WS DOT's Focus Groups on the Public's tolerance for Tolls

PRICING FOCUS GROUPS
FINAL REPORT

DECEMBER 2007

Table of Contents

Executive Summary ... ...2
Introduction... ... 2
Awareness and Acceptance of Tolling ... ... 2
How to Talk about Tolling... . 4
What Moves People to Support or Oppose Tolling ... .. 4
Opportunities to Improve Support for Tolling... . 5
Major Findings ... ..6
Tolling Applications ... . 6
Geographic Characterizations ... .. 9
Focus Group Findings by Discussion Topic ... .. 10
Focus Group Discussion Narrative ... ..13
Congestion ... .. 13
Overall Responses to Tolling ... . 15
HOT Lanes ... .. 17
Full-Corridor Tolling ... . 19
SR 520 Corridor Tolling ... .. 20
Proposition 1 ... .. 23
Messaging ... ... 25
Appendix A: Methodology ... ..26
Appendix B: Focus Group Discussion Guide ... .29


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Executive Summary

Introduction

The Washington State Department of Transportation (WSDOT), Puget Sound Regional Council (PSRC), and King County conducted focus groups to engage King County drivers and transit riders in discussions regarding “congestion pricing.” The following document identifies key findings from this effort. Focus groups were designed to:

• Gauge participants’ awareness of tolling for the purpose of improving traffic • Learn how to successfully talk with the public about traffic operations and
tolling strategies

• Identify what moves people to support or oppose tolling • Determine opportunities to improve support for tolling with a public
engagement program

Eight focus groups were held in four locations, representing North King County, South King County, East King County, and Seattle. In North and South King County, one of two focus groups was composed of “low-income” participants. All other groups were recruited to reflect the demographics of their area.

Focus groups are qualitative research efforts designed to explore the attitudes, beliefs, opinions and experiences of the participants. Although focus groups do not provide statistically valid data, they are designed to elicit useful information through the give and take of group discussion. Findings from focus groups should not be considered to represent the views of the overall population. Additional follow-up work is needed to determine if these results reflect the general population.

Awareness and Acceptance of Tolling

Participant awareness of tolling is high

• They are familiar with traditional tolling to fund projects. • They are aware of using price as a tool to manage congestion. • Participants don’t always understand how tolling can improve traffic flow,
especially if tolls are charged on all lanes of a facility.

• Participants are generally aware of electronic tolling. Some participants had
driven across the Tacoma Narrows Bridge.

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Understanding varies with the type of tolling application

• Participants are more prone to understand high-occupancy toll (HOT) lanes
than full-corridor tolling as a strategy to keep traffic moving.

Lack of understanding leads to skepticism regarding tolling all lanes

• Many participants were skeptical of the idea that a toll on all lanes could
improve traffic flow. Their skepticism was often linked to a belief that either they could not give up their car, or that other people would not give up their cars.

• Many participants indicated that a predictable price is important to them, and
want to know when they leave home what that cost will be.

Support for roadway tolling depends upon the application

• HOT lanes and express toll lanes (applications with regular lanes available)
receive much higher overall levels of support because people have the option to use them or not.

• Tolling all lanes of a corridor is met with skepticism because of the lack of
alternatives, the perceived effects it has on low-income people and the perception that workers with the least flexible work hours are also the ones who make the least amount of money.

Public acceptance is possible, but not guaranteed

• Because participants tend to understand how HOT/express toll lanes work,
they were generally willing to accept this tolling concept.

• Participants accept HOT lanes because there are non-tolled options available. • If tolling could provide a faster trip, most participants indicated they would try
it, even if they say they don’t really like the concept. Most said they would use tolled lanes if they were in a hurry.

• Most participants were open to the various conceptual approaches to tolling,
but how projects get implemented, and what the details are, will determine whether or not participants will be supportive in practice.

Some barriers to broad public acceptance of tolling were identified

• Some participants opposed tolling for philosophical reasons. They either
believe tolling is regressive and hurts low-income people, or they think that it is government’s job to fully fund transportation infrastructure.

• A few participants assumed any effort to toll is government’s approach to get
more money out of their pocketbooks. Others said they would want to know what existing taxes are used for before authorizing any new revenues.

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How to Talk about Tolling

General Terminology

There were no clear standouts for overall terminology to describe what the transportation industry would call “congestion pricing.” The terms “congestion pricing” and “pricing” were poorly received. The term “tolling” was wellreceived, generally with a modifier to explain this new concept.

Participants preferred terms that were descriptive. For example, the term “flexible” came up in several groups (as in “flexible tolling”) because it indicates that the rate changes and that people have options. This term also sounds similar to “Flex pass” and “Flex time,” terms people already know and use.

Another term that was mentioned several times was “express tolling” because it indicates a faster trip. Express tolling was used by participants to describe both single lanes and multiple lanes.

HOT lane names

When discussing HOT lanes, participants liked the term “HOT” only when they knew that it stood for “high-occupancy toll” lanes. Several participants also suggested that public agencies should simply pick terms and brand them through public education.

What Moves People to Support or Oppose Tolling

How tolling affects low-income people

• Learning that HOT lanes were supported by 50-70% of drivers across all
income groups in cities where they are currently operating was the most effective statement presented to build support for HOT lanes among those who were not originally favorable.1

Having travel options

• Few participants were willing to give up their cars. They placed high value on
the convenience of cars or said they need a car to pick up children from school or run errands after work. Most drivers said they would either drive another route to avoid a toll or pay to use a tolled facility if the demand on their time was great enough.

• Some participants thought that improving transit so that it ran more
frequently, or connected more locations, would either be an acceptable alternative for them individually, or could provide an incentive for others to support tolling.

1 Statistic from HOT lanes projects on SR 91 in California, I-15 in California, and I-394 in Minnesota.

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• Participants generally recognized that they contribute to congestion, yet did
not transfer this recognition to what they could do personally to alleviate it.

Opportunities to Improve Support for Tolling

Demonstrate that tolling works

• Leverage the SR 167 HOT Lanes Pilot Project opening to provide a local,
real-life example of tolling that improves traffic flow.

• Let the ability of tolling to improve traffic flow prove itself to people through
experience.

Show how individuals can benefit

• Highlight and define what tolling can do for roadway users (benefit users).
Use examples of successes in other places to build support for tolling - such as the popularity of HOT lanes among all income groups

Emphasize travel options and alternatives

• Reach out to employers. Nearly all the groups talked about the role of the
employer, including flexible scheduling, transit pass subsidies and telecommuting.

Highlight the need for tolling

• In the case of the SR 520 bridge, participants’ understanding of the need to
replace the bridge seemed to motivate greater support for tolling. Participants in the groups even indicated that charging tolls on the existing bridge may be acceptable under certain circumstances.

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Major Findings

The following analyzes the findings relevant to future tolling work in King County. In particular, we examine participants’ awareness, understanding, acceptance and support of tolling applications that are or may be considered for use in this region, briefly summarize some geographic differences between the focus groups, and detail the specific findings from the focus groups by discussion topic.

Tolling Applications

As possible tolling applications are considered for use in King County, successful communications with the public will need to be informed by the public’s current awareness, understanding, acceptance, and support of the specific applications. The following analyzes the responses of focus group participants when asked about HOT/express toll lanes, full-corridor tolling, and tolling the SR 520 corridor.

HOT/Express Toll Lanes
Awareness

Awareness levels about HOT/Express lanes were mixed. Some people knew about them from plans for the SR 167 HOT Lanes Pilot Project, and others were familiar with them from trips to Denver, San Diego and Salt Lake City. For some, the concept was new.

Understanding

Participants understood the idea that people can choose to pay for a faster trip and that tolling a lane or lanes will limit the number of vehicles in that lane. They liked that people have the option to drive in a tolled or non-tolled lane.

They often did not link the benefit an individual gets (a faster trip) and the benefits to the system (more vehicles moving). A few people noted that all lanes should be moving better, but most did not come to this conclusion on their own. Those who did not understand that the overall system would perform better were more concerned about the effects tolling would have on people with lower incomes.

People were quick to understand that accidents will slow down the system and wanted to know if refunds would be provided if the trip was not reliable.

The “Rachel’s Drive” video was effective in explaining how HOT lanes work. Questions came up around the changing driving situation on SR 167 and the

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potential for accidents as a result of the change, especially in the South King County groups. Several participants already drive on SR 167 and realized that the experience will be different. Drivers will have to note the price, make a decision, enter in the correct place, know not to cross the double white line and exit at the right place to leave the highway.

Some participants wondered how people will track their accounts and know if billing mistakes are made since the prices change every day. Some expressed concern for drivers in that area who don’t speak English and wondered how they would figure out the system.

Acceptance

For the most part, people like HOT/Express lanes because drivers have the option of using them or not. Not surprisingly, some people expressed concern about access for low-income people. However, when participants learned that HOT lanes already operating in other cities have from 50 percent to over 70 percent support across income groups, many of the skeptics said they might change their minds. This was the most effective statement presented to build support for HOT lanes among those who were not originally favorable to them.

In the Seattle groups, participants were concerned that opening HOV lanes to solo drivers would degrade the trip for transit and carpoolers. They noted that several HOV lanes are too crowded now and were skeptical that HOT lanes would not hurt current HOV users.

Support

In all groups, except the low-income group in South King County, nearly everyone said that if HOT lanes work and their route had one, they would use it at least occasionally, especially if they are running late or need to be somewhere at a certain time. The low-income participants were less likely to say they would use them - many noted that the rising cost of gas is already hitting their pocketbooks hard.

Full-Corridor Tolling (all lanes)
Awareness

Awareness about tolling to manage traffic did not extend to applications on all lanes of a highway. When people think about tolling all lanes, they tend to think of a classic toll that is collected to pay for a specific project.

Understanding

Most people did not understand how tolling all lanes would improve traffic flow. They assume that if everyone is being tolled, there is no benefit to traffic, other than possibly shifting the congestion problem to other roads. When asked what

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they would do if they had to take a route where all lanes were tolled, the most common answer was to take another route, especially in the North and South King County groups. Participants in Seattle and East King County recognized that there were fewer route options if their trips were east-west and were more likely to consider different alternatives, including transit, avoid unnecessary trips or traveling at a different time of day. Having said this, all groups still had a difficult time understanding that tolls could improve the flow of traffic.

Participants also disliked tolling all lanes because they thought it would affect low-income people the most, and thought low-income workers often have the least schedule flexibility. There was concern that this type of tolling is “punitive,” “elitist” or “classist.”

Acceptance

Acceptance levels for this approach were lower because all the lanes are tolled. People want to have a choice of lanes or routes. Some recognized that choice could include transit, but most people said existing transit service was not convenient, not frequent enough or didn’t go to the right places. Some groups debated the best form of transit - light rail or buses.

When asked if they would drive on a route where all lanes were tolled, and which offered them a faster trip, most participants agreed they would try it if they needed to be somewhere on time.

Support

The two primary barriers to support for tolling all lanes are the concern regarding impacts to lower-income users and the belief that tolling all lanes would not succeed in improving traffic flow.

