U.S. Department of Transportation
Table of Contents
List of Figures
List of Tables
The Primer Series and the Purpose of this Volume
States and local jurisdictions are increasingly discussing congestion pricing as a strategy for improving transportation system performance. In fact, many transportation experts believe that congestion pricing offers promising opportunities to cost-effectively reduce traffic congestion, improve the reliability of highway system performance, and improve the quality of life for residents, many of whom are experiencing intolerable traffic congestion in regions across the country.
Because congestion pricing is still a relatively new concept in the United States, the Federal Highway Administration (FHWA) is embarking on an outreach effort to introduce the various aspects of congestion pricing to decision makers and transportation professionals. One element of FHWA's congestion pricing outreach program is this Congestion Pricing Primer series. The aim of the primer series is not to promote congestion pricing or to provide an exhaustive discussion of the various technical and institutional issues one might encounter when implementing a particular project; rather, the intent is to provide an overview of the key elements of congestion pricing, to illustrate the multidisciplinary aspects and skill sets required to analyze and implement congestion pricing, and to provide an entry point for practitioners and others interested in engaging in the congestion-pricing dialogue.
The concept of tolling and congestion pricing is based on charging for access and use of our roadway network. It places responsibility for travel choices squarely in the hands of the individual traveler, where it can best be decided and managed. The car is often the most convenient means of transportation; however, with a little encouragement, people may find it attractive to change their travel habits, whether through consolidation of trips, car-sharing, by using public transportation, or by simply traveling at less congested times. The use of proven and practical demand-management pricing that we freely use and apply to every other utility is needed for transportation.
Applying tolling and road pricing to solve local transportation and sustainability problems gives localities the opportunity to address transportation problems without Federal or State funding. It could mean that further gas tax, sales tax, or motor vehicle registration fee increases are not necessary now, or in the future. Congestion pricing is a first step, not a complete plan of action. It has to be coordinated with other policy measures and environmental measures for sustainability.
While project managers for congestion pricing strategies and systems are focused on traffic management, technology, toll rates, and design, other critical issues related to operations, policy, and rapidly changing technology tend to arise. In this primer, these challenges are collectively referred to as "back office issues" as they impact operations that are behind the scenes. There are eight such topic areas discussed in detail in this primer: policy decisions drive business rules, interoperability, back office efficiency, enforcement, data analysis and warehouse, transparency, privacy, and private sector involvement. The primer also includes case studies for each describing experiences of implementing agencies. Readers are encouraged to identify elements of the case studies that are similar to those they may be dealing with on local congestion pricing projects.
Figure 1. Photo. I-495 Express Lanes transition.
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Figure 2. Photo. An E-ZPass Express Toll Lane in Virginia.
Source: Virginia DOT
Figure 3. Photo. A gantry-mounted sign above a lane that offers E-ZPass full service to drivers.
Source: Virginia DOT
The Congestion Pricing Primer Series is written with the transportation agency project manager in mind. While most project managers are experienced with traditional transportation projects, they (and their agencies) often have little or no experience with the concept of congestion pricing, managed lanes, or even tolling. Early in the development phases of these projects, the focus is typically and appropriately on traffic management, technology, toll rates, and design. These are the visible, up-front issues that would seem to be most closely related to the purpose and need of the congestion pricing projects.
The Federal Highway Administration (FHWA) conducted a Tolling and Pricing Back Office Issues Peer Exchange in Hanover, MD, on May 6, 2014. Thirteen congestion pricing experts representing both public and private transportation agencies from around the United States gathered to discuss the range of back office operation challenges associated with a range of congestion pricing projects. Additionally, content for this primer was taken from presentations that were given at the National Congestion Pricing Conference in Seattle, WA, on July 9-11, 2013.
Collective experience from dozens of congestion pricing projects deployed in the past decade, however, revealed that other issues need to be addressed early in project development. As with institutional issues (the subject of a previous primer), the back office issues described in this primer tend to emerge well into the planning and design phases. In some cases, projects have been set back as a result of not addressing back office issues up front in early concept stages. Overcoming these issues can present challenges even among agencies with previous experience on similar projects for the simple reason that the technology involved with back office operations evolves very rapidly. Therefore, flexibility must be built in during the development of congestion pricing projects and systems.
Reevaluation of project policies and business rules is often necessary as agencies strive to adjust to these changing conditions. This can result in additional media coverage and recurring political debate on operational congestion pricing projects. Even in cases where broad stakeholder buy-in has been developed for the project and its primary objectives, this renewed scrutiny can complicate the issues and lead to delays in deployment.
TYPES OF BACK OFFICE ISSUES
Implementing congestion pricing projects requires a combination of good planning, proven technical capabilities, and reliable day-to-day operations. Equally important is the ability to work through a wide variety of back office issues that can arise at any point in the process. Congestion pricing projects are different from many other transportation projects: they represent a new way of managing travel demand; they require daily, hourly, or even constant monitoring; and they deal explicitly with money. All of these factors produce an inordinate amount of attention by decision makers, the media, and the public.
