A Tool for Assessing Economic Impacts of Public Transit Spending

(Center Identification Number: 77941)

Principal Investigators:

Steve Polzin, Director, Mobility Research

Phone: 813-974-9849
E-mail: polzin@cutr.usf.edu
Fax: 813-974-5168

and

Xuehao Chu, Senior Research Associate

Phone: 813-974-9831
E-mail: xchu@cutr.usf.edu
Fax: 813-974-5168

Center for Urban Transportation Research
University of South Florida

External Project Contact:     

John Zielinski
Florida Deparment of Transportation, District 5
John.Zielinski@dot.state.fl.us
Phone: 407-482-7868

I.  Project Objective/Problem Statement/Background

Debates on public investments in transit continue at the national, state, and local levels. To participate in these debates, state and local government agencies and other stakeholders frequently need information on the economic and community benefits of public transit in their communities. As an example, local agencies, MPOs, and transit agencies in the Central Florida region need to communicate with the key decision makers in their region about the economic impacts of local spending on public transit. Some of the questions of interest in this example include:

• How many of the region’s employers depend on transit to get their employees to their workplaces?

• What share of the transit boardings are for commuting purposes?

• What does local bus service provide to the community economically?

• What is the economic impact of removing this service?

• Even further, for every $1 spent for maintenance and operations, what is the number of jobs supported and/or created?

• For every $1 invested in capital, what is the number of jobs supported and/or created?

To be effective, the information needs to be objective, current, and specific to the relevant state and local communities. For the vast majority of agencies and stakeholders, getting objective, current, and community-specific information is difficult with the existing tools and information. A few state and local agencies and stakeholders have used their already limited budget to fund studies of transit’s economic and community benefits that are objective, current, and specific to their communities. Others have relied on general information that is often dated and specific to a much larger geography. The American Public Transportation Association (APTA), for example, funded several studies to assess these transit benefits at the national level. Most agencies and stakeholders have used the information from these APTA studies for their participation in these discussions in their local communities. Similarly, when a state agency funds studies of transit benefits, agencies and stakeholders within this state use information from these statewide studies for their local communities. The value of such information measured for larger geographies is greatly reduced for addressing questions in individual communities. The shortcomings of such information are not only its age and lack of local reference, but also that it does not necessarily provide information items that are most relevant for local debates.

II. Objectives/Tasks

To help reduce this difficulty and advance the state of the practice, this research effort proposes to develop an Excel-based tool for state and local government agencies and other stakeholders to assess the economic impacts of community spending on public transit. The tool developed in this project would cover economic impacts in terms of annual total labor earnings, jobs, and gross economic output from community spending for capital and operating expenses for public transit. The results from this tool would represent the annual total impacts of community spending on public transit for a year in terms of earnings, jobs, and gross economic output for the most disaggregate geography of interest available.

A broad review was conducted in preparing this proposal. No tool is identified in Florida that can be used for estimating transit’s economic impacts. The Michigan Department of Transportation did have an Excel tool developed in 2009 to measure transit’s economic benefits, but this tool was specific to Michigan and is not applicable to other communities. In addition, this Michigan tool does not provide the many analysis options desirable for this research. These options are essential for this tool to meet the varying need of different communities. Report 78 of the Transit Cooperative Research Program (TCRP), “Estimating the Benefits and Costs of Public Transit Projects: A Guidebook for Practitioners,” also comes with a set of spreadsheet templates for applying some of the methods in this guidebook. This tool focuses on measuring the economic impact for individual transit projects. In contrast, the proposed tool would be designed to measure the economic impact for transit service in an aggregate geography (i.e., counties, regions, states, etc.). In addition, the tool from TCRP 78 is extremely simplified without the analysis options that will be considered for the proposed tool in this project.

Users of this tool would include transit agencies, local governments, and other public and private stakeholders. These users would use the tool to assess the annual economic impacts of public transit that are relevant and specific for their particular situations. The objective, current, and community-specific information from the proposed tool will better inform policy discussion and support better policy decisions. The proposed tool will greatly reduce the resources needed to produce such information at the local level.

