2.5 Funding and Resource Sharing

Background

In developing strategies to fund M&O activities, regions have an opportunity to promote new relationships and arrangements that support broad regional systems management perspective and better link operations with regional planning. For example, a planning and programming process that places a high priority on interjurisdictional coordination can encourage normally independent practitioners to collaborate and identify opportunities for shared equipment and facilities. Funding strategies can also be used to help ensure implementation of M&O objectives developed through the planning process or to attract new operations stakeholders to planning forums. This section discusses strategies that use funding and resource sharing to improve coordination between planning and operations.

What is Funding and Resource Sharing?

Funding and resource sharing refers to a variety of arrangements by which transportation and other operating agencies collaborate to submit funding requests, develop pooled funding mechanisms, or share equipment and facilities. As a linkage mechanism, this also refers to efforts to increase the consistency between transportation systems management as discussed in plans and the associated regional funding policies and commitments.

What are the Sources of Funds for Management and Operations Efforts?

A number of funding sources can support management and operations activities and equipment. In practice, however, funding for system management and operations must often rely on the discretionary budgets of individual jurisdictions and/or agencies.

Federal policies allow several funding sources to be used for regional systems management and operations programs. In TEA-21, the Federal-aid Highway Program continued eligibility of operating costs for traffic monitoring, management, and control systems. Such operating costs can include funding for both the establishment and continuous operation of management systems such as integrated traffic control systems, incident management programs, and traffic control centers.

For projects located in air quality non-attainment and maintenance areas, Congestion Mitigation and Air Quality Improvement Program (CMAQ) funds may be used for activities that demonstrate a reduction in traffic delay or emissions. CMAQ can support an individual M&O program for up to 3 years.(12) Examples of projects eligible for CMAQ funds include the implementation of ITS strategies, enhanced signalization projects, and intersection improvements.

Although there are greater federal funding opportunities for management and operations than many regions perceive the bulk of funds typically must come from states and localities. State and local funding processes make it difficult to fully integrate planning and operations by creating separate categories of funds for capital and operations expenses.

Degrees of Funding and Resource Coordination

The structure of resource sharing arrangements may evolve over time in response to changing regional needs and changing relationships between agencies. Initially, sharing may be limited to supplying staff, equipment, or facilities in support of regional meetings or other regional collaboration activities. If appropriate, participating public and private organizations may develop more formal sharing arrangements, including pooling of funds and other resources to sustain cooperative regional efforts. In some regions, agencies may provide funding to support a regional entity charged with leading regional collaboration or an entity that owns and operates regional transportation system assets. Exhibit 7 illustrates this range of resource strategies.

Exhibit 7: Range of Resource Strategies

Less Formal to More Formal
In Kind	Pooled Resources	Funding Entity
Individuals commit to periodic meetings to address issues of regional significance.	Jurisdictions and public and private organizations pool funds, people, assets, and other resources to sustain collaboration.	Jurisdictions and public and private organizations allocate funds to support a regional entity responsible for regional collaboration.
Agencies assign staff members and other resources (equipment, facilities) to support collaboration efforts on an ongoing basis.	Agencies and jurisdictions commit resources (people, assets) to be used in regional operating activities (e.g., mutual assistance agreements).	Entities are formed and funded to own and operate assets (e.g., transit systems, maintenance vehicles, emergency response assets) on behalf of multiple jurisdictions.

Source: Regional Transportation Operations Collaboration and Coordination, FHWA, 2003.

Linkage Implementation

All regions lack sufficient funds to implement the full spectrum of transportation projects and programs desired by the region. Sometimes, competition for resources between and within agencies can hinder regional coordination and prevent the region from achieving the full benefits of system-wide M&O strategies. This section discusses some approaches to funding and resource sharing that can help to build bridges between planning and operations practitioners.

Link Funding to Planning Goals and Objectives

Increasingly, local and regional transportation plans include language supporting improved transportation systems management, promoting more efficient use of existing infrastructure, and adopting a more customer-oriented approach to transportation service provision. Yet the funding and staff resources to support the implementation of such planning objectives are often lacking. For example, a plan might state that regional coordination to maximize efficiency of the existing system is a top priority, but no funding is then allocated toward regional incident management programs, corridor management strategies, or regional traveler information systems.

Several approaches have been used to more closely link funding to operations goals. One approach is to have regional stakeholders determine minimum budget requirements to support long-range transportation plan objectives in each program area (see Box 20).(13) Based on these minimum requirements and total funding availability, each program area is assigned a target budget. Projects slated to receive new funding are then prioritized based on whether the target has been met for each proposed project's program area. For example, if new roadway construction is targeted to receive 40% of the transportation budget and the current TIP devotes 50% of its funding to this category, then other program categories (such as M&O) would receive higher priority when selecting projects in a new TIP.