This primer will explore the range of back office issues that have arisen on congestion pricing projects throughout the United States. These issues were examined through a variety of sources: interviews with practitioners, the FHWA-sponsored National Congestion Pricing Conference (2013), and a peer exchange. Through this research, the back office issues fall into the following general topic areas:
ORGANIZATION OF THE PRIMER
This primer contains eight sections, with each being dedicated to one of the back office issues listed above. Each section provides insight into how dealing with the respective issue directly within the project development process can lead to a more successful congestion pricing project. Each section also provides a strategy-specific example illustrating how the issue has been handled in an existing congestion pricing project.
The primer concludes with a section on lessons learned that summarizes the key points identified for each back office issue in the form of an action-oriented project manager's checklist.
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TOPIC AREA 1: Policy Decisions that Drive Business Rules
Transportation agencies that are developing and implementing managed lane projects and other market-based pricing strategies will face policy decisions, small and large, that directly impact operations. In this context, the term "back office" refers to functions that relate to facility tolling and fee collection equipment and technology to complete transactions. Such functions are not typically visible to the public, hence the term "back office." This chapter describes how various policy decisions affect multiple back office functions.
Several agencies implementing congestion pricing projects have teamed with the private sector for technical expertise as well as financial participation in order to accelerate deployment of needed infrastructure. Many operating agencies have adopted a project model through which they are attempting to operate their tolling facilities "as a business." A related issue involves the primary objectives of the tolled facilities and has implications for toll-setting policy and the design and operations of back office functions. Many pricing projects have been deployed by public agency operators that are primarily focused on improving mobility, better utilization of existing infrastructure, and providing a reliable travel time for priority users of the system (such as transit, car, and tolled vehicles). Public agencies today are giving greater emphasis to revenue generation (as are private operators) to meet financial obligations and create more sustainable funding sources for projects.1 Some State departments of transportation (DOT) that are entering the priced managed lane industry have teamed with existing toll agencies for their tolling technology and back office functions. Existing business rules and technical capabilities of the toll agency may impact the back office functions of the new facility. There are often multiple agencies involved, each with dozens of business rules and varying facility-specific pricing structures and discount programs in place. Facility operators must be flexible enough to incorporate all of these variants into their back office functions.
Back office capabilities and business rules should be designed to support the policies of the operating agencies. Project managers view this as policy "framing" the development of business rules as there are practical limitations in directly linking the two. Toll rate setting tends to be a very political decision, and elected officials often set constraints (toll rate caps, limits on the frequency and rate of increase, etc.). Variable rate systems function best in managing traffic when left to actual market conditions to set rates. Some operating agencies in southern California have worked with their policy setting body to adopt a formula and process by which toll rates are to be adjusted, delegating responsibility to staff to set rates according to that formula. This "middle ground" approach allows quick response to changing traffic conditions while keeping elected officials in control of rate setting from a policy level.
Figure 4. Photo. Example of a tolled high-occupancy vehicle lane separated by lane markings from normal travel lanes.
Source: Minneapolis Start Tribune
Priority for carpools is a key policy objective for many priced managed lane operators; however, there is a wide variance among agencies in terms of the business rules and back office processes in place to operate and enforce high-occupancy vehicle (HOV) strategies. Some agencies have changed occupancy requirements from 2+ (minimum of 2 persons per vehicle for free or discounted access) to 3+ on existing highways when converting to priced managed lanes. This shift is driven primarily by the fact that the lanes could not produce enough revenue to cover capital and operating costs. Others have needed to increase occupancy to 3+ due to the fact that their existing HOV (2+) lanes were already congested in the peak periods, eliminating travel time advantages.
