february 23, 2012 up to our ____ in tigers: how to compete successfully kevin keller vice president,...
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AASHTO Rail Resource CenterWorkshop & Webinar February 23, 2012
Up to our ____ in TIGERs:How to Compete Successfully
Kevin KellerVice President, HDR Engineering, Inc.President, American Railway Development Association
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Transportation Investment Generating Economic Recovery (TIGER) Grants
Investments in road, rail, transit and port projects that promise to achieve critical national objectives.
TIGER I - $1.5 billion (51 awards) TIGER II - $600 million (42 capital awards, 33
planning awards) TIGER 2011 - $527 million (46 awards) TIGER 2012 - $600 million
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Keys to Competitive Applications
Eligibility Address Criteria and Outcomes Clarity Leveraging Investment Project Segmentation Benefit-Cost Analysis Project Readiness/NEPA
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Exercise #1
You have been approached by over 20 potential applicants in your State, but you can only be the lead applicant on 3 of them.– How do you pick the 3?– What are priorities?– Political considerations?– Ramifications?
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Eligibility Eligible ≠ Competitive
Surface transportation capital projects only Open to state, tribal, and local entities, and other
subdivisions Private entities, including non-profits, must partner
with a public lead Rural grants: $1 million minimum (no match
required) Urbanized area grants: $10 million minimum (20%
match)
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Two-Tiered Process
Pre-Application– Project Description of 50 words or less– Identification of Applicant– NEPA Status– Funds Requested– Matching Funds
Application
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Address Criteria and Outcomes
Application outline in the NOFA Describe how project addresses challenge Detail how federal funds will be used Address the selection criteria
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Primary Criteria
State of Good Repair Economic Competitiveness Livability Environmental Sustainability Safety Job Creation/Near-Term Economic
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State of Good Repair Improving the condition of existing transportation
facilities and systems, with particular emphasis on projects that minimize life-cycle costs.
DOT focused its investments on bridges that not only exhibited acute need, but also demonstrated substantial State and local support for repair and incorporated broad multimodal goals in their design and reconstruction.
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Benefits –State of Good Repair
State of Good Repair benefits can include:– Reducing long-term maintenance and repair costs (life-
cycle costs)– Travel time savings (from preventing closures of facilities,
lack of speed and weight restrictions)– Other user benefits from better pavement, improved
safety Need to consider benefits and costs of alternatives
– Replacement vs. rehabilitation Risk analysis
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Economic Competitiveness
Contributing to the economic competitiveness of the United States over the medium- to long-term.
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Benefits –Economic Competitiveness
Benefits in this category typically include:– Lower operating costs– Travel time savings– Savings to passengers, carriers, and shippers– Improvements in reliability
Take care in estimating:– Job creation benefits (focus on productivity increases)– Omit multiplier effects– Can include increases in labor and land productivity - But
avoid double-counting
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Livability Fostering livable communities through place-based
policies and investments that increase transportation choices and access to transportation services.
TIGER’s broad, multimodal scope enables DOT to fund projects that strengthen local and regional economies, support communities by expanding transportation choices and foster connections to places people work, play and live.
Providing new or better transportation connections for residents and commuters is critical to livability.
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Benefits –Livability
Livability benefits are often associated with:– Accessibility for Improved access to jobs, amenities– Accessibility for disadvantaged communities
Land use changes linked to transportation Transit and bicycle-pedestrian improvements Affordability (transportation, housing)
– At least show ridership/usership– Try to estimate value per user– Increases in property values may indicate value
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Environmental Sustainability
Improving energy efficiency, reducing dependence on oil, reducing greenhouse gas emissions and benefitting the environment.
As national policy in the United States continues to encourage energy efficiency and security, and reduced reliance on motor fuels, DOT is focused on maintaining a strong, sustainable transportation system.
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Benefits –Sustainability
Environmental sustainability benefits are typically from reduced emissions– Greenhouse gases (e.g., CO2)– SOx– NOx– Particulate matter (PM)– Volatile organic compounds (VOC)
Recommended values are available in NOFA
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Safety
Improving the safety of U.S. transportation facilities and systems.
Through the TIGER programs, DOT focuses investments on projects with broad safety benefits.
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Benefits –Safety
Safety benefits are typically associated with reducing fatalities, injuries, crash costs, and hazmat releases
Benefits should be based on good crash data and valid analysis of cause
Recommended input values for injuries, property damage, and other data are available in USDOT TIGER NOFA
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Jobs Creation & Economic Stimulus
While the TIGER Discretionary Grant program is not a Recovery Act program, job creation and economic stimulus remain a top priority.
DOT will give priority to projects that are expected to quickly create and preserve jobs and stimulate rapid increases in economic activity, particularly jobs and activity that benefit economically distressed areas.
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Secondary Criteria
• Innovation• DOT will give priority to projects that use innovative
strategies to pursue the long-term outcomes outlined earlier.
• Partnership• DOT will give priority to projects that demonstrate
strong collaboration among a broad range of participants and/or integration of transportation with other public service efforts.
