|
Strategic Plan: Illinois State Toll Highway Authority
Final Report - 5.29.97
Prepared for the Authority by the
Northwestern University Infrastructure Technology Institute
Prof. Joseph L. Schofer
Prof. David F. Schulz
Assistance from Steven R. Gordon, Graduate Student
Resource Reports Prepared by
Northeastern Illinois Planning Commission
Max Dieber
John H. Paige
Howard Rosen, Ph.D.
CONTENTS
Transmittal Letter i
Contents ii
Section I - Introduction and Strategic Planning Process
Background 1
Guiding Principles 2
Approach 3
The Strategic Planning Team 4
Section II - Visions, Strategies, and Actions for the Future of ISTHA: Recommendations of the Strategic Planning Process
Introduction 5
Visions, Strategies, and Actions 6
Vision #1 - Provide the Highest Quality Toll Highway Experience in the U.S. 6
Vision #2 - Implement a Long-Term Program of Maintenance and Repair 10
to Ensure the Integrity of the System
Vision #3 - Be a Key Element of and Eager Partner in the Regional 11
Transportation System
Vision #4 - Be an Important Positive Force in Achieving a High Quality 12
of Life and Sound Development Pattern
Vision #5 - Form a High-Level Team with IDOT to Undertake Extension 14
Planning and Environmental Impact Assessment
Vision #6 - Be a Strong, Vital, and Responsive Agency 15
Implementation 18
Section III - Continuing Strategic Planning
Need for Strategic Planning as a Continuing Process 23
Objectives and Tasks of Continuing Strategic Planning 24
Closure 27
Appendix A - Shaping the Battlefield: Trends and Factors Influencing the Context
within Which Toll Authorities Operate
Appendix B - Recent Trends In Land Use and Transportation in Northeastern Illinois
Section I
Introduction and Strategic Planning Process
BACKGROUND
The Illinois State Toll Highway Authority was created as a Commission by the State of Illinois in 1953:
"...to facilitate vehicular traffic by providing convenient, safe and modern highways...it is necessary in the public interest to provide for the construction, operation, regulation and maintenance of a toll highway or system of highways, incorporating therein the benefits of advanced engineering skill, design, experience and safety factors, to eliminate existing traffic hazards, and to prevent automotive injuries and fatalities.."
From the first full year of actual operations in 1959, when the authority served slightly over 63,000 vehicles each day, traveling about one and three-quarter million miles, and making fewer than 120,000 toll transactions, the Authority has evolved to the point where today it carries over a million vehicles each day, over 16 million vehicle-miles, with over 1.8 million toll transactions.
The Authority's first routes, the Northwest Tollway, the Tri-State Tollway, and the East-West Tollway, were conceived primarily as long-distance urban bypass and through-route highways. Today, the continued growth in northeastern Illinois has resulted in the Authority's roads shouldering an increasing burden of providing daily suburban and urban mobility for northeastern Illinois people and businesses, as well as serving trips into, out of, and through this ten-county region.
In addition to meeting the challenge of growing and changing travel markets, the Authority was confronted with the prospect of substantial expansion when the State Legislature authorized five additional toll roads, the southerly extension of the North-South Tollway (1) from I-55 to I-80 and (2) from I- 80 to I-57, (3) the northerly extension of Illinois Route 53 from Lake-Cook Road to Illinois Route 120 then east to I-94 and (4) west to US Highway 12 at the Illinois-Wisconsin state line near Richmond, and (5) the Elgin-O'Hare West bypass and extension. These important facilities present growing implementation challenges in terms of design, development implications, and citizen response. Other recent changes include new people on both the Authority's Board and executive staff, the increasing demands of operating, maintaining and upgrading the existing toll roads to meet growing travel, and initiatives to adopt new technologies such as the Authority's current I-PASS program and communications improvements.
In light of these changes, in September 1996, the Authority deemed it a propitious time to carefully consider where it has been, where it is, and where it is going, and to chart a course for itself to execute its mandate from the people of Illinois through the Governor and the Legislature as effectively and efficiently as possible by developing its strategic plan. The Authority contracted with Northwestern University Infrastructure Technology Institute to assist it in developing this plan.
GUIDING PRINCIPLES
The Northwestern team was guided by three principles in its approach to the strategic planning effort. First, the team believed that, in order for this strategic plan to be of real value to the Authority, it must be the Authority's plan -- a product of the Authority's effort. The Institute team's role was to help define the process; gather and organize data; convene and facilitate workshops to analyze, evaluate and decide; and challenge, question, provoke, and suggest ideas and approaches for the Authority's consideration. It is the Authority leadership, Board, and staff who ultimately shape the plan.
Second, the Institute team understood and appreciated that the Authority operates in a complicated multi-agency transportation environment with a carefully-prescribed mandate from the State. Therefore, its effort was focused on helping the Authority carry out that mandate more effectively.
Third, the Institute team strongly believed that strategic planning and implementation must be an ongoing endeavor, not a once-through effort. This means that for the strategic plan to be of greatest value, the Authority will need to institutionalize the strategic planning activity. The Institute team's effort was designed from the outset to promote and achieve that goal.
APPROACH
A six-part strategic planning process was used to develop the strategic plan:
1. Data Gathering and Analysis - This involved three subtasks:
a. Identification of current and likely future issues, challenges and opportunities facing the Authority - A series of interviews were conducted with key individuals outside the Authority experienced with and possessing an interest in and useful perspective on Authority activities, as well as with senior members of the ISTHA staff. Eighteen outside individuals, two Board members, and ten people from the Authority senior staff were interviewed. The results showed that the Authority confronts eight strategic issues: (1) image, (2) community relations, (3) toll collection, (4) intelligent transportation systems/incident management/user services, (5) extensions, (6) integrated physical/financial planning, (7) scope of business, and (8) survival.
b. Identification of trends in the toll authority movement - The Authority is an acknowledged leader among many similar bodies in the United States and around the world, all of which differ in mission, structure, approach, function, and success. It was determined that the strategic planning process would benefit from an overview of recent trends among these entities describing how they address issues similar to those facing the Authority, and approaches -- both successfully and unsuccessfully. Dr. Howard Rosen, Deputy Director of the American Public Works Association and acknowledged expert in public works history, prepared a resource paper (Appendix A) which discussed the history of the tollroad movement in the United States, identified current trends among toll highway authorities, and examined three case studies of other toll highway authorities confronting similar challenges to those facing ISTHA.
c. Description of past, present, and likely current regional development and transportation trends - The travel markets the Authority's facilities serve, and the physical and financial performance of its facilities are driven by trends in regional land use development and transportation demand. In order to adequately inform the strategic planning process on current and forecast future trends in regional land use and transportation, the Northeastern Illinois Planning Commission, under contract with the Institute, prepared a resource report on development and transportation trends in northeastern Illinois (Appendix B).
2. Workshop #1 - Issues, Challenges, and Opportunities - Armed with the three resource papers, the strategic planning team identified below, together with the principal investigators, Dr. Rosen, and Northwestern graduate student Steven Gordon, participated in a day-long workshop on December 17, 1996, to discuss the most important issues, challenges and opportunities facing the Authority, and identify possible goals, strategies and tactics for dealing with them.
3. Workshop #2 - Visions, Strategies and Actions - After a period for reflection, and informed by the report on Workshop #1, the same workshop participants reconvened on January 28, 1997, for a second day-long planning meeting to develop a recommended set of visions, strategies, and actions for the Authority to pursue -- the framework of the strategic plan.
4. Workshop #3 - Refine Visions, Strategies, and Actions - The workshop participants reconvened on February 26, 1997, for a half-day workshop to finalize their deliberations.
5. Final Report - The Institute Team integrated the three resource papers and the results of the three workshops and framed this final strategic plan document. In the course of completing the final draft, the Institute Team developed priorities, schedules, and implementation responsibilities for each of the 45 actions included in the strategic plan. These were provided in draft form to each of the workshop participants, who were asked to ratify or revise the draft priorities, schedules, and implementation responsibilities. The Institute Team reviewed and incorporated these results in this final report.
6. Ongoing Strategic Planning - As stated earlier, the Institute team recognizes the critical importance of implementation and ongoing planning to the success of the strategic planning effort. Section III provides guidelines for ongoing strategic planning at ISTHA.
THE STRATEGIC PLANNING TEAM
Special acknowledgement should be made of the contribution of the Authority's strategic planning team who guided and shaped development of the draft plan: Board Chairman Julian D'Esposito, Board member Robert Turner, and Authority staff John Benda, Richard DeRobertis, Ken Desmaretz, Nick Jannite, Neal MacDonald, Barbara McKinzie, George Sotos, Kesti Susinskas, Mark Swidergal, and Ralph Wehner. These twelve individuals were each interviewed, and all participated in the three workshops, and reviewed and responded to draft sections of this report. Each gave generously of her/his time and energy to bring the plan to this point.
