The Burns Group
Rick Simonetta, Business Development, rail and transit

What trends are you seeing in the industry right now?
In general, there is a sense of uncertainty about long-term transit funding at the federal level and a continued concern about the economic recovery and the impact that will have on tax revenues at the state and local level. The lack of clarity on funding and the stalemate in Washington until after the November elections has frozen planning and decision-making on major capital construction projects.

Transit agencies continue to tighten budgets with service reductions, staff downsizing and fare increases. This is occurring at a time when higher gas prices and a struggling economy have increased the demand for more affordable transit options. Transit ridership has increased in each of the past several months and shows no signs of changing direction.

Capital development continues at a slower level in most systems where comprehensive programs were initiated and locally supported, or where limited federal funds have been awarded. Needless to say, competition and creativity within the consultant community has increased as a result of these market conditions. Transit systems that are able to advance projects under the current circumstances are benefiting from innovative project delivery approaches and lower construction pricing.

In what ways are consultants promoting green practices in their own businesses, as well as in transit project development?
Environmental sustainability and sustainable design are at the heart of the transit industry’s contributions to society. Our industry’s carbon footprint and energy consumption per-traveled-mile is far superior to the traditional private automobile. The promotion of these facts has begun to take shape through public advertisements and concentrated lobbying efforts. These green initiatives help promote a more sustainable environment and also help attract the top talent into our industry.

Continuing to get that message out to the public will play a significant role in the future success of our industry.

We’ve found that many green initiatives are being insisted on by the employees. The development of next generation transit professionals has created a groundswell within organizations that is helping change the culture in the consulting world. Energy control systems, alternative and sustainable energy sources, resource conservation and reduced carbon footprint have become common lexicon in the office spaces we inhabit, the modes of transportation we use and every project we now work on.

AECOM
Tom Waldron, Sr. VP/Americas Director, transit & rail

Has the lack of a transportation bill started to impact your projects?
Because of the continuing resolutions keeping the current bill alive at pre-existing funding levels, we haven’t seen a widespread impact on the execution of our projects. Certainly, if the current bill were allowed to lapse, many federally funded projects would grind to a halt. What has been impacted, though, is our strategic business planning. We’re being very conservative in our approach due to the uncertainty that the lack of a long-term, well-funded transportation bill creates. It’s difficult to decide where best to invest our future focus, energy and resources when federal transportation funding priorities are not clear.

In this environment, we’ve seen agencies constantly adjusting their capital priorities. State of good repair over system expansion and lighter technologies, such as streetcars and BRT, instead of more infrastructure-intensive options, are some of the trends we’re seeing. Innovative project delivery approaches are being looked at intently, bill or no bill. Design-construct and P3, for instance, are increasingly seen as solutions for meeting transportation infrastructure needs. While these approaches hold promise to shift risk and upfront cost to the private sector, they still require a healthy share of public dollars to make them financially viable.

Of course, it’s incumbent upon all of us in the industry to adjust to market conditions. In doing so, AECOM has expanded our alternative delivery portfolio, continued our focus on modal trends and agency priorities, and have grown our presence in overseas markets where transportation funding is robust.

Other than funding, what are some key challenges the public transportation industry is facing today?
Considering the current workforce demographics, I think that workforce development needs to be at the top of the list. In both the public and private sector, we need to make sure that we’re able to attract the best and the brightest to the field, where they can have fulfilling and rewarding careers that make the world a better place. We need to invest now in the professionals and leaders of tomorrow to ensure that the growing demand for public transportation can be met for years to come. And while we must address the cultivation of the workforce of tomorrow, we must also make sure that our agencies have adequate staffing today to deliver vital services and create a forward vision. In these austere times marked by staff reductions, it has perhaps never been as difficult for them to do more with less.[PAGEBREAK]InfraConsult LLC
Alan Wulkan, Managing Partner

Now that President Obama’s term is almost up is there a change of opinion about this Administration from the public transportation industry’s point of view?
No, it’s still very difficult to find an Administration that has been more supportive of public transportation than the Obama Administration. First of all, more than once having high-speed rail and transit mentioned in the State of the Union address is unique, and in incredibly difficult economic times, they have consistently supported level or increased funding for public transportation, especially when you include high-speed rail. It would be fair to say that we are all disappointed that we haven’t seen a more aggressive reauthorization proposal from the Administration, but again, when you balance all of the issues and the priorities going on in the country and the way Congress is currently composed, I just can’t find any serious criticism of the Administration’s support of public transportation.

Do you feel the industry can still maintain its growth, both short- and long-term?
We have a combination of things happening. At the local level, we continue to see new sources of income, taxes and support for public transportation, so the foundation for public transportation funding has never been better. Even in these economic times, we’re passing 75% of the local initiatives and seeing growth in ridership, so at the local level, clearly public transportation’s popularity continues to grow.

