MULTI-STATE INSTITUTIONS FOR IMPLEMENTING IMPROVED FREIGHT MOVEMENT IN THE U.S.
Part III: ASSESSING INSTITUTIONAL MODELS
The 1970 report of DOT's Northeast Corridor Transportation Project, issued by the Office of High Speed Transportation listed 13 criteria and assessed how each might apply to five institutional models. That list suggests a useful starting point, but it may need some updating and refinement to meet current needs. Very briefly, the 13 criteria used in the 1970 report were:
- Ease of forming and implementing the institution
- Time required to establish the institution
- Financing methods available to the institution and the feasibility of acquiring them
- Degree of federal government participation in the institution's decision making
- Degree of state government participation in the institution's decision making
- Influence of federal regulation on the institution
- Influence of state regulation on the institution
- Tax liability of the institution
- Extent of research and planning activities needed and capability of the institution to supply them
- Labor regulations and practices that might apply to the institution
- Tort and contract liabilities of the institution
- Influence of federal and state aid
- Eminent domain powers available
To simplify the use of these criteria in assessing institutional models, they might be grouped into four fundamental characteristics: formation of the institution, governance, financing, and the capacity to perform the four essential functions of multi-state corridor organizations identified and described earlier in this paper: (1) strategic design and goal-setting, (2) system management and public accountability for achieving overall outcome-oriented performance goals that may depend upon factors not fully within the control of program managers, (3) project implementation, and (4) system operation and service delivery of narrowly specified program outputs that can be determined by program managers alone. For each institutional model, the assessment might analyze the need for each characteristic and how well the model could be expected to satisfy that need.
The following table summarizes an assessment of the eight institutional models based on these four fundamental criteria. The table is color-coded to assist the reader in interpreting it.
- Green indicates the model's probable capability to meet Transportation Corridor needs.
- Yellow indicates uncertainty about the ability of the model to meet those needs.
Red indicates the likelihood that the model would not meet Transportation Corridor needs in some significant way.
Institutional Options to Strengthen Multi-state Transportation Corridor Performance
| Types of Institution | Examples | When Appropriate | Factors for Evaluating Suitability | ||||
|---|---|---|---|---|---|---|---|
Formation & Modification (Degree of Difficulty) |
Governance (Inclusiveness/flexibility) |
Financing (Size & reliability) | Public Purpose/ Performance/Powers/ Authority (strength & scope) | ||||
| Lead | Situation | ||||||
| 1. Interstate Compact | Port Auth. of NY & NJ Delaware River Basin WMATA Midwest Interstate Pass.Rail Commission |
State | Well recognized permanent function of govt. | Problematic: Difficult politically Time consuming Not easily modified Requires consensus |
Suitable: State oriented Always interstate |
Uncertain: Potentially strong Depends on political consensus when created |
Suitable: Real Power (potentially) Probably limited to narrow functions May be viewed as loss of state power |
| 2. Joint Services Agreement | • Interstate waste- water treatment at Blue Plains | Local | Economy of scale Voluntary Coord. May not be used |
Suitable: Relatively easy Flexible State laws determine |
Problematic: Contractual agreement Joint Services org. Seldom interstate |
Uncertain: Regular public funds pooled by agreement Uncertain/uneven |
Uncertain: Powers previously established by law Uncertain/uneven |
| 3. Special District or Authority | Airport & Port Auth. Highway Dist. CA High-Speed Rail Authority |
State or Local | Vital function of govt. Service area diff. than local govt. |
Suitable: Fairly easy where political consensus exists Some states regulate formation |
Problematic: Usually narrow functions Seldom interstate |
Suitable: Strong |
Uncertain: Strong, but narrow Can be effective bldg.block |
| 4. Voluntary Coalition | Transp. Corridor Coalitions MPOs |
Innovators & Fed. incentives | New or uncertain function Large # diverse partners Intergovernmental & public/private |
Suitable: Easy to start May not have full participation May not last |
Suitable: Flexible/potentially inclusive Easily interstate |
Problematic: |
Problematic: Flexible but weak Not dependable Depends on strong consensus bld. Skills |
| 5. Non-Profit Corps. & Foundations | Fed. Chartered TRB, NFWF,NIBS Privately Chartered, ITSA, NAGRC, foundations |
Special interests | Helpful in many situations | Suitable: Very Easy Very flexible |
Suitable: Not necessarily inclusive: not representational Easily interstate |
Uncertain: Potentially strong Privately decided Dependent on others and on market fluctuations |
Uncertain: Self-defined purposes; not publicly or govt.. defined Can be guided by govt. contracts |
| 6. Commercial Companies | Railroads Trucking Cos. Barge Cos. Other shipping & delivery companies |
Private | Private market is strong and aligned with public purposes | Suitable: Contract negotiations Relatively quick & easy |
Suitable: Private decision making Govt. can regulate & contract with Easily interstate |
Uncertain: As strong as the market Can grow with the market (big is better) Weak or absent in weak markets, unless subsidized |
Suitable: Strong performers in strong markets Keep up w/ market demand Growth oriented |
| 7. Federal Corporations | TVA |
Federal | Relatively rare Unique circumstances |
Uncertain: Can be shaped as desired Potentially quick to establish May be viewed as loss of state power |
Suitable: Congress determines May subsidize, or not May be public-private May be backed by federal guarantees Easily interstate |
Uncertain: Federally specified; at least in part Market based Opportunity for Congress to adjust support |
Uncertain: Strong Wide variation in powers & authority Criticized as "big govt." |
| 8. Federal Govt. Agency, Commission or Project Office | ICC/STB Corps. Of Engineers Appalachian Reg. Commission EPA CBPO Bonneville Power Administration |
Federal | Generally requires a crisis Project office is relatively easy; may require only a new appropriation |
Uncertain: Congressional discretion for major new ones & for major re-org. Project office may only require administrative discretion May be viewed as loss of state power |
Suitable: Federal only, in general Commission form can bring diversity to governance FACA can provide stakeholder advice (not governance) Can be linked to a diverse non-federal decision-making body Easily interstate |
Uncertain: Potentially strong Designated revenue stream (Trust Funds) Federal appropriation not reliable any more Criticized as "big govt." |
Suitable: Potentially powerful & effective Directly Indirectly thru grants and/or regulations Can be linked to a judicial decision process |
Several observations about this assessment follow:
- Interstate compact organizations usually are very difficult and time-consuming to establish, and some do not have any more authority to build and operate facilities, or to deliver services to the public than a well structured—and much easier to establish and modify—voluntary coalition, or a multi-state organization funded and empowered largely by federal grants. However, some have been given very effective operating and revenue raising powers not otherwise available to an interstate region. Furthermore, once in place these organizations tend to be permanent. They seem to be most appropriate when their function is essential, there is a strong and broadly held consensus to establish them, and they will have strong and reliable powers to exercise over a long period of time.
