Welcome to the Talking Operations Web Conference, Reauthorization, Applications for Operations & ITs. I'll be giving a brief introduction before turning this over to Valerie Briggs who we are pleased to have as our moderator for today's talking operations seminar. Be advised that today's seminar is being recorded. I'd like to now go over a few logistical details. It will last approximately 90 minutes, 30 minutes allocated for the presenters, 20 minutes for responses from our panelists, and the final 30 minutes for audience questions to the presenter. If you think of a question, you can type did into the chat box on the lower left-hand corner of your screen. Please make sure you are typing into the thin text box and not the large white area. Make sure you send your question to all participants rather than just the host or the speaker. Presenters will be unable to answer your questions during their presentations, but Valerie will use some of the questions typed into the chat box for the question-and-answer session during the last 30 minutes of the seminar. If at any time you'd like to zoom in on the slides showing on your screen, click on the zoom icon on the bottom of your screen. Looks like a magnifying glass with a plus sign in it. This session is being recorded. A file containing the audio and visual of this seminar will be posted to the talking operations web site within the next week. To access the recorded seminar please access talkingoperationswebex.com. Due to the size of the file, recorded files are available for viewing listening purposes only and cannot be saved to your own computer. We encourage you to direct others in the conference that may not have been able to attend the conference. Attendees will be made aware of the transcript. Valerie Briggs is the program manager for transportation operations. In this role she started the highway subcommittee on ITs PassPort. She overseas ASTHO's's deployment program and operations program and coordinate's ASTHO's national transportation operations coalition and the national association of working group for operations and ITs. Before coming to ASTHO Valerie worked for Boon Allen Hamilton. She has a bachelor's degree in civil engineers and a master's in civil engineering and public affairs all from the University of Texas. Now I'll turn it over to Valerie Briggs who will introduce our first speaker. Thank you, Jocelyn, I'm going to start into the speaker introductions right away. Our first speaker will be Dr. Anthony Cane. Dr. Cane joined the American Association of State Highway and Transportation official this is 2001, as the director of engineering and technical services, in this capacity he overseas the development of legislative proposals, the development of hundreds of technical publications and standards, the development of ASTHO software products. The evaluation of transportation products, radio frequency filings with the SEC and support to numerous ASTHO committees. He previously served as the Highway's National Director from 2001. He was instrumental in implementing and enacting transportation acts and funding increases. He's won numerous awards including the U.S. Presidential Rank award for distinguished service in 1991. And with that, I'll turn it over to Mr. Kane. Thanks, Valerie. Today we'll focus on the broad act and I'll touch on a whole host of areas that have been enacted with the President's pen on August tenth There you see the President with the Speaker of the House and the Head of the Service Transportation Committee from the House looking on very favorably on a very tough battle we had for two-years to get enactment of the Service Transportation Act. With many, many challenges, particularly the revenue sources to go into the Highway Trust Fund . I think when all is said and done, we'll highlight many, many of the provisions that were important to our members, including funding and oversight, great increases in the Transit Highway Program. A very new core highway safety program that's really important as we move toward driving down this in this country. A score of environmental streamlining provisions that tie hand-in-hand and many new editions in the freight ITs and operations area. There are three broad dimensions I will focus on in this presentation. Record funding levels, the transit account willing become problematic by 2009, which I'll touch on a little later. Major policy changes in a whole host of areas from expanded eligibility from the ITs and operations areas to tolling provisions and future courses of action. I'll touch on several presentation shall commissions that are established to take a look at the future service of transportation as well as the future revenue sources that are going to provide the income needed for transportation in the future. Something that was near and dear to the members of both AFTA and ASTHO and a whole host of organizations was with maintaining funding guarantees of both the transit and highway programs of both the trust fund as well as the general fund of transportation. Many of you may recall during the enactment of 2T-21 there were several times when negative wrap would have taken effect and Congress would have stepped in and changed that. I think the procedures we have in place now with limits on trust fund balances will protect us from that negative Java impact in the future. Two things that I know the transit recipients in AFTA, the cities, counties really wanted to maintain no matter what, was the structure that had been put in place in reauthorization acts, mainly having funding guarantees and fixing RABA so we did not have negative impacts should trust fund balances be reduced substantially or income generated to trust funds and lessons that had been forecast. Overall, our members, state department of transportation, local governments, AFTA, public transit organizations searching for a program of about 300 billion dollars, and that's fiscal year '04 through '09. As you can really recognize what was enacted, the research areas for lesser years than that, but the six-year package was about 300 billion dollars overall. With FHWA's portion of the highway, 240 billion dollars and transit almost 53 billion dollars, substantial increases