Richard Amodei
Sr. VP/Northeast Regional Manager,
Transportation & Infrastructure Division
STV Inc.
What global trends could make their way to the U.S. or perhaps grow in popularity?
One of the most impressive global trends — which, hopefully, will take root in the U.S. — is the level of investment other nations have been making in their infrastructure. Europe invests 5% of gross domestic product (GDP) in its infrastructure, and China invests 9%. By contrast in the U.S., total public spending on infrastructure has declined over the past four decades and now stands at 2.4% of GDP. Increased pressure on the U.S. to address its aging infrastructure and maintain its global competitiveness should demand a comprehensive strategy to reverse course — the expiration of MAP-21 in 2014 coupled with the projected bankruptcy of the Highway Trust Fund by 2015 may force this issue.

Public-private partnerships (P3) have had a lengthy and successful history, internationally, so they may be the trend that has commanded the most attention, not only in our industry, but also among elected officials and policymakers at every level of government. While Europe leads the infrastructure P3 market, you can look much closer to home for a remarkable commitment to and track record on P3 infrastructure projects. The Canadian federal and local governments have long recognized the merits of well-structured P3s, having put in place a federal program dedicated to improving the delivery of public infrastructure and achieving better value by increasing the effective use of P3s. From the Canada Line in British Columbia to the Confederation Bridge linking New Brunswick and Prince Edward Island, P3s have been playing an important role in meeting public infrastructure needs across Canada.

In Ontario, which has been a leader on P3s, the City of Ottawa is building a new light rail transit line as part of an ambitious plan to develop a world-class transportation system. STV, in a joint venture, provided preliminary engineering and continues to support this $2.1 billion design-build-maintain-finance project with project management and construction administration. And, Canada has more P3 projects in the pipeline.

Comparatively speaking, use of P3s in the U.S. is still in its infancy. But, as federal, state and local governments struggle under mounting deficits that have limited their ability to improve aging and deteriorating roads, bridges and airports, we will likely see an increase in the viability and use of P3s.

Have you seen growth in design-build? If so, how will it impact your business?
Many states have passed laws permitting design-build as an option for some or all types of design and construction, and there’s no question that the actual use of design-build has increased substantially over the past 10 or so years. Even states that have more recently enacted design-build laws have started to invoke them to deliver projects faster and more efficiently. New York State is a great example. Since passing legislation in 2011 to allow design-build for certain infrastructure projects, New York has already awarded one of the largest design-build contracts ever for the replacement of the Tappan Zee Bridge, and preliminary work on the project is getting underway.

From an industry perspective, this growing trend toward design-build seems to bode well on a number of fronts, beginning with the ability of design-build to get projects off the ground faster. In addition, the greater focus of design-build on communication efficiencies and collaboration of team members throughout the project schedule may have a spillover effect by fostering best industry practices that can be applied beyond design-build to other methods of project delivery. On a more micro-level, for design firms like STV, the design-build approach accelerates and increases opportunities nationwide and widens our pool of potential clients to include the contractor community.

What is your company’s greatest challenge?
In our industry, business relationships are a key component to success. Considerable effort goes into forming and cultivating good, productive relationships with new and existing clients and teaming partners and, more often than not, those relationships have been years in the making. The value and importance of those relationships, however, become that much more apparent when viewed in the context of the ‘Silver Tsunami,’ or the aging workforce, as leaders within our firms approach retirement age. With those impending retirements, any firm — including STV — has to consider how best to capture critical business, technical, operational and interpersonal knowledge before it is lost. When it comes to interpersonal knowledge, the question is, how do you pass on a relationship? This is a significant challenge.

