Planning for Change: A Systematic California “Call to Action” for Freight Planning for Change: A Systematic California “Call to Action” for Freight Hearing — “Goods movement: Assessing California’s 21 st Century Needs and Consequences” November 15, 2005 presented to Senate Transportation Sub-Committee on California Ports and Goods Movement presented by Therese W. McMillan Deputy Executive Director — Policy Metropolitan Transportation Commission Oakland, California

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 Billion minimum

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?

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

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

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.

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

What’s needed is a basis for weaving these principles together as a Call to Action for Freight: A 4-Plank proposal: 1. Know What We Face 2. Decide What We Want 3. Make Choices 4. Find Funding Does NOT mean starting from scratch, but cohesively putting together pieces for a strategic statewide freight vision

Know What We Face > More than a project list: must understand freight movement demands > Establish baseline, statewide picture of: — volume and pattern of current and future goods movement demand; and — constraints to meeting that demand with the existing system. 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 out of California > Intra-state distribution movements, including critical connections to local markets within major urban — congested — areas. > Existing regional studies provide valuable input 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. Plank 1:

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 desired outcomes of 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? 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 gateways Options: a)invest in increasing Southern California Port Capacity and interstate access routes b)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??? Plank 2:

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 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 issues that 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. Plank 3:

Find Money MONEY > Planning to implementation requires MONEY > Inevitably involves complex packaging of federal, state, local and private sector dollars > Considerations for such strategy: a)Distribution among federal, state, local and private sources: Eligibility and appropriate “share” b)Availability of funding: dedicated contributions vs. discretionary competition vs. discretionary “earmarking”. c)Need for legislative changes for existing funds d)Legislative and other strategies to pursue new funding Plank 4:

Find Funding Plank 4: 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

Find Funding Plank 4: 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 a)No bias for individual elements of the industry, and b)user contributions are fire walled for the purposes they are levied.

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.