over T-21. If we take a look at core programs, nine state departments of transportation particularly are very much interested in keeping the core programs of the highway as at the highest level possible. Core programs which I'll explain in a little bit are such programs as the interstate 4R program, transportation program. Historically earmarks had been increasing in every reauthorization act. If you go back maybe ten reauthorization acts ago it represented less than 10% of the program. In T-21 it had reached the level of 5%. It reached an all-time high this time as earmarked projects. In projects of national and regional significance and a new category of projects called tips, no, not the programming for Metropolitan areas, a series of additional hundreds of millions of dollars in special projects, our members were very adamant about keeping it down, we wanted to maintain the programs -- they represent a very small dollar amount, less than a half a percent of the overall program. Service of the core programs, I think something very important while Interstate maintenance are main attend have increased substantially. National highway increased substantially. Ridge programs are very important new core program which didn't exist before as the highway safety improvement program which I'll touch on more later -- it puts front and center a new core program at a very substantial increase of what it had been before. Close to a tripling of the money that has to be spent by 2009. Overall, the core programs are now 84% of the total package with an increase of 32% over where we were in T-21. In the area of finance we expanded the Tipia changes which is the ability to have concepts, reducing -- a state infrastructure banks expanded to all states and very important tolling provisions. Demonstrations programs for pricing, allowing the reconstruction pilots to continue as well. It was a tremendous debate during the house and Senate version of the bill as well as conference tolling provisions it was a great effort to roll back the current authority in TOMS and we're very for the I think to allow the flexibility, the cities and states to have an enhanced level of ability to toll for new capacity as well as price during peek periods to really be able to establish and control movements much more easily. A very important area that both the administration and our members were interested in was getting private activity bonds to allow a greater use of public private partnerships in our new projects that we have around the country and we're starting to see great expansion of new capacity using innovative techniques and foreign capital as well for the first time equity partner is coming in, and new toll projects in Texas, foreign investors and projects in Virginia and elsewhere, it's very important to have the package of innovative finance tools available. In addition, financial flexibility which I think was brought about by the number of new earmarked categories of special projects to allow flexibility to move money around. If any of you are aware, one of the real problems of earmarks is underfunding particular projects leading to great expectations. It's a great ability to have financial flexibility over what we had in previous acts. The Congress was also very much in favor of enhancing the stewardship and oversite of the program, the U.S. DOT inspector general as well as the Government Accounting Office and a host of other organizations were very instrumental in seeing that oversite provisions were increased particularly on the highway program and the transit program as well. On the highway program, there will be a requirement for annual reviews of dot financial management systems and project delivery systems, yet to be defined what project delivery systems means but it is a broad look at how projects are planned, funded, designed and constructed. In addition, minimum standards for project costs estimating and the language does not state what stage of a project you may be at, it could imply greater standards and greater rigor used at the environmental stage and PSE design and construction stage. Very important is the relationship with local government. The Federal Government is going to have to ensure and the state dot grant recipients much more control and enforcement of financial management records of local government. So a lot of the pass through funds in the SDP program are going to have closer scrutiny with with regard to financial accounting of local governments, we'll be working hand-in-hand with NPWA and others at the local governmental level. In the area of value engineering, it had always been Enlight Emed 23 Requirement. What this bill did was expand to bridge projects as well for 20 million or more. It really just modified some of the value engineering and included bridges at the 20 million dollar or more level. A very significant new requirement was the expansion of financial plan requirements on large scale projects. Prior law required mega projects, projects over $1 billion dollars to have financial plan as proved by the secretary of transportation. This act steps it down and now projects over 500 million have to have that approval. But not just financial plans, project management plans, so state DOTs local governments are going to have to put together project management plans which show how the consultant and governmental teams actively managed that project through the whole delivery of that project as well as the financial plan. All projects over 100 million will have to have a financial plan. Looking toward the future, we were interested -- in fact the whole coalition of members, NTOC and others have looked toward the future realizing the resources coming into the Highway Trust Fund for both transit and highways were going to be fully utilized in this legislation. Believe me when we show you a slide how they are fully utilized unless there's a revenue enhancement, the programs as we know them today for highways and transit will have to come to a screeching halt in terms of the levels they're at. It's a very comprehensive commission formed, let me mention the last one on the chart first. National financing commission, that commission in title one will