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Transportation for Communities - Advancing Projects Through Partnerships



Applications - Linking the IEF and the Decision Guide

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PRO-2
Approve Methodology for Identifying Project Costs and Criteria for Allocating Revenue

Description: This key decision establishes a consistent methodology for estimating project costs for both the long range transportation plan and the TIP. It also documents the specific requirements and restrictions associated with each funding source. By establishing consistent project cost methodology and revenue requirements as well as the overall available revenue from PRO-1, this ensures that the fiscal constraint for the plan and the TIP are consistent.

There is information developed in prior key decisions that informs this step.



  • Basics
  • Integration
  • Decision Making Questions
  • Case Study Examples
  • Technical Support
  • Special Topics

Purpose

To develop a method for estimating associated project costs and establish the criteria for revenue allocation. This should occur prior to the identification of specific deficiencies and potential solutions so that criteria are not targeted toward particular projects.

Outcome

• A method for estimating project costs that can be used across the region by local governments, private developers, MPO staff, and others, so that project costs are developed uniformly to allow comparison.
• A document identifying the restrictions and requirements for each for available revenue sources.


Partner Roles

FHWA

Advisor

Ensures project cost and revenue allocation are inclusive, consistent, and appropriate

MPO

Formal Decision Maker

Approves a methodology for consistently identifying project costs and allocating revenue that is easily understood by partners and stakeholders

Resource Agency

Observer

Observe the project cost and revenue allocation development.

State DOT

Advisor

Ensures project costs and revenue allocation are reasonable and consistent with state plans and programs

Process

Integration Type

Integration Description
Land Use and Smart GrowthNone.None.
Air Quality ConformityNone.None.
Natural Environment and the IEFData From IEF Step 5 - Establish & Prioritize Ecological Actions IEF Sub-step 5c includes a comparison of the cost of conservation and restoration opportunities. The data and methods used in this sub-step should inform PRO-2 to account for the cost of mitigation.
Data From IEF Step 6 - Develop Crediting StrategyIn IEF Step 6, a specific crediting strategy is developed for mitigation, along with data that can be used to determine the cost and value of mitigation. This data should inform PRO-2 to account for the cost of mitigation.
Capital ImprovementNone.None.
Safety and SecurityNone.None.
Human EnvironmentNone.None.
Economic DevelopmentData• Metrics currently used to track economic vitality or competitiveness.
• Analytical methods to measure and evaluate the project's impact on economic competitiveness.
Greenhouse GasDataCosts associated with individual GHG-reducing strategies
Revenue sources identified in PRO-1 and their associated requirements
Cost of various GHG emissions mitigation measures that can be applied during project development and/or construction

Linkages to other Phases of Transportation Decision Making

Key Decision

What is Linked?

Purpose of Linkage

From Long Range Transportation Planning

LRP-5 - Approve Financial Assumptions

Documented revenue restrictions, overall revenue for the plan, and the methodology for estimating project costs.

To ensure consistency between programming and fiscal constraint in the long range plan.

From Corridor Planning Studies

COR-1 - Approve Scope of Corridor Planning Process

Project cost methodology and restrictions and requirements for allocating revenue.

To inform the scoping process for corridor planning and ensure consistency with the long range plan (where applicable). This establishes general financial parameters for the corridor study.

Policy Questions

Questions about purpose and roles

For P3 projects, has a MOU been established with the private sector partner regarding sharing of cost and revenue estimates?

Questions about stakeholders

No specific questions.

Questions about the transportation process supporting the decision

Are mitigation actions anticipated for any potential negative impacts of P3 projects? If so, have mitigation costs been considered in the identified project costs?

Are the methodology and documentation clearly stated so that it can be easily understood by all?

Are the revenue sources broad enough to allow consideration of transportation and non-transportation solutions to address our vision and goals?

For P3 projects, does information exist about the time period over which the project will be funded or revenues will be generated?

