AMERICAN PUBLIC TRANSPORTATION ASSOCIATION (APTA)
Executive Summary
National Overview
Failure to invest in public transportation infrastructure modernization, also referred to as State of Good Repair (SGR), over the next six years results in a loss of $340 billion in cumulative business sales from 2017-2023. This translates to a loss of $180 billion in cumulative gross national product (GNP) and a loss of $109 billion in household income. Job loss due to this lack of investment in the upkeep and maintenance of America’s aging infrastructure results in the nation losing 162,000 jobs. These losses are a product of decreases in efficiency and productivity from public transit delays and disruptions. The economy benefits when operators can devote resources toward expanding and modernizing service in response to emerging growth instead of investing resources into merely managing and maintaining facilities and equipment that are past their useful service life.
According to case studies, transit systems not in a state of good repair are particularly vulnerable when unanticipated events occur. This can cost a local or regional economy millions of dollars in repairs and lost revenue. Along with the net gains or losses at stake to the U.S. economy, the condition of public transit infrastructure has regional and local implications. As cities throughout America compete to retain key occupations and businesses, the condition and quality of public transit infrastructure play a growing role in what makes a thriving regional economy. The total SGR backlog was estimated to be at $89.9 billion in 2015, and is continuing to grow. Six case studies provide detailed examples of how different agencies are dealing with SGR issues:
San Francisco Municipal Transportation Agency (SFMTA), San Francisco, CA
In San Francisco, both the municipal transit agency (SFMTA) and the regional Bay Area Rapid Transit (BART) are operating with ridership significantly exceeding capacity. Both agencies have struggled to apply available resources to fill gaps in SGR and prevent increases in user costs as infrastructure ages. Business leaders are counting on a public transit system that can adapt to follow emerging market trends, develop workplaces, and be a reliable mobility option for residents. SFMTA estimates a $2.41 billion backlog in SGR investment needs.
Southeastern Pennsylvania Transportation Authority (SEPTA), Philadelphia, PA
In the Philadelphia region, the Southeastern Pennsylvania Transportation Authority (SEPTA) has developed a proficiency for identifying the condition of its assets and has allocated resources on an ongoing basis to optimize the user experience by minimizing delays and system failures. As SEPTA’s tracking of SGR needs, backlog and connections to the user experience becomes more comprehensive, the agency can articulate the case for increased SGR investment. SEPTA can also demonstrate how limitations in the SGR relate to the agency’s ability to respond to growing market and business demands. SEPTA estimated a $5 billion backlog in SGR investment needs in 2014.
Massachusetts Bay Transportation Authority (MBTA), Boston, MA
Boston’s Massachusetts Bay Transportation Authority (MBTA) and its experience of catastrophic system failures in the wake of extreme snow events in 2015 is among the nation’s most instructive examples of the risk associated with allowing SGR to decline. It is also demonstrative of the paradigm shift that can occur when the business and policymaking communities become aware of what is at stake in preserving public transit assets. The 2015 experience was a turning point in MBTA’s SGR investment model—from a business process focused on “putting out fires”—to a process focused on resilience, competitiveness, and strategic intelligence. The paradigm shift came at a significant cost to the Boston region’s businesses and residents in the form of lost wages, productivity and efficiency. Furthermore, it is still unclear whether and how MBTA will arrive at the revenue needed to achieve its 15- year objective of resolving its SGR backlog, much less the more aggressive 10-year objective advocated by the business community. Perhaps the most significant question raised by the Boston experience is whether other legacy systems—or the entire U.S.—will be able to benefit from Boston’s 2015 experience to make strategic SGR investments over time within the context of the Moving Ahead for Progress in the 21st Century Act (MAP-21) and Fixing America’s Surface Transportation (FAST) Act asset management regime. MBTA estimates a $7.3 billion backlog in SGR investment needs, without including components of the commuter rail system.
Metropolitan Atlanta Rapid Transit Authority (MARTA), Atlanta, GA
The Metropolitan Atlanta Rapid Transit Authority (MARTA) has one of the most highly developed asset management systems in America, and is increasingly leveraging its understanding of its SGR needs to support a shift in how the business community views public transit. MARTA’s proactive approach to its SGR enables the agency to clearly show how investments made in the system will enhance the region’s ability to offer more and better service over time at less cost. MARTA estimates a $2.2 billion backlog in SGR investment needs.