Section II
Visions, Strategies, and Actions for the Future of ISTHA: Recommendations of the Strategic Planning Process
INTRODUCTION
The Illinois State Toll Highway Authority faces a number of formidable challenges as it works to carry out its mission of providing a system of high-quality toll highways for the people of northeastern Illinois. While ISTHA also possesses considerable resources to overcome those challenges, it needs to forge agreement among the Board and staff on a set of common visions for the future of the Authority, to communicate those visions to the various publics it serves -- Tollway users, neighbors, elected officials, and the general public, and then to make the visions into reality.
This strategic plan lays out a series of six visions, high-level goal statements which address the challenges and build on the resources of ISTHA. These visions will be implemented through fourteen strategies, or more specific paths to achieving the visions, and 45 actions which specify work tasks to be undertaken by ISTHA. For each action a priority and implementation schedule is indicated. It should be emphasized that the priorities are relative since every action is important by virtue of its being included in the strategic plan.
It is meaningful to be able to identify measures of performance to aid in assessing success -- or lack of it -- in improving performance. To that end, measures are suggested for many strategies, which can be used to assess projects, guide future actions, self-evaluate performance, and report to constituencies. As indicated below, further definition and refinement of implementation measures should be undertaken during plan implementation.
VISIONS, STRATEGIES, AND ACTIONS
Vision #1- ISTHA should provide the highest quality toll highway experience in the United States to Tollway users, providing a premium driving experience.
Strategy #1A - Minimize travel time with particular emphasis on minimizing delays and providing reliable and predictable travel times.
[Measures: average and maximum travel times, bottleneck delays]
Action #1A1 - Continue to improve the already-high quality of snow removal and ice control operations.
Priority: High; Implementation: Ongoing
Action #1A2 - Organize maintenance and repair to minimize traffic disruptions, including increased consideration of late night work.
Priority: High; Implementation: 90 Days
Action #1A3 - Implement I-PASS in all lanes at all plazas by January 1, 1998, with a corresponding 30% market penetration. Install I-Pass Express lanes at selected high traffic plazas by January 1, 2000, matched with a 50% market penetration. I-Pass use will have a goal of 75% participation by January 1, 2002.
Priority: High; Implementation: 60 Months
Action #1A4 - Expedite planning and construction of improvements at known bottlenecks. Take special efforts to notify affected users and communities of improvement plans and timetables, then report frequently on progress.
Priority: High; Implementation: 36 Months
Action #1A5 - Develop interagency agreements to manage traffic on the Tollway system and supporting road network during major incidents.
• Where necessary to maintain free flow on the Tollway, use Tollway resources to support off-system traffic management for short periods.
• Where necessary to provide the best service to Tollway users during major incidents, divert drivers from the Tollway.
Priority: Medium; Implementation: 21 Months
Action #1A6 - Monitor delays at toll plazas and other locations on the Tollway system.
Priority: Medium; Implementation: 18 Months
Action #1A7 - Use the results of the delay monitoring (Action #1A6) to plan and implement plaza operations and facility improvements.
Priority: Medium; Implementation: 30 Months
Strategy #1B - Minimize traveler out-of-pocket and delay costs consistent with achieving other strategies.
[Measures: total user operating cost per mile -- fuel, oil, tolls, travel time]
Action #1B1 - Hold the level of tolls to the minimum necessary to prudently operate, maintain, improve and expand the Tollway system.
Priority: High; Implementation: Ongoing
Also all actions under Strategy #1A
Strategy #1C - Maximize traveler comfort and convenience
[Measure: user satisfaction as measured by consumer research including surveys and focus groups with special attention paid to user and citizen complaints]
Action #1C1 - Train and manage toll collectors to ensure positive interactions with drivers.
Priority: Medium; Implementation: Ongoing
Action #1C2 - Provide reliable real-time driver information both directly (changeable message signs, low-power radio, etc.) and through third parties (IDOT, private providers, radio and television stations).
Priority: Medium; Implementation: 18 Months
Action #1C3 - Evaluate oasis vendor performance and manage oases to respond to user needs.
Priority: Low; Implementation: 24 Months
Strategy #1D - Maximize traveler safety
[Measures: fatalities and personal injury accidents per million vehicle-miles]
Action #1D1 - Review with a panel of experts every fatal and personal injury accident, and every roadway incident which causes major delays, for lessons on emergency response, Tollway operations, and facility design.
Priority: Medium; Implementation: 90 Days
Action #1D2 - Convene an annual meeting of State Police District 15, local emergency response agencies, and Tollway operations staff to review and evaluate performance, improve procedures, and coordinate emergency response efforts.
Priority: High; Implementation: 6 Months
Action #1D3 - Based on the incident review and the meeting of emergency responders, implement a comprehensive safety improvement program, including emergency response/incident management, Tollway operations, and facility improvement/hazard removal.
Priority: High; Implementation: 12 Months
Action #1D4 - Implement the emergency roadway/driver assistance patrols Tollway system wide.
Priority: High; Implementation: Ongoing
Strategy #1E - Make decisions affecting Tollway users based on sound information about user preferences.
[Measure: Survey and focus group-measured satisfaction, number of complaints and their disposition, performance against peers based on benchmarks]
Action #1E1 - Periodically (e.g., biennially) survey Tollway users, the general public, and decision-makers to determine what they want from the Tollway, how satisfied they are with current performance, and ideas they may have for improvements.
Priority: Medium; Implementation: 12 Months
Action #1E2 - Track all user and other public complaints, suggestions, requests, and other calls, ensure positive response and follow-through on all complaints, and prepare monthly summary document for distribution to the Board and staff.
Priority: High; Implementation: 90 Days
Action #1E3 - Hold biennial conferences of representatives of Tollway communities to gather decision-maker and professional views of the Tollway and suggestions for improvement.
Priority: High; Implementation: 6 Months
Action #1E4 - Benchmark objective measures of ISTHA performance against other urban tollroad operators in the U.S.
Priority: Medium; Implementation: 18 Months
Action #1E5 - Publish an annual or biennial report documenting ISTHA's performance versus peer agencies.
Priority: Medium; Implementation: 18 Months
Action #1E6 - Use the benchmarking effort to identify areas for improvement, and develop initiatives to improve ISTHA performance in those areas.
Priority: Medium; Implementation: 18 Months
Also all actions under Strategy #1C
Vision #2 - ISTHA should establish and implement a long-term program of maintenance and repair, ensuring the integrity of the existing system with high level commitment to implementation.
Strategy #2A - Plan and program maintenance and repair of existing Tollway facilities to minimize life-cycle costs and ensure service quality.
[Measures: Successful establishment of life-cycle cost model and process; estimated life-cycle costs for new investments]
Action #2A1 - Conduct annual assessments of the current condition of existing facilities, their likely remaining service life, and probable future repair and maintenance cost.
Priority: High; Implementation: 12 Months
Action #2A2 - Develop and implement a life-cycle cost model to identify the lowest possible life-cycle cost strategies (or approaches) for maintaining these facilities through a combination of ongoing maintenance and repair, periodic rehabilitation, and ultimate replacement and possible upgrading to meeting changing needs.
Priority: Medium; Implementation: 18 Months
Action #2A3 - Based on the life-cycle cost model, prepare a one-year, five-year and ten- year program of major repair, rehabilitation, upgrading, and replacement needs for existing Tollway facilities. Reconcile the needs with obtainable funding.
Priority: High; Implementation: 24 Months
Also Actions #1A2, #1A4, #1A7, #1D3, #3A4
Strategy #2B - Use standards of design, construction and materials sufficient to ensure good system performance and minimize user inconvenience due to unanticipated failures and repair and reconstruction.
[Measures: Successful establishment of standards for good design, construction, and materials; annual occurrences of significant failures (accidents, structural failures, and excessive costs thereof) due to inadequate standards (annual staff review), evaluation of change orders and scope of work changes]
Action #2B1 - Review and if appropriate modify current Authority design, construction, and materials standards.
Priority: Medium; Implementation: 12 Months
Vision #3 - ISTHA should be a key element of and eager partner in a regional transportation system serving the personal and freight mobility needs of the people of northeastern Illinois.
Strategy #3A - Design, construct, and operate the Tollway system not only to provide the best service for Tollway users, but where possible to help improve services provided by other streets and highways, railroads, airports, and public transit systems.
[Measures: Successful establishment of regular liaison and data exchange with sister transportation agencies; participation in meaningful cooperative ventures with other providers]
Action #3A1 - Exchange traffic and incident data with other providers on a real-time basis.
Priority: Medium; Implementation: 12 Months
Action #3A2 - Provide operational coordination and mutual support to other transportation providers. Actively participate in Gary-Chicago-Milwaukee project and other Tollway-related Intelligent Transportation System efforts.
Priority: Medium; Implementation: 9 Months
Also Action #1A5
Action #3A3 - Develop strong two-way technical professional communication relationships with all communities -- counties, townships, and municipalities -- traversed by Tollway, possibly on a segment-by-segment basis; staff should attend and participate in all relevant transportation and planning public meetings.
• Participating staff must be fully informed and knowledgeable.
• Information gathered should be fed back to senior management and Board, and other affected Tollway employees.
• Follow-through on issues/questions/problems with quick and meaningful responses.
