The Bay Area should rethink some of the biggest transportation projects on the books

 Brandon Matthews

Groundbreaking analysis by MTC looks at which projects will get the Bay Area towards social and environmental goals, but overstates the benefits of “congestion relief”

By Stuart Cohen, TransForm Executive Director

This Friday, November 4, staff at the Metropolitan Transportation Committee will release a groundbreaking analysis that could call into question some of the biggest transportation projects on the books.  This “project performance assessment” dives deep into 80 of the largest projects that are being considered for inclusion in the 2013 Regional Transportation Plan (RTP).  The question is, how good is their assessment?

In the assessment, every project will receive 2 scores:

  • A benefit/cost ratio where, for example, a project scoring “5” is estimated to provide five times as much benefit as its total cost.
  • A goals assessment that qualitatively considers how well the project contributes towards MTC’s ten adopted targets – from greenhouse gas reduction to increase in physical activity.  A perfect project would get a score of 10, one point for each goal.  The lowest score can be negative, since MTC appropriately considered adverse impacts as well as positive ones.

While the assessment won’t definitively decide what projects are in or out of the RTP, we hope it will provide critical information as Commissioners grapple with how to take these $180 billion worth of projects and whittle it down to less than $70 billion of funding that is discretionary (i.e. available to fund these projects).

It seems likely that the takeaways from the assessment will be on “outliers,” i.e., projects that have a benefit/cost ratio of 10 may be seen as priorities for funding.  For projects that have a score under 1 (meaning they are projected to have less benefits than cost) or lead to greenhouse gas increases, it will – and should - bring on intense scrutiny.

So does the assessment -- some incredibly complicated and cutting edge analysis – reflect reality and take a hard look at these potential projects?  Are the benefit/cost ratios realistic, and are the targets MTC is supposed to be working towards accurate? It is a mixed bag.  On October 31, along with other members of the technical committee, I got a preview of the draft analysis.

Here are my takeaways so far:

  • The qualitative assessments do a good job of connecting projects to the actual goals of the RTP/Sustainable Communities Strategies.  This is the case even though the answers by nature are somewhat subjective and reflect limitations in the travel model (as outlined below).  Projects based on efficiency measures, and most transit projects, do very well.
  • The congestion reduction benefits of highway and suburban transit projects are overstated.
    • The travel model doesn’t make any changes in “tour destinations” based on transportation improvements.  In reality, faster roads through expansion or efficiency will lead to longer trips – either as people move or decide on more distant schools or jobs.  As vehicle travel grows, this would reduce some of the congestion relief benefits of both road expansion or road efficiency projects. In some situations this could even lead to cost instead of a benefit, if increases in vehicle miles travelled (VMT) outweigh congestion reduction on that particular segment.  Many public transit projects, especially suburban expansions in high growth areas, would also show less congestion relief over time.
    • The land uses stay static.  Even though a capacity expansion project may lead to more growth in an area over time (and thus diminish or negate the congestion relief benefits) no change in growth is modeled.  Conversely, a transit project that serves the urban core doesn’t lead to more dense land use in the model, and thus is not given any of monetized benefits derived from such growth.

This doesn’t just skew the b/c ratio, but the qualitative assessment is greatly impacted as well.  An increase in VMT results in adverse impacts in at least five of the ten goals.  But the model understates that increase.

  • Travel time savings dwarf all other quantitative benefits. 

In total there were 15 benefits that were first quantified, and then multiplied by a dollar value or “monetized”. These benefits are broken into four categories in MTC’s spreadsheets: travel time; travel cost; air pollution reduction; and collisions, active transport, and noise reduction.

But for almost all of the projects analyzed, the benefits of travel time absolutely dwarf the others, often counting for 10x all the other benefits put together. If this in fact reflected reality that would alright, but there is a good chance it doesn’t and skews the results.

This is because both of the factors that create the travel time benefit are skewed upwards.  First, as discussed above, the travel model overestimates the long-term congestion relief of many projects.

Second, the monetary valuations are high if compared to what consumers are actually willing to pay. Travel time reductions are valued at $16 per hour for people in cars and $26 per hour per truck. Transit travelers waiting for their vehicles are valued at $35 per hour as they wait, since they are exposed to the elements and uncertainty.