Is the approach to assigning costs and allocating revenues inclusive enough to cover costs, revenues, financing, and implementation issues relevant to P3 projects?

Questions about other phases

No specific questions.

Questions about non-transportation sectors/processes

Does a mitigation strategy exist for potential adverse economic impacts?
Have data and methods considered these additional economic costs? For example, the costs of any losses or displacements of business and residents.

Does a regional mitigation strategy exist and have data and methods used to estimate the cost of mitigation as part of ecological planning been considered?

How will GHG emission mitigation measures be reflected in project costs?

Should higher priority be given to GHG-reducing projects with significant payback? For example, through energy savings or revenue generation (e.g., alternative fuel/vehicle deployment and pricing projects).

Will long-term operations and maintenance of individual projects that may reduce or increase GHG emissions be factored into the costing methodology?

Questions to Gather Stakeholder Interests

None.

Questions to Incorporate Stakeholder Interests

None.


Case Study Example(s):

Supporting Data for the Key Decision

InfoThe following is a list of data needed to support the key decision. Practitioners collect this information for decision makers to consider. You may add to this list using the comment box at the bottom of the page.

From other phases of transportation decision making

Long Range Planning

No Specific Data

Programming

Methods used for cost estimation from previous studies

PRO-1: Available revenue

Corridor Planning

No Specific Data

Environmental Review

No Specific Data

From other sectors and processes

Land Use and Smart Growth

No Specific Data

Air Quality Conformity

No Specific Data

Natural Environment and the IEF

Methods used in ecological planning to compare the cost of conservation and restoration opportunities

Methods used to develop a crediting strategy for mitigation

Cost and value of mitigation

Capital Improvement

No Specific Data

Safety and Security

No Specific Data

Human Environment

No Specific Data

Economic Development

Metrics and analytical methods to evaluate impact on economic competitiveness

Greenhouse Gas

Cost of various GHG emissions mitigation measures that can be applied during project construction or development

Projections of revenues or savings, if any, from specific GHG-reducing projects

From the transportation technical process supporting this key decision

Methods used for cost estimation at the state level

Data on individual revenue resources and their requirements and restrictions

Data from research on similar regions to inform methodology approaches

Per lane mile cost for highway improvements

Bridge / culvert replacement costs

Operating and capital costs for public transportation

Right of way costs

Functional classification of roads in the region related to preliminary design parameters

Inflation adjustments to consider

Trend line data on cost estimating and cost over-runs where available

Operating and maintenance cost for system (other than public transportation)

Factors for operations and maintenance relevant to each project or program type (only if long-term operations and maintenance costs will be applied at the project level)

Financing and revenues related to P3 projects

Project implementation costs specific to P3 projects

From stakeholder collaboration

No Specific Data

From public private partnership

No Specific Data

Supporting Tools and Technology

Category

Detail

Analysis

Financial Planning Tools: Used to validate estimate of project costs, using metrics from past projects. Also, can perform risk and uncertainty analysis, to determine expected variations or sources of cost overruns.




Key Decision Relationship to Other Topics

Topic Description
Performance Measures
Selection of Specific Performance Measures - Specific measures are chosen for the purpose of prioritizing projects for funding. The integrated planning and fiscal constraint process is directly linked to the vision and goals defined in the long-range planning process. For this reason, the performance measurement factors for programming begin with those selected within the long-range planning phase (LRP-2). Other outside factors, such as legislation and regional equity concerns, may also impact the selection of additional measures at this key decision.
Data Transfer - Factors for consideration are transferred from LRP-2. Selected measures are transferred to PRO-4 for use in determining funding priorities.
Public-Private Partnerships
Ensure Inclusive Methodology - Provide a consistent approach to assigning costs and allocating revenue across projects, ensuring that issues relevant to P3 are considered.
Decision Transfer - Information relevant to cost and revenue generation potential for P3 projects informs project selection and prioritization.


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