Priority: High; Implementation: 9 Months
Action #3A4 - Work with technical professional staff of communities served by Tollway facilities to identify problems and opportunities for improvement in both Tollway operations and facilities and related local transportation operations and facilities and negotiate agreements for implementation of appropriate improvements.
Priority: Medium; Implementation: 6 Months
Vision #4 - ISTHA should be an important positive force in achieving a high quality of life and sound development pattern for people living in its service area.
Strategy #4A - Be the best possible neighbor in communities currently traversed by the Tollway system. Planning, coordination, negotiation, and impact mitigation are essential parts of the costs of building and operating highways today. ISTHA must engage willingly, actively, and wisely in these tasks. That is, it needs the commitment, the authority, and the professional capacity to negotiate successful projects.
[Measures: Successful creation of a planning division; development of impact mitigation investment criteria; implementation of systematic procedures for gathering input from neighboring communities; identification of single point of contact for community relations and outreach; annual assessment of that single point of contact as part of annual performance and complaint tracking; regular participation in regional planning forums, both within government
and among civic interest groups; occasions of outreach to communities, developers and individuals to share expertise; strategic plan monitoring and update]
Action #4A1 - Create a Division of Planning within ISTHA to undertake planning for the Authority and husband relationships with communities within the Tollway service area. An unresolved decision is the reporting relationship of this division.
Priority: High; Implementation: 60 days
Action #4A2 - Develop and consistently use objective criteria to evaluate impact mitigation investments such as noise barrier-walls.
Priority: Medium; Implementation: 6 Months
Action #4A3 - Solicit information from elected and public works officials and citizens on negative impacts of Tollway facilities and operations, and work to mitigate those impacts which meet the mitigation criteria (Action #4A2).
Priority: Medium; Implementation: 12 Months
Action #4A4 - Establish single point of contact within the new Division of Planning (Action #4A1) for community relations and aggressively reach out to affected communities.
• Very senior management level.
• Knowledgeable, authoritative, good communicator.
• Coordinated with technical community liaison (Actions #3A3 & #3A4).
Priority: High; Implementation: 90 Days
Action #4A5 - Participate actively in the regional land use and transportation planning processes. See also Action #3A3 and #3A4
Priority: High; Implementation: Ongoing
Action #4A6 - Use the Tollway's professional knowledge and experience to support local and regional planning in current and proposed Tollway corridors.
• ISTHA has much experience with Tollway impacts and the costs and effectiveness of mitigation actions. Use this to help communities and developers make wise decisions.
• Develop and share information on the economic development impacts of the Tollway on communities. This may entail additional research such as that currently being conducted for the Authority by the University of Illinois-Chicago
Priority: High; Implementation: 90 Days
Vision #5 - ISTHA should take the lead in forming a high-level team with IDOT to undertake planning and environmental impact assessment for the proposed extensions. This team should report directly at a high level to IDOT and ISTHA, and should be housed at a separate location from both IDOT and ISTHA in one of the proposed extension corridors.
Strategy #5A - ISTHA needs to extract itself from its current position of bearing much public responsibility for the planning and environmental impact assessment for the proposed North and South extensions while having little control over the quality or outcome of the planning process.
[Measure: Public announcement and implementation of a revised approach to extension planning]
Action #5A1 - Implement the restructured high-level IDOT/ISTHA extension planning and environmental impact assessment team.
Priority: High; Implementation: 30 Days
Vision #6 - To achieve the first five visions, ISTHA must be a strong and vital agency, responding well to the demands placed on it, and changing in response to new circumstances.
Strategy #6A - Build and maintain a Tollway staff with strong professional credentials, a commitment to public service, an appreciation of their role and importance in the community, pride in themselves and their organization, and impeccable integrity.
[Measures: Increasing frequency of internal communications: meetings with Executive Director, newsletters, use of e-mail, annual survey to assess staff morale; successful establishment of formal professional development program; participation in professional development program: conferences attended, papers presented, courses taken...]
Action #6A1 - Strengthen two-way internal communications.
• Weekly staff meetings with Executive Director.
• Provide staff professionals all materials released to media.
• Create a centralized depository of key knowledge and data concerning Authority actions and policies and make it conveniently available to all staff. Possibilities include both print and electronic.
• Use e-mail where appropriate to communicate quickly and precisely.
• Bring all staff members together periodically (easier in central office, more difficult in "field" locations) to report actions, explain progress, solicit feedback.
• Publish a meaningful staff newsletter on a regular basis.
Priority: High; Implementation: 45 Days
Action #6A2 - Design and implement formal professional development programs, including training, conferences, and evaluations.
Priority: High; Implementation: Ongoing
Strategy #6B - Bolster the role of the Board and the relationship of the Board and the staff.
[Measures: Creation of explicit Board expectation statements; measures of Board meeting time allocation (strategic, tactical...); completion of Board orientation package]
Action #6B1 - Focus Board activities on strategic decisions. Agree on a set of expectations for the Board and define the issues that require the Board's consideration and approval, and those that don't.
Priority: High; Implementation: 6 Months
Action #6B2 - Provide thorough orientation to new Board and advisory committee members including a comprehensive briefing package.
Priority: High; Implementation: Begin ASAP for new appointment, complete in 6 Months
Strategy #6C - Maintain and strengthen ISTHA's historically strong financial base.
[Measures: Bond rating; debt service coverage; completion of financial plan]
Action #6C1 - Prepare and periodically update a comprehensive financial plan for ISTHA, balancing projected revenues with expenditures for operations and maintenance, capital improvements, and debt service.
Priority: High; Implementation: 4 Months
Strategy #6D - Create and enhance a positive image among both the general public and decision-makers based on substantive accomplishments.
[Measures: Public perception of ISTHA as measured by surveys; positive and negative press coverage; number of public complaints]
Action #6D1 - Develop a comprehensive public communications campaign.
• Base public communications efforts on measured attitudes of stakeholders, users, and the general public.
• Respond positively and forthrightly to media inquiries.
• Actively tell positive stories.
• Undertake direct public communications efforts: newsletters, speakers, electronic and print media "appearances."
• Work hard to communicate directly with users - both ways.
Priority: High; Implementation: 90 Days
Strategy #6E - Conduct strategic planning on an ongoing basis.
[Measures: Completion of strategic planning budget, priorities, & responsibilities; conduct of annual retreat]
Action #6E1 - Establish a priority, schedule, budget, and implementation responsibility for each action in this strategic plan. Monitor progress towards implementation of strategic plan actions and report quarterly to the Executive Director and the Board through the Planning Division recommended under Action #4A1.
Priority: High; Implementation: 45 Days
Action #6E2 - Hold an annual strategic planning retreat with senior management to review progress, revise goals, and restructure and modify responsibilities.
Priority: High; Implementation: 12 Months
Action #6E3 - Based on the progress reports and retreat, update the strategic plan annually.
Priority: High; Implementation: 12 Months
IMPLEMENTATION
Task Forces
Some of the 45 actions identified above can be implemented by a division, section, or individual within the Authority. For the others, implementation will be through one of six working groups or task forces within ISTHA. The task forces should hold regular, short meetings, assign homework to members and others as necessary, provide monthly written briefing reports to the Executive Director, and deliver their draft written reports by the dates specified. These plans should lay out specific plans for implementing the actions, identifying responsible individuals and groups, outlining resource requirements -- budget, people, equipment, etc. -- and proposing a priority.
Task Force #1: Performance Measurement and Evaluation
(a) Develop efficient procedures to monitor delays on the Tollway system, particularly at plazas, report those delays on a regular basis, and utilize that information to identify and solve operational problems. Define parameters to be measured as well as data collection and analysis procedures.
Completion Date: 10/1/97; Actions: 1A4, 1A6, 1A7, 1B1
(b) Design procedures for reviewing major accidents and incidents, convening evaluation and planning meetings with participating emergency response agencies, and enhancing emergency response and incident management.
Completion Date: 8/1/97; Actions: 1D1, 1D2, 1D3, 1D4
(c) Design ongoing program to measure user satisfaction with Tollway services, including periodic surveys, complaint tracking and response. Select parameters to measure, survey frequency, and methods. Specify complaint tracking database and develop implementation plan. Identify query-response procedures and recommend responsibilities and training.
Completion Date: 8/1/97; Actions: 1E1, 1E2
(d) Define set of feasible and useful objective measures of ISTHA performance for use in benchmarking. Include measures of the market, service quality, safety, system condition, improvements, and financial condition. Propose efficient schemes for data collection and analysis. Use reports of other authorities as a basis for design and for comparison.
Completion Date: 11/1/97; Actions: 1E4, 1E5, 1E6, 2A1, 6C1
Task Force #2: External Relations
(a) Design a program of interagency agreements to provide for effective management of the interface between the Tollway system and other streets and highways, including exchange of information and needs for ongoing relationships. Identify cooperating agencies by Tollway segment. Develop a plan to negotiate and implement specific agreements.
