Federal Government, Government, Transportation, United States
Prioritizing Your Freight Investments
How to develop a sound freight investment plan to position your state for federal funds
This article is the third and final of our series highlighting what state and local transportation agencies need to know about the Fixing America’s Surface Transportation Act’s (FAST) funding provisions for freight projects—why they matter, how states are affected, what is needed to comply and where the funding opportunities exist.
The FAST Act has ushered in a particular emphasis on freight planning that is investment-focused as opposed to policy-driven. In other words, the federal government is urging states to look through an economic competitiveness lens at the projects that are most critical to improving freight mobility in their territories.
As a stipulation to receiving funds from either FAST’s National Highway Freight Program, which funds an average of $1.2 billion annually by formula, or the discretionary Nationally Significant Freight and Highway Projects program, which funds an average of $900 million per year in the form of FASTLANE grants, states are required to produce freight plans with a 5-year outlook and update them every 5 years at minimum. These statewide plans must include a standalone freight investment plan, which lists prioritized freight projects and describes how funds made available by the federal government would be invested and matched locally. The freight investment plans may be updated more frequently than the state freight plan.
Creating an investment plan may be a new task for some agencies, as they were not mandated by the previous federal transportation bill, MAP-21. Whether you are an investment-planning novice or pro, following these pillars of freight project prioritization will help put your agency in the pole position for FAST freight funds:
Develop freight goals together with public and private stakeholders. While improving freight mobility should be a core goal of all investment plans, individual states should decide on other goals that are important for their multimodal freight networks (e.g., enhancing goods movement at airports and seaports, supporting new industries along key corridors by making highway improvements). These goals should be vetted with stakeholders from both the public and private sector. You should also leverage stakeholder input in setting the scoring criteria you will use to evaluate your freight projects. Ultimately, these stakeholders represent the users of your freight system and can help you pinpoint freight mobility concerns that need to be addressed. Bringing their unique perspectives to the table, these stakeholders can help you identify goals and criteria that may not jump out at you but are important to drivers and businesses. Getting their input makes the process of scoring freight projects, the next step in the plan, much more objective and transparent. Involving them early and often throughout the process will not only help you produce an investment plan that will foster greater economic development, but also provide the best return on investment for citizens and taxpayers.
Identify and score freight projects. With goals and criteria set, the next step is to develop the list of freight projects you want to implement. You can categorize freight projects by mode (roadway, air cargo, waterway, rail) or based on how they support the multimodal freight system. However, it is good practice to develop a prioritization process that is transparent to stakeholders and citizens and provides additional analytical rigor to help decision makers. Engaging stakeholders and the public in developing the scoring process is extremely valuable and increases the probability that these important groups will accept the results of the prioritization and scoring process.
Prioritize the projects in your list and match them to the funding streams available. To put the finishing touches on your investment plan, you will need to prioritize your list based on the results of the scoring exercise. Every project will not rise to the top of your priority list, it may be wise to perform a return on investment analysis for those that best support the state’s freight goals and objectives to ensure that the funds you are proposing to spend will provide the solid return you expect. The final step of your investment plan is to match your prioritized project list to available funding and financing sources, which will allow your investment plan to be “financially constrained.” In other words, sufficient financial information needs to be given to the federal government to support your plan and prioritizations and confirm that they can be reasonably implemented with committed or available funding sources.
While plans of old sit dusty on shelves, the FAST Act’s new requirement is pushing state departments of transportation to refocus their efforts and create actionable plans with a focus on implementation. Taking the above steps in creating your freight investment strategy will not only lead to better overall project selection but also more strategic transportation investments for your state. Ultimately, by developing a sound investment plan, you will position your agency for higher federal participation in your freight projects.
For more information on the FAST Act’s freight implementation plan requirement or on freight project prioritization, please contact Melissa Ziegler, CEcD, principal project manager and multimodal freight planning expert, or Chris Nazar, associate senior planner and technical delivery manager.