FDOT’s Transportation Value to You (TransValU) Supports Benefit-Cost Analysis

Publication Year: 2017

Background

Transportation agencies are often faced with difficult decisions and need to answer questions like “which transportation project will provide the greatest return on investment?” To answer such questions, there is a need to quantify and compare the relative benefits and costs of project alternatives.

Solution

The Florida Department of Transportation (FDOT) District Five created a tool to perform economic analysis and address such questions. Transportation Value to You (TransValU) is a spreadsheet-based tool designed for corridor-level economic and financial analyses of proposed transportation investments. FDOT District Five uses the tool to assess projects focused on passenger movements, including highway, transit, bicycle/pedestrian, and combinations of these modes. The District also uses the tool to assess projects related to the movement of goods, including highway freight, rail freight, and intermodal logistics centers.

Three types of analyses are available within the tool: Benefit-Cost Analysis (BCA), Economic Impact Analysis (EIA), and Financial Analysis. For the BCA and EIA, the tool includes separate modules for the analysis of projects focused on passenger movements and projects focused on goods movements. There is only one module for financial analysis, which is the same for all project modes.

Benefit-Analysis Module

The purpose of BCA is to monetize as many of the costs and benefits of a project, program, or policy as possible. This involves quantifying the benefits and costs of an alternative relative to a base condition to determine whether the net benefits of a project outweigh the costs. TransValU provides a framework to quantify all capital, operating, and maintenance costs, as well as a wide range of benefits. TransValU provides results to help identify the alternative or mix of alternatives that maximizes net benefits or social welfare per dollar invested. The tool provides a side-by-side comparison of multiple alternatives through performance measures such as net present value, benefit-cost ratio, overall rate of return, and discounted payback period.

Figure 1 shows an example of the output from a BCA generated with TransValU. The project benefits include the travel time savings, out-of-pocket cost savings (e.g., fuel use, parking, etc.), emissions cost savings, safety benefits, pavement maintenance cost savings, economic development near transit stations, health benefits, improvements to trip quality, and aesthetic improvements. Notice the difference in project benefits among the various factors. For example, the safety benefits represent approximately 20 percent of the total project benefits. These benefits are plotted in the lower right of the figure to show the relative contribution of each factor. The project costs include the capital costs and continuing operations and maintenance (O&M) costs. Both the benefits and costs are converted to present value using the selected discount rate. The summary provides the net present value, benefit-cost ratio, overall rate of return, and discounted payback period. In this case, the discounted payback period is 21 years, and the figure notes the first year the project is projected to breakeven is 2036.

Figure 1. Sample BCA output from TransValU.

Economic Impact Analysis Module
The purpose of the EIA module is to assess the effects of a project, program, or policy on the economy of a state or region, focusing on changes in economic activity. Economic impacts are expressed as changes in business sales (output), gross regional product (GRP) or “value added,” employment, and earnings. TransValU estimates the short-term economic impacts resulting from spending on transportation projects. Long-term economic impacts are also estimated for freight projects. These are lasting impacts resulting from improvements to a transportation facility.

Financial Analysis Module
The financial analysis module focuses on the flows of money to and from a project or organization, typically a firm or government agency. It helps identify the project or alternative that maximizes net inflows (e.g., total revenue minus total expenses). A financial analysis from the perspective of a government agency looks at the impacts of a project on government expenditures and receipt.

Benefits

TransValU helps to assess the impacts of capital projects based on changes in any of the following variables:

• Changes in the number of crashes by severity resulting from projects that reduce the likelihood of crashes at a specific location and/or projects that entice travelers to use relatively safer modes.
• Changes in vehicle miles traveled (VMT) and/or vehicle hours traveled (VHT) from highway investments and/or spending in other modes affecting highway travel through modal shifts.
• Changes in the number of transit riders and/or the average transportation costs borne by transit riders, including in-vehicle travel time, waiting time, and fares.
• Changes in the number of bicycle users or pedestrians and/or changes in their average door-to door travel times.
• Changes in the percent breakdown of the transit vehicle fleet (e.g., diesel, hybrid, compressed natural gas, or electric buses and trains).
• Changes in the extent of roadside aesthetic improvements, expressed as additional acres of vegetated right-of-way.
• Changes in freight rail movements or volumes of goods handled at an integrated logistics center.