Primary function or product: Multi-state public infrastructure and public services; multi-state revenue sources
Examples: High-speed ground transportation systems; Multi-purpose river-basin management (including such features as dams, waterways, navigation, hydropower, irrigation, and recreation)
- Joint services agreements seem most appropriate to use in a state or sub-state support role within the framework of a larger corridor-wide effort.
Primary function or product: State and local public facilities, services, and revenue sources
Examples: Public transit, regional port or airport, regional water supply and irrigation systems, regional sewage treatment systems, flood control levees
- Special districts and authorities also seem most appropriate to use in a state or sub-state support role within a corridor-wide effort.
Primary function or product: Same as joint services, except revenue streams may be larger and more dependable
Examples: Same as joint services
- Voluntary coalitions are easy to establish and modify across both geographic and functional governmental boundaries, and they can be easily empowered to do studies, build consensus, and facilitate joint or coordinated action on behalf of their members. However, they depend heavily on external sources of funding and the extent of the consensus they are able to develop and maintain among their members. Although they have no governmental authority of their own, they often derive significant "powers" from federal grant requirements. In some cases, these responsibilities include delegated goal-setting and regulatory functions. These organizations seem most appropriate for innovative and evolving programs that need to involve multiple parties and that have dependable sources of outside funding to support their consensus-building and flexible functions. However, they are seldom given major roles in operating programs or in allocating big-ticket project funds. Their effectiveness is limited by their need to remain subordinate to their members and to avoid threatening the powers of their members.
Primary function or product: Studies, plans, proposed funding allocations and project rankings, performance monitoring
Examples: MPO future visions, long-range plans, and Transportation Improvement Programs (investment strategies). Air quality conformity analysis
- Non-profit corporations and foundations are easy to establish, are borderless, and generally can be used for flexible purposes. Although federally chartered ones are relatively rare, they can be important because of their special stature and recognition as public purpose organizations. Governments can make good use of these organizations through contracts that fund them to perform specific public services. Their use seems most appropriate for filling gaps in governmental capabilities.
Primary function or product: Administrative and technical services
Examples: Administer grant programs; produce studies; evaluate public programs; and provide technical assistance (National Fish and Wildlife Foundation). Administer compliance with federal reliability standards by long range electric power transmission companies (North American Electric Reliability Corporation).
- Commercial companies provide essential services to the public based on market demand. For example, they provide the bulk of the nation's freight movement, and satisfy much of the demand for passenger movement in significant sectors—such as air travel and taxi service. They seem most appropriate for use in transportation sectors where market prices and demand for services are high enough to provide attractive private-sector profits. They may also provide unprofitable public services that are supported by governmental contracts that cover the costs and appropriate profits. These organizations can be very flexible and can accommodate and thrive on growth. For these companies, growth is perceived as good, while the same growth in a government agency may be perceived as bad.
Primary function or product: Provide a product or service to people willing and able to pay a price that includes a profit
Examples: Freight movement; package delivery; some forms of passenger service
- Federal corporations are generally subsidized and place public service performance ahead of profit. Nevertheless, they often have significant revenue-raising sources such as fares and fees for their services, and they are managed by a board of directors charged with using good business practices. They seem most appropriate for use in running businesslike enterprises that do not have sufficient short-term profit potential to support a private company.
Primary function or product: Nationwide or multi-state public facilities and services
Examples: Establish and operate a new railroad (Conrail; Amtrak); establish and operate an inland waterway (Saint Lawrence Seaway)
- Federal agencies, commissions and project offices perform public services needed on a national or multi-state scale but not amenable to being financed by direct user fees or fares. New ones have been difficult to establish in recent years because of the perception that they would inappropriately expand the size of government and increase the possibility of public waste and inefficiency. However, they seem most appropriate for performing essential federal functions that no other organization is capable of or willing to perform.
Primary function or product: Nationwide or multi-state regulation; Public works construction, financing and/or operation of needed facilities and service systems that no one else is willing or able to provide
Examples: Appalachian highway system (Appalachian Regional Commission). Regulation of inter-state commerce (Surface Transportation Board—to a limited extent). Regulation of long-distance electric power transmission (Federal Energy Regulatory Commission). Production and long distance transmission of power from the Columbia River and other sources (Bonneville Power Administration, U.S. Department of Energy). Operation of Missouri River and Mississippi River systems, numerous flood control projects, many inland waterways, and more (U.S. Army Corps of Engineers).