Some regions employ a project prioritization process that deliberately assigns more weight to projects that support regional management and operations objectives, as outlined in the region's long-range plan. This approach encourages planners and operators to cooperate when assessing the cost-effectiveness of management and operations strategies. In these cases, the likelihood that management and operations programs receive significant funds depends on how M&O criteria are weighted relative to other prioritization criteria. At a minimum, this approach will assist stakeholders in clearly articulating where M&O investments should be positioned amongst the region's competing transportation needs.

Develop Innovative Operations Funding Sources

New funding mechanisms can help to create bridges between planners and operations managers. One strategy is to fund certain M&O efforts as part of an initial capital investment (e.g., ITS equipment that enhances corridor management activities, see Box 21 below). Planners and operators increasingly recognize that the best time to secure funds for management and operations is at the moment when funds are allocated to major new construction or rehabilitation. Working together, planners and operators can make the case that proper management of new transportation facilities will maximize the long-term benefits of the initial investment. Some areas have required consideration of M&O by developing a checklist for project sponsors.

In the search for funding for system operations, some regions have turned to land developers. The practice of requiring developers to fund transportation improvements as a way to mitigate the transportation impacts of their projects is well established, but relying on this as a source of management and operations improvements is relatively new (see Box 22). Developer concessions can provide an important source of revenue, and can also encourage more detailed planning for management and operations programs. In order to require developer funded improvements, local governments typically must show how the management strategies can mitigate transportation impacts, such as improvements to traffic flow in a particular corridor. This funding opportunity may also prompt local governments to more thoroughly identify management and operations needs so that individual funding opportunities can work together to support an integrated operations approach. This is critical, since operations must typically be applied on a system rather than spot location basis.

Planning and operations coordination can also be strengthened when transportation management strategies are viewed as a potential source of transportation dollars. Pricing mechanisms are an effective tool for managing transportation demand and achieving more efficient use of existing facilities. Moreover, new technologies, such as electronic toll collection, can enable greater use of pricing while reducing collection costs. They can also serve to generate funds for both management programs and new infrastructure. As such, these transportation management strategies naturally capture the interest of planners and decisionmakers, opening the window for a broader discussion between planners and operations managers.

As a first step toward incorporating some of the funding strategies such as those discussed above, examine regional planning documents for goals or objectives that support regional systems management activities. Consider how such objectives are supported with funding, performance measures, or decision criteria in the plan. Develop recommendations for plan future updates that could promote funding for management and operations objectives, such as project prioritization criteria that favor M&O strategies or multi-jurisdictional operations initiatives.

Build on Emergency Response Needs to Create Regional Momentum for Collaboration

The recent focus on improving emergency preparedness and response has heightened the need for coordination between planning and operations. Increased transportation resources are available to conduct emergency response exercises and planning. Explore these funding sources as well as opportunities to use existing emergency management activity to initiate regional interagency collaboration.

Prioritize Multi-Jurisdiction Funding Requests

A number of MPOs give preference to collaborative funding requests in the project prioritization process (see Box 23). This encourages funding requests for ITS and other systems management initiatives that are coordinated between organizations and jointly submitted by different agencies and jurisdictions. Inter-jurisdictional collaboration is frequently a stated objective or strategy in regional transportation plans, so preference for these funding requests is well justified. Such coordination can help to promote a regional systems management approach.

Integrate Capital Investments and M&O within one Budget Process

State and regional management and operations activities are often lumped under broad operations budget categories. These operations categories are usually assessed through a process that is separate from the capital investments planning and budget process. Where this is the case, MPOs might consider ways of incorporating specific management and operations activities as individual budget items within the capital investments budget.

Along the same lines, transportation agencies may consider addressing management and operations costs associated with a particular project as part of the capital investment decisionmaking process. This is can link planning and operations by explicitly addressing M&O investments that would be required to optimally integrate the proposed project. This would provide a stronger motivation to include operators in the discussion of the M&O costs associated with capital investments. (NOTE: This discussion does not imply that routine operating costs would be supported with Federal funds.)

Share Office Facilities

Sharing office facilities inspires enhanced collaboration. In some cases, office sharing is intended because there is recognition that transportation agencies must be working in the same space to do their job more effectively (see Box 24 below). A common example is a traffic management center shared by traffic operators, transit staff, and public safety personnel. In these cases, the planning and development of such facilities functions to inform all stakeholders about the importance of regional coordination between practitioners in these lines of work.

At times, sharing of facilities is not by design. Groups that typically work independently may be required to share office space due to funding or facility limitations. Some agencies that have found themselves unintentionally co-located have discovered that this makes an important difference in the degree of communication between practitioners. When planners and operators are co-located, they are more likely to communicate about their projects, develop new personal relationships, and discover opportunities to assist each other.