Where multiple agencies and facilities are involved in systems of priced facilities, operators are striving to maintain as much consistency as possible for their customers. There is a significant benefit to having a single point of contact for the customer as well as cost savings to agencies that use a Centralized Service Center (CSC). Customer accounts, violation enforcement, disputes, and other contacts are best handled with a single point of contact. Drivers often do not know who the operator is for a specific roadway facility (priced or non-priced) and can be confused when there are multiple facilities and agencies involved. This can be a very complex process, particularly where multiple tolling technologies are available to the customer. Policy decisions become more challenging as CSCs are established and begin dealing with an array of business rules, fees, toll rate setting procedures, and enforcement strategies. However, agencies that shared information for this primer pointed out that regional consistency is the goal. They acknowledge that while not everything has to change, agencies do need to establish a structure that accommodates differences.2
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TOPIC AREA 2: Interoperability
Interoperability among electronic toll collection systems on toll roads and managed lane facilities in a geographic area is important to the development of an effective regional road system. The ultimate goal of interoperability is for the customer to only have one account, with only one bill, and to be able to use any roadway—and eventually any parking and transit facilities—in the country.5
As agency business rules and electronic toll technology continue to evolve, the challenges of interoperability increase. One of the most essential aspects of interoperability is to agree upon a compatible set of business rules. Part of achieving success is learning to give up a little bit of control—perfecting the art of compromise.6 All E-ZPass States agree to one common brand and one set of business rules. This prevents the States from having to make individual agreements with each other; rather, they must simply agree to the same rules.7 Additionally, willingness to open the back office to the third- party commercial market can assist with normalizing business rules.8 Interoperability can be more easily achieved by commercial operators than by governments because there can be issues with cross-cutting between agencies to agree upon one set of business rules. In addition, while interoperability among multiple States offers the potential for increased revenue, such as from out- of-State travelers that may avoid the managed lanes if they are not interoperable with the technology used in their State, there is also a risk of potential loss.9
Figure 5. Photo. Toll plaza on Virginia's Chesapeake Expressway.
Source: Chesapeake Expressway, Rte. 168.
Conversion to a single compliant technology has proven challenging for many legacy toll opera- tors given the magnitude of the investment required. This can be a challenge within a single State as well as throughout a region or across the country. When Washington State Department of Transportation (WSDOT) implemented tolling on all lanes of SR-520, it decided to use variably priced, all-electronic tolling. Electronic tolling allows drivers to pass through the tolling area at highway speeds, and the system either reads their "Good to Go!" transponder or their license plate. In order to achieve regional interoperability, WSDOT needed to retrofit their technology so that all facilities would work similarly. This was a very large and costly undertaking.10
The complexity increases when agencies that use different technologies attempt to develop a regional network. However, these complexities can be overcome with an attitude of cooperation and strategic thinking. The Florida case study highlighted in this chapter gives a good example of how the complexities can be overcome.
Similar interoperability challenges exist with parking pricing. There is a national interest in the way payment methods affect parking pricing. This is important because parking pricing has a significant influence on travel behavior. Currently, parking pricing has slightly less of an interoperability challenge than tolling because customers can still pay with cash. However, agencies are under significant pressure to phase out the cash payment option due to the amount of labor involved with collecting cash from the meters. Some agencies are working toward a goal of having a single account and transponder to pay for both parking and tolls. E-ZPass transponders are used for parking in some areas, but it is expensive and limited due to a patent on the transponders. The E-ZPass Interagency Group (IAG) has researched various options of interoperability among tolls, parking, and transit, but a universal solution has yet to be found.11
The SFpark project began moving toward interoperable parking pricing throughout the San Francisco region by installing new parking sensors and meters allowing a credit card payment option for both on-street and off-street parking. As is the case in many States, cash payment still remains an option in San Francisco; however, in comparison to citywide trends, the installation of credit card-enabled parking meters and longer time limits appears to have resulted in significant increases in net annual revenues.12
Demand-responsive parking pricing and other active parking management strategies have the potential not only to improve utilization of curbside lanes dramatically, but also to serve as a significant congestion reduction strategy in concert with other road pricing elements. Interoperability among these various road user types will require not only interoperable technology, but also an agreement on business rules. There are many different options for how to pursue and achieve interoperability, but however it is achieved, it is important to recognize and respect the toll collection infrastructure that States already have in place.13
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TOPIC AREA 3: Back Office Efficiency
Back office efficiency should be considered from the beginning of the planning process. There is a tendency to make back office functions totally unique to each facility as opposed to standardizing them across facilities. Managed lane project implementers have indicated that more consistency is better, but starting simple can be a good approach. In other words, while it may seem desirable to implement business rules and processes that cover every possible event that could occur, keep in mind that this can make the system overly complicated.15
For many of the early operational managed lane projects, most commonly implemented as High Occupancy Vehicle (HOV) lanes, the primary objective of the implementing agency was to better manage traffic on existing facilities while maintaining travel time advantages for transit and HOV travelers. Over time, many HOV lanes have been converted to High Occupancy Toll (HOT) lanes where a toll was charged for entry into the lane, but revenue generation was predominantly of secondary concern. Thus, there was little focus on the cost of transaction processing and back office operations.
Today's projects, especially those funded through bond proceeds, need to meet very stringent net revenue marks, making all costs critical and driving the need for the most efficient back office operations. Often agencies do not specifically address the efficiency of the systems in the back office. There has been a tendency to overlook the costs associated with back office functions since net revenue is what provides the money to put back into the system. However, Washington State Department of Transportation's (WSDOT) implementation of tolling on SR-520 was very focused on accounting and how to deal with revenue. The agency found that stepping back and looking at managed lane projects holistically is a more constructive approach than looking at things on a project-by-project basis.16
Figure 6. Photo. Changeable displays on an overhead gantry indicate the cost of using SunPass tolled lanes in Florida.