At the national level, despite a lot of attacks on the transit account and the trust fund which we were able to beat back as an industry when the House T&I Committee decided they were going to do something dramatic to how we fund public transportation, the public support was overwhelming at the local level to make sure that nothing dramatic happened to the program in Washington, so I find that encouraging.

Why do you feel there is so much success at the state and local level and why doesn’t that translate over to the federal side?
The general public has been way ahead of elected officials, in general, on the need for options and choices in how they travel. The fact that gasoline prices are at $4, and in some cases approaching $5, isn’t just a phenomena of the last increase, they have obviously seen prices steadily rise over the last four or five years, and so, people want choice.
Also despite how fuel efficient cars are going to be and despite whatever changes are going to happen in the way we public transportation fund in the future, I still believe congestion ranks in almost every major community as the number one or two issue facing communities in their desire in having quality of life and sustainable communities. We’re going to have 100 million new people in this country, mostly in the urban areas over the next 20 years, so it’s no wonder people are concerned over how they are going to move.

Third, we’re seeing a shift in the public’s priorities when it comes to what’s important to them, and time with families, free time, seems to be becoming far more important than most ever in my working life. We’re seeing that with our own employees, as well. Honolulu was just rated the worst congested community, even worse than L.A. It’s no wonder that the public there is interested in supporting a major transit investment, because they are losing time with their families, they are losing time by sitting in traffic and they don’t see that getting better. That is one of the main reasons why public transportation continues to grow in popularity, because we provide a high quality alternative.

HNTB
Elizabeth Rao, Chair, transit services

Have changes to New Starts helped or hindered the industry?
Changes to the New Starts process implemented over the last three years are helping the transit industry more successfully navigate the New Starts process. The changes proposed through the recent Notice of Proposed Rule Making (NPRM), if enacted, have the potential to move the industry further by providing a more simplified process with understandable measures for rating New Starts and Small Starts projects. The new guidance proposed will reduce the need for multiple discussions between the  sponsor and FTA over project requirements and improve the overall intelligibility of the New Starts ratings process. This is important not only for the transit industry but for the public as well. It will make it easier to explain the basis of FTA project approvals and funding recommendations to elected officials and the community. Changes proposed will also expedite the preparation of required project information allowing timely federal project approvals.

Other than more funds, what kind of program/changes would you like to see in the upcoming bill?
Investing in our nation’s transportation infrastructure is a national priority. Other than additional funds, it is very important that more certainty and predictability be provided in the federal authorization bill to specify annual funding levels that can be relied upon. Our current practice of year-to-year continuing authorizations makes it difficult for agencies to plan for the future. While the economy continues to present challenges, timely decisions must be made on how our country’s critical transportation needs are funded as part of the overall federal budget.

What is your company’s greatest challenge?
Our greatest challenge is continuing to evaluate and respond to the rapidly changing needs of our clients. Whether it is developing cost-effective designs, efficient project delivery methods or implementing new technology applications, our clients are interested in saving time, reducing expenses and getting a bigger bang for their dollar. HNTB is responding to this challenge by continuing to provide a sophisticated team of transportation managers that understand this full service approach.  

STV Incorporated
Richard Amodei, Sr. VP/chief strategic growth officer

Canada has successfully instituted a rail program that has abundant buy-in. How have they done it?
Several years ago, the Canadian Federal Government made a decision to significantly increase funding for public transportation initiative nationwide. Prior to this, the federal government was less involved in major public transit funding support. This provided a catalyst for several new major transit initiatives, and when combined with existing and increased provincial and local funding, they now have money to really start planning, designing and building mass transit projects. We are seeing this across Canada. A great example is in the capital city of Ottawa, where they have a fully funded $2.1 billion light rail project that is supported by the province, the federal government and the City of Ottawa, which is moving quickly through the procurement process and toward final design and construction in early 2013.

In the Region of Waterloo they actually made the decision to move ahead and confirm funding on a light rail project while they were in the planning stages. That project is in preliminary engineering and is scheduled to move forward into design and construction by the end of this year. 

One of the key components to Canada’s success is the ability to decide early in the process to make the commitment to funding for the project once they believe it has merit, meets the needs of the community, and helps improve the quality of transportation and mitigate congestion. Early commitment to funding prior to fully completed planning and environmental analyses is one of the biggest drivers that helps make Canada successful when it comes to mass transit projects.

