January 2008 (Washington) - Minutes

TRB Committee ADD10, Transportation and Economic Development
Annual Conference Meeting., Washington, DC
Tuesday, January 15, 2008, 8:00 am - 12:00 noon
Washington Hilton Hotel

Networking

General Committee Discussions

1. Welcome, Sign-in Sheet, and Introductions

After fifteen minutes of “networking” – snacking and mingling (and waiting for late arrivals) – Chairman Glen Weisbrod called the meeting to order at 8:15 am.

2. Approval of Minutes from the 2007 Meetings – deferred

3. Papers and Sessions at This Conference – deferred

4. TRB Staff and Section Updates

TRB staff liaison Martine Micozzi introduced her colleague Larry Goldstein. Mr. Goldstein described an upcoming Transit Cooperative Research Program (TCRP) project, “The Economic Development Impacts of Transit Projects”, originally sponsored by the Federal Transit Administration (FTA). The project has received $400,000 of funding, and is currently looking for nominations to the project panel that will oversee the contract work. After sketching what TCRP project panels do, Mr. Goldstein answered questions from several attendees. Mr. Weisbrod and Ms. Micozzi also added comments based on their knowledge of the TCRP process.

Glen Weisbrod showed preliminary announcements of the upcoming Joint Summer Meeting. The meeting will take place on 15-18 June 2008 in Baltimore, MD. A joint meeting of the TRB marine and freight committees in the same location will follow immediately upon the joint meeting of the TRB economics, finance and planning committees, with some overlap on Wednesday the 18th. “Globalization”, a theme of next year’s Annual Meeting, will be one theme of the summer meeting.

1. Welcome, Sign-in Sheet, and Introductions (continued)

Glen Weisbrod asked that those present introduce themselves. Present around the table: Adjo Amekudzi, Jim Gillespie (secretary), Nadia Gkritza, Glen Weisbrod (chairman), Ira Hirschman, Cam Gordon, Shirley Loveless, Martin Weiss, Barbara Fraumeni, Vic Kamhi, Karen White, Jose Camara, Paul Maxwell, Fred Treyz, Sharada Vadali, Dan Hodge, Ron Poole, Dan Pitzler. Present in audience seats: Roger B. [?], Chris Mann, Fred Berger, Martine Micozzi, Carrie Kissel, Kumudu Gunasekera, Xiaoli Han, Steve Andrle, Ramon Rafiah.

2. Approval of Minutes from the 2007 Meetings

Vic Kamhi moved that the minutes of the 2007 winter and summer meetings be approved. Adjo Amekudzi seconded. The minutes were approved by a voice vote.

3. Papers and Sessions at This Conference

Martine Micozzi reported that Thomson International, an organization whose opinion carries a lot of weight with ISI [?], had transiently (mis-)classified the Transportation Research Record (TRR) as “conference proceedings”, lowering its value to the careers of contributing authors. TRB had gotten the attention of Thomson International and persuaded them to reverse this classification: TRR is classified as a “journal”; the CD-ROM that all attendees receive, which contains nearly every paper presented at the meeting, is “proceedings”.

Glen Weisbrod distributed a one-page handout, and called the attention of those present to committee-sponsored sessions at the current Annual Meeting. [See handout.] Jim Gillespie remarked that poster presentations, which just a few years ago were typically little more than pages of a printed report tacked to a bulletin board, have become much more visitor-friendly as presenters have learned how to take advantage of this relatively-new format.

Glen Weisbrod and Chris Mann said a few elegiac words about the late David Forkenbrock, a long-time chairman of the committee who passed away on the previous Friday. Adjo Amekudzi, Jim Gillespie, Martin Weiss, Ron Poole, and Shirley Loveless added their own appreciations. Karen White noted that John Kuhl is carrying on David Frokenbrock’s work in cost analysis and road pricing.

5. Liaison with Other Committees

Shirley Loveless volunteered to act as a liaison to TRB Committee AV010, Intergovernmental Relations & Aviation.

Jim Gillespie complained about a recurrent, inevitable problem: only a certain number of discrete time slots are available during a four-to-five-day conference, and therefore some committees that share common interests are forced to meet at the same time. Glen Weisbrod acknowledged this issue, and remarked that TRB is able to honor a limited number of requests from committees that want to avoid conflict with one another. Karen White suggested that perhaps two or three committees to whom liaison is important could stagger their agendas, so that when the committees are forced to meet simultaneously, the parts of the meetings that are most likely to benefit from outside input occur non-simultaneously; most often all economics, finance, and planning committees (though not freight) meet in the Hilton, so it feasible for members and friends to migrate from one meeting to another during the appointed time slot.