There are really two main problems with this. The first is that travel time savings for vehicle passengers are not even one of MTC’s ten goals, though time savings for non-auto modes are. There is good reason for this, since faster vehicle travel leads to more vehicle travel which runs counter to so many of the other regional goals such as reducing asthma.  MTC’s goals are smart in that they reward access, health, prosperity and equity rather than simply “mobility” for the sake of mobility.

The other problem is that most people would not be willing to pay that very high price to forego that hour, so should the numbers be this high?  As Todd Litman recently wrote at his new report on www.vtpi.org, “Only a minority of total vehicles are typically engaged in high-value trips, even under urban-peak conditions.”

This was not an intentional bias towards expansion projects or roads, since these travel time benefits accrue to public transportation and other alternatives. Rather MTC staff are trying to follow and develop best practices. Still, if it shows skewed results, how can it be remedied?

One way is a “sensitivity analysis” that instead of pivoting off of average salaries is based on other factors. This could be estimates of consumer’s willingness to pay, after tax salary, or simply putting together an additional b/c ratio that leaves out travel time benefits altogether. This is a relatively easy adjustment.

More difficult is to vary the other time savings factor; the loss of congestion relief over time.  Ultimately, this issue of induced growth and loss of congestion benefit is more easily and meaningfully dealt with at the regional level.  Hopefully we can get some of that clarity when MTC’s regional scenarios, which include different land uses, are released soon.  But since that regional assessment won’t inform and change this project-level one, it still leaves this assessment as biased.  There could be ways to adjust for this, and they should be explored.

While there are dozens of other fine points that affect the assessment, the net result of the three main points raised here is that highway projects, on the whole, end up scoring much higher on the b/c ratio than most other projects.  The “bubble charts” that portray this all on one page, therefore, don’t look much different than they did four years ago.

Beyond these 80 large projects, there is also an assessment by category of all 700 of the potential RTP projects, including the smaller ones.

As mentioned above, this Project Assessment is not determinative but is just one component of this political process.  Staff will frame the results; Commissioners will ingest the staff positions; the public will comment and lobby… and ultimately, this winter, a draft RTP alternative will be formed. Of course, this information is also likely to be used by stakeholders in other venues – such as when a county is reauthorizing a transportation sales tax.

To help stakeholders understand how to interpret this data, TransForm commissioned Dr. Deb Niemeier, a Professor of Civil and Environmental engineering at UC Davis, to provide a critical evaluation of this project-level assessment. You can find that report here. Note that it is probably good to read the latest materials from MTC first, as it assumes some level of knowledge. You can also see the critique of the project assessment done for MTC’s Express Lane proposal.
MTC’s latest information can be found here in their packet for this Friday’s 10 a.m. Planning Committee. This assessment is the primary agenda item.

TransForm will continue to work with Dr. Niemeier to produce analyses to help understand strengths and weaknesses of this approach.  While far from perfect, the results of MTC’s Performance Analysis are a real attempt to connect the excellent targets that were adopted last year for a sustainable, equitable and healthy region to specific investments.

The precedent is incredibly important and may lead to smarter decision-making here in the Bay Area, and ultimately other regions.  The timing couldn’t be better as we face tremendous funding shortfalls and will need to invest transportation funds more strategically than ever.

Finally, I’d like to thank the Resources Legacy Fund and the Clarence E. Heller Foundation that made TransForm’s work on the assessments possible.  I also want to give MTC staff some very strong kudos on this process as they:

  • Set up a diverse technical group, had a truly open process and listened to many of our recommendations.
  • Included more benefits than four years ago, such as benefits of greater physical activity, reduced vehicle ownership costs and more.
  • Included adverse impacts, which more typically apply to highway expansion projects.
  • Make the information much more accessible, providing both significant detail as well as clear summary sheets.
  • Are much more forthcoming with crucial caveats including an explanation of where their model may not be accurate or complete.
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TransForum is the blog of TransForm, California's leading transportation advocate. For more about our work, including ways you can take action and contribute, visit TransFormCA.org.