Financing tools of the future

Colorado’s Regional Transportation District (RTD) develops, operates and maintains the regional mass transit system in eight counties in metropolitan Denver. Now, with construction costs high, the economy deep in a recession, and gas tax revenues – which fund 80 percent of the Federal Transit Authority’s overall budget – becoming increasingly unreliable, the RTD is embarking upon the nation’s largest transit expansion project using an up-and-coming innovative finance tool: Public Private Partnerships (PPPs).

PPPs are binding agreements between public and private sectors that allow for a private firm to assume significant control of, and risk for, multiple elements of a project. These types of agreements can benefit transportation projects by utilizing a wealth of resources and expertise not readily available to government agencies. Because the private sector provides immediate access to private sources of capital, the delivery time of a transportation project is shortened and can result in 6 to 40 percent savings on construction costs alone.

PPPs give cities and regions the opportunity to fast track transit projects and provide the costly, but necessary, infrastructure improvements, upgrades, and maintenance needed for an effective transportation system. Today, traditional ways of funding transportation projects are not keeping pace with demand. Congestion is getting worse, scarce resources are increasingly misallocated, and the lengthy process transportation projects must endure to matriculate makes it difficult for an agency to accurately forecast project budgets. As the increasingly preferred approach for the delivery of new transportation projects and capital improvements, PPPs are a much more reliable option for the future.

Denver plans to build a commuter rail line that connects passengers to Union Station using Public-Private Partnerships to finance the project. Photo Courtesy of Richard Youngdahl

For additional information:

National Council for Public Private Partnerships
Innovation Wave: An Update on the Burgeoning Private Sector Role in U.S. Highway and Transit Infrastructure – U.S. Department of Transportation

This will be the last edition of Talking Transit in 2008. Happy holidays and see you in 2009!

NEWS

Local News

Parking revenues – Chicago Tribune “Reinvesting this revenue in local sidewalk, road and transit improvements will allow equal access for pedestrians, bicyclists, transit riders and drivers.”

CTA Says Green Improvements Will Save $700k Annually – Environmental Leader “The Chicago Transit Board approved funding that will bring solar tracking skylights and new energy efficient lighting to several Chicago Transit Authority’s bus garages, rail stations and facilities.”

Painful parking meter hikes can pave way for progress – Chicago Sun-Times “In the long run, painful as the price may be now, a greater good is served by allowing parking meter rates to climb.”

CN, Amtrak agree on access to Chicago rail line – Southtown Star “Canadian National today announced an agreement with Amtrak that will ensure Amtrak's access to the route for its passenger trains between Chicago's Union Station and downstate Illinois destinations such as Carbondale and Champaign.”

Economic study supports rail bypass, civic group says – Chicago Tribune “The CN plan also would relieve highway congestion in northeastern Illinois and boost the nation's gross domestic product by $267 million, according to the study to be released Wednesday by Chicago Metropolis 2020.”

How to get free parking – Chicago Tribune “Increased parking rates are another sign we need to change the way we live and use our limited resources.”

This ‘L’ stop could be brought to you by… - Chicago Tribune “The CTA is negotiating with possible corporate sponsors for naming rights at some stops to boost revenue.”

World News

Transit Agencies May Get Help on Bad Tax Deals in Bailout – Wall Street Journal “Public transit agencies may get relief from the federal government from soured tax shelter leasing deals, as part of the auto-industry bailout bill Congress is weighing this week.”

Invest in mass transit – Washington Post “Lawmakers, who might think there is less urgency to update the nation's public transit system because of cheaper gas, should view the results of Nov. 4, and the growth in ridership, as a call to action for mass transit.”

Congestion pricing coming to Atlanta – Land Line Magazine “Peters said the Atlanta grant includes $30 million in federal transit funds for the purchase of 36 new buses and to expand park-and-ride facilities to encourage transit use.”

Decongest me – San Francisco Bay Guardian “San Francisco could raise $35 million to $65 million for public transit improvements annually by charging drivers $3 to cross specific downtown zones during peak travel hours, according to a San Francisco County Transportation Authority congestion pricing study.”

Hawaii Endorses Plan for Electric Cars – New York Times “The State of Hawaii and the Hawaiian Electric Company on Tuesday endorsed an effort to build an alternative transportation system based on electric vehicles with swappable batteries and an “intelligent” battery recharging network.”

Minneapolis may reduce off-street parking – Minnesota Daily “The plan seeks to promote transit, walking, and biking as transportation alternatives through reduced parking requirements, while encouraging transit incentive programs, according to city documents.”

As Gas Prices Fall, Transit Still Popular – Washington Post “On the rail, ridership continues to be up during the evenings and weekends as people take the subway for shopping and entertainment in addition to getting to work, Hughes said.”

Unemployment slows BART ridership gains, officials say – Contra Costa Times “Ridership growth is slowing on the transit system in a trend BART managers say is caused more by rising unemployment than by declining gas prices.”

New land-use law’s message: build near transit San Francisco Chronicle “Essentially the law, which will take years to implement, uses incentives and requirements to encourage local governments and builders to concentrate growth in urban areas or close to public transportation hubs in an effort to reduce Californians' use of cars and lower their greenhouse gas emissions.”

Resources

Regional Economic Benefits from CN’s Acquisition of the EJ&E – Chicago Metropolis 2020
Better Coordination of Transportation and Housing Programs to Promote Affordable Housing Near Transit – Housing and Urban Development

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Contact Information

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