SR 520 Corridor Tolling
Awareness

Everyone in all groups seemed well-aware that the SR 520 bridge needs to be replaced. One person was aware of this but disagreed that it was true.

Nearly everyone was aware that the plan to replace the SR 520 bridge includes charging tolls as part of the funding plan.

Understanding

When discussing charging tolls on all lanes of SR 520, which was described as the corridor between I-5 and I-405, most people assumed that the function of the tolls would be to raise funds. As described above, they did not understand how tolling the SR 520 corridor would improve traffic.

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This gap in understanding was illustrated by direct questions from participants about how traffic would be improved and also by the large number of participants who assumed the toll would be charged in only one direction.

Acceptance

Using tolls to partially fund the new bridge is generally accepted. Participants seemed open to the idea that the existing bridge could be tolled as a means to raise funds for the new bridge, with a number of caveats attached. These include knowing:

• The specific alternative to replace the bridge • How much money the tolls would raise • That the other sources of funds were in place • When construction would begin and end

• That the solution was agreed upon and the project would actually get built

The failure of the Seattle Monorail Project was an item of discussion in many of the groups, as was the overall perception that the region can’t build any major transportation improvements. Several groups referred to the failure of the 1960sera light rail vote.

Support

Among focus group participants, there is support for replacing the SR 520 bridge, and for using tolls as a funding source. However, many of the participants don’t use the bridge on a regular basis.

Geographic Characterizations

Having conducted focus groups in four locations in King County, some geographic characterizations are possible and may be useful for future tolling plans and public education programs. The following are some specific distinctions between groups from different regional locations.

North King County

• “Reasonable” toll prices for a faster trip ranged from $0.25 - $5.00 • Tentative support for tolling existing SR 520 corridor; think tolls should be
flat-rate, not variable

City of Seattle

• No more interested in “green” issues than other locations

• Concerned with commute times, transit availability and the replacement of the
SR 520 bridge

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• “Reasonable” toll price for faster trip on SR 520 bridge ranged from $3.00 -


$5.00 (roundtrip)

• More likely than other groups to consider moving to transit to avoid a toll,
rather than changing routes

South King County

• More attuned to possible economic impacts of tolling than other groups,
especially in the low-income group

• “Reasonable” toll prices for a faster trip ranged from $0.25 - $1.00 • Supported tolls on SR 520 corridor because “people who can afford it” would
be paying the tolls and “I don’t drive it”

• Concerned with transit availability and reliability

East King County

• High interest in SR 520 bridge replacement and willingness to contribute toll
revenue

• “Reasonable” toll price for faster trip on SR 520 bridge ranged from $1.50 -
$6.00 (roundtrip)


Focus Group Findings by Discussion Topic

Congestion

• Most participants had a sophisticated knowledge of their daily commutes and
how the transportation system works today - they know when to choose another route and readily provided examples of congestion scenarios.
• Participants were more likely to blame traffic on circumstances (road
capacity, geography, no transit available) than driver behavior (lack of carpooling, traveling during rush hours); however, driver behavior was also mentioned as a cause of congestion.

• Participants suggested improving traffic with more transit options, additional
roadway capacity, and more flexible employment options.

• Tolling to improve traffic flow was not mentioned by participants.

Overall Responses to Tolling

• Participants are familiar with tolls to raise revenue and say they have heard
about tolling to reduce congestion and improve traffic flow.

• The idea of tolling consistently raised concerns about the following critical
issues:

ƒ Whether there will be a non-tolled alternative route ƒ How tolls will impact low-income populations ƒ How toll revenue will be spent

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• Most participants said they are interested in using tolling to improve the flow
of traffic, if it really worked. Many participants have strong concerns about the specific details of any tolling system.

• Participants asked how toll revenue would be spent and were skeptical of
using toll revenue for services other than new infrastructure. A few participants supported using toll revenue to increase transit service in the tolled corridor.

• Some participants oppose tolling “on principle” - either because they see it as
government’s role to provide road services or because it strikes them as economically or geographically unfair.

HOT Lanes

• Participants were generally supportive of HOT lanes, though there were
strong concerns from some participants about equity for low-income drivers. • The majority of participants said that they would use HOT lanes when they
are in a hurry.

• Participants liked that HOT lanes provide motorists with a choice between
tolled and non-tolled lanes.

• Some participants noted that HOT lanes are supposed to create better traffic
flow on the entire roadway; however, most participants considered HOT lanes valuable for the improved travel times they would personally experience when using the HOT lane.

• Participants thought HOT lanes should have a name that describes the lane,
such as “express toll lanes” because you pay a toll to go faster, or “highoccupancy toll lanes” because the lane is both an HOV lane and a toll lane.

Full-Corridor Tolling

• Most participants had a negative reaction to tolling an entire corridor to
improve traffic flow, for the following common reasons: ƒ It would be too expensive for working people ƒ It’s a tax on a road we already paid for

• Most participants began the discussion of full-corridor tolling highly skeptical
that tolling could successfully reduce traffic congestion.

• Some participants said they would pay to take a tolled roadway that was
moving smoothly, while others said they would divert to other roads, transit or a different time of day. Participants did not agree about the value of “saving time.” While many participants were interested in paying a toll for a faster trip, many others were willing to drive further or adjust their schedules to avoid a toll.

• Despite participants’ own answers to how they would respond to a tolled
roadway (i.e. change modes, drive at a different time) many participants remained skeptical that tolls could effectively improve traffic flow.

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SR 520 Corridor Tolling

• Participants were supportive of using toll revenue to pay for a new bridge
structure and many were supportive of tolling the existing bridge to raise revenue, provided the following criteria are met:

ƒ Project has a clear design and schedule ƒ Project is completed on time and on budget ƒ Process of toll collection and revenue use is transparent
• While tolls to raise revenue are supported, participants were confused and
skeptical about the notion of using tolls to improve traffic flow or reduce congestion during construction. As a result, many participants suggested a flat-rate toll or expected the toll to be charged in only one direction of travel.
• Many participants were skeptical that the SR 520 project (or any major
transportation project) could be delivered on time and on budget. That skepticism caused some participants to oppose tolling the existing SR 520 corridor.

• When discussing the SR 520 corridor, many participants raised questions
about the I-90 corridor and the effects a toll on SR 520 would have on I-90. Some participants assumed I-90 would also be tolled, while others were adamantly opposed to tolling I-90.

• Other participants were concerned about effects on I-5 and I-405. Participants
were generally concerned that even if tolling improves congestion in one location, it could make congestion worse in other locations.

Proposition 1

• Participants liked that Proposition 1 attempted to address the region’s
transportation problems.

• Participants disliked the cost of the measure, said the size of the measure was
too ambitious, were concerned about the ability of agencies to deliver promised projects, and saw the measure as vague and lacking a structure for accountability.

Messaging

• Participants found it difficult to explain these concepts and there was little
consensus about useful terminology.

• Participants preferred terms that were descriptive of the purpose of these kinds
of lanes or facilities and who would be allowed to use them.

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Focus Group Discussion Narrative

The following is a general narrative of the discussion topics covered during the focus groups and participants’ responses. For information on the methodology used to select focus groups participants and a copy of the discussion guide used to facilitate the focus groups, please see the Appendices to this report.

Congestion

The opening questions of the focus groups were designed to investigate how participants view congestion, including how significant it is and what role it plays in their daily schedule, their perceived causes of congestion, and how they think congestion could be improved.

Discussion Highlights

On a scale of 1 (very good) to 10 (very bad) how would you rate congestion in the area?

• Congestion is between a 7 and a 10, at least during peak periods. The
majority of participants felt congestion was at least a 7 during peak periods. Participants in South King County rated congestion as slightly better, with more responses at 5 or 6 and fewer 10s.

Is traffic getting better or worse?

• Traffic is getting worse. Participants almost unanimously felt that traffic is
getting worse. A few South King County participants felt traffic in the south Seattle area had improved. They noted specific projects, mostly to separate rail and highway traffic at crossings.

Compared to other issues, how important is traffic to you? Is the traffic in this area the same as in other cities?

• Traffic is important to many people. There was variation between
participants’ level of concern about traffic. More participants thought traffic was an important concern in their lives and fewer felt it was not important, but responses were mixed and depended on individual circumstances. Many people said they organize their trips to avoid traveling during the worst times of day if possible. Several commuters north and south noted that they leave for work between 5 a.m. and 6 a.m.

ƒ “Traffic eats up the time in my day.” (South King County)

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• I-5 was mentioned as a particularly bad route. Increasing congestion on I-5
during weekends was seen as problematic and getting worse. A few people wondered why the express lanes are not open in-bound during weekend days.

What causes traffic congestion?

• Not enough alternatives to driving. Many participants said there need to be
improved transit alternatives, flexible work schedules, and other solutions to “having” to drive.

ƒ “There are no alternatives that are convenient - nothing at the right time or
the right place.” (South King County)


• Roads do not accommodate the traffic. Many participants said that current
roads are not large enough, or are not designed well.

• Geography is limiting. Some participants noted that this area has limited
options to expand highways or add new ones due to the water, mountains and built environment.

• Bad drivers and accidents. Several participants said the bad driving and
traffic accidents are the main causes of traffic backups.

• People live far from where they work. Participants in Seattle and East King
County said that having so many people commute causes traffic. Participants in South King County noted that they are the people who have to live far from work because there is a lack of affordable housing closer in. ƒ “People live too far away from their jobs.” (Seattle)

• HOV lanes. A few participants said HOV lanes waste valuable space on the
freeway and contribute to congestion.

Do you think you contribute to traffic congestion?

• Yes, I’m part of congestion. The majority of participants said their behavior
is a cause of congestion. Participants recognized that when they drive, they are part of traffic congestion.

How can we reduce congestion?

• Increase transit service and connect transit systems. Participants in all
focus groups suggested more accessible, more reliable, or more attractive transit service to get people out of their cars.

ƒ “We don’t have a good transit system because we think people are not
using it, and people are not using it because we don’t have a good system.” (Seattle)

• Change work hours and promote telecommuting. Many participants
suggested having employers change their work hours or make them more flexible. Many people also suggested telecommuting.

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ƒ “To reduce traffic, big corporations need virtual offices.” (South King


County)

• Add more lanes. In most groups, at least one participant suggested adding more lanes to temporarily reduce traffic. This was seen as a temporary but important solution. Most groups had people note that adding lanes does not solve the problem, because they just fill up again, or encourage new trips.

• Use a combination of strategies. Several participants noted that no one idea
is going to work for everyone, so a combination of strategies would be needed.

Overall Responses to Tolling

This section was designed to investigate the level of awareness participants had about tolling to reduce congestion, introduce the overall concept of tolling and gauge participants’ reactions. The facilitator introduced the concept of tolling, and the examples of single-lane tolling (i.e., HOT lanes) and tolling all the lanes of a highway. Participants were asked to think about these ideas generally, rather than on a specific corridor, and discuss any possible benefits and drawbacks that occur to them.

Discussion Highlights

Did you know that tolls and other forms of tolling can be used to reduce congestion?