Public transit can potentially have a range of benefits as described in TCRP Report 78 mentioned above. Besides the economic impacts of transit spending to be assessed through the proposed tool, many of the other potential benefits are transportation related, including reduced delays to car users, reduced energy use and pollutant emissions, improved safety to all roadway users, etc. Most existing methods for estimating these potential benefits focus on effects of individual transit projects rather than effects of transit service in an entire geography. As a result, these methods cannot be readily used for the proposed tool. On the other hand, existing methods are available for assessing these potential transit benefits for an entire geography, but they are not usable for a generic tool. One important consideration for a generic tool is the amount of input required and the availability of data for such input. These geography-based methods require too much information and no uniform source of data is available for such information. For these reasons, the first version of the proposed tool will not include these potential benefits. Instead, a task has been included that will explore the feasibility of including transportation-based benefits into a future version of the tool. The key is to find methods that are analytically sound, do not require a large amount of data, and require data that are readily available to the general public agency.

The following tasks are planned for accomplishing the stated project objectives:

Task 1. Project Management – this task will cover project management at CUTR including producing required progress reports and carrying out deliverable reviews before submittal to FDOT.

Task 2. Literature Review – this task will review the literature in terms of methods, principals, and tools for assessing the economic impact of public transit spending. TCRP Report 78 will be an important part of this review.

Task 3. Tool Design – this task will specify details of the functionalities and their layout in the form of an Excel template. An overall goal is to build in many options so that it provides flexibility in meeting the information need of various users. Some of the design considerations include:

• Some of the analysis options relate to the nature of the economic impacts: 1) gross impacts that are sustained by public transit; and 2) net impacts generated by community spending on public transit.

• Net impacts may be assessed with one of two different approaches. One approach would use only the transit spending that is funded by dollars from outside the study area. This approach assumes that spending funded by local dollars has zero net impacts in the study area. Another approach would determine the net impacts relative to a hypothetic base scenario where the public funds spent on transit now were left in the pockets of the residents of the community.

• Some of the analysis options relate to the source of funds for investments: 1) federal dollars; 2) state dollars; and 3) dollars from the local community exclusively.

• It would also allow the assessment of transit benefits for different geography scales: 1) a region of multiple states; 2) a state; 3) a region of multiple counties; and 4) a single county. A region must consist of one or more geographically contiguous counties.

• Some of the analysis options relate to the type of spending: capital versus operating and maintenance.

• It may have the option to break down impacts for individual political jurisdictions served by the same transit operator. In those cases where a transit operator provides services to multiple political jurisdictions without a designated local funding source, and there is a desire to assess the economic impact of transit spending separately for each jurisdiction, the user may be given the opportunity to provide information on how much revenue each jurisdiction brings and how much transit spending occurs in each jurisdiction. A standard data source, such as the National Transit Database (NTD), may not have a breakdown of revenues and spending across these jurisdictions. Local agencies may have good information on these distributions.

• It may have the option to assess the economic impact of proposed new transit service for a future year. If local agencies have a good handle on the amount of operating and capital spending and the source of the funds, this option would allow these agencies to assess the economic impact of the proposed new service for a future year. An important assumption for this option is that the multipliers from a current input-output model remain approximately the same for the future year in question.

The project will build into the final tool as many options as possible within the limit of the basic methodological framework of the tool. The final tool may have a set of options that differ from those discussed above. Additional options may be added during the research process. It also is possible that some of the above options may not be included in the final tool.

For a specific combination of these various analysis options, additional features may be built into the tool to give the user a choice of how the resulting economic impacts are presented. At least two output choices would be considered. One would be in the form of annual total impacts in terms of earnings, jobs, and gross output. Another would be in the form of derived multipliers for earnings, jobs, and gross output, respectively. Several of the questions from FDOT District Five relate to such derived multipliers.

Task 4. Data Specification – In combination with tool design in Task 3, this task will determine what data would be required and where and how the required data may be obtained. One important component of the required data is government spending on public transit. Spending would need to be separated between capital and operating. Spending would also need to be separated in terms of categories for both capital and operating expenses. One uniform source for spending data would be the National Transit Database. Another important component of the required data is economic multipliers for jobs, earnings, and gross economic output from a standard input-output model. These economic multipliers are specific to individual industries. As a result, this task will also specify the link between the various spending categories and the individual industries for which economic multipliers are available. At $275 per geography, one likely source of these economic multipliers is the Regional Input-Output Modeling System (RIMS II) of the U.S. Bureau of Economic Analysis.