be chaired by the secretary of transportation and will look very broadly at the future needs of service transportation. Transit inter-city rail, highways, will also look strongly at the interstate highway system going out 50 years, how it should be designed from an ITs and capacity. And a strong component on future revenue enhancements and how all service transportation can be financed, not just the highways, but the Highway Trust Fund but other service transportation modes as well. Jumping to the first one on that chart, Section 1909. The Senate Finance Committee looked at the Highway Trust Fund they're setting up a separate commission. The two commissions are going to be looking prodly at the Highway Trust Fund . There's also a Presidential commission on alcohol-impaired driving that comes up in the highway safety and its authorization areas. Extremely important with drunk driving still impacting 40% of fatalities in this country and no drop in total number unfortunately of the 43,000 fatalities we've been experiencing in the past. This commission has come up with hard hitting recommendations of how we can drive those numbers it down. There's also a commission to look at fuel tax enforcement and innovation techniques. One thing the revenue titled in this bill was increase the collection of revenues that less is evaded and there will be a commission set up to look at what more we can do on top of what we currently have in place. This is a chart done by the U.S. Chamber of Commerce foundation, showing what would happen at the level, this is a forecasted level of the Highway Trust Fund balance from not the original house level, but the house level just prior to conference, which is pretty close to the final package. And the revenue forecast at that time. Now, it's not a true picture because the revenue forecast would come a little lower now, because of increased fuel prices and less fuel consumption, the program was decreased a limb bit from the house level. On balance it's probably a good visual of what's likely to happen. The highway account for the trust funds being at 11 billion at the time of enactment will go negative by 2010. Adjustments are being made now in light of the actual level of investments dictated in safety and the actual forecasts which are made twice a year. It shows the importance of having these commissions and how they've come up with hard hitting recommendations on how you increase revenue to the Highway Trust Fund for both transit and highways, or else the federal aide programs will have to be tremendously revised come the next reauthorization. In the transit area, I think very good news as well. The AFTA, strongly pushed great increases in the transit program which you had in the overall programs, by fiscal year 2009. The transit recipients were very much interested in continuing funding guarantees which you got. Keeping the match ratio at 20% which it was, there were efforts to make it 50/50. Increased funding for transit in rural areas which is becoming extremely important with our aging population and providing better transit services tied in with healthcare services and other social services and a real big boost. The transit cooperative research program was increased not as large as many would have liked, but increased as well. Overall I think transit had a strong, strong increase. And the transit account of the trust fund as well as general funds, but the guarantees cover both general funds as well as trust funds through the appropriations process. In the areas of highway engineering and administration, in addition to the project oversight requirements which I mentioned earlier. There are a number of things that will aid the grant recipient. Design bills, increased flexibility as well as being allowed to award projects prior to the completion of NEFA provided no construction has started. Gives much greater flexibility to the design and construction world which is becoming a much larger part of project delivery as more and more states try to get projects online faster with less forces, it's going to be greater use of design build as we go on into the future, clearly. In the bridge program, I think good news for local governments as well as state governments, increased flexibility by allowing bridges to be improved with bridge funds before they become deficient. Why not have them preserved and use asset management techniques. They also pull off the limitation on 35% being the maximum allowed to be spent on the state's apportionment of off state bridges, if the state has critical bridges off the federal aid eligible highway system, they can utilize funds with no limitation. Both state DOTs and the U.S. Government have for many years tried to give greater flexibility to state DOTs in rest areas. The only thing that's allowed in current law, where a rest area revenue raising measures from toll roads that had been incorporated in the interstate in the beginning, like in New Jersey, Ohio, Pennsylvania. The only other revenue option a state could have were vending machines supported by the blind as the even revenue enhancing source you could have in rest areas, resulting in less rest areas, rest areas being closed down, not having expansion of rest areas for commercial vehicle traffic. What was done, some partial success, and this oasis program, which really directs trucks off the interstate. It calls for guide signs to be developed for trucks off the interstate. As a small program allowing commercialization of the idling reduction facilities which would be in effect ability of private sector command to put in isometry indication electrics. Very limited commercialization of rest areas allowed. The Congress made modifications and now calls for additional regulations on temporary traffic control and work zone areas there, will have to be a relook at regulations that were issued very comprehensive regulations that we worked strongly with the Federal Government on issuing. In the areas of buy America, existing provisions codified but expanded and it's going to be less of an ability for a state DOT to be able to have exemptions to buy America. What the Congress did was say you have to have a massive increase in overall project costs