• Yes, I’ve heard of that idea. Many participants said they’d heard of using
tolling to improve traffic. Almost all participants had used a tolled-facility of some kind. A few participants thought of specific example of tolling, such as the lanes in San Diego and London.

How do you think tolling could reduce congestion?

• It would be an incentive not to drive. Many participants suggested that
tolling would encourage people not to drive, to carpool, or to otherwise change their behavior. Participants were not clear on how this would work, and this question prompted more questions from them. Several people wondered if you can convince people to get out of their cars.

What strikes you about that idea?

• Sounds okay if people have a choice. Several people thought this idea could
work if people had other choices of routes that were not tolled, or other services, such as transit.

• Tolls impact those who have lower incomes. When first introduced to the idea, several participants had a gut reaction that tolling would be hard on certain people that may not be able to afford the toll. They used terms like

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“elitist,” “punitive” or “classist” and expressed concern that the people with the least schedule flexibility would be most affected.

• Where would the toll money go? Many participants wanted to know how the
toll revenue would be spent and said that could determine their support for the concept.

• We already pay taxes. Some people don’t think the government should need
to collect more funds. They noted that they are already paying taxes, and some mentioned the gas tax specifically.

• Drivers would move to other roads. Many participants said they would
avoid routes with tolls and expected other drivers to do the same.

• If there’s an accident, do I get my money back? Several participants were
concerned that they might pay for a faster trip and then be stuck behind an accident anyway.

ƒ “Accidents impede traffic flow. There are no guarantees. The idea of
‘smooth traffic’ is a fantasy.” (Seattle)


In general, is the concept of paying for improved traffic flow one you could support?

• Yes, if… The majority of participants thought they could be supportive of
tolling, so long as certain criteria were met and specific questions were answered. The most common caveats to support for tolling were: ƒ …drivers have a choice of non-tolled routes or convenient transit. This
was the most common caveat. Many people are comfortable with the idea of tolling as long as no one has to pay a toll.

ƒ …I know where the toll revenue is being spent. Many participants
expressed a distrust of government making good and transparent investments with their toll revenue.

ƒ …it’s only one lane or two but not all the lanes. Several people said
they would support one or two lanes on a facility having a toll, but would not support all lanes.

ƒ …I know the rate when I leave the house. Many people said they would
not be okay if they arrived at the tolled route and were surprised by the toll they had to pay.

• No, it’s not right. A few participants were opposed to the idea of tolling on
principle. Some said that the whole state needs to pay for improvements through taxes, that it is government’s responsibility to provide infrastructure or that government needs to spend the money it has more efficiently. Others thought these concepts would always be unfair to people with less income.

What would be a reasonable toll rate? What would be unreasonable?

In North King County and South King County, groups discussed what would be a reasonable and unreasonable toll for smooth travel on a highway. The Seattle and

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East King County groups discussed what would be reasonable for a smooth trip on the SR 520 corridor specifically (see SR 520 section).

• In South King County, toll rates from $0.25 to $1.00 were suggested as
reasonable, while other people discussed how $8.00 tolls in California are very expensive. Some people were concerned about impacts on workers. ƒ “Any toll has to be little so it doesn’t make an impact on people. People
who are making $8 to $9 an hour can’t afford that.” (South King County) • In North King County, toll rates from $0.25 to $5.00 were considered
reasonable by some participants. Others felt strongly that $4.00 or $5.00 would be too much or said they would not pay any amount for faster travel. ƒ “If my husband could pay $2.00 a day to eliminate his stress, I’m sure
he’d gladly do that.” (North King County)

HOT Lanes

Focus group participants were shown a video explaining the purpose and function of the SR 167 HOT Lanes Pilot Project. They were asked to respond to the idea of a high-occupancy toll (HOT) lane to keep traffic flowing. Participants were directed to consider this idea on a highway they might use, not specifically on SR 167.

Discussion Highlights

What’s good about HOT lanes?

• I could escape traffic congestion. All groups noted that the HOT lane
provides a choice for people stuck in traffic. Participants liked the idea of having an “escape route” and an option for people in a hurry. ƒ “It’s good to have the option.” (North King County)

• The toll would raise revenue. Several participants saw the toll as a potential
source of revenue that could benefit transportation projects.

• Everyone would get a faster trip. Although most participants did not
identify with the benefit of HOT lanes for all users of the corridor, some noted that the video explaining HOT lanes said that all the lanes of the highway would flow more smoothly. Overall, there was a narrow understanding of the HOT lane benefits.

Would there be problems with HOT lanes?

• HOT lanes won’t do enough. Many participants were concerned that HOT
lanes would not be a long-lasting solution to congestion. Some said different methods of reducing congestion, by adding lanes or improving transit, would be needed for any lasting improvement.

ƒ “This is a band-aid approach.” (South King County)

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ƒ “How long would [HOT lanes] work for, 5 years, 10 years? What


happens when more people come?” (East King County)

• HOT lanes wouldn’t really work. Some participants doubted whether the
tolling mechanism would work effectively. Common concerns were that accidents would slow the HOT lane, overcrowding would ruin the lane for current users, or that HOT lanes would create backups with connecting roads.

• Other drivers would cheat. Some were concerned that enforcement would
be ineffective or too expensive to provide.

• HOT lanes aren’t fair. A few participants expressed concerns about the
economic fairness of HOT lanes, because money can buy faster travel times.

Would you use a HOT lane?

• Yes, if I needed to get somewhere fast. The majority of participants said
they would use a HOT lane if they wanted a faster trip, had an emergency, or needed to get somewhere at a certain time. In most focus groups, more than half of all participants said they would use HOT lanes at least some of the time. In the low-income focus group in South King County, less than half of participants said they would use the lane. Most of the people identified the cost of gas as a reason to avoid additional travel fees. This result was different from the low-income group in North King County, where most participants said they would use a HOT lane.
ƒ ƒ “I’d use it sometimes. Sometimes I have a doctor’s appointment at a certain time and I need to be there.” (North King County) “I’d use it if I was in a hurry.” (Seattle)



What additional information might increase your support for HOT lanes?

The facilitator asked participants if certain factors would increase their support for the idea of HOT lanes. Many participants said they would be more inclined to support HOT lanes if they achieved the following results:

• If I knew that in other places where HOT lanes operate, 50 - 70% of
people of all income groups say they like them. When presented with this information, many participants who had previously expressed concern about HOT lanes said that they were more favorable to the idea, noting that support by all income groups was an important consideration.

ƒ “If it’s working and everyone likes it, it might sway my opinion.”
(North King County (low-income)


• If I knew toll revenue could be used to improve transit service. In both
Seattle focus groups, and the low-income group in South King County, several participants said if revenue was used to improve transit service that would increase their support for HOT lanes.

What name for the idea of “HOT lanes” would clearly describe the lanes?

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• HOV/toll or HOV/pay

• Express Toll Lanes or Express Lanes • High-Occupancy Toll (HOT) Lane • HOV/HOT Lane

Full-Corridor Tolling

The facilitator asked participants to consider the idea of tolling all highway lanes in a corridor to improve the flow of traffic. Participants were then asked what would be useful about that idea, what concerns they have, and whether they would use a facility where all the lanes were tolled.

Discussion Highlights

Do you think tolling all lanes could be useful?

• No, that doesn’t seem good. Most participants had a negative reaction to the
idea of tolling all lanes. They didn’t like that it took away their choice and pretty quickly assumed that it would lead to people using other routes. The majority appeared to find it difficult to think about what would be useful about tolling all the lanes of a roadway.

ƒ “I could support one lane of tolls, but not multiple lanes. I would support it
if it was an option, but not if it was forced on all lanes.” (Seattle) • It could help congestion or raise revenue. Of those who liked the idea, they
suggested ways that this idea could be useful.
ƒ “If people don’t want to pay taxes, we can tax the users.” (South King
County)

ƒ

“You’d have access to a freeway where you could get from Point A to
Point B.” (East King County)

ƒ

“You push people off the road by adding tolls. People will shift modes.”
(North King County)

Do you see any problems with this idea?

• Working people could not afford this. Many people had concerns about the
impacts on workers that “have to drive on certain routes” and have to be at work at a certain time or who have less flexibility with their schedules to avoid peak-hour travel

• It’s a tax on a road we already paid for. Several participants noted that a
toll to pay for a new facility is one thing, but this would be roads taxpayers have already funded.

ƒ “I’m really upset. I pay taxes already.” (Seattle)

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• People would drive on other roads to avoid the toll. Several people thought
that tolling a major freeway would cause congestion on surrounding streets and other routes.

ƒ “People are going to go off the road and take alternative routes and local
roads.” (East King County)


Would you pay to take the highway that was moving smoothly?

• Yes, if I needed to use it. A majority of participants said that they would
probably pay to take a highway that was moving smoothly - if and when they needed the faster trip or had to go that way for work.
ƒ
County)

ƒ ƒ “I would do it because I want to shorten my commute.” (South King

“I would, but other people wouldn’t.” (Seattle)

“I would, but I would also rethink getting on the freeway.” (East King

County)

If you wouldn’t use that highway, what would you do?

• Take other routes. Many people said they would try to find another route
without a toll.
ƒ

ƒ ƒ public transportation or carpool to avoid paying a toll.
“I’d take the bus.” (South King County) “I’d go around it, take side streets.” (North King County) • Take public transportation. Significantly fewer people said they would take
“I would start to wonder if I need to use my car for the trip at all. If a bus

can get me within a few blocks I might consider using the bus instead.” (East King County)

• Go at a different time or not go at all. A few people said they would avoid
driving as much, or would drive at less expensive times of day. ƒ “Limit trips and stay in my area.” (East King County)

SR 520 Corridor Tolling

The facilitator described briefly the need to replace the SR 520 bridge and the need to fund the bridge replacement partially with toll revenue. Almost all participants agreed that SR 520 is an aging structure in need of replacement. The groups had just discussed the concept of a tolled highway to improve traffic flow. The facilitator described using tolls in the SR 520 corridor, from I-5 to I-405. In this scenario, tolls could begin on the existing corridor to reduce traffic congestion and begin raising funds. The discussion was designed to gauge reactions to tolling this particular corridor and tolling the existing bridge.

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Discussion Highlights

What do you think of using tolling on SR 520?

• We need to raise the funds. There was a strong understanding among
participants that the SR 520 bridge needs to be replaced and that tolling is part of the funding strategy. Many participants saw tolling as an avenue to raise funds for the bridge replacement.

ƒ “I believe that people that use it should be the ones paying for it. Once the
bridge is paid for the toll should go away.” (North King County)

• Drivers would divert to I-90. Participants in all focus groups anticipated a
diversion to the I-90 corridor if the SR 520 corridor is tolled. When asked what they thought about tolling I-90 as well, responses were mixed. Some participants thought that tolling I-90 would be necessary if SR 520 were tolled; others thought tolling I-90 would be unacceptable because drivers would not have a choice to get across Lake Washington without paying a toll.
• I don’t believe tolling would reduce congestion. Many participants
expressed skepticism that tolling would improve the flow of traffic. Often this meant they were supportive of their future toll revenue funding a new bridge structure, but not paying for variable tolling or other congestion-reduction measures.