In many cases, there is a tradition of agency and jurisdictional independence, and some practitioners may have never considered options for sharing facilities or equipment. The increased efficiency and professional ties that can grow from such cooperative arrangements suggest that they this should be a more conscious part of institutional consideration.

Use Funding as a Tool to Attract Participation in M&O Discussions

Funding is a powerful tool for promoting participation. When groups are unaccustomed to coordinating with many other agencies or perceive that such coordination would provide more hardship than benefit, one way to overcome this barrier is to provide additional resources to such groups in exchange for participation in collaborative efforts. In some cases, MPOs have attempted to create training programs or other forums to promote the consideration of management and operations strategies (see Box 25 below). There are inevitably difficulties in getting some jurisdictions or stakeholder groups to the table, particularly when a forum or activity is not part of an established regional process. MPOs have had success in overcoming these barriers by linking participation to funding access. For example, a jurisdiction may become eligible for matching funds only by participating in a management and operations training program. Or a public safety group may gain access to new sources of funds contingent upon its participation in regional M&O forums.

Lessons Learned

This section reviews some lessons learned through efforts to secure funding for M&O programs. Past experience has highlighted some of the challenges associated with using resource sharing as a means to link planning and operations, and provides guidance on some ways to overcome these challenges.

Funding Constraints Can Elevate M&O Solutions

Almost every transportation agency identifies inadequate funding as a major concern. At the same time, virtually every agency acknowledges that funding constraints are a major impetus for advancing management and operations strategies. Planners often become champions for management and operations strategies only when they recognize a serious discrepancy between available funds and the cost of new capital investments necessary to maintain regional mobility (see Box 26). This does not imply that planners should wait until desperate times before offering regional leadership on management and operations coordination, nor does it imply that practitioners should always view operational improvements and new roadway construction as a trade-off. Rather, the lesson is that periods of severe funding shortfalls should be seen as opportunities to educate a broader regional constituency about management and operations solutions.

Perspectives Differ on the Value of Dedicated M&O Funding

Practitioners voice significantly different perspectives regarding how funding sources can best be structured to promote management and operations more consistently during the planning process. Some practitioners find that management and operations strategies are hindered by regional, State, or Federal restrictions on how particular funds can be spent. From this perspective, funding categories tend to prevent systems managers from using the most efficient approach to manage the transportation system. For example, one region maintains that ITS earmarks have been detrimental to integrated planning because they tend to set ITS on a separate track from other transportation planning activities. In some cases, this may mean that the planners and stakeholders who are involved in regional transportation planning are not exposed to ITS strategies.

Other practitioners have observed that the absence of funding sources specifically designated for management and operations can make it difficult to include such projects in the long-range transportation plan (see Box 27). Although M&O activities are frequently funded under broad operations or TDM categories, this often means that they are not specifically listed in the funding program. By creating more narrowly defined M&O funding categories, MPOs and State DOTs can make it clear to agencies and jurisdictions that such projects are appropriate uses for regional, State, and Federal funds. They also elevate the profile of such activities among transportation practitioners.

MPOs and DOTs May Resist New Operations Programs

Both MPOs and State DOTs tend to be reluctant to commit to new management and operations programs. This is generally because of the perspective that these activities are continuous and therefore commit the agency to provide funding every year or else face the unpopular option of cutting an existing program. Consequently, MPO and DOT leaders prefer that such ongoing funding requirements be left to local jurisdictions. This can create a situation in which management and operations activities are a patchwork of programs from various jurisdictions, limiting their efficiency and effectiveness at the regional scale.

CMAQ Provides Pilot Funds for M&O Strategies

Air quality nonattainment areas have access to Federal CMAQ funds for management and operations activities that can reduce congestion and improve air quality. This program has proven to be an important source of funds to initiate regional M&O programs. Because CMAQ funds require consideration of how the project can relieve congestion and improve air quality, use of the funds also functions to highlight the capacity of M&O projects to serve regional planning goals. In some cases, the projects prove to be popular and are then funded by local sources.

The Unified Planning Work Program Can Help Define Commitments to M&O Planning

Planning agencies continue to face the perception that management and operations planning is a secondary activity to other MPO and State DOT responsibilities. As such, when agencies are facing staffing and funding shortfalls, it can be difficult for them to initiate regional systems management activities. Some MPOs have found that specific enumeration of regional management and operations activities in the agency's Unified Planning Work Program (UPWP) is a way to ensure that such activities are implemented (see Box 28). This also builds the understanding that the MPO intends to take a leadership role on regional M&O issues.