Completion Date: 9/1/97; Actions: 1A5, 3A1, 3A2, 3A3, 3A4
(b) Specify objectives, procedures, resources and assignment of responsibilities for an aggressive, positive public communications process for ISTHA. Assess current capabilities and recommend changes in personnel, consultants, and other resources as necessary. Develop policies and procedures for integrating effective communications into all relevant activities of ISTHA.
Completion Date: 8/1/97; Action: 6D1
Task Force #3: Motorists Services
(a) Develop a plan and priorities for continuous advancement of information provided to Tollway users and collected for Tollway operations management. Consider traveler information needs, alternative methods to collect and disseminate information, and opportunities for cooperative relationships with other agencies and programs.
Completion Date: 9/1/97; Action: 1A5, 1C2, 3A1
(b) Monitor and oversee design and implementation of the I-Pass program. Develop detailed implementation timetables, budgets, and performance measures, and periodically evaluate to assess progress
Completion Date: 5/1/02; Action 1A3
Task Force #4: Planning and Programming
(a) Detail the responsibilities and capabilities required of a new planning division for ISTHA, as well as its organization placement, personnel requirements, and a staffing plan.
Completion Date: 6/1/97; Action: 4A1
(b) Define a feasible, consistent and community-sensitive policy on mitigation of Tollway impacts, for both existing and proposed facilities. Develop criteria and standards, cost sharing formulae, priority models, and priority setting mechanisms. Prepare a policy statement and information package to inform professional staff, community leadership, developers and residents of policies and procedures.
Completion Date: 2/1/98; Actions: 4A2, 4A3
(c) Develop and maintain a comprehensive financial plan for ISTHA balancing projected revenues with expenditures for operations and maintenance, capital improvements, and debt service. Incorporate results of facilities needs analyses and capital improvements plans.
Completion Date: 11/1/97 and ongoing; Actions: 6C1, 2A3
(d) Define and implement process for utilizing life cycle costing to integrate concerns for design, construction, maintenance, and user services in Tollway management.
Completion Date: 2/1/98 and ongoing; Actions: 2A1, 2A2, 2A3
Task Force #5: Internal Organization and Operations
(a) Develop, implement and monitor enhanced internal communications procedures which keep employees informed of ISTHA policies, positions, and actions, and which gather and convey employee ideas, questions, and concerns to people who can act effectively on them.
Completion Date: 8/1/97; Action: 6A1
(b) Develop a feasible plan for professional development within ISTHA which helps professional staff keep up with the latest developments in their fields of expertise, provides them with the skills to meet ISTHA's evolving needs, enhances ISTHA's professional visibility, and provides employees with professional and personal satisfaction of achievement.
Completion Date: 2/1/98; Action: 6A2
Task Force #6: Strategic Planning
Complete the detailed design of the ongoing strategic planning process and develop budget estimates and implementation responsibilities for first-year strategic plan action implementation. Oversee strategic planning implementation.
Completion Date: 6/1/97 and ongoing; Actions: 6E1, 6E2, 6E3
Implementation Management
It is important that ISTHA staff be informed of the objectives of the strategic plan and enlisted in its implementation. To that end, a summary of the plan should be distributed to all staff members, articles on the plan and its ongoing implementation should be included in the employee newsletter, and it should be a subject of discussion at staff meetings.
One senior manager should be assigned the responsibility of overseeing the implementation of all actions within each of the six vision areas. This person should monitor progress of all task forces within the vision area, help them set priorities and secure resources, and serve as a proactive liaison with the Board, top management, and other vision areas. She/he will report progress to the Strategic Planning Task Force described below, as well as to the Executive Director and Board. When a Planning Division is created, it will assume responsibility for monitoring implementation of the actions.
It will be important during strategic plan implementation to further define and apply measures of effectiveness for evaluating progress toward goals. A refinement and expansion of the measures suggested above, these measures should be outcome-oriented; that is, it is not enough to measure progress toward implementation of the visions by counting the effort which went into the process. The measures need to reveal what was actually achieved.
Determination of action implementation budgets and assignment of responsibilities for action implementation will be the first-priority task of the Strategic Planning Task Force.
Section III
Continuing Strategic Planning
NEED FOR STRATEGIC PLANNING AS A CONTINUING PROCESS
As the pace of change continues to accelerate near the end of the twentieth century, many organizations, both public and private, are rediscovering the value and importance of an idea which had fallen into some disfavor -- strategic planning. After gaining great popularity in the fifties, sixties, and early seventies, strategic planning seemed to become less important as
organizations focused on the short term: quarterly returns, stock prices, tax levies, and the next election. The time and resources devoted to strategic planning and long-range thinking appeared wasted in such an environment. To quote an old engineers' saying, "When you're up to your
neck in alligators, it's hard to remember the mission was to drain the swamp."
The danger of a nearsighted approach to management is that large challenges and opportunities may be overlooked until it is to late. Immediate (day-to-day) problems may be solved, but the organization may not be positioned to succeed -- or to survive -- in the long-term.
Thus, recently strategic planning has enjoyed a renaissance, as organizations came to realize that it is precisely at times of great stress and challenge that strategic planning is most valuable. Private organizations are faced with rapidly-changing markets, technology, and business conditions. Public organizations are confronted by exploding demands for services, taxpayer revolts, and increasing public doubts about the integrity and effectiveness of government. Both types of organizations are increasingly turning to strategic planning. They see it as a way to assess the environment within which they operate, identify current and future opportunities, challenges, and threats, evaluate options for dealing with them, select a plan, and finally achieve organization "buy-in" to a single set of directions or visions. This is essentially what ISTHA has done in developing this strategic plan.
This new incarnation of strategic planning tends to be more process-oriented than product- oriented. This concept is well-presented in Robert Michel's Strategy Pure & Simple (McGraw- Hill 1993) in which the author presents the concept of "strategic thinking," which tends to be:
• visionary (defining a future concept of the organization) rather than extrapolative (predicting where the organization will be in the near future;
• qualitative rather than quantitative;
• truly strategic (i.e., focused on what jobs to do) rather than operational (focused on how to do the same jobs); a long-term strategy supports productive risk-taking. Managers otherwise think short-term, and adopt only conservative actions to get quick payoffs;
• aimed at productive innovation, to make the organization better;
• dynamic and ongoing, rather than a once-through process with a static product, a "snapshot" of an organization's situation and direction at a single point in time.
The environment changes, the organization changes, resources shift and opportunities come and go. Thus, strategic thinking should be something the organization and its members do continuously. Desirably, people at all levels of the organization should learn to constantly -- and productively -- rethink where it is and where it is going.
OBJECTIVES AND TASKS OF CONTINUING STRATEGIC PLANNING
Continuing strategic planning for ISTHA has three major objectives:
1. Monitor and evaluate the position of the Authority, including:
• demands, competition, and problems;
• resources and opportunities; and
• progress toward implementing the adopted strategic visions.
2. Modify schedules and procedures for implementing the visions; and
3. Modify the visions themselves and the strategies and actions which support them in light of changing external needs and threats, resource opportunities and constraints.
The tasks of continuing strategic planning are:
• Monitor progress and problems toward pursuit of the visions. This task should be assigned to the various task forces, the members of which can track their progress, as well as the forces and issues to which they are responding, and report regularly in monthly senior staff meetings, backed by brief written monthly reports. Overall monitoring of the progress in implementing the strategic plan should be the responsibility of the head of the new Planning Division.
• Prepare annual progress reports for each task force area. These should be short, written reports for internal management purposes (e.g., primarily bulleted lists, tables, etc.). Reports should contain the following information:
* Objectives and measures
* Personnel and other resources available and utilized
* Activities undertaken and completed
* Progress: achievements and gaps, described in terms of outcome measures, not inputs (i.e., results, not activities)
* Problems and options
* Recommended actions
• After these reports have been distributed, convene an annual, one-day strategic planning workshop with senior management to review progress, revise visions (goals), restructure priorities and schedules, and revise assignments and responsibilities as necessary. Prioritize time at the workshop to devote most attention to vision areas with the most serious challenges, treating the success areas lightly.
It is especially important that workshop participants stay focused at the strategic level, avoiding unnecessary detail and digression. The strategic planning task force should plan the workshop in advance, identifying the strategic issues as well as potential pitfalls and diversions. A workshop facilitator should be identified from outside the Authority, to participate in advanced planning and to direct the workshop. This person must be empowered to focus discussion and keep the workshop on track.
Workshop agenda:
1. Statement of the mission of the workshop: to identify and resolve the key performance gaps in the strategic implementation effort, and, where necessary, to set a revised course for the Authority.
2. Review changes in outside forces and internal factors since the last workshop. The written reports of the task forces will serve as the principal input. One senior staff member should be charged with the responsibility of preparing a 10-15 minute overview presentation on this topic.
3. Examine each task force area according to the standard reporting form, i.e.,
* Objectives and measures
* Personnel and other resources available and utilized
* Activities
* Progress: achievements and gaps
* Problems and options
* Recommended actions
4. Identify challenges and needs for the coming year: New issues to be dealt with, old ones to discard or downplay. Modify strategic visions as needed.
