The following is a guest blog by Fred Wagner, Principal at Beveridge & Diamond, former Chief Counsel of the Federal Highway Administration (FHWA), and moderator at the upcoming NAIOP Transportation Transformation Conference in Boston on April 9.The post originally appeared on Enviro Structure. The Beyond Traffic report will be one of many topics discussed at the upcoming event. We hope to see you there!

U.S. Department of Transportation Secretary Anthony Foxx has a favorite saying that he attributes to one of his public school teachers:  “Having no plan is a plan.”  Well, now the USDOT has a plan, or, as it calls it, a “framework,” to create the foundation for transportation infrastructure improvement for the next 30 years.  It’s called “Beyond Traffic,” a remarkably comprehensive analysis of existing data, expected trends, and policy suggestions for the entire spectrum of future transportation choices.

On April 9, NAIOP Massachusetts, The Commercial Real Estate Development Association, will host a forward-thinking conference  -“Transportation Transformation” – examining the role of transportation in a growing Massachusetts economy and its impact on real estate development.  A representative of the USDOT’s Office of Policy will kick off the NAIOP event by describing the Beyond Traffic framework and offering ideas on how the concepts reflected in Beyond Traffic could be applied to regional and local transportation planning efforts. Beveridge & Diamond is proud to sponsor this important event.

While it’s difficult to summarize a 300+ page document in one blog post, I’ll give it a go.  The over-arching theme could be this:  “Let’s make infrastructure investment decisions based on the reality of what is and what is likely to be, rather than simply based on short-term fixes to maddening congestion challenges.”

What are some of those realities?

• We face an aging transportation system that desperately needs attention.
• More and more Americans will be settling in “mega-regions” around the country, potentially exacerbating congestion in our already most populated cities.
• Younger people will likely continue to drive less, and look to alternative means of mobility.
• At the same time, the proportion of older Americans will continue to grow, placing greater demands on travel for work and leisure in that segment of our population.
• Innovation will alter the way we think about commuting, from ride-sharing options, to increased telecommuting, to autonomous vehicles.
• Our changing climate will demand that we stress adaptation for some of our most crucial transportation infrastructure.

Some of the data revealed in Beyond Traffic is no doubt sobering.  The U.S. population is expected to increase by 70 million by 2045.  Transportation costs will continue to be the second largest expense for U.S. households (besides shelter) and, at the same time, will likely remain the second highest source of GHG emissions.  We face a huge investment gap at the same time a political solution to long-term funding at the federal level remains a daunting challenge.

Yet, for every significant challenge, great opportunities exist.  Technological advances have resulted in a doubling of vehicle fuel efficiency standards.  Americans have much greater flexibility in how and where they work.  GPS technology tells us where we need to go, but can also be used to help us find parking spaces downtown or in garages more efficiently.  Autonomous vehicles can potentially allow even more vehicles to use our highways and streets, but do so more safely and efficiently.  (Never mind getting additional work done while your car drives you to your destination.)  Freight shipments will also become more efficient as automation connects ports to rails to trucks.

Beyond Traffic challenges all of us to confront how future policy choices could either complement or conflict with these trends.  While the USDOT stresses that this framework is not an action plan, it cries out for all of us to consider how to create such a plan.  Anyone interested in this topic should go to www.dot.gov/beyondtraffic to offer comments before a final version of the report is published later this year.

The recent Massachusetts Taxpayers Foundation’s report The T: The End of Its Line is a must read. NAIOP Massachusetts fully endorses the report and its recommendations.

