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October 2007 Archives

October 1, 2007

Metro... is it really transit?

Being a good, environmentally-conscious citizen, I attempted to use mass transit to get from my home on Capitol Hill to my workplace in Renton the other day.

I went to King County Metro's trip planning page. The first round (point-to-point, .5 mile walk) culled 3 options averaging 3.5 hours and 4 transfers. The second round (point-to-point, 1 mile walk) gave 3 options, with two transfers and 3 hours. Third try (house address-to-Southcenter mall): an average of 1.25 hours, between one and two transfers. That does not include the 20 minute walk from Southcenter to the office in Renton. Total: close to two hours.

Are you kidding me?! Between 2 and 3 hours to get to work... each way?

Figuring this couldn't be right, I rode to Southcenter anyway. Two hours later, finally at work, I realized this scenario is why we will never solve our congestion problem with the current approach. Why would anyone take public transportation when it takes 2 hours to get to work... and only 20 minutes by car?

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October 3, 2007

Tolling Goes Mainstream

Approaching 2008, tolling has entered the mainstream and begun to influence transportation decisions throughout the country. At the same time - as Forbes magazine notes - transponder technology is enabling higher-speed, automated "open road" tolling, foreshadowing an eventual end to the era of tollbooths.

Recent news reports underscore the increased momentum for tolling - although often the pathway to implementation is challenging, and some proposals pencil out while others ultimately do not.

Let's survey the tolling landscape.

With the state facing a projected 30-year, $74 billion shortfall in needed road funding, Georgia Board of Transportation member David Doss has unveiled a plan which includes a 10-year statewide one percent sales tax hike to raise $22 billion for transportation, and which calls for the infusion of private capital for a tolled east-west connector north of Atlanta and an eight-mile tolled tunnel to relieve downtown congestion.

Near San Francisco, the (Silicon) Valley Transportation Authority is vetting plans to widen Highway 101 and add a High Occupancy and Toll (HOT) lane that is free to some carpoolers but for which lower-occupancy vehicles would be charged. Conversion of current High Occupancy Vehicle (HOV) lanes to HOT lanes that are open to toll-paying solo drivers is also being evaluated for other Bay Area highways, including portions of southbound I-680, I-580, I-880 and Route 101 in the North Bay.

Installing more HOT lanes has increasingly become a priority for the federal Department of Transportation, which recently released $1.2 billion to agencies across the country willing to charge tolls...."The feds are looking for dramatic, dynamic ways to get big projects moving," said John Ristow, who is overseeing the VTA's toll plan for 85 and 101. "The huge piece is there had to be tolling involved. You see that in Seattle, in New York...That is where the trend is moving both on the federal and state level in a major way."

Virginia is proceeding with plans to construct HOT and toll lanes on a 14-mile stretch of the Capital Beltway. Private firms will finance $1.3 billion of the $1.7 billion project, the state will provide the rest. The private partners will maintain and operate the HOT and toll lanes. Transit and commuter buses, plus vehicles with three or more passengers will ride free in the HOT lanes; vehicles with fewer than three passengers will pay a congestion-based fee to use the HOT lanes, typically five to six dollars.

Alabama Governor Bob Riley has directed the state transportation department to evaluate the feasibility of private or public-private funding for toll roads on up to five key projects which can't be fully financed by the federal goverment or via a raised state gas tax, which is considered politically unviable. The projects include a southern bypass around Huntsville; an elevated roadway to skirt the congested intersection of two interstates in Birmingham; and a limited access road from Dothan to I-10 in Florida's Panhandle. Alabama already has four privately-operated toll bridges.

Meanwhile, in Maine, The Kennebec Journal reported last week:

The Legislature's Transportation Committee voted Wednesday to direct the Maine Turnpike Authority to study the feasibility of charging tolls on the Interstate. Just hours after the vote, Gov. John Baldacci released a strongly worded statement opposing new tolls. "I oppose the idea of adding tolls to Maine's existing Interstate highway system, and I can assure you it will not happen during my term in office," he said.

