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Why Change?

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Why Change?

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  1. 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

  2. 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

  3. 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?

  4. Freight must make best case to • Capture share of “traditional” funds • Justify and advocate for new, dedicated source of funds (e.g. SB 1024)

  5. 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

  6. 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.

  7. 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

  8. 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

  9. Plank 1: 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.

  10. Plank 1: 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

  11. Plank 1: 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.

  12. Plank 2: 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?

  13. Plank 2: Decide What We Want: Example: • 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???

  14. Plank 3: 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

  15. Plank 3: 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.

  16. Plank 4: 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

  17. Plank 4: 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

  18. Plank 4: 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.

  19. Conclusion • 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.

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