ƒ “As soon as you get a highway that is moving smoothly it is going to
attract more traffic.” (East King County)

ƒ “SR 520 is a workers’ road. They wouldn’t go another route.” (East King
County)


• The toll will be too expensive. Some participants were concerned about how high the toll price would be. Most participants questioned how high it would have to be in order to effectively reduce congestion and fund the new bridge.

• The toll should be a flat rate, not variable. A few participants argued that a
toll on the SR 520 corridor should be a flat-rate toll on the bridge, either because it would be too confusing to have a variable rate, or because it would be unfair to drivers that have to use the bridge during busy times of day.

Would you support tolling the existing bridge?

• Yes, if… The majority of participants said they would support tolling the
existing corridor if the following concerns are addressed adequately. ƒ …the new bridge will be built on time and on budget. Participants
showed skepticism about government’s ability to deliver the SR 520 bridge project successfully. To feel comfortable paying tolls before the bridge is delivered, participants would want to know the exact cost, schedule, design, and other elements of the project.

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• …I know and approve of where my toll revenue is going. Many


participants said they would want to know how exactly their toll revenue would be used. Using toll revenue to fund the bridge replacement had strong support from participants, whereas there was debate about using funds for improved traffic flow, transit, or other services.
ƒ

bridge built before they pay a fee for it.

ƒ

(East King County) “Just say it’s for the new bridge.” (Seattle) • No, I don’t support that. Several people did not support tolling the existing
SR 520 corridor. Those participants most often said they want to see the “I don’t mind a toll, but I don’t want to pay before the bridge is built.”

What other factors could increase your support for tolling the existing SR 520 corridor?

• Expanded transit service would be helpful, but not a strong motivation
for supporting tolling. Some participants expressed interest in transit service, while others saw expanded transit taking funding that would otherwise go towards the bridge replacement.

• Lower tolls due to an early start of tolling might help. A few participants
liked this idea, while others thought tolls would just last longer, or did not believe tolls would really be lower.

• It would be great to improve traffic flow, but I don’t think that will
happen. Reliable travel times on SR 520 are highly desired, but participants were skeptical that this is achievable. Several participants said reliable travel times would be great, while others expressed doubts about the cost of improving travel times and congestion on adjacent roadways, such as I-5 and I-405.

What would be a reasonable toll rate for travel on the SR 520 corridor? What would be unreasonable?

• Many participants were expecting a toll for travel in only one direction of
travel. The facilitator asked them to provide an amount they would consider reasonable and unreasonable for roundtrip travel. It was not obvious to participants that they could be charged for travel in both directions.

• Participants in the Seattle focus groups said between $1.00 and $2.00 for one
way trip, or from $3.00 - $5.00 roundtrip would be reasonable. Some said anything above $3.00 would be unreasonable. Several people said they thought the price of a bus ticket, or slightly higher, was an appropriate price.
• In East King County, roundtrip toll rates ranged from $1.50 to $6.00. Some
participants thought higher than bus fare would be appropriate. Others suggested that the original toll rate on the SR 520 bridge in today’s dollars would be fair, or the price of a latte. When asked what toll would cause them

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to use another mode or facility, some participants said $3.00; others said $5.00.
ƒ “It would have to be high enough to get some people out of their cars.”
(East King County)

ƒ

“I would expect to pay more than I would for a bus pass.” (East King
County)

Proposition 1

Focus group participants were asked for their opinions on Proposition 1, the regional roads and transit measure that was rejected by voters in November 2007. Groups were asked to describe what they liked and disliked about Proposition 1.

Discussion Highlights

What specifically did you like about Proposition 1?

• It was an attempt to solve transportation problems. One of the primary
reasons people liked Proposition 1 was that they believed it was attempting to address the region’s transportation problems.

ƒ “I liked that it was addressing the transportation problems and it was
trying to get the job done.” (North King County)
ƒ

ƒ ƒ “We had the choice between hell and purgatory. We know what hell is like, so I thought maybe purgatory was worth a try.” (North King County) “It addressed a problem that is a big problem.” (Seattle) “I thought it was time we did something - many people did not like the

dollars involved but we’ve got to do something!” (East King County)

What specifically did you not like about Proposition 1?

• Too expensive. Many participants felt that the measure overall was too
expensive
ƒ ƒ

ƒ ƒ “Too much money.” (South King County) “More money, more taxes.” (North King County)

and were not clear about which projects it would build.
County)

make many people uncomfortable with the measure.
was overwhelming.” (East King County) • Too vague. Participants said they did not know what the package would do
“I didn’t see a clear vision of what I would get out of it.” (South King

• Too ambitious. Many participants stated that they felt the measure was too
ambitious and tried to do too much. This element of Proposition 1 seemed to “The size of the package; we’ll be paying for this forever anyway but it

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ƒ “They should have showed the elephant and then showed us how they


were going to eat it one bite at a time. It was so encompassing I don’t know if there was anything I liked.” (Seattle)

• Perceived lack of fiscal responsibility/accountability. Participants in each
of the four groups were concerned that money would be wasted and that promised transportation improvements would never become reality ƒ “I didn’t like the fact that the money was just going into a pit without a
real plan.” (Seattle)
ƒ
County)

ƒ

ƒ

County) “I didn’t trust that the cost was what they said it was.” (South King

“There’s no faith in believing those people when they talk about what they’re going to do and how much it will cost.” (North King County) “We need more efficient government in Washington.” (South King

• Project mix. Some people thought there was too much light rail, or that it was
too early to fund additional light rail until the line under construction is completed. Others thought there were too many road projects. People who favored light rail tended to think it would have been better if the transit and road portions were separate.

Should transportation be funded with user fees or general taxes?

• A combination of user fees and general taxes is needed. The majority of
responses advocated some combination of the two funding sources. ƒ “I think you need a combination of both. Local citizens need to pay for
infrastructure but constantly increasing that cost doesn’t work, so user fees are good too.” (Seattle)

ƒ “A combination of both. General taxes for the majority; user fees for high
traffic areas.” (North King County)


When you hear people talk about the “region” we live in, what do you think of?

• Participants provided a variety of responses to what “region” they live in. In
most groups, answers to this question appeared to follow however the first few participants responded to the question. There was no consensus about how to define this region. Common responses included: ƒ Puget Sound

ƒ Pacific Northwest ƒ Tacoma to Everett

ƒ Snohomish, King and Pierce counties ƒ Western Washington

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Messaging

Focus group participants were asked to consider the general concept of using tolls to reduce congestion, make traffic flow more smoothly, and improve the transportation system. They were asked how they would explain the concept of tolling to a friend or neighbor.

Discussion Highlights

If you were explaining these ideas to a friend or neighbor, what would you tell them?

• “I’d tell them it’s been proven to work in other cities.” (North King County)
• “It’s a user fee instead of a property tax and it’s one way to fund our freeways


and bridges.” (East King County)

• “You’re paying for roads you already use.” (North King County)

What would you call these techniques that use prices that rise and fall to reduce congestion?

• Popular Terms
ƒ Express Toll Lanes ƒ HOV/Pay

ƒ Flex lanes

ƒ Time of day pricing

• Unpopular Terms ƒ Dynamic pricing ƒ Good to Go! lanes

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Appendix A: Methodology

Focus Group Purpose

Focus groups provide an opportunity to explore attitudes, beliefs, opinions and experiences among a somewhat random yet representative sample of the affected public. Although focus groups do not provide statistically valid data, they are designed to elicit qualitative data through the give and take of group discussion.

groups were used on the Awareness and Acceptance of Pricing project to: • Gauge participants’ awareness of tolling for the purpose of improving traffic • Learn how to successfully talk with the public about traffic operations and
tolling strategies

• Identify what moves people to support tolling (or to oppose it) • Determine opportunities to improve support for tolling with a public
engagement program

In Phase 1 of the Awareness and Acceptance of Pricing project, focus groups were held to gauge public awareness and attitudes regarding tolling. The focus groups were held from late-November to early December 2007.

Focus Group Participants

All participants were recruited randomly by a paid public opinion firm from four geographic areas:

• Seattle

• East King County • South King County • North King County

General participants were only required to meet the standard recruitment guidelines, but were screened to ensure demographic diversity. In addition, two low-income sessions were held, one in the north and one in the south. Lowincome participants were screened according to specific recruitment guidelines set forth for the low-income groups. In addition to the standard recruitment guidelines, each focus group targeted participants from geographically relevant areas, and sought users of specific roadways and modes of transportation.

Recruitment Guidelines

The recruitment guidelines for the focus groups were as follows:

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Recruitment Guidelines (for all groups)

- Voted in two of last four elections - Equal numbers of men and women - Minimum of two racial/ethnic minorities - Minimum of four with bachelor’s degrees - Minimum of two who ride transit or carpool Recruitment Guidelines (for low-income groups)
- Equal numbers of men and women - Minimum of two racial-ethnic minorities - A household income level of $30,000 or less per year for households of 1-4 people; and $50,000 or less per year for households of more than 4 people. (Income levels roughly 150% of the federal poverty level.)

Focus groups were held at four locations, with two sessions taking place at each venue. A total of 80 people participated in the focus groups, with 60 people participating in the general sessions and 20 in the low-income sessions. Participants were given a stipend of $75.00 for their time. Detailed information on the four focus groups, including location, session dates and times, and target audiences is below:

Location Date and Time Target Audience
Seattle November 27, 2007 − Recruit from within Seattle city
limits
2101 N. 34th St. 5:30pm - 7:30pm
Seattle, WA 98103 8:00pm - 10:00pm
− Drive or ride transit on these
highways one to three times per
week: SR 520, I-90, AWV, I-5


East King County November 29, 2007 − Recruit from Bellevue,
Redmond, Kirkland, Mercer
11808 Northup Way, Suite 5:30pm - 7:30pm Island
270 8:00pm - 10:00pm


Bellevue, WA 98005

− Drive or ride transit on these
highways one to three times per week: SR 520, I-90, I-405, SR 522
S

outh King County 12825 1st Ave S. Burien, WA 98168 December 5, 2007 5:30pm - 7:30pm (L.I.) 8:00pm - 10:00pm (L.I. - Low-Income Group) − Kent, Auburn 1 Low-Income Group − Recruit from Renton, Tukwila,

− Drive or ride transit on these highways one to three times a
week: I-405, I-90, SR 167

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North King County

19333 North Creek Parkway Bothell, WA 98011 December 10, 2007

5:30pm - 7:30pm (L.I.) 8:00pm - 10:00pm (L.I. - Low-Income Group) − Recruit from Bothell, Lake
Forest Park, Kenmore, Woodinville, Shoreline

− Drive or ride transit on these highways one to three times a
week: I-5, SR 522, SR 520

− 1 Low-Income Group

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Appendix B: Focus Group Discussion Guide

Welcome and Introductions (10 minutes) - help participants to feel at ease, set expectations for the evening

o Introduce self and explain role as moderator. I don’t work for the people who are
sponsoring these sessions and won’t be able to answer all your questions, won’t be out of a job no matter what you say

o Explain that we are here to discuss traffic, transportation and funding, and learn
your thoughts and opinions about the subject.

o People involved in the project are watching and a recording of these meetings and
they may be viewed by other project staff.

o Ask around the table: “What is your first name? Where do you live? How long
does it take you to get to school or work (and back home again)?