Regardless of the governor's feelings, Transportation Committee Chairman Rep. Boyd Marley, D-Portland, said the study will go forward. "I think it's irresponsible not to at least look at it," Marley said, adding that the state Department of Transportation is facing a funding crisis. "We're at such dire straits," he said. "The gas tax is flat, construction costs are out of control, we have 288 bridges in need of repair." The department is projecting a $2.2 billion funding gap over the next 10 years. The study will look at the feasibility of adding tolls to I-295 from Falmouth to Gardiner and I-95 from Augusta to Houlton.

In North Carolina, regional planning officials have signed off on a state-backed plan for a $553 million 21-mile tolled bypass road running parallel to I-74 from Monroe to Marshville.

Backers of an interstate highway forking together from the North Carolina and South Carolina coasts and then running through Virginia, West Virginia and Ohio to Michigan's Canadian border heard from U.S. Assistant Secretary of Transportation Tyler Duvall at a recent gathering. He said the multi-billion dollar proposal would certainly require extensive tolling, transponders instead of toll booths, and would would also greatly benefit from pension and hedge fund investment. Any interstate road projects costing more than $500 million will need to incorporate tolling, Duvall said.

The Palm Beach Post reports that at Florida Governor Charlie Crist's urging, the state will closely examine possible privatization and new or increased tolls on four road facilities: "Alligator Alley," or I-75 running east-west between Naples and Fort Lauderdale; the Tampa Bay Sunshine Skyway Bridge; Pinellas Bayway in St. Petersburg; and the Bee Line Expressway in Orange County. Early indications are that management of I-75 may be best retained by the state.

A combination of factors has helped to propel highway tolling into the mainstream.

  • Growing transportation budget shortfalls have been keeping the tolling option front and center before governors, state legislatures and state transportation officials. In a Washington Post op-ed, U.S. Transportation Secretary Mary Peters wrote:

    "A substantial increase in the nation's gas tax is ill-advised. Of far greater promise than traditional gas taxes is direct pricing of road use similar to how people pay for other utilities."

    Secretary Peters' skepticism about the potential of increasing the fuel tax is well founded. As the New York Times recently observed, "The mere mention of raising gasoline taxes remains almost tantamount to political suicide."

  • Private capital markets, especially institutional investors with long term investment horizons such as pension funds, have discovered transportation infrastructure to be an attractive investment opportunity. Toll facilities in particular, produce a steady cash flow that is relatively unaffected by economic downturns, and offer stable, long term investment returns with a relatively low risk. CalPERS, the nation's largest public pension fund ($246 billion in assets), may have been the harbinger of the new mindset when it announced in September that it was creating a $2.5 billion pilot infrastructure program and establishing a new asset class focused on investments in new roads, bridges, airports and other utilities. In announcing the decision, Charles Valdes, Investment Committee Chair, said "CalPERS could become a major player in solving some pressing public policy problems related to transportation."
  • State legislatures and public authorities have recognized the need for periodic toll increases to keep up with inflation, enhancing the attractiveness and popularity of toll road investments to private capital markets, which now consider toll roads a sound long-term investment.
  • The willingness of private toll concessionaires to accept availability payments and toll revenue sharing has contributed to the public sector's embrace of tolling, by allowing the state to retain the toll revenue. -- This arrangement is politically more defensible than letting a private concessionaire pocket the toll proceeds. Second, by tying payments to the volume of traffic, the state creates a profit incentive for the private concessionaire to manage the facility efficiently and attract a maximum number of customers. Third, the state owes money to its private sector partner only to the extent the facility generates revenue. If traffic is lower than forecast, the private partner bears the risk.
  • Unlike the politically unpopular private leases of existing public toll roads (as exemplified by the Indiana Toll Road and Chicago Skyway deals), concession agreements involving new toll roads have received a positive reception.
  • Tolls may well assume a dominant role in the funding of new highway capacity as early as the next decade. This conclusion does not stem from an ideological preference for "privatization" nor from a libertarian impulse to seek a reduced federal presence in the nation's transportation program. Rather, it is grounded in the reality that every last cent we can raise through the gas tax will be needed to maintain and modernize our aging infrastructure.

