impact on families as a result of the 2017 tax bill. On the Senate side, we have a Republican, Roger Wicker, who is chair of the commerce committee, who has gone on record as supporting a gas tax increase and saying that it is what we have to do. As is so often in politics, we have some odd bedfellows.
The question is whether Congress can come together and develop the political courage to once and for all raise the gas tax, which is now in its more than 25th year of not being raised. Meanwhile, we see at a state level that many have raised their gasoline taxes without political repercussions for those members in the legislature that supported the gasoline tax increases. It is more a matter of getting over the fear that there will be political repercussions in 2020 for members of Congress who support a gas tax increase. Congress is looking to the President to show some leadership by signaling he would support the tax increase. We need Congress and the President to take the steps necessary to put surface transportation on a sustainable foundation, because right now the current situation is not sustainable.
You recently launched a new firm that includes Carolyn Flowers, Sharon Green, Jeff Morales, and Michael I. Schneider… can you discuss what your biggest challenges are as a new firm?
Certainly, within the firm there are five people that are well recognized within the industry. That is a great starting point. It’s just a matter of time from where we begin to go out there in the marketplace and to tell people about what we’re capable of doing that we will continue to win work.
We just won a big contract as part of a team for a major West Coast rail project. We’re hoping there are a lot more of those contracts in our future, based on the collective skills of the people in the firm and the skills that we provide. We are communicating to prospective clients that we’re very focused on the front-end strategic advisory services direct to clients and that we are not your typical A&E firm with the focus on NEPA, design, and engineering. Our focus is looking at program development, program management, funding and financing, and project delivery. We believe there’s a niche out there and we communicating what we believe is the value of that niche.
Sr. VP and National Transit/Rail Market Sector Leader
As the idea of mobility is changing to a more multimodal model, how can consultants help transit agencies move forward with new programs that will boost ridership?
I do not believe there is one simple answer or approach that is a silver bullet. It is important for consultants to provide the resources that transit agencies need to reach their customers through surveys, social media, or other means of real-time communication that create a real dialogue to better understand their travel needs. Most importantly, this should not be a dialogue that happens every two to three years to update a plan. It should be a continuous dialogue (monthly or quarterly) that assures the exchange between customers and service providers, and not just a public involvement process that occurs when a new project or service is being implemented. Consultants can help support the traditional approaches to reaching the public, but we can also bring forward innovative approaches that take advantage of new technologies.
Other than funding, what are the key challenges facing transit properties today?
The biggest challenge facing transit properties today is attracting staff. There is a big push to attract STEAM (Science Technology Engineering Art Math) graduates to explore and consider careers in the transportation industry. We are broadening our reach to colleges and universities across the country to help expose more students to opportunities to be planners, architects, engineers, financial planners, environmental scientists, marketing specialists, graphic designers, and more. The key is helping students at the junior high and high school level to pair their personal passions with some of these career options.
Several reports show younger people are driving less…what are some keys to getting that generation on public transit and/or keeping them riding?
I am not sure that we really need to do a lot other than provide public transportation that is frequent, reliable, safe, convenient, affordable, and embraces technology.
What is your company’s greatest challenge?
Recruiting and retaining good talent. There is strong competition for good talent. It is not just competition from other companies in the transportation field, but it is also from companies in other markets, like Google, Facebook, and Amazon. There is a strong hiring market for people who can think through a problem and develop out-of-the box solutions. The other challenge is to maintain and protect corporate culture in the midst of expanding the workforce. Hiring one person at a time and making sure each one of them is a good fit takes time and dedication.
What is your outlook for the future of public transportation?
I am very excited about the future of public transportation. There is a lot of room for growth and the incorporation of technology.
Jose Bustamante, PE
VP/North America Business Development Director, Transportation & Infrastructure Division. STV Inc.
How do you feel the East Coast, specifically, can best address its issues with infrastructure and state of good repair? Do you feel congestion pricing in New York City will help solve some of those issues?