on component costs. Heretofore the law was administered -- if the state had a problem staying on steel. They could how an exemption to buy America to have steel allowed. Now the total cost of the project is impacted. You have less ability to buy American exemptions, a program that the administration strongly supported and our members see as a high value is highways for life. Funded at a low level. But a program that all states would participate in with a very rich goal of trying to have highways be build better for both safety, operations, but to last longer. We look forward to working with the administration in that program. A new advisory committee was provided for motorcycles and herb you'ves, the membership is kind of unique, there can be only one state DOT person on that membership from a technical capacity provided they're also a motorcycle rider. It's very much a program that was supported by the varying coalitions with a view of how highly operated and designed to accommodate motorcycles . The area of research, I think it's good news, but with a strong caution. The service transportation program has a substantial boost in increase, but designations and earmarks skidded the total funding. So FHWA is going to have a hardship funding some of the tag traditional line items they've funded in the past, areas of publications and technical assistance. So I think some real strong effort with the appropriations committee will be needed to try to bring some resolve with the re-tight constraints that will be there. SPR funding, no program changes, but a funding increase with the core programs rising so there will be a substantial increase in state planning and research funds and then in funds that draw off of that such as the initial highway research program. A brand new research area called F-sharp, it's funded about half the level it has been anticipated but with regard to the mechanism of it being administered by the national academy of science and all the control mechanisms that were supported were but in place. A brand new cooperative research program, 17 million dollars per year, competitive in terms of who the administrator is. One version of the legislation has the academy of science administering it, now it will be administered by the DOT. It's totally up to the department of transportation as to who will manage those program funds. Long-term pavement performance, the states have wanted to have funding to complete the 20-year research and technology sharing effort. About half the level that the states felt were needed. There will be have to be ref forms to their plan, at least a continuation of that program through a completion date of fiscal year 2009. Training and education programs including national highway institute efforts. The L-tab program which impact every state with technology assistant centers as well as the Indian reservations, an increase, but nowhere near the level the grant re1EU7 currents wanted. Those centers have become near and dear to county, governments, the locational governments and to many state DOTs in terms of their district offices who are very, very much aggregated and decentralized right now. The university of transportation research program, most people supported increases, the increase that came out was rather large in both dollar magnitude as well as named universities, and so for at least the initial years, everyone knows who's going to be a winner, because you're all named. There will be competition in two of the tiers in latter years. In the areas of ITs congestion and freight, substantial increases are now, Jeff Lindley later in the presentation will be touching on some of those areas. Highway safety, I think is a real strong message that has come out loud and clear in this bill. And I think everybody from the safety advocates to the administration to all the state groups involved from the governor's highway safety association to ASHTA to the National Association of Chiefs of Police, to AMVA, all strongly supported increases on the safety program. On the FHWA side, it's a substantial boost from about 500 million as 10% of the STP program in prior law, to now a new separate core area rising to 3.1 million by '09. Our members strongly supported the safety plan. What's important is it looks at all roadways, not just those that are under state ownership, and not just highway construction, look at the need for new laws, the need for enforcement, the needs for education, it's going to require all of the partners coming together and have a very strong comprehensive safety plan that the governor endorses. Funding flexibility, a limited amount our members had suggested a little more, but it allows some flexibility of the highway construction side to the softer side within the highway safety improvement program. Another important dimension is within the transportation planning process itself, a separation of the safety and security planning factors. They very much are distinct and the transit area funds to blend a lot closer together because of the he mechanisms in which fixed rail and urban transit had had a very strong safety,continuing also doing safety work. In the highway area, it's different trying to save lives than what is needed on the national level. We're going to have to look at those two issues separately. In the area of transparency, something very strongly pushed in the Senate language, states are going to have to show publicly there were road projects, not just under their ownership, but the entire state there, will be a much more and greater push toward identifying problem areas both in the comprehensive safety planning as well as in the transparency requirement on poor roads within the count. Rural-road safety is a new program pushed by many of the local governments, it focuses on roadways down at the local roads and collector roads and rural areas, 90 million dollars a year apportioned to all states, it's to be sent on those roadways that have the poor safety records both in their fatalities and serious injuries. It will require comprehensive information on every road. All 4 million miles of road in this country. Another new program that is in both the House and Senate bills safe routes the school.