US Department of Transportation

FHWA PlanWorks: Better Planning, Better Projects

US Department of Transportation

FHWA Planworks: Better Planning, Better Projects

PRO-2: Approve Project Cost and Revenue Allocation Approach

Programming

Description:

This Key Decision establishes a consistent methodology for estimating project costs for both the long range transportation plan and the TIP. It also documents the specific requirements and restrictions associated with each funding source. By establishing consistent project cost methodology and revenue requirements as well as the overall available revenue from PRO-1, this ensures that the fiscal constraint for the plan and the TIP are consistent.

There is information developed in prior Key Decisions that informs this step.

Basics:

The first table describes the purpose and anticipated outcome of a Key Decision. If the decision is federally mandated, the purpose and outcome will relate to the legal intent.

The second table describes roles for key partners with legal decision making authority in the transportation process. The roles indicate the influence a partner can have on a decision, and show each partner where their input is most needed. For a full understanding of roles see the Partner Portal.

Purpose

To develop a method for estimating associated project costs and establish the criteria for revenue allocation. This should occur prior to the identification of specific deficiencies and potential solutions so that criteria are not targeted toward particular projects.

Outcome

A method for estimating project costs that can be used across the region by local governments, private developers, MPO staff, and others, so that project costs are developed uniformly to allow comparison.
A document identifying the restrictions and requirements for each for available revenue sources.

Partner	Role Type	Description
MPO	Formal Decision Maker	Approves a methodology for consistently identifying project costs and allocating revenue that is easily understood by partners and stakeholders.
FHWA/FTA	Advisor	Ensures project cost and revenue allocation are inclusive, consistent, and appropriate.
State DOT	Advisor	Ensures project costs and revenue allocation are reasonable and consistent with state plans and programs.
Resource Agency	Observer	Observe the project cost and revenue allocation development.
Public Transportation Operator(s)	Advisor	Ensures project costs and revenue allocation are reasonable and consistent with transit plans and programs.

Links to Decisions

This table identifies the connection to other Key Decisions. The linkages highlight the importance of collaboration across transportation phases. Practitioners are encouraged to document the basis of the decision and consider information from previous Key Decisions.

Transportation Phases	Key Decision	What is Linked?	Purpose of Linkage
From Long Range Transportation Planning	LRP-5 - Approve Financial Assumptions	Documented revenue restrictions, overall revenue for the plan, and the methodology for estimating project costs.	To ensure consistency between programming and fiscal constraint in the long range plan.
From Corridor Planning	COR-1 - Approve Scope of Corridor Planning Process	Project cost methodology and restrictions and requirements for allocating revenue.	To inform the scoping process for corridor planning and ensure consistency with the long range plan (where applicable). This establishes general financial parameters for the corridor study.

Questions to Consider

Questions are a way to gather input from partners and stakeholders that can be used to inform the decision. Decision makers can discuss the questions provided to ensure a broad array of interests are considered to support a collaborative process. Questions also allow staff to collect stakeholder interests, ensure these are included in the decision, and provide a response based on the decision outcome. Although Public Transportation is not represented by a PlanWorks Application, the information provided may be useful in a collaborative transportation process.

Category	Questions to Consider
Long Range Planning	Does the methodology ensure that fiscal constraint in the TIP is consistent with the long range plan? Are the revenue sources broad enough to allow consideration of transportation and non-transportation solutions to address our vision and goals?
Programming	What approach will be used to allocate revenue and estimate project costs? Is the approach to assigning costs and allocating revenues inclusive enough to cover costs, revenues, financing, implementation issues and potential benefits? What costs and funding sources are associated with projects currently in development?
Corridor Planning	Are there active corridor planning studies that need to be informed about the methodology and criteria used?
Environmental Review	No specific questions
Bicycles and Pedestrians	How are the costs of bicycle and pedestrian improvements estimated, including when they are components of larger projects? Are the cost estimates updated and generally in line with local experience?
Capital Improvement	How are planned capital improvement investments integrated into the cost methodology? How are any cost-sharing arrangements accounted for with local capital improvement partners?
Economic Development	Does a mitigation strategy exist for potential adverse economic impacts? For example, the costs of any losses or displacements of business and residents.
Freight	Is the methodology inclusive enough to allow potential funding sources from freight stakeholders? Is there an existing freight plan with cost-benefit analyses or other methodologies or cost estimates for comparison? Does the approved methodology adequately assess the costs of freight projects?
Greenhouse Gas Emissions	How will GHG emission mitigation measures be reflected in project costs? Should higher priority be given to GHG-reducing projects with significant payback? For example, through energy savings or revenue generation.
Health in Transportation	This Key Decision is not associated with the Application.
Human Environment and Communities	This Key Decision is not associated with the Application.
Land Use	This Key Decision is not associated with the Application.
Linking Planning and Operations	Does the cost methodology include long-term maintenance and operation of individual projects? How are the costs associated with TSMO developed?
Natural Environment and Implementing Eco Logical	Have data and methods used to estimate the cost of regional ecological mitigation been considered?
Performance Measures	Does the revenue allocation criteria reflect performance target priorities?
Planning and Environment Linkages	This Key Decision is not associated with the Application.
Public Private Partnerships	Are there recommended methodologies for allocating revenue and identifying costs related to P3s? Are mitigation actions anticipated for potential negative impacts of P3 projects? If so, have mitigation costs been considered? Does information exist about the time period over which any P3 project will be funded or revenues will be generated?
Safety	Are there specific costs associated with safety improvements identified in the long range plan?
Stakeholder Collaboration	This Key Decision is not associated with the Application.
Transportation Conformity	This Key Decision is not associated with the Application.
Visioning and Transportation	This Key Decision is not associated with the Application.