While the tool was developed by FDOT District Five, it provides the ability to perform district-level analysis for other FDOT districts. It also provides the ability to perform county level analysis, but only within District Five.

The BCA modules are consistent with the USDOT guidance for TIGER and FASTLANE grant applications. This includes methods for the valuation of impacts related to safety, travel time, and emissions. It also supports the estimation of benefits from investments in pedestrian and bicycle facilities. Using the results, agencies can make more consistent and informed decisions when developing policy or comparing and selecting project or program alternatives.

Sources

Refer to the following link for further information on the tool.
http://cfgis.org/FDOT-Resources/TransValU.aspx

Contact

Central Florida Geographic Information Systems
455 N. Garland Ave. 
Suite 414
Orlando, FL 32801
Tara McCue, Director of Planning
tara@ecfrpc.org
407-245-0300

Caltrans CAL-B/C Tool Supports Benefit-Cost Analysis for Highway and Transit Projects

Publication Year: 2017

Background

The California Department of Transportation (Caltrans) must continuously justify the economic effectiveness of their programs and expenditures. In selecting among alternative projects and programs, there is a need to quantify and compare factors such as safety performance, pavement preservation, operational performance, and environmental impacts. Benefit-cost analysis (BCA) supports these decisions by quantifying life-cycle costs and benefits, which helps to understand the potential return on investment from alternative projects and programs. While Caltrans routinely quantifies and compares project costs and benefits, there was a need to automate the calculations to improve the efficiency and consistency of analysis.

Solution

Caltrans developed the Cal-B/C tool for BCA of highway and transit projects. It is an Excel spreadsheet application structured to analyze transportation improvement projects in a corridor where there already exists a highway facility or a transit service (the base condition). The tool calculates benefits for existing and (optionally) for induced traffic, as well as for any traffic diverted from a parallel highway or transit service. It estimates benefits separately for peak and off-peak periods as well as for high occupancy vehicle (HOV) and non-HOV passenger vehicles and trucks.

Analysts can use the tool to evaluate highway projects such as general improvements, HOV and passing lanes, interchange improvements, and a bypass highway. Transit projects may include new or improved bus services, with or without an exclusive bus lane, light-rail, and passenger heavy-rail projects. Analysts can evaluate a proposed highway or transit project independently or in the presence of the competing mode, in which case the tool estimates the benefits to diverted traffic.

For costs, the analyst can enter the total life cycle investment and annual operating and rehabilitation costs. The tool considers the following categories of benefits:

• Travel time.
• Safety (both highway and transit).
• Vehicle operating costs (for highway users).
• Emissions (CO, NOx, PM10, VOC) (optional output).

The tool provides the following economic performance measures:

• Net present worth.
• Benefit-cost ratio.
• Internal rate of return.
• Payback period.

Example Application

Description and Purpose of Project

The Commercial Vehicle Information Systems and Networks (CVISN) Program seeks to expand electronic credentialing and screening of commercial vehicles to improve safety and efficiency. CVISN is intended to enhance the safety and efficiency of commercial vehicles nationwide. Benefits include lower costs for vehicle credentialing and operations and more effective safety inspections. Trucks with good safety records save time by bypassing inspection stations at highway speeds. The public benefits from the program through decreased energy consumption and noise pollution. In addition, a more effective inspection system will result in safer commercial vehicles on the road and thus fewer heavy truck accidents.

Alternatives Considered

For this study, a benefit-cost analysis was conducted separately for two CVISN components, roadside enforcement and electronic credentialing.

