Minutes of a Public Meeting
MINUTES OF A
MEETING OF THE
GOVERNOR’S TRANSPORTATION VISION 21 TASK FORCE
1:30 p.m., Thursday, November 21, 2000
Arizona State Capitol, Executive Tower
1700 W. Washington Ave., 2nd Floor, State Reception Room
Phoenix, Arizona
The Governor’s Transportation Vision 21 Task Force met in official session for a meeting at 1:30 p.m., Thursday, November 21, 2000 with Co-Chairpersons Sharon Megdal, Ph.D. and Martin Shultz presiding. Other members in attendance were Lisa Atkins, Malcolm Barrett, Tom Browning, Paulson Chaco, Kurt Davis, Valerie Manning, Diane McCarthy, Dennis Mitchem, Dave Olney, Kevin Olson, Mary Peters, Ingo Radicke, Barbara Ralston, Rene Redondo, Jim Shipman, Lela Steffey, Frank Thorwald and Steve Wheeler. Also present were Alan Maguire, John Carlson, Mary Lynne Tischer, Jennifer Macdonald and Matt Carpenter.
Welcome, Opening Remarks
Dr. Megdal called the meeting to order at 1:38 p.m. and let the pledge of allegiance. She thanked everyone for coming and noted that the Task Force would begin the final phase of analysis necessary to make a recommendation to take to the public in January and February.
Approval of Minutes for October 24, 2000
Action:A motion to accept the minutes, as written, was made, seconded and passed unanimously.
Dr. Megdal referred to a previous discussion about the Task Force’s recommendation relative to the restoration of the Flight Property Tax. It was decided that the recommendation would be included in the Task Force’s full recommendation package to the Governor at the conclusion of their work as opposed to now.
Discussion of 20-Year, Multi-Modal, Hypothetical State Transportation Plans
Mr. Maguire introduced the topic of discussion and reminded the Task Force members that this is the first time Arizona has attempted to create a statewide, long-range plan with a visionary component. He stated that a lot has been learned about the data, and the process will be much easier the next time. He discussed the data collection and validation exercise and the comprehensive process to evaluate revenue sources. He stated that the consultants have developed a variety of alternatives on which to base a comprehensive plan. He emphasized that the plans are hypothetical. He stated that the goal of the meeting was to develop options for proceeding. He was hopeful that the outcome would be that the Task Force would give the consultants guidance with respect to critical components of the plan and character of the system.
Dr. Megdal introduced and welcomed the newest member of the Task Force, Dennis Mitchem, who was replacing Jim Simmons who had resigned for family reasons.
Mr. Yonel Grant, Booz-Allen Hamilton, introduced Mike Ferreri, the newest member of the consultant team.
Mr. Grant updated the Task Force on the status of the database update, which is now 99% complete and captures projects for all modal systems in Arizona over the next 20 years. He described the work of the data consultant over the past six months and the classification of the projects into three categories: preservation, operations and expansion. Mr. Grant described the effect of the categories upon both rural and urban areas, providing examples to demonstrate the differences. The categories also affect modes differently, and Mr. Grant provided examples evidencing that point. He reviewed the breakdown of the costs by project type and mode.
Mr. Mitchem inquired about the percentage of projects without cost estimates. Mr. Grant replied that the projects without cost data are typically smaller projects. Mr. Grant also confirmed for Ms. Peters that the preservation costs were developed to state standards generally. Ms. Peters suggested that Mr. Grant make sure they have included ongoing operations costs that are not project specific but are critical to the system.
Mr. Grant reviewed the five steps to cost normalization, discussed the identification of high and low cost outliers, and the incorporation of the results into the cost normalization database. Mr. Maguire commented on the original frustration with respect to the interim report because of the limited data available, particularly on the needs side. The database developed by the consultants was an exercise very beneficial to the work of the Task Force and has resolved the initial frustrations. He said it was fair to say that the data was not perfect; however, it represents a reasonably reliable set of needs data on which the Task Force can build a plan.
Ms. Ralston commented on the significant amount of effort expended to complete this process. She reminded the Task Fore that 75 percent of the projects were ill defined at best when the process was begun.
Mr. Grant verified that the costs include development costs. Ms. Peters emphasized the significance of development costs today and indicated she feels much more comfortable with the data given the inclusion of development costs.