Anything the U.S. could learn from Canada?
Obviously, it all comes down to funding, but innovation is also very important. Canada is and has been making a big push to encourage and use alternate project delivery methods that include operations, maintenance and financing. Provinces, such as Ontario and British Columbia, have created departments that focus and implement PPPs for large infrastructure projects to help support city and agency sponsors of major initiatives over a certain dollar threshold. I believe they will continue to move in this direction and these are areas where we can share a lot of knowledge and lessons learned, especially because financing is more frequently part of the alternative project delivery strategy.[PAGEBREAK]Holland & Knight LLP
Jeff Boothe, Partner
 
Can you reflect on the past four years of the current Administration and give your opinion on how the upcoming elections may impact the industry?
First of all the Obama Administration has been the most pro-transit Administration since I first came to D.C. and started working on transit issues in 1982. They have done more to advance public transportation and to  discuss it, not just in terms of public transportation, but also, in terms of impact on land use and economic development. They are the first Administration that truly understands the relationship, or the impact, that transit has in shaping growth and economic development in communities, so I commend them for that.

In terms of what does the next election mean, first, I would say the transit program has shown remarkable resiliency even as we have a new Congress and certainly substantial change in the House with a substantial number of new Republican members. When the House made the initial effort to take transit out of the Highway Trust Fund, we were able to demonstrate as an industry strong support for transit within the Republican Party in the House. Given the changes from the districts and the changes in redistricting, I would suspect that there will be more transit support in the House following the 2012 elections, than there is presently.

In the Senate, there has always been strong transit support. It’s hard at this point to say who is going to control the Senate, but transit has always fared  well in the Senate, and we have strong advocates within both parties in the Senate, which is encouraging.
 
There seems to be a lot of optimism a reauthorization bill will get done very soon.
Sen. Barbara Boxer (D-Calif.) has been expressing her strong support and communicating that conversations are going well and that she’s optimistic that there will be a bill. So, yes, there is a concerted effort to be optimistic about the prospects for the bill. There is also a concern that time is not our friend. If you look at the dates on the calendar, you start getting a little concerned whether there is time to complete a bill this Congress. To me, if it is the will of the House and Senate to get a bill done, we will get a bill done. I’m waiting to see leadership step in and communicate in the strongest terms that this bill is important; we haven’t seen that yet. So, I’m hoping that if there is a belief that we need to get a bill done because it’s important to the economy and important for members of Congress heading into the fall elections

Wendel
Marlene Connor, Director,
public transportation planning

What is your outlook for the future of public transportation?
It’s good; it’s going to be different. The future of public transportation is going to be all about figuring out how we fit better in our communities and who our partners are. That is how we’re going to be the most successful in making our case and talking more broadly, instead of just to the people we typically communicate with.

Do you feel the younger generation will continue to use public transportation?
I think so. The younger folks like the idea of living in an urban environment and living in a community where you don’t have to get in your car every time you want to get milk. It’s interesting that a lot of folks are moving back to center cities. A lot of cities are trying to figure out how to make that work by finding how to connect housing and the central city areas, which will definitely continue. In addition to the younger generation, I think older people will follow suit. The landscape is going to shift a little bit and continue that way.

Why do you feel the use of PPPs is still stagnant?
It’s probably different everywhere. From a public-private perspective, it’s pretty good. It’s part of the picture; it’s never going to be the whole picture. Transit’s never going to be able to start suddenly being profitable; it’s an industry that’s always going to depend, to a certain extent, on support from the local, state, and/or federal governments. PPPs are not going to take the place of the usual funding categories. To some extent, I’m not sure, necessarily, a lot of people have figured out what PPPS can do, and people really need to look at them differently. PPPs are not just about getting the private sector to build bus stops or invest in stations and things like that, but it’s figuring out who key partners can be in a community and learning how to work and partner with them.

Why do you feel the state and local initiatives are so successful?
At the local level, people get it. At the local level funds go to real projects assisting real people, so it’s easier to see need for more funding, while at the federal level funds go to amorphous systems that are more difficult to support adding funds during tight economic times. At the local level, a lot of people understand that mobility and connections are important to them.

Parsons Brinckerhoff
George Pierson, President/CEO

The focus on sustainability came along at the same time as the economic and funding issues. How is that impacting agencies in choosing to do green-friendly projects?
I don’t see that it has, and there’s no reason it should. It’s a false equivalency to say that green costs more; it doesn’t. Lifecycle costs with a thoughtful green approach is and should be less. So, the idea that we’re in tough economic times and green has to go by the wayside, in my view, is a false equivalency. Long-term operating costs are shown, in many ways, to be less when you have a green initiative than without. It may be slightly more upfront, but when you factor in the lifecycle costs, it tends to be lower.

Have you seen any growing trends toward design-build?
There’s certainly a growing trend toward design-build not only in transit but in other markets. One of the things that has to be done properly to insure a successful design-build is that the agency has to think well upfront about what it is looking for, what it wants and how it has to operate. That is more complicated for a transit system than it is on a highway project. You have to be more thoughtful on a transit system about all of the parameters of the system and how it ties into the existing systems, so it’s a little more difficult, but it is certainly a growing trend. Agencies are figuring out how they can ensure that they can develop the proper detail of specifications upfront so they know they are getting the product in the end that they need and are paying for without being so prescriptive as to remove the benefit of design-build, by, in effect, calling it design-build but handing such a detailed design to the contractor that there’s very little leeway for innovation and improvements.