For roadside enforcement, the analysis included three alternatives. The first was an upgrade of inspection station computer systems, but without electronic screening. The second was an upgrade from the first scenario to electronic screening and additional station improvements. The third, treated as a sensitivity analysis, entailed the same as the second, with the added assumption that the motor carrier safety regulation violation rate will decrease by 25 percent.

For electronic credentialing, the analysis included two alternatives. The first was electronic credentialing for states not using the Vehicle Information System for Tax Apportionment (VISTA). The second was electronic credentialing for those states currently using VISTA.

Results

Table 1 shows the results of the BCA for the three roadside enforcement scenarios. The benefits include crashes avoided and transit-time savings. The costs include the startup costs, replacement costs, operating costs to states and carriers, and out-of-service costs to carriers. The total value of the benefits and costs are in 1999 U.S. dollars discounted at 7 percent. From these results, it is apparent that the upgrade to electronic screening (scenario 2) provides a net benefit with a net present value of $2,665,400,000 and a benefit-cost ratio of 2.0, indicating a return of $2 for every $1 spent. If this results in a reduction in the rate of motor carrier safety regulation violations (scenario 3), then this project would return even greater benefits. Notice how the value of crashes avoided compares to the value of travel time savings for the three scenarios.

Table 1. Benefit-Cost Analysis for Roadside Enforcement Scenarios.

Table 2 shows the results of the BCA for the two electronic credentialing scenarios. The benefits include operating cost savings to state and carriers as well as inventory cost savings to carriers. The costs include the startup costs and replacement costs to states. The total value of the benefits and costs are in 1999 U.S. dollars discounted at 7 percent. From these results, it is apparent that the upgrade to electronic credentialing provides a net benefit whether implemented in states with or without VISTA. The greatest net benefit is to those states not using VISTA with a net present value of $513,220,000. The return on investment is greatest for those using VISTA with a benefit-cost ratio of 40.4.

Table 2. Benefit-Cost Analysis for Electronic Credentialing Scenarios.

Source

Brand, D., T. E. Parody, J. E. Orban, and V. J. Brown. "Benefit-Cost Analysis of the Commercial Vehicle Information Systems and Networks Program." Transportation Research Record: Journal of the Transportation Research Board, No. 1800, TRB, National Research Council, Washington, D.C., 2002. pp. 35-43.

Contact

CalTrans Office of State Planning, Transportation Economics Branch
Rose Agacer (rose.agacer@dot.ca.gov), Economist for the Transportation Economics Branch

Oregon DOT Implements Two New Tools that Evaluate Asset Condition and Efficiently Manage Maintenance Efforts

Background

With almost 20,000 lane miles on the Oregon highway system, the Oregon Department of Transportation (ODOT) is responsible for managing and maintaining its roadway assets. Managed assets include barriers, traffic signals, lighting, pavement markings, and signs. ODOT has developed an inventory of its assets and evaluates asset condition in order to efficiently manage maintenance efforts. Over several years, ODOT implemented two new programs to manage their roadway assets, TransInfo and the Features, Attributes, and Conditions-Statewide Transportation Improvement Program (FACS-STIP) Tool. TransInfo is a statewide asset management system. It provides ODOT asset management staff with the most up-to-date statistics on assets and other features on the State highway system. The FACS-STIP Tool is a web-based program that provides information on an asset’s location, attributes, and condition to all users with internet access.

Read the Case Study Asset Management in Oregon for more detailed information.

SEMCOG’s Innovative Traffic Data Quality Assurance/Quality Control and Automated AADT Estimation Reduce Labor Costs Associated with Converting and Entering Data

Background

This case study highlights two noteworthy practices at the Southeast Michigan Council of Governments (SEMCOG) regarding short-duration traffic count validation procedures and an automated annual average daily traffic (AADT) estimation process. SEMCOG maintains a centralized traffic count database and receives traffic counts from the local agencies in southeast Michigan. SEMCOG conducts 46 validity checks on all traffic count data to identify invalid data available in the database but not adequate for analysis. After implementing the system, SEMCOG reduced labor costs associated with converting and entering data and was able to spend more time analyzing data. SEMCOG developed an algorithm that works inside its geographic information system (GIS) to improve AADT estimates by searching for uncounted segments with nearby counted segments. When a counted segment is identified, the algorithm calculates the weighted average of two nearby segments and assigns that AADT to the uncounted segment. This process was automated using Python scripts, which results in an increase in the number of AADT estimates without requiring additional field data collection.