    Resorting to tolls and private capital to help finance future highway capacity is not only the logical way -- it's the only way to ensure the growth and long-term vitality of our surface transportation system without imposing an unacceptable tax burden on the American people.

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    October 4, 2007

    Gas Tax Revenue Drop Will Continue, And Hasten Tolling

    The Seattle Times has a story this morning about new projections of a Washington state gas tax revenue shortfall of $1.5 billion, and the added impetus this gives to tolling as means of funding crucial transportation projects. The story says the expectation of state forecasters is for continued high gas prices and constrained demand, and that although the revenue shortfall is relatively small now, it is a real problem in the long term.

    But that is only half of it. As we learned at our technology conference at Microsoft this year, the Prius is the fastest selling model for Toyota in the Northwest. On deck for Toyota, GM, Ford and other manufacturers are plug-in electric hybrid vehicles (PHEVs) which use electricity for their primary energy source and non-petroleum-based alternative fuels for back up. 2009 is the most likely date for mass market distribution for these vehicles - which coincides with the date the federal Highway Trust Fund is expected to go bankrupt.

    With our commitment to renewable energy resources and tradition of hydropower, the Northwest could be the first area in the country to eventually power its transportation sector oil-free.

    So yes, by all means bring on toll roads and more HOT lanes and public-private partnerships to help fill the transportation funding hole that will continue to grow due to dwindling state and federal gas tax revenues. At the same time, flexible, fast and convenient public transit can help, such as bus rapid transit and - in locales like Puget Sound - cutting edge low-wake, high-speed water taxis. So can vehicle trip reduction strategies including employer-provided buses, flexible carpooling, and telework.

    Finally, let's acknowledge that scores of drivers and freight haulers are still going to be on the road, and help them "green the highway." In part, that means retrofitting park-and-ride lots with electric plug-ins; expediting government fleet purchases of PHEVs; and electrifying truck stops, port container storage yards, and rest areas on major Interstate highways such as I-5.

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    October 10, 2007

    Seattle Taxis Going Green?

    Like any big city, Seattle has a diverse fleet of yellow, orange, and every color in between, taxi cabs. If you've taken a taxi in Seattle in the past month, you may have noticed something different about the car that picked you up.

    STITA-TAXI.jpg

    At least one taxi company is allowing gas-electric hybrids including the Toyota Prius to join its fleet. Which company is behind this "green" technology trend? According to the Seattle PI, it's the same one that has faced criticism in the past for its monopoly at Sea-Tac airport:

    For the airport drivers, the hybrids have taken some of the frustration out of the county's system, in which STITA drivers can pick up passengers at the airport and take them to Seattle, but are barred from picking anybody up in the city and taking them to the airport. Similarly, Seattle-licensed cabbies can take people to the airport but are not allowed to bring anybody back to the city.

    As a result, STITA drivers find themselves sitting in traffic while they head back to the airport, burning gas, seeing profits go up in smoke while they sit, with the meter not running.

    As the PI reports, STITA has a government-contracted monopoly on pickups originating from Sea-Tac International Airport. In a strange twist due to licensing, STITA cabs cannot pickup passengers in the City of Seattle. That results in a lot of extra "empty" trips.

    A case-study on the regional taxi market was written by Jeanette Petersen of the Institute for Justice Washington Chapter back in 2004. She reported:

    [The] result of these regulations is approximately 650,000 empty trips to and from Sea-Tac Airport (about 10,000,000 "empty miles") per year. This is detrimental not only to the taxi drivers who must pay for gas even when they do not have a passenger in the cab, but also for the community, clogging overburdened roadways and polluting the environment.

    If STITA continues to phase in hybrids, and other fuel efficient technology, the company should be lauded for its positive environmental action. As the PI story points out, cab companies in Vancouver, B.C. have been using hybrids for the past two years. Some European taxi services have been greening up their fleets in the past few years as well. One germane example is in the Austrian City of Graz, where a taxi company converted its entire fleet to biodiesel. And since 2004, Graz's public bus fleet has similarly been powered on 100% biodiesel, one of the first public bus fleets in Europe to achieve that feat. Coming back to Seattle, clearly some companies are taking a "wait and see" approach. After all, hybrids don't presently have a ton of trunk space for luggage.