Traffic & what causes congestion? (15 minutes) - see what’s at the forefront of their thinking about transportation; learn what participants perceive are the causes of congestion; suggest that traffic can be managed to relieve congestion

o On a scale of 1 (very good) to 10 (very bad), how would you rate traffic and
congestion in the area?
o Is traffic getting better or worse?
o Compared to other things going on, how important is traffic to you? Is our traffic
pretty much the same as in other big cities you’ve visited?
o What causes traffic to be so bad? (Facilitator captures on flip chart.)
o Do you think you contribute to traffic congestion?


(Facilitator reads background piece outlining major causes of congestion).

“Traffic experts have found that highway congestion has many sources. One is the overcrowded lanes on the highway. During the afternoon commute in the Central Puget Sound region, some lanes are so crowded that they move only 1,000 cars per mile per hour - half of what they are designed to move because too many people flood onto them at the same time.

Another major source of congestion is accidents and disabled vehicles. Depending on which highway you are traveling these “incidents” contribute to about 40 or 50 percent of all congestion.”

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Can we solve chronic congestion? (5 minutes) - learn what participants know about possible solutions for congestion; further suggest that traffic can be managed to relieve congestion

o Do you think we can reduce congestion? How? Do you have personal experience
in other cities that have things that we don’t that make traffic and traveling work better? What are those ideas?

(Facilitator prompts with following if necessary.)
ƒ Add lanes

ƒ Add more transit routes

ƒ Make transit service more reliable or more frequent ƒ Use stop-and-go lights on on-ramps to keep the highway moving ƒ Signs over the highway telling drivers which routes are faster ƒ Tow trucks to clear away accidents quickly

ƒ HOV lanes

ƒ Express lanes

Introduce tolling (10 minutes) - Introduce and explain tolling; how it works; and have group respond to the concept

o How many of you have used a bridge or highway with a toll? (Raised hands;
note-taker counts how many participants are familiar with tolls)

o Did you know that tolls and other forms of pricing can be used to reduce
congestion? Because of advances in technology, no toll booths would be necessary, so you don’t have to slow down to pay. What do you think about that idea?

o Can anyone think of how that would work?

(Facilitator reads a background piece on tolling.)

“The tolls most of us think of first are what I’ll call “classic tolls.” Those are tolls designed to pay for the cost of a new highway or bridge, similar to the new Tacoma
Narrows Bridge. For right now, I’d like us to talk about a different kind of toll. There are new kinds of tolls that improve the flow of traffic on the highway.

The idea is to charge people to drive in specific routes to assure that traffic flows smoothly. The price to use the road may change depending on the time of day or the amount of traffic. As a result, some traffic moves to less busy times, or to other carpools or transit. Some people also combine their errands into one trip or eliminate “unnecessary” driving.

Similar thinking has been successfully used to adjust prices for electricity, airline tickets, cell phone rates, and tickets to movies, where a matinee costs less than an evening show.

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The money raised can be used to fund transportation, such as road improvements, transit operations, incident response or other things to help keep traffic moving.”

(If asked “how much would the price be?” facilitator asks the following)
o What would be a reasonable price to pay for faster travel on the highway? o What price would make you change your behavior?

(Info for facilitator if needed) TNB is $3 round trip. In other places where there are lanes where the cost ranges from 50 cents to $8 depending on the time of day.

Examples (10 minutes) - Introduce HOT lanes, and the idea of tolling a whole facility; illustrate how tolling would work in real life.

o Now I’d like to talk about a few ways to improve traffic flow with tolling.

“One way to improve traffic flow is being done in cities like Denver, San Diego, Los Angeles and Minneapolis. These cities have lanes where people can pay to enter carpool or transit lanes, similar to our HOV lanes, when space is available. Washington will be opening a lane like this soon on SR 167 between Renton and Auburn. This quick video segment shows how the new lane will work. (Facilitator shows 3 minutes of Rachel’s Drive).

That concept could be used in several ways.

You could have one lane or several lanes where all drivers pay to use them, and only transit is free. HOVs might pay. There are still regular lanes available.

Another option is to charge for all the lanes. The price could vary by time of day - be higher during the busiest times such as morning and evening commutes, and lower during mid-day or night time when there are fewer vehicles on the road. Remember, the purpose of any of these options is to keep traffic flowing more smoothly, creating more reliable travel times.

Reactions to examples of tolling (5 minutes) - Have group consider different forms of tolling and potential benefits and challenges.

Think about what it would be like to drive on a route like those I just described that charges drivers in order to keep traffic flowing more smoothly.

o What strikes you about the ideas? What thoughts come to your mind? (Facilitator
captures on flip chart.)

o In general, is the concept of paying for improved traffic flow one you could
support? Why or why not?

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ƒ What if you knew that the lanes wouldn’t hurt travel times for transit
or HOV users?

ƒ What if some of the toll revenue funded more frequent transit service
so people have an option to travel in that lane without having to pay if they are on transit?

ƒ What if you knew that in cities where HOT lanes are operating, when
people are asked about HOT lanes, 50 percent to over 70 percent of people across all income groups say they like them?

HOT Lanes (10 minutes)

Great, now assume with me for a minute that these types of designs work well to keep traffic flowing. Remember the example in the video? There, solo-drivers can pay to enter the HOV lane if there is space available and in return get a more reliable trip, because the price in the High Occupancy Toll lane (HOT lane) adjusts to keep traffic flowing smoothly.

o What would be good about this idea?

(Facilitator prompts with following if necessary.)

ƒ Reliable travel times because people might divert to another road or to
transit or to another time of day

ƒ Some people may avoid unnecessary trips ƒ You can buy a faster trip

ƒ You know the trip will be reliable ƒ It has a benefit to the environment ƒ It provides you another travel choice

ƒ It’s optional - there if you need it, but not required

o Do you see any problems with this idea?

(Facilitator prompts with following if necessary.)
ƒ Some people might not be able to afford paying for the lane ƒ The HOV lane might be more crowded

ƒ HOV drivers would be free

ƒ Some people might try to cheat and not pay ƒ A computer will record when your transponder is debited ƒ “Green vehicles” that get very high gas mileage and very low emission
are not given special consideration

o Do you think you would choose to pay to use the lane? Why or why not?

Priced highway (10 minutes)

Now, imagine that all the lanes of the highway are priced and the cost is higher during busy times, such as the morning and evening commute, to keep traffic moving. When there are fewer vehicles, the price is lower, say at mid-day or night.

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o Do you think this could be useful? Why?

(Facilitator prompts with following if necessary.)

ƒ The whole highway would be moving faster, and moving more traffic,
than it is now

ƒ It’s a benefit to the environment

ƒ You individually may have a more reliable drive

o Do you see any problems with this idea? What are they?

(Facilitator prompts with following if necessary.)

ƒ Some people would not want to pay to use that highway and might be
inconvenienced

ƒ Some people might try to cheat and not pay

ƒ You would have to pay since the whole highway has a price

o Do you think you would pay to take the highway that was moving smoothly?
Why or why not?

o If not, what would you do instead?

SR 520 Corridor example (15 minutes)

Now let’s talk about an example of how these ideas might work on a specific highway. We know that tolls, like those on the Tacoma Narrows Bridge right now, can be used to raise funds for a major project. We also know charging drivers can keep traffic flowing smoothly on our highways.

You may know that the SR 520 floating bridge needs to be replaced soon, and the replacement will be partially funded by toll revenue. That’s a given.

Tolls in the SR 520 corridor, from I-5 to I-405, could help raise the needed funds and could also be designed to keep traffic moving during the construction process.

Tolls could also start on the existing corridor, say as early as 2009, to reduce the traffic congestion on SR 520 and start raising funds for the new bridge.

o What do you think of this?

o Would you support tolling the existing corridor? o What if transit service is expanded?

o What if tolling before construction meant a lower price than if we wait until the
new bridge is built?

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o What if rush hour travel on SR 520 corridor was reliable? o What else would have you support tolling the existing corridor?

(Facilitator - if groups talks about how they would use I-90, ask the following)
o What if I-90 also had a toll?

We’ve talked about a lot of different ideas now - we’ll take a quick break and please think about what you’ve heard so far.

[2-3 minute break while facilitator meets with observers]

Overall responses to tolling (5 minutes)

Consider the whole idea of using prices to reduce congestion and make traffic flow more smoothly and improve the transportation system.

o If you were explaining these ideas to a friend or neighbor, what would tell them?
(Facilitator captures on flip chart.)

o What questions do you have about these ideas? (Facilitator captures on flip
chart.)

How do we talk about this? (10 minutes) - Get input from participants about how to discuss tolling with the public

What to call this

Transportation experts are also wondering what to call methods of tolling to keep traffic moving, so that it’s clear to people what we’re talking about.

o What would you call these techniques that use prices that rise and fall to reduce
congestion?

(Facilitator prompts with following if necessary.)
ƒ Road use fees

ƒ Road user fees ƒ Roadway Pricing ƒ Value Pricing ƒ Tolling

ƒ Time of day pricing ƒ Variable pricing ƒ Dynamic pricing ƒ Express Tolling

What to call “HOT lanes”

As you saw in the video earlier, SR 167 between Renton and Auburn will have a four-year test allowing solo-drivers to pay to use the HOV lane if there is space available.

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EnviroIssues 1/15/08


o What name for these types of lanes would be clear, paint the right picture of what
the driver will experience, and have a positive connotation?

(Facilitator prompts with following if necessary.)
ƒ Express Toll Lanes

ƒ High Occupancy Toll lanes ƒ HOT lanes

ƒ Good to Go! lanes ƒ Toll lanes

ƒ H-O-V/ H-O-T lanes ƒ Fast lanes

Response to election (10 minutes) - Get feedback on how participants think transportation should be funded

In November, a general tax package (Proposition 1) to support transportation improvements - both roads and transit - in the region was rejected by a majority of voters.

o Are you familiar with Proposition 1?

o What specifically did you like about Proposition 1? o What specifically did you not like about it? o What’s more fair, general taxes or user fees?

What’s a region? (If time allows, 5 minutes)

o When you hear people talk about the “region” we live in, what do you think of?

Wrap-up (5 minutes) - Wrap up the focus group

o Great work. We really appreciate your thoughts on these important issues and this
is helpful information. Thanks so much.

Pricing Focus Group Report - DRAFT FINAL Page 35 of 35
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Outsourcing Bridge and Road Maintenance

Competing for Highway Maintenance:
Lessons for Washington State

by Dennis Lisk, Research Analyst
September 1998


Executive Summary

Today, current law bars Washington State from tapping the energy and talent of the private sector to maintain its highways. Established research demonstrates that the state could save at least ten percent each biennium over current operations if it contracted highway maintenance with the private sector. That amounts to almost $25 million out of a $248.6 million budget for 1997-1999.

