3.0 DATA ANALYSIS

As noted previously, the Metropolitan Council's regional travel forecast model will be used to estimate the long-range benefits related to congestion reduction resulting from the UPA projects. Mn/DOT has used the traffic forecasts produced from the model to conduct cost benefit analysis for some UPA projects.

The Office of Management and Budget (OMB) Circular A-94 Revised on guidelines and discount rates for cost benefit analysis of Federal programs will be referenced in the Minnesota UPA cost benefit analysis. The cost benefit analysis will be performed using a 10-year time frame. This time frame includes the first year after implementation of the Minnesota UPA projects and a 10-year period after implementation of the projects. Within this evaluation time frame, the cost benefit analysis will estimate and compare annual benefits and costs between two scenarios—without implementation of the Minnesota UPA projects and with implementation of the Minnesota UPA projects.

The basic procedure for calculating the net benefit is to monetize the benefits experienced by facility users and then subtract the costs incurred by the Minnesota UPA projects. The calculation will be done for a 10-year time frame. The major components described below provide examples of how the net benefit will be calculated.

• Travel cost savings from the reduction in travel time, which is a result of improvement in traffic condition from reduced recurring congestion, experienced by drivers, transit users, and telecommuting workers. The following details the computation:
  • For freight transportation, the travel cost savings depends on the truckers' wage rate and the travel time saved. The truckers' wage rate at the historical year will be obtained from the Bureau of Labor Statistics and the forecast of the wage rate from Woods and Poole Economics, Inc. will be used for future years.
  • For personal travel, the basic calculation procedure is the same as the freight transportation but the average wage rate of Twin Cities will be used. The travel time will be adjusted according to trip purposes because non-work-related personal travels are less urgent and bound by less time constraint.
• Safety cost savings from the improvement in safety conditions—The reduction in number of incidents by incident type determines changes in the accident rates. The computation of the safety cost savings depends on the accident rates, the accident value reported by the U.S. DOT, and the miles traveled in the region.
• Vehicle operating cost savings experienced by drivers as a result of reduction in congestion – The vehicle operating cost savings include two components: fuel costs and non-fuel costs, which include “wear-and-tear” costs. The computation of fuel cost depends on fuel prices in the local area, fuel efficiencies under different driving speeds, and mileages traveled. The non-fuel costs rely on average repair and maintenance costs identified by the U.S. DOT and miles traveled.
• Consumer surplus captures the user benefits that result from reduction in travel costs and changes in vehicle volume due to the implementation of the UPA projects. The calculation of the consumer surplus depends on the benefits, which include the cost savings from reduced travel time, safety cost savings, and vehicle operating cost savings, from the improved travel conditions and vehicle volumes with and without the UPA projects.
• Improvement in travel time reliability – The benefits realized from the improved travel time reliability depends on the average wage rate in the local area and the travel time saved from reduced non-recurring congestion, such as reduction in accident processing time or reduction in congestion caused by work-zone.
• Improvement in air quality – The benefits from the improved environment depend on emission rate per mile traveled and the dollar cost per gram of emission estimated by the Environmental Protection Agency.
• Changes in travel costs for those people who shifted from driving to riding the bus – This reflects the difference in travel cost between driving and taking the bus. The computation of the driving cost will be the same as the vehicle operating cost, while the cost of taking the bus will be bus fares to be paid by those people shifted to transit mode, plus the travel cost savings from the travel time saved.
• Changes in productivity for telecommuting workers and changes in businesses' costs from employers permitting telecommuting – This reflects potential benefits for workers and businesses that have engaged in telecommuting. The computation depends on the survey results from the telecommuting data test plan and the survey test plan.
• Capital costs, operating and maintenance costs, and replacement and re-investment costs – As presented in Table 2-1, the costs under each of the major categories will be summed for the purpose of calculating the total cost.

At the last step, the net benefit will be calculated by summing up the benefits and then subtracting costs. For the community, the benefits experienced from the improved environmental condition such as reduction in emissions will be considered.