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Planning for Change:A Systematic California “Call to Action” for FreightHearing — “Goods movement: Assessing California’s 21st Century Needs and Consequences”November 15, 2005presented toSenate Transportation Sub-Committee on California Ports and Goods Movementpresented byTherese W. McMillanDeputy Executive Director — PolicyMetropolitan Transportation CommissionOakland, California

Why change
Why Change?

  • Significant and growing need for goods movement investment

  • BT&H, Cal EPA: Goods Movement Action Plan-Phase 1

    Key Findings:

    • $43 billion in overall needs, plus $4 billion “underway”

    • $2 to $5 billion air quality mitigation

    • A yet-to-be-determined amount of community mitigation and security costs

    • A total of $ 52 Billionminimum

Funding constraints scarce resources and competition
Funding Constraints:Scarce resources and competition

  • Limited $ opportunity from SAFETEA-LU: 2% of identified need

  • Severely constrained existing state funding:

    • No programming in 2006 STIP

    • Future STIPs — nothing new until 2011 at earliest?

Freight must make best case to
Freight must make best case to

  • Capture share of “traditional” funds

  • Justify and advocate for new, dedicated source of funds (e.g. SB 1024)

How to build the case
How to Build the Case

  • Effective freight planning demands a statewide stage

  • Multi-jurisdictional reach, by nature

  • Local partners essential in defining problems and solutions, but challenged to divvy scarce dollars

How do you set priorities
How do you set priorities?

  • Capital and operations improvements that enhance the flow of freight

    • within and through California

    • to local, domestic/national, and international markets

    • in the most cost-effective manner

    • with the least impacts to communities and the environment.

Action plan phase 1 core principles
Action Plan Phase 1 Core Principles:

  • All goods movement operates as integrated, multimodal system.

  • Projects with the highest rate of return should be advanced first.

  • Identify and mitigate environmental impacts

  • Spur private sector investment to leverage public sector resources.

  • Engage cooperation with outside state jurisdictions

What s needed is a basis for weaving these principles together as a call to action for freight
What’s needed is a basis for weaving these principles together as a Call to Action for Freight:

A 4-Plank proposal:

  • Know What We Face

  • Decide What We Want

  • Make Choices

  • Find Funding

Does NOT mean starting from scratch, but cohesively putting together pieces for a strategic statewide freight vision

Know what we face

Plank 1: together as a

Know What We Face

  • More than a project list: must understand freight movement demands

  • Establish baseline, statewidepicture of:

    • volume and pattern of current and future goods movement demand; and

    • constraintsto meeting that demand with the existing system.

Know what we face1

Plank 1: together as a

Know What We Face

Baseline assessment for three distinct freight movements:

  • International imports and exports through California

  • Domestic (U.S.) movements in and outof California

  • Intra-state distribution movements, including critical connections to local markets within major urban — congested — areas.

  • Existing regional studies provide valuable input

Know what we face2

Plank 1: together as a

Know What We Face

Baseline requirement: Maintain and Sustain existing infrastructure

  • Growing deficits in state highway system today are well documented

  • Freight traffic as well as passenger traffic is impacted every day

  • Expanding system capacity without a sustainable foundation invites failure.

Decide what we want

Plank 2: together as a

Decide What We Want:

Establish specific freight system performance objectives, i.e.:

  • Based on known constraints, do we address them to improve freight flows, and how quickly?

  • What are priorities regarding California’s

    • market share of international and domestic trade

    • volumes and/or value of freight moved in the state?

  • What are desiredoutcomesof our investments?

    Bottom line:If we can’t do everything what’s in the best interests of the State of California in terms of freight movement?

Decide what we want1

Plank 2: together as a

Decide What We Want:


  • Constraint:LA/LB Port Capacity in Southern California for increased imports

  • Desired Outcome:Accommodate increased future trade demand to U.S. markets through California gatewaysOptions:

    • invest in increasing Southern California Port Capacity and interstate access routes

    • invest in utilizing surplus import capacity in Northern California ports to absorb more import flows to U.S. markets

      What’s the best choice for the State???

Make choices

Plank 3: together as a

Make Choices

Identify and evaluate investment options to achieve the performance objectives

  • Operational Improvements

    • improve the productivity of the existing freight network

    • Better integrate network of ports, rail and highways

    • New ground in new technologies

    • Cost-Efficiencies on a permanent and interim basis

  • Capital/Physical capacity enhancements

    • Relieve identified bottlenecks

    • Consider most cost-effectiveness investments based on the performance objectives

    • Consider timing/delivery of improvements; pair with operational improvements

Make choices1

Plank 3: together as a

Make Choices

  • Mitigation:

    • Identify adverse impacts to environment, community safety, security, coordination

    • Determine costs and incorporate into overall project costs

    • Mitigations cannot be secondary to proposed system enhancements — concurrent commitments to funding and implementation.

  • Feasibility:

    • Determine jurisdictional, institutional, political issuesthat stand in the way of delivering options — Can they be overcome?

  • Project/Program Ranking:

    • Statewide priority list based on performance outcomes, cost/effectiveness including the costs of needed mitigations, and implementation feasibility.

Find money

Plank 4: together as a

Find Money

  • Planning to implementation requires MONEY

  • Inevitably involves complex packaging of federal, state, local and private sector dollars

  • Considerations for such strategy:

    • Distribution among federal, state, local and private sources: Eligibility and appropriate “share”

    • Availability of funding: dedicated contributions vs. discretionary competition vs. discretionary “earmarking”.

    • Need for legislative changes for existing funds

    • Legislative and other strategies to pursue new funding

Find funding

Plank 4: together as a

Find Funding

Among many, two critical elements

  • Senate Bill 1024 (Perata): proposed $2.5 billion set aside for freight and freight related mitigations

    • Can provide a valuable platform for linking investment to performance

    • Potential leverage for other public and private funds

Find funding1

Plank 4: together as a

Find Funding

Private Sector contributions: U.S. goods movement in the country defined by major private sector ownership and operation of freight infrastructure

  • “Private fee for Private Benefit” user fee concept is an essential piece of successful freight financial strategy, IF

    • No bias for individual elements of the industry, and

    • user contributions are fire walled for the purposes they are levied.

Conclusion together as a

  • Focus on goods movement spotlights how far we must go to catch up with today and prepare for the future.

  • Planning “right” does not preclude action — ongoing and iterative process.

  • Challenges ahead require commitment and information for the long haul — we lay that foundation now.