5. Define strategic responses, assignments, and priorities.
For the first year, at least, the task force structure proposed in this plan should provide an appropriate framework for ongoing monitoring and strategic planning. At the end of each year, as a part of the strategic planning workshop, some time should be devoted to rethinking, and reorganizing, the task force structure and responsibilities for continuing the strategic planning process.
CLOSURE
Strategic planning will have no impact if the plans remain on paper. Implementation, and adaptation, are the keys to long term success. Implementation requires commitment, not only from top management, but from all levels of the Authority to make things happen, and especially to bring about positive change. It will take a majority of the key professionals in the Authority to achieve such changes; it will take only a small number of people to block changes.
People don't implement what they do not understand. This underscores the importance of communicating the visions, the strategies and the actions throughout the Authority. ISTHA professionals need to understand not only what is to be achieved, but why it is to be achieved, so they can develop the personal commitment and self-motivation to share the task of implementing the plan. People do not implement what they are not committed to.
Through understanding and commitment to its evolving strategic visions, the Authority can achieve changes which will make it more effective, enhance its role as a key component of the regional infrastructure system, make it a more successful participant in regional planning and decision making, and increase the satisfaction of its employees.
Appendix A
Shaping the Battlefield: Trends and Factors Influencing the Context within Which Toll Authorities Operate
INTRODUCTION
If the world's greatest transportation experts had assembled in the year 1450, they would have agreed the world was flat and the sun revolved about the earth. A similar panel of experts assembled in 1950 would not have known about color televisions, desktop computers or cell-phones, since they didn't exist; and neither did automobile-dependent suburbs, the Interstate Highway System, and the Illinois State Toll Highway Authority. Yet in each case, revolutionary changes in knowledge lay just around the corner, and might possibly have been discerned if one had only "read the tea leaves" of the past and present correctly.
Strategic planning obviously requires making certain assumptions about the future. Most planning processes, however, ignore the assumptions being made about the present -- and the past. Such assumptions are so much a part of everyday life for most people, and organizations, that they are virtually invisible. Yet a close inspection and validation of them is important if the future is to be made a little less mysterious.
This report identifies 1) historical trends; 2) key current trends; and 3) brief accounts of what some other toll agencies have been doing to prepare for the next century. It is intended to provide ISTHA with a brief discussion of trends and issues that may hold relevant clues for coping with a dynamic and ultimately unknowable future.
HISTORICAL TRENDS
A key observation of the history of U.S. tollroads is that major unanticipated changes in tollroad policy, finance, technology and/or management will likely occur within a decade, and that such changes will most probably require mid-course corrections in whatever strategic plan ISTHA might now adopt. Being able to course-correct quickly when it is recognized as necessary, and to be responsive in the future when the "rules of the game" significantly change, will provide ISTHA with a foundation for continuing success.
Snapshots of American highway transportation taken at 50 year intervals starting in the 1790's, would produce some striking patterns. At each interval -- 1790's, 1840's, 1890's, 1940's, and 1990's -- tollroads were considered to be a critical focus of a new era in highway construction. Yet in the first four instances, often within ten years or less, unforeseen and unanticipated developments fundamentally altered the situation. Changes in federal policy, financial circumstances, technology, and administrative practices occurred that undermined a new seemingly golden era of tollroads.
1790's
Following the ratification of the Constitution, state budgets were minimal and towns were without taxing authority to build highways. With pervasive opposition to taxation and a weak sense of a federal role, states saw turnpikes (private toll companies) as the main option for highway financing. Initially, only a handful of states established such turnpikes. The first to be built was in Pennsylvania in 1792. But by 1800, most states quickly had adopted toll financing, with 69 individual toll companies incorporated. For the most part, they built roads to connect the cities along the eastern seaboard. These were the intercity routes that were expected to carry the volumes of traffic necessary to cover the costs of construction and operation.
But turnpikes were risky business. Fully 65% of the ventures in New York failed. Unlike investments in canal or railroad stock, turnpikes were supported more by citizens who valued the expected benefits they thought building a new road would bring to their communities than as a strictly financial investment. Many states subsidized turnpike companies through direct purchases of stock. Even so, private toll companies were generally distrusted by local residents and state legislatures. States often wrote extensive restrictions into the charters of the toll companies, specifying how the companies would be organized and capitalized and even determining the par value of their stock. These regulatory encumbrances, combined with the inherent degree of risk, inhibited the success of privately financed and managed toll companies in the early 19th century.
1840's
In the mid-1840's a new concept, plank roads, literally swept the still-young country. So-called "plank fever" led to the construction of thousands of miles of roads surfaced with wooden planks. Between 1846 and 1857, there were over 1,000 private plank road companies incorporated. Most were in New York, Pennsylvania, Ohio, Wisconsin, Michigan and Illinois.
Plank roads were the mid-19th century equivalent of prefabricated construction. They could be built quickly and laid over virtually any surface without much preparation. Engineers and plank road supporters predicted the roads would last at least eight years before they would need resurfacing. So, to the highway community in this era, this new technique of construction, combined with private financing, was definitely the way of the future.
Unfortunately, the useful life of these roads turned out to be only 3-4 years, instead of eight. The plank road movement died almost as quickly as it had been born, and from the mid-1850's to the end of the century very few tollroads -- let alone plank roads -- were built.
The 1840's promise of plank roads turned out to be a total disappointment. But even without their shorter-than-anticipated useful life, the future of tollroads in this era would have been compromised by another unforeseen development: the emergence of the railroad as the dominant intercity transportation linkage. By the mid-1850's, only ten years after the promise of the plank road movement began, the railroad brought new toll road construction to a virtual stop. Not only did it become almost impossible to finance any new toll road construction, but the ability to maintain existing routes was severely compromised. Many existing toll routes went totally unmaintained following the coming of the railroad. And many toll companies went out of business.
1890's
Highways became a major focus of public attention in the 1890's. Rural interests attributed increasing isolation and adverse economic consequences to lack of adequate roads. They were supported by elements from cities who saw the construction of rural, farm to market roads to be of national economic and social importance. Thus the 1890's gave birth to the "Good Roads Movement." Ironically, this movement was supported by the railroads (who saw the benefit of having more connecting roads for their markets) and by a new group of highway users who lobbied for all weather, hard pavement surfaces: bicyclists. Bicyclists' importance, their numbers, and their energy and resources, would be hard to overestimate. The efforts of these groups, working in concert with trained engineers, resulted in the establishment of the first professionally organized state highway departments. This era also marked the beginning of an active federal role in highway programs.
There was also significant conflict between urban and rural areas regarding highway policy particularly funding. Cities had the ability to levy property taxes to fund road construction. Larger urban centers were therefore able to self-finance extensive infrastructure improvements through property taxes and bonds. Not possessing sufficient taxable real property bases, and lacking other financial resources, rural areas had little recourse except to turn to the state and federal governments. In response to their concerns, the Office of Road Inquiry was established in 1893 (under the Department of Agriculture). This Office held hearings, public meetings, and educational programs that helped to develop the foundation for broad support for joint federal and state funding for highway construction.
Progressive highway administrators in the 1890's -- had there been any -- would have foreseen the challenges of poorly funded and maintained roads. They would have understood the problems of rural roads which turned to mud in the rain, and appreciated the difficulties of road programs run by untrained political appointees. And overriding all else, no matter how far-sighted the hypothetical enlightened highway engineer, the good roads they would have been trying to build would have been designed and constructed to serve horse-drawn carriages and wagons.
In the early 1890's, city administrators in New York City agonized over the very real potential for the city to be buried under a mountain of horse manure. Yet by the end of the decade, internal combustion-powered automobiles and trucks had emerged as strong competitors to horse-drawn vehicles, and within thirty years had displaced them as the dominant highway vehicle technology.
By 1900, many states had professionally organized highway departments. By 1910, a majority of states would be professional, and the federal Bureau of Public Roads had been created. With the advent of the federal-aid highway system in 1916, and the gas tax for state funding in 1919, tollroads had become less attractive as a funding mechanism for states, and, in fact, were legislatively prohibited on federally designated routes.
1940's
Tollroads again came back into prominence during the Depression of the 1930's, when lack of funds forced state governments to turn to alternative financing schemes. This was especially the case for high traffic intercity routes. From the late 1930's through the early 1950's, Pennsylvania, New Jersey, Ohio, and Illinois undertook high-profile, successful toll road projects. Many urban and some intercity routes had sufficient traffic volumes to sustain toll financing. This again left most rural routes to a mix of state and federal taxes for funding, which in this period had become questionable. In other words, toll financing for highways had become intertwined with rural and urban highway policy conflicts.
Most of the early plans for a national highway system included reliance on tollroads to a greater or lesser extent. In fact, there were even proponents of using tolls to build the entire national system. In 1937 President Roosevelt requested a study on the feasibility of building a transcontinental system of tollroads. Toll Roads and Free Roads, prepared by the Bureau of Public Roads, was issued in 1939. Because the report foresaw significant gaps in a toll-only system, especially in low-volume rural areas, it recommended against the use of any tolls on the federal-aid system. With this report and the Interregional Highway Committee's report in 1944, the lines were set for what would become the Interstate System, with funding to come from the distribution to the states of federal gas taxes. Tollroads continued to be a viable option for states with high traffic corridors until 1956. With passage of the Interstate Highway Act in that year, interest in, support for, and funding of toll facilities dropped dramatically.