Based on what I’ve seen and followed over the years, the politics associated with congestion pricing are always tough. Tolls tend to stir opposition; people dislike tolls. If implemented correctly, however, congestion pricing can bring about a lot of benefits. We have seen Singapore, London, and Stockholm all successfully implement congestion pricing. You can see the benefits those cities have now. They all have reduced air pollution, and they’ve used the funds for strategic transit improvements and to make streets safer for walking and biking. Congestion pricing has created more sustainable and balanced systems for those cities.
In London, travel has shifted from cars to transit, and the numbers are staggering. The number of vehicles entering the city was reduced by 18 percent. At the same time, bus use increased by 40 percent. Those are huge numbers. Similarly, traffic on Stockholm’s most congested roads fell 20 to 25 percent. Some studies have suggested asthma rates have dropped significantly in this city and attribute those benefits to congestion pricing policy. In the end, access to jobs in these cities appears to have improved, further reinforcing the notion that better mobility options result in tangible economic benefits in big metropolitan areas.
As for the East Coast, the Northeast has historically produced a significant percentage of the GDP of the U.S. economy. Cities and communities up and down the East Coast need to find innovative ways to fund infrastructure improvements. Historically, that has been the backbone behind the economic activity in the Northeast, and we have seen how infrastructure investments reinforce economic growth in states like Maryland, Virginia, and North Carolina. I think we will continue seeing cities and communities along the Eastern seaboard pass referendums to fund infrastructure investment. My hope is the federal government would do its part by passing a comprehensive infrastructure bill to complement state and local funds. Congestion pricing along with innovative and reliable project delivery methods are some of the tools states along the East Coast would need to make infrastructure funding and financing more palatable.
The precedent established by the I-66 model in the Washington area may prove to be a viable option for other states along the East Coast. I-66 has put a price on peak travel, and it is relatively high. More importantly, the state of Virginia asked concessionaires to pay the state for use of the facilities and to invest in transit improvement to promote multimodal initiatives along the same corridor. You can follow that same model for other cities on the East Coast, perhaps in places such as the Carolinas and Florida, and it should help ease the bottlenecks and fund much needed transit improvements.
What trends are you seeing in the industry right now?
One trend we’re seeing is a desire to deliver every project through some type of an alternative method. In some cases, delivery methods such as design-build, P3s, and CMAR, among others, appear attractive as they seem to be the only way to transfer the risk to a third party. We always caution people about tailoring project delivery to the specific project/program circumstances and develop an appropriate risk profile for every project before making a final decision regarding the project delivery method. Alternative delivery is not always the answer to every project. You need to look at projects and programs holistically and understand what delivery method works best for each set of circumstances.
What sort of specific project models or trends going on in Canada could the U.S. market adapt to more effectively plan, design, build, and deliver projects?
We already are doing a lot of the things Canadians are doing north of our border. They effectively use public-private partnerships to move new infrastructure projects forward.
As recently as 2016-2017, the Canadian federal government committed to spending about seven to eight percent of their GDP on infrastructure. To properly guide public spending, Canada created an Infrastructure Bank charged to work with provincial and local governments, as well as the private sector to create innovative ways of planning, engineering, and delivering large and complex projects that otherwise would not advance. Canada also has managed to get the public on board. Private entities can bring about innovation, discipline, and creativity that ultimately result in lowering a project price tag. They’ve figured out a winning recipe to implement P3s, and we haven’t done that yet. California is doing a better job now, but there’s more work to do. To create a sustainable project pipeline, you must have funding commitments all around, including federal, state, and local commitments, so that you can appropriately allocate funds to trigger economic growth where needed.
Sr. VP/ Americas Transit Market Sector Leader
Other than funding, what are the key challenges facing transit properties today?