Priced managed lane systems that are under development are facing the challenge of combining back office operations for multiple facilities into a single location with common systems, pricing models, and business rules. As a result, many issues need to be balanced. WSDOT tries to leverage the private sector as much as possible for budgetary and accountability reasons. The agency often has difficulty maintaining systems in house due to budget constraints, but by using the private sector, it can set aside specific funding for the contracts. Vendors are required to address any issues that arise, such as lost transactions or faulty readers, which provides the system with a guarantee that would not exist if it were maintained in house.17
In California, two different models are being used in different areas – one outsources everything while the other does everything in house. The efficiency of the back office was very important for SFpark. Deciding how and when to change rates is a massive data challenge, and the efficiency of their back office was also very important for the evaluation of such a ground-breaking project. They did not want to give too much control to one vendor and wanted the flexibility to be able to switch out parking sensor and meter vendors.18 Conversely, Los Angeles Department of Transportation took a very different approach with its Metro ExpressLanes and turned everything over to the vendor to operate. California provides a good example of a state using a hybrid of back office models that are most effective for them. In some cases, it is beneficial to set industry standards, but in others, enforcing a certain standard can make operations less efficient.19
Several agencies have leveraged the private sector for back office efficiencies through innovative communications approaches. For example, cloud computing and smart phone applications can provide great benefits to these systems.20
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TOPIC AREA 4: Enforcement
A well planned enforcement policy is important both to successful operations and to the ability of the facility operator to manage demand and pricing of the facility. "Enforcement" often has a negative connotation, but well-run parking and managed lane programs strive to turn violators into customers through public information campaigns citing the effectiveness of enforcement activities.
The credibility of an agency depends upon its ability to demonstrate to the toll-paying public that abusers of the system are being pursued and that they will pay significant penalties. In an effort to combat its public perception challenges, Florida Department of Transportation (FDOT) changed its process for egregious violators. Individuals with many toll violations are now required to appear in court and may have their licenses suspended if they do not show up. Florida is also implementing a registration hold on the violators' accounts.
In terms of physical deterrence for violators, Florida requires vehicles to have a SunPass transponder in order to access any of Florida's toll systems. Limited access points combined with physical delineators to prevent lane jumping help to keep the violation rate relatively low.22 Registered high-occupancy vehicles (HOV) with three occupants are allowed free access to the I-95 Express Lanes utilizing their SunPass. While enforcement of HOV has improved dramatically, it should be noted that HOV usage declined on the facility once HOV registration became required.
Previous to the installation of high-occupancy toll (HOT) lanes, Minnesota Department of Transportation (MnDOT) had very high violation rates, between 25 and 45 percent. In 2005, the I-394 HOT lanes were installed, providing a legal option for single-occupancy vehicles (SOV) to avoid congestion. Soon after the HOT lanes were installed, the police officers patrolling the lanes began to use mobile occupancy readers. As a result, their enforcement program has become much more effective, and the violation rates have since been reduced to between 5 and 8 percent.23
Figure 7. Photo. Video and transponder detection devices mounted on an overhead gantry.
Source: WUSA 9
Agencies that have implemented priced managed lanes have found that the more money that people are required to pay the more sensitive they are to price changes. In the areas of San Francisco where there are typically fewer citations, SFpark is achieving its required levels and meeting the goals for the pilot. The better violations are enforced, the more effectively priced parking can be managed. SFpark staff have concluded that people typically want to pay the fee to park, and now that there are more options for payment and flexibility with time limits, they are more likely to pay.24
It is important to public perception of the program to have a visible, active policy for enforcement. Paying customers are very concerned with being sure other people are paying their tolls. Successful enforcement contributes to the credibility of a facility. For example, SFpark included enforcement in its real-time data pilot and was able to show which spots are occupied but not paid for in real-time, making enforcement much easier. And, although Los Angeles Metro predicted reduced violations when converting its HOV lanes to HOT express lanes, the agency also added dedicated photo enforcement.
Enforcement is a very critical factor before and after converting to any new congestion pricing strategy, and it is essential that the back office be capable of supporting the necessary enforcement.
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TOPIC AREA 5: Data Analysis and Warehousing
Figure 8. Photo. An SFPark parking meter.
The process of setting rates on transportation facilities to help manage demand against supply requires a massive data analysis process. Tolling systems have to be strong in this area because they have to capture every transaction and assess revenues. Designs for data architecture and warehousing should be easily expandable to adjust to the ultimate data analysis requirements. The purpose, need, and requirements of data systems must be identified in the planning phase, as business rules are being developed. Charging the correct market-driven toll or parking rate is critical to optimizing the use of limited capacity. However, changing rates or rate structures can sometimes be a large effort, so actions that will streamline such efforts will assist with the back office challenge. For example, SFpark acknowledged that rates needed to be changed by time of day and day of week, but to make the process as simple as possible, the agency used blocks of time rather than making hourly changes. Also, they use the same rate structure for about two months, because there is a lot of back and forth that has to happen with the vendors each time they want to change them.