Sharada Vadali, and Dan Pitzler [and Adjo Amekudzi?] volunteered to form a liaison subcommittee to explore ways to maintain liaison with other TRB committees.

6. Research needs Statements – deferred

7. Updates: Strategic Plan and Membership Plan

Glen Weisbrod announced that Huei Fan, Sharada Vadali, and Peggy Tadej have joined the committee, and that TRB is currently vetting two more prospective new members. The committee has room more young member and one more international member. Glen added that he himself has to step down at the end of the year. TRB is in the process – a rather secretive, bureaucratic process – of selecting a new chairman. The responsibilities of committee members in the recent past have included organizing conferences (bi- or triennially), planning Sunday workshops for the beginning of the Annual Meeting in January, preparing guidebooks and issue papers (e.g., “best practices”), carrying out paper reviews and oversight of the paper sessions at the Annual Meeting, and preparing / updating a strategic plan and triennial review for TRB.

6. Research Needs Statements

Adjo Amekudzi reported that the TNDI [?] committee of the American Society of Civil Engineers (ASCE) has identified “Sustainability” as a new focus.

Nadia Gkritza reported that biofuels are a hot topic. Karen White noted that a session on biofuels, sponsored by the TRB Committee on Motor Vehicle Size and Weight [?] , was scheduled for the next day (Wednesday the 16th).

Dan Hodge remarked that he liked the topics covered at the two most recent Transportation and Economic Development (TED) conferences. Chris Mann agreed; though he regretted that there are now many, many competing Sunday workshops, he would like to link a workshop to the transactions at the last TED conference. Dan admitted, with reference particularly to the last TED conference in Little Rock (2006), that a conference is a lot of work.

Fred Berger suggested that development and investment in post-conflict nations is a timely research need.

Cam Gordon proposed three ideas for future conferences or annual meeting sessions: (1) the difference between financial analysis and economic analysis, (2) the economic development impacts of different types of financing, and (3) the impact of corruption.

8. Committee Initiatives for 2008 (sessions, workshops, conferences, etc.)

Glen Weisbrod wryly offered his ticket to the Chairmen’s Luncheon “to the person who volunteers for the most stuff”, electrifying the meeting.

Ira Hirschman expressed support for the idea of a newsletter – something that could be produced more frequently at less cost – in between the triennial conferences.

Steve Andrle asked if the committee could help disseminate Strategic Highway Research Program (SHRP) products. The “hook” is funding for committee-sponsored activities. SHRP has $100 million to spend over five years; most of this will pay for research, but some can go to fund conferences and other events that disseminate SHRP products.

With respect to the committee’s strategic direction, Martin Weiss mused that the addition of the ports and international trade committees in the Economics, Finance and Planning group’s summer meetings may affect what topics and activities the committee wants to pursue.

Kumudu Gunasekera said….. [?]

By way of alternatives, Vic Kamhi observed that one committee last summer (in Chicago) held a mid-year meeting with conference call participation. Another possible event format, he suggested, could be a “webinar”.

Ron Poole mentioned that the TRB Committee on Public Involvement in fact has held meetings purely by conference call.

Glen Weisbrod attempted to summarize the discussion. Possible event formats include a conference, a workshop, a newsletter, and a webinar. An event such as a conference or workshop can be (1) practical, (2) policy-oriented, or (3) …? He wondered about the possibility of cooperating with the International Economic Development Council. The Department of Commerce’s Economic Development Agency (EDA), with whom Mr. Weisbrod has done webinars, is another possible sponsor.

Ira Hirschman, Cam Gordon, Chris Mann, Dan Hodge, Fred Treyz, Nadia Gkritza, and Glen Weisbrod volunteered to work on the newsletter. Glen Weisbrod will coordinate this effort.

Jim Gillespie, Chris Mann, Ramon Rafiah, Vic Kamhi, Kumudu Gunasekera, Peggy Tadej, Fred Berger, Martin Weiss and William Triplett volunteered to have a conference call and explore leads for the next workshop or conference. Martin Weiss will coordinate this effort.

9. Recent and Ongoing Research – ?

9:45-10:00 Break and Networking

Highway Capital Stock: Investment and Economic Returns

FHWA Initiatives

Karen White provided the committee with a little background on the Federal Highway Administration (FHWA)’s initiatives in supporting the study of economic returns on highway investment – a development of work by Theofanis Mamuneas of Cyprus, last paper out in 2003.

Returns on Highway Investment

Barbara Fraumeni of the University of Southern Maine [I, for one, don’t think of any part of Maine as “southern”] described the findings of her research on “The Contribution of Highways to GDP Growth”.

