USDOT TIGER Program: Discretionary Grant or Political Tool

1. USDOT TIGER Program: Discretionary Grant or Political Tool Baruch Feigenbaum Assistant Director—Transportation Policy Reason Foundation September 20, 2014

2. Outline • Formula funding versus discretionary funding • Why TIGER Grants/what they are supposed to accomplish • Sample projects • Issues with grants • Recommendations to improve

3. Formula Funding versus Discretionary Funding • Typical projects are formula-funded Congress decides how much money to give to each state • Less selection of individual projects • Blunt and politically-motivated • TIGER is discretionary-funded • USDOT chooses projects based on merit • In theory: less political, more targeted to achieve objectives

4. Formula Funding can be Good • GW Bush administration used discretionary program (Congestion Reduction and Urban Partnerships • FHWA, FTA fund highway express lanes and express bus service in Atlanta, Chicago Denver, Los Angeles, Miami, Minneapolis • Projects were suburban in nature they went to Democratic and Republican districts • Clear rigorous evaluation process • Good communication between federal officials and state/local entities

5. Origins of TIGER Grants Program • Transportation Investment Generating Economic Recovery (TIGER) Grants part of the 2009 American Recovery and Reinvestment Act known as the Stimulus • Started as “Stimulus” became an annual part of USDOT budget • Create competitive, rigorous process that selects projects with excellent benefits • 2009: $1.52B, 2010: $597M, 2011: $527M 2012: $500M, 2013: $474M, 2014: $600M

6. Guidelines for TIGER Grants Purpose • Critical national objectives • Related to transportation • Preserve and create jobs • Invest in transportation infrastructure that will provide long-term economic benefits • Assist those most affected by the current economic downturn • Equitable geographic balance of funds • Accurate balance of funds between urban and rural communities

7. Criteria Used to Evaluate the Projects • 2 sets of criteria to evaluate grants • Long-term outcomes • State of Good Repair • Economic Competitiveness • Livability • Sustainability • Safety • Job Creation and Economic Stimulus • Secondary selection criteria • Innovation • Partnership

8. USDOT Also Considers Other Factors • Tertiary Criteria • Project Schedule • Environmental Approvals • Legislative Approvals • State and Local Planning • Technical Feasibility • Financial Feasibility

9. How the Application Process Works • Federal Register/USDOT Announcement of Grants • Applicant (state DOT, county, city, transit agency) fills out grant forms that must show how project meets all criteria • Evaluation Team provides initial review first individually and then as a group • Higher scoring projects are advanced to a Review Team • But Control and Calibration team analyzed rejected projects and advanced some of those to Review Team • Review Team chooses both projects by Evaluation and Control and Calibration Teams for funding

10. Sample Projects from TIGER VI: Highway • Highway: Sarah Mildred Long Bridge • New bridge US 1 Bypass, part of 3 bridge system including I-95 between Maine and New Hampshire • TIGER grant $25M, total bridge cost $158.5M • Federal grant 1/6 of total project • National project

11. Sample Projects from TIGER VI: Transit • M1 Fixed Rail Streetcar Project • New streetcar project, hope to expand transit 12 miles from downtown Detroit into suburbs • TIGER Grants $12.2M total project cost $187 • Federal grant is for 7% of project cost • But project is local; no one outside of Michigan will benefit • Project is non-transportation; it’s a hope that development will come to area

12. Sample Projects from TIGER VI: Freight Rail • New England Central Railroad Freight Rail Project • Upgrade 55 miles of weight and freight restricted tract to Port of New London, CT • TIGER Grant is for $8.1M, total project cost is $10.4M • Federal grant is for 80% of cost • While project is national, more local contribution should have been required

13. Sample Projects from TIGER VI: Green • Dahlonega, GA Complete Streets • Build bike paths and sidewalks in town of 2,500 residents • TIGER Grant $5.1M, total cost is $9.1M • Federal grant is for 58% of the cost • Project is not national; question whether it is related to transportation • Why does town with little traffic even need these facilities

14. Sample Projects from TIGER VI: Other • Restoring Pathways to Economic Opportunities Birmingham, AL • Planning program that examines low income communities cut off from job centers • TIGER Grant is for $125,000, total project cost is $300,000 • Federal Grant is for 40% of cost • Project is not national • Project is not related to transportation Why does town with little traffic even need these facilities • Understand issue of poor neighborhoods/race but if this is national HUD issue

15. Sample Projects from TIGER VI: Multimodal • Champaign-Urbana Multimodal Corridor Enhancement • Bus only lanes, bike lanes, services that will enhance mobility for senior citizens/persons with disabilities bike lanes, protect farmland • TIGER Grant is for $15.7M, total project cost $34.8M • Federal Grant is for 40% of cost • Project is not national • Project has limited transportation purposes

16. Issues with TIGER Grant Awards: Vague Metrics • DOT focused on “rigorous” selection of projects but analysis shows limited rigor • For example: Livability • DOT vague definition: Will significantly enhance user mobility through the creation of more convenient transportation options for the traveler • DOT better definition: Will provide missing links that reduce travel time by an average of five minutes

17. Issues with TIGER Grant Awards: Vague Metrics Part II • Economic Competitiveness • Internal confusion: • Measuring jobs versus job-years: 1 job for 20 years is 20 job-years • USDOT was supposed to use job-yearsbut in referring to project cited 4000 jobs when they meant job-years instead of 467 temporary jobs • Poor calculation methods: • DOTs method did not consider inflation or pay raises leading to inflated number • No analysis: • Unclear how USDOT arrived at calculations