Mr. Grant presented the hypothetical plans, which were formulated by four main drivers: reflect statewide priorities (for example, maintaining the system in a state of good repair, increasing safety or accommodate and facilitate economic vitality); address future Arizona transportation needs as reflected in state, regional, local and tribal plans; not the sum of all projects; first step towards developing the comprehensive plan, which may have components of some or all hypothetical plans. Mr. Grant explained the process by which projects/alternatives were selected for the hypothetical plans. He discussed the importance of the Task Force’s role at this state of the process, that being to identify critical components and characteristics of projects, allowing the consultant team to compile a statewide plan. Mr. Grant provided an overview of the four hypothetical plans developed by the project team, including the cost estimates. He explained that all projects were adjusted for inflation and brought down to year 2000 dollars. He verified for the Task Force that all documented projects/needs are included in the database and, therefore, included in one or more of the plans. Mr. Maguire clarified that it was clear that the level of specificity in local jurisdictions plans was higher in the larger jurisdictions. He stated that the consultants relied upon the efforts of the regional planning agencies to provide needed information. Mr. Maguire explained the theories behind each of the hypothetical plans. He noted that Plan #2 does not include Plan #1, even though there appears to be an obvious incremental increase in Plan #2. He confirmed that the costs have nothing to do with available revenues. Mr. Grant explained how Plans 3 and 4 build on Plans 1 and 2, making them incremental compared to Plans 1 and 2. He stated that there was no high-speed rail project in any of the plans.
Mr. Davis asked if the Task Force can or should make decisions about what is best for local jurisdictions. He felt it most appropriate for them to make decisions only about projects or transportation systems with state significance. He felt this was more a governance issue. Mr. Maguire agreed that to some extent it is beyond the capacity of the Task Force to address local projects. He emphasized that the Task Force is capable of making recommendations on big projects.
Ms. Steffey asked why Plan #4 was less expensive than Plan #3, noting her delight. Mr. Grant answered that without creating a list of projects under each plan, he could not give her a definitive answer. He assumed that the highway corridor development plans in Plan #3 are very expensive. Mr. Ferreri indicated he would like to get the specific elements of each plan out to the Task Fore prior to the next meeting. Ms. Ralston note that the DNRR committee looked extensively at other solutions to move people than highway construction. Mr. Maguire stated that it would be helpful to identify the large projects in Plans 3 and 4 and incorrect to assume the plans deliver the same quantity of transportation service or carrying capacity.
Mr. Grant reviewed the details for each hypothetical plan, including purpose, key elements, sample projects and performance expectations. He presented a graphic depicting the similar modal distribution or each plan. Mr. Maguire noted that Plan #2 includes significant spending on highway projects, which reflects the state’s current plans.
Mr. Grant reviewed the next steps in the process: consultant team completes the hypothetical plans; Task Force identifies critical components and characteristics, and; the consultant team compiles a draft and final statewide plan. Mr. Maguire recommended that the Task Force members review the information presented and provide feedback to him in the next few days. He said he was looking for direction and tone.
Mr. Thorwald commented that Plan #1 represented an annual cost of $1.9 billion, which would exceed current revenues by $1 billion. He stated that the plans represent a significant revenue shortfall and stressed the need to be very creative with how new revenues might be generated.
Mr. Shultz provided direction to the Task Force members as they review the information presented and submit feedback to the consultant team. He suggested he would emphasize building capacity, preserving the existing system, and consider the impact of technology. He suggested that Mr. Mawhinney would call for aspects of the final report to include immediate and obvious benefits to the taxpayers of Arizona. It was decided that e-mail might be the best way for the Task Force members to communicate their feedback to the consultant team. If that was not possible, Task Force members were encouraged to communicate in the most effective way possible for them. It was agreed that the hypothetical plans would not yet be put up on the website.
Mr. Olson commented that the presentation was producer oriented. He recommended that the Task Force judge the plans from the consumer perspective of spending versus investment, asking what kind of service would be provided to the people in a particular plan. He reminded everyone that the state would have to make a case to raise money for all plans. He requested information on the results that would be produced by each plan in terms of congestion and travel time reductions. Mr. Maguire indicated that the consultant team has limited capacity to provide this information. He stated that it is a typical component of a TIP, adopted by a large MPO, but it has never been done on a statewide basis due to constraints on current resources and time. He said that the Task Force has only project judgment to base their decision on. Mr. Olson clarified that he is personally more interested in project judgment than computer models. He would like to hear from the experts whether Plan #4, for example, would be enough to make a significant difference. Mr. Thorwald asked if cost/benefit ratios were available on the big-ticket items. Mr. Ferreri said that it might be available, because the big-ticket projects are likely part of a TIP.