Accounting for highway investment’s impact on Gross Domestic Product (GDP) requires looking at two categories of output: product (building roads) and income (using roads). Highway investment’s share of gross output is around one percent – this happens to be about the same as computers’ share, although computers’ share has been growing at fifty percent per year. In recent years highway capital outlay has grown about two-and-a-half percent per year while GDP has grown around three-and-a-half percent per year.

Dr. Fraumeni defined capital service flow (CSF) as equal to net return plus depreciation. The rate of growth of GDP has averaged, to be more precise, 3.34%. The rate of growth of capital inputs (i.e., the capital stock) has averaged 3.00%. The rate of growth of capital outlay (i.e., investment) has averaged 1.??%.

Glen Weisbrod asked about the recent debate over the (empirically) declining rate of return on transportation investment. The interpretation?: (1) the “big” (high rate-of-return) investments are already made; (2) either the production technology or the accounting cost of investment have changed over time (e.g., more environmental cost arte now internalized). Ira Hirschman asked if this implied that the negative return to disinvestment is also smaller now; Dr. Fraumeni said this is true. Martin Weiss wondered if the authorities today have different transport investment goals; Dr. Fraumeni agreed that this is the case. Sharada Vadali suggested that the degree of utilization would also affect efficiency and productivity; Dr. Fraumeni agreed.

Chris Mann noted that the transportation agencies today sometimes invest at different “margins” than in the past – for example, they can expand capacity by investing in intelligent transportation system (ITS) rather than by building more lanes. Dr. Fraumeni said that the statistical methods for coping with such a change are similar to the hedonic regressions done to take into account the change in quality of, for instance, computer capital stocks. Adjo Amekudzi mentioned that redevelopment / revitalization / “brownfields” investments in “Rust Belt” cities are another situation where transport investment has to take other dimensions into account. Dr. Fraumeni agreed that “profits” as measured by accountants don’t reflect the changes in externalities, spillovers, or utilization of the capital stock (even when these are targeted). Xiaoli Han noted that this question bears on Ira Hirschman’s previous question about the negative return to “disinvestment”: one must distinguish between the different investment “margins” when looking at investment’s contribution to the productivity.

Fred Berger expressed concern about the emphasis on the supply side, offering as a counterexample the notorious “Bridge to Nowhere” in Alaska. Barbara Fraumeni admitted that the methodology does not take connectivity or geography into account – either for highway capital or for computers or other network equipment. Cam Gordon remarked that a location-specific analysis of highway investment would be interesting; probably not possible with Bureau of Economic Analysis (BEA) data? Nope, replied Dr. Fraumeni.

Jean-Claude Ziv asked if it would be possible to compare the productivity of (privately-owned) rail stock with the productivity of (publicly-owned) highway stock. Dr. Fraumeni observed that while she knows much about the highway stock, Xiaoli Han knows more about the rail capital stock.

Mini-Presentations and Discussions

Public-Private Partnerships for Transport Funding in Europe

Jean-Claude Ziv, an advisor to Veolia Transport (which operates a number of US transit properties), a professor at Center National des Arts et Metiers (CNAM) in Paris, and the chairman of Arcurial, a society for training in public-private partnerships (PPPs), gave a presentation on rail PPPs.

Since 1992 the EU has required that management of rail infrastructure in Europe be separated from management of rail operation. This is the case regardless of what sort of organization – public, private, or mixed – is responsible for the management.

A PPP has social, as well as financial, effects. Governments prefer to delegate or concede operation of the railroads; they resort to a PPP only when they lack money to do traditional financing. A PPP can cover (1) the initial investment, (2) the operation, or (3) the investment plus the operation. Success of a PPP depends on many factors: risk assessment and risk sharing (e.g., revision or buy-back clauses); ridership forecasting; geographical bottlenecks; the operator’s association (or not) with the design and construction.

A British member of the audience [?] mentioned a couple of examples from the United Kingdom. Dr. Ziv agreed that they were good examples.

Buses vs. Light Rail: Differences in Beneficiaries

Shirley Loveless presented a comparison of the impact of rail service versus bus service.

The FTA cost-effectiveness criteria emphasize current ridership demand, not the potential for future development. The for rail service rests on its relative permanence and on its large development impact. The case for bus service is that it is flexible and cheap. Comparison of these modes needs to take a longer view: i.e., a sustainability analysis.

Vic Kamhi mentioned that the Los Angeles bus service expanded by diverting capital funds to operations. It now has a deficit and equipment down-time problems. Los Angeles did not, however, divert money from light rail; construction there has continued for years.

Dan Hodge agreed that the FTA analytical criteria are short-sighted. Transit oriented development (TOD) depends on new development.

A member of the audience from New York [?] cited New York City as an example where both modes have their place: heavy rail in Manhattan, buses in Queens.

Adjourn

Glen Weisbrod adjourned the meeting at 11:30 am.

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