Washington Metropolitan Area Transit Authority (WMATA), Washington, DC
The Washington Metropolitan Area Transit Authority (WMATA) is one of the largest public transit systems in the United States. It invests heavily to ensure SGR is adequate to safely provide its services. A long history of underinvestment, however, leaves WMATA with a backlog of approximately $6.6 billion with approximately 16.7 percent of the agency’s assets (by value) considered to be in the SGR backlog. WMATA estimates an annual investment of $1.8 billion is needed over the next 10 years to achieve a good state of repair. A dedicated funding source to achieve this level is currently being worked out by the three respective jurisdictions (District of Columbia, Maryland and Virginia). The importance of WMATA’s stations (and their condition) in economic development is highlighted by the fact that 54 percent of jobs in the region are within one-half mile of a Metrorail station and land value near Metrorail generates $3.1 billion 1 https://www.wmata.com/initiatives/case-for-transit/upload/WMATA-Making-the-Case-for-Transit-Final-Tech-Report.pdf per year in property tax revenues to WMATA’s funding partners.
Chicago Transit Authority (CTA), Chicago, IL
The Chicago Transit Authority (CTA) has assets of more than 1,400 rail cars operating more than 288 miles of track and 1,800 buses serving more than 1,300 miles of routes. CTA has a SGR backlog of approximately $12.5 billion, meaning that reinvestment comprises the vast majority of CTA’s outlays. For CTA, the concept of “State of Good Repair” goes beyond simply preserving existing assets, as CTA recognizes that replacing an old asset involves an appropriate level of modernization to current-year equipment standards, whether for buses, railcars, rails or stations. For this reason, there is a degree of modernization built into CTA’s SGR projects. CTA has some of the nation’s best documented instances of real-estate values strengthened by modernization and enhancement of station areas, with improved locations such as the Morgan and Cermak-McCormick Place stations alone generating more than $2.5 billion in private land investment from 2015-2017.
Background and Introduction
For over a century, many of America’s largest and most established public transit systems have operated with facilities and infrastructure that are decades old. As year-over-year investments in the replacement, rehabilitation and modernization of vehicles, tracks, equipment, stations and other assets fell short of identified needs, the primary mission of many public transit agencies became operating services in just adequate, or often marginal to poor condition. Success came to be understood in terms of preventing failure, ensuring reliability and finding ways to keep service running without interruptions affecting users. While public transit agencies learned to be extremely successful at operating under these conditions, it became increasingly difficult to benchmark the degree to which antiquated equipment or unmet needs to keep the SGR of capital assets was affecting efficiency, agility or expansion capacity for America’s public transit systems. The issue of public transportation modernization is also referred to technically as State of Good Repair (SGR). The concept of “good,” “excellent” or “exceptional” transit facilities and equipment became largely out of reach, with the costs or implications of being less than “good” or “excellent” unknown and often not even considered.
As the 21st-century knowledge economy has evolved with greater focus on quality of life, sustainable transportation and the millennial workforce, the quality of public transit has become a vital aspect of local and regional economic competitiveness. Unlike in the past century, public transit is increasingly seen less as a staple to simply ensure mobility for segments of the workforce, but rather as a neighborhood and urban amenity necessary for places to compete for workers, conventions and other economic activities. The federal transportation laws, MAP-21 and the FAST Act, have provided a structure for public transit agencies to track and report the current state of their transit assets. However, the growing success of agencies with asset management seems to only highlight the degree to which the needed investment to arrive at even fully adequate, much less competitive infrastructure, is beyond available streams of funding.
This study builds on both growing bodies of literature on state of good repair (SGR) and disinvestment generally and specifically related to public transit. Public transit studies can be divided into those that assess the current condition of assets nationally or for specific systems; those that provide evaluation and guidance on how to pursue SGR; and those that examine the consequences of failing to maintain SGR.
Outside the realm of transit assets, the National Cooperative Highway Research Program (NCHRP) in 2015 issued Synthesis Report 480 – Economic and Development Implications of Transportation Disinvestment, which identifies the main state of practice regarding disinvestment decision-making processes for highway and bridge infrastructure. For brevity, this report does not include an extensive reexamination of the literature related to those asset classes. The report also examines asset management and disinvestment literature from the perspective of private business, especially manufacturing firms, and others making longterm investments. Best practices may also be available from other public sector authorities such as the military (Grussing et al. 2006). Synthesis Report 480 discusses progress made by state departments of transportation (DOTs) in learning from one another and related organizations, and suggests the need for a similar review of state of practice among public transit agencies across the U.S.