18. Issues with TIGER Grant Awards: Confusing Review Process • Control and Calibration Team’s Role • Evaluation Team at one level and Review Team at higher level what is the purpose of Control and Calibration • No explanation how team ranked projects • Review Team Composition • All political employees • Better solution: half political employees half career civil-servant • Funding “Recommended” projects instead of “Highly Recommended” • 26 of 51 funded projects “highly recommended”, 25 recommended • Control and Calibration Team projects received lower ratings than Evaluation Team yet 23% received funding while 50% of Control and Calibration Team projects received funding

19. Issues with TIGER Grant Awards: Poor Documentation • Team meetings • Documented Evaluation Team but not Control and Calibration Team or Review Team Provides info via internet or mobile device • Only notes are in draft form and never finalized • Notes show projects funded were no better than projects not funded • Policy • USDOT had official policy of requiring documentation when lower rated projects were funded over higher rated projects • TIGER Grants process violated Obama Administration Policy

20. Issues with TIGER Grant Awards: Limited Information Available • Little explanation why certain project funded • USDOT provided more information in “New Starts” (program since changed by Obama Administration) • Old New Starts publishes all scores • Uses scores in determining where to award grants • USDOT will not provide more information because while it would increase transparency, show accountability, and improve application quality, some applicants may game system • But currently seems to be picking certain types of projects so isn’t the system already rigged

21. Issues with TIGER Grants Awards: Democratic Congressional Districts Receive More Funding • Democratic districts received 29% more funding than Republican districts

22. Issues with TIGER Grant Awards: Democratic Congressional Districts Receive More Funding • Are other factors at play: Who controls which party, did Democratic districts apply for more funding

23. Issues with TIGER Grant Awards: National Priorities • Stated goal is to meet critical national objectives • But award process seems to favor certain modes and modal balance above all else

24. Issues with TIGER Grant Process: Related to Transportation • Many TIGER grants geared towards environmental or economic development gains • Most of the non-motorized projects less than 3 miles in length; many are in suburban or rural areas with non-motorized commuter shares of less than 2%. • Many multimodal transit hubs have economic development; they are located in downtown areas with a maximum of 2 modes of transit

25. Issues with TIGER Grant Process: Other • Port experts reviewing highway project • In TIGER I review teams were multimodal so 1 FHWA, 1 FTA, 1 FRA, 1 Waterway and 1 Office of Secretary employee review a highway project when 4 of these folks have limited background • Unwritten rule to include as much local funding as possible (leverage) • Good rule, but need to make it official • Realistic deadlines • Time between date to apply for grant and when applicants need to have all info together is very tight

26. What Other Reviews Found: General Accountability Office • Poor documentation • “Because no internal documentation from review team meetings exists in which final decisions to recommend or reject projects for award were made, DOT cannot definitely demonstrate the basis for its award selections particularly why recommended projects were selected over highly recommended projects • Poor communication • “Disclosing additional information would give Congress a better basis to assess the merits” • “Did not publish the reasons for the decisions of why some applicants were selected while others were rejected • Evaluation criteria • Does not appear to consistently be rigorous • No consultation with Congress

27. What Other Reviews Found: Eno Foundation • Preference for Shovel-ready unwise • “Unhelpful for discretionary grant programs where the aim is to maximize investments.” • Lack of congressional interaction: Use Transit New Starts as model • Lack of transparency • “A lack of information led to criticism” • “Enabling USDOT to improve the selection process” • Lack of experience (officials in administration do not know what they are doing) • Instead use “dedicated, experienced staff

28. 10 recommendations to improve the process (1-5) • Decrease the number of review metrics and improve the analytics of the remaining metrics (vague metrics) • Increase the quality and quantity of documents explaining the decision making process (poor documentation) • Improve the communication of the process and the scoring to applicants and the public (limited information available) • Eliminate Control and Calibration team and split review teams 50/50 political and civil service appointees (confusing review process) • Maintain political balance between D and R districts (D districts receive more funding)

29. 10 recommendations to improve the process (6-10) • Fund programs in national interest only (national priorities) • Show more flexibility in geographic requirements (national priorities) • Reduce guaranteed funding to rural districts (national priorities) • Eliminate modal requirements (related to transportation) • Create an accurate system for determining economic benefits (vague metrics)

30. Administration Makes Small Changes Between TIGER I and TIGER II • Made two changes • Detailed information on how to conduct a cost-benefit analysis • But no penalty for deliberately conducting a bad analysis (jobs versus job years) • Separate project teams into modes (highway, transit, port)

31. Administration Does Not Make Other Changes • Vague metrics • Confusing review process • Poor documentation • Limited information to the public • Democratic districts receive more funding • National priorities • Related to transportation • Lack of congressional interaction • Lack of experience • Shovel ready

32. Get Rid of TIGER! • Administration will not revise based on feedback from non-partisan source • Turned into a political program not policy program where local officials with Democratic ties who are paperwork wizards get grants • Republican House and Republican Senate likely to kill • Call/mail representative to make sure he/she knows how you feel about program • Your mayor/city manager/etc. may like this program

33. Questions Baruch Feigenbaum Assistant Director of Transportation Policy Reason Foundation baruch.feigenbaum@reason.org