Transcript Slide 1

Up to our ____ in TIGERs:
How to Compete Successfully
Workshop & Webinar
February 23, 2012
Kevin Keller
Vice President, HDR Engineering, Inc.
President, American Railway Development Association
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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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Eligibility
Address Criteria and Outcomes
Clarity
Leveraging Investment
Project Segmentation
Benefit-Cost Analysis
Project Readiness/NEPA
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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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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Pre-Application
– Project Description of 50 words or less
– Identification of Applicant
– NEPA Status
– Funds Requested
– Matching Funds
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Application
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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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State of Good Repair
Economic Competitiveness
Livability
Environmental Sustainability
Safety
Job Creation/Near-Term Economic
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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State of Good Repair benefits can include:
– Reducing long-term maintenance and repair costs (lifecycle costs)
– Travel time savings (from preventing closures of facilities,
lack of speed and weight restrictions)
– Other user benefits from better pavement, improved
safety
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Need to consider benefits and costs of alternatives
– Replacement vs. rehabilitation
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Risk analysis
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Contributing to the economic competitiveness
of the United States over the medium- to
long-term.
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Benefits in this category typically include:
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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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Fostering livable communities through placebased 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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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)
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– At least show ridership/usership
– Try to estimate value per user
– Increases in property values may indicate value
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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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Environmental sustainability benefits are
typically from reduced emissions
– Greenhouse gases (e.g., CO2)
– SOx
– NOx
– Particulate matter (PM)
– Volatile organic compounds (VOC)
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Recommended values are available in NOFA
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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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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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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.
• Innovation
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DOT will give priority to projects that use innovative
strategies to pursue the long-term outcomes outlined
earlier.
• Partnership
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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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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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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)
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Public-private projects must demonstrate
significant public benefits
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$40 million total project cost
– $10 million State
– $10 million Private
– $5 million local
– $15 million TIGER
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Clearly identify multiple project elements if
the project is “segmentable”
Segments must have “independent utility”
– No more bridges to Nowhere!
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Provides transportation benefits
Will be ready for use when complete
Phases must complete operable segment
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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
President’s commitment to data-driven decisionmaking
 Requirement from TIGER I and II
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– No funding for projects for which C > B
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Value of BCA in project selection
– BCA quality matters more than size of the B/C ratio
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Focus your analysis on how it demonstrates need for
your project
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BCA is distinct from:
– Financial analysis
– Economic impact analysis
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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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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
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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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Project Summary
– Base case (“no-build”)
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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
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Discounted to present value (3% & 7%)
Replicable methodology
Demonstrate Independent Utility
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Costs & benefits estimated on incremental basis
against realistic baseline (generally not status quo)
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Reasonable alternatives considered and evaluated
– e.g., smaller scale and more focused projects
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Costs & benefits expressed in monetary terms
(constant dollars) and estimated over project’s useful
life
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Discounting
– i.e., OMB Guidance for TIGER
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Summation of benefits & costs, and estimation of NPV
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CBAs are reviewed and rated by US DOT
Review team
– Very Useful
– Useful
– Marginally Useful
– Not Useful
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
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– Are estimates plausible and reasonable?
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Focus on overall evaluative process, not just the B/C ratio
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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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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
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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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 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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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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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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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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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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TIGER is NOT a highway program
– MULTIMODAL
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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