Almost every state and Canadian provincial highway and transportation agency contracts with the private sector for some or all of their highway maintenance service. Five jurisdictions where private sector competition is used extensively are Massachusetts, British Columbia, Virginia, Texas, and Indianapolis.

The Washington Institute Foundation has undertaken a major study that examines in-depth these five communities. Our study found that, for the most part, these governments have seen highway maintenance costs decrease dramatically, while levels of service simultaneously increased.

Each government employed different methods to involve the private sector in highway maintenance work. Massachusetts and Indianapolis used "managed competition," where private companies and public employees competed against each other to provide service. British Columbia privatized one hundred percent of their highway maintenance in a year's time. Virginia and Texas implemented private sector involvement in different forms after receiving directions from their legislatures.

Washington State has much to learn from the experiences of the communities described in our study. Until current legal barriers fall, Washington taxpayers will never realize the benefits of cost savings, innovations, and choices the marketplace can offer.

Introduction

Maintenance of Washington's roads and bridges may seem inconsequential in the perpetual debate over the proper role of government in our daily lives. Whether we are talking about pavement resurfacing, snow removal, landscaping, or bridge repair, there is no argument that these functions protect public safety and are government's legitimate domain. But determining the function to be performed by government only begins the analysis. Next, government must consider the best way it can provide its service. That requires answering this question: Can the function be provided as well or better by the private sector?

Between 1997 and 1999 the State of Washington will spend $248.6 million on highway maintenance. This is approximately 9 percent of the state Department of Transportation's (WSDOT) total budget of $2.2 billion. During the current biennium, the state will employ 1,427 full-time employees to maintain a network of 7,035 miles of roads and bridges. Today, Washington State performs almost all highway maintenance work through a legally protected monopoly. It is against current law for WSDOT managers to choose from more cost effective and efficient options in the private sector to maintain state highways. In the 1998 state legislative session, State Representative Maryann Mitchell (R-Federal Way) offered a bill to exempt WSDOT from the provisions of state law currently barring them from using private companies. Although the bill did not survive the 1998 Legislature, this issue will return for the 1999 Legislature.

This paper is the first part of a two-part study that will look at how citizens of Washington State can get better value for their tax dollars by giving the private sector an opportunity to compete for highway maintenance. Part One of our study examines the experiences of several governments around North America that have incorporated private sector competition into their highway maintenance programs. This Fall, we will publish Part Two of our study, which will focus on Washington State's current highway maintenance program, legal barriers against private sector competition, the legislative attempts to remove those barriers, and the private sector's capability to provide maintenance services.

Competitive Government

During the 1990s a revolution has been occurring in the way state and local governments deliver services to their citizens. Political leaders today face tight spending constraints and taxpayers who are not satisfied with governments that deliver low levels of service with even lower levels of quality. In order to survive politically, many elected officials are learning the same, age-old lesson which businesses have found to be key to their own prosperity: to succeed you must provide the highest quality goods and services at the lowest possible prices.

Today, a new breed of political leaders is asking fundamental questions: What services should we perform? Are there services we currently offer that could be performed better by the private sector? When we do perform services, how can we deliver a high level of quality for the lowest possible price to our citizens? Across the country, these questions increasingly are being answered through recourse to market principles.

Competitive government is a simple concept. It substitutes the creativity of the marketplace for centralized decision making, employing the challenge of the private sector to stimulate public sector employees to meet cost and performance standards in order to retain the work (and their jobs).

Our examination revealed four goals an effective competitive government tries to achieve. Those goals are discussed in detail below:

Lower Costs: Lower costs for effective and quality service are the paramount goal of any competitive government. Private companies are disciplined to seek efficiencies through the need to operate at a profit while providing a service at a competitive price. Traditional, tax-supported government organizations lack that guiding discipline. By employing the techniques of competition, governments force themselves to find efficiencies within their operations and lower their costs of performing a service.

Higher Service Levels: The genius of the competitive process is that it rewards innovators who discern new or better patterns of service delivery as a way to distinguish themselves from their competitors. Monopolies - government or private - frequently lack the stimulus to improve. By opening themselves to the challenge of competition, governments can learn to upgrade their services within existing budgets and even, experience shows, achieve cost savings at the same time.

Better Management: The competitive process rewards efficient management. Governments can streamline their operations by using the same accounting procedures and productivity measures that the private sector uses, which are more accurate and comprehensive than traditional government methods. Businesses know very well that they must be lean and efficient to compete in the marketplace.

Changed Government Culture: The culture of government changes when it chooses competition over monopoly. Instead of performing more functions with less expertise and effectiveness, competitive governments liberate themselves to perform a smaller set of core functions better than ever before. Instead of being the adversary of the private sector, competitive governments become partners with the private sector.
To see how competitive government works in practice when applied to highway maintenance we selected five case studies of governments from across North America - Massachusetts, British Columbia, Virginia, Texas, and Indianapolis. Some have had more success than others in achieving the goals set out above, but all are important examples for Washington State to consider for the future of its highway maintenance program.

Competitive Highway Maintenance in Other Communities

According to a recent audit of Washington's Department of Transportation (WSDOT), "Nearly all [U.S.] state and Canadian provincial highway and transportation agencies, as well as many counties and cities, contract for some portion of their highway maintenance work." After analyzing examples of other communities and looking at past studies of the market in Washington, the audit concluded that by contracting out highway maintenance work, WSDOT could achieve "real cost savings of 10 percent or more over current expenditures and at the same time [improve] service levels." Savings would amount to almost $25 million dollars, slightly more than what Washington State taxpayers will spend in the current biennium on capital expenditures for high-speed passenger rail between Vancouver, B.C., Seattle and Portland.

Our study found several examples of competitive highway maintenance in other communities:

The Commonwealth of Massachusetts and City of Indianapolis gradually implemented systems of managed competition for road maintenance after determining that there was a clear need to reduce unnecessary costs. After initial reluctance by government employees, the amount of services provided increased, while costs dramatically decreased.

The Province of British Columbia, on the other hand, privatized 100 percent of highway maintenance service in 1988, with the assumption that private sector provision of the service would lower costs. Since then, a number of reports have not been able to determine whether costs have either increased or decreased.

The Commonwealth of Virginia contracts out a number of maintenance services and also "has undertaken the nation's first major roadway all-inclusive routine maintenance outsourcing." Essentially, they have given a five-year contract to one private vendor to perform maintenance on three Interstate highways, with the vendor guaranteeing the Commonwealth $22 million in cost savings.

The State of Texas has been contracting with the private sector for highway maintenance since 1989, when the state legislature mandated that the Texas DOT contract out a minimum of 25 percent of maintenance services and achieve at least 10 percent cost savings.

Case Study #1: Massachusetts - State Level Managed Competition

The Massachusetts Highway Department (MassHighway) manages 12,500 miles of highway, 3,000 bridges, 60,000 roadside acres, 80,000 catch basins, and 3.6 million feet of guardrail. In 1992, Massachusetts' roads and bridges were in dire need of basic maintenance. According to Massachusetts' Transportation Secretary James Kerasiotes, "A notable lack of management...contributed to needlessly high costs in the maintenance of the state's roads and bridges." This situation led to incredible waste and abuse: one foreman for every two laborers in the Maintenance Division; "average sick day totals...as high as 23 days in some maintenance sections," when MassHighway's stated goal was six days or less per year ; and a productivity monitoring system that left management with hardly any idea of what its own employees were doing on a daily basis. The situation was so bad that MassHighway management believed fundamental change was necessary.

The injection of competitive forces revived the Massachusetts highway maintenance program. In October 1992, Secretary Kerasiotes initiated a year long pilot project in Essex County in eastern Massachusetts to test how competitive contracting with the private sector would work. The project's main component was a transfer of all normal highway maintenance to a single private contractor. Some state employees were assigned to monitor the progress of the contract, while the bulk were transferred to other sections of the department.

In just one year, the Essex County contract saved MassHighway approximately $4.4 million, while the value of services performed increased by over $2 million. In plain English, this meant that services like lawn mowing, which state workers performed once a year along highways in Essex County, were completed at least five times a year by the private contractor. Efficiency does not just mean getting things done quicker - it means increased productivity at a cost that is the same or less than the original expenditure. This is exactly what happened in Massachusetts.

The success of the Essex County pilot project led Massachusetts to expand their program in 1993 to maintenance districts' four and five, which encompass all of eastern Massachusetts. The state awarded seven contracts for this area; private sector companies won four and the state employees union three. Massachusetts saved $7.8 million with these contracts , seeing service levels rise by an additional $10.2 million. Finally, in 1996, MassHighway expanded its maintenance program across the rest of the Commonwealth with similar positive results.

There were efforts by opponents of competitive highway maintenance to stop its extension and to discredit the claims of cost savings Massachusetts received from the Essex County pilot project. Secretary Kerasiotes responded to that criticism by commissioning an independent accounting firm, Coopers & Lybrand, to perform an audit that confirmed that significant cost savings did, in fact, occur from the Essex County contract. As a result of the success of the project, Boston's Pioneer Institute awarded MassHighway its 1995 Better Government Award for Innovations in State Government.

There were several keys to Massachusetts' success. First and foremost, there was strong executive commitment and leadership. Transportation Secretary James Kerasiotes, a former businessman, had full backing from Governor William Weld to pursue competitive bidding in the face of entrenched political opposition.

Second, once the initial suspicion of motives on both sides dissipated, management and labor learned to cooperate. State workers began to exercise peer pressure to see that they performed their tasks in a timely and effective fashion. The competitive process removed poor management procedures and empowered workers to suggest better methods for performing their tasks and managing themselves. Some workers feared the elimination of their jobs, but those fears disappeared as 31 promotions were issued to public employees working on the three competitive contracts the union won. At the same time, management learned to appreciate the expertise of their own workers and share valuable information with them to make their jobs more effective. U.S. Labor Secretary Robert Reich recognized this kind of cooperation in 1996 when his Task Force on Excellence in State and Local Government Through Labor-Management Cooperation awarded Massachusetts for their program.

The final key to Massachusetts' success was the willingness and capability of private sector companies who were given a chance to compete. In Essex County, seven companies bid for one $3 million contract. A study by graduate students at Harvard's Kennedy School of Government stated that competition for the highway maintenance market in Massachusetts was "robust." The reasons for this high level of healthy competition were fairly simple according to the Harvard students: first, there will always be a need for maintenance of the public's roads and bridges, and second, private contractors were already thriving by servicing non-government markets like parking lots, housing development roads, and other projects.

Case Study #2: British Columbia - 100 Percent Privatization

Since 1989, the Province of British Columbia has contracted out all of its highway maintenance to the private sector. The Provincial responsibility for highway maintenance includes all the roads and bridges outside of municipal jurisdictions. The Province is divided into 28 separate maintenance service areas, which total over 42,000 kilometers of roads and over 2,800 bridges. Recent figures place the total value of maintenance activities in the Province at $290 (Canadian) million annually.