    Regardless of whether the STITA cars are plug-in hybrids or the compressed natural gas vehicles originally urged by the airport operator, the Port of Seattle, clearly the environmental benefits are reason enough to applaud the company's and the Port's efforts.

    But the problem of government-mandated monopoly of taxi service originating at Sea-Tac - and the thousands of unnecessarily "empty miles" per year for Seattle airport taxis - remains. Unfortunately, that situation doesn't appear to be fixable by simply "going green."

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    October 11, 2007

    State Auditor's Report Details Congestion-Busting Agenda

    A report issued yesterday by Washington State Auditor Brian Sonntag's office urges the state to more aggressively attack highway congestion, beginning with a formal declaration that congestion is a top transportation policy priority. The Seattle Times reported on the findings today. The transportation performance audit, prepared for Sonntag's office by Talbot, Korvola & Warwick of Portland, goes on to make more than 20 specific policy recommendations. These include urging that the state legislature should:

  • "empower a single body - either the Department of Transportation or a regional transportation entity for the Puget Sound Region - to allow for a more integrated approach to planning for congestion reduction:"
  • "choose/identify transportation projects based on congestion reduction rather than other agendas;"
  • "implement new legislation to facilitate the expansion of road pricing should the department's high-occupancy toll lane pilot project (on S.R. 167) be successful;"
  • and "review whether new legislation is required for public private partnerships for transportation infrastructure and implement any changes."
  • The transportation performance audit, authorized under Initiative 900, also recommends the department add new highway lanes.

    WSDOT observes in the audit report, correctly, with respect to new highway lanes and other capital-intensive proposals, that new state funding has been hard to secure over the years and much responsibility lies with the legislature.

    But as state legislators were recently reminded, state and federal gas tax revenues - a key funding source - aren't a good bet going forward. All the more reason for state lawmakers to explore and ultimately implement the report's recommendations, especially expanding opportunities for public private partnerships, building more HOT lanes, and implementing transportation governance reform to boost investment and accountability.

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    October 16, 2007

    The Straightforward Benefits Of Roundabouts

    Puget Sound's arterial roads need more roundabouts. They're much bigger than the "traffic circles" in residential Seattle, and do occasionally materialize in the suburbs here. More to the point, they're cheaper than stoplights (both to build and maintain), reduce congestion and save fuel. Most importantly, roundabouts have 80% fewer crashes with injuries than regular intersections.

    The Economist makes the case for roundabouts, and notes there've been about 100 constructed in Washington state, which is approximately one-tenth of the U.S. total. Some other nations have exponentially more than the U.S., the magazine reports.

    So why don't we use roundabouts more, and why aren't they part of the solution? It might be a small win, but at this point, shouldn't we also be looking at any low-hanging fruit?

    Other advantages: roundabouts are not affected by power outages (read: 2006 wind storm!), don't need their light bulbs changed, and don't have unattractive wiring hanging over intersections that can fall and kill people. In fact, they are a net positive if landscaped or festooned with a piece of art. (Arc de Triumph, anyone?)

    Granted, this is not about to solve our whole congestion problem, but it should merit further emphasis from the federal and state DOTs, city and county planners, and elected decision-makers.

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    October 23, 2007

    Can Better Carpooling Help Fix Our Traffic Mess?

    A recent proposal under Washington State DOT's Trip Reduction Performance Program would utilize a "Flexible Carpooling" strategy in a pilot project for Sea-Tac Airport employees, removing 100 commuter round trips per work day.

    Trip Convergence Ltd. is seeking a WSDOT grant of $86,000 over two years to help launch a five-year "proof of concept" test of its user-friendly form of carpooling - described in this YouTube video. (Full disclosure: Cascadia Center is one of several regional entities serving in an advisory capacity to Trip Convergence Ltd. with respect to the above-referenced pilot project).