Communicating changing prices with the public is also a big challenge. This is an area where parking pricing greatly differs from managed lanes, because there is not a large sign showing drivers what the current rates are, as managed lanes typically have. SFpark publishes everything on their website, mobile applications, and many other places, and still people tend not to know what the rate is going to be until they get to the meter. Informing the customer in a timely manner involves analysis of real-time data, as well as usage trends before publishing the rates, thus requiring the back office to be extremely efficient.27
When Washington State Department of Transportation (WSDOT) installed its first high-occupancy toll (HOT) lane project, traffic information was already being pushed out from the traffic management center (TMC) in real-time. Prices were not initially pushed out in real-time because they do not really have an effect on travelers unless they are already in the lane. However, with the addition of tolling on SR-520, a number of mobile applications have been developed to send users real-time pricing information. WSDOT is working to start pushing out prices to give the application developers additional information to assist the traveling public in making travel decisions.28 San Diego Association of Governments (SANDAG) is also working to do this with their mobile application, but they are concerned that there could be issues resulting in a negative impression on the system if for some reason the mobile application has a different number than the bill does.29
Figure 9. Map. An SFPark operational area and information on rates by time period.
Data privacy (addressed in Topic Area 7), which can be regulated by State and local laws, directly impacts the data analysis process for toll and rate transactions and, in turn, the architecture required. Many States do not have specific privacy laws regarding data analysis written into their constitution. In order to develop a good set of data privacy rules for a project, it is essential to look at the data that is being collected and determine what will be done with it and for how long it is needed.30 Different agencies keep data for varying lengths of time. The challenge is to strike a balance between privacy advocates wanting data to be kept for the shortest amount of time possible and the necessity of keeping transaction and vehicle data linked long enough to deal with contested transactions and the full adjudication process. San Francisco Municipal Transit Authority (SFMTA) is currently keeping all of SFpark's data as there will be a great deal of analysis performed on this pilot project. The agency is also requiring all of its vendors to keep all of the data for 5 years past the terms of their contract.31 In San Diego, legislation says that 4 years after an account is closed, an agency must remove all personally identifiable information.
SANDAG tries to keep any records that may be needed to serve their customers, as they have had people call years later asking for a list of transactions for tax filing, but all photo supportive information is written over after 30 days.32
It is easy to underestimate the amount of data an agency will acquire throughout a large congestion pricing project. Defining the requirements up front to the greatest degree possible helps inform the structuring and data warehousing effort that will be needed. Understanding the data and filtering through it to see what does and does not make sense will be a necessary part of the process. Agencies should keep in mind that there is always some judgment involved.33
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TOPIC AREA 6: Transparency
Public support for priced managed lanes, tolling, and other market-based transportation strategies is highly dependent upon an understanding of policy and operations, with the result being public trust in the agency.
Public agencies such as State departments of transportation (DOT) are often held to a different standard regarding disclosure than private operators or even legacy tolling agencies. They must be more transparent and open in their process as the public is accustomed to State DOTs providing highways for "free." Agencies that propose to repurpose roadway lanes for more efficient use of existing infrastructure (e.g., high-occupancy vehicle (HOV) to high- occupancy toll (HOT) conversion), have the burden of demonstrating that tolls are necessary to maintain travel time advantage for priority users (transit, HOV) and to repay costs. Transparency is critical to proving the need to toll. For projects and systems where new lanes or other major facilities are provided through tolls and user fee funding, the linkage between high initial costs and revenue sources can be more apparent.
One of the key policy considerations is sources and uses of funds. Agencies are now recognizing that managed lane facilities and public parking are "consumer products" and that customers need to understand where their money is going. They have questions such as:
For example, several HOT lane conversion projects operate on infrastructure that was funded in part through Urban Mass Transit Administration (UMTA) (currently Federal Transit Administration (FTA)) funding. Transit agencies and advocates expect a return on that major investment since those were built originally as HOV/bus lanes. There is a wide variance in responding to these questions about projects and systems nationally as performance of the implemented strategy will vary by locality. While specific national "guidance" would be inappropriate on these questions, the lesson learned here is that these decisions must be revealed and consistently supported by operational strategies.
Figure 10. Photo. An express bus travelling in tolled lanes on a Florida highway.
Source: Carol Zimmerman
There has been a public misperception common to many of the operating HOT lane conversion projects (including MnPASS) that these lanes are a "cash cow" for the operating agency, even though the reality is that the lanes generate only a modest amount of revenue by most tolling standards.35 In addition, because vendor operations agreements, enforcement cost, equipment purchases, revenue allocation requirements, and revenue sharing agreements are unique to each corridor, there is a rather complex accounting and reconciliation process. The complexity of this accounting trail is formidable, further complicating agencies' efforts to be open and transparent.