The aging workforce and knowledge transfer issues implicate still another challenge: finding enough talent to meet the growing demand for mid-career level technical professionals in certain specialized areas. At STV, we have been addressing this challenge by taking a multifaceted approach that involves intelligently investing in our people through training and mentoring programs. We are also looking to the horizon for the skill sets that will be in demand, so we can best direct our training and recruitment efforts to keep pace with, and get ahead of, that demand. [PAGEBREAK]

Rick Simonetta
Business Development, Rail and Transit
Burns Group
Other than funding, what are the key challenges facing transit properties?
A key challenge exists with workforce development. There has been significant turnover of talent at all levels within transit agencies. The baby boomer generation is retiring in large numbers, creating vacancies at all levels of employment. In response, the transit industry has been diligent in developing programs and initiatives to encourage and support the development of the next generation of transit professionals. The American Public Transportation Foundation now provides scholarships to college students pursuing careers in public transportation, and Leadership APTA provides hands-on experience to transit professionals already pursuing careers in the industry. There is also a significant challenge in the recruitment of operations and maintenance personnel in small and large transit systems.

APTA is very aware of these major challenges and has identified workforce development as an ongoing initiative that will require years of continuous effort and creative focus. Another key challenge relates to record-high ridership on many transit systems, resulting in the need to add capacity. This is a consequence of many factors, including the increasing cost of automobile travel and the preference of the younger generation to live in urban centers instead of suburbs, utilizing public transit as their transportation mode of choice.

How will the recent changes to NEPA impact projects?
For many years, transit projects were burdened with an overly extensive NEPA process, while highway, aviation and other infrastructure projects had a much easier and less time-consuming set of requirements. The time and cost to deliver a transit project was greater as a result. The changes to NEPA level the playing field for transit projects, while continuing to respect the environmental impacts of all infrastructure projects. The results will include transit projects being completed more quickly and at a lower cost and also allow more transit projects to be completed with the available transit funding.

Streetcar projects are becoming popular again. Can you explain why?
Rail development, including transit-oriented development (TOD), has a significant impact on the economic growth of urban areas, making new transit projects attractive to communities looking to revitalize neighborhoods or develop new spaces. What we are seeing today is a renaissance of many urban centers and a dramatic increase of people living in downtown areas. Streetcar projects are becoming popular again because they are generally less expensive and take less time to complete. As a result, many cities that could not support light rail development are now considering the benefits of streetcar development. The end result is more rail development in more cities across the country, providing more attractive transit alternatives to the riding public.

What is your company’s greatest challenge?
Like all engineering firms, our greatest challenge is finding creative ways to continue to grow despite the lack of growth in transportation infrastructure funding at the federal, state and local levels. Growth during this time requires a continuous focus on quality work, staff development and customer satisfaction. The Burns Group strives to be a company that continues to attract and retain the brightest talent that is fully committed to our clients and their projects.

Elizabeth Rao
Chair, Public Transit Services
HNTB Corp.
How will the recent changes to NEPA impact projects?
The changes to NEPA will help expedite the review and implementation process for federally-funded projects. Specifically, the new rule provides clear direction on the types of projects that will qualify for this streamlined process. In addition, the clarifications provided on the use of categorical exclusions for emergency recovery actions allow transit agencies to act quickly after a natural disaster to begin the process of rehabilitating their transit infrastructure.

What, if any, are some new trends you are seeing that are helping projects reach completion sooner or at least in the client’s desired time frame?
More transit agencies are turning to the private sector to help with financing and project delivery strategies. P3s can bring innovation, efficiency, and in some cases, capital resources to complete projects. Over the last 10 years, transit agencies have been using design-build partnerships to deliver their projects with success — on time and within budget.

Within the last few years there has been more interest in design-build-finance-operate and maintain procurements with the opportunity for the private sector to share more of the finance and implementation risk. This has helped transit agencies adhere to their implementation schedules in some very challenging budget times. Denver Regional Transportation District has successfully employed this strategy for their FasTracks Program, and other agencies, like the Maryland Transit Administration, are now looking at P3 opportunities.

