Archive | February, 2013

Where Does VMT Come From?

Speaker: B. Starr McMullen, OSU

Topic: Determinants of VMT in Urban Areas: A Panel Study of 87 US. Urban Areas 1982-2009

Abstract:

This paper uses econometric techniques to examine the determinants of vehicle miles traveled (VMT) in a panel study using data from a cross section of 87 U.S. urban areas over the period 1982-2009. We use standard OLS regression as well as two-stage least squares techniques to examine the impact of factors such as population density, lane-miles per capita, per capita income, real fuel cost, transit mileage, and various industry mix variables on VMT. We use a distributed lag model to estimate the long run elasticity of various factors on VMT driven.

Preliminary empirical results show the demand for VMT in urban areas is positively and significantly impacted by lane miles, personal income, and the percent of employment in the construction. Fuel price, transit use and population density are all found to be negatively related to VMT per capita. Consistent with results from earlier studies, we find the long run price elasticity of demand for VMT per capita is approximately five times larger than the short run elasticity.

Holding all factors constant, per capita VMT is found to differ significantly by region with VMT being higher the more western and the larger the population size of an urban area. Finally, we find that the industry mix or the urban area also has a significant impact on driving.

When: Friday, March, 1 12-1 p.m.

Where: PSU Urban Center Building, SW 6th and Mill, Room 204

Portland State University
Fall 2012 Friday Transportation Seminar Series

A Critical Analysis of HB 2800

This bill, which authorizes Oregon State bonds to fund construction of the Columbia River Crossing could be voted on by the Oregon House as early as today, and the State Senate later this week. Our correspondent Joe Cortright has been reading closely:

Analysis of HB 2800A
Prepared by Joe Cortright
February 24, 2013

HB 2800A gives ODOT wide latitude to issue bonds without a long-term financial plan in place.

This is still the classic Robert Moses strategy of doing anything to get the project started. ODOT can issue $450 million in bonds backed directly by the highway fund, plus an essentially unlimited amount of bonds backed by toll revenues and federal grants (and backed further by pledges of state highway funds and future federal grants) to get the CRC project started. The treasurer is only given authority to require that ODOT has a financial plan for “the initial phase” of the project.

So under this version of the bill, ODOT can issue an enormous amount of debt, start a portion of the project, and leave it to some later time to figure out how to pay for finishing the project. There is no requirement that the federal government provide the full $850 million the CRC is counting on, or that Washington appropriate or allocate $450 million, and there is no mention of the $400 million in FHWA funding that the CRC has counted on. There is no requirement that the Investment Grade Analysis (due in December 2013) show that tolls will produce any specific dollar amount of funds, much less than $1.3 billion the project’s financial plan assumes. These are toothless triggers.

HB 2800A:

  • allows ODOT to pledge future highway funds and federal grants as security on toll bonds, so that if tolls are under-realized, these funds will be tapped.
  • allows Washington to “commit” only the amount required to get FTA approval for the transit portion of the project; this could be much less than $450 million
  • allows ODOT to issue bonds based only on FTA submitting an application to Congress–not the commitment of any specific dollar amount of funds.
  • does not eliminate the sections authorizing of ODOT to buy land and build highways Washington State, the effect of which is to enable ODOT to evade constitutional restrictions on spending gas tax funds on transit.
  • HB 2800A’s $3.4 billion cost limitation is meaningless: As the Oregonian’s “Truth o Meter” observed on February 20, 2013, it is legally unenforceable and ODOT will not walk away from a partly-completed project.

HB 2800A
Section by Section Analysis

New Subsection 3: Revised Bond Limit
Second sentence: says intent of Legislature is to “pledge . . . with other security”–Coupled with the unamended provisions in Section 13 that allow a pledge of state highway funds and future federal grants, this again gives a loophole.

Subsection (4) (a) State of Washington Contribution
Still no dollar amount listed
Washington needs only contribute an amount needed to satisfy FTA There are no “requirements” of the finance section in the FEIS. If you mean $450 million, why not say $450 million?

Subsection (4)(b) Federal Transit Administration
Essentially no change: DOT submits an application for $850 million; It should be that Congress or DOT sign or approve a FFGA that commits the feds to $850 million

New Subsection (4)(c) Investment Grade Analysis
No dollar amount is specified. The project finance plan assumes $1.3 billion. The IGA should show that tolling will not produce nearly that amount, and the project would still go forward.

New Subsection (4)(d) Approved Financing Plan
This only requires the Treasurer to find that there is enough money for the “initial phase of the project,” as described in the Full Funding Grant Agreement. Since the FFGA has not been created yet, this is completely ambiguous. This allows ODOT to define the initial phase to just be a small portion of the project, and leave un-analyzed and un-funded the amounts necessary to complete the project.

Here’s what serious “sideboards” or “triggers” would look like:

  1. Require specific dollar amounts as minimums from the FTA ($850 million), FHWA ($400 million), State of Washington ($450 million), net proceeds of toll bonds demonstrated by the Investment Grade Analysis ($1.3 billion). These are the amounts specified in the CRC finance plan. If they are not obtained, the State of Oregon is liable for the shortfall.
  2. Require the committed amounts to be legally obligated–not just “applied for” or “committed”–neither of these terms binds anyone to actually provide the money.
  3. Require a financial plan for the entire project, and not just the amount needed for some vague and un-defined “initial phase”. Once you start the project you will be obligated to finish it–with state money. A financial plan for part of the project is not a financial plan at all.
  4. There needs to be a specific provision for stating who will pay for cost overruns. ODOT averages 200% cost overruns on its largest projects; Megaproject bridges average 33% cost overruns. There is no provision in the CRC finance plan or this bill saying how cost overruns will be paid for. This should be addressed now.

What TriMet Needs Now: A Really Good Audit

Full disclosure: I was one of the “stakeholders” who got briefed beforehand on the presentation TriMet GM Neil McFarlane gave to the board last week, predicting dire financial straights if TriMet’s labor agreement, particularly health benefits, is not modified.

There is clearly a messaging war going on. ATU has an “open letter” to passengers out for circulation (it was published in my neighborhood newspaper, and others), raising claims of many flavors of agency mismanagement and mis-allocation of resources.

As to TriMet’s message – this tweet I saw last week pretty much says it all:

Cue complete lack of credibility of #Trimet, again.

What’s a poor transit supporter to think? TriMet needs to show its house is in order before it can credibly ask for increases in the payroll tax – an important opportunity to restore bus service. But is the agency bloated as ATU says? Or is the labor agreement the main source of its long term woes?

It seems to me that the entire conversation would benefit from credible independent scrutiny – not just a thorough financial audit, but also benchmarking of the agency’s metrics against other well-regarded transit agencies.

But who would we call on to perform this review? The City, County and Metro all have well-respected auditors. But all of those governments, particularly the City and Metro, have strong partnerships with TriMet and may not be perceived as objective.

Would Secretary of State Kate Brown’s office be perceived as sufficiently independent? If not, who would?