Transparency is also essential for demonstrating traffic operations advantages and effective enforcement (see Topic Area 4: Enforcement) on the facility. Many agencies have identified "improving traffic flow" or "more efficient use of existing infrastructure" as a top objective for variable pricing of facilities. While the positive effects on traffic can be substantial where new lanes are added or major operational changes are made, impacts may be less apparent and more difficult to demonstrate on certain projects. In particular, several HOV to HOT lane conversion projects have experienced small but measurable improvements in traffic flow. However, they have had difficulty in clearly communicating to the public that the congestion levels have actually improved in the general purpose lanes as a result of some drivers leaving that traffic stream and opting to pay a toll for the premium HOT service. It is incumbent upon the agency to share these impacts with the public in order to show how they have performed in achieving their stated objectives. As an example, SFpark stated in the development phase of their variable parking pricing program that they would raise and lower parking meter rates, as supply and demand dictated. While the public may have been skeptical initially, the agency earned the trust of the public when they actually lowered meter rates on lower demand blocks or at certain times of day. This was made possible because SFpark transparently and clearly publicized these actions.36
Despite agencies' efforts to communicate their processes, transparency can boil down to the issue of user understanding. San Diego Association of Government's (SANDAG) experience on the I-15 Express Lanes has shown that carpoolers understand that they may use the facility, but people with tolling accounts and transponders from various facilities in the region have not fully understood that they are eligible. Minnesota Department of Transportation (MnDOT) has found that there is confusion about when MnPass holders (tolled) and free users (buses, carpools, and motorcycles) can use the facility and when they cannot. Even though the signage, website, and literature all state that the lanes are available to all, using managed lane facilities in off-peak hours is not something that many drivers seem comfortable with. WSDOT observed that many carpoolers did not realize that they were still eligible for free use following the conversion of SR 167 from HOV to HOT lanes, despite clear signage to that effect.
Figure 11. Illustration. A dynamic traveler information sign indicates the amount of time it will take to reach a destination via high-occupancy vehicle lanes versus normal travel lanes.
Source: Virginia DOT
Transparency at the policy level is very important to ensuring public understanding of how and why the agency came to certain conclusions in developing the facility. However, operationally, it is very difficult to be fully transparent without raising unnecessary questions and confusing the public. Providing too much information can lead to evaluation of fine details, such as exact amount and timing of toll rate changes. This can lead to some uncertainty in the overall process and mask broader successes in meeting project objectives.
Figure 12. Photo. A sign on a gantry shows rates for using a high-occupancy toll lane to reach different destinations.
Source: Newsline. MnDOT
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TOPIC AREA 7: Privacy
Privacy of data related to customer accounts has been an issue of concern since the early days of electronic tolling two decades ago. Today's all-electronic tolling (no option for cash payment) has heightened this concern among privacy advocates. At the same time, the acceptance of the technologies in our everyday lives (smart phones, iPads, and Global Positioning System (GPS)) that makes much of our private information publicly available seems to have moderated drivers' concerns about the government tracking their movements.
There is a delicate balance between a transparent back office process and data privacy. As outlined in the previous section, tolling operators want to be as transparent in their operations as practical in order to gain credibility and trust with the public. However, they must draw the line when it comes to information contained in customer accounts. There is significant value in sharing the detailed movements of vehicles on the roadway and tollway network for traffic analysis and research purposes. The public must be able to trust that the data that is collected to apply proper tolls and effectively enforce use of the facility is only used for that purpose. In an effort to reassure the public, agencies have applied various methods to separate transaction data from the vehicle by aggregating data and eliminating individual trips. Other agencies have retained transaction data but deleted "violation supportive" data, such as photos, once a successful transaction is complete.
Many States have existing statutes pertaining to data privacy and must develop their tolling business rules consistent with those statutes. For example, Florida Department of Transportation (FDOT) acknowledges that privacy issues are driven solely by the legislature.38 Likewise, Washington has very strict statutes designed to maintain user privacy, and vendors are required to adhere to the same data privacy standards as are imposed on banking institutions.39 In some States, there are no specific privacy laws written into the constitution. Customer privacy protections, which are provided in laws, can be explicitly written into the customer service agreement (see Minnesota case study) along with the limited permitted uses of that data. A written policy that explicitly describes what an agency can and cannot share should be available for reporters and others requesting data and information in order to allay concerns of bias or preference in information requests. It is the practice of some operating agencies to release data only when specifically required to by court order or subpoena.
Figure 13. Photo. Entrance to the SunPass Express Toll Lanes on I-95.