1990's
Today tollroads are once again being looked to as a valuable option for financially-strapped governments. Under the banner of public-private partnerships, privatization, outsourcing, etc., toll authorities are seen by states as possible sources of funding, management expertise and organizational support for state highway projects. With the policy changes introduced by ISTEA, states are now able to initiate their own toll-financed projects, and can even consider incorporating existing toll authorities into their system and still keep their federal funding. Many states have chartered new toll authorities and/or have initiated private toll-financed projects. These trends in policy and finance, combined with the rapidly emerging technologies of Intelligent Transportation Systems (ITS) and Electronic Toll Collection (ETC), are once again reshaping the environment in which toll authorities function.
CURRENT TRENDS
Developments beyond the direct control of toll authorities shape the overall context in which they operate. Successful toll authorities in the future will depend as much on their ability to respond quickly and effectively to these external trends as they arise as on their ability to manage their own internal operations. These trends are both historical and contemporary. They involve overall changes in the economy, finance, technology, and policy of toll highways.
Changing State and Federal Policy on Tolls
More than any other single factor, changes in the overall financial situation have resulted in shifts in attitude and policy towards toll-financed highways. Starting in the 1970's, states saw their revenues diminish as disbursements from the federal gas tax trust fund suffered as a result of increased vehicle fuel economy (reducing fuel tax revenues per vehicle mile of travel), combined with greater construction and maintenance costs. It was this revenue shortfall that prompted the American Association of State Highway and Transportation Officials, on behalf of the states, to recommend to the Federal Highway Administration -- successor to the Bureau of Public Roads -- to once again consider toll financing as an option. The use of tolls was initially deliberated (in this instance) in 1982, but FHWA continued its opposition to tolls on roads constructed as toll-free facilities, and required a pledge to remove tolls once the original debt was retired. In 1987 FHWA introduced a pilot program that allowed nine states to use federal funds and toll revenues to finance new highway construction or reconstruction. This measure was a partial reversal of prior policy in that it allowed the continuation of tolls to a level that would cover the costs of maintenance.
Federal policy on tolls has had a complicated history. Through a complicated arrangement, some toll-financed highways built before the Interstate System were allowed to come into the system. But until recently, no newly-constructed tollroads were allowed to become Interstates. But in 1991, ISTEA finally reversed the federal opposition to tolls as embodied in the highway legislation of 1916 and 1956. ISTEA permitted the use of tolls (and private ownership) on the:
• construction and rebuilding of new and existing highways, bridges and tunnels, except on the Interstate system;
• congestion pricing pilot projects in urban areas.
The congestion pricing option allows states to introduce user fees on existing Interstate segments, while continuing to receive federal funds. With some states supporting legislation that would allow for the mix of private and public investment in highway transportation, and with the longstanding federal opposition to tolls significantly reduced, the possibility exists that the ban on tolling the Interstates may be revisited. An early version of the 1995 National Highway System bill included exactly such a proposition. As in the past, strong opposition from auto and trucking interests was encountered, and the provision was dropped. Similar future proposals should be expected to face similar opposition. However, rural opposition does not seem to be as strong as in the past.
Some states have initiated projects using private toll financing. Two toll-financed routes have been added to the expressway system in the Metro Houston area. Toll facilities have been built with private, as well as public/private mixed financing in the greater Denver and Washington, DC areas. Outside Washington, DC, the privately-financed 14 mile Dulles Tollway has been opened between Dulles Airport and Leesburg, Virginia. Initial traffic volumes have not met forecasts, and toll operators and investors are working frantically to make the road a success.
California has enacted legislation to allow private companies to build for-profit tollroads, bridges and tunnels. In Orange County, a private consortium secured a franchise from the state to build and operate a ten mile variable-toll roadway in the median of SR-91, connecting Riverside with Route 55. Opened in 1996, this road is reportedly enjoying both considerable success and public acceptance, with its unique peak-hour sliding-scale toll structure designed to guarantee a maximum travel time as an alternative to the often-congested freeway. There are currently three other toll projects actively planned or under construction in California.
As of 1995, 12 states (beginning with Virginia in 1987) have enacted modern private tollway laws, allowing a role for private for-profit organizations in the construction and maintenance of highways. Several other states are actively pursuing privatization options including Wisconsin, Minnesota, Arizona, Washington, Massachusetts, Maryland, New Jersey and Ohio.
Currently 29 states operate 37 tollroads and 44 toll bridges, accounting for some 5,000 miles. Toll facilities represent 6.5% of the Interstate System, and carry approximately 7% of total Interstate traffic. While toll revenues constitute less than five per cent of highway revenues, when leveraged with public funds they are expected to play an increasingly significant role. California, Florida and Texas anticipate as much as 30% of their future highway revenues will come from non-traditional sources, including tolls.
Challenges to Autonomy
In several instances, states have indicated their interest in absorbing existing toll authorities into their departments of transportation. This has already occurred in West Virginia and Connecticut, and is being considered in Texas. Maryland DOT has relied on its toll authority for many years to provide the state with resources for infrastructure development projects -- highways and transit. Toll authorities generally perceive this trend as a potential challenge to their ability to provide effective debt service. They recognize financing projects through the discipline of the marketplace requires careful analysis and estimates of costs and revenues. Surpluses taken from an Authority to fund projects that could not meet the test of the market likely will be seen by bond-holders and rating agencies alike as a diversion from priority investments. Since governments commonly do not have an inherent understanding of or respect for marketplace methods, they may well be tempted to view a toll authority as a "cash cow" as they face serious revenue shortfalls.
In the face of a changing financial and policy environment, and with a variety of outside interests either opposing their initiatives or seeking to tap their resources, toll authorities which seek to remain fully autonomous will increasingly be targets. Actively engaging in local and regional planning, visibly helping to address appropriate public transportation issues, and being a part of the mix of public/private partnerships in planning, financing and managing highway/transportation projects, may help to protect an Authority's credibility -- and its existence.
Technology Changes
Developments in technology have had a significant impact on how toll authorities function. Perhaps even more importantly, these changes are having an impact on how toll authorities are perceived by the public. ETTM (electronic toll and traffic management) systems have been introduced which allow for electronic toll collection, advanced payment systems, traveler information, traffic management, and congestion pricing. ETTM is also being used as an alternative approach to incident detection. Given advances in mapping, satellite tracking, computers and communication systems, two-way communication between roadside and vehicles, smart signs, etc. can be expected to transform how toll authorities do business.
Given the dynamic character of communications and information technology as it relates to traffic management, toll authorities may find themselves in a strategically advantageous position. Because they are less bureaucratic and regulation-bound than a typical state agency, they can be early adopters of innovative technology. FHWA has recently recognized this potentially beneficial relationship. They are working with Delaware's toll authority to serve as a test bed for new snow and ice control technologies. Toll authorities can also be effective partners with public agencies in the technology transfer process. Being able to play such a role can help an authority acquire additional revenues, develop closer ties to state and federal agencies, and have a more favorable public image as an innovator. Organizationally, this may mean (as it has in other authorities-see below) that the information processing and communication technology function needs to be elevated in importance.
International Trends
It is easy to be impressed by the number of recent major transportation projects in other countries which have been financed through public/private partnerships and other innovative financial means. From China to Canada to the English Channel, BOT (Build-Operate-Transfer) style projects on a major scale are now under construction or have just opened in the last year. Each of these projects represents well over $1 billion in costs, much of which could never have been raised without government incentives provided to private investors. These high profile projects, combined with numerous others being initiated in countries all over the world, give the clear impression of a strong and growing trend.
In fact, European nations, in particular Italy, France and Spain have been using BOT methods for many years. In 1924, Italy opened the world's first tolled highway built for automobiles. By 1935, Italy had constructed 455km of tolled highways. As of 1991, over 85% of Italy's national highway network was tollroads, covering some 5,335 km. The French introduced legislation in 1955 which offered road concessions to private finance. From that time to 1991, private concessionaires had built 5,726 km of roads, fully 80% of the French national highway system. In Spain, since 1960, private interests built nearly 2,000 km of tolled highways, virtually the entire extent of the Spanish national system.
It should be pointed out, however, that in each of these cases (Italy, France and Spain) it was on occasion necessary for the government to step in and make extensive financial commitments to keep the program going. As was the case in the 19th century U.S., European governments in the mid-20th century often needed to become buyers of stock in private transportation efforts in order to keep them from failing. Without the willingness of the national government to provide ultimate support to these enterprises, they would have failed. The long experience of these countries would suggest extreme caution to governments looking to be able to get major infrastructure built at no cost or risk.
The British, in contrast, have traditionally opposed direct government support of tollroads. They have encouraged private investment and financing, but without government guarantees of any kind. To date, the result has been a notable lack of private tollroad initiatives in Great Britain, in contrast to the substantial activity on the Continent.