During the 1980s the Ministry of Transportation and Highways contracted a growing amount of maintenance to the private sector, and finally in 1988 the ruling Social Credit Party (a conservative party), led by Premier Bill Vander Zalm decided to privatize the entire maintenance program. According to Maintenance Programs Manager John Newhouse, "The decision was made on philosophical grounds, in the general belief that the private sector could provide the services more efficiently." The government hoped that privatizing highway maintenance would reduce costs, but it had no established data to support this belief prior to making its decision. Essentially, a political decision was made before any examination of the actual government costs of providing highway maintenance were assessed.

In 1988, the Ministry of Transportation and Highways hired 20 private firms for service contracts totaling almost $756 (Canadian) million over three years. The contracts were lump-sum agreements, which paid contractors for the satisfactory completion of all work in the maintenance district over the three-year life of the contract. In addition, the private contractors performing government maintenance work were required to offer employment to almost all of the approximately 2,500 Ministry employees (at the same wage rates) assigned to highway maintenance before privatization. Government equipment, machinery, offices and maintenance facilities were sold or leased to private contractors as well.

One of the other major changes in the Province's maintenance program was the implementation of a different set of standards for how maintenance work was to be done. Before privatization, the Ministry operated with process-oriented standards that did not describe the results to be achieved, but rather gave detailed instructions for maintenance workers to follow. In contrast, the privatization policy set out end-result standards, making it easier for contractors to perform without day-to-day micromanaging from the Ministry. In other words, the Province is paying for good roads, rather than putting down defined quantities of asphalt. These standards enhanced final accountability by placing the entire responsibility for performance on the contractor. By all accounts the new standards are a substantial improvement. In 1991, the New Democrat Party (a socialist party) took power in British Columbia. The New Democrats were highly critical of the original privatization policy. Therefore, it was not surprising that once entering office they raised concerns that the Province was not receiving the savings hoped for from privatization. In 1993, the Provincial government appointed a review team to investigate the results of privatization. The team's June 1994 report reached several conclusions:

The Province's complete privatization was but one method of involving competition from the private sector, and not necessarily the best method.

Except for the changed maintenance standards, the "privatized approach [was] essentially a mirror image of the Ministry of Transportation." Going further, the report stated that it could not "subscribe to the notion that a full 'privatization' had actually occurred..."

Finally, the primary conclusion of the review team was "that there [was] strong evidence to indicate that the privatized highway maintenance program...cost substantially more than the predecessor program and a cost reduction program should be explored."

According to the report, the Ministry did not first accurately estimate the costs it would incur in administering the program. Furthermore, no attempts were made to estimate what it had actually cost the Ministry to perform highway maintenance before privatization. There were similarly no attempts to measure the potential costs for the Ministry to administer the new contracts until after the political decision was made to go forward, and no pilot project was attempted to test the Ministry's privatization approach.

The charge that full privatization had not occurred makes sense when one considers that private companies were forced to hire at the same wages almost all the government's maintenance employees. According to the report, this policy "severely constrain[ed] contractors' normal abilities to control input costs and obtain efficiencies." Additionally, a 1995 report of a committee of Ministry representatives, the contractors' trade association, and organized labor suggests that one reason contractor costs appeared higher than the previous government costs was because employee benefits were now expressed as actual costs, instead of being hidden as they had been previously in government budgets.

Despite the New Democrats' philosophical hostility toward it, they have made no move to end privatization of highway maintenance since coming to power in 1991. The Ministry's report of 1994 concluded that a return to government operation would "have more counter productive consequences." Despite significant and positive changes in the standards by which highway maintenance is performed, complete privatization of the service in British Columbia has not succeeded in achieving the foremost goal of competitive government: better service at lower costs. Although private contractors exclusively perform highway maintenance in British Columbia, they do so within a heavily regulated environment that shuts out the cost-saving benefits of the marketplace. In British Columbia, true competition has not yet been tried.

Case Study #3: Virginia - Public-Private Partnerships

The Commonwealth of Virginia is responsible for maintaining a transportation network of 55,600 miles of Interstate, state, county and local highways. The system includes more than 12,800 bridges, several underwater and mountain tunnels, and 41 Interstate rest areas. Virginia's Department of Transportation (VDOT) employs over 4,000 maintenance workers, divides the state into nine different highway districts, and keeps one maintenance headquarters in each of the Commonwealth's 95 counties. Virginia allocates $798 million for highway maintenance, about 38 percent of VDOT's $2.1 billion annual budget.

According to a 1996 Maintenance Management Evaluation done for WSDOT by the Dye Management Group, Virginia contracts out a number of "specialty services" like maintenance of rest areas, movable bridges, and tunnels. For a number of years Virginia contracted out maintenance and operation of some of their rest areas by selecting companies based on the lowest bid. The state subsequently found it received inadequate service with this approach and has since adopted a contracting out process in which cost is only one of several criteria for selection of the winning proposal. Since then, according to Dye Management, contractors have cut costs and simultaneously increased service levels at rest areas, which now provide 24-hour operation, with "contractors...very responsive to the rest area user's needs."

Another way the private sector has become involved in highway maintenance in Virginia is through the Public-Private Transportation Act of 1995, which encourages the use of public-private partnerships to design, build, maintain and operate roads in the Commonwealth. Soon after passage of the act, VDOT found that there was great interest from the private sector in putting together all-inclusive highway maintenance proposals.

In 1996, such a proposal was offered - unsolicited - to VDOT by Virginia Maintenance Services (VMS), to maintain several hundred miles of Interstate highways running through Virginia. Prior to their proposal, VMS had been contracting for a large percentage of the rest area maintenance in Virginia. VDOT was interested in the proposal and decided to make a pilot program out of it. A competitive bidding process was undertaken, which, not surprisingly, VMS won. VMS was given a five and one-half year renewable, fixed-price contract for a total of $131.6 million to perform all maintenance functions on 101 miles of I-95, the main north-south corridor on the Eastern seaboard, and 150 miles of I-81 and I-177. VMS is bearing full risk for "losses due to budgeting errors, weather, and other risks," and understands that they will be paid only when they have met VDOT's specific performance standards. This contract is expected to save Virginia $22 million over five years.

According to VDOT, "the VMS work is progressing satisfactorily. They are responsive to service requests from VDOT staff and citizens. When they make mistakes, they appear quick to correct them, and...learn from them quickly." Costs were higher in the first transitional weeks of the contract, but by the end of 1997, the total cost of the contract was running within the budget. Acceptance by VDOT personnel was guarded at first, as well as from other government groups such as police and fire departments, which already had a good working relationship with VDOT on matters of emergency response, but their skepticism has diminished as VMS' work has improved. No VDOT workers have been laid-off as a result of the contract with VMS. State workers who had previously been maintaining Interstate highways shifted their jobs to county road maintenance operations (Virginia maintains almost all county roads and bridges in the Commonwealth) that had been sorely neglected.

Case Study #4: Texas - Legislatively Mandated Competition

The Texas Department of Transportation (TxDOT) is like many things in Texas - very big. In the 1995-1997 biennium over 14,000 full time employees administered a $6.3 billion budget for TxDOT. Unfortunately, according to one recent analysis of TxDOT by the Texas Public Policy Foundation, "the entire agency suffers from a monopolistic culture that is hostile to the private sector and to the needs and desires of local communities." The report says that the costs of administering such a massive organization contributes to its inefficiency - over ten percent of all spending on highway construction and maintenance goes purely to administrative costs, nearly three percent above the national average of 7.4%.

In 1988 the government-sponsored Texas Transportation Institute (TTI) analyzed and compared the costs of selected TxDOT services with the cost of using private contractors. TTI's researchers selected four maintenance functions to study: guardrails, rest stops, pavement markers and road striping, and chip sealing. Except for pavement markers, TTI found that costs would decrease in all areas by as much as one third if private contractors were used.

In 1989, the Texas Legislature took action on these findings and required TxDOT to contract out 25 percent of the state's highway maintenance work, and to reach at least 10 percent cost savings in the process. To reach this goal, TxDOT directed its district offices each to achieve a set percentage of contracted work, with the Amarillo district at the low end with 11 percent and the Houston district at the top with 53 percent. A year after the 25 percent goal was mandated, TxDOT had actually exceeded this percentage and was contracting with the private sector for 27.2 percent of it's highway maintenance, saving over $10 million in the process. In 1991, the Legislature directed TxDOT to increase the level of contracted highway maintenance to 30 percent by 1992 and 50 percent by 1995. By 1996, TxDOT was contracting for 52.1 percent of highway maintenance.

Despite the apparent success TxDOT has had in achieving the percentages of contracting out and cost savings set by the Legislature, the agency continues to resist real change and cooperation with the spirit of the mandates set by the Legislature. According to the study published by the Texas Public Policy Foundation, TxDOT inflated the amount of maintenance operations they say they had contracted by counting activities in their budget that "are not directly related to highway maintenance." Furthermore, the annual report requested by the Legislature on the status of contracted maintenance operations "has never been submitted." At the recommendation of the Texas Public Policy Foundation, the Legislature passed a bill into law in 1997 stopping TxDOT from including activities not directly related to highway maintenance in contracted operations.

Case Study #5: Indianapolis - Municipal Managed Competition

The story of street maintenance in Indianapolis is about two virtues voters often complain are missing in politics today: trust and courage. Republican Mayor Stephen Goldsmith was elected in 1992 with an ambitious agenda and privatization was a big part of that agenda. However, after just a short time in office, he realized his campaign's emphasis on privatization was misdirected. It quickly became clear, as Mayor Goldsmith describes in his recent book, that

"competition, not privatization made the difference. Competition drives private firms - and, as we soon discovered, public agencies - to constantly seek ways to reduce costs and improve service."

Mayor Goldsmith decided to make street repair one of his administration's first laboratories of competition and assigned Mitch Roob, the Director of Transportation, to put together a pilot project competitively bidding a 10-block section of streets in northeast Indianapolis. At the outset they sought to determine how much it cost the city to fill its potholes, but they were unable to get a straight answer to this simple question. Roob decided that simply knowing how much it cost to fill a pothole was not as important as asking managers, "What is your cost of putting down a ton of asphalt?"

To answer Mitch Roob's question, the city hired the accounting firm of KPMG Peat Marwick to implement activity-based costing (ABC) for Indianapolis' government. Activity-based costing is an accounting system that measures every cost of providing a government service. Once all the costs of providing a service are known, efficiency can finally be brought to areas where resources are being wasted. As Mayor Goldsmith describes, "amazing things happened" when ABC was instituted.

In order to insure a level playing field between the city and the private sector in the bidding process, the city's maintenance division was required to determine the total cost for their work that included all the costs for equipment, material, labor, and overhead. For the first time, factors like the costs of heating and lighting city facilities and the depreciation on those buildings were included in the government accounting process. This process resulted in the union workforce streamlining their operations by cutting street crews from eight workers to five and two trucks to one per job.

Even after adopting workforce efficiencies, the city's costs were high, in comparison to what the city expected from the private sector. The workers knew the problem lay with bloated, unproductive management. To oversee 94 line workers in the maintenance division, the city employed 32 highly-paid supervisors (most of them Republican political appointees). The workers challenged Goldsmith to remove some of those supervisors to prove that he was serious about competition. Although the supervisors had supported Mayor Goldsmith's election, and the line workers were primarily Democrats, who mostly voted against Goldsmith, the mayor was not deterred. He laid-off or transferred half of the supervisors, winning the workers' respect and trust in the process, and making it clear that the city department would now sink or swim in a competitive market.