Read the Case Study Southeast Michigan Council of Governments: Innovative Traffic Data Quality Assurance/Quality Control Procedures and Automating AADT Estimation for more detailed information.

New York State Department of Transportation Work with Local Agencies to Reduce Duplicate Data Collection and Improve Data Analysis

Background

This case study highlights two noteworthy practices at the New York State Department of Transportation (NYSDOT) regarding traffic data collection agreements with local agencies and random sampling procedures to select short-duration traffic count locations. Through agreements with local agencies, NYSDOT provides traffic counting equipment and training in exchange for short-duration traffic counts. The agreement stipulates the minimum number of counts local agencies must conduct each year, a number equal to the breakeven point between the cost of the counters and cost of conducting short-duration traffic counts. The benefits of these agreements include reducing duplicate traffic data collection efforts and costs for NYSDOT while providing additional data and analysis to partnering local agencies. NYSDOT conducted a one-time project to collect short-duration counts on a random sample of local roads not typically counted as part of the traffic data collection program. This project supplements existing count data so that at least 10 percent of the local road mileage in each municipality has short-duration counts to support local road annual average daily traffic (AADT) data collection. Random sampling provides an unbiased method to select segments for short-duration traffic counts to increase the amount of measured AADT on local roads.

Read the Case Study New York State Department of Transportation: Engagement of Local Agencies in Traffic Volume Collection and Random Sampling Procedures for more detailed information.

Virginia Department of Transportation Uses Innovative Procedures in Traffic Volume Estimation

Background

This case study presents how the Virginia Department of Transportation (VDOT) estimates traffic volumes on secondary local roadways using a trip generation method instead of taking short-duration counts in the field. The use of trip generation estimates was an outcome of a review process that aimed to reduce data collection costs and achieve manpower savings by establishing a local secondary count program. As part of this program, VDOT provided guidelines to its staff on how to identify eligible traffic links and generate traffic volume estimates using the trip generation method. According to this program, region and district staff are responsible for reviewing candidate segments using aerial photos, determining potential development and roadway connectivity, evaluating roadway eligibility criteria, documenting the trip generation process used, developing estimates, and submitting the estimates to the Central Office-Traffic Engineering Division. After implementing the method, VDOT realized several benefits, most of which are associated with time and cost savings. Because of the positive experience and feedback received with this effort, VDOT will continue to promote and improve the use of the trip generation method.

Read the Case Study Virginia Department of Transportation: Innovative Procedures in Traffic Volume Estimation for more detailed information.

Delaware Valley Regional Planning Commission’s Innovative Traffic Data Sharing Practices

This case study highlights how the Delaware Valley Regional Planning Commission (DVRPC) promotes traffic data sharing with other agencies and makes traffic and geographic information system data available to the public. DVRPC has developed an interactive mapping application, called Traffic Count Viewer that provides open access to different types of short-duration traffic counts that DVRPC and other external entities take. Traffic Count Viewer communicates with a regional database that DVRPC maintains, allowing users to view, filter, and download traffic data. Further, users can directly connect to DVRPC’s ArcGIS server map service and extract data for traffic and safety analysis. After implementing this tool, DVRPC minimized duplicate data collection efforts, increased the efficiency of its data collection program, and improved its relationships with external entities by offering no-cost access to a comprehensive data source. The Viewer also resulted in time and cost savings for DVRPC’s data partners and provided quick and easy access to data that otherwise would be difficult to obtain. DVRPC will continue to improve Traffic Count Viewer, considering its increased popularity with and positive feedback from users.