What is your outlook for the future of public transportation?
The future of public transportation is facing some unique opportunities and challenges. Last year ranked as the second highest transit ridership year since 1957, according to APTA. This trend is fueled by economics — transit is a more affordable option to high gas prices, demographics — as more young adults between the ages of 18 to 35 are using transit, and finally, by the increased attractiveness of transit options as cities continue investment in rail and bus improvements. However, the uncertainty of funding at the federal and local levels, for transit, in the midst of unprecedented demand is a challenge. This challenge must be addressed by our government at all levels, and in part, by creating opportunities like P3s. The future of public transportation will be determined by our collective ability to resolve these challenges and create these partnerships.[PAGEBREAK]

Angela Iannuzziello
VP, Canadian Transit Practice
With sustainable practices growing on a larger scale, how have agencies approached projects differently?
AECOM’s clients see sustainable practices and technology as both potential design options for their projects and, more broadly, as important innovations. Such advancements support achieving an optimal outcome in system performance and the user’s experience. But at the same time, they are understood and accepted as part of a shift in current thinking that is prompting action in response to environmental and cost challenges. AECOM focuses on helping clients address these challenges. We don’t offer sustainability services as a separate and distinct product from our transit services. Instead, we provide clients with integrated solutions in highly sustainable ways.

What trends are going on right now outside the U.S. that could eventually make its way over or grow in popularity?
From a Canadian perspective, I think one important trend is how the public sector here is continuing to develop its capacity for the more consistent and effective delivery of P3 projects. In Ontario, Infrastructure Ontario, a crown corporation, procures and delivers large projects using a P3 model on behalf of public operator-owners, such as Metrolinx.

Partnerships BC is also doing the similar work in British Columbia. Along with efforts in Alberta, and other provinces, the result you now see is four of the largest transit projects in Canada are currently being delivered, or planned, as P3 projects.

Other than more funds, what kind of programs/changes/etc. would you like to see in the upcoming bill?
An important element is to explicitly allow federal funds to be used toward P3 delivery of large transit capital infrastructure projects and acquisition of fleet and equipment over an extended period of time. These project types would have very specific schedules and budgets.

Another consideration is to re-establish the rail title in the bill. Well maintained and expanded rail infrastructure — commuter, intercity and freight — is essential to economic growth and environmental vitality in the U.S., yet it was largely overlooked by MAP-21. A long term, well-defined and amply funded rail title will bring about the investment we need to help achieve a national vision for a highly integrated and balanced multi-modal network.

What is your outlook for the future of public transportation?
Quite frankly, I’m optimistic. I think public appetite for public transit improvements and expansion has never been greater. Collectively, we need to continue to educate the general public about current and recent transit achievements, the benefits they generate and what more we can deliver. I believe growing more public understanding and support for transit will have the greatest effect on encouraging political action. People understand transit is the solution for greater urban and interregional mobility, improved commute times and enhanced quality of life. All levels of government are responding, in part, by becoming more aware their role also involves leveraging new ideas on how large projects are funded and delivered.

Although the capital costs and management demands involved in upgrading and maintaining existing infrastructure are increasing, operators are also being strategically proactive by planning expansion projects. High-speed rail is an important target for network growth, but so are the traditional forms of transport. And, I am also excited to see the continuing role of digital technology in transit. From trip planning applications to real-time system information and electronic ticketing, these advancements and others are transforming the commuter’s experience and reflect the larger trend we see in society itself.

Jeff Boothe
Holland & Knight LLP
How have some of the changes in MAP-21 helped/hurt the public transportation industry?
The changes in MAP-21 have certainly helped in the areas of project delivery, environmental streamlining and project finance. Those are clear wins where Congress intentionally tried to reduce the time projects spend in evaluation or review before being able to go to construction.

Another helpful change was the expansion of TIFIA; there was intent to increase the use of project finance as a means to advance construction of projects. Congress responded to a need in the transit industry to create the Core Capacity Program, which has been discussed in the transit industry for many years, and created that program to address the need by expanding section 5339 through the establishment of the Capital Investment Grants Program, so Core Capacity projects are now eligible and distinct from projects eligible for funding under the State of Good Repair program.