City employees won the initial contract by reducing the projected cost of pouring a ton of asphalt from $407 to $301 - a 25 percent cut. They also increased their productivity, from working 3.1 lane miles per day to 5.2 lane miles per day - an efficiency increase of 68 percent. Since the competitive policy began, city workers have won about 80 percent of all bids for street maintenance.

Although Indianapolis city employee union leader Stephen Fantauzzo differs with Mayor Stephen Goldsmith on most issues, his words about competition are strikingly similar to the Mayor's views about competition:

"The competitive model is a means to an end. It requires that line employees be involved in not only the performing of the work, but in deciding how the work is performed. It is a program that forces the city and the process to stop asking workers to park their brains at the door."

Lessons Learned

The experiences of these five governments illustrate several elements needed for successful competition. The five elements discussed in detail below are:

1. Committed Leadership
2. Accurate and Comprehensive Accounting
3. Performance Standards and Monitoring
4. The Existence of Competition
5. Empower Government Workers

1. Committed Leadership - A central factor in implementing private sector competition is the commitment of elected officials and agency managers to making competition work.

Of the examples studied, leadership was best displayed in Massachusetts and Indianapolis, where both the chief executives and their subordinate agency directors saw eye to eye on what needed to be done and were willing to back each other up when faced with opposition. It is also interesting to note that prior to their government service, agency directors in both Massachusetts and Indianapolis were not career government bureaucrats, but successful private businessmen.

In British Columbia, privatization was instituted under very committed political leadership, but the program has been administered for 8 out of its 10 years of existence by governments that probably would never have initiated such a policy on their own. Results have been mixed.

The Texas Legislature led the way in opening up highway maintenance to the private sector and achieving cost savings, but without leadership from the agency, it has required the legislature's constant oversight to see that the spirit of the reform is being obeyed.

2. Accurate and Comprehensive Accounting - If governments adopt the managed competition process to make themselves more competitive, instituting systems like activity-based costing will help them focus on finding efficiencies within their operations while creating a level playing field for public employees and private contractors.

Both Massachusetts and Indianapolis replaced outmoded and inadequate accounting systems in order to find out exactly how much it cost their governments to perform road maintenance.

When privatizing its entire system all at once, British Columbia did not feel it necessary to institute a new accounting system. As a result, British Columbia lacks the demonstration of cost savings required to drive competition forward.

Texas and Virginia do not use the managed competition approach, but contract out portions of highway maintenance work with the private sector alone, counting on competition in the private marketplace to drive down costs.

3. Performance Standards and Monitoring - Perhaps the most difficult lesson to learn and implement is that performance standards and the capability to monitor those standards are absolutely crucial if competitive government is to succeed.

In its first street repair pilot project, Indianapolis retained KPMG Peat Marwick to monitor city employees against cost overruns. With proper monitoring "the pothole job came in on time and on budget."

British Columbia's outcome-based standards are a key to improved maintenance service.

Strict standards were written into the contract for Virginia's Interstate maintenance pilot project that will save the state $22 million over 5 years. If the private contractor doesn't meet those standards, it will be financially responsible.

4. The Existence of Competition - As Mayor Goldsmith learned, contracting to a private monopoly rarely produced significant results. An essential part of successful competitive procurement is the existence of flourishing competition.

In its Essex County pilot project, Massachusetts chose an area where there were already many companies willing and able to compete for highway maintenance work.

Texas uses a "Contractibility Rating Analysis System" to determine an overall cost-effective contracting percentage for the state. This system sets a contracting percentage goal for each local maintenance district based on things like unit cost, availability of contractors, volume of work, and administrative costs. This rating system has determined that it is less cost effective to contract out in more remote districts than it is in urban districts.

One reason British Columbia required private companies to hire government maintenance employees was to prevent unemployment in remote communities of the Province. Serving this political goal deprived the Province of the flexibility, innovation and savings full competition can bring.

5. Empower Government Workers - Freed of monopolistic barriers to innovations, government employees can be as creative as the private sector and will respond to the stimulus of competition with intelligent ways to save dollars, improve service, and win the contracts.

When Stephen Goldsmith announced that maintenance on Indianapolis' motor pool would be competitively bid, Indianapolis Fleet Services asked for one more chance to improve the poor service they were providing. Faced with competition, IFS cut its workforce by 29% and trimmed its budget from $11.1 million to $9.1 million. As in the street maintenance division, most of these cuts were achieved by removing unneeded layers of management and rearranging work crews. The story doesn't end there, though. In exchange for previously negotiated pay raises, union workers agreed to a plan that allowed them a share of any additional savings gained on top of the original savings they already promised to the city. This gave public employees a direct financial reward ($800 on average per worker) for decreasing their costs.

According to Massachusetts union leader Frank Borges, competition "energized" state maintenance workers. By winning and retaining competitive contracts, public employees are now free from the restrictive and inefficient management practices of the past. They, like their private sector competitors, are now responsible for organizing and managing their own work. Public employees finally feel they are performing valuable and appreciated work.

Conclusion

As stated at the beginning of this paper, the goal of governments today should be to deliver high quality services at the lowest possible price to the taxpayer. This paper examined how five governments across North America applied this lesson in their street and highway maintenance programs. For the most part, those governments achieved major cost savings after careful application of competitive principles. Equally important, however, is that those savings freed up money for other transportation needs.

Competition in the marketplace is the best way to provide the highest quality goods and services for the lowest possible price. As it does for so many other things, competition will work for highway maintenance too. In the final analysis, we should remember again Mayor Goldsmith's dictum that competition makes the difference.

[This Fall the Washington Institute Foundation will publish Part II of our study, which will examine how competition would benefit Washington's highway maintenance program, the potential industry for highway maintenance work in Washington, and legislative efforts to implement competition.]

About the Author

Dennis Lisk is Research Analyst at the Washington Institute Foundation, where he works on issues like transportation, privatization, and state and local tax and budget matters. A native of Washington State, he has been with the Washington Institute since graduating from the University of Washington in 1993, with a Bachelors Degree in History. He and his wife live in Redmond, Washington.

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Source Notes

1. Joint Legislative Audit Review Committee, Department of Transportation Highways and Rail Programs Performance Audit Preliminary Report, prepared by Cambridge Systematics, Inc., February 9, 1998.
2. Ibid.
3. Ibid.
4. James Kerasiotes, A Proposal for Contracted Highway Maintenance: 1995 Better Government Award, p. 101, The Pioneer Institute for Public Policy Research, Boston, MA, November 1995.
5. Ibid.
6. Ibid.
7. Ibid.
8. Ibid.
9. David Gow et al, Privatization in Massachusetts: Highway Maintenance Services in Essex County. Excerpted from: From Public to Private: The Massachusetts Experience 1991-1993, p. 40, John F. Kennedy School of Government, Harvard University, Cambridge, MA, April 1993.
10. Nicole Crawford, "We Thought You'd Never Ask!" Union, p. 8, March/April 1995.
11. James Kerasiotes, A Proposal for Contracted Highway Maintenance... p. 108.
12. Independent Assessment of Massachusetts Highway Maintenance Privatization Program, Coopers & Lybrand L.L.P., June 1996.
13. Working Together for Public Service: Report of the U.S. Secretary of Labor's Task Force on Excellence in State and Local Government Through Labor-Management Cooperation, p. 28, U.S. Department of Labor, Washington, DC, May 1996.
14. James Kerasiotes, A Proposal for Contracted Highway Maintenance...p. 111.
15. David Gow et al, Privatization in Massachusetts: Highway Maintenance Services in Essex County. Excerpted from: From Public to Private: The Massachusetts Experience 1991-1993, p. 40, John F. Kennedy School of Government, Harvard University, Cambridge, MA, April 1993.
16. Ibid.
17. Ibid.
18. John Newhouse, An Overview of the B.C. Road and Bridge Highway Privatization Experience, p. 1, Ministry of Transportation and Highways, Victoria, British Columbia.
19. Correspondence from John Newhouse, Maintenance Programs Manager, Ministry of Transportation and Highways, March 30, 1998.
20. The Operational, Human Resource and Financial Implications of the Privatized Highway Maintenance Program of the Province of British Columbia - A Preliminary Report, p. 15, Ministry of Transportation and Highways, June 1994.
21. Ibid.
22. Ibid.
23. Ibid.
24. Ibid.
25. Ibid.
26. Ibid.
27. Ibid.
28. Ibid.
29. Report of the Tripartite Committee in Regard to Road and Bridge Maintenance, p. 35, Ministry of Transportation and Highways, January 1995.
30. The Operational, Human Resource and Financial Implications..., p. 60.
31. Dye Management Group, Inc., WSDOT Maintenance Management and Administration Evaluation, p. VI-18, Bellevue, WA, June 30, 1996. 32. Ibid. The Dye Management study did not comment on why the quality of contractors' work was inadequate under the low-bid contracting approach. So it remains unclear whether their work simply was of low quality or if VDOT wrote contracts with low performance standards and did not monitor those contracts well enough.
33. Ibid.
34. Dennis Shea, Public-Private Transportation Act Interstate Maintenance Contract: The First Year's Experience, Virginia Department of Transportation, December 1997.
35. Privatization Watch, p. 7, Reason Foundation, Los Angeles, CA, July 1998.
36. Dennis Shea, Public-Private Transportation Act Interstate Maintenance Contract: The First Year's Experience...
37. Ibid.
38. Cynthia Thomas, Sundown on Big Government, p. 28, Texas Public Policy Foundation, San Antonio, TX, January 1997.
39. Ibid.
40. Alberto Garcia-Diaz and Fernando Cediel-Franco, Evaluation of In-House Maintenance Contract Costs for Guardrail, Rest Areas, Pavement Marker, Striping and Seal Coats, Texas Transportation Institute, Texas A&M University, College Station, TX, July 1988.
41. Sundown on Big Government, p. 34.
42. Ibid.
43. Stephen Goldsmith, The Twenty First Century City: Resurrecting Urban America, p. 19, Regnery Publishing, Washington, DC, 1997. (Emphasis added.)
44. Organizing Competition in Indianapolis: Mayor Stephen Goldsmith and the Quest for Lower Costs (B), p. 2, John F. Kennedy School of Government, Harvard University, Cambridge, MA, 1995.
45. Ibid.
46. Organizing Competition in Indianapolis..., p. 3.
47. William D. Eggers and John O'Leary, Revolution at the Roots: Making our Government Smaller, Better, and Closer to Home, p. 110, The Free Press, New York, NY, 1995.
48. The Twenty First Century City, p. 20
49. Ibid.
50. Organizing Competition in Indianapolis..., p. 5.
51. "Pushing Back Privatization: The Indianapolis Story," AFSCME in the Public Service videotape, American Federation of State, County, and Municipal Employees, Indianapolis, IN.