Task 5. Tool Development – this task will develop the tool in the form of an Excel template. This development would be based on the design from Task 3 and the data specification from Task 4. In addition to spaces for input data and its functionalities, the tool would also contain user instructions.

Task 6. Application – This task will apply the tool to the study area that consists of the nine counties in FDOT District Five, including Brevard, Flagler, Marion, Lake, Orange, Osceola, Seminole, Sumter, and Volusia. Five transit operators currently serve this district:

• LYNX – Orange, Osceola, and Seminole

• LakeXpress – Lake County

• SunTran – Marion County

• VOTRAN – Volusia County

• SCAT – Brevard County

Both Flagler and Sumter Counties are considering providing public transit service in the near future.

The basic plan is to apply the tool to each of the service areas of these transit operators separately. That means that the three counties served by LYNX would have a combined set of results. The main reason is that standard data sources do not break down where funds come from and where funds have been spent among the counties. LYNX and the counties it serves will need to provide information on how much revenue each county contributes and how much transit spending by category occurs in each county. Then one can estimate the economic impact of transit spending separately for each of these three counties. In addition, if Flagler and Sumter Counties can provide information on operating and capital spending by category and the source of funds for proposed services for a near future year, the tool can estimate the economic impact of the proposed transit spending for these two counties, respectively.

This application will answer as many of the questions raised by stakeholders of this region as possible. These stakeholders include the following:

• FDOT District 5 Functional Areas: Public Transportation, Government Operations, and Public Involvement

• Transit Agencies: Lynx, Space Coast Area Transit, Votran, SunTran, Lake Xpress

• Metropolitan Planning Organizations: Metroplan Orlando, Lake-Sumter MPO, Volusia TPO, Space Coast TPO, Marion/Ocala TPO, the East Central Florida Regional Planning Council

• The Central Florida MPO Alliance.

Most of the questions from these stakeholders relate to the economic impact of transit spending: What does local bus service provide to the community economically? What is the economic benefit/impact of adding, improving or removing this service? Even further, for every $1 invested in maintenance and operations, what is the number of jobs supported and/or created? For every $1 invested in capital, what is the number of jobs supported and/or created? This application should be able to answer these questions.

Other questions from these stakeholders, however, relate to employment accessibility via transit: What share of the transit boardings are for commuting purposes? How many of the region’s employers depend on transit to get their employees to their workplaces? There are no uniform data across a wide range of geographies that could be used to answer these questions. As a result, answers to these questions are not being considered as part of the proposed tool. Unique local data, however, may provide answers to these questions. One potential source would be transit on-board surveys that include questions on trip purposes. Another potential source would be a geographic information system (GIS) that contains stop and route information, the location of employers, and the number of employees in a study area. One potential source of the GIS information of employers would be the InfoUSA dataset that provides information on the location of a business, a range for the number of employees at the business, and the SIC code that represents the business type.

Task 7. Transportation Benefits – In response, we plan to add a task that will explore the feasibility of including transportation benefits into a future version of the tool. As mentioned above, most existing methods focus on effects of individual transit projects rather than effects of transit service in an entire geography. As a result, these methods cannot be readily used for the current tool. Although our recent state-wide study included many transportation benefits, the methods used in this study are not useable for a generic tool either. One important consideration for a generic tool is the amount of input required and the availability of data for such input. The key is to find methods that are analytically sound, do not require a large amount of data, and require data that are readily available to the agency.

Task 8. Final Report – this task will develop the project final report, which would contain user instructions for using the tool and results from its application to FDOT District Five. The draft final report would be reviewed internally within CUTR before it is submitted to FDOT for its review. FDOT’s comments on the submitted draft final report would be the basis for developing the final report.

Work not included in this scope of service is not to be performed and will not be subject to compensation by the Department.