This does not suggest the BOT model is not worth noting. It only suggests caution. Estimates of costs and revenues must be realistic, not optimistic. Roads built for largely political reasons -- because a government wants it built, as opposed to a response to market demand -- are very risky, for public and private interests alike.
WHAT OTHERS ARE DOING -- 3 CASE STUDIES
The following brief examples were selected to represent trends in what other toll authorities are doing to respond to the changing environment. The examples were selected because they are each undergoing major changes today. They include the oldest and possibly youngest authorities, and one that has an urban metro focus and was the first to take advantage of ISTEA. Each has at least one key element of direct relevance to ISTHA.
Harris County [Texas] Toll Road Authority
Chartered by the county in which metro Houston is located, HCTRA was the first to take advantage of ISTEA legislation, putting itself into position of eligibility to receive federal funds by entering into cooperative partnerships with FHWA and the Texas DOT. HCTRA sees its role as providing transportation services to the metropolitan area. It has become a key player in funding highway construction as well as in providing technical support to other transportation providers in the Houston metro area. As a result of its active partnerships with federal and state transportation agencies, and its close cooperation with the City of Houston and other municipalities, HCTRA has been able to finance construction of 18% of all lane miles built in the metro Houston area in the last five years.
The Authority did not easily enter into a partnership with the federal agency. They were most concerned about "Big Brother" coming in and usurping control over their operations and programs. Their experience has shown them this fear was largely unfounded. Once they learned what was needed to become eligible for federal funding under ISTEA, they were able to comply and the results were almost uniformly positive, with virtually no loss of Authority control.
HCTRA has been aggressively involved in introducing new toll collection, information, and communication technologies. They are a partner in TRANSTAR, a Texas DOT-led consortium of municipal, county, and state agencies. This ITS deployment is interesting as much from its intergovernmental and public/private partnership character as from its innovative use of technology. At its base is a customer-service perspective that utilizes extensive market research to determine what users really want, and what new techniques can really work. Information from Toll Authority sensors and television monitors is fed to the TRANSTAR control room. From there, the shared information from all participating transportation agencies allows for rapid, coordinated responses to emerging conditions. For example, Toll Authority sensors help state DOT officials dispatch county sheriff vans to handle roadway emergencies.
Even with their highly visible and active partnership role in the County/metro area, the Toll Authority retains control of traffic management. Because convenience and safety are too important to their customers to be entrusted to someone else, the Authority controls all communication, signalization, signage and overall traffic control (including police and roadside service).
Because "throughput" -- moving cars and trucks through the system -- is critical to customer satisfaction and revenue generation, the HCTRA introduced an electronic toll collection system on June 1, 1996. The Authority is providing incentives to steer customers to use radio frequency tags called "easy tags." They have created special toll collection lanes for vehicles with tags, and have kept the toll constant for them while increasing it for non-tag users. After only five months of operation, 29% of all vehicles using the system now have their tolls collected electronically. The system started with 55,000 vehicles tagged. Only a few months later, the number has grown to 115,000. This is part of the Authority's strategy to provide capacity for the next twenty years. HCRTA is working with other agencies to utilize the same tag and transponder system for multiple uses, including airports, parking garages and other facilities.
HCTRA was able to play an active role as a transportation partner in the metro area -- and to be innovative in terms of technology adoption and working relationships with FHWA -- without having to undergo major internal stress. This was primarily due to the minimal bureaucracy in the Authority's organizational structure. HCTRA has three primary decision-makers, with virtually no management layer between them and the operational staff. With a simplified "clean" system, management can focus on debt service. A larger, state-chartered toll authority might have had greater difficulty identifying new opportunities and aggressively moving to take advantage of them. With limited resources available, only enough to fund approximately 40% of needed transportation projects in Texas, the Authority is continually seeking ways to leverage resources. As a metro county authority, whose purview is limited to a local area (and their responsibility to bond-holders), they regularly confront the challenge of rural-oriented state legislators who look to the revenues generated by tolls as a resource to be redistributed to finance rural roads in other parts of the state.
South Jersey Transportation Authority
This toll authority was created in 1992 as a result of the merger of the New Jersey Expressway Authority and the Atlantic City Bus Authority. As a new organization it has adopted a new mission. From its primary role as a provider of roadway and bus service, the Authority is now a key player in regional economic development. The original State of New Jersey legislation also mandated a management audit in the first five years of the new authority. Following the recommendations proposed by the audit -- a process which included the active participation of staff at all levels -- a major restructuring of the SJTA will take place as of January 1, 1997.
The new structure reflects the new sense of mission, and is fully customer-based. From a structure that worked well for the staff, SJTA is moving to one that will work more effectively for their customers. Operations, planning and marketing -- which until now had been separate departments -- will have their functions attached to other departments, some of them newly established. The focus of the new Tourist Services Department, for example, reflects the mission of the Authority as providing the transportation dimension for regional economic development in Southern New Jersey.
Instead of seeing themselves as an agency that pours concrete, collects tolls and issues bonds, the Tourist Services Department brings together a variety of functions as resources to address the needs of tourists. Planning, marketing, and toll collection are now part of Tourist Services. This means toll collectors will see themselves as being part of the tourist industry in their region. In fact, they already see themselves that way. As of January 1, toll collectors will dress in casual, resort wear, not in uniforms which make them appear to be agents of the state highway patrol. Changing uniforms of its toll collectors is not just a cosmetic change. The employees helped to choose the new clothing they will wear, and as a result of participating in the entire process they now see themselves as important actors in helping the Authority serve its customers.
Management of SJTA recognized the importance of marketing new concepts and practices to its employees. Getting employees actively involved in the change process not only gave them a sense of buy-in, it also communicated the notion that the motivation for change was positive, not negative. The changes were an effort to take better advantage of opportunities to serve customers rather than the response to a problem situation. As a result, there was no feeling of blame, or of the need to assess responsibility for a bad situation that needed correction. The employees also played a part in proposing a new Electronic Toll Collection (ETC) system. They will introduce their "Easy Pass" system in May, 1997. This is in keeping with the intention of SJTA management to give employees greater responsibility under the new structure, not leave them with the feeling of being the victims of change.
SJTA has become a visible actor in the new South Jersey Economic Development Council, of which the Authority is a major funder. In addition, the regional metropolitan planning organization actually reports to the SJTA, which has to sign off on proposals before federal funding can be acquired. On a regular basis, counties and local municipalities in the region come to the SJTA for funding as well as technical engineering and management support. SJTA maintains strong, highly visible linkages with New Jersey DOT, contributing to its positive image. In terms of the new SJTA structure, the element that works with the South Jersey Planning Organization (the regional MPO) actually falls under the Engineering Department. This department will now include capital programs, preventive maintenance, and information systems. A newly structured Finance Department will include Human Resources, Accounting, Purchasing, Toll Auditing, General Accounting and Safety.
Part of SJTA's new management structure reflects the notion that the executive department should be the smallest, which wasn't the case before restructuring. The new Executive Department will focus on the programs that deal with external audiences and policy issues, including public Information, media and legislative relations, contracts, and overall management policy.
A significant part of the new SJTA mission is to serve as a transportation resource for the development of the Atlantic City International Airport. Recognizing their role to help increase customer use of and satisfaction with the Airport, the Authority will work closely with the Atlantic City Convention Bureau, hotels and casinos, and airlines. They will assist in the development of new signage, special lighting, contract parking rate incentives, and overall traffic management. And they will cooperate with the casinos and airlines to develop packages, focusing on services people want.
Pennsylvania Turnpike Commission
The oldest toll commission in the U.S. has just undergone a complete evaluation of its overall management structure as it prepares to face the challenges of the next century. As a result of intensive review and analysis, the Commission is currently in the process of introducing a new organizational structure. For many years the Commission has been organized into operating departments which will now be brought together into Divisions. The Divisions were selected to reflect the commitment to customer service. Each Division will be headed by a Deputy Executive Director, giving a higher profile and priority to each. Individual Departments, with their Department Heads, will be coordinated by the Division.
New Divisions being established by PTC include Customer Service, Engineering, Information Technology, and Finance. The new Customer Service Division will have four Departments which previously had been separate: State Police; Marketing; Toll Collection; & Communications. In a similar vein, the Departments of Engineering and Maintenance, which previously had been separate, will now comprise the Division of Engineering. Such combinations are intended to ensure coordination and cooperation, as well as bringing into focus the real priorities of the organization. In the words of their Executive Director, "we needed to make customer service more than just a phrase."
The creation of an Information Technology Division reflects the view that this function needed to be elevated in importance. In order to emphasize the need for change, as well as to facilitate it, the Commission has actively sought to bring in people from the private sector. The Commission has also looked to the private sector in other respects. They are adopting a corporate model for financial analysis, investment tracking, and overall financial planning under the new Finance Division. Such measures were considered essential to better manage a diminishing revenue stream. Last year, the Commission had its first reduced budget in 36 years.