According to the report, there are some critical next steps that decision makers can and must take in the near term. The Foundation recommends that the state prioritize the following nine steps to inform a more detailed analysis so that it may develop a plan for rescuing the T:

•    Tie FY 2016 state contract assistance to the release of up-to-date State of Good Repair (SGR) backlog data
The MBTA’s asset management system, which quantifies the SGR backlog and helps to prioritize maintenance projects, has been inoperative for several years and full implementation of a new Federal Transit Administration (FTA)-funded system is several years away. This is an enormous management failing and the state should withhold additional assistance until the T can produce a comprehensive SGR backlog project list that clearly and accurately states both the size of total maintenance shortfall and the cost to keep the system from deteriorating further.
•    Conduct a detailed audit of the MBTA’s maintenance protocols
The state should insist on an independent assessment of the T’s maintenance protocols, project selection criteria, and capital spending to determine whether the T has the capacity to bring its infrastructure into a state-of-good repair.
•    Require an independent fiscal audit of the T
The Governor should request an independent, third-party, in-depth analysis of the T’s finances. The T’s long history of using financial maneuvers such as debt restructurings and securitizing long-term revenue streams have complicated its debt obligations, and the T provides minimal information on unfunded pension and retiree health care liabilities. All pose substantial hurdles to the T’s ability to continue as a going concern. Full analysis and disclosure of the T’s financial exposures is necessary before solutions can be found.
•    Halt expansion contracts for the remainder of 2015
Before the MBTA undertakes any further expansion (with the exception of the Green Line Extension), it must get its current fiscal house in order. The state and the T must perform more analysis of the impact that expansions will have on the operating budget and maintenance expenditures and must identify revenue streams to cover the ongoing costs of expansions before any additional outlays are made. A brief delay will afford an opportunity to re-examine both the way in which projects are being carried through and the sustainability of each expansion as a part of the T system as a whole.
•    Reform the procurement process including a two-year moratorium of the Pacheco Law with a report on savings
Just as its maintenance systems require a careful review, so too do the T’s procurement practices. A series of problems with T procurement practices and other policies have further eroded public confidence in the T. The size and uniqueness of the T’s capital purchases warrant a centralized procurement process with in-house experts overseeing contracts to ensure purchases are delivered on time, on budget, and fully operative.
•    Reexamine the MBTA’s governance structure
The T’s long-term problems cannot be addressed effectively unless the Authority’s own leadership is fully committed to the reform effort. Currently, the T’s Board is independent and not accountable to the Secretary of Transportation, the Governor, or the Legislature and management has too often been resistant to external examination and proposals for change. The Administration should have control over the MBTA board in the short-term to ensure compliance, accountability, and full transparency. The Administration should also have the authority to select the next general manager and work with the Legislature to determine the most suitable governance structure to develop and execute a rescue plan for the T.
•    Eliminate Social Security eligibility to align with the state pension system
The unique dual pension eligibility of T employees, dating back to the state takeover of private operators, makes no sense decades later, and it imposes significant unnecessary costs on a financially stressed system.
•    Eliminate binding arbitration
Binding arbitration stands in the way of the responsible cost-conscious management the T requires. It was eliminated for most public employees a generation ago.
•    Require full disclosure of the pension system finances
Despite efforts by the Legislature, the T has not released details regarding its pension system and assets because it asserts that the pension system is a private entity. However, the T would have no hope of meeting its annual pension obligations without the annual infusion of hundreds of millions of dollars in tax revenues. At a minimum, the T pension system should release the details on its investments and cash flows and provide actuarial valuations.

The last 30 days have seen record snowfall for the Greater Boston area. The resulting impacts on commuters, businesses, and residents have been devastating. However, for some reason, the breakdown in our mass transit system has come as a surprise to many. Our transit system is in crisis and has been getting by for decades with aging equipment, poor maintenance, and declining performance ratings.

The problems go beyond the MBTA. Across the state, many bridges are closed, or have weight and lane restrictions, with many being off limits to emergency vehicles. Miles of roads need repairs and many regional bus systems have reduced schedules.

The state needs to create a road map to take us from the failures of today to a fully operating and maintained system, with sufficient capacity and quality of service for its customers. A top priority of our political leaders must be the purchase and placement into operation of new cars, signalization, switch heaters, and other maintenance and repair upgrades. The economic health of our Commonwealth is at risk with the status quo. The losses to businesses and employees, due directly to the MBTA’s current failures, is historic.

The public was lulled into the belief that our transit system, although not perfect, could continue to serve commuters and business for many years without any serious lapses. No one is under that illusion anymore. Now is the time for clarity of purpose and a serious plan to provide the citizens of this Commonwealth the first class system they deserve.