Strategically Prioritizing Your Capital Needs
Few industries are likely to see as great a near-term opportunity to transform themselves as mass transit. The country’s focus on economic development, mobility and the environment all point to an increasing role for mass transit. This emphasis on transit was seen in the American Recovery and Reinvestment Act of 2009 (ARRA) which provided $8.4 billion for transit capital projects.
The question is, how can transit seize the opportunity for a larger role in the U.S. transportation sector? Are transit organizations prepared to clearly demonstrate that investing in transit will produce outcomes the country wants? Are they changing processes quickly and thinking differently about capital programming?
Yes — and no. With the U.S. economy in a tailspin, and the financial sector on life support, the federal government stepped in with ARRA to spur growth and put the nation’s economy back on track. As a result of ARRA, most transit agencies went through the process of evaluating their current capital needs, identifying what was “shovel ready” and selecting projects that would promote economic growth. However, proving the value of transit investment will take more than one infusion of funding. To solidify transit’s growing role, transit agencies will need to clearly connect decisions to strategic outcomes and performance measures.
One agency, the Washington Metropolitan Transit Authority (Metro), took lessons learned in the selection of its ARRA projects and applied this approach to its overall capital needs program.
Identifying Capital Needs
Metro is the second largest rail transit system, the sixth largest bus network, and the eighth largest paratransit service provider in the United States. Created by an interstate compact in 1967, Metro is tasked with planning, developing, building, financing and operating a balanced regional transportation system in the national capital area.
Similar to other transit agencies, Metro regularly conducts a comprehensive assessment of its future capital needs. In September 2008, Metro staff presented to its board of directors the capital needs inventory (CNI) which outlined more than $11 billion in needs over the FY 2011 to FY 2020 timeframe. The CNI includes performance projects ($7.6 billion, 67 percent of total) and customer/demand projects ($3.8 billion, 33 percent of total). Performance projects maintain and replace assets on a life cycle basis. They promote safety and reliability and preserve the current levels of service. These projects keep Metro in a "State of Good Performance" — assets are not simply replaced with an exact replica, but with assets that take advantage of the latest technology and materials for greater efficiency.
Between 2010 and 2020, average daily Metrorail ridership is expected to grow by about 20 percent. Over the same period, average daily Metrobus ridership is projected to grow by about 15 percent. Of all its modal services, Metro’s paratransit service, MetroAccess, is expected to experience Metro’s fastest growing ridership at 114 percent. Customer/demand projects help meet growing ridership requirements and improve the rider's experience. Safety needs are included throughout the CNI.
Together, performance and customer/demand capital needs address Metro’s physical assets, including vehicles, fleet maintenance facilities, operating systems, information technology and rail system track, among others. Not included in the CNI are system expansion projects (new entrances, stations or rail lines), transit projects entirely funded by state and local jurisdictions, debt repayment costs, project administration and other needs to be identified in the future by federal oversight agencies.
The CNI established Metro’s capital needs baseline. As Metro’s general manager states, “Our house is more than 32 years old. We have a wet basement, rusting pipes, old wiring and a 1976-model car in a 100-year-old garage. And the family is growing. Now we need to prioritize what gets fixed first.” That is exactly what Metro did.
- « Previous Page
- 1
- 2
- 3
- 4
- Next Page »