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Clarity
Ensure project descriptions are clear and concise
Pictures and maps are helpful Focus on why project is compelling DOT Staff and experts may review 100-200
applications within a short period of time
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Leveraging Investment
Matching state and local funds with private funds helps demonstrate commitment = more competitive– Average match for urban projects = 67% (20%
required)– Average match for rural projects = 47% (0%
required) Public-private projects must demonstrate
significant public benefits
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“Ideal” Match
$40 million total project cost– $10 million State – $10 million Private– $5 million local– $15 million TIGER
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Project Segmentation
Clearly identify multiple project elements if the project is “segmentable”
Segments must have “independent utility”– No more bridges to Nowhere!
Provides transportation benefits Will be ready for use when complete
Phases must complete operable segment
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Benefit-Cost Analysis
Demonstrate demand for the project include good ridership/usership estimates
Document benefit-cost calculations and references for monetized values
Show the net societal benefits of the project not just local benefits
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Why Require a BCA? President’s commitment to data-driven decision-
making Requirement from TIGER I and II
– No funding for projects for which C > B Value of BCA in project selection
– BCA quality matters more than size of the B/C ratio Focus your analysis on how it demonstrates need for
your project
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So What is a BCA?
BCA is distinct from:– Financial analysis– Economic impact analysis
Costs and benefits refer to changes in welfare– Are people made better off by the proposal
“...an analysis which quantifies in monetary terms as many of the costs and benefits of a proposal as feasible, including items for which the market does not provide a satisfactory measure of economic value.”
UK Treasury (2003), Appraisal and Evaluation in Central Government
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Benefit-Cost Analysis Basics
What is the purpose of the BCA?– Benefit Cost Analysis measures the creation or
erosion of real economic value– “Value” denotes welfare or quality of life
TIGER III project selection & BCA– BCA quality matters more than size of the B/C ratio– Focus your analysis on how it demonstrates need
for your project
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Basic Requirements Project Summary
– Base case (“no-build”) Project description Justification and impact on long-term outcomes Affected population(s) Expected economic benefits Alternatives Monetized estimates of benefits & costs
– Year-by-year stream of benefits and costs Discounted to present value (3% & 7%) Replicable methodology Demonstrate Independent Utility
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CORE BCA Principles
i. Costs & benefits estimated on incremental basis against realistic baseline (generally not status quo)
ii. Reasonable alternatives considered and evaluated
– e.g., smaller scale and more focused projects
iii. Costs & benefits expressed in monetary terms (constant dollars) and estimated over project’s useful life
iv. Discounting
– i.e., OMB Guidance for TIGER
v. Summation of benefits & costs, and estimation of NPV
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CBA Project Rating
CBAs are reviewed and rated by US DOT Review team– Very Useful– Useful– Marginally Useful– Not Useful
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BCA - Lessons Learned ALWAYS document and provide reliable sources for data and
calculations Be realistic in assumptions and estimates Qualitative discussion helps supplement understanding for
difficult-to-measure benefits & costs Consider the viewpoint of objective reviewers
– Are estimates plausible and reasonable? Focus on overall evaluative process, not just the B/C ratio
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Benefit-Cost Analysis (cont.)
Be cautious in estimating job-related benefits Be cautious in estimating real estate
investment benefits Consider costs and benefits of more land
development Estimate safety benefits based on good crash
data and valid analysis of cause
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Project Readiness/NEPA
Projects that are ready to move to construction quickly are given priority
Document where the project is in the NEPA process
Initiate NEPA in advance of the application process, if possible
If the project expects a CE determination, demonstrate why this is justified
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Exercise #2
There is a new round of TIGER funding coming out – total funding is $1 billion.– What project type is the best to select for a
potential TIGER Grant application?– What is target ask?– What is the ultimate matching fund mix?– What is NEPA Status?– How does project fit the USDOT criteria?
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TIFIA Challenge
Up to $150 million available for TIGER TIFIA Payments
Also required to submit a TIFIA letter of interest
Must demonstrate that the loan is ready to close on or before September 30, 2013
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Rural Applicants
Rural Areas -any area not in an Urbanized Area (pop. 50,000), as defined by the Census Bureau
$1 million minimum grant No match requirement
– Competitive applications often feature a match
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Highly Competitive Projects Multimodal projects, coordinated investment from
other sources and programs Demonstrate project benefits across selection criteria New partnerships, multi-jurisdictional cooperation Public-private partnerships Support key national priorities Non-traditional or hard to fund projects Average award in recent rounds has been $10-15 million Average match has been 67% for urban and 47% in rural
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Application Pitfalls Ineligibility: applicants and projects Priorities/outcomes not aligned with selection
criteria Project readiness Insufficient matching funds, lack of demonstration Non-construction requests: O/M assistance, ROW Grouping unrelated projects Performance Measures
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Lessons Learned
Focus on best project(s) –those that align well with the program’s selection criteria
Develop an application that your neighbor could read and understand
Big League Politics State DOTS have to be engaged Introduce DOT TIGER Team to project early Take advantage of debriefs
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Exercise #3
The Governor’s Office is insisting that your agency support the TIGER Grant App for a certain project that doesn’t fit the TIGER program criteria.– What do you do?
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Parting Words…
TIGER is NOT a highway program– MULTIMODAL
Not all projects fit the TIGER criteria Remember – the TIGER Team does not know
your project – be clear and concise Be realistic in your assumptions and estimates Have a Plan B