The Economic Return on Transportation Investments The Florida Experience presented to ited Session: Integration of Economic Analysis into Transportation Decisions presented by Cambridge Systematics, Inc. Jonathan Lee April 11, 2014
Need for Analysis Planning, Prioritizing, and Programming Justification and Grants Need to secure funds and spend appropriately 2
Economic Analyses Examples of traditional planning processes» STIP» Evaluation criteria» Ranking and scoring Quantitative tools or services» Return on Investment» Economic Impact» Fiscal Impacts» Independent analyses or studies 3
WORK PROGRAM MACRO STUDY 4
Work Program Goals Five year multi-billion dollar transportation investment program Evaluate the program expenditures and multi-modal outcomes Goals of Study» Demonstrate economic performance relative to others» Business environment: growth and attraction» Sustain long-term growth» Repeatable and recurring analysis 5
Analysis Framework Transportation Investments: Multi-modal Direct Transportation Impacts (VOT, VOC, Safety, Capacity, & Modal Shifts) Direct Economic Impacts Personal Travel User Benefits Macroeconomic Impacts (Jobs, Income, GSP) Total Benefits 6
Process Run travel models or analysis for different modes» Estimate changes in VMT and VHT» Determine any modal shifts and changes to freight volumes Transportation Benefits» Vehicle O&M» On-the-clock business travel» Shipper cost savings (truck, rail, and marine)» Consumer Surplus (transit) Impacts» Income, jobs, GSP 7
Macro Study Outcomes How it s used?» Reference» Justifying future investments» Legislature and administrators Outcomes» Study replicated for every 5 year program» Advancements and areas for further research identified» Challenges capturing full range of multi-modal investments 8
RETURN ON INVESTMENT 9
Features of Available Tools Return on Investment» Modes: Transit Freight Rail Ports Highway» Benefits Safety Emissions Congestion Health Provides estimates of:» Net Present Value» Discounted payback period» Benefit-cost ratio Consistent framework for testing alternatives not one-time use Follows standard practices» USDOT TIGER BCA Guidance 10
Development Design and scope for specific application or question» All encompassing tools can have limitations» Requires detailed documentation and guidance» Methodology must be solid» Avoid double counting and mixing of concepts 11 Tools can be developed in excel» Plenty of flexibility» Macros allow custom interfaces and calculations» No IT restrictions» Ease of updates» Custom Reports
General Transportation ROI Process: Costs Conceptual Design, Value Engineering, etc Direct Capital Costs Mid-cycle rehabilitation Long-term Maintenance Costs Per unit / marginal cost Total Costs 12
General Transportation ROI Process: Benefits Travel data HERS / NBIAS BTS: Transportation Statistics Cash benefits Operating costs Shipper costs Pavement Benefits to society Emissions Safety Health benefits Travel time EPA MOVES NHTSA Total benefits 13
Cross modal comparisons Transit, Bicycle and Pedestrian» Diversions, induced riders, and existing riders have different benefits must be accounted for separately» Health benefits» Property value implications Ports» Multi-modal connections (marine, road, rail, or air)» Affected by different cost structures and geographies 14
What a tool across multiple modes might look like Analysis suite:» Identify project types and minimum analysis requirements» Detailed guidance» Modules for each mode 15 Detailed logic required for:» Allocating benefits» Accounting (new, induced, & existing)» Understanding modal: Diversions Marginal cost Potential for double counting
Uses and Applications 16 Macro study has legislative mandate and is cited frequently ROI tools have been used for conceptual design ranking in District Offices» Evaluation of individual projects - BRT» Program level analysis - SIS projects Analyses (EIA & BCA) can now be performed» More often» By staff» Throughout planning stages Needs for cross modal analysis
Thank you. Questions? 17