Data

The following list of data may be needed to support the Key Decision. Practitioners collect this information for decision makers to consider. Although Public Transportation is not represented by a PlanWorks Application, the information provided may be useful in a collaborative transportation process.

Category	Data to Consider
Long Range Planning	Vision and goals from the adopted long-range plan Bridge / culvert replacement costs
Programming	Methods used for cost estimation from previous studies Cost / benefit analysis Data from research on similar regions to inform methodology approaches Data on individual revenue resources and their requirements and restrictions Methods used for cost estimation at the state level Return on investment Cost data associated with projects under development
Corridor Planning	Active corridor studies that should be informed
Environmental Review	No specific data
Bicycles and Pedestrians	Costs for pedestrian and bicycle Infrastructure improvements
Capital Improvement	Capital improvement investments that may contribute to project costs Capital improvement partner input on the potential for cost sharing
Economic Development	Metrics and analytical methods to evaluate impact on economic competitiveness
Freight	Methodologies and allocation priorities from existing freight plans
Greenhouse Gas Emissions	Cost of various GHG emissions mitigation measures that can be applied during project construction or development Projections of revenues or savings, if any, from specific GHG-reducing projects
Health in Transportation	This Key Decision is not associated with the Application.
Human Environment and Communities	This Key Decision is not associated with the Application.
Land Use	This Key Decision is not associated with the Application.
Linking Planning and Operations	Operations and maintenance costs relevant to each project and/or program type Cost and value of mitigation
Natural Environment and Implementing Eco Logical	Methods used in ecological planning to compare the cost of conservation and restoration opportunities Methods used to develop a crediting strategy for mitigation
Performance Measures	Performance targets Performance measurement factors
Planning and Environment Linkages	This Key Decision is not associated with the Application.
Public Private Partnerships	Methodologies for allocating revenue and identifying costs of P3 projects Assessment of the potential negative impacts of P3 projects and the costs to mitigate those impacts
Public Transportation	Operating and capital costs for public transportation and other demand-management strategies
Safety	Costs and funding sources for specific safety improvements
Stakeholder Collaboration	This Key Decision is not associated with the Application.
Transportation Conformity	This Key Decision is not associated with the Application.
Visioning and Transportation	This Key Decision is not associated with the Application.

Links to Applications

The interaction between transportation decision making and other planning processes will ensure that important values and goals outside the transportation process are recognized and considered. Although Public Transportation is not represented by a PlanWorks Application, the information provided may be useful in a collaborative transportation process.

Application	Description
Bicycles and Pedestrians	Financing options relevant to bicycle and pedestrian improvements
Capital Improvement	The methodology used to determine project costs and allocate revenue should consider the potential for cost sharing or other in-kind contributions. Land Use, Economic Development, Greenhouse Gas Emissions, Human Environment and Communities, and Natural Environment and Implementing Eco-Logical are additional Applications to consider at this decision.
Economic Development	The selected methodology can help ensure that economic development is considered throughout the decision-making process, including the development of Performance Measures which help identify benefits. Stakeholder Collaboration with the economic development sector and common interests with Human Environment and Communities and Natural Environment and Implementing Eco-Logical can help ensure that the methodology adequately considers potential impacts.
Freight	The basis for including freight at this Key Decision is to ensure that reasonable costs can be applied to any project specifically intended to provide a benefit to freight transportation and to include the potential for non-traditional funding sources. This may be related to the inclusion of a Public-Private Partnership for funding.
Greenhouse Gas Emissions	Costs associated with individual GHG-reducing strategies Cost of various GHG emissions mitigation measures that can be applied during project development and/or construction
Health in Transportation	This Key Decision is not associated with the Application.
Human Environment and Communities	This Key Decision is not associated with the Application.
Land Use	This Key Decision is not associated with the Application.
Linking Planning and Operations	Develop methodology that captures the ongoing life cycle costs of operational strategies; which might extend beyond the TIP/STIP timeframe. Consider Safety and Economic Development relationships
Natural Environment and Implementing Eco Logical	Specific crediting strategy for mitigation, along with data that can be used to determine the cost and value of mitigation, as available Comparison of the cost of conservation and restoration opportunities to inform and account for the cost of mitigation
Performance Measures	At the beginning of TIP development, it is essential to link performance measurement and reporting commitments in the long-range plan to funding priorities. Other relevant Applications include Public-Private Partnerships and Linking Planning and Operations.
Planning and Environment Linkages	This Key Decision is not associated with the Application.
Public Private Partnerships	To incorporate P3 projects, associated costs and realistic revenue allocation must be comparable to those developed by traditional methods. External revenue from Economic Development and Freight may be a useful comparison.
Public Transportation	Coordinate with public transportation operators and FTA to consider public transportation program and plans that are applicable to this region
Safety	Safety partners may provide information on appropriate safety project costs/criteria to consider in the methodology.
Stakeholder Collaboration	This Key Decision is not associated with the Application.
Transportation Conformity	This Key Decision is not associated with the Application.
Visioning and Transportation	This Key Decision is not associated with the Application.

Examples

In - depth case studies of successful practices in collaborative decision making were used to develop the Decision Guide.Links in this table point to a specific paragraph or section of a case study that supports a Key Decision. It is not necessary to read through an entire case study to find the example; however, full versions are available in the Library.

PlanWorks Case Study Examples:
I-5 Beltline Interchange Plan - Using Community Values as Performance Measures pro-2

Other Examples:
None.