    According to Trip Convergence's grant application to WSDOT, members would drive to a Park and Ride location near Interstate 5 and State Route 18 in Federal Way, where they meet up with other commuters - each person choosing whether to drive or to be a passenger. When a car has one or more additional passengers, the driver then departs for the airport, letting the passenger(s) out at a designated drop off point. In the evening, the process is simply reversed. The application notes:

    Participation will be tracked through the use of infrared and radio frequency ID technology, and based on the record of each trip, ride credits will be transferred between riders and drivers. The ride credit received by the driver will entitle the driver to take a ride at a later date.

    The system does a good job of addressing the inconvenience that often accompanies carpooling. Rather than wait for a specific group of people, each member rides with the first available vehicle thereby increasing flexibility of when to come into and leave from work. Commuters that often need a car during the day can choose to be drivers, and locating a couple of Flexcars at the airport would also help alleviate the fear of being caught somewhere without a car.

    But will it really pencil out, especially with a government grant involved, and compared to more popular forms of alternative commuting, such as bus transit? Let's try to drill down a bit. When a "trip reduction" is tallied, the car is sitting idle not for one day, but for each work day of the calendar year - about 250 days - because the driver is using an alternative form of travel, flexible carpooling in this case. Thus an "annual trip reduced" is really about 250 annual round trips that one car foregoes, or the equivalent spread among several cars.

    So, 100 annual round trips reduced - the aim of the Trip Convergence Ltd. pilot project - is really about 25,000 daily round trips, total, reduced per year. At a stated trip reduction cost to WSDOT of $43,000 per year in the project's first two years, the operating subsidy would total a modest $1.72 per daily trip reduced. Factoring in 15 vacation days per year for the owner of each vehicle, 100 annual round trips reduced would total 23,500 daily round trips reduced, and the subsidy would rise to $1.82.

    That compares favorably to King County Metro bus service, which as this Metro fact sheet reports, requires $3.64 in operating costs per boarding while simultaneously yielding only 84 cents in operations revenue, for an average operating subsidy of $2.80 per boarding, or $5.60 per daily round trip.

    A large part of the difference is likely explained by the unionized salary and benefits costs of operating large public bus fleets and, as off-peak load factors run low, uneconomic fuel costs as well.

    One implication is that smaller, more nimble and flexible approaches to group commuting could attract greater market share, especially if regional tolling and transportation-specific carbon taxes, or mileage or cordon fees, are instituted within high-density metropolitan regions. Already, due simply to existing road congestion, we see companies such as Microsoft instituting their own privately-funded regional bus service for employees, which is both salubrious for taxpayers, and in the company's enlightened self-interested, due to its employee retention concerns.

    Another implication is that Metro may need to look more closely at serving fewer routes better and faster to improve operating margins. Metro's planned bus rapid transit "rapid ride" corridor routes may provide a useful template for broader stratagic shifts in the system.

    More on Vehicle Trip Reduction: "Slow But Steady Telework Revolution Eyed."

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    October 24, 2007

    Puget Sound Mobility Requires Public-Private Partnerships

    The Tacoma News Tribune reports this morning that the crumbling, 94-year-old Murray Morgan Bridge has been ordered closed by State Transportation Secretary Paula Hammond, raising strong city council concerns about access to Tacoma's tidelands areas for medical or industrial emergency response. A 2004 estimate pegs rehab costs at $77 million, but only $25 million has been secured to date, the TNT reports.

    Current road and transit needs for the Puget Sound Region total $66 billion over the next two decades, according to a transportation governance commission created by the Washington State Legislature and Governor Christine Gregoire. Those needs are likely to grow. The population of four-county metro Seattle will rise from the 2000 U.S. Census level of 3.276 million by 52 percent, or 1.712 million - about as much as metro Portland today - to just shy of 5 million by 2040. This according to the Puget Sound Regional Council's new draft Vision 2040 regional update on growth, transportation and economic development. Additionally, roads and transit construction costs are rising ever higher.