The biggest negative is the lack of funding that affects the program across the board and does not provide the funding necessary to meet the demand. As a result, you have segments of the industry that are facing cutbacks in funding. These cuts are most pronounced for medium- and small-sized bus operations. All systems lost the discretionary bus program to do one-time bus acquisitions or to build facilities, but it’s hard to see how those smaller agencies can now cobble together funding to do either one of those with the demise of the Discretionary Bus Program. The rationale for making the change on Capitol Hill was really twofold — the current climate regarding earmarks had the effect of moving everything to formulas except for the New Starts program and the desire not to give the Administration the discretion to make the funding decisions. It has hurt the industry since transit properties are struggling with how they should undertake major facilities projects in the future. And for those systems that have need for bus replacement, it gets more difficult to assemble the dollars necessary to do bus replacement or grow their fleets.

If we look forward to the reauthorization, I don’t see a lot of changes in the structure of the program. I do think the next bill will be largely about funding and identifying a funding source that is sustainable into the future, and sustainability takes on many elements. I don’t think the fuel tax will be eliminated. However, when you examine the impact of Corporate Average Fuel Economy (CAFE) standards, the change in driving patterns and the continued reduction in vehicle miles travelled since the mid-2000s, the gasoline tax has already lost its buying power and is not sustainable because it is no longer a surrogate for wear-and-tear on the highway system. So, we are in need of a supplemental funding source that has the ability to continue to sustain the funding in response to these trends, as well as the changing vehicle mileage standards, which will exacerbate the funding gap into the future. That to me will be the biggest challenge of reauthorization: focusing on what the funding source is to provide the revenues necessary to maintain the current system and provide system expansion, whether it is for highways or transit.

One thing that gets lost in much of this conversation about the current transportation funding system in the U.S. is where people are moving to and what forms of transportation they are using. There is still a need for people to move and go from place to place, they are just using different modes, and the programs we have presently are not as responsive to those changes as it should be. I think that will be a challenge in the next transportation bill and will spur conversations about resource allocation, where investments should take place, and perhaps, the performance measures will begin to illustrate the need as those conversations move forward.

Do you feel the success of state referendums will continue?
Yes. My understanding is we are still sustaining the same percentage of success, but there is no doubt that the same pressures experienced here in Washington, D.C., in terms of spending and distrust of government, are impacting many at the state and local level. It is still going to be a battle to win those elections. The upside for everyone is with the economy beginning to recover, we are seeing growth in sales tax and property tax receipts. Maybe not so much in gas tax receipts, although with the economy improving, we might see that if people start driving more. But certainly at the state and local levels, we are beginning to see the impact of economic recovery resulting in higher proceeds from sales tax and some increase in property values, which will generate property tax increases for those agencies that rely on them.

Currently, there is a piece of legislation Congress is considering called the Marketplace Fairness Act that would levy a sales tax on goods sold on the Internet and would allow state and locals to collect that sales tax, which would provide additional revenues in certain states. If passed, that legislation has a real upside for transit.[PAGEBREAK]

Alan Wulkan
Sr. VP
With high-speed rail experiencing a backlash, do you think it could have been avoided if another term was used instead?
First of all I’m a big believer in the future of high-speed rail. Looking around the world, we are playing catch-up on infrastructure, and certainly, high-speed rail is no exception. I do believe there could have been a much better marketing and public outreach campaign for the whole concept. And also let’s be fair, the Obama Administration has done a great job in bringing it to the public but at a really tough time. The economy was horrible; selling a vision, if you will, like President Eisenhower’s Highway Interstate program, is tough. When President Eisenhower sold that program, the country was coming out of a war. It was a big jobs bill, a vision the president sold. I think that is where the Obama Administration’s high-speed rail program ran into some bumpy roads. I just don’t think they put the right people or the right organization in charge of marketing the program.