Funding is certainly the 'elephant in the room' as transit agencies attempt to face their significant infrastructure needs. It’s true in today’s climate that transit agencies struggle with how to prioritize their infrastructure needs with available funding. The challenges are many, including renewal of aging existing infrastructure or attempting to provide new services to better serve local ridership. Balancing these can make for difficult choices. Additionally, the original layout of a city’s transit system may no longer efficiently meet the mobility needs of today’s local populations. New lines or extensions may be needed to reach developing new employment hubs and other vital economic destinations while servicing these new locales from existing and evolving residential hubs and activity centers.
How do you feel the East Coast, specifically, can best address its issues with infrastructure and state of good repair?
The East Coast struggles with continued population growth, and from having to maintain one of the oldest transit systems in the country. East Coast states are going to have to continue to explore ways to increase their own infrastructure funding, potentially through sales or other forms of tax increases. Some levels of federal funding participation are certainly necessary; states can no long rely on a guaranteed flow of large federal dollars. East Coast transit agencies are also going to have to develop, if they don’t already have one, a solid prioritized plan, to upgrade existing infrastructure systems to modern or current standards. States and transit agencies should also be looking to partner with the private sector for maximized funding assistance. The use of Public-Private-Partnerships are not a panacea but are a vital element of the 'Toolbox' for programs or projects where it makes sense to leverage this approach. Certainly, the use of design-build, design-build-maintain, or even design-build-operate-maintain delivery methodologies should also be included in the toolbox to better allocate and/or reduce to risks associated with these major investment programs as well as better manage costs.
What global trends could eventually make their way over here?
One trend that is used outside the U.S. that I believe needs to be leveraged more, in the right situations, are Public-Private Partnerships as value-added project delivery mechanisms. With the funding demands of major programs continuing to increase, the investment in these programs by the private sector cannot be overlooked. Partnering with the private sector not only allows access to alternative sources of money, but can improve public perception and participate in infrastructure development when objectives, risk, and cost are more proportionally shared in large-scale projects that deliver improved public benefits such as improved mobility, better quality of life, and reduced reliance of public taxes and funding.
Because the largest disruptor to U.S. transit and other infrastructure projects is going to be the exponential growth and development of technologies, technologies such as automated and autonomous vehicles, the use of artificial intelligence in operations, the use of robotics for certain maintenance functions, etc. are going to dramatically affect transit agencies and their future projects. Being able to deliver these quicker and with more fiscal confidence and timing will be crucial to ensure that the technologies planned into projects today are not outdated when the project goes into service.
Discuss a current project, as well as how AECOM has helped the agency/partner effectively execute that project.
A current AECOM project is the Automated Bus Consortium. One of the disruptive technologies today is the continued development of automated and autonomous vehicles. To date, the primary focus has really been on micro-transit vehicles. Additionally, transit agencies across the country have committed to conversion of their fleets to electric buses. Although bus manufactures have embraced and moved forward with the development of electric 40-foot coaches, they have not been as quick to address automation technologies. In early discussions with bus manufacturers, AECOM learned that although the automation technologies were available, the manufacturers would need a market seeking to buy 75 to 100 electric automated 40-foot coaches. AECOM realized that although many agencies were looking to automated vehicles to relieve driver shortages, increase safety and continue to improve the customer experience, no one agency would buy 75 to 100 coaches.
That’s when AECOM realized that no one agency would, but a consortium of 10 to 12 agencies, under a joint procurement, might want to buy five to 10 coaches. AECOM then prepared a presentation of our consortium concept to over 25 agencies that may be interested in this technology. By setting up this consortium, AECOM is not assisting our agency/partners in reacting to the market of today, but is working with them to create the market of tomorrow.
We currently have 12 agencies as part of the consortium. We are working with each agency to identify the particular need they may have for their automated buses, be it a new BRT line, or a new point to point service line or a new arterial route. We are also working with APTA to modify and enhance the APTA Bus Specification to include going to electric vehicles as well as including the automation requirements.
At the end of this first phase of the Automated Bus Consortium program, the participating agencies have the ability to drop out of going forward into actual procurement. But the agencies that do want to continue will work with AECOM, the FTA, and the bus manufacturers in a joint procurement that will create the market for the 40-foot automated electric buses of the future.