Read the Case Study Delaware Valley Regional Planning Commission’s Innovative Traffic Data Sharing Practices for more detailed information.

Illinois Develops Safety Performance Functions for Network Screening

Summary from: Roadway Safety Data Program | Development of Safety Performance Functions for Network Screening in Illinois

Background

In 2006, the Illinois Center for Transportation, Illinois Department of Transportation (IDOT), and the University of Illinois at Urbana-Champaign performed a research project to develop state-specific SPFs to use in the State’s network screening process. Prior to 2006, IDOT used the High Accident Location Identification System (HALIS) to identify High Accident Locations (HAL) and wet pavement cluster/segments that were based on crash frequency, rate, and equivalent property only. This project addressed the following specific challenges:

• linking crash and roadway data, given each had a different linear referencing system;
• establishing the criteria to assign each roadway segment to a peer group;
• using “reference points” to establish intersection locations;
• currency of crash and traffic data;
• processing a large volume of crash and roadway data; and
• helping users understand the meaning of the results.

Read the Case Study Development of Safety Performance Functions for Network Screening in Illinois for more detailed information.

Utah Collects and Uses Roadway Asset Data

Summary from: Roadway Safety Data Program | Collection and Use of Roadway Asset Data In Utah | FHWA-SA-14-078

Background

Quality data are the foundation for making important decisions regarding the design, operation, and safety of roadways. While crash data have been a consistent element of highway safety analysis, in recent years there has been an increased focus on the combination of crash, roadway, and traffic data to make more precise and prioritized safety decisions. The application of advanced highway safety analysis processes and tools requires a comprehensive inventory of roadway safety data combined with crash data to better identify and understand problems, prioritize locations for treatment, apply appropriate countermeasures, and evaluate the effectiveness of the those countermeasures. Comprehensive roadway safety data include information on roadway and roadside features, traffic operations, traffic volumes, and crashes.

Read the Case Study Collection and Use of Roadway Asset Data In Utah for more detailed information.

Virginia Develops and Uses State-Specific Performance Functions (SPFS)

Summary from: Roadway Safety Data Program | Developing and Using State-Specific Safety Performance Functions (SPFS) In Virginia | FHWA-SA-14-078

Background

The Virginia Department of Transportation (VDOT) emphasizes data-driven decision-making and desires to improve safety and safety data. From this desire, VDOT implemented a comprehensive set of State-specific Safety Performance Functions (SPFs) covering 98 percent of its State-maintained roadway locations. The impetus for VDOT developing their own SPFs and analytical tools arose from the decision that AASHTOWare Safety Analyst™ did not meet their needs. VDOT developed State-specific SPFs using historical crash, traffic, and roadway inventory data. SPF developers worked closely with engineers throughout the development process to see whether each SPF was implementable for all types of improvements (spot, corridor, and systemic). To date, VDOT has developed 24 SPFs covering a majority of roadway facilities, including two-lane roads, intersections, and freeways/multi-lane highways.

After performing network screening, the VDOT central office identifies the top 100 sections and top 100 miles of segments with the largest Potential for Safety Improvement (PSI). The list is then sent to the district engineers who determine which sites to prioritize based on practical experience and knowledge of their area. VDOT has noted several benefits of Virginia’s SPF implementation effort. For example, the advanced data-driven process leads to better use of funds, benefits for both systemic and spot improvements are quantifiable, VDOT can better manage public concerns, and VDOT can compare locations to prioritize projects. The SPF development team conducts training (including an annual “roadshow” to all nine districts) and hosts webinars to ensure district engineers understand the methodology and how to use the SPFs. VDOT has not mandated the use of SPFs and PSIs by the districts because the process of introducing a new methodology takes time, but the district engineers know it is the preferred method for network screening.

Read the Case Study Developing and Using State-Specific Safety Performance Functions (SPFS) In Virginia for more detailed information.