For the first time in its history, the Pennsylvania Turnpike Commission has developed a clear mission statement: to be recognized by its customers as a premier service provider and to be the preferred highway in the Commonwealth of Pennsylvania. They wanted to define their mission because their consultant pointed out they really didn't do planning. The consultant noted they tended to change priorities from year to year. The Commission wanted a clear statement that would guide their staff in the establishment of priorities.
A key element in the Commission's strategy to ensure effective prioritization is the introduction of a new budget process. Subcommittees will be established in 7-9 areas: roadways, plazas, computers, etc. The capital budget requests from each department will be submitted to the appropriate subcommittee. It will be the responsibility of these subcommittees, which will include representatives from a cross-section of departments, to determine what the priorities will be for allocating funds in the capital budget. The total amount available for the capital budget for the coming year will be determined in advance by the financial analysis of the Deputy Director of Finance and his team. This amount will be considered to be a given, and it will then be shared with the Departments. They will make their recommendations as to how best to spend that amount of money. These recommendations will then go to the subcommittees for ultimate prioritization. In this participatory way, the staff will be highly involved in helping to make the decisions on the capital budget. The process is designed to make sure these decisions will be guided more by the Commission's mission and priorities rather than departmental politics.
Also for the first time in its history, the Commission introduced performance evaluations. Because of the extent of change being introduced into a large, stable organization, much attention and effort went into communicating with employees, the Board of Commissioners and the Governor. The support of each stakeholder group was solicited at the very beginning of the process, so they understood what was going to be done and why. As the process went along, considerable efforts were made to communicate information as to where things were going. And once decisions were being made, each group -- including all 400 plus management staff -- were talked to, either individually or in small groups.
The Executive Director held at least 20 three-hour sessions with small groups of management staff to discuss where they were going with their management study. These sessions were give and takes, allowing for the expression of concerns on the part of staff. These sessions, and a management staff newsletter, "Under Construction", which gave a steady stream of information on the reorganization, all helped to reduce the negative impact of the rumor mill. This effort also helped to overcome the resistance experienced with prior management studies which had issued reports but had not been fully implemented. In large part, the motivation for change was financial: annual expenses were increasing by 5% and revenues by only 2%.
In addition to the changing financial climate, the need for PTC to undergo this extensive change can be found in the relationship of the Commission to the state. Because of the Commission's financial, managerial and technical resources, the state is looking to it to handle projects it believes it cannot. The Commission has been given a project by the state to build a beltway around Pittsburgh. This $2.5 billion project is one of the largest in the U.S.. It will cause the Commission's annual debt service to increase from $10 to $95 million. The Commission therefore needs to visibly demonstrate what its priorities are and what it is doing to meet those responsibilities.
SOME CONCLUDING OBSERVATIONS
• Changes in technology, policy and economics can have a significant impact on the context in which toll authorities operate, so it is prudent to adopt organizational strategies which carefully monitor and closely interact with external developments;
• States have vacillated in their approach to toll authorities over the years, depending largely on the availability of funding;
• New roles can offer toll authorities a basis for a more positive image;
• Being less regulated than a state DOT offers a toll authority the opportunity to be a leader in the adoption of new technologies and management techniques;
• Toll authorities can become valued partners in regional economic development programs;
• Toll authorities can be effective in working with metropolitan planning organizations to shape transportation plans and policy;
• Defining the customer base, and organizing to better serve key customers and communities will help ensure the organization is focused on service -- not just the bottom line -- ironically improving customer satisfaction and benefiting the bottom line.
Bibliography
American Association of State Highway and Transportation Officials, Washington, D.C., 1991. The States and the Interstates: Research on the Planning, Design and Construction of the Interstate and Defense Highway System
American Public Works Association, Chicago, 1976. History of Public Works in the United States: 1776-1976. Edited by E. Armstrong, M. Robinson and S. Hoy.
Blair, Beryl. 1994. Road Charging in the 90's: an Overview and Guide to the Literature. The British Library Science Reference and Information Service, London.
Crawford, James A., Getting Market Share for Toll-Based Transportation Authorities: Satisfied Customers will be Repeat Customers. International Bridge, Tunnel and Turnpike Association. Proceedings of the 1995 Annual Meeting and Exhibition.
Desmaretz, Kenneth and Messier, Robert L. Illinois State Toll Highway Authority Engineering Management System. International Bridge, Tunnel and Turnpike Association. Proceedings of the 1994 Annual Meeting and Exhibition, Oct/Nov 1994. pp. 21-37.
Duritt, Mark A. et al. 1995. An Evaluation of the Status, Effectiveness, and the Future of Toll Roads in Texas: Remaining Issues and Executive Summary. CTR-0-1322-3F. Austin, TX: Center for Transportation Research, Bureau of Engineering Research, the University of Texas at Austin
Fielding, Gordon J. and Daniel B. Klein. 1993. How to Franchise Highways. Paper presented at the Transportation Research Board 72nd Annual Meeting, January 10-14, 1993, Washington, D.C. TRB Preprint 93-0153. Washington, DC: Transportation Research Board.
Florida Department of Transportation. Fiscal Year 1995 Annual Report. Tallahassee, Florida.
Florida Department of Transportation. Fiscal Year 1993 Annual Report. Tallahassee, Florida.
Gomez-Ibanez, Jose A. et al. Missing Dimensions in the Privatization Debate. Portfolio, v.3 no.2, Summer, 1990. pp. 25-36.
Gomez-Ibanez, Jose A. and Kenneth A. Small. 1994. Road Pricing for Congestion Management: a Survey of International Practice. NCHRP Synthesis of Highway Practice 210. Washington, DC: National Academy Press.
Hartje, Ronald L. Tomorrow's Toll Road. Civil Engineering, Feb. 1991, v. 61, no.2, pp. 60-61.
Illinois State Toll Highway Authority. 1992 Annual Report. Oak Brook, Illinois.
Illinois State Toll Highway Authority. Illinois Tollway: Financial Report for the Year Ended December 31, 1994. Oak Brook, Illinois.
Illinois State Toll Highway Authority. Moving Illinois Forward: 1990 Annual Report. Oak Brook, Illinois.
Klein, Daniel B. and Fielding, Gordon J. Private Toll Roads: Learning From the 19th Century. Transportation Research Quarterly, v. 46, no. 3, July 1992, pp. 321-341.
Lockwood, Stephen C. Public-Private Partnerships in U.S. Highway Finance. Proceedings of seminar at the PTRC Transport and Planning Summer Annual Meeting, University of Sussex, England, September 1990. pp. 1-25.
New Jersey Highway Authority. 1992, 1994, and 1995 Annual Reports. Woodbridge, N.J.
New York State Thruway Authority. 1995 Annual Report. Albany, N.Y.
Nielsten, Gerald V., 1996. Classic Toll Road Financial Failures -- Lessons for the Future. ITE Compendium of Technical Papers.
Pennsylvania Turnpike Commission. 1991 and 1994-1995 Annual Reports. Harrisburg, Pennsylvania.
Poole, Robert W. Jr. 1996. Private Tollways for Wisconsin. Wisconsin Policy Research Institute Report, v. 9, no. 2. Milwaukee, Wisconsin.
Rao, Kant et al. Federal Toll Highway Policy: Review and Options for the 1990's. Transportation Research Forum Proceedings of the 33rd Annual Meeting, Oct/Nov 1991. pp 43-51.
Richmond Metropolitan Authority. Annual Report Fiscal Year 1994-1995. Richmond, Virginia.
Rosen, Howard. Building the History of the Interstate. Transportation Quarterly, 1996.
Smith, Patrick. Risk and Reward. World Highways/Routes Du Monde, v.5 no.1, January/February 1996.
U.S. General Accounting Office. 1990. Highway Financing: Participating States Benefit User Toll Facilities Pilot Program: Report to Congressional Requesters. GAO-RCED-91-46. Washington, D.C.
U. S. Congress, Office of Technology Assessment. 1991. Delivering the Goods: Public Works Technologies, Management, and Finance. OTA-SET-477. Washington, D.C: U.S. Government Printing Office.
Yates, Charles M. Private Sector Finance for Roads in Europe. Proceedings of a seminar held at the PTRC Transport, Highways and Planning Summer Annual Meeting, University of Manchester, Institute of Science and Technology, England, September 1992. pp. 15-30.
Yermack, Lawrence et al. 1995. ETTM - An Early ITS Winner. ITE Journal, v.65 no.12.
Individuals Interviewed during Preparation of This Report
(The inclusion of names of any persons listed below does not imply any endorsement on their part of the views expressed in this report.)
John T. Durbin, Executive Director, Pennsylvania Turnpike Commission
Wesley E. Friese, Executive Director, Harris County Toll Road Authority
Neil A. Gray, Director of Government Affairs, International Bridge, Tunnel and Turnpike Association
Kristi Howell, Assistant Executive Director, South Jersey Transportation Authority
Richard Macomb, Special Assistant, Office of Technology Applications, FHWA
Renee McHenry, former Infrastructure Librarian, Seeley G. Mudd Library for Science & Engineering, Northwestern University
Neil D. Schuster, Executive Director, International Bridge, Tunnel and Turnpike Association
|