Source: Carol Zimmermann
Business rules vary greatly with regard to deleting data from customer accounts over time. Some States have legislation requiring the agency to retain transaction data for up to 4 years. The length of time required for the adjudication process for toll enforcement and contested tolls often drives the period of time that individual transaction data is retained. For example, in Virginia, if the agency is successful in collecting the toll, it has 30 days to keep the related transaction information. If the issue is in adjudication, however, the agency can keep the information until the dispute is settled.40
Figure 14. Photo. Video and transponder detection devices mounted on an overhead gantry on the I-495 Express Lanes in Virginia.
Source: Washington Post
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TOPIC AREA 8: Private Sector Involvement
For many years, traditional public funding sources for transportation improvements have been insufficient to keep up with growing traffic demands. Transportation agencies have increasingly found that teaming with the private sector can successfully deliver projects as much as decades earlier than projected in their long- range transportation plans. There are varying degrees of public-private partnership (P3) arrangements, but in the majority of priced managed lane projects, the private partner provides the funding up front and performs design and construction in exchange for the right to tolling revenue for a period of several decades. In many cases, the private entity is responsible for all maintenance and customer service—called an "end-to-end" operations agreement.
Some public agency toll operators have policies or procurement agreements in place that limit their options regarding conversion to interoperable technology and back office systems. The private sector often has the flexibility to employ the technology that they deem most cost effective without such constraints. Regions that are deploying priced managed lane networks with multiple toll operators involved are implementing cost-sharing agreements across all public facilities in order to equitably distribute the shared costs of back office operations.
WSDOT has teamed with the private sector as much as possible, particularly for maintenance and operations activities on the State's tolling facilities. The agency found that it is advantageous to have the private sector take on the roadway system maintenance because contracts for private firms are not subject to agency budget cuts that can affect operations. Additionally, WSDOT can hold vendors accountable for continuous service of the equipment for which they are contracted. This is not the case when in-house resources are used. The private sector has already factored in the risk of equipment failure into their proposal.42
Minnesota has also succeeded in engaging the private sector and implementing P3s. The Minnesota Department of Transportation (MnDOT) issued a request for proposals (RFP) to the private sector when they entered the design phase of the I-394 MnPass project, inviting firms to submit proposals describing how they would design and operate the facility.
The private sector provided good input, pricing the lanes as low as possible so that as many people as possible could use it at the lowest price. The agency also received a response offering to help design and manage the facility at a discount, which leveraged limited resources. As part of the eventual agreement with that offeror, they signed an additional agreement to carry on the operations. That worked well for the contractor because it gave that firm the advantage when MnDOT began planning the next facility. The back office operator collects money for the State of Minnesota, but no money goes through the contractor's account?all checks are written to the State of Minnesota. This has proven important because it shows the public that the operator does not actually control any State funds.43
Figure 15. Photo. A dynamic sign mounted on a gantry depicts the cost to travel to different destinations using the I-495 Express Lanes.
Source: Virginia DOT
Managed lane and tolling industry experts report that there is great potential for many more successful P3 projects in the future to meet the growing transportation system demands. Lessons learned from current projects, both operating and in development stages, provide valuable information on how best to capitalize on the opportunity. Some public agency tolling operators could benefit greatly by opening their tolling and back office systems to competition and moving away from proprietary processes and technologies that lock them into sole-sourcing. In addition, smart phone technology is poised to revolutionize communications and data transfer for pricing systems if the competition is allowed to harness private sector innovation.
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Implementing a congestion pricing regime involves overcoming complex challenges. These challenges are found both internally within an agency and externally in the public and among outside partner transportation agencies. Many of the congestion pricing challenges fall into a broad category of back office issues, which have been explored in this primer.
The following back office issues tend to cut across the different types of congestion pricing projects, including variably priced lanes, zone-based pricing, and parking pricing:
These issues point to a substantial shift in how traditional transportation agencies implement and operate toll-related projects. Many public agencies that are operating congestion priced and tolled facilities for the first time have recognized the need to transition from their current role of delivering transportation facilities to a new role that emphasizes a full customer-driven approach. The move toward a customer service-oriented perspective requires a new organizational approach and a new type of leadership. As various types of congestion pricing projects continue to be deployed, organizations can build on the back office ideas summarized in this primer to make their programs more successful.
These back office issues are often overlooked early in the project development process for congestion pricing projects. Project goals and objectives and transportation agency policies may be assumed by the project manager but not necessarily explicitly articulated and formalized. The collective experience of the Back Office Peer Exchange panelists and other congestion pricing professionals that contributed to this primer indicates that project managers will be dealing with these issues during the course of project development. In most cases, these experts wished that they had addressed these issues earlier and in coordination with other key development issues, avoiding some delays due to changes in project direction and costly technology retrofits.
A checklist that can assist the new congestion pricing project manager early in the project development process appears in Appendix A.