III. Deliverables

This section addresses all deliverables to be produced under this project:

Project Kickoff Meeting – A kick-off meeting shall be scheduled to occur within the first 30 days of execution by the university. The preferred method for the kick-off meeting is via teleconference or video conference. As a minimum, the project manager and the principal investigator will attend. The Research Center staff must be advised of the meeting and given the option to attend. Other parties may be invited, as appropriate. The subject of the meeting will be to review and discuss the project’s tasks, schedule, milestones, deliverables, reporting requirements, and deployment plan. A summary of the kick-off meeting shall be included in the first progress report.

Progress Reports – The Principal Investigator will submit quarterly progress reports to the Research Center. The first report will cover the activity that occurred in the quarter following execution of the contract. Reports should be submitted within 30 days of the end of the reporting period. Quarterly report due dates will follow the annual calendar: April 30, July 31, October 31 and January 31.

Reports should be submitted within 30 days of the end of the reporting period. Reports are due even if little or no progress has occurred (in which case, the report should explain delays and/or lack of progress). Progress reports should be sent in MS Word to Sandra Bell, sandra.bell@dot.state.fl.us.

Progress reports must include the following information:

1. Contract number, task work order number, and title

2. Work performed during the period being reported

3. Work to be performed in the following period

4. Anticipated modifications (i.e., to funding, schedule, or scope). This section is for reporting/informational purposes, not for officially requesting an amendment.

Note: To request an amendment to a contract, the contractor must provide the project manager with the appropriate information (i.e., what is being requested with justification) in the required format. If the project manager concurs with the request, he/she shall forward it with his/her approval and commentary, as appropriate, to the Research Center for administrative review and processing (pending available funds, etc.)

5. A progress schedule updated to reflect activities for the period being reported.

Failure to submit progress reports in a timely manner may result in termination of the work order.

Draft Final Reports – The Draft Final Report is due 90 days prior to the end date of the task work order. The draft final report will be submitted to Sandra Bell, sandra.bell@dot.state.fl.us. It should be edited for technical accuracy, grammar, clarity, organization, and format prior to submission to the Department for technical approval. The Research Center expects contractors to be able to provide well-written, high-quality reports that address the objectives defined by the scope of service. Draft final reports must be prepared in accordance with the “Guidelines for Preparing Draft Final and Final Reports” posted at http://www.dot.state.fl.us/research%2Dcenter/Program_Information/Guidelines%20for%20Preparing%20a%20Final%20Report%2012-07.pdf. This document provides information on all report requirements, including format, the technical report documentation form, disclaimer language, and so forth.

Final Reports – Once the draft final report has been approved, the university shall prepare the final report. The university will deliver a minimum eight (8) copies on CD or DVD – seven (7) CDs should contain the final report in PDF format, one (1) CD should contain the final report in PDF format, MS Word format and a Summary of the Final Report. The CD/DVDs should be labeled in a professional manner and include at a minimum the contract number, task work order number, project title and date.

The final report is due no later than the end date of the task work order and should be delivered to the following address:

The Florida Department of Transportation

Research Center, MS 30

605 Suwannee Street

Tallahassee, FL 32399-0450

Project Closeout Meeting – A closeout meeting shall be scheduled during the final 30 days of the project to review project performance, the deployment plan, and next steps. Attendees shall include, as a minimum, the project manager, the principal investigator, and the Research Center performance coordinator.

IV. Project Schedule

Start Date:  October 2011               Expected End Date: January 2013

V. Project Budget

Total Lump Sum Amount (Salaries and Benefits)            $97,232.61

Cost Reimbursable Subtotal                                                   $2,475.00

Indirect Cost (subtotal x 10%)                                                     $247.50

Total Project Cost                                                                   $99,955.11

VI. Equipment

No equipment is anticipated nor requested for the completion of this study.

VII. Travel

No travel is expected for this project.

VIII. Personnel 

Dr. Chu will direct and participate in all tasks of the research effort and take responsibility for the deliverables. Dr. Polzin will also participate in all tasks. Joel Volinski and additional faculty members of CUTR will review the final deliverables as part of CUTR’ internal review process.

Use of Graduate Student(s) and other Research Assistants

An OPS student may be involved in working with the local agencies in FDOT District 5 for the applications of the tool for Task 6.

 

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