Mr. Thorwald suggested that there have been issues discussed which have never been brought to any level of planning, i.e. a seaport. He asked how the Task Force would consider those kinds of projects, which might be completed by the private sector. Dr. Megdal commented that some of those things may be in the vision and not quantified, but they are likely not part of the 20-year plan. She noted that those projects could be included as part of a visionary component in the final report.
Ms. Linda Carpenter, Wilbur Smith Associates, provided a presentation on the revenue side of the hypothetical packages. She presented information on the base case revenue forecasts for highway, transit and aviation over 20 years, totaling $38.9 billion. She reviewed potential alternative revenue sources, noting that the figures were shown in constant year 2000 dollars and not reflective of the impact of the alternative fuel vehicle costs to the state. She stated that the highway revenue estimates are conservative and include debt service. They have not assumed the continuation of the Maricopa RARF after 2006. Mr. Maguire commented that it is fair to say that the methodology used to forecast revenues has improved dramatically. Therefore, the projections are reasonably reliable and consistently conservative. However, they are still very long-term forecasts, and he noted the difficulty associated with making such long-term forecasts. He cited the growth of the state over the last 20 years and the impact it had on revenue forecasts made in the late 1970s.
Ms. Carpenter presented an overview of the potential alternative revenue sources, discussing the selection process at length. Mr. Maguire noted that the process of matching revenues to needs will take place after the Task Force has shaped the needs plan.
Mr. Davis asked if the gas tax projections assume a reduction in use as a result of increased transit use. Ms. Carpenter said it did not and explained why she felt this would not have an impact. She stated that the overall projections assume the impact of increased fuel efficiency. Ms. Carpenter said she would provide information on the revenues that would be generated if the automobile sales tax were re-dedicated to transportation. This was not included because it did not represent a new source of revenue. Ms. Steffey felt this source should be included in the mix because it raises revenues without raising taxes.
Ms. Carpenter provided a detailed review of the revenue sources used in the hypothetical packages, including typical yields by source, options for generating $5, $10, $15 and $20 billion in additional revenue, and impacts of the revenue package options for the typical household in a single year. Ms. Carpenter noted for comparison purposes that Arizona’s 18 cent gas tax ranks 40th in the nation, with the average being 22 cents.
Mr. Shipman asked if additional federal revenues would be available if the state generated additional revenues. Ms. Peters answered no, with the exception of matching revenues that might be generated by local level transit projects, but this is very minor.
The group discussed how to proceed from this point. Mr. Maguire said he would send a survey/questionnaire to the Task Force early the following week, and he requested input into the questions by the following Monday.
Mr. Thorwald asked that the cost/benefit ratio information on the big-ticket items be provided before the survey. Mr. Shultz suggested that the Task Force create a complete hypothetical plan and then make a judgment on service levels based on the cost/benefit ratio information and modify the plan to achieve the objectives of the Task Force. Mr. Maguire indicted that the development of the plan is an iterative process, and it would be worth starting down the road while trying to quantify the impact of major projects. However, waiting to start the process until the cost/benefit information is available would delay the process by at least ten days. Dr. Megdal suggested that the consultants start with identifying the cost/benefit ratios on inter-regional big-ticket items. She felt that this would provide a greater level of understanding as to what is in the hypothetical plans. Mr. Shultz stated that the Task Force and consultants have spent a lot of time on the process already. He expressed confidence in the ability of the Task Force members to provide the conceptual input needed by the consultants to put together a plan. He recommended performance the analysis on service levels after a specific plan is available. He felt this would be the most efficient way to accomplish the objectives.
Mr. Thorwald suggested that another futuristic option to the revenue issue is the possibility of an investment fee paid to taxpayers by the federal government.
Mr. Radicke commended the consultants on their presentation and thanked them for their work. He wished everyone a Happy Thanksgiving.
Call to the Public
There were no requests to speak.
Adjourn
The meeting adjourned at 4:39 p.m.
MARTIN SHULTZ, Co-Chairperson
SHARON MEGDAL, Co-Chairperson