References and Resources
The Federal Highway Administration (FHWA) conducted a Tolling and Pricing Back Office Issues Peer Exchange in Hanover, MD, on May 6, 2014, to discuss the range of institutional issues associated with a range of congestion pricing projects. Additionally, content for this primer was taken from presentations that were given at the National Congestion Pricing Conference in Seattle, WA, on July 9-11, 2013. The following professionals participated in one or both of these two events.
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Here is a simple checklist that can assist the new congestion pricing project manager early in the project development process:
For more information on these checklist items, refer back to the eight topical chapters of this primer. Also, the case studies in each chapter provide details of what your peers actually did on their projects, in response to some of these checklist items.
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1 Samuel Johnson, San Diego Association of Governments (SANDAG). FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 1. ]
2 Ibid. [ Return to note 2. ]
3 Patty Rubstello, WSDOT. National Congestion Pricing Conference. Seattle, WA, July 9-11, 2013. And FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 3. ]
4 Patty Rubstello, WSDOT. [ Return to note 4. ]
5 Samuel Johnson, San Diego Association of Governments. Federal Highway Administration (FHWA) Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 5. ]
6 Diane Gutierrez-Scaccetti, Florida Department of Transportation (FDOT). FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 6. ]
7 Tom Gugel, Maryland Transportation Authority. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 7. ]
8 Jack Opiola, D'Artagnan Consulting. National Congestion Pricing Conference. Seattle, WA, July 9-11, 2013. [ Return to note 8. ]
9 Diane Gutierrez-Scaccetti, FDOT. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 9. ]
10 Patty Rubstello, WSDOT. National Congestion Pricing Conference. Seattle, WA, July 9-11, 2013. [ Return to note 10. ]
11 Tom Gugel, MDTA. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 11. ]
12 SFpark and San Francisco Municipal Transportation Agency, SFpark Pilot Project Evaluation Summary, June 2014. Available at: http://sfpark.org/wp-content/uploads/2014/06/SFpark_Eval_Summary_2014.pdf [ Return to note 12. ]
13 Diane Gutierrez-Scaccetti, FDOT. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 13. ]
14 Diane Gutierrez-Scaccetti, FDOT. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 14. ]
15 Patty Rubstello, WSDOT. National Congestion Pricing Conference. Seattle, WA, July 9-11, 2013. [ Return to note 15. ]
16 Ibid. [ Return to note 16. ]
17 Patty Rubstello, WSDOT. Federal Highway Administration (FHWA) Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 17. ]
18 Jay Primus, SFpark. National Congestion Pricing Conference. Seattle, WA, July 9-11, 2013. [ Return to note 18. ]
19 Samuel Johnson, San Diego Association of Governments. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 19. ]
20 Jack Opiola, D'Artagnan Consulting. National Congestion Pricing Conference. Seattle, WA, July 9-11, 2013. [ Return to note 20. ]
21 Diane Gutierrez-Scaccetti, Florida Department of Transportation (FDOT). FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 21. ]
22 Diane Gutierrez-Scaccetti, FDOT. Federal Highway Administration (FHWA) Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 22. ]
23 Ken Buckeye, MnDOT. Federal Highway Administration (FHWA) Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 23. ]
24 Alex Demisch, SFpark. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 24. ]
25 Samuel Johnson, San Diego Association of Governments. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 25. ]
26 Technology research and testing are currently being conducted. [ Return to note 26. ]
27 Alex Demisch, SFpark. Federal Highway Administration (FHWA) Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 27. ]
28 Patty Rubstello, WSDOT. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 28. ]
29 Samuel Johnson, SANDAG. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 29. ]
30 Jack Opiola, D'Artagnan Consulting. National Congestion Pricing Conference. Seattle, WA, July 9-11, 2013. [ Return to note 30. ]
31 Alex Demisch, SFpark. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 31. ]
32 Samuel Johnson, SANDAG. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 32. ]
33 Alex Demisch, SFpark. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 33. ]
34 Alex Demisch, SFpark. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. And Jay Primus, SFpark. National Congestion Pricing Conference. Seattle, WA, July 9-11, 2013. [ Return to note 34. ]
35 Ken Buckeye, FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 35. ]
36 Alex Demisch, SFpark. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 36. ]
37 Ken Buckeye, MnDOT. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 37. ]
38 Diane Gutierrez-Scaccetti, FDOT. Federal Highway Administration (FHWA) Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 38. ]
39 Patty Rubstello, WSDOT. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 39. ]
40 David Caudill, Virginia Department of Transportation (VDOT). FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 40. ]
41 Ken Buckeye, MnDOT. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 41. ]
42 Patty Rubstello, WSDOT. Federal Highway Administration (FHWA) Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 42. ]
43 Ken Buckeye, MnDOT. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 43. ]
44 Lev Pinelis, Transurban. FHWA Tolling and Pricing Back Office Issues Peer Exchange. Hanover, MD, May 6, 2014. [ Return to note 44. ]
United States Department of Transportation - Federal Highway Administration