    The upshot: A solid long-term transportation finance strategy is crucial. Our Cascadia Center's Director Bruce Agnew and Senior Fellow Steve Marshall argued in a News Tribune "Insight" section op-ed Sunday, October 21 that we're at a crossroads, and must move well beyond reliance on traditional funding sources to address current system maintenance and future system expansion needs.

    ....new construction should be financed from tolls and private equity while federal Highway Trust Fund and state resources handle the maintenance of the existing system. Until now, large international construction firms and foreign banks have dominated the private sector partnership world. But today, local labor unions like the Northwest Building Trades and state public employee pension funds like the giant California Public Employee Retirement System want a piece of the action. The potential for funding alliances between public entities and labor unions or public employee pension funds is an important consideration in a state that has banned most public-private partnerships.

    We are not talking about foreign investors making huge profits and setting ever-higher tolls. Instead, the men and women who build the infrastructure would share in returns on the investment while the public retains control over toll rates. As former U.S. House of Representatives Majority Leader Dick Gephardt noted earlier this year at our Cascadia Forum, "pension funds are patient funds, a 50-year return on investment" for union members and the public.

    A special state transportation performance audit prepared for the office of State Auditor Brian Sonntag recommends, among other things, that the legislature "review whether new legislation is required for public-private partnerships for transportation infrastructure and implement any necerssary changes."

    In California, interest in PPPs is also running high. Former Governors Gray Davis, Pete Wilson and George Dukemejian yesterday highlighted the need for private-public partnerships, in a Southern California newspaper op-ed, "California Infrastructure Needs 'Plan B.'" They wrote:

    It's clear we need a new solution, a Plan B, to ensure our state's future success. We can do so by creating "Public Private Partnerships" or "P3." Through P3, most of the highway, bridge, rail, water conveyance, public health and other facilities projects are paid for out of a combination of taxpayer supported bonds, private equity and debt, and fees charged to those who actually use or benefit from the infrastructure and services. One successful model in British Columbia created a "state enterprise agency" to identify P3 opportunities and then impartially evaluate private- or public-sector involvement while focusing on ensuring the long-term protection and benefit of the community.

    ...Sacramento needs to pass legislation enabling P3 to function in this state. Senate Bill 61 (Runner), supported by the governor, is a first step but is stuck in the Assembly because of opposition by public employee unions who believe their jobs may be threatened. What they don't understand is that without this Plan B, a lagging economy and dwindling state revenue stream will indeed threaten their jobs and retirements.....We need a fair, open process that clears the way to plan for major new infrastructure projects that attract private sector planning, management and financial skills, while protecting the long-term interests of the broader community.

    Thomas J. Donahue, president of The U.S. Chamber of Commerce, put it this way, in a recent Washington Post op-ed titled "Bridges To Somewhere":

    What must our nation do to meet the urgent infrastructure funding challenges? Where is the money going to come from? We can start by unlocking potentially hundreds of billions of dollars in private investment just waiting to be spent on power plants; pipelines; shipping and hauling routes to railroads and airports; privately constructed and operated roadways; and more. The money is there if government regulators would get out of the way. Countries around the world use an array of innovative financing approaches and public-private partnerships to bring key projects on line quickly. It's about time America did the same.

    Transportation construction companies are taking the lead right now in public-private partnerships to build new infrastructure. One example is the new South Bay Expressway in San Diego. On a highway route initially proposed in 1959, the $635 million north-south artery built on the eastern edge of San Diego was financed by Macquarie Infrastructure Group funds based in New York and Australia, which will recoup their outlays via a 35-year tolling concession. Regular users can bypass tollboths, using windshield-installed tolling account cards which are automatically read by overhead transponders in the roadway. Depending on distance travelled, tolls for two-axle vehicles range from 75 cents to $3.50 for account-holders, nominally more for tollbooth customers. The toll is doubled for vehicles with three or four axles. The South Bay Expressway opens November 19.

    Cascadia Center is planning a luncheon forum on public private partnerships in transportation, during the week of Dec. 17, in Seattle. Stay tuned for more details.

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    About October 2007

    This page contains all entries posted to Cascadia Prospectus in October 2007. They are listed from oldest to newest.

    September 2007 is the previous archive.

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