That being said, I don’t think it would have mattered what you called it. I have always thought the high-speed rail program is going to be as much the next great jobs bill for America as it was going to be a great transportation program for America, and I still believe that. How you design it — whether it is 125 miles per hour in the Northeast Corridor or 220 miles per hour in California — doesn’t matter. I think that is one of the strengths of the program is it could be tailored to the particular parts of the country, but there is still no great vision. The average person in America does not know or understand what is in it for them to do high-speed rail, and until they do, I think there is going to be a lot of bumps on the road for the program. But, I still believe high-speed rail in the U.S. is going to happen.

How much will the climate in D.C. hinder future investment in public transportation or the next authorization bill?
Well, the thing that will drive the next transportation bill is the Highway Trust Fund is running out of money. Everybody agrees there has to be a fix, but nobody is willing to talk about what the funding source is going to be. Frankly in my judgment, and I may not be in the mainstream with this, we need to start looking at the next bill, not in the context of the next six years but in the context of the next 20 or 30 years. The next bill should be the down payment for the vision of how we invest in infrastructure over that period of time. And if we really believe what we read, which is 100 million new people will be in urban areas of American over the next 30 or 40 years, sooner or later we need to start rethinking how we fund our transportation infrastructure. We need to start thinking how we address, with an archaic funding source that nobody believes is the future, this huge infrastructure demand we are going to have starting with the next bill.

I am hoping the bill can lay the foundation for a new way of funding transportation, in general, and public transit, specifically. It is absolutely difficult to believe that public transit, in its growing popularity, will be able to sustain with a 20% or less share of the transportation investment in this country for the foreseeable future. Sooner or later, we have to come to grips that there needs to be increased, by a dramatic level, transit funding in America. The idea the highway program requires 80% of the national infrastructure funding and transit, where all the growth will be in the urban areas, should stay at 20% is getting to be archaic thinking, in my judgment. Again, the driving force for the next bill is that the Highway Trust Fund is about to go bankrupt, and soon, the transit portion of that is also going to run out of money. We need to fix this.

I am hoping in the Obama Administration’s last two to three years, they are willing to put a grand plan together not only to fix the economy, but also fix the Highway Trust Fund in a more creative way. In my lifetime, I don’t think there has been a reauthorization done on time, and I see no reason to believe this will be an exception. I am thinking it will be toward the end of the Obama Administration, and am hoping the mid-term elections will moderate the Congress.

Do you think it has a negative spin because of the way it’s portrayed in the mainstream media?

There are people who would oppose any project this size, and they are going to use any terminology they can. For some people, if they have been to Europe, the term “bullet train” is a very positive thing, actually. I do think high-speed rail has been demonized by conservatives who would have demonized it whatever you called it, just as many in the country has demonized Amtrak as a failed nationwide regional system, which is also not true. Amtrak works quite well; it is a great system.

These are part of typical growing pains, but high-speed rail has just not found its legs yet. It has not found that imagery that is going to capture the country’s imagination. Yet, everybody you talk to who has been to Europe and has used high-speed rail or that sees what is going on in China, conservative or liberal, thinks it is one of the greatest things they have ever been on. It is not unusual for this country to be a little behind the times, so now we really just need to find the way we are going to capture the public’s imagination.

George Pierson
Parsons Brinckerhoff
What are keys to getting younger people on public transit and keeping them riding?

One of the key factors with younger people driving less is they are purchasing fewer cars. The economy has generally hit younger people more than others, because they are entering the workforce with maybe not as much education, and therefore, they don’t have the funds to purchase and maintain a vehicle, either in its initial outlay or upkeep. Because of these factors, many of these younger people are saying a car is now a luxury and not a necessity, especially if they live in a city area.

There are a lot of studies showing that once people begin to ride public transportation and see its convenience and cost savings, they tend to stay with it. Therefore, the first key to keeping them on public transportation is to get them on it to begin with. Second, just like anything else, any other product or service, the customer experience, convenience, cost, all those things are important and that is something public transportation agencies work on every single day. The third issue, I suppose, is public transportation being seen as the green transportation alternative will likely continue to resonate with younger people.

Is there anything the industry can do to spin the public’s negative perception of public transportation programs?