1.1 What Assets Are Below an SGR?
The Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) have jointly published the Status of the Nation’s Bridges, Highways, and Transit: Conditions and Performance Report to Congress in 1999, 2002, 2004, 2006, 2009, 2010, 2013, and 2015. This national report series provides a high-level overview of conditions-based FTA surveys and inspections of asset conditions; a brief review of public transit performance; and estimates of investment needs nationwide based on FTA’s Transit Economic Requirements Model (TERM). Although inventories of public transit assets are collected for the National Transit Database (NTD), only bus vehicles must be reported with age information and no asset categories require condition reporting as of the beginning of 2017.
The 2015 Conditions and Performance Report finds that for rail, a poor condition is found in more than 35 percent of the nation’s fixed guideway elements (dedicated right of way), nearly 40 percent of stations, over 24 percent of maintenance facilities, 17 percent of communication systems and 2.1 percent of vehicles. For bus, a poor condition is found in approximately 6 percent of fixed guideway elements, 12 percent of stations, 7 percent of facilities, 17 percent of communication systems and 10 percent of vehicles.
In 2008, FTA began to increase the federal focus on SGR and the depth of analysis beyond the Conditions and Performance Reports. This effort began with the 2008 SGR Summit, which covered a wide variety of SGR-related topics with 14 agencies and DOTs (AECOM and FTA 2008, FTA 2008). This meeting helped set the FTA’s research agenda for the coming years. In most of the following years, FTA has hosted an SGR Roundtable, recently renamed the Transit Asset Management (TAM) Roundtable.
Following the summit, FTA issued two condition reports. The first was the Rail Modernization Study (2009), which covered the nation’s seven largest rail public transit operators in depth (the Chicago Transit Authority (CTA), Boston’s Massachusetts Bay Transportation Authority (MBTA), New York’s Metropolitan Transportation Authority (MTA), New Jersey Transit (NJT), Bay Area Rapid Transit (BART), Southeastern Pennsylvania Transportation Authority (SEPTA) and Washington Metropolitan Area Transit Authority (WMATA)). FTA found that more than $50 billion in SGR backlog existed at these agencies alone. The National SGR Assessment found a national SGR backlog (for all systems, inclusive of the $50 billion for the seven largest operators) of $77.7 billion with $14.4 billion annually necessary to prevent the backlog from growing any higher. As investments have fallen short of this level, by the time of publication of the 2015 Conditions and Performance Report, total backlog estimates had already grown to $89.9 billion (FHWA and FTA 2015) and were continuing to grow.
The Rail Modernization Study (FTA 2009) found that although the largest seven rail systems maintained asset inventories, three had condition monitoring systems in place, two used rigorous prioritization methods, and only one conducted what-if analysis using decision support tools. MTA was one agency that had integrated inventory and condition assessment information with its 5- and 20-year capital planning processes (Boylan 2009). At the time of the National SGR Study (FTA 2010a), of 16 additional agencies surveyed, none had inventory, condition monitoring, decision support, or prioritization systems in place. TCRP Synthesis 92: Transit Asset Condition Reporting also found that public transit asset management systems used by the 50 largest agencies were relatively “elementary and limited,” although already more widespread than when FTA was surveying agencies for the National SGR Study (McCollom and Berrang 2011).
There is evidence of progress at many agencies toward more robust SGR assessment systems. By the next year’s SGR Roundtable, additional agencies were sharing their progress on asset inventories and condition assessment, incorporating SGR into decision-making processes. In addition to the seven largest rail agencies, since 2009 best practices and progress on agency initiatives have been presented by Chapel Hill Transit, Dallas Area Rapid Transit, Southern California’s Foothill Transit, Houston’s Metropolitan Transit Authority of Harris County, Seattle’s King County Metro Transit, Long Beach Transit, Long Island Rail Road, Metropolitan Atlanta Rapid Transit Authority (MARTA), Niagara Frontier Transportation Authority, Denver’s RTD, San Francisco Municipal Transportation Agency, St. Louis Metro, Utah Transit Authority, and Virginia’s Department of Rail and Public Transportation.
These agencies’ presentations show that the capacity to track asset conditions and needs has expanded significantly, at least among leading agencies. The tools and procedures developed by these agencies will continue to be disseminated to other agencies. However, as identified by McCollom and Berrang (2011), even when agencies have frequently updated information, asset management systems often lack the information necessary to prioritize between investments and provide funding justifications to policymakers and the public.
Download full version (PDF): The Economic Cost of Failing to Modernize Public Transportation
About the American Public Transportation Association (APTA)
www.apta.com
APTA’s mission is to strengthen and improve public transportation. APTA serves and leads its diverse membership through advocacy, innovation and information sharing. APTA and its members and staff work to ensure that public transportation is available and accessible for all Americans in communities across the country.
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