Discuss some of your company’s newest training initiatives.
We’re actually rolling out a global mandatory sustainability training program for everybody in the company and that’s as much of a cultural training as it is technical.

We have what we call PB University, which is online training on a number of programs, including an annual ethics training that everyone in the entire company has to go through. We have increased the emphasis on third-party certifications. In fact, we have equated people getting LEED accreditation with getting a professional engineer’s license, and we not only encourage that, but we pay for the course and actually give an automatic salary increase when they successfully attain the accreditation.
When we look at training, we try to take a very expansive thought process. For instance, something we’ve started over the last couple of years is putting a much greater focus on training within the industry. A large component of that is how we drive more engineers into the field. One of the things we did a few years ago is create an alliance with Bucknell University, which is designed to drive more minority engineers into the field to try to continue to fill the gap that is growing from those retiring and those entering the field. A component of that is support for their academic achievement, training, internships and more. [PAGEBREAK]HDR
Steven R. Beard, Sr. VP/Transit Market Sector Director

Is there a solution consultants can share with transit agencies to help bridge the funding gap?
There is no magic wand to fix the funding gap for new projects and bring what we have up to an acceptable state of good repair. The consulting/contracting community can provide direct help with “financing” gaps but not with funding gaps. One thing we as consultants can do is work in partnership with our clients to reduce project costs. We can identify innovative ways to do things better and cheaper. We can suggest ways to save money and still satisfy the goals of the project. We can help our clients make do with the funding that they do have. Another thing we can do is to bring our national and international experience to bear by informing our clients what other cities and countries are doing in terms of adding funding sources or increasing the return from the sources they already have.

HDR is currently working with the Counties Transit Improvement Board in the Minneapolis/St. Paul area to define ways to develop and accelerate implementation of a regional program of bus and rail transitway projects. The work draws upon the experience of peer cities around the U.S.

How is the lack of a transportation bill starting to impact your projects?
The primary impact of a lack of a transportation bill is the slowing down of new rail projects in the federal funding pipeline. Agencies are more and more hesitant to invest millions of up-front local dollars with the uncertainty of whether or not the federal funds will be there in the future. Many project sponsors are taking a wait-and-see attitude. Unfortunately, the current proposal for a two-year (or less) bill will not give project sponsors a lot of long term confidence.

Have you seen any growing trends toward design-build? If so, how do you think that will impact your business?
There is definitely an increase in clients using design-build as a project delivery approach. I don’t think we can call design-build an ‘alternative’ delivery method any longer; it is now in the mainstream. Design-build is a quickly growing part of HDR’s transit business. However, we are also very careful not to let the design-build practice have any negative impact on our traditional planning, design and construction services lines of business. Contractors are a relatively new client base for us but we are committed to continuing to provide extraordinary professional services to our traditional clients as well as our new contractor partners. HDR is one of the larger design firms, and we have great relationships with the major contractors. These two factors, combined with our commitment to quality, will serve our design-build clients and our employee-owners well in the years to come.

Legacy Resource Group
Huelon Harrison, Principal

How do you see the upcoming election impacting the industry?
As far as the consultants, the smaller firms, we are pretty much dependent on activity from the transit authorities. Many projects you saw planning for in 2008 that we thought would be in the works beginning in 2010, well here it is 2012 and those projects are still on the table because a lot of agencies don’t want to commit without funding in place to carry it on. For some of those reasons, the elections are very important, because in an election year, everything is on hold. Everybody is anticipating once the elections are over things will stabilize and be on a long-term funding basis versus these 60- or 90-day extensions.

How is the economy impacting smaller firms?
I’ve seen some of the firms have some shrinkage. I’ve seen firms that were preparing for good projects and the projects just don’t happen. So, when you have staff there, versus being a billable person, you are sometimes forced to have to make some tough decisions to streamline, and when things get better, you can ramp back up.

How do you think the industry will be able to maintain growth?
We need to focus on having a safe, reliable service and getting the ridership up. We always see our usual spikes. We see market-driven spikes when gas prices go up, and you think you got somebody who is now going to be converted to a public transit user, but as soon as the prices come down, they get off the train and they get off the bus. We have to help develop a mindset where it’s OK to ride the bus. Also, as you see more of the younger people get into the marketplace that are used to riding the bus or the train, it’s not that much of a paradigm shift to go from college to a new job and still ride the bus. It’s very important to keep people educated to know what’s available and that there are programs to give people an incentive to use public transportation and make it a fun way to get around, versus a last resort.

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