With high-speed rail and many programs, part of the answer is to be very transparent, open and accurate, so when a cost assessment is given, we want to make sure it is a fully accurate cost assessment that people feel comfortable can be met. Part of the cynicism to large public infrastructure projects is the feeling, sometimes justified sometimes not, that the initial number is given as a low ball just to get a program approved, and then it ends up costing much more than that; that is always going to draw a negative conclusion. By being transparent on how it is operated, what the goals are, what the cost is intended to be, I think you remove surprises, and while you can debate that, let’s debate it once and not every six months or so because new information comes out. So, one key way to gaining public confidence is to show that a program is being run well and efficiently. You can always debate whether it is an appropriate program, but debate that once. And, once it is approved to go forward, then all your debating should be about how efficiently it is being managed. If it is being managed efficiently and transparently, I think we will have a lessening of that backlash.

How helpful can it be to move into forms of alternative project delivery to help fill the funding gap?

There is no question it can be helpful. If you have a project you want to deliver but can’t afford, there are two ways to afford it: to get the money elsewhere or deliver the project for less money. Therefore, all the mechanisms for delivering projects for less money have to be employed. Design-Build is one of those, and if used properly, can create significant efficiencies within the program, both in actual cost savings and in schedule. Schedule always equals cost, so that clearly has a role to play.

More and more, companies, and certainly we are one of them, are driving to create a culture of innovation — to challenge not only contractual mechanisms, but how we go about the whole process, including the design and construction. We have to challenge what it is we are actually designing and building, against what it is we are trying to achieve, and ask questions to try to create efficiencies where maybe they didn’t occur before. The way you do that is through a culture of asking ‘what if we did this? or ‘what if we did that?’ It is through advanced use of technology that maybe hasn’t been applied in different areas. We are trying to drive an approach to question the old ways of doing things and not simply doing things because they have always been done that way. We have to challenge those old ways of doing things and try to come up with, at every step of the process, a better, faster and more efficient way of achieving the same end-result.[PAGEBREAK]

Huelon Harrison
Legacy Resource Group
Have you reached out to local and federal representatives to communicate what you do?
I have had many opportunities to visit with the representatives of those members who represent the Dallas area. Fortunately, they are in tune with what Dallas Area Rapid Transit, a leading transit authority in the region, is doing. They also realize capital programs provide opportunities for small business owners, like me, to participate on various projects for the authority. I make sure to tell of my experiences and successes any time I can. I also recommend to my fellow industry colleagues to do the same.

Why do you think that is important?
I feel the representatives appreciate hearing from their constituents who can also keep them abreast of opportunities in the area they serve. I also feel they appreciate hearing someone’s story that lives, works, and is involved in their district and has benefitted from opportunities derived from the public transportation arena. 

Do you feel the DBEs out there are properly equipped to take on work as opportunities continue to grow?
Yes. There are many certified DBE firms in the marketplace that are properly equipped to take on opportunities as they are presented to them. I feel it’s important for the DBEs to engage with primes, let them know what their capacity is and share their strong points relative to being a value add to a particular project. I see many situations where primes will engage a DBE firm to participate on a project. As their relationship matures with a positive performance record, many firms have the opportunity to gain additional scope and grow in their capacity. 

So it helps to be involved in something smaller?
It has helped me, because if you are on one project and perform well, you may be invited to propose on additional work for other projects. Many firms that I work with look at your past history of performance as your door to new opportunities. I have found many firms that are committed to seeing their subcontractors grow and want to be part of that firm’s success story.

Being a smaller company, what is your greatest challenge?
With the amount of competition in the public transportation marketplace, a challenge for small firms, such as mine, is developing a relationship with a prime with the right project at the right time. Also, as with any endeavor, there must be some investment of time and money. It is also advisable to get involved with industry organizations such as APTA, the Conference of Minority Transportation Officials and WTS International. Remember, you are making an investment in yourself. You must get involved, prove yourself and take advantage of any opportunity presented.

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